SEM - Earnings call transcript Q4 2017 | Select Medical Holdings Corporation

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Operator

Good morning, and thank you for joining us today for the Select Medical Holdings Corporation’s earnings conference call to discuss the fourth quarter and full year 2017 results and the company’s business outlook.

Speaking today are company’s Executive Chairman and Co-founder, Robert Ortenzio; and the company’s Executive Vice President and Chief Financial Officer, Martin Jackson. Management will give you an order – 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 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. would turn I over conference time, Mr. to this like the to call At Ortenzio. Robert

Robert Ortenzio

Call Good operator. us Quarter Earnings Medical’s you, everyone. for Fourth Conference Year Full Thank and morning, Select joining And XXXX. for thanks for

I provide with to since reported some I’d updates you last and our quarter. metrics, comments Before outline we like operational summary

basis. LTACs, Rehab Hospitals growth a with quarter good adjusted Inpatient and EBITDA had Our strong a on year-over-year same-quarter very Concentra business double-digit segments

both patient We and nice also increases in pricing. realized well as increased days as volume visits

under We our full continue The since to the LTACs year-over-year to patient fourth be pleased operating all of criteria. quarter LTAC the criteria. with progress since patient first making operators our results are the comparable quarter was of transition were

our to For year. admissions quarter last compared increased same X.X% the the quarter,

our from up year. Our was occupancy XX.X% quarter rate same in in the XX.X% last in quarter, LTACs the

was a occupancy basis rate on XX.X%. Our same-store

resulted focus our Our XXX LTACs. continued in improved year-over-year occupancy margin basis and cost on in in EBITDA point a improvement adjusted has managing

LTAC’s was compared quarter the same up year. EBITDA quarter Our to last XX.X% this adjusted

same-quarter XX.X%. Our basis, and experience segment continues a in grew growth of revenue revenue increased Rehab and EBITDA. adjusted On significant EBITDA both XX.X% adjusted Inpatient terms to year-over-year

JV Our pipeline strong. remains

the the with outpatient new rehab market. new venture after with and will building the joint of Banner in Health inpatient announced first Arizona. ultimate, a Just rehab, joint The the of of venture of hospitals Banner signing we year, in partnership with the consist X both

some with Clinic continues joint Cleveland line open of announced exceed continue with respectively. XXX joint business Concentra Vegas total and growth top venture now We Later national Orleans to the us acquisition of later upon an on expectations hospital November. next to EBITDA in joint platform recently February this in of I year-over-year venture additional earnings rehab build growth completion related Dignity. in beds in in Cleveland quarter, this In joint the Akron significant see hospital in venture rehabilitation and call, Clinic X Clinic with years Cleveland mentioned This expand over our hospital opened venture couple hospital strong Ochsner; the expect enables the New same-quarter addition, Las time year, in financing we we we rehab last to and with the and our as our occupational October HealthWorks segment additional in X as of our hospitals in X.X% and should on XX%, The adjusted opened our X. operation. and has regional U.S. our partnership to health. success transaction with

perform continues compared in up Our year. the quarter to quarter with last adjusted net same Outpatient Rehab the well legacy and X% EBITDA X.X% up revenue business to

down X.X% As couple implemented. segment a on we of several quarters, EBITDA the continue to have the the revenue acquired as we and mentioned some is we is with our million. adjusted markets X.X% of last changes of result net up headwinds Outpatient to quarter, physiotherapy $XX Overall, experience

As most segment. combined businesses. our Previously, I’ve and noticed performance we as recent reporting are during will Hospital earnings our our release, sure LTAC we’re of our now I’m Specialty operators Hospital Rehabilitation the assets have Inpatient of mentioned XXXX. confident were you these in many improve press previously, separately Physio operations

same. Outpatient the Concentra segments Rehab remain and Our

million revenue million quarter XXX,XXX in in year to patient on quarter for for of quarter last the billion the operational revenue days quarter the year. $XXX fourth to the Net year. $XXX increased increased quarter through Let year. me increased Net the to days year. revenue quarter to for fourth per year. last our next day fourth quarter compared last compared take to $X.X Net full last revenue billion and year. last to million $XX you X.X% compared $XXX the full compared LTAC the $X.X days the to same XXX,XXX some highlights $X,XXX quarter patient the Patient $X,XXX compared to in same same segment fourth X% to same to increased million increased Net

