Concentra Group Holdings Parent, Inc. Announces Results For Its First Quarter Ended March 31, 2025, Cash Dividend, and Revised FY 2025 Guidance

About this update from Concentra Group Holdings Parent, Inc.

ADDISON, Texas, May 07, 2025 --( BUSINESS WIRE )--Concentra Group Holdings Parent, Inc. ("Concentra," the "Company," "we," "us," or "our") (NYSE: CON), the nation’s largest provider of occupational health services, today announced results for its first quarter ended March 31, 2025, and the declaration of a cash dividend. "Concentra reported a solid start to 2025 with strong revenue and Adjusted EBITDA growth in the first quarter. With a deep understanding of patient and client needs and market dynamics, we continue to execute on key drivers of growth and deliver a comparative market advantage. Maintaining this focus ensures we continue to achieve our strategic business objectives for the year," said Keith Newton, Chief Executive Officer of Concentra. Matt DiCanio, Concentra’s President & Chief Financial Officer, added, "We are very pleased with the organic and inorganic growth developments at the outset of 2025, including the first positive year-over-year growth in Employer Services visit volumes in several quarters. We successfully closed the Nova Medical Centers acquisition and launched three de novo centers in the first quarter, and in April signed a definitive agreement to acquire Pivot Onsite Innovations. We remain focused and confident in our ability to achieve an effective and efficient integration of these centers and businesses through our organizational design and operational efficiency, providing great momentum as we progress in 2025." First Quarter 2025 Highlights First Quarter 2025 Financial Overview For the first quarter ended March 31, 2025, revenue increased 7.1% to $500.8 million, compared to $467.6 million for the same quarter, prior year. Income from operations increased 6.4% to $80.3 million for the first quarter ended March 31, 2025, compared to $75.5 million for the same quarter, prior year. Net income was $40.6 million and earnings per common share was $0.30 for the first quarter ended March 31, 2025 compared to net income of $50.3 million and earnings per common share of $0.47, for the same quarter, prior year. Net income decreased due to higher interest expense from the IPO recapitalization. Adjusted earnings per common share was $0.32 for the first quarter ended March 31, 2025, compared to $0.49 for the same quarter, prior year. Adjusted EBITDA increased 6.8% to $102.7 million for the first quarter ended March 31, 2025, compared to $96.1 million for the same quarter, prior year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table VII of this release. The definition of adjusted earnings per share and a reconciliation of net income attributable to common shares and earnings per common share on a fully diluted basis to adjusted net income attributable to common shares and adjusted earnings per common share on a fully diluted basis are presented in table VIII of this release. Balance Sheet As of March 31, 2025, our balance sheet reflected cash of $52.1 million, total debt of $1,634.2 million and total assets of $2,729.2 million. Concentra’s net leverage ratio as of March 31, 2025 is 3.9x, which was in compliance with the financial covenant under our credit agreement. The Company is targeting a net leverage ratio of approximately 3.0x within 18-24 months. Cash Flow Cash flows provided by operating activities in the first quarter ended March 31, 2025 totaled $11.7 million compared to $44.6 million for the same quarter, prior year. The decline in year over year cash flow from operations is largely attributable to a $28.2 million increase in interest payments following the recapitalization of the Company in July 2024 in conjunction with Concentra’s IPO. During the first quarter ended March 31, 2025, cash flow from investing activity resulted in cash used of $294.7 million, including capital expenditures of $15.7 million and acquisition-related spend of $279.0 million. Cash flow from operations less cash flow from investing activity resulted in cash used of $283.1 million for the quarter. Cash flow from financing activity generated $151.9 million for the quarter, resulting in a decrease in cash of $131.1 million. Nova Acquisition Closing Effective March 1, 2025, the Company acquired Nova Medical Centers ("Nova") for a purchase price of $265 million, subject to adjustment in accordance with the terms and conditions set forth in the equity purchase agreement. Nova operates 67 occupational health centers in five states, providing workers’ compensation injury care services, physical therapy, drug and alcohol screening, and pre-employment physicals as part of their full suite of occupational health services. The process of integrating Nova into Concentra’s network of occupational health centers is off to a strong start, which will help us strengthen the delivery of quality care and exceptional service through greater access, while also resulting in accelerated innovation and enhanced outcomes for patients, customers