You should read this discussion together with our unaudited condensed consolidated financial statements and accompanying notes. Forward-Looking Statements This report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “target,” “estimate,” “project,” “intend,” and similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, including our business strategy and means to implement our strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs, and sources of liquidity. Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding our services, the expansion of our services, competitive conditions, and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following: •changes in government reimbursement for our services and/or new payment policies may result in a reduction in revenue, an increase in costs, and a reduction in profitability; •adverse economic conditions including an inflationary environment, and changes to United States tariff and import/export regulations, could cause us to continue to experience increases in the prices of labor and other costs of doing business resulting in a negative impact on our business, operating results, cash flows, and financial condition; •shortages in qualified nurses, therapists, physicians, or other licensed providers, and/or the inability to attract or retain qualified healthcare professionals could limit our ability to staff our facilities; •shortages in qualified health professionals could cause us to increase our dependence on contract labor, increase our efforts to recruit and train new employees, and expand upon our initiatives to retain existing staff, which could increase our operating costs significantly; •the negative impact of public threats such as a global pandemic or widespread outbreak of an infectious disease similar to the COVID-19 pandemic; •political instability, conflicts (such as the ongoing war between Russia and Ukraine, conflicts in the Middle East, tensions between China and Taiwan, and recent U.S. military action in Venezuela), and government shutdowns, civil disturbances, and international events; •the failure of our Medicare-certified long term care hospitals or inpatient rehabilitation facilities to maintain their Medicare certifications may cause our revenue and profitability to decline; •the failure of our Medicare-certified long term care hospitals and inpatient rehabilitation facilities operated as “hospitals within hospitals” to qualify as hospitals separate from their host hospitals may cause our revenue and profitability to decline; •a government investigation or assertion that we have violated applicable regulations may result in sanctions or reputational harm and increased costs; •acquisitions or joint ventures may prove difficult or unsuccessful, use significant resources, or expose us to unforeseen liabilities; •our plans and expectations related to our acquisitions and our ability to realize anticipated synergies; •private third-party payors for our services may adopt payment policies that could limit our future revenue and profitability; 17 Table of Contents •the failure to maintain established relationships with the physicians in the areas we serve could reduce our revenue and profitability; •the proposed Merger, including the ability of the parties to consummate the proposed Merger, if at all, on the anticipated terms and timing, including obtaining the stockholder and regulatory approvals, and the satisfaction of other conditions to the completion of the proposed Merger; •potential payment of the termination fees under specified circumstances if the Merger Agreement is terminated; •the outcome of any current or potential litigation against us, and members of our Board of Directors relating to the proposed Merger; •competition may limit our ability to grow and result in a decrease in our revenue and profitability; •the loss of key members of our management team could significantly disrupt our operations; •the effect of claims asserted against us could subject us to substantial uninsured liabilities; •a security breach of our or our third-party vendors’ information technology systems may subject us to potential legal and reputational harm and may result in a violation of the Health Insurance Portability and Accountability Act of 1996 or the Health Information Technology for Economic and Clinical Health Act; and •other factors discussed from time to time in our filings with the SEC, including factors discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and in our Quarterly Report on Form 10-Q. 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. Investors should also be aware that while we do, from time to time, communicate with securities analysts, it is against our policy to disclose to securities analysts any material non-public information or other confidential commercial information. Accordingly, stockholders should not assume that we agree with any statement or report issued by any securities analyst irrespective of the content of the statement or report. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of the Company. 18 Table of Contents Overview We began operations in 1997 and, based on number of facilities, are one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States. As of March 31, 2026, we had operations in 38 states and the District of Columbia. We operated 103 critical illness recovery hospitals in 28 states, 41 rehabilitation hospitals in 15 states, and 1,912 outpatient rehabilitation clinics in 37 states and the District of Columbia. Our reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, and the outpatient rehabilitation segment. We had revenue of $1,421.5 million for the three months ended March 31, 2026. Of this total, we earned approximately 45% of our revenue from our critical illness recovery hospital segment, approximately 25% from our rehabilitation hospital segment, and approximately 23% from our outpatient rehabilitation segment. Our critical illness recovery hospital segment consists of hospitals designed to serve the needs of patients recovering from critical illnesses, often with complex medical needs, and our rehabilitation hospital segment consists of hospitals designed to serve patients that require intensive physical rehabilitation care. Patients are typically admitted to our critical illness recovery hospitals and rehabilitation hospitals from general acute care hospitals. Our outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services. On March 2, 2026, the Company entered into an agreement and plan of merger, by and among the Company, Stallion Intermediate Corporation, a Delaware corporation (“Parent”), and Stallion MergerSub Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) (as may be amended from time to time, the “Merger Agreement”), pursuant to which and subject to the terms and conditions therein, at the effective time of the Merger (the “Effective Time”), Merger Sub will merge with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent (the “Merger”). Parent is a wholly-owned subsidiary of WCAS XIV, L.P., an investment fund affiliated with Welsh, Carson, Anderson & Stowe and a member of a consortium led by Robert A. Ortenzio, our Executive Chairman, Co-Founder and Director and Martin F. Jackson, our Senior Executive Vice President of Strategic Finance and