MECHANICSBURG, Pa., May 5, 2022
/PRNewswire/ -- Select Medical Holdings Corporation ("Select
Medical," "we," "us," or "our") (NYSE: SEM) today announced results
for its first quarter ended March 31, 2022 and the declaration
of a cash dividend.
For the first quarter ended March 31, 2022, revenue
increased 3.4% to $1,599.5 million,
compared to $1,546.5 million for the
same quarter, prior year. Income from operations was $104.0 million for the first quarter ended
March 31, 2022, compared to $202.0 million for the same quarter, prior
year. For the first quarter ended March 31, 2021, income from
operations included $16.1 million of
other operating income related to the recognition of payments
received under the Coronavirus Aid, Relief, and Economic Security
Act ("CARES Act") Public Health and Social Services Emergency Fund,
also referred to as the Provider Relief Fund. Net income was
$55.9 million for the first quarter
ended March 31, 2022, compared to $137.2 million for the same quarter, prior year.
Adjusted EBITDA was $163.8 million
for the first quarter ended March 31, 2022, compared to
$258.3 million for the same quarter,
prior year. Earnings per common share was $0.37 for the first quarter ended March 31,
2022, compared to $0.82 for the same
quarter, prior year. The definition of Adjusted EBITDA and a
reconciliation of net income to Adjusted EBITDA are presented in
table VI of this release.
In addition to providing key statistics in table V of this
release for both the first quarters ended March 31, 2022 and
2021, Select Medical also provided statistics for the comparable
period in 2019. Select Medical believes this additional data
provides insight into how it has performed in comparison to the
year prior to the widespread emergence of the coronavirus disease
2019 ("COVID-19") in the United
States. The effects of the COVID-19 pandemic, including the
duration and extent of disruption on our operations, continues to
create uncertainties about Select Medical's future operating
results and financial condition. Please refer to the risk factors
in Item 1A and the section titled "Effects of the COVID-19
Pandemic on our Results of Operations" in Item 7 of our Annual
Report on Form 10-K for the year ended December 31, 2021 for further discussion.
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 March 31, 2022,
Select Medical operated 105 critical illness recovery hospitals in
28 states, 30 rehabilitation hospitals in 12 states, and 1,901
outpatient rehabilitation clinics in 38 states and the District of Columbia. Concentra operated 518
occupational health centers in 41 states. At March 31, 2022,
Select Medical had operations in 46 states and the District of Columbia. Information about Select
Medical is available at www.selectmedical.com.
Critical Illness Recovery Hospital Segment
For the first quarter ended March 31, 2022, revenue for the
critical illness recovery hospital segment increased 1.2% to
$601.8 million, compared to
$594.9 million for the same quarter,
prior year. Adjusted EBITDA for the critical illness recovery
hospital segment was $36.0 million
for the first quarter ended March 31, 2022, compared to
$113.3 million for the same quarter,
prior year. For the first quarter ended March 31, 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 6.0% for the
first quarter ended March 31, 2022, compared to 19.0% for the
same quarter, prior year. Certain critical illness recovery
hospital key statistics are presented in table V of this release
for the first quarters ended March 31, 2022 and 2021.
Rehabilitation Hospital Segment
For the first quarter ended March 31, 2022, revenue for the
rehabilitation hospital segment increased 6.2% to $220.6 million, compared to $207.8 million for the same quarter, prior year.
Adjusted EBITDA for the rehabilitation hospital segment was
$42.4 million for the first quarter
ended March 31, 2022, compared to $50.5
million for the same quarter, prior year. The Adjusted
EBITDA margin for the rehabilitation hospital segment was 19.2% for
the first quarter ended March 31, 2022, compared to 24.3% for
the same quarter, prior year. Certain rehabilitation hospital key
statistics are presented in table V of this release for the first
quarters ended March 31, 2022 and 2021.
Outpatient Rehabilitation Segment
For the first quarter ended March 31, 2022, revenue for the
outpatient rehabilitation segment increased 7.9% to $271.9 million, compared to $252.0 million for the same quarter, prior year.
