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Select Medical Holdings Corporation Announces Results For Its Second Quarter Ended June 30, 2024 and Cash Dividend

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Select Medical Holdings (NYSE: SEM) reported its Q2 2024 results, showing a 5.1% revenue increase to $1,759.7 million. Net income rose 3.2% to $94.8 million, while Adjusted EBITDA grew 3.1% to $226.3 million. Earnings per share remained steady at $0.60. The company's board declared a cash dividend of $0.125 per share, payable on August 30, 2024.

For the first half of 2024, revenue increased 6.3% to $3,548.5 million, with net income up 19.7% to $211.9 million. Select Medical operates 107 critical illness recovery hospitals, 33 rehabilitation hospitals, 1,925 outpatient rehabilitation clinics, and 547 occupational health centers across the United States.

The company also announced the successful IPO of its subsidiary, Concentra Group Holdings Parent, raising $528.8 million in gross proceeds.

Select Medical Holdings (NYSE: SEM) ha riportato i risultati del secondo trimestre del 2024, mostrando un aumento del 5,1% nei ricavi pari a $1.759,7 milioni. L'utile netto è aumentato del 3,2% a $94,8 milioni, mentre l'EBITDA rettificato è cresciuto del 3,1% a $226,3 milioni. L'utile per azione è rimasto stabile a $0,60. Il consiglio di amministrazione ha dichiarato un dividendo in contante di $0,125 per azione, pagabile il 30 agosto 2024.

Per il primo semestre del 2024, i ricavi sono aumentati del 6,3% a $3.548,5 milioni, con l'utile netto in crescita del 19,7% a $211,9 milioni. Select Medical gestisce 107 ospedali per la cura delle malattie critiche, 33 ospedali di riabilitazione, 1.925 cliniche di riabilitazione ambulatoriale e 547 centri di salute occupazionale negli Stati Uniti.

L'azienda ha anche annunciato il successo dell'IPO della sua controllata, Concentra Group Holdings Parent, raccogliendo $528,8 milioni in proventi lordi.

Select Medical Holdings (NYSE: SEM) informó sus resultados del segundo trimestre de 2024, mostrando un aumento del 5,1% en ingresos que suma $1,759.7 millones. El ingreso neto creció un 3,2% hasta alcanzar $94,8 millones, mientras que el EBITDA ajustado aumentó un 3,1% hasta $226,3 millones. Las ganancias por acción se mantuvieron estables en $0,60. La junta directiva de la empresa declaró un dividendo en efectivo de $0,125 por acción, pagadero el 30 de agosto de 2024.

Para la primera mitad de 2024, los ingresos aumentaron un 6,3% a $3,548.5 millones, con el ingreso neto en aumento del 19,7% hasta $211,9 millones. Select Medical opera 107 hospitales de recuperación de enfermedades críticas, 33 hospitales de rehabilitación, 1,925 clínicas de rehabilitación ambulatoria y 547 centros de salud ocupacional en todo Estados Unidos.

La compañía también anunció el exitoso IPO de su subsidiaria, Concentra Group Holdings Parent, recaudando $528.8 millones en ingresos brutos.

Select Medical Holdings (NYSE: SEM)가 2024년 2분기 실적을 발표하여 5.1%의 수익 증가를 기록하며 $1,759.7 백만 달러에 달했습니다. 순수익은 3.2% 증가하여 $94.8 백만 달러에 이르렀고, 조정된 EBITDA는 3.1% 증가하여 $226.3 백만 달러로 성장했습니다. 주당 수익은 $0.60로 유지되었습니다. 회사의 이사회는 주당 $0.125의 현금 배당금을 선언하였으며, 이는 2024년 8월 30일에 지급됩니다.

2024년 상반기 동안 수익은 6.3% 증가하여 $3,548.5 백만 달러에 이르렀고, 순수익은 19.7% 증가하여 $211.9 백만 달러에 달했습니다. Select Medical은 미국 전역에 107개의 중증 질환 회복 병원, 33개의 재활 병원, 1,925개의 외래 재활 클리닉, 547개의 산업재해 예방 센터를 운영하고 있습니다.

회사는 또한 자회사인 Concentra Group Holdings Parent의 성공적인 IPO를 발표하며 $528.8 백만 달러의 총 수익을 올렸습니다.

Select Medical Holdings (NYSE: SEM) a annoncé ses résultats du deuxième trimestre 2024, montrant une augmentation de 5,1% des revenus atteignant 1 759,7 millions de dollars. Le revenu net a augmenté de 3,2% pour atteindre 94,8 millions de dollars, tandis que l'EBITDA ajusté a crû de 3,1% pour atteindre 226,3 millions de dollars. Le bénéfice par action est resté stable à 0,60 $. Le conseil d'administration de l'entreprise a déclaré un dividende en espèces de 0,125 $ par action, payable le 30 août 2024.

Pour le premier semestre 2024, les revenus ont augmenté de 6,3% pour atteindre 3 548,5 millions de dollars, avec un revenu net en hausse de 19,7% pour atteindre 211,9 millions de dollars. Select Medical exploite 107 hôpitaux de rétablissement pour maladies critiques, 33 hôpitaux de réhabilitation, 1 925 cliniques de réhabilitation ambulatoire et 547 centres de santé au travail à travers les États-Unis.

L'entreprise a également annoncé le succès de l'introduction en bourse de sa filiale, Concentra Group Holdings Parent, ayant levé 528,8 millions de dollars en recettes brutes.

