Core Viewpoint - Acadia Healthcare Company, Inc. (ACHC) is expected to report first-quarter 2025 results on May 12, with earnings estimated at 42 cents per share and revenues at $770.5 million, indicating a year-over-year earnings decline of 50% but a slight revenue growth of 0.3% [1][2]. Financial Estimates - First-quarter earnings estimates have declined by 8 cents per share over the past 60 days, reflecting a significant year-over-year decrease [2]. - For the full year 2025, the revenue estimate for Acadia Healthcare is $3.33 billion, representing a year-over-year increase of 5.7%, while the EPS estimate is $2.76, indicating a decline of 16.4% year-over-year [2]. Recent Performance - Acadia Healthcare has beaten earnings estimates in three of the last four quarters, with an average surprise of negative 0.4% [3]. Earnings Prediction Model - The current model does not predict an earnings beat for Acadia Healthcare, as it has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell) [4]. Revenue Drivers - Revenue per patient day is estimated to rise by 2% year-over-year, and revenues from Residential Treatment Centers are expected to increase by 9.7% from $85.6 million a year ago [6]. - U.S. same-facility admissions are projected to show a marginal increase, while revenues from Specialty Treatment Facilities are expected to rise by 0.1% from $143.8 million [7]. Expense Concerns - Rising expenses are anticipated to impact profit levels, with total expenses expected to increase by more than 11% due to higher salaries, wages, benefits, and other operating costs [8]. - Supply costs are also expected to rise due to increased utilization [8]. Revenue Declines in Specific Areas - Revenues from Acute Inpatient Psychiatric Facilities are projected to decrease by 1.3% from $401.1 million, and same-facility patient days are expected to decline by 1.1% year-over-year [9]. - Comprehensive Treatment Centers' revenues are estimated to fall by 0.5% from $132.2 million [9].

Group 1 - Acadia Healthcare Company, Inc. (ACHC) has been added to the Zacks Rank 5 (Strong Sell) List due to a 17.4% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Blackbaud, Inc. (BLKB) is also on the Zacks Rank 5 (Strong Sell) List, with a 6.7% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Cable One, Inc. (CABO) has been included in the Zacks Rank 5 (Strong Sell) List, with an 8.5% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]

Group 1 - ASE Technology Holding Co., Ltd. (ASX) provides semiconductor packaging and testing, and electronic manufacturing services, with a current year earnings estimate revised downward by 6.2% over the last 60 days [1] - Acadia Healthcare Company, Inc. (ACHC) is a provider of behavioral healthcare services, with a current year earnings estimate revised downward by 18.1% over the last 60 days [2] - Blackbaud, Inc. (BLKB) offers cloud software solutions to educational institutions, with a current year earnings estimate revised downward by 6.7% over the last 60 days [2]

Group 1 - ASE Technology Holding Co., Ltd. (ASX) is a semiconductor packaging and testing company with a Zacks Consensus Estimate for its current year earnings revised 6.2% downward over the last 60 days [1] - Acadia Healthcare Company, Inc. (ACHC) is a provider of behavioral healthcare services, and its Zacks Consensus Estimate for current year earnings has been revised 18.8% downward over the last 60 days [1] - Barrick Gold Corporation (GOLD) is a global explorer, developer, producer, and seller of gold and copper properties, with its Zacks Consensus Estimate for current year earnings revised 16.6% downward over the last 60 days [2]

