Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Acadia Healthcare (NASDAQ:ACHC)

Q3 2013 Earnings Call

October 30, 2013 9:00 am ET

Executives

William Brent Turner - President

Joey A. Jacobs - Chairman and Chief Executive Officer

David M. Duckworth - Chief Financial Officer, Chief Accounting Officer and Controller

Analysts

Kevin M. Fischbeck - BofA Merrill Lynch, Research Division

Brian Tanquilut - Jefferies LLC, Research Division

Frank G. Morgan - RBC Capital Markets, LLC, Research Division

John W. Ransom - Raymond James & Associates, Inc., Research Division

Kevin Campbell - Avondale Partners, LLC, Research Division

Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

Darren P. Lehrich - Deutsche Bank AG, Research Division

Operator

Today's call is being recorded. Please go ahead.

William Brent Turner

Thank you. Good morning. I'm Brent Turner, President of Acadia Healthcare, and I'd like to welcome you to our third quarter 2013 conference call.

To the extent any non-GAAP financial measure is discussed in today's call, you may also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP on our website by following the Investor Relations link to Press Releases and viewing yesterday's news release.

This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Acadia's expected quarterly and annual financial performance for 2013 and beyond. For this purpose, any statements made during the call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify forward-looking statements. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in Acadia's filings with the Securities and Exchange Commission and in the company's third quarter news release. And consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements.

The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

At this time, for opening remarks, I will now turn the conference call over to our Chairman and Chief Executive Officer, Joey Jacobs.

Joey A. Jacobs

Good morning, and thanks for being with us today. In addition to Brent, I'm here today with our Chief Financial Officer, David Duckworth, and other members of our executive management team. David and I each have some brief remarks about the third quarter and our outlook for Acadia. Then we'll open the line for your questions.

Acadia continued to grow at a strong pace for the third quarter 2013. Our revenue increased nearly 80% from the third quarter last year to a new quarterly record of $185 million.

Adjusted income from continuing operations grew at a triple-digit rate for the third consecutive quarter. Adjusted income from continuing operations per diluted share rose over 75% to $0.30 on a 20% increase on weighted average shares outstanding due to our public equity offering in December last year.

The growth in revenue for the quarter primarily reflects the addition of 15 acquired facilities in the 12 months ended September 30, 2013, as well as the addition of 263 beds to existing facilities and the opening of a 60-bed de novo facility.

These activities included the completion of our acquisition of an 87-bed facility and the addition of 43 beds to existing facilities in the third quarter of 2013.

As a result, Acadia licensed beds increased to approximately 3,900 at the end of third quarter this year from more than 2,400 at the end of the third quarter last year.

The addition of new beds to the existing facilities again drove strong growth and same facility revenues for the third quarter, which also benefited from our ongoing local and national initiative to generate additional revenue in our existing facility base.

We produced a 9.9% same facility revenue increase with growth of 8.4% in same facility patient days and 1.4% in revenue per patient day.

Our same facility EBITDA margin was 25.3% for the quarter compared to 25.8% for the quarter third quarter last year.

We also continued to produce very significant growth in consolidated adjusted EBITDA, which increased by 82.6% to $38 million for the quarter and by 40 basis points to 20.8% as a percentage of revenue.

Looking ahead, we have already taken a number of positive steps toward continuing our steady growth thus far in the fourth quarter.

On October 1, we opened a 75-bed facility in North Tampa, Florida, that was under construction when we acquired it in May 2013, and we also completed the acquisition of a 68-bed facility in Alexandria, Louisiana. On October 15, we opened a new 42-bed facility in Lancaster, South Carolina.

We are also continuing to add beds to existing facilities during the fourth quarter. While we expect a new bed of at least 5% of our beginning licensed beds in any given year, we have targeted adding approximately 300 new beds for 2013 and for 2014, which is higher than our 5% expansion bed target.

To summarize, we believe Acadia is well positioned in our market as the leading provider of high quality behavioral health care for our patients and their families. We are also well positioned as a growth company, both because of attractive industry dynamics and strong long-term record of our management team in executing our proven growth strategy. As a market leader with favorable growth prospects, we remain confident of our ability to drive further long-term expansion and shareholder value.

Thank you again for being with us today. And now here's David Duckworth to discuss our results in greater detail.

David M. Duckworth

Thanks, Joey, and good morning. Acadia produced third quarter revenue of $184.7 million, an increase of 79.1% from $103 million for the third quarter of 2012.

