MECHANICSBURG, Pa., Feb. 20,
2025 /PRNewswire/ -- Select Medical Holdings
Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM)
today announced results for its fourth quarter and year ended
December 31, 2024, its 2025 business outlook, and the
declaration of a cash dividend.
On November 25, 2024, we completed
a tax-free distribution of 104,093,503 shares of common stock of
Concentra Group Holdings Parent, Inc. ("Concentra") to our
stockholders. Holders of our common stock received 0.806971 shares
of Concentra common stock for each outstanding share of our common
stock owned as of November 18, 2024.
Following the completion of the distribution, we no longer own any
shares of Concentra's common stock. The results of Concentra, and
related transaction costs, have been reflected as discontinued
operations in the consolidated statements of operations, and prior
periods have been recast to reflect this presentation.
For the fourth quarter ended December 31, 2024,
revenue increased 7.8% to $1,312.6
million, compared to $1,218.1
million for the same quarter, prior year. Income from
continuing operations before other income and expense was
$21.1 million for the fourth quarter
ended December 31, 2024, compared to
$64.9 million for the same quarter,
prior year. Loss from continuing operations, net of tax, was
$10.5 million for the fourth quarter
ended December 31, 2024, compared to
income from continuing operations, net of tax, of $30.3 million for the same quarter, prior year.
In connection with the distribution of Concentra, there was a
one-time acceleration of $45.9
million of stock compensation expense, which reduced income
(loss) from continuing operations for the quarter ended
December 31, 2024. Additionally,
during the quarter ended December 31,
2024, we recognized a loss on early retirement of debt of
$17.9 million as a result of the debt
refinancing transactions described below. Adjusted EBITDA increased
3.8% to $116.0 million for the fourth
quarter ended December 31, 2024,
compared to $111.8 million for the
same quarter, prior year. Diluted loss per common share from
continuing operations was $0.19 for
the fourth quarter ended December 31,
2024, compared to earnings per common share from continuing
operations of $0.12 for the same
quarter, prior year. Adjusted earnings per common share from
continuing operations, net of tax, which excludes the one-time
acceleration of stock compensation expense, the loss on early
retirement of debt, and certain reclassified transaction costs
associated with the Concentra transaction, increased
50.0% to $0.18 for the fourth quarter ended
December 31, 2024, compared to $0.12 for the same quarter, prior year. The
definition of Adjusted EBITDA and a reconciliation of income from
continuing operations, net of tax, to Adjusted EBITDA are presented
in table IX of this release. A reconciliation of earnings per
common share from continuing operations, net of tax, to adjusted
earnings per common share from continuing operations, net of tax,
is presented in table X of this release.
For the year ended December 31, 2024, revenue increased
7.5% to $5,187.1 million, compared to
$4,826.0 million for the prior year.
Income from continuing operations before other income and expense
increased 0.4% to $268.3 million for
the year ended December 31, 2024, compared to $267.2 million for the prior year. Income from
continuing operations, net of tax, increased 17.7% to $130.0 million for the year ended
December 31, 2024, compared to $110.5
million for the prior year. In connection with the
distribution of Concentra, there was a one-time acceleration of
$45.9 million of stock compensation
expense, which reduced income from continuing operations for the
year ended December 31, 2024.
Additionally, during the year ended December
31, 2024, we recognized a loss on early retirement of debt
of $28.8 million. Adjusted EBITDA
increased 14.4% to $510.4 million for
the year ended December 31, 2024, compared to $446.1 million for the prior year. Earnings per
common share from continuing operations, net of tax, increased
10.9% to $0.51 for the year ended
December 31, 2024, compared to $0.46 for the prior year. Adjusted earnings per
common share from continuing operations, net of tax, which excludes
the one-time acceleration of stock compensation expense and the
loss on early retirement of debt, increased 74.1% to $0.94 for the year ended December 31, 2024,
compared to $0.54 for the prior year.
The definition of Adjusted EBITDA and a reconciliation of income
from continuing operations, net of tax, to Adjusted EBITDA are
presented in table IX of this release. A reconciliation of earnings
per common share from continuing operations, net of tax, to
adjusted earnings per common share from continuing operations, net
of tax, 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, and
outpatient rehabilitation clinics 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, and the
outpatient rehabilitation segment. As of December 31, 2024, Select Medical operated 104
critical illness recovery hospitals in 29 states, 35 rehabilitation
hospitals in 14 states, and 1,914 outpatient rehabilitation clinics
in 39 states and the District of
Columbia. At December 31,
2024, Select Medical had operations in 40 states and the
District of Columbia. Information
about Select Medical is available at www.selectmedical.com.
Critical Illness Recovery Hospital Segment
For the fourth quarter ended December 31,
2024, revenue for the critical illness recovery hospital
segment increased 5.9% to $600.4
million, compared to $567.1
million for the same quarter, prior year. Adjusted EBITDA
for the critical illness recovery hospital segment increased 10.0%
to $63.1 million for the fourth
quarter ended December 31, 2024,
compared to $57.4 million for the
same quarter, prior year. The Adjusted EBITDA margin for the
critical illness recovery hospital segment was 10.5% for the fourth
quarter ended December 31, 2024,
compared to 10.1% for the same quarter, prior year. Certain
critical illness recovery hospital key statistics are presented in
table VII of this release for the fourth quarters ended
December 31, 2024 and 2023.
For the year ended December 31,
2024, revenue for the critical illness recovery hospital
segment increased 6.3% to $2,444.2
million, compared to $2,299.8
million for the prior year. Adjusted EBITDA for the critical
illness recovery hospital segment increased 22.6% to $301.6 million for the year ended December 31, 2024, compared to $246.0 million for the prior year. The Adjusted
EBITDA margin for the critical illness recovery hospital segment
was 12.3% for the year ended December 31,
2024, compared to 10.7% for the prior year. Certain critical
illness recovery hospital key statistics are presented in table
VIII of this release for the years ended December 31, 2024 and 2023.
