Acadia Healthcare Q3 profit falls to $34.5M
Acadia added 542 beds in the first nine months, including 424 through the opening of two wholly owned and three joint-venture facilities.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Acadia Healthcare Company, Inc. (ACHC) reported third-quarter revenue of $895.309 million, compared with $851.573 million a year earlier. Net income attributable to Acadia was $34.486 million versus $36.246 million, and diluted earnings per share were $0.38 versus $0.40. For the first nine months, revenue was $2,589.950 million versus $2,491.310 million, while net income attributable to Acadia was $49.519 million versus $74.747 million. Net cash provided by operating activities was $321.481 million, compared with $218.191 million.
At September 30, 2026, Acadia operated 280 behavioral healthcare facilities with approximately 12,800 beds across 40 states and Puerto Rico. Same-facility third-quarter admissions increased 6.6%, patient days increased 1.1%, and average length of stay decreased 5.1% year over year. Acadia said Medicaid funding changes may negatively affect financial performance; it does not expect a material operational impact from phased-in eligibility requirements, primarily because of exemptions for populations it serves. Acadia settled remaining claims in the Sandoval litigation for $15.0 million, paid during the quarter; $13.8 million above the available primary insurance policy was included in nine-month legal settlements expense.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly revenue reached $895.309 million, versus $851.573 million a year earlier.
- Moderate pointOperating cash flow was $321.481 million, versus $218.191 million in the prior-year period.
Negative
- Moderate pointNine-month attributable net income: $49.519 million versus $74.747 million.
Filing Explained
A subsidiary’s $35 million compensatory and $70 million punitive jury awards remain under challenge, so the final exposure is unresolved.
The 10-Q reports a jury award against Fashion Valley, an indirect Acadia subsidiary, of
Separately, the company reports that the DOJ Criminal Division and SEC have sought information concerning acute-care admissions, length of stay and billing, with SEC requests also covering comprehensive treatment centers; Acadia says it is cooperating and its internal review has reached no findings or conclusions. Acadia says it cannot estimate the amount or range of ultimate liability, if any, from these investigations, so the filing does not quantify that exposure.
Key Figures
Key Terms
same facility results financial
performance obligation financial
variable consideration financial
variable interest entity financial
Consolidated Total Net Leverage Ratio financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue and attributable net income did ACHC report in Q3 2026?
How many beds did ACHC add in the first nine months of 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
|
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address, including zip code, of principal executive offices)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ |
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Accelerated filer |
☐ Non-accelerated filer |
☐ |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
At November 3, 2026, there were
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ACADIA HEALTHCARE COMPANY, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements |
1 |
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Condensed Consolidated Balance Sheets (Unaudited) |
1 |
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Condensed Consolidated Statements of Income (Unaudited) |
2 |
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Condensed Consolidated Statements of Equity (Unaudited) |
3 |
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Condensed Consolidated Statements of Cash Flows (Unaudited) |
4 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
5 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 |
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Item 3. |
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Quantitative and Qualitative Disclosures About Market Risk |
32 |
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Item 4. |
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Controls and Procedures |
33 |
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PART II – OTHER INFORMATION |
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Item 1. |
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Legal Proceedings |
34 |
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Item 1A. |
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Risk Factors |
34 |
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Item 2. |
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Unregistered Sales of Equity Securities and Use of Proceeds |
34 |
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Item 5. |
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Other Information |
34 |
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Item 6. |
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Exhibits |
35 |
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SIGNATURES |
36 |
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Acadia Healthcare Company, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
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September 30, 2026 |
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December 31, 2025 |
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(In thousands, except share and per |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Goodwill |
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Intangible assets, net |
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Deferred tax assets |
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Operating lease right-of-use assets |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Current portion of long-term debt |
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$ |
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$ |
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Accounts payable |
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Accrued salaries and benefits |
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Current portion of operating lease liabilities |
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Other accrued liabilities |
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Total current liabilities |
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Long-term debt |
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Deferred tax liabilities |
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Operating lease liabilities |
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Other liabilities |
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Total liabilities |
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Redeemable noncontrolling interests |
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Equity: |
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Preferred stock, $ |
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— |
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— |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
) |
Total equity |
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Total liabilities and equity |
|
$ |
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$ |
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||
See accompanying notes.
1
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Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2026 |
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2025 |
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2026 |
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2025 |
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(In thousands, except per share amounts) |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Salaries, wages and benefits (including equity-based compensation |
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Professional fees |
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Supplies |
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Rents and leases |
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Other operating expenses |
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Depreciation and amortization |
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Interest expense, net |
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Debt extinguishment costs |
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— |
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— |
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— |
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Legal settlements (gain) expense |
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( |
) |
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— |
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Loss on impairment |
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— |
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Loss (gain) on sale of property |
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— |
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( |
) |
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( |
) |
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Transaction, legal and other costs |
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Total expenses |
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Income before income taxes |
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Provision for income taxes |
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Net income |
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||||
Net income attributable to noncontrolling interests |
|
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( |
) |
|
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( |
) |
|
|
( |
) |
|
|
( |
) |
Net income attributable to Acadia Healthcare Company, Inc. |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Earnings per share attributable to Acadia Healthcare |
|
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|
||||
Basic |
|
$ |
|
|
$ |
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$ |
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$ |
|
||||
Diluted |
|
$ |
|
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$ |
|
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$ |
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$ |
|
||||
Weighted-average shares outstanding: |
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|
||||
Basic |
|
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||||
Diluted |
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|
||||
See accompanying notes.
2
|
|
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Equity
(Unaudited)
(In thousands)
|
|
Common Stock |
|
|
Additional |
|
|
Retained Earnings |
|
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|
||||||||
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Shares |
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Amount |
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Capital |
|
|
(Accumulated Deficit) |
|
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Total |
|
|||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Common stock issued under stock incentive plans |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Repurchase of shares for payroll tax withholding, net of |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Repurchase of common stock, including excise tax |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net income attributable to Acadia Healthcare |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance at March 31, 2025 |
|
|
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|
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|
|||||
Common stock issued under stock incentive plans |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Repurchase of shares for payroll tax withholding, net of |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Repurchase of common stock, including excise tax |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Other |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net income attributable to Acadia Healthcare |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance at June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common stock issued under stock incentive plans |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Repurchase of shares for payroll tax withholding, net of |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Repurchase of common stock, including excise tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Other |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net income attributable to Acadia Healthcare |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance at September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common stock issued under stock incentive plans |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Repurchase of shares for payroll tax withholding, net of |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Repurchase of common stock, including excise tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss attributable to Acadia Healthcare |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Common stock issued under stock incentive plans |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Repurchase of shares for payroll tax withholding, net of |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net income attributable to Acadia Healthcare |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance at March 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Common stock issued under stock incentive plans |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Repurchase of shares for payroll tax withholding, net of |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Other |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income attributable to Acadia Healthcare |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance at June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Common stock issued under stock incentive plans |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Repurchase of shares for payroll tax withholding, net of |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Other |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income attributable to Acadia Healthcare |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance at September 30, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
See accompanying notes.
3
|
|
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
(In thousands) |
|
|||||
Operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Equity-based compensation expense |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
|
||
Debt extinguishment costs |
|
|
— |
|
|
|
|
|
Non-cash legal settlements expense |
|
|
— |
|
|
|
|
|
Loss on impairment |
|
|
|
|
|
|
||
Loss (gain) on sale of property |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
|
|
|
|
||
Change in operating assets and liabilities, net of effect of acquisitions: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
( |
) |
|
|
( |
) |
Other current assets |
|
|
|
|
|
( |
) |
|
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable and other accrued liabilities |
|
|
|
|
|
|
||
Accrued salaries and benefits |
|
|
( |
) |
|
|
|
|
Other liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Investing activities: |
|
|
|
|
|
|
||
Cash paid for acquisitions, net of cash acquired |
|
|
— |
|
|
|
( |
) |
Cash paid for capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of property and equipment |
|
|
|
|
|
|
||
Other |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Financing activities: |
|
|
|
|
|
|
||
Borrowings on long-term debt |
|
|
— |
|
|
|
|
|
Borrowings on revolving credit facility |
|
|
|
|
|
|
||
Principal payments on revolving credit facility |
|
|
( |
) |
|
|
( |
) |
Principal payments on long-term debt |
|
|
( |
) |
|
|
( |
) |
Repayment of long-term debt |
|
|
— |
|
|
|
( |
) |
Payment of debt issuance costs |
|
|
— |
|
|
|
( |
) |
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises |
|
|
( |
) |
|
|
( |
) |
Repurchase of common stock |
|
|
— |
|
|
|
( |
) |
Contributions from noncontrolling partners in joint ventures |
|
|
|
|
|
|
||
Distributions to noncontrolling partners in joint ventures |
|
|
( |
) |
|
|
( |
) |
Cash paid for contingent consideration |
|
|
— |
|
|
|
( |
) |
Other |
|
|
( |
) |
|
|
( |
) |
Net cash (used in) provided by financing activities |
|
|
( |
) |
|
|
|
|
Net increase in cash and cash equivalents |
|
|
|
|
|
|
||
Cash and cash equivalents at beginning of the period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of the period |
|
$ |
|
|
$ |
|
||
Effect of acquisitions: |
|
|
|
|
|
|
||
Assets acquired, excluding cash |
|
$ |
|
|
$ |
|
||
Liabilities assumed |
|
|
— |
|
|
|
( |
) |
Redeemable noncontrolling interest resulting from an acquisition |
|
|
( |
) |
|
|
( |
) |
Cash paid for acquisitions, net of cash acquired |
|
$ |
— |
|
|
$ |
|
|
See accompanying notes.
4
|
|
Acadia Healthcare Company, Inc.
Notes to Condensed Consolidated Financial Statements
September 30, 2026
(Unaudited)
Description of Business
Unless the context otherwise requires, all references herein to “Acadia,” “the Company,” “we,” “us” or “our” mean Acadia Healthcare Company, Inc. and its consolidated subsidiaries. Acadia Healthcare Company, Inc. is a holding company whose direct and indirect subsidiaries own and operate acute inpatient psychiatric facilities, specialty treatment facilities, comprehensive treatment centers (“CTCs”), residential treatment centers and facilities providing outpatient behavioral healthcare services to serve the behavioral healthcare and recovery needs of communities throughout the United States (the “U.S.”) and Puerto Rico. At September 30, 2026, these subsidiaries operated
Basis of Presentation
The business of the Company is conducted through limited liability companies, partnerships and C-corporations. The Company’s condensed consolidated financial statements include the accounts of the Company and all subsidiaries controlled by the Company through its direct or indirect ownership of majority interests and exclusive rights granted to the Company as the controlling member of an entity. All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation of the Company’s financial position and results of operations have been included. The Company’s fiscal year ends on December 31 and interim results are not necessarily indicative of results for a full year or any other interim period. The condensed consolidated balance sheet at December 31, 2025 has been derived from the audited financial statements as of that date. The information contained in these condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Certain reclassifications have been made to the prior year to conform to the current year presentation.
