Acadia Healthcare Company Inc (ACHC) 2018 Q3 法說會逐字稿

As a reminder, this call is being recorded. Please proceed.

Good morning. I'm Brent Turner, President of Acadia Healthcare, and I'd like to welcome you to our Third Quarter 2018 Conference Call.

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

This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Acadia's expected quarterly and annual financial performance for 2018 and beyond.

For this purpose, any statements made during the call that are not statements of historical facts may be deemed to be forward-looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify forward-looking statements.

You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in Acadia's filings with the Securities and Exchange Commission and in the company's third quarter news release. And consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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

Good morning, and thank you for being with us today for our third quarter conference call. In addition to Brent, I'm here today with our Chief Financial Officer, David Duckworth, and other members of our executive management team. David and I each have some remarks about the third quarter and our outlook for going forward in 2018, then we will open the line for your questions.

Acadia produced solid growth of 6.2% in revenue for the third quarter. Our revenue growth continues to be driven primarily by organic growth, including a 6.2% increase in total same facility for the quarter. This increase was mainly the result of adding 806 beds to our operations over the last 12 months. We added 132 beds during the third quarter and 408 in the first 9 months of this -- of the year, and we expect to add more than 800 beds to existing and new facilities in 2018.

Our 6.2% total same-facility revenue growth included a 2.4% increase in patient days and a 3.8% increase in revenue per patient day. U.S. same-facility revenue increased 7.2% for the quarter with a 3.3% increase in patient days and a 3.8% increase in revenue per patient day. U.S. same facility EBITDA margin increased 60 basis points to 27.4%.

Core operations in the U.K., same facility revenue was up 4.4%, consisting of 1.3% increase in patient days and a 3.1% increase in revenue per patient day. Same facility EBITDA margin declined 450 basis points to 16.9% for the quarter. Our operations in the U.K. were affected by a lower census and higher-than-expected operating expenses. Our operating costs were significantly higher, primarily due to the ongoing nursing and clinical staff shortage and our dependence on higher-cost agency labor. The census in our existing health care business declined as we experienced a decrease in referrals from the NHS.

Similar to industry trends, we continue to experience difficulty with recruiting nurses and clinical staff, which requires us to utilize agency labor to fill those positions. Because their census did not reach a sufficient level to absorb the higher wages and other operating costs, our third quarter margins and earnings were adversely affected. We expect continued difficulties resulting from the nursing and clinical staff shorter -- shortage for the foreseeable future.

We signed definitive agreements for 2 acquisitions following the end of the third quarter, one with Mission Treatment, which operates 9 comprehensive treatment centers for substance abuse with locations in California, Nevada, Arizona and Oklahoma. We also announced an agreement to acquire The Whittier Pavilion, a 71-bed inpatient psychiatric hospital in Haverhill, Massachusetts.

Thanks for your time this morning and your interest in Acadia. Now here's David Duckworth to discuss our financial results and guidance in more detail.

Thanks, Joey, and good morning. The company's revenue for the third quarter of 2018 was $760.9 million, an increase of 6.2% from $716.7 million for the third quarter of 2017. Adjusted earnings per diluted share were $0.55 for the third quarter of 2018 compared with $0.58 for the third quarter last year. Adjusted EPS excludes transaction-related expenses of $2.4 million for the third quarter of 2018 and $5.7 million for the third quarter of 2017.

The company's consolidated adjusted EBITDA for the third quarter of 2018 was $148.9 million or 19.6% of revenue. Acadia's operating cash flows from continuing operations were $288.7 million for the 9 months ended September 30, 2018, compared with $272.6 million for the same period last year.

Turning to our financial guidance. And as announced in yesterday's news release, we have adjusted our 2018 financial guidance based on the company's performance for the first 9 months of the year and our expectations for the fourth quarter.

Our full year guidance is as follows: revenue of approximately $3 billion, adjusted EBITDA in a range of $605 million to $610 million and adjusted diluted EPS in the range of $2.25 to $2.27.

This concludes our prepared remarks this morning, and I'll now turn it over to Joey for some final comments.

Thank you, David. Before we move into Q&A, I want to briefly address the recent press reports and rumors regarding Acadia being approached by private equity firms. It is our company's policy not to comment on rumors or speculation. That's all we will say today on this topic, so we ask that you keep your questions focused on our results.