Select Medical Holdings (NYSE: SEM) hat ihre Ergebnisse für das 2. Quartal 2024 veröffentlicht, die einen Anstieg des Umsatzes um 5,1% auf $1.759,7 Millionen zeigen. Der Nettogewinn stieg um 3,2% auf $94,8 Millionen, während das bereinigte EBITDA um 3,1% auf $226,3 Millionen wuchs. Der Gewinn pro Aktie blieb stabil bei $0,60. Der Vorstand des Unternehmens erklärte eine Bardividende von $0,125 pro Aktie, die am 30. August 2024 zahlbar ist.

Für das erste Halbjahr 2024 stieg der Umsatz um 6,3% auf $3.548,5 Millionen, während der Nettogewinn um 19,7% auf $211,9 Millionen zunahm. Select Medical betreibt 107 Krankenhäuser für die Rehabilitation schwerer Krankheiten, 33 Rehabilitationskliniken, 1.925 ambulante Rehabilitationskliniken und 547 Betriebliche Gesundheitszentren in den Vereinigten Staaten.

Das Unternehmen gab auch den erfolgreichen Börsengang seiner Tochtergesellschaft, Concentra Group Holdings Parent, bekannt, bei dem $528,8 Millionen an Bruttoerlösen erzielt wurden.

Positive
  • Revenue increased 5.1% to $1,759.7 million in Q2 2024
  • Net income rose 3.2% to $94.8 million in Q2 2024
  • Adjusted EBITDA grew 3.1% to $226.3 million in Q2 2024
  • First half 2024 revenue increased 6.3% to $3,548.5 million
  • First half 2024 net income up 19.7% to $211.9 million
  • Declared cash dividend of $0.125 per share
  • Successful IPO of subsidiary Concentra Group Holdings Parent, raising $528.8 million
Negative
  • Earnings per share slightly decreased from $0.61 to $0.60 in Q2 2024
  • Income from operations decreased slightly from $159.2 million to $157.8 million in Q2 2024

MECHANICSBURG, Pa., Aug. 1, 2024 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced results for its second quarter ended June 30, 2024, and the declaration of a cash dividend.

For the second quarter ended June 30, 2024, revenue increased 5.1% to $1,759.7 million, compared to $1,674.5 million for the same quarter, prior year. Income from operations was $157.8 million for the second quarter ended June 30, 2024, compared to $159.2 million for the same quarter, prior year. Net income increased 3.2% to $94.8 million for the second quarter ended June 30, 2024, compared to $91.9 million for the same quarter, prior year. Adjusted EBITDA increased 3.1% to $226.3 million for the second quarter ended June 30, 2024, compared to $219.5 million for the same quarter, prior year. Earnings per common share and adjusted earnings per common share was $0.60 for the second quarter ended June 30, 2024, compared to $0.61 for the same quarter, prior year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table IX of this release. A reconciliation of earnings per common share to adjusted earnings per common share is presented in table X of this release.

For the six months ended June 30, 2024, revenue increased 6.3% to $3,548.5 million, compared to $3,339.5 million for the same period, prior year. Income from operations increased 13.2% to $351.8 million for the six months ended June 30, 2024, compared to $310.7 million for the same period, prior year. Net income increased 19.7% to $211.9 million for the six months ended June 30, 2024, compared to $177.1 million for the same period, prior year. Adjusted EBITDA increased 12.6% to $488.2 million for the six months ended June 30, 2024, compared to $433.5 million for the same period, prior year. Earnings per common share increased 15.4% to $1.35 for the six months ended June 30, 2024, compared to $1.17 for the same period, prior year. Adjusted earnings per common share increased 17.1% to $1.37 for the six months ended June 30, 2024, compared to $1.17 for the same period, prior year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table IX of this release. A reconciliation of earnings per common share to adjusted earnings per common share is presented in table X of this release.

Company Overview

Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States based on number of facilities.  Select Medical's reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, the outpatient rehabilitation segment, and the Concentra segment. As of June 30, 2024, Select Medical operated 107 critical illness recovery hospitals in 29 states, 33 rehabilitation hospitals in 13 states, 1,925 outpatient rehabilitation clinics in 39 states and the District of Columbia, and 547 occupational health centers in 41 states. At June 30, 2024, Select Medical had operations in 46 states and the District of Columbia. Information about Select Medical is available at www.selectmedical.com.

Critical Illness Recovery Hospital Segment

For the second quarter ended June 30, 2024, revenue for the critical illness recovery hospital segment increased 5.2% to $604.9 million, compared to $575.1 million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 9.7% to $71.8 million for the second quarter ended June 30, 2024, compared to $65.5 million for the same quarter, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 11.9% for the second quarter ended June 30, 2024, compared to 11.4% for the same quarter, prior year. Certain critical illness recovery hospital key statistics are presented in table VII of this release for the second quarters ended June 30, 2024 and 2023.

For the six months ended June 30, 2024, revenue for the critical illness recovery hospital segment increased 7.9% to $1,260.8 million, compared to $1,169.0 million for the same period, prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 32.0% to $187.8 million for the six months ended June 30, 2024, compared to $142.3 million for the same period, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 14.9% for the six months ended June 30, 2024, compared to 12.2% for the same period, prior year. Certain critical illness recovery hospital key statistics are presented in table VIII of this release for the six months ended June 30, 2024 and 2023.

Rehabilitation Hospital Segment

For the second quarter ended June 30, 2024, revenue for the rehabilitation hospital segment increased 11.2% to $267.8 million, compared to $240.9 million for the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 13.3% to $62.0 million for the second quarter ended June 30, 2024, compared to $54.7 million for the same quarter, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 23.1% for the second quarter ended June 30, 2024, compared to 22.7% for the same quarter, prior year. Certain rehabilitation hospital key statistics are presented in table VII of this release for the second quarters ended June 30, 2024 and 2023.