Group 1 - AST SpaceMobile (ASTS) is developing a space-based cellular broadband network that will work with standard mobile devices, leveraging its extensive IP and patent portfolio [1] - The Zacks Consensus Estimate for AST SpaceMobile's current year earnings has been revised downward by 75.6% over the last 60 days [1] Group 2 - Acadia Healthcare (ACHC) provides behavioral health care services in the United States and Puerto Rico [2] - The Zacks Consensus Estimate for Acadia Healthcare's current year earnings has been revised downward by almost 18.8% over the last 60 days [2] Group 3 - ASE Technology (ASX) offers semiconductor manufacturing services, specifically in assembly and testing [2] - The Zacks Consensus Estimate for ASE Technology's current year earnings has been revised downward by 6.2% over the last 60 days [2]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 increased by 4.2% year-over-year to $774 million, with full-year revenue exceeding $3.1 billion, marking a 7.7% increase over 2023 [8][21] - Same facility patient days grew by 3.2% in Q4, remaining stable between 3% and 4% throughout the quarter [8][21] - Adjusted EBITDA for Q4 2024 was $153.1 million, with an adjusted EBITDA margin of 19.8%, down from 22.8% in the same quarter last year [22][23] - Adjusted income attributable to Acadia stockholders per diluted share was $0.64 for Q4 2024, compared to $0.85 for the prior year period [25] Business Line Data and Key Metrics Changes - Same facility revenue grew by 4.7% compared to Q4 2023, driven by patient day growth and a 1.4% increase in revenue per patient day [21] - Startup losses related to new facilities were $11.2 million in Q4 2024, a $6 million year-over-year increase [23] Market Data and Key Metrics Changes - The company reported a more stable labor environment in 2024, which supported recruitment and retention initiatives [9] - The company anticipates adding between 800 and 1,000 total beds in 2025, continuing to address the mental health and addiction crisis in the U.S. [18][19] Company Strategy and Development Direction - The company is focused on transforming patient care and has invested heavily in technology to enhance safety and care delivery [11][12] - Acadia's growth strategy includes completing construction on approximately 1,300 beds in 2024, with 776 of these beds becoming operational [15][17] - The company aims to maintain a balanced approach to growth and free cash flow generation, expecting to return to free cash flow positive by the end of 2026 [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and goals, emphasizing the importance of expanding access to specialized care [19] - The outlook for 2025 includes revenue guidance of $3.3 billion to $3.4 billion and adjusted EBITDA guidance of $675 million to $725 million [27][28] - Management acknowledged challenges from underperforming facilities but maintained a cautious approach to guidance [29][30] Other Important Information - The company has authorized a new $300 million share repurchase program, which will be executed based on market conditions [44] - The company expects capital spending in the range of $630 million to $690 million for 2025, with a significant portion allocated to expansion spending [28] Q&A Session Summary Question: Can you provide insights on financing plans and cash flow expectations? - Management confirmed refinancing existing bank facilities and upsizing to about a billion dollars, with expectations of returning to cash flow positive by the end of 2026 [47][48] Question: How do you view the growth outlook and margin assumptions post-2025? - Management expects revenue growth of 7% to 9% and EBITDA growth of 8% to 10% in the years following 2025, with a focus on balancing capital expenditures and free cash flow [62][66] Question: What is the current status of referral activity and its impact on growth? - Management reported that referral issues are less of a challenge now, with ongoing efforts to improve relationships with key referral sources [99][102] Question: What actions are being taken to improve underperforming facilities? - Management is conducting comprehensive reviews of underperforming facilities, focusing on business development, leadership, and technology adoption [118][122]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 increased by 4.2% year-over-year to $774 million, with full-year revenue exceeding $3.1 billion, marking a 7.7% increase over 2023 [8][21] - Same facility patient days grew by 3.2% in Q4, remaining stable between 3% and 4% throughout the quarter [8][21] - Adjusted EBITDA for Q4 2024 was $153.1 million, with an adjusted EBITDA margin of 19.8%, down from 22.8% in the same quarter last year [22][23] - Adjusted income attributable to Acadia stockholders per diluted share was $0.64 for Q4 2024, compared to $0.85 for the prior year period [25] Business Line Data and Key Metrics Changes - Same facility revenue grew by 4.7% compared to Q4 2023, driven by patient day growth and a 1.4% increase in revenue per patient day [21] - Startup losses related to new facilities were $11.2 million in Q4 2024, a $6 million increase year-over-year [23] Market Data and Key Metrics Changes - The company reported a more stable labor environment in 2024, which supported recruitment and retention initiatives [9] - The company anticipates adding between 800 and 1,000 total beds in 2025, reflecting ongoing demand for behavioral health services [18] Company Strategy and Development Direction - The company is focused on transforming the lives of patients and communities by providing specialized behavioral health care [10] - Acadia is committed to expanding access to care, with a strong pipeline of potential partnerships with leading health systems [19] - The company plans to moderate the pace of bed additions to 600 to 800 beds per year starting in 2026, balancing growth and free cash flow generation [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and goals, emphasizing the need to address the mental health and addiction crisis in the U.S. [19] - The company expects to return to free cash flow positive by the end of 2026, driven by new bed contributions and reduced startup costs [50][51] Other Important Information - The Board of Directors authorized a new $300 million share repurchase program, subject to market conditions [44] - The company recorded a $4 million increase in reserves for self-insured professional and general liability claims, reflecting unfavorable industry trends [23][34] Q&A Session Summary Question: Follow-up on capital commitments and cash flow - Management confirmed refinancing existing bank facilities and upsizing to about a billion dollars, with expectations of cash flow returning to positive by the end of 2026 [47][48] Question: Clarification on first-quarter guidance - Management indicated that the first quarter is expected to contribute less to the full year than typical, with startup losses anticipated to be high [55][56] Question: Update on referral activity - Management noted that referral issues are less of a challenge now, focusing on a small number of underperforming facilities [99][102] Question: Long-term growth outlook and margin assumptions - Management reiterated a balanced approach to growth, expecting revenue growth of 7% to 9% and EBITDA growth of 8% to 10% in the coming years [62][66] Question: Update on underperforming facilities - Management is conducting comprehensive reviews of underperforming facilities, focusing on business development, leadership, and technology adoption [118][122]