I will now ask Kathy to open the floor for your questions.

(Operator Instructions) And we'll go first to A.J. Rice of Crédit Suisse.

Maybe 2 questions, if I could. First of all, there's also been some reporting -- particularly mainly in the financial press this quarter about regulatory issues that maybe the company's been facing. And I wanted to give you a chance to give any comments you'd like to give about that and then also to ask you in the aftermath because it didn't seem to get picked up in the popular press. I would think there hasn't been any change in your interaction with regulators, but just to ask whether that is indeed the case.

Sure, A.J. Referring to the statement I've made in previous earnings calls concerning regulatory issues at a few of our facilities, I'm pleased to announce that all of those have been resolved and that those facilities do not have admission holds as of this time. As you know, A.J., we're a large company with a large number of facilities. So at any time -- and at any time, we can have an inspection go bad or an incident occur or an investigation be instigated. So -- but I'm pleased to report that for the ones we've been talking about this year, those facilities have their admission holds removed and have their license and are building back their census.

Okay, all right. And the other question I was going to ask was obviously about the U.K. operations. It sounds like the issues that you're experiencing are really more the margin, not really anything you'd say with respect to your management team over there not doing what they should be doing. I want to confirm that, that is indeed what you think. And then you sort of said in your prepared remarks that this is -- potentially could go on for a while. Does it make you think about capital allocation to the U.K. differently? Does it make you think about repositioning that portfolio somehow? I don't know what the options are. But give us some flavor for, okay, if this does persist, what can you do to try to at least minimize the impact on Acadia overall, given that the U.S. operations still seem to be doing pretty well?

Sure, A.J. First, in the U.K., Absolutely, the nurse shortage continues and actually grows. So we see that occurring, continuing and going forward. So that's the reason for the lowering the guidance. We do expect to, hopefully, rebound on the census, to grow the census however small it might be, but we do have beds coming online that the NHS wanted us to retool so that we could take those patients. However, unfortunately, when we get those patients, a part of that staffing will be nurse agency costs, but it would still be incremental positive to us. So as far as capital deployment to the U.K., we have a pretty stringent policy, whether it's in the U.K., in the U.S. now about capital deployment. But it will be a little bit tougher for capital to be deployed in the U.K. We are seeing a lot of activity here in the U.S. for the use of our capital. So as -- so we'll just take that a day at a time. But yes, we will be more careful about deploying capital to the U.K.

Our next question will come from Kevin Fischbeck of Bank of America Merrill Lynch.

Great. So I guess, given some of those comments, do you think that the kind of the margin profile that you showed this quarter in the U.K. is the right way to think about it, at least for the next several quarters?

Well, Kevin, I think that is the profile for the next quarter for sure. Could it go a little bit lower? Yes. But the team is working on making it, growing it. So -- but it is tough all across U.K. for health care providers concerning just nurse and clinical staff shortage. So that does continue to put pressure on us and everybody. So -- but our goal would be to improve the margin, and we would have to get there through growing the census incremental to the census, I think.

Okay. Then I guess to that end, can you talk a little bit about what happened? You said that census was lower because the NHS had a decrease in referral, but you also talked about them asking you to take -- to add more beds. So can you talk about what happened in the quarter, why that was an issue and how long it takes to fix itself?

Well, in this quarter, those are the holiday months over in the U.K. and we should have been more pessimistic in our budget for what the census would do. And yes, during the year, the NHS has come to us and asked us to build beds for certain services, and those beds are coming online. And so both of those things occurred. The census was softer, but the NHS is asking us to build beds to meet the needs of the patients in the U.K.

Okay. So when do those kind of new referrals start to kick in?

We already have some of the new referrals now, and we expect that to grow. But that does -- Kevin, I can't predict. Does the existing base census soften a little? I hope it doesn't. I want it to grow. Everybody in the U.K. wants it to grow, and that's what we're focused on. But we'll just have to wait and see. And -- but we're predicting more of the same for the fourth quarter that we saw in the third quarter.

Okay. And this may be last question because, like, 4.5% same-store growth is actually not a bad number. But obviously, given the labor pressures, you need a higher number. What number do you think you need to get to on a same-store basis in the U.K. to be able to maintain margins?