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): “Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires disaggregated disclosure of certain income statement expenses. This guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and must be applied prospectively. The Company is currently evaluating the impact of ASU 2024-03 on the Company’s condensed consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05 Financial Instruments—Credit Losses (Topic 326): “Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). ASU 2025-05 allows entities to elect a practical expedient to assume the current conditions as of the balance sheet date remain unchanged for the remaining life of the asset in the development of a reasonable and supportable forecast for current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. This guidance is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years, and must be adopted prospectively. The Company
In September 2025, the FASB issued ASU 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): “Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”). ASU 2025-06 is intended to clarify and modernize the accounting for costs related to internal-use software. This guidance is effective for fiscal years beginning after
5
|
|
December 15, 2027, and interim periods within those fiscal years, and may be adopted using a prospective, retrospective, or modified transition approach. Early adoption is permitted and must be applied as of the beginning of the annual reporting period in which it is early adopted. The Company is currently evaluating the impact of ASU 2025-06 on the Company’s condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-10 Government Grants (Topic 832): “Accounting for Government Grants Received by Business Entities” (“ASU 2025-10”). ASU 2025-10 establishes guidance on the recognition, measurement, and presentation of government grants received by business entities. This guidance leverages the principles in the accounting framework for government assistance in International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance, makes certain targeted improvements, and modifies certain of the existing disclosure requirements in ASC 832, Government Assistance. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, and interim reporting periods within those fiscal years, and may be adopted on a modified prospective basis, a modified retrospective basis, or a full retrospective basis. Early adoption is permitted in any period for which financial statements have not been issued. The Company is currently evaluating the impact of ASU 2025-10 on the Company’s condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270): “Narrow-Scope Improvements” (“ASU 2025-11”). ASU 2025-11 clarifies the interim reporting requirements in GAAP by improving the navigability of Topic 270 and more clearly specifying what disclosures are required in an interim reporting period. This guidance is effective for interim reporting periods in fiscal years beginning after December 15, 2027, and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-11 on the Company’s condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-12 Codification Improvements (“ASU 2025-12”). ASU 2025-12 provides for technical corrections, clarifications and other minor improvements to a variety of topics. This guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods and may be adopted on a prospective or retrospective basis on an issue-by-issue basis. Early adoption is permitted on an issue-by-issue basis. The Company is currently evaluating the impact of ASU 2025-12 on the Company’s condensed consolidated financial statements.
Revenue is primarily derived from services rendered to patients for inpatient psychiatric and substance abuse care, outpatient psychiatric care and residential treatment. The services provided by the Company have no fixed duration and can be terminated by the patient or the facility at any time, and therefore, each treatment is its own stand-alone contract.
Services ordered by a healthcare provider in an episode of care are not separately identifiable and therefore have been combined into a single performance obligation for each contract. The Company recognizes revenue as its performance obligations are completed. The performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits of the healthcare services provided. For inpatient services, the Company recognizes revenue equally over the patient stay on a daily basis. For outpatient services, the Company recognizes revenue equally over the number of treatments provided in a single episode of care. Typically, patients and third-party payors are billed within several days of the service being performed or the patient being discharged, and payments are due based on contract terms.
As the Company’s performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as its patients typically are under no obligation to remain admitted in the Company’s facilities.
The Company disaggregates revenue from contracts with customers by service type and by payor.
The Company’s facilities and services provided by the facilities can generally be classified into the following categories: acute inpatient psychiatric facilities, specialty treatment facilities, CTCs and residential treatment centers.
Acute inpatient psychiatric facilities. Acute inpatient psychiatric facilities provide a high level of care in order to stabilize patients that are either a threat to themselves or to others. The acute setting provides 24-hour observation, daily intervention and monitoring by psychiatrists.
Specialty treatment facilities. Specialty treatment facilities include residential recovery facilities. The Company provides a comprehensive continuum of care for adults with addictive disorders and co-occurring mental disorders. Inpatient, including detoxification and rehabilitation, partial hospitalization and outpatient treatment programs give patients access to the least restrictive level of care.
6
|
|
Comprehensive treatment centers. CTCs specialize in providing medication-assisted treatment in an outpatient setting to
individuals addicted to opioids such as opioid analgesics (prescription pain medications).
Residential treatment centers. Residential treatment centers treat patients with behavioral disorders in a non-hospital setting. The facilities balance therapy activities with social, academic and other activities.
The table below presents total revenue attributed to each category (in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Acute inpatient psychiatric facilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Specialty treatment facilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive treatment centers |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Residential treatment centers |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company receives payments from the following sources for services rendered in its facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by the Centers for Medicare and Medicaid Services (“CMS”) and other programs; and (iv) individual patients and clients. The recognition of revenue under certain state government programs can depend on the timing of the programs’ approval by regulatory authorities. Based on the timing of approval of two such programs, during the nine months ended September 30, 2026, the Company recognized $
The Company determines the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients and implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. Implicit price concessions are based on historical collection experience. Most of the Company’s facilities have contracts containing variable consideration. However, it is unlikely a significant reversal of revenue will occur when the uncertainty is resolved, and therefore, the Company has included the variable consideration in the estimated transaction price. Subsequent changes resulting from a patient’s ability to pay are recorded as bad debt expense, which is included as a component of other operating expenses in the condensed consolidated statements of income. Bad debt expense for the three and nine months ended September 30, 2026 and 2025 was not significant.
The table below presents the Company’s revenue by payor type and as a percentage of revenue (dollars in thousands) and includes an immaterial revision of amounts for the three months ended September 30, 2025, and the nine months ended September 30, 2026 and 2025, to correct the classification of certain revenue among payors.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||||
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
||||||||
Commercial |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||||
Medicare |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||||
Medicaid |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||||
Self-Pay |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||||
Other |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||||
Revenue |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||||
7
|
|
4. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2026 and 2025 (in thousands, except per share amounts):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Acadia Healthcare Company, |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding for basic earnings |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effects of dilutive instruments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares used in computing diluted earnings per common |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share attributable to Acadia Healthcare |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Approximately
Other current assets consisted of the following (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Assets held for sale |
|
$ |
|
|
$ |
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Income taxes receivable |
|
|
|
|
|
|
||
Workers’ compensation deposits – current portion |
|
|
|
|
|
|
||
Other receivables |
|
|
|
|
|
|
||
Inventory |
|
|
|
|
|
|
||
Cost report receivable |
|
|
|
|
|
|
||
Insurance receivable – current portion |
|
|
|
|
|
|
||
Securities litigation insurance receivable |
|
|
— |
|
|
|
|
|
Other |
|
|
|
|
|
|
||
Other current assets |
|
$ |
|
|
$ |
|
||
8
|
|
Property and equipment consisted of the following (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Land |
|
$ |
|
|
$ |
|
||
Building and improvements |
|
|
|
|
|
|
||
Equipment |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
During the three and nine months ended September 30, 2026, the Company recorded non-cash property impairment charges of $
The Company has recorded assets held for sale within other current assets on the condensed consolidated balance sheets for closed properties actively marketed of $
Goodwill
The changes in goodwill during 2025 and 2026 are as follows (in thousands):
Balance at January 1, 2025 |
$ |
|
|
Increase from acquisitions |
|
|
|
Decrease from impairment of goodwill |
|
( |
) |
Balance at December 31, 2025 |
|
|
|
Increase from acquisitions |
|
|
|
Balance at September 30, 2026 |
$ |
|
Other Intangible Assets
Other identifiable intangible assets consisted of the following (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Licenses and accreditations |
|
$ |
|
|
$ |
|
||
Trade names |
|
|
|
|
|
|
||
Certificates of need |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
All of the Company’s definite-lived intangible assets are fully amortized. The Company’s licenses and accreditations, trade names and certificates of need have indefinite lives and are, therefore, not subject to amortization.
Professional and General Liability
The Company is subject to medical malpractice and other lawsuits due to the nature of the services the Company provides. A portion of the Company’s professional liability risks are insured through a wholly-owned insurance subsidiary providing coverage for up to $
The reserve for professional and general liability risks was estimated based on historical claims, prior settlements and judgments, industry trends, severity factors, and other actuarial assumptions. The estimated accrual for professional and general
9
|
|
liabilities could be significantly affected should current and future occurrences differ from historical claim trends and expectations. While claims are monitored closely when estimating professional and general liability accruals, the complexity of the claims and wide range of potential outcomes often hampers timely adjustments to the assumptions used in these estimates. The Company recorded an unfavorable actuarial adjustment of $
Legal Proceedings
The Company is, from time to time, subject to various claims, lawsuits, governmental investigations, regulatory actions and other legal and administrative proceedings, including claims for damages for personal injuries, medical malpractice, overpayments, breach of contract, securities law violations, and tort and employment related claims. In these actions, plaintiffs request a variety of damages, including, in some instances, punitive and other types of damages that may not be covered by insurance. In addition, healthcare companies are subject to numerous investigations by various governmental agencies. Certain of the Company’s individual facilities have received, and from time to time, the Company's facilities may receive, subpoenas, civil investigative demands, audit requests, and other inquiries from, and may be subject to investigation by, federal and state agencies. These investigations can result in repayment obligations, and violations of law can result in substantial monetary penalties and fines, the imposition of a corporate integrity agreement, and exclusion from participation in governmental health programs. In addition, the federal False Claims Act permits private parties to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state whistleblower and false claims provisions.
Desert Hills
From October 2018 to August 2020, the Company, its subsidiary Youth and Family Centered Services of New Mexico, Inc. (“Desert Hills”), and FamilyWorks, a not-for-profit treatment foster care program to which Desert Hills provided management services, including day-to-day administration of the program, via a management services agreement, were among a number of defendants named in five lawsuits (collectively, the “Desert Hills Litigation”) filed in New Mexico State District Court (the “District Court”). These lawsuits each related to abuse by a foster parent, Clarence Garcia, that occurred in foster homes where FamilyWorks had placed children. In 2021, the Company finalized out-of-court settlements for two of the five cases for amounts covered under the Company’s professional liability insurance: Dorsey, as Guardian ad Litem of M.R. v. Clarence Garcia, et al. (the “M.R. case”), and Higgins, as Guardian ad Litem of J.H. v. Clarence Garcia, et al. (the “J.H. case”). While the plaintiffs in those two cases had claims pending against FamilyWorks, and FamilyWorks had raised claims or potential claims against the Company, the parties in each of those cases finalized settlements that resolved all claims between FamilyWorks and the Company. The District Court approved the settlement in the J.H. case on June 10, 2024 and the settlement in the M.R. case on August 12, 2024.
On July 7, 2023, in connection with one of the lawsuits in the Desert Hills Litigation styled Inman v. Garcia, et al., Case No. D-117-CV-2019-00136 (the “Inman Litigation”), a jury awarded the plaintiff compensatory damages of $
On October 30, 2023, the Company and Desert Hills entered into settlement agreements in connection with the Inman Litigation, as well as two other related cases: Rael v. Garcia, et al., Case No. D-117-CV-2019-00135 and Endicott-Quinones v. Garcia, et al., Case No. D-117-CV-2019-00137 (together with the Inman Litigation, the “Cases”).
