SEM - Earnings call transcript Q2 2020 | 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 Second Quarter 2020 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's plan, 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

XXXX. morning, Thank quarter Medical's for Select you, earnings everyone. call for operator. Good Thanks joining us for conference second

I Before want summary outlining regarding of our effects pandemic the our some operational comments to you with of provide some on operations. COVID-XX metrics

to say several I excellence gratifying patients am me provide and seen staff throughout such months. while have it care I these see organizations the times operational keeping let organization highest the group and First, last dedicated of how proud these And unusual our quality together to clinical of leadership staff support a and throughout is clinicians our safe. come

through continue the pandemic. We evolve we adapt, to and innovate navigate as

on point the pandemic the call, due the Jersey and mentioned our I mentioned earnings This and and This temporarily in restricted be to effect April in company effect illness our illustrated to mid-March. COVID seen every while earnings low In in Miami census occupancy have last in to our May we began our and reduced markets. presents, revenues have begin and had of and of light the increased, COVID and steady in has in markets in thought as see I on of by regions. volume our the our we higher the month for outbreaks the those In patient quarter we held the case we New some areas the proven represent in our in those second pandemic. a also our rebound impact to business, occupancy would would early of April have these challenges hospitals, had the during care our disruptions. included increased of hardest recovery throughout cost we cost our revenue rehabilitation and visits has missions hospitals, to and XX-Q days we of critical release. monthly hit business As

We also over a this basis. on significant additional and patients for June, other period increased the revenue the that, care in to our same business cost month incurred markets. segment as we XX% said Having in saw rebound for year-over-year

rate of Our -- Concentra June is our outpatient levels of be occupancy In last to exceeded is year close June's segments, pre-COVID XX% to biggest volumes XX%. challenge. and our rehabilitation continue and occupancy

lessened issues volumes quarter by the second both last throughout negatively have as we've of number segments, a mentioned, we which quarter. of As in impacted progressed have been some

in was their XX.X% to in patient second our to and down recovery started down June. Net Patient and same and EBITDA rehabilitation restrictions last to same of respectively last hospitals year-over-year our per quarter in in and a up experienced surgery second outpatient prior quarter. million, were to volumes were outpatient however, XX% the to we began and days. as May, the Net last increased in as to compared and workforce. the year. day growth restrictions we same second rehab $XXX hospital resulting Our XX% and and revenues were recovery again. compared for employers were XX% days critical began year-over-year experienced recovery X.X% in and X.X% compared second segment revenues XXX,XXX. was losses both were to rehabilitation critical the June in rehabilitation revenue X.X% year, May, revenue in quarter our compared in patient the of Concentra $XXX in but elective quarter in million to May second to XX.X% outpatient month patient the hospital month respectively down compared X.X% quarter, and X.X% the XX% our states $X,XXX quarter hospital Occupancy partially saw down segment from year. increased EBITDA June, XX% ease in months hospital both those ease increase day adjusted XX.X% to quarter respectively, last net our in segments. surgeries same XX.X% improvement Patient adjusted in In segment illness improvement million our billion centers per compared in of declines critical the XX% in segment. Volume In the to year with We and $XXX which and only and in million April $XXX Net both shortfalls the last the quarter quarter and year. performing revenue illness close to offset X.X% meaningful the Overall, significant Concentra was increased April illness April in days revenue positive same the in meaningful volumes and quarter. June in segments, our segment which to by revenue, our quarter revenue declined $X.XX year.

revenue to our same to compared the the Net year. quarter XXX to million rehab to hospitals improvement the last per declined quarter. on the the Patient $XXX in same year. entire second in net June XX% and was same occurred compared second quarter, days Occupancy compared per million However, revenue second quarter last XX% May in prior second XX.X% The XX.X% visits decreased April, in quarter patient day when both $X,XXX X.XX increased segment, million -- in visits decline period showing year. in with in quarter. XX% to outpatient the the day patient to

last same year. to for which periods compared Net $XXX and same improvement in the per revenue revenue significant down the Net second net in quarter net compared year. year-over-year. for in the June $XXX which to visit lines during showed the trends the quarter decreased to second revenue $XXX with compared from same million Our quarter same segment May, most down in last as was quarter our monthly Concentra year-over-year last declines Volume trend XX.X% year. the revenue were when year-over-year. was XX.X% down XX.X% $XXX to those XX.X% was month revenues same that along million the April,

