EX-99.1 2 eightk1q10earningsrelease.htm REHABCARE GROUP 1Q2010 EARNINGS RELEASE eightk1q10earningsrelease.htm
Exhibit 99.1

FOR IMMEDIATE RELEASE
Tuesday, May 4, 2010


REHABCARE REPORTS FIRST QUARTER 2010 RESULTS

·  
Year over year, consolidated revenues increase 62.4% to $327.4 million and earnings per diluted share increases 27.1% to $0.61

·  
Triumph achieves 17.7% EBITDA (earnings before interest, taxes, depreciation and amortization) margin for the quarter despite slow start

·  
Legacy hospitals improve operating losses by $3.1 million sequentially, when excluding transaction related costs in the prior quarter

·  
Skilled Nursing Rehabilitation Services and Hospital Rehabilitation Services divisions achieve operating earnings margins of 8.2% and 16.0%, respectively


ST. LOUIS, MO, May 4, 2010--RehabCare Group, Inc. (NYSE:RHB) today reported financial results for the quarter ended March 31, 2010.  Comparative results for the quarter follow.

 
First
Fourth
First
    
 
Quarter
Quarter
Quarter
    
Amounts in millions, except per share data
2010
2009
2009
              
                                 
Consolidated Operating Revenues
$
327.4
  
$
254.7
  
$
201.5
                
Consolidated Operating Earnings (a)
  
32.5
    
6.9
    
14.3
                
Consolidated Net Earnings from Continuing Operations
  
14.8
    
0.3
    
8.4
                
Gain from Discontinued Operations, Net of Tax
  
—
    
—
    
0.1
                
Consolidated Net Earnings
  
14.8
    
0.3
    
8.5
                
Net Losses Attributable to Noncontrolling Interests
  
0.2
    
0.4
    
0.2
                
Net Earnings Attributable to RehabCare
  
15.0
    
0.7
    
8.7
                
Diluted Earnings per Share Attributable to RehabCare:
                                
Earnings from Continuing Operations, Net of Tax
  
0.61
    
0.03
    
0.48
                
Net Earnings
  
0.61
    
0.03
    
0.48
                
                                 
SRS Operating Revenues
  
126.4
    
126.0
    
123.1
                
SRS EBITDA (a)
  
11.7
    
9.8
    
12.1
                
SRS Operating Earnings (a)
  
10.3
    
8.4
    
10.5
                
                                 
HRS Inpatient Operating Revenues
  
31.1
    
33.3
    
31.8
                
HRS Outpatient Operating Revenues
  
12.1
    
11.7
    
11.3
                
HRS Operating Revenues
  
43.2
    
45.0
    
43.1
                
HRS EBITDA (a)
  
7.5
    
7.9
    
6.9
                
HRS Operating Earnings (a)
  
6.9
    
7.3
    
6.3
                
                                 
Hospital Operating Revenues
  
157.8
    
83.8
    
35.3
                
Hospital EBITDA (a)
  
20.6
    
(5.8
)
  
(0.8
)
              
Hospital Operating Earnings (Loss) (a)
  
15.2
    
(8.8
)
  
(2.3
)
              
                                 

(a)
The fourth quarter of 2009 includes pretax transaction and severance expenses primarily related to the Triumph merger of $9.4 million, or $0.34 per diluted share after tax (see table on page 10).


 
 
 
REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 2 

“After a slow start to the quarter, all three divisions had strong performance in March, which generated better than anticipated results.  Total operating revenues and earnings increased dramatically as a result of our merger with Triumph HealthCare,” said John H. Short, Ph.D, RehabCare President and Chief Executive Officer.
“While Triumph’s operating results for January and February were hampered by lower acute care volumes and achieving 25-day length of stay compliance in six hospitals, they reported an EBITDA margin of 17.7% for the quarter.  Our 13 legacy hospitals continued to improve operating performance in the first quarter, reaffirming our expectations for a breakeven operating earnings run rate by the end of the second quarter and breakeven operating earnings for the full year. We are making excellent progress with integration efforts and are on track for margin expansion in our legacy long-term acute care hospitals (LTACHs),” he said.
Dr. Short continued, “Despite the impact of Part B therapy caps on the first 61 days of the quarter, our Skilled Nursing Rehabilitation Services division delivered strong earnings results.  Based on first quarter performance, we are raising our operating earnings margin outlook for the full year to 7% - 8%, recognizing the uncertain impact of concurrent therapy provisions that go into effect October 1, the rollout of new technologies in the division and reimbursement changes for skilled nursing operators under healthcare reform.
“While the full effect of healthcare reform legislation remains to be seen, we are pleased with its short-term benefits, including the extension of LTACH-related provisions and the exceptions process for Part B therapy caps, and we are well positioned for many of its long-term initiatives.”

