Full Press Release Details
Select Medical Holdings Corporation
For Its Third Quarter Ended September 30,
MECHANICSBURG, PENNSYLVANIA
- October 29, 2020 - Select Medical Holdings Corporation ("Select Medical," "we," "us,"
or "our") (NYSE: SEM) today announced results for its third quarter ended September 30, 2020.
For the third quarter
ended September 30, 2020, net operating revenues increased 2.2% to $1,423.9 million, compared to $1,393.3 million for the
same quarter, prior year. Income from operations increased 27.0% to $156.1 million for the third quarter ended September 30,
2020, compared to $122.9 million for the same quarter, prior year. Income from operations included a net reduction of $1.2 million related to payments received under the Provider Relief Fund, as described
below. Net income increased 137.2% to $104.5 million for the third
quarter ended September 30, 2020, compared to $44.0 million for the same quarter, prior year. Net income included pre-tax
gains on sales of businesses of $5.1 million for the third quarter ended September 30, 2020. Net income included pre-tax losses
on early retirement of debt of $18.6 million for the third quarter ended September 30, 2019. Adjusted EBITDA increased
16.7% to $213.2 million for the third quarter ended September 30, 2020, compared to $182.7 million for the same quarter, prior
year. Earnings per common share was $0.57 on a fully diluted basis for the third quarter ended September 30, 2020, compared
to $0.23 for the same quarter, prior year. Adjusted earnings per common share was $0.56 on a fully diluted basis for the third
quarter ended September 30, 2020, compared to $0.33 for the same quarter, prior year. Adjusted earnings per common share excludes
the gains on sales of businesses and related tax effects for the third quarter ended September 30, 2020. Adjusted earnings
per common share excludes the losses on early retirement of debt and related costs, and their related tax effects, for the third
quarter ended September 30, 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.
ended September 30, 2020, net operating revenues were $4,071.2 million, compared to $4,079.3 million for the same period,
prior year. Income from operations increased 12.5% to $404.3 million for the nine months ended September 30, 2020, compared
to $359.5 million for the same period, prior year. For the nine months ended September 30, 2020, income from operations included
other operating income of $53.8 million related to the recognition of payments received under the Provider Relief Fund, as described
below, for loss of revenue and health care related expenses attributable to coronavirus disease 2019 ("COVID-19").
Net income increased 54.0% to $242.4 million for the nine months ended September 30, 2020, compared to $157.4 million for
the same period, prior year. Net income included pre-tax gains on sales of businesses of $12.7 million for the nine months ended
September 30, 2020. Net income included pre-tax losses on early retirement of debt of $18.6 million and a pre-tax gain
on sale of businesses of $6.5 million for the nine months ended September 30, 2019. Adjusted EBITDA increased 7.5% to
$579.3 million for the nine months ended September 30, 2020, compared to $539.0 million for the same period, prior year. Earnings
per common share was $1.35 on a fully diluted basis for the nine months ended September 30, 2020, compared to $0.86 for the
same period, prior year. Adjusted earnings per common share was $1.31 on a fully diluted basis for the nine months ended September 30,
2020, compared to $0.93 for the same period, prior year. Adjusted earnings per common share excludes the gains on sales of businesses
and related tax effects for the nine months ended September 30, 2020. Adjusted earnings per common share excludes the losses
on early retirement of debt and related costs, gain on sale of businesses, and their related tax effects for the nine months ended
September 30, 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.
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 September 30, 2020, Select Medical operated 100 critical illness recovery hospitals in 28
states, 29 rehabilitation hospitals in 12 states, and 1,777 outpatient rehabilitation clinics in 37 states and the District of
Columbia. Select Medical's joint venture subsidiary Concentra operated 523 occupational health centers in 41 states. At
September 30, 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
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 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 COVID-19.
nine months ended September 30, 2020, Select Medical recognized payments received under the Provider Relief Fund for loss
of revenue and health care related expenses attributable to COVID-19 as other operating income. For the three months ended September 30,
2020, other operating income of $0.4 million is included within the operating results of our Select Medical's Concentra segment,
and a reduction to other operating income of $1.5 million is included within the operating results of its other activities. The
reduction in other operating income resulted from changes in the terms and conditions associated with the acceptance of the Provider
Relief Fund payments; these terms and conditions have changed from those which existed upon receipt of the payments. For the nine
months ended September 30, 2020, $52.7 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 third quarter
ended September 30, 2020, net operating revenues for the critical illness recovery hospital segment increased 12.2% to $519.5
million, compared to $462.9 million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital
segment increased 55.2% to $88.8 million for the third quarter ended September 30, 2020, compared to $57.2 million for the
same quarter, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 17.1% for the third
quarter ended September 30, 2020, compared to 12.4% for the same quarter, prior year. Certain critical illness recovery hospital
key statistics are presented in table VII of this release for both the third quarters ended September 30, 2020 and 2019.
ended September 30, 2020, net operating revenues for the critical illness recovery hospital segment increased 11.4% to $1,539.6
million, compared to $1,381.6 million for the same period, prior year. Adjusted EBITDA for the critical illness recovery hospital
segment increased 37.4% to $267.1 million for the nine months ended September 30, 2020, compared to $194.4 million for the
same period, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 17.4% for the nine months
ended September 30, 2020, compared to 14.1% for the same period, prior year. Certain critical illness recovery hospital key
statistics are presented in table VIII of this release for both the nine months ended September 30, 2020 and 2019.
Rehabilitation Hospital Segment
For the third quarter
ended September 30, 2020, net operating revenues for the rehabilitation hospital segment increased 8.5% to $188.1 million,
compared to $173.4 million for the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased
21.4% to $44.6 million for the third quarter ended September 30, 2020, compared to $36.8 million for the same quarter, prior
year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 23.7% for the third quarter ended September 30,
2020, compared to 21.2% for the same quarter, prior year. Certain rehabilitation hospital key statistics are presented in table
VII of this release for both the third quarters ended September 30, 2020 and 2019.
ended September 30, 2020, net operating revenues for the rehabilitation hospital segment increased 10.3% to $538.8 million,
compared to $488.3 million for the same period, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 19.7%
to $110.8 million for the nine months ended September 30, 2020, compared to $92.5 million for the same period, prior year.
The Adjusted EBITDA margin for the rehabilitation hospital segment was 20.6% for the nine months ended September 30, 2020,
compared to 19.0% for the same period, prior year. For the nine months ended September 30, 2019, the Adjusted EBITDA results
for the rehabilitation hospital segment included start-up losses of approximately $8.8 million. Certain rehabilitation hospital
key statistics are presented in table VIII of this release for both the nine months ended September 30, 2020 and 2019.
Outpatient Rehabilitation Segment
For the third quarter
ended September 30, 2020, net operating revenues for the outpatient rehabilitation segment were $240.0 million, compared to
$265.3 million for the same quarter, prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $30.6 million for
the third quarter ended September 30, 2020, compared to Adjusted EBITDA of $40.0 million for the same quarter, prior year.
The Adjusted EBITDA margin for the outpatient rehabilitation segment was 12.8% for the third quarter ended September 30, 2020,
compared to 15.1% for the same quarter, prior year. Certain outpatient rehabilitation key statistics are presented in table VII