Acadia Healthcare Company, Inc. - FORM 8-K - EX-99.4

Attached files

file	filename
8-K - 8-K - Acadia Healthcare Company, Inc.	d97648d8k.htm
EX-99.3 - EX-99.3 - Acadia Healthcare Company, Inc.	d97648dex993.htm
EX-99.2 - EX-99.2 - Acadia Healthcare Company, Inc.	d97648dex992.htm
EX-99.1 - EX-99.1 - Acadia Healthcare Company, Inc.	d97648dex991.htm

Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The tables below set forth the unaudited pro forma condensed combined financial data for Acadia Healthcare Company, Inc. (“Acadia”) giving effect to certain acquisitions and related financing transactions as further described below and give effect to each transaction as if it occurred on January 1, 2014. The unaudited pro forma condensed combined financial data is based on the assumption that Acadia will issue $250,000,000 of senior unsecured notes in this offering.

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

The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2015 combines the unaudited consolidated statement of operations of Acadia for that period, the unaudited consolidated statement of operations of CRC for the period prior to February 11, 2015, the CRC acquisition date, and the unaudited consolidated statement of operations for other completed acquisitions for the periods prior to the respective acquisition dates.

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

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

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

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

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2014

(In thousands, except per share amounts)


	Acadia(1)			Partnerships in Care(5)			CRC(2)			Completed Acquisitions(3)			Pro Forma Adjustments			Notes			Pro Forma Combined
Revenue before provision for doubtful accounts	$	1,030,784		$	142,312		$	460,040		$	191,356								$	1,824,492
Provision for doubtful accounts		(26,183	)		3			—			(261	)		(7,872	)		(7	)		(34,313	)

Revenue		1,004,601			142,315			460,040			191,095			(7,872	)					1,790,179
Salaries, wages and benefits		575,412			84,641			227,692			106,424									994,169
Professional fees		52,482			6,737			40,551			10,636									110,406
Supplies		48,422			4,868			20,858			6,868									81,016
Rents and leases		12,201			909			17,538			5,985									36,633
Other operating expenses		110,654			11,644			51,517			16,225			(1,122	)		(11	)		188,918
Depreciation and amortization		32,667			11,731			21,290			7,601			(10,747	)		(8	)		62,542
Interest expense, net		48,221			43,084			72,718			1,435			(52,760	)		(9	)		112,698
Provision for doubtful accounts		—			—			7,872			—			(7,872	)		(7	)		—
Debt extinguishment costs		—			—			11,622			—									11,622
Gain on foreign currency derivatives		(15,262	)		—			—			—			15,262			(10	)		—
Goodwill and asset impairments		—			—			1,089			—									1,089
Transaction-related expenses		13,650			—			7,686			—			(21,336	)		(11	)		—

Total expenses		878,447			163,614			480,433			155,174			(78,575	)					1,599,093
Income (loss) from continuing operations before income taxes		126,154			(21,299	)		(20,393	)		35,921			70,703						191,086
Provision (benefit) for income taxes		42,922			30			6,576			8,981			2,639			(12	)		61,148

Income (loss) from continuing operations	$	83,232		$	(21,329	)	$	(26,969	)	$	26,940		$	68,064					$	129,938

Earnings per share—income (loss) from continuing operations:
Basic	$	1.51																	$	1.85

Diluted	$	1.50																	$	1.84

Weighted average shares:
Basic		55,063												15,214			(13	)		70,277
Diluted		55,327												15,214			(13	)		70,541

See accompanying notes to unaudited pro forma financial information.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2015

(In thousands, except per share amounts)


	Acadia(1)			CRC(2)			Completed Acquisitions(4)			Pro Forma Adjustments			Notes			Pro Forma Combined
Revenue before provision for doubtful accounts	$	835,956		$	53,014		$	66,135								$	955,105
Provision for doubtful accounts		(16,513	)		—			(10	)		(1,206	)		(7	)		(17,729	)

