Select Medical Holdings Corporation Announces Results For Its Third Quarter Ended September 30, 2021 and Cash Dividend

Rhea-AI Summary

Select Medical reported a 7.8% year-over-year revenue increase to $1.534 billion for Q3 2021, while net income declined to $100.2 million from $104.5 million in Q3 2020. Adjusted EBITDA was $208.6 million, slightly down from $213.2 million in the prior year. The company declared a $0.125 cash dividend, payable on November 29, 2021. For the nine months ended September 30, 2021, revenue rose 14.1% to $4.645 billion, with net income up 78.9% to $433.6 million. Select Medical also increased its stock repurchase program to $1 billion.

Positive

• Q3 2021 revenue increased 7.8% year-over-year to $1.534 billion.
• Net income for nine months up 78.9% to $433.6 million.
• Dividend declared: $0.125 per share, payable November 29, 2021.
• Stock repurchase program increased to $1 billion.

Negative

• Q3 2021 net income decreased to $100.2 million from $104.5 million year-over-year.
• Q3 adjusted EBITDA declined to $208.6 million, down from $213.2 million.

MECHANICSBURG, Pa., Nov. 4, 2021 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced results for its third quarter ended September 30, 2021 and the declaration of a cash dividend.

For the third quarter ended September 30, 2021, revenue increased 7.8% to $1,534.2 million, compared to $1,423.9 million for the same quarter, prior year. Income from operations was $150.3 million for the third quarter ended September 30, 2021, compared to $156.1 million for the same quarter, prior year. Income from operations included $1.7 million of other operating income related to the recognition of payments received under the Provider Relief Fund for the third quarter ended September 30, 2021, compared to a reduction of other operating income of $1.2 million related to payments received under the Provider Relief Fund for the same quarter, prior year. Refer to "CARES Act Provider Relief Fund" for further discussion. Net income was $100.2 million for the third quarter ended September 30, 2021, compared to $104.5 million for the same quarter, prior year. Net income included pre-tax gains on sales of businesses of $5.1 million for the third quarter ended September 30, 2020. Adjusted EBITDA was $208.6 million for the third quarter ended September 30, 2021, compared to $213.2 million for the same quarter, prior year. Earnings per common share was $0.57 for both the third quarters ended September 30, 2021 and 2020. Adjusted earnings per common share was $0.57 for the third quarter ended September 30, 2021, compared to $0.56 for the same quarter, prior year. Adjusted earnings per common share excluded the gains on sales of businesses and related tax effects for the third quarter ended September 30, 2020. 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 nine months ended September 30, 2021, revenue increased 14.1% to $4,644.7 million, compared to $4,071.2 million for the same period, prior year. Income from operations increased 57.4% to $636.2 million for the nine months ended September 30, 2021, compared to $404.3 million for the same period, prior year. Income from operations included $115.8 million of other operating income related to the recognition of payments received under the Provider Relief Fund for the nine months ended September 30, 2021, compared to $53.8 million for the same period, prior year. Refer to "CARES Act Provider Relief Fund" for further discussion. Net income increased 78.9% to $433.6 million for the nine months ended September 30, 2021, compared to $242.4 million for the same period, prior year. Net income included pre-tax gains on sales of businesses of $12.7 million for the nine months ended September 30, 2020. Adjusted EBITDA increased 39.6% to $808.9 million for the nine months ended September 30, 2021, compared to $579.3 million for the same period, prior year. Earnings per common share increased to $2.61 for the nine months ended September 30, 2021, compared to $1.35 for the same period, prior year. Adjusted earnings per common share was $2.61 for the nine months ended September 30, 2021, compared to $1.31 for the same period, prior year. Adjusted earnings per common share excluded the gains on sales of businesses and related tax effects for the nine months ended September 30, 2020. 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.

Please refer to "Effects of the COVID-19 Pandemic on Select Medical's Results of Operations" below for further discussion regarding the impact of the coronavirus disease 2019 ("COVID-19") pandemic on Select Medical's operating results.

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 September 30, 2021, Select Medical operated 100 critical illness recovery hospitals in 28 states, 30 rehabilitation hospitals in 12 states, and 1,850 outpatient rehabilitation clinics in 39 states and the District of Columbia. Select Medical's joint venture subsidiary Concentra operated 519 occupational health centers in 41 states. At September 30, 2021, Select Medical had operations in 46 states and the District of Columbia. Information about Select Medical is available at www.selectmedical.com.

CARES Act Provider Relief Fund

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted. The CARES Act provided additional waivers, reimbursement, grants and other funds to assist health care providers during the COVID-19 pandemic, including appropriations for the Public Health and Social Services Emergency Fund, also referred to as the Provider Relief Fund, to be used for preventing, preparing, and responding to COVID-19, and for reimbursing eligible health care providers for health care related expenses and lost revenues that are attributable to COVID-19.

For the three and nine months ended September 30, 2021, Select Medical recognized $1.7 million and $115.8 million of payments received under the Provider Relief Fund as other operating income, respectively.

For the three months ended September 30, 2020, Select Medical recognized a reduction to other operating income of $1.2 million related to payments received under the Provider Relief Fund. This resulted from changes in the terms and conditions associated with the Provider Relief Fund program. For the nine months ended September 30, 2020, Select Medical recognized $53.8 million of payments received under the Provider Relief Fund as other operating income.

Critical Illness Recovery Hospital Segment

For the third quarter ended September 30, 2021, revenue for the critical illness recovery hospital segment increased 2.2% to $530.6 million, compared to $519.5 million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital segment was $57.2 million for the third quarter ended September 30, 2021, compared to $88.8 million for the same quarter, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 10.8% for the third quarter ended September 30, 2021, compared to 17.1% for the same quarter, prior year. Certain critical illness recovery hospital key statistics are presented in table VII of this release for both the third quarters ended September 30, 2021 and 2020.