Adjusted income from continuing operations rose 115.3% to $15.2 million, and adjusted income from continuing operations per diluted share rose 76.5% to $0.30.

Our adjusted results exclude transaction-related expenses of $984,000 for the third quarter of 2013 and $732,000 for the same quarter last year.

Acadia's weighted average shares outstanding increased 19.9% on a comparable quarter basis, primarily due to its common stock offering in December of 2012.

The company's same facility revenue grew 9.9% for the third quarter with an 8.4% increase in patient days and a 1.4% increase in revenue per patient day.

Same facility EBITDA was 25.3% of same facility revenue compared with 25.8% for the third quarter of 2012. This decrease is primarily attributable to the lower bad debt expense in the third quarter of 2012 of 1.4% compared with 2% of revenue in the third quarter of 2013.

Year-to-date same facility bad debt expense is 2% for 2013 compared with 1.8% year-to-date in 2012.

Adjusted consolidated EBITDA increased to 82.6% for the comparable quarters to $38.5 million, which was 20.8% of revenue, compared to 20.4% of revenue for the third quarter of 2012.

Acadia's effective tax rate for the third quarter of 2013 improved 140 basis points to 34.7% compared with 36.1% for the third quarter last year. This improvement, which added $0.02 per diluted share to our earnings for the quarter, was a result of our ongoing tax funding strategies in each of the states in which we operate. We expect that our tax rate will be approximately 38% in the fourth quarter of 2013.

As detailed in our news release, we have raised our 2013 guidance for adjusted earnings per diluted share to a range of $1.06 to $1.07 from the previous range of $1.01 to $1.03.

Our financial guidance excludes transaction-related expenses, debt extinguishment costs and the impact from any future acquisitions.

This concludes our prepared remarks this morning and thank you for being with us. I'll now ask Rochelle to open the floor for your questions.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question, we'll hear from Kevin Fischbeck with Bank of America Merrill Lynch.

Kevin M. Fischbeck - BofA Merrill Lynch, Research Division

Can you just talk a little bit more about the same-store margins? If I understood the commentary, it sounds like you view bad debt expense year -- this quarter as being kind of the right run rate. It was just that the prior year quarter was abnormally low. Is that the way to think about why it was up -- or why it was down year-over-year?

Joey A. Jacobs

Kevin, this is Joey. That's right. As the previous history with the prior company and with this company, our bad debt runs about 2% of net revenue. And last year, we did have 2 good quarters, the third and fourth quarters. And it's basically where we were doing some cleanup with some acquisitions that we had made in the earlier part of 2012. So we're up against last year's I think it was 1.4% and normally, we run about 2% and that was the difference in the same-store facility margin.

Kevin M. Fischbeck - BofA Merrill Lynch, Research Division

Okay. And then the overall bad debt was higher than that. Is that still related to the Delta Medical Center you highlighted last quarter? And is that just going to always operate at a higher bad debt number or will that come down over time to the 2% number?

Joey A. Jacobs

It will operate that way, Kevin, for the next couple of years. We'll have to wait to see about -- Tennessee was not an expansion state, and we'll just have to wait to see about what -- how the ObamaCare rolls out and how the uninsured and the Medicaid get covered. Tennessee was not an expansion state. So for the next 18 months, at least, I think it's going to be what it is now. But there is a chance that it could go down in the outer years as more people are covered under insurance plans.

Kevin M. Fischbeck - BofA Merrill Lynch, Research Division

Okay. And then other operating expenses was a bit higher than we would have thought. I guess, if you look at that last year, it did ramp up Q1 to Q2 to Q3 sort of the same progression, but this just seems like a little bit faster ramp. Is there anything going on there?

Joey A. Jacobs

No. It is -- once again, it is primarily, the Delta is such a large facility. And it does have roughly 30 medical surgical beds in it. And it -- that is continuing to move the numbers in all the categories up a little bit because of the complexity. And we have more than 100 psych beds there. And quite frankly, we're looking to find ways to put more beds in the facility. We're running about 100% occupancy on the psych side. So things are doing well there. It's just that due to the med/surg part of the business, it distorts some of those ratios from this year to last year.

Kevin M. Fischbeck - BofA Merrill Lynch, Research Division

Okay. And then last question, I wasn't quite sure what you were referring to, I guess, in the press release. And then also I think in your prepared comments, you mentioned some revenue growth initiatives at the same facility level. Is there something kind of unusual there or new there that you would kind of spike out as an initiative beyond just maybe hiring more salespeople or adding new service lines?