Adjusted EBITDA for the outpatient rehabilitation segment increased
1.0% to $26.6 million for the first
quarter ended March 31, 2022, compared to $26.3 million for the same quarter, prior year.
The Adjusted EBITDA margin for the outpatient rehabilitation
segment was 9.8% for the first quarter ended March 31, 2022,
compared to 10.4% for the same quarter, prior year. Certain
outpatient rehabilitation key statistics are presented in table V
of this release for the first quarters ended March 31, 2022
and 2021.
Concentra Segment
For the first quarter ended March 31, 2022, revenue for the
Concentra segment increased to $423.4
million, compared to $422.8
million for the same quarter, prior year. Adjusted EBITDA
for the Concentra segment increased 9.1% to $89.5 million for the first quarter ended
March 31, 2022, compared to $82.0
million for the same quarter, prior year. The Adjusted
EBITDA margin for the Concentra segment was 21.1% for the first
quarter ended March 31, 2022, compared to 19.4% for the same
quarter, prior year. Certain Concentra key statistics are presented
in table V of this release for the first quarters ended
March 31, 2022 and 2021.
Dividend
On May 5, 2022, Select Medical's board of directors
declared a cash dividend of $0.125
per share. The dividend will be payable on or about June 1,
2022 to stockholders of record as of the close of business on
May 19, 2022.
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, 2023, 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 first quarter ended March 31, 2022, Select
Medical repurchased 2,128,494 shares at a cost of approximately
$51.7 million, or $24.28 per share, which includes transaction
costs. Since the inception of the common stock repurchase program
through March 31, 2022, Select Medical has repurchased
42,480,122 shares at a cost of approximately $466.9 million, or $10.99 per share, which includes transaction
costs.
Business Outlook for Revenue
Select Medical reaffirms its 2022 business outlook for revenue,
which was provided most recently in its February 24, 2022 press release. Select Medical
continues to expect consolidated revenue to be in the range of
$6.25 billion to $6.40 billion for the full year of 2022. Select
Medical is also reaffirming its previously issued three-year
compound annual growth rate target for revenue only, which is
expected to be in the range of 4% to 6% for 2021 through 2023.
Select Medical intends to address its business outlook and
target compound annual growth rates for Adjusted EBITDA and
earnings per common share when the labor climate stabilizes.
Conference Call
Select Medical will host a conference call regarding its first
quarter results, as well as its business outlook for revenue and
the impact of the COVID-19 pandemic on each of its reportable
segments, on Friday, May 6, 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
5892378. 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,
May 13, 2022. The replay number is
1-855-859-2056 (domestic) or 1-404-537-3406 (international). The
conference ID for the replay will be 5892378. 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 2022 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, 2021.
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 March 31, 2021 and 2022
(In thousands,
except per share amounts, unaudited)
|
|
|
|
2021
|
|
2022
|
|
%
Change
|
Revenue
|
|
$
1,546,463
|
|
$
1,599,547
|
|
3.4%
|
Costs and
expenses:
|
|
|
|
|
|
|
Cost of services, exclusive of depreciation and
amortization
|
|
1,293,449
|
|
1,407,010
|
|
8.8
|
General and administrative
|
|
35,403
|
|
37,513
|
|
6.0
|
Depreciation and amortization
|
|
49,620
|
|
51,039
|
|
2.9
|
Total costs and
expenses
|
|
1,378,472
|
|
1,495,562
|
|
8.5
|
Other operating
income
|
|
34,021
|
|
—
|
|
N/M
|
Income from
operations
|
|
202,012
|
|
103,985
|
|
(48.5)
|
Other income and
expense:
|
|
|
|
|
|
|
Equity in earnings of unconsolidated subsidiaries
|
|
9,919
|
|
5,397
|
|
(45.6)
|
Interest income
|
|
4,749
|
|
—
|
|
N/M
|
Interest expense
|
|
(34,402)
|
|
(35,514)
|
|
3.2
|
Income before income
taxes
|
|
182,278
|
|
73,868
|
|
(59.5)
|
Income tax
expense
|
|
45,064
|
|
17,942
|
|
(60.2)
|
Net income
|
|
137,214
|
|
55,926
|
|
(59.2)
|
Less: Net income
attributable to non-controlling interests
|
|
26,668
|
|
6,809
|
|
(74.5)
|
Net income attributable
to Select Medical
|
|
$
110,546
|
|
$
49,117
|
|
(55.6)%
|
Basic and diluted
earnings per common share:(1)
|
|
$
0.82
|
|
$
0.37
|
|
|
|
(1)
Refer to table II for calculation of earnings per common
share.
