Select Medical Holdings Corporation Announces Results For Its Third Quarter Ended September 30, 2025 and Cash Dividend

MECHANICSBURG, Pa., Oct. 30, 2025 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced results for its third quarter ended September 30, 2025, and the declaration of a cash dividend.

For the third quarter ended September 30, 2025, revenue increased 7.2% to $1,363.4 million, compared to $1,271.6 million for the same quarter, prior year. Income from continuing operations before other income and expense increased 32.9% to $73.0 million for the third quarter ended September 30, 2025, compared to $54.9 million for the same quarter, prior year. Income from continuing operations, net of tax, increased 7.0% to $44.2 million for the third quarter ended September 30, 2025, compared to $41.3 million for the same quarter, prior year. Adjusted EBITDA increased 7.5% to $111.7 million for the third quarter ended September 30, 2025, compared to $103.9 million for the same quarter, prior year. Earnings per common share from continuing operations increased 21.1% to $0.23 for the third quarter ended September 30, 2025, compared to $0.19 for the same quarter, prior year. Adjusted earnings per common share from continuing operations, net of tax, was $0.23 for the third quarter ended September 30, 2025, compared to $0.26 for the same quarter, prior year. The definition of Adjusted EBITDA and a reconciliation of income from continuing operations, net of tax, to Adjusted EBITDA are presented in table IX of this release. A reconciliation of earnings per common share from continuing operations, net of tax, to adjusted earnings per common share from continuing operations, net of tax, is presented in table X of this release.

For the nine months ended September 30, 2025, revenue increased 4.7% to $4,056.2 million, compared to $3,874.5 million for the same period, prior year. Income from continuing operations before other income and expense increased 10.1% to $272.2 million for the nine months ended September 30, 2025, compared to $247.2 million for the same period, prior year. Income from continuing operations, net of tax, increased 25.9% to $176.8 million for the nine months ended September 30, 2025, compared to $140.4 million for the same period, prior year. Adjusted EBITDA was $388.5 million for the nine months ended September 30, 2025, compared to $394.4 million for the same period, prior year. Earnings per common share from continuing operations increased 44.9% to $1.00 for the nine months ended September 30, 2025, compared to $0.69 for the same period, prior year. Adjusted earnings per common share from continuing operations, net of tax, increased 31.6% to $1.00 for the nine months ended September 30, 2025, compared to $0.76 for the same period, prior year. The definition of Adjusted EBITDA and a reconciliation of income from continuing operations, net of tax, to Adjusted EBITDA are presented in table IX of this release. A reconciliation of earnings per common share from continuing operations, net of tax, to adjusted earnings per common share from continuing operations, net of tax, is presented in table X of this release.

On November 25, 2024, Select completed a tax-free distribution of 104,093,503 shares of common stock of Concentra Group Holdings Parent, Inc. ("Concentra") to its stockholders. Following the completion of the distribution, the Company no longer owns any shares of Concentra common stock. The results of Concentra are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for the three and nine months ended September 30, 2024.

Company Overview

Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States based on number of facilities. Select Medical's reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, and the outpatient rehabilitation segment. As of September 30, 2025, Select Medical operated 105 critical illness recovery hospitals in 29 states, 36 rehabilitation hospitals in 14 states, and 1,922 outpatient rehabilitation clinics in 39 states and the District of Columbia. At September 30, 2025, Select Medical had operations in 40 states and the District of Columbia. Information about Select Medical is available at www.selectmedical.com.

Critical Illness Recovery Hospital Segment

For the third quarter ended September 30, 2025, revenue for the critical illness recovery hospital segment increased 4.6% to $609.9 million, compared to $583.0 million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 10.5% to $56.1 million for the third quarter ended September 30, 2025, compared to $50.8 million for the same quarter, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment increased to 9.2% for the third quarter ended September 30, 2025, compared to 8.7% for the same quarter, prior year. Certain critical illness recovery hospital key statistics are presented in table VII of this release for the third quarters ended September 30, 2025 and 2024.

