SecProbe.io

CORRESP
1
filename1.htm

CORRESP

 January 21, 2025

VIA EDGAR

 Tayyaba Shafique

Tracey Houser

 Division of Corporation Finance

Office of Industrial Applications and Services

 United States
Securities and Exchange Commission

 100 F Street, NE

Washington, D.C. 20549

Re:
 Acadia Healthcare Company, Inc.

Form 10-K for Fiscal Year Ended December 31, 2023

Form 8-K Filed February 27, 2024

Response dated December 6, 2024

File No. 001-35331

 Ladies and
Gentlemen:

 This letter sets forth the responses of Acadia Healthcare Company, Inc. (the “Company”) to the comments
of the Staff (the “Staff”) of the U.S. Securities and Exchange Commission set forth in your letter, dated December 20, 2024, with respect to the Company’s Form 8-K, filed on February 27, 2024 (File
No. 001-35331).

 For your convenience, each of the above referenced comments of the Staff is reprinted in bold, italicized text
below, followed by the Company’s responses thereto.

 Tayyaba Shafique

Tracey Houser

 U.S. Securities & Exchange Commission

January 21, 2025

  Page
 2

 Form 8-K Filed February 27, 2024

Exhibit 99

1.
 We note your response to prior comment 3, along with the draft presentations provided in Annexes A
through C. In Annex B, please present Profit margin with equal or greater prominence of your presentation of Adjusted EBITDA margin.

RESPONSE:

 The Company
acknowledges the Staff’s comment and respectfully advises the Staff that the Company has determined to no longer present adjusted EBITDA margin in future filings. As such, the Company has modified the draft presentation of Operating Statistics
included as Annex A to the Company’s response to the Staff’s letter, dated November 15, 2024 (such response, the “Prior Response Letter”), to remove the Company’s presentation of profit margin and
adjusted EBITDA margin, and the Company intends to present its Operating Statistics in future earnings releases and periodic reports as reflected in Annex A hereto, which now includes same facility results and facility results for
adjusted EBITDA. As a result of such modifications, the Company has revised its draft presentation of reconciliations previously presented in Annex B to the Prior Response Letter, as reflected in Annex B hereto, which revised
presentation also includes applicable reconciliations previously included in Annex C to the Prior Response Letter. Accordingly, the Company has deleted the standalone draft presentation previously provided in Annex C to the Prior Response
Letter.

2.
 In Annex A, we note your presentations of same facility results and facility results for profit margin,
adjusted EBITDA margin, profit margin excluding income from provider relief fund, and adjusted EBITDA margin excluding income from provider relief fund, all of which are non-GAAP measures. Please revise the title of profit margin to clearly identify
it as a non-GAAP measure for both presentations. Please expand the associated reconciliations provided in Annex C to begin with the most directly comparable US GAAP measure and provide us with the revised reconciliations. Refer to
Item 10(e)(1)(i)(B) of Regulation S-K for guidance.

 RESPONSE:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the Company has modified the draft presentation
previously provided in Annex A to the Prior Response Letter, as reflected in Annex A hereto, to remove the Company’s presentation of same facility results and facility results for profit margin, adjusted EBITDA margin, profit
margin excluding income from provider relief fund, and adjusted EBITDA margin excluding income from provider relief fund. Additionally, as detailed in the Company’s response to Comment No. 1 above, the Company has removed the draft
presentation previously provided in Annex C to the Prior Response Letter because the Company has moved the reconciliations provided therein that remain applicable to the draft presentation in Annex B hereto. The Company respectfully
advises the Staff that the Company’s reconciliation of net income attributable to Acadia Healthcare Company, Inc. to same facility adjusted EBITDA and same facility adjusted EBITDA excluding income from provider relief fund is included in
Annex B hereto.

 Tayyaba Shafique

Tracey Houser

 U.S. Securities & Exchange Commission

January 21, 2025

  Page
 3

3.
 We note your response to prior comment 5, which provides the same information in Note 16 to your third
quarter of fiscal year 2024 Form 10-Q. As previously requested, please provide us with a comprehensive explanation, including quantification, for each of the components included in the transaction, legal and other costs adjustment to your various
non-GAAP performance measures and provide expand disclosures for the adjustment.

 RESPONSE:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that, beginning with its next earnings release, which will
be for the fiscal year ended December 31, 2024, it will modify the disclosure to provide expanded disclosures for each of the adjustments to the Company’s non-GAAP performance measures as requested by the Staff. In addition, the Company
will include expanded disclosures regarding the use of non-GAAP measures, including the same facility metrics. The Company advises the Staff that such disclosure will be presented similarly to the disclosure contained in Annex C hereto.
For ease of reference, the Company has included as Annex D hereto its reconciliation of net income attributable to Acadia Healthcare Company, Inc. to adjusted income attributable to Acadia Healthcare Company, Inc., which includes two
line items with footnotes described in Annex C hereto. Such reconciliation is the same as the presentation included in the Company’s earnings release for the fiscal quarter ended September 30, 2024, except for updates to footnote
references to reflect the addition of new footnote (e) in the revised reconciliation included in Annex B hereto.

