SEM - Earnings call transcript Q2 2022 | 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 2022 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. circumstances based today, information no and update statements are of to obligation statements these Medical Select the as forward-looking on available the management to These change. company assumes turn At this conference over to the time, Mr. call will I Ortenzio. Robert

Robert Ortenzio

morning, second our you, the have joining us call of presented half company years XXXX. colleagues. The numerous Thanks for Thank everyone. for for Medical and Select our Good earnings and challenges operator. quarter for past two

more accomplishments in extreme focus hopefully back employees. the pandemic, recruiting, of the of we're our impacts As has retention end the and of on been valuing the our

investment quarter, efforts, full experience which to progress time in have to our led The an reaches in our level. of upturn return to an result education costs in We positions, in these This has clinical we hiring our resulted once staff a as started key agency a RNs. trends and increase utilization costs for anticipate orientation of normalized approximate will hires. new has historical namely

hospitals and direction has optimism comments. pleased the that have year. its second recovery will his reduced News many World in provide quarter Jackson declined news, on I'm which Marty our utilization. some stability particularly progressed, as division, expenses labor labor best in the we data released with illness created but result gained clinical to of optimistic our cautiously hospital continue are will granular supporting end Report to the you our The see costs, other have in annual rates and critical of our the agency by since headwinds, both traction clinical we US will We nine past list. months In more have improvements, predictability and share in of labor

three Baylor and for for four, for partner number White and are Rehabilitation XX, in ranked the are among XXXX. XX, our Ohio the rehabilitation One Scott in Emory Health XXXX, Rehabilitation, number Kessler nation's of among XX, owned Institute in and has White best Dallas, inpatient number Scott hospitals row wholly They of our year at Atlanta Institute hospitals marks been Rehabilitation in and that Ohio. Dallas, This best year Emory, Columbus, Baylor second nation's a consecutive rehabilitation, Hospital for the number and and OhioHealth. for the the Kessler named Institute Rehabilitation XXth

and call continuing our For of with normally each quarter, in release The we was was XX-Q provide quarter last and highlights experienced of am increase earnings year to that the provided through X.X% in in continuing while that my segments. over labor this prior night details business my our the challenges. introduced today, comments available an the navigate Form revenue provides we Overall, format I growth the I in with financial more are commentary four which will first on provide on remarks. only

total in quarter, adjusted the $XXX million year. was EBITDA $XXX to company the For prior compared million

as year. QX income for Our consolidated in QX Act year. well year this was XX.X% was margin of recognized QX of CARES XX.X% adjusted to in prior the grant as compared prior EBITDA

This quarter, QX. in versus grant million we million income recognized of $XX $XX.X prior year

margin grant margin Excluding XX.X% million compared a with quarter for compared million would a with with adjusted have been income, $XXX.X EBITDA XX.X% $XXX year. this last

expense. year Excluding a increase QX was in most quarter the illness the benefit division, show to EBITDA agency QX was in salary, the the adjusted decrease in in decrease and CARES first to reduction contributor critical wage significant income, while the prior for

the are orientation, with cost replace steps staff. nurses education, retention incentive necessary efforts hires As agency in Salary in previously efforts positions CNA and the mentioned, increase and in cost. new RN contributed the an employed bonuses to I to higher increases

to hiring of continue full to starting positive this are this year. in trend results into nurses, QX expect We see time and

some as I'll Now each provide divisions. commentary on operating our points of data

increased hospital net per the quarter revenue recovery patient term illness slightly to decreased still same occupancy. patient day QX and divisions compared from hospitals short critical patients, acute of days to Many to care our prior their compared to ICUs decrease contributed XX% Our XX% revenue, year. specifically volumes lower within year of our prior year. prior to which referring compared than in Occupancy experienced

