SEM - Earnings call transcript Q4 2021 | 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 Fourth Quarter and Full Year 2021 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 the 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

conference Prior morning, Thank great quarter, our quarter Medical's earnings Select you, I for and to year. a and entire to for everyone. year for thank adjust to operator. clinicians Good for would Thanks the like joining all XXXX, all on COVID testimony providing Their to details us to hard for full call throughout the XXXX. and of work adaptability professionalism. their operators team's the and efforts quarter variance changing and this our fourth ability is their

for in growth XX%. the Our nicely all revenues revenue of with for our grew close business quarter aggregate and year, segments, the over four X% to

QX labor experienced of his more our critical comments. also substantial terms rates utilization, Jackson in Martin increases these hospitals. pressure wage will primarily in and we cover in illness in nursing agency, in However, detail recovery

done business have volume and we will data revenue, the each we release earnings This in our from monthly our statistics compared and current to our XXXX. point monthly over press outlined the a results year, As of filing. information filings, segment occupancy segments including business the prior provide past public pandemic for have to

fourth income does wanted and impact to operating payments. In the million recorded that this note related other for the $XX the continue full full XXXX grant these Concentra million rehabilitation COVID-XX Provider of to and not of it funds. recovery $XX The and the million I any to quarter, related to for company in information, the in billion, for in $X rehabilitation to include for insight recognition and Relief for XXXX $XX include also fourth year critical will $X million EBITDA these to The financial year. quarter, million segments the same provides Fund in include funds. outpatient we $XXX results fourth adjusted Total payments. the We segment the hospitals, to our the fourth EBITDA other hospitals, related operating year increase these $X.XX prior XXXX the as do long illness quarter XXXX, we and year quarter revenue compared meaningful as income was million full a X.X% in of company's adjusted recorded performance. quarter

$X.X patient patient the case XXX,XXX fourth Hospitals prior increased up as fourth million in compared For in in year, per to prior to quarter year. the were quarter X.X% billion X.XX patient the quarter index quarter mix the $XXX prior billion compared increased same Revenue full company million day Patient days. to year, to segment days quarter $X,XXX the X.X% to year. in increased over last to Net total same revenue year. Recovery in day X.X% same Illness Critical X.XX quarter the fourth revenue the was per $X.X with to $XXX XX.X% compared the our in compared in

patient XX X.X% our our Patient per in in up X.X% were Illness segment almost prior days revenue revenue over the compared to year, Rehabilitation in billion Recovery year, revenue billion $X.X the X.X% day For up year. Critical Revenue to to prior to prior Hospital X.X% $X.X the patient million and $XXX Patient and million the to year. quarter. the increased - increased compared compared days Hospital to quarter fourth X.X% day segment the same increased in XX.X% per same in compared $X,XXX the year. fourth net $XXX quarter quarter per day increased to prior were in

segment rate prior year, increases. revenue to Patient million million compared volume and $XXX XX.X% Rehabilitation compared in X.X% quarter increased the revenue day up quarter to increased $XXX quarter. in by year, the over to visits X.X% prior our For quarter year. to $XXX prior year. were in Outpatient were Revenue the X.X% million in per prior to in segment same fourth increased compared $XXX Rehab days Patient year, XX.X%, the the fourth in million up as the both our to visits million with X.X patient the same Hospital driven compared

$XXX Our quarter. revenue fourth per the visit in was

the to prior For $X.XX the Rehab increased $XXX million segment our million to visits almost Outpatient year. in up for visits compared XX.X% X.X were over with year. XX.X% year, revenue Patient the billion in

segment $XXX full million Concentra year. million Our for net same year. in the the revenue for increased $XXX in quarter to Revenue quarter the visit fourth our $XXX X% to per was compared prior

up For health quarter. fourth were centers in visits X.X% centers, the occupational $XXX the over visits million in visit patient quarter. in fourth with Revenue X was per the the