Financial Overview of First Quarter
Consolidated operating revenues for the first quarter of 2010, which included $112.6 million generated by Triumph HealthCare, were $327.4 million, a 62.4% increase compared to $201.5 million in the 2009 first quarter.
Consolidated net earnings attributable to RehabCare were $15.0 million in the first quarter of 2010 compared to $8.7 million in the prior year quarter.  Diluted earnings per share attributable to RehabCare for the first quarter of 2010 was $0.61 compared to $0.48 for the 2009 first quarter.
Operating revenues in the Skilled Nursing Rehabilitation Services (SRS) division increased 2.6% from $123.1 million in the first quarter of 2009 to $126.4 million in the first quarter of 2010, driven by a 5.3% increase in the average number of contract therapy programs operated.  Contract therapy same store revenues decreased by 0.6%, impacted by lower Medicare Part B volumes in January and February due to therapy caps.  The therapy cap exceptions process was reinstated through a package of short-term extenders that cleared the Senate on March 2 and was subsequently extended through the end of 2010 with passage of the Patient Protection and Affordable Care Act on March 23.
On March 31, 2010, SRS operated in 1,125 locations compared to 1,118 locations at the end of 2009 and 1,063 locations at the end of the first quarter of 2009.
The SRS division’s operating earnings were $10.3 million, or 8.2% of revenue, compared to $10.5 million, or 8.5% of revenue, in the first quarter of 2009.  The negative impact of Part B therapy caps in the 2010 first quarter was offset by higher productivity and Part A volumes, better leveraging of corporate general and administrative expenses as a result of integrating Triumph, lower bad debt expense and lower depreciation and amortization.  The division will continue to be challenged in 2010 by pricing pressures, wage rate increases, new rules for concurrent therapy and the rollout of new technologies.
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REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 3    
The Hospital Rehabilitation Services (HRS) division’s first quarter 2010 operating revenues increased 0.4% to $43.2 million from $43.1 million in the first quarter of 2009.  Inpatient operating revenues declined 2.0% as a result of a 6.2% decline in the average number of inpatient programs.  Inpatient rehabilitation facility (IRF) same store revenues and discharges increased 4.1% and 1.6%, respectively, over the prior year quarter.  Outpatient operating revenues increased 7.1% in the 2010 first quarter despite a 14.8% decline in the average number of outpatient programs.  Same store outpatient revenues improved 11.3%.
At March 31, 2010, the division operated 103 IRF programs compared to 106 at the beginning of the quarter and 113 a year ago. The division had one IRF opening and four IRF closings during the first quarter and signed contracts for two IRFs.  At March 31, 2010, the number of signed but unopened IRF contracts was three, compared to two IRFs at the end of the fourth quarter.  Given increased sales activity, the Company reaffirms its expectation for unit recovery in the second half of the year.
HRS first quarter 2010 operating earnings were $6.9 million, or 16.0% of revenue, compared to operating earnings of $6.3 million, or 14.6% of revenue, for the 2009 first quarter.
Operating revenues in the Hospital division for the first quarter of 2010 increased $74.0 million, or 88.4%, sequentially to $157.8 million.  RehabCare legacy same store revenues increased 2.7% on a sequential basis.
The legacy hospitals’ operating loss in the 2010 first quarter was $1.0 million, a sequential improvement of $3.1 million, after excluding $8.4 million in 2009 fourth quarter transaction and severance expenses primarily related to the Triumph merger.  The first quarter operating loss included $1.3 million in start-up losses for Greater Peoria Specialty Hospital, which ended its Medicare demonstration period on April 30.  The first quarter also included a $0.6 million operating loss at Dallas LTAC Hospital, compared to a $1.8 million loss in the prior quarter.  The Company continues to expect this hospital to be accretive by the end of the 2010 second quarter.
Triumph HealthCare generated revenues of $112.6 million, operating earnings of $16.2 million and EBITDA of $19.9 million, or 17.7% of revenue, during the first quarter of 2010.
At the end of the quarter, the combined division operated a total of 34 hospitals, including 28 LTACHs and six IRFs.  Triumph Hospital-The Heights, an LTACH in Houston, admitted its first patient on April 15.

