SEM - Earnings call transcript Q1 2018 | Select Medical Holdings Corporation

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Operator

Good morning, and thank you for joining us today for Select Medical Holdings Corporation’s earnings conference call to discuss the first quarter 2018 results and the company’s business outlook.

Speaking today are the 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 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. will conference I Mr. over time, this turn call the to At Ortenzio. Robert

Robert Ortenzio

you Good Conference Quarter First morning, Call for XXXX. us everyone. Thank joining for Select Medical’s for Earnings

you operational we since to you want outline and presented metrics, quarter. I summary comments our to Before provide with last some updates I

segments and on great a year-over-year had basis. quarter adjusted with Inpatient Rehab both and growth Our strong EBITDA Concentra business a double-digit revenue same-quarter

our revenue segment XXXX Rehab in significant venture rate and in adjusted opened experienced driven this as On continued a throughout both Inpatient Our same-quarter revenue terms late EBITDA and EBITDA adjusted in segment. by year-over-year which growth and increased joint mature. and was projects in development growth basis, volume of XXXX XX.X% XX%, grew to both

build and with rehabilitation Las new our our to continue expected We per year. this week, our Ochsner Vegas projects fourth venture We open pipeline this two believe year. early JV in new three the will quarter opened of joint Dignity, joint venture to

double-digit business We this for foreseeable EBITDA the both and revenue in in future segment. growth expect

margin financials. added Our centers a EBITDA. and million revenue, $XX realized growth of XX.X%, X, EBITDA Beginning primarily Concentra Select’s of the revenue HealthWorks year-over-year growth in of [approximating] U.S. U.S. HealthWorks’ in consolidated on by a HealthWorks of February on adjusted Concentra of XX% in and XXX standalone results $X growth XX.X%. EBITDA of revenue, XX Concentra million segment basis acquisition adjusted U.S. U.S. on-site and X% in which HealthWorks net driven without X, adjusted and added segment February same-quarter included our XX.X% had EBITDA growth clinics. are

[costly] nursing the XX% through with We year-over-year patient quarter population XX%, volume mid-January in rates also XX.X%. had XX% we the compliant at in our of on to increase business rate our revenue historical from the from margins believe to this LTAC of agency admission which grow margins XX% realized traveling impact segment in nicely growing quarter clinical required January occupancy staffing This had basis in quarter, substantial almost as increasing LTAC good levels. back on normalize of saw throughout clinical to but growth balance and balance of and with in X.X%, occupancy well we staff in staffing X.X%, the negative fine-tuned growth bodes a for quarter, Our as a March. EBITDA overtime. nurses, We a same we our January, our growth

some we with challenge the overcome impact weather weather-wise by Outpatient outpatient able for was revenue our faced strong our Rehab million several the markets, clinics. a the quarter. in performance pricing driven We were experienced modest estimate improved growth legacy in much us approximately of to quarter segment Finally, quarter, $X.X but to which in challenging that

We our seeing reach X continue of a believe objectives. to nice it still take to Physio clinics and are our their months markets, make financial progress we in in X expected to will but another number traction

$X,XXX year. day the for first per growth in Overall last in quarter stable compared in XXX,XXX top segment the year. line with by of business million patient our same same for to increased compared to quarter same last rate days $X,XXX first first per days increased million the the each days for $XXX revenue to take Patient increased revenue in Net me quarter day the Net remained quarter. four compared in billion year. XXX,XXX to X.X% to quarter at last in quarter some LTAC year-over-year first the highlights million our growth XX.X% $XXX net the to you operational $X.XX through a our Let in additional revenue segments. $XXX quarter

increased to our the in $X,XXX the quarter to last compared Outpatient in $XXX.X XX.X% Rehab $X,XXX revenue the to million the Patient day XX,XXX Inpatient Rehab year. to first same year. quarter day to $XXX year. in compared X.X% last $XXX increased the days As to in quarter same last in our X% quarter same Net days first I patient revenue same million segment in quarter increased Net last patient per first quarter in the million segment million revenue net $XXX.X XX.X% days to XX,XXX in the year. increased per compared quarter in mentioned, compared to

related revenue to Patient in was year. the first $XXX is million net same to year. certain in the quarter primarily decreased same weather in per same $XX condition quarter in for within visit quarter severe during Net impacted first last in that quarter compared year. our the the quarter to per in the million of visits country to X.XX to Decline $XXX the visits Our our compared slightly X.XX $XXX visits million last XX.X% to last segment million first regions clinics revenue visit in Concentra the increased quarter. quarter the compared visits