For the nine months ended September 30, 2021, revenue for the critical illness recovery hospital segment increased 8.4% to $1,669.6 million, compared to $1,539.6 million for the same period, prior year. Adjusted EBITDA for the critical illness recovery hospital segment was $243.4 million for the nine months ended September 30, 2021, compared to $267.1 million for the same period, prior year. For the nine months ended September 30, 2021, Adjusted EBITDA included $17.9 million of other operating income related to the outcome of litigation with the Centers for Medicare & Medicaid Services. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 14.6% for the nine months ended September 30, 2021, compared to 17.4% for the same period, prior year. Certain critical illness recovery hospital key statistics are presented in table VIII of this release for both the nine months ended September 30, 2021 and 2020.

Rehabilitation Hospital Segment

For the third quarter ended September 30, 2021, revenue for the rehabilitation hospital segment increased 13.0% to $212.4 million, compared to $188.1 million for the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment was $44.1 million for the third quarter ended September 30, 2021, compared to $44.6 million for the same quarter, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 20.7% for the third quarter ended September 30, 2021, compared to 23.7% for the same quarter, prior year. Certain rehabilitation hospital key statistics are presented in table VII of this release for both the third quarters ended September 30, 2021 and 2020.

For the nine months ended September 30, 2021, revenue for the rehabilitation hospital segment increased 17.5% to $632.9 million, compared to $538.8 million for the same period, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 31.2% to $145.4 million for the nine months ended September 30, 2021, compared to $110.8 million for the same period, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 23.0% for the nine months ended September 30, 2021, compared to 20.6% for the same period, prior year. Certain rehabilitation hospital key statistics are presented in table VIII of this release for both the nine months ended September 30, 2021 and 2020.

Outpatient Rehabilitation Segment

For the third quarter ended September 30, 2021, revenue for the outpatient rehabilitation segment increased 14.4% to $274.5 million, compared to $240.0 million for the same quarter, prior year. Adjusted EBITDA for the outpatient rehabilitation segment increased 26.6% to $38.8 million for the third quarter ended September 30, 2021, compared to $30.6 million for the same quarter, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 14.1% for the third quarter ended September 30, 2021, compared to 12.8% for the same quarter, prior year. Certain outpatient rehabilitation key statistics are presented in table VII of this release for both the third quarters ended September 30, 2021 and 2020.

For the nine months ended September 30, 2021, revenue for the outpatient rehabilitation segment increased 21.8% to $806.9 million, compared to $662.4 million for the same period, prior year. Adjusted EBITDA for the outpatient rehabilitation segment increased to $110.7 million for the nine months ended September 30, 2021, compared to $51.5 million for the same period, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 13.7% for the nine months ended September 30, 2021, compared to 7.8%  for the same period, prior year. Certain outpatient rehabilitation key statistics are presented in table VIII of this release for both the nine months ended September 30, 2021 and 2020.

Concentra Segment

For the third quarter ended September 30, 2021, revenue for the Concentra segment increased 12.8% to $442.2 million, compared to $391.9 million for the same quarter, prior year. Adjusted EBITDA for the Concentra segment increased 23.9% to $99.8 million for the third quarter ended September 30, 2021, compared to $80.5 million for the same quarter, prior year. Adjusted EBITDA included other operating income of $1.6 million related to the recognition of payments received under the Provider Relief Fund for the third quarter ended September 30, 2021, compared to $0.4 million for the same quarter, prior year. The Adjusted EBITDA margin for the Concentra segment was 22.6% for the third quarter ended September 30, 2021, compared to 20.6% for the same quarter, prior year. Certain Concentra key statistics are presented in table VII of this release for both the third quarters ended September 30, 2021 and 2020.

For the nine months ended September 30, 2021, revenue for the Concentra segment increased 19.8% to $1,321.4 million, compared to $1,102.7 million for the same period, prior year. Adjusted EBITDA for the Concentra segment increased to $318.9 million for the nine months ended September 30, 2021, compared to $183.5 million for the same period, prior year. Adjusted EBITDA included other operating income of $33.8 million related to the recognition of payments received under the Provider Relief Fund for the nine months ended September 30, 2021, compared to $1.1 million for the same period, prior year. The Adjusted EBITDA margin for the Concentra segment was 24.1% for the nine months ended September 30, 2021, compared to 16.6% for the same period, prior year. Certain Concentra key statistics are presented in table VIII of this release for both the nine months ended September 30, 2021 and 2020.

Effects of the COVID-19 Pandemic on Select Medical's Results of Operations

Beginning in March 2020, state governments placed significant restrictions on businesses and mandated closures of non-essential or non-life sustaining businesses, causing many employers to furlough their workforce and temporarily cease or significantly reduce their operations. State governments also implemented restrictions on travel and individual activities outside of the home, closed schools, and mandated other social distancing measures. At the same time, hospitals and other facilities began suspending elective surgeries. In an effort to ensure hospitals and health systems had the capacity to absorb and effectively manage surges of COVID-19 patients, a number of waivers and modifications of certain requirements under the Medicare, Medicaid and Children's Health Insurance Program ("CHIP") programs were authorized in March 2020, including certain regulations under the Medicare program which govern admissions into Select Medical's critical illness recovery hospitals and rehabilitation hospitals. Specifically, Select Medical's critical illness recovery hospitals which are certified as long-term care hospitals ("LTCHs") became exempt from the greater-than-25-day average length of stay requirement for all cost reporting periods that include the COVID-19 public health emergency period. Select Medical's rehabilitation hospitals which are certified as inpatient rehabilitation facilities ("IRFs") could exclude patients admitted solely to respond to the emergency from the calculation of the "60 percent rule" thresholds to receive payment as an IRF. The COVID-19 public health emergency period has been extended and is currently in effect through January 15, 2022.

