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FILED PURSUANT TO RULES 424(b)(5) AND 424(b)(7)
REGISTRATION NO. 333-184456

 

PROSPECTUS    SUPPLEMENT

(To prospectus dated November 1, 2012)

10,576,623 Shares

 

Acadia Healthcare Company, Inc.

Common Stock

 

 

We are selling 7,000,000 shares of our common stock, and the selling stockholders are selling 3,576,623 shares of our common stock. We will not receive any proceeds from the sale of shares to be offered by the selling stockholders. Certain of the selling stockholders are members of our senior management. See “Selling Stockholders” beginning on page S-35 of this prospectus supplement.

Our shares trade on The NASDAQ Global Market under the symbol “ACHC.” On December 6, 2012, the last sale price of the shares as reported on The NASDAQ Global Market was $22.84 per share.

Investing in the common stock involves risks that are described in the “Risk Factors” section beginning on page S-11 of this prospectus supplement.

 

 

 

		Per Share				Total
Public offering price			$22.50				$237,974,018
Underwriting discount			$.90				$9,518,961
Proceeds, before expenses, to us			$21.60				$151,200,000
Proceeds, before expenses, to the selling stockholders			$21.60				$77,255,057

The underwriters may also exercise their option to purchase up to an additional 1,050,000 shares from us and up to an additional 533,153 shares, collectively, from certain of the selling stockholders, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus supplement.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The shares will be ready for delivery on or about December 12, 2012.

 

 

Joint Book-Running Managers

 

BofA Merrill Lynch		Citigroup		Jefferies

 

 

Co-Managers

 

RBC Capital Markets		Raymond James		Avondale Partners

 

 

The date of this prospectus supplement is December 6, 2012.

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TABLE OF CONTENTS

 

		Page
Prospectus Supplement
ABOUT THIS PROSPECTUS SUPPLEMENT			S-ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION			S-ii
CAUTIONARY NOTE REGARDING FINANCIAL INFORMATION			S-iv
MARKET AND INDUSTRY DATA			S-v
TRADEMARKS AND TRADE NAMES			S-v
NON-GAAP FINANCIAL MEASURES			S-v
PROSPECTUS SUPPLEMENT SUMMARY			S-1
SUMMARY HISTORICAL CONDENSED CONSOLIDATED FINANCIAL DATA AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA			S-6
RISK FACTORS			S-11
USE OF PROCEEDS			S-17
PRICE RANGE OF OUR COMMON STOCK			S-18
DIVIDEND POLICY			S-18
CAPITALIZATION			S-19
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			S-20
SELLING STOCKHOLDERS			S-35
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS			S-37
UNDERWRITING			S-41
LEGAL MATTERS			S-47
EXPERTS			S-47
WHERE YOU CAN FIND MORE INFORMATION			S-48
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE			S-49
Prospectus
ABOUT THIS PROSPECTUS			2
THE COMPANY			3
RISK FACTORS			3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
USE OF PROCEEDS			5
DESCRIPTION OF COMMON STOCK			5
SELLING STOCKHOLDERS			9
PLAN OF DISTRIBUTION			9
LEGAL MATTERS			11
EXPERTS			11
WHERE YOU CAN FIND MORE INFORMATION			11
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE			12

 

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ABOUT THIS PROSPECTUS SUPPLEMENT

This prospectus supplement is a supplement to the accompanying prospectus. This prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, utilizing a shelf registration process. Under this shelf registration process, we and selling stockholders may sell from time to time the securities described in the accompanying prospectus in one or more offerings such as this offering. This prospectus supplement provides you with specific information about our common stock that we and the selling stockholders are selling in this offering. Both this prospectus supplement and the accompanying prospectus include important information about us, the selling stockholders and other information you should know before investing. This prospectus supplement also adds to, updates and changes information contained in the accompanying prospectus. To the extent the information in this prospectus supplement is different from that in the accompanying prospectus, you should rely on the information in this prospectus supplement. You should read both this prospectus supplement and the accompanying prospectus, together with the additional information described in the sections entitled “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” of this prospectus supplement, before investing in our common stock.

You should rely only on the information contained in or incorporated by reference into this prospectus supplement and the accompanying prospectus and in any related free writing prospectus we prepare or authorize. We have not, and the selling stockholders and the underwriters have not, authorized any other person to provide you with different information. This prospectus supplement and the accompanying prospectus is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted. The information in this prospectus supplement and the accompanying prospectus is complete and accurate as of the date on the front cover, but the information may have changed since that date.

You should not consider any information in this prospectus supplement or the accompanying prospectus to be investment, legal or tax advice. You should consult your own counsel, accountants and other advisers for legal, tax, business, financial and related advice regarding the purchase of shares of our common stock.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Some of the statements made in this prospectus supplement and the accompanying prospectus constitute 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,” “should,” “could” or the negative thereof. Generally, the words “anticipate,” “believe,” “continues,” “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 contained in this prospectus supplement under the headings “Prospectus Supplement Summary” and “Risk Factors” 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:

 

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our ability to close our planned acquisitions of Behavioral Centers of America, LLC and AmiCare Behavioral Centers, LLC and to obtain the necessary financing on time;

 

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our ability to amend our existing senior secured credit facility on time, on currently anticipated terms, or at all;

 

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the impact of payments received from the government and third-party payors on our revenues and results of operations;

 

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our significant indebtedness, our ability to meet our debt obligations, and our ability to incur substantially more debt;

 

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our future cash flow and earnings;

 

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our restrictive covenants, which may restrict our business and financing activities;

 

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our ability to make payments on our financing arrangements;

 

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the impact of the economic and employment conditions in the United States on our business and future results of operations;

 

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compliance with laws and government regulations;

 

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the impact of claims brought against our facilities;

 

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the impact of governmental investigations, regulatory actions and whistleblower lawsuits;

 

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the impact of recent health care reform;

 

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the impact of our highly competitive industry on patient volumes;

 

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the impact of the trend by insurance companies and managed care organizations entering into sole source contracts;

 

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the impact of recruitment and retention of quality psychiatrists and other physicians on our performance;

 

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the impact of competition for staffing on our labor costs and profitability;

 

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our dependence on key management personnel, key executives and our local facility management personnel;

 

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our acquisition strategy, which exposes us to a variety of operational and financial risks;

 

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difficulties in successfully integrating the operations of acquired facilities or realizing the potential benefits and synergies of these acquisitions;

 

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the impact of state efforts to regulate the construction or expansion of health care facilities on our ability to operate and expand our operations;

 

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our potential inability to extend leases at expiration;

 

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the impact of controls designed to reduce inpatient services on our revenues;

 

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the impact of different interpretations of accounting principles on our results of operations or financial condition;

 

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the impact of environmental, health and safety laws and regulations, especially in states where we have concentrated operations;

 

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the impact of an increase in uninsured and underinsured patients or the deterioration in the collectability of the accounts of such patients on our results of operations;

 

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the impact of legislative and regulatory initiatives relating to privacy and security of patient health information and standards for electronic transactions;

 

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failure to achieve and maintain effective internal control over financial reporting;

 

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the impact of fluctuations in our operating results, quarter to quarter earnings and other factors on the price of our common stock;

 

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changes in our board and corporate governance as a result of our no longer qualifying as a “controlled company”;

 

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the impact of our sponsor’s rights over certain company matters; and

 

•

the other risks described under the heading “Risk Factors” in this prospectus supplement and the accompanying prospectus and in similarly titled sections in our other reports that we file with the SEC.

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 prospectus supplement. 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.

CAUTIONARY NOTE REGARDING FINANCIAL INFORMATION

We have incorporated by reference in this prospectus supplement two different sets of financial statements as of December 31, 2011 and 2010, and for each of the years in the three-year period ended December 31, 2011. Each of these two sets of financial statements has a different basis of presentation. The different presentations, required by generally accepted accounting principles in the United States, or GAAP, result from our June 2012 disposition of our PsychSolutions facility in Miami, Florida, or the PsychSolutions Disposition.

Financial Accounting Standards Board Accounting Standards Codification 205-20, “Discontinued Operations,” or ASC 205-20, requires that all components of an entity that has been disposed of (by sale, by abandonment or in a distribution to owners) or is held for sale, and whose cash flows can be clearly distinguished from the rest of the entity, be presented as discontinued operations. Our Quarterly Reports on Form 10-Q for the three months ended June 30, 2012 and September 30, 2012 were prepared in accordance with ASC 205-20. Under SEC requirements, the same reclassification to discontinued operations that is required by ASC 205-20 is also required for previously issued financial statements for each of the three years shown in our last Annual Report on Form 10-K, if those financial statements are incorporated by reference in subsequent filings with the SEC made under the Securities Act of 1933, as amended, or the Securities Act, such as the registration statement of which this prospectus supplement and the accompanying prospectus form a part, even though those financial statements relate to periods prior to the date the operations were exited or made available for sale. This reclassification had no effect on our reported net income and should not be read as a restatement of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. While our Quarterly Reports on Form 10-Q for the three months ended June 30, 2012 and September 30, 2012 reflected the PsychSolutions facility as a discontinued operation, the unaudited interim financial statements for the three months ended March 31, 2012 will not reflect the reclassification to discontinued operations until the inclusion of such period in our Quarterly Report on Form 10-Q for the three months ended March 31, 2013.

