Select Medical(US:SEM)2022-11-03 20:35Financial Performance - For the nine months ended September 30, 2022, the company reported total revenue of $4,752.1 million, with approximately 35% from the critical illness recovery hospital segment, 14% from the rehabilitation hospital segment, 18% from the outpatient rehabilitation segment, and 28% from the Concentra segment [74]. - Adjusted EBITDA for the nine months ended September 30, 2022, was $497.954 million, a decrease from $808.939 million in the same period of 2021 [78]. - Net income for the three months ended September 30, 2022, was $38.126 million, down from $100.217 million in the same period of 2021 [78]. - Total revenue for the company reached $1.57 billion for the three months ended September 30, 2022, up 2.2% from $1.53 billion in the same period of 2021 [84]. - Net income for the nine months ended September 30, 2022, was $160.3 million, down from $433.6 million for the same period in 2021 [87]. - Adjusted EBITDA for the company was $153.1 million in Q3 2022, reflecting a decrease of 26.6% compared to $208.6 million in Q3 2021 [85]. - Total revenue for the three months ended September 30, 2022, increased by 2.2% to $1,567.8 million compared to $1,534.2 million for the same period in 2021 [124]. - Total revenue for the nine months ended September 30, 2022, was $4,752.1 million, a 2.3% increase from $4,644.7 million in the same period of 2021 [87]. Segment Performance - The company operated 105 critical illness recovery hospitals, 31 rehabilitation hospitals, and 1,933 outpatient rehabilitation clinics as of September 30, 2022 [73]. - The company’s rehabilitation hospital segment generated approximately 14% of total revenue, highlighting its role in the overall business [74]. - Revenue for Critical Illness Recovery Hospital was $524.6 million for the three months ended September 30, 2022, a decrease of 1.1% compared to $530.6 million in the same period of 2021 [84]. - Rehabilitation Hospital revenue increased by 8.0% to $229.4 million in Q3 2022 from $212.4 million in Q3 2021 [85]. - Outpatient Rehabilitation revenue rose by 3.8% to $285.0 million in Q3 2022 compared to $274.5 million in Q3 2021 [85]. - Revenue from the Critical Illness Recovery Hospital segment decreased by 1.1% to $524.6 million, with revenue per patient day declining to $1,878 from $1,931 [125]. - Revenue for the Rehabilitation Hospital Segment increased by 7.3% to $678.9 million for the nine months ended September 30, 2022, with patient days rising by 3.7% to 321,690 [147]. - Revenue for the Outpatient Rehabilitation Segment rose by 4.6% to $844.2 million for the nine months ended September 30, 2022, driven by a 4.6% increase in patient visits to 7,165,866 [148]. - Concentra Segment's revenue was $1,309.4 million for the nine months ended September 30, 2022, down from $1,321.4 million in 2021, primarily due to a decline in COVID-19 screening revenue [149]. Operational Challenges - The company faced challenges due to the COVID-19 pandemic, impacting future operating results and financial condition [79]. - The company is subject to various risks, including changes in government reimbursement policies and competition, which could affect revenue and profitability [69]. - The company experienced a significant decline in income from operations, with a 50.3% decrease overall, and a notable drop of 89.4% in the Critical Illness Recovery Hospital segment [88]. - The company is navigating regulatory changes due to the COVID-19 pandemic, which may impact future financial performance [90]. - The company is focused on adapting to ongoing healthcare regulatory changes that may affect reimbursement and operational strategies [90]. Cost and Expenses - Operating expenses increased to $4,305.6 million, or 90.6% of revenue, for the nine months ended September 30, 2022, compared to $3,991.6 million, or 85.9% of revenue, for the same period in 2021 [151]. - The cost of services as a percentage of revenue increased from 84.6% in Q3 2021 to 88.9% in Q3 2022 [116]. - Total operating expenses for the three months ended September 30, 2022, were $1,433.3 million, representing 91.4% of revenue, up from 87.1% in the prior year [130]. Cash Flow and Dividends - Cash flows from operating activities were $272.3 million for the nine months ended September 30, 2022, down from $461.9 million in the same period of 2021 [168]. - The company had cash and cash equivalents of $108.2 million as of September 30, 2022, with $213.5 million available under its revolving facility [177]. - Cash dividends declared were $0.125 per share, with total cash dividends paid amounting to $16.7 million, $16.1 million, and $15.9 million in March, June, and September 2022 respectively [82]. - The board of directors declared a cash dividend of $0.125 per share on November 2, 2022, payable on or about November 29, 2022 [179]. Share Repurchase and Debt - The company repurchased 7,883,195 shares at a cost of approximately $185.1 million during the nine months ended September 30, 2022, as part of a $1.0 billion stock repurchase program [175]. - As of September 30, 2022, Select had outstanding borrowings of $2,103.4 million under a term loan and $380.0 million under a revolving facility [184]. - The company entered into an interest rate cap transaction to limit the 1-month LIBOR rate to 1.0% on $2.0 billion of principal outstanding under its term loan, effective through September 30, 2024 [185]. - As of September 30, 2022, the 1-month LIBOR rate was 3.14%, with $103.4 million of term loan borrowings subject to variable interest rates [185]. - Each 0.25% increase in market interest rates will impact the interest expense on Select's variable rate debt by $1.2 million [186].