Core Viewpoint - Acadia Healthcare Company, Inc. reported weaker-than-expected fourth-quarter earnings, with adjusted EPS of 64 cents, missing the Zacks Consensus Estimate by 11.1% and declining 24.7% year over year [1][2] Financial Performance - Total revenues for the fourth quarter increased by 4.2% year over year to $774.2 million, but fell short of consensus estimates [2] - Same-facility revenues reached $765 million, a 4.7% year-over-year increase, but also missed the estimate of $796.7 million [4] - Adjusted EBITDA decreased by 9.7% year over year to $153.1 million, below the estimate of $179.2 million, with a margin decline of 300 basis points to 19.8% [5] Operational Metrics - Patient days improved by 2.5% year over year, while admissions grew by 2.9% [5] - Revenue per patient day increased by 1.7% year over year, lower than the growth estimate of 3.7% [5] - The average length of stay declined by 0.4% year over year, missing the growth estimate of 2.5% [5] Expense Overview - Total expenses rose by 11.1% year over year to $736.2 million, exceeding the estimate of $703.3 million, driven by higher salaries, wages, benefits, and operating expenses [6] Balance Sheet and Cash Flow - As of December 31, 2024, cash and cash equivalents were $76.3 million, down 23.8% from the previous year [7] - Total assets increased by 9.5% to $6 billion, while long-term debt rose by 11.2% to $1.9 billion [8] - Net cash provided by operations totaled $129.7 million, significantly lower than $462.3 million in the prior year [8] Full Year Update - For the full year 2024, revenues rose by 7.7%, while adjusted EPS declined by 5.4% to $3.30 [9] Guidance for 2025 - Projected revenues for the first quarter of 2025 are between $765 million and $775 million, with adjusted EBITDA estimated at $130-$135 million [10] - Full-year 2025 revenue guidance is between $3.3 billion and $3.4 billion, indicating a 6.2% improvement from 2024 [10] - Adjusted EPS is expected to be between $2.50 and $2.80 [11]