The adverse effects of the COVID-19 pandemic, along with the actions of governmental authorities and those in the private sector to limit the spread of COVID-19, caused disruptions in each of Select Medical's segments; these disruptions were most significant within the outpatient rehabilitation and Concentra segments. By mid-March 2020, Select Medical's outpatient rehabilitation clinics began experiencing significantly less patient visit volume due to declines in patient referrals from physicians, a reduction in workers' compensation injury visits resulting from the temporary closure of businesses, and the suspension of elective surgeries which would have required outpatient rehabilitation services. Select Medical's Concentra centers experienced similar declines in patient visit volume due to businesses furloughing their workforce and temporarily ceasing or significantly reducing their operations. Since March 2021, Select Medical's outpatient rehabilitation clinics and Concentra centers have experienced patient visit volumes which approximate or exceed the levels experienced in the months prior to the widespread emergence of COVID-19 in the United States. Although they have experienced temporary disruptions in their core businesses as a result of the COVID-19 pandemic, Select Medical's outpatient rehabilitation and Concentra segments have been able to expand their services to provide COVID-19 screening and testing.

Select Medical's critical illness recovery hospitals have played a critical role in caring for patients during the COVID-19 pandemic, and the relaxation of certain admission restrictions have contributed to volume increases in certain of its hospitals. The revenue of Select Medical's critical illness recovery hospitals and rehabilitation hospitals has also benefited from the temporary suspension of the 2.0% cut to Medicare payments due to sequestration, which began May 1, 2020 following the enactment of the CARES Act, and has been extended through December 31, 2021. Certain of Select Medical's rehabilitation hospitals experienced temporary declines in patient volume, beginning in March 2020, in areas more significantly impacted by the spread of COVID-19, and as a result of the suspension of elective surgeries at hospitals and other facilities, which consequently reduced the demand for inpatient rehabilitation services. Additionally, some of Select Medical's rehabilitation hospitals temporarily restricted admissions as a result of the COVID-19 pandemic. Beginning at the onset of the COVID-19 pandemic, both Select Medical's critical illness recovery hospitals and rehabilitation hospitals modified certain of their protocols in order to follow the guidelines and recommendations for patient treatment and for the protection of their patients and staff members. This has resulted in increased labor costs, including increased contracted labor usage, as well as additional costs resulting from the purchase of personal protective equipment.

The unpredictable effects of the COVID-19 pandemic, including the duration and extent of disruption on Select Medical's operations, creates uncertainties about Select Medical's future operating results and financial condition. Select Medical has provided revenue and certain operating statistics below for each of its segments for each of the periods presented. Please refer to our risk factors previously reported in our Annual Report on Form 10-K for the year ended December 31, 2020 for further discussion.

		Critical Illness Recovery Hospital
		Revenue													Patient Days										Occupancy Rate							Number of Hospitals Owned(1)
		2019				2020				2021					2019			2020			2021				2019		2020		2021			2019		2020		2021
		(in thousands)
January		$	149,799			$	163,238			$	199,611				86,238			90,783			100,933				69%		69%		75%			96		100		99
February		145,586				165,375				190,703					80,806			87,844			92,036				71%		72%		75%			96		100		99
March		162,149				171,908				204,558					91,085			91,831			100,149				73%		70%		74%			96		100		99
Three Months Ended March 31		$	457,534			$	500,521			$	594,872				258,129			270,458			293,118				71%		70%		75%			96		100		99
April		$	156,231			$	171,445			$	185,934				88,357			90,710			91,506				70%		71%		70%			99		100		99
May		156,422				178,223				183,471					89,350			95,191			93,708				69%		72%		70%			99		100		99
June		148,490				169,958				174,654					85,153			90,988			87,767				68%		71%		68%			99		100		99
Three Months Ended June 30		$	461,143			$	519,626			$	544,059				262,860			276,889			272,981				69%		72%		69%			99		100		99
Six Months Ended June 30		$	918,677			$	1,020,147			$	1,138,931				520,989			547,347			566,099				70%		71%		72%			99		100		99
July		$	151,416			$	175,253			$	171,483				87,143			94,144			88,119				67%		71%		65%			99		99		100
August		155,485				173,967				178,240					86,553			93,964			91,756				66%		71%		68%			99		99		100
September		155,991				170,234				180,923					84,393			90,955			92,579				67%		71%		71%			99		99		100
Three Months Ended September 30		$	462,892			$	519,454			$	530,646				258,089			279,063			272,454				67%		71%		68%			99		99		100
Nine Months Ended September 30		$	1,381,569			$	1,539,601			$	1,669,577				779,078			826,410			838,553				69%		71%		70%			99		99		100

 