Joey A. Jacobs

There is nothing new there, but I guess we were just wanting to reinforce that our same-store facility growth, their revenue initiatives really are at that local level with the CEO adding new programs to their facilities and then, overlaying that is that our national marketing group has done -- has had a record-breaking year this year about placing patients into our facilities. So both of those is basically the CEOs adding new programs to their facilities and the national marketing group doing -- having a record year. And we just to want to highlight them and what we're doing to the company. Nothing new is there. It's just that they've had a great year and we expect them to continue to do great things in the future.

Operator

And next we'll move to Brian Tanquilut with Jefferies.

Brian Tanquilut - Jefferies LLC, Research Division

Joey, you highlighted how you guys are ahead of your typical 5% average on that expansion. Do you mind reminding us what you're spending for these beds just on a capital expenditure basis?

Joey A. Jacobs

It's between $100,000 and $120,000 a bed. Some locales, we can go in and do it at $80,000, some costs $150,000. But a good average or a good modeling number would be $100,000 to $120,000.

Brian Tanquilut - Jefferies LLC, Research Division

Okay, got it. And then you highlighted the 60-bed de novo facility. Is that something that we should expect you guys to do more going forward, starting de novos from the ground up?

Joey A. Jacobs

I think I'm going to be a little bit more positive there. I think we would say we would do maybe 1 a year or whatever. It could now ramp up into maybe 2 a year, maybe 3 a year. We've also done a new one in South Carolina that we've just opened up and we did the one in Atlanta. So -- and really, North Tampa opening up. Even though we acquired the facility, we had to finish the construction and bring it up. So this year, it looks like we've done 3 facilities. So I think it's going to be more in the 2 to 3 range going forward. We are getting several inbound calls from large med/surg not-for-profit systems about us -- about inviting us to their campus and to build a psych hospital on their campus or near their campus. So Steve Davidson is very active working those opportunities.

Brian Tanquilut - Jefferies LLC, Research Division

Joey, to that point, I know we've talked in the past but a bit about how there are opportunities emerging in the nonprofit hospital space for acquisitions. And if you don't mind just giving us an update on what you're seeing there and really just a broader view on the acquisition pipeline. I know you guys have had a good year this year, but what does 2014 look like so far?

Joey A. Jacobs

2014 I think is going to look a lot like 2013. We expect to close on more facilities in the fourth quarter. And the pipeline, our visibility into next year, we've got some letter of intents already signed and more than one of those are with not-for-profit systems, where we will be buying their facility and partnering with them. So 2014 I think could -- has the potential to be like 2013. And Steve and his department are very busy following up on leads and projects. And so we feel very good today.

Brian Tanquilut - Jefferies LLC, Research Division

And Joey, last question for you is Delta, we've talked about that on this call quite a bit. Just wondering if you can share with us how the capacity has ramped up there? Because I think you said it's 100% capacity now. So what did that look like when you bought it and how long did it take for you guys to ramp that up?

Joey A. Jacobs

Well, we bought it the first part of this year and we renovated and spruced up some beds and we have those beds filled. And we are looking at the next expansion there to fill more beds. And then we're also looking at something else in that market to assist our network there. So that's turning up to be a great market and Delta is presenting us with tremendous opportunities on expansion and we still have over 100 beds that we can grow into on the Delta campus. So we'll take another 20 beds, get those online and do it at 20 beds in increments, but we have a lot of demand there for good quality behavioral healthcare services.

Operator

And next, we'll move to Frank Morgan with RBC Capital Markets.

Frank G. Morgan - RBC Capital Markets, LLC, Research Division

You had mentioned about your -- and called out your national marketing group, Joey. I'm curious when you talked about their help in placing patients, where have you seen that success? Has it been acute RTC? And what's the payer type? Is it more commercial or government?

Joey A. Jacobs

It is primarily residential patients and the reimbursement it similar to what it's always been. It's more governmental, Medicaid patients. There is a few private pay patients also or commercial patients. But primarily, it is a -- primarily, it's Medicaid and governmental agencies. However, we have just recently started working with another partner and we are getting some acute referrals to us that we would not have seen. So things are looking good about through our call center and our referral and our national marketing group.

Frank G. Morgan - RBC Capital Markets, LLC, Research Division

Okay. And one other, maybe just an update on pricing from a Medicaid standpoint, how is that looking? And then maybe a little bit discussion around what's happening on the exchange negotiation? And I'll hop off.

