[Company Announcement and First Quarter 2025 Highlights](index=1&type=section&id=Company%20Announcement%20and%20First%20Quarter%202025%20Highlights) Select Medical reported Q1 2025 revenue growth and increased income from continuing operations, despite a decline in Adjusted EBITDA, following the Concentra spin-off [First Quarter 2025 Financial Performance](index=1&type=section&id=First%20Quarter%202025%20Financial%20Performance) Q1 2025 saw **2.4% revenue growth** and a **21.5% rise in income from continuing operations**, with an **8.7% Adjusted EBITDA decrease** Q1 2025 vs Q1 2024 Key Financial Performance (Continuing Operations, Millions) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | % Change | | :--------------------------------- | :----------------- | :----------------- | :------- | | Revenue | $1,353.2 | $1,321.2 | 2.4% | | Income from continuing operations before other income and expense | $112.7 | $118.5 | (4.8)% | | Income from continuing operations, net of tax | $74.7 | $61.5 | 21.5% | | Adjusted EBITDA | $151.4 | $165.8 | (8.7)% | | Earnings per common share from continuing operations | $0.44 | $0.33 | 33.3% | [Company Overview](index=1&type=section&id=Company%20Overview) Select Medical is a leading operator of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States, with a significant presence across 40 states and the District of Columbia - As of March 31, 2025, Select Medical operated **104 critical illness recovery hospitals** in 29 states, **35 rehabilitation hospitals** in 14 states, and **1,911 outpatient rehabilitation clinics** in 39 states and the District of Columbia[5](index=5&type=chunk) [Concentra Spin-off Impact](index=1&type=section&id=Concentra%20Spin-off%20Impact) On November 25, 2024, Select Medical completed a tax-free distribution of Concentra Group Holdings Parent, Inc. shares to its stockholders, leading to Concentra's results being reclassified and presented as discontinued operations - Select Medical completed a tax-free distribution of **104,093,503 shares** of common stock of Concentra Group Holdings Parent, Inc. to its stockholders on November 25, 2024[4](index=4&type=chunk) - The results of Concentra are presented as discontinued operations and have been excluded from both continuing operations and segment results for the three months ended March 31, 2024[4](index=4&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) An overview of Q1 2025 performance across Critical Illness Recovery, Rehabilitation, and Outpatient Rehabilitation segments, highlighting varied revenue and Adjusted EBITDA trends [Critical Illness Recovery Hospital Segment](index=2&type=section&id=Critical%20Illness%20Recovery%20Hospital%20Segment) The Critical Illness Recovery Hospital segment experienced a decline in Q1 2025, with revenue decreasing by 2.9% and Adjusted EBITDA falling by 25.3%, resulting in a lower Adjusted EBITDA margin Critical Illness Recovery Hospital Segment Performance (Q1 2025 vs Q1 2024, Millions) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | % Change | | :-------------------- | :----------------- | :----------------- | :------- | | Revenue | $637.0 | $655.9 | (2.9)% | | Adjusted EBITDA | $86.6 | $115.9 | (25.3)% | | Adjusted EBITDA margin | 13.6% | 17.7% | | [Rehabilitation Hospital Segment](index=2&type=section&id=Rehabilitation%20Hospital%20Segment) The Rehabilitation Hospital segment showed strong growth in Q1 2025, with revenue increasing by 15.7% and Adjusted EBITDA rising by 14.7%, while maintaining a stable Adjusted EBITDA margin Rehabilitation Hospital Segment Performance (Q1 2025 vs Q1 2024, Millions) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | % Change | | :-------------------- | :----------------- | :----------------- | :------- | | Revenue | $307.4 | $265.7 | 15.7% | | Adjusted EBITDA | $70.4 | $61.4 | 14.7% | | Adjusted EBITDA margin | 22.9% | 23.1% | | [Outpatient Rehabilitation Segment](index=2&type=section&id=Outpatient%20Rehabilitation%20Segment) The Outpatient Rehabilitation segment reported modest revenue growth of 1.4% in Q1 2025, but experienced a slight decrease in Adjusted EBITDA and its corresponding margin Outpatient Rehabilitation Segment Performance (Q1 2025 vs Q1 2024, Millions) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | % Change | | :-------------------- | :----------------- | :----------------- | :------- | | Revenue | $307.3 | $303.2 | 1.4% | | Adjusted EBITDA | $24.3 | $24.9 | (2.6)% | | Adjusted EBITDA margin | 7.9% | 8.2% | | [Shareholder Actions](index=2&type=section&id=Shareholder%20Actions) Details the company's Q1 2025 cash dividend declaration and ongoing common stock repurchase program, reflecting capital allocation strategies [Cash Dividend Declaration](index=2&type=section&id=Cash%20Dividend%20Declaration) Select Medical's Board of Directors declared a cash dividend of $0.0625 per share, payable in May 2025, with future declarations subject to various financial and operational factors - On April 30, 2025, Select Medical's Board of Directors declared a cash dividend of **$0.0625 per share**, payable on or about May 29, 2025, to stockholders of record as of May 15, 2025[9](index=9&type=chunk) - The declaration and payment of future dividends are at the discretion of the Board, considering factors such as financial condition, operating results, available cash, and indebtedness[10](index=10&type=chunk) [Stock Repurchase Program](index=3&type=section&id=Stock%20Repurchase%20Program) The company has an authorized common stock repurchase program of up to $1.0 billion, which remains in effect until December 31, 2025. In Q1 2025, Select Medical repurchased 649,804 shares for approximately $11.4 million - The Board of Directors authorized a common stock repurchase program to repurchase up to **$1.0 billion** worth of shares, remaining in effect until December 31, 2025[11](index=11&type=chunk) Stock Repurchase Activity (Q1 2025 and Inception-to-date, Millions) | Period | Shares Repurchased | Cost (Millions) | Average Price Per Share | | :-------------------------- | :----------------- | :---------------- | :---------------------- | | Q1 2025 | 649,804 | $11.4 | $17.52 | | Inception through March 31, 2025 | 48,884,627 | $611.7 | $12.51 | [Business Outlook](index=3&type=section&id=Business%20Outlook) Select Medical's updated fiscal year 2025 projections for revenue and Adjusted EBITDA, alongside reaffirmed earnings per share guidance [Fiscal Year 2025 Outlook](index=3&type=section&id=Fiscal%20Year%202025%20Outlook) Select Medical adjusted its 2025 business outlook for revenue and Adjusted EBITDA, while reaffirming its guidance for fully diluted earnings per share Fiscal Year 2025 Business Outlook (Billions/Millions) | Metric | Range (Billions/Millions) | | :-------------------------- | :------------------------ | | Revenue | $5.3 to $5.5 billion | | Adjusted EBITDA | $510.0 to $530.0 million | | Fully diluted earnings per share | $1.09 to $1.19 | [Additional Information](index=3&type=section&id=Additional%20Information) Provides details for the upcoming Q1 earnings conference call and outlines significant forward-looking statements and associated risk factors [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) Select Medical will host a conference call on May 2, 2025, to discuss its first quarter results and business outlook, accessible via live webcast or telephone dial-in - A conference call regarding Q1 results and business outlook will be held on **Friday, May 2, 2025, at 9:00 am ET**[14](index=14&type=chunk) - The conference call will be a live webcast accessible at www.selectmedicalholdings.com, with a replay available shortly after[14](index=14&type=chunk) - Listeners can pre-register for the call to obtain dial-in numbers and unique passcodes for telephone participation and Q&A[15](index=15&type=chunk) [Forward-Looking Statements and Risk Factors](index=4&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements that are subject to various risks and uncertainties, which could cause actual results to differ materially from expectations. Key risks include changes in government reimbursement, adverse economic conditions, and shortages in qualified healthcare professionals - Statements not describing historical facts are 'forward-looking' and actual results may differ materially due to various risks and uncertainties[17](index=17&type=chunk)[19](index=19&type=chunk) - Key risk factors include changes in government reimbursement, adverse economic conditions (including inflation), shortages in qualified healthcare professionals, and the failure to maintain Medicare certifications[18](index=18&type=chunk) - Other risks involve potential negative impacts from public threats like pandemics, government investigations, difficulties with acquisitions or joint ventures, and the loss of key management team members[18](index=18&type=chunk)[20](index=20&type=chunk) [Financial Tables](index=6&type=section&id=Financial%20Tables) Comprehensive financial statements and key operational statistics for Q1 2025, including income, balance sheet, cash flow, and segment-specific performance data [I. Condensed Consolidated Statements of Operations](index=6&type=section&id=I.%20Condensed%20Consolidated%20Statements%20of%20Operations) This table presents the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2025, detailing revenue, costs, income from continuing operations, and net income, highlighting a 2.4% revenue increase and a 21.5% rise in income from continuing operations, net of tax Condensed Consolidated Statements of Operations (Three Months Ended March 31, 2024 and 2025, Thousands) | | | 2024 | 2025 | % Change | |:---|:---|:---|:---|:---|\ | Revenue | $ | 1,321,211 | $ 1,353,172 | 2.4% | | Costs and expenses: | | | | | | Cost of services, exclusive of depreciation and amortization | | 1,120,711 | 1,172,611 | 4.6 | | General and administrative | | 48,447 | 33,008 | (31.9) | | Depreciation and amortization | | 35,584 | 34,808 | (2.2) | | Total costs and expenses | | 1,204,742 | 1,240,427 | 3.0 | | Other operating income | | 2,000 | — | N/M | | Income from continuing operations before other income and expense | | 118,469 | 112,745 | (4.8) | | Other income and expense: | | | | | | Equity in earnings of unconsolidated subsidiaries | | 10,421 | 12,512 | 20.1 | | Interest expense | | (40,681) | (29,072) | (28.5) | | Income from continuing operations before income taxes | | 88,209 | 96,185 | 9.0 | | Income tax expense from continuing operations | | 26,680 | 21,453 | (19.6) | | Income from continuing operations, net of tax | | 61,529 | 74,732 | 21.5 | | Discontinued operations: | | | | | | Income from discontinued business | | 65,416 | — | N/M | | Income tax expense from discontinued business | | 9,778 | — | N/M | | Income from discontinued operations, net of tax | | 55,638 | — | N/M | | Net income | | 117,167 | 74,732 | (36.2) | | Less: Net income attributable to non-controlling interests | | 20,270 | 18,051 | (10.9) | | Net income attributable to Select Medical | $ | 96,897 | $ 56,681 | (41.5)% | | Net income attributable to Select Medical's common stockholders: | | | | | | Income from continuing operations, net of tax | $ | 42,582 | $ 56,681 | | | Income from discontinued operations, net of tax | | 54,315 | — | | | Net income attributable to Select Medical's common stockholders | $ | 96,897 | $ 56,681 | | | Earnings per common share: | | | | | | Continuing operations - basic and diluted | $ | 0.33 | $ 0.44 | | | Discontinued operations - basic and diluted | | 0.42 | — | | | Total earnings per common share - basic and diluted | $ | 0.75 | $ 0.44 | | [II. Earnings per Share](index=7&type=section&id=II.