Select Medical Holdings Corporation Announces Results For Its Second Quarter Ended June 30, 2025 and Cash Dividend
MECHANICSBURG, Pa., July 31, 2025 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE:SEM) today announced results for its second quarter ended June 30, 2025, and the declaration of a cash dividend.
For the second quarter ended June 30, 2025, revenue increased 4.5% to $1,339.6 million, compared to $1,281.7 million for the same quarter, prior year. Income from continuing operations before other income and expense increased 17.2% to $86.5 million for the second quarter ended June 30, 2025, compared to $73.9 million for the same quarter, prior year. Income from continuing operations, net of tax, increased 53.8% to $57.9 million for the second quarter ended June 30, 2025, compared to $37.6 million for the same quarter, prior year. Adjusted EBITDA increased 0.5% to $125.4 million for the second quarter ended June 30, 2025, compared to $124.7 million for the same quarter, prior year. Earnings per common share from continuing operations increased 88.2% to $0.32 for the second quarter ended June 30, 2025, compared to $0.17 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.
For the six months ended June 30, 2025, revenue increased 3.4% to $2,692.8 million, compared to $2,603.0 million for the same period, prior year. Income from continuing operations before other income and expense increased 3.6% to $199.3 million for the six months ended June 30, 2025, compared to $192.3 million for the same period, prior year. Income from continuing operations, net of tax, increased 33.7% to $132.6 million for the six months ended June 30, 2025, compared to $99.2 million for the same period, prior year. Adjusted EBITDA was $276.9 million for the six months ended June 30, 2025, compared to $290.5 million for the same period, prior year. Earnings per common share from continuing operations increased 52.0% to $0.76 for the six months ended June 30, 2025, compared to $0.50 for the same period, 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.
On November 25, 2024, Select completed a tax-free distribution of 104,093,503 shares of common stock of Concentra Group Holdings Parent, Inc. ("Concentra") to its stockholders. Following the completion of the distribution, the Company no longer owns any shares of Concentra common stock. The results of Concentra are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for the three and six months ended June 30, 2024.
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 June 30, 2025, Select Medical operated 104 critical illness recovery hospitals in 29 states, 36 rehabilitation hospitals in 14 states, and 1,919 outpatient rehabilitation clinics in 39 states and the District of Columbia. At June 30, 2025, 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 second quarter ended June 30, 2025, revenue for the critical illness recovery hospital segment was $601.1 million, compared to $604.9 million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital segment was $56.3 million for the second quarter ended June 30, 2025, compared to $71.8 million for the same quarter, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 9.4% for the second quarter ended June 30, 2025, compared to 11.9% for the same quarter, prior year. Certain critical illness recovery hospital key statistics are presented in table VII of this release for the second quarters ended June 30, 2025 and 2024.
For the six months ended June 30, 2025, revenue for the critical illness recovery hospital segment was $1,238.2 million, compared to $1,260.8 million for the same period, prior year. Adjusted EBITDA for the critical illness recovery hospital segment was $142.9 million for the six months ended June 30, 2025, compared to $187.8 million for the same period, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 11.5% for the six months ended June 30, 2025, compared to 14.9% for the same period, prior year. Certain critical illness recovery hospital key statistics are presented in table VIII of this release for the six months ended June 30, 2025 and 2024.
Rehabilitation Hospital Segment
For the second quarter ended June 30, 2025, revenue for the rehabilitation hospital segment increased 17.2% to $313.8 million, compared to $267.8 million for the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 14.7% to $71.0 million for the second quarter ended June 30, 2025, compared to $62.0 million for the same quarter, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 22.6% for the second quarter ended June 30, 2025, compared to 23.1% for the same quarter, prior year. Certain rehabilitation hospital key statistics are presented in table VII of this release for the second quarters ended June 30, 2025 and 2024.
