Acadia Healthcare Company, Inc. - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - FORM 8-K - Acadia Healthcare Company, Inc.	d917242d8k.htm
EX-99.2 - EX-99.2 - Acadia Healthcare Company, Inc.	d917242dex992.htm
EX-23.1 - EX-23.1 - Acadia Healthcare Company, Inc.	d917242dex231.htm

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The tables below set forth the unaudited pro forma condensed combined financial data for Acadia Healthcare Company, Inc. (“Acadia”) giving effect to certain acquisitions as further described below and give effect to each transaction as if it occurred on January 1, 2014.

With respect to the issuance of common stock and the use of a portion of the proceeds to repay outstanding indebtedness on the Senior Secured Revolving Line of Credit under our Amended and Restated Senior Credit Facility, the earnings per share calculations reflect only the shares whose proceeds are being used to effect the adjustments made in the income statement (2,723,044 shares based on an assumed public offering price of $68.50 per share, which was the closing price of our common stock on April 30, 2015, as reported on The Nasdaq Global Select Market). The additional earnings per share data set forth below in the unaudited pro forma condensed combined financial data is based on the assumption that Acadia will issue 4,500,000 shares of common stock.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2014 combines the audited consolidated statement of operations of Acadia for the year ended December 31, 2014, the unaudited consolidated statement of operations of Partnerships in Care for the six months ended June 30, 2014, the audited consolidated statement of operations of CRC for the year ended December 31, 2014 and the unaudited consolidated statement of operations for Acadia’s other completed acquisitions for the period from January 1, 2014 to the earlier of the acquisition date or December 31, 2014.

The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2015 combines the unaudited consolidated statement of operations of Acadia for that period, the unaudited consolidated statement of operations of CRC for the period prior to February 11, 2015, the acquisition date, and the unaudited consolidated statement of operations for Acadia’s other completed acquisitions for the periods prior to the respective acquisition dates.

The unaudited pro forma condensed combined financial data has been prepared using the acquisition method of accounting for business combinations under GAAP. The adjustments necessary to fairly present the unaudited pro forma condensed combined financial data have been made based on available information and in the opinion of management are reasonable. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with this unaudited pro forma condensed combined financial data.

The unaudited pro forma condensed combined financial data is for illustrative purposes only and does not purport to represent what our financial position or results of operations actually would have been had the events noted above in fact occurred on the assumed dates or to project our financial position or results of operations for any future date or future period.

The unaudited pro forma condensed combined financial data should be read in conjunction with the consolidated financial statements and notes thereto of Acadia, Partnerships in Care and CRC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2014

(In thousands, except per share amounts)


	Acadia(1)			Partnerships in Care(5)			CRC(2)			Completed Acquisitions(3)			Pro Forma Adjustments			Notes			Pro Forma Combined
Revenue before provision for doubtful accounts	$	1,030,784		$	142,312		$	460,040		$	73,934								$	1,707,070
Provision for doubtful accounts		(26,183	)		3			—			(261	)		(7,872	)		(7	)		(34,313	)

Revenue		1,004,601			142,315			460,040			73,673			(7,872	)					1,672,757
Salaries, wages and benefits		575,412			84,641			227,692			34,305									922,050
Professional fees		52,482			6,737			40,551			4,968									104,738
Supplies		48,422			4,868			20,858			2,795									76,943
Rents and leases		12,201			909			17,538			3,619									34,267
Other operating expenses		110,654			11,644			51,517			7,162			(1,122	)		(11	)		179,855
Depreciation and amortization		32,667			11,731			21,290			2,065			(10,747	)		(8	)		57,006
Interest expense, net		48,221			43,084			72,718			1,432			(56,600	)		(9	)		108,855
Provision for doubtful accounts		—			—			7,872			—			(7,872	)		(7	)		—
Debt extinguishment costs		—			—			11,622			—									11,622
Gain on foreign currency derivatives		(15,262	)		—			—			—			15,262			(10	)		—
Goodwill and asset impairments		—			—			1,089			—									1,089
Transaction-related expenses		13,650			—			7,686			—			(21,336	)		(11	)		—

Total expenses		878,447			163,614			480,433			56,346			(82,415	)					1,496,425
Income (loss) from continuing operations before income taxes		126,154			(21,299	)		(20,393	)		17,327			74,543						176,332
Provision (benefit) for income taxes		42,922			30			6,576			5,181			1,717			(12	)		56,426

Income (loss) from continuing operations	$	83,232		$	(21,329	)	$	(26,969	)	$	12,146		$	72,826					$	119,906

Earnings per share—income (loss) from continuing operations:
Basic	$	1.51																	$	1.77

Diluted	$	1.50																	$	1.76

Weighted average shares:
Basic		55,063												12,762			(13a	)		67,825
Diluted		55,327												12,762			(13a	)		68,089

