Core Insights - Select Medical Holdings Corporation (SEM) reported fourth-quarter 2025 adjusted earnings per share (EPS) of 16 cents, missing the Zacks Consensus Estimate by 31.6%, and reflecting an 11.1% decline year over year [1][9] - Net operating revenues increased by 6.4% year over year to $1.4 billion, surpassing the consensus mark by 2.6% [1][9] Financial Performance - Total costs and expenses rose by 3.2% year over year to $1.3 billion, exceeding estimates by 3.9% [3] - Adjusted EBITDA decreased by 9.8% year over year to $104.7 million, falling short of the estimate of $126.7 million [3] Segment Performance - **Critical Illness Recovery Hospital**: Revenues reached $629.7 million, a 4.9% year-over-year increase, surpassing estimates. Admissions increased by 3% year over year, while patient days declined by 1% [4] - **Rehabilitation Hospital**: Revenues grew by 15.2% year over year to $339.2 million, driven by a 9.6% increase in admissions. Adjusted EBITDA improved by 11.1% year over year to $69.2 million [6][7] - **Outpatient Rehabilitation**: Revenues totaled $324.6 million, a 1.6% year-over-year increase, supported by a 4.9% rise in visits. However, revenue per visit decreased by 3.9% [8][10] Financial Position - As of December 31, 2025, cash and cash equivalents were $26.5 million, down 55.6% from the previous year. Total assets increased by 4.3% to $5.9 billion, while long-term debt rose by 6.6% to $1.8 billion [11] - Net cash from operations was $64.3 million, a decline of 48.7% year over year [12] Shareholder Returns - In 2025, Select Medical repurchased shares worth approximately $96.5 million. A cash dividend of 6.25 cents per share was approved for payment on March 12, 2026 [13] 2026 Outlook - Management projects revenues between $5.6 billion and $5.8 billion for 2026, indicating a 3.6% increase from 2025. Adjusted EBITDA is expected to range from $520 million to $540 million, with EPS anticipated between $1.22 and $1.32 [14]

Financial Data and Key Metrics Changes - Total revenue grew more than 6% year-over-year in Q4 2025, with full-year revenue increasing over 5% [8][10] - Adjusted EBITDA declined 10% to $104.7 million from $116 million in the prior year, with a margin decrease to 9% from 9.8% [9][10] - Earnings per common share from continuing operations was $0.16, compared to a diluted loss per common share of $0.19 in the prior year [9] Business Line Data and Key Metrics Changes - Inpatient Rehab Hospital Division revenue increased over 15% year-over-year to $339.2 million, with adjusted EBITDA rising 11% to $69.2 million [10] - Critical Illness Recovery Hospital Division revenue increased nearly 5% to $629.7 million, with adjusted EBITDA growing 5% to $66.4 million [11] - Outpatient Rehab Division revenue increased to $324.6 million, driven by nearly 5% growth in patient visits, but adjusted EBITDA fell to $11.2 million from $26.6 million [12] Market Data and Key Metrics Changes - The company added 150 beds in Q4 2025, contributing to a total of 212 rehab beds added for the full year [5][6] - The average daily census in the Inpatient Rehab Hospital Division grew nearly 10%, with occupancy improving to 82% from 81% [10] Company Strategy and Development Direction - The company is focused on expanding its inpatient rehabilitation business, with plans to add 399 beds across 2026 and 2027 [6][8] - A cash dividend of $0.0625 per share was approved, reflecting a commitment to returning value to shareholders [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the outpatient division, indicating that recent health insurance expenses were likely one-time impacts [20] - The company expects revenue for 2026 to be in the range of $5.6 billion to $5.8 billion, with adjusted EBITDA projected between $520 million and $540 million [15] Other Important Information - A non-binding proposal to take the company private is under review by a special committee of the board [4] - The company ended the quarter with $1.8 billion of debt and $26.5 million of cash on the balance sheet [13] Q&A Session Summary Question: Can you provide details on the higher health costs and their impact on the outpatient rehab business? - Management indicated that health insurance expenses impacted the outpatient division by approximately $5 million, with variable discounts adding another $6 million, totaling around $11 million [18] Question: What are the expectations for guidance going forward? - Management expressed confidence in the inpatient rehab division and cautiously optimistic outlook for outpatient improvements, indicating that the $11 million impact was likely a one-time event [20] Question: Can you elaborate on the special committee's review process? - Management stated they could not comment further on the process beyond the initial announcement [25] Question: Was there any impact from weather in Q1? - Management confirmed that there was no significant impact on inpatient divisions, but outpatient experienced some effects due to weather conditions [26] Question: Can you provide more detail on the outpatient issues and payer mix? - Management noted that the outpatient division faced challenges due to a deterioration in payer mix, impacting net revenue per visit [40]