		Rehabilitation Hospital
		Revenue													Patient Days										Occupancy Rate							Number of Hospitals Owned(1)
		2019				2020				2021					2019			2020			2021				2019		2020		2021			2019		2020		2021
		(in thousands)
January		$	50,615			$	61,673			$	68,297				27,434			32,111			34,404				74%		79%		82%			17		19		20
February		48,080				60,690				64,202					25,442			31,813			32,178				76%		84%		84%			17		19		20
March		55,863				59,656				75,305					29,940			30,644			35,857				78%		76%		85%			18		19		20
Three Months Ended March 31		$	154,558			$	182,019			$	207,804				82,816			94,568			102,439				76%		79%		84%			18		19		20
April		$	51,991			$	45,878			$	70,295				28,266			23,553			34,861				76%		61%		85%			18		19		20
May		56,019				57,815				71,190					29,730			29,787			35,604				75%		73%		84%			19		19		20
June		52,364				64,974				71,181					28,529			30,741			34,483				73%		78%		84%			19		19		20
Three Months Ended June 30		$	160,374			$	168,667			$	212,666				86,525			84,081			104,948				75%		71%		85%			19		19		20
Six Months Ended June 30		$	314,932			$	350,686			$	420,470				169,341			178,649			207,387				76%		75%		84%			19		19		20
July		$	57,077			$	62,312			$	70,467				30,054			31,986			34,894				75%		81%		83%			19		18		20
August		58,072				63,673				71,682					30,228			32,518			34,835				75%		83%		83%			19		18		20
September		58,220				62,090				70,285					29,172			31,176			33,224				75%		82%		81%			19		18		20
Three Months Ended September 30		$	173,369			$	188,075			$	212,434				89,454			95,680			102,953				75%		82%		82%			19		18		20
Nine Months Ended September 30		$	488,301			$	538,761			$	632,904				258,795			274,329			310,340				75%		77%		84%			19		18		20

 

		Outpatient Rehabilitation
		Revenue													Visits										Working Days(2)
		2019				2020				2021					2019			2020			2021				2019			2020			2021
		(in thousands)
January		$	83,185			$	90,924			$	76,763				687,007			757,171			625,964				22			22			20
February		78,573				88,239				77,063					658,610			739,061			641,942				20			20			20
March		85,147				76,086				98,135					708,866			626,433			832,248				21			22			23
Three Months Ended March 31		$	246,905			$	255,249			$	251,961				2,054,483			2,122,665			2,100,154				63			64			63
April		$	90,230			$	49,084			$	95,251				762,914			386,108			810,314				22			22			22
May		90,272				51,186				89,030					759,829			409,703			758,773				22			20			20
June		81,389				66,868				96,128					680,762			546,456			835,774				20			22			22
Three Months Ended June 30		$	261,891			$	167,138			$	280,409				2,203,505			1,342,267			2,404,861				64			64			64
Six Months Ended June 30		$	508,796			$	422,387			$	532,370				4,257,988			3,464,932			4,505,015				127			128			127
July		$	89,267			$	77,793			$	90,352				754,102			636,826			780,118				22			22			21
August		90,687				79,034				93,056					743,813			651,738			798,459				22			21			22
September		85,376				83,215				91,132					706,413			694,808			768,493				20			21			21
Three Months Ended September 30		$	265,330			$	240,042			$	274,540				2,204,328			1,983,372			2,347,070				64			64			64
Nine Months Ended September 30		$	774,126			$	662,429			$	806,910				6,462,316			5,448,304			6,852,085				191			192			191

 

		Concentra
		Revenue													Visits										Working Days(2)
		2019				2020				2021					2019			2020			2021				2019			2020			2021
		(in thousands)
January		$	133,507			$	141,236			$	127,103				985,598			1,032,069			867,793				22			22			20
February		126,309				133,690				132,349					919,065			965,741			869,910				20			20			20
March		136,505				123,609				163,388					1,006,944			879,585			1,057,871				21			22			23
Three Months Ended March 31		$	396,321			$	398,535			$	422,840				2,911,607			2,877,395			2,795,574				63			64			63
April		$	140,050			$	91,178			$	152,143				1,040,543			610,555			999,622				22			22			22
May		143,183				99,228				142,228					1,073,763			674,629			956,250				22			20			20
June		130,218				121,932				162,001					988,783			865,896			1,074,206				20			22			22
Three Months Ended June 30		$	413,451			$	312,338			$	456,372				3,103,089			2,151,080			3,030,078				64			64			64
Six Months Ended June 30		$	809,772			$	710,873			$	879,212				6,014,696			5,028,475			5,825,652				127			128			127
July		$	142,385			$	132,465			$	146,509				1,057,809			930,427			1,033,266				22			22			21
August		144,452				130,291				150,333					1,087,165			933,555			1,106,356				22			21			22
September		135,063				129,103				145,348					1,005,929			963,065			1,084,009				20			21			21
Three Months Ended September 30		$	421,900			$	391,859			$	442,190				3,150,903			2,827,047			3,223,631				64			64			64
Nine Months Ended September 30		$	1,231,672			$	1,102,732			$	1,321,402				9,165,599			7,855,522			9,049,283				191			192			191

______________________________

(1)

Represents the number of hospitals owned at the end of each period presented.

(2)

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

 

Stock Repurchase Program

The board of directors of Select Medical previously authorized a common stock repurchase program to repurchase up to $500.0 million worth of shares of its common stock. On November 2, 2021, the board of directors increased the capacity of the program from $500.0 million to $1.0 billion worth of shares and the program has been extended until December 31, 2023. The common stock repurchase program will remain in effect until then, 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.

During the quarter ended September 30, 2021, Select Medical repurchased 1,383,508 shares at a cost of approximately $47.5 million, or $34.34 per share, which includes transaction costs.  Since the inception of the common stock repurchase program through September 30, 2021, Select Medical has repurchased 39,964,416 shares at a cost of approximately $404.1 million, or $10.11 per share, which includes transaction costs.

Dividend

On November 2, 2021, Select Medical's board of directors declared a cash dividend of $0.125 per share. The dividend will be payable on or about November 29, 2021 to stockholders of record as of the close of business on November 16, 2021.

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.