Joey A. Jacobs

Okay, I think pricing has not changed since our last call. I think we're going to get to 2%, 2.5% for Medicare. We're going to get 4% to 6% from commercial and Medicaid is going to be in that 0% to 1% range there. And as you can see today, on the third quarter, we blended out a 1.4% increase for the quarter and that's okay with us as rapidly as we're growing our same-store patient day. We're having limited discussions about the exchanges in the networks. Once again, we will be one of the last places where they will focus on putting us and keeping us in the network. We're not being excluded from anything that I'm aware of. And we do have a few discussions going on with payers about new products, those sort of things going on, but nothing definitive today.

Operator

And Mr. Morgan, were you done with your question?

Frank G. Morgan - RBC Capital Markets, LLC, Research Division

Yes, I'm finished.

Operator

We'll move onto John Ransom with Raymond James.

John W. Ransom - Raymond James & Associates, Inc., Research Division

How much room do you think you still have to expand and convert beds in your same-store base? And what do you think the margin opportunity is? Obviously, it's been great. I just wonder how much is left.

Joey A. Jacobs

Expansion, John, we will add close to 300 beds to the same facility base and the base continues to get larger. So we're just kind of wrapping up our budgeting processed for next year. And the projects we see on the construction list are very good, very strong and there will be more to come. And then on the margins, the margins are going to be in the 26%, I think, maybe 27% range, as we take on -- this last group of 15 facilities that we acquired had margins less than what we -- than our company average and we'll be moving those up into -- be moving those up above there. So I think our margins to get into the 26%, 27% range. But if it stayed at 26%, that would be fine for us, but there is a couple of hundred more basis points there potential for us as we think about the RTC.

John W. Ransom - Raymond James & Associates, Inc., Research Division

What about converting from residential to acute? Is there much more in there as well?

Joey A. Jacobs

No, not really. We did -- we're doing one big project right now, where we've taken a facility and converting it to acute -- half of it to acute and we just about got that done. There'll be one project next year. We don't have anything identified now, but there'll be a 20 to 40-bed project that we will do that will probably take residential and to convert it to acute. But at the same time, we will continue to add residential beds to the company. Our residential facilities are doing great. And so we will look at our opportunities there to...

John W. Ransom - Raymond James & Associates, Inc., Research Division

And you're not seeing -- I mean, one of your large competitors is experiencing pressures on length of stay -- you're not seeing any pressures on length of stay, in the residential side?

Joey A. Jacobs

No, nothing, no. John, it's -- there's always been utilization review and pressure there but we have not seen any intensity or pick up in intensity on utilization review. Once again, the patients we take care of need to be with us and I think everybody realizes that the worst thing we can do is prematurely discharge a patient in today's environment because something bad could happen.

John W. Ransom - Raymond James & Associates, Inc., Research Division

Right. And lastly on M&A, is there any -- are there any large-scale opportunities out there? Is it going to be more of what you've seen, which are the smaller batches and de novos?

Joey A. Jacobs

I think it's going to be smaller batches, but there are a couple of larger things out there -- opportunities out there for us. But it's going to be smaller batches, one-offs. You're going to see -- the facilities that we partner with on the not-for-profit side, you're going to see those facilities being much bigger and the revenue base being much larger. So one of those hospitals might be 3x the size of, say, single facilities that we've been buying. So there are some large single facilities that we're looking at.

John W. Ransom - Raymond James & Associates, Inc., Research Division

And are you typically splitting the profits there down the middle? Or do you get a majority? Or how does that work?

Joey A. Jacobs

Right now, it looks like we will be acquiring 80-plus-percent of the opportunity.

Operator

And next we'll move to Kevin Campbell with Avondale Partners.

Kevin Campbell - Avondale Partners, LLC, Research Division

I just want to make sure I heard something correct on your prepared remarks, Joey. Did you say you acquired a new facility in Alexandria, Virginia on October 1?

Joey A. Jacobs

Alexandria, Louisiana.

Kevin Campbell - Avondale Partners, LLC, Research Division

Okay, Louisiana. And can you provide us with any additional details on that? I don't think there was a press release on that one.

Joey A. Jacobs

It's 68 beds. It's a sole community providing hospital. Our operations team really like this facility. And it has opportunities to grow. And Steve and his team have been working this deal for a while and we were able to agree on the price. And we think we bought it right and we think operations has a great chance to grow it and improve the operation. And we're off to a good start there. The employees have really accepted Acadia and the way we do things and so we've got -- we think good things are going to come out of that facility.

