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Acadia Healthcare (ACHC) Shares Up 12% on Q2 Earnings Beat
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Shares of Acadia Healthcare Company, Inc. (ACHC - Free Report) gained 11.6% since it reported second-quarter 2024 earnings on Jul 31. The results benefited on the back of growing patient volumes, which remain the most significant contributor to a healthcare facility operator’s top line.
Higher patient days, sustained demand for behavioral health services and impressive growth-related initiatives remained other tailwinds for the company. Management anticipates further volume growth in the second half of 2024 as the recently added facilities and beds continue to scale up. However, the upside was partly offset by an elevated expense level.
ACHC reported adjusted second-quarter earnings of 91 cents per share, which beat the Zacks Consensus Estimate by 3.4%. However, the bottom line dipped 1.1% year over year.
Total revenues advanced 8.8% year over year to $796 million. The top line outpaced the consensus mark by 1.5%.
Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise
Same-facility revenues of $776.1 million rose 8.3% year over year but fell short of our estimate of $776.4 million. The year-over-year improvement was driven by 5.6% growth in revenue per patient day and a 2.6% increase in patient days.
Admissions inched up 0.7% year over year. The average length of stay grew 1.8% year over year but missed our growth estimate of 2%.
In the overall facility, patient days advanced 2.6% year over year while admissions inched up 1% year over year. Revenue per patient day improved 6.1% year over year, which was higher than our growth estimate of 6%. The average length of stay rose 1.6% year over year but lagged our growth estimate of 2.9%.
Adjusted EBITDA climbed 7.6% year over year to $187.6 million but came lower than our estimate of $190.1 million. Adjusted EBITDA margin remained flat year over year at 29.5%.
Total expenses of $689.6 million escalated 8.6% year over year, higher than our estimate of $674.9 million. The year-over-year increase was due to higher salaries, wages and benefits, professional fees, other operating costs and interest expenses.
Financial Update (as of Jun 30, 2024)
Acadia Healthcare exited the second quarter with cash and cash equivalents of $77.2 million, which decreased 22.9% from the 2023-end level. It had a leftover capacity of $371.5 million under its $600 million revolving credit facility at the second-quarter end.
Total assets of $5.7 billion increased 6% from the figure at 2023 end.
Long-term debt amounted to $1.8 billion, which escalated 32.2% from the figure as of Dec 31, 2023. The current portion of long-term debt was $66.6 million.
Total equity of $3 billion advanced 6.1% from the 2023-end level. The net leverage ratio was around 2.5X at the second-quarter end.
Net cash used in operations totaled $150.1 million in the first half of 2024 against net cash generated from operating activities of $208.2 million in the prior-year comparable period.
Business Update
Acadia Healthcare added 37 beds to its existing facilities in the second quarter. It also inaugurated one acute care hospital, named Agave Ridge Behavioral Hospital, in Arizona.
2024 Guidance Updated
Revenues are projected to lie between $3.18 billion and $3.225 billion compared with the earlier guided range of $3.18-$3.25 billion. The mid-point of the updated outlook indicates an improvement of 9.3% from the 2023 figure.
Adjusted EBITDA is estimated to be in the range of $735-$765 million compared with the previous guidance of $730-$770 million. The mid-point of the revised outlook indicates 10.7% growth from the 2023 figure.
Adjusted earnings per share (EPS) are predicted to be between $3.45 and $3.65 compared with the earlier guided range of $3.40-$3.70.
Interest expenses continue to be estimated within the band of $110-$120 million. Depreciation and amortization expenses continue to be anticipated in the $150-$160 million band. The tax rate is still expected within 24.5-25.5%. Stock compensation expenses are still expected to lie between $40 million and $45 million.
Operating cash flows are still forecasted within the range of $525-$575 million. Expansion capital expenditure is still anticipated between $425 million and $475 million. Maintenance and IT capital expenditures continue to be expected in the range of $90-$110 million.
Management still estimates to add more than 400 beds to existing facilities in 2024. It aims to inaugurate a maximum of 14 comprehensive treatment centers. ACHC anticipates opening four inpatient facilities in the second half of 2024, which comprise two new joint venture facilities.
Of the Medical sector players that have reported second-quarter 2024 results so far, the bottom-line results of Tenet Healthcare Corporation (THC - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and The Ensign Group, Inc. (ENSG - Free Report) beat the respective Zacks Consensus Estimate.
Tenet Healthcare reported second-quarter 2024 adjusted EPS of $2.31, which outpaced the Zacks Consensus Estimate by 22.2%. The bottom line soared 60.4% year over year. Net operating revenues of $5.103 billion inched up 0.4% year over year. The top line beat the consensus mark by 2.5%. Adjusted net income of $226 million climbed 46.8% year over year. Adjusted EBITDA was $945 million, which advanced 12.1% year over year. Adjusted EBITDA margin of 18.5% improved 190 bps year over year.