Operations. Upon completion of the Merger, each issued and outstanding share of Company common stock, par value $0.001 per share (subject to certain exceptions, including Rollover Shares, shares held by Parent or the Company as treasury stock or otherwise, and shares for which appraisal rights have been properly demanded), will be converted into the right to receive $16.50 per share in cash, without interest (the “Merger Consideration”). Immediately prior to the Effective Time, each share of common stock that is subject to forfeiture conditions (other than any such shares that are Rollover Shares (as defined in the Merger Agreement)) will vest in full and be treated the same as all other shares of common stock, entitling the holder thereof to receive the Merger Consideration. Concurrently with the execution of the Merger Agreement, WCAS XIV, L.P. (in such capacity, the “Equity Investor”) committed to provide equity financing of up to $880.0 million to fund a portion of the Merger Consideration and related fees and expenses, on the terms and subject to the conditions set forth in an equity commitment letter. In addition, Parent has obtained committed debt financing pursuant to a debt commitment letter to fund the remaining portion of the amounts required to consummate the Merger. The Equity Investor (in such capacity, the “Guarantor”) also entered into a limited guaranty in favor of the Company, guaranteeing certain payment obligations of Parent and Merger Sub under the Merger Agreement, including payment of the termination fee that may be owed by Parent. The completion of the Merger is subject to the receipt of required regulatory approvals, including certain healthcare regulatory approvals, the approval of the Company’s stockholders (including a separate majority vote of shares not beneficially owned by Parent, Merger Sub, the Rollover Holders (as defined in the Merger Agreement) or their respective affiliates), and other customary closing conditions. The applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on April 27, 2026. The Merger Agreement does not contain any financing condition. The Company currently expects to complete the Merger in the middle of 2026, although there can be no assurance that the Merger will occur in accordance with the expected plans or anticipated timeline, or at all. The Merger Agreement contains certain customary termination rights for the Company and Parent, including, without limitation, a right for either party to terminate if the Merger is not completed on or before December 1, 2026, subject to an automatic extension until March 1, 2027, under certain circumstances specified in the Merger Agreement. Termination under specified circumstances will require the Company to pay Parent a termination fee of $66.5 million (the “Company Termination Fee”) or Parent to pay the Company a termination fee of $133.0 million. The Merger Agreement also provides that, in certain circumstances, each party may seek to compel the other parties to specifically perform their obligations under the Merger Agreement. If the Merger is consummated, the shares of common stock will be delisted from the New York Stock Exchange and deregistered under the Exchange Act. 19 Table of Contents Non-GAAP Measure We believe that the presentation of Adjusted EBITDA, as defined below, is important to investors because Adjusted EBITDA is commonly used as an analytical indicator of performance by investors within the healthcare industry. Adjusted EBITDA is used by management to evaluate financial performance and determine resource allocation for each of our segments. Adjusted EBITDA is not a measure of financial performance under GAAP. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation, or as an alternative to, or substitute for, net income, income from operations before other income and expense, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying definitions, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. We define Adjusted EBITDA as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, take private transaction costs, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries. We will refer to Adjusted EBITDA throughout the remainder of Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following table reconciles net income and income from operations to Adjusted EBITDA and should be referenced when we discuss Adjusted EBITDA: Three Months Ended March 31, 2025 2026 (in thousands) Net income $ 74,732 $ 63,775 Income tax expense 21,453 18,318 Interest expense 29,072 28,336 Equity in earnings of unconsolidated subsidiaries (12,512) (12,011) Income from operations 112,745 98,418 Stock compensation expense: Included in general and administrative 3,108 3,609 Included in cost of services 784 1,029 Depreciation and amortization 34,808 37,666 Take private transaction costs — 846 Adjusted EBITDA $ 151,445 $ 141,568 20 Table of Contents Summary Financial Results Three Months Ended March 31, 2026 The following tables reconcile our segment performance measures to our consolidated operating results: Three Months Ended March 31, 2026 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Other Total (in thousands) Revenue $ 638,776 $ 351,942 $ 321,300 $ 109,458 $ 1,421,476 Operating expenses (565,343) (270,864) (299,316) (149,869) (1,285,392) Depreciation and amortization (17,651) (9,215) (9,149) (1,651) (37,666) Income (loss) from operations $ 55,782 $ 71,863 $ 12,835 $ (42,062) $ 98,418 Depreciation and amortization 17,651 9,215 9,149 1,651 37,666 Take private transaction costs — — — 846 846 Stock compensation expense — — — 4,638 4,638 Adjusted EBITDA $ 73,433 $ 81,078 $ 21,984 $ (34,927) $ 141,568 Adjusted EBITDA margin 11.5 % 23.0 % 6.8 % N/M 10.0 % Three Months Ended March 31, 2025 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Other Total (in thousands) Revenue $ 637,030 $ 307,388 $ 307,342 $ 101,412 $ 1,353,172 Operating expenses (550,381) (236,964) (283,069) (135,205) (1,205,619) Depreciation and amortization (16,648) (7,378) (9,052) (1,730) (34,808) Income (loss) from operations $ 70,001 $ 63,046 $ 15,221 $ (35,523) $ 112,745 Depreciation and amortization 16,648 7,378 9,052 1,730 34,808 Stock compensation expense — — — 3,892 3,892 Adjusted EBITDA $ 86,649 $ 70,424 $ 24,273 $ (29,901) $ 151,445 Adjusted EBITDA margin 13.6 % 22.9 % 7.9 % N/M 11.2 % Net income was $63.8 million for the three months ended March 31, 2026, compared to $74.7 million for the three months ended March 31, 2025. The following table summarizes the changes in our segment performance measures for the three months ended March 31, 2026, compared to the three months ended March 31, 2025: Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Other Total Change in revenue 0.3 % 14.5 % 4.5 % 7.9 % 5.0 % Change in income from operations (20.3) % 14.0 % (15.7) % N/M (12.7) % Change in Adjusted EBITDA (15.3) % 15.1 % (9.4) % N/M (6.5) % _______________________________________________________________________________ N/M Not meaningful. 