%20Earnings%20per%20Share) This section details the computation of basic and diluted earnings per share for the three months ended March 31, 2024 and 2025, applying the two-class method due to participating unvested restricted stock awards Income from Continuing Operations, Net of Tax, Attributable to Select Medical and Participating Securities (Thousands) | | Three Months Ended March 31, | | |:---|:---|:---|\ | | 2024 | 2025 | | Income from continuing operations, net of tax | $ 61,529 | $ 74,732 | | Less: net income attributable to non-controlling interests | 18,947 | 18,051 | | Income from continuing operations, net of tax, attributable to Select Medical's common stockholders | 42,582 | 56,681 | | Less: distributed and undistributed net income attributable to participating securities | 1,493 | 1,145 | | Distributed and undistributed income from continuing operations, net of tax, attributable to common shares | $ 41,089 | $ 55,536 | Computation of EPS Under Two-Class Method (Three Months Ended March 31, 2024 and 2025, Thousands) | | 2024 | | | | 2025 | | | | |:---|:---|:---|:---|:---|:---|:---|:---|:---|\ | | Income from Continuing Operations, Net of Tax, Allocation | Shares | Basic and Diluted EPS | Income from Continuing Operations, Net of Tax, Allocation | Shares | Basic and Diluted EPS | | Common shares | $ 41,089 | 123,859 | $ 0.33 | $ 55,536 | 126,205 | $ 0.44 | | Participating securities | 1,493 | 4,501 | $ 0.33 | 1,145 | 2,602 | $ 0.44 | | Total | $ 42,582 | | | $ 56,681 | | | [III. Condensed Consolidated Balance Sheets](index=8&type=section&id=III.%20Condensed%20Consolidated%20Balance%20Sheets) This table provides the condensed consolidated balance sheets as of December 31, 2024, and March 31, 2025, outlining current and non-current assets, liabilities, and total equity, showing an increase in total assets and total equity Condensed Consolidated Balance Sheets (December 31, 2024 and March 31, 2025, Thousands) | | December 31, 2024 | March 31, 2025 | |:---|:---|:---|\ | Assets | | | | Current Assets: | | | | Cash and cash equivalents | $ 59,694 | $ 53,213 | | Accounts receivable | 821,385 | 908,185 | | Other current assets | 138,698 | 130,894 | | Total Current Assets | 1,019,777 | 1,092,292 | | Operating lease right-of-use assets | 908,095 | 909,180 | | Property and equipment, net | 872,185 | 894,920 | | Goodwill | 2,331,898 | 2,331,898 | | Identifiable intangible assets, net | 103,183 | 102,544 | | Other assets | 372,813 | 365,169 | | Total Assets | $ 5,607,951 | $ 5,696,003 | | Liabilities and Equity | | | | Current Liabilities: | | | | Payables and accruals | $ 777,781 | $ 734,841 | | Current operating lease liabilities | 179,601 | 181,605 | | Current portion of long-term debt and notes payable | 20,269 | 28,353 | | Total Current Liabilities | 977,651 | 944,799 | | Non-current operating lease liabilities | 787,124 | 787,861 | | Long-term debt, net of current portion | 1,691,546 | 1,767,409 | | Non-current deferred tax liability | 81,497 | 75,245 | | Other non-current liabilities | 73,038 | 74,652 | | Total Liabilities | 3,610,856 | 3,649,966 | | Redeemable non-controlling interests | 10,167 | 9,021 | | Total equity | 1,986,928 | 2,037,016 | | Total Liabilities and Equity | $ 5,607,951 | $ 5,696,003 | [IV. Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=IV.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table presents the condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2025, showing a significant reduction in net cash used in operating activities and a decrease in net cash provided by financing activities Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2024 and 2025, Thousands) | | 2024 | 2025 | |:---|:---|:---|\ | Operating activities | | | | Net income | $ 117,167 | $ 74,732 | | Adjustments to reconcile net income to net cash used in operating activities: | | | | Distributions from unconsolidated subsidiaries | 12,374 | 20,145 | | Depreciation and amortization | 54,069 | 34,808 | | Provision for expected credit losses | 854 | 2,283 | | Equity in earnings of unconsolidated subsidiaries | (10,421) | (12,512) | | (Gain) loss on sale or disposal of assets | 44 | (23) | | Stock compensation expense | 11,610 | 3,892 | | Amortization of debt discount, premium, and issuance costs | 750 | 783 | | Deferred income taxes | (6,891) | (5,655) | | Changes in operating assets and liabilities, net of effects of business combinations: | | | | Accounts receivable | (195,308) | (89,083) | | Other current assets | (9,611) | (12,230) | | Other assets | 2,363 | 2,127 | | Accounts payable and accrued expenses | (43,689) | (22,724) | | Net cash used in operating activities | (66,689) | (3,457) | | Investing activities | | | | Business combinations, net of cash acquired | (5,405) | — | | Purchases of property and equipment | (52,517) | (52,339) | | Proceeds from sale of assets | 265 | 24 | | Net cash used in investing activities | (57,657) | (52,315) | | Financing activities | | | | Borrowings on revolving facilities | 495,000 | 405,000 | | Payments on revolving facilities | (265,000) | (330,000) | | Payments on term loans | (79,085) | (2,625) | | Borrowings of other debt | 17,728 | 16,015 | | Principal payments on other debt | (9,061) | (7,729) | | Dividends paid to common stockholders | (16,045) | (8,060) | | Repurchases of common stock | — | (11,389) | | Decrease in overdrafts | (1,740) | (5,120) | | Proceeds from issuance of non-controlling interests | 4,002 | 7,944 | | Distributions to and purchases of non-controlling interests | (12,839) | (14,745) | | Net cash provided by financing activities | 132,960 | 49,291 | | Net increase (decrease) in cash and cash equivalents | 8,614 | (6,481) | | Cash and cash equivalents at beginning of period | 84,006 | 59,694 | | Cash and cash equivalents at end of period | $ 92,620 | $ 53,213 | | Supplemental information | | | | Cash paid for interest, excluding amounts received of $22,515 under the interest rate cap contract during the three months ended March 31, 2024 | $ 88,834 | $ 23,772 | | Cash paid for taxes | 604 | 1,472 | [V. Key Statistics](index=10&type=section&id=V.