The Hospital Operations and Services segment’s net operating revenues tumbled 4.3% year over year to $3.96 billion. On a same-hospital basis, net patient service revenues advanced 8.2% year over year. The Ambulatory Care segment recorded net operating revenues of $1.14 billion, which rose 21.1% year over year.
Universal Health reported second-quarter adjusted EPS of $4.31, which beat the Zacks Consensus Estimate by 27.9%. The bottom line rose 70.4% from the year-ago period. Net revenues amounted to $3.9 billion, which rose from $3.6 billion a year ago. The top line outpaced the consensus mark by 1.5%. Adjusted EBITDA net of NCI rose 35.9% year over year to $578.7 million. In the Acute Care Hospital Services unit, adjusted admissions (adjusted for outpatient activity) increased 3.4% year over year on a same-facility basis. Adjusted patient days rose 1.6% year over year. Net revenues stemming from Universal Health’s acute care services improved 6.6% year over year on a same-facility basis.
In the Behavioral Health Care Services segment, adjusted admissions declined 0.4% year over year on a same-facility basis. Meanwhile, adjusted patient days increased 1.4% year over year, lower than our model estimate of 1.9%. On a same-facility basis, net revenues derived from the behavioral healthcare services of UHS increased 11% year over year.
Ensign Group reported second-quarter 2024 EPS of $1.32, which beat the Zacks Consensus Estimate by 2.3%. The bottom line increased 13.8% year over year. Operating revenues of $1.04 billion improved 12.5% year over year. The top line outpaced the consensus mark by 2%. Ensign Group’s adjusted net income grew 15.3% year over year to $76.4 million.
Same-store occupancy improved 280 bps year over year while transitioning occupancy expanded 430 bps year over year. The Skilled Services segment’s revenues rose 12.1% year over year to $991.3 million. Segment income of $122.2 million improved 4.4% year over year. Skilled nursing and campus operations of the segment totaled 272 and 29, respectively, at the second-quarter end. In the Standard Bearer unit, Rental revenues amounted to $23.4 million, which grew 17.3% year over year.
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Acadia Healthcare (ACHC) Shares Up 12% on Q2 Earnings Beat
Shares of Acadia Healthcare Company, Inc. (ACHC - Free Report) gained 11.6% since it reported second-quarter 2024 earnings on Jul 31. The results benefited on the back of growing patient volumes, which remain the most significant contributor to a healthcare facility operator’s top line.
Higher patient days, sustained demand for behavioral health services and impressive growth-related initiatives remained other tailwinds for the company. Management anticipates further volume growth in the second half of 2024 as the recently added facilities and beds continue to scale up. However, the upside was partly offset by an elevated expense level.
ACHC reported adjusted second-quarter earnings of 91 cents per share, which beat the Zacks Consensus Estimate by 3.4%. However, the bottom line dipped 1.1% year over year.
Total revenues advanced 8.8% year over year to $796 million. The top line outpaced the consensus mark by 1.5%.
Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise
Acadia Healthcare Company, Inc. price-consensus-eps-surprise-chart | Acadia Healthcare Company, Inc. Quote
Q2 Operations
Same-facility revenues of $776.1 million rose 8.3% year over year but fell short of our estimate of $776.4 million. The year-over-year improvement was driven by 5.6% growth in revenue per patient day and a 2.6% increase in patient days.
Admissions inched up 0.7% year over year. The average length of stay grew 1.8% year over year but missed our growth estimate of 2%.
In the overall facility, patient days advanced 2.6% year over year while admissions inched up 1% year over year. Revenue per patient day improved 6.1% year over year, which was higher than our growth estimate of 6%. The average length of stay rose 1.6% year over year but lagged our growth estimate of 2.9%.
Adjusted EBITDA climbed 7.6% year over year to $187.6 million but came lower than our estimate of $190.1 million. Adjusted EBITDA margin remained flat year over year at 29.5%.
Total expenses of $689.6 million escalated 8.6% year over year, higher than our estimate of $674.9 million. The year-over-year increase was due to higher salaries, wages and benefits, professional fees, other operating costs and interest expenses.
Financial Update (as of Jun 30, 2024)
Acadia Healthcare exited the second quarter with cash and cash equivalents of $77.2 million, which decreased 22.9% from the 2023-end level. It had a leftover capacity of $371.5 million under its $600 million revolving credit facility at the second-quarter end.
Total assets of $5.7 billion increased 6% from the figure at 2023 end.