$X.X XX.X% For over prior revenue billion to the the year, compared Concentra billion year. at increased to in $X.X

with visit $XXX $XXX.X the XX prior per visits adjusted over Revenue quarter For company for the the was for the patient Total quarter the XX.X%, increased compared fourth year. million to centers $XXX.X same in centers, million the year. year. health EBITDA occupational million was for visits in

adjusted X.X% margin the was to EBITDA for for consolidated same quarter prior the compared of Our year. quarter fourth XX.X%

compared adjusted in company to For million prior the XX.X% full $XXX.X increased the million year, to EBITDA year. total $XXX.X

in EBITDA XX.X% adjusted to compared for year. year XX.X% prior was margin the Our the consolidated

million for the Funds adjusted prior year. Relief results As income $XX full to grant previously, year mentioned million included in $XXX Provider the compared EBITDA of

segment margin compared quarter Recovery Illness $XX to fourth in by year. prior for agency of labor quarter same in was EBITDA XX% X.X% in Our to due adjusted in quarter was the million million Segment EBITDA the $XX.X this fourth Adjusted prior the cost same reduction driven to primarily compared quarter for was Hospital Critical The increases staffing. the utilization year. EBITDA

full was primarily the related year year, of increased for EBITDA Recovery XX.X% the Illness compared $XXX.X margin compared segment Critical EBITDA to throughout was year. the million The is labor For prior year. segment year. Hospitals to in costs EBITDA the to this reduction the million in full adjusted $XXX XX.X% Adjusted for prior

prior $XX.X million segment in the quarter fourth Hospital the million XX.X% the same XX.X% fourth segment EBITDA was Rehabilitation in Hospital to compared quarter was Our same for year. prior EBITDA in quarter year. Rehab adjusted margin to quarter Adjusted the for the compared $XX.X

agency We pressures rehabilitation in also our experienced during hospitals nurse QX.

XX.X% For for the year. full XX.X% year, was $XXX.X EBITDA the $XXX.X Hospital year Rehabilitation year. in to segment segment compared for prior compared this EBITDA million prior the adjusted margin was million to in the Adjusted

adjusted quarter the in compared Adjusted the margin same EBITDA XX.X% Outpatient $XX.X the was for quarter $XX.X million to X.X% the prior in to quarter quarter fourth prior Rehab Our same in year. segment fourth million year. EBITDA compared was

was EBITDA For was was compared Rehab the XX.X% year compared to X.X% $XX.X XX.X% the quarter full $XXX.X full the for million $XX.X same in $XX.X EBITDA for the year. quarter segment Outpatient the year. year, in in the quarter million the EBITDA prior the year. in in fourth compared margin prior Concentra Adjusted adjusted Adjusted compared prior million XX.X% prior quarter to EBITDA same to year. was to margin adjusted million fourth

per share prior to the per year. to in same year. diluted in XX.X% to was the million year share was in Earnings quarter XX.X% compared compared the EBITDA in year, prior was year. Adjusted $XXX.X For $X.XX fourth Concentra $X.XX the fully for prior the EBITDA margin the quarter $XXX.X full million full adjusted compared

additional I'll per share point, the effects. $X.XX we fully share earnings financial tax last per to their non-operating the prior details, turn related For call some for to $X.XX, excluding year call Adjusted year, Martin for were diluted this diluted year. At open full up questions. the over compared earnings per before $X.XX fully share and was in gains the Jackson

Martin Jackson

and everyone. morning, Thanks, Rob, good

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

driver of For the billion labor The prior our is quarter our Recovery of Critical and particularly revenues. expenses increased XX.X% operating represented were due expenses increases Illness to year, in $X.XX costs, in hospitals. our same primary operating

of illness an utilization nurse seen in also increase rates hospitals. our and agency QX, a doubling have We recovery critical in nursing agency in nearly

of job operating as operators per other controlling per and most costs, day Our have a patient visit basis. on decreased done have a good

in to we continue referral calls, mentioned our us labor even patients is have increased to sent our strategy have by illness hospital partners, - recovery though complex previous previous critically costs to earnings substantially. critical admit As our

acceptance We have believe, these developed referrals over strong continued provide referral of will the for we strong relationships relations during pandemic, this and term. long

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

year this As a operating prior year. XX.X% expenses and both were revenue, the percent in of

same quarter Cost quarter. expenses to our in QX of in year. increases the section, mentioned increased compares throughout costs $X.X our billion are of the in I for operating of $X.XX billion services the were This the fourth majority labor As result year. the prior expense

to a fourth XX.X% were percent XX.X% cost quarter of revenue, for compared in same services the year. prior the As of quarter

were For $X.X This $X.X compares the in billion full the prior billion. services year. year, cost of to

a fourth quarter in the was prior the As the percentage fourth in the year both quarter quarter. compares prior of revenue, same year year. G&A for in prior as G&A XX.X% of this This services revenue $XX.X the same million year and percent full this was to were both expense million of X.X% $XX cost a year. quarter and year.

