Behavioral health provider Acadia Healthcare saw the benefits of its acquisition spree, but also the costs of those deals, in its first-quarter financial results.
The Franklin, Tenn.-based chain reported an 81.6% increase in revenue but only a 12.3% increase in income from continuing operations as it spent significantly more money on deals compared with the previous year.
Acadia reported $14.6 million in income from continuing operations on $365.8 million in revenue for the first quarter, compared with $13 million in income from continuing operations on $201.4 million in revenue in the prior-year period. Acquisition-related costs climbed to $18.4 million in the quarter compared with $1.6 million a year ago.
Acadia has made six acquisitions over the past 12 months, including its $1.2 billion takeover of CRC Health Group, which closed this quarter. The deals, both in the U.S. and United Kingdom, added 61 inpatient facilities and 88 comprehensive treatment facilities.
The company also said it has acquired three more facilities in the U.K. this quarter: Pastoral Healthcare, Choice Lifestyle and Vista Healthcare, bringing its total facility count there to 29. The U.K. is attractive because the National Health Service is looking to private operators to help alleviate bed shortages at its own facilities.
The acquisitions have diversified Acadia's payer mix, President Brent Turner said at Avondale Partners' Behavioral Health Conference earlier this month. The share of revenue coming from government payers has been cut in half and now represents just 35% of the total. The U.K. now represents 18% of its revenue, he added.
But Acadia also said it saw same-facility revenue increase 8.5% as it added new beds to existing locations. The company plans to add 500 beds this year, up from 378 in 2014, Turner said.
The company also raised its earnings projections for 2015. It now expects earnings per share to fall in the range of $2.11 to $2.15, up from its earlier forecast of $2.03 to $2.10.