We have incorporated by reference in this prospectus supplement the financial statements and other financial information (including financial information under the captions “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) included in our

 

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Current Report on Form 8-K filed with the SEC on October 17, 2012. Those financial statements and other financial information, which supersede the corresponding information included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, give effect to the PsychSolutions Disposition. We refer to all financial statements and other financial information filed on the Current Report on Form 8-K described in this paragraph as the “Post Disposition Financials.”

In accordance with the rules and regulations of the SEC, we have also incorporated by reference in this prospectus supplement the financial statements and other financial information (including financial information under the captions “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and interim unaudited financial statements and other financial information (including financial information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) included in our Quarterly Report on Form 10-Q for the three months ended March 31, 2012. The financial statements and other financial information in these reports do not include ASC 205-20 adjustments. We refer to all financial statements and other financial information described in this paragraph as the “Prior Financials.”

You should not rely on the Prior Financials in assessing our financial performance or making an investment decision with respect to this offering. You should instead review carefully and consider the Post Disposition Financials in assessing our financial performance or making an investment decision.

MARKET AND INDUSTRY DATA

Market data and other statistical information used throughout this prospectus supplement are based on independent industry publications, government publications, reports by market research firms or other published independent sources. Some data are also based on our good faith estimates, which are derived from management’s review of internal data and information, as well as the independent sources listed above. Although we believe these sources are reliable, we have not independently verified the information, and we have not ascertained the underlying economic assumptions relied upon therein, and cannot guarantee its accuracy and completeness. Statements as to our market position are based on market data currently available to us and, primarily, on management estimates as information regarding most of our major competitors is not publicly available. Our estimates involve risks and uncertainties, and are subject to change based on various factors, including those discussed under the heading “Risk Factors” in this prospectus supplement.

TRADEMARKS AND TRADE NAMES

This prospectus supplement includes our trademarks, which are protected under applicable intellectual property laws and are the property of Acadia Healthcare Company, Inc. or its subsidiaries. This prospectus supplement also contains trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus supplement may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and trade names.

NON-GAAP FINANCIAL MEASURES

We have included certain financial measures in this prospectus supplement, including pro forma EBITDA and pro forma adjusted EBITDA, which are “non-GAAP financial measures” as defined under the rules and regulations promulgated by the SEC. We define pro forma EBITDA as pro forma net income (loss) adjusted for loss (income) from discontinued operations, net interest expense, income tax provision (benefit) and depreciation and amortization. We define pro forma adjusted EBITDA as pro forma EBITDA adjusted for equity-based compensation expense, cost savings, rent elimination, legal settlement, integration and

 

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closing costs, rate increases, startup losses, reimbursement adjustments, divestiture costs, bad debt accounting policy changes and Cedar Crest locum tenens adjustment. For a reconciliation of pro forma net income (loss) to pro forma adjusted EBITDA, see “Prospectus Supplement Summary–Summary Historical Condensed Consolidated Financial Data and Unaudited Pro Forma Condensed Combined Financial Data–Summary Unaudited Pro Forma Condensed Combined Financial Data.” We may not achieve all of the expected benefits from synergies, cost savings and recent improvements to our revenue base.

Pro forma EBITDA and pro forma adjusted EBITDA, as presented in this prospectus supplement, are supplemental measures of our performance and are not required by, or presented in accordance with, GAAP. Pro forma EBITDA and pro forma adjusted EBITDA 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 pro forma EBITDA and pro forma adjusted EBITDA may not be comparable to similarly titled measures of other companies and are not measures of performance calculated in accordance with GAAP. We have included information concerning pro forma EBITDA and pro forma adjusted EBITDA in this prospectus supplement 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 EBITDA and adjusted EBITDA when reporting their results. Our presentation of pro forma EBITDA and pro forma adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

 

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RISK FACTORS

Investing in our common stock involves risks. Before making an investment in our common stock, you should carefully consider, among other factors, the risks described below and elsewhere in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference in this prospectus supplement. Please see “Cautionary Statement Regarding Forward-Looking Information” on page S-ii of this prospectus supplement. Please also see “Risk Factors” and “Special Note Regarding Forward-Looking Statements” beginning on page 3 of the accompanying prospectus and the risks described in the documents incorporated by reference in this prospectus supplement, including those identified under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and in our Quarterly Report on Form 10-Q for the three months ended June 30, 2012. The risks described in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference in this prospectus supplement are not the only ones we face. Additional risks not presently known or that we currently deem immaterial could also materially and adversely affect our financial condition, results of operations, business and prospects. You should consult your own financial and legal advisors as to the risks entailed by an investment in these shares and the suitability of investing in such shares in light of your particular circumstances. Our business, financial condition and results of operations could be materially adversely affected by the materialization of any of these risks. The trading price of our common stock could decline due to the materialization of any of these risks, and you may lose all or part of your investment.

We may be unable to complete our planned acquisitions of BCA and AmiCare on currently anticipated terms, or at all.

On November 21, 2012 and November 23, 2012, we entered into binding purchase agreements to acquire BCA and AmiCare, respectively, both of which acquisitions are subject to certain conditions set forth in the respective purchase agreements. We expect the closings for these acquisitions to occur in late December 2012. The total consideration for the BCA acquisition is approximately $145 million in cash, as adjusted for net indebtedness, transaction expenses and net working capital at closing. The total consideration for the AmiCare acquisition is approximately $113 million in cash, as adjusted for net working capital at closing. We plan to finance these acquisitions in part through this offering and in part through an amendment to our Senior Secured Credit Facility, as we do not currently have sufficient capacity under our Senior Secured Credit Facility. We are currently negotiating an amendment to our Senior Secured Credit Facility to provide for additional debt of approximately $165.0 million and expect the amendment to be effective commensurate with the closing of the planned acquisitions of BCA and AmiCare. If we are not able to complete the amendment to our Senior Secured Credit Facility on currently anticipated terms or at all or if this offering is not successful, we may be unable to successfully complete the pending acquisitions on time, or at all, which could have a material adverse effect on our results of operations, financial condition and the trading price of our common stock.

Our substantial debt could adversely affect our financial health and prevent us from fulfilling our obligations under our financing arrangements.

As of September 30, 2012, we had approximately $296.6 million of total debt, which included $148.9 million of debt under our Senior Secured Credit Facility and $147.7 million (net of a discount of $2.3 million) of debt under our 12.875% senior notes due 2018, or the Senior Notes. In connection with the planned acquisitions of BCA and AmiCare, we anticipate amending our Senior Secured Credit Facility to provide for additional debt of approximately $165.0 million. Our substantial debt could have important consequences to you. For example, it could:

 

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increase our vulnerability to general adverse economic and industry conditions;

 

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make it more difficult for us to satisfy our other financial obligations;

 

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restrict us from making strategic acquisitions or cause us to make non-strategic divestitures;

 

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•

require us to dedicate a substantial portion of our cash flow from operations to payments on our debt (including scheduled repayments on our outstanding term loan borrowings under the Senior Secured Credit Facility), thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;

 

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expose us to interest rate fluctuations because the interest on the debt relating to revolving borrowings under the Senior Secured Credit Facility is imposed at variable rates;

 

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make it more difficult for us to satisfy our obligations to our lenders, resulting in possible defaults on and acceleration of such debt;

 

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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

 

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place us at a competitive disadvantage compared to our competitors that have less debt;

 

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limit our ability to borrow additional funds; and

 

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limit our ability to pay dividends, redeem stock or make other distributions.

In addition, the terms of our financing arrangements contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debts, including the Senior Secured Credit Facility and Senior Notes.

Our acquisition strategy exposes us to a variety of operational and financial risks.

A principal element of our business strategy is to grow by acquiring other companies and assets in the behavioral health industry. Growth, especially rapid growth, through acquisitions exposes us to a variety of operational and financial risks. Therefore, the risks described below may be acutely relevant. We summarize the most significant of these risks below.

Integration risks

We must integrate our acquisitions with our existing operations. This process includes the integration of the various components of our business and of the businesses we have acquired or may do so in the future, including the following:

 

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additional psychiatrists, other physicians and employees who are not familiar with our operations;

 

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patients who may elect to switch to another behavioral health care provider;

 

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regulatory compliance programs; and

 

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disparate operating, information and record keeping systems and technology platforms.

Integrating a new facility could be expensive and time consuming and could disrupt our ongoing business, negatively affect cash flow and distract management and other key personnel from day-to-day operations.