|
N/M Not
meaningful.
|
II. Earnings per Share
For the Three Months
Ended March 31, 2021 and 2022
(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 months ended
March 31, 2021 and 2022:
|
|
Basic and Diluted EPS
|
|
|
Three Months Ended March 31,
|
|
|
2021
|
|
2022
|
Net income
|
|
$
137,214
|
|
$
55,926
|
Less: net income
attributable to non-controlling interests
|
|
26,668
|
|
6,809
|
Net income attributable
to Select Medical
|
|
110,546
|
|
49,117
|
Less: net income
attributable to participating securities
|
|
3,698
|
|
1,643
|
Net income attributable
to common shares
|
|
$
106,848
|
|
$
47,474
|
The following tables set forth the computation of EPS under the
two-class method for the three months ended March 31, 2021 and
2022:
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
|
2022
|
|
|
Net Income
Allocation
|
Shares(1)
|
|
Basic and
Diluted EPS
|
|
|
Net Income
Allocation
|
|
Shares(1)
|
|
Basic and
Diluted EPS
|
Common
shares
|
|
$
106,848
|
|
130,329
|
|
$
0.82
|
|
|
$
47,474
|
|
129,010
|
|
$
0.37
|
Participating
securities
|
|
3,698
|
|
4,511
|
|
$
0.82
|
|
|
1,643
|
|
4,464
|
|
$
0.37
|
Total
|
|
$
110,546
|
|
|
|
|
|
|
$
49,117
|
|
|
|
|
|
(1)
Represents the weighted average share count outstanding during the
period.
|
III. Condensed
Consolidated Balance Sheets
(In thousands,
unaudited)
|
|
|
|
December 31,
2021
|
|
March 31,
2022
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
74,310
|
|
$
130,881
|
Accounts receivable
|
|
889,303
|
|
941,434
|
Other current assets
|
|
175,826
|
|
178,536
|
Total Current
Assets
|
|
1,139,439
|
|
1,250,851
|
Operating lease
right-of-use assets
|
|
1,078,754
|
|
1,102,710
|
Property and equipment,
net
|
|
961,467
|
|
952,926
|
Goodwill
|
|
3,448,912
|
|
3,465,456
|
Identifiable intangible
assets, net
|
|
374,879
|
|
368,850
|
Other assets
|
|
356,720
|
|
395,151
|
Total
Assets
|
|
$
7,360,171
|
|
$
7,535,944
|
Liabilities and
Equity
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Payables and accruals
|
|
$
942,288
|
|
$
909,162
|
Government advances
|
|
83,790
|
|
20,862
|
Unearned government assistance
|
|
93
|
|
194
|
Current operating lease liabilities
|
|
229,334
|
|
234,420
|
Current portion of long-term debt and notes
payable
|
|
17,572
|
|
24,513
|
Total Current
Liabilities
|
|
1,273,077
|
|
1,189,151
|
Non-current operating
lease liabilities
|
|
916,540
|
|
938,423
|
Long-term debt, net of
current portion
|
|
3,556,385
|
|
3,738,299
|
Non-current deferred
tax liability
|
|
142,792
|
|
156,407
|
Other non-current
liabilities
|
|
106,442
|
|
105,098
|
Total
Liabilities
|
|
5,995,236
|
|
6,127,378
|
Redeemable
non-controlling interests
|
|
39,033
|
|
41,670
|
Total equity
|
|
1,325,902
|
|
1,366,896
|
Total Liabilities
and Equity
|
|
$
7,360,171
|
|
$
7,535,944
|
IV. Condensed
Consolidated Statements of Cash Flows
For the Three Months
Ended March 31, 2021 and 2022
(In thousands,
unaudited)
|
|
|
|
2021
|
|
2022
|
Operating
activities
|
|
|
|
|
Net income
|
|
$
137,214
|
|
$
55,926