Balance Sheet and Liquidity
At March 31, 2010, the Company had $27.4 million in cash and cash equivalents and $462.3 million in outstanding debt excluding unamortized original issue discounts.  Days sales outstanding (DSO) increased from 60.2 days at December 31, 2009 to 61.8 days at March 31, 2010.
For the three months ended March 31, 2010, the Company generated cash from operations of $8.5 million and expended $5.2 million for capital expenditures, principally related to companywide information systems, the start-up of Triumph Hospital-The Heights and hospital facility maintenance capital.

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REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 4    
Legislative Update
 
The enactment of healthcare reform legislation in March set the stage for a series of new programs, pilots and payments in both Medicare and other payors over the next 10 years.  Positive provisions for RehabCare included an extension of the Part B therapy cap exceptions process through December 31, 2010, as well as an extension of LTACH provisions contained in the 2007 Medicare, Medicaid and SCHIP Extension Act through the end of 2012.  The Company is taking a leadership role in post-acute payment bundling, accountable care organizations and establishing LTACH facility and admission criteria.
As a means to finance healthcare reform, hospitals face a series of Medicare rate reductions phased in over the next 10 years, some of which went into effect for IRFs and LTACHs in April.  In addition, on April 19, 2010, the Centers for Medicare and Medicaid Services (CMS) issued its proposed rate year (RY) 2011 rule for acute care hospitals and LTACHs.  The Company does not expect the rate reductions or the RY2011 rule for LTACHs, as proposed, to alter its 2010 outlook.   Proposed rules for IRFs and skilled nursing facilities are anticipated in the days ahead.

Outlook
The Company does not provide revenue and earnings per share guidance, but provides the following outlook for the total year 2010:
·  
The Skilled Nursing Rehabilitation Services division expects 7% to 8% operating earnings margins for the full year 2010, which will be driven by mid-single digit year-over-year same store revenue growth and which reflects the estimated impact of new concurrent therapy rules, the rollout of new technologies, pricing pressures and wage rate increases during the year.  The division expects 50 to 75 net new units in 2010.
·  
 		 The Hospital Rehabilitation Services division expects 15% to 17% operating earnings margins and 2% to 4% year-over-year growth in IRF same store discharges for the full year 2010.  Unit count is anticipated to decrease in the first half of the year and recover in the second half, resulting in flat unit growth for the total year 2010.
·  
The Hospital division expects total year revenue of $650 to $675 million and EBITDA of $90 to $100 million.  As previously stated, the Company expects a breakeven operating earnings run rate for its 13 legacy hospitals by the end of the second quarter of 2010 and to achieve breakeven operating earnings for the full year 2010.
·  
The effective tax rate, after consideration of noncontrolling interests, is now anticipated to be 38.25% for 2010 compared to the prior outlook of 39%.
·  
Net income attributable to noncontrolling interests is expected to approximate $3 million for the total year 2010.
·  
The Company expects continued strong operating cash flow with DSO between 60 and 63 days.
·  
Capital expenditures are anticipated to be $32 million in 2010, consisting of $12.5 million of information systems investments, $12.5 million in expansion projects and $7 million related to maintenance.
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REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 5    

Conference Call Information
RehabCare will host a conference call on May 5, 2010, beginning at 11:00 AM Eastern time.  Listeners may access the call by dialing (800) 640-9765, confirmation number 26760582, or in a listen-only mode through the Company’s website at http://www.rehabcare.com/about/investors/webcast.html.  A replay of the call will be available beginning at approximately 4:00 PM Eastern Time on May 5 by dialing (877) 213-9653, confirmation number 26760582.  An online archive of the conference call will remain on the Company’s website through June 4, 2010.