For the nine months ended September 30, 2025, revenue for the critical illness recovery hospital segment increased 0.2% to $1,848.1 million, compared to $1,843.8 million for the same period, prior year. Adjusted EBITDA for the critical illness recovery hospital segment was $199.0 million for the nine months ended September 30, 2025, compared to $238.5 million for the same period, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 10.8% for the nine months ended September 30, 2025, compared to 12.9% for the same period, prior year. Certain critical illness recovery hospital key statistics are presented in table VIII of this release for the nine months ended September 30, 2025 and 2024.

Rehabilitation Hospital Segment

For the third quarter ended September 30, 2025, revenue for the rehabilitation hospital segment increased 16.2% to $328.6 million, compared to $282.7 million for the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 13.0% to $68.0 million for the third quarter ended September 30, 2025, compared to $60.1 million for the same quarter, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 20.7% for the third quarter ended September 30, 2025, compared to 21.3% for the same quarter, prior year. Certain rehabilitation hospital key statistics are presented in table VII of this release for the third quarters ended September 30, 2025 and 2024.

For the nine months ended September 30, 2025, revenue for the rehabilitation hospital segment increased 16.4% to $949.8 million, compared to $816.2 million for the same period, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 14.1% to $209.4 million for the nine months ended September 30, 2025, compared to $183.5 million for the same period, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 22.1% for the nine months ended September 30, 2025, compared to 22.5% for the same period, prior year. Certain rehabilitation hospital key statistics are presented in table VIII of this release for the nine months ended September 30, 2025 and 2024.

Outpatient Rehabilitation Segment

For the third quarter ended September 30, 2025, revenue for the outpatient rehabilitation segment increased 4.3% to $325.4 million, compared to $312.0 million for the same quarter, prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $24.2 million for the third quarter ended September 30, 2025, compared to $28.3 million for the same quarter, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 7.4% for the third quarter ended September 30, 2025, compared to 9.1% for the same quarter, prior year. Certain outpatient rehabilitation key statistics are presented in table VII of this release for the third quarters ended September 30, 2025 and 2024.

For the nine months ended September 30, 2025, revenue for the outpatient rehabilitation segment increased 3.2% to $960.3 million, compared to $930.7 million for the same period, prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $79.0 million for the nine months ended September 30, 2025, compared to $82.0 million for the same period, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 8.2% for the nine months ended September 30, 2025, compared to 8.8% for the same period, prior year. Certain outpatient rehabilitation key statistics are presented in table VIII of this release for the nine months ended September 30, 2025 and 2024.

Dividend

On October 29, 2025, Select Medical's Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about November 25, 2025, to stockholders of record as of the close of business on November 12, 2025.

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. On October 29, 2025, the Board of Directors extended the common stock repurchase program from December 31, 2025, to December 31, 2027. The common stock repurchase program will remain in effect until then, 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.

During the nine months ended September 30, 2025, Select Medical repurchased 6,375,512 shares at a cost of approximately $96.5 million, or $15.13 per share, which includes transaction costs. From the inception of the common stock repurchase program through September 30, 2025, Select Medical has repurchased 54,610,335 shares at a cost of approximately $696.8 million, or $12.76 per share, which includes transaction costs. On August 16, 2022, Congress passed the Inflation Reduction Act of 2022, which enacted a 1% excise tax on stock repurchases that exceed $1.0 million, effective January 1, 2023. As of September 30, 2025, $0.9 million has been accrued for the 1% excise tax as a cost of the stock repurchase.

Business Outlook

Select Medical is increasing its 2025 business outlook for fully diluted earnings per share and reaffirming its 2025 business outlook for revenue and Adjusted EBITDA, which was provided most recently in its July 31, 2025 press release. For fiscal year 2025, Select Medical expects revenue to be in the range of $5.3 billion to $5.5 billion, Adjusted EBITDA to be in the range of $510.0 million to $530.0 million, and fully diluted earnings per share to be in the range of $1.14 to $1.24. Reconciliations of full year 2025 Adjusted EBITDA expectations to income from operations, net of tax, is presented in table XI of this release.