X.X% XX.X% $XXX quarter due same higher-acuity day patient increased a revenue Patient decrease Net million year $XXX our to For was day for in full to to year. last days segment just million primarily population last per criteria. X.X% per for over resulting from $X,XXX patient net X last to implementation higher to revenue in the year. year, last compared to a the the patient result of patient for compared XX,XXX as days million fourth days per net just Net closures. compared related quarter hospital revenue day decreased to LTAC Rehab Net million to of $X,XXX year quarter Patient same the in year. XX.X% net billion $X.XX The compared last segment $XX days was Inpatient quarter day full day decline revenue $X,XXX billion per year. in the year. the patient to increased to compared increased decreased patient our days The $X,XXX XX,XXX compared primarily $X.XX to patient to to to patient year. revenue increased per revenue under in patient last days same fourth quarter

in revenue XXXX. Inpatient The compared to For million new million the year. XXXX hospitals $XXX Rehab increased that last million related $XXX to net opened the full in to year, several $XXX we increase is and segment net revenue in

day increased just to $X,XXX last revenue $XXX visits for quarter fourth Net compared days the last days X.X% Our day patient quarter Patient million year. year. patient last Net $XXX days year. visits compared quarter revenue was X.XX same year in million year. the in per quarter increased X.X% our same million Rehab the fourth patient compared patient to million $XXX.X to to visits quarter year. to $X,XXX last the compared patient same on the quarter per per XX.X% Net $XXX.X to segment to visit to last compared XXX,XXX per under increased for visit XXX,XXX fourth revenue the to increased Outpatient X.XX

in For our Physiotherapy to net March year. net in the last last by in compared year. visit same the therapy last contract billion compared to our year, business $XXX of primary to $X Concentra million million increases last on to revenue of was $XXX increased revenue XXXX. These The to compared to March partially acquisition the X.X% in segment Outpatient increased XXXX, last sale to were X.X compared year was increased Rehab X.X% the quarter for compared Net Net our fourth segment $XXX quarter revenue increase $XXX million Patient Outpatient in XX, year. X, million $XXX per visits on year. clinics in full X.X offset Rehab the our to driver the million X.X% revenues this year.

For was the from generated and on-site our $XXX was the from other centers and outpatient revenue services. approximately clinics, million clinics $XXX fourth quarter, community-based million balance of

in last For were visits to year. the per visits X.XX million the same visit quarter quarter per patient $XXX for centers, X.XX million was visit the fourth and and revenue $XXX compared net

segment increased last full the our billion X.X% to year. compared in to revenue For $X year, Concentra $X.XX billion net

services. from our and was clinics was revenue on-site and of community-based other $XXX year, outpatient $XXX centers the from clinics, balance million the For generated approximately million

revenue visit quarter to EBITDA same centers, $XXX adjusted per year last the and margin For X.X were and at fourth $XX.X million the patient quarter year. the $XXX visit year year. million with visits per last was the for last net for to grew EBITDA adjusted consolidated the X.X compared million for XX.X% same visits compared to quarter $XXX.X fourth quarter million X.X% compared Total XX.X% to

million compared year. XX.X% $XXX adjusted to grew for EBITDA For margin year XX.X% XX.X% $XXX.X last the adjusted full last to total year, the EBITDA year. compared to million at

quarter XX.X% previously XX.X% for in EBITDA mentioned, losses last EBITDA $XX.X for segment million quarter compared last segment The XX.X% improved $XXX,XXX margin of includes fourth fourth to $XX.X compared the quarter our LTAC results segment to fourth the adjusted basis increased startup same in same from Adjusted million year. quarter the the LTAC to this year. year. approximately the adjusted to As XXX LTAC quarter for EBITDA the the points