Kevin Campbell - Avondale Partners, LLC, Research Division

And what's the revenue run rate there now?

Joey A. Jacobs

We haven't disclosed that.

Kevin Campbell - Avondale Partners, LLC, Research Division

Okay. And then cash flow from ops was pretty strong for a second quarter in a row. Can you maybe give us a sense for what a normalized annual number should be there?

David M. Duckworth

Yes, I mean it is going to fluctuate during the year, but we expect to see at least the number we saw in the third quarter. We did have some AR increases and other items that we typically see in the third quarter that made that lower -- that number lower than what we saw in the second quarter. $25 million or so a quarter is what we expect. We benefit from a lower cash tax rate than our effective tax rate. That's been a positive to us from a cash flow from operations standpoint as well.

Kevin Campbell - Avondale Partners, LLC, Research Division

So we should think about it in general, and again, it will fluctuate, but about $25 million or so a quarter?

Joey A. Jacobs

Yes. Yes, with the exception of first and third, we have our largest interest payment semi-annual on our notes. So that's where you see a little volatility in the first and third but...

Kevin Campbell - Avondale Partners, LLC, Research Division

Okay, that's helpful. And then the tax rate, I know you gave a number for the fourth quarter. As we think about modeling it for 2014, is it going to sort of stay around that 38% or -- it was obviously higher in the first half of this year?

David M. Duckworth

We do think that our tax rate will be lower looking out into 2014, depending on recent acquisitions, other state tax planning projects that we have in the works, we think it will be between 38%, 38.5%, but we will provide more guidance on that when we provide our 2014.

Joey A. Jacobs

Yes. And Kevin, the thing not to lose there is whether our provision is 38% or 38.5%, due to some of the structuring of our acquisitions over the past 12 months, our effective cash tax rate is running about 23%. So that's sort of the most important piece for us is we're actually paying about 23% on a cash basis.

Operator

And our next question, we'll hear from Charles Haff with Craig-Hallum.

[Technical Difficulty]

Operator

We'll move onto the next one, Whit Mayo with Robert Baird.

Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division

Joey, do you have any new thoughts on what to expect in the final parity rule that I guess should be out in the next few weeks?

Joey A. Jacobs

Whit, I don't have any update. Brent, do you got any current update on that?

William Brent Turner

No. We expect the final to be very similar to the interim regs that we've been operating under the last few years. Obviously, there's a few technical aspects that you always look for to be buttoned up, but we continue to believe that the administration, that there's so much support for the concept of Mental Health Parity that we anticipate that those will be consistent and in the best interest of the patients who are benefiting from the access due to the parity legislation.

Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division

Got it. And Brent, back on the Alexandria facility, how large is that in terms of beds?

William Brent Turner

It's 68 beds.

Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division

Is that a psych hospital?

William Brent Turner

Yes, this is a psych acute hospital.

Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division

Okay, got it. And the Lancaster facility in South Carolina, what was the size of that?

William Brent Turner

It is 42 beds, and it's substance abuse and acute.

Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division

Got it. And one last question just on the Tampa de novo, just wanted to get an update on how that's progressing. And do you have Medicare certification at this point? And was that a drag at all in the third quarter? Just trying to get a sense of the trajectory there.

Joey A. Jacobs

Just a little bit of a drag. We opened it up October 1. We will have the number of discharges for Joint Commission Medicare to come through and look at it in the next week or so. And Tom Dodd and his group do a super job for us in getting the provider numbers. And everything is on track there, no delays. And we think Tom and his group will be -- will get the number as efficiently and as soon as possible. So off to a good start there, pretty good statistically.

Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division

So we should expect certification in the fourth quarter?

Joey A. Jacobs

Yes. Absolutely. I personally expect it in November and maybe the first half of November.

Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division

Got it. What's the rule on that, is it 30 admissions before certification?

Joey A. Jacobs

30 discharges. You've got to have 30 charts for them to review.

Operator

And we do have Charles Haff with Craig-Hallum back with us.

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

I had a question for you regarding Puerto Rico. I wondered if you could give us an update there on how things are going in Puerto Rico. I think when you did that deal, you thought there will be some organic bed additions. I wonder if you could give us an update on that.

