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For the first quarter ended March 31, 2010, net operating revenues increased 4.2% to $584.8 million compared to $561.2 million for the same quarter, prior year. Income from operations increased 7.4% to $72.6 million compared to $67.6 million for the same quarter, prior year. Net income attributable to Select decreased to $24.2 million compared to $25.0 million for the same quarter, prior year. Net income attributable to Select for the quarter ended March 31, 2009 includes a gain on early retirement of debt, net of tax, of $6.9 million. Additionally, net income before interest, income taxes, depreciation and amortization, gain on early retirement of debt, stock compensation expense and other income ("Adjusted EBITDA") for the first quarter increased 6.1% to $90.9 million compared to $85.7 million for the same quarter, prior year. A reconciliation of net income to Adjusted EBITDA is attached to this release. Income per common share was $0.15 on a fully diluted basis.
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Select's income per common share for the quarter ended March 31, 2009 was $0.27, which includes a non-recurring gain related to the early retirement of debt. Excluding this item, on an adjusted basis income available to common stockholders was $0.17 per diluted share for the quarter ended March 31, 2009. A reconciliation of net income per share to adjusted net income per share is attached to this release.
Specialty Hospitals
At March 31, 2010, Select operated 89 long term acute care hospitals and six acute medical rehabilitation hospitals. This compares to 87 long term acute care hospitals and five acute medical rehabilitation hospitals operated at March 31, 2009. For the first quarter of 2010, net operating revenues for all of Select's hospitals increased 4.7% to $411.7 million compared to $393.2 million for the same quarter, prior year. Total patient days for the first quarter of 2010 were 267,848, admissions were 11,101 and net revenue per patient day was $1,511. This compares to 256,273 days, 10,805 admissions and net revenue per patient day of $1,508 for the same quarter, prior year. For the hospitals opened or acquired as of January 1, 2009 and operated by Select throughout both periods, patient days in the first quarter of 2010 were 262,939 and admissions were 10,818, compared to 254,267 days and 10,731 admissions in the same quarter, prior year. Adjusted EBITDA for the specialty hospital segment increased 8.0% to $82.9 million compared to $76.8 million for the same quarter, prior year. The Adjusted EBITDA margin for the segment was 20.1% for the first quarter of 2010, compared to 19.5% for the same quarter, prior year. The Adjusted EBITDA margin for the hospitals opened or acquired as of January 1, 2009 and operated by Select throughout both periods was 20.8% for the first quarter of 2010, compared to 19.7% for the same quarter, prior year.
Outpatient Rehabilitation
At March 31, 2010, Select operated 959 outpatient clinics. This compares to 948 outpatient clinics at March 31, 2009. For the first quarter of 2010, net operating revenues for the outpatient rehabilitation segment increased 3.1% to $173.1 million compared to $167.8 million for the same quarter, prior year. Adjusted EBITDA for the segment for the first quarter decreased 3.6% to $20.5 million compared to $21.3 million for the same quarter, prior year. The Adjusted EBITDA margin for the segment for the quarter was 11.9% compared to 12.7% in the same quarter, prior year. Patient visits for the quarter were 1,125,958 compared to 1,096,296 for the same quarter, prior year. Net revenue per visit for the quarter ended March 31, 2010 was $101 compared to $103 for the same quarter, prior year.
Business Outlook
The Company reaffirms its 2010 business outlook. The Company continues to expect net operating revenues for 2010 to range from $2,380 million to $2,420 million. Adjusted EBITDA for 2010 is expected to range from $360 million to $370 million. The Company also expects its capital spending for 2010 to range from $50 million to $60 million, and to have free cash flow of approximately $120 million. Free cash flow is calculated as net cash provided by operating activities less purchases of property and equipment. This business outlook does not reflect future changes in reimbursement or material acquisitions or divestitures, if any.
Conference Call
Select will host a conference call regarding its first quarter results and its business outlook on Friday, May 14, 2010, at 11:00 am EDT. The domestic dial in number for the call is 1-866-383-7989. The international dial in number is 1-617-597-5328. The pass code for the call is 26319432. The conference call will be webcast simultaneously and can be accessed at Select Medical Holdings Corporation's website http://www.selectmedicalholdings.com/.
For those unable to participate in the conference call, a replay will be available until 11:59pm EDT, May 21, 2010. The replay number is 1-888-286-8010 (domestic) or 1-617-801-6888 (international). The passcode for the replay will be 44956273. The replay can also be accessed at Select Medical Holdings Corporation's website, http://www.selectmedicalholdings.com.
Select Medical Holdings Corporation is a leading operator of specialty hospitals in the United States. As of March 31, 2010, Select operated 89 long term acute care hospitals and six acute medical rehabilitation hospitals in 25 states. Select is also a leading operator of outpatient rehabilitation clinics in the United States, with approximately 959 locations in 36 states and the District of Columbia. Select also provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior care centers, schools and worksites. Information about Select is available at http://www.selectmedicalholdings.com/
Certain statements contained herein that are not descriptions of historical facts are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements due to factors including the following:
-- additional changes in government reimbursement for our services, including changes that will result from the expiration of the moratorium for long term acute care hospitals established by the SCHIP Extension Act of 2007, the American Recovery and Reinvestment Act, and the Patient Protection and Affordable Care Act may result in a reduction in net operating revenues, an increase in costs and a reduction in profitability; -- the failure of our specialty hospitals to maintain their Medicare certifications as such may cause our net operating revenues and profitability to decline; -- the failure of our facilities operated as "hospitals within hospitals" or HIHs, to qualify as hospitals separate from their host hospitals may cause our net operating revenues and profitability to decline; -- a government investigation or assertion that we have violated applicable regulations may result in sanctions or reputational harm and increased costs; -- future acquisitions or joint ventures may prove difficult or unsuccessful, use significant resources or expose us to unforeseen liabilities; -- private third-party payors for our services may undertake future cost containment initiatives that limit our future net operating revenues and profitability; -- the failure to maintain established relationships with the physicians in the areas we serve could reduce our net operating revenues and profitability; -- shortages in qualified nurses or therapists could increase our operating costs significantly; -- competition may limit our ability to grow and result in a decrease in our net operating revenues and profitability; -- the loss of key members of our management team could significantly disrupt our operations; -- the effect of claims asserted against us or lack of adequate available insurance could subject us to substantial uninsured liabilities; -- the ability to refinance our outstanding indebtedness before it comes due; -- the ability to obtain any necessary or desired waiver or amendment from our lenders may be difficult due to the current uncertainty in the credit markets; -- the inability to draw funds under our senior secured credit facility because of lender defaults; and -- other factors discussed from time to time in our filings with the Securities and Exchange Commission, including factors under the heading "Risk Factors" in our annual report on Form 10-K.
SOURCE Select Medical Holdings Corporation