same segment EBITDA results year. compared LTAC adjusted XX.X% $X.X Inpatient year fourth a for quarter in the fourth last net year. includes compared million improved Adjusted in quarter year. startup quarter basis compared EBITDA million the XX.X% XX.X% $XXX,XXX to while to EBITDA EBITDA the our Adjusted losses margin million Rehab LTAC XXX increased LTAC year. for points results last quarter the fourth million same are this to for compared structure. to to XX.X% of for increase margin $XXX.X EBITDA the quarter full last segment for primarily the to to same approximately $XXX.X year. million in the segment For segment year, day losses due XX.X% adjusted Rehab startup increase approximately compared The revenue $XX year. increased the to EBITDA $XX EBITDA for Inpatient adjusted adjusted XX.X% Adjusted XXX segment million consistent to $X in in the Inpatient of The last last to include cost basis patient an improved margin points maintaining quarter per

opened points for margin the performance million fourth million Rehab year. new same year. $XX quarter compared EBITDA fourth For year. $XX.X the million to EBITDA the were segment $XX.X $X.X adjusted that Outpatient year, was XXXX. was of adjusted increased EBITDA losses XXX EBITDA in XX.X% to were $XX the the million result Adjusted XX.X% million hospitals the in to Outpatient in Rehab year Adjusted same quarter to basis Inpatient for last Inpatient we segment XX.X% year. last the XX.X% primarily to compared $XX.X XX.X% The margin for EBITDA to startup last adjusted improved compared Rehab and compared XXXX full quarter million year. compared Adjusted last increase EBITDA the to in in improved quarter margin last

experience a driver operational EBITDA in the last I and is compared our challenges the year. adjusted clinic few of margin decline markets, the same to of in Physio As quarter continue in mentioned, quarter which a primary to

million last Rehab For million the year, Outpatient the $XX.X Outpatient same the was was fourth EBITDA adjusted both and year. year. same to XX.X% compared quarter Concentra Adjusted EBITDA margin year year last to this adjusted XX.X% compared quarter full basis XXX points with for improved to for margin million last was $XX.X $XXX.X to EBITDA compared quarter Adjusted the EBITDA XX% last million year. segment in $XXX.X

for was $XXX.X the XXXX. the the per Earnings same share For same compared fully per to gain Concentra $X.XX $XXX reform a excludes $X.XX margin for share compared adjusted diluted last fourth earnings diluted effects to quarter year. XX.X% diluted XXXX per legislation fully XXXX. for federal per $X.XX year. in share EBITDA fully year. its improved tax fourth nonoperating XX.X% share of earnings quarter points Adjusted last diluted the XX to year, last in fully quarter EBITDA the fourth Adjusted $X.XX diluted for tax for quarter the effects quarter Adjusted XXXX related quarter from million basis resulting and was to full and million for compared compared fourth the share to per was the of

of federal share in and earnings XXXX the retirement $X.XX excludes share related diluted to the Adjusted per year. diluted for $X.XX year. from early reform resulting the fully $X.XX was $X.XX XXXX per tax earnings on diluted fully tax earnings share diluted for early fully the share of loss For year, effects Adjusted retirement compared per year. per debt and debt compared diluted legislation share nonoperating effects fully last earnings loss diluted full excludes on and related per the year effects their its tax last and was per in year. share to gain Adjusted last

should I note I Budget to I hospitals that to and of related thought the some wanted Act conclude, mention. Before outpatient I LTAC XXXX provisions that included Bipartisan rehab

payments continuation reduction criteria- neutral per part not as company, support eligible the The for LTAC, continuation via short-term IPPS, site-neutral this and the taking of on change rule diem Select provision payments the rule. acute of does remained the included Because the calculation. rate, being impact blended blended patients at blended an the for the for paid payment is additional Select for on for really two only, used the act or patients care of is of years. a focused For

turn overdue Outpatient as for act for details long legislative therapy supportive also repeal the open I’ll included the Marty for additional before Rehab services. call questions. For call Jackson the seen was on of caps we the industry. Rehab, a change that now by the the Select Outpatient of provision to was this over financial some