Conference Call

Select Medical will host a conference call regarding its third quarter results and its business outlook on Friday, October 31, 2025, 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.

* * * * *

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), including statements related to Select Medical's 2025 business outlook. 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:

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. Condensed Consolidated Statements of Operations

For the Three Months Ended September 30, 2024 and 2025

(In thousands, except per share amounts, unaudited)

2024

2025

% Change

Revenue

$ 1,271,582

$ 1,363,445

7.2 %

Costs and expenses:

Cost of services, exclusive of depreciation and amortization

1,135,708

1,215,995

7.1

General and administrative

47,347

40,050

(15.4)

Depreciation and amortization

34,930

34,442

(1.4)

Total costs and expenses

1,217,985

1,290,487

6.0

Other operating income

1,302

—

N/M

Income from continuing operations before other income and expense

54,899

72,958

32.9

Other income and expense:

Loss on early retirement of debt

(10,939)

—

N/M

Equity in earnings of unconsolidated subsidiaries

33,069

12,992

(60.7)

Interest expense

(31,379)

(30,021)

(4.3)

Income from continuing operations before income taxes

45,650

55,929

22.5

Income tax expense from continuing operations

4,374

11,749

168.6

Income from continuing operations, net of tax

41,276

44,180

7.0

Discontinued operations:

Income from discontinued business

62,174

—

N/M

Income tax expense from discontinued business

22,435

—

N/M

Income from discontinued operations, net of tax

39,739

—

N/M

Net income

81,015

44,180

(45.5)

Less: Net income attributable to non-controlling interests

25,387

15,387

(39.4)

Net income attributable to Select Medical

$ 55,628

$ 28,793

(48.2) %

Net income attributable to Select Medical's common stockholders:

Income from continuing operations, net of tax

$ 24,798

$ 28,793

Income from discontinued operations, net of tax

30,830

—

Net income attributable to Select Medical's common stockholders

$ 55,628

$ 28,793

Earnings per common share:

Continuing operations - basic and diluted

$ 0.19

$ 0.23

Discontinued operations - basic and diluted

0.24

—

Total earnings per common share - basic and diluted (1)

$ 0.43

$ 0.23

(1)

Refer to table III for calculation of earnings per common share.

N/M

Not meaningful

II. Condensed Consolidated Statements of Operations

For the Nine Months Ended September 30, 2024 and 2025

(In thousands, except per share amounts, unaudited)

2024

2025

% Change

Revenue

$ 3,874,541

$ 4,056,196

4.7 %

Costs and expenses:

Cost of services, exclusive of depreciation and amortization

3,378,362

3,572,735

5.8

General and administrative

145,672

108,721

(25.4)

Depreciation and amortization

106,583

104,098

(2.3)

Total costs and expenses

3,630,617

3,785,554

4.3

Other operating income

3,300

1,592

(51.8)

Income from continuing operations before other income and expense

247,224

272,234

10.1

Other income and expense:

Loss on early retirement of debt

(10,939)

—

N/M

Equity in earnings of unconsolidated subsidiaries

53,481

39,122

(26.8)

Interest expense

(100,054)

(89,071)

(11.0)

Income from continuing operations before income taxes

189,712

222,285

17.2

Income tax expense from continuing operations

49,269

45,494

(7.7)

Income from continuing operations, net of tax

140,443

176,791

25.9

Discontinued operations:

Income from discontinued business

198,745

—

N/M

Income tax expense from discontinued business

46,240

—

N/M

Income from discontinued operations, net of tax

152,505

—

N/M

Net income

292,948

176,791

(39.7)

Less: Net income attributable to non-controlling interests

62,860

50,746

(19.3)

Net income attributable to Select Medical

$ 230,088

$ 126,045

(45.2) %

Net income attributable to Select Medical's common stockholders:

Income from continuing operations, net of tax

$ 89,137

$ 126,045

Income from discontinued operations, net of tax

140,951

—

Net income attributable to Select Medical's common stockholders

$ 230,088

$ 126,045

Earnings per common share:

Continuing operations - basic and diluted

$ 0.69

$ 1.00

Discontinued operations - basic and diluted

1.09

—

Total earnings per common share - basic and diluted (1)

$ 1.78

$ 1.00

(1)

Refer to table III for calculation of earnings per common share.