We may not be able to combine successfully the operations of recently acquired facilities with our operations, and, even if such integration is accomplished, we may never realize the potential benefits of the acquisition. The integration of acquisitions with our operations requires significant attention from management, may impose substantial demands on our operations or other projects and may impose challenges on the combined business including, but not limited to, consistencies in business standards, procedures, policies, business cultures

 

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and internal controls and compliance. Certain acquisitions involve a capital outlay, and the return that we achieved on any capital invested may be less than the return that we would achieve on our other projects or investments. If we fail to complete the integration of recently acquired facilities, we may never fully realize the potential benefits of the related acquisitions.

Benefits may not materialize

When evaluating potential acquisition targets, we identify potential synergies and cost savings that we expect to realize upon the successful completion of the acquisition and the integration of the related operations. We may, however, be unable to achieve or may otherwise never realize the expected benefits. Our ability to realize the expected benefits from potential cost savings and revenue improvement opportunities is subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control, such as changes to government regulation governing or otherwise impacting the behavioral health care industry, reductions in reimbursement rates from third-party payors, reductions in service levels under our contracts, operating difficulties, client preferences, changes in competition and general economic or industry conditions. If we are unsuccessful in implementing these improvements or if we do not achieve our expected results, it may adversely impact our results of operations.

Assumptions of unknown liabilities

Facilities that we acquire may have unknown or contingent liabilities, including, but not limited to, liabilities for failure to comply with health care laws and regulations. Although we typically attempt to exclude significant liabilities from our acquisition transactions and seek indemnification from the sellers of such facilities for at least a portion of these matters, we may experience difficulty enforcing those obligations or we may incur material liabilities for the past activities of acquired facilities. Such liabilities and related legal or other costs and/or resulting damage to a facility’s reputation could negatively impact our results of operations.

Competing for acquisitions

We face competition for acquisition candidates primarily from other for-profit health care companies, as well as from not-for-profit entities. Some of our competitors may have greater resources than we do. As a result, we may pay more to acquire a target business or may agree to less favorable deal terms than we would have otherwise. Our principal competitors for acquisitions have included UHS, Aurora Behavioral Health Care and Ascend Health Corporation. Also, suitable acquisitions may not be accomplished due to unfavorable terms.

Further, the cost of an acquisition could result in a dilutive effect on our results of operations, depending on various factors, including the amount paid for an acquired facility, the acquired facility’s results of operations, the fair value of assets acquired and liabilities assumed, effects of subsequent legislation and limits on rate increases. In addition, we may have to pay cash, incur debt, or issue equity securities to pay for any such acquisition, which could adversely affect our financial results, result in dilution to our stockholders, result in increased fixed obligations, or impede our ability to manage our operations.

Managing growth

Some of the facilities we have acquired or may acquire in the future may have had significantly lower operating margins prior to the time of our acquisition or may have had operating losses prior to such acquisition. If we fail to improve the operating margins of the facilities we acquire, operate such facilities profitably or effectively integrate the operations of the acquired facilities, our results of operations could be negatively impacted.

We are party to a stockholders agreement with Waud Capital Partners which provides them with certain rights over Company matters.

Prior to this offering, Waud Capital Partners controlled approximately 44% of the voting power of our common stock. In accordance with the terms of the stockholders agreement among Waud Capital Partners,

 

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Acadia and certain members of our management, for so long as Waud Capital Partners owns at least 17.5% of our outstanding common stock, it is entitled to designate the pro rata number of our directors that is proportional (but rounded up to the nearest whole number) to its percentage ownership of our outstanding common stock, subject to the NASDAQ rules regarding director independence, and has consent rights to many corporate actions, such as issuing equity or debt securities, paying dividends, acquiring any interest in another company and materially changing our business activities. Although Waud Capital Partners is selling shares of our common stock in this offering, it will continue to own at least 17.5% of our outstanding common stock after completion of the offering. It is possible that the interests of Waud Capital Partners may in some circumstances conflict with our interests and the interests of our other stockholders.

If securities or industry analysts do not publish research or reports about our business, if they were to change their recommendations regarding our stock adversely or if our operating results do not meet their expectations, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock or if our operating results do not meet their expectations, our stock price could decline.

Certain financial information incorporated by reference in this prospectus supplement is presented on a basis that is different from the basis on which our most recently published financial information is presented and is, therefore, not comparable.

We have incorporated by reference in this prospectus supplement financial statements and other financial information that do not include the adjustments required by ASC 205-20 and related SEC rules for discontinued operations in relation to the PsychSolutions Disposition. These financial statements complied with applicable accounting requirements when they were initially filed and are incorporated by reference in this prospectus supplement in accordance with the rules and regulations of the SEC. Our most recently published financial information complies with applicable accounting requirements and SEC rules. As a result of the different bases of presentation, however, the financial statements and other financial information published more recently are not comparable to the financial statements and other financial information that do not give retroactive effect to the PsychSolutions Disposition, and the latter should not be relied upon in assessing our financial performance or in making an investment decision with respect to this offering. For more information, see “Cautionary Note Regarding Financial Information.”

If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.

The public offering price of our common stock is substantially higher than the net tangible book value per share of our outstanding common stock immediately after this offering. As a result, you will suffer immediate and substantial dilution in the net tangible book value of the common stock you purchase in this offering. If the underwriters exercise their option to purchase additional shares, you will experience additional dilution.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively, which could cause the value of your investment to decline.

Although we currently intend to use the net proceeds from this offering in the manner described in “Use of Proceeds” elsewhere in this prospectus supplement, we will have broad discretion in the application of the net proceeds of this offering. The results and effectiveness of the use of proceeds are uncertain, and we could spend the proceeds in ways that you do not agree with or that do not improve our results of operations or enhance the value of our common stock. Our failure to apply these net proceeds effectively could adversely affect our ability to continue to develop and grow our business, which could cause the price of our common stock to decline.

 

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Future sales of common stock by our existing stockholders may cause our stock price to fall.

The market price of our common stock could decline as a result of sales by our existing stockholders in the market, or the perception that these sales could occur. These sales might also make it more difficult for us to sell equity securities at a time and price that we deem appropriate.

Waud Capital Partners and certain of its affiliates, along with certain members of our management, have certain demand and piggyback registration rights with respect to shares of our common stock beneficially owned by them. The presence of additional shares of our common stock trading in the public market, as a result of the exercise of such registration rights, may have an adverse effect on the market price of our securities.

Fluctuations in our operating results, quarter to quarter earnings and other factors, including incidents involving our patients and any negative media coverage, may result in decreases in the price of our common stock.

The stock markets experience volatility that is often unrelated to operating performance. These broad market fluctuations may adversely affect the trading price of our common stock and, as a result, there may be significant volatility in the market price of our common stock. If we are unable to operate our facilities as profitably as we have in the past or as our stockholders expect us to in the future, the market price of our common stock will likely decline as stockholders could sell shares of our common stock when it becomes apparent that the market expectations may not be realized. In addition to our operating results, many economic and seasonal factors outside of our control could have an adverse effect on the price of our common stock and increase fluctuations in our quarterly earnings. These factors include certain of the risks discussed in this prospectus supplement, demographic changes, operating results of other health care companies, changes in our financial estimates or recommendations of securities analysts, speculation in the press or investment community, the possible effects of war, terrorist and other hostilities, adverse weather conditions, the level of seasonal illnesses, managed care contract negotiations and terminations, changes in general conditions in the economy or the financial markets or other developments affecting the health care industry. An incident involving one or more of our patients could result in negative media coverage and adversely affect the trading price of our common stock.

Provisions of our charter documents or Delaware law could delay or prevent an acquisition of us, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for you to change management.

Provisions of our amended and restated certificate of incorporation and amended and restated bylaws may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. This is because these provisions may prevent or frustrate attempts by stockholders to replace or remove our management. These provisions include:

 

•

a classified board of directors;

 

•

a prohibition on stockholder action through written consent;

 

•

a requirement that special meetings of stockholders be called only upon a resolution approved by a majority of our directors then in office;

 

•

advance notice requirements for stockholder proposals and nominations; and

 

•

the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine.

 

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Section 203 of the Delaware General Corporation Law, or the DGCL, prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person that together with its affiliates owns or within the last three years has owned 15% of voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. Although we have elected not to be subject to Section 203 of the DGCL, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that Waud Capital Partners, its affiliates and any investment fund managed by Waud Capital Partners and any persons to whom Waud Capital Partners sells at least five percent (5%) of our outstanding voting stock will be deemed to have been approved by our board of directors, and thereby not subject to the restrictions set forth in our amended and restated certificate of incorporation that have the same effect as Section 203 of the DGCL. Accordingly, the provision in our amended and restated certificate of incorporation that adopts a modified version of Section 203 of the DGCL may discourage, delay or prevent a change in control of us.

As a result of these provisions in our charter documents and Delaware law, the price investors may be willing to pay in the future for shares of our common stock may be limited.

We do not anticipate paying any cash dividends in the foreseeable future.