Investor Day Information
RehabCare will host an Investor Day for financial analysts and investors on May 18, 2010, from 8:00 AM to 4:00 PM Central Time at the JW Marriott in Houston, TX.  The event will include presentations by senior management and tours of two RehabCare wholly-owned hospitals. From 8:30 AM to 12:00 PM, a live webcast of the management presentations may be accessed on the Company’s website.
 
About RehabCare Group
Established in 1982 and headquartered in St. Louis, MO, RehabCare (www.rehabcare.com) is a leading provider of rehabilitation program management services in partnership with nearly 1,270 hospitals and skilled nursing facilities in 41 states.  The Company also operates 34 freestanding long-term acute care and rehabilitation hospitals across the country.  RehabCare is included in the Russell 2000 and Standard and Poor’s Small Cap 600 Indices.
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the Company’s current expectations and could be affected by numerous factors, risks and uncertainties discussed in the Company’s filings with the Securities and Exchange Commission, including its most recent report on Form 10-K, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. Do not rely on forward-looking statements as the Company cannot predict or control many factors that affect its ability to achieve the results estimated.  The Company makes no promise to update any forward- looking statements because of changes in underlying factors, new information, future events or otherwise.
This press release contains non-GAAP financial measures as such term is defined in Regulation G under the rules of the Securities and Exchange Commission. While the Company believes these non-GAAP financial measures are useful in evaluating the Company, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Further, these non-GAAP financial measures may differ from similarly titled measures presented by other companies.  The Company has included reconciliations of these non-GAAP measures to the most directly comparable GAAP measure in the tables of this release.

CONTACT: RehabCare Group, Inc.
Financial: Jay W. Shreiner, Chief Financial Officer
(314) 659-2189
Press: Donna Lee, Office of the CEO
(314) 659-2287

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REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 6    



I. Condensed Consolidated Statements of Earnings
  
(Unaudited; amounts in thousands, except per share data)
  
                                 
 
Three Months Ended
    
 
Mar. 31,
Dec. 31,
Mar. 31,
      
   
2010
    
2009
    
2009
                
                                 
Operating revenues
$
327,361
  
$
254,692
  
$
201,531
                
Costs and expenses:
                                
Operating
  
261,070
    
208,824
    
159,291
                
Selling, general and administrative
  
26,535
    
33,876
    
24,081
                
Depreciation and amortization
  
7,280
    
5,120
    
3,869
                
Total costs and expenses
  
294,885
    
247,820
    
187,241
                
                                 
Operating earnings
  
32,476
    
6,872
    
14,290
                
                                 
Interest income
  
18
    
79
    
15
                
Interest expense
  
(8,500
)
  
(3,927
)
  
(572
)
              
Other income, net
  
7
    
8
    
1
                
Equity in net income of affiliates
  
116
    
105
    
166
                
                                 
Earnings from continuing operations before income taxes
  
24,117
    
3,137
    
13,900
                
Income tax expense
  
9,288
    
2,842
    
5,503
                
Earnings from continuing operations
  
14,829
    
295
    
8,397
                
Gain from discontinued operations
  
—
    
8
    
51
                
Net earnings
  
14,829
    
303
    
8,448
                
Net loss attributable to noncontrolling interests
  
164
    
352
    
212
                
Net earnings attributable to RehabCare
$
14,993
  
$
655
  
$
8,660
                
                                 
Amounts attributable to RehabCare:
                                
Earnings from continuing operations
$
14,993
  
$
647
  
$
8,609
                
Gain from discontinued operations
  
—
    
8
    
51
                
Net earnings
$
14,993
  
$
655
  
$
8,660
                
                                 
Diluted EPS attributable to RehabCare:
                                
Earnings from continuing operations
$
0.61
  
$
0.03
  
$
0.48
                
Gain from discontinued operations
  
—
    
—
    
—
                
Net earnings
$
0.61
  
$
0.03
  
$
0.48
                
                                 
Weighted average diluted shares
  
24,655
    
21,284
    
17,899
                

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REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 7    


