Acadia Healthcare (ACHC) Lack of Fourth Quarter Profits Due to High Operating Costs – March 1, 2022

Acadia Healthcare Company, Inc. (CCSA Free Report) reported fourth-quarter 2021 adjusted earnings of 67 cents per share, missing Zacks’ consensus estimate by a penny. Net income was also down 40.7% year-on-year.

Acadia Healthcare’s revenue improved to $593.5 million for the quarter under review, from $541.3 million a year ago. The top line also beat the consensus mark of 1.4%.

The weak fourth quarter profits were caused by higher operating expenses and lower admissions to the same facilities in the United States. The negative effects were partially offset by an increase in patient days and average length of stay.


Total U.S. same store revenue increased 10.7% year-over-year due to 2.7% improvement in patient days and 7.8% growth revenue per patient day. Still, admissions were down 0.4% year over year.

In the United States, revenue increased 9.6% year-over-year. While patient days jumped 2.2% year over year, revenue per patient day increased 7.3% and admissions increased slightly.

Adjusted EBITDA decreased 1.1% year over year to $156.1 million. Adjusted EBITDA margin also decreased by 290 basis points year over year to 26.3%.

Total expenses increased to $497.4 million from $465.2 million in the prior year quarter, primarily due to an increase in salaries, wages and benefits, professional fees, supplies and other expenses operating.

In the fourth quarter, the company added 13 beds to its existing operations. With 295 bed additions, it moved closer to its goal of adding about 300 beds to its existing facilities through 2021.

Financial update (as of December 31, 2021)

Cash and cash equivalents of $133.8 million were down 64.7% from the level recorded on December 31, 2020.

Total assets of $4,768.1 million plunged 26.6% from the level at the end of 2020.

Long-term debt totaled $1,478.6 million, a decrease of 50.2% from the figure as of December 31, 2020. The current portion of long-term debt was $18.6 million. At the end of the fourth quarter, its long-term debt to capitalization ratio was 37%.

Acadia Healthcare’s 2021 free operating cash flow was $374.5 million, down 43.2% year-over-year.

View 2022

Revenues are estimated at $2.55 billion to $2.60 billion for 2022, indicating an increase from the 2021 level of $2.3 billion. The company aims to add 300 beds to its existing facilities.

Adjusted EBITDA is expected to be between $575 and $610 million, an increase from $558.7 million in 2021. Adjusted earnings per share is expected to be between $2.85 and $3.15, calling an increase from the 2021 level of $2.56.

Operating cash flow (including $39 million in CARES Act reimbursements) is expected to be $350-400 million. While capital expenditures for expansions are expected to be between $290 and $340 million, the same for maintenance will likely be in the range of $50 million.

First quarter 2022

For the first quarter, the company expects revenue between $600 million and $610 million. Adjusted EBITDA is expected to be between $130 and $135 million. The ACHC expects earnings per share between 62 and 66 cents for the March quarter.

Zacks Rank

Acadia Healthcare currently has a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of some other companies

Of the players in the medical space that have reported fourth quarter results so far, Tenet Healthcare Corporation (THC free report), Mednax, Inc. (MARYLAND free report) and Community Health Systems, Inc. (CYH Free Report) beat Zacks consensus estimate for revenue.

Tenet Healthcare reported adjusted net earnings of $2.70 per share in the fourth quarter of 2021, which beat Zacks’ consensus estimate of 73.1%, driven by expense reductions and operational excellence. Profits from Tenet Healthcare’s hospital and other businesses increased year-over-year, which helped results.

Mednax reported fourth-quarter 2021 adjusted earnings of 50 cents per share, which beat Zacks’ consensus estimate of 21.9% due to an increase in patients. On a preliminary basis, Mednax expects 2022 Adjusted EBITDA to be at least $270 million.

Community Health Systems reported adjusted net income of $1.15 per share in the fourth quarter of 2021, beating Zacks’ consensus estimate by 130% due to lower net interest expense. CYH expects net earnings per share for 2022 in the range of $1 to $1.50.

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