Rehabilitation Hospital Segment
For the fourth quarter ended December 31,
2024, revenue for the rehabilitation hospital segment
increased 13.1% to $294.4 million,
compared to $260.2 million for the
same quarter, prior year. Adjusted EBITDA for the rehabilitation
hospital segment was $62.3 million
for the fourth quarter ended December 31,
2024, compared to $66.3
million for the same quarter, prior year. The Adjusted
EBITDA margin for the rehabilitation hospital segment was 21.2% for
the fourth quarter ended December 31,
2024, compared to 25.5% for the same quarter, prior year.
Certain rehabilitation hospital key statistics are presented in
table VII of this release for both the fourth quarters ended
December 31, 2024 and 2023.
For the year ended December 31,
2024, revenue for the rehabilitation hospital segment
increased 13.4% to $1,110.6 million,
compared to $979.6 million for the
prior year. Adjusted EBITDA for the rehabilitation hospital segment
increased 10.8% to $245.7 million for
the year ended December 31, 2024,
compared to $221.9 million for the
prior year. The Adjusted EBITDA margin for the rehabilitation
hospital segment was 22.1% for the year ended December 31, 2024, compared to 22.6% for the
prior year. Certain rehabilitation hospital key statistics are
presented in table VIII of this release for the years ended
December 31, 2024 and 2023.
Outpatient Rehabilitation Segment
For the fourth quarter ended December 31,
2024, revenue for the outpatient rehabilitation segment
increased 7.2% to $319.6 million,
compared to $298.2 million for the
same quarter, prior year. Adjusted EBITDA for the outpatient
rehabilitation segment increased 18.2% to $26.6 million for the fourth quarter ended
December 31, 2024, compared to
$22.5 million for the same quarter,
prior year. The Adjusted EBITDA margin for the outpatient
rehabilitation segment was 8.3% for the fourth quarter ended
December 31, 2024, compared to 7.5%
for the same quarter, prior year. Certain outpatient rehabilitation
key statistics are presented in table VII of this release for the
fourth quarters ended December 31,
2024 and 2023.
For the year ended December 31,
2024, revenue for the outpatient rehabilitation segment
increased 5.2% to $1,250.3 million,
compared to $1,188.9 million for the
prior year. Adjusted EBITDA for the outpatient rehabilitation
segment was $108.6 million for the
year ended December 31, 2024,
compared to $111.9 million for the
prior year. The Adjusted EBITDA margin for the outpatient
rehabilitation segment was 8.7% for the year ended December 31, 2024, compared to 9.4% for the prior
year. Certain outpatient rehabilitation key statistics are
presented in table VIII of this release for the years ended
December 31, 2024 and 2023.
Dividend
On February 13, 2025, Select Medical's board of directors
declared a cash dividend of $0.0625
per share. The dividend will be payable on or about March 13,
2025 to stockholders of record as of the close of business on
March 3, 2025.
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 year ended December 31,
2024. Since the inception of the common stock repurchase program
through December 31, 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.
Financing Transactions
On December 3, 2024, we entered
into Amendment No. 11 to our credit agreement. Amendment No. 11
established a new incremental term loan in the aggregate amount of
$1,050.0 million. The maturity date
of the term loan is December 3, 2031.
In addition, Amendment No. 11 extended the maturity date of the
revolving credit facility to December 3,
2029 and increased the revolving credit facility commitments
from $550.0 million to
$600.0 million. The interest
rate on the term loan is equal to Term SOFR plus 2.00%, or the
Alternative Base Rate (as defined in the credit agreement) plus
1.00%. The interest rate on the revolving facility is equal to
Adjusted Term SOFR plus a percentage ranging from 2.25% to 2.50%,
or the Alternative Base Rate (as defined in the credit agreement)
plus a percentage ranging from 1.25% to 1.50%, in each case subject
to a specified leverage ratio.
On December 3, 2024, Select issued
and sold $550.0 million aggregate
principal amount of 6.250% senior notes due December 1, 2032. Select used the net proceeds of
the 6.250% senior notes due 2032, together with the proceeds from
the incremental term loan borrowings (as described above) and cash
on hand, to redeem in full the $1,225.0 million senior notes due 2026,
repay the existing term loans, and pay related fees and expenses
associated with the financing. Interest on the 2032 senior notes
accrues at the rate of 6.250% per annum and is payable
semi-annually in arrears on June 1
and December 1 of each year,
beginning on June 1, 2025.
Business Outlook
Select Medical is issuing its business outlook for 2025. Select
Medical expects revenue to be in the range of $5.4 billion to $5.6
billion, Adjusted EBITDA to be in the range of $520.0 million to $540.0
million, and fully diluted earnings per share to be in the
range of $1.09 to $1.19. A reconciliation of full year 2025
Adjusted EBITDA expectations to income from continuing operations,
net of tax, is presented in table XI of this release.
Conference Call
Select Medical will host a conference call regarding its results
for the fourth quarter and full year ended December 31, 2024,
and its business outlook on Friday, February
21, 2025, 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 2025 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;
- the negative impact of public threats such as a global pandemic
or widespread outbreak of an infectious disease similar to the
COVID-19 pandemic;
- 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, 2024.