Well, we know 4% won't do it. So we're -- Kevin, quite frankly, we're going to have to have some relief on the premiums we're having to pay for the nurse agencies. There's got to be more staff, more nurses, more clinicians enter into the system. And we are, actually, I think, might -- going through this environment the best of any of the providers. The NHS, they have the worst of the problem. They have, I think, thousands of open positions for nurses. So that has to be fixed. We can grow the census and marginally improve the margin in earnings, hopefully, but it's really the souring wages. That's the issue.

We will now take a question from Matt Borsch of BMO Capital Markets.

Yes. Just a little bit more on the U.K. Can you just talk about your level of commitment to the U.K. as a market, given these results as you look into 2019? I mean, I guess, one of the questions here, in addition to the unfavorable developments and the uncertainty of Brexit impact, is given that they're an ocean away, does that impact your ability, top management's ability to be on top of trends in this close away as you are in the U.S.?

We have a medcert, we have a psych hospital 40 minutes from us here in the corporate office. So I can keep an eye on that facility basically from my office. But the U.K. distance really is not an issue. They keep us up-to-date, and we have enough detail to know what's happening over there. So a 17% EBITDA margin, that's okay. It's not what we expect, but that's a pretty good margin. And as Kevin mentioned earlier, more than a 4% revenue growth, that would be a strong number here in the U.S. So we have some positive numbers, and we're just weathering the storm and doing everything we can on the expense side to make a stronger asset today than we had yesterday.

Got it, got it. It makes sense. Has anything changed with respect to what you had talked about last quarter in terms of -- last quarter, you talked about the ability to bring in labor from the Commonwealth countries and how that was something that was helping. Has the situation changed? Or is just that it's just tougher than you had hoped it would be for the second half?

It's just tougher. It is just tougher. And the government -- yes, it is tougher. Thank you.

And next, we've got Peter Costa of Wells Fargo Securities.

Back to the same area, a couple questions. Let's start with the slowdown in NHS referrals to you. Do you believe those referrals are going somewhere else? Do you believe the 2 competitors? Is there the ability to stay with NHS beds? Or is it just less demand?

I don't think they're going to competitors. NHS may be keeping them longer in the system before they get to us. But quite frankly, just getting them through the system and getting them funded is the speed of the referrals. And once again, during the third quarter, it slows down historically, and it did this time, too. So we hope that the referrals will pick up in pace because everybody's back, but we're getting ready to head into the holidays. So we're trying to be a little bit conservative about that, too. And we hope that the funding of the individual patient will happen at a quicker pace. So those are things we're working on and talking to the referral sources over in the U.K.

Okay. Then second question. The talk of your company being taken private has been more recent than the talk of you, perhaps, selling the U.K. assets, which has been some time ago. Did that talk ever filtrate down into the management of the U.K. facilities or, perhaps, to the NHS in terms of impacting their referral streams to you such that, that conversation or that talk impacted your business?

I do not think so. No one has brought that to my attention.

Okay. And then lastly, can you give us some concrete things about what you're doing to improve the margins going forward here? For example, if you don't have the business, you could consolidate facilities, perhaps. So is there some mechanism that you can talk about the concrete steps of how you're going to fix things?

Yes. We're -- we have more than 500 facilities there. We're looking at the lower number of performing facilities and what we can do with them. And worst-case scenario, it would be that we would close them and that we're not adverse to doing that. Or if we decided we could put 20 facilities together and maybe somebody would want them or whatever, we would look at that, too. But primarily, if we can't turn around the lower-performing facilities, then we will make the decision to close them.

Do you have a number as to how many of those lower-performing facilities are on that target list?

We're going through that process right now.

And now our question will come from Brian Tanquilut from Jefferies.

Joey, just sorry to go back to the U.K., but what changed?

No, U.K., U.K. -- Brian, you can't go back to the U.K. Let's talk about the U.S.

I will not.

Let's talk about it. It's 7%.

No, that will be one question. But just really quickly in the U.K. The big drop in margins, we saw challenges in Q3 of last year, and your margins dropped to 21%. But the 450 basis point drop just seemed really big, and it seems like the last few quarters, you had your eye on the ball really closely on staffing. So what blindsided you here in the quarter?