Additional earnings per share data
Earnings per share—income (loss) from continuing operations:
Basic	$	1.51																	$	1.72

Diluted	$	1.50																	$	1.72

Weighted average shares:
Basic		55,063												14,539			(13b	)		69,602
Diluted		55,327												14,539			(13b	)		69,866

See accompanying notes to unaudited pro forma financial information.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Three Months Ended March 31, 2015

(In thousands, except per share amounts)


	Acadia(1)			CRC(2)			Completed Acquisitions(4)			Pro Forma Adjustments			Notes			Pro Forma Combined
Revenue before provision for doubtful accounts	$	374,158		$	53,014		$	12,428								$	439,600
Provision for doubtful accounts		(8,375	)		—			(10	)		(1,206	)		(7	)		(9,591	)

Revenue		365,783			53,014			12,418			(1,206	)					430,009
Salaries, wages and benefits		205,871			31,288			6,284									243,443
Professional fees		22,427			5,136			895									28,458
Supplies		16,254			2,583			465									19,302
Rents and leases		5,886			2,023			564									8,473
Other operating expenses		40,527			5,708			1,183									47,418
Depreciation and amortization		13,104			2,459			333			(571	)		(8	)		15,325
Interest expense, net		22,146			8,883			134			(3,567	)		(9	)		27,596
Provision for doubtful accounts		—			1,206			—			(1,206	)		(7	)		—
Gain on foreign currency derivatives		(53	)		—			—			53			(10	)		—
Transaction-related expenses		18,416			1,712			—			(20,128	)		(11	)		—

Total expenses	$	344,578			60,998			9,858			(25,419	)					390,015
Income (loss) from continuing operations before income taxes		21,205			(7,984	)		2,560			24,213						39,994
Provision (benefit) for income taxes		6,613			(3,034	)		632			8,587			(12	)		12,798

Income (loss) from continuing operations	$	14,592		$	(4,950	)	$	1,928		$	15,626					$	27,196

Earnings per share—income (loss) from continuing operations:
Basic	$	0.23														$	0.40

Diluted	$	0.23														$	0.40

Weighted average shares:
Basic		62,530									5,445			(13a	)		67,975
Diluted		62,894									5,445			(13a	)		68,339

Additional earnings per share data
Earnings per share data—income (loss) from continuing operations:
Basic	$	0.23														$	0.39

Diluted	$	0.23														$	0.39

Weighted average shares:
Basic		62,530									7,222			(13b	)		69,752
Diluted		62,894									7,222			(13b	)		70,116

See accompanying notes to unaudited pro forma financial information.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(In thousands, except per share amounts)

(1)	The amounts in this column represent, for Acadia, actual results for the periods presented.

(2)	The amounts in this column represent, for CRC, actual results for the periods presented prior to the acquisition date of February 11, 2015.

(3)

The amounts in this column represent pro forma adjustments for Acadia’s and CRC’s completed acquisitions of (a) Habit, (b) McCallum Place, (c) Quality Addiction Management, Inc. (“QAM”), (d) two facilities from Choice Lifestyles (“Choice”), (e) Pastoral Care Group (“Pastoral”) and (f) Mildmay Oaks (none of which were individually material) up to the respective acquisition dates.

(4)	The amounts in this column represent pro forma adjustments for Acadia’s completed acquisitions of (a) QAM, (b) Choice, (c) Pastoral and (d) Mildmay Oaks (none of which were individually material) up to the respective acquisition dates.

(5)

The historical financial statements of Partnerships in Care are prepared in accordance with U.K. GAAP and are adjusted to: (i) reconcile the financial statements to U.S. GAAP and (ii) translate the financial statements to U.S. dollars based on the historical exchange rates below. The Partnerships in Care financial statements have been reclassified to conform to Acadia’s financial statement presentation.


		GBP/USD
Six months ended June 30, 2014	Average Rate	$	1.6687

The amounts below represent results for the six months ended June 30, 2014.


	Partnerships in Care (in £, in U.K. GAAP)			U.S. GAAP Adjustments			Notes			Partnerships in Care (in £, in U.S. GAAP)			Partnerships in Care (in $, in U.S. GAAP)
Revenue before provision for doubtful accounts	£	85,283		£						£	85,283		$	142,312
Provision for doubtful accounts		2									2			3

Revenue		85,285									85,285			142,315
Salaries, wages and benefits		51,601			(878	)		(6	)		50,723			84,641
Professional fees		4,037									4,037			6,737
Supplies		2,917									2,917			4,868
Rents and leases		545									545			909
Other operating expenses		6,978									6,978			11,644
Depreciation and amortization		5,991			1,039			(6	)		7,030			11,731
Interest expense, net		31,979			(6,160	)		(6	)		25,819			43,084
Transaction-related expenses		—									—			—