and employers. The transaction was financed using a combination $102.1 million of new debt financing under the Credit Agreement, $50.0 million of available borrowing capacity under our existing Revolving Credit Facility, and the remaining with cash on hand. Debt Financing On March 3, 2025, the Company completed an amendment to the Credit Agreement to increase our Revolving Credit Facility by $50.0 million from $400.0 million to $450.0 million. The interest rate for the Revolving Credit Facility has been reduced from Term SOFR plus 2.50% to Term SOFR plus 2.00%, subject to a leverage-based pricing grid. In addition, the amendment to the Credit Agreement also added new debt through an incremental term loan of $102.1 million, which provides an updated Term Loan of $950.0 million. The Term Loan interest rate has been reduced from Term SOFR plus 2.25% down to Term SOFR plus 2.00%, subject to a leverage-based pricing grid including 25-basis point step down at a net leverage ratio of ≤3.25x. Pivot Onsite Innovations On April 18, 2025, Concentra Health Services, Inc. ("CHS"), a wholly owned subsidiary of the Company, entered into an equity purchase agreement with Pivot Occupational Health, LLC to acquire all of the outstanding equity interests of Onsite Innovations, LLC ("Pivot Onsite Innovations"). The transaction values Pivot Onsite Innovations at $55 million, subject to adjustment in accordance with the terms and conditions set forth in the purchase agreement. The transaction is expected to close in the second quarter of 2025 and is subject to customary closing conditions set forth in the purchase agreement. CHS currently expects to finance the announced transaction using a combination of cash on hand and available borrowing capacity under its existing revolving credit facility. Pivot Onsite Innovations operates approximately 200 onsite health clinics at employer locations in over 40 states, providing occupational health, wellness, prevention, and performance services. When combined with Concentra’s current onsite health clinic footprint, the acquisition will enable the Company to expand to more than 350 onsite health clinics at employer worksites. Dividend On May 6, 2025, the Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable May 29, 2025, to stockholders of record as of the close of business on May 20, 2025. There is no assurance that future dividends will be declared. The declaration and payment of dividends in the future are at the discretion of the Board of Directors after taking into account various factors, including, but not limited to, the Company’s financial condition, operating results, available cash and current and anticipated cash needs, the terms of indebtedness, and other factors the Board of Directors may deem to be relevant. 2025 Business Outlook Concentra raised its financial guidance for 2025, based on strong Q1 results and additional development activity. For 2025, Concentra now expects to deliver the following results: A reconciliation of full year 2025 Adjusted EBITDA expectations to net income is presented in table IX of this release. Company Overview Concentra is the largest provider of occupational health services in the United States by number of locations, with the mission of improving the health of America’s workforce, one patient at a time. Our approximately 12,000 colleagues and affiliated physicians and clinicians support the delivery of an extensive suite of services, including occupational and consumer health services and other direct-to-employer care. We support the care of approximately 50,000 patients each day on average across 45 states at our 627 occupational health centers, 160 onsite health clinics at employer worksites, and Concentra Telemed as of March 31, 2025. Conference Call Concentra will host a conference call regarding its first quarter financial results and business outlook on Thursday May 8, 2025, at 9 a.m. Eastern Time. The conference call will be a live webcast and can be accessed via this Earnings Call Webcast Link or via Concentra’s website at https://ir.concentra.com . A replay of the webcast will be available shortly after the call at the same locations. Participants may join the audio-only version of the webcast or participate in the question-and-answer session by calling: Toll Free: 888-506-0062 International: 973-528-0011 Participant Access: All dial-in participants should ask to join the Concentra call. 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), including statements related to Concentra’s 2025 and long-term business outlook. 