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 December 31, 2023 and 2024
(In thousands,
except per share amounts, unaudited)
|
|
|
|
2023
|
|
2024
|
|
%
Change
|
|
Revenue
|
|
$
1,218,116
|
|
$
1,312,564
|
|
7.8 %
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of services,
exclusive of depreciation and amortization
|
|
1,074,062
|
|
1,175,099
|
|
9.4
|
|
General and
administrative
|
|
44,090
|
|
80,197
|
|
81.9
|
|
Depreciation and
amortization
|
|
35,485
|
|
36,283
|
|
2.2
|
|
Total costs and
expenses
|
|
1,153,637
|
|
1,291,579
|
|
12.0
|
|
Other operating
income
|
|
458
|
|
106
|
|
(76.9)
|
|
Income from continuing
operations before other income and
expense
|
|
64,937
|
|
21,091
|
|
(67.5)
|
|
Other income and
expense:
|
|
|
|
|
|
|
|
Loss on early
retirement of debt
|
|
—
|
|
(17,906)
|
|
N/M
|
|
Equity in earnings of
unconsolidated subsidiaries
|
|
10,195
|
|
10,423
|
|
2.2
|
|
Interest
expense
|
|
(40,263)
|
|
(28,551)
|
|
(29.1)
|
|
Income (loss) from
continuing operations before income taxes
|
|
34,869
|
|
(14,943)
|
|
N/M
|
|
Income tax expense
(benefit) from continuing operations
|
|
4,618
|
|
(4,487)
|
|
N/M
|
|
Income (loss) from
continuing operations, net of tax
|
|
30,251
|
|
(10,456)
|
|
N/M
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income from
discontinued business
|
|
38,779
|
|
24,669
|
|
(36.4)
|
|
Income tax expense
from discontinued business
|
|
7,232
|
|
10,457
|
|
44.6
|
|
Income from
discontinued operations, net of tax
|
|
31,547
|
|
14,212
|
|
(54.9)
|
|
Net income
|
|
61,798
|
|
3,756
|
|
(93.9)
|
|
Less: Net income
attributable to non-controlling interests
|
|
15,529
|
|
19,806
|
|
27.5
|
|
Net income (loss)
attributable to Select Medical
|
|
$
46,269
|
|
$
(16,050)
|
|
N/M
|
|
Net income (loss)
attributable to Select Medical's common
stockholders:
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
|
$
15,743
|
|
$
(23,664)
|
|
|
|
Income from
discontinued operations, net of tax
|
|
30,526
|
|
7,614
|
|
|
|
Net income (loss)
attributable to Select Medical's common
stockholders
|
|
$
46,269
|
|
$
(16,050)
|
|
|
|
Basic earnings (loss)
per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
0.12
|
|
$
(0.18)
|
|
|
|
Discontinued
operations
|
|
0.24
|
|
0.06
|
|
|
|
Total basic earnings
(loss) per common share
|
|
$
0.36
|
|
$
(0.12)
|
|
|
|
Diluted earnings (loss)
per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
0.12
|
|
$
(0.19)
|
|
|
|
Discontinued
operations
|
|
0.24
|
|
0.06
|
|
|
|
Total diluted earnings
(loss) per common share
|
|
$
0.36
|
|
$
(0.13)
|
|
|
|
_______________________________________________________________________________
|
|
(1)
Refer to table III for calculation of earnings per common
share.
|
|
N/M
Not meaningful.
|
|
II. Condensed
Consolidated Statements of Operations
For the Years Ended
December 31, 2023 and 2024
(In thousands,
except per share amounts, unaudited)
|
|
|
|
2023
|
|
2024
|
|
%
Change
|
|
Revenue
|
|
$
4,825,977
|
|
$
5,187,105
|
|
7.5 %
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of services,
exclusive of depreciation and amortization
|
|
4,254,369
|
|
4,553,461
|
|
7.0
|
|
General and
administrative
|
|
170,193
|
|
225,869
|
|
32.7
|
|
Depreciation and
amortization
|
|
135,691
|
|
142,866
|
|
5.3
|
|
Total costs and
expenses
|
|
4,560,253
|
|
4,922,196
|
|
7.9
|
|
Other operating
income
|
|
1,518
|
|
3,406
|
|
124.4
|
|
Income from continuing
operations before other income and
expense
|
|
267,242
|
|
268,315
|
|
0.4
|
|
Other income and
expense:
|
|
|
|
|
|
|
|
Loss on early
retirement of debt
|
|
(14,692)
|
|
(28,845)
|
|
96.3
|
|
Equity in earnings of
unconsolidated subsidiaries
|
|
41,339
|
|
63,904
|
|
54.6
|
|
Interest
expense
|
|
(154,165)
|
|
(128,605)
|
|
(16.6)
|
|
Income from continuing
operations before income taxes
|
|
139,724
|
|
174,769
|
|
25.1
|
|
Income tax expense from
continuing operations
|
|
29,253
|
|
44,782
|
|
53.1
|
|
Income from continuing
operations, net of tax
|
|
110,471
|
|
129,987
|
|
17.7
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income from
discontinued business
|
|
242,632
|
|
223,414
|
|
(7.9)
|
|
Income tax expense from
discontinued business
|
|
53,372
|
|
56,697
|
|
6.2
|
|
Income from
discontinued operations, net of tax
|
|
189,260
|
|
166,717
|
|
(11.9)
|
|
Net income
|
|
299,731
|
|
296,704
|
|
(1.0)
|
|
Less: Net income
attributable to non-controlling interests
|
|
56,240
|
|
82,666
|
|
47.0
|
|
Net income attributable
to Select Medical
|
|
$
243,491
|
|
$
214,038
|
|
(12.1) %
|
|
Net income attributable
to Select Medical's common
stockholders:
|
|
|
|
|
|
|
|
Income from continuing
operations, net of tax
|
|
$
59,027
|
|
$
65,473
|
|
|
|
Income from
discontinued operations, net of tax
|
|
184,464
|
|
148,565
|
|
|
|
Net income attributable
to Select Medical's common
stockholders:
|
|
$
243,491
|
|
$
214,038
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Continuing operations -
basic and diluted
|
|
$
0.46
|
|
$
0.51
|
|
|
|
Discontinued operations
- basic and diluted
|
|
1.44
|
|
1.15
|
|
|
|
Basic and diluted
earnings per common share:(1)
|
|
$
1.91
|
(2)
|
$
1.66
|
|
|
|
_______________________________________________________________________________
|
|
(1)
Refer to table III for calculation of earnings per common
share.
|
|
(2)
Does not total due to rounding.
|
|
N/M
Not meaningful.
|
|
III. Earnings
per Share
For the Three Months and Years Ended December
31, 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. Select Medical applies the treasury stock
method when computing diluted EPS.