%20Key%20Statistics) This table provides detailed operational and financial key statistics for the Critical Illness Recovery Hospital, Rehabilitation Hospital, and Outpatient Rehabilitation segments for the three months ended March 31, 2024 and 2025, including revenue, patient days/visits, and Adjusted EBITDA Key Statistics by Segment (Three Months Ended March 31, 2024 and 2025, Thousands) | | | 2024 | | 2025 | % Change | |:---|:---|:---|:---|:---|:---|\ | Critical Illness Recovery Hospital | | | | | | | | Number of hospitals operated – end of period | | 107 | | 104 | | | | Revenue (,000) | $ | 655,880 | $ | 637,030 | (2.9)% | | Number of patient days | | 294,622 | | 291,324 | (1.1)% | | Number of admissions | | 9,529 | | 9,351 | (1.9)% | | Revenue per patient day | $ | 2,219 | $ | 2,179 | (1.8)% | | Occupancy rate | | 71% | | 73% | 2.8% | | Adjusted EBITDA (,000) | $ | 115,940 | $ | 86,649 | (25.3)% | | Adjusted EBITDA margin | | 17.7% | | 13.6% | | | | Rehabilitation Hospital | | | | | | | | Number of hospitals operated – end of period | | 33 | | 35 | | | | Revenue (,000) | $ | 265,700 | $ | 307,388 | 15.7% | | Number of patient days | | 116,844 | | 122,822 | 5.1% | | Number of admissions | | 8,275 | | 8,848 | 6.9% | | Revenue per patient day | $ | 2,096 | $ | 2,234 | 6.6% | | Occupancy rate | | 87% | | 82% | (5.7)% | | Adjusted EBITDA (,000) | $ | 61,400 | $ | 70,424 | 14.7% | | Adjusted EBITDA margin | | 23.1% | | 22.9% | | | | Outpatient Rehabilitation | | | | | | | | Number of clinics operated – end of period | | 1,922 | | 1,911 | | | | Working days | | 64 | | 63 | | | | Revenue (,000) | $ | 303,158 | $ | 307,342 | 1.4% | | Number of visits | | 2,735,126 | | 2,709,964 | (0.9)% | | Revenue per visit | $ | 99 | $ | 102 | 3.0% | | Adjusted EBITDA (,000) | $ | 24,928 | $ | 24,273 | (2.6)% | | Adjusted EBITDA margin | | 8.2% | | 7.9% | | | [VI. Income from Continuing Operations, Net of Tax, to Adjusted EBITDA Reconciliation (Q1 2025)](index=11&type=section&id=VI.%20Income%20from%20Continuing%20Operations%2C%20Net%20of%20Tax%2C%20to%20Adjusted%20EBITDA%20Reconciliation%20%28Q1%202025%29) This section provides a reconciliation of income from continuing operations, net of tax, to Adjusted EBITDA for Select Medical for the three months ended March 31, 2024 and 2025, defining Adjusted EBITDA as a non-GAAP measure used for performance evaluation and resource allocation - Adjusted EBITDA is a non-GAAP measure commonly used as an analytical indicator of performance in the healthcare industry and by management to evaluate financial performance and determine resource allocation for each segment[28](index=28&type=chunk) - 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[29](index=29&type=chunk) Adjusted EBITDA Reconciliation (Three Months Ended March 31, 2024 and 2025, Thousands) | | Three Months Ended March 31, | | |:---|:---|:---|\ | | 2024 | 2025 | | Income from continuing operations, net of tax | $ 61,529 | $ 74,732 | | Income tax expense | 26,680 | 21,453 | | Interest expense | 40,681 | 29,072 | | Equity in earnings of unconsolidated subsidiaries | (10,421) | (12,512) | | Income from continuing operations, before other income and expense | 118,469 | 112,745 | | Stock compensation expense: | | | | Included in general and administrative | 9,682 | 3,108 | | Included in cost of services | 1,762 | 784 | | Depreciation and amortization | 35,584 | 34,808 | | Concentra separation transaction costs | 278 | — | | Adjusted EBITDA | $ 165,775 | $ 151,445 | | Critical illness recovery hospital | $ 115,940 | $ 86,649 | | Rehabilitation hospital | 61,400 | 70,424 | | Outpatient rehabilitation | 24,928 | 24,273 | | Other | (36,493) | (29,901) | | Adjusted EBITDA | $ 165,775 | $ 151,445 | [VII. Income from Continuing Operations, Net of Tax, to Adjusted EBITDA Reconciliation (2025 Business Outlook)](index=12&type=section&id=VII.%20Income%20from%20Continuing%20Operations%2C%20Net%20of%20Tax%2C%20to%20Adjusted%20EBITDA%20Reconciliation%20%282025%20Business%20Outlook%29) This table provides a reconciliation of the full year 2025 Adjusted EBITDA expectations to income from continuing operations, net of tax, presenting both low and high points of the projected range Adjusted EBITDA Reconciliation for Fiscal Year 2025 Business Outlook (Millions) | Non-GAAP Measure Reconciliation | Low (Millions) | High (Millions) | |:---|:---|:---|\ | 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 |

Financial Performance - For the three months ended March 31, 2025, the company reported total revenue of $1,353.2 million, a 2.4% increase compared to $1,321.2 million for the same period in 2024[78]. - Income from continuing operations, net of tax, was $74.7 million for the three months ended March 31, 2025, compared to $61.5 million for the same period in 2024, representing a 21% increase[78]. - Adjusted EBITDA for the three months ended March 31, 2025, was $151.4 million, down 8.6% from $165.8 million in the same period in 2024[78]. - Revenue for the three months ended March 31, 2025, was $1,353.2 million, a 2.4% increase from $1,321.2 million in the same period of 2024[108]. - Income from continuing operations before other income and expense decreased to $112.7 million in Q1 2025, down from $118.5 million in Q1 2024[108]. - Adjusted EBITDA for Q1 2025 was $151.4 million, with an Adjusted EBITDA margin of 11.2%, compared to $165.8 million and 12.5% in Q1 2024[108]. - Total operating expenses for Q1 2025 were $1,205.6 million, or 89.1% of revenue, compared to $1,169.2 million, or 88.5% of revenue in Q1 2024[112]. - Cost of services for Q1 2025 was $1,172.6 million, representing 86.7% of revenue, up from 84.8% in Q1 2024[112]. - General and administrative expenses decreased to $33.0 million, or 2.4% of revenue, from $48.4 million, or 3.7% of revenue in Q1 2024[112]. - Net income attributable to Select Medical Holdings Corporation was 4.2% in Q1 2025, down from 7.3% in Q1 2024[103]. Segment Performance - The critical illness recovery hospital segment generated revenue of $637.0 million, accounting for approximately 47% of total revenue, while the rehabilitation hospital and outpatient rehabilitation segments each contributed approximately 23%[73]. - The company experienced a 29.1% decrease in income from continuing operations before other income and expense in the critical