II. Condensed Consolidated Balance Sheets
(Amounts in thousands)
         
   
Unaudited
    
   
March 31,
  
December 31,
   
2010
  
2009
Assets
                
Cash and cash equivalents
  
$
27,351
    
$
24,690
  
Accounts receivable, net
    
215,472
      
199,447
  
Deferred tax assets
    
21,240
      
21,249
  
Other current assets
    
18,380
      
19,530
  
Total current assets
    
282,443
      
264,916
  
                 
Property and equipment, net
    
112,070
      
111,814
  
Goodwill
    
566,078
      
566,078
  
Intangible assets
    
133,280
      
135,406
  
Investment in unconsolidated affiliate
    
4,754
      
4,761
  
Other assets
    
26,277
      
27,005
  
   
$
1,124,902
    
$
1,109,980
  
Liabilities & Equity
                
Current portion of long-term debt
  
$
11,747
    
$
7,507
  
Payables & accruals
    
142,933
      
144,113
  
Total current liabilities
    
154,680
      
151,620
  
                 
Long-term debt, less current portion
    
442,016
      
447,760
  
Other non-current liabilities
    
52,013
      
50,980
  
Stockholders’ equity
    
453,605
      
437,338
  
Noncontrolling interests
    
22,588
      
22,282
  
   
$
1,124,902
    
$
1,109,980
  
                 


III. Condensed Consolidated Statements of Cash Flows
(Unaudited; amounts in thousands)
 
Three Months Ended
 
March 31,
 
2010
  
2009
               
Net cash provided by operating activities
$
8,511
    
$
9,388
  
Net cash used in investing activities
  
(5,151
)
    
(1,468
)
Net cash provided by (used in) financing activities
  
(699
)
    
2,908
  
               
Net increase in cash and cash equivalents
  
2,661
      
10,828
  
Cash and cash equivalents at beginning of period
  
24,690
      
27,373
  
Cash and cash equivalents at end of period
$
27,351
    
$
38,201
  
               
               
Supplemental information:
              
Additions to property and equipment
$
(5,241
)
  
$
(1,557
)
               

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REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 8    
 
IV. Operating Statistics (Unaudited; dollars in thousands)
  
                                 
                                 
   
First
    
Fourth
    
First
      
   
Quarter
    
Quarter
    
Quarter
      
   
2010
    
2009
    
2009
                
Skilled Nursing Rehabilitation Services
                                
Operating revenues
$
126,352
  
$
125,965
  
$
123,148
                
Operating expenses
  
103,333
    
103,698
    
98,998
                
Selling, general and administrative
  
11,367
    
12,448
    
12,017
                
Depreciation and amortization
  
1,307
    
1,463
    
1,678
                
Operating earnings
$
10,345
  
$
8,356
  
$
10,455
                
Operating earnings margin
  
8.2
%
  
6.6
%
  
8.5
%
              
                                 
EBITDA
$
11,652
  
$
9,819
  
$
12,133
                
                                 
Average number of contract therapy locations
  
1,131
    
1,121
    
1,074
                
End of period number of contract therapy locations
  
1,125
    
1,118
    
1,063
                
                                 
Patient visits (in thousands)
  
2,020
    
2,023
    
2,005
                
                                 
                                 
Hospital Rehabilitation Services
                                
Operating revenues
                                
Inpatient Rehabilitation Facility (IRF)
$
29,016
  
$
31,294
  
$
30,018
                
Subacute
 
2,094
    
1,981
    
1,725
                
Total Inpatient
$
31,110
  
$
33,275
  
$
31,743
                
Outpatient
  
12,130
    
11,691
    
11,323
                
Total HRS
$
43,240
  
$
44,966
  
$
43,066
                
Operating expenses
  
31,155
    
31,666
    
30,634
                
Selling, general and administrative
  
4,627
    
5,373
    
5,490
                
Depreciation and amortization
  
537
    
592
    
646
                
Operating earnings
$
6,921
  
$
7,335
  
$
6,296
                
Operating earnings margin
  
16.0
%
  
16.3
%
  
14.6
%
              
                                 
EBITDA
$
7,458
  
$
7,927
  
$
6,942
                
                                 
Average number of programs
                                
IRF
  
104
    
110
    
113
                
Subacute
  
10
    
9
    
9
                
Total Inpatient
  
114
    
119
    
122
                
Outpatient
  
31
    
34
    
36
                
Total HRS
  
145
    
153
    
158
                
                                 
End of period number of programs
                                
IRF
  
103
    
106
    
113
                
Subacute
  
10
    
9
    
9
                
Total Inpatient
  
113
    
115
    
122
                
Outpatient
  
31
    
30
    
36
                
Total HRS
  
144
    
145
    
158
                
                                 
IRF discharges
  
10,007
    
10,907
    
10,999
                
Outpatient visits (in thousands)
  