Long-term debt amounted to $1.8 billion, which escalated 32.2% from the figure as of Dec 31, 2023. The current portion of long-term debt was $66.6 million.
Total equity of $3 billion advanced 6.1% from the 2023-end level. The net leverage ratio was around 2.5X at the second-quarter end.
Net cash used in operations totaled $150.1 million in the first half of 2024 against net cash generated from operating activities of $208.2 million in the prior-year comparable period.
Business Update
Acadia Healthcare added 37 beds to its existing facilities in the second quarter. It also inaugurated one acute care hospital, named Agave Ridge Behavioral Hospital, in Arizona.
2024 Guidance Updated
Revenues are projected to lie between $3.18 billion and $3.225 billion compared with the earlier guided range of $3.18-$3.25 billion. The mid-point of the updated outlook indicates an improvement of 9.3% from the 2023 figure.
Adjusted EBITDA is estimated to be in the range of $735-$765 million compared with the previous guidance of $730-$770 million. The mid-point of the revised outlook indicates 10.7% growth from the 2023 figure.
Adjusted earnings per share (EPS) are predicted to be between $3.45 and $3.65 compared with the earlier guided range of $3.40-$3.70.
Interest expenses continue to be estimated within the band of $110-$120 million. Depreciation and amortization expenses continue to be anticipated in the $150-$160 million band. The tax rate is still expected within 24.5-25.5%. Stock compensation expenses are still expected to lie between $40 million and $45 million.
Operating cash flows are still forecasted within the range of $525-$575 million. Expansion capital expenditure is still anticipated between $425 million and $475 million. Maintenance and IT capital expenditures continue to be expected in the range of $90-$110 million.
Management still estimates to add more than 400 beds to existing facilities in 2024. It aims to inaugurate a maximum of 14 comprehensive treatment centers. ACHC anticipates opening four inpatient facilities in the second half of 2024, which comprise two new joint venture facilities.
Zacks Rank
Acadia Healthcare currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported second-quarter 2024 results so far, the bottom-line results of Tenet Healthcare Corporation (THC - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and The Ensign Group, Inc. (ENSG - Free Report) beat the respective Zacks Consensus Estimate.
Tenet Healthcare reported second-quarter 2024 adjusted EPS of $2.31, which outpaced the Zacks Consensus Estimate by 22.2%. The bottom line soared 60.4% year over year. Net operating revenues of $5.103 billion inched up 0.4% year over year. The top line beat the consensus mark by 2.5%. Adjusted net income of $226 million climbed 46.8% year over year. Adjusted EBITDA was $945 million, which advanced 12.1% year over year. Adjusted EBITDA margin of 18.5% improved 190 bps year over year.
The Hospital Operations and Services segment’s net operating revenues tumbled 4.3% year over year to $3.96 billion. On a same-hospital basis, net patient service revenues advanced 8.2% year over year. The Ambulatory Care segment recorded net operating revenues of $1.14 billion, which rose 21.1% year over year.
Universal Health reported second-quarter adjusted EPS of $4.31, which beat the Zacks Consensus Estimate by 27.9%. The bottom line rose 70.4% from the year-ago period. Net revenues amounted to $3.9 billion, which rose from $3.6 billion a year ago. The top line outpaced the consensus mark by 1.5%. Adjusted EBITDA net of NCI rose 35.9% year over year to $578.7 million. In the Acute Care Hospital Services unit, adjusted admissions (adjusted for outpatient activity) increased 3.4% year over year on a same-facility basis. Adjusted patient days rose 1.6% year over year. Net revenues stemming from Universal Health’s acute care services improved 6.6% year over year on a same-facility basis.
In the Behavioral Health Care Services segment, adjusted admissions declined 0.4% year over year on a same-facility basis. Meanwhile, adjusted patient days increased 1.4% year over year, lower than our model estimate of 1.9%. On a same-facility basis, net revenues derived from the behavioral healthcare services of UHS increased 11% year over year.
Ensign Group reported second-quarter 2024 EPS of $1.32, which beat the Zacks Consensus Estimate by 2.3%. The bottom line increased 13.8% year over year. Operating revenues of $1.04 billion improved 12.5% year over year. The top line outpaced the consensus mark by 2%. Ensign Group’s adjusted net income grew 15.3% year over year to $76.4 million.
Same-store occupancy improved 280 bps year over year while transitioning occupancy expanded 430 bps year over year. The Skilled Services segment’s revenues rose 12.1% year over year to $991.3 million. Segment income of $122.2 million improved 4.4% year over year. Skilled nursing and campus operations of the segment totaled 272 and 29, respectively, at the second-quarter end. In the Standard Bearer unit, Rental revenues amounted to $23.4 million, which grew 17.3% year over year.