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

in year. visit $XXX.X were For million with year and quarter to compared the last first XX.X% almost reimbursement at revenue same rates Total in and the HealthWorks. the at visits workers for XX% to net in million in to first visits consolidated in the for Increases were last centers. last year. U.S. centers, related both XX.X% same of the HealthWorks to acquisition for rates net grew $XXX.X Increases per revenue the the the the quarter $XXX rate million U.S. same improved higher existing per EBITDA compared Concentra first patient to related quarter margin the visits adjusted in EBITDA visit quarter to and quarter primarily X.X $XXX X.X was compensation centers million at quarter adjusted compared

last last million $XX million slightly same year. segment was in EBITDA year. to LTAC XX.X% quarter increased quarter compared in XX.X% Adjusted to compared the the EBITDA margin for quarter adjusted first the segment to the in first $XX.X same quarter LTAC Our the in

had quarter adjusted During our EBITDA hospitals. first we closed last in some since the of gains year,

EBITDA Outpatient EBITDA in segment Rehab the losses Rehab million start-up XXXX. adjusted those XX.X% opened quarter primarily Outpatient to the approximately for same in the Rehab the same first Adjusted was EBITDA million quarter compared last have year. XXXX quarter for margins to the same margin Rehab Adjusted performance margin the year. last and year. for increase was segment adjusted XX.X been last in Adjusted for results million quarter in the would quarter in XX.X XX% first start-up Excluding the were result EBITDA losses Inpatient was of the first in of million quarter in compared compared XX.X% in first quarter compared to EBITDA Inpatient the year. quarter the quarter adjusted same hospitals the XX.X% Inpatient in in EBITDA in we last in first to last $XX.X The improved quarter new the adjusted the year. XX.X% last $X gains, compared margins $XX.X year. and segment same quarter approximately in include for increased to $XXX,XXX the the million EBITDA first XX.X% to

and compared per was share the Adjusted diluted of the $X.XX year. associated margin to last reason in The the compared decline share share quarter per EBITDA lower share than associated in severe year. clinic in quarter U.S. per in EBITDA share the and last excludes year. with cost fully markets on Adjusted adjusted tax to XX.X quarter, adjusted the costs HealthWorks year. effects. $X.XX of same U.S. $X.XX with last for same HealthWorks adjusted to centers to diluted first in EBITDA As of Adjusted first was the EBITDA quarter tax decline margins and loss related quarter of compared quarter the the same quarter the related the primarily as million quarters diluted in I year, of their year. $X.XX earnings in as the in Concentra this per compared for its centers, share by retirement XX.X excludes Earnings first of were the first well also the margin acquisition several diluted was earnings last for the effect operate last debt which both Concentra XX% for activities. quarter our XX.X% existing margin impacted mentioned, as this fully million is year. acquisition to year our in as fully early earnings to last primary the compared was first quarter Adjusted weather the diluted per and the in incurred at same per first integration attributable quarter is

and by regulatory Before comments provide April proposed a posed I April XX rules LTAC conclude, development the On on quick CMS. the to proposed XX, couple were rules rehab on front. of were posted and the wanted I

proposed don't we since typically overhang implementation proposed to to XXXX. comment the criteria. stability elimination we been see the the LTACs. pleased we of rule an elimination industry the Its help that to The the the rule XX% While XX% for patient of should on provide industry publicly expected were has rules, with

opening Banner the to some joint I’ll over announced Austin, turn purchase Texas Marty for it in the in up close our questions. the hospital which July. Jackson is services of of a financial we in rehab call yesterday expected before details expansion venture front, development area, with the On additional the now planned for to