For the six months ended June 30, 2024, revenue for the rehabilitation hospital segment increased 13.0% to $533.5 million, compared to $472.3 million for the same period, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 21.0% to $123.4 million for the six months ended June 30, 2024, compared to $101.9 million for the same period, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 23.1% for the six months ended June 30, 2024, compared to 21.6% for the same period, prior year. Certain rehabilitation hospital key statistics are presented in table VIII of this release for the six months ended June 30, 2024 and 2023.

Outpatient Rehabilitation Segment

For the second quarter ended June 30, 2024, revenue for the outpatient rehabilitation segment increased 4.1% to $315.5 million, compared to $303.0 million for the same quarter, prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $28.8 million for the second quarter ended June 30, 2024, compared to $32.9 million for the same quarter, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 9.1% for the second quarter ended June 30, 2024, compared to 10.8% for the same quarter, prior year. Certain outpatient rehabilitation key statistics are presented in table VII of this release for the second quarters ended June 30, 2024 and 2023.

For the six months ended June 30, 2024, revenue for the outpatient rehabilitation segment increased 3.3% to $618.7 million, compared to $598.9 million for the same period, prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $53.7 million for the six months ended June 30, 2024, compared to $63.0 million for the same period, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 8.7% for the six months ended June 30, 2024, compared to 10.5% for the same period, prior year. Certain outpatient rehabilitation key statistics are presented in table VIII of this release for the six months ended June 30, 2024 and 2023.

Concentra Segment

For the second quarter ended June 30, 2024, revenue for the Concentra segment increased 2.3% to $477.9 million, compared to $467.1 million for the same quarter, prior year. Adjusted EBITDA for the Concentra segment increased 1.2% to $101.6 million for the second quarter ended June 30, 2024, compared to $100.4 million for the same quarter, prior year. The Adjusted EBITDA margin for the Concentra segment was 21.3% for the second quarter ended June 30, 2024, compared to 21.5% for the same quarter, prior year. Certain Concentra key statistics are presented in table VII of this release for the second quarters ended June 30, 2024 and 2023.

For the six months ended June 30, 2024, revenue for the Concentra segment increased 2.4% to $945.5 million, compared to $923.4 million for the same period, prior year. Adjusted EBITDA for the Concentra segment increased 1.9% to $197.7 million for the six months ended June 30, 2024, compared to $194.1 million for the same period, prior year. The Adjusted EBITDA margin for the Concentra segment was 20.9% for the six months ended June 30, 2024, compared to 21.0% for the same period, prior year. Certain Concentra key statistics are presented in table VIII of this release for the six months ended June 30, 2024 and 2023.

Dividend

On July 31, 2024, Select Medical's Board of Directors declared a cash dividend of $0.125 per share. The dividend will be payable on or about August 30, 2024, to stockholders of record as of the close of business on August 14, 2024.

There is no assurance that future dividends will be declared. The declaration and payment of dividends in the future are at the discretion of Select Medical's Board of Directors after taking into account various factors, including, but not limited to, Select Medical's financial condition, operating results, available cash and current and anticipated cash needs, the terms of Select Medical's indebtedness, and other factors Select Medical's Board of Directors may deem to be relevant.

Stock Repurchase Program

The Board of Directors of Select Medical has authorized a common stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock. The common stock repurchase program will remain in effect until December 31, 2025, unless further extended or earlier terminated by the Board of Directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Select Medical deems appropriate. Select Medical funds this program with cash on hand and borrowings under its revolving credit facility.

Select Medical did not repurchase shares under its authorized stock repurchase program during the six months ended June 30, 2024. Since the inception of the common stock repurchase program through June 30, 2024, Select Medical has repurchased 48,234,823 shares at a cost of approximately $600.3 million, or $12.45 per share, which includes transaction costs.

Concentra Group Holdings Parent Initial Public Offering and Debt Transactions

On July 26, 2024, Concentra Group Holdings Parent ("Concentra"), a wholly-owned subsidiary of Select, completed an initial public offering ("IPO") of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public offering price of $23.50 per share for gross proceeds of $528.8 million. In addition, Concentra has granted the underwriters a 30-day option to purchase up to an additional 3,375,000 shares of its common stock. Concentra shares began trading on the New York Stock Exchange under the symbol "CON" on July 25, 2024. In connection with the offering, Concentra Health Services, Inc. ("CHSI"), a wholly-owned subsidiary of Concentra, entered into certain financing arrangements which include Credit Facilities and $650.0 million aggregate principal amount of 6.875% Senior Notes due 2032 (the "Notes"). The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Concentra and certain of its wholly-owned subsidiaries. The Notes bear interest at a rate of 6.875% per annum and mature on July 15, 2032. The Credit Facilities consist of a $850.0 million Term Loan and a $400.0 million Revolving Credit Facility. The Term Loan matures on July 26, 2031, and has an interest rate of Term SOFR plus 2.25%, subject to a leverage-based pricing grid. The Revolving Credit Facility matures on July 26, 2029, and has an interest rate of Term SOFR plus 2.50%, subject to a leverage-based pricing grid.

The net proceeds of the IPO and the debt financing transactions, except for $34.7 million, were used to repay $1.9 billion of Select's Credit Facilities.

Business Outlook

Select Medical is reaffirming its 2024 business outlook, which was provided most recently in its May 2, 2024, press release. Select Medical expects revenue to be in the range of $6.9 billion to $7.1 billion, Adjusted EBITDA to be in the range of $845 million to $885 million, fully diluted earnings per share to be in the range of $1.95 to $2.19 and adjusted earnings per share to be in the range of $1.96 to $2.20. Reconciliations of full year 2024 Adjusted EBITDA expectations to net income and adjusted earnings per share to fully diluted earnings per share are presented in table XI of this release.