illness recovery hospital segment compared to the previous year[79]. - The rehabilitation hospital segment saw a 15.7% increase in revenue, while the outpatient rehabilitation segment experienced a 1.4% increase[79]. - Critical illness recovery hospital revenue decreased by 2.9% to $637.0 million in Q1 2025, primarily due to a decrease in revenue per patient day from $2,219 to $2,179[109]. - Rehabilitation hospital revenue increased by 15.7% to $307.4 million in Q1 2025, with revenue per patient day rising 6.6% to $2,234[110]. - Outpatient rehabilitation revenue increased by 1.4% to $307.3 million in Q1 2025, driven by a 3.0% increase in revenue per visit to $102[111]. - Adjusted EBITDA for the Critical Illness Recovery Hospital Segment decreased to $86.6 million for the three months ended March 31, 2025, down from $115.9 million for the same period in 2024, resulting in a margin drop from 17.7% to 13.6%[114]. - Adjusted EBITDA for the Rehabilitation Hospital Segment increased by 14.7% to $70.4 million for the three months ended March 31, 2025, with a margin of 22.9%, slightly down from 23.1% in 2024[115]. - Adjusted EBITDA for the Outpatient Rehabilitation Segment was $24.3 million for the three months ended March 31, 2025, compared to $24.9 million in 2024, with a margin decrease from 8.2% to 7.9%[116]. Cash Flow and Capital Management - Net cash used in operating activities significantly improved to $(3.5) million for the three months ended March 31, 2025, compared to $(66.7) million in 2024, driven by a normalization of accounts receivable[125]. - Net working capital increased to $147.5 million at March 31, 2025, compared to $42.1 million at December 31, 2024, mainly due to higher accounts receivable[130]. - The company authorized a common stock repurchase program of up to $1.0 billion, with 649,804 shares repurchased at a cost of approximately $11.4 million during the three months ended March 31, 2025[132]. - As of March 31, 2025, the company had cash and cash equivalents of $53.2 million and $377.5 million of availability under its revolving facilities[134]. Market and Regulatory Environment - The company faces various risks, including changes in government reimbursement policies and shortages of qualified healthcare professionals, which could negatively impact revenue and profitability[68]. - Revenue from the Medicare program accounted for approximately 29% of the company's total revenue for both Q1 2025 and the year 2024[81]. - The standard federal rate for LTCH-PPS for fiscal year 2024 increased to $48,117 from $46,433 in fiscal year 2023, reflecting a market basket increase of 3.5%[86]. - The fixed-loss amount for high cost outlier cases under LTCH-PPS for fiscal year 2024 rose to $59,873, up from $38,518 in fiscal year 2023[86]. - The standard payment conversion factor for IRF-PPS for fiscal year 2024 was set at $18,541, an increase from $17,878 in fiscal year 2023[94]. - The outlier threshold amount for IRF-PPS decreased to $10,423 for fiscal year 2024 from $12,526 in fiscal year 2023[94]. - The proposed standard federal rate for LTCH-PPS for fiscal year 2026 is $50,729, an increase from $49,383 in fiscal year 2025[88]. - The proposed fixed-loss amount for high cost outlier cases under LTCH-PPS for fiscal year 2026 is $91,247, up from $77,048 in fiscal year 2025[88]. - The standard payment conversion factor for IRF-PPS for fiscal year 2026 is proposed to be $19,364, an increase from $18,907 in fiscal year 2025[96]. - CMS expects a 3% decrease in Medicare payments for physical and occupational therapy services in 2025[98]. - The criteria for outlier payment reconciliation were modified to a change in the LTCH's CCR of 20% or more, effective for cost reporting periods beginning on or after October 1, 2024[91]. Future Growth Strategies - The company plans to pursue new joint venture relationships and open new outpatient rehabilitation clinics to drive incremental growth[133].

Core Viewpoint - Select Medical Holdings Corporation reported a 2.4% increase in revenue for Q1 2025, alongside a significant rise in net income from continuing operations, indicating a positive financial trajectory despite challenges in certain segments [2][12]. Financial Performance - Revenue for Q1 2025 reached $1,353.2 million, up from $1,321.2 million in Q1 2024 [2]. - Income from continuing operations before other income and expense was $112.7 million, a decrease from $118.5 million year-over-year [2]. - Net income from continuing operations increased by 21.5% to $74.7 million compared to $61.5 million in the prior year [2]. - Adjusted EBITDA for Q1 2025 was $151.4 million, down from $165.8 million in Q1 2024 [2]. - Earnings per share from continuing operations rose by 33.3% to $0.44, compared to $0.33 in the same quarter last year [2]. Segment Performance - **Critical Illness Recovery Hospital Segment**: Revenue decreased by 2.9% to $637.0 million, with Adjusted EBITDA down 25.3% to $86.6 million [5][23]. - **Rehabilitation Hospital Segment**: Revenue increased by 15.7% to $307.4 million, with Adjusted EBITDA rising by 14.7% to $70.4 million [6][23]. - **Outpatient Rehabilitation Segment**: Revenue increased by 1.4% to $307.3 million, while Adjusted EBITDA slightly decreased to $24.3 million [7][24]. Company Overview - Select Medical operates 104 critical illness recovery hospitals, 35 rehabilitation hospitals, and 1,911 outpatient rehabilitation clinics across 40 states and the District of Columbia as of March 31, 2025 [4]. Dividend and Stock Repurchase - The Board of Directors declared a cash dividend of $0.0625 per share, payable on or about May 29, 2025 [8]. - A stock repurchase program was authorized for up to $1.0 billion, with 649,804 shares repurchased at a cost of approximately $11.4 million during Q1 2025 [10][11]. Business Outlook - For fiscal year 2025, Select Medical expects revenue between $5.3 billion and $5.5 billion, Adjusted EBITDA between $510 million and $530 million, and fully diluted earnings per share between $1.09 and $1.19 [12].