The settlement agreements for the Cases were approved by the District Court in December 2023 and fully resolve each of the Cases with no admission of liability or wrongdoing by either the Company or Desert Hills. On January 19, 2024, pursuant to the terms of the settlement agreements, the Company paid an aggregate amount of $
On January 30, 2024, a sixth lawsuit styled CNRAG, Inc. as Legal Guardian of A.C. v. Garcia, et al., Case No. D-117-CV-2024-00045 was filed in the District Court alleging similar claims as the previous five lawsuits in the Desert Hills Litigation. The ward in this sixth lawsuit was referenced in prior criminal charges against Garcia in January 2019; however, prior to this lawsuit, neither the ward nor guardian made contact with the Company about a possible claim. The Company determined that a lawsuit from this plaintiff
10
|
|
was unlikely because no claims had ever been asserted and the statute of limitations had expired. Plaintiff’s allegations assert certain claims, which, if true, may toll the statute of limitations. The parties are engaged in fact and expert discovery, and trial is currently scheduled for April 19, 2027. The Company’s insurance coverage for the relevant policy year was exhausted in its entirety by prior losses, leaving any loss resulting from this sixth lawsuit uninsured. At this time, the Company cannot reasonably estimate the amount or range of the ultimate liability, if any, in connection with this sixth lawsuit. No additional victims are referenced in the prior criminal charges against Garcia.
Securities Litigation
On April 1, 2019, a consolidated complaint was filed against the Company and certain former and current officers in the lawsuit styled St. Clair County Employees’ Retirement System v. Acadia Healthcare Company, Inc., et al., Case No. 3:19-cv-00988, in the United States District Court for the Middle District of Tennessee (the “2019 Securities Litigation”). The complaint alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder. On November 24, 2025, the parties entered into a stipulation to settle the 2019 Securities Litigation for $
On July 10, 2025, a consolidated class action complaint was filed against the Company and certain former and current officers in the consolidated lawsuit styled Kachrodia v. Acadia Healthcare Company, Inc., et al., Case No. 3:24-cv-01238, which is pending in the United States District Court for the Middle District of Tennessee (the “2025 Securities Litigation”). The complaint is brought on behalf of a putative class consisting of all persons (other than defendants) who purchased or otherwise acquired publicly traded securities of the Company between February 8, 2020 and February 27, 2025. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. Defendants filed a motion to dismiss the consolidated complaint on September 8, 2025. On July 24, 2026, the court issued an order denying the motion to dismiss, and the action is proceeding. At this time, the Company cannot reasonably estimate the amount or range of the ultimate liability, if any, in connection with this action.
Derivative Actions
On February 21, 2019, a purported stockholder filed a derivative action related to the 2019 Securities Litigation on behalf of the Company against certain former and current officers and directors in the lawsuit styled Davydov v. Jacobs, et al., Case No. 3:19-cv-00167, which is pending in the United States District Court for the Middle District of Tennessee. The complaint alleges claims for violations of Sections 10(b) and 14(a) of the Exchange Act, breach of fiduciary duty, waste of corporate assets, and unjust enrichment. On May 23, 2019, a purported stockholder filed a second related derivative action on behalf of the Company against certain former and current officers and directors in the lawsuit styled Beard v. Jacobs, et al., Case No. 3:19-cv-0441, which is pending in the United States District Court for the Middle District of Tennessee. The complaint alleges claims for violations of Sections 10(b), 14(a), and 21D of the Exchange Act, breach of fiduciary duty, waste of corporate assets, unjust enrichment, and insider selling. On June 11, 2019, the Davydov and Beard actions were consolidated. On February 22, 2021, the court entered an order staying the case. On October 23, 2020, a purported stockholder filed a third related derivative action on behalf of the Company against former and current officers and directors in the lawsuit styled Pfenning v. Jacobs, et al., Case No. 2020-0915-NAC, which is pending in the Court of Chancery of the State of Delaware. The complaint alleges claims for breach of fiduciary duty. On February 17, 2021, the court entered an order staying the case. On February 24, 2021, a purported stockholder filed a fourth related derivative action on behalf of the Company against former and current officers and directors in the lawsuit styled Solak v. Jacobs, et al., Case No. 2021-0163-NAC, which is pending in the Court of Chancery of the State of Delaware. The complaint alleges claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and insider selling. On July 31, 2026, the parties to these derivative cases entered into a stipulation of settlement to resolve all of the cases. On September 1, 2026, the United States District Court for the Middle District of Tennessee entered an order preliminarily approving the settlement and setting the final approval hearing for December 10, 2026. Based on the terms of the settlement, which is still subject to final approval by the court, the Company does not expect to incur a material loss. Pursuant to the stipulation of settlement, in September 2026, the Company received $
On February 14, 2025, a purported stockholder filed a derivative action related to the 2025 Securities Litigation on behalf of the Company against certain former and current officers and directors in the lawsuit styled Kachrodia v. Osteen, et al., Case No. 3:25-cv-00172, which is pending in the United States District Court for the Middle District of Tennessee. The complaint alleges claims for violations of Sections 10(b) and 21D of the Exchange Act, breach of fiduciary duty, insider selling, unjust enrichment, and waste of corporate assets. Based on the nature of the action, the Company does not expect to incur a material loss.
11
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|
Government Investigations
In September 2024, the Company received a grand jury subpoena from the United States District Court for the Western District of Missouri (the “W.D.Mo.”), issued by attorneys from the Criminal Division of the U.S. Department of Justice (the “DOJ Criminal Division”), related to the Company’s acute care service line and related admissions, length of stay, and billing practices. In addition, Lakeland Hospital Acquisition, LLC, a subsidiary of the Company, also received a grand jury subpoena from the W.D.Mo. on the same day regarding similar subject matter. The Company had also received requests in September 2024 for information on similar subject matter from the United States Attorney’s Office for the Southern District of New York, which were withdrawn in the same month. The investigation is being led by attorneys from the DOJ Criminal Division. The DOJ Criminal Division withdrew its subpoenas in October 2024, then re-issued subpoenas regarding the same subject matter in December 2024. The DOJ Criminal Division is leading and coordinating the efforts from a number of federal agencies and departments investigating such issues, any of which might later make their own requests for information. The Company has also received subpoenas from the SEC requesting similar information as well as information relating to the CTC service line. The Company is currently conducting a comprehensive internal investigation using external advisors, but, at this time, no findings or conclusions have been made. The Company is fully cooperating with authorities, including active engagement with the DOJ Criminal Division and the SEC. At this time, the Company cannot speculate on whether the outcome of these investigations will have any impact on its business or operations and cannot reasonably estimate the amount or range of the ultimate liability, if any, in connection with these investigations.
Certain members of the United States Congress have requested, and such members or other members may in the future request, information from or about the Company related to, among other things, the Company’s admissions, length of stay, billing practices, and opioid treatment programs. The Company intends to cooperate with any such request. At this time, the Company cannot speculate on the outcome or duration of any such inquiries.
Sandoval Litigation
In October 2020, a civil action asserting wrongful death and negligence claims was filed against the Company in California state court following a patient death at a California subsidiary facility (Sandoval v. Acadia Healthcare Company, Inc., Marin County Super. Ct. No. CIV1802171) (the “Sandoval Litigation”). Following a jury trial, judgment was entered against the Company, and the Company subsequently appealed. In April 2026, the judgment was affirmed in substantial part. On May 31, 2026, the Company entered into a settlement agreement to resolve all remaining claims for an aggregate payment of $
The Company maintains a primary insurance policy and an excess insurance policy applicable to the Sandoval Litigation, but the excess insurance policy for the relevant policy year was exhausted in its entirety by prior losses, leaving the portion of the loss in excess of the available primary policy uninsured. The amount of the settlement in excess of the primary policy totals $
Fashion Valley
In January 2024, a former employee of one of the Company’s indirect subsidiaries, San Diego Health Alliance, Inc. d/b/a Fashion Valley Comprehensive Treatment Center (“Fashion Valley”), filed a lawsuit in San Diego County Superior Court against Fashion Valley alleging retaliation, wrongful termination, and other claims (Giaquinta v. San Diego Health Alliance, Case No. 37-2024-00002653-CU-WT-CTL). The employee alleged she was terminated by Fashion Valley for reporting mistreatment and harassment by a co-worker. Fashion Valley denied the allegations and asserted that the employee was terminated for legitimate reasons. The Company is not a party to the lawsuit.
The case went to trial in April 2026. On May 12, 2026, a jury found in favor of the plaintiff and awarded $
12
|
|
Other accrued liabilities consisted of the following (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Accrued expenses |
|
$ |
|
|
$ |
|
||
Insurance liability – current portion |
|
|
|
|
|
|
||
Accrued interest |
|
|
|
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|
|
||
Accrued property taxes |
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||
Accrued legal settlements |
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||
Contract liabilities |
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||
Finance lease liabilities |
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|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Other accrued liabilities |
|
$ |
|
|
$ |
|
||
Long-term debt consisted of the following (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Credit Facility: |
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|
|
|
|
|
||
Term Loan A |
|
$ |
|
|
$ |
|
||
Revolving Line of Credit |
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||
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|||
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Less: unamortized debt issuance costs, discount and |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Less: current portion |
|
|
( |
) |
|
|
( |
) |
Long-term debt |
|
$ |
|
|
$ |
|
||
Credit Facility
On February 28, 2025 (the “Credit Facility Closing Date”), the Company entered into a new credit agreement (the “Credit Agreement”), which provides for a $
On the Credit Facility Closing Date, the full $
Borrowings under the Credit Agreement bear interest at a floating rate equal to, at the Company’s option, either (i) a Secured Overnight Financing Rate (“SOFR”) -based rate plus a margin ranging from
The Company has the ability to increase the amount of the Credit Facility, which may take the form of increases to the Revolving Facility or the Term Loan Facility or the issuance of one or more incremental term loan facilities (collectively, the “Incremental Facilities”), upon obtaining additional commitments from new or existing lenders and the satisfaction of certain customary conditions precedent for such Incremental Facilities. Such Incremental Facilities may not exceed the sum of (i) the greater of $
13
|
|
Company at the time of determination and (ii) additional amounts that would not cause the Company’s Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) to exceed
Subject to certain exceptions, substantially all of the Company’s existing and subsequently acquired or organized direct and indirect wholly-owned U.S. subsidiaries are required to guarantee the repayment of the Company’s obligations under the Credit Agreement. The obligations of the Company and such guarantor subsidiaries are secured by a pledge of substantially all assets of the Company and such guarantor subsidiaries (excluding all real property and certain other customarily excluded assets).
