For the fourth quarter ended December 31, 2020, revenue increased 6.2% to $1,460.5 million, compared to $1,374.6 million for the same quarter, prior year.
MECHANICSBURG, Pa., Feb. 25, 2021 /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, 2020.
For the fourth quarter ended December 31, 2020, revenue increased 6.2% to $1,460.5 million, compared to $1,374.6 million for the same quarter, prior year. Income from operations increased 45.4% to $163.3 million for the fourth quarter ended December 31, 2020, compared to $112.4 million for the same quarter, prior year. Income from operations included other operating income of $36.2 million related to the recognition of payments received under the Provider Relief Fund. Net income increased 134.1% to $102.2 million for the fourth quarter ended December 31, 2020, compared to $43.7 million for the same quarter, prior year. Net income included pre-tax losses on early retirement of debt of $19.4 million for the fourth quarter ended December 31, 2019. Adjusted EBITDA increased 28.7% to $221.3 million for the fourth quarter ended December 31, 2020, compared to $171.9 million for the same quarter, prior year. Earnings per common share increased to $0.57 on a fully diluted basis for the fourth quarter ended December 31, 2020, compared to $0.24 for the same quarter, prior year. Adjusted earnings per common share was $0.57 on a fully diluted basis for the fourth quarter ended December 31, 2020, compared to $0.31 for the same quarter, prior year. Adjusted earnings per common share excludes the losses on early retirement of debt and their related tax effects for the fourth quarter ended December 31, 2019. 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 year ended December 31, 2020, revenue increased 1.4% to $5,531.7 million, compared to $5,453.9 million for the prior year. Income from operations increased 20.3% to $567.7 million for the year ended December 31, 2020, compared to $471.9 million for the prior year. For the year ended December 31, 2020, income from operations included other operating income of $90.0 million related to the recognition of payments received under the Provider Relief Fund. Net income increased 71.4% to $344.6 million for the year ended December 31, 2020, compared to $201.0 million for the prior year. For the year ended December 31, 2020, net income included pre-tax gains on sales of businesses of $12.4 million. For the year ended December 31, 2019, net income included pre-tax losses on early retirement of debt of $38.1 million and a pre-tax gain on sale of businesses of $6.5 million. Adjusted EBITDA increased 12.6% to $800.6 million for the year ended December 31, 2020, compared to $710.9 million for the prior year. Earnings per common share increased to $1.93 on a fully diluted basis for the year ended December 31, 2020, compared to $1.10 for the prior year. Adjusted earnings per common share was $1.89 on a fully diluted basis for the year ended December 31, 2020, compared to $1.24 for the prior year. Adjusted earnings per common share excludes the gains on sales of businesses and their related tax effects for the year ended December 31, 2020. Adjusted earnings per common share excludes the losses on early retirement of debt and related costs, the gain on sale of businesses, and their related tax effects for the year ended December 31, 2019. 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.
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, 2020, Select Medical operated 99 critical illness recovery hospitals in 28 states, 30 rehabilitation hospitals in 12 states, and 1,788 outpatient rehabilitation clinics in 37 states and the District of Columbia. Select Medical’s joint venture subsidiary Concentra operated 517 occupational health centers in 41 states. At December 31, 2020, 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 coronavirus disease 2019 (“COVID-19") pandemic, including $100.0 billion in 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 the coronavirus, and for reimbursing eligible health care providers for lost revenues and health care related expenses that are attributable to the COVID-19 pandemic.
For the three months and year ended December 31, 2020, Select Medical recognized payments received under the Provider Relief Fund for loss of revenue and health care related expenses attributable to the COVID-19 pandemic as other operating income. For the three months ended December 31, 2020, other operating income of $36.2 million is included within the operating results of Select Medical’s other activities. For the year ended December 31, 2020, $88.9 million and $1.1 million of other operating income is included within the operating results of Select Medical’s other activities and its Concentra segment, respectively.