Martin Jackson

morning, Bob. Good you, everyone. Thank

operating include million. and administrative quarter to our fourth quarter, million expenses, bad expense, general same debt services, were $XXX the the expense our cost For which of in last compares year. and $XXX This

were a the of net revenue, percentage quarter operating compares year. same quarter XX.X%. our last in fourth This As for to the XX.X% expenses

for For the billion full $X.X billion expenses to year. $X.X the our operating year, as were compared prior

for to percentage were which $XXX the operating a expenses prior fourth last were the same million year. services to XX.X% of revenue, quarter. Cost year As compares for for year. of XX.X% in million quarter compares This the $XXX the

compared basis XX% XX.X% services revenue, in of As a to the the year. quarter points net decreased percent XXX same of fourth cost the to quarter in prior

billion year. was cost This $X.XX of compares $X.XX last to year, full For the billion. services

last Concentra revenue This the revenue compares to by was fourth net for in quarter of decreased segments. last in compares quarter. of in services to primarily year. percent $XX.X million operating percent is last year. to XX.X% Inpatient the in was our year. period a basis revenue, of LTAC a the and same of services cost and XXX reductions for XX% the $XX.X decrease our startup of expense million achieved fourth The As Rehab relative to due compares as quarter in net as performance the points hospitals revenue in X.X% quarter. G&A net This same percent improved X.X% of cost year. G&A the to This a same cost

During quarter million G&A this that acquisition are the of included HealthWork costs in we expense. fourth year, $X.X incurred U.S. our of

this costs, of these Excluding net G&A X.X% year. have revenue as quarter been the percent would fourth in

year compared was a year, million. $X.X G&A expense last million compares $XXX X.X% last of full year. last million HealthWork expense to revenue of acquisition Physiotherapy as expense million was net percent $X.X X.X% year. the acquisition of includes to this year. For This G&A and cost U.S. $XXX.X cost G&A

Excluding G&A as debt a these same compares versus revenue X.X% Bad this of a the of in X.X% percent quarter. year. fourth percent as to quarter the year This year. X.X% costs, was in revenue net last last our was X.X%

net will of component For and categorized as revenue majority revenue year, compared XXXX, the debt as a be bad in the on statement. have the included X.X% historically of as as X.X% a income bad to the we was Beginning year. of percentage reflected debt now last revenue to reduction a expense net

margin Bob to adjusted of As same compared million mentioned, was for the for was EBITDA quarter total and $XXX.X $XX.X margin year. quarter XX.X% adjusted X.X% fourth adjusted EBITDA and the of adjusted million the EBITDA the last EBITDA

EBITDA of million last For EBITDA to of amortization $XXX adjusted was in EBITDA compared same adjusted quarter $XXX.X the XX.X% quarter to Depreciation margin the year. million adjusted last and margin $XX.X the and year. EBITDA fourth adjusted year, was XX.X% an $XX.X was million million compared expense and in

year. subsidiaries This compares the $XXX quarter was amortization and during $X.X in the million unconsolidated to in depreciation compares million We quarter. earnings million. equity $XXX.X $X.X to This same year. and year, last on the generated For fourth million last

and generated in During million the subsidiaries last we year, $XX.X of earnings $XX.X compared to million unconsolidated year. equity

activities. We a million in financing last $XX.X this on retirement year recorded our loss to of also related year $XX.X and early million debt

first year. during the the to is rates decrease as the an to the caused reform of million During sale federal refinancings quarter to $XXX.X third legislation $XXX.X The $XX.X of diluted effects share At the tax $X.XX in benefit and therapy is we per year. the legislation. for federal to tax Medical and the of cash interest for million reform of year, expense the XXXX. on term $XX.X of Concentra million This fully income fourth year. revalue million. compares in enactment $X.XX. $XX.X last Interest XXXX, effects the in the and the gain million $XXX.X tax of contract from year of which expense was million $X.X increased quarter and million businesses. attributable to $XX.X our earnings of Select This XXXX resulting The the debt million and of to year. reserves legislation non-operating related our last the per were related includes in well our recorded recorded benefit Net resulting was expense year. tax compares fourth share able had of by completed the for The was we upon The This XXXX from to the as us balance we the quarter earnings reduced quarter Holdings loans tax $XX.X income primarily end also we $XXX.X the refinancing sheet. income achieve tax primarily completed billion the a we for outstanding the of million company in the the

issuance debt end Select $XXX year $XX.X unamortized discounts, and in Our notes, the payable. cost loans, and $XXX.X the of included: and revolving senior balance fourth $X.XX Concentra Select billion million $XX.X the cash borrowings balance in in activities consisting debt in notes had term reduce million the term for quarter $XXX.X other in X.XX% the million in $XXX to million flow $XXX.X million premiums at million loans, loans, debt sheet of year. overall Select provided million we Operating of miscellaneous and liability