Conference Call

Select Medical will host a conference call regarding its second quarter results and its business outlook on Friday, August 2, 2024, at 9:00am ET. The conference call will be a live webcast and can be accessed at Select Medical Holdings Corporation's website at www.selectmedicalholdings.com. A replay of the webcast will be available shortly after the call through the same link.

For listeners wishing to dial-in via telephone, or participate in the question and answer session, you may pre-register for the call at Select Medical Earnings Call Registration to obtain your dial-in number and unique passcode.

*   *   *   *   *

Certain statements contained herein that are not descriptions of historical facts are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), including statements related to Select Medical's 2024 and long-term business outlook. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements due to factors including the following:

  • changes in government reimbursement for our services and/or new payment policies may result in a reduction in revenue, an increase in costs, and a reduction in profitability;
  • adverse economic conditions including an inflationary environment could cause us to continue to experience increases in the prices of labor and other costs of doing business resulting in a negative impact on our business, operating results, cash flows, and financial condition;
  • shortages in qualified nurses, therapists, physicians, or other licensed providers, and/or the inability to attract or retain qualified healthcare professionals could limit our ability to staff our facilities;
  • shortages in qualified health professionals could cause us to increase our dependence on contract labor, increase our efforts to recruit and train new employees, and expand upon our initiatives to retain existing staff, which could increase our operating costs significantly;
  • public threats such as a global pandemic, or widespread outbreak of an infectious disease, similar to the COVID-19 pandemic, could negatively impact patient volumes and revenues, increase labor and other operating costs, disrupt global financial markets, and/or further legislative and regulatory actions which impact healthcare providers, including actions that may impact the Medicare program;
  • the failure of our Medicare-certified long term care hospitals or inpatient rehabilitation facilities to maintain their Medicare certifications may cause our revenue and profitability to decline;
  • the failure of our Medicare-certified long term care hospitals and inpatient rehabilitation facilities operated as "hospitals within hospitals" to qualify as hospitals separate from their host hospitals may cause our revenue and profitability to decline;
  • a government investigation or assertion that we have violated applicable regulations may result in sanctions or reputational harm and increased costs;
  • acquisitions or joint ventures may prove difficult or unsuccessful, use significant resources, or expose us to unforeseen liabilities;
  • our plans and expectations related to our acquisitions and our ability to realize anticipated synergies;
  • failure to complete or achieve some or all the expected benefits of the potential separation of Concentra;
  • private third-party payors for our services may adopt payment policies that could limit our future revenue and profitability;
  • the failure to maintain established relationships with the physicians in the areas we serve could reduce our revenue and profitability;
  • competition may limit our ability to grow and result in a decrease in our revenue and profitability;
  • the loss of key members of our management team could significantly disrupt our operations;
  • the effect of claims asserted against us could subject us to substantial uninsured liabilities;
  • a security breach of our or our third-party vendors' information technology systems may subject us to potential legal and reputational harm and may result in a violation of the Health Insurance Portability and Accountability Act of 1996 or the Health Information Technology for Economic and Clinical Health Act; and
  • other factors discussed from time to time in our filings with the Securities and Exchange Commission (the "SEC"), including factors discussed under the heading "Risk Factors" of the annual report on Form 10-K for the year ended December 31, 2023.

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance.

Investor inquiries:
Joel T. Veit
Senior Vice President and Treasurer
717-972-1100
ir@selectmedical.com

 

I.  Condensed Consolidated Statements of Operations

For the Three Months Ended June 30, 2023 and 2024

(In thousands, except per share amounts, unaudited)




2023


2024


% Change

Revenue


$             1,674,528


$             1,759,663


5.1 %

Costs and expenses:







Cost of services, exclusive of depreciation and amortization


1,423,603


1,498,044


5.2

General and administrative


42,508


49,878


17.3

Depreciation and amortization


49,939


53,939


8.0

Total costs and expenses


1,516,050


1,601,861


5.7

Other operating income


726


(2)


N/M

Income from operations


159,204


157,800


(0.9)

Other income and expense:







Equity in earnings of unconsolidated subsidiaries


10,501


6,315


(39.9)

Interest expense


(48,997)


(37,107)


(24.3)

Income before income taxes


120,708


127,008


5.2

Income tax expense


28,848


32,242


11.8

Net income


91,860


94,766


3.2

Less: Net income attributable to non-controlling interests


13,623


17,203


26.3

Net income attributable to Select Medical


$                  78,237


$                  77,563


(0.9) %

Basic and diluted earnings per common share:(1)


$                       0.61


$                       0.60



________________

(1)           Refer to table III for calculation of earnings per common share.

N/M        Not meaningful

 

II.  Condensed Consolidated Statements of Operations

For the Six Months Ended June 30, 2023 and 2024

(In thousands, except per share amounts, unaudited)




2023


2024


% Change

Revenue


$             3,339,508


$             3,548,472


6.3 %

Costs and expenses:







Cost of services, exclusive of depreciation and amortization


2,842,422


2,992,654


5.3

General and administrative


84,787


98,325


16.0

Depreciation and amortization


102,364


108,008


5.5

Total costs and expenses


3,029,573


3,198,987


5.6

Other operating income


726


2,282


N/M

Income from operations


310,661


351,767


13.2

Other income and expense:







Equity in earnings of unconsolidated subsidiaries


19,057


16,736


(12.2)

Interest expense


(97,568)


(87,870)


(9.9)

Income before income taxes


232,150


280,633


20.9

Income tax expense


55,033


68,700


24.8

Net income


177,117


211,933


19.7

Less: Net income attributable to non-controlling interests


28,075


37,473


33.5

Net income attributable to Select Medical


$                149,042


$                174,460


17.1 %

Basic and diluted earnings per common share:(1)


$                       1.17


$                       1.35



________________

(1)           Refer to table III for calculation of earnings per common share.