N/M

Not meaningful

III. Earnings per Share

For the Three and Nine Months Ended September 30, 2024 and 2025

(In thousands, except per share amounts, unaudited)

Select Medical's capital structure includes common stock and unvested restricted stock awards. To compute earnings per share ("EPS"), Select Medical applies the two-class method because its unvested restricted stock awards are participating securities which are entitled to participate equally with its common stock in undistributed earnings.

The following table sets forth the income from continuing operations, net of tax, attributable to Select Medical, its common shares outstanding, and its participating securities outstanding for the three and nine months ended September 30, 2024 and 2025:

Basic and Diluted EPS

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024

2025

2024

2025

Income from continuing operations, net of tax

$ 41,276

$ 44,180

$ 140,443

$ 176,791

Less: net income attributable to non-controlling interests

16,478

15,387

51,306

50,746

Income from continuing operations, net of tax, attributable to

Select Medical's common stockholders

24,798

28,793

89,137

126,045

Less: distributed and undistributed net income attributable to

participating securities

956

706

3,462

2,727

Distributed and undistributed income from continuing

operations, net of tax, attributable to common shares

$ 23,842

$ 28,087

$ 85,675

$ 123,318

The following tables set forth the computation of EPS under the two-class method for the three and nine months ended September 30, 2024 and 2025:

Three Months Ended September 30,

2024

2025

Income from

Continuing

Operations,

Net of Tax,

Allocation

Shares (1)

Basic and

Diluted EPS

Income from

Continuing

Operations,

Net of Tax,

Allocation

Shares (1)

Basic and

Diluted EPS

Common shares

$ 23,842

124,714

$ 0.19

$ 28,087

120,476

$ 0.23

Participating securities

956

5,001

$ 0.19

706

3,030

$ 0.23

Total

$ 24,798

$ 28,793

Nine Months Ended September 30,

2024

2025

Income from

Continuing

Operations,

Net of Tax,

Allocation

Shares (1)

Basic and

Diluted EPS

Income from

Continuing

Operations,

Net of Tax,

Allocation

Shares (1)

Basic and

Diluted EPS

Common shares

$ 85,675

124,175

$ 0.69

$ 123,318

123,326

$ 1.00

Participating securities

3,462

5,017

$ 0.69

2,727

$ 1.00

Total

$ 89,137

$ 126,045

(1)

Represents the weighted average share count outstanding during the period.

IV. Condensed Consolidated Balance Sheets

(In thousands, unaudited)

December 31, 2024

September 30, 2025

Assets

Current Assets:

Cash and cash equivalents

$ 59,694

$ 60,054

Accounts receivable

821,385

825,811

Other current assets

138,698

134,599

Total Current Assets

1,019,777

1,020,464

Operating lease right-of-use assets

908,095

939,083

Property and equipment, net

872,185

903,242

Goodwill

2,331,898

2,333,143

Identifiable intangible assets, net

103,183

101,425

Other assets

372,813

388,366

Total Assets

$ 5,607,951

$ 5,685,723

Liabilities and Equity

Current Liabilities:

Payables and accruals

$ 777,781

$ 726,585

Current operating lease liabilities

179,601

184,215

Current portion of long-term debt and notes payable

20,269

28,778

Total Current Liabilities

977,651

939,578

Non-current operating lease liabilities

787,124

818,586

Long-term debt, net of current portion

1,691,546

1,743,371

Non-current deferred tax liability

81,497

88,311

Other non-current liabilities

73,038

76,021

Total Liabilities

3,610,856

3,665,867

Redeemable non-controlling interests

10,167

8,651

Total equity

1,986,928

2,011,205

Total Liabilities and Equity

$ 5,607,951

$ 5,685,723

V. Condensed Consolidated Statements of Cash Flows

For the Three Months Ended September 30, 2024 and 2025

(In thousands, unaudited)

