Psychiatric Solutions Inc. (PSYS) reported an EPS from continuing operations of 94 cents in the third quarter of 2010, surpassing the Zacks Consensus Estimate of 59 cents. EPS increased 88% from 50 cents in the year-ago quarter due to an increase in overall revenue on the back of heightened admissions.
Results for the third quarter included $2.4 million of transaction costs associated with its planned acquisition by Pennsylvania-based Universal Health Services Inc (UHS). The acquisition is expected to close in the fourth quarter.
Psychiatric Solutions reported a 12.2% year-over-year increase in revenues to $508.5 million from $453.2 million in the year-ago quarter, which beat the Zacks Consensus Estimate of $488 million. The company derives its revenues from owned or operated facilities (same facility) and from managed contracts or Others.
Total facility’s revenues grew 12.1% to $471.4 million with a 5.3% increase in patient days (755.3 million) and 6.5% increase in revenue per patient day ($0.62 million). Total admissions increased 10.7% to 49.6 million, while average length of stay declined 5% to 15.2 million.
The same-facility’s revenues grew 10.4% year over year to $464.0 million, attributable to a 4.0% increase in patient days (745.8 million) and a 6.1% increase in revenue per patient day ($0.62 million). Total admissions for the same facility increased 8.2% year over year to 48.5 million, while the average length of stay declined 3.8% to 15.4 million.
Adjusted EBITDA (excluding one-time items) increased 51.6% to $121.5 million, or 23.9% of revenues from $80.2 million, or 17.7% of revenues in the year-ago quarter.
Psychiatric Solutions exited the quarter with $43.4 million in cash and cash equivalents and without any borrowings under its $300 million revolving credit facility. Cash from operating activities increased 85.5% year over year to $68.9 million. Capital expenditures for the maintenance and addition of beds to the existing facilities amounted to $24.8 million.
The company also made a principal payment of $51.2 million towards long-term debt during the quarter, including a $50 million optional prepayment on its senior secured term loan. Its ratio of debt-to-total capitalization improved to 48.2% at the end of the third quarter from 50.6% at the end of second quarter and 56.2% at the end of the year-ago quarter.
Psychiatric Solutions runs behavioral health facilities, including psychiatric hospitals and residential treatment facilities. The company provides its services in both acute care and residential treatment center (RTC) settings, offering longer-term treatment primarily to children and adolescents with long-standing behavioral problems.
PSYCHIATRIC SOL (PSYS): Free Stock Analysis Report
Zacks Investment Research