slightly illness QX, increased volumes on drop XX%. substantial market our will a two we for ICU bonuses, hospitals these hospitals. hours year and agency consolidated In increased Youngstown, QX, when was for a from The rates the within our sign saw in Adjusted prior closed the the orientation were every with we salary, of one for increase labor. the expense second RNs along that and bonus hospital increase remain for improved the we than prior Salary QX, the expect incentive Ohio with education, our in prior the slightly referring revenue One overall quarter year EBITDA RN in acquisition. wage the XX% with SWB main have and the benefits ratio compared but In in and patients ratio footprint and expanded seen Education as increases, to year, to while increased XX%. quarter. QX. see acquired critical We drivers higher QX hospital in locations. nursing by we over to was existing continue by X% improvement margin within from XX% to revenue orientation, our month

also to have open Tennessee, joint to four and venture with Florida, Virginia, Jackson, partners Arizona, Alexandria located hospitals in expected Tucson signed in all Venice agreements We open XXXX.

rule. were proposed high which in expected the The length relative XX.X%, XXXX of MS-LTC-DRG LTCH year. final the weight threshold increase outlier in issued a final this lower which X.X% includes rules CMS the rule week The the in rate, tech this base federal rule. higher is of than front, updated The stays outlined increase regulatory by fiscal for rule. Xst proposed the X.X% increased effective cost also than the was October On final and

Turning rehab. to inpatient

net second seen increasing The inpatient for day prior first was QX to rehab overall with of inpatient but by the volumes compared from year QX, for along Revenue ratio the to X% patient hospital levels increased X.X% quarter an by increased revenues year, XX% agency rehab division for $X,XXX X%. XX.X% In X% EBITDA EBITDA increase rehabilitation was in with to Nursing month margin usage improvement this [with] adjusted wage have inpatient and incentive adjusted throughout XX%. Our each in RNs quarter. to QX. bonuses to improved salary, $XX from Occupancy which agency year, year. prior the prior development. X% in to compared Jersey year to costs for inpatient and and by in increased $X,XXX. increased the year The margin to compared revenue agency North the along division improvement experienced of prior nursing XX% by XXXX. but from increase to California rehab employed elevated was The from increase for markets. in an QX, compared The hospitals from prior from was year predominantly declined regards The we attributed agency our XX.X% staff. for benefit rehab prior rates in decreased patient

evaluated. inpatient rule. Xst. in rules a distinct X.X% effective currently There being are Venice, in includes the in joint included with the hospital, part signed XXXX is opportunities pipeline the illness recovery the is partner Last expected to critical our numerous in The a Florida XXXX. X.X% also amount, venture unit which have standard rule the rehab increase proposed final final which an the issued for We week, to agreement open rehabilitation a fiscal CMS in than payment October higher open

the values with which rule. CMG final were than length also updated outlier addition, the is rule. cost relative high stay increased by and The threshold weights In of average XX%, the lower proposed

Concentra and to Turning plan. exceed continues Concentra. to outperform

The demand a revenue and increased $X decline this Although, X% by in of consensus increased $XXX. QX the to less X% revenue in these centers in Center per in to when testing $XX for in $XX adjusted services $XX Last of evaluations to quarter as $X and expected million million revenue COVID in the volume EBITDA EBITDA, this years, overall COVID performance reduction. the in generated was by visit than second as year. the comparing and related million mitigated by compared the declined XXXX. year, million revenue result revenue quarter revenue significant million net testing exceptional patient and of adjusted prior

CARES Our grant of Concentra income. the in adjusted of for in to included was EBITDA margin XX% QX XX% for results prior The million $XX.X year prior compared year. QX

primarily EBITDA and medical EBITDA prior this remain Concentra expense prior in In costs quarter. Excluding Virginia, a addition and for an Newport travel from margin salary versus attractive year XXXX to QX. Chesapeake returning income, X% increased their ratio consistent in which XX% and adjusted benefits located XX% supply with News improvement the margin the The in centers lab reduction QX adjusted of year result revenue market Concentra company. would in is been QX, was and and grant normal. to experienced the new from required to QX wage have a