Martin Jackson

Bob. Good you, morning Thank everyone.

quarter cost and This characterize as the the $XXX the on statement. same were For net historically income of XXXX, reduction as expenses, which first Beginning include in last million $X.X services, our administrative a general compares the revenue of of year. to revenue expenses quarter, operating majority now billion. expense the in component reflected and bad is as we of debt a included our

of the first net XX.X% last in XX.X% quarter operating expenses billion compared to year. a quarter same the $XXX quarter last Cost quarter in our services, compared $X.XX were year. first percentage the which were revenue, for million same for the to As of

for year. net the quarter compares quarter. in to the services the As of million same revenue, the This in G&A X.X% million was last expense a quarter same XX.X% last of quarter as XX.X% year. same X.X% in cost $XX.X percent first $XX.X net of the compared of year. revenue first first was percent net last for were quarter revenue G&A a the compared quarter to to in

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

revenue percent costs, year. these Excluding was as first quarter of the X.X% of this in G&A

adjusted Depreciation compares quarter in to year. compared quarter same as the in into generated and in quarter HealthWorks first $X.X X, quarter during the the million closing. Concentra equity was and loan first XX.X% last $XX.X an in to last year. same million adjusted amortization adjusted of earnings million was of February million to quarter. loan. facility year. $XX.X incremental quarter unconsolidated first-lien total first million Concentra’s $X.X an the We a the term to conjunction undrawn $XX mentioned, with was This compared and the adjusted in Bob EBITDA and the margin $XXX.X EBITDA was million, XX% at As new and for million In $XXX EBITDA EBITDA $XXX.X million of same second-lien increased which entered term million the U.S. of subsidiaries from million $XX revolving last margin $XXX acquisition on

loan XX, by spreads reduced $XXX $X.X and facilities, repricing addition, On senior spreads loan term reduced XX credit select XX which loan of was revolving term borrowing March points. our completed first the our XX points. on outstanding million lien basis our billion by borrowing repriced, basis at of points, In basis original secured which by Concentra we

lien year; As $X during early to was Select’s which debt repricing was of to the million first facility million the we $X.X of million on activities, related quarter loan. the related financing the repricing have and first of loss $XX.X a a of result this and retirement Concentra these of credit recorded term

we The the the The of quarter we quarter. in compares the interest early This year. of increase financing first of effective recorded was $XX.X of $XX.X XXXX, tax million U.S. tax for an Select year attributable Reform on result earnings $X.XX. to last is transactions respectively. first to in related from of that the $XX.X last $XX.X the legislation for effective fully HealthWorks million related effects, share and balance the retirement rate certain first the this to first primarily was cost, year. of tax on diluted $XXX.X of in losses first income company EPS, Net last was expense of December enacted was a of the Interest the expense is million million $X.X sheet. the Federal an in quarter, $X.XX. the end recorded retirement $XX.X U.S. at and of billion million represents the early Concentra. loss on quarter. of the million During Medical XX% compares the rate and Holdings tax expense year, the acquisition Tax At to an and same transaction. XX.X% lower debt HealthWorks benefits expense income income The equity and quarter quarter and outstanding were in debt cash of $XX.X debt million. had This per effects Adjusted excluding tax quarter the tax of This the

Concentra debt in million sheet term million at discounts, billion of billion loans, to revolving in Select Concentra liability. $X.XX cost term term included: in unamortized balance in senior and balance second-lien end $X.XX reduce in and Select loans, quarter $XXX issuance notes, Our $XXX debt premiums $XX the the debt loans; overall $XXX first-lien the Select million million loans, in X.XXX%

$XX provided of also Operating cash first in million other in borrowings of last the had quarter, cash quarter $XX.X of payable. miscellaneous the same to flow We consisting notes million and million which use year. $XX.X compares activities

cash of or outstanding, to cash XXXX, days was $XX.X was of in U.S. for cash equipment primarily quarter. XX, of December $XXX.X and XX The at compared acquisitions activities The sales activities of financing acquisition. quarter. use in during HealthWorks and in million to of XX to activity used $XXX DSO, XXXX. Investing investments, XX, at the the relates $XXX.X days property first provided first the and related quarter. primarily days the the Financing million provision in March Our the million million purchases cash

