Acadia Healthcare Company, Inc. [ACHC] Filings

10-Q 1 achc-10q_20220331.htm 10-Q achc-10q_20220331.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35331

Acadia Healthcare Company, Inc.

(Exact name of registrant as specified in its charter)

Delaware

45-2492228

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

6100 Tower Circle, Suite 1000

Franklin, Tennessee 37067

(Address, including zip code, of registrant’s principal executive offices)

(615) 861-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $.01 par value	ACHC	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒		Accelerated filer	☐ Non-accelerated filer	☐
Smaller reporting company	☐		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At May 4, 2022, there were 90,526,686 shares of the registrant’s common stock outstanding.

Table of contents

ACADIA HEALTHCARE COMPANY, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets (Unaudited)	1

	Condensed Consolidated Statements of Income (Unaudited)	2

	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	3

	Condensed Consolidated Statements of Equity (Unaudited)	4

	Condensed Consolidated Statements of Cash Flows (Unaudited)	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	32

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 6.	Exhibits	34

SIGNATURES		35

Table of contents

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

Acadia Healthcare Company, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	March 31, 2022			December 31, 2021
	(In thousands, except share and per share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	140,367		$	133,813
Accounts receivable, net		299,022			281,332
Other current assets		90,710			79,886
Total current assets		530,099			495,031
Property and equipment, net		1,795,791			1,771,159
Goodwill		2,200,659			2,199,937
Intangible assets, net		70,319			70,145
Deferred tax assets		3,047			3,080
Operating lease right-of-use assets		139,264			133,761
Other assets		95,460			94,965
Total assets	$	4,834,639		$	4,768,078

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	21,250		$	18,594
Accounts payable		104,209			98,575
Accrued salaries and benefits		138,092			137,845
Current portion of operating lease liabilities		25,170			23,348
Other accrued liabilities		122,030			126,499
Total current liabilities		410,751			404,861
Long-term debt		1,463,848			1,478,626
Deferred tax liabilities		77,604			74,368
Operating lease liabilities		120,560			116,841
Other liabilities		117,062			110,505
Total liabilities		2,189,825			2,185,201
Redeemable noncontrolling interests		70,304			65,388
Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued		—			—
Common stock, $0.01 par value; 180,000,000 shares authorized; 89,661,341 and 89,028,158 issued and outstanding at March 31, 2022 and December 31, 2021, respectively		897			890
Additional paid-in capital		2,632,527			2,636,350
Accumulated deficit		(58,914	)		(119,751	)
Total equity		2,574,510			2,517,489
Total liabilities and equity	$	4,834,639		$	4,768,078

See accompanying notes.

Table of contents

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

	Three Months Ended March 31,
	2022			2021
	(In thousands, except per share amounts)
Revenue	$	616,653		$	551,199
Salaries, wages and benefits (including equity-based compensation expense of $7,925 and $7,034, respectively)		335,762			304,333
Professional fees		36,911			31,617
Supplies		23,699			21,322
Rents and leases		11,249			9,412
Other operating expenses		81,425			72,010
Depreciation and amortization		28,926			24,894
Interest expense, net		15,787			29,027
Debt extinguishment costs		—			24,650
Transaction-related expenses		3,582			4,610
Total expenses		537,341			521,875
Income from continuing operations before income taxes		79,312			29,324
Provision for income taxes		17,402			6,204
Income from continuing operations		61,910			23,120
Loss from discontinued operations, net of taxes		—			(12,641	)
Net income		61,910			10,479
Net income attributable to noncontrolling interests		(1,073	)		(762	)
Net income attributable to Acadia Healthcare Company, Inc.	$	60,837		$	9,717
Basic earnings per share attributable to Acadia Healthcare Company, Inc. stockholders:
Income from continuing operations attributable to Acadia Healthcare Company, Inc.	$	0.68		$	0.25
Loss from discontinued operations		—			(0.14	)
Net income attributable to Acadia Healthcare Company, Inc.	$	0.68		$	0.11

Diluted earnings per share attributable to Acadia Healthcare Company, Inc. stockholders:
Income from continuing operations attributable to Acadia Healthcare Company, Inc.	$	0.67		$	0.25
Loss from discontinued operations		—			(0.14	)
Net income attributable to Acadia Healthcare Company, Inc.	$	0.67		$	0.11
Weighted-average shares outstanding:
Basic		89,258			88,242
Diluted		91,012			89,941

See accompanying notes.