Critical Illness Recovery Hospital Segment
For the fourth quarter ended December 31, 2020, revenue for the critical illness recovery hospital segment increased 18.2% to $537.9 million, compared to $454.9 million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 24.5% to $75.3 million for the fourth quarter ended December 31, 2020, compared to $60.5 million for the same quarter, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 14.0% for the fourth quarter ended December 31, 2020, compared to 13.3% for the same quarter, prior year. Certain critical illness recovery hospital key statistics are presented in table VII of this release for both the fourth quarters ended December 31, 2020 and 2019.
For the year ended December 31, 2020, revenue for the critical illness recovery hospital segment increased 13.1% to $2,077.5 million, compared to $1,836.5 million for the prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 34.4% to $342.4 million for the year ended December 31, 2020, compared to $254.9 million for the prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 16.5% for the year ended December 31, 2020, compared to 13.9% for the prior year. Certain critical illness recovery hospital key statistics are presented in table VIII of this release for both the years ended December 31, 2020 and 2019.
Rehabilitation Hospital Segment
For the fourth quarter ended December 31, 2020, revenue for the rehabilitation hospital segment increased 7.2% to $195.9 million, compared to $182.7 million for the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment was $42.4 million for the fourth quarter ended December 31, 2020, compared to $43.3 million for the same quarter, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 21.6% for the fourth quarter ended December 31, 2020, 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 fourth quarters ended December 31, 2020 and 2019.
For the year ended December 31, 2020, revenue for the rehabilitation hospital segment increased 9.5% to $734.7 million, compared to $671.0 million for the prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 12.8% to $153.2 million for the year ended December 31, 2020, compared to $135.9 million for the prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 20.9% for the year ended December 31, 2020, compared to 20.2% for the prior year. The Adjusted EBITDA results for the rehabilitation hospital segment include start-up losses of approximately $8.8 million for the year ended December 31, 2019. Certain rehabilitation hospital key statistics are presented in table VIII of this release for both the years ended December 31, 2020 and 2019.
Outpatient Rehabilitation Segment
For the fourth quarter ended December 31, 2020, revenue for the outpatient rehabilitation segment was $257.5 million, compared to $271.9 million for the same quarter, prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $27.7 million for the fourth quarter ended December 31, 2020, compared to $40.2 million for the same quarter, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 10.8% for the fourth quarter ended December 31, 2020, compared to 14.8% for the same quarter, prior year. Certain outpatient rehabilitation key statistics are presented in table VII of this release for both the fourth quarters ended December 31, 2020 and 2019.
For the year ended December 31, 2020, revenue for the outpatient rehabilitation segment was $919.9 million, compared to $1,046.0 million for the prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $79.2 million for the year ended December 31, 2020, compared to $151.8 million for the prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 8.6% for the year ended December 31, 2020, compared to 14.5% for the prior year. Certain outpatient rehabilitation key statistics are presented in table VIII of this release for both the years ended December 31, 2020 and 2019.
Concentra Segment
For the fourth quarter ended December 31, 2020, revenue for the Concentra segment increased 0.4% to $398.7 million, compared to $397.1 million for the same quarter, prior year. Adjusted EBITDA for the Concentra segment increased 22.9% to $69.4 million for the fourth quarter ended December 31, 2020, compared to $56.5 million for the same quarter, prior year. The Adjusted EBITDA margin for the Concentra segment was 17.4% for the fourth quarter ended December 31, 2020, compared to 14.2% for the same quarter, prior year. Certain Concentra key statistics are presented in table VII of this release for both the fourth quarters ended December 31, 2020 and 2019.
For the year ended December 31, 2020, revenue for the Concentra segment was $1,501.4 million, compared to $1,628.8 million for the prior year. Adjusted EBITDA for the Concentra segment was $252.9 million for the year ended December 31, 2020, compared to $276.5 million for the prior year. The Adjusted EBITDA margin for the Concentra segment was 16.8% for the year ended December 31, 2020, compared to 17.0% for the prior year. Certain Concentra key statistics are presented in table VIII of this release for both the years ended December 31, 2020 and 2019.
Effects of the COVID-19 Pandemic on Select Medical’s Results of Operations
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 for each of its segments during the three months and year ended December 31, 2020.