Total expenses		104,048			(5,999	)					98,049			163,614
(Loss) income from continuing operations before income taxes		(18,763	)		5,999						(12,764	)		(21,299	)
(Benefit) provision for income taxes		(1,063	)		1,081			(6	)		18			30

Loss from continuing operations	£	(17,700	)	£	4,918					£	(12,782	)	$	(21,329	)

(6)

Reflects adjustments to reconcile U.K. GAAP to U.S. GAAP including (i) a property and equipment impairment charge and related depreciation expense adjustment, which would not have been recorded under U.S. GAAP; (ii) amortization of an interest rate swap, which would not have been recorded under U.S. GAAP; (iii) a share-based payment charge, which would not have been recorded under U.S. GAAP; and (iv) the tax impact of the previous adjustments.

(7)	Reflects reclassification of CRC provision for doubtful accounts to conform to Acadia historical presentation.

(8)	Represents the adjustments to depreciation and amortization expense as a result of recording the property and equipment and intangible assets at preliminary estimates of fair value as of the date of the acquisitions, as follows:


	Amount		Useful Lives (in years)		Monthly Depreciation		Year Ended December 31, 2014			Three Months Ended March 31, 2015
Partnerships in Care:
Land	$	72,086		N/A	$	—	$	—		$	—
Building and improvements		437,195		30-50		1,046		6,275			—
Equipment		18,909		3-10		354		2,127			—

		528,190				1,400		8,402			—
Indefinite-lived intangible assets		651		N/A		—		—			—

		651				—		—			—
Partnerships in Care depreciation and amortization expense								8,402			—
CRC:
Land	$	24,597		N/A	$	—	$	—		$	—
Building and improvements		87,638		10-40		575		6,900			939
Equipment		24,110		3-10		581		6,972			949
Construction in progress		3,133		N/A		—		—			—

		139,478				1,156		13,872			1,888
Indefinite-lived intangible assets		37,000		N/A		—		—			—

		37,000				—		—			—
CRC depreciation and amortization expense								13,872			1,888

Total depreciation and amortization expense								22,274			1,888
Less: historical depreciation and amortization expense of Partnerships in Care								(11,731	)		—
Less: historical depreciation and amortization expense of CRC								(21,290	)		(2,459	)

Depreciation and amortization expense adjustment							$	(10,747	)	$	(571	)

(9)	Represents an adjustment to interest expense to give effect to the following transactions:


	Year Ended December 31, 2014			Three Months Ended March 31, 2015
Interest related to 5.125% Senior Notes due 2022	$	7,688		$	—
Interest related to 5.625% Senior Notes due 2023		21,094			2,871
Interest related to Term Loan A		8,225			—
Interest related to Term Loan B		22,500			3,063
Interest related to change in the applicable interest rate on term A loans based on Acadia’s consolidated leverage ratio		1,141			285
Interest related to revolving line of credit paydown, net of borrowing		(3,915	)		(1,605	)
Interest related to amortization of deferred financing costs		3,901			836
Less: historical interest expense of Partnerships in Care		(43,084	)		—
Less: historical interest expense of CRC		(72,718	)		(8,883	)
Less: historical interest expense of other completed acquisitions		(1,432	)		(134	)

Interest expense adjustment	$	(56,600	)	$	(3,567	)

(10)	Represents adjustments to eliminate the gain on foreign currency derivatives, which are related to the acquisition of Partnerships in Care on July 1, 2014 and the acquisitions of Choice, Pastoral and Mildmay Oaks on April 1, 2015.

(11)	Represents adjustments to eliminate transaction-related expenses incurred by Acadia, Partnerships in Care, Habit and CRC related to the acquisitions.

(12)	Reflects adjustments to income taxes to reflect the impact of the above pro forma adjustments applying combined U.S. federal and state statutory tax rates and U.K. statutory rates.

(13)

Represents adjustments to weighted average shares used to compute basic and diluted earnings per share to reflect the effect of 8,881,794 shares of common stock issued by Acadia in June 2014, 5,975,326 shares of common stock issued by Acadia on February 11, 2015 related to the acquisition of CRC and the effect of an estimated 4,500,000 shares of common stock to be issued by Acadia, as follows:

(a)

Earnings per share calculations reflect only the shares whose proceeds are being used to effect the adjustments made in the income statement, which results in 2,723,044 shares of the 4,500,000 shares offered hereby being included in the earnings per share calculations.

(b)

Additional earnings per share data reflects all of the 4,500,000 shares offered hereby.

Acadia Healthcare Company, Inc. - FORM 8-K - EX-99.1 - May 4, 2015

Attached files

Acadia Healthcare Company, Inc. Reports