Table of contents

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended March 31,
	2022			2021
	(In thousands)
Net income	$	61,910		$	10,479
Other comprehensive income:
Foreign currency translation loss		—			(4,260	)
Gain on derivative instruments, net of tax of $0.1 million		—			19
U.K. Sale		—			375,606
Other comprehensive income		—			371,365
Comprehensive income		61,910			381,844
Comprehensive income attributable to noncontrolling interests		(1,073	)		(762	)
Comprehensive income attributable to Acadia Healthcare Company, Inc.	$	60,837		$	381,082

See accompanying notes.

Table of contents

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Equity

(Unaudited)

(In thousands)

	Common Stock				Additional Paid-in			Accumulated Other Comprehensive			Accumulated
	Shares		Amount		Capital			Loss			Deficit			Total
Balance at December 31, 2020		88,024	$	880	$	2,580,327		$	(371,365	)	$	(310,386	)	$	1,899,456
Common stock issued under stock incentive plans		705		7		12,733			—			—			12,740
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises		—		—		(4,521	)		—			—			(4,521	)
Equity-based compensation expense		—		—		7,034			—			—			7,034
Other		—		—		2,208			—			—			2,208
Other comprehensive income		—		—		—			371,365			—			371,365
Net income attributable to Acadia Healthcare Company, Inc.		—		—		—			—			9,717			9,717
Balance at March 31, 2021		88,729		887		2,597,781			—			(300,669	)		2,297,999
Common stock issued under stock incentive plans		188		2		5,620			—			—			5,622
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises		—		—		(580	)		—			—			(580	)
Equity-based compensation expense		—		—		9,031			—			—			9,031
Net income attributable to Acadia Healthcare Company, Inc.		—		—		—			—			44,514			44,514
Balance at June 30, 2021		88,917		889		2,611,852			—			(256,155	)		2,356,586
Common stock issued under stock incentive plans		89		1		3,254			—			—			3,255
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises		—		—		(444	)		—			—			(444	)
Equity-based compensation expense		—		—		8,923			—			—			8,923
Net income attributable to Acadia Healthcare Company, Inc.		—		—		—			—			66,126			66,126
Balance at September 30, 2021		89,006		890		2,623,585			—			(190,029	)		2,434,446
Common stock issued under stock incentive plans		22		—		412			—			—			412
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises		—		—		(189	)		—			—			(189	)
Equity-based compensation expense		—		—		12,542			—			—			12,542
Net income attributable to Acadia Healthcare Company, Inc.		—		—		—			—			70,278			70,278
Balance at December 31, 2021		89,028		890		2,636,350			—			(119,751	)		2,517,489
Common stock issued under stock incentive plans		633		7		3,742			—			—			3,749
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises		—		—		(15,490	)		—			—			(15,490	)
Equity-based compensation expense		—		—		7,925			—			—			7,925
Net income attributable to Acadia Healthcare Company, Inc.		—		—		—			—			60,837			60,837
Balance at March 31, 2022		89,661	$	897	$	2,632,527		$	—		$	(58,914	)	$	2,574,510

See accompanying notes.