The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including limitations on the ability of the Company and its subsidiaries to: (i) incur debt; (ii) permit additional liens; (iii) make investments and acquisitions; (iv) merge or consolidate with others; (v) dispose of assets; (vi) pay dividends and distributions; (vii) pay junior indebtedness; and (viii) enter into affiliate transactions, in each case, subject to customary exceptions. In addition, the Credit Agreement contains financial covenants requiring the Company to maintain, on a consolidated basis as of the last day of each quarterly period, a Consolidated Total Net Leverage Ratio of not more than
During the nine months ended September 30, 2026, the Company borrowed $
At September 30, 2026, the Company had $
Prior Credit Facility
On March 17, 2021, the Company entered into a credit agreement (as amended, the “Prior Credit Facility”), which provided for a $
During the nine months ended September 30, 2025, the Company borrowed $
On February 28, 2025, the Company refinanced the Prior Credit Facility by using the proceeds of the Credit Facility to repay the outstanding balances of the Prior Term Loan Facility and the Prior Revolving Facility, which totaled $
Senior Notes
5.500% Senior Notes due 2028
On June 24, 2020, the Company issued $
5.000% Senior Notes due 2029
On October 14, 2020, the Company issued $
7.375% Senior Notes due 2033
On March 10, 2025, the Company issued $
14
|
|
The indentures governing the 5.500% Senior Notes, the 5.000% Senior Notes and the 7.375% Senior Notes (together, the “Senior Notes”) contain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) transfer or sell assets; (iv) engage in certain transactions with affiliates; (v) create restrictions on dividends or other payments by the restricted subsidiaries; (vi) merge, consolidate or sell substantially all of the Company’s assets; and (vii) create liens on assets.
The Senior Notes issued by the Company are guaranteed by each of the Company’s subsidiaries that guarantee the Company’s obligations under the Credit Agreement. The guarantees are full and unconditional and joint and several.
The Company may redeem the Senior Notes at its option, in whole or part, at the dates and amounts set forth in the applicable indentures.
Noncontrolling interests in the condensed consolidated financial statements represent the portion of equity held by noncontrolling partners in the Company’s non-wholly owned subsidiaries. At September 30, 2026, the Company operated
The components of redeemable noncontrolling interests are as follows (in thousands):
Balance at January 1, 2025 |
|
$ |
|
|
Contributions from noncontrolling partners in joint ventures |
|
|
|
|
Net income attributable to noncontrolling interests |
|
|
|
|
Distributions to noncontrolling partners in joint ventures |
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
Contributions from noncontrolling partners in joint ventures |
|
|
|
|
Net income attributable to noncontrolling interests |
|
|
|
|
Distributions to noncontrolling partners in joint ventures |
|
|
( |
) |
Balance at September 30, 2026 |
|
$ |
|
For legal entities where the Company has a financial relationship, the Company evaluates whether it has a variable interest and determines if the entity is considered a variable interest entity (“VIE”). If the Company concludes an entity is a VIE and the Company is the primary beneficiary, the entity is consolidated. The primary beneficiary analysis is a qualitative analysis based on power and benefits. A reporting entity has a controlling financial interest in a VIE and must consolidate the VIE if it has both power and benefits. It must have the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE.
At September 30, 2026, the Company operated
15
|
|
The consolidated VIE assets and liabilities in the Company’s condensed consolidated balance sheets are shown below (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Other current assets |
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|
||
Total current assets |
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|
||
Property and equipment, net |
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|
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Goodwill |
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|
||
Intangible assets, net |
|
|
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|
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Operating lease right-of-use assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued salaries and benefits |
|
|
|
|
|
|
||
Current portion of operating lease liabilities |
|
|
|
|
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|
||
Other accrued liabilities |
|
|
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|
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|
||
Total current liabilities |
|
|
|
|
|
|
||
Operating lease liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
$ |
|
|
$ |
|
||
Equity Incentive Plans
The Company issues stock-based awards, including stock options, restricted stock awards and performance stock units, to certain officers, employees and non-employee directors under the Acadia Healthcare Company, Inc. Amended and Restated Incentive Compensation Plan (the “Equity Incentive Plan”). At September 30, 2026, a maximum of
The Company recognized $
The Company recognized a deferred income tax benefit of $
16
|
|
Stock Options
Stock option activity during 2025 and 2026 was as follows:
|
|
Number |
|
|
Weighted |
|
|
Weighted |
|
|
Aggregate |
|
||||
Options outstanding at January 1, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Options granted |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Options exercised |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Options cancelled |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Options outstanding at December 31, 2025 |
|
|
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|
|
|
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|
||||
Options granted |
|
|
|
|
|
|
|
|
|
|
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|
||||
Options exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Options cancelled |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Options outstanding at September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Options exercisable at September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
On January 20, 2026, the Company granted a one-time option award to the Company’s Chief Executive Officer, Debra K. Osteen (the “CEO Award”). The CEO Award will vest in six tranches based on service and the achievement of market conditions, subject to continued employment through January 20, 2027. The various stock price metrics will be achieved when the 30-day volume weighted-average price equals or exceeds the respective price target on any day during the grantee’s employment or during the two years thereafter, subject to certain conditions.
The fair value of the CEO Award was determined using a Monte Carlo simulation. Equity-based compensation expense is recognized on a straight-line basis over the requisite one-year service period.
Weighted average grant-date fair value of options granted under the CEO Award |
|
$ |
|
|
Strike price |
|
$ |
|
|
Expected volatility |
|
|
% |
|
Dividend yield |
|
|
% |
|
Expected life (in years) |
|
|
||
Risk free interest rate |
|
|
||
Since the CEO Award was granted in proximity to the disclosure of Ms. Osteen’s appointment as Chief Executive Officer, management exercised judgment to determine the current price input used in the valuation of the CEO Award, considering the impact of the disclosure of her appointment on the Company’s stock price. The Company’s estimate of expected volatility is based upon the volatility of its stock price over the term of the award. The Company’s expected dividend yield is
17
|
|
Other Stock-Based Awards
Restricted stock awards activity during 2025 and 2026 was as follows:
|
|
Number of |
|
|
Weighted |
|
||
Unvested at January 1, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Cancelled |
|
|
( |
) |
|
|
|
|
Vested |
|
|
( |
) |
|
|
|
|
Unvested at December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Cancelled |
|
|
( |
) |
|
|
|
|
Vested |
|
|
( |
) |
|
|
|
|
Unvested at September 30, 2026 |
|
|
|
|
$ |
|
||
Performance stock unit activity during 2025 and 2026 was as follows:
|
|
Number of |
|
|
Weighted |
|
||
Unvested at January 1, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Performance adjustment |
|
|
( |
) |
|
|
|
|
Cancelled |
|
|
( |
) |
|
|
|
|
Vested |
|
|
( |
) |
|
|
|
|
Unvested at December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Performance adjustment |
|
|
|
|
|
|
||
Cancelled |
|
|
( |
) |
|
|
|
|
Vested |
|
|
( |
) |
|
|
|
|
Unvested at September 30, 2026 |
|
|
|
|
$ |
|
||
Restricted stock awards are time-based vesting awards that vest over a period of three or
Performance stock units are granted to employees and are subject to Company performance compared to pre-established targets. In addition to Company performance, these performance-based stock units are generally subject to the continuing service of the employee during the
The fair values of performance stock units were determined based on the closing price of the Company’s common stock on the trading date immediately prior to the grant date for units subject to performance conditions.
On February 25, 2025, the Company’s board of directors authorized a share repurchase program (the “Share Repurchase Program”) pursuant to which the Company may, from time to time, acquire up to $
18
|
|
and may be modified, suspended or discontinued by the Company’s board of directors at any time. The authorization does not obligate the Company to repurchase any shares. During the three and nine months ended September 30, 2026, there were
Transaction, legal and other costs represent costs primarily related to government investigation, legal, accounting, termination, restructuring, management transition, acquisition and other similar costs.
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Government investigations |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Legal, accounting and other acquisition-related costs |
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Termination and restructuring costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Management transition costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 8 – Commitments and Contingencies. Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($
The provision for income taxes for the three months ended September 30, 2026 and 2025 reflects effective tax rates of
As the Company continues to monitor the implications of potential tax legislation in each of its jurisdictions, the Company may adjust estimates and record additional amounts for tax assets and liabilities. Any adjustments to the Company’s tax assets and liabilities could materially impact the provision for income taxes and its effective tax rate in the periods in which they are made.
The carrying amounts reported for cash and cash equivalents, accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value because of the short-term maturity of these instruments.
The carrying amounts and fair values of the Credit Facility and the Senior Notes at September 30, 2026 and December 31, 2025 were as follows (in thousands):
|
|
Carrying Amount |
|
|
Fair Value |
|
||||||||||
|
|
September 30, |
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
||||
Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
5.500% Senior Notes due 2028 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
5.000% Senior Notes due 2029 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
7.375% Senior Notes due 2033 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
19
|
|
The Credit Facility and the Senior Notes were categorized as Level 2 in the GAAP fair value hierarchy. Fair values were based on trading activity among the Company’s lenders and the average bid and ask price as determined using published rates.
The Company has
The CODM uses EBITDA to evaluate income generated from segment assets in deciding whether to reinvest assets into the behavioral healthcare services segment or into other parts of the entity, such as for acquisitions or debt reduction. EBITDA is used to monitor budget versus actual results. The CODM also uses EBITDA in competitive analysis by benchmarking to the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation. The Company does not have intra-entity sales or transfers.
20
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations with our unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statements that address future results or occurrences. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “would,” “should,” “could” or the negative thereof. Generally, the words “anticipate,” “believe,” “continue,” “expect,” “intend,” “estimate,” “project,” “plan” and similar expressions identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are forward-looking statements.
We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, many of which are outside of our control, which could cause our actual results, performance or achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to:
political conditions that are out of our control, including any effects that ongoing global conflicts, tariffs, or trade disputes may have on financial markets and macroeconomic conditions;
securities and result in incremental regulatory burdens and governmental investigations;
21
|
|
disasters, and any resulting outmigration;
ability to obtain patients;
22
|
|
Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. These forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments.
Overview
Our business strategy is to become the indispensable behavioral healthcare provider for the high-acuity and complex needs patient population. We are committed to providing the communities we serve with quality, cost-effective behavioral healthcare services, while growing our business, increasing profitability and creating long-term value for our stockholders. This strategy includes five growth pathways: expansions of existing facilities, joint venture partnerships, de novo facilities, acquisitions and expansion across our continuum of care. At September 30, 2026, we operated 280 behavioral healthcare facilities with approximately 12,800 beds in 40 states and Puerto Rico. During the nine months ended September 30, 2026, we added 542 beds, consisting of 118 beds added to existing facilities and 424 beds added through the opening of two wholly-owned facilities and three joint venture facilities. The three joint venture facilities opened during the nine months ended September 30, 2026 were through partnerships with Tufts Medicine, Orlando Health, and Methodist Jennie Edmundson. During the nine months ended September 30, 2026, we opened three CTCs.
We are the leading publicly traded pure-play provider of behavioral healthcare services in the U.S. Management believes that we are positioned as a leading platform in a highly fragmented industry under the direction of an experienced management team that has significant industry expertise. Management expects to take advantage of several strategies that are more accessible as a result of our increased size and geographic scale, including continuing a national marketing strategy to attract new patients and referral sources, increasing our volume of out-of-state referrals, providing a broader range of services to new and existing patients and clients and selectively pursuing opportunities to expand our facility and bed count through acquisitions, wholly-owned de novo facilities, joint ventures and bed additions in existing facilities.