Business Outlook

Select Medical is updating its business outlook for 2021 following the reporting of its third quarter 2021 results. Select Medical now expects revenue for the full year of 2021 to be in the range of $6.05 billion to $6.15 billion and Adjusted EBITDA for the full year of 2021 to be in the range of $980.0 million to $1.0 billion. Select Medical now expects fully diluted earnings per common share for the full year of 2021 to be in the range of $2.98 to $3.09. A reconciliation of net income to Adjusted EBITDA for the full year of 2021 is presented in table XI of this release.

Select Medical reaffirms its target compound annual growth rates, provided most recently in its August 5, 2021 press release, for revenue, Adjusted EBITDA, and earnings per common share. Select Medical continues to expect its compound annual growth for revenue to be in the range of 4% to 6% and compound annual growth for Adjusted EBITDA to be in the range of 7% to 8% from 2021 through 2023. Select Medical continues to expect compound annual growth for earnings per common share to be in the range of 17% to 20% from 2021 through 2023.

Conference Call

Select Medical will host a conference call regarding its third quarter results, as well as its business outlook and the impact of the COVID-19 pandemic on each of its reportable segments, on Friday, November 5, 2021, at 9:00am ET. The domestic dial in number for the call is 1-866-440-2669. The international dial in number is 1-409-220-9844. The conference ID for the call is 2359393. The conference call will be webcast simultaneously and can be accessed at Select Medical Holdings Corporation's website www.selectmedicalholdings.com.

For those unable to participate in the conference call, a replay will be available until 12:00pm ET, November 12, 2021. The replay number is 1-855-859-2056 (domestic) or 1-404-537-3406 (international). The conference ID for the replay will be 2359393. The replay can also be accessed at Select Medical Holdings Corporation's website, www.selectmedicalholdings.com.

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 2021 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:

• developments related to the COVID-19 pandemic including, but not limited to, the duration and severity of the pandemic, additional measures taken by government authorities and the private sector to limit the spread of COVID-19, and further legislative and regulatory actions which impact healthcare providers, including actions that may impact the Medicare program;
• 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;
• 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;
• 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;
• shortages in qualified nurses, therapists, physicians, or other licensed providers, or the inability to attract or retain healthcare professionals due to the heightened risk of infection related to the COVID-19 pandemic, could increase our operating costs significantly or limit our ability to staff our facilities;
• 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 quarterly reports on Form 10-Q and of the annual report on Form 10-K for the year ended December 31, 2020.

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 September 30, 2020 and 2021 (In thousands, except per share amounts, unaudited)
		2020				2021				% Change
Revenue		$	1,423,869			$	1,534,221			7.8	%
Costs and expenses:
Cost of services, exclusive of depreciation and amortization		1,180,951				1,297,682				9.9
General and administrative		35,516				37,885				6.7
Depreciation and amortization		50,110				50,128				0.0
Total costs and expenses		1,266,577				1,385,695				9.4
Other operating income		(1,160)				1,729				N/M
Income from operations		156,132				150,255				(3.8)
Other income and expense:
Equity in earnings of unconsolidated subsidiaries		8,765				11,452				30.7
Gain on sale of businesses		5,143				—				N/M
Interest expense		(34,026)				(33,825)				(0.6)
Income before income taxes		136,014				127,882				(6.0)
Income tax expense		31,557				27,665				(12.3)
Net income		104,457				100,217				(4.1)
Less: Net income attributable to non-controlling interests		27,511				23,289				(15.3)
Net income attributable to Select Medical		$	76,946			$	76,928			0.0	%
Basic and diluted earnings per common share:(1)		$	0.57			$	0.57

______________________________

(1)

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

N/M

Not meaningful.

 

 

II.  Condensed Consolidated Statements of Operations For the Nine Months Ended September 30, 2020 and 2021 (In thousands, except per share amounts, unaudited)
		2020				2021				% Change
Revenue		$	4,071,219			$	4,644,704			14.1	%
Costs and expenses:
Cost of services, exclusive of depreciation and amortization		3,463,778				3,882,579				12.1
General and administrative		102,808				109,025				6.0
Depreciation and amortization		154,133				150,702				(2.2)
Total costs and expenses		3,720,719				4,142,306				11.3
Other operating income		53,828				133,837				N/M
Income from operations		404,328				636,235				57.4
Other income and expense:
Equity in earnings of unconsolidated subsidiaries		19,677				33,180				68.6
Gain on sale of businesses		12,690				—				N/M
Interest income		—				4,749				N/M
Interest expense		(117,499)				(102,115)				(13.1)
Income before income taxes		319,196				572,049				79.2
Income tax expense		76,805				138,410				80.2
Net income		242,391				433,639				78.9
Less: Net income attributable to non-controlling interests		60,670				81,271				34.0
Net income attributable to Select Medical		$	181,721			$	352,368			93.9	%
Basic and diluted earnings per common share:(1)		$	1.35			$	2.61

______________________________

(1)

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

N/M

Not meaningful.