Financial Data and Key Metrics Changes - Total revenue grew more than 6% year-over-year in Q4 2025, with full-year revenue increasing over 5% [8][10] - Adjusted EBITDA declined 10% to $104.7 million from $116 million in the prior year, with a margin decrease to 9% from 9.8% [9][10] - Earnings per common share from continuing operations was $0.16, compared to a diluted loss per common share of $0.19 in the prior year [9] Business Line Data and Key Metrics Changes - Inpatient Rehab Hospital Division revenue increased over 15% year-over-year to $339.2 million, with Adjusted EBITDA rising 11% to $69.2 million [10] - Critical Illness Recovery Hospital Division revenue increased nearly 5% to $629.7 million, with Adjusted EBITDA growing 5% to $66.4 million [11] - Outpatient Rehab Division revenue increased to $324.6 million from $319.6 million, driven by nearly 5% growth in patient visits, but net revenue per visit declined to $98 from $102 [12] Market Data and Key Metrics Changes - The company added 150 beds in Q4 2025, with a total of 212 rehab beds added for the full year [5][6] - The average daily census grew nearly 10% in the Inpatient Rehab Hospital Division, with occupancy improving to 82% from 81% [10] Company Strategy and Development Direction - The company is focused on expanding its inpatient rehabilitation business, with plans to add 399 beds across 2026 and 2027 [6][8] - A cash dividend of $0.0625 per share was approved, reflecting a commitment to returning value to shareholders [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the outpatient division, indicating that recent health insurance expenses were likely one-time impacts [20] - The company expects revenue for 2026 to be in the range of $5.6 billion to $5.8 billion, with Adjusted EBITDA projected between $520 million and $540 million [15] Other Important Information - The company received a non-binding indication of interest for a take-private proposal, which is under review by a special committee [4] - The company ended the quarter with $1.8 billion of debt and $26.5 million of cash on the balance sheet [13] Q&A Session Summary Question: Impact of higher health costs on outpatient business - Management indicated that health insurance expenses impacted the outpatient division by approximately $5 million, with variable discounts adding around $6 million, totaling about $11 million [18] Question: Guidance and market pressures - Management expressed confidence in the inpatient rehab division and cautiously optimistic outlook for outpatient, suggesting that the $11 million impact was likely a one-time issue [20] Question: Special committee and strategic alternatives - Management was unable to provide further details on the special committee's review process [25] Question: Weather impact on segments - Management noted that there was no significant impact on inpatient divisions, but outpatient experienced some effects due to weather [26] Question: Payer mix and variable discounts - Management explained that the outpatient division faced challenges due to a shift in payer mix and higher managed care discounts, impacting net revenue per visit [40] Question: Labor and staffing issues - Management reported improvements in labor costs and staffing levels, with no significant threats from union activities [68]