Recent Legislative Developments
On July 4, 2025, Congress passed the One Big Beautiful Bill Act (the “OBBBA”), its budget reconciliation act for fiscal year 2025. The OBBBA includes provisions that may impact our financial performance and may substantially modify certain state and federal statutes and regulations to which our operations are subject. The OBBBA provisions that may impact us have varying effective dates. We are unable to predict whether or how future legislation, rulemaking, or judicial action will impact implementation of the OBBBA. Of particular relevance to us, the OBBBA reduces the federal government’s overall Medicaid expenditures and tightens Medicaid eligibility requirements. The law limits eligibility for Medicaid by imposing work or community engagement requirements for adults under 65 years old in Medicaid expansion states, including states with waiver-based expansions, subject to limited exceptions, and requires eligibility redeterminations at least every six months for the Medicaid expansion state population. The potential for mid-year loss of coverage increases financial uncertainty and may disrupt ongoing treatment services, complicate eligibility and coverage verification, prior authorization processes, and exposure to uncompensated care or bad debt on patient accounts. States are required to implement the work and community engagement requirements no later than December 31, 2026, although states may implement such requirements earlier and the Secretary of the U.S. Department of Health and Human Services (“HHS”) may grant certain states good faith exemptions through December 31, 2028. We do not expect a material impact on our operations as these requirements are phased in, primarily due to exemptions for the populations we serve, including individuals who are medically frail, such as individuals with a substance use disorder or a disabling mental disorder, and individuals with serious or complex medical conditions. However, the scope and application of these exemptions will depend on federal implementing guidance and state implementation, and we may not realize their anticipated benefit.
In addition, the OBBBA includes significant changes to Medicaid funding mechanisms by restricting federal matching funds received by state Medicaid programs. Effective upon enactment, the law prohibits states from establishing new provider assessments or taxes, or increasing the rates of existing provider assessments, and, beginning in fiscal year 2028, progressively reduces the permissible provider tax threshold in Medicaid expansion states, while also limiting the structure and application of such assessments. The OBBBA also directs HHS to revise regulations governing state directed payment program arrangements to cap total payment rates paid by Medicaid managed care organizations for certain services at 100% of Medicare payment rates in Medicaid expansion states and 110% of Medicare payment rates in non-Medicaid expansion states, instead of average commercial rates, which impacts Medicaid payment rates for services rendered in our hospital facilities. These limits apply to state directed payment programs established on or after the date of enactment unless the program meets certain grandfathering criteria. The OBBBA provides that payments under grandfathered programs will be reduced by ten percentage points per year beginning with rating periods on or after January 1, 2028, until they reach the applicable cap.
Because our facilities rely in part on reimbursement from federal health care programs, including Medicaid, for the reimbursement of services rendered, these changes may have a negative impact on our financial performance. Ongoing budgetary
23
|
|
uncertainties and continued efforts to reduce the federal deficit may result in further payment reductions to both Medicaid and Medicare programs.
In addition to changes made to federal healthcare programs, the OBBBA contains policy changes that have decreased the number of individuals who obtain health insurance from Affordable Care Act (“ACA”) marketplace exchanges. For example, the OBBBA effectively ends automatic renewals of coverage by requiring pre-enrollment verification of eligibility. In addition to ending automatic renewals of ACA plans, the OBBBA eliminates federal enhanced subsidies of ACA marketplace exchange-based plans, which has resulted in significant cost increases for ACA plans.
Results of Operations
The following table illustrates our consolidated results of operations for the respective periods shown (dollars in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||||
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
||||||||
Revenue |
|
$ |
895,309 |
|
|
|
100.0 |
% |
|
$ |
851,573 |
|
|
|
100.0 |
% |
|
$ |
2,589,950 |
|
|
|
100.0 |
% |
|
$ |
2,491,310 |
|
|
|
100.0 |
% |
Salaries, wages and benefits |
|
|
490,267 |
|
|
|
54.8 |
% |
|
|
462,169 |
|
|
|
54.3 |
% |
|
|
1,431,402 |
|
|
|
55.3 |
% |
|
|
1,359,857 |
|
|
|
54.6 |
% |
Professional fees |
|
|
58,664 |
|
|
|
6.6 |
% |
|
|
51,478 |
|
|
|
6.0 |
% |
|
|
167,621 |
|
|
|
6.5 |
% |
|
|
147,146 |
|
|
|
5.9 |
% |
Supplies |
|
|
31,504 |
|
|
|
3.5 |
% |
|
|
30,412 |
|
|
|
3.6 |
% |
|
|
91,192 |
|
|
|
3.5 |
% |
|
|
87,286 |
|
|
|
3.5 |
% |
Rents and leases |
|
|
11,933 |
|
|
|
1.3 |
% |
|
|
11,736 |
|
|
|
1.4 |
% |
|
|
35,510 |
|
|
|
1.4 |
% |
|
|
36,002 |
|
|
|
1.4 |
% |
Other operating expenses |
|
|
135,738 |
|
|
|
15.2 |
% |
|
|
128,787 |
|
|
|
15.1 |
% |
|
|
422,564 |
|
|
|
16.3 |
% |
|
|
377,203 |
|
|
|
15.1 |
% |
Depreciation and amortization |
|
|
53,134 |
|
|
|
5.9 |
% |
|
|
47,468 |
|
|
|
5.6 |
% |
|
|
155,987 |
|
|
|
6.0 |
% |
|
|
143,495 |
|
|
|
5.8 |
% |
Interest expense, net |
|
|
37,278 |
|
|
|
4.2 |
% |
|
|
36,619 |
|
|
|
4.3 |
% |
|
|
113,786 |
|
|
|
4.4 |
% |
|
|
100,939 |
|
|
|
4.1 |
% |
Debt extinguishment costs |
|
|
— |
|
|
|
0.0 |
% |
|
|
— |
|
|
|
0.0 |
% |
|
|
— |
|
|
|
0.0 |
% |
|
|
1,269 |
|
|
|
0.0 |
% |
Legal settlements (gain) expense |
|
|
(7,151 |
) |
|
|
-0.8 |
% |
|
|
— |
|
|
|
0.0 |
% |
|
|
6,600 |
|
|
|
0.3 |
% |
|
|
3,504 |
|
|
|
0.1 |
% |
Loss on impairment |
|
|
3,546 |
|
|
|
0.4 |
% |
|
|
— |
|
|
|
0.0 |
% |
|
|
10,910 |
|
|
|
0.4 |
% |
|
|
1,452 |
|
|
|
0.1 |
% |
Loss (gain) on sale of property |
|
|
189 |
|
|
|
0.0 |
% |
|
|
— |
|
|
|
0.0 |
% |
|
|
(3,392 |
) |
|
|
-0.1 |
% |
|
|
(8,715 |
) |
|
|
-0.3 |
% |
Transaction, legal and other costs |
|
|
23,739 |
|
|
|
2.6 |
% |
|
|
42,919 |
|
|
|
5.0 |
% |
|
|
68,331 |
|
|
|
2.5 |
% |
|
|
138,416 |
|
|
|
5.6 |
% |
Total expenses |
|
|
838,841 |
|
|
|
93.7 |
% |
|
|
811,588 |
|
|
|
95.3 |
% |
|
|
2,500,511 |
|
|
|
96.5 |
% |
|
|
2,387,854 |
|
|
|
95.9 |
% |
Income before income taxes |
|
|
56,468 |
|
|
|
6.3 |
% |
|
|
39,985 |
|
|
|
4.7 |
% |
|
|
89,439 |
|
|
|
3.5 |
% |
|
|
103,456 |
|
|
|
4.1 |
% |
Provision for income taxes |
|
|
17,818 |
|
|
|
2.0 |
% |
|
|
1,668 |
|
|
|
0.2 |
% |
|
|
34,065 |
|
|
|
1.3 |
% |
|
|
18,139 |
|
|
|
0.7 |
% |
Net income |
|
|
38,650 |
|
|
|
4.3 |
% |
|
|
38,317 |
|
|
|
4.5 |
% |
|
|
55,374 |
|
|
|
2.1 |
% |
|
|
85,317 |
|
|
|
3.4 |
% |
Net income attributable to |
|
|
(4,164 |
) |
|
|
-0.5 |
% |
|
|
(2,071 |
) |
|
|
-0.2 |
% |
|
|
(5,855 |
) |
|
|
-0.2 |
% |
|
|
(10,570 |
) |
|
|
-0.4 |
% |
Net income attributable to Acadia |
|
$ |
34,486 |
|
|
|
3.9 |
% |
|
$ |
36,246 |
|
|
|
4.3 |
% |
|
$ |
49,519 |
|
|
|
1.9 |
% |
|
$ |
74,747 |
|
|
|
3.0 |
% |
We believe that we are well positioned to help meet the growing demand for behavioral healthcare services and recorded revenue growth of 4.0% for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Similar to many other healthcare providers and other industries across the country, we have been navigating a tight labor market. While we experienced higher wage inflation compared to historical averages in recent years, we continue to see stability in our labor costs and our proactive focus helps us manage through this environment. We remain focused on ensuring that we have the level of staff to meet the demand in our markets across 40 states and Puerto Rico.
24
|
|
The following table sets forth percent changes in same facility operating data for the three and nine months ended September 30, 2026 compared to the same periods in 2025:
|
|
Three Months Ended |
|
Nine Months Ended |
Same Facility Results (a) |
|
|
|
|
Revenue growth |
|
5.2% |
|
4.0% |
Patient days growth |
|
1.1% |
|
1.2% |
Admissions growth |
|
6.6% |
|
6.5% |
Average length of stay change (b) |
|
-5.1% |
|
-5.0% |
Revenue per patient day growth |
|
4.0% |
|
2.8% |
Same facility results include operating results only for facilities and services operated in both the current and prior year. These metrics exclude the operating results associated with facilities under operation for less than one year and facilities acquired during the current or prior year, as well as facilities divested or removed from service, and also exclude general and administrative costs related to our corporate functions. Such costs related to our corporate functions include, amongst others, costs for accounting and finance, information systems, human resources, legal and operational and executive leadership. General and administrative costs directly related to the facilities are included in same facility results. Such costs directly related to our facilities include, amongst others, labor at the facility level, insurance, including property, professional, legal and general liability insurance, hospital supplies, including medication, utilities and food service, and general maintenance costs for the facility. We determine which general and administrative costs to exclude and include in same facility results by ensuring those costs directly associated with facility operations are captured at the facility level for reporting.
We believe that providing results on a same facility basis is helpful to our investors as a measure of our financial and operating performance because it neutralizes the impact of corporate-level items that do not arise out of our core operations at our facilities and because it neutralizes the impact of new facilities that are in early stages of operation and facilities that we no longer operate, each of which may distort investors’ understanding of our underlying performance at our existing and continuing facilities. Further, we believe that providing same facility information is helpful to our investors as a measure of the financial and operating performance of our existing and continuing facilities on a comparable basis, and same facility results metrics provide investors with information useful in understanding underlying organic growth in such facilities. For these reasons, we believe that same facility results are particularly useful during periods of significant expansion or contraction.
Same facility results reflect adjustments that are intended to provide the specific presentation described above and that may be irregular in timing from period to period related to newly opened or acquired facilities or facilities that we no longer operate, and may omit certain results that investors may view as important. Same facility results may therefore not be indicative of the overall performance of our business, and should not be considered as an alternative for net income or any other performance measures derived in accordance with GAAP.