The following table sets forth the income from continuing
operations, net of tax, attributable to Select Medical's common
stockholders, its common shares outstanding, and its participating
securities outstanding for the three months and years ended
December 31, 2023 and 2024:
|
|
Basic
EPS
|
|
|
Three Months
Ended
December 31,
|
|
Years
Ended
December
31,
|
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
Income (loss) from
continuing operations, net of tax
|
|
$
30,251
|
|
$
(10,456)
|
|
$
110,471
|
|
$
129,987
|
|
Less: Net income
attributable to non-controlling interests
|
|
14,508
|
|
13,208
|
|
51,444
|
|
64,514
|
|
Income (loss) from
continuing operations, net of tax,
attributable to Select Medical's common stockholders
|
|
15,743
|
|
(23,664)
|
|
59,027
|
|
65,473
|
|
Less: distributed and
undistributed net income (loss)
attributable to participating securities(1)
|
|
556
|
|
(597)
|
|
2,127
|
|
2,319
|
|
Income (loss) from
continuing operations, net of tax,
attributable to common shares
|
|
$
15,187
|
|
$
(23,067)
|
|
$
56,900
|
|
$
63,154
|
The following tables set forth the computation of EPS for the
three months and years ended December 31,
2023 and 2024:
|
|
Three Months Ended
December 31,
|
|
|
2023
|
|
|
Income from
Continuing
Operations, Net of
Tax, Allocation
|
|
Shares(1)
|
|
Basic and
Diluted
EPS
|
|
|
(in thousands,
except for per share amounts)
|
|
Common
shares
|
|
$
15,187
|
|
123,817
|
|
$
0.12
|
|
Participating
securities
|
|
556
|
|
4,530
|
|
$
0.12
|
|
Total
|
|
$
15,743
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2024
|
|
|
Loss from
Continuing
Operations,
Net of Tax,
Allocation -
Basic
|
|
Basic
Shares(1)
|
|
Basic
EPS
|
|
|
Loss from
Continuing
Operations,
Net of Tax,
Allocation -
Diluted
|
|
Diluted
Shares(1)
|
|
Diluted
EPS
|
|
|
(in thousands,
except for per share amounts)
|
|
Common
shares
|
|
$
(23,067)
|
|
125,923
|
|
$
(0.18)
|
|
|
$
(23,664)
|
|
127,535
|
|
$
(0.19)
|
|
Participating
securities
|
|
(597)
|
|
3,261
|
|
$
(0.18)
|
|
|
|
|
|
|
|
|
Total
|
|
$
(23,664)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31,
|
|
|
2023
|
|
|
2024
|
|
|
Income from
Continuing
Operations,
Net of Tax,
Allocation
|
|
Shares(1)
|
|
Basic and
Diluted EPS
|
|
|
Income from
Continuing
Operations,
Net of Tax,
Allocation
|
|
Shares(1)
|
|
Basic and
Diluted EPS
|
|
|
(in thousands,
except for per share amounts)
|
|
Common
shares
|
|
$
56,900
|
|
123,105
|
|
$
0.46
|
|
|
$
63,154
|
|
124,614
|
|
$
0.51
|
|
Participating
securities
|
|
2,127
|
|
4,601
|
|
$
0.46
|
|
|
2,319
|
|
4,576
|
|
$
0.51
|
|
Total
|
|
$
59,027
|
|
|
|
|
|
|
$
65,473
|
|
|
|
|
|
_______________________________________________________________________________
|
|
(1)
Represents the weighted average share count outstanding during the
period.
