Concentra Raises Outlook as Margins Expand
Second-quarter revenue rose 10% to $606.0 million despite slower patient-visit growth.
Concentra Group Holdings Parent (CON), the occupational-health services provider, expanded its adjusted EBITDA margin to 23.3% in the second quarter from 20.9% a year earlier and about 21.2% in the first quarter.
The margin gains marked an earnings acceleration even as revenue growth moderated. Higher revenue per visit and rapid expansion in onsite clinics helped offset slower patient-volume growth.
Revenue rose 10% from a year earlier, easing from growth of 13.7% in the first quarter. Net income attributable to Concentra increased 46.5% to $65.3 million, while earnings rose to $0.51 a share from $0.35 a year earlier and $0.39 in the preceding quarter.
Patient visits increased 2.6% to 3.61 million, slowing from 6.7% growth in the first quarter. Revenue per visit rose 4.6% to $152.67, an acceleration from the prior quarter’s 3.1% increase.
Workers’ compensation remained the principal center-based driver, with visits up 3.7% and revenue per visit rising 4.9%. Consumer-health visits fell 3.8%, while revenue per visit slipped 0.2%.
Onsite health-clinic revenue rose 72.1% to $38.8 million, supplying roughly $16.3 million of Concentra’s $55.2 million overall revenue increase. Occupational-health-center revenue grew 7.2% to $553.5 million.
Adjusted EBITDA increased 22.5% to $140.9 million, accelerating from 17.6% growth in the first quarter. Operating income rose 28.5% as total costs and expenses increased 6.3%, below the pace of revenue growth.
Concentra raised its full-year outlook for a second consecutive quarter. The company now expects revenue of $2.325 billion to $2.375 billion and adjusted EBITDA of $485 million to $495 million, while targeting free cash flow of $220 million to $240 million and net leverage below 3.0 times.
Net leverage declined to 2.99 times at June 30, meeting that target, as free cash flow rose 91.6% to $121.0 million. President and Chief Financial Officer Matt DiCanio will become chief executive on Nov. 1, succeeding Keith Newton, who will become executive chairman.