Financial Data and Key Metrics Changes - Total revenue grew more than 6% year-over-year in Q4 2025, with full-year revenue growth exceeding 5% [6][8] - Adjusted EBITDA declined 10% to $104.7 million from $116 million in the prior year, impacted by increased health insurance expenses [7][8] - Earnings per common share from continuing operations was $0.16, compared to a diluted loss per common share of $0.19 in the prior year [7] - Adjusted earnings per common share from continuing operations was $0.16, down from $0.18 last year [8] - For the full year, adjusted EBITDA was $493.2 million, with a 9% margin, compared to $510.4 million and a 9.8% margin in 2024 [9] Business Line Data and Key Metrics Changes - Inpatient Rehab Hospital Division revenue increased over 15% year-over-year to $339.2 million, with adjusted EBITDA rising 11% to $69.2 million [9] - Critical Illness Recovery Hospital Division revenue increased nearly 5% to $629.7 million, with adjusted EBITDA growing 5% to $66.4 million [10] - Outpatient Rehab Division revenue increased to $324.6 million from $319.6 million, driven by nearly 5% growth in patient visits, but net revenue per visit declined to $98 from $102 [10][11] Market Data and Key Metrics Changes - The company added 150 beds in Q4 2025, contributing to a total of 212 rehab beds added for the full year [4] - The company expects to add 399 beds across 2026 and 2027, with several new hospitals and rehab units planned [5] Company Strategy and Development Direction - The company is focused on expanding its inpatient rehabilitation business and has a robust pipeline for growth in 2026 [20] - A cash dividend of $0.0625 per share was approved, reflecting the company's commitment to returning value to shareholders [6] - The company is evaluating strategic alternatives following a take-private proposal from its executive chairman [3] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the outpatient division's recovery, attributing recent challenges to one-time factors [20] - The company anticipates a 2% increase in Medicare rates for 2026, which is expected to positively impact margins [41] - Labor costs have stabilized, and the company is focused on improving staffing levels in certain markets [66] Other Important Information - The company ended the quarter with $1.8 billion of debt and $26.5 million of cash on the balance sheet [12] - Interest expense for the quarter was $28.9 million, slightly up from the previous year [13] - The company expects capital expenditures in the range of $200 million-$220 million for 2026 [14] Q&A Session Summary Question: Can you provide details on the higher health costs and their impact on the outpatient business? - Management indicated that health insurance expenses impacted the outpatient division by approximately $5 million, with variable discounts adding around $6 million, totaling about $11 million in impact [18] Question: What are the expectations for guidance going forward? - Management expressed confidence in the inpatient rehab division and cautiously optimistic outlook for outpatient improvements, noting that the $11 million impact was likely a one-time event [20] Question: Can you elaborate on the special committee's review process? - Management stated they could not comment further on the process beyond the initial update provided [24] Question: Was there any impact from weather in Q1? - Management confirmed that there was no significant impact on inpatient divisions, but outpatient experienced some effects due to weather conditions [25] Question: Can you clarify the outpatient issues and payer mix? - Management noted that the outpatient division faced challenges due to a shift in payer mix and an uptick in managed Medicare population, which impacted net revenue per visit [39] Question: What are the expectations for margins in the outpatient division? - Management expects margins to improve year-over-year in the outpatient division, aided by regulatory changes in Medicare [43]

Select Medical (SEM) came out with quarterly earnings of $0.16 per share, missing the Zacks Consensus Estimate of $0.23 per share. This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -31.57%. A quarter ago, it was expected that this hospital and rehabilitation center operator would post earnings of $0.18 per share when it actually produced earnings of $0.23, delivering a surprise of +27.78%.Over ...

