Full Press Release Details
Concentra Group Holdings Parent, Inc.
For Its Second Quarter Ended June 30, 2024
ADDISON, TEXAS - August 1, 2024 -
Concentra Group Holdings Parent, Inc. ("Concentra," "we," "us," or "our") (NYSE:
CON) today announced results for its second quarter ended June 30, 2024.
"Our colleagues' ongoing commitment
to providing exceptional service and care continues to be the powerful force driving Concentra forward. With steadfast dedication to our
mission to improve the health of America's workforce, one patient at a time, we have reached another important milestone with the
completion of our IPO," said Keith Newton, Chief Executive Officer of Concentra.
Matt DiCanio, President & Chief Financial
Officer, added "We are so proud of our colleagues and teams who have provided great care and dedication over the past 45 years.
Our IPO marks a significant landmark in our company's history, but it does not change our goal of meeting and exceeding customer
and patient needs and delivering consistent financial results. We are confident in our ability to continue to drive optimal performance
now and into the future."
Second Quarter 2024 Highlights
For the second quarter ended June 30,
| Revenue of $477.9 million, an increase of 2.3% from $467.1 million in Q2 2023 | ||
| Net Income of $53.1 million, a decrease of 1.8% from $54.0 million in Q2 2023 | ||
| Adjusted EBITDA of $101.6 million, an increase of 1.2% from $100.4 million in Q2 2023 | ||
| Earnings per Share of $0.50, a decrease of 2.0% from $0.51 in Q2 2023 | ||
| Patient Visits of 3,214,255, or 50,223 Visits per Day in the quarter, a decrease of 1.6% from Q2 2023 | ||
| Revenue per Visit of $139.81, an increase of 3.9% from $134.50 in Q2 2023 | ||
| Total occupational health centers of 547, compared to 540 at end of Q2 2023 | ||
| Total onsite health clinics of 154, compared to 141 at end of Q2 2023 |
Concentra is the largest provider of occupational
health services in the United States by number of locations, with the mission of improving the health of America's workforce, one
patient at a time. Our 11,000 colleagues and affiliated physicians and clinicians support the delivery of an extensive suite of services,
including occupational and consumer health services and other direct-to-employer care, to more than 50,000 patients each day on average
across 45 states at our 547 occupational health centers, 154 onsite health clinics at employer worksites, and Concentra Telemed as of
Second Quarter 2024 Financial Overview
For the second quarter ended June 30, 2024,
revenue increased 2.3% to $477.9 million, compared to $467.1 million for the same quarter, prior year. Income from operations increased
2.2% to $83.9 million for the second quarter ended June 30, 2024, compared to $82.1 million for the same quarter, prior year. Net
income decreased 1.8% to $53.1 million for the second quarter ended June 30, 2024, compared to $54.0 million for the same quarter,
prior year. Adjusted EBITDA increased 1.2% to $101.6 million for the second quarter ended June 30, 2024, compared to $100.4 million
for the same quarter, prior year. The Adjusted EBITDA margin was 21.3% for the second quarter ended June 30, 2024, compared to 21.5%
for the same quarter, prior year. Earnings per common share decreased 2.0% to $0.50 for the second quarter ended June 30, 2024, compared
to $0.51 for the same quarter, prior year. Adjusted earnings per share was $0.49 for the second quarter ended June 30, 2024, compared
to $0.51 for the same quarter, prior year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are
presented in table X of this release. A reconciliation of earnings per common share to adjusted earnings per share is presented in table
Year to Date June 30, 2024 Financial
For the six months ended June 30, 2024, revenue
increased 2.4% to $945.5 million, compared to $923.4 million for the same period, prior year. Income from operations increased 1.3% to
$159.4 million for the six months ended June 30, 2024, compared to $157.4 million for the same period, prior year. Net income increased
1.8% to $103.3 million for the six months ended June 30, 2024, compared to $101.5 million for the same period, prior year. Adjusted
EBITDA increased 1.9% to $197.7 million for the six months ended June 30, 2024, compared to $194.1 million for the same period, prior
year. The Adjusted EBITDA margin was 20.9% for the six months ended June 30, 2024, compared to 21.0% for the same period, prior year.
Earnings per share increased 2.1% to $0.97 for the six months ended June 30, 2024, compared to $0.95 for the same period, prior year.
Adjusted earnings per common share was $0.98 for the six months ended June 30, 2024, compared to $0.95 for the same period, prior
year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table X of this release.
A reconciliation of earnings per share to adjusted earnings per common share is presented in table XI of this release.
As of June 30, 2024, Concentra's balance
sheet reflected cash of $50.7 million, total debt of $427.7 million and total assets of $2.363 billion.
Cash flows provided by operating activities in
the second quarter ended June 30, 2024 totaled $70.4 million compared to $81.8 million for the same quarter, prior year. During the
second quarter ended June 30, 2024, capital expenditures totaled $15.3 million, excluding acquisitions.
Initial Public Offering and Debt Transactions
On July 26, 2024, Concentra completed an
initial public offering ("IPO") of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public
offering price of $23.50 per share for gross proceeds of $528.8 million. In addition, Concentra has granted the underwriters a 30-day
option to purchase up to an additional 3,375,000 shares of its common stock. Concentra shares began trading on the New York Stock Exchange
under the symbol "CON" on July 25, 2024. In connection with the offering, Concentra Health Services, Inc. ("CHSI"),
a wholly-owned subsidiary of Concentra, entered into certain financing arrangements which include Credit Facilities and $650.0 million
aggregate principal amount of 6.875% Senior Notes due 2032 (the "Notes"). The Notes are unconditionally guaranteed, jointly
and severally, on a senior unsecured basis by Concentra and certain of its wholly-owned subsidiaries. The Credit Facilities consist of
an $850.0 million Term Loan and a $400.0 million Revolving Credit Facility. The Term Loan matures on July 26, 2031 and
has an interest rate of Term SOFR plus 2.25%, subject to a leverage-based pricing grid. The Revolving Credit Facility matures on July 26,
2029 and has an interest rate of Term SOFR plus 2.50%, subject to a leverage-based pricing grid.
The net proceeds of the IPO were used to pay down
the long-term debt and promissory note with a related party and the debt financing transactions, except for $34.7 million, were used
to issue a dividend to Select Medical Corporation.
This recapitalization results in $1.5 billion
in total debt and $100 million in cash on our balance sheet, or total net debt of $1.4 billion. With the $400 million revolver, we have
$500 million in total liquidity.
host a conference call regarding its second quarter results and its business outlook on Friday, August 2, 2024, at 10:30 am ET.
The conference call will be a live webcast and can be accessed at Concentra Group Holdings Parent, Inc.'s website at www.concentra.com
and 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 Concentra
Earnings Call Registration to obtain your dial-in number and unique passcode.
Certain statements contained
herein that are not descriptions of historical facts are "forward-looking" statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995). 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:
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.
Vice President, Strategy & Investor Relations
SOURCE: Concentra Group Holdings Parent, Inc.
I. Condensed Consolidated Statements of Operations
For the Second Quarter Ended June 30, 2024 and 2023
(In thousands, except per share amounts, unaudited)
| 2024 | 2023 | % Change | ||||||||||
| Revenue | $ | 477,915 | $ | 467,079 | 2.3 | % | ||||||
| Costs and expenses: | ||||||||||||
| Cost of services, exclusive of depreciation and amortization | 339,273 | 329,836 | 2.9 | |||||||||
| General and administrative, exclusive of depreciation and amortization (1) | 36,828 | 37,003 | (0.5 | ) | ||||||||
| Depreciation and amortization | 17,870 | 18,283 | (2.3 | ) | ||||||||
| Total costs and expenses | 393,971 | 385,122 | 2.3 | |||||||||
| Other operating income | - | 151 | N/M | |||||||||
| Income from operations | 83,944 | 82,108 | 2.2 | |||||||||
| Other income and expense: | ||||||||||||
| Equity in losses of unconsolidated subsidiaries | (3,676 | ) | - | N/M | ||||||||
| Interest expense on related party debt | (9,318 | ) | (11,500 | ) | (19.0 | ) | ||||||
| Interest income | 205 | 17 | N/M | |||||||||
| Income before income taxes | 71,155 | 70,625 | 0.8 | |||||||||
| Income tax expense | 18,096 | 16,593 | 9.1 | |||||||||
| Net income | 53,059 | 54,032 | (1.8 | ) | ||||||||
| Less: Net income attributable to non-controlling interests | 1,322 | 1,290 | 2.5 | |||||||||
| Net income attributable to Concentra | $ | 51,737 | $ | 52,742 | (1.9 | )% | ||||||
| Basic and diluted earnings per common share: (2) | $ | 0.50 | $ | 0.51 |
II. Condensed Consolidated Statements of Operations
For the Six Months Ended June 30, 2024 and 2023
(In thousands, except per share amounts, unaudited)
| 2024 | 2023 | % Change | ||||||||||
| Revenue | $ | 945,513 | $ | 923,377 | 2.4 | % | ||||||
| Costs and expenses: | ||||||||||||
| Cost of services, exclusive of depreciation and amortization | 676,263 | 657,914 | 2.8 | |||||||||
| General and administrative, exclusive of depreciation and amortization (1) | 73,737 | 71,653 | 2.9 | |||||||||
| Depreciation and amortization | 36,355 | 36,593 | (0.7 | ) | ||||||||
| Total costs and expenses | 786,355 | 766,160 | 2.6 | |||||||||
| Other operating income | 284 | 151 | N/M | |||||||||
| Income from operations | 159,442 | 157,368 | 1.3 | |||||||||
| Other income and expense: | ||||||||||||
| Equity in losses of unconsolidated subsidiaries | (3,676 | ) | (526 | ) | N/M | |||||||
| Interest expense on related party debt | (19,289 | ) | (22,576 | ) | (14.6 | ) | ||||||
| Interest income (expense) | 94 | (44 | ) | N/M | ||||||||
| Income before income taxes | 136,571 | 134,222 | 1.8 | |||||||||
| Income tax expense | 33,233 | 32,759 | 1.4 | |||||||||
| Net income | 103,338 | 101,463 | 1.8 | |||||||||
| Less: Net income attributable to non-controlling interests | 2,645 | 2,457 | 7.7 | |||||||||
| Net income attributable to Concentra | $ | 100,693 | $ | 99,006 | 1.7 | % | ||||||
| Basic and diluted earnings per common share: (2) | $ | 0.97 | $ | 0.95 |
III. Earnings per Share
For the Three and Six Months Ended June 30,
(In thousands, except per share amounts, unaudited)
At December 31, 2023,
there were 435,000 Class A units, 8,498 Class B units, and 3,583 Class C units (in thousands) outstanding which converted
to common shares on a one-for-one basis effective March 4, 2024. On June 24, 2024, the Company effectuated a reverse stock split
at a ratio of one share of common stock for every 4.295 shares of common stock and resulted in 104,094 shares (in thousands) outstanding.
There were no participating shares or securities outstanding during the three and six months ended June 30, 2024.