Select Medical Holdings Corporation (NYSE:SEM) Q3 2019 Earnings Conference Call Transcript

Nov 01, 2019 • 09:00 am ET

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Select Medical Holdings Corporation (NYSE:SEM) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and thank you for joining us today for Select Medical Holdings Corporation's Earnings Conference Call to discuss the Third Quarter 2019 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 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.

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

Executive
Robert Ortenzio

Thank you, operator. Good morning, everyone, and thanks for joining us for Select Medical's Third Quarter Earnings Conference Call for 2019. We start out by saying Q3 was a very good quarter for us with three of our four business segments exceeding prior year adjusted EBITDA by double-digit growth and our fourth business segment grew EBITDA by over 7%. We experienced nice growth in terms of patient admissions in our specialty hospital business with critical illness recovery hospitals growing at almost 5% and inpatient rehabilitation hospitals growing at over 19%. Our outpatient rehabilitation clinic visits grew by more than 8% and Concentra visits grew by over 5%. We also saw a nice growth in our pricing.

We completed two significant refinancing transactions during the quarter, both at Select and Concentra, which Marty will provide some color in his remarks. We also opened a new non-consolidated joint venture rehabilitation hospital in the quarter, affiliated with several partners in New Orleans, Louisiana.

Overall, our net revenue for the third quarter increased 9.9% to $1.39 billion in the quarter compared to $1.27 billion last year. Net revenue in our critical illness recovery hospitals segment in the third quarter increased 10.2% to $463 million compared to $420 million in the same quarter last year. The increase is attributable to both in increase in patient volumes and revenue per patient day. Patient days increased 5.8% compared to the same quarter last year, with 258,000 patient days in the third quarter. Occupancy in our critical illness recovery hospitals segment was 67% in the third quarter this year compared to 65% in the same quarter last year. Net revenue per patient day increased 4% to $1,773 per patient day in the third quarter compared to $1,705 per patient day in the same quarter last year.

Net revenue on a rehabilitation hospital segment in third quarter increased 19.9% to $173 million compared to $145 million in the same quarter last year. Patient days increased 12% to over 89,000 days compared to 79,000 days in the same quarter