Hospital Operations - As of December 31, 2025, the company operated 104 critical illness recovery hospitals across 28 states, with approximately 37%, 33%, and 32% of revenue from Medicare reimbursement for the years ended December 31, 2023, 2024, and 2025, respectively [22]. - The company operated 1,917 outpatient rehabilitation clinics across 39 states and the District of Columbia as of December 31, 2025 [51]. - The company has a significant presence in the rehabilitation hospital segment, operating 38 rehabilitation hospitals in 15 states as of December 31, 2025 [63]. - As of December 31, 2025, the company operated 104 critical illness recovery hospitals and 38 rehabilitation hospitals, all certified by Medicare [100]. - The company operated 18 critical illness recovery hospitals and 11 rehabilitation hospitals that are treated as provider-based satellites, with 294 outpatient rehabilitation clinics also classified as provider-based [163]. Patient Care and Quality - The average length of stay for patients in critical illness recovery hospitals was 31 days for the year ended December 31, 2025 [24]. - The average length of stay for patients in rehabilitation hospitals was 14 days for the year ended December 31, 2025 [38]. - All rehabilitation hospitals were accredited by TJC and certified by Medicare as inpatient rehabilitation facilities as of December 31, 2025 [39]. - The company focuses on high-quality care and service, utilizing patient satisfaction surveys to continuously improve service levels [55]. - The company maintains quality assurance programs to support and monitor care standards, ensuring compliance with regulatory requirements and Medicare certifications [31]. Financial Performance - Medicare accounted for 28.6% of the company's revenue in 2025, while commercial insurance represented 51.6% [71]. - 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, 2025 [102]. - The company's revenue sources include Medicare and Medicaid, which generally pay less than customary charges for services provided [73]. - The company employed approximately 45,300 employees, including 30,800 full-time and 14,500 part-time employees [75]. - The company has approximately 17,500 credentialed practitioners providing services in its hospitals [78]. Strategic Growth - The company is pursuing opportunistic acquisitions to grow its network of critical illness recovery hospitals, focusing on improving financial performance through clinical program additions and centralized administrative functions [36]. - The company aims to increase commercial volume by expanding relationships with commercial insurers, offering high-quality, cost-effective care [35]. - The company aims to increase market share by opening new clinics in existing markets and entering joint ventures with hospital systems [56]. - The company is pursuing opportunistic acquisitions to grow its network of rehabilitation facilities and improve financial performance [60]. Regulatory Compliance - The company is required to comply with the Health Insurance Portability and Accountability Act (HIPAA) and has a Privacy and Security Committee to monitor compliance, which has not materially affected its financial condition [169]. - The company must provide clear pricing information online for at least 300 "shoppable services" as mandated by new regulations effective January 1, 2021 [174]. - The Stark Law imposes penalties for prohibited referrals, including civil monetary penalties of up to $15,000 per service and exclusion from federal healthcare programs [162]. - The company is required to monitor government publications to enhance compliance efforts related to fraud and abuse enforcement [159]. - The Compliance and Audit Committee meets quarterly to review compliance program activities and ensure adherence to regulatory requirements [182]. Operational Challenges - The company faces significant operating issues due to shortages of clinical personnel, which may lead to increased use of costly temporary labor [76]. - The company has implemented a communications tool called the "10-Foot Circle of Employee Safety," resulting in significant reductions in workplace injuries [87]. - The company maintains strong community and employee relations, emphasizing quality care and customer service to drive patient volume [59]. Financial Obligations - As of December 31, 2025, Select had outstanding borrowings of $1,039.5 million under a term loan and $100.0 million under a revolving facility, with variable interest rates [444]. - An interest rate cap was entered into on March 31, 2025, limiting the Term SOFR rate to 4.5% on $1.0 billion of principal outstanding under the term loan, applicable through March 31, 2028 [445]. - A 0.25% increase in market interest rates will impact the annual interest expense on variable rate debt by $2.8 million per year [446].

Exhibit 99.1 FOR IMMEDIATE RELEASE 4714 Gettysburg Road Mechanicsburg, PA 17055 NYSE Symbol: SEM Select Medical Holdings Corporation Announces Results For Its Fourth Quarter and Year Ended December 31, 2025, Its 2026 Business Outlook, and Cash Dividend MECHANICSBURG, PENNSYLVANIA — February 19, 2026 — Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced results for its fourth quarter and year ended December 31, 2025, its 2026 business outlook, and the decl ...