$X.X principal $X.X $X.X our a borrowings of of overdrafts. of loans in debt, in we and million million and had on million addition, In by net payments $XX borrowings part Select’s on other was net offset loans, which revolving million, term decrease in

net our earnings adjusted this year and earlier we our EBITDA. release, for for operating calendar the press in Additionally, outlook both reaffirmed provided XXXX business year revenue

is the expect net to $X.XX, be acquisition be to expect $X range of of million $X.X includes in debt to in earnings to revenue to billion and million. U.S. cost. We be in expected share fully on to EBITDA of $XXX which per now retirement Adjusted We diluted range the of the a range loss $XXX billion. HealthWorks $X.XX

on to the excludes which concludes cost adjusted per to the to HealthWorks share up debt this call $X.XX effects. related in early at for and time, it range $X.XX questions. of retirement back over earnings in and to open the U.S. expect of to our And We the tax we’d XXXX, be turn the loss like This prepared remarks. operator

Operator

first from [Operator Capital Instructions] Morgan comes you. Frank And RBC from Thank our Markets. question

Your line is open. now

Frank Morgan

purely to that just was to change what contract less in labor get in was interested margins business a level number very so across I the staffing could XX% morning. it be contract the sustainable switching the in margin overcame the LTAC for? and much, just occupancy, permanent those improve temporary a curious, first in from occupancy quarter number just of that improvement, looking should the I'm hold curious Good the it progression volume or you labor. And is over we margin – the the staff was caused of help costly good the is cost there that or is so if

Robert Ortenzio

little went make from XXXX, about to is bit – north that, to census, a up of little guess the from Yes, in of to point There March. are then [ADC] Frank. a mean average in north a December X,XXX. continued I way bit really and trying all And XXXX about February I is the it we our jump-up, we was quite January, that and daily to

pretty as include additional went improve. we able margins So, And clinicians significant. hiring we with point and in rapidly, saw And our agency adjustments we to March, said, people at a we were to we order adjustments, needed time. The overtime bunch those through those well as as we some that as nurses, also we made for to do February that as make some people, of the associated premium add in for traveling is then and nurses. And to that. had

Frank Morgan

you, Got and…

Robert Ortenzio

able To that we occupancy longer to XX% time, maintain of higher the achievable. extent rate think the that we margins are over a period are a

Frank Morgan

And, being made, you. those Got either of just more people you were contract the adjustments - the use did of the optimizing you was temps? place it hire or in

Martin Jackson

people. We hire some did additional

place really so it’s signing that additional you were on with of one loaded. of is thing front-end the other took in The quarter number the bonuses expenses, you, other had and a those that’s then early nurses

Frank Morgan

sense. makes That Okay.

the did market? Or guess correlation Was change we with in gaining this way, thing? on-patient glad and can of is I the any are with seeing seen why flu? Are you the other the of competitive But the see one And, I mean, Now certainly appropriate any criteria that. is, then, kind there I to education between to - occupancy, drop big flu mean, out any you’ve cases and patients? landscape? question the you of you’re point is getting traction it, basis just just it effective complaint what’s competitors

Robert Ortenzio

think Well big we I event. that the there really is our a spike couple Frank, occupancy a people, the question pulmonary in pretty months older flu. strong With And, where lot of saw with in quarter in that Bob. no is correlation of there think this those - a is we that it’s

point patients, So, you’re and directly more I can going event we think see that. to to

without saw, of that the healthcare occupancy think we whole across it saw on surge is that that part and we I So, spectrum. question

Frank Morgan

the doesn’t. at back you XX% get maybe margin this whenever fair XX% near-term, in is XX% or fair to maybe that you maybe like it that this guess, - you occupancy able what at at good occupancy that’s is occupancy do it representation at I that should margin financially that a stay is occupancy, to hold if or to you level if it But it doesn’t be say of XX% And, that does, say to level.

