Encompass Health Corp (EHC) · Nov 6, 2026 · Other events
90-bed hospital closure — Sea Pines contributed ~$44M revenue and ~$14M adjusted EBITDA through nine months
Encompass Health’s guidance remains intact after flooding indefinitely closes its 90-bed Sea Pines hospital, while reopening costs remain uncertain.
Encompass Health is expanding a national inpatient-rehabilitation network, with 179 hospitals and an ongoing de novo construction program aimed at adding capacity to a large, underpenetrated market. The filing removes one hospital from that growth footprint indefinitely: Sea Pines, a 90-bed joint-venture facility in Melbourne, Florida, suffered substantial flood damage and remains closed while the partners assess refurbishment or replacement. 〔0〕
| Figure | Current | Compared with |
|---|---|---|
| Sea Pines net operating revenue, 9M 2026 | $44M | |
| Sea Pines adjusted EBITDA, 9M 2026 | $14M | |
| Sea Pines total discharges, 9M 2026 | 1,876 | |
| FY 2026 net operating revenue guidance | $6,450–$6,500M | Oct. 28 guide: $6,450–$6,500M |
| FY 2026 adjusted EBITDA guidance | $1,395–$1,415M | Oct. 28 guide: $1,395–$1,415M |
| FY 2026 adjusted EPS guidance | $6.23–$6.37 | Oct. 28 guide: $6.23–$6.37 |
The immediate financial hit is limited at the group level, but the operational setback is real: Sea Pines generated roughly 0.7% of Encompass Health’s reaffirmed full-year revenue range and about 1% of its adjusted EBITDA range on a simple nine-month-to-full-year comparison. The hospital’s closure also interrupts local capacity in a business whose strategy depends on adding beds and treating more patients.
Reaffirmed guidance contains the near-term earnings damage rather than eliminating it: Encompass Health says remediation and continuing operating costs will be excluded from adjusted measures, along with related insurance proceeds. That keeps the freshly raised 2026 non-GAAP outlook unchanged, but the exclusion makes the reported adjusted figures less representative of the full economic cost until the insurance and reopening path are clearer. 〔1〕
The bigger uncertainty is duration and replacement cost: the filing provides no reopening date, repair budget, insurance recovery amount, or decision between refurbishing and rebuilding. That leaves the event manageable for the consolidated business today, but more consequential if the 90-bed capacity is unavailable for an extended period or must be replaced at materially higher cost.
Bottom line: This is a contained but genuine setback to Encompass Health’s capacity-growth story, not a change to its 2026 earnings guide. The financial exposure looks modest relative to the company, while the indefinite closure and unknown redevelopment bill keep the read slightly negative rather than routine.
Reopening or replacement plan for Sea Pines
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