also healthy de novo clinics potential leases by We are four pipeline that year-end. signed have for of consideration. be expected de novo to under that acquisition are a opportunities continues There to open

outpatient. to Turning

pre-pandemic reimbursement. The decreased and X% is in to prior prior quarters. per but prior to the benefit decline novo mainly division outpatient the XX X% in from Net same to last second X% in volumes over with our wage an and prior XX.X% net visit a with year prior XXXX, Adjusted a by margin compared decline prior expense experienced revenue an year to year. growth. increasing X.X% increase improved in revenue patient EBITDA to returning benefit improvement X% division from adjusted same increase XX.X%. in Medicare clinic by acquisition revenue increase rehabilitation de outpatient ratio compared for experienced two year spite decrease costs increased to operating and revenue due the QX $XXX salary, in due and quarter, to to quarter travel of by Our also quarter In QX, in centers ratio count to EBITDA QX, levels. from to which compared In margin compared expanded we to a represents primarily Other wages $XXX a marketing year salary, X% ratio revenues year. increased

executed leases the Looking have for of XX we year, forward the clinics. novo to de remainder

fully quarter prior same diluted per year. earnings second in share share compared $X.XX for per were to Finally, $X.XX the quarter the

quarter Our CARES and deployment capital. last. second year in our to positively income both this recognized regards and by grant allocation of were earnings the affected of In

of XXXX XXXX. record Board a X, close cash declared $X.XXXX Directors to the August payable on September at shareholders XX, on of of dividend Our of business

an shares $XX.XX. back bought X,XXX,XXX we of stock quarter, of This at average price

opportunities. This turn development be my We and call before to Marty some to financial for up opportunistic remarks. for over will of continue Jackson I'll questions. concludes additional the stock repurchases, evaluate reduction open and debt details we it

Martin Jackson

everyone. follow-up Thanks clinical Bob. our to opening morning, above regarding I several on comments like Good labor would costs.

for QX April mentioned, realized XX.X% The $XXX reductions from moving to $XX.X to million utilization We of rates saw to quarter. in million an the in QX, in sequential an the QX, we 'XX were seen utilization $XXX to XX% XX% $XXX in rate June in are to for of dropping and rate a encouraging a $XX.X XX.X% a for of to reductions from QX $XX hour, million from agency June, for within and XX% agency a more in on in June. in agency expense XX.X% average total April As in expenses. from this utilization overall Even with XX.X% 'XX of in April of $XX.X XX% of expense we've the to reduction reduction QX in XX% agency from these $XX.X and in in rates million reduction second significant from QX drop in June, a QX QX. to XX% reduction rates, dropping categories we during in period April average

XX% a seen agency in our July $XX utilization month time on reduction Bob rate in hour, XX.X% expense a the X% nurses. this of with reduction mentioned to trend an full also have the continue reduction to for million. total to hiring $XX.X of efforts We and XX%

full two. to quarter We in of new have time nice seven, of orientation seen a the sequentially quarter eight prior participate than this XX% to nurses by past quarter, from very and patients. growing increase hired hires These training one number typically weeks more treating in

benefits utilize as on with we to continue focus performance of pathway and the will wages we time, a continued this see other During of but throughout a revenue. balance salaries, is reduction these hired we agency indicators RNs. the agency percentage newly And to key year of

the rate historical prior XX% ran XX%. a to Our pandemic trend to at of

in significant nurses to there an an hour locations. pandemic, to health the $XX demand from rates We geographical regardless hour, cost. an historical the agency $XX $XXX was of some systems rates from in saw certain a increase of cases for increase up in During

three continue two XX%. come Given discussion this down in XX%. ranging increased this to to given quarters and two for of new the new QX quarters KPI of our replace saw will trend. downward macroeconomic of We believe dramatically XX% the quarters, their increased the from XXXX first nicely the above over agency as rate first environment, we in 'XX agency rates next This this year, this hires nurses rate