for X.X% full This G&A of This million $XXX year. a the the year. prior prior percent X.X% year. compares full $XXX the G&A million. year, the in For to compares expense was to as was revenue for

As fourth $XXX.X EBITDA This and margin Rob XX.X% X.X% million, EBITDA adjusted quarter. adjusted and quarter was same the compares the EBITDA mentioned, EBITDA adjusted was total million in adjusted prior to for margins year. $XXX.X of

$XXX.X $XXX.X total year. the Depreciation quarter EBITDA to XX.X% total million the was of year, in full and million, This amortization margin quarter. adjusted compares an adjusted the This margin adjusted For same $XX.X in compares prior of the EBITDA fourth and EBITDA year. XX.X%. million prior EBITDA and to in adjusted $XX.X million was was

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

and in million. full prior the $XX.X year. were $XX.X million earnings the For This to compares year, equity

We in the a fourth $XXX,XXX also quarter year. fourth the last had and loss million of of quarter in $X.X gain non-operating year, a nonoperating this

$XX.X million we year, the in million same million gain Interest full and prior in quarter. the to non-operating expense This year. of was the For million of $XX.X year. gain $XX.X fourth quarter non-operating compares last $X.X had

recorded $XXX,XXX fourth year. the in quarter interest We this of also income

This year, interest income million. full tax year. income compares expense also this expense fourth We've income benefit and of prior million in recorded We year. the the quarter an interest to same quarter in of $XXX For recorded million the in million $XX.X the in tax $XXX was $X.X year, year. $X.X this prior million

of interests expense Net income year. million, million, which quarter tax attributable For in represents the tax the of of effective $XXX.X expense income full quarter. tax year, XX.X% rate were This income prior of rate effective to $XX.X year. non-controlling an prior the to million an compared in the we in fourth $XX.X million to recorded tax XX.X% same $XXX.X compares and

net $XX.X $XX.X $XX.X million compares sheet. quarter, For the the cash Select in non-controlling attributable fully fourth At full Holdings $X.X year, fully $X.XX. Net on year, year. per debt in the diluted Medical prior billion income income Net was to for million. of million earnings balance and outstanding, million This of Medical were to of and had was were to full was $X.XX. per end share to share the Select the income diluted attributable attributable interests $XXX.X year, we $XX the the million Holdings earnings

at million senior in $XXX senior for X.XX% million year loans, notes, term secured $X.X balance We in $X.X with revolving in leverage $XX end net ended of our X.XXx. of agreement billion of included year debt the other debt. miscellaneous Our loans, credit and the billion the

cash activities repayment of operating For of advances This and includes $XX.X quarter, the of million. Medicare - payroll million million flow. employer of fourth used $XX.X deferred tax employment $XX.X

to $XX.X of We this repaid by expect the million Medicare April year. of advances of be remaining the balance

compares the the Healthcare investment the of in Financing and fourth This was activities acquisition the XX sales of equipment, in outstanding, quarter, the in used activities Investing now to days quarter, or million membership which over and Acuity voting million including quarter. and days $XXX.X This XX during includes to activities includes $XX.X end used of the end the days purchase acquisition quarter. property days and DSO, cash $XXX in at at the in own Our interest. this million of last purchases end year. interest third $XX Concentra, XXX% in of of This fourth the the quarter. of year. cash we $XX million million XX at of

to in after million Medicare year. million year, advances, repayment of proceeds the million $XXX.X activities of year. million $XX.X provided for the the cash repayment activities of payroll used This $XXX This activities million from includes equipment, asset and which and of was in taxes. $XXX over of the in $XXX the year. and part purchases cash of million was $XXX.X $XXX.X flow, investment used activities for in the close million the of property deferred operating and Financing For full offset by in million the acquisition during sales $XX cash Investing full full for year.

