Psychiatric Solutions, Inc. announced that it has acquired Alliance Health Center (AHC) located in Meridian, Mississippi. AHC is a licensed acute care hospital with 109 beds that provides psychiatric care for children, adolescents and adults. In addition, a 60-bed residential treatment center is under construction and is scheduled to open during the third quarter of 2004. AHC produced revenues of approximately $12.0 million for the 12-month period ended September 30, 2003.

Psychiatric Solutions, Inc. offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its operation of 23 owned or leased freestanding psychiatric inpatient facilities with more than 2,800 beds. The company also manages freestanding psychiatric inpatient facilities for government agencies and psychiatric inpatient units within general acute care hospitals owned by others.

Joey Jacobs, PSI's chairman, president and CEO, remarked, "We are very pleased to announce our acquisition of AHC, which will bring Psychiatric Solutions a facility with a skilled and experienced health care team and a reputation for high quality care. Consistent with our earlier acquisitions, we expect this transaction to be accretive to our financial results and represent a future organic growth opportunity for the company.

"This acquisition reflects the continuing opportunity we have to complement our organic growth through accretive acquisitions. In an environment of increasing patient admissions and reimbursement, the behavioral health industry remains highly fragmented. We believe our demonstrated ability to complete and integrate acquisitions positions us well to leverage this opportunity to produce additional profitable growth and increased stockholder value and to achieve our long-term goal of becoming the country's leading provider of inpatient psychiatric care."

In conjunction with this announcement and assuming the completion of the proposed equity financing PSI announced that a portion of the net proceeds of which will be used for additional accretive acquisitions, PSI establishes its guidance for 2004 earnings in a range of $0.86 to $0.90 per diluted share.