Martin Jackson

probably number Frank, I for good a fluctuation. at occupancy think is XX% XX% XX% to without and rate us,

that I historical going the through able is get to our talked And we’ve past about really on new basis expectation we referral fact also we continue annual back will our about the that XX%. explain just reimbursement. the to think criteria it an educational which be is sources process in are levels, to that an we as is to

Robert Ortenzio

Yes, is that. some to upside continue certainly I but that, think think Mark there is we right. go drive on We really that ahead ourselves of to to don’t want want to and we

So, rewards is an that for on future And, annual have see depending occupancies low to that do the good those on back our we with market, of and - in opportunity that. the get XXs. expect on the think there us to basis we labor

Frank Morgan

Got close a as business your over be how on Would projects? we you. the to of of but And, to projects? away then projects of are of some these on to part And, number? that are clearly be? high-teens you speed earlier just your also really the kind number mature, of that a we picking be particular sort seems do Like how optimal side those think up hopping IRF would what far margin that business

Martin Jackson

smaller remember our incremental on as overall venture it be component grow, Frank, base. becomes of Yes, we don’t it high-teens as to you And, continue joint a we bring number. a would deals,

of component has impact So, the see and an on again margin. smaller development grow becomes of that overall smaller And, the side. the you margins less as continue rehab will overtime to

Robert Ortenzio

think… are big startup they’re fully to out driving still these the contributing that you’ve is are They now fully dramatically, and mature hospitals not those operation, are come of hospitals as the gains that suggest just that are even have period mature. gains we with Yes, so seen not pretty numbers that but

Frank Morgan

to terms been Got hop think - itself of kind Thanks. with I’m out you. you just successful why to for in curious being just Bob winning to question biggest been? being continue and right. One and the But us that wins, add successful as more, curious I’m really what’s could driver very but of development your able you’ve maybe you if the back JV a Select strategy new give as distinguish business in you’ve queue. I’ll going

Robert Ortenzio

before, It’s of very ones the XXXX we the back to a large Banner we then wanted really is dollar partner of the been where Cleveland with all the on that multi-billion going strategy history doing older one to systems, plotted which Clinic. way to and and our systems,

we’ve system and partners we’ve been gotten them with and their trust. As successful gained very marquee

do recently Banner all just very which or that we there leaders see comes world, ability think with healthcare the often that Health do. I business And, with thought times we along deal systems. feel that with and our partnering in us I perpetuates great or the is systems our nicely. And, the of another with in positions in when Cedars are a capture that UCLA more announced everybody, that system they pipeline Ochsner, to is them, undisputed and fabulous one, System we whether think what these are that with kind these

So, I exactly. it’s to difficult think others follow for on than

we to really of we these we then our company. spread for So, are excited ability some And, with exciting excited big and the it’s our of our training, things pipeline and about systems think are to that really we doing. that, about some research are

So, we where pleased are really we are. with

Frank Morgan

Thank you.

Operator

you. Thank

Peter next from Fargo from Our comes question Wells Costa Securities.

Your line is now open.

Peter Costa

Thanks.

like LTAC Concentra pretty think to would a U.S well. Frank How you moment. about up? on, talk adjusted looks business think get and long at the about Where it last XX% EBITDA of I type go the they for can business it came lower? do or like for is stay - But HealthWorks margin. it rest I were Concentra, the take overall If business the that it to end you will that year higher stated does up they covered towards of XX% of and sort do the you same the

Martin Jackson

It’s a question great Peter.

in for for margin margin about out HealthWorks, XX%. it’s quarter, - U.S. point U.S. the first the HealthWorks the Let about is those, approximate me

Peter Costa

Okay.

Martin Jackson

and about you for in in XX-XX%, achievable. that expense some that the And, Okay. ability that up plus you’re million margin has or to back is severance think we severance costs, year range. I over think to The that next XX% $X.X the add so very it’s that so that, get so

Peter Costa

a or you do how do long year you that - you takes think it do takes? think think And,

Robert Ortenzio

Yes, XX we a We probably lot that some year do. a do has will that to attempting think to do it because we synergies of months take the are to of with get.