2024

2025

Operating activities

Net income

$ 81,015

$ 44,180

Adjustments to reconcile net income to net cash provided by operating

activities:

Distributions from unconsolidated subsidiaries

16,306

11,723

Depreciation and amortization

50,143

34,442

Provision for expected credit losses

199

506

Equity in earnings of unconsolidated subsidiaries

(33,069)

(12,992)

Loss on extinguishment of debt

10,939

—

Gain on sale or disposal of assets

(89)

(4)

Stock compensation expense

13,376

4,255

Amortization of debt discount, premium and issuance costs

787

784

Deferred income taxes

(602)

17,895

Changes in operating assets and liabilities, net of effects of business

combinations:

Accounts receivable

22,348

83,144

Other current assets

1,299

(8,060)

Other assets

26,789

1,597

Accounts payable and accrued expenses

(8,472)

(2,163)

Net cash provided by operating activities

180,969

175,307

Investing activities

Business combinations, net of cash acquired

3,682

(1,601)

Purchases of property and equipment

(50,683)

(53,102)

Proceeds from sales and exchange of assets

1,908

22,093

Net cash used in investing activities

(45,093)

(32,610)

Financing activities

Borrowings on revolving facilities

235,000

200,000

Payments on revolving facilities

(570,000)

(300,000)

Proceeds from term loans, net of issuance costs

836,697

—

Payments on term loans

(1,640,418)

(2,625)

Proceeds from 6.875% senior notes, net of issuance costs

637,337

—

Borrowings of other debt

3,078

20,169

Principal payments on other debt

(12,521)

(9,274)

Dividends paid to common stockholders

(16,194)

(7,739)

Repurchases of common stock

(16,524)

(1,970)

Decrease in overdrafts

(9,453)

(16,506)

Proceeds from issuance of non-controlling interests

3,662

2,058

Distributions to and purchases of non-controlling interests

(17,430)

(19,105)

Proceeds from Concentra initial public offering

511,198

—

Net cash used in financing activities

(55,568)

(134,992)

Net increase in cash and cash equivalents

80,308

7,705

Cash and cash equivalents at beginning of period

111,160

52,349

Cash and cash equivalents at end of period

$ 191,468

$ 60,054

Supplemental information

Cash paid for interest, excluding amounts received of $23,115 under the

interest rate cap contract during the three months ended September 30, 2024

$ 74,879

$ 21,937

Cash paid for taxes

41,870

1,066

VI. Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2024 and 2025

(In thousands, unaudited)

2024

2025

Operating activities

Net income

$ 292,948

$ 176,791

Adjustments to reconcile net income to net cash provided by operating

activities:

Distributions from unconsolidated subsidiaries

30,436

42,815

Depreciation and amortization

158,151

104,098

Provision for expected credit losses

1,659

2,061

Equity in earnings of unconsolidated subsidiaries

(49,805)

(39,122)

Loss on extinguishment of debt

10,939

—

Gain on sale or disposal of assets

(1,111)

(47)

Stock compensation expense

39,399

12,179

Amortization of debt discount, premium, and issuance costs

2,279

2,353

Deferred income taxes

(34,941)

10,547

Changes in operating assets and liabilities, net of effects of business

combinations:

Accounts receivable

(116,761)

(6,487)

Other current assets

7,856

(7,498)

Other assets

13,942

5,056

Accounts payable and accrued expenses

37,441

(20,604)

Net cash provided by operating activities

392,432

282,142

Investing activities

Business combinations, net of cash acquired

(2,311)

(1,601)

Purchases of property and equipment

(158,748)

(170,125)

Proceeds from sales and exchange of assets

4,241

22,132

Net cash used in investing activities

(156,818)

(149,594)

Financing activities

Borrowings on revolving facilities

950,000

970,000

Payments on revolving facilities

(1,220,000)

(925,000)