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
Revenue. Revenue increased $43.7 million, or 5.1%, to $895.3 million for the three months ended September 30, 2026 from $851.6 million for the three months ended September 30, 2025. Same facility revenue increased $43.6 million, or 5.2%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, resulting from same facility increase in revenue per day of 4.0%, same facility growth in patient days of 1.1% and same facility growth in admissions of 6.6%. Consistent with same facility revenue growth in 2025, the growth in same facility patient days for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 resulted from the addition of beds to our existing facilities and ongoing demand for our services.
Salaries, wages and benefits. Salaries, wages and benefits (“SWB”) expense was $490.3 million for the three months ended September 30, 2026 compared to $462.2 million for the three months ended September 30, 2025, an increase of $28.1 million. SWB expense included $9.2 million and $6.0 million of equity-based compensation expense for the three months ended September 30, 2026 and 2025, respectively. SWB increased primarily due to new facility openings as well as routine annual wage increases. Excluding equity-based compensation expense, SWB expense was $481.1 million, or 53.7% of revenue, for the three months ended September 30, 2026, compared to $456.2 million, or 53.6% of revenue, for the three months ended September 30, 2025. Same facility SWB expense was $435.6 million for the three months ended September 30, 2026, or 49.3% of revenue, compared to $417.7 million for the three months ended September 30, 2025, or 49.8% of revenue.
25
|
|
Professional fees. Professional fees were $58.7 million for the three months ended September 30, 2026, or 6.6% of revenue, compared to $51.5 million for the three months ended September 30, 2025, or 6.0% of revenue. Same facility professional fees were $51.6 million for the three months ended September 30, 2026, or 5.8% of revenue, compared to $45.0 million for the three months ended September 30, 2025, or 5.4% of revenue.
Supplies. Supplies expense was $31.5 million for the three months ended September 30, 2026, or 3.5% of revenue, compared to $30.4 million for the three months ended September 30, 2025, or 3.6% of revenue. Same facility supplies expense was $30.7 million for the three months ended September 30, 2026, or 3.5% of revenue, compared to $29.8 million for the three months ended September 30, 2025, or 3.5% of revenue.
Rents and leases. Rents and leases were $11.9 million for the three months ended September 30, 2026, or 1.3% of revenue, compared to $11.7 million for the three months ended September 30, 2025, or 1.4% of revenue. Same facility rents and leases were $10.4 million for the three months ended September 30, 2026, or 1.2% of revenue, compared to $10.6 million for the three months ended September 30, 2025, or 1.3% of revenue.
Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, provider taxes, travel and repairs and maintenance expenses. Other operating expenses were $135.7 million for the three months ended September 30, 2026, or 15.2% of revenue, compared to $128.8 million for the three months ended September 30, 2025, or 15.1% of revenue. Same facility other operating expenses were $126.1 million for the three months ended September 30, 2026, or 14.3% of revenue, compared to $121.1 million for the three months ended September 30, 2025, or 14.4% of revenue.
Depreciation and amortization. Depreciation and amortization expense was $53.1 million for the three months ended September 30, 2026, or 5.9% of revenue, compared to $47.5 million for the three months ended September 30, 2025, or 5.6% of revenue.
Interest expense. Interest expense was $37.3 million for the three months ended September 30, 2026 compared to $36.6 million for the three months ended September 30, 2025. The increase in interest expense was primarily the result of increased borrowings.
Legal settlements (gain) expense. Legal settlements gain was $7.2 million for the three months ended September 30, 2026 and primarily related to the receipt of insurance proceeds in excess of payments of attorneys’ fees and expenses to plaintiffs’ counsel in connection with the settlement of derivative cases against the Company.
Loss on impairment. During the three months ended September 30, 2026, we recorded non-cash property impairment charges totaling $3.5 million. The 2026 non-cash impairment charges included property impairments of $2.4 million and operating lease right-of-use asset impairments of $1.1 million.
Loss (gain) on sale of property. During the three months ended September 30, 2026, we recorded a loss on property sale of $0.2 million related to the sale of closed properties.
Transaction, legal and other costs. Transaction, legal and other costs were $23.7 million for the three months ended September 30, 2026, compared to $42.9 million for the three months ended September 30, 2025. Transaction, legal and other costs represent government investigation, legal, accounting, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective period, as summarized below (in thousands).
|
Three Months Ended September 30, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Government investigations |
$ |
18,269 |
|
|
$ |
38,737 |
|
Legal, accounting and other acquisition-related costs |
|
3,374 |
|
|
|
976 |
|
Termination and restructuring costs |
|
2,096 |
|
|
|
3,206 |
|
Total |
$ |
23,739 |
|
|
$ |
42,919 |
|
Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 8 – Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements. Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($0.1 million and $0.5 million for the three months ended September 30, 2026 and 2025, respectively); and legal and settlement costs incurred related to certain litigation not included in government investigations ($3.2 million and $0.4 million for the three months ended September 30, 2026 and 2025, respectively). Termination and restructuring costs include costs, net of gains, incurred related to workforce reductions, contract amendments, and the closure and disposition of certain facilities, including related lease terminations.
Provision for income taxes. For the three months ended September 30, 2026, the provision for income taxes was $17.8 million, reflecting an effective tax rate of 31.6%, compared to $1.7 million, reflecting an effective tax rate of 4.2%, for the three months ended September 30, 2025. The increase in the effective tax rate for the three months ended September 30, 2026 compared to the
26
|
|
three months ended September 30, 2025 was primarily attributable to an increase in nondeductible legal settlements and an increase in valuation allowances against certain state deferred tax assets in the current year. In addition, the three months ended September 30, 2025 included a tax benefit related to the release of uncertain tax positions.
As we continue to monitor the implications of potential tax legislation in each of our jurisdictions, we may adjust our estimates and record additional amounts for tax assets and liabilities. Any adjustments to our tax assets and liabilities could materially impact our provision for income taxes and our effective tax rate in the periods in which they are made.
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Revenue. Revenue increased $98.6 million, or 4.0%, to $2,590.0 million for the nine months ended September 30, 2026 from $2,491.3 million for the nine months ended September 30, 2025. The nine months ended September 30, 2026, included $34.0 million of revenue from two state government programs based on timing of program approval, all of which related to services rendered in prior periods. The nine months ended September 30, 2025, included $65.6 million of revenue from one state government program based on timing of program approval, $34.4 million of which related to services rendered in prior periods. Same facility revenue increased $98.2 million, or 4.0%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, resulting from same facility growth in revenue per day of 2.8%, same facility growth in patient days of 1.2%, and same facility growth in admissions of 6.5%. Consistent with same facility revenue growth in 2025, the growth in same facility patient days for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 resulted from the addition of beds to our existing facilities and ongoing demand for our services.
Salaries, wages and benefits. SWB expense was $1,431.4 million for the nine months ended September 30, 2026 compared to $1,359.9 million for the nine months ended September 30, 2025, an increase of $71.5 million. SWB expense included $28.2 million and $25.3 million of equity-based compensation expense for the nine months ended September 30, 2026 and 2025, respectively. SWB increased primarily due to new facility openings as well as routine annual wage increases. Excluding equity-based compensation expense, SWB expense was $1,403.2 million, or 54.2% of revenue, for the nine months ended September 30, 2026, compared to $1,334.6 million, or 53.6% of revenue, for the nine months ended September 30, 2025. Same facility SWB expense was $1,267.8 million for the nine months ended September 30, 2026, or 49.7% of revenue, compared to $1,217.6 million for the nine months ended September 30, 2025, or 49.6% of revenue.
Professional fees. Professional fees were $167.6 million for the nine months ended September 30, 2026, or 6.5% of revenue, compared to $147.1 million for the nine months ended September 30, 2025, or 5.9% of revenue. Same facility professional fees were $144.7 million for the nine months ended September 30, 2026, or 5.7% of revenue, compared to $129.0 million for the nine months ended September 30, 2025, or 5.3% of revenue.
Supplies. Supplies expense was $91.2 million for the nine months ended September 30, 2026, or 3.5% of revenue, compared to $87.3 million for the nine months ended September 30, 2025, or 3.5% of revenue. Same facility supplies expense was $88.7 million for the nine months ended September 30, 2026, or 3.5% of revenue, compared to $85.3 million for the nine months ended September 30, 2025, or 3.5% of revenue.
Rents and leases. Rents and leases were $35.5 million for the nine months ended September 30, 2026, or 1.4% of revenue, compared to $36.0 million for the nine months ended September 30, 2025, or 1.4% of revenue. Same facility rents and leases were $30.6 million for the nine months ended September 30, 2026, or 1.2% of revenue, compared to $32.0 million for the nine months ended September 30, 2025, or 1.3% of revenue.
Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, provider taxes, travel and repairs and maintenance expenses. Other operating expenses were $422.6 million for the nine months ended September 30, 2026, or 16.3% of revenue, compared to $377.2 million for the nine months ended September 30, 2025, or 15.1% of revenue. Same facility other operating expenses were $392.0 million for the nine months ended September 30, 2026, or 15.4% of revenue, compared to $351.2 million for the nine months ended September 30, 2025, or 14.3% of revenue. Other operating expenses for the nine months ended September 30, 2026 includes an unfavorable adjustment of $28.6 million to our estimated liability for self-insured professional and general liability claims relating to the settlement or expected settlement of certain prior year claims.
Depreciation and amortization. Depreciation and amortization expense was $156.0 million for the nine months ended September 30, 2026, or 6.0% of revenue, compared to $143.5 million for the nine months ended September 30, 2025, or 5.8% of revenue.
Interest expense. Interest expense was $113.8 million for the nine months ended September 30, 2026 compared to $100.9 million for the nine months ended September 30, 2025. The increase in interest expense was primarily the result of increased borrowings.
Debt extinguishment costs. Debt extinguishment costs were $1.3 million for the nine months ended September 30, 2025 related to the refinancing of the Prior Credit Facility.
27
|
|
Legal settlements (gain) expense. Legal settlements expense was $6.6 million for the nine months ended September 30, 2026 related to costs associated with the Sandoval Litigation, partially offset by the receipt of insurance proceeds in excess of payments of attorneys’ fees and expenses to plaintiffs’ counsel in connection with the settlement of derivative cases against the Company during the three months ended September 30, 2026. Legal settlements expense was $3.5 million for the nine months ended September 30, 2025 related to costs associated with the Desert Hills Litigation.
Loss on impairment. During the nine months ended September 30, 2026, we recorded non-cash property impairment charges totaling $10.9 million. The 2026 non-cash impairment charges included property impairments of $9.8 million and operating lease right-of-use asset impairments of $1.1 million. During the nine months ended September 30, 2025, we recorded non-cash property impairment charges of $1.5 million.
Loss (gain) on sale of property. During the nine months ended September 30, 2026 and 2025, we recorded gain on sale of property of $3.4 million and $8.7 million, respectively, related to the sale of closed properties.