21 Table of Contents Regulatory Changes Our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026, contains a detailed discussion of the regulations that affect our business in Part I — Business — Government Regulations. The following is a discussion of some of the more significant healthcare regulatory changes that have affected our financial performance in the periods covered by this report, or are likely to affect our financial performance and financial condition in the future. The information below should be read in conjunction with the more detailed discussion of regulations contained in our Form 10-K. Medicare Reimbursement The Medicare program reimburses healthcare providers for services furnished to Medicare beneficiaries, which are generally persons age 65 and older, those who are chronically disabled, and those suffering from end stage renal disease. The program is governed by the Social Security Act of 1965 and is administered primarily by the Department of Health and Human Services (“HHS”) and CMS. Revenue generated directly from the Medicare program represented approximately 31% and 29% of our revenue for the three months ended March 31, 2026, and for the year ended December 31, 2025, respectively. One Big Beautiful Bill Act On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (Pub. L. No. 119-21) (“OBBBA”) into law. OBBBA made several significant changes to Medicaid funding and coverage requirements that will impact many health care providers. The Congressional Budget Office (“CBO”) estimates that OBBBA will reduce federal funding for Medicaid and the Children’s Health Insurance Program by approximately $1 trillion over the next 10 years. The OBBBA includes significant changes to Medicaid provider taxes, provider tax waivers, and state directed payments (“SDPs”). On January 29, 2026, CMS issued a final rule titled "Preserving Medicaid Funding for Vulnerable Populations - Closing a Health Care-Related Tax Loophole.” Effective April 3, 2026, the rule finalizes and codifies proposed regulations under the OBBBA to close a loophole that currently allows some health care-related taxes, especially taxes on managed care organizations, to be imposed at higher tax rates on Medicaid taxable units than non-Medicaid taxable units. It is likely that some states will need to reform their Medicaid programs to account for the reduced federal funding under the OBBBA. Responses by affected states could include adjustments to provider tax assessments, cuts to their Medicaid reimbursement rates for providers, or eliminating Medicaid coverage for certain optional services or patient populations. On February 2, 2026, CMS issued updated guidance addressing the new limits in OBBBA on SDPs for inpatient hospital services, outpatient hospital services, nursing facility services, and qualified practitioner services at academic medical centers. Medicaid programs use SDPs to increase Medicaid managed care organization payment rates for certain services. Section 71116 of OBBBA requires CMS to limit SDP payment rates for the specified services to 100% of the Medicare rate in Medicaid expansion states and 110% of the Medicare rate in non-expansion states. The updated guidance states that CMS intends to issue a proposed rule to implement OBBBA’s new limits on SDPs, and this rule could extend the limits on SDPs for other services beyond the four services mandated by Section 71116 of OBBBA. In addition, the updated guidance expands the time-period slightly to determine whether a state’s SDP is eligible for the temporary grandfathering provision in OBBBA that allows certain existing SDPs to exceed the new limits until the first rating period that begins on or after January 1, 2028. At this time, we cannot estimate the OBBBA’s impact, nor can we predict the timing of that impact, on our future financial condition or results of operations; however, we may experience decreased reimbursement from governmental health care programs as a result of OBBBA, including the law’s changes to Medicaid provider taxes and SDPs. Additionally, as discussed below under the “Medicare Reimbursement of Outpatient Rehabilitation Clinic Services,” CMS implemented a statutory increase of 2.5% to the calendar year 2026 Medicare physician fee schedule (“MPFS”) conversion factor, as required by the OBBBA. The CBO sent an August 15, 2025, letter to Democratic budget and finance committee leaders in Congress estimating that OBBBA will increase the federal deficit by $2.1 trillion from 2025 to 2029 and by $3.4 trillion from 2025 to 2034, triggering Pay-As-You-Go (“PAYGO”) Act cuts to government spending through a sequestration provision. A sequestration cut under the Budget Control Act (“BCA”) of 2011 (Pub. L. 112-25) currently reduces Medicare payments to all providers and suppliers by 2%. Medicare payments would have been reduced by an additional 4% as a result of a PAYGO sequestration order, without relief from Congress. However, the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (Pub. L. No. 119-37) reset the PAYGO scorecards to zero at the end of 2025. This eliminated the 4% PAYGO sequestration cut to Medicare payments in 2026. The 2% BCA sequestration cut to Medicare payments will continue to apply. 22 Table of Contents Medicare Reimbursement of LTCH Services The following is a summary of significant regulatory changes to the Medicare prospective payment system for our critical illness recovery hospitals, which are certified by Medicare as LTCHs, which have affected our results of operations, as well as the policies and payment rates that may affect our future results of operations. Medicare payments to our critical illness recovery hospitals are made in accordance with the long-term care hospital prospective payment system (“LTCH-PPS”). Fiscal Year 2025. On August 28, 2024, CMS published a final rule updating policies and payment rates for the LTCH-PPS for fiscal year 2025 (affecting discharges and cost reporting periods beginning on or after October 1, 2024, through September 30, 2025). Certain errors in the final rule were corrected in a document published on October 2, 2024. In an interim final action document published on October 3, 2024, CMS also made modifications to the fiscal year 2025 policies and payment rates as a result of a decision issued by the United States Court of Appeals for the District of Columbia Circuit. The standard federal rate for fiscal year 2025 was set at $49,383, an increase from the standard federal rate applicable during fiscal year 2024 of $48,117. The update to the standard federal rate for fiscal year 2025 included a market basket increase of 3.5%, less a productivity adjustment of 0.5%. The standard federal rate also included an area wage budget neutrality factor of 0.9964315. The fixed-loss amount for high cost outlier cases paid under LTCH-PPS was set at $77,048, an increase from the fixed-loss amount in the 2024 fiscal year of $59,873. The fixed-loss amount for high cost outlier cases paid under the site-neutral payment rate was set at $46,217, an increase from the fixed-loss amount in the 2024 fiscal year of $42,750. Fiscal Year 2026. On August 4, 2025, CMS published a final rule updating policies and payment rates for the LTCH-PPS for fiscal year 2026 (affecting discharges and cost reporting periods beginning on or after October 1, 2025, through September 30, 2026). The standard federal rate for fiscal year 2026 is $50,825, an increase from the standard federal rate applicable during fiscal year 2025 of $49,383. The update to the standard federal rate for fiscal year 2026 includes a market basket