Critical Illness Recovery Hospital Segment. Select Medical’s critical illness recovery hospitals are a key component of the inpatient hospital continuum of care. Beginning in March 2020, a number of waivers and modifications of certain requirements under the Medicare, Medicaid and Children’s Health Insurance Program (“CHIP”) programs were authorized, including certain regulations concerning patient length of stay requirements under the Medicare program which apply to Select Medical’s critical illness recovery hospitals. The length of stay requirements were suspended in order to facilitate the transfer of patients from general acute care hospitals and expand hospital bed capacity to care for COVID-19 patients. During the year ended December 31, 2020, Select Medical’s critical illness recovery hospitals played a critical role in caring for patients during the COVID-19 pandemic due, in part, to the rapid preparation and implementation of modifications that supported the treatment of COVID-19 patients.
The following table shows revenue, patient days, and occupancy rates for each of the periods presented, as well as the number of critical illness recovery hospitals Select Medical owned at the end of each period.
| Revenue | Patient Days | Occupancy Rate | Number of | ||||||||||||||||||||||||
| 2019 | 2020 | % Change | 2019 | 2020 | % Change | 2019 | 2020 | 2019 | 2020 | ||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||
| January | $ | 149,799 | $ | 163,238 | 9.0% | 86,238 | 90,783 | 5.3% | 69% | 69% | 96 | 100 | |||||||||||||||
| February | 145,586 | 165,375 | 13.6% | 80,806 | 87,844 | 8.7% | 71% | 72% | 96 | 100 | |||||||||||||||||
| March | 162,149 | 171,908 | 6.0% | 91,085 | 91,831 | 0.8% | 73% | 70% | 96 | 100 | |||||||||||||||||
| Three Months Ended March 31 | $ | 457,534 | $ | 500,521 | 9.4% | 258,129 | 270,458 | 4.8% | 71% | 70% | 96 | 100 | |||||||||||||||
| April | $ | 156,231 | $ | 171,445 | 9.7% | 88,357 | 90,710 | 2.7% | 70% | 71% | 99 | 100 | |||||||||||||||
| May | 156,422 | 178,223 | 13.9% | 89,350 | 95,191 | 6.5% | 69% | 72% | 99 | 100 | |||||||||||||||||
| June | 148,490 | 169,958 | 14.5% | 85,153 | 90,988 | 6.9% | 68% | 71% | 99 | 100 | |||||||||||||||||
| Three Months Ended June 30 | $ | 461,143 | $ | 519,626 | 12.7% | 262,860 | 276,889 | 5.3% | 69% | 72% | 99 | 100 | |||||||||||||||
| Six Months Ended June 30 | $ | 918,677 | $ | 1,020,147 | 11.0% | 520,989 | 547,347 | 5.1% | 70% | 71% | 99 | 100 | |||||||||||||||
| July | $ | 151,416 | $ | 175,253 | 15.7% | 87,143 | 94,144 | 8.0% | 67% | 71% | 99 | 99 | |||||||||||||||
| August | 155,485 | 173,967 | 11.9% | 86,553 | 93,964 | 8.6% | 66% | 71% | 99 | 99 | |||||||||||||||||
| September | 155,991 | 170,234 | 9.1% | 84,393 | 90,955 | 7.8% | 67% | 71% | 99 | 99 | |||||||||||||||||
| Three Months Ended September 30 | $ | 462,892 | $ | 519,454 | 12.2% | 258,089 | 279,063 | 8.1% | 67% | 71% | 99 | 99 | |||||||||||||||
| Nine Months Ended September 30 | $ | 1,381,569 | $ | 1,539,601 | 11.4% | 779,078 | 826,410 | 6.1% | 69% | 71% | 99 | 99 | |||||||||||||||
| October | $ | 152,791 | $ | 181,251 | 18.6% | 87,188 | 95,616 | 9.7% | 66% | 71% | 100 | 100 | |||||||||||||||
| November | 150,399 | 174,133 | 15.8% | 84,540 | 92,651 | 9.6% | 67% | 71% | 100 | 99 | |||||||||||||||||
| December | 151,759 | 182,514 | 20.3% | 87,555 | 97,079 | 10.9% | 67% | 72% | 100 | 99 | |||||||||||||||||
| Three Months Ended December 31 | $ | 454,949 | $ | 537,898 | 18.2% | 259,283 | 285,346 | 10.1% | 67% | 71% | 100 | 99 | |||||||||||||||