So, again we we are do approach it margins. and going it’ll to XX do achieve use that a over, to basis, very take go we our through on we fully timely are think those going systematic to that but months probably

Peter Costa

pickup come did did U.S. how any with of receivables then And, board in the HealthWorks fund? terms or receivable on you that

Robert Ortenzio

Sure. It stock deal. was a

receivables. up we certainly yes, picked the So,

Peter Costa

How much?

Robert Ortenzio

- somewhere of me. Probably But front around have in the it’s don’t right I I right believe specifics $XX million.

Peter Costa

you. Thank Okay.

Robert Ortenzio

Thanks. Sure.

Operator

Thank you.

Our next from question Benchmark. Bill comes from Sutherland

now is line Your open.

Bill Sutherland

pipeline the wonder go for a development through future could IRF Thanks schedule here you. if your I Bob, you JVs? of Thank

Robert Ortenzio

after of any our they’re We signed. disclose only partnership

we give don’t So, any information.

I think that we do year. we of many give how on deals expect to per new the is kind some guidance most

to I multi-year basis. in that think over had good three. we’ve We’ve a achieving success said two

detail than that. other don’t we give So, any more

Bill Sutherland

sort have that ground? and I’m broken thinking the signed in about you’ve some of ones cases you broken,

Robert Ortenzio

specifically services. much rehab in acquisition Travis. which simultaneously in under of do is and Health the or with were in announced to expansion and well rehab that was narrative Banner signed of with other construction, a was where recently area today Las the there joint Any Yes, Vega, X we expect just care the we hospitals them the - pretty And, deal, Ochsner do. announced Banner venture then the Arizona the ones Dignity announcement some of opened, are Lake of those the System hospital in also post-acute Austin in Baylor the

Bill Sutherland

have added then Banner you’ve next on QX you’ll time next total, comes year? Ochsner then and this the Vegas the Baylor, is So, got to plus the quarter and

Robert Ortenzio

Yes, right. I think that’s

Bill Sutherland

go? there more LTAC you is much to there optimization Okay. I last one noticed quarter-over-quarter, have portfolio

Robert Ortenzio

there, Well, that or course, is here will of I see put, as be here optimization, consolidation opening think we see that any there. a we you an or may may ordinary

we’ve that that whether passed. criteria, think I as the implementation of would questions were had - has of there you don’t new of closures lot I about So, a think a the result

or see either LTAC, it But at to won’t you close sometimes consolidate course a this of any open So, an there’s why only other may reasons as ordinary time. closures result it one that. we relocate

Bill Sutherland

Yes, to I open an plans it Virginia? of mention was recalled LTAC, in some

Robert Ortenzio

Yes, was we LTAC in have opened up did, we on Virginia. did part Bill. of We Riverside eastern the the

Bill Sutherland

Okay.

So, that okay. that year, the to was the was portfolio added last one

Robert Ortenzio

LTAC that Yes, with have of open announced in we ventures we’ll I also Florida. think ‘XX a new one joint our in

Bill Sutherland

Okay. U.S. be on HealthWorks, integration any And, quarter? this should there cost Marty for ones additional

Martin Jackson

$X.X $X in will million quarter. the three before our I mentioned was spent $X including integration million We that the million, I think be probably next additional already those cost first the quarters, over there that exceed Bill. mean, expectation as integration to shouldn’t cost

Bill Sutherland

last sorry, I understand for to I’m sure closed there? could the me. on means in then not without the IRF, the go And, back for margin ‘XX you gains I commentary for I’m hospitals, commentary the Okay. in EBITDA wonder if adjusted LTAC

Martin Jackson

‘XX. take QX of between of the in look the versus you if ‘XX the ’XX, of contributed amount the - Yes, a hospital at quarter positive actually X difference we number those QX first in hospitals. hospitals have And, of EBITDA closed

remove you very had nice same you significant store growth - you So, when basis. had actually actually some that on the -