the of the Concentra for for quarter, of membership cost year X.XX for The a cash mentioned, of company its dividends XXX,XXX million I this a year. in of total its million fourth fourth shareholders terms under shares in the As common paid interest $XX.X program. the to fourth full purchased $XX.X over million for common authorized also and in and of the total The cost repurchase included million shares quarter. over company stock, quarter, $XXX of during $XX.X million repurchased the million $XX.X board

higher-than-expected due increased uncertainties labor this business the for costs we staff, are use our significant for of agency clinical only resulting issuing XXXX. from time Given outlook revenue to at

in of to $X.XX expect revenue be range full for XXXX. to year $X.X the of billion We the billion

through to to previously the We for rate X% XXXX compound revenue in also growth we which only, target annual are for XXXX. our X% of reaffirming X-year issued range expect be

to per stabilizes. when climate year. business time, all earnings common capital our to back our share labor expenditure our to the answer to remarks. the be do for in we to the $XXX readdress turn for range concludes growth annual target this million adjusted $XXX it of million and to EBITDA operator this This We like questions. the expect would And plan prepared and We at outlook compound rates

Operator

will question question. [Operator line your Please Instructions] with Our Bowers of Bank. Deutsche first come with the Justin go ahead from

Justin Bowers

in just some So kind like a maybe labor isolated then, talk doing issues about well? at isolated fairly margin other think And little just as in that? on illness, the other compression you the do any segments to the the you Is sounds seeing well. but withdrawal. quarter point? bit labor - of - in you some as of are critical are segments philosophy we see behind Can the the some Or it issues LTAC this it's the - did to

Martin Jackson

One - provide So of. that provided have with, we feel the basically that is, we have comfortable guidance provided, two we we when guidance, questions provide we Typically, we here. Justin, that knowledge we guidance

critical hospital don't in be on issues numbers, of we're would good we have ways - it at The the variation, to and just looking our benefits be. quarter, several we a providing not to to It our unfortunate knowledge if anyone revenue feel percentage XX% large. recovery or in going market. guidance what as were labor very our we We given the the And that did, XX%. good wouldn't macroeconomic in so past typically is, have revenue just comfort. large be at do just any sight illness give have would range. to comfortable spread very on, in we're historical you the thing is give And we This

strong. provide in the We'll purposes, throughout that see And, this changes at able that the which see for in be time. revenue is So of we the as we year to - we balance labor clarity point provided go hope and line, to market. we feel on in changes very we

question, could you Your Justin? that, repeat second

Justin Bowers

in of labor anything you're kind degree, well? LTAC, if you're or was the lower what little to rehab seeing the it It if are isolated anything in or seeing as just issues - health as well? Yes, in to came there, some Concentra were and segments margins in and other outpatient did like around a - look if

Martin Jackson

Yes. Got it.

Justin Bowers

on just any you segments are in basis, And like anticipating more directionally? XXXX, I margin importantly, contraction those a guess, you are for go-forward

Martin Jackson

Yes.

in illness As segments, hospitals. and labor critical in far, the area. cost That's predominantly recovery far largest business the it's the our as by

of to million some and million, where rehab we in did of costs. the in our Now, the clinics, our the many quarter, close associated was - hospitals, therapist. costs, to associated have $X clinics one end use we our in at some $X those did We because with we only And impact impact had we in agency where fourth that neighborhood rehab we had see the outpatient see of call-offs. on to the COVID of some had

million that they was someone dollars. really visits, was either, had had the But had couple was So a that and it that patients. COVID quarantine missed COVID contact with of or we - had again, because

We in February. So that it a XX is a December. saw was spike January, We in to down in that of impact. XX day type really continue significantly very saw spike and

Justin Bowers

Okay.

So CCU largely isolated sounds like and other just seem - nurses. with be to it then the in to and And CapEx. LTAC control. ICU Things the segments okay, on

You've but just going? you of XXXX is refresh us can CapEx put development the there, out plans where on and is number - the that a kind for

Martin Jackson

million the million coming bit. feel Yes. development. CapEx. of But The projects And extent a that range. million right this is may The is in that to go $XXX concerned. up $XXX we that to in maintenance - $XXX $XXX as have far balance majority in is really we year, CapEx as now, We're in comfortable additional development million that the CapEx little to

Operator

come with line your Kevin America. Fischbeck with ahead go of the will question question. from Bank Please next of Your

Kevin Fischbeck

guess to assumptions for I each Has margin previous the minute. guidance more a business right guess guidance? margin term your those for line. Wanted some go you lines I on uncertainty all? view business what it the changed target that's had at a be your the Or is profit about to near just back pull to would the for guidance causing