N/M        Not meaningful

 

III.  Earnings per Share

For the Three and Six Months Ended June 30, 2023 and 2024

(In thousands, except per share amounts, unaudited)

Select Medical's capital structure includes common stock and unvested restricted stock awards. To compute earnings per share ("EPS"), Select Medical applies the two-class method because its unvested restricted stock awards are participating securities which are entitled to participate equally with its common stock in undistributed earnings.

The following table sets forth the net income attributable to Select Medical, its common shares outstanding, and its participating securities outstanding for the three and six months ended June 30, 2023 and 2024:



Basic and Diluted EPS



Three Months Ended

June 30,


Six Months Ended

June 30,



2023


2024


2023


2024

Net income


$         91,860


$         94,766


$       177,117


$       211,933

Less: net income attributable to non-controlling interests


13,623


17,203


28,075


37,473

Net income attributable to Select Medical


78,237


77,563


149,042


174,460

Less: net income attributable to participating securities


2,877


3,324


5,449


6,801

Net income attributable to common shares


$         75,360


$         74,239


$       143,593


$       167,659

The following tables set forth the computation of EPS under the two-class method for the three and six months ended June 30, 2023 and 2024:



Three Months Ended June 30,



2023



2024



Net Income
Allocation


Shares(1)


Basic and
Diluted EPS



Net Income
Allocation


Shares(1)


Basic and
Diluted EPS



(in thousands, except for per share amounts)

Common shares


$         75,360


122,634


$              0.61



$            74,239


123,946


$              0.60

Participating securities


2,877


4,681


$              0.61



3,324


5,550


$              0.60

Total


$         78,237







$            77,563





 



Six Months Ended June 30,



2023



2024



Net Income
Allocation


Shares(1)


Basic and
Diluted EPS



Net Income
Allocation


Shares(1)


Basic and
Diluted EPS



(in thousands, except for per share amounts)

Common shares


$       143,593


122,594


$              1.17



$          167,659


123,902


$              1.35

Participating securities


5,449


4,652


$              1.17



6,801


5,026


$              1.35

Total


$       149,042







$          174,460





________________

(1)   Represents the weighted average share count outstanding during the period.

 

IV.  Condensed Consolidated Balance Sheets

(In thousands, unaudited)




December 31, 2023


June 30, 2024

Assets





Current Assets:





Cash and cash equivalents


$                       84,006


$                     111,160

Accounts receivable


940,335


1,077,984

Other current assets


233,305


175,943

Total Current Assets


1,257,646


1,365,087

Operating lease right-of-use assets


1,188,616


1,252,839

Property and equipment, net


1,023,561


1,030,587

Goodwill


3,513,170


3,525,474

Identifiable intangible assets, net


329,916


316,930

Other assets


376,722


384,385

Total Assets


$                 7,689,631


$                 7,875,302

Liabilities and Equity





Current Liabilities:





Payables and accruals


$                     932,736


$                     962,648

Current operating lease liabilities


245,400


247,920

Current portion of long-term debt and notes payable


70,329


46,431

Total Current Liabilities


1,248,465


1,256,999

Non-current operating lease liabilities


1,025,867


1,091,784

Long-term debt, net of current portion


3,587,675


3,593,660

Non-current deferred tax liability


143,306


97,647

Other non-current liabilities


110,303


98,682

Total Liabilities


6,115,616


6,138,772

Redeemable non-controlling interests


26,297


29,565

Total equity


1,547,718


1,706,965

Total Liabilities and Equity


$                 7,689,631


$                 7,875,302

 

V.  Condensed Consolidated Statements of Cash Flows

For the Three Months Ended June 30, 2023 and 2024

(In thousands, unaudited)




2023


2024

Operating activities





Net income


$                       91,860


$                       94,766

Adjustments to reconcile net income to net cash provided by operating activities:





Distributions from unconsolidated subsidiaries


6,275


1,756

Depreciation and amortization


49,939


53,939

Provision for expected credit losses


332


606

Equity in earnings of unconsolidated subsidiaries


(10,501)


(6,315)

Gain on sale or disposal of assets


(16)


(1,066)

Stock compensation expense


10,326


14,413

Amortization of debt discount, premium and issuance costs


609


742

Deferred income taxes


(8,275)


(27,448)

Changes in operating assets and liabilities, net of effects of business combinations:





Accounts receivable


32,262


56,199

Other current assets


5,745


16,168

Other assets


1,814


(15,210)

Accounts payable and accrued expenses


54,468


89,602

Net cash provided by operating activities


234,838


278,152

Investing activities





Business combinations, net of cash acquired


(7,335)


(588)

Purchases of property, equipment, and other assets


(59,514)


(55,548)

Proceeds from sale of assets


36


2,068

Net cash used in investing activities


(66,813)


(54,068)

Financing activities





Borrowings on revolving facilities


210,000


220,000

Payments on revolving facilities


(325,000)


(385,000)

Borrowings of other debt


850


Principal payments on other debt


(15,203)


(14,200)

Dividends paid to common stockholders


(15,924)


(16,254)

Repurchase of common stock


(1,506)


(1,400)

Increase (decrease) in overdrafts


257


(4,908)

Proceeds from issuance of non-controlling interests


12,081


1,749

Distributions to and purchases of non-controlling interests


(16,116)


(5,531)

Net cash used in financing activities


(150,561)


(205,544)

Net increase in cash and cash equivalents


17,464


18,540

Cash and cash equivalents at beginning of period


83,703


92,620

Cash and cash equivalents at end of period


$                     101,167


$                     111,160

Supplemental information





Cash paid for interest, excluding amounts received of $20,456 and $22,439 under interest rate cap contract