increase of 3.4%, less a productivity adjustment of 0.7%. The standard federal rate also includes an area wage budget neutrality factor of 1.0021275. The fixed-loss amount for high cost outlier cases paid under LTCH-PPS is $78,936, an increase from the fixed-loss amount in the 2025 fiscal year of $77,048. The fixed-loss amount for high cost outlier cases paid under the site-neutral payment rate is $40,397, a decrease from the fixed-loss amount in the 2025 fiscal year of $46,217. Fiscal Year 2027. On April 14, 2026, CMS published a proposed rule to update policies and payment rates for the LTCH-PPS for fiscal year 2027 (affecting discharges and cost reporting periods beginning on or after October 1, 2026, through September 30, 2027). The proposed standard federal rate for fiscal year 2027 is $52,177, an increase from the standard federal rate applicable during fiscal year 2026 of $50,825. The proposed update to the standard federal rate for fiscal year 2027 includes a market basket increase of 3.2%, less a productivity adjustment of 0.8%. The proposed standard federal rate also includes an area wage budget neutrality factor of 1.0025505. The proposed fixed-loss amount for high cost outlier cases paid under LTCH-PPS is $78,936, which is the same fixed-loss amount CMS adopted for fiscal year 2026. The proposed fixed-loss amount for high cost outlier cases paid under the site-neutral payment rate is $51,679, an increase from the fixed-loss amount in the 2026 fiscal year of $40,397. Criteria for Reconciliation of Outlier Payments Under the LTCH-PPS, CMS makes two types of outlier payments to LTCHs. First, CMS makes additional payments to LTCHs for high cost outlier cases that have extraordinarily high costs relative to the costs of most discharges. For these cases, CMS sets a fixed-loss amount each year that represents the maximum loss an LTCH will incur for a case before qualifying for a high cost outlier payment. A high cost outlier threshold equal to the LTCH-PPS adjusted federal payment for the case plus the fixed-loss amount determines when Medicare pays a high cost outlier payment. Such payments are based on 80% of the estimated cost of the case above the high cost outlier threshold. Second, CMS reduces payments to LTCHs for patients with a relatively short stay, which is defined as a length of stay less than or equal to five-sixths of the geometric average length of stay for that particular “MS-LTC-DRG”, which is a Medicare severity long-term diagnosis-related group for LTCHs. Short stay outlier cases are paid using a per diem rate based on 120% of the MS-LTC-DRG specific per diem amount and an inpatient prospective payment system per diem amount. Outlier payments made to LTCHs during the cost reporting year may be reconciled at cost report settlement by the Medicare Administrative Contractor (“MAC”) if certain criteria are met. According to CMS, the reconciliation of outlier payments is intended to account for the fact that the LTCH’s cost-to-charge ratio (“CCR”) used to pay Medicare claims during the cost reporting year may differ from the LTCH’s final CCR for the year calculated by the MAC at cost report settlement. The outlier reconciliation criteria were: (1) a change in the LTCH’s CCR of 10 percentage points or more when comparing the actual CCR to the CCR used during the cost reporting period to make outlier payments; and (2) the LTCH received at least $500,000 in outlier payments during the cost reporting period. If the criteria for outlier reconciliation are met, the MAC will conduct an outlier reconciliation to determine whether the LTCH was overpaid or underpaid for outlier cases. If the LTCH was overpaid, the LTCH must repay Medicare in the amount of the overpayment plus the time value of money (i.e., interest). If the LTCH was underpaid, Medicare must pay the LTCH in the amount of the underpayment plus the time value of money. 23 Table of Contents On April 26, 2024, CMS issued new guidance in Transmittal 12594 changing the criteria for LTCH outlier reconciliations. CMS modified the first criterion to a change in the LTCH’s CCR of 20 percent or more from the CCR used to make outlier payments during the cost reporting period. CMS did not change the second criterion for reconciliation that the LTCH must have received at least $500,000 in outlier payments during the cost reporting period. CMS added a new requirement that every new LTCH will be subject to outlier reconciliation. The revised policy was scheduled to be effective for cost reporting periods beginning on or after October 1, 2024. However, CMS issued Transmittal 13428 on September 22, 2025, to delay the effective date by one year, for cost reporting periods beginning on or after October 1, 2025. MACs should receive the first cost reports subject to the revised policy in March 2027. Setting the threshold at 20 percent for changes in the hospital’s CCR will result in more outlier reconciliations. This increases the likelihood that LTCHs will have a portion of their outlier payments recouped by the MAC at cost report settlement. Because outlier reconciliations often delay the final settlement of cost reports, and providers cannot appeal disputed reimbursement amounts until the cost report is settled, this new policy will likely result in additional delays of reimbursement appeals related to LTCH cost reports. Medicare Reimbursement of IRF Services The following is a summary of significant regulatory changes to the Medicare prospective payment system for our rehabilitation hospitals, which are certified by Medicare as IRFs, which have affected our results of operations, as well as the policies and payment rates that may affect our future results of operations. Medicare payments to our rehabilitation hospitals are made in accordance with the inpatient rehabilitation facility prospective payment system (“IRF-PPS”). Fiscal Year 2025. On August 6, 2024, CMS published the final rule to update policies and payment rates for the IRF-PPS for fiscal year 2025 (affecting discharges and cost reporting periods beginning on or after October 1, 2024, through September 30, 2025). Certain errors in the final rule were corrected in a document published on October 2, 2024. The standard payment conversion factor for discharges for fiscal year 2025 was set at $18,907, an increase from the standard payment conversion factor applicable during fiscal year 2024 of $18,541. The update to the standard payment conversion factor for fiscal year 2025 included a market basket increase of 3.5%, less a productivity adjustment of 0.5%. CMS increased the outlier threshold amount for fiscal year 2025 to $12,043 from $10,423 established in the final rule for fiscal year 2024. Fiscal Year 2026. On August 5, 2025, CMS published the final rule to update policies and payment rates for the IRF-PPS for fiscal year 2026 (affecting discharges and cost reporting periods beginning on or after October 1, 2025, through September 30, 2026). Certain errors in the final rule were corrected in a document published on December 17, 2025. The standard payment conversion factor for discharges for fiscal year 2026 was set at $19,371, an increase from the standard payment conversion factor applicable during fiscal year 2025 of $18,907. The update to the standard payment conversion factor for