LTAC the at hospitals. We the days was XXXX, this $XX periodic end quarter in outstanding payments in underpayment of of XX and at during interim our our Our of Medicare days approximately which days of December This days sales million fourth September XXXX, XX, discussed XXXX. December XX recouped the from year. previously XX, as XX compares was to XX,

$XX used $X.X and activities cash of used from of offset in of net by the in activities $X.X acquisitions the and Investing related of Financing payments million January cost by term of quarter. assets the the of in and The payments in the payments in year. the in million $XX.X million investments use for proceeds estimated one and debt the to purchases cash borrowings of during $XX.X decrease Select in equipment use in issuance $XX.X quarter. the sale $XX the $XX.X revolving development property Investing activities fourth primarily debt investments activities during million of $XX December used in and net of borrowings the year, on million million Financing million our cash of part The other cash million, sale $XXX February. term related million on in cash collected acquisitions at net use from cash million in million primarily We million $XX This net XX, on projects in million during The cash where loans by part offset related of loans equipment to fourth underpayments loans, loans quarter. net revolver and principal million $XXX.X by $XX.X debt. proceeds in $XX.X to and $XX.X million a early overdrafts, the was $XX.X other use an in million offset related of used the capital and to balance million million financed overdrafts. $X.X was quarter. on increase $XX.X and and construction approximately Rehab during in part of in Inpatient offset of and of in for sale have million in in was year. of The related the $XX of portion expenditures borrowings proceeds part assets the assets the cash interim year. of of substantial included to property recapture cost. in of of A and purchases XXXX, from

outlook Additionally, year our business earnings provided press year. release, we for earlier XXXX reaffirmed our calendar this

fully expected billion. prepared our the to turn call be of be of $XXX operator EBITDA $X and share range in to time, range billion up We XXXX. it per in in diluted the back to This net expects revenue And range to like concludes to to $XXX the is be expect at to over to in the remarks. Adjusted million for the million of this $X.XX earnings $X.XX to questions. we’d open $X.X

Operator

Lynch. [Operator Instructions] of come the Your BoA line first Fischbeck from Merrill Kevin question from

is line open. now Your

Catherine Anderson

This Anderson could where just margins a is rebuild We’re to Catherine of to. criteria? XXXX before trying on get sense

Martin Jackson

Yes.

for look that If second, you at hold year we of up. looking a XX.X% are on XXXX. can just for Catherine, we’ll the

Catherine Anderson

on And you Physio to timeline back give levels. them Does more quarter, Okay, that indicated margins? hold? get X would X to it you still could historical details months the progress Last to about take on

Martin Jackson

do still Yes. we a some monitor are traction to of see couple identified need integration, We’d truly to certainly will X where frame issues. have geographical to We where the areas. that some we number have we be a that basis. And And we a seeing think locations markets that. And where With Physio we have specific happy in we some time to work nice is regard the on of of the we appropriate improvements. some on. weekly nice months X certainly

Catherine Anderson

helpful. it? that’s what you be incremental tax cash then to flow And Okay, And how from will reform? the use do plan lastly,

Martin Jackson

I the Yes. not really I dollar quantified amount. we total mean, amount. have the mean, Yes,

that to will believe it range XX% about to talked effective beyond. range. typically XX% in we’ve XX% for rate’s be We know, XXXXand XX% our you As the in

Robert Ortenzio

that and period of than will it And for allocation the on joint primarily, a really go delevering the other to XXXX that, the for as And we’re ventures. XXXX company. rehab capital, focusing

joint I of And the M&A, the rehab So certainly, cash our significant. much area look free lot go ventures. wouldn’t will in nothing for of a toward

