Q1 2024 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$16.93Last close (May 3, 2024)
Post-Earnings Price$16.93Last close (May 3, 2024)
Price Change
$0.00(0.00%)
- Select Medical's new rehabilitation hospital with RUSH University System is filling up nicely, indicating successful expansion and strong demand for their services.
- The critical illness recovery hospital division has significantly improved its salaries, wages, and benefits ratio, reaching the 52%-53% range ahead of schedule by reducing reliance on agency nurses and decreasing orientation hours, leading to enhanced profitability.
- Critical illness margins improved by 480 basis points year-over-year, despite Medicare reimbursement pressure, driven by increased volume, higher case mix index, and effective cost control, showcasing strong operational performance.
- Declining Employer Demand for Concentra's Services: The demand for Concentra's employer-based services, such as drug screenings and physicals, has decreased due to lower hiring rates as employment returns to normal levels. This decline in lower-margin services could impact overall visit volumes and revenue growth for Concentra.
- One-Time Medicaid Supplemental Payments May Not Recur: The company's earnings benefited from a one-time Medicaid supplemental payment of approximately $4 million to $5 million net after taxes, which may not be repeated in subsequent quarters. Reliance on non-recurring items could pose a risk to sustaining earnings levels.
- High Leverage Post-Concentra Spin-Off: Following the planned spin-off of Concentra, both the remaining company and the new entity are expected to have leverage ratios of about 4×, which is relatively high. This significant debt burden could pose financial risks, especially in a rising interest rate environment or if operating performance weakens.