 

 

III.  Earnings per Share For the Three and Nine Months Ended September 30, 2020 and 2021 (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 nine months ended September 30, 2020 and 2021:
		Basic and Diluted EPS
		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2021				2020				2021
		(in thousands)
Net income		$	104,457			$	100,217			$	242,391			$	433,639
Less: net income attributable to non-controlling interests		27,511				23,289				60,670				81,271
Net income attributable to Select Medical		76,946				76,928				181,721				352,368
Less: net income attributable to participating securities		2,666				2,550				6,254				11,781
Net income attributable to common shares		$	74,280			$	74,378			$	175,467			$	340,587

 

The following tables set forth the computation of EPS under the two-class method for the three and nine months ended September 30, 2020 and 2021:
		Three Months Ended September 30,
		2020												2021
		Net Income Allocation				Shares(1)			Basic and Diluted EPS					Net Income Allocation				Shares(1)			Basic and Diluted EPS
Common shares		$	74,280			129,882			$	0.57				$	74,378			130,594			$	0.57
Participating securities		2,666				4,662			$	0.57				2,550				4,477			$	0.57
Total		$	76,946											$	76,928
		Nine Months Ended September 30,
		2020												2021
		Net Income Allocation				Shares(1)			Basic and Diluted EPS					Net Income Allocation				Shares(1)			Basic and Diluted EPS
Common shares		$	175,467			129,616			$	1.35				$	340,587			130,441			$	2.61
Participating securities		6,254				4,620			$	1.35				11,781				4,512			$	2.61
Total		$	181,721											$	352,368

______________________________

(1)

Represents the weighted average share count outstanding during the period.

 

 

IV.  Condensed Consolidated Balance Sheets (In thousands, unaudited)
		December 31, 2020				September 30, 2021
Assets
Current Assets:
Cash and cash equivalents		$	577,061			$	747,983
Accounts receivable		896,763				898,823
Other current assets		120,176				132,535
Total Current Assets		1,594,000				1,779,341
Operating lease right-of-use assets		1,032,217				1,069,953
Property and equipment, net		943,420				936,695
Goodwill		3,379,014				3,399,794
Identifiable intangible assets, net		387,541				378,433
Other assets		319,207				335,257
Total Assets		$	7,655,399			$	7,899,473
Liabilities and Equity
Current Liabilities:
Payables and accruals		$	800,918			$	919,976
Government advances		321,807				159,505
Unearned government assistance		82,607				2,414
Current operating lease liabilities		220,413				226,419
Current portion of long-term debt and notes payable		12,621				18,059
Total Current Liabilities		1,438,366				1,326,373
Non-current operating lease liabilities		875,367				909,950
Long-term debt, net of current portion		3,389,398				3,384,164
Non-current deferred tax liability		132,421				120,274
Other non-current liabilities		168,703				167,770
Total Liabilities		6,004,255				5,908,531
Redeemable non-controlling interests		398,171				627,330
Total equity		1,252,973				1,363,612
Total Liabilities and Equity		$	7,655,399			$	7,899,473

 

 

V.  Condensed Consolidated Statements of Cash Flows For the Three Months Ended September 30, 2020 and 2021 (In thousands, unaudited)
		2020				2021
Operating activities
Net income		$	104,457			$	100,217
Adjustments to reconcile net income to net cash provided by operating activities:
Distributions from unconsolidated subsidiaries		10,497				8,388
Depreciation and amortization		50,110				50,128
Provision for expected credit losses		28				(40)
Equity in earnings of unconsolidated subsidiaries		(8,765)				(11,452)
Gain on sale of assets and businesses		(16,842)				(581)
Stock compensation expense		6,962				8,194
Amortization of debt discount, premium and issuance costs		542				560
Deferred income taxes		(11,140)				(3,642)
Changes in operating assets and liabilities, net of effects of business combinations:
Accounts receivable		(104,592)				32,396
Other current assets		(23,528)				11,034
Other assets		4,831				8,860
Accounts payable and accrued expenses		133,748				17,795
Government advances		1,124				(91,767)
Unearned government assistance		21,433				(1,684)
Income taxes		(34,328)				(29,452)
Net cash provided by operating activities		134,537				98,954
Investing activities
Business combinations, net of cash acquired		(7,115)				(16,749)
Purchases of property and equipment		(34,319)				(48,944)
Investment in businesses		(11,108)				(5,182)
Proceeds from sale of assets and businesses		70,919				1,794
Net cash provided by (used in) investing activities		18,377				(69,081)
Financing activities
Borrowings of other debt		3,599				10,600
Principal payments on other debt		(7,087)				(7,596)
Dividends paid to common stockholders		—				(16,940)
Repurchase of common stock		(4,827)				(64,440)
Proceeds from issuance of non-controlling interests		—				14,238
Distributions to and purchases of non-controlling interests		(14,536)				(21,245)
Net cash used in financing activities		(22,851)				(85,383)
Net increase (decrease) in cash and cash equivalents		130,063				(55,510)
Cash and cash equivalents at beginning of period		509,737				803,493
Cash and cash equivalents at end of period		$	639,800			$	747,983
Supplemental information
Cash paid for interest		$	54,050			$	51,615
Cash paid for taxes		77,025				60,763

 

 

