SecProbe.io

CORRESP
1
filename1.htm

CORRESP

 February 18, 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 8-K Filed February 27, 2024

Response dated January 21, 2025

File No. 001-35331

Ladies and Gentlemen:

 This letter sets forth
the response of Acadia Healthcare Company, Inc. (the “Company”) to the comment of the Staff (the “Staff”) of the U.S. Securities and Exchange Commission set forth in your letter, dated
February 12, 2025, with respect to the Company’s Form 8-K, filed on February 27, 2024 (File No. 001-35331).

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

 Tayyaba Shafique

Tracey Houser

 U.S. Securities & Exchange Commission

February 18, 2025

  Page
 2

 Form 8-K Filed February 27, 2024

Exhibit 99

1.
 We note the draft disclosures you provided in response to comment 2. Please expand these disclosures to
provide a more fulsome discussion of your Same Facility Results and Facility Results to address the following:

•

 Clearly explain the purpose and what you are trying to convey for each presentation.

•

 Discuss the limitations of these presentations, especially as it relates to Adjusted EBITDA; an explanation
about how you address these limitations; and a statement that the presentations should not be used to evaluate your performance as a whole.

•

 For the adjustments to arrive at Same Facility Adjusted EBITDA and Facility Adjusted EBITDA, provide a more
robust discussion of the nature of the specific costs being excluded and how you determined these costs.

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 C to the Company’s response to the Staff’s letter, dated December 20, 2024
(such response, the “Prior Response Letter”), as reflected in Annex C hereto, to provide further discussion of the Company’s presentation of facility and same facility results. Further, the
Company has modified the draft presentation previously provided in Annex A to the Prior Response Letter, as reflected in Annex A hereto, to add additional disclosure relating to the facility and same facility results,
and the Company has modified the draft presentation previously provided in Annex B to the Prior Response Letter, as reflected in Annex B hereto, to update one line item and certain footnote references.

Additionally, the Company advises the Staff that, beginning with its next earnings release, which will be for the fiscal year ending
December 31, 2024, it will modify the note beneath the “Highlights” section on the first page of its earnings release, and such note will be presented similarly to the below, as applicable (additions italicized and deletions
indicated with strikethrough):

 Adjusted income attributable to Acadia, and Adjusted EBITDA and
Same Facility Adjusted EBITDA are non-GAAP financial measures. A reconciliation of all non-GAAP financial measures in this press release begins on page [X].

* * * *

 Tayyaba Shafique

Tracey Houser

 U.S. Securities & Exchange Commission

February 18, 2025

  Page
 3

 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 comment.

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 (1)

(Unaudited, Revenue $ in thousands except per Patient Day metrics)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

%
Change

2024

2023

%
Change

 Same Facility Results (1) (2)

 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) (3)

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 excluding income from provider relief fund (4)

$
238,578

$
212,529

12.3
%

$
684,849

$
614,716

11.4
%

 Total 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) (3)

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 excluding income from provider relief fund (4)

$
230,091

$
210,611

9.2
%

$
665,052

$
606,721

9.6
%

(1)
 Total facility and same facility results may not be indicative of the overall performance of our business
and should not be considered as alternatives for net income or any other performance measures in accordance with GAAP (as defined herein).

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

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

(4)
 For each of the three and nine months ended September 30, 2023, includes income from
provider relief fund of $4.4 million.

 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

 Corporate and other general and administrative costs (e)

(35,784
)

(34,730
)

(109,170
)

(105,061
)

 Total Facility Adjusted EBITDA

230,091

215,053

665,052

611,163

 De novos, acquisitions, and closed facilities (e)(f)

(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 (e)

(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

 De novos, acquisitions, and closed facilities (e)(f)

(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

 ANNEX C

(Responsive additions italicized and responsive deletions indicated with strikethrough)

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.

•

 Total 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 total 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.

 Total facility
results include operating results for all of our facilities and services but 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 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 total facility results by ensuring those costs directly associated with facility operations are captured at the facility level for reporting. Note
that total facility costs include those related to new facilities and the cost of closure and run-out costs related to facilities we have closed. We believe that providing results on a total 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.

Same facility results metrics 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. We believe that
providing results on a same facility basis is helpful to investors 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 the Company’s 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
existing such facilities. For these reasons, we believe that same facility results are particularly useful during periods of significant expansion or contraction.

Total facility results reflect adjustments that are intended to provide the specific presentation described above, and same facility results reflect
adjustments 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. Total facility and same
facility results may therefore not be indicative of the overall performance of our business and should be not be considered as alternatives for net income or any other performance measures derived in accordance with GAAP.

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 and other costs in