 * 
*  *  *

 Tayyaba Shafique

Tracey Houser

 U.S. Securities & Exchange Commission

January 21, 2025

  Page
 4

 Please contact Matthew Pacey of Kirkland & Ellis LLP at (713) 836-3786 or
Heather Dixon of the Company at (615) 861-6000 with any questions or further comments regarding the responses to the Staff’s comments.

Very truly yours,

ACADIA HEALTHCARE COMPANY, INC.

 /s/ Heather Dixon

Name:

Heather Dixon

Title:

Chief Financial Officer

cc:
 Christopher H. Hunter, Acadia Healthcare Company, Inc.

Brian Farley, Acadia Healthcare Company, Inc.

Matthew R. Pacey, P.C., Kirkland & Ellis LLP

Ieuan A. List, Kirkland & Ellis LLP

 ANNEX A

(Responsive additions italicized and responsive deletions indicated with strikethrough)

Acadia Healthcare Company, Inc.

Operating Statistics

(Unaudited, Revenue in thousands)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

% Change

2024

2023

% Change

 Same Facility Results (1)

 Revenue

$
802,555

$
739,335

8.6%

$
2,334,956

$
2,148,408

8.7%

 Patient Days

800,880

764,703

4.7%

2,332,369

2,260,513

3.2%

 Admissions

50,368

49,397

2.0%

147,617

147,130

0.3%

 Average Length of Stay (2)

15.9

15.5

2.7%

15.8

15.4

2.8%

 Revenue per Patient Day

$
1,002

$
967

3.6%

$
1,001

$
950

5.3%

 Adjusted EBITDA

$
238,578

$
216,971

10.0%

$
684,849

$
619,158

10.6%

 Adjusted EBITDA margin (3)

29.7%

29.3%

40 bps

29.3%

28.8%

50 bps

 Adjusted EBITDA margin excluding income from provider relief fund

29.7%

28.7%

100 bps

29.3%

28.6%

70 bps

 Facility Results

 Revenue

$
815,634

$
750,334

8.7%

$
2,379,725

$
2,185,938

8.9%

 Patient Days

815,126

779,296

4.6%

2,375,477

2,306,109

3.0%

 Admissions

51,513

50,302

2.4%

151,082

150,237

0.6%

 Average Length of Stay (2)

15.8

15.5

2.1%

15.7

15.3

2.4%

 Revenue per Patient Day

$
1,001

$
963

3.9%

$
1,002

$
948

5.7%

 Adjusted EBITDA

$
230,091

$
215,053

7.0%

$
665,052

$
611,163

8.8%

 Adjusted EBITDA margin (3)

28.2%

28.7%

-50 bps

27.9%

28.0%

-10 bps

 Adjusted EBITDA margin excluding income from provider relief fund

28.2%

28.1%

10 bps

27.9%

27.8%

10 bps

(1)
 Same facility results for the periods presented include facilities we have operated for more than one year and
exclude certain closed services.

(2)
 Average length of stay is defined as patient days divided by admissions.

 ANNEX B

(Responsive additions italicized and responsive deletions indicated with strikethrough)

Acadia Healthcare Company, Inc.

Reconciliation of Net Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA, Same Facility
Adjusted EBITDA and Same Facility Adjusted EBITDA excluding income from provider relief fund

 (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands)

 Net income (loss) attributable to Acadia Healthcare Company, Inc.

$
68,132

$
(217,710
)

$
222,997

$
(79,396
)

 Net income attributable to noncontrolling interests

3,236

2,185

7,958

3,978

 Provision for (benefit from) income taxes

27,199

(71,873
)

72,916

(29,907
)

 Interest expense, net

29,924

20,742

86,297

61,651

 Depreciation and amortization

37,641

33,388

110,054

96,969

 EBITDA

166,132

(233,268
)

500,222

53,295

 Adjustments:

 Equity-based compensation expense (a)

9,467

8,163

27,014

23,140

 Transaction, legal and other costs (b)

8,249

11,247

17,187

26,792

 Legal settlements expense (c)

— 

394,181

— 

394,181

 Loss on impairment (d)

10,459

—

11,459

8,694

 Adjusted EBITDA

$
194,307

$
180,323

$
555,882

$
506,102

 Adjusted EBITDA margin

23.8%

24.0%

23.4%

23.2%

 Corporate and other costs

(35,784
)

(34,730
)

(109,170
)

(105,061
)

 Total Facility Adjusted EBITDA

230,091

215,053

665,052

611,163

 Denovos, acquisitions, and closed facilities (e)

(8,487
)

(1,918
)

(19,797
)

(7,995
)

 Same Facility Adjusted EBITDA

$
238,578

$
216,971

$
684,849

$
619,158

 Adjusted EBITDA

$
194,307

$
180,323

$
555,882

$
506,102

 Income from provider relief fund

— 

(4,442
)

— 

(4,442
)

 Adjusted EBITDA excluding income from provider relief fund

$
194,307

$
175,881

$
555,882

$
501,660

 Corporate general and administrative costs

(35,784
)

(34,730
)

(109,170
)

(105,061
)

 Total Facility Adjusted EBITDA excluding income from provider relief fund

230,091

210,611

665,052

606,721

 Denovos, acquisitions, and closed facilities (e)

(8,487
)

(1,918
)

(19,797
)

(7,995
)

 Same Facility Adjusted EBITDA excluding income from provider relief fund

$
238,578

$
212,529

$
684,849

$
614,716

 Adjusted EBITDA margin excluding income from provider relief fund

23.8%

23.4%

23.4%

22.9%

 ANNEX C

(Responsive additions italicized)

Acadia Healthcare Company, Inc.

Footnotes

 We have included certain
financial measures in this press release, including those listed below, which are “non-GAAP financial measures” as defined under the rules and regulations promulgated by the SEC. These non-GAAP financial measures include, and are
defined, as follows:

•

 EBITDA: net income attributable to Acadia Healthcare Company, Inc. adjusted for net income attributable to
noncontrolling interests, provision for income taxes, net interest expense and depreciation and amortization.

•

 Adjusted EBITDA: EBITDA adjusted for equity-based compensation expense, transaction, legal and other
costs, legal settlements expense and loss on impairment.

•

 Adjusted EBITDA excluding income from provider relief fund: Adjusted EBITDA adjusted for income from
provider relief fund.

•

 Adjusted income before income taxes attributable to Acadia Healthcare Company, Inc.: net income
attributable to Acadia Healthcare Company, Inc. adjusted for transaction, legal and other costs, legal settlements expense, loss on impairment and provision for income taxes.

•

 Adjusted income attributable to Acadia Healthcare Company, Inc.: Adjusted income before income taxes
attributable to Acadia Healthcare Company, Inc. adjusted for the income tax effect of adjustments to income.

•

 Adjusted income attributable to Acadia Healthcare Company, Inc. excluding income from provider relief
fund: Adjusted income attributable to Acadia Healthcare Company, Inc. adjusted for income from provider relief fund.

•

 Facility adjusted EBITDA: Adjusted EBITDA adjusted for general and administrative costs related
to our corporate functions. General and administrative costs directly related to the facilities are included in facility results.

•

 Same facility adjusted EBITDA: Adjusted EBITDA for facilities and services to those facilities
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, divested or removed from service during the current or prior year.

 The non-GAAP financial measures presented herein are supplemental measures of our performance and are not required by, or presented
in accordance with, generally accepted accounting principles in the United States (“GAAP”). The non-GAAP financial measures presented herein are not measures of our financial performance under GAAP and should not be considered as
alternatives to net income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as measures of our liquidity. Our measurements of these non-GAAP financial measures may not be
comparable to similarly titled measures of other companies. We have included information concerning the non-GAAP financial measures in this press release because we believe that such information is used by certain investors as measures of a
company’s historical performance. We believe these measures are frequently used by securities analysts,

investors and other interested parties in the evaluation of issuers of equity securities, many of which present similar non-GAAP financial measures when reporting their results. Because the
non-GAAP financial measures are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures of other
companies. Our presentation of these non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

Facility results exclude general and administrative costs related to our corporate functions. General and administrative costs directly related to the
facilities are included in facility results.

 Same facility metrics include operating results 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.
We believe providing same facility information is helpful to our investors as a measure of the operating performance of our existing facilities on a comparable basis, and same facility metrics provide investors with information useful in
understanding underlying organic growth in existing facilities.

 The Company is not able to provide a reconciliation of projected Adjusted EBITDA and
adjusted earnings per diluted share, where provided, to expected results due to the unknown effect, timing and potential significance of transaction-related expenses and the tax effect of such expenses.

(a)
 Represents the equity-based compensation expense of Acadia. Equity-based compensation expense is excluded
from Adjusted EBITDA because Acadia believes that the cost of equity awards granted to employees does not contribute to the earnings potentially available for distributions to its equity holders or reinvestment into its business.

(b)
 Represents transaction, legal a