#USA #Select Medical #Cash Dividend #Q1 2026 #Mechanicsburg, PA

Select Medical Holdings Corporation Reports Q1 2026 Results and Dividend Announcement

Select Medical Holdings Corporation has disclosed its financial results for the first quarter ending March 31, 2026, showcasing a solid revenue growth while announcing a cash dividend for its shareholders. The company reported revenues of $1,421.5 million, representing a 5.0% increase from $1,353.2 million during the same quarter the previous year.

Financial Performance Overview

Despite the revenue growth, income from operations saw a decline to $98.4 million compared to $112.7 million in Q1 2025. The net income also decreased to $63.8 million, down from $74.7 million year over year. Likewise, adjusted EBITDA fell from $151.4 million in the prior year to $141.6 million in the current quarter, reflecting a continuing need for evaluation of operational efficiencies.

Earnings per common share went down to $0.35 from $0.44 in the same quarter of the previous year, indicating challenges in the current operational environment that the company must address moving forward.

Merger Agreement

On March 2, 2026, Select Medical entered into a merger agreement with a subsidiary of WCAS XIV, L.P., an affiliate investment fund. This agreement stipulates that a wholly-owned subsidiary of the buyer will merge into Select Medical, with the company remaining a subsidiary post-merger. As part of the merger, stakeholders will receive $16.50 per share in cash. The successful completion of this merger is anticipated by mid-2026, contingent upon securing necessary regulatory and shareholder approvals.

Segmented Revenue Analysis

When dissecting the revenue across its principal operational segments, Select Medical reported:

• - Critical Illness Recovery Hospital Segment: Revenue increased slightly by 0.3% to $638.8 million. However, adjusted EBITDA notably decreased to $73.4 million from $86.6 million in Q1 2025, with a margin drop to 11.5%.

• - Rehabilitation Hospital Segment: This segment showcased robust growth, with a revenue increase of 14.5%, totaling $351.9 million. Adjusted EBITDA also rose by 15.1%, reaching $81.1 million, with a stable margin of 23.0%.

• - Outpatient Rehabilitation Segment: Revenue improved by 4.5%, resulting in $321.3 million, but adjusted EBITDA fell to $22.0 million from $24.3 million the previous year, indicating areas for improvement.

Dividend Declaration

Select Medical's Board of Directors declared a cash dividend of $0.0625 per share, which will be payable to shareholders by May 28, 2026. Shareholders must be on record by May 14, 2026, to be eligible for this dividend. It is worth noting that the declaration of future dividends remains at the discretion of the Board and will depend on various factors including financial health and operational results.

Business Outlook

Looking ahead, Select Medical maintains a revenue target of between $5.6 billion and $5.8 billion for 2026, alongside an expected adjusted EBITDA range of $520 million to $540 million. The company aims for a fully diluted earnings per share between $1.22 and $1.32. The outlook reflects a confident yet cautious approach, acknowledging both operational challenges and growth opportunities.

Conclusion

Select Medical's Q1 2026 results reveal a mix of progress and challenges. While revenue climbed, the decrease in operational income and adjusted EBITDA presents an essential area for strategic focus. With planned mergers and continuing operational adjustments, the company strives to enhance profitability and sustain shareholder value. As it navigates the complexities of healthcare delivery, stakeholder engagement and innovative patient care solutions will remain crucial to its long-term success.