February 17, 2017
2030 STRATEGIC VISION
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February 17, 2017
Notice to Investors
We use market data and industry forecasts and projections throughout this presentation, including data from publicly available information and
industry publications. These sources generally state that the information they provide has been obtained from sources believed to be reliable,
but that the accuracy and completeness of the information are not guaranteed. The forecasts and projections are based on industry surveys
and the preparers’ experience in the industry, and there can be no assurance that any of the forecasts or projections will be achieved. We
believe that the surveys and market research others have performed are reliable, but we have not independently investigated or verified this
information. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and
uncertainties as the other forward-looking statements contained in this presentation.
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IMPORTANT PRESENTATION INFORMATION
February 17, 2017
Forward-Looking Statements
Some of the statements made in this presentation constitute forward-looking statements within the meaning of federal securities laws. Forward-
looking statements reflect our current views with respect to future events and performance. In some cases you can identify forward-looking
statements by terminology such as “may,” “might, “will,” “should,” “could” or the negative thereof. Generally, the words “anticipate,” “believe,”
“continues,” “expect,” “intend,” “estimate,” “project,” “plan” and similar expressions identify forward-looking statements. In particular, statements
about our pipeline, industry growth opportunities, disclosure of key performance indicators, business growth strategy and financial guidance in
this presentation are forward-looking statements.
We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these
expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known
and unknown risks, uncertainties and other factors, many of which are outside of our control, which could cause our actual results, performance
or achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements.
For additional discussion of risks, uncertainties and other factors, see the section titled “Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2018 and our subsequent filings with the United States Securities and Exchange Commission (the "SEC").
Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These risks and
uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. These
forward-looking statements are made only as of the date of this presentation. We do not undertake and specifically decline any obligation to
update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or
developments.
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IMPORTANT PRESENTATION INFORMATION
February 17, 2017
CURRENT STATE OF
AMERICAN ADDICTION CENTERS
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Why did the valuation of the only publicly-traded addiction treatment company in the country
increase dramatically over the first 4 years and decrease dramatically over the past 4 years?
$0 in market cap in 2011 $1B in market cap in 2015 $40M in market cap in 2019
$0
$250
$500
$750
$1,000
$1,250
Jul 2011 Oct 2014 Jul 2015 Jul 2016 Jul 2017 Jul 2018 Apr 2019
Ma
rke
t C
ap
AAC MARKET CAP
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February 17, 2017
HOW DID A 25 YEAR INDUSTRY VETERAN
GET IT ALL WRONG?
&
HOW DID HIS 19 YEAR OLD SON UNLOCK HIS BRAIN
TO CHANGE HIS WAY OF THINKING?
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• We are operating like we are in the stagecoach era, but in a Tesla world
• Doctors and clinicians are quick to label patients with DSM-V code diagnoses
• Blanketed approach to MAT without proof of efficacy
• One-size-fits-all treatment plans for a highly individualized disease
THE SYSTEM IS BREAKING DOWN
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A D D I C T I O N M I L E S T O N E S T I M E L I N E
1784
Alcoholism Identified
as a Disease
1935
AA Founded
1964
Methadone
Introduced
2002
Buprenorphine
Introduced
1850
First Inebriate
Home Opens
1951
Antabuse FDA
Approved
1971
Narcan
Introduced
1994
Naltrexone
Introduced
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ADDICTION TREATMENT HAS NOT INNOVATED
LIKE TREATMENT HAS IN OTHER CHRONIC DISEASES
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WE ARE TREATING SYMPTOMS
INSTEAD OF THE DISEASE OF THE
BRAIN
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Depression
Anxiety
Alcoholism
Drug Addiction Gambling
Eating
Disorders
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THE INDUSTRY IS IN
DISTRESS
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INDUSTRY MODEL SHIFTS
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1. Improved and added more recipes
2. Rebranded from “Domino’s Pizza” to “Domino’s”
3. Reduced the number of steps to order
4. Diversified product ordering and delivery methods
5. Developed at-home point-of-sales systems
6. Restructured and reduced brick-and-mortar footprint
DOMINO’S
Photo: Ford
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1. Changed from rental to subscription model
2. Pivoted from physical DVDs to digital-only content
3. Added new and original content to diversity
product offerings
4. Increased customer base utilizing technology
NETFLIX
https://www.macrotrends.net/stocks/charts/NFLX/netflix/revenue
BLOCKBUSTER 1. Didn’t change business model
2. Stayed with current brick and mortar model
3. Went from a $6 billion market cap to a bankrupt
company in 6 years
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AAC Websites
AAC’S LARGEST
ASSETS
Diagnostic testing
and the laboratory
AAC Real Estate
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AAC has pharmocogenetic testing and
the full DEA drug seizures list
Other addiction treatment providers only
provide UA and a limited drug panel
AAC’S DIAGNOSTIC
TESTING
OTHER PROVIDERS
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WEBMD’S VS. AAC’S
PORTFOLIO OF WEBSITES
WebMD • Approx. $720M in annual revenue, primarily
through advertising, sponsorships, and premium
consumer and provider content
• 75 million monthly site visitors
• 676,000 active physicians on Medscape
AAC • Revenue dependent on conversion of web traffic to
treatment
• 10 million monthly site visitors
• 100 treatment center advertisers
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Over 1,200 beds across 8 states
REAL ESTATE
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WHERE ARE
WE GOING?
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TECHNOLOGY
TMS
Telemedicine
Nuclear Medicine
(SPECT and PET Scans)
The Bridge Device
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DIRECT TO CONSUMER
Hematology Testing
Genetics
Testing
Nutraceuticals
On-Line Assessments
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INNOVATIVE
PERSONALIZED
MEDICINE
Mind
Body Spirit
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360K Calls
5M seeking addition treatment
30M needing addition treatment
365M with behavioral health symptoms
20K Patients
EXPANDED
OPPORTUNITY
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$0B
$1B
$2B
$3B
$4B
$5B
2017 2018 2019 2020 2021 2022 2023 2024 2025
GLOBAL BEHAVIORAL / MENTAL HEALTH
SOFTWARE & SERVICE MARKET
Size is expected to reach $4.31 billion by 2025
From MSNBC
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MARRYING PAYOR BEHAVIORS
WITH THE BEST SCIENCE
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Why don’t we do genetic testing?
HOW WE BILL FOR
SERVICES TODAY
Why don’t we do on-line treatment?
Why don’t we do brain scans?
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Cost sharing arrangements with payors
WHAT IS THE FUTURE
OF REIMBURSEMENT?
Direct contracts with governments, unions, EAP’s and
larger employers
Direct to consumer revenue streams
Disease management
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TRANSFORMING
OUR BUSINESS
• Focus on the 365M distressed Americans with symptoms of depression,
anxiety, alcoholism, drug addiction, and other brain health diseases
• Subscription-based model for brain health care
• Direct-to-consumer products
• Redesign facilities for best-in-class technology-based customer experience
• Mobile app and website portal with premium tailored content
• AI- and VR-based therapies
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NEAR-TERM
FOCUS Continued focus on current operations
Improve the balance sheet
New revenue streams
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CONTINUED FOCUS ON CURRENT OPERATIONS • Filling existing beds could potentially lead to $60mm - $75mm of incremental annual revenue at
incrementally high margins
• Expense savings initiatives completed in the second half of 2018 and into the 1st quarter of 2019
are expected to reduce operating expenses by over $30 million annually
• These combined could potentially result in a run rate EBITDA of $20 million quarterly or
$80 million annually
Bed Count (Inpatient + Sober Living Capacity) 1,443
Utilization Rate 85% 88% 90%
Census at Utilization Rate 1,227 1,270 1,299
Q1 2019 Census 953 953 953
Census Increase 274 317 346
Additional Mo. Revenue (MM)(1) $4.9 $5.7 $6.2
Additional Annual Revenue (MM) $59 $68 $75
(1) Analysis assumes $18,000 in additional monthly revenue per increase in average census.
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IMPROVE THE BALANCE SHEET
Sell the de novo project in Ringwood, NJ within next 3 to 6 months which could
potentially generate $20 million to pay down existing debt
Utilize existing real estate that could potentially generate up to $400
million(1) of proceeds to significantly reduce cost of capital by up to $14
million annually and improve liquidity and financial flexibility
(1) Assume proceeds from 100% of owned real estate
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NEW REVENUE
STREAMS Offering branded nutraceuticals through websites
Mobile app subscription services
Brain disease advertising on websites
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TRANSITION PLAN:
EXAMPLE OF NEW REVENUE STREAMS
Tiered monthly subscription-based model of care
Online nutraceuticals store
Mail order diagnostic, genomic, and nutrigenomic testing with mobile result reports
Diamond: In-person treatment experience
Platinum: Personalized program with pharmocogenetics and brain scans
Gold: telemedicine, physician-guided treatment plan
Silver: virtual physician consultation, self-guided treatment plan
Bronze: mobile app with curated content
February 17, 2017
THANK YOU
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