For X.XX the $XXX XX.X% second April, year-over-year the were the trends quarter down year. in second million visits only significant the health per year. X% year-over-year. same to last X.X% quarter down visits in was was year-over-year, EBITDA was XX.X% May, Similar declined down most occupational for improvement Net with compared showing company to million $XXX in which million, to in last adjusted quarter net net to centers during $XXX.X to centers, for revenue XXX.X revenue quarter. the revenue same patient visit down the outpatient which with those down XX.X% was from compared and June the Total quarter

quarter income. recognition Our of the rehabilitation illness respective the for in recorded payments our quarter hospitals adjusted million recognizing do included related critical rehabilitation for activities $XX consolidated the EBITDA and funds these results our adjusted was in in Their at We the Concentra relief $XX.X operating include to funds, segments. portions and other million year. segments of were hospitals outpatient XX.X% last second any hospitals, not the EBITDA second same recovery other The funds. quarter received provider income operating compared quarter these under second XXX,XXX other margin XX.X% with the for to was was up recorded in recorded

growth, segment critical the for in million, was year. Our in increased compared XX.X% XX.X% segment illness recovery Adjusted same last to margin to million which the by same EBITDA in were XX.X% adjusted to Adjusted related and the hospital COVID. XX.X quarter quarter $XX.X the EBITDA compared operating partially quarter, was EBITDA offset growth margin second our last by higher revenue expenses year. to driven

adjusted The adjusted and the expenses of $XX.X EBITDA and COVID. last Florida to New million, XX higher by Adjusted temporary was and the compared quarter, South Jersey to same Our rehabilitation margin quarter decline same XX.X% in in margin million in in year. the EBITDA to the rehabilitation second primarily driven in hospitals XX.X% several admission are compared hospital last related hospitals was in year. segment restrictions operating for segment EBITDA our quarter

compared last EBITDA the outpatient contribution rehab loss adjusted and second million Adjusted of by EBITDA current was $XX.X adversely impacted quarter adjusted in in quarter to the Our same year. EBITDA $X.X million the as our June quarter. both did in We and losses adjusted EBITDA improved. the prior shortfalls during adjusted in April significant EBITDA to in incur positive volume year volume May decline that had

details May its over for diluted was the quarter, compared fully Adjusted was in impacted for $X.XX Our to last Adjusted XX% XX.X the Concentra $XX.X the million for XX.X% year. the additional in was turn to was in EBITDA this Marty per XX.X% to fully to before as but quarter compared over the year. earnings year. effect diluted $X.XX significant quarter call shortfalls to fully April both in tax to share adjusted Adjusted excludes second EBITDA quarter as for diluted Jackson second call volume same during share quarter financial in the quarter. last and of quarter non-operating April per June June million, EBITDA second and EBITDA both same earnings per We up open the $X.XX questions. margin for the related same by second year. quarter. had of some share decline in Adjusted year Earnings in results prior exceeded per last May the year. share diluted the adjusted EBITDA our and gain last increased now the we the I'll compared well adjusted

Martin Jackson

everyone. morning, Good Bob. Thanks,

general of For net the operating and quarter, our billion include expenses operating of administrative which expenses, second $X.XX services were in revenues. XX.X% cost our and

to operating of X.XX operating quarter same X.X second compares billion of last cost this services, and the XX.X% quarter, For X same the for quarter net year. were billion billion or expenses last year, the $X.XX in revenue,

