Select Medical(US:SEM)2022-02-25 19:36Financial Data and Key Metrics Changes - Total company revenue for Q4 2021 was $1.56 billion, a 6.8% increase compared to the same quarter in the prior year. For the full year, total revenue increased 12.2% to $6.2 billion compared to $5.5 billion in the prior year [11] - Adjusted EBITDA for Q4 was $138.4 million, down from $221.3 million in the same quarter prior year, with an adjusted EBITDA margin of 8.9% compared to 15.2% [20][36] - Earnings per fully diluted share were $0.37 in Q4, down from $0.57 in the same quarter prior year, while for the full year, earnings per share were $2.98 compared to $1.93 in the prior year [28][41] Business Segment Data and Key Metrics Changes - Revenue in the Critical Illness Recovery Hospitals segment for Q4 increased 7.3% to $577 million, with patient days up 3.2% and net revenue per patient day increasing 3.5% to $1,946 [11][12] - Revenue in the Rehabilitation Hospital segment for Q4 increased 10.5% to $216 million, with patient days up 8.1% and net revenue per patient day increasing 2.7% to $1,888 [14] - Revenue in the Outpatient Rehab segment for Q4 increased 7.8% to $277 million, with patient visits up 9.2% [16] - Revenue in the Concentra segment for Q4 increased 3% to $411 million, with patient visits up 8.3% [18] Market Data and Key Metrics Changes - The company experienced substantial wage pressure in Q4, particularly in critical illness recovery hospitals, with agency nursing rates nearly doubling [6][30] - Patient days in the Critical Illness Recovery Hospitals segment were up 1.9% for the full year, while revenue per patient day increased 6.1% [13] Company Strategy and Development Direction - The company aims to continue admitting critically complex patients despite increased labor costs, leveraging strong referral relationships developed during the pandemic [31] - The company plans to maintain a capital expenditure range of $180 million to $200 million for 2022, primarily focused on maintenance [49][59] Management Comments on Operating Environment and Future Outlook - Management expressed concerns about macroeconomic labor market issues affecting guidance, particularly in the critical illness recovery hospitals segment [53] - The company expects revenue for 2022 to be in the range of $6.25 billion to $6.4 billion, reaffirming a 3-year compound annual growth rate target for revenue of 4% to 6% from 2021 to 2023 [49] Other Important Information - The company recorded $8 million in other operating income in Q4 related to Provider Relief Fund grant payments, compared to $36 million in the same quarter of the prior year [8] - The company ended the year with $3.6 billion of debt outstanding and $74 million of cash on the balance sheet [42] Q&A Session Summary Question: Can you talk about the philosophy behind the withdrawal of guidance? - Management indicated that the guidance was based on strong revenue visibility but was cautious due to macroeconomic labor market issues affecting costs [52][54] Question: Are labor issues isolated to critical illness recovery hospitals? - Labor cost issues are predominantly in critical illness recovery hospitals, with some impact noted in rehabilitation and outpatient rehab segments due to COVID-related staffing challenges [57][58] Question: What are the capital expenditure plans for 2022? - The majority of capital expenditures will be maintenance-related, with a range of $180 million to $200 million anticipated [59] Question: How do you view the testing and screening outlook for 2022? - Management anticipates a decrease in revenue from screening and testing as COVID wanes, but expects overall revenue growth for Concentra [100]