Acadia Healthcare Company, Inc. 2026 Jefferies Healthcare Services and Technology Conference

stronger normalized volume growth and revenue per day for the company continues to be stable as well. Some strong revenue trends for the company and momentum that we have going into the back half of the year, just combined with a continued focus on discipline on how we manage cost as we ramp the volumes, how we see a leveraging of the cost structure that we have always had built for this company that can now really be a resource for improvement as we bring on additional volumes.

I think that the demand trends continue to be very strong. I was mentioning earlier today, I saw some data that from 2020 to 2024, the incidence of mental illness has gone up by about 10 million. If you think about that, and then you also consider that only one in five individuals actually seek help, there's just an enormous group out there, not just for the mental illness, but for substance use treatment as well, that need care. We measure that through our referrals. We measure that through our inquiries, which have been very, very strong. If you take the acute service line, our volumes were up 5.5% in the second quarter. RTC continues to perform very well. They added a number of new beds that they've been able to fill.

If you look at specialty, even though, and David mentioned the headwind of New York, we've been able to make up some of those patients, but also just see strong performance across that portfolio. CTC, we continue to be very positive about, and I do think that we've seen volume increase there year over year. We do have a couple of areas where we have more clinics than we might have four or five years ago, but we still think that's a strong demand area as well. With those that need that kind of treatment, there's only 25% getting it, so that's an enormous group of people. Unfortunately, we get asked about NARCAN, and it's saving lives, but it's not eliminating the need for treatment.

Yeah, sure. I was excited to go through the details of that number when I rejoined the company at the end of April, and of course, Debbie rejoined in January. One of the first things that I know both of us focused on is the detailed plan by facility and the financial model by facility behind that $200 million number. Many of the facilities that we have added in the last four years were facilities that I know Debbie, in her previous tenure, that we signed joint venture partnerships with those partners, and we are now at a point in the last couple of years where those facilities have now opened.

Very familiar with the markets and the opportunity that we had and, yes, spent some time looking at that number and have been highly focused with the team on what can we do across all of those facilities, at whatever point in the process they are in today, to accelerate the ramp of the earnings from those facilities. We have recently, in August, opened our last of the new facilities, and we had just opened two facilities at the end of June. What that means for the company, we incur startup losses as new facilities open, and we are now at a point where we have opened the last facility that is in that four-year cohort of facilities. Some of the key milestones we are focused on today have been getting those newer facilities through the survey process, and we are happy.

I do not think we had this in hand when we reported our quarter, but the facilities that opened at the end of June, both have finished their survey and gotten accreditation really in record time. We cut that timeline in half compared to what we typically see and expect. Those facilities will now be on to payer contracting and then ramping up the census and the volumes from here. That is a huge step for our facilities to get through that first step, and we are really proud of what those local teams have been able to accomplish. Some of the facilities that are already at other points in the process, the key milestones that they are seeing today would be contracting with payers Medicare, Medicaid, and then all the commercial payers, once you have the Medicare and Medicaid contracting in hand.

And then just focused on ramping up the team and the referral sources. That does take time, but the team's focused on doing that as quickly as they can and are seeing tremendous progress. I know our goal, in general, as a company with a new facility, is to try to get to breakeven results, so get through the startup losses as close to one year from the first patient as we can. That, I think, has been a challenge in the last couple of years. But I know a facility that we opened in the third quarter of 2025 just hit their breakeven. It's taken a lot of great work from the operations team, a lot of focus and just acting with urgency. But all of those facilities are really having a great year, showing some great progress.

And we have, as a management team, increased confidence and, I'll say, visibility into being able to achieve that $200 million incremental EBITDA number.

Well, I think, we've said several times, even on our earnings calls, we're back to the basics. There was a lot of activity happening, but keeping a focus on our priorities was really what I tried to bring as I returned to the CEO role. I think, it starts really with a sense of urgency. I've said, we can all identify problems, but we also have to come up with action steps, and we need to have plans that are specific to look at the issues. We did a lot of that the first couple of months. It's just, what have we learned? How can we correct what we have control over? Then my first real focus, and I think it's spread through the company, I would hope, and that is the people that we have.

I took a look at what's the experience level, what is the scope, what is the geography that our leaders are managing, and what is their performance. As we did that, I'm a big believer that your team is the one that advances your strategies. But I've also said it's not just a strategy. You have to have action and results around that. Part of that's execution. But the other part that I think we've tried to build in, there's a lot of things you can look at in metrics, but what are the ones that matter, and what should we be viewing? One of the areas that we view now every week are the 23, 24, 25, and now 26 facilities that have opened. Where are we at? What do we need to do? Should we change our action steps?