Hospital operator Select Medical Holdings Corporation (SEM) recently completed the spin-off of Concentra Group Holdings Parent, Inc. (CON) by distributing its 81.7% ownership stake in the company to its shareholders. Per the previously announced distribution plan, Select Medical distributed 104,093,503 shares of Concentra’s common stock.This was done through a pro-rata stock distribution, where shareholders of SEM received 0.806971 shares of Concentra common stock for each share of SEM they held as of the r ...

MECHANICSBURG, Pa., Nov. 25, 2024 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced that we have completed our previously announced distribution (the "Distribution") of 104,093,503 shares of common stock of Concentra Group Holdings Parent, Inc. ("Concentra") (NYSE: CON) owned by Select Medical Corporation ("SMC"), a wholly owned subsidiary of Select Medical, representing approximately 81.7% of the outstanding shares of Concentra's common ...

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MECHANICSBURG, Pa., Nov. 19, 2024 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced the distribution ratio for the previously announced special stock distribution (the "Distribution") to its stockholders of its equity interest in Concentra Group Holdings Parent, Inc. ("Concentra") (NYSE: CON). Based on the shares of Select Medical's common stock outstanding as of November 18, 2024, the record date (the "Record Date") for the Distribution ...

MECHANICSBURG, Pa.  , Nov. 18, 2024 /PRNewswire/ -- Select Medical Holdings Corporation ("Holdings") (NYSE: SEM), today announced that Select Medical Corporation, a wholly-owned subsidiary of Holdings ("Select"), has priced a private offering (the "Offering") of $550.0 million in aggregate principal amount of its 6.250% senior notes due 2032 (the "notes"). The Offering is expected to close on December 3, 2024, subject to the satisfaction of customary closing conditions. The notes will be senior unsecured ob ...

MECHANICSBURG, Pa., Nov. 18, 2024 /PRNewswire/ -- Select Medical Holdings Corporation ("Holdings") (NYSE: SEM), today announced that Select Medical Corporation ("Select") has commenced a private offering (the "Offering"), subject to market and other customary conditions, of $850 million in aggregate principal amount of senior notes due 2032 (the "notes"). The notes will be senior unsecured obligations of Select and will be guaranteed by certain of Select's existing and future domestic subsidiaries.Concurren ...

Medical worker shows the structure of a recipe.gettyOn November 06, Select Medical Holdings (NYSE: SEM; $40.20; Market Cap: $5.2 billion) announced a special stock distribution of its carved out unit Concentra Holdings (NYSE: CON; $19.67; Market Cap: $2.5 billion) to its shareholders. The distribution is set for November 25, 2024, with a record date of November 18, 2024. Shareholders will receive approximately 0.806971 shares of Concentra’s common stock for each share of Select Medical stock they own. This ...

Core Viewpoint - Select Medical Holdings Corporation (SEM) experienced a 13.8% increase in stock price following the release of its third-quarter 2024 results, attributed to upward revisions in revenue and adjusted EBITDA outlook, driven by growth in patient days and revenue per patient day at its hospitals [1][2]. Financial Performance - SEM reported adjusted earnings per share (EPS) of 50 cents, exceeding the Zacks Consensus Estimate by 38.9%, with an 8.7% year-over-year increase [2]. - Net operating revenues reached $1.76 billion, reflecting a 5.4% year-over-year growth and surpassing the consensus mark by 2.3% [2]. - Total costs and expenses rose 5.5% year over year to $1.54 billion, which was lower than the estimated $1.59 billion [3]. - Adjusted EBITDA was $205.5 million, a 6% year-over-year increase, exceeding the estimate of $190.3 million [3]. Segment Performance - **Critical Illness Recovery Hospital**: Revenues were $583 million, a 3.4% year-over-year increase, but fell short of estimates. Revenue per patient day increased by 2.4%, while patient days improved by 1.1% [4]. - **Rehabilitation Hospital**: Revenues grew 14.4% year over year to $282.7 million, surpassing estimates. Adjusted EBITDA rose 12.1% to $60.1 million [6]. - **Outpatient Rehabilitation**: Revenues reached $312 million, a 6.9% year-over-year increase, driven by a 5.6% rise in patient visits [7]. - **Concentra**: Revenues were $489.6 million, a 3.3% year-over-year increase, exceeding estimates. Adjusted EBITDA improved 2.7% to $101.6 million [8]. Financial Position - As of September 30, 2024, SEM had cash and cash equivalents of $191.5 million, up from $84 million at the end of 2023. Total assets increased to $8 billion from $7.7 billion [9]. - Long-term debt decreased to $3.1 billion, while total equity rose to $2.3 billion from $1.5 billion at the end of 2023 [9]. Cash Flow and Shareholder Returns - SEM generated cash flow from operations of $181 million in the reported quarter, a 55.5% year-over-year increase [10]. - The company did not repurchase shares in Q3 2024 but declared a cash dividend of 12.5 cents per share, payable on November 26, 2024 [11]. 2024 Outlook - Management revised revenue guidance to between $6.95 billion and $7.15 billion, indicating a 5.2% growth from 2023 [12]. - Adjusted EBITDA is expected to be between $865 million and $885 million, suggesting an 8.4% rise from the previous year [12]. - EPS is projected to be between $2.01 and $2.12, reflecting an 8.1% improvement from 2023 [13].