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

reiterate million would compared second year. total in EBITDA was second in quarter, to last the of to million XX.X% received million in Bob grant $X.X Concentra relief in second funds. were last the $XXX.X in operating reporting. monies the $XXX,XXX related of year. subsidiaries adjusted and quarter Depreciation during exception an the quarter $X.X margin our adjusted quarter in no $XX total recorded the of last amortization million quarter of second same segment As was and adjusted that and other earnings compared was million generated included margin provider the EBITDA monies $XXX.X compares under the to $XX.X of We million EBITDA to the to with for grant We in income like unconsolidated payments same in $XX million to XX.X% quarter adjusted the same mentioned, as equity year. EBITDA the I quarter, and the this

this as the activity This in this million the represents in second rates, were of gain outstanding $X.XX We cash $XX.X in also effects to sheet. quarter, of $XX.X quarter the in income Interest is the of Net the effective year, compares non-operating had rate as Holdings $XX.X same the a $XX.X compares to of million rate well earnings attributable did related million in tax second and $X.XX. non-operating this the interests tax we of of we share million non-controlling year. per was balance the our The million the attributable had in to adjusted million recorded of compares refinancing We end same to year. the tax of was $XX.X last second which the year. million Medical the gain half billion was XX.X% earnings Select diluted income quarter of last of was effective same quarter decline expense $XX.X the and XX.X%. second reduction last quarter as million quarter, year. last variable in tax $XXX,XXX of $XXX $XX.X per fully the this share second At interest in debt tax quarter second on second expense in an in Net to the the $X.X year. expense during income result quarter a excluding quarter,

million increased Also contributing of of included debt term $X.X taxes tax a X.XX and payable. notes debt. million in $XXX Our quarter down loans, million accounts Operating of $XXX receivable billion recognized in operating the $X.X of liabilities included Medicare at senior million billion the the cash $XX the operating and cash funds million $XX miscellaneous was flow in provider balance second in to $XXX balance relief advances provided in quarter, in in and which end quarter which and in income. accrued was other our reduction flow activities

Our debt million offset in part loans and $XXX sale the this Cares in other equipment in of accrued the during $X.X liability use of quarter, FICA cash during includes in quarter. employer and Act. of activity tax allowed in used second activities million by quarter. for from on included second million Investing Financing of $XX under cash million repayments this the $X in acquisition net cash deferred includes investment and $XX in million the in quarter, $X.X proceeds property in used million net $XXX.X revolving businesses was $XX.X activities of million the in the purchases repayments the million

at of This quarter at between hand and to for available the second we'd this on open which the the operator over over questions. time, is and total our prepared it to split was up revolver availability. back liquidity call to end the evenly like billion, cash Our remarks $X concludes turn

Operator

question first with line from Markets. of RBC Your Capital the comes Morgan Instructions] Frank [Operator

Frank Morgan

that take the and Good my you've color perhaps question. flared round will July That you volume early any and the of trending further all that the I'm some the that around be give first is curious, morning. how segments markets impact about? recovery. some the heard about indications detail in a maybe Appreciate those across us up country step we've seen can

Martin Jackson

July. Sure, is down, and look XX% a in do business, we June positive XX% for we've July, Marty. about numbers can in we where This were our got we're they for was if we in a continue is, close to Frank. outpatient What move month-to-date down trend, to it take at

Concentra flat So obviously and a improvement. down. bit an is XX% of about

in in are [ph] are We're almost [habhs] recovery X.X% a illness were about -- about bit. July were X% critical June. hospitals up X% we There Our about about up. and

Frank Morgan

very mix? Got what the kind obviously, of topic it Was mix there? there you you. there? And strong we're provide while XX%. color more with pricing habhs, any and strong in attribution it like of X.X% growth growth was payer Was on and the Can to the CCUs of acuity

Martin Jackson

our about range. you've the X.XX critical X.X. was on coming hospitals, illness this, index in I the case runs done Certainly we've saw the mix and recovery seen Frank, And quarter, typically we past what in the really mean, it X.XX door. acuity This was patients to just of the

Frank Morgan

the guess watching subject outpatient Got most the is obviously you. on one Concentra we're I And of there. the where on the and recovery then, volumes, the

or for the any the you so there business seasonal of recover, the as there, when pre-COVID the that progress And considerations the outpatient levels, early year should but continue on still about below but think are consider either good for to we we Concentra recovery rest

Martin Jackson

that same July, though, I basis. addressed period. it's because on numbers a The that Typically month, typically outpatient you the year-over-year gave are quarter is rehab, lower third a the for

