EHCHIGH SIGNALFINANCIAL10-K

EHC delivered exceptional operational performance with operating income surging 323% while simultaneously strengthening its balance sheet through debt reduction and aggressive share buybacks.

The dramatic operating income improvement of $412M alongside 10.5% revenue growth indicates significant operational leverage and margin expansion in EHC's rehabilitation hospital business. The company's confidence is reflected in quintupling share buybacks to $158M while reducing debt by 17%, suggesting management believes the business has fundamentally improved and shares are undervalued.

Comparing 2026-02-26 vs 2025-02-28View on EDGAR →
FINANCIAL ANALYSIS

EHC demonstrated exceptional financial performance with operating income exploding 323% to $539.5M on 10.5% revenue growth, indicating massive operational leverage and margin expansion. The company strengthened its balance sheet by reducing total debt 17% to $1.3B while increasing stockholders' equity 18% to $2.4B, and quintupled share buybacks to $158M, signaling strong cash generation and management confidence. Despite slightly lower cash balances, the overall picture shows a company hitting on all cylinders with improved profitability, stronger balance sheet metrics, and aggressive capital returns to shareholders.

FINANCIAL STATEMENT CHANGES
Share Buybacks
Cash Flow
+408%
$31.1M→$158.0M

Share repurchases increased 408% — management returning capital, signals confidence in intrinsic value.

Operating Income
P&L
+323.1%
$127.5M→$539.5M

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

Net Income
P&L
+24.2%
$455.7M→$566.2M

Net income grew 24.2% — bottom-line growth signals improving overall business health.

Stockholders Equity
Balance Sheet
+18%
$2.1B→$2.4B

Equity base grew 18% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Total Debt
Balance Sheet
-17%
$1.5B→$1.3B

Debt reduced 17% — deleveraging strengthens balance sheet and reduces financial risk.

Cash & Equivalents
Balance Sheet
-15.5%
$85.4M→$72.2M

Cash decreased 15.5% — monitor burn rate and upcoming capital needs.

Revenue
P&L
+10.5%
$5.4B→$5.9B

Revenue growing 10.5% — solid top-line momentum, watch margins for quality of growth.

LANGUAGE CHANGES
NEW — 2026-02-26
PRIOR — 2025-02-28
ADDED
There were 99,416,162 shares of common stock of the registrant outstanding, net of treasury shares, as of February 12, 2026.
Efforts to reduce payments to healthcare providers undertaken by third-party payors and conveners, including restrictive coverage determinations by Medicare Advantage plans during the pre-authorization process, could adversely affect our revenues or profitability.
Other Regulatory Risks Changes in the rules and regulations of the healthcare industry at the federal, state or local levels, including those contemplated now and in the future as part of national healthcare reform and deficit reduction (such as the re-basing of payment systems, the introduction of value-based payment models, and other payment system reforms) could decrease revenues and increase the costs of complying with the rules and regulations.
Our inability to maintain proper local, state and federal licensing, including compliance with the Medicare conditions of participation and provider enrollment requirements could decrease our revenues.
Business Overview of the Company General We are the nation s largest owner and operator of inpatient rehabilitation hospitals in terms of patients treated, revenues, and number of hospitals.
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REMOVED
There were 100,709,106 shares of common stock of the registrant outstanding, net of treasury shares, as of February 13, 2025.
Efforts to reduce payments to healthcare providers undertaken by third-party payors and conveners could adversely affect our revenues or profitability.
Other Regulatory Risks Changes in the rules and regulations of the healthcare industry at the federal, state or local levels, including those contemplated now and in the future as part of national healthcare reform and deficit reduction (such as the re-basing of payment systems, the introduction of a unified post-acute payment system or case-mix weightings across post-acute settings, and other payment system reforms) could decrease revenues and increase the costs of complying with the rules and regulations.
Our inability to maintain proper local, state and federal licensing, including compliance with the Medicare conditions of participation and provider enrollment requirements, such as the CMS vaccine mandate, could decrease our revenues.
Business Overview of the Company General We are a national leader in post-acute healthcare services and the nation s largest owner and operator of inpatient rehabilitation hospitals in terms of patients treated, revenues, and number of hospitals.
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