fiscal year 2026 included a market basket increase of 3.3%, less a productivity adjustment of 0.7%. CMS decreased the outlier threshold amount for fiscal year 2026 to $10,141 from $12,043 established in the final rule for fiscal year 2025. Fiscal Year 2027. On April 6, 2026, CMS published a proposed rule to update policies and payment rates for the IRF-PPS for fiscal year 2027 (affecting discharges and cost reporting periods beginning on or after October 1, 2026, through September 30, 2027). The standard payment conversion factor for discharges for fiscal year 2027 would be set at $19,881, an increase from the standard payment conversion factor applicable during fiscal year 2026 of $19,371. The update to the standard payment conversion factor for fiscal year 2027, if adopted, would include a market basket increase of 3.2%, less a productivity adjustment of 0.8%. CMS proposed to decrease the outlier threshold amount for fiscal year 2027 to $8,689 from $10,141 established in the final rule for fiscal year 2026. Medicare Reimbursement of Outpatient Rehabilitation Clinic Services Our Annual Report on Form 10-K for the year ended December 31, 2025 contains a detailed discussion of Medicare reimbursement that affects our outpatient rehabilitation clinic operations in Part I — Business — Government Regulations. Outpatient rehabilitation providers enroll in Medicare as a rehabilitation agency, a clinic, or a public health agency. The Medicare program reimburses outpatient rehabilitation providers based on the Medicare physician fee schedule. For calendar year 2025, CMS reduced Medicare payments for the physical and occupational therapy services we provide by approximately 3%. Congress directed the Secretary to increase calendar year 2026 MPFS payments by 2.5% in section 71202 of OBBBA. In the calendar year 2026 MPFS final rule, CMS implemented this OBBBA statutory 2.5% increase to the conversion factor for calendar year 2026, along with the two separate conversion factors based on alternative payment model (“APM”) participation as required under the Medicare Access and CHIP Reauthorization Act ("MACRA"). Starting in 2026, as required by MACRA, eligible professionals participating in an APM who meet certain criteria will receive an annual update of 0.75%, while all other 24 Table of Contents professionals will receive an annual update of 0.25%. CMS expects that its policies for 2026 will result in a 1% decrease in Medicare payments for the therapy specialty but it did not consider the statutory increases to the conversion factor and APM in its therapy specialty estimated impact. After factoring in these statutory increases, the calendar year 2026 MPFS final rule will increase Medicare payments for the physical and occupational therapy services we provide by approximately 2%. The increase to the conversion factors is mitigated by a new -2.5% efficiency adjustment applied to certain work relative value units (“RVUs”) for certain non-time-based services and an update to the practice expense RVU methodology. The efficiency adjustment reduces PFS payments for certain non-time-based codes, some of which are used by our physical and occupational therapists. The new practice expense methodology reduces certain facility practice expense RVUs allocated based on work RVUs. Modifiers to Identify Services of Physical Therapy Assistants or Occupational Therapy Assistants Our Annual Report on Form 10-K for the year ended December 31, 2025, contains a detailed discussion of Medicare regulations concerning services provided by physical therapy assistants and occupational therapy assistants in Part I — Business — Government Regulations and in Part II — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Regulatory Changes. There have been no significant updates to these regulations subsequently. New Provider-Based Attestation and Separate NPI Requirements for Off-Campus Outpatient Departments CMS requires that off-campus outpatient departments meet the provider-based entity requirements at 42 C.F.R. § 413.65. CMS currently allows providers to submit a voluntary attestation of compliance with the applicable provider-based entity requirements. However, section 6225 of the Consolidated Appropriations Act, 2026 (“CAA”) (Pub. L. No. 119-75) added a new mandatory provider-based entity attestation requirement for off-campus outpatient departments. Subject to new CMS regulations implementing the CAA, after January 1, 2028, Medicare will not pay for services and items under the Outpatient Prospective Payment System (“OPPS”) or the MPFS provided by an off-campus outpatient department of a provider, unless: (1) the provider submits an attestation confirming that its off-campus outpatient department complies with the Medicare provider-based entity regulation, and (2) the off-campus outpatient department has its own National Provider Identifier (“NPI”) and bills for services under that NPI. The CAA requires that CMS conduct rulemaking to implement these new requirements. That rulemaking should address how frequently a provider must submit subsequent attestations of continued compliance with the provider-based entity requirements. Many of our outpatient rehabilitation clinics are off-campus provider-based departments of our rehabilitation hospitals. Subject to CMS rulemaking, we expect that these off-campus outpatient departments will need to comply with the new attestation and NPI requirements to continue receiving payment under the MPFS after January 1, 2028. New CMS Fraud Initiatives CMS is implementing several new initiatives to prevent fraud, waste, and abuse in the Medicare program. On February 25, 2026, CMS issued a request for information (“RFI”) for the Comprehensive Regulations to Uncover Suspicious Healthcare (“CRUSH”) initiative. The RFI seeks input on potential regulatory or policy changes to address fraud in Medicare, Medicaid, Medicare Advantage, and other federal health care programs. As part of the CRUSH initiative, CMS is considering modifications to program integrity requirements, enhanced identity proofing and ownership requirements, reducing the claim filing deadline for high-risk items and services, and using artificial intelligence to increase the efficiency and accuracy of hospital billing. The policies developed under this initiative could increase the administrative burden for our providers. The CMS Innovation Center also launched the Wasteful and Inappropriate Service Reduction (“WISeR”) model on January 1, 2026, in six states (New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington). The WISeR model, which is scheduled to run until December 31, 2031, uses artificial intelligence and other enhanced technologies to conduct medical necessity reviews of certain services and items with historically elevated risk of fraud, including skin and tissue substitutes, implantation of electrical nerve stimulators, and knee arthroscopy for knee osteoarthritis. Providers in the selected states will need to obtain prior authorization from the technology company contractor, known as the WISeR participant, for the selected services. If the provider does not request prior authorization, the WISeR participant will conduct a pre-payment medical review. WISeR participants use enhanced technologies, including artificial intelligence, for these tasks. The WISeR model could increase the administrative burdens for our providers in the selected states. 