For the six months ended June 30, 2025, revenue for the rehabilitation hospital segment increased 16.4% to $621.2 million, compared to $533.5 million for the same period, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 14.7% to $141.5 million for the six months ended June 30, 2025, compared to $123.4 million for the same period, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 22.8% for the six months ended June 30, 2025, compared to 23.1% for the same period, prior year. Certain rehabilitation hospital key statistics are presented in table VIII of this release for the six months ended June 30, 2025 and 2024.
Outpatient Rehabilitation Segment
For the second quarter ended June 30, 2025, revenue for the outpatient rehabilitation segment increased 3.8% to $327.6 million, compared to $315.5 million for the same quarter, prior year. Adjusted EBITDA for the outpatient rehabilitation segment increased 6.1% to $30.5 million for the second quarter ended June 30, 2025, compared to $28.8 million for the same quarter, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 9.3% for the second quarter ended June 30, 2025, compared to 9.1% for the same quarter, prior year. Certain outpatient rehabilitation key statistics are presented in table VII of this release for the second quarters ended June 30, 2025 and 2024.
For the six months ended June 30, 2025, revenue for the outpatient rehabilitation segment increased 2.6% to $634.9 million, compared to $618.7 million for the same period, prior year. Adjusted EBITDA for the outpatient rehabilitation segment increased 2.0% to $54.8 million for the six months ended June 30, 2025, compared to $53.7 million for the same period, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 8.6% for the six months ended June 30, 2025, compared to 8.7% for the same period, prior year. Certain outpatient rehabilitation key statistics are presented in table VIII of this release for the six months ended June 30, 2025 and 2024.
Dividend
On July 30, 2025, Select Medical's Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about August 28, 2025, to stockholders of record as of the close of business on August 13, 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.
During the six months ended June 30, 2025, Select Medical repurchased 6,375,512 shares at a cost of approximately $96.5 million, or $15.13 per share, which includes transaction costs. From the inception of the common stock repurchase program through June 30, 2025, Select Medical has repurchased 54,610,335 shares at a cost of approximately $696.8 million, or $12.76 per share, which includes transaction costs. On August 16, 2022, Congress passed the Inflation Reduction Act of 2022, which enacted a 1% excise tax on stock repurchases that exceed $1.0 million, effective January 1, 2023. As of June 30, 2025, $0.9 million has been accrued for the 1% excise tax as a cost of the stock repurchase.
Business Outlook
Select Medical is reaffirming its 2025 business outlook, which was provided most recently in its May 1, 2025 press release. For fiscal year 2025, Select Medical expects revenue to be in the range of $5.3 billion to $5.5 billion, Adjusted EBITDA to be in the range of $510.0 million to $530.0 million, and fully diluted earnings per share to be in the range of $1.09 to $1.19. Reconciliations of full year 2025 Adjusted EBITDA expectations to income from operations, net of tax, is presented in table X of this release.
Conference Call
Select Medical will host a conference call regarding its second quarter results and its business outlook on Friday, August 1, 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.