Robert Ortenzio

This good. of guidance And - I now, longer-term is the that if guidance very in those critical think, the Kevin. Yes, are we demand those We margins expectations illness some the quarters, at on a three you next marketplace. for that four even in business and recovery hospitals, the nurses our near the look take segments, are in see equilibrium couple - in of it of supply think that we'll term. is think

note that, post-acute, I to and that in add-on our nurses. acute not think at important that Select, the getting hospitals unfortunately, XX% for ICU care CCU compete puts it's with a at we the and being for And us disadvantage. Medicare, we're

So, we us, to think pretty we expires, that adjust will market that once and that helpful think see add-on be rapidly. the XX%

Kevin Fischbeck

Okay.

So it's the market market just guidance? not LTAC business causing, and in profit really labor we uncertainty that's of labor I guess, call certainty the of

Robert Ortenzio

it's I'd hearing not that's Yes. you that it's I first say it. this is the not accurate. - And time - know something you're

So our recovery and it's primarily in nurses. division, critical is - really it illness hospital is it

Now, - weeks, of trajectory COVID segments over we had back that as margins the if the been which of Martin the think couple go to call-offs, downward see all continues to I did last it has be business that our and in that subside, some we've on mentioned, we'll previously. have you'll

Kevin Fischbeck

guess remains add-on Like are management I elevated from it more That's or if that COVID of help normalizing? broadly And going getting side the create or add-on the there else deciding like really market Okay. XX% that away. improvement? is Are anything and more some that there do rate about or to mentioned the a is I any a things like from hospitals guess, Or you helpful. can kind extended? levers, other COVID side for you

Robert Ortenzio

things going money. There's we they're do, but that to cost Well, can yes.

nurses, there don't things of to a do - see we costs that. associated be those mentioned keep to continuation to can yes, to a things you're we to going of COVID, but would can that going will - saw you're resurgence be the in you so things of attract you that with get we that. that fourth probably But in and we mean, - see quarter. there's similar going So do, what what I expect

Kevin Fischbeck

And talking companies like or guess, should lot helpful. think anything I that. I the XXXX That's of Medicare Okay. better rate a about update how a see are like

way there So 'XX a is there it? really from to in Like reflect some help side? about in be on going the think is might think reason rate the XXXX? Or it's that to there that to rate increase not the

Robert Ortenzio

Kevin, Yes, think I that's fair.

going We to I to increases for basket increases. the the Medicare. think increases in see the that see you're extent see that in expect we inflationary that, to would our basket in expenses,

Kevin Fischbeck

It the at last And like in seems kind January. started peaked of Okay. maybe just to end COVID then December question. and spike of

QX it be the QX? saw you'll to, bracing Or actually So in for headwind cost as something in a should in in basically similar first we be we be is able QX LTACs?

Robert Ortenzio

Yes, Kevin.

think should see you expect to that. I

seen down Now will in significantly come February. we saw in that it certainly we we've that, say January, month of the

see So spike, there's see But in a did I you think, the no and trend impact long I think we timeframe. February between significant a other January should as downward March. as

Operator

will line Please your Next Sutherland Bill with Company. of question ahead Benchmark from go the question. with come

William Sutherland

March. revenue elevated Marty, labor - So simply the the on the referencing total LTAC, this said were improving compensation to still to the January, Well, referring that very cost? month one into in were mean in was same. it's I it costs you just you you - when trend, just

Martin Jackson

percentage is When cost, - saw of the labor Bill. purely really in gave that the focused wages It just XX%, revenue the and I a benefits cost, on labor QX. was So and spike numbers as salaries, it of we

William Sutherland

very the it's - January that in much February. number was then And QX like to you're for then so number, and improve starting saying the

Martin Jackson

the and that to see in improvements seeing February expect are March. in We are saying, we timeframe

William Sutherland

earlier XXXX? remember the I'm elevated margins trying it what to in Was were.

