Company History and Business Overview

Concentra was founded in 1979 as OccuSystems and has grown to become the dominant player in the occupational health services market. The company operated under the name OccuSystems until 1995 when it was acquired and renamed Concentra. The company's expansion has been driven by a combination of organic growth, strategic acquisitions, and the development of innovative service offerings. In 2015, Concentra was acquired by Select Medical Holdings Corporation (SEM), a leading operator of specialty hospitals and outpatient rehabilitation clinics.

Concentra operated as an operating segment of Select Medical until January 2024 when Select announced its intention to separate Concentra into a new, publicly traded company. In June 2024, Concentra completed an initial public offering, issuing 23.25 million shares of common stock. The net proceeds from the IPO were used to pay down debt and fund the company's growth initiatives.

On November 25, 2024, Select Medical completed the spin-off of Concentra, distributing approximately 81.7% of Concentra's outstanding shares to Select's shareholders. This separation has enabled Concentra to focus on its core occupational health business and pursue growth opportunities more effectively as a fully independent, publicly traded company.

Throughout its history, Concentra has faced various challenges common to healthcare providers, such as navigating complex regulatory environments, managing costs, and adapting to changes in reimbursement models. The company has also had to contend with competition from other occupational health providers, hospital-owned clinics, and urgent care facilities. Despite these challenges, Concentra has maintained its position as the industry leader by continuously investing in its infrastructure, technology, and talent to deliver high-quality patient care and innovative services to its customers.

The company's three operating segments - occupational health centers, onsite health clinics, and other businesses - are all focused on delivering high-quality, comprehensive care to employers and their employees. Concentra's occupational health centers provide a wide range of services, including workers' compensation injury care, physical therapy, drug and alcohol screenings, and various types of examinations and evaluations. The company's onsite health clinics bring these services directly to employer worksites, offering a convenient and cost-effective solution for managing workforce health. Additionally, Concentra's other businesses segment includes its telemedicine platform, pharmacy operations, and medical compliance administration services.

As of December 31, 2024, Concentra operated 552 occupational health centers and 157 onsite clinics at employer worksites across 42 states, making it the largest provider of occupational health services in the United States based on the number of locations. The company serves all types of employers, ranging from Fortune 500 companies to small businesses.

Financial Performance and Liquidity

For the full year 2024, Concentra reported revenue of $1.90 billion, a 3.4% increase compared to the prior year. This growth was driven by a 4.5% increase in revenue per visit, partially offset by a 1.2% decrease in total patient visits. The company's net income for 2024 was $171.9 million, or $1.51 per share. Operating cash flow for the year was $274.7 million, while free cash flow reached $210.4 million.

In the fourth quarter of 2024, Concentra generated revenue of $465 million, representing a 5.5% year-over-year increase. This growth was primarily driven by a 5.8% increase in revenue per visit. Net income for the quarter was $21.5 million.

The occupational health centers segment, which generated approximately 95% of Concentra's total revenue in 2024, saw a 2.6% increase in workers' compensation revenue per visit and a 4.5% increase in employer services revenue per visit compared to the prior year. Workers' compensation services accounted for 64% of occupational health center revenue, followed by employer services at 34% and consumer health services at 2%.

The onsite health clinics segment contributed approximately 3% of Concentra's total revenue in 2024, while the other businesses segment, which includes Concentra Telemed, Concentra Pharmacy, and Concentra Medical Compliance Administration, accounted for about 2% of total revenue.

Concentra's balance sheet remains strong, with $183.3 million in cash and cash equivalents as of December 31, 2024. The company has $1.48 billion in total debt, including $835.4 million in term loans and $638.1 million in senior notes. Concentra's leverage ratio, as defined in its credit agreement, was 3.46x as of the end of 2024, well within the required limit of 6.50x.

The company's debt-to-equity ratio stood at 5.53 as of December 31, 2024. Concentra had $386.4 million of available borrowing capacity under its $400 million revolving credit facility, after giving effect to $13.6 million of outstanding letters of credit. The company's current ratio and quick ratio were both 1.42, indicating a solid liquidity position.

Concentra's robust financial position and ample liquidity provide the necessary resources to fund its strategic growth initiatives, including acquisitions and expansion of its service offerings. The company's strong cash flow generation further underscores its financial strength and flexibility.

Growth Strategies and Competitive Positioning

Concentra's growth strategy is centered around three key pillars: driving organic growth, executing strategic acquisitions and de novo expansions, and expanding its service offerings. The company's robust national footprint, reputation for high-quality care, and diversified service portfolio position it well to capitalize on the growing demand for occupational health services.

In terms of organic growth, Concentra has consistently increased its revenue per visit through proactive management of state fee schedules and contract negotiations with employers and third-party payors. The company has also demonstrated the ability to grow its patient visit volumes, with an average annual increase of 2.0% from 2022 to 2024.

Concentra's acquisition strategy has played a pivotal role in its growth, with the company completing several tuck-in and larger-scale acquisitions in recent years. In March 2025, the company announced the acquisition of Nova Medical Centers, a leading occupational health services provider with 67 medical centers in five states. This transaction will expand Concentra's presence to more than 775 occupational health centers and onsite health clinics across 42 states.

The company's focus on expanding its service offerings, such as the launch of advanced primary care at its onsite health clinics and the introduction of workers' compensation behavioral health services via its telemedicine platform, has also been a key driver of growth. These new initiatives address evolving customer needs and position Concentra as a comprehensive, end-to-end provider of occupational health solutions.

Competitive Landscape and Risks

Concentra operates in a highly competitive industry, with local independent occupational health practices, regional players, hospital-owned clinics, and urgent care providers all vying for market share. The company's ability to maintain its leading position is dependent on its reputation for high-quality care, strong customer relationships, and continuous innovation in service offerings.

Additionally, Concentra faces regulatory risks, as the healthcare industry is subject to extensive federal, state, and local laws and regulations. Any changes or new interpretations of these regulations could impact the company's operations and profitability. The company also faces risks related to labor shortages, increasing employee-related costs, and potential union activity, which could adversely affect its ability to attract and retain talent.

The occupational health services industry has seen stable demand, with the US workforce growing by 6% since 2019. However, the industry has also faced challenges such as labor shortages, increased employee turnover, and rising labor costs. The industry-wide CAGR for revenue is estimated to be around 3-4% in recent years.

Human Capital Management

As of December 31, 2024, Concentra had approximately 11,250 colleagues and affiliated physicians and clinicians supporting the delivery of services. The company's ability to attract, retain, and develop talented healthcare professionals is crucial to its success in delivering high-quality care and maintaining its competitive edge in the market.

Key Operating Metrics

Concentra's operational performance is reflected in several key metrics:

• Total patient visits in 2024: 12.62 million
• Visits per day (VPD) in 2024: 49,310
• Revenue per visit in 2024: $141.30

These metrics demonstrate the company's significant scale and efficiency in delivering occupational health services across its network of centers and clinics.

Outlook and Conclusion

Looking ahead, Concentra expects to continue its strong performance, guiding for full-year 2025 revenue of $2.1 billion. The company's strategic focus on organic growth, strategic acquisitions, and service expansion, combined with its robust financial position and competitive advantages, position it well to capitalize on the growing demand for occupational health services in the United States.

As the largest provider of occupational health services in the country, Concentra is poised to play a leading role in shaping the industry's evolution and delivering comprehensive, high-quality care to employers and their employees. With its diversified service offerings, national footprint, and proven track record of growth, Concentra appears well-equipped to navigate the complexities of the occupational health market and deliver value for its shareholders.