Revenue		819,443			53,014			66,125			(1,206	)					937,376
Salaries, wages and benefits		449,173			31,288			39,831									520,292
Professional fees		52,456			5,136			3,687									61,279
Supplies		36,796			2,583			2,364									41,743
Rents and leases		14,097			2,023			1,600									17,720
Other operating expenses		91,655			5,708			5,277									102,640
Depreciation and amortization		28,030			2,459			2,852			(571	)		(8	)		32,770
Interest expense, net		50,195			8,883			862			(2,186	)		(9	)		57,754
Provision for doubtful accounts		—			1,206			—			(1,206	)		(7	)		—
Gain on foreign currency derivatives		908			—			—			(908	)		(10	)		—
Transaction-related expenses		25,573			1,712			—			(27,285	)		(11	)		—

Total expenses	$	748,883			60,998			56,473			(32,156	)					834,198
Income (loss) from continuing operations before income taxes		70,560			(7,984	)		9,652			30,950						103,178
Provision (benefit) for income taxes		22,125			(3,034	)		2,069			11,857			(12	)		33,017

Income (loss) from continuing operations	$	48,435		$	(4,950	)	$	7,583		$	19,093					$	70,161

Earnings per share—income (loss) from continuing operations:
Basic	$	0.74														$	0.98

Diluted	$	0.74														$	0.97

Weighted average shares:
Basic		65,429									6,529			(13	)		71,958
Diluted		65,782									6,529			(13	)		72,311

See accompanying notes to unaudited pro forma financial information.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2014

(In thousands, except per share amounts)


	Acadia(1)			Partnerships in Care(5)			CRC(2)			Completed Acquisitions (3)			Pro Forma Adjustments			Notes			Pro Forma Combined
Revenue before provision for doubtful accounts	$	426,783		$	142,312		$	219,175		$	101,857								$	890,127
Provision for doubtful accounts		(11,562	)		3			—			(204	)		(3,432	)		(7	)		(15,195	)

Revenue		415,221			142,315			219,175			101,653			(3,432	)					874,932
Salaries, wages and benefits		240,048			84,641			104,362			56,741									485,792
Professional fees		21,273			6,737			19,355			5,555									52,920
Supplies		20,660			4,868			9,812			3,607									38,947
Rents and leases		5,658			909			8,377			3,413									18,357
Other operating expenses		47,756			11,644			23,721			8,779			(1,122	)		(11	)		90,778
Depreciation and amortization		11,371			11,731			10,316			4,003			(6,709	)		(8	)		30,712
Interest expense, net		19,437			43,084			36,476			810			(43,715	)		(9	)		56,092
Provision for doubtful accounts		—			—			3,432			—			(3,432	)		(7	)		—
Debt extinguishment costs		—			—			11,622			—									11,622
Gain on foreign currency derivatives		(13,735	)		—			—			—			13,735			(10	)		—
Goodwill and asset impairments		—			—			—			—									—
Transaction-related expenses		4,595			—			2,588			—			(7,183	)		(11	)		—

Total expenses		357,063			163,614			230,061			82,908			(48,426	)					785,220
Income (loss) from continuing operations before income taxes		58,158			(21,299	)		(10,886	)		18,745			44,994						89,712
Provision (benefit) for income taxes		22,680			30			3,511			4,756			(2,269	)		(12	)		28,708

Income (loss) from continuing operations	$	35,478		$	(21,329	)	$	(14,397	)	$	13,989		$	47,263					$	61,004

Earnings per share—income (loss) from continuing operations:
Basic	$	0.70																	$	0.86

Diluted	$	0.69																	$	0.86

Weighted average shares:
Basic		50,872												19,691			(13	)		70,563
Diluted		51,174												19,691			(13	)		70,865

See accompanying notes to unaudited pro forma financial information.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(In thousands, except per share amounts)

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

(2)	The amounts in this column represent, for CRC, actual results for the periods presented prior to the acquisition date of February 11, 2015 based on financial information prepared and obtained from CRC management.

(3)

The amounts in this column represent pro forma adjustments for Acadia’s and CRC’s completed acquisitions of (a) Habit, (b) McCallum Place, (c) Quality Addiction Management, Inc. (“QAM”), (d) three facilities from Choice Lifestyles (“Choice”), (e) Pastoral Care Group (“Pastoral”), (f) Mildmay Oaks, (g) 15 facilities from Care UK Limited (“Care UK”), (h) Belmont, (i) H&SCP and (j) Danshell (none of which were individually material) up to the respective acquisition dates based on financial information prepared and obtained from the respective companies.