Company Overview - Select Medical Holdings Corporation is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States based on the number of facilities [4] - As of March 31, 2025, Select Medical operated 104 critical illness recovery hospitals in 29 states, 35 rehabilitation hospitals in 14 states, and 1,911 outpatient rehabilitation clinics in 39 states and the District of Columbia [4] - The company has operations in 41 states and the District of Columbia [4] Financial Results Announcement - Select Medical will release its financial results for the first quarter ended March 31, 2025, on Thursday, May 1, 2025, after the market closes [1] - A conference call regarding the first quarter results and business outlook will be hosted on Friday, May 2, 2025, at 9:00 am ET [2] - The conference call will be available as a live webcast and can be accessed through the company's website [2]

Core Insights - Select Medical Holdings Corporation (SEM) experienced a 7.2% decline in stock price following the release of its fourth-quarter 2024 results, primarily due to reduced occupancy rates and lower admissions in key segments, alongside increased costs [1] Financial Performance - SEM reported adjusted earnings per share (EPS) of 18 cents, missing the Zacks Consensus Estimate by 5.3%, but showing a 50% increase year over year [2] - Net operating revenues reached $1.31 billion, reflecting a 7.8% year-over-year growth and surpassing the consensus estimate by 1.2% [2] - Total costs and expenses rose 12% year over year to $1.29 billion, lower than the estimated $1.62 billion, driven by increased service costs and administrative expenses [3] - Adjusted EBITDA was $116 million, a 3.8% increase year over year, but fell short of the estimate of $187 million [3] Segment Performance - **Critical Illness Recovery Hospital**: Revenues were $600.4 million, up 5.9% year over year, but below the consensus estimate of $612.5 million. Revenue per patient day increased by 7.2%, while patient days and admissions declined by 1.2% and 4.8%, respectively [4] - Adjusted EBITDA for this segment was $63.1 million, a 10% year-over-year increase, but missed the consensus estimate of $64.7 million [5] - **Rehabilitation Hospital**: Revenues grew 13.1% year over year to $294.4 million, exceeding the consensus mark of $286 million. Admissions and patient days increased by 4.4% and 3.3%, respectively [6] - Adjusted EBITDA declined 6.1% year over year to $62.3 million, although it surpassed the Zacks Consensus Estimate of $51.8 million [6] - **Outpatient Rehabilitation**: Revenues reached $319.6 million, a 7.2% year-over-year increase, beating the consensus estimate of $308.4 million. Patient visits rose by 5.2% [7] - Adjusted EBITDA improved 18.2% year over year to $26.6 million, exceeding estimates [7] Financial Position - As of December 31, 2024, SEM had cash and cash equivalents of $59.7 million, up from $52.6 million at the end of 2023. Total assets decreased to $5.6 billion from $7.7 billion [9] - Long-term debt was $1.7 billion, down from the previous year, while total equity increased to $2 billion from $1.5 billion [9] Cash Flow and Full-Year Highlights - Cash flow from operations was $125.4 million, a decline of 30.1% year over year [10] - For the full year 2024, EPS was 94 cents compared to 54 cents in 2023, with total revenue rising to $5.2 billion from $4.8 billion [11] Future Outlook - Management projects revenues for 2025 to be between $5.4 billion and $5.6 billion, indicating a potential growth of 5.8% from 2024 [13] - Expected adjusted EBITDA for 2025 is between $520 million and $540 million, suggesting a 3.8% increase from 2024 [13] - EPS is anticipated to range from $1.09 to $1.19 [13]

Financial Data and Key Metrics Changes - The company reported a combined revenue increase of 8% in Q4 2024, with adjusted EBITDA growing by 4% from $111.8 million to $116 million [14][15] - For the full year, revenue from continuing operations grew by 7%, and adjusted EBITDA increased by 14%, reaching $510.4 million with a 9.8% adjusted EBITDA margin compared to 9.2% in 2023 [15][24] - The diluted loss per common share from continuing operations was $0.19 for Q4, compared to earnings of $0.12 in the same quarter last year [23] Business Line Data and Key Metrics Changes - The critical illness recovery hospital division saw a 6% increase in revenue and a 10% increase in adjusted EBITDA, with an adjusted EBITDA margin of 10.5% for Q4 [15][16] - The inpatient rehab hospital division experienced a 13% revenue increase, but adjusted EBITDA declined by 6%, with a margin of 21.2% [18] - The outpatient rehab division reported a 7% revenue increase, 4% increase in patient volume, and 18% increase in adjusted EBITDA, with net revenue per visit rising from $100 to $102 [20][21] Market Data and Key Metrics Changes - The company added 94 inpatient rehabilitation beds in Q4 and plans to add 481 additional beds in 2025 and 2026 [8][12] - The occupancy rate for the critical illness recovery hospital division increased from 66% to 67% year-over-year [16] - The average daily census for the entire rehab division increased by 3%, while the occupancy rate was 81%, down from 85% the previous year [19] Company Strategy and Development Direction - The company completed the spin-off of Concentra, which is now reflected as discontinued operations [5] - The company plans to continue expanding its inpatient rehab division with multiple new facilities scheduled to open through 2026 [12] - The company is focusing on optimizing resources by closing or consolidating underperforming outpatient clinics [13] Management's Comments on Operating Environment and Future Outlook - Management noted that nursing agency rates have stabilized and utilization has returned to pre-COVID levels, with a 15% reduction in nursing sign-on incentive bonus dollars [17][27] - The company expects revenue for 2025 to be in the range of $5.4 billion to $5.6 billion, with adjusted EBITDA projected between $520 million and $540 million [36] - Management acknowledged confusion in the market regarding the impact of the Concentra spin-off on consensus estimates [41] Other Important Information - The company did not repurchase shares in the last quarter but continues to evaluate stock repurchases and debt reduction opportunities [25][35] - A cash dividend of $0.0625 per share has been declared, payable on March 13, 2025 [24] Q&A Session Summary Question: Clarification on 2025 metrics - Management confirmed that there is confusion in the market regarding consensus estimates and emphasized the importance of excluding Concentra's numbers [40][41] Question: Development activity and startup costs - Management indicated that the increase in inpatient rehab beds will dampen margins in 2025 but expects significant EBITDA growth in 2026 and 2027 [47] Question: Post-separation leverage targets - Management expects to maintain leverage around 3 to 3.1 times for 2025, with a reduction anticipated in 2026 and beyond [57] Question: Inpatient rehab margins - Management attributed lower margins to startup losses and a referral source impacted by Hurricane Helene, which has since returned to normal [59] Question: Outpatient rehab growth drivers - Management highlighted increased net revenue per visit and improved clinical productivity as key drivers for expected growth in outpatient rehab EBITDA [78]