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Distributions from unconsolidated subsidiaries
|
|
11,633
|
|
7,486
|
Depreciation and amortization
|
|
49,620
|
|
51,039
|
Provision for expected credit losses
|
|
67
|
|
94
|
Equity in earnings of unconsolidated subsidiaries
|
|
(9,919)
|
|
(5,397)
|
Loss (gain) on sale or disposal of assets
|
|
72
|
|
(23)
|
Stock compensation expense
|
|
6,709
|
|
8,823
|
Amortization of debt discount, premium and issuance
costs
|
|
543
|
|
558
|
Deferred income taxes
|
|
(897)
|
|
420
|
Changes in operating assets and liabilities, net of effects
of business
combinations:
|
|
|
|
|
Accounts receivable
|
|
(60,142)
|
|
(52,225)
|
Other current assets
|
|
(4,425)
|
|
(1,819)
|
Other assets
|
|
961
|
|
2,686
|
Accounts payable and accrued
expenses
|
|
44,627
|
|
(15,002)
|
Government advances
|
|
—
|
|
(62,928)
|
Unearned government
assistance
|
|
19,207
|
|
101
|
Income taxes
|
|
44,618
|
|
16,598
|
Net cash provided by
operating activities
|
|
239,888
|
|
6,337
|
Investing
activities
|
|
|
|
|
Business combinations,
net of cash acquired
|
|
(6,314)
|
|
(5,186)
|
Purchases of property
and equipment
|
|
(39,719)
|
|
(46,845)
|
Investment in
businesses
|
|
(6,571)
|
|
(3,337)
|
Proceeds from sale of
assets
|
|
19
|
|
37
|
Net cash used in
investing activities
|
|
(52,585)
|
|
(55,331)
|
Financing
activities
|
|
|
|
|
Borrowings on revolving
facilities
|
|
—
|
|
280,000
|
Payments on revolving
facilities
|
|
—
|
|
(100,000)
|
Borrowings of other
debt
|
|
8,915
|
|
15,794
|
Principal payments on
other debt
|
|
(9,342)
|
|
(9,188)
|
Dividends paid to
common stockholders
|
|
—
|
|
(16,691)
|
Repurchase of common
stock
|
|
—
|
|
(51,676)
|
Decrease in
overdrafts
|
|
—
|
|
(7,608)
|
Proceeds from issuance
of non-controlling interests
|
|
—
|
|
5,229
|
Distributions to and
purchases of non-controlling interests
|
|
(13,663)
|
|
(10,295)
|
Net cash provided by
(used in) financing activities
|
|
(14,090)
|
|
105,565
|
Net increase in cash
and cash equivalents
|
|
173,213
|
|
56,571
|
Cash and cash
equivalents at beginning of period
|
|
577,061
|
|
74,310
|
Cash and cash
equivalents at end of period
|
|
$
750,274
|
|
$
130,881
|
Supplemental
information
|
|
|
|
|
Cash paid for
interest
|
|
$
52,470
|
|
$
53,517
|
Cash paid for
taxes
|
|
1,343
|
|
923
|
V. Key
Statistics
For the Three Months Ended March 31, 2019, 2021, and
2022
(unaudited)
|
|
|
|
2019
|
|
|
2021
|
|
2022
|
|
%
Change
|
Critical Illness Recovery
Hospital
|
|
|
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
97
|
|
|
99
|
|
105
|
|
|
Revenue
(,000)
|
|
$
457,534
|
|
|
$ 594,872
|
|
$ 601,755
|
|
1.2%
|
Number of patient
days(b)(c)
|
|
258,129
|
|
|
293,118
|
|
289,217
|
|
(1.3)%
|
Number of
admissions(b)(d)
|
|
9,456
|
|
|
9,859
|
|
9,457
|
|
(4.1)%
|
Revenue per patient
day(b)(e)
|
|
$
1,759
|
|
|
$
2,024
|
|
$
2,075
|
|
2.5%
|
Occupancy
rate(b)(f)
|
|
71%
|
|
|
75%
|
|
71%
|
|
(5.3)%
|
Adjusted EBITDA
(,000)
|
|
$
72,998
|
|
|
$ 113,272
|
|
$
35,967
|
|
(68.2)%
|
Adjusted EBITDA
margin
|
|
16.0%
|
|
|
19.0%
|
|
6.0%