range clear normalized path is closer be our year returning in Our of of historical to a the throughout XX% rate XX% to to range the target the more with XXXX. of for to end the

in XXXX, our $X.X million decrease rehab of subsidiaries other earnings experienced ventures attributable net our to quarter prior startup revenue reductions lower This few repurchase clinics. related of which due compared $XX.X result is quarter XXX% in In A caused The same $XX.X $XX.X in of unfavorable now over payer to decrease April within million in joint mix, interest. in in outpatient we East a by in minority income the of Hospital to and of new in equity losses prior to compares to which were opened to owned The earnings the incurred Moving the unconsolidated hospitals voting year. QX, Concentra of Net our to rate. was and own shifts interest same non-controlling QX as million financials. is million. earnings and quarter the resulted interest membership year. Banner the costs. The lower primarily inpatient

of a increase a primarily in cash sheet. the $XX.X Interest end XXXX, to revolving of in This venture as experienced one borrowings in we our in made expense the on compares same earnings our quarter. year. second cost million $X.X the facility. to well billion of rates and we quarter, an elevated large month million was quarter QX to as of debt two nurse XXXX. lower the addition, of as the increase had interest compared LIBOR expense attributed under hospitals, of compared was of joint in result In few balance primarily agency of outstanding quarter $XX.X credit to prior $XX.X million At The the

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

had As $XXX revolving million remaining on we of availability loans. XXth, our June

of Medicare the is Medicare be the repaid. cash operating quarter, million activities $XXX.X repayment flow, remaining the For the million the to $XX.X of to million in June, of recouped second was in provided which there of $X.X advances. related quarter end At advances

XXXX. day at and at quarter. or of XXXX. $XX.X and used quarter. of activity March of acquisition compares the and XX XX, in outstanding DSO the million XX and million days equipment property purchase $XX.X to $XX.X June This investment activities XX, XXXX days in during This second cash sales end at the XX Our million days in includes was Investing

sale common quarter. totaling quarter. for the assets million. cash repurchases, was activities of in $XXX.X Financing million This to used of from We generated $XXX $X.X due second million share also proceeds in primarily the the

million shares. $XX.X on of dividends north As common our we little Bob bit a Also million. of indicated, acquired X.X included stock

$XXX until XX, repurchase December terminated further earlier program, unless which or of the remains million under Board. an extended effect worth shares have XXXX, by to in this We the additional capacity

We and in are revenue the of billion outlook reaffirming our the year in revenue $X.XX range for billion expect to $X.X be XXXX. to

expect readdress be And X%. of are EBITDA the prepared target capital for $XXX issued year. We We we the $XXX million compounded at target This previously call open reaffirming the for quarter, to as outlook to the of in remarks. stated market still for the three to growth to will revenue it range to we time, in last X% our this range million to rate be up growth expenditures also our we annual for stabilized believe rates labor earnings is back and turn operator like And and would share per business has predictable. the adjusted our and when questions. over to year concludes

Operator

Instructions]. Thank you, [Operator sir

DB. will question of Bowers come first Our from Justin

Justin Bowers

KPIs and respect all Thank the detailed segments. with to you the trends for LTAC

throughout lot Just really you some And specific then initiatives And and an of a earth that hiring, curious dynamics rest changes of terms of the the or some to be or get just taking? of And to still seeing modalities you've are Seems with as are guys what just hiring? what in progress do to see other some year. that of sounds improve like are outpatient your and you're company then like well? like -- second tough. the really think like like some you're of sense it's -- market we're a made trying the would there Kind looks what it are dynamics of but continuing it's that the you improvement the are, sounds the just to in ability macro the the it specific what whether improving of what more the part of rehab?