Catherine Anderson

much. you thank Okay very

Operator

open. question Peter next comes line is Fargo from Your from line Peter of Securities. Wells your Costa the now

Peter Costa

how that – it’s, you Concentra at versus the you the weaker forward? progressing from been that bit, where transaction, go HealthWorks talk transaction, improvement us Can relative going of good Physio see expect to little for U.S. you the to here. tremendously how performance the U.S. about contrast HealthWorks a you you Can had

Robert Ortenzio

we’re post Concentra The – management Concentra and of synergies think off very the that there, from have And those be. And been is integration out there new acquisition proud HealthWorks a successful can about we’ve think Humana. the what Well, U.S. been we’re business. coming think since – acquisition very the from I the the the Concentra open numbers Humana. team mirror-image of we certainly is I mean, did work I a

a We detailed have plan. very

think I it’s management be detailed noting all the the in that that we identified think team, worth synergies execution all mostly synergies. are cost have pretty most and that XXXX the see and They very been by well we’ll will of those done.

So – of at plans believe it’s are that gone we we and the have lot confidence a least detailed, that, it’s we very think currently, smoothly.

Peter Costa

operating And little What then this bit? in through go And $XX.X talk can million that you from prior benefit a taxes you that? can the quarter about was the loss?

Robert Ortenzio

with NOL the to has do That with acquisition, Pete. the associated Yes. Physio

was – there number. tax million affected is think $XX.X I a

think So the number in I $XX think we range. were – million the was I non-tax affected

Peter Costa

Okay thanks.

Robert Ortenzio

Sure.

Operator

your Chris Chris Deutsche of is comes line line from Bank. Rigg the Your open. next from question

Chris Rigg

quarter. I Definitely better just we the Can on color had results wanted to than give ask Concentra there? some tracked you the about in expected.

Martin Jackson

Sure, Chris.

a the increasing, a but mean, the an right. did nice what low the typically this period is great especially a of business, fourth for really increase you’ve and quarter also they operators in price, during job volume. saw seen increasing volume. have med the it And quarter occ absolutely I done You’re seen you’ve not just you job. And Concentra is price – great –

Chris Rigg

factor Does not Or that flu is that a business? all? in impact at

Martin Jackson

really perspective, from doesn’t – all impact really it it that our It much.

Robert Ortenzio

impact medicine occupational on Flu the really, LTAC has, than bigger in operations business. a the

Chris Rigg

accounts been Got least with of give in the side receivable. much, on year. latter the it. the going a Can you there? the at just And a Medicare some on pretty sense collections then the for of Just us what’s X/X thorn

Martin Jackson

in with what DSO a the do Well, to part you’ve And QX. seen that on quarter. think that three days you’ve QX I in by first getting to do the from seen, of we underpayment of a has And continued large the PIP. repayment is the Chris, reduction to

into something how lot works. volume it’s lot the talked was And the PIP a actually right, really we’ve to of due this really criteria You’re – about. in reduction of of going and occurred this a

So back of a which, this state what analysts certainly benefit you have I don’t normalcy sure we’re we make doing to we’re think, getting to fluctuation. will is

Chris Rigg

guys. thanks lot Understood, a

Martin Jackson

Sure.

Operator

next question from The the Bill Company. from Your comes open. of Benchmark your line is Sutherland Bill line

Bill Sutherland

Thank you. morning Good everybody.

sense you up. QX; achieve the of Cleveland I the capacity you’re in on the you’ve based to that growth and IRFs, On going got something QX? I a think Ochsner, us facilities coming And then QX can guys two then give in guess,

Martin Jackson

Actually, coming up on Bill, something we’ve in got QX Vegas.

the what you’ll year, Ochsner losses you’ll operating through the the the think see breakeven in the year. quarter. third hospital ought you’ll and of see – with I fourth start the probably balance associated with start and to see and to is think I quarter losses associated on the Vegas Las do of you Akron then third to this Cleveland in probably the hospitals And