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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 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;
- changes to United States tariff and import/export regulations and the impact on global economic conditions may have a negative effect on our business, financial condition, and results of operations;
- 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;
- 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 quarterly reports on Form 10-Q and 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
[email protected]
I. Condensed Consolidated Statements of Operations For the Three Months Ended June 30, 2024 and 2025 (In thousands, except per share amounts, unaudited) | ||||||
2024 | 2025 | % Change | ||||
Revenue | $ 1,281,748 | $ 1,339,579 | 4.5 % | |||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 1,121,943 | 1,184,129 | 5.5 | |||
General and administrative | 49,878 | 35,663 | (28.5) | |||
Depreciation and amortization | 36,069 | 34,848 | (3.4) | |||
Total costs and expenses | 1,207,890 | 1,254,640 | 3.9 | |||
Other operating income (loss) | (2) | 1,592 | N/M | |||
Income from continuing operations before other income and expense | 73,856 | 86,531 | 17.2 | |||
Other income and expense: | ||||||
Equity in earnings of unconsolidated subsidiaries | 9,991 | 13,618 | 36.3 | |||
Interest expense | (27,994) | (29,978) | 7.1 | |||
Income from continuing operations before income taxes | 55,853 | 70,171 | 25.6 | |||
Income tax expense from continuing operations | 18,215 | 12,292 | (32.5) | |||
Income from continuing operations, net of tax | 37,638 | 57,879 | 53.8 | |||
Discontinued operations: | ||||||
Income from discontinued business | 71,155 | — | N/M | |||
Income tax expense from discontinued business | 14,027 | — | N/M | |||
Income from discontinued operations, net of tax | 57,128 | — | N/M | |||
Net income | 94,766 | 57,879 | (38.9) | |||
Less: Net income attributable to non-controlling interests | 17,203 | 17,308 | 0.6 | |||
Net income attributable to Select Medical | $ 77,563 | $ 40,571 | (47.7) % | |||
Net income attributable to Select Medical's common stockholders: | ||||||
Income from continuing operations, net of tax | $ 21,757 | $ 40,571 | ||||
Income from discontinued operations, net of tax | 55,806 | — | ||||
Net income attributable to Select Medical's common stockholders | $ 77,563 | $ 40,571 | ||||
Earnings per common share: | ||||||
Continuing operations - basic and diluted | $ 0.17 | $ 0.32 | ||||
Discontinued operations - basic and diluted | 0.43 | — | ||||
Total earnings per common share - basic and diluted(1) | $ 0.60 | $ 0.32 | ||||
(1) Refer to table III for calculation of earnings per common share. |
N/M Not meaningful |
II. Condensed Consolidated Statements of Operations For the Six Months Ended June 30, 2024 and 2025 (In thousands, except per share amounts, unaudited) | ||||||
2024 | 2025 | % Change | ||||
Revenue | $ 2,602,959 | $ 2,692,751 | 3.4 % | |||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 2,242,654 | 2,356,740 | 5.1 | |||
General and administrative | 98,325 | 68,671 | (30.2) | |||
Depreciation and amortization | 71,653 | 69,656 | (2.8) | |||
Total costs and expenses | 2,412,632 | 2,495,067 | 3.4 | |||
Other operating income | 1,998 | 1,592 | (20.3) | |||
Income from continuing operations before other income and expense | 192,325 | 199,276 | 3.6 | |||
Other income and expense: | ||||||
Equity in earnings of unconsolidated subsidiaries | 20,412 | 26,130 | 28.0 | |||
Interest expense | (68,675) | (59,050) | (14.0) | |||
Income from continuing operations before income taxes | 144,062 | 166,356 | 15.5 | |||