|
|
|
Rehabilitation Hospital
|
|
|
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
27
|
|
|
30
|
|
30
|
|
|
Revenue
(,000)
|
|
$
154,558
|
|
|
$ 207,804
|
|
$ 220,634
|
|
6.2%
|
Number of patient
days(b)(c)
|
|
82,816
|
|
|
102,439
|
|
103,802
|
|
1.3%
|
Number of
admissions(b)(d)
|
|
5,836
|
|
|
7,131
|
|
7,182
|
|
0.7%
|
Revenue per patient
day(b)(e)
|
|
$
1,633
|
|
|
$
1,853
|
|
$
1,943
|
|
4.9%
|
Occupancy
rate(b)(f)
|
|
76%
|
|
|
84%
|
|
84%
|
|
0.0%
|
Adjusted EBITDA
(,000)
|
|
$
25,797
|
|
|
$
50,534
|
|
$
42,379
|
|
(16.1)%
|
Adjusted EBITDA
margin
|
|
16.7%
|
|
|
24.3%
|
|
19.2%
|
|
|
Outpatient Rehabilitation
|
|
|
|
|
|
|
|
|
|
Number of clinics
operated – end of period(a)
|
|
1,684
|
|
|
1,809
|
|
1,901
|
|
|
Working
days(g)
|
|
63
|
|
|
63
|
|
64
|
|
|
Revenue
(,000)
|
|
$
246,905
|
|
|
$ 251,961
|
|
$ 271,940
|
|
7.9%
|
Number of
visits(b)(h)
|
|
2,054,483
|
|
|
2,100,154
|
|
2,310,086
|
|
10.0%
|
Revenue per
visit(b)(i)
|
|
$
103
|
|
|
$
104
|
|
$
102
|
|
(1.9)%
|
Adjusted EBITDA
(,000)
|
|
$
28,991
|
|
|
$
26,329
|
|
$
26,596
|
|
1.0%
|
Adjusted EBITDA
margin
|
|
11.7%
|
|
|
10.4%
|
|
9.8%
|
|
|
Concentra
|
|
|
|
|
|
|
|
|
|
Number of centers
operated – end of period(b)
|
|
525
|
|
|
519
|
|
518
|
|
|
Working
days(g)
|
|
63
|
|
|
63
|
|
64
|
|
|
Revenue
(,000)
|
|
$
396,321
|
|
|
$ 422,840
|
|
$ 423,423
|
|
0.1%
|
Number of
visits(b)(h)
|
|
2,911,607
|
|
|
2,795,574
|
|
3,116,898
|
|
11.5%
|
Revenue per
visit(b)(i)
|
|
$
124
|
|
|
$
125
|
|
$
125
|
|
0.0%
|
Adjusted EBITDA
(,000)
|
|
$
66,258
|
|
|
$
82,015
|
|
$
89,469
|
|
9.1%
|
Adjusted EBITDA
margin
|
|
16.7%
|
|
|
19.4%
|
|
21.1%
|
|
|
|
|
(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 portion
of our hospitals being utilized for patient care during the periods
presented. Occupancy rate is calculated using the number of patient
days, as presented above, divided by the total number of bed days
available during the period. Bed days available is derived by
adding the daily number of available licensed beds for each of the
periods presented.
|
(g)
|
Represents the number
of days in which normal business operations were conducted during
the periods presented.
|
(h)
|
Represents the number
of visits in which patients were treated at Select Medical's
outpatient rehabilitation clinics and Concentra centers during the
periods presented.
|
(i)
|
Represents the average
amount of revenue recognized for each patient visit. Revenue per
visit is calculated by dividing patient service revenue, excluding
revenues from certain other ancillary services, by the total number
of visits. For purposes of this computation for the Concentra
segment, patient service revenue does not include onsite
clinics.
|
VI. Net Income to Adjusted EBITDA
Reconciliation
For the Three Months Ended March 31, 2019, 2021 and 2022
(In
thousands, unaudited)
The presentation of Adjusted EBITDA is important to investors
because Adjusted EBITDA is commonly used as an analytical indicator
of performance by investors within the healthcare industry.