Proceeds from term loans, net of issuance costs

836,697

—

Payments on term loans

(1,719,503)

(7,875)

Proceeds from 6.875% senior notes, net of issuance costs

637,337

—

Borrowings of other debt

20,806

41,522

Principal payments on other debt

(35,782)

(25,965)

Dividends paid to common stockholders

(48,493)

(23,684)

Repurchases of common stock

(17,924)

(99,535)

Decrease in overdrafts

(16,101)

(25,803)

Proceeds from issuance of non-controlling interests

9,413

12,964

Distributions to and purchases of non-controlling interests

(35,800)

(48,812)

Proceeds from Concentra initial public offering

511,198

—

Net cash used in financing activities

(128,152)

(132,188)

Net increase in cash and cash equivalents

107,462

360

Cash and cash equivalents at beginning of period

84,006

59,694

Cash and cash equivalents at end of period

$ 191,468

$ 60,054

Supplemental information

Cash paid for interest, excluding amounts received of $68,069 under the

interest rate cap contract during the nine months ended September 30, 2024

$ 216,757

$ 84,002

Cash paid for taxes

102,696

22,118

VII. Key Statistics

For the Three Months Ended September 30, 2024, and 2025

(unaudited)

2024

2025

% Change

Critical Illness Recovery Hospital

Number of hospitals operated – end of period (a)

106

105

Revenue (,000)

$ 582,950

$ 609,929

4.6 %

Number of patient days (b)(c)

270,760

265,730

(1.9) %

Number of admissions (b)(d)

8,676

8,859

2.1 %

Revenue per patient day (b)(e)

$ 2,145

$ 2,287

6.6 %

Occupancy rate (b)(f)

65 %

0.0 %

Adjusted EBITDA (,000)

$ 50,763

$ 56,102

10.5 %

Adjusted EBITDA margin

8.7 %

9.2 %

Rehabilitation Hospital

Number of hospitals operated – end of period (a)

Revenue (,000)

$ 282,709

$ 328,607

16.2 %

Number of patient days (b)(c)

116,835

129,787

11.1 %

Number of admissions (b)(d)

8,439

9,385

11.2 %

Revenue per patient day (b)(e)

$ 2,148

$ 2,254

4.9 %

Occupancy rate (b)(f)

82 %

83 %

1.2 %

Adjusted EBITDA (,000)

$ 60,117

$ 67,956

13.0 %

Adjusted EBITDA margin

21.3 %

20.7 %

Outpatient Rehabilitation

Number of clinics operated – end of period (a)

1,925

1,922

Working days (g)

Revenue (,000)

$ 312,042

$ 325,383

4.3 %

Number of visits (b)(h)

2,773,465

2,924,794

5.5 %

Revenue per visit (b)(i)

$ 101

$ 100

(1.0) %

Adjusted EBITDA (,000)

$ 28,319

$ 24,198

(14.6) %

Adjusted EBITDA margin

9.1 %

7.4 %

(a)

Includes managed locations.

(b)

Excludes managed locations.

(c)

Each patient day represents one patient occupying one bed for one day during the periods presented.

(d)

Represents the number of patients admitted to Select Medical's hospitals during the periods presented.

(e)

Represents the average amount of revenue recognized for each patient day. Revenue per patient day is calculated by dividing patient service revenues, excluding revenues from certain other ancillary and outpatient services provided at Select Medical's hospitals, by the total number of patient days.

(f)

Represents the portion of our hospitals being utilized for patient care during the periods presented. Occupancy rate is calculated using the number of patient days, as presented above, divided by the total number of bed days available during the period. Bed days available is derived by adding the daily number of available licensed beds for each of the periods presented.

(g)

Represents the number of days in which normal business operations were conducted during the periods presented.

(h)

Represents the number of visits in which patients were treated at Select Medical's outpatient rehabilitation clinics during the periods presented.

(i)

Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated by dividing patient service revenue, excluding revenues from certain other ancillary services, by the total number of visits.

