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Select Medical Holdings Corporation announces Q4 results

Select Medical Holdings Corporation announced results for its fourth quarter and year ended December 31, 2023 and the declaration of a cash dividend.

For the fourth quarter ended December 31, 2023, revenue increased 4.9% to $1,658.9 million, compared to $1,581.5 million for the same quarter, prior year. Income from operations increased 31.5% to $114.3 million for the fourth quarter ended December 31, 2023, compared to $86.9 million for the same quarter, prior year. Net income increased 63.9% to $61.8 million for the fourth quarter ended December 31, 2023, compared to $37.7 million for the same quarter, prior year. Adjusted EBITDA increased 20.9% to $180.1 million for the fourth quarter ended December 31, 2023, compared to $148.9 million for the same quarter, prior year. Earnings per common share increased 63.6% to $0.36 for the fourth quarter ended December 31, 2023, compared to $0.22 for the same quarter, prior year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table IX of this release.

For the year ended December 31, 2023, revenue increased 5.2% to $6,664.1 million, compared to $6,333.5 million for the prior year. Income from operations increased 37.6% to $554.9 million for the year ended December 31, 2023, compared to $403.3 million for the prior year. For the year ended December 31, 2023, income from operations included $1.8 million of other operating income, compared to $28.8 million for the prior year. The other operating income for the year ended December 31, 2022, was principally related to the recognition of payments received under the Coronavirus Aid, Relief, and Economic Security Act Public Health and Social Services Emergency Fund, also referred to as the Provider Relief Fund. Net income increased 51.4% to $299.7 million for the year ended December 31, 2023, compared to $198.0 million for the prior year. Adjusted EBITDA increased 24.8% to $807.4 million for the year ended December 31, 2023, compared to $646.9 million for the prior year. Earnings per common share increased 54.9% to $1.91 for the year ended December 31, 2023, compared to $1.23 for the prior year. Adjusted earnings per common share increased 61.8% to $1.99 for the year ended December 31, 2023, compared to $1.23 for the prior year. Adjusted earnings per common share excludes the loss on early retirement of debt and related costs, and their related tax effects for the year ended December 31, 2023.

Dividend
On February 13, 2024, Select Medical’s board of directors declared a cash dividend of $0.125 per share. The dividend will be payable on or about March 13, 2024 to stockholders of record as of the close of business on March 1, 2024.

There is no assurance that future dividends will be declared. The declaration and payment of dividends in the future are at the discretion of Select Medical’s board of directors after taking into account various factors, including, but not limited to, Select Medical’s financial condition, operating results, available cash and current and anticipated cash needs, the terms of Select Medical’s indebtedness, and other factors Select Medical’s board of directors may deem to be relevant.

Stock repurchase program
The board of directors of Select Medical has authorized a common stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock. The common stock repurchase program will remain in effect until December 31, 2025, unless further extended or earlier terminated by the board of directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Select Medical deems appropriate. Select Medical funds this program with cash on hand and borrowings under its revolving credit facility.

Select Medical did not repurchase shares under its authorized stock repurchase program during the year ended December 31, 2023. Since the inception of the common stock repurchase program through December 31, 2023, Select Medical has repurchased 48,234,823 shares at a cost of approximately $600.3 million, or $12.45 per share, which includes transaction costs.

Business outlook
Select Medical is issuing its business outlook for 2024. Select Medical expects revenue to be in the range of $6.9 billion to $7.1 billion, Adjusted EBITDA to be in the range of $830 million to $880 million, and fully diluted earnings per share to be in the range of $1.88 to $2.18.
MB Bureau

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