Financial Data and Key Metrics Changes - The consolidated adjusted EBITDA grew 6% from $193.8 million to $205.5 million, with an adjusted EBITDA margin of 11.7% compared to 11.6% in the prior year Q3 [16][25] - Revenue increased by 6% compared to Q3 of the prior year [16] - EPS was $0.43 per share for the third quarter compared to $0.38 per share in the same quarter prior year [25] Business Line Data and Key Metrics Changes - The inpatient rehab hospital division had a 14% increase in revenue and a 12% increase in adjusted EBITDA compared to Q3 of the prior year [20] - The critical illness recovery hospital division saw a 3% increase in revenue and a 9% increase in adjusted EBITDA compared to the same quarter prior year [17] - The outpatient rehab division experienced a 7% increase in revenue, with patient volumes increasing by 6% [24] Market Data and Key Metrics Changes - Concentra experienced increases of 3% in both net revenue and adjusted EBITDA over the prior year same quarter, driven by a 4% increase in rate [23] - The outpatient division's adjusted EBITDA margin increased from 9% to 9.1% [25] Company Strategy and Development Direction - The company plans to open several new inpatient rehab hospitals and expand its operations, adding 569 additional beds from 2024 through 2026 [13][11] - The development pipeline is described as robust, with opportunities in both inpatient and outpatient rehab [48] - The company aims to maintain a leverage ratio of around 3 times, allowing flexibility in capital deployment [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operating environment, noting improvements in labor costs and occupancy rates [29][44] - The company updated its business outlook for 2024, expecting revenue in the range of $6.95 billion to $7.15 billion and adjusted EBITDA between $865 million to $885 million [42] Other Important Information - The company completed Concentra's initial public offering, retaining an 81.74% ownership stake [5][6] - A cash dividend of $0.125 was declared, payable on November 26, 2024 [26] - The company did not repurchase shares during the quarter but continues to evaluate stock repurchases and debt reduction [41] Q&A Session Summary Question: Comments on LTAC occupancy trends - Management noted that the occupancy rate was higher than the prior year and attributed it to seasonal factors rather than staffing issues [44] Question: Thoughts on capital deployment and leverage - Management indicated a preference to maintain leverage around 3 times and emphasized a robust development pipeline [49] Question: Additional progress on SWB as a percent of revenue - Management believes there is room for improvement and expects to end the year in the 57% range [57] Question: Keys for outpatient rehab margin improvement - Management highlighted clinical efficiency and technology improvements as major factors for future margin enhancements [61]

Group 1: Earnings Performance - Select Medical reported quarterly earnings of $0.50 per share, exceeding the Zacks Consensus Estimate of $0.36 per share, and up from $0.46 per share a year ago, representing an earnings surprise of 38.89% [1] - The company posted revenues of $1.76 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.30%, compared to $1.67 billion in the same quarter last year [2] - Over the last four quarters, Select Medical has consistently surpassed consensus EPS estimates and revenue estimates [2] Group 2: Stock Performance and Outlook - Select Medical shares have increased approximately 39.8% since the beginning of the year, outperforming the S&P 500's gain of 21.9% [3] - The future stock price movement will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $1.75 billion, and for the current fiscal year, it is $2.03 on revenues of $7.02 billion [7] Group 3: Industry Context - The Medical - HMOs industry, to which Select Medical belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Select Medical's performance [5]