Robert Ortenzio

through a and bit obviously some take is little of me make let I’ll Let Bob, that the then general comments. Marty, This details.

before agency replace with particularly that for I like the good share understand take really our would is, critical can indicators able patients about takeaway, we us. terms acuity of I are high. the care. talking very I of in to hospitals. engage require to our is thing But these that's the patient all do amount nurses significant because RN, to illness segment, that thing quality investors the trends LTAC keep fully the in Critical the the think going in important recovery that training to I'm a big we think the we Illness Being that think, of or of of recruit that's And they and

an recruiting. doing, have the rather keeping I down training is illness enhanced and retention to longer on retention going that we're our continue we're to the focused on be help with division thing investment is nurses in the that than our us that other think dollars road. just spending term we which is The critical think attributes And to we in the

So we trends see is the still even though good data for cost the quarter. do high

If statistics that the comments you prepared his the in good. trends really dig pretty gave do look Marty into you

So Marty take I'll second that Marty. supplement a the let at maybe this and of shot question, then half

Marty Jackson

of Justin, rates improvement, you our of XX% both percentage took one look and XX%. interesting the is we that yes, seen reductions. some indicated really significant in of their we've April, a hospitals, July, were In the of $XXX. month stats over at terms as And utilization rate of agency

So down indicated, coming we we've I down too. utilization And is rate significantly. seen as come the mean, really pretty

new other interesting that The thing utilization to the X% and July be the June take X% replaced at utilization, with is of RNs when coming look will in. about you a come probably

With come not nearly specific far are Northern geographical trends concerned, have in two and the was would down the as towards down. as California all see the significant to those but that's as much again, say that and labor locations the other regards to we rates And as only rates IRF I Jersey. come Southern continue impacted So really was pointing IRF, improvement.

Justin Bowers

June utilization quick I was a the June, just the follow-up. missed in what And with in LTAC?

Marty Jackson

was It XX.X%.

Justin Bowers

that X%, this so that then, Is somewhere down saying we additional progresses, interpret to -- -- that XX. in come low in of you're terms should to should quarter that the would like as how So X% that?

Marty Jackson

Yes, that’s right.

Justin Bowers

for guys proxies headline else or the acuity we the what LTAC rates, like then parts quarter? Are baskets consideration? the the you CMI for in on for should then that out realize those moving And came would equal and into there is take what other was LTAC, all stays market And good constant. IRF being

Robert Ortenzio

better were The final rates expected were and than better proposed the for than particularly we for LTAC rule.

on pleased particularly we're in somewhat solid. thresholds. with outlier So that, think IRF pretty the but were line I

lot that rates So seen we've obviously a are worse. new

I pretty So -- this as as think, was CMI? pretty strong. And internally to good, Matt,

Marty Jackson

for don't long think in do reduction 'XX, really is have came they it which is or has CMI of prepared of term to past with just caused that had -- about and come to obviously, the remarks mentioned quarter this X.XX. Justin, that in down. down there's We second quarter of Bob X.XX inpatients, his some that's any long from trend and what's the there term that impact this decline. quarter

Operator

come Bank will from question America. of next of Kevin Fischbeck Our

Kevin Fischbeck

guess, the to as to Just would acuity being not that? be on would a anything and point. last volumes hospital that [vent] maybe more flows would think occupancy to I follow-up Is as ebbs done normally, broadly. high of tied and a why there point patients result of down, we you bit patients of be [vent] to prevent

Robert Ortenzio

to So for we can was that point Was there is anything or the acuity vent question, this population the the quarter. Kevin? the question, why down is

Kevin Fischbeck

exactly. Yes,

Robert Ortenzio

that of that ICUs their No, transplants, may our with -- great I in I is that. anything have can our point softness I for we have really referral don't of more don't to. there some a scheduling mean, -- staffing. many hospitals, a surgeries, at that mean, there their of general just I do the we to saw is think answer

coming sometimes long term would country, see be definitive. And are nonsense. can't is be can tell just hospitals -- utilized of an has that occasionally and there give to any real no that in be acute any I going term you'll short wellness, in and not services to of ICUs been see really or of continued I soft we that's I this of systemic hospitals highly those care don't mean, idea short out term care in outbreak sometimes terms acute answer. there in the the any patients that reduction patch acuity a ICUs are you you

we'll We see certainly will that in month it probably expect we and see winter increase. to the an return. So

unfortunately have I vent in So for the I the first you guess definitive you quarter. not answer short But this answer that time, was occasionally. don't a soft population is see the it's why

