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Acadia Healthcare(ACHC) - 2024 Q4 - Earnings Call Transcript
ACHCAcadia Healthcare(ACHC)2025-02-28 21:34
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Financial Data and Key Metrics Changes - Total revenue for Q4 2024 increased by 4.2% year-over-year to 774million,withfull−yearrevenueexceeding774 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 153.1million,withanadjustedEBITDAmarginof19.8153.1 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 0.85fortheprioryearperiod[25]BusinessLineDataandKeyMetricsChanges−Samefacilityrevenuegrewby4.70.85 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 6millionyear−over−yearincrease[23]MarketDataandKeyMetricsChanges−Thecompanyreportedamorestablelaborenvironmentin2024,whichsupportedrecruitmentandretentioninitiatives[9]−Thecompanyanticipatesaddingbetween800and1,000totalbedsin2025,continuingtoaddressthementalhealthandaddictioncrisisintheU.S.[18][19]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedontransformingpatientcareandhasinvestedheavilyintechnologytoenhancesafetyandcaredelivery[11][12]−Acadia′sgrowthstrategyincludescompletingconstructiononapproximately1,300bedsin2024,with776ofthesebedsbecomingoperational[15][17]−Thecompanyaimstomaintainabalancedapproachtogrowthandfreecashflowgeneration,expectingtoreturntofreecashflowpositivebytheendof2026[42][43]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthecompany′sstrategyandgoals,emphasizingtheimportanceofexpandingaccesstospecializedcare[19]−Theoutlookfor2025includesrevenueguidanceof6 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 3.4billionandadjustedEBITDAguidanceof3.4 billion and adjusted EBITDA guidance of 675 million to 725million[27][28]−Managementacknowledgedchallengesfromunderperformingfacilitiesbutmaintainedacautiousapproachtoguidance[29][30]OtherImportantInformation−Thecompanyhasauthorizedanew725 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 630millionto630 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]