Psychiatric Solutions Exceeds Expectations with Fourth Quarter Income from Continuing Operations Per Diluted Share of $0.33.

Same-Facility Revenue Increases 9.6%

Produces Full Year Income from Continuing Operations Per Diluted Share of $1.14

FRANKLIN, Tenn. -- Psychiatric Solutions, Inc. ("PSI") (NASDAQ: PSYS) today announced financial results for the fourth quarter and year ended December 31, 2006. Revenue increased 27.1% to a record $280,960,000 for the fourth quarter of 2006 from $221,108,000 for the fourth quarter of 2005. Income from continuing operations was $18,044,000, or $0.33 per diluted share, for the fourth quarter of 2006, up from $13,800,000, or $0.26 per diluted share, for the fourth quarter of 2005. Adjusted income from continuing operations per diluted share, which excludes stock compensation expense of $0.02 for the fourth quarter of 2006, increased 34.6% to $0.35 from $0.26. All results in this release have been adjusted to reflect the 2-for-1 stock split effected in January 2006. Please see pages 7 and 8 for a reconciliation of GAAP and non-GAAP financial results.

Revenue for 2006 was $1.026 billion, an increase of 43.5% from $715,324,000 for 2005. Income from continuing operations was $61,881,000, or $1.14 per diluted share, up from $26,818,000 or $0.58 per diluted share. Adjusted income from continuing operations per diluted share, which excludes stock compensation expense of $0.15 for 2006 and loss on refinancing of long-term debt of $0.29 for 2005, increased 48.3% to $1.29 from $0.87, on a 17.0% increase in diluted shares used in computing per share amounts.

Joey Jacobs, Chairman, President and Chief Executive Officer of PSI, said, "As our results demonstrate, PSI continued to achieve strong profitable growth for the fourth quarter, as well as for the fiscal year. We are especially pleased with our substantial organic growth evidenced by the increase in same-facility revenue of 9.6% for the fourth quarter. The operating leverage we gained from this revenue growth, combined with our ongoing focus on enhancing productivity and operating efficiencies, accounted for the 80 basis point expansion of our same-facility EBITDA margin to 20.6% of same-facility revenue from 19.8% for the fourth quarter of 2005. Our same-facility revenue growth was comprised of a 4.5% increase in patient days and a 5.0% increase in revenue per patient day, and our full year same-facility revenue growth was 9.0%, the high end of our continuing annual target

range of 7% to 9%.

"Over the last four years, we have averaged same-facility revenue growth of 8.75%, and we are optimistic about our ability to continue producing same-facility revenue growth within our target range, primarily by expanding patient days and revenue per patient day, each in a range of 3% to 5% annually.

"We have also continued to build the foundation for our future organic growth by expanding the number of our inpatient beds, to more than 8,000 at year end from over 6,400 at the end of 2005. We contributed to this total during the fourth quarter with the completion of the Alternative Behavioral Services transaction, through which we added nine inpatient facilities with over 1,000 beds. As a result, we acquired a total of 19 inpatient facilities during 2006, well above our annual target to acquire a minimum of six facilities.

"Furthermore, we are already well positioned to expand our inpatient beds during 2007. In December, we signed a definitive agreement to acquire Horizon Health Corporation, which, among other assets, owns or leases 15 inpatient facilities with over 1,500 beds and provides services under 115 behavioral health and physical rehabilitation program management contracts in acute care hospitals. Horizon Health produced revenue of $275 million for its fiscal year ended in August 2006. We expect to complete this transaction in the second quarter of 2007, subject to customary closing conditions, including regulatory approvals, clearance under the Hart-Scott-Rodino Act and approval by Horizon Health's stockholders. We also acquired Three Rivers Behavioral Health in January, an 86-bed inpatient facility, which was recently awarded a Certificate of Need for an additional 32 beds that we expect to complete in the second half of 2007. In addition to acquisitions, we plan to expand existing facilities with new inpatient beds totaling approximately 1% to 2% of our total base at the beginning of the year."

Based primarily on the Company's operating and financial results for 2006, PSI affirms its guidance for earnings per diluted share for 2007 in a range of $1.42 to $1.46. The Company's guidance does not include the impact from any future acquisitions, including Horizon Health. PSI expects the acquisition of Horizon Health to be accretive to its earnings per diluted share for the 12 months following the completion of the transaction by an amount in the range of $0.17 to $0.20.

Mr. Jacobs concluded, "In addition to the strong record of performance PSI has created, our confidence in our prospects for further profitable growth rests on the opportunities we see for organic growth and acquisitions and on the resources we can focus on accomplishing our goals. Chief among these resources, we have a team of skilled and dedicated colleagues numbering more than 18,000, who either work directly with our patients or who support those who do. The high quality of care these individuals provide is the essence of our continuing ability to serve our patients and their families, our shareholders and all our other stakeholders."

PSI will hold a conference call to discuss this release tomorrow at 10:00 a.m. Eastern time. Participants will have the opportunity to listen to the conference call over the Internet by going to www.psysolutions.com and clicking Investor Relations or by going to www.earnings.com. Participants are encouraged to go to the selected web sites at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at these sites shortly after the call through the end of business on March 2, 2007.

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 acquisition of Horizon Health Corporation and to successfully integrate the Horizon Health 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 integrate and 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, including financing for the acquisition of Horizon Health; (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; 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.

PSI offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its operation of 75 owned or leased freestanding psychiatric inpatient facilities with more than 8,000 beds in 29 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.

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