| Twelve Months Ended December 31 | $ | 1,836,518 | $ | 2,077,499 | 13.1% | 1,038,361 | 1,111,756 | 7.1% | 68% | 71% | 100 | 99 | |||||||||||||||
| (1) | Represents the number of hospitals owned at the end of each period presented. | ||
Rehabilitation Hospital Segment. Select Medical’s rehabilitation hospitals receive most of their admissions from general acute care hospitals. Beginning in March 2020, a number of waivers and modifications of certain requirements under the Medicare, Medicaid and CHIP programs were authorized, including certain regulations governing admissions into rehabilitation hospitals. This was done in order to facilitate the transfer of patients from general acute care hospitals and critical illness recovery hospitals and to expand hospital bed capacity to care for COVID-19 patients. Select Medical’s rehabilitation hospitals were affected by the suspension of elective surgeries at hospitals and other facilities at the beginning of the pandemic, which resulted in reduced need for inpatient rehabilitation services. Beginning in May 2020, state governments and health departments began to ease restrictions and hospitals began to perform elective surgeries again, which has increased the need for the services provided by our rehabilitation hospitals.
The following table shows revenue, patient days, and occupancy rates for each of the periods presented, as well as the number of rehabilitation hospitals Select Medical owned at the end of each period.
| Revenue | Patient Days | Occupancy Rate | Number of | ||||||||||||||||||||||||
| 2019 | 2020 | % Change | 2019 | 2020 | % Change | 2019 | 2020 | 2019 | 2020 | ||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||
| January | $ | 50,615 | $ | 61,673 | 21.8% | 27,434 | 32,111 | 17.0% | 74% | 79% | 17 | 19 | |||||||||||||||
| February | 48,080 | 60,690 | 26.2% | 25,442 | 31,813 | 25.0% | 76% | 84% | 17 | 19 | |||||||||||||||||
| March | 55,863 | 59,656 | 6.8% | 29,940 | 30,644 | 2.4% | 78% | 76% | 18 | 19 | |||||||||||||||||
| Three Months Ended March 31 | $ | 154,558 | $ | 182,019 | 17.8% | 82,816 | 94,568 | 14.2% | 76% | 79% | 18 | 19 | |||||||||||||||
| April | $ | 51,991 | $ | 45,878 | (11.8)% | 28,266 | 23,553 | (16.7)% | 76% | 61% | 18 | 19 | |||||||||||||||
| May | 56,019 | 57,815 | 3.2% | 29,730 | 29,787 | 0.2% | 75% | 73% | 19 | 19 | |||||||||||||||||
| June | 52,364 | 64,974 | 24.1% | 28,529 | 30,741 | 7.8% | 73% | 78% | 19 | 19 | |||||||||||||||||
| Three Months Ended June 30 | $ | 160,374 | $ | 168,667 | 5.2% | 86,525 | 84,081 | (2.8)% | 75% | 71% | 19 | 19 | |||||||||||||||
| Six Months Ended June 30 | $ | 314,932 | $ | 350,686 | 11.4% | 169,341 | 178,649 | 5.5% | 76% | 75% | 19 | 19 | |||||||||||||||
| July | $ | 57,077 | $ | 62,312 | 9.2% | 30,054 | 31,986 | 6.4% | 75% | 81% | 19 | 18 | |||||||||||||||
| August | 58,072 | 63,673 | 9.6% | 30,228 | 32,518 | 7.6% | 75% | 83% | 19 | 18 | |||||||||||||||||
| September | 58,220 | 62,090 | 6.6% | 29,172 | 31,176 | 6.9% | 75% | 82% | 19 | 18 | |||||||||||||||||
| Three Months Ended September 30 | $ | 173,369 | $ | 188,075 | 8.5% | 89,454 | 95,680 | 7.0% | 75% | 82% | 19 | 18 | |||||||||||||||
| Nine Months Ended September 30 | $ | 488,301 | $ | 538,761 | 10.3% | 258,795 | 274,329 | 6.0% | 75% | 77% | 19 | 18 | |||||||||||||||
| October | $ | 61,975 | $ | 66,591 | 7.4% | 31,767 | 33,378 | 5.1% | 78% | 82% | 19 | 19 | |||||||||||||||
| November | 60,353 | 64,610 | 7.1% | 31,022 | 31,581 | 1.8% | 79% | 80% | 19 | 19 | |||||||||||||||||
| December | 60,342 | 64,711 | 7.2% | 31,447 | 31,545 | 0.3% | 78% | 78% | 19 | 19 | |||||||||||||||||