We intend to retain our future earnings, if any, for use in our business or for other corporate purposes and do not anticipate that cash dividends in respect to common stock will be paid in the foreseeable future. Any decision as to the future payment of dividends will depend on our results of operations, financial position and such other factors as our board of directors, in its discretion, deems relevant. In addition, the terms of our debt substantially limit our ability to pay dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

 

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USE OF PROCEEDS

We estimate that our net proceeds from the issuance and sale of 7,000,000 shares of common stock in this offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $150.3 million. If the underwriters exercise their option in full to purchase 1,050,000 additional shares of common stock from us, we estimate that our net proceeds from this offering will be approximately $173.0 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the proceeds from this offering principally to fund our acquisition strategy, particularly the planned acquisitions of BCA and AmiCare.

To the extent not used for the planned acquisitions of BCA and AmiCare, we plan to use the proceeds for general corporate purposes, which may include the repayment of debt under the Senior Secured Credit Facility. The applicable rate for Eurodollar Rate Loans and Base Rate Loans under the Senior Secured Credit Facility was 4.25% and 3.25%, respectively, as of September 30, 2012. The maturity date of the Senior Secured Credit Facility is April 1, 2016.

As of the date of this prospectus supplement, we cannot predict with certainty all of the particular uses for the proceeds from this offering or the amounts that we will actually spend on the uses set forth above. Accordingly, we will retain broad discretion over the use of such proceeds. The uses, amounts and timing of our actual expenditures will depend on numerous factors, including the extent to which the closing conditions for the planned acquisitions of BCA and AmiCare are satisfied, the results of our ongoing integration efforts and the amount of cash generated or used by our operations. Under the terms of the Senior Secured Credit Facility, we are required to use 50% of the proceeds from this offering to repay outstanding debt thereunder unless such proceeds are used to finance permitted acquisitions (as defined in the Senior Secured Credit Facility) within 180 days of receipt thereof or, if we do not use all of such proceeds to finance permitted acquisitions, as described, we are required to use 50% of the remaining portion of the proceeds to repay outstanding debt thereunder. Pending application of the proceeds as described above, we intend to place the proceeds in interest bearing time deposits of a national banking association which are insured by the Federal Deposit Insurance Corporation or to invest the proceeds in bonds or other debt obligations issued or guaranteed by the United States government or one of its agencies or instrumentalities or money market funds solely invested in or collateralized by such bonds or debt obligations, to the extent the proceeds are not immediately used to fund our planned acquisitions.

We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders. We will, however, bear the costs, other than underwriting discounts and commissions, associated with the sale of shares of common stock by the selling stockholders. Certain of the shares being offered by the selling stockholders are being offered by our senior management. See “Selling Stockholders.”

 

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PRICE RANGE OF OUR COMMON STOCK

Our common stock began trading on The NASDAQ Global Market on November 1, 2011 under the symbol “ACHC.” Prior to that date, there was no public market for our common stock. The table below sets forth, for the quarters indicated, the high and low sales prices of our common stock as reported by The NASDAQ Global Market. As of November 30, 2012, there were 41,837,360 shares outstanding, held by 141 shareholders of record. On December 6, 2012, the last reported sale price of our common stock on The NASDAQ Global Market was $22.84 per share.

 

		Sale Price Per Share of Common Stock
		High				Low
2012
Fourth Quarter (through December 6, 2012)		$	24.83			$	18.53
Third Quarter			24.12				15.08
Second Quarter			18.60				14.40
First Quarter			16.50				9.38
2011
Fourth Quarter (from November 1, 2011)*		$	10.50			$	5.43

 

*	Prior to November 1, 2011, there was no public market for our common stock.

DIVIDEND POLICY

We have never declared or paid dividends on our common stock. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness, and therefore we do not anticipate paying any cash dividends in the foreseeable future. Additionally, because we are a holding company, our ability to pay dividends on our common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us, including restrictions under the terms of the agreements governing our indebtedness. Any future determination to pay dividends will be at the discretion of our board of directors, subject to compliance with covenants in current and future agreements governing our indebtedness (including our Senior Secured Credit Facility and the indenture governing our Senior Notes), and will depend upon our results of operations, financial condition, capital requirements and other factors that our board of directors deems relevant.

 

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CAPITALIZATION

The table below sets forth our cash and cash equivalents and our consolidated capitalization as of September 30, 2012:

 

•

on an actual basis; and

 

•

on an adjusted basis to give effect to the issuance and sale of 7,000,000 shares of common stock offered by us and our receipt of the estimated net proceeds therefrom, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table in conjunction with “Use of Proceeds,” “Unaudited Pro Forma Condensed Combined Financial Information” and the financial information incorporated by reference in this prospectus supplement.

 

		As of September 30, 2012
		Actual				As Adjusted(1)
		(Unaudited) (Dollars in thousands, except per share data)
Cash and cash equivalents		$	11,719			$	162,004
Debt:
Senior secured credit facility:
Senior secured term loan			148,938				148,938
Revolving credit facility			—				—
Senior notes			147,694				147,694
Total debt (including current portion)		$	296,632			$	296,632
Stockholders’ Equity:
Common stock, $0.01 par value per share; 90,000,000 shares authorized and 41,773,053 shares issued and outstanding, actual; 90,000,000 shares authorized and 48,773,053 shares issued and outstanding, as adjusted		$	418			$	488
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized; no shares issued and outstanding			—				—
Additional paid-in capital			281,687				431,902
Accumulated deficit			(28,542	)			(28,542	)
Total equity		$	253,563			$	403,848
Total capitalization		$	550,195			$	700,480

 

(1)

Does not reflect (i) the impact of the potential amendment to the Senior Secured Credit Facility to provide for additional debt, (ii) the debt assumed by Acadia in the acquisition of Park Royal Hospital on November 11, 2012, consisting of $23.0 million of industrial revenue bonds issued by the Lee County Industrial Development Authority, bearing interest at 9.34%, or (iii) approximately $10.6 million of cash used to pay for the Park Royal Hospital acquisition.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The tables below set forth the unaudited pro forma condensed combined financial data for Acadia, YFCS, PHC, HHC Delaware, the Haven Facilities, BCA and AmiCare as a combined company, giving effect to:

 

•

Acadia’s acquisition of YFCS and the related debt and equity financing transactions on April 1, 2011;

 

•

PHC’s acquisition of MeadowWood on July 1, 2011;

 

•

Acadia’s acquisition of PHC and related debt and equity transactions on November 1, 2011;

 

•

Acadia’s acquisition of the Haven Facilities and the related debt financing on March 1, 2012; and

 

•

Acadia’s planned acquisitions of BCA and AmiCare and the related debt financing and equity issuance.

With respect to this offering, the unaudited pro forma condensed combined financial data is based on the assumption that we are offering 6,000,000 shares of common stock at an assumed public offering price of $22.95 per share, which was the closing price of our common stock on November 30, 2012, as reported on The NASDAQ Global Market, and does not reflect the actual public offering price of $22.50 per share or the increase in the size of the offering to 7,000,000 shares of common stock.

The unaudited pro forma condensed combined statements of operations give effect to each transaction as if it occurred on January 1, 2011. Acadia’s condensed consolidated statement of operations for the year ended December 31, 2011 reflects the results of operations for YFCS for the period from April 1, 2011 to December 31, 2011 and PHC for the period from November 1, 2011 to December 31, 2011. Acadia’s condensed consolidated statement of operations for the nine months ended September 30, 2012 reflects the results of operations for the Haven Facilities for the period from March 1, 2012 to September 30, 2012.

Acadia’s condensed consolidated balance sheet as of September 30, 2012 reflects the effect of the acquisitions of YFCS, PHC, HHC Delaware and the Haven Facilities. The unaudited pro forma condensed combined balance sheet at September 30, 2012 combines the condensed consolidated balance sheet of Acadia at September 30, 2012 with (a) the unaudited consolidated balance sheet of BCA at September 30, 2012 and (b) the unaudited consolidated balance sheet of AmiCare at September 30, 2012.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 combines the audited consolidated statement of operations of Acadia for that period with:

 

•

the unaudited condensed consolidated statement of operations of YFCS for the three months ended March 31, 2011;

 

•

the unaudited condensed consolidated statement of operations of HHC Delaware for the six months ended June 30, 2011;

 

•

the unaudited condensed consolidated statement of operations of PHC for the ten months ended October 31, 2011 (which was derived from the audited consolidated statement of operations of PHC for the fiscal year ended June 30, 2011 less the unaudited condensed consolidated statement of operations of PHC for the six months ended December 31, 2010 plus the unaudited condensed consolidated statement of operations of PHC for the three months ended September 30, 2011 plus the unaudited condensed consolidated statement of operations of PHC for the month ended October 31, 2011);

 

•

the audited consolidated statement of operations of the Haven Facilities for the year ended December 31, 2011;

 

•

the audited consolidated statement of operations of BCA for the year ended December 31, 2011; and

 

•

the audited consolidated statement of operations of AmiCare for the year ended December 31, 2011.