|
|
IV. Condensed
Consolidated Balance Sheets
(In thousands,
unaudited)
|
|
|
|
December
31,
|
|
|
2023
|
|
2024
|
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
52,632
|
|
$
59,694
|
|
Accounts
receivable
|
|
724,141
|
|
821,385
|
|
Current assets of
discontinued operations
|
|
291,064
|
|
—
|
|
Other current
assets
|
|
189,809
|
|
138,698
|
|
Total Current
Assets
|
|
1,257,646
|
|
1,019,777
|
|
Operating lease
right-of-use assets
|
|
790,764
|
|
908,095
|
|
Property and equipment,
net
|
|
845,191
|
|
872,185
|
|
Goodwill
|
|
2,283,425
|
|
2,331,898
|
|
Identifiable intangible
assets, net
|
|
105,147
|
|
103,183
|
|
Non-current assets of
discontinued operations
|
|
2,039,142
|
|
—
|
|
Other assets
|
|
368,316
|
|
372,813
|
|
Total
Assets
|
|
$
7,689,631
|
|
$
5,607,951
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Payables and
accruals
|
|
$
735,857
|
|
$
777,781
|
|
Current operating
lease liabilities
|
|
172,454
|
|
179,601
|
|
Current portion of
long-term debt and notes payable
|
|
68,874
|
|
20,269
|
|
Current liabilities of
discontinued operations
|
|
271,280
|
|
—
|
|
Total Current
Liabilities
|
|
1,248,465
|
|
977,651
|
|
Non-current operating
lease liabilities
|
|
668,557
|
|
787,124
|
|
Long-term debt, net of
current portion
|
|
3,584,384
|
|
1,691,546
|
|
Non-current deferred
tax liability
|
|
119,942
|
|
81,497
|
|
Non-current liabilities
of discontinued operations
|
|
411,487
|
|
—
|
|
Other non-current
liabilities
|
|
82,781
|
|
73,038
|
|
Total
Liabilities
|
|
6,115,616
|
|
3,610,856
|
|
Redeemable
non-controlling interests
|
|
26,297
|
|
10,167
|
|
Total Equity
|
|
1,547,718
|
|
1,986,928
|
|
Total Liabilities
and Equity
|
|
$
7,689,631
|
|
$
5,607,951
|
|
V. Condensed
Consolidated Statements of Cash Flows
For the Three Months
Ended December 31, 2023 and 2024
(In thousands,
unaudited)
|
|
|
|
2023
|
|
2024
|
|
Operating
activities
|
|
|
|
|
|
Net income
|
|
$
61,798
|
|
$
3,756
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Distributions from
unconsolidated subsidiaries
|
|
13,521
|
|
8,742
|
|
Depreciation and
amortization
|
|
53,984
|
|
45,743
|
|
Provision for expected
credit losses
|
|
(71)
|
|
2,620
|
|
Equity in earnings of
unconsolidated subsidiaries
|
|
(10,195)
|
|
(10,423)
|
|
Loss on extinguishment
of debt
|
|
—
|
|
8,099
|
|
(Gain) loss on sale of
assets and businesses
|
|
(50)
|
|
48
|
|
Stock compensation
expense
|
|
11,818
|
|
61,271
|
|
Amortization of debt
discount, premium and issuance costs
|
|
748
|
|
684
|
|
Deferred income
taxes
|
|
930
|
|
2,507
|
|
Changes in operating
assets and liabilities, net of effects of business
combinations:
|
|
|
|
|
|
Accounts
receivable
|
|
4,170
|
|
20,916
|
|
Other current
assets
|
|
(12,098)
|
|
10,216
|
|
Other
assets
|
|
3,003
|
|
(1,009)
|
|
Accounts payable and
accrued expenses
|
|
51,884
|
|
(27,738)
|
|
Net cash provided by
operating activities
|
|
179,442
|
|
125,432
|
|
Investing
activities
|
|
|
|
|
|
Business combinations,
net of cash acquired
|
|
(9,085)
|
|
(10,786)
|
|
Purchases of property
and equipment
|
|
(60,603)
|
|
(63,429)
|
|
Proceeds from sale of
assets and businesses
|
|
104
|
|
22
|
|
Net cash used in
investing activities
|
|
(69,584)
|
|
(74,193)
|
|
Financing
activities
|
|
|
|
|
|
Borrowings on revolving
facilities
|
|
270,000
|
|
290,000
|
|
Payments on revolving
facilities
|
|
(330,000)
|
|
(195,000)
|
|
Proceeds from term
loans, net of issuance costs
|
|
—
|
|
1,043,355
|
|
Payments on term
loans
|
|
(5,258)
|
|
(372,982)
|
|
Payment on senior
notes, including call premium
|
|
—
|
|
(1,237,764)
|
|
Proceeds from senior
notes, net of issuance costs
|
|
—
|
|
539,261
|
|
Borrowings of other
debt
|
|
550
|
|
4,086
|
|
Principal payments on
other debt
|
|
(8,648)
|
|
(29,498)
|
|
Dividends paid to
common stockholders
|
|
(16,048)
|
|
(16,124)
|
|
Repurchase of common
stock
|
|
(1,709)
|
|
(19,981)
|
|
Increase in
overdrafts
|
|
280
|
|
11,630
|
|
Proceeds from issuance
of non-controlling interests
|
|
2,472
|
|
6,300
|
|
Distributions to and
purchases of non-controlling interests
|
|
(14,931)
|
|
(24,201)
|
|
Cash transferred to
Concentra at separation
|
|
—
|
|
(182,095)
|
|
Net cash used in
financing activities
|
|
(103,292)
|
|
(183,013)
|
|
Net increase (decrease)
in cash and cash equivalents
|
|
6,566
|
|
(131,774)
|
|
Cash and cash
equivalents at beginning of period
|
|
77,440
|
|
191,468
|
|
Cash and cash
equivalents at end of period(1)
|
|
$
84,006
|
|
$
59,694
|
|
Supplemental
information:
|
|
|
|
|
|
Cash paid for interest,
excluding amounts received of $22,465 under the
interest rate cap contract in 2023
|
|
$
50,564
|
|
$
39,472
|
|
Cash paid for
taxes
|
|
10,008
|
|
30,491
|
|
__________________________________________
|
|
(1) Discontinued
operations at December 31, 2023, includes $31.4 million of
cash and cash equivalents.
