• Total Revenue: $774 million for Q4 2024, a 4.2% increase over Q4 2023; $3.1 billion for the full year, a 7.7% increase over 2023.
• Same Facility Revenue Growth: 4.7% in Q4 2024 compared to Q4 2023.
• Same Facility Patient Days Growth: 3.2% in Q4 2024.
• Adjusted EBITDA: $153.1 million for Q4 2024; Adjusted EBITDA margin of 19.8% compared to 22.8% in Q4 2023.
• Adjusted Income Per Share: $0.64 for Q4 2024, compared to $0.85 in Q4 2023.
• Cash and Cash Equivalents: $76.3 million as of December 31, 2024.
• Available Credit Facility: $226.5 million available under a $600 million revolving credit facility.
• Net Leverage Ratio: Approximately 2.7 as of December 31, 2024.
• New Beds Operational: 577 newly constructed beds became operational in Q4 2024.
• Startup Losses: $11.2 million in Q4 2024, a $6 million increase year-over-year.
• Revenue Impact from Facility Closure: $7 million revenue impact and $5 million EBITDA impact in Q4 2024.
• 2025 Revenue Guidance: Expected to be in the range of $3.3 billion to $3.4 billion.
• 2025 Adjusted EBITDA Guidance: Expected to be in the range of $675 million to $725 million.
• 2025 Adjusted Earnings Per Share Guidance: Expected to be in the range of $2.50 to $2.80.
• 2025 Operating Cash Flow Guidance: Expected to be in the range of $460 million to $510 million.
• 2025 Capital Spending Guidance: Expected to be in the range of $630 million to $690 million.

• Warning! GuruFocus has detected 1 Warning Sign with ACHC.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Acadia Healthcare Co Inc (NASDAQ:ACHC) reported a 4.2% increase in total revenue for the fourth quarter of 2024, reaching $774 million.
• For the full year 2024, the company delivered over $3.1 billion in revenue, marking a 7.7% increase over 2023.
• Same facility patient days grew by 3.2% in the fourth quarter, with potential growth above 5% excluding underperforming facilities.
• The company benefited from a more stable labor environment in 2024, supported by initiatives in recruitment, retention, and employee engagement.
• Acadia Healthcare Co Inc (NASDAQ:ACHC) completed construction on approximately 1,300 beds in 2024, with 776 new beds becoming operational, including four new acute inpatient hospitals.

Negative Points

• Adjusted EBITDA margin for the fourth quarter of 2024 was 19.8%, down from 22.8% in the same quarter last year.
• The company recorded a $14 million increase to reserves for self-insured professional and general liability claims, impacting financial results.
• Startup losses related to new facilities were $11.2 million in the fourth quarter of 2024, a $6 million increase compared to the fourth quarter of 2023.
• A facility closure in the fourth quarter resulted in a $7 million revenue impact and a $5 million EBITDA impact.
• The company anticipates a $20 million EBITDA headwind in 2025 from a small group of underperforming facilities, with no material improvement assumed in their performance.

Q & A Highlights

Q: Can you provide details on your financing plans for 2025, considering the capital commitments and potential cash burn? A: Heather Dixon, CFO, mentioned that Acadia is finalizing a refinancing of existing bank facilities and upsizing the revolver to $1 billion. The company expects to return to cash flow positive by the end of 2026, driven by EBITDA contributions from new beds and reduced pre-opening costs. CapEx is expected to decline materially over 2025 and 2026, potentially by around $100 million.

Q: The first quarter guidance seems to contribute less to the full year than usual. Can you explain the factors affecting this? A: Heather Dixon explained that the first quarter will see high startup losses, with about $20 million expected, representing 35% to 40% of the full-year startup costs. Supplemental payments are also expected to be down by $10 million to $15 million year over year in the first quarter but will be up for the full year.

Q: How should we think about the long-term growth outlook, especially with the 10% bed additions in recent years? A: Heather Dixon stated that revenue growth is expected to be 7% to 9% and EBITDA growth 8% to 10% over the next few years. The company expects 2026 to be at the high end of this range, driven by mid-single-digit volume growth and normalized rate growth in the low to mid-single digits.

Q: Can you update us on the referral activity and its impact on volume growth? A: CEO Christopher Hunter noted that Acadia has been actively engaging with referral sources to correct misunderstandings from past media reports. The referral issue is less of a challenge now, allowing focus on a smaller number of underperforming facilities.

Q: What are the plans for the $300 million share repurchase program, and how does it relate to leverage targets? A: Christopher Hunter stated that the share repurchase program is in place to be utilized, with plans to naturally de-lever as EBITDA grows. Heather Dixon added that the company is comfortable with its leverage ratio and expects it to decrease as free cash flow improves by 2026.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.