 

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The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2012 combines the unaudited consolidated statement of operations of Acadia for that period with:

 

•

the unaudited condensed consolidated statement of operations of the Haven Facilities for the period from January 1, 2012 to February 29, 2012;

 

•

the unaudited condensed consolidated statement of operations of BCA for the nine months ended September 30, 2012; and

 

•

the unaudited condensed consolidated statement of operations of AmiCare for the nine months ended September 30, 2012.

The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2011 combines the unaudited consolidated statement of operations of Acadia for that period with:

 

•

the unaudited condensed consolidated statement of operations of YFCS for the three months ended March 31, 2011;

 

•

the unaudited condensed consolidated statement of operations of HHC Delaware for the six months ended June 30, 2011;

 

•

the unaudited condensed consolidated statement of operations of PHC for the nine months ended September 30, 2011 (which was derived from the audited consolidated statement of operations of PHC for the fiscal year ended June 30, 2011 less the unaudited condensed consolidated statement of operations of PHC for the six months ended December 31, 2010 plus the unaudited condensed consolidated statement of operations of PHC for the three months ended September 30, 2011);

 

•

the unaudited consolidated statement of operations of the Haven Facilities for the nine months ended September 30, 2011;

 

•

the unaudited condensed consolidated statement of operations of BCA for the nine months ended September 30, 2011; and

 

•

the unaudited condensed consolidated statement of operations of AmiCare for the nine months ended September 30, 2011.

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 pro forma adjustments relating to the planned acquisitions of BCA and AmiCare are preliminary and revisions to the fair value of assets acquired and liabilities assumed may have a significant impact on the pro forma adjustments. A final valuation of assets acquired and liabilities assumed has not been completed and the completion of fair value determinations may result in changes in the values assigned to property and equipment and other assets (including intangibles) acquired and liabilities assumed.

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, YFCS, PHC, HHC Delaware, the Haven Facilities, BCA and AmiCare incorporated by reference in this prospectus supplement.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

As of September 30, 2012

(In thousands)

 

		ACADIA(1)				AMICARE(2)				BCA(3)				PRO FORMA ADJUSTMENTS				NOTES				PRO FORMA COMBINED
ASSETS
Current assets:
Cash and cash equivalents		$	11,719			$	804			$	44			$	(848	)			(4	)		$	45,499
															33,780				(8	)
Accounts receivable, net			54,777				4,405				8,177				(1,082	)			(10	)			66,277
Deferred tax assets			5,230				—				—				—								5,230
Other current assets			15,305				885				2,469				(521	)			(10	)			18,138
Total current assets			87,031				6,094				10,690				31,329								135,144
Property and equipment, net			155,188				20,694				23,334				229				(7a	)			200,058
															613				(7b	)
Property and equipment held for sale			—				—				330				(330	)			(10	)			—
Goodwill			334,622				14,175				16,550				74,812				(7a	)			539,644
															99,485				(7b	)
Intangible assets, net			12,534				—				—				1,790				(7a	)			16,249
															1,925				(7b	)
Other assets			14,383				71				646				3,000				(8	)			17,642
															(71	)			(6	)
															(387	)			(10	)
Total assets		$	603,758			$	41,034			$	51,550			$	212,395							$	908,737
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt		$	12,000			$	4,283			$	2,613			$	(11,046	)			(9	)		$	7,850
Accounts payable			13,323				504				3,078				(235	)			(10	)			16,670
Accrued salaries and benefits			19,125				2,373				2,677				(141	)			(10	)			24,034
Other accrued liabilities			13,374				940				317				(14	)			(10	)			14,617
Total current liabilities			57,822				8,100				8,685				(11,436	)							63,171
Long-term debt			284,632				18,637				2,316				148,197				(9	)			453,782
Deferred tax liabilities—noncurrent			1,167				—				—				—								1,167
Other liabilities			6,574				173				958				(431	)			(10	)			7,274
Total liabilities			350,195				26,910				11,959				136,330								525,394
Equity:
Common stock			418				—				—				60				(8	)			478
Additional paid-in capital			281,687				—				—				131,220				(8	)			412,907
Accumulated deficit			(28,542	)			—				—				(1,500	)			(8	)			(30,042	)
Members’ equity			—				14,124				39,591				(53,715	)			(5	)			—
Total equity			253,563				14,124				39,591				76,065								383,343
Total liabilities and equity		$	603,758			$	41,034			$	51,550			$	212,395							$	908,737

See accompanying notes to unaudited pro forma financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2011

(In thousands, except per share amounts)

 

		ACADIA(1)				COMPLETED ACQUISITIONS(16)				AMICARE(2)				BCA(3)				PRO FORMA ADJUSTMENTS				NOTES				PRO FORMA COMBINED
Revenue before provision for doubtful accounts		$	219,704			$	186,977			$	59,842			$	54,507											$	521,030
Provision for doubtful accounts			(3,206	)			(6,207	)			(1,381	)			(1,443	)											(12,237	)
Revenue			216,498				180,770				58,461				53,064												508,793
Salaries, wages and benefits			152,609				102,044				37,969				28,920												321,542
Professional fees			8,896				12,043				1,948				3,199												26,086
Supplies			11,349				9,060				1,157				2,886												24,452
Rents and leases			5,576				4,558				2,041				1,152												13,327
Other operating expenses			20,171				20,395				8,543				9,769												58,878
Depreciation and amortization			4,278				3,655				925				955				147				(20e	)			10,694
																			734				(20f	)
Interest expense, net			9,191				21,114				1,794				135				2,300				(21b	)			34,534
Sponsor management fees			1,347				—				—				924				(2,271	)			(22	)			—
Transaction-related expenses			41,547				—				—				—				(41,547	)			(23	)			—
Legal settlement			—				446				—				—												446
Total expenses			254,964				173,315				54,377				47,940				(40,637	)							489,959
Income (loss) from continuing operations before income taxes			(38,466	)			7,455				4,084				5,124				40,637								18,834
Provision (benefit) for income taxes			(5,272	)			3,349				—				219				(133	)			(25	)			14,011
																			15,848				(26	)
Income (loss) from continuing operations		$	(33,194	)		$	4,106			$	4,084			$	4,905			$	24,922							$	4,823
Earnings per share—income (loss) from continuing operations:
Basic		$	(1.77	)																						$	0.10
Diluted		$	(1.77	)																						$	0.10
Weighted average shares:
Basic			18,757				13,342												9,488				(27c	)			47,587
																			6,000				(27d	)
Diluted			18,757				13,342												9,488				(27c	)			47,587
																			6,000				(27d	)

See accompanying notes to unaudited pro forma financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2012

(In thousands, except per share amounts)

 

		ACADIA(1)				COMPLETED ACQUISITIONS(17)				AMICARE(2)				BCA(3)				PRO FORMA ADJUSTMENTS				NOTES				PRO FORMA COMBINED
Revenue before provision for doubtful accounts		$	298,638			$	30,079			$	47,220			$	48,427											$	424,364
Provision for doubtful accounts			(5,429	)			(689	)			(1,340	)			(1,157	)											(8,615	)
Revenue			293,209				29,390				45,880				47,270												415,749
Salaries, wages and benefits			173,590				15,391				29,877				24,650												243,508
Professional fees			13,521				1,060				1,249				1,666												17,496
Supplies			14,148				1,328				813				2,223												18,512
Rents and leases			6,244				25				1,773				471												8,513
Other operating expenses			30,768				3,358				6,044				8,727												48,897
Depreciation and amortization			5,332				584				703				951				100				(20e	)			7,930
																			260				(20f	)
Interest expense, net			22,186				313				1,015				242				2,006				(21b	)			25,762
Sponsor management fees			—				—				—				524				(524	)			(22	)			—
Transaction-related expenses			2,097				—				—				—				(2,097	)			(23	)			—
Total expenses			267,886				22,059				41,474				39,454				(255	)							370,618
Income (loss) from continuing operations before income taxes			25,323				7,331				4,406				7,816				255								45,131
Provision (benefit) for income taxes			9,307				2,827				—				(5	)			99				(26	)			12,228
Income (loss) from continuing operations		$	16,016			$	4,504			$	4,406			$	7,821			$	156							$	32,903
Earnings per share—income (loss) from continuing operations:
Basic		$	0.44																							$	0.69
Diluted		$	0.43																							$	0.69
Weighted average shares:
Basic			36,795																4,900				(27c	)			47,695
																			6,000				(27d	)
Diluted			37,006																4,900				(27c	)			47,906
																			6,000				(27d	)

See accompanying notes to unaudited pro forma financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2011

(In thousands, except per share amounts)

 