$                       49,050


$                       53,044

Cash paid for taxes


42,419


60,222

 

VI.  Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2023 and 2024

(In thousands, unaudited)




2023


2024

Operating activities





Net income


$                     177,117


$                     211,933

Adjustments to reconcile net income to net cash provided by operating activities:





Distributions from unconsolidated subsidiaries


8,841


14,130

Depreciation and amortization


102,364


108,008

Provision for expected credit losses


761


1,460

Equity in earnings of unconsolidated subsidiaries


(19,057)


(16,736)

Gain on sale or disposal of assets


(23)


(1,022)

Stock compensation expense


20,508


26,023

Amortization of debt discount, premium, and issuance costs


1,174


1,492

Deferred income taxes


(10,876)


(34,339)

Changes in operating assets and liabilities, net of effects of business combinations:





Accounts receivable


(23,135)


(139,109)

Other current assets


(5,997)


6,557

Other assets


5,472


(12,847)

Accounts payable and accrued expenses


29,129


45,913

Net cash provided by operating activities


286,278


211,463

Investing activities





Business combinations, net of cash acquired


(7,732)


(5,993)

Purchases of property, equipment, and other assets


(118,399)


(108,065)

Investment in businesses


(9,800)


Proceeds from sale of assets and businesses


56


2,333

Net cash used in investing activities


(135,875)


(111,725)

Financing activities





Borrowings on revolving facilities


435,000


715,000

Payments on revolving facilities


(535,000)


(650,000)

Payments on term loans



(79,085)

Borrowings of other debt


22,298


17,728

Principal payments on other debt


(26,373)


(23,261)

Dividends paid to common stockholders


(31,821)


(32,299)

Repurchase of common stock


(1,506)


(1,400)

Decrease in overdrafts


(467)


(6,648)

Proceeds from issuance of non-controlling interests


14,812


5,751

Distributions to and purchases of non-controlling interests


(24,085)


(18,370)

Net cash used in financing activities


(147,142)


(72,584)

Net increase in cash and cash equivalents


3,261


27,154

Cash and cash equivalents at beginning of period


97,906


84,006

Cash and cash equivalents at end of period


$                     101,167


$                     111,160

Supplemental information





Cash paid for interest, excluding amounts received of $38,284 and $44,954 under the interest rate cap contract


$                     133,581


$                     141,878

Cash paid for taxes


42,755


60,826

 

VII.  Key Statistics

For the Three Months Ended June 30, 2023, and 2024

(unaudited)




2023


2024


% Change

Critical Illness Recovery Hospital







Number of hospitals operated – end of period(a)


108


107



Revenue (,000)


$      575,091


$      604,921


5.2 %

Number of patient days(b)(c)


276,366


279,241


1.0 %

Number of admissions(b)(d)


8,925


8,888


(0.4) %

Revenue per patient day(b)(e)


$          2,076


$          2,159


4.0 %

Occupancy rate(b)(f)


68 %


67 %


(1.5) %

Adjusted EBITDA (,000)


$        65,496


$        71,833


9.7 %

Adjusted EBITDA margin


11.4 %


11.9 %



Rehabilitation Hospital







Number of hospitals operated – end of period(a)


32


33



Revenue (,000)


$      240,856


$      267,831


11.2 %

Number of patient days(b)(c)


109,680


117,045


6.7 %

Number of admissions(b)(d)


7,865


8,325


5.8 %

Revenue per patient day(b)(e)


$          2,008


$          2,113


5.2 %

Occupancy rate(b)(f)


84 %


84 %


0.0 %

Adjusted EBITDA (,000)


$        54,689


$        61,954


13.3 %

Adjusted EBITDA margin


22.7 %


23.1 %



Outpatient Rehabilitation







Number of clinics operated – end of period(a)


1,944


1,925



Working days(g)


64


64



Revenue (,000)


$      302,972


$      315,496


4.1 %

Number of visits(b)(h)


2,720,490


2,827,625


3.9 %

Revenue per visit(b)(i)


$             100


$             100


0.0 %

Adjusted EBITDA (,000)


$        32,850


$        28,769


(12.4) %

Adjusted EBITDA margin


10.8 %


9.1 %



Concentra







Number of centers operated – end of period(b)


540


547



Working days(g)


64


64



Revenue (,000)


$      467,079


$      477,915


2.3 %

Number of visits(b)(h)


3,267,894


3,214,255


(1.6) %

Revenue per visit(b)(i)


$             134


$             140


4.5 %

Adjusted EBITDA (,000)


$      100,391


$      101,600


1.2 %

Adjusted EBITDA margin


21.5 %


21.3 %



________________

(a)

Includes managed locations.

(b)

Excludes managed locations. For purposes of the Concentra segment, onsite clinics are excluded.

(c)

Each patient day represents one patient occupying one bed for one day during the periods presented.

(d)

Represents the number of patients admitted to Select Medical's hospitals during the periods presented.

(e)

Represents the average amount of revenue recognized for each patient day. Revenue per patient day is calculated by dividing patient service revenues, excluding revenues from certain other ancillary and outpatient services provided at Select Medical's hospitals, by the total number of patient days.

(f)

Represents the portion of our hospitals being utilized for patient care during the periods presented. Occupancy rate is calculated using the number of patient days, as presented above, divided by the total number of bed days available during the period. Bed days available is derived by adding the daily number of available licensed beds for each of the periods presented.

(g)

Represents the number of days in which normal business operations were conducted during the periods presented.

(h)

Represents the number of visits in which patients were treated at Select Medical's outpatient rehabilitation clinics and Concentra centers during the periods presented.