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: Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance. II. Earnings per Share For the Three Months Ended March 31, 2025 and 2024 (In thousands, except per share amounts, unaudited) As of March 31, 2025, the Company’s capital structure consists of common stock and unvested restricted stock. To calculate earnings per share ("EPS") for the three months ended March 31, 2025, the Company applied the two-class method because its unvested restricted shares were participating securities. As of March 31, 2024, the Company’s capital structure consists of common stock and there were no participating shares or securities outstanding. The following table sets forth the net income attributable to the Company, its shares, and its participating shares: The following table sets forth the computation of EPS. The Company applied the two-class method for the three months ended March 31, 2025. The following table sets forth operating statistics for our occupational health centers operating segment for the periods presented: VI. Disaggregated Revenue For the Three Months Ended March 31, 2025 and 2024 (In thousands, unaudited) The following table disaggregates the Company’s revenue for the three months ended March 31, 2025 and 2024: VII. Net Income to Adjusted EBITDA Reconciliation For the Three Months Ended March 31, 2025 and 2024 (In thousands, unaudited) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures that we believe provide useful insight into the underlying performance of our business by excluding items that may obscure trends in our core operating results. These metrics are not intended to be substitutes for GAAP measures such as net income and may differ from similarly titled metrics supported by other companies. We use these non-GAAP measures internally for budgeting, forecasting, and evaluating performance. Investors should consider these measures in addition to, and not as a replacement for, GAAP results reported in our financial statements. Adjusted EBITDA is a supplemental measure that we believe offers a clearer view of business performance by excluding items that do not reflect the core operations of the Company. We define adjusted EBITDA as net income before interest, income taxes, depreciation and amortization, stock-based compensation expense, acquisition related costs, gains or losses on early retirement of debt, separation transaction costs, gains or losses on the sale of businesses, and equity in earnings or losses from unconsolidated subsidiaries. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenue. This margin helps assess the efficiency of our operations on a normalized basis. The following table reconciles net income to Adjusted EBITDA and net income margin to Adjusted EBITDA margin and should be referenced when we discuss Adjusted EBITDA and Adjusted EBITDA margin. VIII. Reconciliation of Earnings per Common Share to Adjusted Earnings per Common Share For the Three Months Ended March 31, 2025 and 2024 (In thousands, except per share amounts, unaudited) Adjusted Net Income Attributable to Common Shares and Adjusted Earnings per Common Share are used by management to provide useful insight into the underlying performance of our business in each of our operating segments. Adjusted Net Income Attributable to Common Shares and Adjusted Earnings per Common Share are not measures of financial performance under U.S. GAAP and are not intended to be substitutes for U.S. GAAP measures such as net income or earnings per common share. These metrics may differ from similarly titled metrics supported by other companies. Concentra believes that the presentation of Adjusted Net Income Attributable to Common Shares and Adjusted Earnings per Common Share are important to investors because they are reflective of the financial performance of Concentra’s ongoing operations and provide better comparability of its results of operations between periods. Investors should consider these measures in addition to, and not as a replacement for, U.S. GAAP results reported in our financial statements. We define Adjusted Net Income Attributable to Common Shares as net income attributable to common shares, excluding gain (loss) on early retirement of debt, separation transaction costs, acquisition costs, gain (loss) on sale of businesses, and other non-recurring costs not directly tied to operating performance. We define Adjusted Earnings per Common Share as the Adjusted Net Income Attributable to Common Shares divided by the diluted weighted average common shares outstanding. The following table reconciles net income attributable to common shares and earnings per common share on a fully diluted basis to Adjusted Net Income Attributable to Common Shares and Adjusted Earnings per Common Share on a fully diluted basis. IX. 2025 Net Income to Adjusted EBITDA Reconciliation Business Outlook for the Year Ending December 31, 2025 (In millions, unaudited) The following is a reconciliation of full year 2025 Adjusted EBITDA expectations as computed at the low and high points of the range to the closest comparable GAAP financial measure. Refer to tables VII for discussion of Concentra's use of Adjusted EBITDA in evaluating financial performance and for the definition of Adjusted EBITDA. Each item presented in the below table is an estimation of full year 2025 expectations. View source version on businesswire.com: https://www.businesswire.com/news/home/20250507862937/en/ Contacts Investor inquiries: Bill Chapman Vice President, Strategy & Investor Relations 972-725-6488 [email protected]

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