MECHANICSBURG, Pa.,
Jan. 8, 2018 /PRNewswire/ -- Select
Medical Holdings Corporation ("Select Medical") (NYSE: SEM), today
announced its business outlook for calendar year 2018.
Select Medical expects consolidated net operating revenues for
the full year 2018 to be in the range of $5.0 billion to $5.2
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 2018 to be
in the range of $630 million to
$660 million. Select Medical
expects fully diluted income per common share for the full year
2018 to be in the range of $0.97 to
$1.12.
Select Medical assumed that the consummation of the acquisition
of U.S. HealthWorks, Inc. by its Concentra joint venture subsidiary
and the related financing would occur on February 1, 2018 when preparing the above
business outlook. Select Medical also included in the expectation
for consolidated net operating revenues a reduction in net
operating revenues for what historically was reported as bad debt
expense. In 2018, bad debt expense will be reported as a component
of net operating revenue. Select Medical assumed a 28.0% effective
tax rate when preparing the above business outlook, which includes
the expected impact of the federal tax reform legislation passed in
2017. Select Medical assumed total shares outstanding of 134.5
million when preparing the above business outlook for 2018. This
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 2018 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 2018
expectations.
|
Range
|
Non-GAAP Measure
Reconciliation
|
Low
|
High
|
Net Income
attributable to SEM
|
$
|
131
|
$
|
150
|
Non-controlling
Interest
|
45
|
47
|
Net Income
|
176
|
197
|
Income tax
expense
|
68
|
77
|
Interest
expense
|
206
|
206
|
Equity in earnings of
unconsolidated subsidiaries
|
(22)
|
(22)
|
Income from
Operations
|
$
|
428
|
$
|
458
|
Stock Compensation
Expense
|
21
|
21
|
Depreciation and
amortization
|
181
|
181
|
Adjudsted
EBITDA
|
$
|
630
|
$
|
660
|
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,
2017, Select Medical operated 101 long term acute care
hospitals and 22 acute medical rehabilitation hospitals in 28
states and 1,604 outpatient rehabilitation clinics in 37 states and
the District of Columbia. Select
Medical's joint venture subsidiary Concentra operated 312 centers
in 38 states. Concentra also provides contract services at employer
worksites and Department of Veterans Affairs community-based
outpatient clinics. At September 30,
2017, 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
established 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;
- the timing of the consummation of the proposed acquisition of
U.S. HealthWorks, Inc. by Concentra;
- our plans and expectations related to the acquisition of U.S.
HealthWorks, Inc. and our ability to realize anticipated
synergies;
- private third-party payors for our services may adopt payment
policies 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 for the
year ended December 31, 2016.
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@selectmedical.com
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SOURCE Select Medical Holdings Corporation