(4)	The amounts in this column represent pro forma adjustments for Acadia’s completed acquisitions of (a) QAM, (b) Choice, (c) Pastoral, (d) Mildmay Oaks, (e) Care UK, (f) Belmont, (g) H&SCP and (h) Danshell (none of which were individually material) up to the respective acquisition dates.

(5)

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


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

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


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

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

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

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

(6)

Reflects adjustments to reconcile U.K. GAAP to U.S. GAAP including (i) a property and equipment impairment charge and related depreciation expense adjustment, which would not have been recorded under U.S. GAAP; (ii) amortization of an interest rate swap, which would not have been recorded under U.S.

GAAP; (iii) a share-based payment charge, which would not have been recorded under U.S. GAAP; and (iv) the tax impact of the previous adjustments.

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

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


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

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

		651				—		—			—			—

Partnerships in Care depreciation and amortization expense								8,402			—			8,402
CRC:
Land	$	24,597		N/A	$	—	$	—		$	—		$	—
Building and improvements		88,312		10-40		575		6,900			939			3,450
Equipment		24,110		3-10		581		6,972			949			3,486
Construction in progress		3,133		N/A		—		—			—			—

		140,152				1,156		13,872			1,888			6,936
Indefinite-lived intangible assets		37,000		N/A		—		—			—			—

		37,000				—		—			—			—
CRC depreciation and amortization expense								13,872			1,888			6,936

Total depreciation and amortization expense								22,274			1,888			15,338
Less: historical depreciation and amortization expense of Partnerships in Care								(11,731	)		—			(11,731	)
Less: historical depreciation and amortization expense of CRC								(21,290	)		(2,459	)		(10,316	)

Depreciation and amortization expense adjustment							$	(10,747	)	$	(571	)	$	(6,709	)

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


	Year Ended December 31, 2014			Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Interest related to 5.125% Senior Notes due 2022	$	7,688		$	—		$	7,688
Interest related to 5.625% Senior Notes due 2023 issued February 2015		21,094			2,871			10,547
Interest related to new 5.625% Senior Notes		14,063			7,032			7,032
Interest related to paydown of 12.875% Senior Notes		(12,553	)		(6,277	)		(6,277	)
Interest related to Term Loan A		8,225			—			4,113
Interest related to Term Loan B		21,250			2,892			10,625
Interest related to change in the applicable interest rate on term A loans based on Acadia’s consolidated leverage ratio		1,141			285			571
Interest related to revolving line of credit paydown, net of borrowing		(105	)		33			239
Interest related to amortization of deferred financing costs		3,674			723			2,117
Less: historical interest expense of Partnerships in Care		(43,084	)		—			(43,084	)
Less: historical interest expense of CRC		(72,718	)		(8,883	)		(36,476	)
Less: historical interest expense of other completed acquisitions		(1,435	)		(862	)		(810	)

Interest expense adjustment	$	(52,760	)	$	(2,186	)	$	(43,715	)

An increase or decrease of 0.125% in the interest rate of 5.625% for the new unsecured senior notes would result in a change of $0.3 million, $0.2 million and $0.2 million for the year ended December 31, 2014 and the six months ended June 30, 2015 and 2014, respectively.

(10)

Represents adjustments to eliminate the gain on foreign currency derivatives, which are related to the acquisition of Partnerships in Care on July 1, 2014, the acquisitions of two facilities from Choice Lifestyles, Pastoral and Mildmay Oaks on April 1, 2015 and the acquisitions of Care UK and one facility from Choice Lifestyles on June 1, 2015.

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

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

(13)

Represents adjustments to weighted average shares used to compute basic and diluted earnings per share to reflect the effect of 8,881,794 shares of common stock issued by Acadia in June 2014, 5,975,326 shares of common stock issued by Acadia on February 11, 2015 related to the acquisition of CRC and 5,175,000 shares of common stock issued on May 11, 2015.

Acadia Healthcare Company, Inc. - FORM 8-K - EX-99.4 - September 14, 2015

Attached files

Acadia Healthcare Company, Inc. Reports