262
    
305
    
311
                
                                 

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REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 9    

IV. Operating Statistics Continued (Unaudited; dollars in thousands)
  
                                 
   
First
    
Fourth
    
First
      
   
Quarter
    
Quarter
    
Quarter
      
   
2010
    
2009
    
2009
                
Hospitals
                                
Operating revenues
$
157,769
  
$
83,761
  
$
35,317
                
Operating expenses
  
126,582
    
73,460
    
29,659
                
Selling, general and administrative
  
10,541
    
16,055
    
6,455
                
Depreciation and amortization
  
5,436
    
3,065
    
1,545
                
Operating earnings (loss)
$
15,210
  
$
(8,819
)
$
(2,342
)
              
Operating earnings margin
  
9.6
%
  
-10.5
%
  
-6.6
%
              
                                 
EBITDA
$
20,646
  
$
(5,754
)
$
(797
)
              
                                 
LTACHs
                                
Number of hospitals – end of period
  
28
    
28
    
5
                
Available licensed beds – end of period
  
1,593
    
1,593
    
243
                
Admissions
  
3,563
    
1,759
    
516
                
Patient days
  
90,455
    
47,465
    
13,844
                
Average length of stay (Medicare days only)
  
26
    
27
    
27
                
Net inpatient revenue per patient day
$
1,515
  
$
1,346
  
$
1,248
                
Occupancy rate
  
63
%
  
61
%
  
63
%
              
Percent patient days - Medicare
  
73
%
  
72
%
  
74
%
              
                                 
IRFs
                                
Number of hospitals – end of period
  
6
    
6
    
6
                
Available licensed beds – end of period
  
243
    
243
    
243
                
Admissions
  
1,228
    
1,207
    
1,210
                
Discharges
  
1,188
    
1,223
    
1,148
                
Average length of stay (Medicare days only)
  
13
    
13
    
12
                
Net inpatient revenue per discharge
$
14,845
  
$
14,310
  
$
14,187
                
Occupancy rate
  
73
%
  
71
%
  
68
%
              
Percent patient days - Medicare
  
66
%
  
67
%
  
64
%
              
                                 
 

                                 
V. Operating Earnings and EBITDA Reconciliation
                                 
   
First
    
Fourth
    
First
      
   
Quarter
    
Quarter
    
Quarter
      
   
2010
    
2009
    
2009
                
                                 
SRS operating earnings
$
10,345
  
$
8,356
  
$
10,455
                
HRS operating earnings
  
6,921
    
7,335
    
6,296
                
Hospital operating earnings (loss)
  
15,210
    
(8,819
)
  
(2,342
)
              
Unallocated items
  
—
    
—
    
(119
)
              
Consolidated operating earnings
  
32,476
    
6,872
    
14,290
                
Depreciation and amortization
  
7,280
    
5,120
    
3,869
                
Consolidated EBITDA
$
39,756
  
$
11,992
  
$
18,159
                
 
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REHABCARE REPORTS FIRST QUARTER 2010 RESULTS
Page 10    



VI. Charges Included in Statement of Earnings
(Amounts in thousands, except per share data)
   
 
Fourth Quarter 2009
           
 
Pre-Tax Impact
  
After-Tax Impact
  
Diluted EPS
Transaction expenses1
  
$
7,070
  
$
4,313
  
$
0.20
Tax impact of non-deductible transaction expenses2
    
—
    
1,502
    
0.07
Severance expenses3
    
862
    
526
    
0.03
Long-term incentive plan expense resulting from the transaction2
    
1,443
    
880
    
0.04
   
$
9,375
  
$
7,221
  
$
0.34
                   
Breakdown by division
                  
Skilled Nursing Rehabilitation Services
  
$
648
            
Hospital Rehabilitation Services
    
322
            
Hospitals
    
8,405
            
   
$
9,375
            
                   
1$6,781 pretax related to the Triumph merger
                  
2Transaction expenses directly related to the Triumph merger
                  
3Severance expenses were primarily incurred in an effort to reduce corporate overhead and eliminate redundancies created by the Triumph merger
                  


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