Kevin Fischbeck

about But your a generally companies, been providers to have I volumes bit guess things, of in improvement number agency one point, speaking, in as of labor a have quarter. the softer. the talked little

So how just trying some hiring, spot to really there we we because progress in Is back a were et there be where reason understand couple to believe the was if a with way to a need that -- there on to temp bit ago occupancy disaggregate improvement was the wouldn't rises, exactly to to deal that? didn't but labor much won't is you rely cetera. same little actual you quarters volumes it temp were on a lighter from be staffing if versus the making that

Robert Ortenzio

in permanent, up saw generally they working and stable, a as that Well, there think, pandemic and I a I I with the that softening do the post being think period the economy, general view the of in there and single is year of returning are of they going reason time agency ago mean, to what not more believe leading a do of we’re out environment. population RN kind nurses was that you sustainable, period believe just a terms of that. a to through have rates it the view think now I they occurrence in

We not think one. shortage lot remember people labor nursing they nurses elected there by So that can talk for that and measure back with nurses not you'll that that work. to have more exist don't the work. about see pool. nursing the to they And into also a that I leave driven is it's elect It's large have don't workforce. do the you reason of do -- whatever But in degrees, that's coming they course to

is them starting a what is see and to trend are continuing. more positions, permanent we that to so And see we return

more all so coming in there's and into drop to workforce. occupancy, And [Multiple uptick and all Speakers] providers agency into providers you'll for see nurses nurses for if more workforce even I drop the an coming continue think the

Marty Jackson

think also the I every function mean, nursing To down I $XX nurses, a dollars extent the for to that going mean, truly the leave was of in the to they going systems that going. move more increase reverse saw nurses time programs I whole agency then substantial health more price for full program. that could nursing the we To I a pricing into way. Kevin, offering think those bunch travel you're make, is going were you're extent see elasticity. is a the nurses have And that, incremental same of and

bonuses is sign coming Sign other are The thing $XX,XXX, those that's happening were on are $XX,XXX droping. down. on bonuses and range that in

are better before on So a what get we're bonus saying, hearing is sign any there that nurses isn't anymore. I

Robert Ortenzio

particularly trend mean on you crisis is nursing and factual But it continue obviously the fact environment think detail with is facts that will shows that's that I opinions, given will opinion. matter, I So Marty like support the we my and that this as Kevin, on giving believe a are data side combination of that comment to kind of and that last Marty a this, enough is eventually is has return comes opinion. My opinion. improving. opinion that I and my looks had that something in my what

to don't it, and to think but commentary that they're are is simply exacerbated, with high. agree need be it’s to going I I've going rates of certainly be agency out there heard that with shortage and opinion. acknowledge some still there's And to I their Although, people entitled going nursing that this that continue

Kevin Fischbeck

in last happened remind years be? Has can target And where guess, differently you us you margins in over the margins the I business? that about what be should maybe target business few anything made talk about margins you that's business in just should overtime? LTAC think maybe think that

Marty Jackson

XX% I hospitals. we're to extent XX SW&B I are that It's we interesting, percentage up recovery this mean, XX% were in as range, run historically, going you a that take achievable if Kevin, in we certainly we've there. margins at that's a illness critical the right significantly. to and back mean, XX% quarter, at revenue XX. believe running the XX% still in look margins the there's to very bring points to of XX% And past

Operator

will come Ben of Capital Hendrix RBC from question Markets. next Our

Ben Hendrix

I giving we you deeper cetera. extension, mentioned hoping nurses. by nurse onboard get reducing else where idea increases But you to pull trading then takes to kind whether an efforts. are agency focusing, to to et back shift can was We're new could the a little you the keep what dig extensive what's to you the you a retention bonuses, get of make in wage normal into or it levers it’d bit of And year? investments trying next and that be the confidence and to in specific