Core Viewpoint - Select Medical Holdings Corporation reported significant growth in revenue and income for the fourth quarter and full year ended December 31, 2025, alongside a positive business outlook for 2026 and the declaration of a cash dividend [1][2]. Financial Performance - For Q4 2025, revenue increased by 6.4% to $1,396.6 million from $1,312.6 million in Q4 2024 [1]. - Income from continuing operations before other income and expense surged by 203.1% to $63.9 million compared to $21.1 million in the prior year [1]. - Net income from continuing operations, net of tax, rose by 461.0% to $37.7 million, reversing a loss of $10.5 million in Q4 2024 [1]. - Adjusted EBITDA for Q4 2025 was $104.7 million, down from $116.0 million in Q4 2024 [1]. - Earnings per common share from continuing operations increased by 184.2% to $0.16, compared to a diluted loss per share of $0.19 in the prior year [1]. Annual Performance - For the year ended December 31, 2025, revenue grew by 5.1% to $5,452.8 million from $5,187.1 million in 2024 [1]. - Income from continuing operations before other income and expense increased by 25.3% to $336.2 million compared to $268.3 million in 2024 [1]. - Net income from continuing operations, net of tax, increased by 65.0% to $214.5 million from $130.0 million in the prior year [1]. - Adjusted EBITDA for the year was $493.2 million, down from $510.4 million in 2024 [1]. - Earnings per common share from continuing operations, net of tax, increased by 127.5% to $1.16, compared to $0.51 in 2024 [1]. Segment Performance - Critical Illness Recovery Hospital Segment: Q4 revenue increased by 4.9% to $629.7 million, with adjusted EBITDA rising by 5.3% to $66.4 million [2]. - Rehabilitation Hospital Segment: Q4 revenue increased by 15.2% to $339.2 million, with adjusted EBITDA increasing by 11.1% to $69.2 million [2]. - Outpatient Rehabilitation Segment: Q4 revenue increased by 1.6% to $324.6 million, but adjusted EBITDA fell to $11.2 million from $26.6 million in the prior year [2]. Business Outlook - For 2026, Select Medical expects revenue to be between $5.6 billion and $5.8 billion, with adjusted EBITDA projected between $520.0 million and $540.0 million [3]. - Fully diluted earnings per share are anticipated to range from $1.22 to $1.32 [3]. Dividend and Stock Repurchase - A cash dividend of $0.0625 per share was declared, payable on or about March 12, 2026 [2]. - The company authorized a stock repurchase program of up to $1.0 billion, with $96.5 million spent on repurchasing 6,375,512 shares in 2025 [2].

Select Medical Holdings Corporation to Announce Fourth Quarter and Full Year 2025 Results and Business Outlook on Thursday, February 19, 2026 [Accessibility Statement] Skip NavigationMECHANICSBURG, Pa., Feb. 17, 2026 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical") (NYSE: SEM), will release the financial results for its fourth quarter and full year ended December 31, 2025 on Thursday, February 19, 2026 after the market closes.Select Medical will host a conference call regarding its fou ...

Core Viewpoint - Select Medical Holdings Corporation (SEM) is expected to report its fourth-quarter 2025 results on February 19, 2026, with earnings estimated at 23 cents per share and revenues at $1.36 billion [1]. Financial Performance Estimates - The fourth-quarter earnings estimate has decreased by one cent over the past 60 days, indicating a year-over-year increase of 27.8% [2]. - The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year growth of 3.7% [2]. - For the full year 2025, the revenue estimate is $5.42 billion, reflecting an 18.2% year-over-year decline, while the earnings per share estimate is $1.23, implying a rise of 30.9% from the previous year [3]. Earnings Surprise History - Select Medical's earnings have surpassed the Zacks Consensus Estimate in two of the last four quarters, missing in the other two, with an average surprise of 8.7% [3]. Earnings Prediction Model - The current model does not predict an earnings beat for SEM, as it has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell) [4]. Segment Performance Insights - The Critical Illness Recovery segment is projected to see a 2.1% year-over-year revenue growth in Q4, with revenues per Patient Day expected to increase by 2.8% [6]. - The Rehabilitation Hospital segment's revenues are anticipated to rise by 11.1% in Q4, with revenues per Patient Day expected to increase by 5.9% [8]. - The Outpatient Rehabilitation segment's adjusted EBITDA is projected to surge by 55.8% year-over-year, although revenues per Visit are expected to dip by 0.8% [9]. Operational Metrics - A 3.8% increase in admissions is expected in Q4, with an occupancy rate projected at 67.3% [7]. - The Rehabilitation Hospital segment is expected to see admissions grow by 10.4% year-over-year, with an occupancy rate expanding by 320 basis points to 84.2% [8]. - Total operating expenses are estimated to decrease to $1.28 billion, primarily due to lower general and administrative expenses, despite a nearly 6% growth in interest expense [10]. Peer Performance Comparison - Ensign Group reported a fourth-quarter adjusted EPS of $1.82, beating estimates by 4%, with a 19.5% year-over-year improvement in earnings [12]. - Encompass Health reported an adjusted EPS of $1.46, exceeding estimates by 13.2%, with a 24.8% year-over-year increase in earnings [13].