|
|
VI. Condensed
Consolidated Statements of Cash Flows
For the Years Ended
December 31, 2023 and 2024
(In thousands,
unaudited)
|
|
|
|
2023
|
|
2024
|
|
Operating
activities
|
|
|
|
|
|
Net income
|
|
$
299,731
|
|
$
296,704
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Distributions from
unconsolidated subsidiaries
|
|
23,417
|
|
39,178
|
|
Depreciation and
amortization
|
|
208,742
|
|
203,894
|
|
Provision for expected
credit losses
|
|
1,030
|
|
4,279
|
|
Equity in earnings of
unconsolidated subsidiaries
|
|
(40,813)
|
|
(60,228)
|
|
Loss on extinguishment
of debt
|
|
175
|
|
19,038
|
|
Gain on sale of assets
and businesses
|
|
(57)
|
|
(1,063)
|
|
Stock compensation
expense
|
|
43,809
|
|
100,670
|
|
Amortization of debt
discount, premium and issuance costs
|
|
2,647
|
|
2,963
|
|
Deferred income
taxes
|
|
(16,119)
|
|
(32,434)
|
|
Changes in operating
assets and liabilities, net of effects of business
combinations:
|
|
|
|
|
|
Accounts
receivable
|
|
1,156
|
|
(95,845)
|
|
Other current
assets
|
|
(29,374)
|
|
18,072
|
|
Other
assets
|
|
10,031
|
|
12,933
|
|
Accounts payable and
accrued expenses
|
|
77,683
|
|
9,703
|
|
Net cash provided by
operating activities
|
|
582,058
|
|
517,864
|
|
Investing
activities
|
|
|
|
|
|
Business combinations,
net of cash acquired
|
|
(29,567)
|
|
(13,097)
|
|
Purchases of property,
equipment, and other assets
|
|
(229,200)
|
|
(222,177)
|
|
Investment in
businesses
|
|
(9,873)
|
|
—
|
|
Proceeds from sale of
assets and businesses
|
|
163
|
|
4,263
|
|
Net cash used in
investing activities
|
|
(268,477)
|
|
(231,011)
|
|
Financing
activities
|
|
|
|
|
|
Borrowings on revolving
facilities
|
|
905,000
|
|
1,240,000
|
|
Payments on revolving
facilities
|
|
(1,070,000)
|
|
(1,415,000)
|
|
Proceeds from term
loans, net of issuance costs
|
|
2,092,232
|
|
1,880,052
|
|
Payments on term
loans
|
|
(2,113,952)
|
|
(2,092,485)
|
|
Payment on senior
notes
|
|
—
|
|
(1,237,764)
|
|
Proceeds from senior
notes, net of issuance costs
|
|
—
|
|
1,176,598
|
|
Borrowings of other
debt
|
|
31,399
|
|
24,892
|
|
Principal payments on
other debt
|
|
(46,946)
|
|
(65,280)
|
|
Dividends paid to
common stockholders
|
|
(63,904)
|
|
(64,617)
|
|
Repurchase of common
stock
|
|
(12,759)
|
|
(37,905)
|
|
Decrease in
overdrafts
|
|
(1,687)
|
|
(4,471)
|
|
Proceeds from issuance
of non-controlling interests
|
|
22,935
|
|
15,713
|
|
Distributions to and
purchases of non-controlling interests
|
|
(63,531)
|
|
(60,001)
|
|
Purchase of membership
interests of Concentra Group Holdings Parent
|
|
(6,268)
|
|
—
|
|
Proceeds from Concentra
initial public offering
|
|
—
|
|
511,198
|
|
Cash transferred to
Concentra at separation
|
|
—
|
|
(182,095)
|
|
Net cash used in
financing activities
|
|
(327,481)
|
|
(311,165)
|
|
Net decrease in cash
and cash equivalents
|
|
(13,900)
|
|
(24,312)
|
|
Cash and cash
equivalents at beginning of period
|
|
97,906
|
|
84,006
|
|
Cash and cash
equivalents at end of period(1)
|
|
$
84,006
|
|
$
59,694
|
|
Supplemental
information:
|
|
|
|
|
|
Cash paid for interest,
excluding amounts received of $82,818 and $68,069
under the interest rate cap contract in 2023 and 2024,
respectively
|
|
$
272,261
|
|
$
256,229
|
|
Cash paid for
taxes
|
|
88,510
|
|
133,187
|
|
______________________________________________________________
|
|
(1) Discontinued
operations at December 31, 2023, includes $31.4 million of
cash and cash equivalents.
|
|
VII. Key
Statistics
For the Three Months Ended December 31, 2023 and
2024
(unaudited)
|
|
|
|
2023
|
|
2024
|
|
%
Change
|
|
Critical Illness
Recovery Hospital
|
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
107
|
|
104
|
|
|
|
Revenue
(,000)
|
|
$
567,128
|
|
$
600,445
|
|
5.9 %
|
|
Number of patient
days(b)(c)
|
|
277,470
|
|
274,134
|
|
(1.2) %
|
|
Number of
admissions(b)(d)
|
|
9,126
|
|
8,691
|
|
(4.8) %
|
|
Revenue per patient
day(b)(e)
|
|
$
2,037
|
|
$
2,183
|
|
7.2 %
|
|
Occupancy
rate(b)(f)
|
|
66 %
|
|
67 %
|
|
1.5 %
|
|
Adjusted EBITDA
(,000)
|
|
$
57,384
|
|
$
63,098
|
|
10.0 %
|
|
Adjusted EBITDA
margin
|
|
10.1 %
|
|
10.5 %
|
|
|
|
Rehabilitation
Hospital
|
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
33
|
|
35
|
|
|
|
Revenue
(,000)
|
|
$
260,166
|
|
$
294,352
|
|
13.1 %
|
|
Number of patient
days(b)(c)
|
|
116,003
|
|
119,870
|
|
3.3 %
|
|
Number of
admissions(b)(d)
|
|
8,264
|
|
8,626
|
|
4.4 %
|
|
Revenue per patient
day(b)(e)
|
|
$
2,063
|
|
$
2,177
|
|
5.5 %
|
|
Occupancy
rate(b)(f)
|
|
85 %
|
|
81 %
|
|
(4.7) %
|
|
Adjusted EBITDA
(,000)
|
|
$
66,344
|
|
$
62,277
|
|
(6.1) %
|
|
Adjusted EBITDA
margin
|
|
25.5 %
|
|
21.2 %
|
|
|
|
Outpatient
Rehabilitation
|
|
|
|
|
|
|
|
Number of clinics
operated – end of period(a)
|
|
1,933
|
|
1,914
|
|
|
|
Working
days(g)
|
|
63
|
|
64
|
|
|
|
Revenue
(,000)
|
|
$
298,235
|
|
$
319,598
|
|
7.2 %
|
|
Number of
visits(b)(h)
|
|
2,672,936
|
|
2,811,704
|
|
5.2 %
|
|
Revenue per
visit(b)(i)
|
|
$
100
|
|
$
102
|
|
2.0 %
|
|
Adjusted EBITDA
(,000)
|
|
$
22,473
|
|
$
26,561
|
|
18.2 %
|
|
Adjusted EBITDA
margin
|
|
7.5 %
|
|
8.3 %
|
|
|
|
_______________________________________________________________________________
|
|
(a)
|
Includes managed
locations.