Table of contents

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2022			2021
	(In thousands)
Operating activities:
Net income	$	61,910		$	10,479
Adjustments to reconcile net income to net cash provided by continuing operating activities:
Depreciation and amortization		28,926			24,894
Amortization of debt issuance costs		808			1,646
Equity-based compensation expense		7,925			7,034
Deferred income taxes		3,269			3,962
Loss from discontinued operations, net of taxes		—			12,641
Debt extinguishment costs		—			24,650
Other		(478	)		1,737
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		(18,222	)		(2,490	)
Other current assets		(16,638	)		75
Other assets		(202	)		(3,570	)
Accounts payable and other accrued liabilities		10,501			(3,979	)
Accrued salaries and benefits		246			2,915
Other liabilities		6,298			(4,210	)
Government relief funds		(7,556	)		—
Net cash provided by continuing operating activities		76,787			75,784
Net cash provided by discontinued operating activities		—			253
Net cash provided by operating activities		76,787			76,037
Investing activities:
Cash paid for capital expenditures		(50,527	)		(58,682	)
Proceeds from U.K. Sale		—			1,511,020
Settlement of foreign currency derivatives		—			(84,795	)
Proceeds from sale of property and equipment		1,294			134
Other		(460	)		(74	)
Net cash (used in) provided by investing activities		(49,693	)		1,367,603
Financing activities:
Borrowings on long-term debt		—			425,000
Borrowings on revolving credit facility		—			430,000
Principal payments on revolving credit facility		(10,000	)		(270,000	)
Principal payments on long-term debt		(2,656	)		—
Repayment of long-term debt		—			(2,224,603	)
Payment of debt issuance costs		—			(9,935	)
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises		(11,741	)		8,219
Contributions from noncontrolling partners in joint ventures		4,290			1,000
Distributions to noncontrolling partners in joint ventures		(447	)		(377	)
Other		14			(6,793	)
Net cash used in financing activities		(20,540	)		(1,647,489	)
Effect of exchange rate changes on cash		—			4,067
Net increase (decrease) in cash and cash equivalents		6,554			(199,782	)
Cash and cash equivalents at beginning of the period		133,813			378,697
Cash and cash equivalents at end of the period	$	140,367		$	178,915

See accompanying notes.

Table of contents

Acadia Healthcare Company, Inc.

Notes to Condensed Consolidated Financial Statements

March 31, 2022

(Unaudited)

1.	Description of Business and Basis of Presentation

Description of Business

Acadia Healthcare Company, Inc. (the “Company”) develops and operates inpatient psychiatric facilities, residential treatment centers, group homes, substance abuse facilities and facilities providing outpatient behavioral healthcare services to serve the behavioral health and recovery needs of communities throughout the United States (“U.S.”) and Puerto Rico. At March 31, 2022, the Company operated 238 behavioral healthcare facilities with approximately 10,600 beds in 40 states and Puerto Rico.

On January 19, 2021, the Company completed the sale of its operations in the United Kingdom (“U.K.”) to RemedcoUK Limited, a company organized under the laws of England and Wales and owned by funds managed or advised by Waterland Private Equity Fund VII (the “U.K. Sale”). The U.K. Sale allowed the Company to reduce its indebtedness and focus on the Company’s U.S. operations. As a result of the U.K. Sale, the Company reported, for all periods presented, results of operations and cash flows of the U.K. operations as discontinued operations in the accompanying financial statements. See Note 9 – U.K. Sale.

Basis of Presentation

The business of the Company is conducted through limited liability companies, partnerships and C-corporations. The Company’s consolidated financial statements in

Acadia Healthcare Company, Inc. [ACHC] Filings
10-Q	[2022-05-04]
10-K	[2022-03-01]
10-Q	[2021-10-29]
10-Q	[2021-08-03]
10-Q	[2021-04-30]
10-K	[2021-02-26]
10-Q	[2020-10-30]
10-Q	[2020-08-05]
10-Q	[2020-05-05]
10-K	[2020-02-28]
10-Q	[2019-11-06]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-03-01]
10-Q	[2018-11-06]
10-Q	[2018-07-31]
10-Q	[2018-05-03]
10-K	[2018-02-27]
10-Q	[2017-10-25]
10-Q	[2017-07-28]
10-Q	[2017-04-26]
10-K	[2017-02-24]
10-Q	[2016-11-02]
10-Q	[2016-07-29]
10-Q	[2016-04-29]
10-K	[2016-02-26]
10-Q	[2015-11-04]
10-Q	[2015-08-05]
10-Q	[2015-04-29]
10-K	[2015-02-27]
10-Q	[2014-10-30]
10-Q	[2014-07-30]
10-Q	[2014-04-30]
10-K	[2014-02-21]
10-Q	[2013-10-30]
10-Q	[2013-07-31]
10-Q	[2013-05-02]
10-K	[2013-03-01]
10-Q	[2012-11-08]
10-Q	[2012-08-02]
S-1	[2012-04-30]
10-Q	[2012-04-27]
10-K	[2012-03-13]