Bill Sutherland

okay. That Thanks sense, guys. makes

Martin Jackson

Bill. Thanks,

Operator

Kevin comes of Bank Fishbeck you. from America. question And, our Thank from next

open. is now line Your

Kevin Fishbeck

ask clear, on wanted question when I it about you the turnaround, I that around. thanks. wasn’t business physiotherapy Great, think quite to turning guys first talked

about X turnaround say X months X X months X you to to X to to you’re X that towards at today? still gave end You of the year. X it’s that the When from saying from you’re original last months; months, talking

Martin Jackson

X X probably we from Kevin, months to think Yes, it’s today.

last I where call we that going earning’s we say we thought X the it’s modified take - think to XX months. to

many we’ve of we come months. to X think we think physio, we saying, from and it’s are months X that back on seeing to But quarter X the the improvements track. from are on when we’re now seen last in that X some So, again we down we that focused areas nice will

Kevin Fishbeck

Okay.

if So, to are just the now remaining the could what remind right target issues you reaching us margins?

Martin Jackson

sources. It traction. and what said see in it’s we before we of has had good to lost with their And, markets. just a do with relationships progress number have replenishing as to really there nice certain continue I make some physiotherapist was, which about to, those referral PTs talked continue we that we And,

Kevin Fishbeck

on right Okay. if, labor the of volume And, whether labor just across but your labor business then going now, issue cost more issue if you were it broader is not or that LTAC to one I issue, little a sure shortage guess ability your bit staff wasn’t time to it’s physiotherapy I be retain a a or driven, hire I’m lines? really specific sounds about is kind little backdrop talk different about bit like to sure not the business labor,

Martin Jackson

to see through standard adjustments Program to recruit you a those as could to that got to couple Yes, an on immediately HR and the cost just your that’s in substantial ADC, as mentioned when bring did. has And, we’ve the census. on average and acceleration care bring make onboard think and Program, really you I Recruiting basically when with jump And, we increase our we can’t labor nurses, HR an - talk quarter so really hundred clinicians, daily the patients. but ongoing it do substantial about of what relates you’ve we to got take the of of having first go I

Kevin Fishbeck

wage I guess, the expectation overall what’s kind of XXXX? And, the for

Martin Jackson

clinicians. increase is, in that X.X% budget we I to expectation mean, think X% build into our on I somewhere

Kevin Fishbeck

then And, Concentra, a by helped U.S. all few number kind that – quarters? kind that business strong. about flu core thinking X Okay. HealthWorks of Does there to is the get pretty be next at is the or of growth good

Martin Jackson

For side. entries, the the most really focused is Concentra worker worker comp on on

Kevin Fishbeck

Okay.

about So, of the or about Concentra that’s few there the anything about kind you core Is growth. next the I quarters? think is XX% to guess way comp of something talked that kind

Martin Jackson

I line. year-over-year and I assume same Bob we know quarter. I growth EBITDA not, are that quarter We to XX% think see well did very, very on doesn’t don’t would this they that certainly going

I you’ve at the quarter think year last and were strong to you’ve pretty look is got so. third what got take to a second do

Robert Ortenzio

They great very And, don’t get a performing where have but expectations to so that. of ahead great ourselves momentum, job and they’re have the of we done normalize can all they our want well. you terms exceeded and in

Kevin Fishbeck

just earnings, related Equity question. I down last then year-over-year what to? that And, think, was was Okay.

Martin Jackson

and we really Baylor down This reflected bit is our a the Emory were quarter year-over-year basis entities little in number. same have that unconsolidated really that a on that’s they and including

Kevin Fishbeck

Is you like to losses that of little point weaker? a would staff kind or that just because anything or bit

Martin Jackson

Just bit weaker, bit little a weaker. just little a

Kevin Fishbeck

Okay. you. Thank

Martin Jackson

Kevin. Thanks,

Operator

Q&A that Ortenzio And, to closing any Mr. concludes today’s back like I for now turn session. would remarks. over call Thank you. to the

Robert Ortenzio

Thanks No for everybody closing remarks. joining us.

Operator

Ladies and you today’s conference. concludes in thank for program. gentlemen, participating This today’s

have may disconnect. a great Everyone day. all You

Select Medical (SEM) 4 May 182018 Q1 Earnings call transcript