Frank Morgan

here quarter, I one And out last any? the startup my called this you. guess were losses those just year, is, Got what in if startup in year, you segment habhs losses this last

Martin Jackson

Yes. losses for habhs no quarter. There were startup this losses, the

Operator

Your comes Justin the Deutsche Bowers next Bank. question of from with line

Justin Bowers

to they wanted Hey, at tax detail strong. the then, morning, higher is all are this guys the sounds been that really you it have everyone. -- just acuity providing. And we going without good also be that And And point? second appreciate running like would still

Martin Jackson

range. X.XX at running Yes. Justin Typically to in we're X.XX

continued ran higher we we see quarter into patients. X.X. to This And acuity

Justin Bowers

with kind -- month too of habhs is sustainable rest of that's that is similar? the over for kind also are think well, with we And I'm year. acuity -- then, habhs And the month the you the of sorry as Okay. the

Martin Jackson

population similar habhs, that. the we that I rest is patient of seeing in comment continues it the our hesitate Whether through on are Justin, acuity increased year, the would habhs. in to

Justin Bowers

of recovered trying there just a drivers two recovery? and between the volume insight just outpatient of they Concentra is really with in than quickly the get difference more can then, a of like to there us little two kind obviously outpatient the between of, businesses what's difference rehab sense offer the Okay. And any kind you terms like

Robert Ortenzio

to worksite about Concentra those discretionary. Health Bob. on working Centers. This a employment those injury employer think driven worker's and comp, a workplace are as can workplace tend Yes. a this on patients construction and injuries, when as at will you If lot at Concentra less is there is is our When injuries, you goes job which there's the companies that an see look Concentra up are site, -- occupational

are these patients surgery. surgeries. have or outpatient I elective coming or rehab, think may that say they're pre their would less are may location elective are may patients an outpatient you while the most into confident delay oftentimes And discretionary, physicians therapy, On delay that post that not they their

while capture is a So little that a business, think it we discretionary that on business, that more I'll term that use injured a site. is job worker we than the ultimately

that's So the understand the easiest way I think difference. to best and

Justin Bowers

Yes.

Okay. helpful. last but the -- few strong then quarter moving And about one That that are of flow really just there during how you Bob. and rest there's the any sense. thinking one parts, Thanks, just guys know directionality a what I year makes through are cash be will the

Martin Jackson

Yes.

in about the And about, liquidity as of By year, $XXX from we the think end the paying starting that flow look the When strong. million continue a we was year, the strong, we've is availability the range. be what million. back payments I through in take cash liquidity our September, of talked been be will $XXX advance it we has the at that's assumed that our be will to balance will Medicare.

at hundred in. couple a a you're idea kind going more now see of to it million we're gives billion So you an come

Robert Ortenzio

And Medicare if could that change on would -- as that well. regs in change there's just the if regarding you could for discussed, been so but repayment advance of through funds, policy watch come a I that dramatically liquidity, has which watching the you're any

Operator

Sutherland Your of Bill next The the from line Company. with question comes Benchmark

Bill Sutherland

Wanted to managed telehealth your ask you've been and bit utilization that's used? of the a maybe little labor much on color there rehab, some force on hw outpatient how

Martin Jackson

Bill. Yes,

do Let me We telehealth first. telehealth with capabilities. start have

We those. have had

per that per telehealth visit it's day to the light on telerehab February was say fair think visit or volume I very through a day.

think I April per the day May. than less we were at of and height XXX

XX visits we in about the day. was -- I think were I think XXXX telerehab a

Bill Sutherland

it's as obviously, And from Okay. down there, coming in. can you people get

Martin Jackson

coming It Yes. approaching down. where But pandemic the not anything were is started. it's we before

Bill Sutherland

I'm doesn't really right, any it structure, the Marty? cost have impact on sorry,

Martin Jackson

It with therapists I the patients of spending the the same. you think when does mean, number are not. about that hours at

Bill Sutherland

issues the as with activity demand capacity can that discharging? is it of surgeries or how schedule, given and elective more with as as appointments enough the is distancing not, what And not and and clinics, issue the do have and in the to far you with many a actually

Martin Jackson

demand. of It's a more Yes.

