Psychiatric Solutions Announces Acquisition of Five Hospitals from United Medical Corporation

FRANKLIN, Tenn.--(BUSINESS WIRE)--Psychiatric Solutions, Inc. (“PSI”) (NASDAQ: PSYS) today announced that it has acquired five inpatient psychiatric facilities. The facilities, located in Florida and Kentucky, are expected to generate revenue of approximately $68 million in the next twelve months and include more than 300 acute beds and approximately 100 residential treatment center beds.

The newly acquired hospitals are expected to add earnings of $0.04 per diluted share in 2008. As a result, PSI now expects 2008 earnings per share to be in the range of $1.97 to $2.01 and reiterates its expectation that first quarter 2008 earnings will be in the range of $0.42 to $0.43 per diluted share. PSI funded the transaction with available cash and funding under its revolving credit facility.

Joey Jacobs, Chairman, President and Chief Executive Officer of PSI commented, “We are very pleased with the acquisition of these five facilities, extending our successful track record and adding to our future growth potential. We continue to see significant opportunity to acquire valuable inpatient psychiatric facilities in this fragmented market, allowing us to pursue our strategy of acquisitive growth and organic growth for the foreseeable future.”

PSI offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults and is the largest operator of owned or leased freestanding psychiatric inpatient facilities with over 10,000 beds in 31 states, Puerto Rico and the U.S. Virgin Islands. PSI also manages freestanding psychiatric inpatient facilities for government agencies and psychiatric inpatient units within medical/surgical hospitals owned by others.

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements other than those made solely with respect to historical fact and are based on the intent, belief or current expectations of PSI and its management. PSI’s business and operations are subject to a variety of risks and uncertainties that might cause actual results to differ materially from those projected by any forward-looking statements. Factors that could cause such differences include, but are not limited to: (1) PSI’s ability to successfully integrate recently acquired operations; (2) potential competition which alters or impedes PSI's acquisition strategy by decreasing PSI's ability to acquire additional inpatient facilities on favorable terms; (3) the ability of PSI to improve the operations of acquired inpatient facilities; (4) the ability to maintain favorable and continuing relationships with physicians who use PSI's facilities; (5) the ability to receive timely additional financing on terms acceptable to PSI to fund PSI's acquisition strategy and capital expenditure needs; (6) risks inherent to the health care industry, including the impact of unforeseen changes in regulation, decreases in reimbursement rates from federal and state health care programs or managed care companies and exposure to claims and legal actions by patients and others; and (7) PSI’s ability to comply with applicable licensure and accreditation requirements. The forward-looking statements herein are qualified in their entirety by the risk factors set forth in PSI's filings with the Securities and Exchange Commission. PSI undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof.