Psychiatric Solutions Announces the Purchase of National Deaf Academy and Cedars Hospital

From: PR Newswire (press release), NY - Jul 5, 2006

Has Now Completed or Announced the Purchase of 15 facilities with Approximately 1,500 Beds since the Start of 2006

FRANKLIN, Tenn., July 5 /PRNewswire-FirstCall/ -- Psychiatric Solutions, Inc. ("PSI") (Nasdaq: PSYS) today announced that it has completed the purchase of the National Deaf Academy ("NDA"), an 84-bed Residential Treatment Center located in Mt. Dora, Florida. NDA is a nationally known institution specializing in the provision of mental healthcare to Deaf, Hard of Hearing, and Deaf-Blind children, adolescents and adults. In addition, NDA has developed highly individualized services for autistic residents that present with a wide range of pervasive developmental disorders. For 2005, NDA produced revenues of approximately $14.2 million.

Alan Cohen, M.D., a founder and CEO of NDA, remarked, "There continues to be a tremendous need throughout the U.S. for our specialized services, and as a part of the behavioral health industry's leading inpatient psychiatric provider, we will be better positioned to expand our operations to comprehensively serve this often overlooked population. We are honored to be part of an organization that not only is committed to quality care, but also, has demonstrated a sincere desire to understand the unique aspects of the Deaf culture that both our patients and employees live in."

Joey Jacobs, Chairman, President and Chief Executive Officer of PSI, added, "Our purchase of NDA extends our record of acquiring high quality inpatient psychiatric facilities that are leaders in their markets and that have significant organic growth potential. NDA and its outstanding staff give us a strong platform in a niche market, which is characterized by substantial demand that enables the facility to draw high acuity patients from across the country. We are confident that as a result of this transaction, we can increase our presence in this growing market.

"We are also pleased today to announce the completion of the purchase of a second inpatient psychiatric facility, the Cedars Hospital in DeSoto, Texas, which operates 76 inpatient beds and produced revenues of approximately $8.1 million for 2005. This facility enhances our existing share of the Dallas/Ft. Worth market and gives us a total of 10 facilities with approximately 1,300 inpatient beds in Texas.

"We will continue to evaluate additional opportunities to acquire high quality inpatient facilities in accretive transactions. Since the beginning of 2006, we have completed or announced six transactions covering 15 facilities and approximately 1,500 beds."

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 complete the ABS acquisition and to successfully integrate the ABS facilities; (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, reimbursement rates from federal and state health care programs or managed care companies and exposure to claims and legal actions by patients and others; (7) PSI's ability to comply with applicable licensure and accreditation requirements; and (8) potential difficulties in integrating recently acquired operations with PSI. 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.

PSI offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its operation of 61 owned or leased freestanding psychiatric inpatient facilities with over 6,600 beds in 27 states. PSI also manages freestanding psychiatric inpatient facilities for government agencies and psychiatric inpatient units within medical/surgical hospitals owned by others.

SOURCE Psychiatric Solutions, Inc.

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