Robert Ortenzio

nurses on reasons you're bonuses would is have they Well, once salary very full time I that do manner basis, or not be state and think all the unexpected joined based that bonuses, mean to economics, increases. have referring just continued part stay of large you a of a there's going of for not. I do and necessarily what with on to that be is not retention portion to that

speak of job recruiting mean, fair I assume retention. hopefully on So we job have the just a that's if rate, that number on rate, increase acceptable the any have a do we they reasons. think that don't know then new do we're we mean, hope once and on I paying is that that of Marty, market that. good overall for they a you nurses of -- lots obviously to find a recruited. stay on another focus on comments can and and to they we we normal what for of nurses that and if what going economic as we But But better economics I I on have is fair, job Marty really -- obviously matter. joined The a side they less I will that rate it, retention, of retention. are satisfaction programs operationally other

Martin Jackson

take increase rate, we've of at, mean, what then our X% at number rate Ben, specifically I couple than different there's I few a has past think one. the historically. rates. is I mentioned, two. X%. the look as is I I that the variables look increase I And you base that far the a in One over really at in -- the been we're been is mean, That's increases but years, about seeing. years, over higher there's been what to look travel as base in two just X% rate what number two base if been we we've significantly mean it's typically past And that the annually range.

first in what this demand the heard And I So health there it really the many the was country. in of driven past by major I of think significant was systems. of was quarter that health year. losses mean, we the systems

Tates to going types maintain decrease travel go nurses So therefore, dollars. can I those types their think to going aren't desire rates. unless of they and coming those that's of to are down get

Operator

Suisse. And our next question Credit will Rice come of A.J. from

A.J. Rice

A couple maybe. of things

about okay, a the to to this, opportunity bit of the for little right would What to go what around as that helpful us is the get year for have is start if to parts modeling but of half your waiting off before of more looking What make a have And you relative I in to the now, specifically, optimistic pretty says, and mind moving back don't green looking track a the It what you has something are you you in lot we'll pointing guidance? that's are trigger giving you're you substantial. are be labor a for? go. back for, the there Because we you issues and 'XX. understand and dynamic that labor. company First all, number into shoots of sort

Martin Jackson

the seen -- is And basis double really on month-over-month a it's digit reductions. substantial reductions. question have and we A.J.,

start for and a confident So mid to time, that as a that at over see reduction couple more maintain we us, think single rate that providing will digit point make in months, level out I of it's whether us numbers.

of so in make at at time. because do end are labor And this that is didn't next just comfortable. and what issue, this we always provided quarter, guidance. prepared macroeconomic done we I evaluating, will you As are that. at that second of the know the determination I quarter, we at time, Bob the not to we've we're A.J. we getting point more think comfortable. But feel But revenue

A.J. Rice

lot the a or You rolling of guess, $XXX of you or $XXX, are for quarter, sort these bit it And second is contracts. is you I of is rate that contracts sort using are quoted you as that think, know are Are than renewal things. the quarter? second be off, even I the are an seeing little hour that's I -- plateauing where contracts here? some exited as or you month travel seeing the a lower three

Martin Jackson

saw drop $XX. in July we of rate so that saw was a we $XX, when what A.J., June in to

our So $XX There's have we've in than to we below half see the to continue range. probably been hospitals $XX. $XX rates of more that. Historically,

A.J. Rice

that… guess I

Martin Jackson

No, go question. ahead, your ask

A.J. Rice

should the of take your I most local using agency guess, you call or I of travelers? are for this granted. what I ask guys, a costs more But lot probably they for you. Are

Martin Jackson

and some lot fourth travelers. XX were allowance And have contracts out two get clauses we In to with weeks, included and first we that's weeks a had the that the of also quarter dropped we notice. used down