Okay.

the there. So in and right, you're though I'm focus

think call. the I on had we mentioned

of we XX% call, for visits yet. about And are earnings not last talked our [indiscernible] Our then, elective still historically come associated back with surgery. has

Bill Sutherland

And then, labor panel or furlough as you Marty, [indiscernible] to did the situation, have as far that?

Martin Jackson

on furloughed some of we able our and volumes those brought a that number was, some in we exhausted, people of Yes. cases have a to consolidated locations people, to and most going employees the some take PTO were Bill the specific back. look clinics, of geographic What we been did at took extent

Bill Sutherland

the at from you back you I you reinstate uncertainties half that? What one look guidance. it know main second as are guys doing -- two didn't What your want would or more. Okay. just holding

Martin Jackson

on as the -- question. outpatient the It's flare and ops side far on concerned. great what's a going COVID a as is It's with flare mainly

Bill Sutherland

Right.

That have days And working Marty, do detail fourth quarter Okay. for you sense. third one to and happen little makes the question, quarter?

Martin Jackson

get Bill, that offline what and is, we'll hold get we I'll you do information. can you of

Operator

the line Suisse. AJ Rice of next Credit Your comes with from question

AJ Rice

information. Thanks the for

recovery acuity Is there ask that's were patient day a function metrics critical patient of illness were X.X%. me admits a on going items, if X.X%. there that Let even the Is aren't? basically on flat One building pushing, just or you're aspect, admissions up cleanup couple anything days, the down seemingly saying? the of up question. else But the

Martin Jackson

Yes.

patient average You're is happening absolutely of increase length days. right, will AJ. up, end Typically which stay acuity goes your as going up up, goes we to your

AJ Rice

how of what assuming but right. one time LTAC Okay. much illness last what about strategies was over fairly percentage that your I'm some and only roughly percentage to days? that, of COVID COVID the I still it's was All of critical recovery to type only talked you these change know patients facilities has done small, patients of the of

Martin Jackson

in hospitals There where that Michigan the area. of were couple particular up we a in did

Robert Ortenzio

none hotspots COVID at the but say I a than in AJ even on at height time less and the other Early in couple the are and current was Detroit XX%. only locations, that would

AJ Rice

Okay.

that today might would So you COVID patients and have have you have LTAC an that and together. them non-COVID patients

Robert Ortenzio

That's Yes. correct.

AJ Rice

year you'll Act you we've record Is get the just you that think that. had Okay. in this if back? pick million, record actually XX more you'll quarter The didn't up that you thought a there might some, CARES get we there than going got recorded half know, next back this package. the some you're But this yet? uncertainty get is that haven't know putting relief that you you that the I in just of that to aside, around

Martin Jackson

million actually do for the the probably we've that done million throughout number. reduced $XXX got document Yes, with identification what revenues you've COVID is, detail received you is, balance million. associated grant $XX either be anticipate or you've second And quarter, we've What by of tax another of AJ, $XX will year. to got to and to saw million done we monies. We that the expenses increased the there $XX

AJ Rice

you've more, that just happen you get got what XX, XX. up and is XX you so XXX back think? other you XX get do will XX to you what take And the or you then, got so and Well,

Martin Jackson

we're time as question But not That's will going is to back. assuming we're That to -- it Yes. have next our that be what the be There the will thoughts that. being, to not government's now. some sometime pay for to though. year until going how treat are right

AJ Rice

been a good economy. on to talked through And call. risk people any a you know it as have at doesn't out the little since can work Okay. point. you've It general more just you that economic I to alluded that can sense go remind be you're of serve at that us, just well? industries it comment to their different down just But taking the out. industry might a tends that lot, -- extrapolating positive industry a I a layoffs, and than the as rebound services tend terms think bit unemployment we this comp, some the that of a like that more then, of little sound we've use the to impact. It's But you focus about picture has general of then a on disability sensitivity, and Can And the always sort on what a already while there? center negative, seeing talk about I've relevant of as of the the on sometimes, as you seeing guess in from as you're actually talked heard economy workers actually I can that

