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Select Medical Corp. (SEM) filed Quarterly Report for the period ended 2011-06-30.
Select Medical Holdings has a market cap of $1.03 billion; its shares were traded at around $6.68 with a P/E ratio of 12.2 and P/S ratio of 0.5.
This is the annual revenues and earnings per share of SEM over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of SEM.
Highlight of Business Operations:
On June 1, 2011, Select Medical Corporation (“Select”) entered into a new senior secured credit agreement that provides for $1.15 billion in senior secured credit facilities, comprised of an $850.0 million, seven-year term loan facility and a $300.0 million five-year revolving credit facility of which $125.0 million was drawn at closing. The refinancing also included the completion of a cash tender offer for $266.5 million aggregate principal amount of Select’s 7 5/8% senior subordinated notes due 2015 and the repurchase of all $150.0 million principal amount of Holdings’ 10.0% senior subordinated notes.
At June 30, 2011, Select had outstanding an $850.0 million term loan (at aggregate principal value) and a $65.0 million balance on the revolving portion of its senior secured credit facilities and $345.0 million in principal amount of 7 5/8% senior subordinated notes due 2015. Holdings also had $167.3 million in principal amount outstanding of its senior floating rate notes due 2015.
For the three months ended June 30, 2011, our net operating revenues increased 20.5% to $698.7 million compared to $579.9 million for the three months ended June 30, 2010. This increase in net operating revenues resulted principally from a 29.1% increase in our specialty hospital net operating revenue. The increase in our specialty hospital net operating revenue is primarily due to the Regency hospitals acquired on September 1, 2010. We had income from operations for the three months ended June 30, 2011 of $81.0 million compared to $72.6 million for the three months ended June 30, 2010. The increase in income from operations resulted from the addition of the Regency hospitals acquired on September 1, 2010 and improved operating performance at our other specialty hospitals, offset by an increase in general and administrative costs. Holdings’ interest expense for the three months ended June 30, 2011 was $25.3 million compared to $29.3 million for the three months ended June 30, 2010. Select’s interest expense for the three months ended June 30, 2011 was $19.7 million compared to $22.3 million for the three months ended June 30, 2010. The decrease in interest expense for both Holdings and Select was attributable to a reduction in our average interest rate that resulted from the expiration of interest rate swaps during 2010 that carried higher fixed interest rates and lower interest rates on portions of the debt we refinanced on June 1, 2011.
For the six months ended June 30, 2011, our net operating revenues increased 19.5% to $1,391.9 million compared to $1,164.7 million for the six months ended June 30, 2010. This increase in net operating revenues resulted principally from a 27.7% increase in our specialty hospital net operating revenue. The increase in our specialty hospital net operating revenue is primarily due to the Regency hospitals acquired on September 1, 2010. We had income from operations for the six months ended June 30, 2011 of $168.7 million compared to $145.2 million for the six months ended June 30, 2010. The increase in income from operations resulted from the addition of the Regency hospitals acquired on September 1, 2010 and improved operating performance at our other specialty hospitals, offset by an increase in general and administrative costs. Holdings’ interest expense for the six months ended June 30, 2011 was $51.0 million compared to $59.3 million for the six months ended June 30, 2010. Select’s interest expense for the six months ended June 30, 2011 was $38.4 million compared to $45.4 million for the six months ended June 30, 2010. The decrease in interest expense for both Holdings and Select was attributable to a reduction in our average interest rate that resulted from the expiration of interest rate swaps during 2010.
On August 16, 2010, CMS published the policies and payment rates for long term care hospital prospective payment system (“LTCH-PPS”) for fiscal year 2011 (affecting discharges and cost reporting periods beginning on or after October 1, 2010 through September 30, 2011). The standard federal rate for fiscal year 2011 is $39,600, which is a decrease from the fiscal year 2010 federal rate of $39,897 in effect from October 1, 2009 to March 31, 2010 and $39,795 in effect from April 1, 2010 to September 30, 2010. The final rule establishes a fixed-loss amount for high cost outlier cases for fiscal year 2011 of $18,785, which is higher than the fiscal year 2010 fixed-loss amount of $18,425 in effect from October 1, 2009 to March 31, 2010 and $18,615 in effect from April 1, 2010 to September 31, 2010. The final rule included revisions to the relative weights for the Medicare severity long term care diagnostic related groups for fiscal year 2011.
On July 22, 2010, CMS published an update to the payment rates for inpatient rehabilitation facility prospective payment system (“IRF-PPS”) for fiscal year 2011 (affecting discharges and cost reporting periods beginning on or after October 1, 2010 through September 30, 2011). The standard payment conversion factor for discharges during fiscal year 2011 is $13,860 which is an increase from $13,661 in effect from October 1, 2009 to March 31, 2010 and $13,627 in effect from April 1, 2010 to September 30, 2010. CMS also increased the outlier threshold amount for fiscal year 2011 to $11,410 from $10,721 in fiscal year 2010.
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