		ACADIA(1)				COMPLETED ACQUISITIONS(18)				AMICARE(2)				BCA(3)				PRO FORMA ADJUSTMENTS				NOTES				PRO FORMA COMBINED
Revenue before provision for doubtful accounts		$	142,797			$	161,249			$	43,539			$	40,915											$	388,500
Provision for doubtful accounts			(1,654	)			(5,220	)			(951	)			(1,351	)											(9,176	)
Revenue			141,143				156,029				42,588				39,564												379,324
Salaries, wages and benefits			108,158				88,869				27,858				22,189												247,074
Professional fees			5,018				10,478				1,457				1,735												18,688
Supplies			7,645				7,792				865				2,117												18,419
Rents and leases			3,576				4,205				1,494				1,334												10,609
Other operating expenses			12,760				17,895				6,438				7,224												44,317
Depreciation and amortization			3,108				3,124				691				674				112				(20e	)			8,302
																			593				(20f	)
Interest expense, net			4,143				18,667				1,318				105				1,910				(21b	)			26,143
Sponsor management fees			1,135				—				—				813				(1,948	)			(22	)			—
Transaction-related expenses			10,595				—				—				—				(10,595	)			(23	)			—
Legal settlement			—				446				—				—												446
Total expenses			156,138				151,476				40,121				36,191				(9,928	)							373,998
Income (loss) from continuing operations before income taxes			(14,995	)			4,553				2,467				3,373				9,928								5,326
Provision (benefit) for income taxes			3,426				2,272				—				160				(133	)			(25	)			9,597
																			3,872				(26	)
Income (loss) from continuing operations		$	(18,421	)		$	2,281			$	2,467			$	3,213			$	6,189							$	(4,271	)
Earnings per share—income (loss) from continuing operations:
Basic		$	(1.05	)																						$	(0.09	)
Diluted		$	(1.05	)																						$	(0.09	)
Weighted average shares:
Basic			17,633				14,475												9,488				(27c	)			47,596
																			6,000				(27d	)
Diluted			17,633				14,475												9,488				(27c	)			47,596
																			6,000				(27d	)

See accompanying notes to unaudited pro forma financial information.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(Dollars 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 AmiCare, actual results for the periods presented.

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

(4)	Represents cash not acquired as part of the acquisitions.

(5)	Reflects the elimination of equity accounts of AmiCare and BCA.

(6)	Reflects the elimination of deferred financing costs in connection with the repayment of debt.

(7)	Represents adjustments based on preliminary estimates of fair value and the adjustment to goodwill derived from the difference in the estimated total consideration to be transferred by Acadia and the estimated fair value of assets acquired and liabilities assumed by Acadia, calculated as follows:

 

(a)

AmiCare:

 

Estimated cash consideration		$	113,000
Cash and cash equivalents			—
Accounts receivable			4,405
Other current assets			885
Property and equipment			20,923
Intangible assets			1,790
Other long-term assets			—
Accounts payable			(504	)
Accrued salaries and benefits			(2,373	)
Other accrued liabilities			(940	)
Other long-term liabilities			(173	)
Fair value of assets acquired less liabilities assumed		$	24,013
Estimated goodwill		$	88,987
Less: historical goodwill			(14,175	)
Goodwill adjustment		$	74,812

 

(b)

BCA:

 

Estimated cash consideration		$	145,000
Cash and cash equivalents			—
Accounts receivable			7,095
Other current assets			1,948
Property and equipment			23,947
Intangible assets			1,925
Other long-term assets			259
Accounts payable			(2,843	)
Accrued salaries and benefits			(2,536	)
Other accrued liabilities			(303	)
Other long-term liabilities			(527	)
Fair value of assets acquired less liabilities assumed		$	28,965
Estimated goodwill		$	116,035
Less: historical goodwill			(16,550	)
Goodwill adjustment		$	99,485

The acquired assets and liabilities assumed will be recorded at their relative fair values as of the closing date of the acquisitions. Estimated goodwill is based upon a determination of the fair value of assets acquired and liabilities assumed that is preliminary and subject to revision as the value of total consideration is finalized and additional information related to the fair value of property and equipment and other assets (including intangible assets) acquired and liabilities assumed becomes available. The actual determination of the fair value of assets acquired and liabilities assumed will differ from that assumed in these unaudited pro forma condensed combined financial statements and such differences may be material. Qualitative factors comprising goodwill include efficiencies derived through synergies expected by the elimination of certain redundant corporate functions and expenses, the ability to leverage call center referrals to a broader provider base, coordination of services provided across the combined network of facilities, achievement of operating efficiencies by benchmarking performance and applying best practices throughout the combined company.

 

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(8)

Represents a $33,780 increase in cash as a result of the planned acquisitions of BCA and AmiCare and relating financing transactions. Acadia expects to issue $165,000 of incremental term loans through an amendment to its existing senior credit facility, or Incremental Term Loans, and to issue additional common shares for estimated net proceeds of $131,280. Based on the assumed public offering price of $22.95, which was the closing price of our common stock on November 30, 2012 as reported on The NASDAQ Global Market, the number of shares to be issued is 6,000,000 with a par value of $0.01, which results in additional common stock of $60 and additional paid-in capital of $131,220 and includes estimated underwriting discounts and other offering expenses of $6,420. The sources and uses of cash in connection with the acquisitions are expected to be as follows:

 

Sources:
Incremental Term Loans		$	165,000
Equity issuance			131,280
Uses:
AmiCare cash consideration			(113,000	)
BCA cash consideration			(145,000	)
Transaction-related expenses(a)			(4,500	)
Cash adjustment		$	33,780

 

(a)

Estimated costs to be incurred in connection with the BCA and AmiCare transactions include $3,000 of debt financing costs associated with the Incremental Term Loans and $1,500 of acquisition costs.

 

(9)	Represents the issuance of Incremental Term Loans, the elimination of debt not assumed in the BCA and AmiCare acquisitions and the amendment to the credit agreement to adjust the payment schedule for existing loans, as follows:

 

		CURRENT PORTION				LONG-TERM PORTION				TOTAL DEBT
Elimination of AmiCare debt not assumed		$	(4,283	)		$	(18,637	)		$	(22,920	)
Elimination of BCA debt not assumed			(2,613	)			(2,316	)			(4,929	)
Incremental Term Loan			4,125				160,875				165,000
Amendment to credit agreement			(8,275	)			8,275				—
Adjustments		$	(11,046	)		$	148,197			$	137,151

 

(10)	Represents the following adjustments to eliminate the assets and liabilities of BCA’s Permian Basin facility, which will be divested prior to the acquisition:

 

Accounts receivable, net		$	1,082
Other current assets			521
Property and equipment held for sale			330
Other assets			387
		$	2,320
Accounts payable		$	235
Accrued salaries and benefits			141
Other accrued liabilities			14
Other liabilities			431
		$	821

 

(11)

The amounts in this column represent, for YFCS, actual results for the periods presented, up to the April 1, 2011 acquisition date. The condensed consolidated statements of operations of YFCS have been reclassified to present the provision for doubtful accounts as a deduction from revenue in accordance with Accounting Standards Update No. 2011-07, “Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities,” or ASU 2011-07.

(12)

The amounts in this column represent, for PHC, actual results for the periods presented, up to the November 1, 2011 acquisition date. The condensed consolidated statements of operations of PHC have been reclassified to conform to Acadia’s expense classification policies, including the reclassification of the provision for doubtful accounts from operating expenses to a deduction from revenue.

(13)

The amounts in this column represent, for HHC Delaware, actual results for the periods presented, up to July 1, 2011, the date of PHC’s acquisition of HHC Delaware. The condensed consolidated statements of operations of HHC Delaware have been reclassified to present the provision for doubtful accounts as a deduction from revenue in accordance with ASU 2011-07.

(14)	The amounts in this column represent, for the Haven Facilities, actual results for the periods presented, up to the March 1, 2012 acquisition date.

 

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(15)	The amounts in this column represent, for other acquisitions, actual results for the periods presented, up to the acquisition dates.

(16)	The amounts in this column represent pro forma combined results of operations for acquisitions completed as of September 30, 2012 for the year ended December 31, 2011 as detailed below.