25 Table of Contents Operating Statistics The following table sets forth operating statistics for each of our segments for the periods presented. The operating statistics reflect data for the period of time we managed these operations. Our operating statistics include metrics we believe provide relevant insight about the number of facilities we operate, volume of services we provide to our patients, and average payment rates for services we provide. These metrics are utilized by management to monitor trends and performance in our businesses and therefore may be important to investors because management may assess our performance based in part on such metrics. Other healthcare providers may present similar statistics, and these statistics are susceptible to varying definitions. Our statistics as presented may not be comparable to other similarly titled statistics of other companies. Three Months Ended March 31, 2025 2026 Critical illness recovery hospital data: Number of consolidated hospitals—start of period(1) 104 104 Number of hospitals acquired — — Number of hospital start-ups — — Number of hospitals closed/sold — (1) Number of consolidated hospitals—end of period(1) 104 103 Available licensed beds(3) 4,432 4,380 Admissions(3)(4) 9,351 9,449 Patient days(3)(5) 291,324 284,936 Average length of stay (days)(3)(6) 32 31 Revenue per patient day(3)(7) $ 2,179 $ 2,234 Occupancy rate(3)(8) 73 % 72 % Percent patient days—Medicare(3)(9) 35 % 37 % Rehabilitation hospital data: Number of consolidated hospitals—start of period(1) 23 26 Number of hospitals acquired — — Number of hospital start-ups — 1 Number of hospitals closed/sold — — Number of consolidated hospitals—end of period(1) 23 27 Number of unconsolidated hospitals managed—end of period(2) 12 14 Total number of hospitals (all)—end of period 35 41 Available licensed beds - consolidated hospitals(3) 1,657 1,873 Available licensed beds - unconsolidated hospitals managed(12) 652 765 Admissions(3)(4) 8,848 9,999 Patient days(3)(5) 122,822 138,133 Average length of stay (days)(3)(6) 14 14 Revenue per patient day(3)(7) $ 2,234 $ 2,296 Occupancy rate(3)(8) 82 % 83 % Percent patient days—Medicare(3)(9) 50 % 53 % Outpatient rehabilitation data: Number of consolidated clinics—start of period 1,617 1,617 Number of clinics acquired — — Number of clinic start-ups 9 4 Number of clinics closed/sold (12) (14) Number of consolidated clinics—end of period 1,614 1,607 Number of unconsolidated clinics managed—end of period 297 305 Total number of clinics (all)—end of period 1,911 1,912 Number of visits(3)(10) 2,709,964 2,831,858 Revenue per visit(3)(11) $ 102 $ 102 26 Table of Contents _______________________________________________________________________________ (1)Represents the number of hospitals included in our consolidated financial results at the end of each period presented. (2)Represents the number of hospitals which are managed by us at the end of each period presented. We have minority ownership interests in these businesses. (3)Data excludes locations managed by the Company. (4)Represents the number of patients admitted to our hospitals during the periods presented. (5)Each patient day represents one patient occupying one bed for one day during the periods presented. (6)Represents the average number of days in which patients were admitted to our hospitals. Average length of stay is calculated by dividing the number of patient days, as presented above, by the number of patients discharged from our hospitals during the periods presented. (7)Represents the average amount of revenue recognized for each patient day. Revenue per patient day is calculated by dividing patient service revenues, excluding revenues from certain other ancillary and outpatient services provided at our hospitals, by the total number of patient days. (8)Represents the portion of our hospitals being utilized for patient care during the periods presented. Occupancy rate is calculated using the number of patient days, as presented above, divided by the total number of bed days available during the period. Bed days available is derived by adding the daily number of available licensed beds for each of the periods presented. (9)Represents the portion of our patient days which are paid by Medicare. The Medicare patient day percentage is calculated by dividing the total number of patient days which are paid by Medicare by the total number of patient days, as presented above. (10)Represents the number of visits in which patients were treated at our outpatient rehabilitation clinics during the periods presented. (11)Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated by dividing patient service revenue, excluding revenues from certain other ancillary services, by the total number of visits. (12)Represents the number of available licensed beds at hospitals which are managed by us at the end of each period presented. We own a minority interest in these businesses. 27 Table of Contents Results of Operations The following table outlines selected operating data as a percentage of revenue for the periods indicated: Three Months Ended March 31, 2025 2026 Revenue 100.0 % 100.0 % Costs and expenses: Cost of services, exclusive of depreciation and amortization(1) 86.7 87.7 General and administrative 2.4 2.8 Depreciation and amortization 2.6 2.6 Total costs and expenses 91.7 93.1 Income from operations 8.3 6.9 Equity in earnings of unconsolidated subsidiaries 0.9 0.8 Interest expense (2.1) (1.9) Income before income taxes 7.1 5.8 Income tax expense 1.6 1.3 Net income 5.5 4.5 Net income attributable to non-controlling interests 1.3 1.4 Net income attributable to Select Medical Holdings Corporation 4.2 % 3.1 % _______________________________________________________________________________ (1)Cost of services includes personnel expense, facilities expense, and other operating costs. 28 Table of Contents The following table summarizes selected financial data by segment for the periods indicated: Three Months Ended March 31, 2025 2026 % Change (in thousands, except percentages) Revenue: Critical illness recovery hospital $ 637,030 $ 638,776 0.3 % Rehabilitation hospital 307,388 351,942 14.5 Outpatient rehabilitation 307,342 321,300 4.5 Other(1) 101,412 109,458 7.9 Total Company $ 1,353,172 $ 1,421,476 5.0 % Income (loss) from operations: Critical illness recovery hospital $ 70,001 $ 55,782 (20.3) % Rehabilitation hospital 63,046 71,863 14.0 Outpatient rehabilitation 15,221 12,835 (15.7) Other(1) (35,523) (42,062) N/M Total Company $ 112,745 $ 98,418 (12.7) % Adjusted EBITDA: Critical illness recovery hospital $ 86,649 $ 73,433 (15.3) % Rehabilitation hospital 70,424 81,078 15.1 Outpatient rehabilitation 24,273 21,984 (9.4) Other(1) (29,901) (34,927) N/M Total Company $ 151,445 $ 141,568 (6.5) % Adjusted EBITDA margins: Critical illness recovery hospital 13.6 % 11.5 % Rehabilitation hospital 22.9 23.0 Outpatient rehabilitation 7.9 6.8 Other(1) N/M N/M Total Company 11.2 % 10.0 % Total assets: Critical illness recovery hospital $ 2,696,663 $ 2,798,255 Rehabilitation hospital 1,405,911 1,668,331 Outpatient rehabilitation 1,415,655 1,396,662 Other(1) 177,774 178,835 Total Company $ 5,696,003 $ 6,042,083 Purchases of property and equipment: Critical illness recovery hospital $ 16,671 $ 13,804 Rehabilitation hospital 25,925 34,944 Outpatient rehabilitation 9,047 8,692 Other(1) 696 1,458 Total Company $ 52,339 $ 58,898 _______________________________________________________________________________ (1) Other includes our corporate administration and shared services, as well as employee leasing services with our non-consolidating subsidiaries. Total assets include certain non-consolidating joint ventures and minority investments in other healthcare related businesses. N/M Not meaningful. 