Select Medical Holdings Stock Earnings Reports

Select Medical reported Q1 2026 results and provided a mid-2026 outlook. The company announced a previously disclosed take-private transaction in which unaffiliated shareholders will receive $16.50 per share; the deal is expected to close mid-2026 pending approvals and would result in Select becoming privately held. Total revenue grew 5% year-over-year, but adjusted EBITDA declined 6.5% to $141.6 million and EPS fell to $0.35 (or $0.36 excluding take-private costs). All three operating divisions delivered revenue growth: inpatient rehabilitation hospitals (IRF) revenue +14% with adjusted EBITDA +15%, critical illness recovery hospitals (CIRH) revenue roughly flat but adjusted EBITDA down 15%, and outpatient rehabilitation revenue +4% with modest margin pressure. Select continues an active development pipeline (166 beds opened so far in 2026, ~275 additional beds expected through 2027) and plans further IRF and critical-illness expansions and JV openings. Regulatory context: CMS proposed modest increases (~2.6% for IRF and ~2.66% for LTAC) for FY2027 payments; final rules expected late July/early August. Operational headwinds included lower Medicare Advantage conversion rates (impacting CIRH volume by roughly $13–$14 million) and some outpatient market exits (e.g., Oregon closures) as the company optimizes clinic productivity. Balance sheet: total debt ~$1.9 billion, cash $25.7 million, net leverage 3.75x under the senior secured credit agreement, $443.5 million revolver availability. Board approved a $0.0625 per share cash dividend. Management maintained full-year 2026 guidance: revenue $5.6–$5.8 billion, adjusted EBITDA $520–$540 million, diluted EPS $1.22–$1.32, and capex $200–$220 million.