VI.  Condensed Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2020 and 2021 (In thousands, unaudited)
		2020				2021
Operating activities
Net income		$	242,391			$	433,639
Adjustments to reconcile net income to net cash provided by operating activities:
Distributions from unconsolidated subsidiaries		21,720				27,772
Depreciation and amortization		154,133				150,702
Provision for expected credit losses		281				172
Equity in earnings of unconsolidated subsidiaries		(19,677)				(33,180)
Gain on sale of assets and businesses		(24,723)				(87)
Stock compensation expense		20,828				22,002
Amortization of debt discount, premium and issuance costs		1,635				1,655
Deferred income taxes		(14,556)				(11,965)
Changes in operating assets and liabilities, net of effects of business combinations:
Accounts receivable		(91,413)				645
Other current assets		(22,815)				(1,822)
Other assets		16,335				(3,124)
Accounts payable and accrued expenses		142,027				107,710
Government advances		318,116				(165,470)
Unearned government assistance		66,938				(80,193)
Income taxes		9,415				13,524
Net cash provided by operating activities		820,635				461,980
Investing activities
Business combinations, net of cash acquired		(14,076)				(26,830)
Purchases of property and equipment		(105,572)				(125,386)
Investment in businesses		(25,857)				(16,367)
Proceeds from sale of assets and businesses		83,320				11,257
Net cash used in investing activities		(62,185)				(157,326)
Financing activities
Borrowings on revolving facilities		470,000				—
Payments on revolving facilities		(470,000)				—
Payments on term loans		(39,843)				—
Borrowings of other debt		35,086				19,515
Principal payments on other debt		(42,820)				(22,910)
Dividends paid to common stockholders		—				(33,816)
Repurchase of common stock		(14,242)				(66,050)
Proceeds from issuance of non-controlling interests		1,686				19,926
Distributions to and purchases of non-controlling interests		(28,196)				(50,397)
Purchase of membership interests of Concentra Group Holdings Parent		(366,203)				—
Net cash used in financing activities		(454,532)				(133,732)
Net increase in cash and cash equivalents		303,918				170,922
Cash and cash equivalents at beginning of period		335,882				577,061
Cash and cash equivalents at end of period		$	639,800			$	747,983
Supplemental information
Cash paid for interest		$	140,174			$	118,570
Cash paid for taxes		81,945				136,857

 

 

VII.  Key Statistics For the Three Months Ended September 30, 2020 and 2021 (unaudited)
		2020				2021				% Change
Critical Illness Recovery Hospital
Number of hospitals – end of period(a)		100				100
Revenue (,000)		$	519,454			$	530,646			2.2	%
Number of patient days(b)(c)		279,063				272,454				(2.4)	%
Number of admissions(b)(d)		9,380				9,250				(1.4)	%
Revenue per patient day(b)(e)		$	1,845			$	1,931			4.7	%
Adjusted EBITDA (,000)		$	88,830			$	57,245			(35.6)	%
Adjusted EBITDA margin		17.1		%		10.8		%
Rehabilitation Hospital
Number of hospitals – end of period(a)		29				30
Revenue (,000)		$	188,075			$	212,434			13.0	%
Number of patient days(b)(c)		95,680				102,953				7.6	%
Number of admissions(b)(d)		6,443				7,243				12.4	%
Revenue per patient day(b)(e)		$	1,775			$	1,881			6.0	%
Adjusted EBITDA (,000)		$	44,637			$	44,076			(1.3)	%
Adjusted EBITDA margin		23.7		%		20.7		%
Outpatient Rehabilitation
Number of clinics – end of period(a)		1,777				1,850
Revenue (,000)		$	240,042			$	274,540			14.4	%
Number of visits(b)(f)		1,983,372				2,347,070				18.3	%
Revenue per visit(b)(g)		$	104			$	102			(1.9)	%
Adjusted EBITDA (,000)		$	30,623			$	38,762			26.6	%
Adjusted EBITDA margin		12.8		%		14.1		%
Concentra
Number of centers – end of period(b)		523				519
Revenue (,000)		$	391,859			$	442,190			12.8	%
Number of visits(b)(f)		2,827,047				3,223,631				14.0	%
Revenue per visit(b)(g)		$	121			$	124			2.5	%
Adjusted EBITDA (,000)		$	80,547			$	99,832			23.9	%
Adjusted EBITDA margin		20.6		%		22.6		%

______________________________

(a)

Includes managed locations.

(b)

Excludes managed locations. For purposes of the Concentra segment, onsite clinics and community-based outpatient 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 number of visits in which patients were treated at Select Medical's outpatient rehabilitation clinics and Concentra centers during the periods presented.

(g)

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 and community-based outpatient clinics.

 

 

VIII.  Key Statistics For the Nine Months Ended September 30, 2020 and 2021 (unaudited)
		2020				2021				% Change
Critical Illness Recovery Hospital
Number of hospitals – end of period(a)		100				100
Revenue (,000)		$	1,539,601			$	1,669,577			8.4	%
Number of patient days(b)(c)		826,410				838,553				1.5	%
Number of admissions(b)(d)		28,080				28,135				0.2	%
Revenue per patient day(b)(e)		$	1,850			$	1,982			7.1	%
Adjusted EBITDA (,000)		$	267,143			$	243,421			(8.9)	%
Adjusted EBITDA margin		17.4		%		14.6		%
Rehabilitation Hospital
Number of hospitals – end of period(a)		29				30
Revenue (,000)		$	538,761			$	632,904			17.5	%
Number of patient days(b)(c)		274,329				310,340				13.1	%
Number of admissions(b)(d)		18,489				21,734				17.6	%
Revenue per patient day(b)(e)		$	1,777			$	1,861			4.7	%
Adjusted EBITDA (,000)		$	110,811			$	145,378			31.2	%
Adjusted EBITDA margin		20.6		%		23.0		%
Outpatient Rehabilitation
Number of clinics – end of period(a)		1,777				1,850
Revenue (,000)		$	662,429			$	806,910			21.8	%
Number of visits(b)(f)		5,448,304				6,852,085				25.8	%
Revenue per visit(b)(g)		$	105			$	103			(1.9)	%
Adjusted EBITDA (,000)		$	51,463			$	110,724			115.2	%
Adjusted EBITDA margin		7.8		%		13.7		%
Concentra
Number of centers – end of period(b)		523				519
Revenue (,000)		$	1,102,732			$	1,321,402			19.8	%
Number of visits(b)(f)		7,855,522				9,049,283				15.2	%
Revenue per visit(b)(g)		$	123			$	125			1.6	%
Adjusted EBITDA (,000)		$	183,510			$	318,907			73.8	%
Adjusted EBITDA margin		16.6		%		24.1		%

______________________________

(a)

Includes managed locations.

