Q1 2024 Select Medical Holdings Corp Earnings Call Transcript
Key Points
- Select Medical Holdings Corp reported a strong start to 2024 with a 22% growth in adjusted EBITDA and a 7% increase in revenue compared to Q1 of the previous year.
- The critical illness recovery hospital division exceeded expectations with a 51% increase in adjusted EBITDA and a 10% increase in revenue.
- Significant reductions in salary, wages, and benefits to revenue ratio by 6%, with nurse agency utilization decreasing by 20% and agency rates decreasing by 7%.
- Announced several new hospital openings and expansions, including partnerships with Rush University System, UF Health Jacksonville, Cleveland Clinic, and UPMC, enhancing future growth prospects.
- Successful management of labor costs, particularly in the critical illness recovery hospital division, where SW&B as a percentage of revenue ratio improved significantly from 56.2% in Q1 of the prior year to 52.9%.
- Despite overall growth, the outpatient rehab division experienced a 17% decrease in adjusted EBITDA and a reduction in adjusted EBITDA margin from 10.2% to 8.2%.
- Reported a decline in employer demand for drug screens and physicals in the Concentra division, leading to a 2% overall visit decline.
- An increase in day sales outstanding (DSO) from 54 days to 58 days, primarily due to the changed health cyber incident, indicating potential issues in cash flow management.
- Interest expenses increased to $50.8 million in Q1 from $48.6 million in the same quarter of the previous year, reflecting higher borrowing costs.
- The company faces ongoing challenges with Medicare reimbursement pressures and regulatory changes, which could impact future profitability.
Good morning, and thank you for joining us today for Select Medical Holdings Corporation's earnings conference call to discuss the first-quarter-2024 results and the company's business outlook. Speaking today are the company's Chief Executive Chairman and Co-Founder, Robert Ortenzio; and the company's Senior Executive Vice President of Strategic Finance and Operations, Martin Jackson. Management will give you an overview of the quarter, and then, open the call for questions.
Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company, including without limitation, statements regarding operating results, growth opportunities and other statements that refer to Select Medical's plans, expectations, strategies, intentions and beliefs. These forward-looking statements are based on the information available to management of Select Medical today, and the company assumes no obligation to update these statements as circumstances change.
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