29 Table of Contents Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025 For the three months ended March 31, 2026, we had revenue of $1,421.5 million and income from operations of $98.4 million, as compared to revenue of $1,353.2 million and income from operations of $112.7 million for the three months ended March 31, 2025. For the three months ended March 31, 2026, Adjusted EBITDA was $141.6 million, with an Adjusted EBITDA margin of 10.0%, as compared to Adjusted EBITDA of $151.4 million and an Adjusted EBITDA margin of 11.2% for the three months ended March 31, 2025. Revenue Critical Illness Recovery Hospital Segment. Revenue increased 0.3% to $638.8 million for the three months ended March 31, 2026, compared to $637.0 million for the three months ended March 31, 2025. Our revenue per patient day increased 2.5% to $2,234 for the three months ended March 31, 2026, compared to $2,179 for the three months ended March 31, 2025. Our patient days were 284,936 for the three months ended March 31, 2026, compared to 291,324 days for the three months ended March 31, 2025. Occupancy in our critical illness recovery hospitals was 72% and 73% for the three months ended March 31, 2026 and 2025, respectively. Rehabilitation Hospital Segment. Revenue increased 14.5% to $351.9 million for the three months ended March 31, 2026, compared to $307.4 million for the three months ended March 31, 2025. The increase in revenue was principally attributable to patient days, which increased 12.5% to 138,133 days for the three months ended March 31, 2026, compared to 122,822 days for the three months ended March 31, 2025. Revenue per patient day increased 2.8% to $2,296 for the three months ended March 31, 2026, compared to $2,234 for the three months ended March 31, 2025. Occupancy in our rehabilitation hospitals was 83% and 82% for the three months ended March 31, 2026 and 2025, respectively. Outpatient Rehabilitation Segment. Revenue increased 4.5% to $321.3 million for the three months ended March 31, 2026, compared to $307.3 million for the three months ended March 31, 2025. The increase in revenue was attributable to patient visits, which increased 4.5% to 2,831,858 visits for the three months ended March 31, 2026, compared to 2,709,964 visits for the three months ended March 31, 2025. Our revenue per visit was $102 for both the three months ended March 31, 2026 and 2025. Operating Expenses Our operating expenses consist principally of cost of services and general and administrative expenses. Our operating expenses were $1,285.4 million, or 90.5% of revenue, for the three months ended March 31, 2026, compared to $1,205.6 million, or 89.1% of revenue, for the three months ended March 31, 2025. Our cost of services, a major component of which is labor expense, was $1,246.0 million, or 87.7% of revenue, for the three months ended March 31, 2026, compared to $1,172.6 million, or 86.7% of revenue, for the three months ended March 31, 2025. The increase in our cost of services relative to our revenue was principally attributable to the operating performance of our Critical Illness Recovery Hospital and Outpatient Rehabilitation segments. General and administrative expenses were $39.4 million, or 2.8% of revenue, for the three months ended March 31, 2026, compared to $33.0 million, or 2.4% of revenue, for the three months ended March 31, 2025. The increase in general and administrative expenses was principally attributable to an increase in personnel expense, partially due to the timing of accrued bonuses and a decrease in support services costs charged to Concentra Group Holdings Parent, Inc. under the transition services agreement. Adjusted EBITDA Critical Illness Recovery Hospital Segment. Adjusted EBITDA was $73.4 million for the three months ended March 31, 2026, compared to $86.6 million for the three months ended March 31, 2025. Our Adjusted EBITDA margin for the critical illness recovery hospital segment was 11.5% for the three months ended March 31, 2026, compared to 13.6% for the three months ended March 31, 2025. The decreases in our Adjusted EBITDA and Adjusted EBITDA margin during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were principally attributable to the increase in personnel expense exceeding the increase in revenue during the quarter. Rehabilitation Hospital Segment. Adjusted EBITDA increased 15.1% to $81.1 million for the three months ended March 31, 2026, compared to $70.4 million for the three months ended March 31, 2025. Our Adjusted EBITDA margin for the rehabilitation hospital segment was 23.0% for the three months ended March 31, 2026, compared to 22.9% for the three months ended March 31, 2025. The increase in our Adjusted EBITDA for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was principally attributable to an increase in revenue. 30 Table of Contents Outpatient Rehabilitation Segment. Adjusted EBITDA was $22.0 million for the three months ended March 31, 2026, compared to $24.3 million for the three months ended March 31, 2025. Our Adjusted EBITDA margin for the outpatient rehabilitation segment was 6.8% for the three months ended March 31, 2026, compared to 7.9% for the three months ended March 31, 2025. The decreases in our Adjusted EBITDA and Adjusted EBITDA margin during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were principally attributable to an increase in personnel expense, partially offset by an increase in revenue. Depreciation and Amortization Depreciation and amortization expense was $37.7 million for the three months ended March 31, 2026, compared to $34.8 million for the three months ended March 31, 2025. Income from Operations For the three months ended March 31, 2026, we had income from operations of $98.4 million, compared to $112.7 million for the three months ended March 31, 2025. The decrease in income from operations is attributable to a decrease in the Adjusted EBITDA of our Critical Illness Recovery Hospital and Outpatient Rehabilitation segments and an increase in general and administrative expenses, partially offset by an increase in Adjusted EBITDA within our Rehabilitation Hospital segment. Equity in Earnings of Unconsolidated Subsidiaries For the three months ended March 31, 2026, we had equity in earnings of unconsolidated subsidiaries of $12.0 million, compared to $12.5 million for the three months ended March 31, 2025. Interest Interest expense was $28.3 million for the three months ended March 31, 2026, compared to $29.1 million for the three months ended March 31, 2025. Income Tax Expense We recorded income tax expense of $18.3 million for the three months ended March 31, 2026, which represented an effective tax rate of 22.3%. We recorded income tax expense of $21.5 million for the three months ended March 31, 2025, which represented an effective tax rate of 22.3%. 