(b)

Excludes managed locations. For purposes of the Concentra segment, onsite clinics and community-based outpatient 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 number of visits in which patients were treated at Select Medical's outpatient rehabilitation clinics and Concentra centers during the periods presented.

(g)

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 and community-based outpatient clinics.

 

 

IX. Net Income to Adjusted EBITDA Reconciliation For the Three and Nine Months Ended September 30, 2020 and 2021 (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 to evaluate financial performance and determine resource allocation for each of Select Medical's operating segments. Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles ("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, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries.
	Three Months Ended September 30,								Nine Months Ended September 30,
	2020				2021				2020				2021
Net income	$	104,457			$	100,217			$	242,391			$	433,639
Income tax expense	31,557				27,665				76,805				138,410
Interest expense	34,026				33,825				117,499				102,115
Interest income	—				—				—				(4,749)
Gain on sale of businesses	(5,143)				—				(12,690)				—
Equity in earnings of unconsolidated subsidiaries	(8,765)				(11,452)				(19,677)				(33,180)
Income from operations	156,132				150,255				404,328				636,235
Stock compensation expense:
Included in general and administrative	5,600				6,457				16,488				17,537
Included in cost of services	1,362				1,737				4,340				4,465
Depreciation and amortization	50,110				50,128				154,133				150,702
Adjusted EBITDA	$	213,204			$	208,577			$	579,289			$	808,939
Critical illness recovery hospital(a)	$	88,830			$	57,245			$	267,143			$	243,421
Rehabilitation hospital	44,637				44,076				110,811				145,378
Outpatient rehabilitation	30,623				38,762				51,463				110,724
Concentra(b)	80,547				99,832				183,510				318,907
Other(c)(d)	(31,433)				(31,338)				(33,638)				(9,491)
Adjusted EBITDA	$	213,204			$	208,577			$	579,289			$	808,939

______________________________

(a)

For the nine months ended September 30, 2021, Adjusted EBITDA included other operating income of $17.9 million. The other operating income related to the outcome of litigation with the Centers for Medicare & Medicaid Services.

(b)

For the three and nine months ended September 30, 2021, Adjusted EBITDA included other operating income of $1.6 million and $34.0 million, respectively. For the three and nine months ended September 30, 2020, Adjusted EBITDA included other operating income of $0.4 million and $1.1 million, respectively. The other operating income is primarily related to the recognition of payments received under the Provider Relief Fund.

(c)

For the three and nine months ended September 30, 2021, Adjusted EBITDA included other operating income of $0.1 million and $82.0 million, respectively. For the three and nine months ended September 30, 2020, Adjusted EBITDA included a reduction to other operating income of $1.5 million and other operating income of $52.7 million, respectively. The other operating income is related to the recognition of payments received under the Provider Relief Fund.

(d)

Other primarily includes general and administrative costs and other operating income, as discussed further above.

 

 

X. Reconciliation of Earnings per Common Share to Adjusted Earnings per Common Share For the Three and Nine Months Ended September 30, 2020 and 2021 (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 September 30,
	2020				Per Share(a)				2021				Per Share(a)
Net income attributable to common shares(a)	$	74,280			$	0.57			$	74,378			$	0.57
Adjustments:(b)
Gains on sales of businesses, net of tax effects of $234	(1,189)				(0.01)				—				—
Adjusted net income attributable to common shares	$	73,091			$	0.56			$	74,378			$	0.57
	Nine Months Ended September 30,
	2020				Per Share(a)				2021				Per Share(a)
Net income attributable to common shares(a)	$	175,467			$	1.35			$	340,587			$	2.61
Adjustments:(b)
Gains on sales of businesses, net of tax effects of $3,272	(5,089)				(0.04)				—				—
Adjusted net income attributable to common shares	$	170,378			$	1.31			$	340,587			$	2.61

______________________________

(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.

 

 

XI. Net Income to Adjusted EBITDA Reconciliation Business Outlook for the Year Ending December 31, 2021 (In millions, unaudited)
The following is a reconciliation of full year 2021 Adjusted EBITDA expectations as computed at the low and high points of the range to the closest comparable GAAP financial measure. Refer to table IX for the definition of Adjusted EBITDA and a discussion of Select Medical's use of Adjusted EBITDA in evaluating financial performance. Each item presented in the below table is an estimation of full year 2021 expectations.
	Range
Non-GAAP Measure Reconciliation	Low				High
Net income attributable to Select Medical	$	402			$	417
Net income attributable to non-controlling interests	98				98
Net income	500				515
Income tax expense	162				167
Interest income	(5)				(5)
Interest expense	137				137
Equity in earnings of unconsolidated subsidiaries	(44)				(44)
Income from operations	750				770
Stock compensation expense	29				29
Depreciation and amortization	201				201
Adjusted EBITDA	$	980			$	1,000

 

 

 

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SOURCE Select Medical Holdings Corporation

FAQ

What was Select Medical's revenue for Q3 2021?

Select Medical's revenue for Q3 2021 was $1.534 billion, a 7.8% increase year-over-year.

How much is the declared dividend and when will it be paid?

The declared dividend is $0.125 per share, payable on November 29, 2021.

What is the stock symbol for Select Medical?

The stock symbol for Select Medical is SEM.

What was Select Medical's net income for nine months ended September 30, 2021?

Select Medical's net income for the nine months ended September 30, 2021, was $433.6 million.

What is the updated outlook for Select Medical's revenue in 2021?

Select Medical expects revenue for the full year of 2021 to be in the range of $6.05 billion to $6.15 billion.