Income tax expense from continuing operations | 44,895 | 33,745 | (24.8) | |||
Income from continuing operations, net of tax | 99,167 | 132,611 | 33.7 | |||
Discontinued operations: | ||||||
Income from discontinued business | 136,571 | — | N/M | |||
Income tax expense from discontinued business | 23,805 | — | N/M | |||
Income from discontinued operations, net of tax | 112,766 | — | N/M | |||
Net income | 211,933 | 132,611 | (37.4) | |||
Less: Net income attributable to non-controlling interests | 37,473 | 35,359 | (5.6) | |||
Net income attributable to Select Medical | $ 174,460 | $ 97,252 | (44.3) % | |||
Net income attributable to Select Medical's common stockholders: | ||||||
Income from continuing operations, net of tax | $ 64,339 | $ 97,252 | ||||
Income from discontinued operations, net of tax | 110,121 | — | ||||
Net income attributable to Select Medical's common stockholders | $ 174,460 | $ 97,252 | ||||
Earnings per common share: | ||||||
Continuing operations - basic and diluted | $ 0.50 | $ 0.76 | ||||
Discontinued operations - basic and diluted | 0.85 | — | ||||
Total earnings per common share - basic and diluted(1) | $ 1.35 | $ 0.76 | ||||
(1) Refer to table III for calculation of earnings per common share. |
N/M Not meaningful |
III. Earnings per Share |
For the Three and Six Months Ended June 30, 2024 and 2025 |
(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 income from continuing operations, net of tax, attributable to Select Medical, its common shares outstanding, and its participating securities outstanding for the three and six months ended June 30, 2024 and 2025:
Basic and Diluted EPS | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2024 | 2025 | 2024 | 2025 | |||||
Income from continuing operations, net of tax | $ 37,638 | $ 57,879 | $ 99,167 | $ 132,611 | ||||
Less: net income attributable to non-controlling interests | 15,881 | 17,308 | 34,828 | 35,359 | ||||
Income from continuing operations, net of tax, attributable to | 21,757 | 40,571 | 64,339 | 97,252 | ||||
Less: distributed and undistributed net income attributable to | 932 | 820 | 2,508 | 1,965 | ||||
Distributed and undistributed income from continuing | $ 20,825 | $ 39,751 | $ 61,831 | $ 95,287 | ||||
The following tables set forth the computation of EPS under the two-class method for the three and six months ended June 30, 2024 and 2025:
Three Months Ended June 30, | |||||||||||||
2024 | 2025 | ||||||||||||
Income from | Shares(1) | Basic and | Income from | Shares(1) | Basic and | ||||||||
Common shares | $ 20,825 | 123,946 | $ 0.17 | $ 39,751 | 123,359 | $ 0.32 | |||||||
Participating securities | 932 | 5,550 | $ 0.17 | 820 | 2,545 | $ 0.32 | |||||||
Total | $ 21,757 | $ 40,571 | |||||||||||
Six Months Ended June 30, | |||||||||||||
2024 | 2025 | ||||||||||||
Income from | Shares(1) | Basic and | Income from | Shares(1) | Basic and | ||||||||
Common shares | $ 61,831 | 123,902 | $ 0.50 | $ 95,287 | 124,774 | $ 0.76 | |||||||
Participating securities | 2,508 | 5,026 | $ 0.50 | 1,965 | 2,573 | $ 0.76 | |||||||
Total | $ 64,339 | $ 97,252 | |||||||||||
(1) Represents the weighted average share count outstanding during the period. |
IV. Condensed Consolidated Balance Sheets (In thousands, unaudited) | ||||
December 31, 2024 | June 30, 2025 | |||
Assets | ||||
Current Assets: | ||||
Cash and cash equivalents | $ 59,694 | $ 52,349 | ||
Accounts receivable | 821,385 | 909,460 | ||
Other current assets | 138,698 | 119,081 | ||
Total Current Assets | 1,019,777 | 1,080,890 | ||
Operating lease right-of-use assets | 908,095 | 938,624 | ||
Property and equipment, net | 872,185 | 921,741 | ||