| Three Months Ended December 31 | $ | 182,670 | $ | 195,912 | 7.2% | 94,236 | 96,504 | 2.4% | 78% | 80% | 19 | 19 | |||||||||||||||
| Twelve Months Ended December 31 | $ | 670,971 | $ | 734,673 | 9.5% | 353,031 | 370,833 | 5.0% | 76% | 78% | 19 | 19 | |||||||||||||||
| (1) | Represents the number of hospitals owned at the end of each period presented. | ||
Outpatient Rehabilitation Segment. Beginning in mid-March 2020, state governments began implementing mandatory closures of non-essential or non-life sustaining businesses, restricting travel and individual activities outside of the home, closing schools, and mandating other social distancing measures. Additionally, hospitals and other facilities began to suspend elective surgeries. As a result, Select Medical’s outpatient rehabilitation clinics experienced significantly less patient visit volume due to a decline 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. Beginning in May 2020, state governments began to ease restrictions imposed on businesses and individuals, physician offices began reopening for routine office visits, and hospitals and other facilities began performing elective surgeries again, which has resulted in an increased need for the services provided by Select Medical’s outpatient rehabilitation clinics.
The following table shows revenue and patient visits for each of the periods presented, as well as the number of working days for each period.
| Revenue | Visits | Working Days(1) | |||||||||||||||||||||
| 2019 | 2020 | % Change | 2019 | 2020 | % Change | 2019 | 2020 | ||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| January | $ | 83,185 | $ | 90,924 | 9.3% | 687,007 | 757,171 | 10.2% | 22 | 22 | |||||||||||||
| February | 78,573 | 88,239 | 12.3% | 658,610 | 739,061 | 12.2% | 20 | 20 | |||||||||||||||
| March | 85,147 | 76,086 | (10.6)% | 708,866 | 626,433 | (11.6)% | 21 | 22 | |||||||||||||||
| Three Months Ended March 31 | $ | 246,905 | $ | 255,249 | 3.4% | 2,054,483 | 2,122,665 | 3.3% | 63 | 64 | |||||||||||||
| April | $ | 90,230 | $ | 49,084 | (45.6)% | 762,914 | 386,108 | (49.4)% | 22 | 22 | |||||||||||||
| May | 90,272 | 51,186 | (43.3)% | 759,829 | 409,703 | (46.1)% | 22 | 20 | |||||||||||||||
| June | 81,389 | 66,868 | (17.8)% | 680,762 | 546,456 | (19.7)% | 20 | 22 | |||||||||||||||
| Three Months Ended June 30 | $ | 261,891 | $ | 167,138 | (36.2)% | 2,203,505 | 1,342,267 | (39.1)% | 64 | 64 | |||||||||||||
| Six Months Ended June 30 | $ | 508,796 | $ | 422,387 | (17.0)% | 4,257,988 | 3,464,932 | (18.6)% | 127 | 128 | |||||||||||||
| July | $ | 89,267 | $ | 77,793 | (12.9)% | 754,102 | 636,826 | (15.6)% | 22 | 22 | |||||||||||||
| August | 90,687 | 79,034 | (12.8)% | 743,813 | 651,738 | (12.4)% | 22 | 21 | |||||||||||||||
| September | 85,376 | 83,215 | (2.5)% | 706,413 | 694,808 | (1.6)% | 20 | 21 | |||||||||||||||
| Three Months Ended September 30 | $ | 265,330 | $ | 240,042 | (9.5)% | 2,204,328 | 1,983,372 | (10.0)% | 64 | 64 | |||||||||||||
| Nine Months Ended September 30 | $ | 774,126 | $ | 662,429 | (14.4)% | 6,462,316 | 5,448,304 | (15.7)% | 191 | 192 | |||||||||||||
| October | $ | 96,868 | $ | 88,274 | (8.9)% | 808,649 | 745,562 | (7.8)% | 23 | 22 | |||||||||||||
| November | 87,072 | 82,102 | (5.7)% | 722,607 | 685,885 | (5.1)% | 20 | 20 | |||||||||||||||
| December | 87,945 | 87,108 | (1.0)% | 725,710 | 713,593 | (1.7)% | 21 | 22 | |||||||||||||||
| Three Months Ended December 31 | $ | 271,885 | $ | 257,484 | (5.3)% | 2,256,966 | 2,145,040 | (5.0)% | 64 | 64 | |||||||||||||