Core Viewpoint - Acadia Healthcare reported quarterly earnings of $0.64 per share, missing the Zacks Consensus Estimate of $0.72 per share, and down from $0.85 per share a year ago [1][2] Financial Performance - The company posted revenues of $774.24 million for the quarter, missing the Zacks Consensus Estimate by 0.73%, compared to $742.8 million in the same quarter last year [3] - Acadia Healthcare has surpassed consensus EPS estimates three times over the last four quarters, but has only topped revenue estimates once in the same period [2][3] Stock Performance - Acadia Healthcare shares have increased approximately 3.4% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.72 on revenues of $828.22 million, and for the current fiscal year, it is $3.39 on revenues of $3.43 billion [8] - The estimate revisions trend for Acadia Healthcare is currently unfavorable, which may impact future stock performance [7] Industry Context - The Medical - Hospital industry, to which Acadia Healthcare belongs, is ranked in the top 34% of over 250 Zacks industries, suggesting a favorable environment for stocks in this sector [9]

Financial Agreements and Borrowing - The company entered into a credit agreement providing for a $600.0 million senior secured revolving credit facility and a $425.0 million senior secured term loan facility, both maturing on March 17, 2026[18]. - In 2024, the company borrowed $305.0 million on the Revolving Facility and repaid $15.0 million, while in 2023, it borrowed $40.0 million and repaid $35.0 million[22]. Revenue and Growth - As of December 31, 2024, the company operated 262 behavioral healthcare facilities with approximately 11,850 beds across 39 states and Puerto Rico, generating revenue of $3,154.0 million, up from $2,928.7 million in 2023[37]. - For the year ended December 31, 2024, revenue sources included 56.5% from Medicaid, 26.0% from commercial payors, 14.2% from Medicare, and 3.3% from other payors[27]. - The company added 312 beds to existing facilities during the year ended December 31, 2024, and opened four wholly-owned facilities and one joint venture facility, totaling 464 new beds[30][33]. - Acute inpatient psychiatric facilities accounted for 53% of total revenue for the year ended December 31, 2024, followed by specialty treatment facilities at 19%, comprehensive treatment centers at 17%, and residential treatment centers at 11%[36]. - The company plans to expand its facility and bed count, leveraging its national marketing strategy to attract new patients and referral sources[26]. Capital Expenditures and Compliance - The company’s maintenance capital expenditures were approximately 3% of revenue for the year ended December 31, 2024[29]. - The healthcare facilities are subject to numerous regulations, including compliance with federal, state, and local licensing and certification requirements, which are essential for participation in government healthcare programs[51]. - The company maintains accreditation from private entities like The Joint Commission and CARF, which is crucial for ensuring quality and safety in healthcare services[54]. - The company is subject to audits by federal, state, and commercial payors to validate the accuracy of claims, with potential liabilities arising from identified overpayments[56]. - The Anti-Kickback Statute and Stark Law impose strict regulations on financial arrangements with healthcare providers, with violations leading to significant penalties and exclusion from government programs[60][66]. - The federal False Claims Act allows the government to pursue healthcare providers for submitting false claims, with penalties ranging from $14,308 to $28,619 for each fraudulent claim[68]. - The company believes it is in material compliance with HIPAA regulations, which protect the privacy and security of patient information, although compliance costs may increase due to proposed regulatory changes[73][74]. Workforce and Diversity - The company has approximately 25,500 employees as of December 31, 2024, with 19,192 employed full-time[91]. - Approximately 73% of the company's employees are women and about 50% are people of color, reflecting its commitment to diversity[93]. - The company faces rising labor costs and turnover, leading to increased reliance on more expensive contract labor[95]. Market Trends and Competition - Legislative trends indicate a growing market for behavioral healthcare services, with 58.7 million U.S. adults suffering from mental illness in 2023, highlighting increased demand for services[24]. - The healthcare industry is highly competitive, with principal competitors including Universal Health Services, Inc. and other behavioral healthcare service companies[89]. Environmental and Safety Compliance - The company is subject to various federal, state, and local environmental laws, which may impose compliance costs and liabilities[84]. - The company has a statutory workers' compensation program with a $0.5 million deductible per accident and professional liability coverage of up to $7.0 million per claim[83]. - The company is committed to providing a safe, therapeutic environment for patients and offers workplace safety training programs for employees[98].