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Acadia Healthcare Beats on Q3 Earnings, Revenues; View Up

Acadia Healthcare CompanyACHC reported third-quarter 2015 adjusted earnings of 62 cents per share, which outpaced the Zacks Consensus Estimate of 57 cents. Adjusted earnings also surged 34.8% on a year-over-year basis, on the back of higher revenues.

Acadia Healthcare Company Inc. (ACHC) - Earnings Surprise | FindTheCompany

Revenues in the reported quarter escalated 62.9% on a year-over-year basis to $479.7 million, higher than the Zacks Consensus Estimate of $471 million. The revenue upside may be primarily attributed to the addition of beds at Acadia's existing facilities.

Same facility revenues increased 6.5% on a year-over-year basis to $304.2 million, mainly owing to an increase in patient days (up 6.8%) and admissions (up 13.5%). This growth helped Acadia Healthcare gain further operating leverage, which in turn propelled same facility EBITDA margin expansion of 40 basis points (bps).

During the reported quarter, Acadia Healthcare completed five acquisitions inclusive of eight inpatient facilities with a total of over 300 beds. The transactions amplified total acquisition activity over the 12 months (ended Sep 30, 2015) to 14 transactions for 66 inpatient facilities with about 3,300 beds and 88 comprehensive treatment centers (CTCs).

Adjusted EBITDA margin expanded 50 bps to 22.6%, on the back of higher revenues.

Cash and cash equivalents, as of Sep 30, 2015, amounted to $50.8 million. Long-term debt totaled $2.09 billion. For the nine months ending Sep 30, 2015, net cash from operating activities amounted to $142.1 million.

2015 Guidance

For full-year 2015, Acadia Healthcare raised its adjusted EPS projection. The company now expects adjusted EPS in the range of $2.20-$2.22, compared with the previous guidance of $2.15-$2.18.

Our Take

On a year-over-year basis, Acadia Healthcare delivered a stellar performance this quarter with respect to both the top and the bottom line. The company seems to be growing largely on the back of acquisitions along with reasonable organic growth. Meanwhile, we believe that the addition of new beds at its existing facilities in the U.S. and the U.K. bode well.

However, high debt levels are a concern, as according to us, it may hamper Acadia's financial position in the long run.

Zacks Rank and Key Picks

Currently, Acadia Healthcare carries a Zacks Rank #3 (Hold). Better-ranked stocks in the medical sector are Masimo MASI , Natus Medical BABY and Cesca Therapeutics KOOL . All the stocks sport a Zacks Rank #1 (Strong Buy).

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MASIMO CORP (MASI): Free Stock Analysis Report

NATUS MEDICAL (BABY): Free Stock Analysis Report

ACADIA HEALTHCR (ACHC): Free Stock Analysis Report

CESCA THERAP (KOOL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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