MECHANICSBURG, Pa.,
Jan. 6, 2017 /PRNewswire/
-- Select Medical Holdings Corporation ("Select Medical")
(NYSE: SEM), today announced its business outlook for calendar year
2017.
Select Medical expects consolidated net operating revenues for
the full year 2017 to be in the range of $4.4 billion to $4.6 billion. Select
Medical expects net income before interest, income taxes,
depreciation and amortization, stock compensation expense, other
income/(expense), and equity in earnings/(losses), or Adjusted
EBITDA for the full year 2017 to be in the range of $540 million to $580 million. Select
Medical expects fully diluted income per common share for the full
year 2017 to be in the range of $0.73 to
$0.91.
Select Medical assumed a 40.0% effective tax rate and total
shares outstanding of 133 million when preparing the above business
outlook for 2017. The share count includes unvested
restricted shares, which have participation rights and are
allocated an equitable portion of earnings under the two-class
method for calculating income per common share.
The following is a reconciliation of full year 2017 Adjusted
EBITDA expectations as computed to the low and high points of the
range to the closest comparable GAAP financial measure. Refer
to Select Medical's most recent Form 10-Q filing for a discussion
of Select Medical's use of Adjusted EBITDA in evaluating financial
performance and determining resource allocation. Each item
presented in the table below is an estimation of full year 2017
expectations.
Non-GAAP Measure
Reconciliation
(in
millions)
|
Low
|
|
High
|
Net Income
|
$135
|
|
$159
|
Income tax
expense
|
90
|
|
106
|
Interest
expense
|
173
|
|
173
|
Equity in
earnings of unconsolidated subsidiaries
|
(23)
|
|
(23)
|
Income from
Operations
|
$375
|
|
$415
|
Stock
Compensation Expense
|
15
|
|
15
|
Depreciation
and amortization
|
150
|
|
150
|
Adjusted
EBITDA
|
$540
|
|
$580
|
Select Medical began operations in 1997 and has grown to be one
of the largest operators of specialty hospitals, outpatient
rehabilitation clinics and occupational health centers in
the United States based on the
number of facilities. As of September
30, 2016, Select Medical operated 104 long term acute care
hospitals and 19 acute medical rehabilitation hospitals in 27
states and 1,603 outpatient rehabilitation clinics in 37 states and
the District of Columbia. Select
Medical's joint venture subsidiary Concentra operated 301 centers
in 38 states. Concentra also provides contract services at employer
worksites and Department of Veterans Affairs community-based
outpatient clinics. At September 30,
2016, Select Medical had operations in 46 states and the
District of Columbia. Information
about Select Medical is available at www.selectmedical.com.
Certain statements contained herein that are not descriptions of
historical facts are "forward-looking" statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995).
Because such statements include risks and uncertainties,
actual results may differ materially from those expressed or
implied by such forward-looking statements due to factors including
the following:
- changes in government reimbursement for our services due to the
implementation of healthcare reform legislation, deficit reduction
measures, and/or new payment policies (including, for example, the
expiration of the moratorium limiting the full application of the
25 Percent Rule that would reduce our Medicare payments for those
patients admitted to a long term acute care hospital from a
referring hospital in excess of an applicable percentage admissions
threshold) may result in a reduction in net operating revenues, an
increase in costs and a reduction in profitability;
- the impact of the Bipartisan Budget Act of 2013, which
establishes new payment limits for Medicare patients who do not
meet specified criteria, may result in a reduction in net operating
revenues and profitability of our long term acute care
hospitals;
- the failure of our specialty hospitals to maintain their
Medicare certifications may cause our net operating revenues and
profitability to decline;
- the failure of our facilities operated as "hospitals within
hospitals" to qualify as hospitals separate from their host
hospitals may cause our net operating revenues and profitability to
decline;
- a government investigation or assertion that we have violated
applicable regulations may result in sanctions or reputational harm
and increased costs;
- acquisitions or joint ventures may prove difficult or
unsuccessful, use significant resources or expose us to unforeseen
liabilities;
- our plans and expectations related to the acquisitions of
Concentra Inc. and Physiotherapy Associates Holdings, Inc. and our
ability to realize anticipated synergies;
- private third-party payors for our services may undertake
future cost containment initiatives that could limit our future net
operating revenues and profitability;
- the failure to maintain established relationships with the
physicians in the areas we serve could reduce our net operating
revenues and profitability;
- shortages in qualified nurses, therapists, physicians, or other
licensed providers could increase our operating costs significantly
or limit our ability to staff our facilities;
- competition may limit our ability to grow and result in a
decrease in our net operating revenues and profitability;
- the loss of key members of our management team could
significantly disrupt our operations;
- the effect of claims asserted against us could subject us to
substantial uninsured liabilities; and
- other factors discussed from time to time in our filings with
the Securities and Exchange Commission (the "SEC"), including
factors discussed under the heading "Risk Factors" of our quarterly
reports on Form 10-Q and of the annual report on Form 10-K.
Except as required by applicable law, including the securities
laws of the United States and the
rules and regulations of the SEC, we are under no obligation
to publicly update or revise any forward-looking statements,
whether as a result of any new information, future events or
otherwise. You should not place undue reliance on our
forward-looking statements. Although we believe that the
expectations reflected in forward-looking statements are
reasonable, we cannot guarantee future results or performance.
Investor inquiries:
Joel T. Veit
Senior Vice President and Treasurer
717-972-1100
ir@selectmedicalcorp.com
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SOURCE Select Medical Corporation