Acadia Healthcare(US:ACHC)2025-05-13 13:32Financial Data and Key Metrics Changes - First quarter revenue was $770.5 million, slightly above the midpoint of the guidance range of $765 million to $775 million [6] - Adjusted EBITDA for the first quarter was $134.2 million, near the high end of the guidance range of $130 million to $135 million [6] - Same facility patient days grew by 2.2% in the first quarter, impacted by an unfavorable leap year effect of approximately 110 basis points [6][15] - Adjusted EBITDA margin was 17.4% for the first quarter [16] Business Line Data and Key Metrics Changes - Same facility revenue grew by 2.1% year-over-year, driven by patient day growth of 2.2% [15] - Same facility adjusted EBITDA was $191.6 million, with an adjusted EBITDA margin of 25.2% [17] - Start-up losses related to new facilities were higher year-over-year and sequentially, reflecting an increase in newly constructed facilities [16] Market Data and Key Metrics Changes - Acadia added 378 new beds in the first quarter, including 90 beds to existing facilities and 288 beds from two new facilities [7] - The company expects to add between 800 to 1,000 total beds for the full year 2025 [18] Company Strategy and Development Direction - Acadia's strategy focuses on high-quality care and clinical health outcomes, with a commitment to quality and safety as foundational elements [10] - The company aims to bridge the gap between physical and behavioral health care, enhancing relationships with referral sources and joint venture partners [7] - Acadia plans to continue expanding its market reach, with expectations to add between 600 to 800 beds annually from 2026 to 2028 [8][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for behavioral health services, particularly for higher acuity patients [39] - The company remains engaged in policy discussions to strengthen the behavioral health care system and expects continued support for essential care [12] - Management acknowledged the challenges posed by underperforming facilities but indicated that improvements are expected over time [17][19] Other Important Information - As of March 31, 2025, Acadia had $91.2 million in cash and cash equivalents and approximately $900 million available under its revolving credit facility [18] - The company repurchased approximately 1.6 million shares during the first quarter for a total of $47.3 million [18] Q&A Session Summary Question: Can you provide perspective on the progression of EBITDA and seasonality of the business this year? - Management highlighted several moving parts affecting EBITDA, including the timing of supplemental payments and the impact of start-up costs from new beds [25][28] Question: What are you seeing in Medicaid rate updates? - Management noted stable underlying rate growth and a cautious approach to assumptions due to policy uncertainties [32][34] Question: How is the broader demand environment for behavioral health? - Management indicated consistent demand for services, particularly for higher acuity patients, and ongoing efforts to meet that demand through new facilities and bed additions [39][41] Question: What is the expected return target for new facilities? - Management emphasized a disciplined approach to capital deployment, ensuring returns exceed the cost of capital [65][66] Question: How should we think about legal expenses moving forward? - Management is actively cooperating with ongoing investigations, and while it's difficult to predict future legal costs, significant preliminary work is being undertaken [73][74] Question: Can you provide guidance on Q2's percentage of annual guidance? - Management refrained from providing specific Q2 guidance but noted that supplemental payments, particularly from the Tennessee program, would be a significant swing factor [79][80] Question: What is happening with specialty revenue? - Management acknowledged a year-over-year decline in specialty revenue and indicated ongoing efforts to address this issue [104]