Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenue increased by 9.1% over the previous year's first quarter, reaching $768 million, driven by rate improvements and patient day growth.
- Adjusted EBITDA grew by 14.9% and adjusted EPS by 12.0% compared to the first quarter of 2023, reflecting strong operating leverage.
- Acadia Healthcare Co Inc (ACHC, Financial) is expanding its facilities, with 27 new beds added in the first quarter and plans to add over 400 beds throughout 2024.
- The company successfully opened new facilities and has plans for further expansion, including a 100-bed acute care hospital and up to 14 comprehensive treatment centers.
- Acadia Healthcare Co Inc (ACHC) continues to strengthen its leadership team with strategic hires, enhancing its expertise in behavioral health care.
Negative Points
- Experienced weaker-than-anticipated same-store patient volumes in the first quarter, primarily due to greater seasonality effects from the timing of spring break and Easter.
- Weaker admissions towards the end of the quarter were noted, particularly in military specialty programs, impacting overall performance.
- The company faces ongoing challenges from the opioid epidemic, which complicates treatment demands and service delivery.
- Despite overall growth, certain operational headwinds such as the timing of new military facility openings unexpectedly impacted patient admissions.
- The company's guidance for 2024 remains cautious, reflecting potential uncertainties in patient volume and revenue growth due to external factors.
Q & A Highlights
Q: Can you comment on the volume headwinds cited in the first quarter and your confidence in achieving the full-year revenue guidance?
A: (Christopher Howal Hunter, CEO) We experienced stronger seasonality in March due to the proximity of Easter to spring break, which was not anticipated. Despite this, we saw a recovery in April and expect to be back on track by the end of Q2. We anticipate mid-single-digit same-store patient day growth in the second half of the year, driven by the ramp-up of bed additions and joint ventures.
Q: How are pricing trends developing relative to your expectations for the year?
A: (Heather Dixon, CFO) The first quarter benefited from $7 million in one-time state supplemental payments, which contributed about 100 basis points to our revenue per patient day. For the full year, we expect revenue per patient day to grow in the mid-single-digit range, consistent with our initial guidance.
Q: Can you provide insights into the impact of closures or divestitures on your financials?
A: (Heather Dixon, CFO) We closed four facilities last year, impacting year-over-year comparisons. These closures included three specialty facilities and one acute facility, with an additional acute facility closure in Q1 of this year.
Q: What are your expectations for the regulatory environment surrounding Comprehensive Treatment Centers (CTCs) and opioid treatment?
A: (Christopher Howal Hunter, CEO) We do not anticipate significant changes that would materially impact our CTC business. Recent regulatory updates have been favorable, including continued take-home flexibilities and broader use of telehealth.
Q: How do you view the potential impact of legislative changes on methadone treatment access?
A: (Christopher Howal Hunter, CEO) We support increasing access to Opioid Use Disorder (OUD) care and believe our focus on quality and patient outcomes positions us well to adapt to any legislative changes. We continue to make significant investments in this area and work with lawmakers to expand access.
Q: Could you discuss the trends in labor costs and how they are impacting your operations?
A: (Heather Dixon, CFO) Our salary, wage, and benefits (SWB) per patient day tracked below 5%, reflecting our ongoing efforts in employee engagement and retention. We expect these costs to continue at a moderated rate throughout the year, contributing to EBITDA leverage.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