The census was softer than our expectation. And then we had to use -- our discussions with the U.K. operators, we had to use more nurse agency expense just on the base patient. And then on the new beds that we opened up that we utilized more nurse agency expense there. And the census, it takes a little while for that census to ramp up. I think we'll be fine once it ramps up. It will cover the additional costs of the agency nurse. But those are the 2 things that hit us in the third quarter was a softening of the census, but more importantly, the nurse agency just was too great.

Got it. And then, all right, I'll shift to the U.S. business now. So pretty good same-store this quarter. How are you thinking about your ability to maintain or ratchet up that same-store volume trend, number one? And then, how are you thinking about potential facility closures in 2019 or any impact from news reports that it seems like you're exiting some markets here in the U.S.?

Say that one more time, Brian.

So yes. So your same-store volumes are stronger this quarter. So how do you think about the sustainability of that or your ability to ratchet that up? And then the follow-up is just I think there are reports that you're exiting some markets in the U.S. Just want to hear your thoughts on that and how that impacts 2019.

Sure, absolutely. First, absolutely, the key to this is building the beds. And we've got those beds coming online, and we've got a group of de novo facilities and joint venture facilities that will be going into the same-store, in addition to the beds that we have built at those facilities. So it is good to see that it looks like the U.S. census wants to grow same-store facility, wants to grow more than 3%. And you saw that in the third quarter, and I think that is a goal for us, is to get more than 3%, closer to the 4%. So as your comment about ratcheting up, I think the potential for us to grow the census higher here does exist. Now the only thing I'm aware of that we might be closing or we are closing is we have an out-patient business in a state that we made a decision to close that due to the state not reimbursing us, and they had cut reimbursement. So it didn't make the business model work, and we reviewed that. And so we are closing those out-patient services in that state, and it was the right decision to do.

Our next question will come from Frank Morgan of RBC Capital Markets.

I kind of want to go back to that last question in a little more detail. Obviously, when we start thinking about 2019, from what you're saying about the U.K., we don't -- correct me if I'm wrong, but I don't think we should expect a lot of improvement there. So my question is in terms of how you can compensate for that in your U.S. operations, either through margin expansion on your consolidated base today but also, perhaps, even acquisitions. So if you could kind of give us a little color on, perhaps, how you could offset some of the lack of growth in the U.K., how you could accelerate growth in the U.S. to maintain a higher overall growth enterprise. And then, specifically, maybe you even comment a little bit about these acquisitions you've announced today.

Sure, Frank. The key to here in the U.S. is to increase our occupancy and fill the beds we're building. They're absolutely in the same-store numbers that will drive that. And secondly, those facilities that A.J. talked about that had regulatory issues this year, if we can keep that to a minimum, that was me knocking on wood. If we can keep that to a minimum, that will improve the margin. So we have an opportunity here that if we'll execute and have a little good luck, that we can grow the census and actually improve the margin here in the U.S. on the same-facility basis. So that is one way we can help offset some of the U.K. And then as far as the acquisitions, we have been analyzing these acquisitions probably for the last 5 months, and you probably have heard me mention it on the call that we would be making some acquisitions this year. And we like the facility up in Massachusetts, the acute hospital. As you know, we have one of our large joint ventures in Massachusetts, and we have quite a bit of penetration on the CTC side in Massachusetts. And then the Mission acquisition, the CTC acquisition. This is a single owner that had started this business several years ago, had grown it and was wanting to start planning for his retirement. And we were fortunate in that the team was able to negotiate this -- that transaction also. So we think they both fit us very well in existing businesses and markets. So good acquisitions. Frank, are you still there?

I'm sorry. Yes. In terms of just the sort of embedded growth potential in your U.S. operations from when you've had these issues and you could fill them up, do you have a number on, like, how many beds we're talking about that will be available for -- if we were trying to get to a number on how much EBITDA growth potential there is from any of these underutilized beds?

I don't have that number, Frank. I'm sure, in our analysis, working on this project, we have that. We're getting ready to do this. We're in the process of doing the 2019 budgets. So I would be able to speak more about that in the first quarter about what the assumptions are for that in 2019.