| Twelve Months Ended December 31 | $ | 1,046,011 | $ | 919,913 | (12.1)% | 8,719,282 | 7,593,344 | (12.9)% | 255 | 256 | |||||||||||||
| (1) | Represents the number of days in which normal business operations were conducted during the periods presented. | |||
Concentra Segment. Beginning in mid-March 2020, state governments began placing significant restrictions on businesses and mandating closures of non-essential or non-life sustaining businesses, causing many employers to furlough their workforce and temporarily cease or significantly reduce their operations. These actions have had significant effects on patient visit volumes. Beginning in May 2020, state governments began to ease restrictions imposed on businesses and employers began to increase their workforce, which has resulted in an increased need for occupational health services. During the year ended December 31, 2020, Concentra expanded its services to provide COVID-19 screening and testing at its centers and various onsite clinics located at employer worksites.
The following table shows revenue and patient visits for each of the periods presented, as well as the number of working days for each period.
| Revenue | Visits | Working Days(1) | |||||||||||||||||||||
| 2019 | 2020 | % Change | 2019 | 2020 | % Change | 2019 | 2020 | ||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| January | $ | 133,507 | $ | 141,236 | 5.8% | 985,598 | 1,032,069 | 4.7% | 22 | 22 | |||||||||||||
| February | 126,309 | 133,690 | 5.8% | 919,065 | 965,741 | 5.1% | 20 | 20 | |||||||||||||||
| March | 136,505 | 123,609 | (9.4)% | 1,006,944 | 879,585 | (12.6)% | 21 | 22 | |||||||||||||||
| Three Months Ended March 31 | $ | 396,321 | $ | 398,535 | 0.6% | 2,911,607 | 2,877,395 | (1.2)% | 63 | 64 | |||||||||||||
| April | $ | 140,050 | $ | 91,178 | (34.9)% | 1,040,543 | 610,555 | (41.3)% | 22 | 22 | |||||||||||||
| May | 143,183 | 99,228 | (30.7)% | 1,073,763 | 674,629 | (37.2)% | 22 | 20 | |||||||||||||||
| June | 130,218 | 121,932 | (6.4)% | 988,783 | 865,896 | (12.4)% | 20 | 22 | |||||||||||||||
| Three Months Ended June 30 | $ | 413,451 | $ | 312,338 | (24.5)% | 3,103,089 | 2,151,080 | (30.7)% | 64 | 64 | |||||||||||||
| Six Months Ended June 30 | $ | 809,772 | $ | 710,873 | (12.2)% | 6,014,696 | 5,028,475 | (16.4)% | 127 | 128 | |||||||||||||
| July | $ | 142,385 | $ | 132,465 | (7.0)% | 1,057,809 | 930,427 | (12.0)% | 22 | 22 | |||||||||||||
| August | 144,452 | 130,291 | (9.8)% | 1,087,165 | 933,555 | (14.1)% | 22 | 21 | |||||||||||||||
| September | 135,063 | 129,103 | (4.4)% | 1,005,929 | 963,065 | (4.3)% | 20 | 21 | |||||||||||||||
| Three Months Ended September 30 | $ | 421,900 | $ | 391,859 | (7.1)% | 3,150,903 | 2,827,047 | (10.3)% | 64 | 64 | |||||||||||||
| Nine Months Ended September 30 | $ | 1,231,672 | $ | 1,102,732 | (10.5)% | 9,165,599 | 7,855,522 | (14.3)% | 191 | 192 | |||||||||||||
| October | $ | 149,260 | $ | 139,365 | (6.6)% | 1,113,408 | 1,011,816 | (9.1)% | 23 | 22 | |||||||||||||
| November | 123,152 | 126,431 | 2.7% | 908,159 | 867,918 | (4.4)% | 19 | 19 | |||||||||||||||
| December | 124,733 | 132,906 | 6.6% | 881,699 | 892,648 | 1.2% | 21 | 22 | |||||||||||||||
| Three Months Ended December 31 | $ | 397,145 | $ | 398,702 | 0.4% | 2,903,266 | 2,772,382 | (4.5)% | 63 | 63 | |||||||||||||
| Twelve Months Ended December 31 | $ | 1,628,817 | $ | 1,501,434 | (7.8)% | 12,068,865 | 10,627,904 | (11.9)% | 254 | 255 | |||||||||||||
| (1) | Represents the number of days in which normal business operations were conducted during the periods presented. | ||
Purchase of Concentra Interest