Transaction, legal and other costs. Transaction, legal and other costs were $68.3 million for the nine months ended September 30, 2026, compared to $138.4 million for the nine months ended September 30, 2025. Transaction, legal and other costs represent government investigation, legal, accounting, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective period, as summarized below (in thousands).
|
Nine Months Ended September 30, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Government investigations |
$ |
38,162 |
|
|
$ |
123,274 |
|
Legal, accounting and other acquisition-related costs |
|
13,414 |
|
|
|
(304 |
) |
Termination and restructuring costs |
|
12,842 |
|
|
|
15,446 |
|
Management transition costs |
|
3,913 |
|
|
|
— |
|
Total |
$ |
68,331 |
|
|
$ |
138,416 |
|
Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 8 – Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements. Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($0.5 million and $1.9 million for the nine months ended September 30, 2026 and 2025, respectively); and legal and settlement costs incurred related to certain litigation not included in government investigations ($12.9 million and $(2.3) million for the nine months ended September 30, 2026 and 2025, respectively). Termination and restructuring costs include costs, net of gains, incurred related to workforce reductions, contract amendments, and the closure and disposition of certain facilities, including related lease terminations. Management transition costs during the nine months ended September 30, 2026, consist primarily of severance benefits incurred with the departure of the Company’s former Chief Executive Officer, Christopher H. Hunter.
Provision for income taxes. For the nine months ended September 30, 2026, the provision for income taxes was $34.1 million, reflecting an effective tax rate of 38.1%, compared to $18.1 million, reflecting an effective tax rate of 17.5%, for the nine months ended September 30, 2025. The increase in the effective tax rate for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily attributable to an increase in nondeductible legal settlements and an increase in valuation allowances against certain state deferred tax assets in the current year. In addition, the nine months ended September 30, 2025 included a tax benefit related to the release of uncertain tax positions.
As we continue to monitor the implications of potential tax legislation in each of our jurisdictions, we may adjust our estimates and record additional amounts for tax assets and liabilities. Any adjustments to our tax assets and liabilities could materially impact our provision for income taxes and our effective tax rate in the periods in which they are made.
Revenue
Our revenue is primarily derived from services rendered to patients for inpatient psychiatric and substance abuse care, outpatient psychiatric care and adolescent residential treatment. We receive payments from the following sources for services rendered in our facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by CMS and other programs; and (iv) individual patients and clients. We determine the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients and implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. Implicit price concessions are based on historical collection experience.
28
|
|
Our ability to negotiate favorable payment rates and other terms for our services impacts our revenue and results of operations. We actively engage with payors to negotiate such terms and, from time to time, we have had and may continue to have disagreements with payors regarding the interpretation or application of contractual terms, including with respect to claims for payment, which could result in reimbursement for certain of our services at rates lower than those we believe are required under our existing contractual arrangements or delays in payment.
The table below presents revenue by payor type and as a percentage of revenue (dollars in thousands) and includes an immaterial revision of amounts for the three months ended September 30, 2025, and the nine months ended September 30, 2026 and 2025, to correct the classification of certain revenue among payors.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||||
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
||||||||
Commercial |
|
$ |
187,450 |
|
|
|
20.9 |
% |
|
$ |
208,536 |
|
|
|
24.5 |
% |
|
$ |
554,103 |
|
|
|
21.4 |
% |
|
$ |
602,346 |
|
|
|
24.2 |
% |
Medicare |
|
|
132,689 |
|
|
|
14.8 |
% |
|
|
125,375 |
|
|
|
14.7 |
% |
|
|
370,671 |
|
|
|
14.3 |
% |
|
|
358,820 |
|
|
|
14.4 |
% |
Medicaid |
|
|
551,422 |
|
|
|
61.6 |
% |
|
|
486,976 |
|
|
|
57.2 |
% |
|
|
1,600,071 |
|
|
|
61.8 |
% |
|
|
1,442,671 |
|
|
|
57.9 |
% |
Self-Pay |
|
|
16,352 |
|
|
|
1.8 |
% |
|
|
18,514 |
|
|
|
2.2 |
% |
|
|
41,106 |
|
|
|
1.6 |
% |
|
|
49,645 |
|
|
|
2.0 |
% |
Other |
|
|
7,396 |
|
|
|
0.9 |
% |
|
|
12,172 |
|
|
|
1.4 |
% |
|
|
23,999 |
|
|
|
0.9 |
% |
|
|
37,828 |
|
|
|
1.5 |
% |
Revenue |
|
$ |
895,309 |
|
|
|
100.0 |
% |
|
$ |
851,573 |
|
|
|
100.0 |
% |
|
$ |
2,589,950 |
|
|
|
100.0 |
% |
|
$ |
2,491,310 |
|
|
|
100.0 |
% |
The following tables present a summary of our aging of accounts receivable at September 30, 2026 and December 31, 2025:
September 30, 2026
|
|
Current |
|
|
30-90 |
|
|
90-150 |
|
|
>150 |
|
|
Total |
|
|||||
Commercial |
|
|
14.8 |
% |
|
|
3.6 |
% |
|
|
3.2 |
% |
|
|
10.0 |
% |
|
|
31.6 |
% |
Medicare |
|
|
8.7 |
% |
|
|
1.3 |
% |
|
|
0.6 |
% |
|
|
1.7 |
% |
|
|
12.3 |
% |
Medicaid |
|
|
30.2 |
% |
|
|
5.5 |
% |
|
|
4.0 |
% |
|
|
9.1 |
% |
|
|
48.8 |
% |
Self-Pay |
|
|
1.1 |
% |
|
|
1.6 |
% |
|
|
1.5 |
% |
|
|
3.1 |
% |
|
|
7.3 |
% |
Other |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
Total |
|
|
54.8 |
% |
|
|
12.0 |
% |
|
|
9.3 |
% |
|
|
23.9 |
% |
|
|
100.0 |
% |
December 31, 2025
|
|
Current |
|
|
30-90 |
|
|
90-150 |
|
|
>150 |
|
|
Total |
|
|||||
Commercial |
|
|
14.7 |
% |
|
|
4.8 |
% |
|
|
3.1 |
% |
|
|
8.2 |
% |
|
|
30.8 |
% |
Medicare |
|
|
8.6 |
% |
|
|
1.9 |
% |
|
|
1.0 |
% |
|
|
1.5 |
% |
|
|
13.0 |
% |
Medicaid |
|
|
31.1 |
% |
|
|
6.9 |
% |
|
|
4.3 |
% |
|
|
6.9 |
% |
|
|
49.2 |
% |
Self-Pay |
|
|
1.3 |
% |
|
|
1.5 |
% |
|
|
1.5 |
% |
|
|
2.7 |
% |
|
|
7.0 |
% |
Other |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
Total |
|
|
55.7 |
% |
|
|
15.1 |
% |
|
|
9.9 |
% |
|
|
19.3 |
% |
|
|
100.0 |
% |
Liquidity and Capital Resources
Cash provided by operating activities for the nine months ended September 30, 2026 was $321.5 million compared to $218.2 million for the nine months ended September 30, 2025. The increase in operating cash flows for the nine months ended September 30, 2026 was primarily related to collection of the insurance proceeds for the 2019 Securities Litigation, an increase in funds received from certain state supplemental payment programs and favorable changes in working capital and other liabilities. Days sales outstanding were 52 days at September 30, 2026 compared to 49 days at December 31, 2025.
Cash used in investing activities for the nine months ended September 30, 2026 was $135.4 million compared to $463.8 million for the nine months ended September 30, 2025. Cash used in investing activities for the nine months ended September 30, 2026 primarily consisted of $165.9 million of cash paid for capital expenditures and $3.4 million of other, offset by $33.9 million of proceeds from the sale of property and equipment. Cash paid for capital expenditures for the nine months ended September 30, 2026 was $165.9 million, consisting of routine or maintenance capital expenditures of $71.1 million and expansion capital expenditures of $94.8 million. We define expansion capital expenditures as those that increase the capacity of our facilities or otherwise enhance revenue. Routine or maintenance capital expenditures, including information technology capital expenditures, were approximately 2% of revenue for the nine months ended September 30, 2026. Cash used in investing activities for the nine months ended September 30, 2025 primarily consisted of $478.6 million of cash paid for capital expenditures, $8.2 million of cash paid for acquisitions and $0.1
29
|
|
million of other, offset by $23.2 million of proceeds from sales of property and equipment. Cash paid for capital expenditures for the nine months ended September 30, 2025 was $478.6 million, consisting of routine or maintenance capital expenditures of $76.1 million and expansion capital expenditures of $402.5 million.
Cash used in financing activities for the nine months ended September 30, 2026 was $156.0 million compared to cash provided by financing activities of $288.0 million for the nine months ended September 30, 2025. Cash used in financing activities for the nine months ended September 30, 2026 consisted of principal payments on revolving credit facility of $215.0 million, principal payments on long-term debt of $20.3 million, repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises, of $4.2 million, distributions to noncontrolling partners in joint ventures of $4.2 million and $0.1 million of other, offset by borrowings on revolving credit facility of $85.0 million and contributions from noncontrolling partners in joint ventures of $2.8 million. Cash provided by financing activities for the nine months ended September 30, 2025 consisted of borrowings on long-term debt of $1,200.0 million, borrowings on revolving credit facility of $875.0 million and contributions from noncontrolling partners in joint ventures of $5.0 million, offset by principal payments on revolving credit facility of $1,035.0 million, repayment of long-term debt of $670.9 million, repurchase of common stock of $50.0 million, payment of debt issuance costs of $18.6 million, principal payments on long-term debt of $8.1 million, repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises, of $4.0 million, distributions to noncontrolling partners in joint ventures of $3.9 million, cash paid for contingent consideration of $1.5 million and $0.1 million of other.
We had total available cash and cash equivalents of $163.3 million and $133.2 million at September 30, 2026 and December 31, 2025, respectively, of which approximately $14.2 million and $8.0 million was held by our foreign subsidiaries, respectively. Our strategic plan does not require the repatriation of foreign cash in order to fund our operations in the U.S.
Credit Facility
On the Credit Facility Closing Date, we entered into the Credit Agreement, which provides for the $1.0 billion Revolving Facility (including a $50.0 million sublimit for the issuance of letters of credit and a $50.0 million swingline subfacility) and the $650.0 million Term Loan Facility, each maturing on February 28, 2030.
On the Credit Facility Closing Date, the full $650.0 million amount of the Term Loan Facility was funded, and $550.0 million was funded under the Revolving Facility, which amounts were used, among other things, to refinance the outstanding obligations under the Prior Credit Facility.
Borrowings under the Credit Agreement bear interest at a floating rate equal to, at our option, either (i) a SOFR-based rate plus a margin ranging from 1.375% to 2.250% or (ii) a base rate plus a margin ranging from 0.375% to 1.250%, in each case, depending on our Consolidated Total Net Leverage Ratio. In addition, an unused fee that varies according to our Consolidated Total Net Leverage Ratio ranging from 0.200% to 0.350% is payable quarterly in arrears based on the average daily undrawn portion of the commitments in respect of the Revolving Facility. The Term Loan Facility requires quarterly principal repayments of $8.1 million through March 31, 2028, $12.2 million from June 30, 2028 to March 31, 2029 and $16.3 million from June 30, 2029 to December 31, 2029, with the remaining outstanding principal balance of the Term Loan Facility due on the maturity date of February 28, 2030.