Okay. One last one. Do you think '19 would be a year where you would make more acquisitions? Would you accelerate the pace of acquisitions in '19? Or is there going to be sort of a retrench in the U.K. and fill up what you got in the U.S.?

Adequate -- I mean, carefully deploying our capital, which means more of it will be going to the U.S., and we will make acquisitions next year. The number is still not -- we haven't pegged a number. We'll just take them one at a time, the opportunities. We have several joint ventures that we're looking at. So we'll just take it one at a time.

And we'll go now to Ana Gupte of Leerink Partners.

You have -- so in the U.S., the volumes look great, the patient -- the revenue per patient day also looks really good. And wanted to understand what the underlying drivers were. Is it a mix issue around acute residential or payer mix or more psych versus addiction? And what's the sustainability of that going into '19?

I'm going to let David take this question.

Yes. Ana, the key driver in the revenue per day is payer increases from our different payers, and we've seen increases for Medicaid, commercial Medicare really across all payer categories this year. That is the key driver. As you know, we have added more acute beds so that, that would be a small part of the growth would be the acute mix becoming stronger. But the key driver is rate increases.

Okay. So underlying rate increases. Got it. On the -- then on the length of stay, you've had a little bit of pressure here. It's obviously been offset by the volumes, and so you get good patient day growth. One of your peers has talked about this managed Medicaid mix shifting for a while, and they continue to talk about that this quarter. Is that likely to accelerate for you? Or is your book of business pretty much are you kind of reaching a place where the length of stay pressures have reached a floor?

Ana, this is Joey. The length of stay is very stable. The length of stay for acute patients is 9 days this year versus last year for this quarter, and it was 9 days. The specialty is 21 days this year versus 21 days last year. And the RTC is basically the same as it was last year. What's driving it down is -- or mathematically, what does this is the lower length of stay on more of the acute patients. So our length of stay is not an issue internally.

All right. It's not an issue for you. Okay. Yes, I mean, it's very modest this time around compared to your volumes anyways. And then the last one was on the labor on the U.S. side. Again, you've had very good success recruiting. Your markets are not the same as UHS. They did have some wage inflation pressure, and I think they also talked about competition from new entrants or maybe it's private companies or PE investing. It was hard to understand, really. But is there anything that might suggest that going forward in the U.S. too, there'll be wage pressure that should impact your margins? Or are you comfortable on that one ?

Ana, we feel pretty comfortable. We think we're going to be able to live with a 2% to 3% raise in wages next year as we go through our merit increases. There are -- there will be and has been. There'll be a few isolated markets where we might have to do something different in those markets just because of not being able to fund the -- all staff we need. And we address those as one-offs. And so that's how we'll approach 2019. So we feel good about the position that we're in but once again, we have different markets, that's right. And we probably have more rural markets. So -- but we're okay. We'll do 2% to 3% in our budget for next year and hope to stay within that.

We will take our next question from John Ransom of Raymond James.

Let's just say, hypothetically, that the team decides so maybe the better part of valor is to look at maybe see if there's a buyer out there for U.K. and refocus on the U.S. Do you have any market feedback as to what kind of multiple assets are trading for over there?

John, I'm going to pull out the no-comment answer.

I had to try. The other thing, you used to give an agency labor percentage number, latter part of last year, early part of this year. Obviously, that number has gone up. But can you give us a ballpark range of how much that's up versus a year ago?

David will give that to you.

Yes, John, we have seen, as mentioned, higher agency labor as a percentage of our total labor costs. That's 14% in the third quarter this year compared to just under 12% last year. And total labor cost as a percentage of revenue, 68.5% this quarter, and we were at 65% last year.

So David, what's the rule of thumb every 1%? Is it the double the cost? Or is it something like that? What's the rule of thumb?

For every 1% of the contract increase.

I'm sorry. I think you cut out there.

We're having to pay a 30% premium to the agency per nursing hour on average.

Got you. And then lastly, switching to the U.S. How should we think about, over the next 3 or 4 quarters, how new beds in the U.S. will come online?

Similar to how they've done this year, I think. I don't have that schedule with me. David will be glad to give that to you off-line, John, but I think it's going to be similar to this year.