Goodwill | 2,331,898 | 2,331,898 | ||
Identifiable intangible assets, net | 103,183 | 101,925 | ||
Other assets | 372,813 | 367,172 | ||
Total Assets | $ 5,607,951 | $ 5,742,250 | ||
Liabilities and Equity | ||||
Current Liabilities: | ||||
Payables and accruals | $ 777,781 | $ 736,514 | ||
Current operating lease liabilities | 179,601 | 182,150 | ||
Current portion of long-term debt and notes payable | 20,269 | 20,326 | ||
Total Current Liabilities | 977,651 | 938,990 | ||
Non-current operating lease liabilities | 787,124 | 818,128 | ||
Long-term debt, net of current portion | 1,691,546 | 1,839,631 | ||
Non-current deferred tax liability | 81,497 | 72,946 | ||
Other non-current liabilities | 73,038 | 73,293 | ||
Total Liabilities | 3,610,856 | 3,742,988 | ||
Redeemable non-controlling interests | 10,167 | 8,493 | ||
Total equity | 1,986,928 | 1,990,769 | ||
Total Liabilities and Equity | $ 5,607,951 | $ 5,742,250 | ||
V. Condensed Consolidated Statements of Cash Flows For the Three Months Ended June 30, 2024 and 2025 (In thousands, unaudited) | ||||
2024 | 2025 | |||
Operating activities | ||||
Net income | $ 94,766 | $ 57,879 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 1,756 | 10,947 | ||
Depreciation and amortization | 53,939 | 34,848 | ||
Provision for expected credit losses | 606 | (728) | ||
Equity in earnings of unconsolidated subsidiaries | (6,315) | (13,618) | ||
Gain on sale or disposal of assets | (1,066) | (20) | ||
Stock compensation expense | 14,413 | 4,032 | ||
Amortization of debt discount, premium and issuance costs | 742 | 786 | ||
Deferred income taxes | (27,448) | (1,693) | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | 56,199 | (548) | ||
Other current assets | 16,168 | 12,792 | ||
Other assets | (15,210) | 1,332 | ||
Accounts payable and accrued expenses | 89,602 | 4,283 | ||
Net cash provided by operating activities | 278,152 | 110,292 | ||
Investing activities | ||||
Business combinations, net of cash acquired | (588) | — | ||
Purchases of property and equipment | (55,548) | (64,684) | ||
Proceeds from sale of assets | 2,068 | 15 | ||
Net cash used in investing activities | (54,068) | (64,669) | ||
Financing activities | ||||
Borrowings on revolving facilities | 220,000 | 365,000 | ||
Payments on revolving facilities | (385,000) | (295,000) | ||
Payments on term loans | — | (2,625) | ||
Borrowings of other debt | — | 5,338 | ||
Principal payments on other debt | (14,200) | (8,962) | ||
Dividends paid to common stockholders | (16,254) | (7,885) | ||
Repurchase of common stock | (1,400) | (86,176) | ||
Decrease in overdrafts | (4,908) | (4,177) | ||
Proceeds from issuance of non-controlling interests | 1,749 | 2,962 | ||
Distributions to and purchases of non-controlling interests | (5,531) | (14,962) | ||
Net cash used in financing activities | (205,544) | (46,487) | ||
Net increase (decrease) in cash and cash equivalents | 18,540 | (864) | ||
Cash and cash equivalents at beginning of period | 92,620 | 53,213 | ||
Cash and cash equivalents at end of period | $ 111,160 | $ 52,349 | ||
Supplemental information | ||||
Cash paid for interest, excluding amounts received of $22,439 under the | $ 53,044 | $ 38,293 | ||
Cash paid for taxes | 60,222 | 19,580 | ||
VI. Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2024 and 2025 (In thousands, unaudited) | ||||
2024 | 2025 | |||
Operating activities | ||||
Net income | $ 211,933 | $ 132,611 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 14,130 | 31,092 | ||
Depreciation and amortization | 108,008 | 69,656 | ||
Provision for expected credit losses | 1,460 | 1,555 | ||