Adjusted EBITDA is used by management to evaluate financial
performance and determine resource allocation for each of Select
Medical's segments. Adjusted EBITDA is not a measure of financial
performance under accounting principles generally accepted in
the United States of America
("GAAP"). Items excluded from Adjusted EBITDA are significant
components in understanding and assessing financial performance.
Adjusted EBITDA should not be considered in isolation or as an
alternative to, or substitute for, net income, income from
operations, cash flows generated by operations, investing or
financing activities, or other financial statement data presented
in the consolidated financial statements as indicators of financial
performance or liquidity. Because Adjusted EBITDA is not a
measurement determined in accordance with GAAP and is thus
susceptible to varying definitions, Adjusted EBITDA as presented
may not be comparable to other similarly titled measures of other
companies.
The following table reconciles net income to Adjusted EBITDA for
Select Medical. Adjusted EBITDA is used by Select Medical to report
its segment performance. Adjusted EBITDA is defined as earnings
excluding interest, income taxes, depreciation and amortization,
gain (loss) on early retirement of debt, stock compensation
expense, gain (loss) on sale of businesses, and equity in earnings
(losses) of unconsolidated subsidiaries.
|
Three Months Ended
March 31,
|
|
2019
|
|
|
2021
|
|
2022
|
Net income
|
$
53,344
|
|
|
$
137,214
|
|
$
55,926
|
Income tax
expense
|
18,467
|
|
|
45,064
|
|
17,942
|
Interest
expense
|
50,811
|
|
|
34,402
|
|
35,514
|
Interest
income
|
—
|
|
|
(4,749)
|
|
—
|
Gain on sale of
businesses
|
(6,532)
|
|
|
—
|
|
—
|
Equity in earnings of
unconsolidated subsidiaries
|
(4,366)
|
|
|
(9,919)
|
|
(5,397)
|
Income from
operations
|
111,724
|
|
|
202,012
|
|
103,985
|
Stock compensation
expense:
|
|
|
|
|
|
|
Included
in general and administrative
|
4,748
|
|
|
5,460
|
|
6,949
|
Included
in cost of services
|
1,507
|
|
|
1,249
|
|
1,874
|
Depreciation and
amortization
|
52,138
|
|
|
49,620
|
|
51,039
|
Adjusted
EBITDA
|
$
170,117
|
|
|
$
258,341
|
|
$
163,847
|
|
|
|
|
|
|
|
Critical illness
recovery hospital(a)
|
$
72,998
|
|
|
$
113,272
|
|
$
35,967
|
Rehabilitation
hospital
|
25,797
|
|
|
50,534
|
|
42,379
|
Outpatient
rehabilitation
|
28,991
|
|
|
26,329
|
|
26,596
|
Concentra
|
66,258
|
|
|
82,015
|
|
89,469
|
Other(b)(c)
|
(23,927)
|
|
|
(13,809)
|
|
(30,564)
|
Adjusted
EBITDA
|
$
170,117
|
|
|
$
258,341
|
|
$
163,847
|
|
|
(a)
|
For the three months
ended March 31, 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 months
ended March 31, 2021, Adjusted EBITDA included other operating
income of $16.1 million. The other operating income is related to
the recognition of payments received under the Provider Relief
Fund.
|
(c)
|
Other primarily
includes general and administrative costs and other operating
income, as discussed further above.
|
View original
content:https://www.prnewswire.com/news-releases/select-medical-holdings-corporation-announces-results-for-its-first-quarter-ended-march-31-2022-and-cash-dividend-301541276.html
SOURCE Select Medical Holdings Corporation