(i)

Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated by dividing patient service revenue, excluding revenues from certain other ancillary services, by the total number of visits. For purposes of this computation for the Concentra segment, patient service revenue does not include onsite clinics.

 

VIII.  Key Statistics

For the Six Months Ended June 30, 2023, and 2024

(unaudited)




2023


2024


% Change

Critical Illness Recovery Hospital







Number of hospitals operated – end of period(a)


108


107



Revenue (,000)


$    1,169,017


$    1,260,801


7.9 %

Number of patient days(b)(c)


563,112


573,863


1.9 %

Number of admissions(b)(d)


18,363


18,417


0.3 %

Revenue per patient day(b)(e)


$            2,067


$            2,190


6.0 %

Occupancy rate(b)(f)


70 %


69 %


(1.4) %

Adjusted EBITDA (,000)


$        142,269


$        187,773


32.0 %

Adjusted EBITDA margin


12.2 %


14.9 %



Rehabilitation Hospital







Number of hospitals operated – end of period(a)


32


33



Revenue (,000)


$        472,318


$        533,531


13.0 %

Number of patient days(b)(c)


218,047


233,889


7.3 %

Number of admissions(b)(d)


15,523


16,600


6.9 %

Revenue per patient day(b)(e)


$            1,989


$            2,105


5.8 %

Occupancy rate(b)(f)


85 %


85 %


0.0 %

Adjusted EBITDA (,000)


$        101,905


$        123,354


21.0 %

Adjusted EBITDA margin


21.6 %


23.1 %



Outpatient Rehabilitation







Number of clinics operated – end of period(a)


1,944


1,925



Working days(g)


128


128



Revenue (,000)


$        598,875


$        618,654


3.3 %

Number of visits(b)(h)


5,357,260


5,562,751


3.8 %

Revenue per visit(b)(i)


$               100


$               100


0.0 %

Adjusted EBITDA (,000)


$          63,049


$          53,697


(14.8) %

Adjusted EBITDA margin


10.5 %


8.7 %



Concentra







Number of centers operated – end of period(b)


540


547



Working days(g)


128


128



Revenue (,000)


$        923,377


$        945,513


2.4 %

Number of visits(b)(h)


6,485,839


6,369,910


(1.8) %

Revenue per visit(b)(i)


$               134


$               139


3.7 %

Adjusted EBITDA (,000)


$        194,139


$        197,742


1.9 %

Adjusted EBITDA margin


21.0 %


20.9 %



________________

(a)

Includes managed locations.

(b)

Excludes managed locations. For purposes of the Concentra segment, onsite clinics are excluded.

(c)

Each patient day represents one patient occupying one bed for one day during the periods presented.

(d)

Represents the number of patients admitted to Select Medical's hospitals during the periods presented.

(e)

Represents the average amount of revenue recognized for each patient day. Revenue per patient day is calculated by dividing patient service revenues, excluding revenues from certain other ancillary and outpatient services provided at Select Medical's hospitals, by the total number of patient days.

(f)

Represents the portion of our hospitals being utilized for patient care during the periods presented. Occupancy rate is calculated using the number of patient days, as presented above, divided by the total number of bed days available during the period. Bed days available is derived by adding the daily number of available licensed beds for each of the periods presented.

(g)

Represents the number of days in which normal business operations were conducted during the periods presented.

(h)

Represents the number of visits in which patients were treated at Select Medical's outpatient rehabilitation clinics and Concentra centers during the periods presented.

(i)

Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated by dividing patient service revenue, excluding revenues from certain other ancillary services, by the total number of visits. For purposes of this computation for the Concentra segment, patient service revenue does not include onsite clinics.

 

IX. Net Income to Adjusted EBITDA Reconciliation

For the Three and Six Months Ended June 30, 2023 and 2024

(In thousands, unaudited)

The presentation of Adjusted EBITDA is important to investors because Adjusted EBITDA is commonly used as an analytical indicator of performance by investors within the healthcare industry. Adjusted EBITDA is used by management to evaluate financial performance and determine resource allocation for each of Select Medical's segments. Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America ("GAAP"). Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, income from operations, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying definitions, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.

The following table reconciles net income to Adjusted EBITDA for Select Medical. Adjusted EBITDA is used by Select Medical to report its segment performance. Adjusted EBITDA is defined as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, transaction costs associated with the Concentra separation, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries.


Three Months Ended

June 30,



Six Months Ended

June 30,



2023


2024



2023


2024

Net income


$         91,860


$         94,766



$       177,117


$       211,933

Income tax expense


28,848


32,242



55,033


68,700

Interest expense


48,997


37,107



97,568


87,870

Equity in earnings of unconsolidated subsidiaries


(10,501)


(6,315)



(19,057)


(16,736)

Income from operations


159,204


157,800



310,661


351,767

Stock compensation expense:










Included in general and administrative


8,553


11,874



16,958


21,556

Included in cost of services


1,773


2,539



3,549


4,467

Depreciation and amortization


49,939


53,939



102,364


108,008

Concentra separation transaction costs(b)



177




2,448

Adjusted EBITDA


$       219,469


$       226,329



$       433,532


$       488,246











Critical illness recovery hospital


$         65,496


$         71,833



$       142,269


$       187,773

Rehabilitation hospital


54,689


61,954



101,905


123,354

Outpatient rehabilitation


32,850


28,769



63,049


53,697

Concentra


100,391


101,600



194,139


197,742

Other(a)


(33,957)


(37,827)



(67,830)


(74,320)

Adjusted EBITDA


$       219,469


$       226,329



$       433,532


$       488,246

________________

(a)

Other primarily includes general and administrative costs.