|
|
(b)
|
Excludes managed
locations.
|
|
(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 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.
|
|
VIII. Key
Statistics
For the Years Ended December 31, 2023 and 2024
(unaudited)
|
|
|
|
2023
|
|
2024
|
|
%
Change
|
|
Critical Illness
Recovery Hospital
|
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
107
|
|
104
|
|
|
|
Revenue
(,000)
|
|
$
2,299,773
|
|
$
2,444,196
|
|
6.3 %
|
|
Number of patient
days(b)(c)
|
|
1,108,492
|
|
1,118,757
|
|
0.9 %
|
|
Number of
admissions(b)(d)
|
|
36,225
|
|
35,784
|
|
(1.2) %
|
|
Revenue per patient
day(b)(e)
|
|
$
2,067
|
|
$
2,177
|
|
5.3 %
|
|
Occupancy
rate(b)(f)
|
|
68 %
|
|
68 %
|
|
0.0 %
|
|
Adjusted EBITDA
(,000)
|
|
$
246,015
|
|
$
301,634
|
|
22.6 %
|
|
Adjusted EBITDA
margin
|
|
10.7 %
|
|
12.3 %
|
|
|
|
Rehabilitation
Hospital
|
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
33
|
|
35
|
|
|
|
Revenue
(,000)
|
|
$
979,585
|
|
$
1,110,592
|
|
13.4 %
|
|
Number of patient
days(b)(c)
|
|
446,145
|
|
470,594
|
|
5.5 %
|
|
Number of
admissions(b)(d)
|
|
31,627
|
|
33,665
|
|
6.4 %
|
|
Revenue per patient
day(b)(e)
|
|
$
2,017
|
|
$
2,134
|
|
5.8 %
|
|
Occupancy
rate(b)(f)
|
|
85 %
|
|
84 %
|
|
(1.2) %
|
|
Adjusted EBITDA
(,000)
|
|
$
221,875
|
|
$
245,748
|
|
10.8 %
|
|
Adjusted EBITDA
margin
|
|
22.6 %
|
|
22.1 %
|
|
|
|
Outpatient
Rehabilitation
|
|
|
|
|
|
|
|
Number of clinics
operated – end of period(a)
|
|
1,933
|
|
1,914
|
|
|
|
Working
days(g)
|
|
254
|
|
256
|
|
|
|
Revenue
(,000)
|
|
$
1,188,914
|
|
$
1,250,294
|
|
5.2 %
|
|
Number of
visits(b)(h)
|
|
10,657,558
|
|
11,147,920
|
|
4.6 %
|
|
Revenue per
visit(b)(i)
|
|
$
100
|
|
$
101
|
|
1.0 %
|
|
Adjusted EBITDA
(,000)
|
|
$
111,868
|
|
$
108,577
|
|
(2.9) %
|
|
Adjusted EBITDA
margin
|
|
9.4 %
|
|
8.7 %
|
|
|
|
_______________________________________________________________________________
|
|
(a)
|
Includes managed
locations.
|
|
(b)
|
Excludes managed
locations.
|
|
(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 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.
|
|
IX. Income
from Continuing Operations, Net of Tax, to Adjusted EBITDA
Reconciliation
For the Three Months and Years Ended
December 31, 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, income from continuing
operations, income from continuing operations before other income
and expense, 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 income from continuing
operations, net of tax, to Adjusted EBITDA for Select Medical.
Adjusted EBITDA is used by Select Medical to report its segment
performance. Adjusted EBITDA is defined as earnings from continuing
operations 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
December
31,
|
|
|
Years
Ended
December
31,
|
|
2023
|
|
2024
|
|
|
2023
|
|
2024
|
|
Income (loss) from
continuing operations, net of tax
|
$
30,251
|
|
$
(10,456)
|
|
|
$
110,471
|
|
$
129,987
|
|
Income tax expense
(benefit)
|
4,618
|
|
(4,487)
|
|
|
29,253
|
|
44,782
|
|
Interest
expense
|
40,263
|
|
28,551
|
|
|
154,165
|
|
128,605
|
|
Equity in earnings of
unconsolidated subsidiaries
|
(10,195)
|
|
(10,423)
|
|
|
(41,339)
|
|
(63,904)
|
|
Loss on early
retirement of debt
|
—
|
|
17,906
|
|
|
14,692
|
|
28,845
|
|
Income from continuing
operations before other income
and expense
|
$
64,937
|
|
$
21,091
|
|
|
$
267,242
|
|
$
268,315
|
|
Stock compensation
expense:
|
|
|
|
|
|
|
|
|
|
Included in general
and administrative
|
9,658
|
|
47,414
|
|
|
36,041
|
|
79,931
|
|
Included in cost of
services
|
1,688
|
|
12,902
|
|
|
7,117
|
|
19,283
|
|
Depreciation and
amortization
|
35,485
|
|
36,283
|
|
|
135,691
|
|
142,866
|
|
Concentra separation
transaction costs(b)
|
—
|
|
(1,698)
|
|
|
—
|
|
—
|
|
Adjusted
EBITDA
|
$
111,768
|
|
$
115,992
|
|
|
$
446,091
|
|
$
510,395
|
|
|
|
|
|
|
|
|
|
|
Critical illness
recovery hospital
|
$
57,384
|
|
$
63,098
|
|
|
$
246,015
|
|
$
301,634
|
|
Rehabilitation
hospital
|
66,344
|
|
62,277
|
|
|
221,875
|
|
245,748
|
|
Outpatient
rehabilitation
|
22,473
|
|
26,561
|
|
|
111,868
|
|
108,577
|
|
Other(a)
|
(34,433)
|
|
(35,944)
|
|
|
(133,667)
|
|
(145,564)
|
|
Adjusted
EBITDA
|
$
111,768
|
|
$
115,992
|
|
|
$
446,091
|
|
$
510,395
|
|
_______________________________________________________________________________
|
|
(a)
|
Other primarily
includes general and administrative costs and other operating
income, as discussed further above.