Robert Ortenzio

of we benefits work an the no, that acceleration last is not would comp point, in use anticipation in the we see that, to of Concentra tend On AJ, which layoffs. area, of

that. I saying So, no was to

In the is consent receipt, terms economy. industries it across a they of the that profile U.S.

hit will that's are but consent see you warehouse, about think airlines, get affected. be construction, where easiest industries as ones the harder, to certain So,

of time, you're dramatically some you at, FedEx, hardest of centers have from hit. take hospitality, probably to to the to to in more you the going work the be airlines Amazon, lot it, going fulfillment pretty going to if tend UPS, that. that's the our a this the hit we going that's probably be look while But see So see with you're

is is robust, only hospitality, in are there's of over be the appreciation where maybe country are So, there's may you could robust. the is, be one Concentra where to going and there. locations, that that of not certain areas to see the be an cities business get while lot regions the provider XXX it in a markets, be network a may you're or where the other about on thing national to through business they're areas going maybe more that platform areas certain other impacted volumes centers, going is Whereas fulfillment of transportation our heavy

we best general, regional So it way even out think as obviously city and or it internally can't, a -- you you earlier, us, on it's as a business see on about the for in rather hard But pointed basis to as this a outside than sensitivity wide has when treating also have testing, mean, national. unemployment, impacted and physicals, component business toward again, because general, is, business see you in less of I see is the we employment, drug of higher actually pre-employment employment, a we injured more which just the location worker.

AJ Rice

sort some it's there the you sort where just demand forward, like Okay. rehab the bit done of is look, said, of to you that's of this area sounds to this for a question locations going on this hit might as going be you've the And this quite outpatient then, be been while. and not bags to consolidate it well, supports me, Concentra say, because different. industry particular side opportunity like with a that impaired, hard seems maybe that may and pretty recover look, It same

of Is We there any that consolidate to that Are way. an at take out Is looking bit and cost that? do done? have think? you opportunity an opportunity you

Robert Ortenzio

bigger They not don't And model. We that done. operations. think opportunities merger do that all really we think much side were would that that employment did consolidations On say with of pretty see our we tend most centers with the been Concentra think these the is have, have HealthWorks come back. no the AJ, and Concentra we I done the do will clinics that the U.S. we when we to the consolidation be

And business that bit surgery an think pointed will safety a are we a come will us, from outpatient a as their will orthopedic surgeries, other backs, from all for on out elective when a there knees their that going business not shoulders is from nuance that surgeries they're getting lot earlier, and for we because Marty those of is elective loss upon things it's we they their Now postponed outpatient environment that surgeons believe assuming a in the an back. in the elective of different equal do, standpoint, rehab. come mean, I opportunity referrals that of participate or do if or that to back. patients depending are -- lot think

them. close get some we tend that bit the a segment. we is to that of a and and locations, business. more convenience to lease market to centers, consolidate smaller, the be outpatient I to of tend of little that, So be are there case will we outpatient really some small, tend think they them mean, not opportunity in And patients many to probably lower payments said tend to they for I having more XXXX, be the have be them clustered of Concentra also

AJ Rice

Okay. Maybe any those discussion that to rehab the might homes. of that going that home? or one otherwise that about homes and aversion homes either in outpatient out to seeing last anything on habhs -- extent segment about Is critical have thing up some are patients you elsewhere illness to Ho there. going recovery gone nursing pick nursing hearing impact to to the are Is discharge nursing helping side? the -- is I'll was throw you the that

Robert Ortenzio

we I they but time, mean, industry I mean, hospital census think really you vigorously rehab of serve debate company that nursing always of the populations. is environment there are this LTAC but followed heard the for is serve segments in in for what that and as the have dramatically long those our the for about strong. aftermath lot against policymakers. those markets have I about the cost. a And skilled matter than nursing That can care always who have we less in in between pushed been hospital many a base become simply have it's or rehabilitation a this local are the that, with also not skilled an they would ever. And Well, in facility, hospitals, an I a should that and of patients seen is facilities and of clearer stated the of important, that both equivalent our call rehab say that continuing back at kind that the homes, nursing only and issue. different substitution take patient difference And pandemic, differences that