And do you have an estimate -- are the startup losses from de novo -- not bed adds, but brand-new facilities, does that ever hit a -- will that hit a point of materiality next year? Or is it just something you can absorb?

John, this is David. I think as we think about next year, we have had several de novos over the last 12 months. We had 4 different facilities incurring losses, and we do see that continuing just as we have other projects coming online next year. But I do think as these 4 projects and new facilities mature, it would be potentially less of a loss number as we think about 2019 than it has been in 2018.

What's your number for '18 approximately?

Well, for the full year, there is approximately $7 million of losses from that group of facilities.

We will now go to Gary Taylor of JPMorgan.

Most of my questions are answered. Just 2 left. Did I hear you guys talk about the DSO growth and the cause of that? Did I miss that?

I couldn't hear you.

Gary, this is David. The DSO growth, part of it is the de novo facilities that we have. We have seen our DSOs increase from 40 in the first part of this year to 42. Part of that is the de novos, and that's just timing. We should see that return. Part of it is just as we look at the calendar, the month of September, we did have just timing of payments that we expect to improve in the fourth quarter as well. So it's timing between collections in the month of September and then the working capital being built up for our de novo facilities.

Got it. And then just my second question. I don't recall if you've yet talked about bed growth guidance for 2019. But I'm asking the question in the context of planned capital spending. Obviously, there's been a lot of de novo bed growth, bed adds that have driven CapEx. You guys have been spending probably roughly 75% of your cash from ops on CapEx over the last several years. When you look at the trajectory of CapEx over the next couple, does that large majority of cash from ops invested in the CapEx, does that continue to be the case? Or do you see an opportunity to bring CapEx down and free cash flow up?

I think, Gary, with the opportunities we have to grow the company and to be in supermarkets with these joint ventures and de novos, that we'll continue to do that next year, that if you're doing some modeling or whatever. So I think our CapEx spend will stay about the same. And I think we'll build somewhere hopefully between 700 to 800 beds just based on the number of de novos that we get finalized for the year. So that's our thoughts right now. Now we'll be able to give you a better number at the end-of-the-year call because we'll have our budgets done and the initial capital allocations made.

We will now take a question from Ralph Giacobbe of Citi.

Just a couple of quick ones for me as well. I wanted to ask about length of stay in the U.K. Obviously, admissions are down, but length of stay was up. It's a little bit of a different dynamic. Maybe just if this is, you think, kind of a one-off quarter. Just want to get off any details on that and if there's anything to sort of call out there.

Ralph, this is Brent. It's really just a mix of the patients there. I mean, we're not seeing any trends within each of the service lines similar to the U.S. as far as a change over last year. But just given the mix of patients across the different service lines, that's really what's extended the length of stay. And also, it appears when you have a little lighter admission activity, just mathematically, you're going to have higher ALOS.

All right. Fair enough. And then I want to go back to the question earlier. I think, in the past, you had talked about potential -- I think it was regulatory relief around Brexit and the ability to bring in offshore staff. So where does that stand? Did that just kind of go away? Or is that still in the works? Is there any specific sort of timing that you can provide around where that stands?

Well, they have made the change where we can now get staff from the Commonwealth countries, but that is becoming harder than we initially talked. And also, there is a unique requirement in the U.K. that you have site certification if you are a nurse. And maybe some of the Commonwealth countries do not have that same requirement in their teaching. So if we've got them here, we would have to educate them, get them educated. And then it appears that the government there actually canceled that course. So it's made it tougher for us.

Okay, all right. And then lastly for me in the U.K. Is there any way to break down and just give a sense whether it's 10% of the facilities that are driving 80% of the pressures? Or is it really broad-based and we shouldn't think of a smaller subset that's driving disproportionate pressure in the U.K.?

Well, I think on the nurse agency, that's the one I could give you the best on. The nurse agency expense is probably being -- the vast majority of that expense is being driven by 10 large -- 10 facilities.

And with that, that does conclude today's question-and-answer session. I would like to turn things back to Joey Jacobs for any additional or closing comments.

Thank you, Kathy. Thanks again being with us today and for your interest in Acadia Healthcare. If you have any additional questions today, please do not hesitate to contact us directly and have a good day.

And again, ladies and gentlemen, that does conclude today's call. We thank you again for your participation. You may now disconnect.