|
|
(b)
|
During the three months
ended December 31, 2024, transaction costs of $1.7 million
recognized in previous periods were reclassified from income from
continuing operations to income from discontinued operations. Total
Concentra separation transaction costs of $16.3 million were
recognized during the year ended December 31, 2024 and included in
income from discontinued business.
|
|
X.
Reconciliation of Earnings per Common Share from Continuing
Operations, Net of Tax, to Adjusted Earnings per Common Share from
Continuing Operations, Net of Tax
For the Years Ended
December 31, 2023 and 2024
(In thousands, except per
share amounts, unaudited)
|
Adjusted income from continuing operations, net of tax,
attributable to common shares and adjusted earnings per common
share from continuing operations are not measures of financial
performance under GAAP. Items excluded from adjusted income from
continuing operations, net of tax, attributable to common shares
and adjusted earnings per common share from continuing operations
are significant components in understanding and assessing financial
performance. Select Medical believes that the presentation of
adjusted income from continuing operations, net of tax,
attributable to common shares and adjusted earnings per common
share from continuing operations 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 income from
continuing operations, net of tax, attributable to common shares
and adjusted earnings per common share from continuing operations
should not be considered in isolation or as alternatives to, or
substitutes for, income from continuing operations, net of tax,
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 income from continuing
operations, net of tax, 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 income from continuing operations, net of
tax, attributable to common shares and adjusted earnings per common
share from continuing operations as presented may not be comparable
to other similarly titled measures of other companies.
The following tables reconcile income from continuing
operations, net of tax, attributable to common shares and earnings
per common share from continuing operations on a fully diluted
basis to adjusted income from continuing operations, net of tax,
attributable to common shares and adjusted earnings per common
share from continuing operations on a fully diluted basis.
|
Three Months Ended
December 31,
|
|
2023
|
|
Per
Share(a)
|
|
2024
|
|
Per
Share(a)
|
|
Income from continuing
operations, net of tax,
attributable to common shares(a)
|
$
15,187
|
|
$
0.12
|
|
$
(23,664)
|
|
(0.19)
|
|
Adjustments:(b)
|
|
|
|
|
|
|
|
|
Loss on early
retirement of debt, net of tax
|
—
|
|
—
|
|
12,885
|
|
0.10
|
|
Concentra separation
transaction costs, net of tax
|
—
|
|
—
|
|
(1,241)
|
|
(0.01)
|
|
Stock compensation
expense due to accelerated
vesting, net of tax
|
—
|
|
—
|
|
34,645
|
|
0.28
|
|
Adjusted income from
continuing operations, net of
tax, attributable to common shares
|
$
15,187
|
|
$
0.12
|
|
$
22,625
|
|
$
0.18
|
|
Years Ended
December 31,
|
|
2023
|
|
Per
Share(a)
|
|
2024
|
|
Per
Share(a)
|
|
Income from continuing
operations, net of tax,
attributable to common shares(a)
|
$
56,900
|
|
$
0.46
|
|
$
63,154
|
|
$
0.51
|
|
Adjustments:(b)
|
|
|
|
|
|
|
|
|
Loss on early
retirement of debt, net of tax
|
10,019
|
|
0.08
|
|
20,311
|
|
0.16
|
|
Stock compensation
expense due to accelerated
vesting, net of tax
|
—
|
|
—
|
|
33,846
|
|
0.27
|
|
Adjusted income from
continuing operations, net of
tax, attributable to common shares
|
$66,919
|
|
$
0.54
|
|
$
117,311
|
|
$
0.94
|
|
_______________________________________________________________________________
|
|
(a)
|
Income from continuing
operations, net of tax, attributable to common shares and earnings
per common share from continuing operations are calculated based on
the diluted weighted average common shares outstanding, as
presented in table III.
|
|
(b)
|
Adjustments to income
from continuing operations, net of tax, 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. Income
from Continuing Operations, Net of Tax, to Adjusted EBITDA
Reconciliation
Business Outlook for the Year Ending
December 31, 2025
(In millions, unaudited)
|
The following is a reconciliation of full year 2025 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 2025 expectations.
|
Range
|
|
Non-GAAP Measure
Reconciliation
|
Low
|
|
High
|
|
Income from continuing
operations, net of tax, attributable to Select Medical
|
$
142
|
|
$
155
|
|
Net income attributable
to non-controlling interests
|
75
|
|
78
|
|
Income from continuing
operations, net of tax
|
217
|
|
233
|
|
Income tax
expense
|
79
|
|
84
|
|
Interest
expense
|
107
|
|
107
|
|
Equity in earnings of
unconsolidated subsidiaries
|
(47)
|
|
(48)
|
|
Income from continuing
operations before other income and expense
|
356
|
|
376
|
|
Stock compensation
expense
|
18
|
|
18
|
|
Depreciation and
amortization
|
146
|
|
146
|
|
Adjusted
EBITDA
|
$
520
|
|
$
540
|
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SOURCE Select Medical Holdings Corporation