Financial Data and Key Metrics Changes - The company reported a combined revenue increase of 8% in Q4 2024, with adjusted EBITDA growing by 4% from $111.8 million to $116 million [10] - For the full year, revenue from continuing operations grew by 7%, and adjusted EBITDA increased by 14%, reaching $510.4 million with a 9.8% adjusted EBITDA margin compared to 9.2% in 2023 [10][15] - The diluted loss per common share from continuing operations was $0.19 for Q4, compared to earnings of $0.12 in the same quarter last year [14] Business Line Data and Key Metrics Changes - The Critical Illness Recovery Hospital division saw a 6% increase in revenue and a 10% increase in adjusted EBITDA, with an adjusted EBITDA margin of 10.5% for Q4 [11] - The Inpatient Rehab Hospital division experienced a 13% revenue increase, but adjusted EBITDA declined by 6%, resulting in a margin of 21.2% [12] - The Outpatient Rehab division reported a 7% revenue increase and an 18% rise in adjusted EBITDA, with the adjusted EBITDA margin improving from 7.5% to 8.3% [13][14] Market Data and Key Metrics Changes - The company added 94 inpatient rehabilitation beds in Q4, with plans to add 481 additional beds in 2025 and 2026 [6][8] - The average daily census for the entire rehab division increased by 3%, while the occupancy rate was 81%, down from 85% in the prior year [12] Company Strategy and Development Direction - The company completed the spin-off of Concentra, focusing on its remaining three lines of business [3][4] - The company plans to open multiple new facilities, including a 45-bed rehab hospital in Temple, Texas, and a 63-bed rehab hospital in Ozark, Missouri, among others [7][8] - The company aims to optimize resources and serve targeted demographics through strategic closures and acquisitions in the outpatient division [9] Management Comments on Operating Environment and Future Outlook - Management noted that nursing agency rates have stabilized and utilization has returned to pre-COVID levels, with expectations for continued improvement in labor costs [11][17] - The company anticipates revenue for 2025 to be in the range of $5.4 billion to $5.6 billion, with adjusted EBITDA expected between $520 million and $540 million [22] - Management acknowledged confusion in the market regarding the impact of the Concentra spin-off on financial metrics [25][26] Other Important Information - The company refinanced $1.6 billion of outstanding debt, extending the maturity of its revolving credit facility to 2029 and increasing availability [4][5] - The company declared a cash dividend of $0.0625 per share payable on March 13, 2025 [16] Q&A Session Summary Question: Clarification on 2025 metrics - Analyst Justin Bowers inquired about revenue growth, EBITDA growth, and net leverage metrics for 2025, to which Martin Jackson confirmed the calculations and acknowledged market confusion regarding Concentra [25][26] Question: Development activity and startup costs - Bowers asked about the maturation of new facilities and associated startup costs, with Jackson indicating that the new beds would have a dampening effect on inpatient rehab margins for 2025 but expect significant growth in 2026 and 2027 [30][31] Question: Inpatient rehab margins and headwinds - Ben Hendrix questioned the lower margins in the inpatient rehab segment, with Robert Ortenzio explaining that hurricane impacts and startup losses contributed to the decrease [45][46] Question: 2025 outlook for IRF margins - Joanna Gajuk asked about the expected decline in IRF margins for 2025, with Jackson confirming that startup losses were the primary driver [50][51] Question: Outpatient rehab growth drivers - Gajuk also inquired about the expected growth in outpatient rehab EBITDA, with Jackson attributing it to increased rates from commercial contracts and improved clinical productivity [58][59]

Company Performance - Select Medical reported quarterly earnings of $0.18 per share, missing the Zacks Consensus Estimate of $0.19 per share, and down from $0.36 per share a year ago, representing an earnings surprise of -5.26% [1] - The company posted revenues of $1.31 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.18%, but down from $1.66 billion year-over-year [2] - Over the last four quarters, Select Medical has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - Select Medical shares have increased by approximately 2.1% since the beginning of the year, compared to the S&P 500's gain of 4.5% [3] - The current Zacks Rank for Select Medical is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $1.37 billion, and for the current fiscal year, it is $1.17 on revenues of $5.37 billion [7] - The outlook for the Medical - HMOs industry, to which Select Medical belongs, is currently in the bottom 20% of over 250 Zacks industries, which may impact stock performance [8]

Hospital Operations - As of December 31, 2024, the company operated 104 critical illness recovery hospitals, with 38%, 37%, and 33% of revenue from Medicare reimbursement for the years ended December 31, 2022, 2023, and 2024, respectively[26]. - The rehabilitation hospital segment operated 35 hospitals as of December 31, 2024, with 46%, 47%, and 45% of revenue from Medicare reimbursement for the years ended December 31, 2022, 2023, and 2024, respectively[43]. - As of December 31, 2024, the company operated 1,914 outpatient rehabilitation clinics across 39 states and the District of Columbia, employing approximately 11,300 people[58]. - The company operates 35 rehabilitation hospitals in 14 states and 104 critical illness recovery hospitals in 29 states as of December 31, 2024[71]. - As of December 31, 2024, all critical illness recovery hospitals operated by the company were certified by Medicare as LTCHs, and 22 rehabilitation hospitals were certified as IRFs[110]. Patient Care Metrics - The average length of stay for patients in critical illness recovery hospitals was 31 days for the year ended December 31, 2024[28]. - The average length of stay for patients in rehabilitation hospitals was 14 days for the year ended December 31, 2024[44]. Workforce and Employment - The company employed approximately 16,500 people in its critical illness recovery hospital segment as of December 31, 2024[26]. - As of December 31, 2024, the company employed approximately 44,100 individuals, including 30,000 full-time and 14,100 part-time employees[83]. - The company has developed a cultural framework called "The Select Medical Way" to enhance employee experience and retention[86]. - The company employs various strategies for talent acquisition, including employee referral programs and partnerships with nursing and therapy schools[88]. Financial Performance and Revenue Sources - For the year ended December 31, 2024, approximately 82% of the company's revenue from outpatient rehabilitation came from commercial payors, with the remainder from Medicare and other government programs[60]. - The company's revenue by payor source for 2024 indicated that Medicare accounted for 28.8%, commercial insurance for 51.3%, and Medicaid for 3.0%[79]. - Revenue from workers' compensation programs accounted for approximately 15% of outpatient rehabilitation segment revenue, 2% of rehabilitation hospital segment revenue, and 1% of critical illness recovery hospital segment revenue for the year ended December 31, 2024[112]. - Revenues from Medicare-covered services represented approximately 31%, 31%, and 29% of total revenue for the years ended December 31, 2022, 2023, and 2024, respectively[209]. Strategic Initiatives - The company focuses on increasing admissions by demonstrating quality outcomes and improving relationships with referring physicians and hospitals[29]. - The company aims to control operating costs by centralizing administrative functions and standardizing operations[38]. - The company is pursuing opportunistic acquisitions to grow its network of critical illness recovery hospitals[41]. - The company has a strategy to pursue opportunistic acquisitions to grow its network of rehabilitation hospitals and outpatient facilities[57][67]. Quality Assurance and Compliance - The company maintains quality assurance programs to support and monitor care standards, ensuring compliance with regulatory requirements and Medicare certifications[51]. - The company maintains a Privacy and Security Committee to monitor compliance with HIPAA regulations[174]. - The compliance program includes a written code of conduct and is overseen by a compliance and audit committee that meets quarterly[188][189]. Regulatory and Payment System Challenges - The company faces risks from potential changes in Medicare reimbursement rates, which could adversely affect revenue and profitability[210]. - The company is exposed to risks from legislative and regulatory changes that could affect payment systems under the Medicare program[210]. - LTCHs and IRFs face a 2% reduction in annual payment updates if they fail to submit required quality data[158]. Operational Challenges - The company faced significant operating issues due to a shortage of clinical personnel, which may lead to increased reliance on costly temporary personnel[84]. - Increased labor costs due to shortages and high turnover rates are impacting profitability, with significant increases in operating costs expected[215]. - The company is experiencing challenges in attracting and retaining qualified healthcare personnel, which may limit operational capacity and increase costs[216]. Economic and Market Risks - Economic downturns or inflationary pressures could negatively impact patient volumes and overall financial performance[212]. - Public health threats, such as pandemics, may create uncertainties regarding future operating results and financial conditions[220]. - Global economic conditions, including geopolitical conflicts, may adversely affect the company's business and financial results[221].

