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]

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].

Financial Performance - Acadia reported record annual revenue of $3.2 billion for 2024, reflecting a robust demand for behavioral healthcare services [4] - Fourth quarter revenue totaled $774.2 million, an increase of 4.2% compared to the fourth quarter of 2023 [6] - Net income for the year ended December 31, 2024, was $264,484, compared to a net loss of $15,661 in 2023 [25] - Revenue for the same facility increased by 4.7% to $765,014 in Q4 2024, compared to $730,836 in Q4 2023 [28] - Adjusted income attributable to Acadia Healthcare Company, Inc. for Q4 2024 was $59,151,000, a decrease of 25.5% from $79,770,000 in Q4 2023 [33] - Adjusted income per diluted share for Q4 2024 was $0.64, down from $0.87 in Q4 2023 [33] EBITDA and Guidance - Adjusted EBITDA for the fourth quarter was $153.1 million, including a $14.3 million professional liability reserve adjustment [6] - For 2025, Acadia provided revenue guidance of $3.3 to $3.4 billion and adjusted EBITDA guidance of $675 to $725 million [11] - Acadia's first quarter 2025 revenue guidance is set at $765 to $775 million, with adjusted EBITDA guidance of $130 to $135 million [12] - Adjusted EBITDA for Q4 2024 was $153,102,000, down 10.8% from $171,551,000 in Q4 2023 [31] - Same Facility Adjusted EBITDA for Q4 2024 was $196,412,000, a decrease of 6.4% compared to $209,828,000 in Q4 2023 [31] - Total Facility Adjusted EBITDA for the year ended December 31, 2024, was $849,411,000, an increase of 3.9% from $817,110,000 in 2023 [31] Capital Expenditures and Assets - The company incurred $690,385 in capital expenditures for the year ended December 31, 2024, compared to $424,133 in 2023, reflecting a significant increase of 62.7% [25] - Total assets increased to $5,956,915 in 2024, up from $5,358,841 in 2023, representing a growth of 11.1% [23] - Total liabilities rose to $2,766,084 in 2024, compared to $2,471,181 in 2023, indicating an increase of 11.9% [23] - Long-term debt increased to $1,880,093 in 2024 from $1,342,548 in 2023, marking a rise of 40% [23] Operational Metrics - The company operates a network of 262 facilities with approximately 11,850 beds, serving over 80,000 patients daily [16] - Patient days for the year ended December 31, 2024, were 3,098,132, a 3.2% increase from 3,002,524 in 2023 [28] - The average length of stay for patients remained stable at 16.0 days in Q4 2024, unchanged from Q4 2023 [28] - The company added 577 newly licensed beds in the fourth quarter, with a total of approximately 1,300 newly constructed beds for the year [5][8] - The company expects to add 800 to 1,000 new beds in 2025 [11] Shareholder Actions - Acadia announced a new $300 million share repurchase authorization [10] Costs and Expenses - Interest expense for Q4 2024 increased to $30,071,000, compared to $20,474,000 in Q4 2023, reflecting a rise of 46.8% [31] - Corporate general and administrative costs for the year ended December 31, 2024, were $140,427,000, slightly up from $139,457,000 in 2023 [31] - Government investigations costs for Q4 2024 were $24.986 million, up from $15.360 million in Q4 2023, and for the full year 2024, these costs totaled $30.620 million compared to $18.796 million in 2023 [46] - Termination and restructuring costs increased to $2.631 million in Q4 2024 from $1.887 million in Q4 2023, while the full year costs decreased to $1.362 million from $7.242 million [46] - Legal, accounting, and other acquisition-related costs were $1.436 million for Q4 2024, down from $9.294 million in Q4 2023, with full year costs at $11.172 million compared to $12.705 million [46] - Management transition costs significantly decreased to $513,000 in Q4 2024 from $8.693 million in Q4 2023, with full year costs dropping to $3.599 million from $23.283 million [46] - Total transaction, legal, and other costs for Q4 2024 were $29.566 million, a decrease from $35.234 million in Q4 2023, and for the full year, these costs were $46.753 million compared to $62.026 million in 2023 [46] Impairments and Adjustments - The company reported a loss on impairment of $5,817,000 in Q4 2024, compared to $1,096,000 in Q4 2023 [33] - The income tax effect of adjustments to income was 18.4% for Q4 2024 and 23.7% for Q4 2023, with full year rates at 23.4% and 24.6% respectively [52] - The company incurred non-cash impairment charges related to facility closures, which are excluded from Adjusted EBITDA as they do not reflect ongoing operations [47] - Gains from facility property sales are also excluded from Adjusted EBITDA, as they are not indicative of day-to-day business operations [48] - General and administrative costs related to corporate functions are excluded from Total Facility Adjusted EBITDA to provide a clearer view of core operational performance [49] - Approximately 0.9 million shares of restricted stock and common stock were excluded from the diluted earnings per share calculation for the year ended December 31, 2023, due to the net loss making them anti-dilutive [53]

Core Viewpoint - Acadia Healthcare Company, Inc. is expected to report its fourth-quarter 2024 results on February 27, 2025, with earnings estimated at 72 cents per share and revenues of $779.89 million, indicating a year-over-year revenue growth of 5% despite a decline in earnings per share [1][2]. Financial Estimates - The fourth-quarter earnings estimate has decreased by 2 cents per share over the past 60 days, reflecting a year-over-year decrease of 15.3% in earnings [2]. - For the full year 2024, the revenue estimate for Acadia Healthcare is $3.16 billion, representing a year-over-year increase of 7.9%, while the EPS estimate is $3.38, indicating a decline of approximately 1.7% year-over-year [3]. Recent Performance - Acadia Healthcare has consistently beaten consensus earnings estimates in the last four quarters, with an average surprise of 3.9% [3]. - However, the current model indicates uncertainty regarding an earnings beat for the upcoming quarter, as the company has an Earnings ESP of -5.44% and a Zacks Rank of 4 (Sell) [4]. Revenue Drivers - Revenue estimates for Acute Inpatient Psychiatric Facilities are projected to increase nearly 6% from the previous year's figure of $375.6 million, while Residential Treatment Centers are expected to see a 23% increase from $84.3 million [6]. - U.S. same-facility patient days are anticipated to grow by 4% year-over-year, with admissions expected to rise by 3.1% [7]. Expense Considerations - Rising expenses are likely to impact profit levels, with total expenses expected to increase by more than 6% in the upcoming quarter due to higher salaries, professional fees, and operating costs [8]. - Supply costs are also projected to rise due to increased utilization [8]. Other Revenue Insights - Revenue estimates for Specialty Treatment Facilities are expected to decrease by nearly 2% from $151.3 million, and Comprehensive Treatment Centers are projected to see a 1.2% decline from $131.6 million [9].