On its fourth quarter and year-end 2020 earnings call in February, Acadia Healthcare (NASDAQ: ACHC) talked optimistically about its four-pronged future growth plan, largely fueled by the divestiture of its United Kingdom operations. Flash forward to the present, and the behavioral health care giant’s plans are already bearing fruit on its bottom line.
In Q1 2021, Acadia added 92 beds to existing facilities and opened two new outpatient medication-assisted treatment (MAT) centers. Plus, it made progress on its joint venture (JV) goals and entered a definitive agreement to acquire a new 61-bed psychiatric hospital in California.
“We believe there are significant opportunities for growth for Acadia as we continue to expand our market range through bed expansions, wholly owned de novo facilities, strategic joint ventures and acquisitions,” CEO Debbie Osteen said Friday during the company’s first-quarter earnings call. “Importantly, our balance sheet is very strong with ample capital to pursue these growth initiatives and also continue to make strategic investments in our business.”
Headquartered in Franklin, Tennessee, Acadia is the nation’s largest standalone behavioral health company, operating 227 behavioral healthcare facilities across 40 states and Puerto Rico.
In its latest earnings call, Acadia reported revenue for Q1 2021 at $551.2 million, up more than 8% from the same quarter last year. The strong performance caused the company to boost its revenue guidance for 2021 to between $2.24 and $2.29 billion, along with raising its expected diluted earnings per share for the year to between $2.30 to $2.55.
“These results demonstrate consistent and successful execution of our growth strategy, as well as strong cost management in the face of the impact from the resurgence of COVID,” Osteen said on the call.
Part of Acadia’s financial growth strategy involves the expansion of patient services, with approximately 300 total beds expected to have been added to its facilities before year’s end. The company is nearly a third of the way there with the beds it added in Q1.
Also of note for the quarter was Acadia completing construction of Glenwood Behavioral Health, an 80-bed hospital in Cincinnati that it has scheduled to open in Q2.
The new facility is a prelude to other ones Acadia has coming down the pike over the next couple of years. That includes a JV with Lutheran Health Network of Indiana to open a 120-bed hospital in Fort Wayne, as well as another one with Danville, Pennsylvania-based Geisinger Health System to open two 96-bed behavioral health facilities in the state.
Acadia also added to its portfolio in Q1 with the purchase of Vallejo Behavioral Hospital in Vallejo, California. Going forward, Osteen said acquisitions will be a key strategy for future growth.
“I think that our diversity of service lines gives us multiple opportunities, not just in our acute space … line, but … also the specialty [areas],” Osteen said on the call. “I do think that … we’re well informed of the market.”
Those specialty areas include substance use disorder (SUD), which has become more prevalent since the onset of the pandemic.
To meet the demand, Acadia opened its two new outpatient MAT centers in Q1, and is on track to open a total of 11 this year.
“We continue to see opportunities to help more individuals struggling with addiction,” Osteen said on the call.
Finally, Osteen said telehealth will likely continue to be a significant part of Acadia’s plans going forward, especially for underserved populations that might have problems with access.
“Our referral sources, and our physicians for that matter, are comfortable with telehealth,” she said on the call. “They are using it, and … I think that it just opens up a new area of opportunity for us. That’s one of the positive things I think that occurred from the pandemic, is [that] we are looking at support for our existing services.”
Acadia’s stock closed at $60.92 per share at the end of trading Friday, down less than 1%.