 

		YFCS (11)				PHC (12)				HHC DELAWARE (13)				HAVEN FACILITIES (14)				OTHER ACQUISITIONS (15)				PRO FORMA ADJUSTMENTS				NOTES				COMPLETED ACQUISITIONS
Revenue before provision for doubtful accounts		$	45,686			$	59,786			$	7,541			$	43,448			$	30,516											$	186,977
Provision for doubtful accounts			(208	)			(3,466	)			(339	)			(1,458	)			(736	)											(6,207	)
Revenue			45,478				56,320				7,202				41,990				29,780												180,770
Salaries, wages and benefits			29,502				31,569				4,747				21,391				14,835												102,044
Professional fees			—				6,365				454				1,374				1,949				1,901				(19	)			12,043
Supplies			—				2,299				469				2,819				1,269				2,204				(19	)			9,060
Rents and leases			—				3,048				19				171				—				1,320				(19	)			4,558
Other operating expenses			9,907				7,576				410				4,119				3,808				(5,425	)			(19	)			20,395
Depreciation and amortization			819				1,051				179				1,046				475				(294	)			(20a	)			3,655
																							430				(20b	)
																							(470	)			(20c	)
																							419				(20d	)
Interest expense, net			1,726				1,160				224				343				—				17,661				(21a	)			21,114
Sponsor management fees			—				—				226				—				—				(226	)			(22	)			—
Transaction-related expenses			—				3,374				—				—				—				(3,374	)			(23	)			—
Change in fair value of derivatives			—				—				—				(276	)			—				276				(24	)			—
Legal settlement			—				446				—				—				—												446
Total expenses			41,954				56,888				6,728				30,987				22,336				14,422								173,315
Income (loss) from continuing operations before income taxes			3,524				(568	)			474				11,003				7,444				(14,422	)							7,455
Provision (benefit) for income taxes			1,404				403				193				4,071				2,903				(5,625	)			(26	)			3,349
Income (loss) from continuing operations		$	2,120			$	(971	)		$	281			$	6,932			$	4,541			$	(8,797	)						$	4,106
Weighted average shares:
Basic																							4,074				(27a	)			13,342
																							9,268				(27b	)
Diluted																							4,074				(27a	)			13,342
																							9,268				(27b	)

 

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(17)	The amounts in this column represent pro forma information for acquisitions completed as of September 30, 2012 for the nine months ended September 30, 2012.

 

		HAVEN FACILITIES (14)				OTHER ACQUISITIONS (15)				PRO FORMA ADJUSTMENTS				NOTES				COMPLETED ACQUISITIONS
Revenue before provision for doubtful accounts		$	7,158			$	22,921											$	30,079
Provision for doubtful accounts			(233	)			(456	)											(689	)
Revenue			6,925				22,465												29,390
Salaries, wages and benefits			3,694				11,697												15,391
Professional fees			222				838												1,060
Supplies			461				867												1,328
Rents and leases			25				—												25
Other operating expenses			687				2,671												3,358
Depreciation and amortization			172				341				(76	)			(20c	)			584
											147				(20d	)
Interest expense, net			56				—				257				(21a	)			313
Total expenses			5,317				16,414				328								22,059
Income (loss) from continuing operations before income taxes			1,608				6,051				(328	)							7,331
Provision (benefit) for income taxes			595				2,360				(128	)			(26	)			2,827
Income (loss) from continuing operations		$	1,013			$	3,691			$	(200	)						$	4,504

 

(18)	The amounts in this column represent pro forma information for acquisitions completed as of September 30, 2012 for the nine months ended September 30, 2011.

 

		YFCS (11)				PHC (12)				HHC DELAWARE (13)				HAVEN FACILITIES (14)				OTHER ACQUISITIONS (15)				PRO FORMA ADJUSTMENTS				NOTES				COMPLETED ACQUISITIONS
Revenue before provision for doubtful accounts		$	45,686			$	52,989			$	7,541			$	32,872			$	22,161											$	161,249
Provision for doubtful accounts			(208	)			(3,006	)			(339	)			(1,225	)			(442	)											(5,220	)
Revenue			45,478				49,983				7,202				31,647				21,719												156,029
Salaries, wages and benefits			29,502				27,840				4,747				16,097				10,683												88,869
Professional fees			—				5,630				454				1,024				1,469				1,901				(19	)			10,478
Supplies			—				2,062				469				2,128				929				2,204				(19	)			7,792
Rents and leases			—				2,736				19				130				—				1,320				(19	)			4,205
Other operating expenses			9,907				6,914				410				3,015				3,074				(5,425	)			(19	)			17,895
Depreciation and amortization			819				918				179				789				387				(294	)			(20a	)			3,124
																							397				(20b	)
																							(357	)			(20c	)
																							286				(20d	)
Interest expense, net			1,726				968				224				261				—				15,488				(21a	)			18,667
Sponsor management fees			—				—				226				—				—				(226	)			(22	)			—
Transaction-related expenses			—				2,896				—				—				—				(2,896	)			(23	)			—
Change in fair value of derivatives			—				—				—				(221	)			—				221				(24	)			—
Legal settlement			—				446				—				—				—												446
Total expenses			41,954				50,410				6,728				23,223				16,542				12,619								151,476
Income (loss) from continuing operations before income taxes			3,524				(427	)			474				8,424				5,177				(12,619	)							4,553
Provision (benefit) for income taxes			1,404				459				193				3,118				2,019				(4,921	)			(26	)			2,272
Income (loss) from continuing operations		$	2,120			$	(886	)		$	281			$	5,306			$	3,158			$	(7,698	)						$	2,281
Weighted average shares:
Basic																							4,892				(27a	)			14,475
																							9,583				(27b	)
Diluted																							4,892				(27a	)			14,475
																							9,583				(27b	)

 

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(19)	Reflects the reclassification from YFCS other operating expenses of: (a) professional fees of $1,901 for the three months ended March 31, 2011, (b) supplies expense of $2,204 for the three months ended March 31, 2011, and (c) rent expense of $1,320 for the three months ended March 31, 2011.

(20)	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 respective dates of the acquisitions, as follows:

 

(a)

YFCS acquisition:

 

		AMOUNT				USEFUL LIVES (IN YEARS)		MONTHLY DEPRECIATION				TWELVE MONTHS ENDED DECEMBER 31, 2011				NINE MONTHS ENDED SEPTEMBER 30, 2011
Land		$	5,122			N/A		$	—			$	—			$	—
Land improvements			2,694			10			22				66				66
Building and improvements			21,562			25, or lease term			73				219				219
Equipment			2,024			3-7			53				159				159
Construction in progress			239			N/A			—				—				—
			31,641						148				444				444
Indefinite-lived intangible assets			3,835			N/A			—				—				—
Non-compete intangible asset			321			1			27				81				81
Patient-related intangible asset			1,200			0.25			400				—				—
Total depreciation and amortization expense													525				525
Less: historical depreciation and amortization expense													(819	)			(819	)
Depreciation and amortization expense adjustment												$	(294	)		$	(294	)

The adjustment to decrease depreciation and amortization expense relates to the excess of the historical amortization of the pre-acquisition intangible assets of YFCS over the amortization expense resulting from the intangible assets identified by Acadia in its acquisition of YFCS.

 

(b)

PHC acquisition:

 

		AMOUNT				USEFUL LIVES (IN YEARS)		MONTHLY DEPRECIATION				TWELVE MONTHS ENDED DECEMBER 31, 2011				NINE MONTHS ENDED SEPTEMBER 30, 2011
Land		$	2,940			N/A		$	—			$	—			$	—
Building and improvements			12,194			25, or lease term			102				1,020				918
Equipment			1,751			3-7			29				290				261
			16,885						131				1,310				1,179
Indefinite-lived intangible assets			1,425			N/A			—				—				—
Customer contract intangibles			2,100			5			35				350				315
Total depreciation and amortization expense													1,660				1,494
Less: PHC and MeadowWood historical depreciation and amortization expense													(1,230	)			(1,097	)
Depreciation and amortization expense adjustment												$	430			$	397

 

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(c)

Haven Facilities acquisition:

 

		AMOUNT				USEFUL LIVES (IN YEARS)		MONTHLY DEPRECIATION				TWELVE MONTHS ENDED DECEMBER 31, 2011				NINE MONTHS ENDED SEPTEMBER 30, 2012				NINE MONTHS ENDED SEPTEMBER 30, 2011
Land		$	2,960			N/A		$	—			$	—			$	—			$	—
Building and improvements			8,840			25, or lease term			29				348				58				261
Equipment			871			3-7			15				180				30				135
Construction in progress			52			N/A			—				—				—				—
			12,723						44				528				88				396
Indefinite-lived intangible assets			1,050			N/A			—				—				—				—
Non-compete intangible asset			150			3			4				48				8				36
Total depreciation and amortization expense													576				96				432
Less: historical depreciation and amortization expense													(1,046	)			(172	)			(789	)
Depreciation and amortization expense adjustment												$	(470	)		$	(76	)		$	(357	)

 

(d)

Other acquisitions:

 

		AMOUNT				USEFUL LIVES (IN YEARS)		MONTHLY DEPRECIATION				TWELVE MONTHS ENDED DECEMBER 31, 2011				NINE MONTHS ENDED SEPTEMBER 30, 2012				NINE MONTHS ENDED SEPTEMBER 30, 2011
Land		$	1,137			N/A		$	—			$	—			$	—			$	—
Land improvements			2,601			10			22				260				176				198
Building and improvements			9,296			25, or lease term			31				372				248				279
Equipment			481			3-7			8				96				64				72
Construction in progress			109			N/A			—				—				—				—
			13,624						61				728				488				549
Indefinite-lived intangible assets			3,151			N/A			—				—				—				—
Non-compete intangible asset			166			1			14				166				—				124
Total depreciation and amortization expense													894				488				673
Less: historical depreciation and amortization expense													(475	)			(341	)			(387	)
Depreciation and amortization expense adjustment												$	419			$	147			$	286