VIII. Key Statistics

For the Nine Months Ended September 30, 2024, and 2025

(unaudited)

2024

2025

% Change

Critical Illness Recovery Hospital

Number of hospitals operated – end of period (a)

106

105

Revenue (,000)

$ 1,843,751

$ 1,848,098

0.2 %

Number of patient days (b)(c)

844,623

835,970

(1.0) %

Number of admissions (b)(d)

27,093

27,176

0.3 %

Revenue per patient day (b)(e)

$ 2,175

$ 2,203

1.3 %

Occupancy rate (b)(f)

68 %

69 %

1.5 %

Adjusted EBITDA (,000)

$ 238,536

$ 199,034

(16.6) %

Adjusted EBITDA margin

12.9 %

10.8 %

Rehabilitation Hospital

Number of hospitals operated – end of period (a)

Revenue (,000)

$ 816,240

$ 949,770

16.4 %

Number of patient days (b)(c)

350,724

378,536

7.9 %

Number of admissions (b)(d)

25,039

27,335

9.2 %

Revenue per patient day (b)(e)

$ 2,119

$ 2,242

5.8 %

Occupancy rate (b)(f)

84 %

82 %

(2.4) %

Adjusted EBITDA (,000)

$ 183,471

$ 209,427

14.1 %

Adjusted EBITDA margin

22.5 %

22.1 %

Outpatient Rehabilitation

Number of clinics operated – end of period (a)

1,925

1,922

Working days (g)

192

191

Revenue (,000)

$ 930,696

$ 960,309

3.2 %

Number of visits (b)(h)

8,336,216

8,568,784

2.8 %

Revenue per visit (b)(i)

$ 100

$ 101

1.0 %

Adjusted EBITDA (,000)

$ 82,016

$ 78,984

(3.7) %

Adjusted EBITDA margin

8.8 %

8.2 %

(a)

Includes managed locations.

(b)

Excludes managed locations.

(c)

Each patient day represents one patient occupying one bed for one day during the periods presented.

(d)

Represents the number of patients admitted to Select Medical's hospitals during the periods presented.

(e)

(f)

(g)

Represents the number of days in which normal business operations were conducted during the periods presented.

(h)

Represents the number of visits in which patients were treated at Select Medical's outpatient rehabilitation clinics during the periods presented.

(i)

IX. Income from Continuing Operations, Net of Tax, to Adjusted EBITDA Reconciliation

For the Three and Nine Months Ended September 30, 2024 and 2025

(In thousands, unaudited)

The presentation of Adjusted EBITDA is important to investors because Adjusted EBITDA is commonly used as an analytical indicator of performance by investors within the healthcare industry. Adjusted EBITDA is used by management to evaluate financial performance and determine resource allocation for each of Select Medical's segments. Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America ("GAAP"). Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, income from continuing operations, income from continuing operations before other income and expense, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying definitions, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.

The following table reconciles income from continuing operations, net of tax, to Adjusted EBITDA for Select Medical. Adjusted EBITDA is used by Select Medical to report its segment performance. Adjusted EBITDA is defined as earnings from continuing operations excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, transaction costs associated with the Concentra separation, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries.

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024

2025

2024

2025

Income from continuing operations, net of tax

$ 41,276

$ 44,180

$ 140,443

$ 176,791

Income tax expense from continuing operations

4,374

11,749

49,269

45,494

Interest expense

31,379

30,021

100,054

89,071

Equity in earnings of unconsolidated subsidiaries

(33,069)

(12,992)

(53,481)

(39,122)

Loss on early retirement of debt

10,939

—

10,939

—

Income from continuing operations, before other income

and expense

54,899

72,958

247,224

272,234

Stock compensation expense:

Included in general and administrative

10,961

3,448

32,517

9,714

Included in cost of services

2,247

807

6,382

2,465

Depreciation and amortization

34,930

34,442

106,583

104,098

Concentra separation transaction costs

861

—

1,696

—

Adjusted EBITDA

$ 103,898

$ 111,655

$ 394,402

$ 388,511

Critical illness recovery hospital

$ 50,763

$ 56,102

$ 238,536

$ 199,034

Rehabilitation hospital

60,117

67,956

183,471

209,427

Outpatient rehabilitation

28,319

24,198

82,016

78,984

Other (a)

(35,301)

(36,601)

(109,621)

(98,934)

Adjusted EBITDA

$ 103,898

$ 111,655

$ 394,402

$ 388,511

(a)

Other primarily includes general and administrative costs.