Equity in earnings of unconsolidated subsidiaries | (16,736) | (26,130) | ||
Gain on sale or disposal of assets | (1,022) | (43) | ||
Stock compensation expense | 26,023 | 7,924 | ||
Amortization of debt discount, premium, and issuance costs | 1,492 | 1,569 | ||
Deferred income taxes | (34,339) | (7,348) | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | (139,109) | (89,631) | ||
Other current assets | 6,557 | 562 | ||
Other assets | (12,847) | 3,459 | ||
Accounts payable and accrued expenses | 45,913 | (18,441) | ||
Net cash provided by operating activities | 211,463 | 106,835 | ||
Investing activities | ||||
Business combinations, net of cash acquired | (5,993) | — | ||
Purchases of property and equipment | (108,065) | (117,023) | ||
Proceeds from sale of assets | 2,333 | 39 | ||
Net cash used in investing activities | (111,725) | (116,984) | ||
Financing activities | ||||
Borrowings on revolving facilities | 715,000 | 770,000 | ||
Payments on revolving facilities | (650,000) | (625,000) | ||
Payments on term loans | (79,085) | (5,250) | ||
Borrowings of other debt | 17,728 | 21,353 | ||
Principal payments on other debt | (23,261) | (16,691) | ||
Dividends paid to common stockholders | (32,299) | (15,945) | ||
Repurchases of common stock | (1,400) | (97,565) | ||
Decrease in overdrafts | (6,648) | (9,297) | ||
Proceeds from issuance of non-controlling interests | 5,751 | 10,906 | ||
Distributions to and purchases of non-controlling interests | (18,370) | (29,707) | ||
Net cash provided by (used in) financing activities | (72,584) | 2,804 | ||
Net increase (decrease) in cash and cash equivalents | 27,154 | (7,345) | ||
Cash and cash equivalents at beginning of period | 84,006 | 59,694 | ||
Cash and cash equivalents at end of period | $ 111,160 | $ 52,349 | ||
Supplemental information | ||||
Cash paid for interest, excluding amounts received of $44,954 under the | $ 141,878 | $ 62,065 | ||
Cash paid for taxes | 60,826 | 21,052 | ||
VII. Key Statistics For the Three Months Ended June 30, 2024, and 2025 (unaudited) | ||||||
2024 | 2025 | % Change | ||||
Critical Illness Recovery Hospital | ||||||
Number of hospitals operated – end of period(a) | 107 | 104 | ||||
Revenue (,000) | $ 604,921 | $ 601,139 | (0.6) % | |||
Number of patient days(b)(c) | 279,241 | 278,916 | (0.1) % | |||
Number of admissions(b)(d) | 8,888 | 8,966 | 0.9 % | |||
Revenue per patient day(b)(e) | $ 2,159 | $ 2,148 | (0.5) % | |||
Occupancy rate(b)(f) | 67 % | 69 % | 3.0 % | |||
Adjusted EBITDA (,000) | $ 71,833 | $ 56,283 | (21.6) % | |||
Adjusted EBITDA margin | 11.9 % | 9.4 % | ||||
Rehabilitation Hospital | ||||||
Number of hospitals operated – end of period(a) | 33 | 36 | ||||
Revenue (,000) | $ 267,831 | $ 313,775 | 17.2 % | |||
Number of patient days(b)(c) | 117,045 | 125,927 | 7.6 % | |||
Number of admissions(b)(d) | 8,325 | 9,102 | 9.3 % | |||
Revenue per patient day(b)(e) | $ 2,113 | $ 2,236 | 5.8 % | |||
Occupancy rate(b)(f) | 84 % | 82 % | (2.4) % | |||
Adjusted EBITDA (,000) | $ 61,954 | $ 71,047 | 14.7 % | |||
Adjusted EBITDA margin | 23.1 % | 22.6 % | ||||
Outpatient Rehabilitation | ||||||
Number of clinics operated – end of period(a) | 1,925 | 1,919 | ||||
Working days(g) | 64 | 64 | ||||
Revenue (,000) | $ 315,496 | $ 327,584 | 3.8 % | |||
Number of visits(b)(h) | 2,827,625 | 2,934,026 | 3.8 % | |||
Revenue per visit(b)(i) | $ 100 | $ 100 | 0.0 % | |||
Adjusted EBITDA (,000) | $ 28,769 | $ 30,513 | 6.1 % | |||
Adjusted EBITDA margin | 9.1 % | 9.3 % | ||||
(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 Six Months Ended June 30, 2024, and 2025 (unaudited) | ||||||
2024 | 2025 | % Change | ||||