We have the ability to increase the amount of the Credit Facility, which may take the form of increases to the Revolving Facility or the Term Loan Facility or the issuance of one or more Incremental Facilities, upon obtaining additional commitments from new or existing lenders and the satisfaction of certain customary conditions precedent for such Incremental Facilities. Such Incremental Facilities may not exceed the sum of (i) the greater of $710.0 million and an amount equal to 100% of our LTM Consolidated EBITDA at the time of determination and (ii) additional amounts that would not cause our Consolidated Senior Secured Net Leverage Ratio to exceed 4.0 to 1.0.
Subject to certain exceptions, substantially all of our existing and subsequently acquired or organized direct and indirect wholly-owned U.S. subsidiaries are required to guarantee the repayment of our obligations under the Credit Agreement. The obligations of us and such guarantor subsidiaries are secured by a pledge of substantially all of our and such guarantor subsidiaries’ assets (excluding all real property and certain other customarily excluded assets).
The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including limitations on the ability of us and our subsidiaries to: (i) incur debt; (ii) permit additional liens; (iii) make investments and acquisitions; (iv) merge or consolidate with others; (v) dispose of assets; (vi) pay dividends and distributions; (vii) pay junior indebtedness; and (viii) enter into affiliate transactions, in each case, subject to customary exceptions. In addition, the Credit Agreement contains financial covenants requiring us to maintain, on a consolidated basis as of the last day of each quarterly period, a Consolidated Total Net Leverage Ratio of not more than 5.0 to 1.0 (which may be increased in connection with a material acquisition to 5.5 to 1.0 for a four quarter period up to three times during the term of the Credit Agreement) and a Consolidated Interest Coverage Ratio of at least 3.0 to 1.0. The Credit Agreement also includes events of default customary for facilities of this type and upon the occurrence of such events of default, among other things, all outstanding loans under the Credit Agreement may be accelerated,
30
|
|
lenders commitments terminated, and/or lenders may exercise collateral remedies. At September 30, 2026, our Consolidated Total Net Leverage Ratio was 3.9x, and we were in compliance with all financial covenants. Consolidated Total Net Leverage Ratio is being reported as calculated under the Credit Agreement and not pursuant to GAAP. Investors should refer to the agreements governing the Credit Agreement attached as exhibits to our periodic reports for further information related to the calculation thereof and should not consider Consolidated Total Net Leverage Ratio as an alternative for any measures derived in accordance with GAAP. For risks related to our indebtedness and compliance with these covenants, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
During the nine months ended September 30, 2026, we borrowed $85.0 million on the Revolving Facility and repaid $215.0 million of the balance outstanding. During the nine months ended September 30, 2025, we borrowed $760.0 million on the Revolving Facility and repaid $550.0 million of the balance outstanding.
At September 30, 2026, we had $710.1 million of availability under the Revolving Facility and had standby letters of credit outstanding of $15.9 million related to security for multiple development projects.
Prior Credit Facility
On March 17, 2021, we entered into the Prior Credit Facility, which provided for the Prior Revolving Facility and the Prior Term Loan Facility, each of which was scheduled to mature on March 17, 2026.
During the nine months ended September 30, 2025, we borrowed $115.0 million on the Prior Revolving Facility and repaid $485.0 million of the balance outstanding prior to February 28, 2025, when the Prior Credit Facility was refinanced in connection with entering into the Credit Facility.
On February 28, 2025, we refinanced the Prior Credit Facility by using the proceeds of the Credit Facility to repay the outstanding balances of the Prior Term Loan Facility and the Prior Revolving Facility, which totaled $670.9 million and $485.0 million, respectively. In connection therewith, we recorded a loss on extinguishment of $1.3 million, which is included in debt extinguishment costs in the condensed consolidated statements of income.
Senior Notes
5.500% Senior Notes due 2028
On June 24, 2020, we issued $450.0 million of 5.500% Senior Notes. The 5.500% Senior Notes mature on July 1, 2028 and bear interest at a rate of 5.500% per annum, payable semi-annually in arrears on January 1 and July 1 of each year.
5.000% Senior Notes due 2029
On October 14, 2020, we issued $475.0 million of 5.000% Senior Notes. The 5.000% Senior Notes mature on April 15, 2029 and bear interest at a rate of 5.000% per annum, payable semi-annually in arrears on April 15 and October 15 of each year.
7.375% Senior Notes due 2033
On March 10, 2025, we issued $550.0 million of 7.375% Senior Notes. The 7.375% Senior Notes mature on March 15, 2033 and bear interest at a rate of 7.375% per annum, payable semi-annually in arrears on March 15 and September 15 of each year. The net proceeds from the issuance and sale of the 7.375% Senior Notes, together with cash on hand, were used to pay down $550.0 million of outstanding borrowings under the Revolving Facility.
The indentures governing the Senior Notes contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) transfer or sell assets; (iv) engage in certain transactions with affiliates; (v) create restrictions on dividends or other payments by the restricted subsidiaries; (vi) merge, consolidate or sell substantially all of our assets; and (vii) create liens on assets.
The Senior Notes issued by us are guaranteed by each of our subsidiaries that guarantee our obligations under the Credit Agreement. The guarantees are full and unconditional and joint and several.
We may redeem the Senior Notes at our option, in whole or part, at the dates and amounts set forth in the applicable indentures.
Supplemental Guarantor Financial Information
We conduct all of our business through our subsidiaries. The Senior Notes are jointly and severally guaranteed on an unsecured senior basis by all of our subsidiaries that guarantee our obligations under the Credit Facility. The summarized financial information presented below is consistent with our condensed consolidated financial statements, except transactions between combining entities have been eliminated. Financial information for our combined non-guarantor entities has been excluded pursuant to SEC Regulation
31
|
|
S-X Rule 13-01. Presented below is condensed financial information for our combined wholly-owned subsidiary guarantors at September 30, 2026 and December 31, 2025, and for the nine months ended September 30, 2026. The information presented below as of December 31, 2025 has been revised to correct an immaterial error included in the Supplemental Guarantor Financial Information in Part I, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Summarized balance sheet information (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Current assets |
|
$ |
602,751 |
|
|
$ |
585,902 |
|
Property and equipment, net |
|
|
1,900,166 |
|
|
|
1,994,863 |
|
Goodwill |
|
|
1,157,060 |
|
|
|
1,157,060 |
|
Total noncurrent assets |
|
|
3,432,201 |
|
|
|
3,502,915 |
|
|
|
|
|
|
|
|
||
Current liabilities |
|
|
474,988 |
|
|
|
498,156 |
|
Long-term debt |
|
|
2,319,859 |
|
|
|
2,471,529 |
|
Total noncurrent liabilities |
|
|
2,579,224 |
|
|
|
2,716,259 |
|
Redeemable noncontrolling interests |
|
|
— |
|
|
|
— |
|
Total equity |
|
|
980,740 |
|
|
|
874,402 |
|
Summarized operating results information (in thousands):
|
|
Nine Months Ended September 30, 2026 |
|
|
Revenue |
|
$ |
2,065,955 |
|
Income before income taxes |
|
|
48,029 |
|
Net income |
|
|
24,697 |
|
Net income attributable to Acadia Healthcare Company, Inc. |
|
|
24,697 |
|
Contractual Obligations
The following table presents a summary of contractual obligations at September 30, 2026 (in thousands):
|
|
Payments Due by Period |
|
|||||||||||||||||
|
|
Less Than |
|
|
1-3 Years |
|
|
3-5 Years |
|
|
More Than |
|
|
Total |
|
|||||
Long-term debt (a) |
|
$ |
174,230 |
|
|
$ |
1,255,956 |
|
|
$ |
861,473 |
|
|
$ |
610,845 |
|
|
$ |
2,902,504 |
|
Operating lease liabilities (b) |
|
|
31,216 |
|
|
|
54,224 |
|
|
|
39,396 |
|
|
|
79,282 |
|
|
|
204,118 |
|
Finance lease liabilities |
|
|
1,089 |
|
|
|
2,178 |
|
|
|
2,387 |
|
|
|
17,529 |
|
|
|
23,183 |
|
Total obligations and commitments |
|
$ |
206,535 |
|
|
$ |
1,312,358 |
|
|
$ |
903,256 |
|
|
$ |
707,656 |
|
|
$ |
3,129,805 |
|
Critical Accounting Policies
There have been no material changes in our critical accounting policies at September 30, 2026 from those described in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
Our interest expense is sensitive to changes in market interest rates. Our long-term debt outstanding at September 30, 2026 was composed of $1,464.1 million of fixed-rate debt and $888.2 million of variable-rate debt with interest based on Adjusted Term SOFR plus an applicable margin. Based on our borrowing level at September 30, 2026, a hypothetical 1% increase in interest rates would decrease our pretax income on an annual basis by approximately $8.9 million.
32
|
|
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, our management conducted an evaluation, with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the three months ended September 30, 2026 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
33
|
|
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Information with respect to this item may be found in Note 8 – Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements of this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.
Item 1A. Risk Factors
In addition to the other information set forth in this report, an investor should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which are incorporated herein by reference. There have been no material changes to the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. However, the risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are not the only risks facing the Company. Additional risks and uncertainties not currently known to management or that management currently deems immaterial also may materially, adversely affect the Company’s business, financial condition, operating results or cash flows.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides our repurchases of shares of our common stock during the three months ended September 30, 2026:
Period |
|
Total Number |
|
|
Average Price |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
|
Maximum Dollar Value that |
|
||||
July 1 - July 31 |
|
|
5,730 |
|
|
$ |
33.32 |
|
|
|
— |
|
|
$ |
250.0 |
|
August 1 - August 31 |
|
|
5,402 |
|
|
$ |
31.54 |
|
|
|
— |
|
|
$ |
250.0 |
|
September 1 - September 30 |
|
|
7,907 |
|
|
$ |
28.53 |
|
|
|
— |
|
|
$ |
250.0 |
|
Total |
|
|
19,039 |
|
|
|
|
|
|
|
|
|
|
|||
Item 5. Other Information
From time to time, certain of our executive officers and directors may enter into, amend or terminate written trading arrangements pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934 or otherwise. During the three months ended September 30, 2026, none of the Company’s
34
|
|
Item 6. Exhibits
Exhibit No. |
|
Exhibit Description |
|
|
|
3.1 |
|
Amended and Restated Certificate of Incorporation, as amended. (1) |
|
|
|
3.2 |
|
Amended and Restated Bylaws of the Company, as amended. (2) |
|
|
|
22 |
|
List of Subsidiary Guarantors and Issuers of Guaranteed Securities. (3) |
|
|
|
31.1* |
|
Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2* |
|
Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32* |
|
Certification of Chief Executive Officer and Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101.INS** |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
101.SCH** |
|
Inline XBRL Taxonomy Extension Schema with embedded Linkbase Documents. |
|
|
|
104 |
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, has been formatted in Inline XBRL. |
* Filed herewith.
** The XBRL related information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
35
|
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Acadia Healthcare Company, Inc. |
||
|
|
|
|
|
By: |
|
/s/ David M. Duckworth |
|
|
|
David M. Duckworth |
|
|
|
Interim Chief Financial Officer |
Dated: November 4, 2026
36