31 Table of Contents Liquidity and Capital Resources Cash Flows for the Three Months Ended March 31, 2026 and Three Months Ended March 31, 2025 In the following, we discuss cash flows from operating activities, investing activities, and financing activities. Three Months Ended March 31, 2025 2026 (in thousands) Net cash provided by (used in) operating activities $ (3,457) $ 37,860 Net cash used in investing activities (52,315) (56,655) Net cash provided by financing activities 49,291 17,955 Net decrease in cash and cash equivalents (6,481) (840) Cash and cash equivalents at beginning of period 59,694 26,523 Cash and cash equivalents at end of period $ 53,213 $ 25,683 Operating activities provided $37.9 million of cash flows for the three months ended March 31, 2026, compared to $3.5 million of cash flows used by operating activities for the three months ended March 31, 2025. The change in our Net cash provided by (used in) operating activities was attributable to routine changes in net working capital. Our days sales outstanding was 60 days at March 31, 2026, compared to 57 days at December 31, 2025. Our days sales outstanding was 60 days at March 31, 2025, compared to 58 days at December 31, 2024. Our days sales outstanding will fluctuate based upon variability in our collection cycles and patient volumes. Investing activities used $56.7 million of cash flows for the three months ended March 31, 2026, principally for the purchase of property and equipment. The principal source of cash was proceeds from sale of assets and business of $2.2 million. Investing activities used $52.3 million of cash flows for the three months ended March 31, 2025, principally for the purchase of property and equipment. Financing activities provided $18.0 million of cash flows for the three months ended March 31, 2026. The principal sources of cash were net borrowings under our revolving facility of $25.0 million, net borrowings on other debt of $9.5 million, and proceeds of $5.9 million from the issuance of non-controlling interests. The principal uses of cash were $14.7 million for distributions to and purchases of non-controlling interests and $7.8 million of dividend payments to common stockholders. Financing activities provided $49.3 million of cash flows for the three months ended March 31, 2025. The principal sources of cash were net borrowings under our revolving facilities of $75.0 million and net borrowings on our other debt of $8.3 million. The principal uses of cash were $14.7 million for distributions to and purchases of non-controlling interests, $11.4 million for repurchases of common stock, and $8.1 million of dividend payments to common stockholders. 32 Table of Contents Capital Resources Working capital. We had net working capital of $141.7 million at March 31, 2026, compared to $40.8 million at December 31, 2025. The increase in net working capital was principally due to an increase in our accounts receivable. Credit facilities. At March 31, 2026, Select had outstanding borrowings under its credit facilities consisting of a $1,036.9 million term loan (excluding unamortized original issue discounts and debt issuance costs of $6.8 million) and borrowings of $125.0 million under its revolving facility. At March 31, 2026, Select had $443.5 million of availability under its revolving facility after giving effect to $31.5 million of outstanding letters of credit. Stock Repurchase Program. Holdings’ Board of Directors has authorized a common stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock. The common stock repurchase program will remain in effect until December 31, 2027, unless further extended or earlier terminated by the Board of Directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Holdings deems appropriate. Holdings funds this program with cash on hand and borrowings under its revolving facility. Holdings did not repurchase shares under the program during the three months ended March 31, 2026. Since the inception of the program through March 31, 2026, Holdings has repurchased 54,610,335 shares at a cost of approximately $696.8 million, or $12.76 per share, which includes transaction costs. On August 16, 2022, Congress passed the Inflation Reduction Act of 2022, which enacted a 1% excise tax on stock repurchases that exceed $1.0 million, effective January 1, 2023. Since the inception of the program through March 31, 2026, $0.8 million has been incurred for the 1% excise tax as a cost of the stock repurchase. Use of Capital Resources. We may from time to time pursue opportunities to develop new joint venture relationships with large, regional health systems and other healthcare providers. We also intend to open new outpatient rehabilitation clinics in local areas that we currently serve where we can benefit from existing referral relationships and brand awareness to produce incremental growth. In addition to our development activities, we may grow through opportunistic acquisitions. Liquidity We believe our internally generated cash flows and borrowing capacity under our revolving facility will allow us to finance our operations in both the short and long term. As of March 31, 2026, we had cash and cash equivalents of $25.7 million and $443.5 million of availability under our revolving facility after giving effect to $125.0 million of outstanding borrowings and $31.5 million of outstanding letters of credit. We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases or exchanges, if any, may be funded from operating cash flows or other sources and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. Dividend On February 12, 2026, our Board of Directors declared a cash dividend of $0.0625 per share. On March 12, 2026, a cash dividend totaling $7.8 million was paid. On April 29, 2026, the Company’s Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about May 28, 2026, to stockholders of record as of the close of business on May 14, 2026. There is no assurance that future dividends will be declared. The declaration and payment of dividends in the future are at the discretion of our Board of Directors after taking into account various factors, including, but not limited to, our financial condition, operating results, available cash and current and anticipated cash needs, the terms of our indebtedness, and other factors our Board of Directors may deem to be relevant. Effects of Inflation The healthcare industry is labor intensive and our largest expenses are labor related costs. Wage and other expenses increase during periods of inflation and when labor shortages occur in the marketplace. We have recently experienced higher labor costs related to an inflationary environment and competitive labor market. In addition, suppliers have passed along rising costs to us in the form of higher prices. Higher prices could also result from the impact of proposed tariffs. We cannot predict our ability to pass along cost increases to our customers. 33 Table of Contents Recent Accounting Pronouncements Refer to Note 2 – Accounting Policies of the notes to our condensed consolidated financial statements included herein for information regarding recent accounting pronouncements. 34 Table of Contents