 

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(e)

AmiCare acquisition:

 

		AMOUNT				USEFUL LIVES (IN YEARS)		MONTHLY DEPRECIATION				TWELVE MONTHS ENDED DECEMBER 31, 2011				NINE MONTHS ENDED SEPTEMBER 30, 2012				NINE MONTHS ENDED SEPTEMBER 30, 2011
Land		$	1,381			N/A		$	—			$	—			$	—			$	—
Building and improvements			16,930			25, or lease term			56				677				508				508
Equipment			1,723			3-7			29				345				258				258
Construction in progress			889			N/A			—				—				—				—
			20,923						85				1,022				766				766
Indefinite-lived intangible assets			1,640			N/A			—				—				—				—
Non-compete intangible asset			150			3			4				50				37				37
Total depreciation and amortization expense													1,072				803				803
Less: historical depreciation and amortization expense													(925	)			(703	)			(691	)
Depreciation and amortization expense adjustment												$	147			$	100			$	112

 

(f)

BCA acquisition:

 

		AMOUNT				USEFUL LIVES (IN YEARS)		MONTHLY DEPRECIATION				TWELVE MONTHS ENDED DECEMBER 31, 2011				NINE MONTHS ENDED SEPTEMBER 30, 2012				NINE MONTHS ENDED SEPTEMBER 30, 2011
Land		$	1,301			N/A		$	—			$	—			$	—			$	—
Building and improvements			15,073			25, or lease term			50				603				452				452
Equipment			5,057			3-7			84				1,011				759				759
Construction in progress			2,516			N/A			—				—				—				—
			23,947						134				1,614				1,211				1,211
Indefinite-lived intangible assets			1,850			N/A			—				—				—				—
Non-compete intangible asset			75			1							75				—				56
Total depreciation and amortization expense													1,689				1,211				1,267
Less: historical depreciation and amortization expense													(955	)			(951	)			(674	)
Depreciation and amortization expense adjustment												$	734			$	260			$	593

 

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(21)

 

(a)

Represents adjustments to interest expense to give effect to the Senior Secured Credit Facility entered into by Acadia on April 1, 2011, the issuance of $150,000 of Senior Notes on November 1, 2011, the amendment to the interest rate applicable to the Senior Secured Credit Facility on November 1, 2011, and the amendment to the Senior Secured Credit Facility on March 1, 2012 to issue incremental term loans of $25,000 and increase the revolving line of credit from $30,000 to $75,000 and to the borrowing of $7,000 under the revolving line of credit. Interest expense includes related amortization of $1,000 of deferred financing cost and debt discounts for the year ended December 31, 2011 and $900 for the nine months ended September 30, 2011. The interest expense calculation for the amendment to the Senior Secured Credit Facility on March 1, 2012 assumes the 4.5% rate in effect as of such date was in place throughout the period.

 

		TWELVE MONTHS ENDED DECEMBER 31, 2011				NINE MONTHS ENDED SEPTEMBER 30, 2012				NINE MONTHS ENDED SEPTEMBER 30, 2011
Interest related to Senior Secured Credit Facility entered into on April 1, 2011		$	1,992			$	—			$	1,992
Interest related to Senior Notes issued on November 1, 2011			17,100				—				15,390
Interest related to amendment to the Senior Secured Credit Facility on November 1, 2011			331				—				249
Interest related to amendment to the Senior Secured Credit Facility on March 1, 2012			1,914				313				1,036
Less: historical interest expense of Acadia (for the period prior to April 1, 2011), YFCS, PHC, MeadowWood, and Haven as to which the related debt has been repaid			(3,676	)			(56	)			(3,179	)
Interest expense adjustment		$	17,661			$	257			$	15,488

 

(b)

Represents adjustments to interest expense to give effect to the Incremental Term Loans based on an estimated interest rate of 3.25% and to adjust historical interest expense on the Senior Secured Credit facility entered on April 1, 2011 from the interest rate that was in effect for that period to 3.25%. Interest expense includes related amortization of $650 of deferred financing cost and debt discounts for the year ended December 31, 2011 and $450 for the nine months ended September 30, 2011 and 2012. The interest expense calculation for the Senior Secured Credit Facility assumes the 3.25% rate was in place throughout the period.

 

		TWELVE MONTHS ENDED DECEMBER 31, 2011				NINE MONTHS ENDED SEPTEMBER 30, 2012				NINE MONTHS ENDED SEPTEMBER 30, 2011
Interest related to Incremental Term Loans		$	5,916			$	4,449			$	4,358
Effect of amendment to lower interest rate on Senior Secured Credit Facility			(1,687	)			(1,186	)			(1,025	)
Less: historical interest expense of BCA and AmiCare as to which the related debt will not be assumed			(1,929	)			(1,257	)			(1,423	)
Interest expense adjustment		$	2,300			$	2,006			$	1,910

An increase or decrease of 0.125% in the assumed interest rate would result in a change in interest expense of $395 for the year ended December 31, 2011 and $269 and $304 for the nine month periods ended September 30, 2012 and 2011.

 

(22)

For Acadia, represents the elimination of advisory fees paid to Waud Capital Partners pursuant to Acadia’s professional services agreement, which was terminated on November 1, 2011 in connection with the PHC acquisition. For BCA, represents management fees paid to its equity sponsor and parent company. For HHC Delaware, represents management fees paid to its parent company.

(23)	Reflects the removal of acquisition-related expenses included in the historical statements of operations relating to Acadia’s acquisition of YFCS, PHC, the Haven Facilities and other acquisitions and PHC’s acquisition of HHC Delaware and sale to Acadia.

(24)	Reflects the elimination of the change in fair value associated with interest rate swap agreements, which were not assumed by Acadia in the acquisition of the Haven Facilities.

(25)	Reflects a decrease in income taxes of $133 for the three months ended March 31, 2011 to give effect to the election by Acadia Healthcare Company, LLC to be treated as a taxable corporation effective April 1, 2011.

(26)	Reflects adjustments to income taxes to reflect the impact of the above pro forma adjustments applying combined federal and state statutory tax rates for the respective periods.

 

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(27)	Represents adjustments to weighted average shares used to compute basic and diluted earnings (loss) per share to reflect the following:

 

(a)

The effect of the 4,892,000 shares of common stock of Acadia issued to PHC stockholders on November 1, 2011, which resulted in an increase in weighted average shares outstanding of 4,074,000 shares for the year ended December 31, 2011 and 4,892,000 shares for the nine months ended September 30, 2011.

(b)

The effect of the 9,583,000 shares of common stock issued by Acadia on December 20, 2011, which resulted in an increase in weighted average shares outstanding of 9,268,000 shares for the year ended December 31, 2011and 9,583,000 shares for the nine months ended September 30, 2011. The proceeds from such offering of common stock were used to partially fund Acadia’s acquisition of the Haven Facilities.

(c)

The effect of the 9,488,000 shares of common stock issued by Acadia on May 9, 2012, which resulted in an increase in weighted average shares outstanding of 9,488,000 shares for the year ended December 31, 2011, 4,900,000 shares for the nine months ended September 30, 2012 and 9,488,000 shares for the nine months ended September 30, 2011. The proceeds from such offering of common stock were used to partially fund Acadia’s acquisition of the Haven Facilities.

(d)

The effect of an estimated 6,000,000 shares of common stock to be issued by Acadia in this offering, which resulted in an increase in weighted average shares outstanding of 6,000,000 shares for the year ended December 31, 2011, 6,000,000 shares for the nine months ended September 30, 2012 and 6,000,000 shares for the nine months ended September 30, 2011. The proceeds from such offering of common stock are to be used to partially fund Acadia’s planned acquisition of BCA and AmiCare.

 

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SELLING STOCKHOLDERS

The table below sets forth information with respect to the selling stockholders and the shares of our common stock beneficially owned by the selling stockholders as of November 30, 2012. The percentages of shares owned prior to and after the offering are based on the 41,837,360 shares of our common stock outstanding as of November 30, 2012. The information regarding shares beneficially owned after the offering assumes the sale of all shares offered by the selling stockholders, in the aggregate, and that the selling stockholders do not acquire any additional shares. Information in the table below with respect to beneficial ownership has been furnished by each of the selling stockholders, and we have not sought to verify such information

The amounts and percentage of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he or she has no economic interest. The number of shares of common stock outstanding used in calculating the percentage for each listed person includes the shares of common stock underlying options or warrants held by such person that are exercisable within 60 days after November 30, 2012, but excludes shares of common stock underlying options or warrants held by any other person.

Except as indicated by footnote, the stockholders named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

 

Name (1)

Shares Beneficially Owned Before the Offering

Number of Shares Offered

Shares Beneficially Owned After the Offering

Assuming the Underwriters’ Option is Not Exercised

Number of Shares Offered in Underwriters’ Option

Assuming the Underwriters’ Option is Exercised in Full

Number

Percentage

Number

Percentage

Number

Percentage