MECHANICSBURG, Pa.,
Jan. 17, 2022 /PRNewswire/ -- Select
Medical Holdings Corporation ("Select Medical," "we," "us," or
"our") (NYSE: SEM) today announced an estimate of certain results
for its full year ended December 31,
2021 in advance of the announcement of actual results.
Select Medical will release its actual financial results for its
fourth quarter and full year ended December
31, 2021 on Thursday, February 24,
2022 after the market closes.
Select Medical expects its net operating revenue for the year
ended December 31, 2021 to be
approximately $6,204 million.
Select Medical expects 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, or Adjusted EBITDA, for the year ended December 31, 2021 to be approximately
$947 million. Select Medical expects fully diluted earnings
per common share for the year ended December
31, 2021 to be in the range of $2.90 to $2.92.
When Select Medical issues its business outlook for the year ended
December 31, 2022, it will readdress
its target compound annual growth rates for revenue, Adjusted
EBITDA, and earnings per common share.
The above expectations regarding Select Medical's results for
the year ended December 31, 2021 are
management estimates and projections based on currently available
information, and are subject to change upon completion of Select
Medical's financial statement closing process and audit.
A reconciliation of full year 2021 Adjusted EBITDA expectations
to the closest comparable GAAP financial measure is presented in
table I of this release. Please refer to Select Medical's most
recent Form 10-Q filing for a discussion of Select Medical's use of
Adjusted EBITDA in evaluating financial performance and determining
resource allocation. Each item presented in table I is an
estimation of full year 2021 expectations (dollars in
millions).
Our business outlook issued on November
4, 2021 reflected the best information available at the time
and our best estimates about the financial forecast of Select
Medical for the year ending December 31,
2021. During the fourth quarter however, we experienced,
predominantly in our critical illness recovery hospital segment, a
higher than expected use of agency clinical staff and higher than
expected costs for agency in our hospitals. This unexpected
significant increase in our labor costs had a detrimental effect on
our Adjusted EBITDA and diluted earnings per common share for the
quarter and year ended December 31,
2021.
The unpredictable effects of the COVID-19 pandemic, including
the duration and extent of disruption on Select Medical's
operations and increases to our labor costs, creates uncertainties
about Select Medical's future operating results and financial
condition. Please refer to our risk factors previously reported in
our Annual Report on Form 10-K for the year ended December 31, 2020 and our Quarterly Reports on
Form 10-Q for further discussion.
Select Medical will host a conference call regarding its fourth
quarter and full year results, as well as its business outlook, on
Friday, February 25, 2022, 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
7334656. The conference call will be webcast simultaneously and can
be accessed at Select Medical Holdings Corporation's website at
www.selectmedicalholdings.com.
For those unable to participate in the conference call, a replay
will be available until 12:00pm ET,
March 4, 2022. The replay number is
1-855-859-2056 (domestic) or 1-404-537-3406 (international). The
conference ID for the replay will be 7334656. The replay can also
be accessed at Select Medical Holdings Corporation's website at
www.selectmedicalholdings.com.
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 December 31,
2021, Select Medical operated 104 critical illness recovery
hospitals in 28 states, 30 rehabilitation hospitals in 12 states,
and 1,881 outpatient rehabilitation clinics in 38 states and the
District of Columbia. Concentra
operated 518 occupational health centers in 41 states. At
December 31, 2021, Select Medical had
operations in 46 states and the District
of Columbia. Information about Select Medical is available
at 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 results 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. Net Income to
Adjusted EBITDA Reconciliation
|
|
Business Outlook
for the Year Ending December 31, 2021
|
|
(In millions,
unaudited)
|
|
|
|
Non-GAAP
Measure Reconciliation(1)
|
|
Net income
attributable to Select Medical
|
$
394
|
Net income
attributable to non-controlling interests
|
98
|
Net income
|
492
|
Income tax
expense(2)
|
137
|
Interest
income
|
(5)
|
Interest
expense
|
136
|
Gain on sale of
businesses
|
(2)
|
Equity in earnings of
unconsolidated subsidiaries
|
(44)
|
Income from
operations
|
714
|
Stock compensation
expense
|
31
|
Depreciation and
amortization
|
202
|
Adjusted
EBITDA
|
$
947
|
|
|
|
|
|
(1)
|
These amounts are
subject to change upon completion of Select Medical's financial
statement closing process and audit.
|
(2)
|
Income tax expense is
estimated to be between $137.0 million and
$141.0 million.
|
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SOURCE Select Medical Holdings Corporation