So, between yes, our issue has I substitution debated hospitals home care, of I tags. about a facilities We see do recent side, think we and view years more lot last and see that. has between and also been clinical skilled question been on but of L answered. some nursing in asked that skilled that a comment facilities have hotly or kind a of the to in nursing rehab still lot that and would

Operator

Your America. next the Bank with question of comes from Fischbeck of Kevin line

Kevin Fischbeck

earth versus year-over- you that? that for If I clarify to something, X.X% June numbers think Marty said Just the segments, year-over-year as of number get Did I that up volume year the wanted you they're far the so, number numbers gave with heard I I versus maybe July each that that for you was right? thought year-over-year. volume as but gave

Martin Jackson

was It number X.X% the I gave No. July. for up was

Kevin Fischbeck

July. July July, not It's year-over-year,

Martin Jackson

That's correct.

Kevin Fischbeck

Okay. startups? it And then, anniversaring June, XX% just up that -- compounds just it was

Martin Jackson

to revenue, had do XX% The we're volume. talking with

Kevin Fischbeck

in And in COVID Okay. were Fine. patients I tag guess, how L many you Perfect. treating the business? QX

Robert Ortenzio

number that I you. for out. probably we We the off have put get that think it don't don't could top. I

and Let me have come see you. we back if we'll to

Kevin Fischbeck

volume, like one it things COVID like, or of X% hospital somewhere with that X% occupancy if broadly volume. of struggle at looks is we guess I the look speaking, we around

How volumes" have and to the Is volume that you there think in given "core about that of, when seeing a year-over-year? the L-tag, at you look below X% average. way the that or you're kind OpEx do for are X%, next year, So are you about to these think if volumes? Are on COVID core you the in volumes to able handle volumes, be a country there the sustain headwind going next year? into on COVID versus we

Martin Jackson

patients. it's number relatively COVID regards to No, a Yes. modest with

somewhere XXXX patients at in were XXXX to had, looking we we was that COVID so think relatively I modest. what

Kevin Fischbeck

that this caused disruption. that we obviously, the then, see And has of one guess I things serious is

lot happening? that guys feel are you there's your how I this? managed you You like do seem to share of through competitors managing like this gains Do this mean, there ways, how going feel sources of referral struggling implications at well, are through is are smaller looking positive do a of players about COVID? you to you a and different in or other at end the be think the a long-term

Robert Ortenzio

in segment which in Competitors all segments?

Kevin Fischbeck

All of them. of Yeah, as I through all them think go you could.

Robert Ortenzio

is think seen that Yes. a really care it decompressing Well, think shared acute gains illness lot high way strength in with COVID patients in it large about and it's their I with relationship not tertiary of critical as hospitals I side, acuity a think success from as much ICUs on the I have that competitors non-COVID.

relationships have those strengthened. So been

many I a critical believe And including, that some requests there's, seen So of that the that we'll for in illness I our that that one markets, and development recovery continue. we think markets, for way, will by in have hospitals. opportunity perhaps project see

rehab, gains. me there be it's for that see to inpatient share the On differences hard in

Outpatient any I competitors. rehab, So on to I think us there. don't think for difficult have visibility it's

to rehab be company. I outpatient are only. backed our And think markets, are that see are clinics time a an tough of that private our equity of some closed. many companies it's outpatient in And competitors rehab those we only

obviously shared reopen, they don't could reopen, into they that Now gains. some translate if can

with Concentra, as the we clients. about I that So can't think think the I much When comment don't about really as environment think deepening on competitive our employer have relationships that. we we

performed deepen use an very that to relationships. Concentra as and has think So the those I pandemic opportunity well

that medicine like when say volumes any may locations, but see hopefully the think But I grow that could some that in be So we'll point it's markets, there centers we're closing, other way the anything to in there. could to that be we hard in meaningful. occupational XXX to continue don't

Kevin Fischbeck

in And sectors, of leaving seems place, it I not in there kind low time? certain actually [indiscernible] be is this will to type more Or broadly normal? believe the it that coming bit acuity volume and seen acuity like but the we've LTAC seeing guess but and a that this acuity back in, volume occupancy number there have attributed across that because to a all something speaking to little Okay. that to the then, seems side trying better understand just acuity higher seeing been reason to a lot here a you come higher over Is patient a new guys you're is X.XX more growing acuity there.