Critical Illness Recovery Hospital | ||||||
Number of hospitals operated – end of period(a) | 107 | 104 | ||||
Revenue (,000) | $ 1,260,801 | $ 1,238,169 | (1.8) % | |||
Number of patient days(b)(c) | 573,863 | 570,240 | (0.6) % | |||
Number of admissions(b)(d) | 18,417 | 18,317 | (0.5) % | |||
Revenue per patient day(b)(e) | $ 2,190 | $ 2,164 | (1.2) % | |||
Occupancy rate(b)(f) | 69 % | 71 % | 2.9 % | |||
Adjusted EBITDA (,000) | $ 187,773 | $ 142,932 | (23.9) % | |||
Adjusted EBITDA margin | 14.9 % | 11.5 % | ||||
Rehabilitation Hospital | ||||||
Number of hospitals operated – end of period(a) | 33 | 36 | ||||
Revenue (,000) | $ 533,531 | $ 621,163 | 16.4 % | |||
Number of patient days(b)(c) | 233,889 | 248,749 | 6.4 % | |||
Number of admissions(b)(d) | 16,600 | 17,950 | 8.1 % | |||
Revenue per patient day(b)(e) | $ 2,105 | $ 2,235 | 6.2 % | |||
Occupancy rate(b)(f) | 85 % | 82 % | (3.5) % | |||
Adjusted EBITDA (,000) | $ 123,354 | $ 141,471 | 14.7 % | |||
Adjusted EBITDA margin | 23.1 % | 22.8 % | ||||
Outpatient Rehabilitation | ||||||
Number of clinics operated – end of period(a) | 1,925 | 1,919 | ||||
Working days(g) | 128 | 127 | ||||
Revenue (,000) | $ 618,654 | $ 634,926 | 2.6 % | |||
Number of visits(b)(h) | 5,562,751 | 5,643,990 | 1.5 % | |||
Revenue per visit(b)(i) | $ 100 | $ 101 | 1.0 % | |||
Adjusted EBITDA (,000) | $ 53,697 | $ 54,786 | 2.0 % | |||
Adjusted EBITDA margin | 8.7 % | 8.6 % | ||||
(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 and Six Months Ended June 30, 2024 and 2025 |
(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 June 30, | Six Months Ended June 30, | |||||||
2024 | 2025 | 2024 | 2025 | |||||
Income from continuing operations, net of tax | $ 37,638 | $ 57,879 | $ 99,167 | $ 132,611 | ||||
Income tax expense | 18,215 | 12,292 | 44,895 | 33,745 | ||||
Interest expense | 27,994 | 29,978 | 68,675 | 59,050 | ||||
Equity in earnings of unconsolidated subsidiaries | (9,991) | (13,618) | (20,412) | (26,130) | ||||
Income from continuing operations, before other income and expense | 73,856 | 86,531 | 192,325 | 199,276 | ||||
Stock compensation expense: | ||||||||
Included in general and administrative | 11,874 | 3,159 | 21,556 | 6,267 | ||||
Included in cost of services | 2,373 | 873 | 4,135 | 1,657 | ||||
Depreciation and amortization | 36,069 | 34,848 | 71,653 | 69,656 | ||||
Concentra separation transaction costs | 557 | — | 835 | — | ||||
Adjusted EBITDA | $ 124,729 | $ 125,411 | $ 290,504 | $ 276,856 | ||||
Critical illness recovery hospital | $ 71,833 | $ 56,283 | $ 187,773 | $ 142,932 | ||||
Rehabilitation hospital | 61,954 | 71,047 | 123,354 | 141,471 | ||||
Outpatient rehabilitation | 28,769 | 30,513 | 53,697 | 54,786 | ||||
Other(a) | (37,827) | (32,432) | (74,320) | (62,333) | ||||
Adjusted EBITDA | $ 124,729 | $ 125,411 | $ 290,504 | $ 276,856 | ||||
(a) Other primarily includes general and administrative costs. |
X. 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 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 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 | $ 141 | $ 154 | |
Net income attributable to non-controlling interests | 73 | 76 | |
Income from continuing operations, net of tax | 214 | 230 | |
Income tax expense | 64 | 70 | |
Interest expense | 116 | 116 | |
Equity in earnings of unconsolidated subsidiaries | (49) | (51) | |
Income from continuing operations before other income and expense | 345 | 365 | |
Stock compensation expense | 19 | 19 | |
Depreciation and amortization | 146 | 146 | |
Adjusted EBITDA | $ 510 | $ 530 | |
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SOURCE Select Medical Holdings Corporation