MECHANICSBURG, Pa., July 19,
2023 /PRNewswire/ -- Select Medical Holdings
Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) is
currently in discussions with its lenders regarding a proposed
refinancing of certain of its outstanding indebtedness. In
connection with such discussions, Select Medical today announced an
estimate of certain financial results for its second quarter ended
June 30, 2023 in advance of the
announcement of actual results, which is expected to occur after
market close on Thursday, August 3,
2023.
Select Medical expects its net operating revenue for its second
quarter of 2023 to be approximately $1.67
billion. Select Medical expects earnings excluding interest,
income taxes, depreciation and amortization, gain (loss) on early
retirement of debt, stock compensation expense, gain (loss) on sale
of businesses, and equity in earnings (losses) of unconsolidated
subsidiaries, or Adjusted EBITDA, for the second quarter of 2023 to
be approximately $219 million. Select
Medical expects fully diluted earnings per common share for the
second quarter of 2023 to be approximately $0.61. As of June 30,
2023, Select Medical expects approximately $100 million of cash and $3.75 billion of indebtedness on its balance
sheet.
The above expectations regarding Select Medical's financial
results for the second quarter of 2023 are management estimates and
projections based on currently available information, and are
subject to change upon completion of Select Medical's financial
statement closing process.
A reconciliation of Adjusted EBITDA expectations for the second
quarter of 2023 to the closest comparable GAAP financial measure is
presented in table I of this release. Please 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 table I is an estimation of the expectations (dollars
in millions) for the second quarter of 2023.
As previously announced, Select Medical will host a conference
call regarding its second quarter results, as well as its business
outlook, on Friday, August 4, 2023,
at 9:00am ET. The conference call
will be a live webcast and can be accessed at Select Medical
Holdings Corporation's website at www.selectmedicalholdings.com. A
replay of the webcast will be available shortly after the call
through the same link. For listeners wishing to dial-in via
telephone, or participate in the question and answer session, you
may pre-register for the call at Select Medical Earnings Call
Registration to obtain your dial-in number and unique passcode for
the call.
Company Overview
Select Medical is one of the largest operators of critical
illness recovery hospitals, rehabilitation hospitals, outpatient
rehabilitation clinics, and occupational health centers in the
United States based on the number of facilities. Select
Medical's reportable segments include the critical illness recovery
hospital segment, the rehabilitation hospital segment, the
outpatient rehabilitation segment, and the Concentra segment. As of
June 30, 2023, Select Medical
operated 108 critical illness recovery hospitals in 28 states, 32
rehabilitation hospitals in 12 states, 1,944 outpatient
rehabilitation clinics in 39 states and the District of
Columbia, 540 occupational health
centers in 41 states, and 141 onsite clinics at employer worksites.
At June 30, 2023, 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:
- adverse economic conditions including an inflationary
environment could cause us to continue to experience increases in
the prices of labor and other costs of doing business resulting in
a negative impact on our business, operating results, cash flows,
and financial condition;
- shortages in qualified nurses, therapists, physicians, or other
licensed providers, and/or the inability to attract or retain
qualified healthcare professionals could limit our ability to staff
our facilities;
- shortages in qualified health professionals could cause us to
increase our dependence on contract labor, increase our efforts to
recruit and train new employees, and expand upon our initiatives to
retain existing staff, which could increase our operating costs
significantly;
- the continuing effects of the COVID-19 pandemic including, but
not limited to, the prolonged disruption to the global financial
markets, increased operational costs due to recessionary pressures
and labor costs, additional measures taken by government
authorities and the private sector to limit the spread of COVID-19,
and further legislative and regulatory actions which impact
healthcare providers, including actions that may impact the
Medicare program;
- changes in government reimbursement for our services and/or new
payment policies may result in a reduction in revenue, an increase
in costs, and a reduction in profitability;
- the failure of our Medicare-certified long term care hospitals
or inpatient rehabilitation facilities to maintain their Medicare
certifications may cause our revenue and profitability to
decline;
- the failure of our Medicare-certified long term care hospitals
and inpatient rehabilitation facilities operated as "hospitals
within hospitals" to qualify as hospitals separate from their host
hospitals may cause our revenue 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 our acquisitions and our
ability to realize anticipated synergies;
- private third-party payors for our services may adopt payment
policies that could limit our future revenue and profitability;
- the failure to maintain established relationships with the
physicians in the areas we serve could reduce our revenue and
profitability;
- competition may limit our ability to grow and result in a
decrease in our revenue 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;
- a security breach of our or our third-party vendors'
information technology systems may subject us to potential legal
and reputational harm and may result in a violation of the Health
Insurance Portability and Accountability Act of 1996 or the Health
Information Technology for Economic and Clinical Health Act;
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" in our Annual
Report on Form 10-K for the year ended December 31, 2022.
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
I. Net Income to
Adjusted EBITDA Reconciliation
Business Outlook for the Quarter Ending June 30, 2023
(In millions, unaudited)
|
|
Non-GAAP Measure
Reconciliation(1)
|
|
|
Net income
|
$
|
92
|
Income tax
expense
|
|
29
|
Interest
expense
|
|
49
|
Equity in earnings of
unconsolidated subsidiaries
|
|
(11)
|
Income from
operations
|
|
159
|
Stock compensation
expense
|
|
10
|
Depreciation and
amortization
|
|
50
|
Adjusted
EBITDA
|
$
|
219
|
|
|
|
(1)
These amounts are subject to change upon completion of Select
Medical's financial statement closing process
and audit.
|
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SOURCE Select Medical Holdings Corporation