(b)

Concentra separation transaction costs represent incremental consulting, legal, and audit-related fees incurred in connection with the Company's planned separation of the Concentra segment into a new, publicly traded company and are included within general and administrative expenses on the Condensed Consolidated Statements of Operations. During the three months ended June 30, 2024, an adjustment was made to capitalize Concentra separation transaction costs recognized during the first quarter of 2024.

 

X. Reconciliation of Earnings per Common Share to Adjusted Earnings per Common Share

For the Three and Six Months Ended June 30, 2023 and 2024

(In thousands, except per share amounts, unaudited)


Adjusted net income attributable to common shares and adjusted earnings per common share are not measures of financial performance under GAAP. Items excluded from adjusted net income attributable to common shares and adjusted earnings per common share are significant components in understanding and assessing financial performance. Select Medical believes that the presentation of adjusted net income attributable to common shares and adjusted earnings per common share are important to investors because they are reflective of the financial performance of Select Medical's ongoing operations and provide better comparability of its results of operations between periods. Adjusted net income attributable to common shares and adjusted earnings per common share should not be considered in isolation or as alternatives to, or substitutes for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because adjusted net income attributable to common shares and adjusted earnings per common share are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, adjusted net income attributable to common shares and adjusted earnings per common share as presented may not be comparable to other similarly titled measures of other companies.

The following tables reconcile net income attributable to common shares and earnings per common share on a fully diluted basis to adjusted net income attributable to common shares and adjusted earnings per common share on a fully diluted basis.


Three Months Ended June 30,



2023


Per Share(a)


2024


Per Share(a)


Net income attributable to common shares(a)

$           75,360


$               0.61


$           74,239


$               0.60


Adjustments:(b)









Concentra separation transaction costs, net of tax



138


0.00


Adjusted net income attributable to common shares

$           75,360


$               0.61


$           74,377


$               0.60


 


Six Months Ended June 30,



2023


Per Share(a)


2024


Per Share(a)


Net income attributable to common shares(a)

$         143,593


$               1.17


$         167,659


$               1.35


Adjustments:(b)









Concentra separation transaction costs, net of tax



1,751


0.01


Adjusted net income attributable to common shares

$         143,593


$               1.17


$         169,410


$               1.37

(c)

________________

(a)

Net income attributable to common shares and earnings per common share are calculated based on the weighted average common shares outstanding, as presented in table III.

(b)

Adjustments to net income attributable to common shares include estimated income tax and non-controlling interest impacts and are calculated based on the diluted weighted average common shares outstanding. The estimated income tax impact, which is determined using tax rates based on the nature of the adjustment and the jurisdiction in which the adjustment occurred, includes both current and deferred income tax expense or benefit.

(c)

Does not total due to rounding.

 

XI. Net Income to Adjusted EBITDA and Earnings per Common Share to Adjusted Earnings per Common Share Reconciliations

Business Outlook for the Year Ending December 31, 2024

(In millions, unaudited)

The following are reconciliations of full year 2024 Adjusted EBITDA and adjusted earnings per common share expectations as computed at the low and high points of the range to the closest comparable GAAP financial measure. Refer to table IX and X for discussion of Select Medical's use of Adjusted EBITDA and adjusted earnings per common share in evaluating financial performance. Refer to table IX for the definition of Adjusted EBITDA. Each item presented in the below table is an estimation of full year 2024 expectations.


Range

Non-GAAP Measure Reconciliation

Low


High

Net income attributable to Select Medical

$                            252


$                            284

Net income attributable to non-controlling interests

68


69

Net income

320


353

Income tax expense

96


105

Interest expense

218


218

Equity in earnings of unconsolidated subsidiaries

(43)


(45)

Income from operations

591


631

Stock compensation expense

48


48

Depreciation and amortization

204


204

Concentra separation transaction costs(a)

2


2

Adjusted EBITDA

$                            845


$                            885

 


Range

Non-GAAP Measure Reconciliation

Low


High

Basic and diluted earnings per common share

$                           1.95


$                           2.19

Adjustments:




Concentra separation transaction costs, net of tax (a)

0.01


0.01

Adjusted earnings per common share

$                           1.96


$                           2.20

________________

(a)

Concentra separation transaction costs represent incremental consulting, legal, and audit-related fees incurred in connection with the Company's planned separation of the Concentra Segment into a new, publicly traded company and are included within general and administrative expenses on the Condensed Consolidated Statements of Operations. The transaction costs reflect the costs incurred by the Company during the six months ended June 30, 2024, and they do not include an estimate of costs to be incurred during the remainder of 2024.

 

Cision View original content:https://www.prnewswire.com/news-releases/select-medical-holdings-corporation-announces-results-for-its-second-quarter-ended-june-30-2024-and-cash-dividend-302212731.html

SOURCE Select Medical Holdings Corporation

FAQ

What was Select Medical's (SEM) revenue for Q2 2024?

Select Medical's revenue for Q2 2024 was $1,759.7 million, a 5.1% increase from the same quarter in the previous year.

How much was Select Medical's (SEM) net income for Q2 2024?

Select Medical's net income for Q2 2024 was $94.8 million, a 3.2% increase from the same quarter in the previous year.

What dividend did Select Medical (SEM) declare for Q2 2024?

Select Medical declared a cash dividend of $0.125 per share, payable on or about August 30, 2024, to stockholders of record as of August 14, 2024.

How did Select Medical's (SEM) subsidiary Concentra perform in its IPO?

Concentra Group Holdings Parent, a wholly-owned subsidiary of Select Medical, completed an IPO of 22,500,000 shares at $23.50 per share, raising gross proceeds of $528.8 million.

SELECT MEDICAL HOLDINGS CORP

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Medical Care Facilities
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