X. Reconciliation of Earnings per Common Share from Continuing Operations, Net of Tax, to Adjusted Earnings per Common Share from Continuing Operations, Net of Tax

For the Three and Nine Months Ended September 30, 2024 and 2025

(In thousands, except per share amounts, unaudited)

Adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations are not measures of financial performance under GAAP. Items excluded from adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations are significant components in understanding and assessing financial performance. Select Medical believes that the presentation of adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations are important to investors because they are reflective of the financial performance of Select Medical's ongoing operations and provide better comparability of its results of operations between periods. Adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations should not be considered in isolation or as alternatives to, or substitutes for, income from continuing operations, net of tax, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations as presented may not be comparable to other similarly titled measures of other companies.

The following tables reconcile income from continuing operations, net of tax, attributable to common shares and earnings per common share from continuing operations on a fully diluted basis to adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations on a fully diluted basis.

Three Months Ended September 30,

2024

Per Share (a)(c)

2025

Per Share (a)

Income from continuing operations, net of tax,

attributable to common shares (a)

$ 23,842

$ 0.19

$ 28,087

$ 0.23

Adjustments: (b)

Loss on early retirement of debt, net of tax

7,697

0.06

—

Concentra separation transaction costs, net of tax

612

0.00

—

Adjusted income from continuing operations, net of

tax, attributable to common shares

$ 32,151

$ 0.26

(c)

$ 28,087

$ 0.23

Nine Months Ended September 30,

2024

Per Share (a)

2025

Per Share (a)

Income from continuing operations, net of tax,

attributable to common shares (a)

$ 85,675

$ 0.69

$ 123,318

$ 1.00

Adjustments: (b)

Loss on early retirement of debt, net of tax

7,695

0.06

—

Concentra separation transaction costs, net of tax

1,208

0.01

—

Adjusted income from continuing operations, net of

tax, attributable to common shares

$ 94,578

$ 0.76

$ 123,318

$ 1.00

(a)

Income from continuing operations, net of tax, attributable to common shares and earnings per common share from continuing operations are calculated based on the diluted weighted average common shares outstanding, as presented in table III.

(b)

Adjustments to income from continuing operations, net of tax, attributable to common shares include estimated income tax and non-controlling interest impacts and are calculated based on the diluted weighted average common shares outstanding. The estimated income tax impact, which is determined using tax rates based on the nature of the adjustment and the jurisdiction in which the adjustment occurred, includes both current and deferred income tax expense or benefit.

(c)

Total does not foot due to rounding.

XI. Income from Continuing Operations, Net of Tax, to Adjusted EBITDA Reconciliation

Business Outlook for the Year Ending December 31, 2025

(In millions, unaudited)

The following is a reconciliation of full year 2025 Adjusted EBITDA as computed at the low and high points of the range to the closest comparable GAAP financial measure. Refer to table IX for the definition of Adjusted EBITDA and discussion of Select Medical's use of Adjusted EBITDA in evaluating financial performance. Each item presented in the below table is an estimation of full year 2025 expectations.

Range

Non-GAAP Measure Reconciliation

Low

High

Income from continuing operations, net of tax, attributable to Select Medical

$ 143

$ 156

Net income attributable to non-controlling interests

Income from continuing operations, net of tax

212

227

Income tax expense

Interest expense

119

Equity in earnings of unconsolidated subsidiaries

(49)

(51)

Income from continuing operations before other income and expense

345

365

Stock compensation expense

Depreciation and amortization

146

Adjusted EBITDA

$ 510

$ 530

SOURCE Select Medical Holdings Corporation