Revenue Performance - For Q4 2024, revenue increased by 7.8% to $1,312.6 million compared to $1,218.1 million in Q4 2023[3] - For the year ended December 31, 2024, revenue increased by 7.5% to $5,187.1 million compared to $4,826.0 million in 2023[5] - Revenue for Q4 2024 increased to $1,312,564, representing a 7.8% growth compared to Q4 2023's $1,218,116[30] - Revenue for Critical Illness Recovery Hospitals increased by 5.9% from $567.1 million in 2023 to $600.4 million in 2024[46] - Revenue for Critical Illness Recovery Hospital increased by 6.3% from $2,299,773,000 in 2023 to $2,444,196,000 in 2024[49] - Revenue for Rehabilitation Hospital grew by 13.4% from $979,585,000 in 2023 to $1,110,592,000 in 2024[49] - Total revenue for Outpatient Rehabilitation was $1,188,914,000 in 2023, increasing to $1,250,294,000 in 2024, a growth of 5.2%[49] Income and Earnings - Income from continuing operations, net of tax, was a loss of $10.5 million in Q4 2024, compared to income of $30.3 million in Q4 2023[3] - Net income attributable to Select Medical decreased significantly to $(16,050) in Q4 2024, down from $46,269 in Q4 2023, marking a 93.9% decline[30] - Net income attributable to Select Medical for the year 2024 was $214,038, down 12.1% from $243,491 in 2023[33] - Basic earnings per share from continuing operations for Q4 2024 was $(0.18), compared to $0.12 in Q4 2023[30] - The company experienced a 67.5% decline in income from continuing operations before other income and expense, dropping to $21,091 in Q4 2024 from $64,937 in Q4 2023[30] - Adjusted income from continuing operations, net of tax, attributable to common shares increased from $66,919,000 in 2023 to $117,311,000 in 2024[57] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 increased by 3.8% to $116.0 million, up from $111.8 million in Q4 2023[3] - Adjusted EBITDA for the year ended December 31, 2024 increased by 14.4% to $510.4 million, compared to $446.1 million in 2023[5] - Adjusted EBITDA for Outpatient Rehabilitation grew by 18.2%, from $22.5 million in 2023 to $26.6 million in 2024[46] - Adjusted EBITDA for Critical Illness Recovery Hospital rose by 22.6% from $246,015,000 in 2023 to $301,634,000 in 2024[49] - Adjusted EBITDA for Rehabilitation Hospital increased by 10.8% from $221,875,000 in 2023 to $245,748,000 in 2024[49] - Adjusted EBITDA for Outpatient Rehabilitation decreased by 2.9% from $111,868,000 in 2023 to $108,577,000 in 2024[49] - The company expects Adjusted EBITDA for 2025 to range between $520,000,000 and $540,000,000[60] Costs and Expenses - Total costs and expenses for Q4 2024 rose to $1,291,579, a 12.0% increase from $1,153,637 in Q4 2023[30] - General and administrative expenses surged by 32.7% to $225,869 in 2024 from $170,193 in 2023[33] Future Outlook - Select Medical expects 2025 revenue to be in the range of $5.4 billion to $5.6 billion[21] - Income from continuing operations, net of tax, is projected to be between $142,000,000 and $155,000,000 for 2025[60] Cash and Assets - Total current assets decreased from $1.26 billion in 2023 to $1.02 billion in 2024, a decline of approximately 19%[41] - Cash and cash equivalents at the end of the period dropped from $84.0 million in 2023 to $59.7 million in 2024, representing a decrease of 29%[43] - The company reported a net cash provided by operating activities of $582.1 million in 2023, which decreased to $517.9 million in 2024, a decline of 11%[45] Debt and Liabilities - Total liabilities decreased significantly from $6.12 billion in 2023 to $3.61 billion in 2024, a reduction of approximately 41%[41] - The company’s long-term debt, net of current portion, decreased from $3.58 billion in 2023 to $1.69 billion in 2024, a reduction of approximately 53%[41] Operational Metrics - The number of hospitals operated in the Critical Illness Recovery segment decreased from 107 in 2023 to 104 in 2024, a reduction of 2.8%[46] - The number of admissions in Critical Illness Recovery Hospitals fell by 4.8%, from 9,126 in 2023 to 8,691 in 2024[46] - The number of hospitals operated in Critical Illness Recovery increased from 107 in 2023 to 104 in 2024, while Rehabilitation Hospitals increased from 33 to 35[49] Risks and Challenges - The company highlighted potential risks including government reimbursement changes and shortages of qualified healthcare professionals impacting future profitability[27]