On December 31, 2020, Select Medical, Welsh, Carson, Anderson & Stowe XII, L.P. (“WCAS”), and Dignity Health Holding Corporation (“DHHC”) entered into an agreement pursuant to which Select Medical acquired approximately 11.1% of the outstanding membership interests of Concentra Group Holdings Parent, LLC on a fully diluted basis from WCAS, DHHC, and other equity holders of Concentra Group Holdings Parent, LLC for approximately $210.2 million.
This purchase was in lieu of, and deemed to be, the exercise of the second put right provided to certain equity holders under the terms of the Amended and Restated Limited Liability Company Agreement of Concentra Group Holdings Parent, LLC, dated as of February 1, 2018. Following this purchase, Select Medical owns approximately 78.0% of the outstanding membership interests of Concentra Group Holdings Parent, LLC on a fully diluted basis and approximately 79.8% of the outstanding voting membership interests of Concentra Group Holdings Parent, LLC.
Stock Repurchase Program
The board of directors of Select Medical has authorized a common stock repurchase program to repurchase up to $500.0 million worth of shares of its common stock. The program has been extended until December 31, 2021, and 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.
Select Medical did not repurchase shares during the quarter ended December 31, 2020. During the year ended December 31, 2020, Select Medical repurchased 491,559 shares at a cost of approximately $8.7 million, or $17.68 per share, which includes transaction costs. Since the inception of the program through December 31, 2020, Select Medical has repurchased 38,580,908 shares at a cost of approximately $356.6 million, or $9.24 per share, which includes transaction costs.
Business Outlook
Select Medical is issuing its business outlook for 2021. Select Medical expects for the full year of 2021 revenue to be in the range of $5.65 billion to $5.85 billion and Adjusted EBITDA for the full year of 2021 to be in the range of $840.0 million to $880.0 million. Select Medical expects fully diluted earnings per common share for the full year 2021 to be in the range of $2.26 to $2.48. A reconciliation of net income to Adjusted EBITDA for the full year of 2021 is presented in table XI of this release.
Select Medical is also providing a three-year compound annual growth rate target for the years 2021 through 2023. Select Medical is targeting compound annual growth for revenue in the range of 4% to 6% from 2021 through 2023. Select Medical is targeting compound annual growth for Adjusted EBITDA in the range of 7% to 8% from 2021 through 2023. Select Medical is targeting compound annual growth for fully diluted earnings per common share in the range of 17% to 20% from 2021 through 2023.
Conference Call
Select Medical will host a conference call regarding its results for the fourth quarter and full year ended December 31, 2020, as well as its business outlook and the impact of the COVID-19 pandemic on each of its reporting segments, on Friday, February 26, 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 4288605. 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, March 5, 2021. The replay number is 1-855-859-2056 (domestic) or 1-404-537-3406 (international). The conference ID for the replay will be 4288605. 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 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
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SOURCE Select Medical Holdings Corporation
Company Codes: NYSE:SEM