Martin Jackson

first quarter. 'XX. and to in dropped It QX. can million That to in was $XXX average the that million, $XXX the $XXX down million agency that Not in about quarter was then tell $XXX rates saw about second in we QX, you I of the third extent be $XXX to exact. the and to - on million

it So we saw downwards, spike then QX. in this and we trending saw big

William Sutherland

pretty nationwide that's - interesting. that much And was

Martin Jackson

Well, critical recovery that was illness across all hospitals. of our

William Sutherland

Yes.

the was Did the And Okay. the digits mid-single it up your into peak? quarantine get - what like rate? at

Martin Jackson

quarantine? it mean. The - I No, was

Robert Ortenzio

talking or company-wide division? - you specific about for Are a

William Sutherland

kind Well, curious by were I'm some It just both X% it you thinking how I'm of impacted X% that. companies. yes, - will was be - or for

Martin Jackson

No. had It was double it on of It - handle digit, was or was outpatient, it mean the Bill. a XX% Concentra, for inpatient rehab. two I range in it. north

William Sutherland

Switching for Okay. gears. Last cash. question is on priorities just your

is how and cash Now Concentra we return that shareholders? the priorities your purchase going complete, should to cash about are think what - on how forward to

Robert Ortenzio

I Well, say that's those want would that, consistent that I be I be priorities plan could say always continue is that been be opportunistic. a Marty not priority and abated. to our we to will pretty the that shifting. have would dividend.

the in We constantly then, the at, rehab, illness development at outpatient projects the inpatient as projects repayment we're side buybacks. And and have business. and we some area, looking development obviously of or debt that stock be Concentra well projects looking smaller on some the critical as M&A will

monitoring I the we the the where best will want are. real in above on the mean, I is So, of all of time - in be to question. all But I don't time evasive think table. opportunities the we're

can change. So - they and

William Sutherland

set without to the reason X, priority there's I just X, circumstances. understand no list X, X, a

Robert Ortenzio

top being or opportunity. and could something M&A else, as or stock the any At be compelling, rise month, given opportunities that to Right. any opportunity, time, at an given some

Operator

go the of from Suisse. A.J. come will question question. with line with next your ahead Your Please Rice Credit

A.J. Rice

questions couple a maybe. Just of

potentially Is think it accretive or the now. it's the as fair has is lot it - big over sense year? that last twice I On bought potentially but $X.XX think the this purchase. accretive. because Concentra $X.XX, to about twice half it you one the last about purchased was, the is year about as know stake as as fair year was a I much as buying - over little that ago, a ago you're stake I know as was January a original And about year, a changed much, 'XX,

Robert Ortenzio

you're A.J. - that's mean I ballpark, Yes. the in

A.J. Rice

I because anything of capital But mentioned on own you couldn't business pursue And a XXX Okay. your there and you about some is you - the XXX% just of priorities. mean, deployment unless I Concentra know it. about

initiatives forward move with some way? incremental more or little rapidly, bit in You'll move a

Robert Ortenzio

joint partners, one-off we I they going so. that don't development. minority and mean, about initiatives No, were right it an we've a with we'll we we them some would on the the now. on to they cutting-edge so to Concentra employer more when XXX%. think to do owned or we acquisitions, I think venture thought think med Services, - out comp And centers, for stuff way some deploy on same we have I put business good the some do I our the that I think some think announcement continue do in about way allocated of operating the I and two-off We'll when mean was capital work some for the capital business that. continue to

projects think good we But as time minority cash which I we that, well. they've use to de during the do think much we partners. accelerated a that's pushing novo as Concentra de were some that of novos had some not

the So some small was de some partners. Concentra strategic minority I their with of and which with investments, way buyout last to consistent novos, run the prior continue acquisitions, the is think, very

A.J. Rice

care and parameters out into some of guidance. from back some us in? maybe Okay. was of another moderates do that, if - revenue illness you of assumptions around giving patients assumed you ICUs wonder you're I Can Is facility your guidance that? of type levels, about - you a sense obviously, a quicker Where and any see the business? Concentra? your baked sort even little And benefiting hospitals rehab sort you but to - acute do keep of facilities. in give us give you have you of were or same would that what Have you outpatient understand bit? critical expense question giving COVID then comparison? are discharges And terms critical Where talking probably to try And it little see the pre-pandemic that, not access better a I

Robert Ortenzio

Sure, A.J.

critical start the me recovery Let with hospitals. illness

referral being seen index yet, We our occupancy does case this in very COVID reduction we're with we've have relationships reduction patients strong. with hospitals. strong, is very up. and that only talked that seen a sources strong our admitted pleased in we've are those but And mix COVID remains one to of remains - is, not occupancy that about substantial the patients, And things

we we is So we think as really occurring terrific - future, event into the a believe that that's is look that, really it there. that

and venture the outpatient rehab the and grow even and cases, above to a certainly, with inpatient looks side, continue the good I to of rehab. most strongly, joint there On too, regards we're partners. to growth pre-pandemic on very in pipeline think continues areas, basis, in That both and on well we opportunities were nice see where Concentra those the on we

A.J. Rice

then thing? you for rate remind highlight just Okay. has of Medicare critical is payments the if half you else the might quarterly from sequestration with been off things, anything kind away of and illness we can of just - the final back benefit go guess, us I two year emergency that should run Maybe in the year, the that site-neutral one the what thing. facilities, public in the the those - and Obviously, benefit. there's around rolls of there second half some Can health the for benefit that that

Robert Ortenzio

comment don't Well, on the that, say Marty change, any the expect site-neutral change. I'll can we sequestration. on

that highly take And believers We to patients, the to neutral be a from be benefit criteria the industry reimbursement the have position want that. opposed the return criteria LTAC emergency, full not the that patients to reimbursement. to segment long extending a right reduced patients patients. to We've acute time site-neutral site been have supporting much to we're back to and takes - we more the higher utilized exception we'd to and after public to

comment let that. your for sequestration on So I'll question, Marty

Martin Jackson

for not sequestration we does back the in year that A.J. Yes, million $XX at half an When take a that, to extent the that headwind the continue, represents us. about look of

A.J. Rice

quarter? per full the for or that Is second half

Martin Jackson

half. second full the For

Operator

question line question. Ben the Your go will Capital. come with with next Hendricks your of ahead Please from RBC

Michael Murray

testing looks course is and Murray of really the Ben. the on decelerated year. quarter, It revenues Michael screening This like during Concentra's the for over and

with could general give rapid And of costs? for at you how this as we look us cadence and outlook the the do environment for a current view Given XXXX? segment tests, you screening sense testing year-over-year

Martin Jackson

to EBITDA of those 'XX. regards end And anticipate from With anticipated revenue amount the of the yes, the screening, into that certainly, we decrease activities. don't would 'XX, coming and going towards same in we

- second repeat as far As could the you question?

Michael Murray

you just could through year that revenues declining given the COVID with us revenue but help year-over-year comps the testing Just decreased? cadence as and wanes, source, also

Robert Ortenzio

the Yes. and I mean very think I doing testing. those good job a with Concentra associated screening dollars replacing is

that in Concentra I would revenue anticipate a 'XX. in So we'd for see still growth

Operator

follow-up the a We Bowers do Please Justin have line Bank. from of with ahead. go Deutsche

Justin Bowers

year, the at like - wanted well? kind terms mix just up than on commentary and of XQ of earlier being question LTAC patients that the And year, I was throughout COVID maybe the up COVID of - of and being when in case or sequentially. It look what lower I XQ Acuity in tell as you index and was up that to you in patients? mix follow in was in then, your us the sounds was like XQ can the mix just your patients down. on A.J.'s

Robert Ortenzio

X.X index we've The in case QX Justin. up Yes, X.XX. think to I mix range. been in And was that

it the With fourth So admissions three first and to north through up quarters, was of it's COVID, a of yes, nicely. bit it XX%, quarter, was X%. regards the about with patients little

Justin Bowers

then modeling quick one. a And just Okay.

level basis? - that on be Concentra the owned, thinking I we a just about it help of models. would NCI - wholly now of what's the everyone go-forward that think that's should what kind Now with

Martin Jackson

Yes.

Justin, we're to to going that on back have one. to get you

don't closer as what don't - exact I - for you to has we of as if that acquired more think I Yes. I come two you. we number you know, NCI with the have be, anticipate past we over and don't the years, have more will - mean, but that mind Concentra

Operator

questions the would now over Ortenzio. to time, this Mr. call in further at queue to no With I back like turn

Robert Ortenzio

to you and everyone, again joining look next Thanks, you, operator. Thank we for quarter. updating us, forward

Operator

you your this conference. gentlemen, wonderful concludes today's and for and day. have Thank participation, a Ladies

disconnect. may You all

Select Medical (SEM) 25 Feb 222021 Q4 Earnings call transcript