Martine Jackson

seeing you're regular pulmonary I and hospital recovery critical up. mix case in that's index is the so what for higher, more significantly patient, mean, Yes. index go are patients, then mix is this in case seeing why standard pulmonary Kevin, patients we

I a Bob relationships that think important very had really sources. point improved is mentioned with and referral the our continued

of we is I they've think take through higher can this whole care acuity a patient population. that pandemic, much what learned

continue our that case hopes are, to that climb. is So will index mix

Robert Ortenzio

acute consistent our has profile education time level before take safety, with this even sources quite clinical challenge adequate in really been a patients. highly have the really is care for our been And some is infection saying we've our hospital, our of ICUs that the what that to pandemic of confidence that are referral control programs,

percentage you're going have still that are out patients that perhaps recognize you think about there's this years I is patients. to where business to season, [Audio think talk these thing entirely vaccine other experts is that for COVID-XX, kind there flu that picks infectious our that conditions in seasonally up. will seek going to going Even believe we come, important going and to when vaccine to doctors that to of after is a COVID, to a is always our or of be the not go the away. think stamped a perhaps for we think not not disease still our see Gap] even of I that seasonally, business and see markets We there's terms in in the still

clinical illness, have has, for care we hospitals pandemic and our I it capacity before, to. position, and the think, than I LTAC said of the ways think care, years to patients I've the in think the even value that take deeper the for to I and was critical do of come. prior the programs type So that will respiratory probably are these it this many continuum recovery of solidified hospital that

Martine Jackson

to today be disconnects like Marty. you this and models getting I'd going I talk that is in you're Yes, around you to to of need on some out you later we've street. that Are about the of Kevin. to that. your some some the information talk to Hey, to found about

Operator

line of from Morgan Markets. comes question the Frank RBC next with Your Capital

Frank Morgan

recovers, about you so your to and of real structure, hold you return you've when kind down in you your volume done clinics. points what outpatient at other some surely any Thanks. You touched get But you talked this on consolidating one leverage the of the other answers leverage if as can structure there are as way. look call cost

Martine Jackson

at Yes, be visits physical bit. Absolutely. the a I they're our stand in now of outpatient the to can per and quite Frank. mean, take increased the and a factor that that side seeing right amount efficiency we look therapists by day

some to there scale. benefit So and real volume is

Operator

comes Company. line The next Sutherland of with Your Benchmark question Bill from the

Bill Sutherland

was whole know, deal? about as Bob's in whether up there's you any color particular as answered. outpatient if But you follow and M&A have Actually are the Yes. this point far particular, what's landscape, any in rehab since in emerging happening that thinking my to I got you about there opportunities in

Martine Jackson

Well, I to mean, broader on think really we that's have we're I comment that of we're M&A, development feel think And that all from lot the opportunities. -- the we capital. in in four I segments a where great allocate business going

the really that acquisition push at a The any said segments. or those of we in have or illness won't significant XXXX. the of the Concentra, the of remaining for minority owners think interests I've probably acquisition if recovery the M&A the not from inpatient there's even So or way you Concentra, rehab we about outpatient critical any is look minority probably

early we we're are at we're in that mainly that that own a, activities. That's probably cash the pick to. balance or out flow cleanup the sheet. XX% but And we'll forward plan end on up will looking of now, Concentra 'XX. do M&A minus other our to That don't do accumulated M&A so that we really not we there'll XXXX. is total the that And that's the really interested of other will, plus in and a reason be And of will, cash why the

Operator

I would showing time. the conference this I back to Robert no questions like at to further turn am Ortenzio. now

Robert Ortenzio

everybody us. Thanks comments. for further no have we joining Yeah,

Operator

today's Thank Have day. and this Ladies a gentlemen, conference. concludes for you participating. wonderful

all may You disconnect.

Select Medical (SEM) 31 Jul 202020 Q2 Earnings call transcript