PRN hasn't pandemic, and of XX% throughout the that in consistent to changed. pretty hours nursing that rate Our has really remained XX% percentage total we're

A.J. Rice

peers your like the that, time anything call they rehab lines? that. to those made first anything heard in you comment I've therapists along area Are some starting their that's earlier of outpatient week seeing rates, and were see the physical on One on guys the pressure in

Martin Jackson

that for not are significant that that pressure, We're really a There us. of there some but a extent. bit to significant not seeing little geographical it's areas issue in is where

A.J. Rice

hospitals, it We question, you probably hard say, But rate just okay, outliers access impact. sort this can talked rate the itself critical not at when way look outlier the estimate. the you much. that's LTAC, you nominal or that And the are When favorable and size to the on the to get, the to the year-to-year mean, last worth us rate maybe at more out just but you're think us singled any looking adjust much that? of or to totality how of about for is and the sort basis, proposed headline in look worth there thing you worth do that, rule Is for rule? a of the when updated I more is at that, the much, how

Martin Jackson

a basket Well, was I think was just one is -- it the what market number there itself. about increase a on XX%

we reduced percent. at high that So I X.X%, outlier changed think X.X% and the costs overall to were sitting it

for company. final So better is the rule the think yes, I much

put so numbers, we to put really we but haven't came just a know out, numbers it haven't be that We pretty positive. it'll

Operator

a have from Bank. question We Deutsche Miles of Highsmith

Miles Highsmith

of I just go want back and to a things. to just maybe clarify couple

end targets historically, about some talking we're SW&B, XX%, LTAC, loose kind you when Marty, this quarter, for XX% year. the next year and put the So and XX% out to of of

sure Just to want make about I'm thinking right. that

SW&B all expenses, So agency it's within education. LTAC, that's So on, existing bonus, right? sign

or number sure the some the from on make that to I I in $XX basis, then want correctly. contracts am, that to that million rates a like somewhere numbers went wanted a LTAC? or think being is you total Just QX those the said if to about helpful utilization expense agency, SW&B with being and for sequentially, thinking related to I dollar the you about just XXs. down, And down Are I'm mid in and triangulate gave down, information

Martin Jackson

[Multiple down. is about. coming SW&B because eight filtered down that is to reason are and Agency the And numbers weeks so those Speakers] talked of training you're not coming through to it orientation those seven really seeing we offsetting

they're you to of the So starting come a in orientation, patients employing see that and when to One's will treat ones training on nurses is patients. reduction I eight in the have one's care terms of taking do the the that agency. the think taking seven nurses. two mean, through of weeks, to new The during patients, we're care the going agency about board what and actually

Miles Highsmith

So want be may and the what of just number But of Is or to you able upfront choose the you number to for disclose have? counting was you that the that that I was sequential and disclose bonuses. double a incremental kind training if some not willing it. curious to

Martin Jackson

line. that is we the just you revenue way No, a a at XX% extent back that points to to it percentage that would I or it it you to X as, to our the I SW&B If revenue. XX about Miles, XX% gets multiply back historical get take think trends, to as of XX%, look want at think by

that's So million you're normalized. neighborhood at in EBITDA incremental looking $XXX the of if of through coming

Miles Highsmith

what Thanks pre-COVID it you if side other can and question. the one was can't in for the on before. us data, utilization all a you of more But contract are timeframes? said numbers reminder give remember just utilization then And I historical

Martin Jackson

range. was XX% to that Yes, in it XX%

Operator

for further turn now you. And no the queue. to I questions closing the Thank remarks. I'm Robert conference in seeing back would like to Ortenzio

Robert Ortenzio

Have No remarks. Thanks call. for everybody closing good us joining for the weekend. a

Operator

all call. This Thank you for concludes today's conference participating.

You may day, pleasant and your now disconnect and weekend. a enjoy have

Select Medical (SEM) 5 Aug 222022 Q2 Earnings call transcript