Joey A. Jacobs

Puerto Rico is doing well. I think, quite frankly, we're working hard at adding beds to that facility because their occupancy many days is close to 100%. And we've got a great administrator there and things are going well in Puerto Rico. We just can't get the beds filled fast enough. So it's off to a good start and we like being there. And once again, this is a facility that has really embraced us. And it's got a good leadership at the local level and at the division level and it's doing very well.

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

And I think you also said that you thought you may be able to add a new facility to Puerto Rico at the time that you did the deal. Is that still in place? Do you have plans to add another facility to the island?

Joey A. Jacobs

We're working on that as we speak. And we do have plans that we're reviewing to put beds somewhere else on the island.

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

Okay, great. And then my last question is regarding the increased public awareness for mental health, I'm wondering if you're hearing anything from your markets with the increased public awareness and you thought that that may be translated to admission growth this quarter? Or is that not really having much of a material impact at this point?

Joey A. Jacobs

It's not having a material impact at this point. Once ObamaCare actually gets up and running and if those 60 million people get enrolled, then the opportunity to have some of our bad debt covered and to actually get more patient days, those people would access mental health, we think that's a positive. We just can't quantify.

Operator

And next, we'll move to Darren Lehrich with Deutsche Bank.

Darren P. Lehrich - Deutsche Bank AG, Research Division

A couple of things. First, I wanted to just ask about the acute med/surg beds that you referenced, Joey, at Delta Medical Center. I'm just wondering given that they certainly add a little bit of noise to the reported numbers, are those beds that you expect to keep in service long term? Or can you decommission any of those med/surg beds? I'm just curious just to hear what the long-term plan is on that.

Joey A. Jacobs

We could decommission them but we're not going to. They serve a need in that community and we think they're going to be a positive to our facility. And it allows us to take a more medically compromised psych patients than a normal freestanding psych hospital could because of the med/surg facility being there, the services being there. So it's a positive to us. It's a positive to that community. And once it -- same store is over, the numbers will be comparable. So no, we like Delta. We like those 30 beds and so -- and the psych services. And they support our psych services. We have a unique opportunity to take care of a more difficult, medically complicated patient.

Darren P. Lehrich - Deutsche Bank AG, Research Division

Got it. And then just as you referred to a number of the not-for-profit system deals you're looking at. Are any of them going to have a similar flavor to what you have in Delta? Or they're just more traditional campus-related transactions for psych hospitals with hospital partners?

Joey A. Jacobs

They're going to be more traditional psych facilities because we have a med/surg partner that is working with us and had to own previously the psych hospital. So we have someone that will support us on the medical side, so there's no need to do that. Delta is kind of a one-off opportunity for us. And so the not-for-profits that we're looking at right now are just purely psych acute facilities.

Darren P. Lehrich - Deutsche Bank AG, Research Division

Okay, that's helpful. And then also, I wanted to ask you about your bed expansion program. And you're obviously giving us some flavor for 2014 at 300 new beds. Can you maybe just talk a little bit about CapEx that you think you'll need to deploy for those beds? Is there anything different about the next 300 beds, in terms of how they'll be configured or how much they'll cost relative to what you have been spending? And maybe just an update on that.

Joey A. Jacobs

It's going to be very similar to what we've done in the past, Darren. If we build 300 beds, I would say CapEx probably around $30 million for that expansion. So might be a little bit higher, might be a little bit lower, but it's about $100,000 a bed. So it looks very similar to what we've done this year and last year.

Darren P. Lehrich - Deutsche Bank AG, Research Division

Okay, that's great. And then just last question. Could you just give us the facility and bed count in your same-store grouping?

David M. Duckworth

Yes, we have facilities in our same facility group with almost 2,600 beds in that group.

Operator

And that will conclude the Q&A session for today. I'd like to turn the call back over to Mr. Jacobs for any additional or closing remarks.

Joey A. Jacobs

Thank you very much. I just want to thank all of our facilities and the team out there on the ground that does the work, that takes care of our patients and our families, and the clinicians that practice in our facilities. I want to thank them. Thank you all for our great 2013, for the first 9 months. We've got 3 more months to go to close out this year. So thanks for all what you're doing to finish strong here. And I'll be going down soon to visit our facility in Tampa. So I look forward to getting out and visiting that facility. So once again, thanks for your interest in Acadia. If you have any questions -- additional questions, please do not hesitate to contact us directly. Hope everyone has a great day and thanks and goodbye.

Operator

And that will conclude today's conference. We thank you for your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Acadia Healthcare Management Discusses Q3 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts