Full Press Release Details
Select Medical Holdings Corporation Announces
For Its First Quarter Ended March 31, 2021
MECHANICSBURG, PENNSYLVANIA
- May 6, 2021 - Select Medical Holdings Corporation ("Select Medical," "we," "us,"
or "our") (NYSE: SEM) today announced results for its first quarter ended March 31, 2021 and the declaration of a cash
For the first quarter ended
March 31, 2021, revenue increased 9.3% to $1,546.5 million, compared to $1,414.6 million for the same quarter, prior year. Income
from operations increased 57.0% to $202.0 million for the first quarter ended March 31, 2021, compared to $128.7 million for
the same quarter, prior year. Net income increased 94.8% to $137.2 million for the first quarter ended March 31, 2021, compared to
$70.4 million for the same quarter, prior year. Net income included a pre-tax gain on sale of businesses of $7.2 million for the first
quarter ended March 31, 2020. Adjusted EBITDA increased 37.9% to $258.3 million for the first quarter ended March 31, 2021,
compared to $187.3 million for the same quarter, prior year. Earnings per common share increased to $0.82 for the first quarter ended
March 31, 2021, compared to $0.40 for the same quarter, prior year. Adjusted earnings per common share was $0.82 for the first quarter
ended March 31, 2021, compared to $0.37 for the same quarter, prior year. Adjusted earnings per common share excluded the gain on
sale of businesses and its related tax effects for the first quarter ended March 31, 2020. The definition of Adjusted EBITDA and
a reconciliation of net income to Adjusted EBITDA are presented in table VI of this release. A reconciliation of earnings per common share
to adjusted earnings per common share is presented in table VII of this release.
Please refer to "Effects
of the COVID-19 Pandemic on Select Medical's Results of Operations during the Three Months Ended March 31, 2020 and 2021"
below for further discussion regarding the impact of the coronavirus disease 2019 ("COVID-19") pandemic on Select Medical's
Select Medical is one of
the largest operators of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational
health centers in the United States based on number of facilities. Select Medical's reportable segments include the critical illness
recovery hospital segment, the rehabilitation hospital segment, the outpatient rehabilitation segment, and the Concentra segment. As
of March 31, 2021, Select Medical operated 99 critical illness recovery hospitals in 28 states, 30 rehabilitation hospitals in 12
states, and 1,809 outpatient rehabilitation clinics in 37 states and the District of Columbia. Select Medical's joint venture subsidiary
Concentra operated 519 occupational health centers in 41 states. At March 31, 2021, 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 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 COVID-19, and for reimbursing eligible health care providers for health care related expenses and lost revenues that
are attributable to COVID-19.
For the three months ended
March 31, 2021, Select Medical recognized $16.1 million of other operating income related to payments received under the Provider
Relief Fund for health care related expenses and lost revenue attributable to COVID-19. This other operating income is included within
the operating results of Select Medical's other activities.
Critical Illness Recovery Hospital Segment
For the first quarter ended
March 31, 2021, revenue for the critical illness recovery hospital segment increased 18.9% to $594.9 million, compared to $500.5
million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 27.9% to $113.3
million for the first quarter ended March 31, 2021, compared to $88.6 million for the same quarter, prior year. Adjusted EBITDA includes
$17.9 million of other operating income related to the outcome of litigation with the Centers for Medicare & Medicaid Services. The
Adjusted EBITDA margin for the critical illness recovery hospital segment was 19.0% for the first quarter ended March 31, 2021, compared
to 17.7% for the same quarter, prior year. Certain critical illness recovery hospital key statistics are presented in table V of this
release for both the first quarters ended March 31, 2021 and 2020.
Rehabilitation Hospital Segment
For the first quarter ended
March 31, 2021, revenue for the rehabilitation hospital segment increased 14.2% to $207.8 million, compared to $182.0 million for
the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 31.0% to $50.5 million for the first quarter
ended March 31, 2021, compared to $38.6 million for the same quarter, prior year. The Adjusted EBITDA margin for the rehabilitation
hospital segment was 24.3% for the first quarter ended March 31, 2021, compared to 21.2% for the same quarter, prior year. Certain
rehabilitation hospital key statistics are presented in table V of this release for both the first quarters ended March 31, 2021
Outpatient Rehabilitation Segment
For the first quarter ended
March 31, 2021, revenue for the outpatient rehabilitation segment was $252.0 million, compared to $255.2 million for the same quarter,
prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $26.3 million for the first quarter ended March 31, 2021,
compared to $27.1 million for the same quarter, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 10.4%
for the first quarter ended March 31, 2021, compared to 10.6% for the same quarter, prior year. Certain outpatient rehabilitation
key statistics are presented in table V of this release for both the first quarters ended March 31, 2021 and 2020.
For the first quarter ended
March 31, 2021, revenue for the Concentra segment increased 6.1% to $422.8 million, compared to $398.5 million for the same quarter,
prior year. Adjusted EBITDA for the Concentra segment increased 33.4% to $82.0 million for the first quarter ended March 31, 2021,
compared to $61.5 million for the same quarter, prior year. The Adjusted EBITDA margin for the Concentra segment was 19.4% for the first
quarter ended March 31, 2021, compared to 15.4% for the same quarter, prior year. Certain Concentra key statistics are presented
in table V of this release for both the first quarters ended March 31, 2021 and 2020.
Effects of the COVID-19 Pandemic on Select
Medical's Results of Operations during the Three Months Ended March 31, 2020 and 2021
Beginning in March 2020,
state governments placed significant restrictions on businesses and mandated closures of non-essential or non-life sustaining businesses,
causing many employers to furlough their workforce and temporarily cease or significantly reduce their operations. State governments also
implemented restrictions on travel and individual activities outside of the home, closed schools, and mandated other social distancing
measures. At the same time, hospitals and other facilities began suspending elective surgeries. In an effort to ensure hospitals and health
systems had the capacity to absorb and effectively manage surges of COVID-19 patients, a number of waivers and modifications of certain
requirements under the Medicare, Medicaid and Children's Health Insurance Program ("CHIP") programs were authorized
in March 2020, including certain regulations under the Medicare program which govern admissions into Select Medical's critical illness
recovery hospitals and rehabilitation hospitals. Specifically, Select Medical's critical illness recovery hospitals which are certified
as long-term care hospitals ("LTCHs") became exempt from the greater-than-25-day average length of stay requirement for all
cost reporting periods that include the COVID-19 public health emergency period. Select Medical's rehabilitation hospitals which
are certified as inpatient rehabilitation facilities ("IRFs") could exclude patients admitted solely to respond to the emergency
from the calculation of the "60 percent rule" thresholds to receive payment as an IRF. The COVID-19 public health emergency
period has been extended and is currently in effect through July 20, 2021.
The adverse effects of the
COVID-19 pandemic, along with the actions of governmental authorities and those in the private sector to limit the spread of COVID-19,
caused disruptions in each of Select Medical's segments; these disruptions were most significant within the outpatient rehabilitation
and Concentra segments. By mid-March 2020, Select Medical's outpatient rehabilitation clinics began experiencing significantly less
patient visit volume due to declines 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. Select Medical's Concentra centers experienced similar declines in patient visit volume due to businesses furloughing
their workforce and temporarily ceasing or significantly reducing their operations. The effects of the COVID-19 pandemic continued to
adversely impact patient visit volume in January and February 2021; however, in March 2021, both Select Medical's outpatient rehabilitation
clinics and Concentra centers experienced patient visit volume approximating the levels experienced in January and February 2020, the
months preceding the widespread emergence of COVID-19 in the United States. Although they have experienced temporary disruptions in their
core businesses as a result of the COVID-19 pandemic, Select Medical's outpatient rehabilitation and Concentra segments have been
able to expand their services to provide COVID-19 screening and testing.
Select Medical's critical
illness recovery hospitals have played a critical role in caring for patients during the COVID-19 pandemic, and the relaxation of certain
admission restrictions have contributed to volume increases in certain of its hospitals. The revenue of Select Medical's critical