Acadia Healthcare Company, Inc.

Good morning and welcome to the Acadia Healthcare Second Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jason Piedman. Please go ahead.

Thank you and good morning. Yesterday, after the market closed, we issued a press release announcing our second quarter 2026 financial results. This press release can be found on the investor relations section of the AcadiaHealthcare.com website. Today, Debbie Osteen, Acadia's Chief Executive Officer, and David Duckworth, Interim Chief Financial Officer, will discuss the results. To the extent any non-GAAP financial measures 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 in the press release that is posted on our website. 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 2026 and beyond. 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 second quarter news release, and consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. At this time, I would like to turn the conference call over to Debbie.

Good morning, and thank you for joining us. I am pleased to be with you today to discuss Acadia's results for the second quarter of 2026. Overall, Acadia delivered solid results in the second quarter that were consistent with our expectations across our key financial and operating metrics, including revenue, adjusted EBITDA, adjusted EPS, and free cash flow. David and I will discuss our results in more detail. As always, Acadia is guided by our mission to provide compassionate care that improves lives, inspires hope, and elevates communities. Our capabilities allow us to stand as a leader in the behavioral healthcare industry through the important work we do. Since I returned as CEO six months ago, we have refocused on our key priorities in order to create lasting value for our patients and communities, our partners, our employees, and our investors. We are building on our strong foundation with operational discipline. As I discussed last quarter, our primary focus in 2026 continues to be on operational execution and serving patients through our existing facilities and our new locations. I'm pleased to say that we have made significant advances on these priorities in the first half of the year. And we are confident in our ability to deliver further progress in the coming quarters. Looking at our second quarter results, a few notable highlights include the following. We delivered revenue that was above the high end of our guidance range. as well as adjusted EBITDA and adjusted EPS that were near the high end of our guidance. We generated 124 million of free cash flow and reduced our debt by 113 million. We are taking a disciplined approach to capital deployment, including CapEx, and we expect to generate additional free cash flow in the second half of the year. During the quarter, we opened two new acute facilities on schedule, a 144-bed JV facility with Orlando Health in Florida and a 96-bed JV facility with Methodist Jenny Edmondson in Iowa. For the second quarter, our total revenue was flat compared with the prior year period. After normalizing for the impact of the timing of supplemental payments related to prior periods in Florida and Tennessee, our total revenue growth would have been 2.8% on a year-over-year basis and 3.2% on same facility revenue growth. In our acute business, We saw continued progress in ramping occupancy and revenue at our new facilities that have opened over the last few years, and our growth in same facility volumes was consistent with our expectations. Our specialty business delivered solid performance in the second quarter, including a $5 million sequential increase in revenue. The team also made progress in mitigating some of the impact on our Pennsylvania facilities related to changes in the New York Medicaid program that we've discussed in prior quarters. Our RTC business delivered strong revenue growth in the second quarter, driven by volume growth and capacity expansions that were completed last year. In our CTC service line, revenue was flat on a year-over-year basis. Our CTC clinics provide important services that are highly valued by patients, families, and payers, and we opened two new CTC clinics during the second quarter. Our adjusted EBITDA for the second quarter was $149.2 million. Adjusted EBITDA includes two items that were not included in our guidance, a benefit related to the Florida Supplemental Payment Program, and an expense related to an increase in our professional and general liability reserves for prior years. The combined impact of these two items was a $2.5 million reduction to adjusted EBITDA in the second quarter. David will provide additional details. Switching to our key operational priorities, we continue to focus on delivering more value from our increased bed capacity and the new facilities that we've opened over the last few years. During the second quarter, we made further progress with that group, including revenue and facility level EBITDA results for those 2023 to 2026 cohorts that were ahead of our expectations. I am pleased with the progress we've made in these facilities, and I want to highlight a few contributing factors that have enabled this success. First, our team has been operating with a heightened sense of urgency and focus. which has allowed us to accelerate timelines across multiple critically important milestones for new facilities, including licensing, accreditation, and payer contracting. Second, we've been emphasizing expense discipline alongside the occupancy ramp through a focus on execution, ensuring our facilities have the resources necessary to support patient care and operational needs. Third, we're maintaining strong referral partnerships in the markets we serve. We've increased our focus on consistent communication with our JV partners to better align around shared growth objectives, patient access, and ensuring that patients are receiving the right care at the right level and in the right setting. The organization is now operating with a clear set of priorities and has the right resources in place. And the combination of ramping volumes and disciplined expense control has allowed us to outperform our startup targets for two quarters in a row. An increasing number of our new facilities are beginning to contribute positive adjusted EBITDA. We remain confident in this group delivering on the 200 million of incremental adjusted EBITDA relative to 2025 that we've discussed previously. We also continue to strengthen our leadership team at both the corporate level and at our facilities. as we focus on having the right leaders in place to support our facilities. We are seeing increasing benefits from our decision to refine the structure of our acute service line. And we are confident that we will continue to see clinical excellence and consistent value over the coming quarters. We are also advancing in our initiatives to deliver quality care for the patients that we serve. For example, we are expanding our measurement-based care initiative to additional acute facilities as well as to our specialty and CTC service lines. We are leveraging evidence-based practices to guide clinical decision-making and improve treatment outcomes. It allows clinicians to use real-time data to identify changes in symptoms, adjust treatment plans, and help patients remain engaged in their own care. As I previewed earlier, we are also pleased to share that we successfully opened two new acute facilities in June in partnership with Premier Health Systems. In total, we've added over 300 beds in the first half of the year, and we remain on track to add 500 to 600 beds in 2026, including our planned opening in the third quarter of a de novo acute facility near Jacksonville, Florida. As we look ahead, We see that demand for our services remains strong and we are well positioned with added capacity to meet this demand. Above all, we remain committed to our mission and to providing clinical excellence for patients and the communities we serve. With that, I will turn it over to David to review the financial details.