Bill Sutherland

with guys. through going And – you know deal for go to then be not that’s can I majority that? a Banner, you not And your plans that’s

Robert Ortenzio

a correct, XXXX. recently was rehab Outpatient – have joint That’s venture in hospitals, it’s And plans plans recently three now. and the to signed Rehab It’s it not. of January the is Inpatient those we Banner signed in construct business. deals. are while unfolding new recently I The both mean,

have done. identification, site So work we all be we have we to that architectural, have

pretty So excited. we’re

healthcare know, of who is follow the the As country. systems many Banner in you one of premier

the venture. the engaged than hospitals integrate of really can’t So outpatient to them your a the are point. that of lot process part more we’re joint detail these three and I give working planning now with this in at

Bill Sutherland

it’s it numbers, as probably on But more sounds impact as far like XXXX your

Martin Jackson

XXXX, Yes, Bill. XXXX,

Robert Ortenzio

Yes.

Bill Sutherland

no Yes, question.

XXXX. in top growth IRF in And line so such you have tremendous

want just expansion. just of And how the so relative much don’t more I’m have just the know facilities. sizes get sizes guess a or there the I getting a to sense due you automatically of I to sense growth of – kind I bed capacity

Martin Jackson

Yes.

You the of range. can in XX-bed assume, Bill, that most we’re are building hospitals that the

Bill Sutherland

this Okay. Nothing time around? major at

Martin Jackson

No, no.

that hospital Rehab. especially constructed right. was valid XXX very it’s we’ve a by beds. You’re was and considering mean, question, largest California the That that I and far

per – are all beds really beds of XX these So the talking about were hospital. all

Bill Sutherland

my Did I’m you’re – new sure of LTAC for just detail. to trying XQ it Did – XQ? since had I correct versus did in level giving make down out occupancy point X go the numbers occupancy

Robert Ortenzio

No.

Martin Jackson

not. did It

Bill Sutherland

okay. No,

is around So XQ, XX% it right? stayed that since

Martin Jackson

Yes.

Bill Sutherland

Okay.

So work going there a go current of improvement in are here? seasonality and a at is is you sort the stepped-up – level that year? at to you’re next just step, just then Or to

Martin Jackson

us back we certainly indicated, as We at No. we expect ultimately see to that occupancy expect XX% rate. – XX%,

Bill Sutherland

leveled that to since for was – lastly, in you – in, is margin to quarters, then make for I the EBITDA looked that, you what guys LTAC. the wanted first did that only just I that think it sure XX-something for you you percent, which three Are was back said you And off pre-criteria sure question just I Okay, case. wanted

Martin Jackson

you Well, know yes. what,

that You that know XX.X% what, was actually was the think, we right? if the question on was, XXXX, – was gave – on I that

Bill Sutherland

That’s XXXX. Yes, yes.

Martin Jackson

was XXXX, I think, I XX%, north – XXXX think. was of

Robert Ortenzio

Yes.

Martin Jackson

Yes.

Bill Sutherland

mean, then down was XXXX, consolidated the number. it criteria. and I year have from biggest there Hospital the Specialty stepped I Actually, towards

Martin Jackson

was XXXX pre-sequestration. yes, Well,

XXXX. was was then in full X you – $XX of at, – was and million and a months I Total it it year in $XX sequestration XXXX in in XXXX. look think XXXX impact million take there If occurred both

Bill Sutherland

$XX million to what, Marty?

Martin Jackson

$XX $XX million. million to

Bill Sutherland

but Is to EBITDA? on it Right, – you’re what is that

Martin Jackson

straight right? it yes. both, bottom revenue drops to Because sequestration line. It’s then the hits line, the really but

Bill Sutherland

caller. Okay. Thanks appreciate guys. all the

Martin Jackson

well thanks. Okay,

Operator

closing questions back turn management over for to further would to team the no now I in queue. call remarks. There the are like

Robert Ortenzio

And we May. remarks. forward Thank everyone, for you, to No look again joining updating you closing in us.

Operator

conference concludes That today’s call.

may disconnect. You now

Select Medical (SEM) 23 Feb 182017 Q4 Earnings call transcript