Company Declares $.17 Per Share Quarterly
Dividend
U.S. Physical Therapy, Inc. (“USPH”) (NYSE: USPH), a national
operator of outpatient physical therapy clinics, today reported
results for the first quarter ended March 31, 2016.
USPH’s net income attributable to common shareholders, net of
tax (“operating results”) increased 27.9% to $5.3 million for the
first quarter of 2016 as compared to $4.2 million for the first
quarter of 2015. Diluted earnings per share from operating results
rose to $0.43 from $0.34.
First Quarter 2016 Compared to First
Quarter 2015
- Net revenues increased by $9.7 million
or 12.5% from $77.2 million in the first quarter of 2015 to $86.9
million in the first quarter of 2016, due to an increase in total
patient visits of 13.4% from 712,900 to 808,300 and offset by a
decrease in the average net revenue per visit to $105.22 from
$106.34. Net revenues from new clinics opened or acquired in the
past 12 months was $5.8 million.
- Total clinic operating costs were $66.4
million, or 76.4% of net revenues, in the first quarter of 2016, as
compared to $60.4 million, or 78.2% of net revenues, in the 2015
period. Most of the dollar expense increase was attributable to
$4.9 million in operating costs of new clinics opened or acquired
in the past 12 months. Total clinic salaries and related costs,
including those from new clinics, were 55.0% of net revenues in the
recent quarter versus 55.7% in the 2015 period. Rent, clinic
supplies, contract labor and other costs as a percentage of net
revenues were 20.1% for the recent quarter versus 21.1% in the 2015
period. The provision for doubtful accounts as a percentage of net
revenues was 1.3% for the 2016 and 2015 periods.
- The gross margin for the first quarter
of 2016 was $20.5 million, or 23.6%, as compared to $16.8 million,
or 21.8%, for the 2015 quarter.
- Corporate office costs were $9.0
million in the first quarter of 2016 compared to $7.7 million in
the 2015 first quarter. Corporate office costs were 10.4% of net
revenues for the 2016 quarter compared to 9.9% of net revenues for
the 2015 period.
- Operating income for the recent quarter
increased 25.1% to $11.5 million compared to $9.2 million in the
2015 first quarter.
- Interest expense was $0.3 million in
the first quarter of 2016 and 2015.
- The provision for income taxes for the
2016 period was $3.5 million and for the 2015 quarter was $2.8
million. The provision for income taxes as a percentage of income
before taxes less net income attributable to non-controlling
interest was 39.8% in the 2016 first quarter and 40.0% in the 2015
first quarter.
- Net income attributable to
non-controlling interests was $2.4 million in the recent quarter as
compared to $2.0 million in the year earlier period.
- Operating results attributable to
common shareholders for the three months ended March 31, 2016 were
$5.3 million and $4.2 million in the 2015 period. Diluted earnings
per share from operating results were $0.43 for the 2016 period and
$0.34 for the 2015 period.
- Same store visits increased 6.7% for de
novo and acquired clinics open for one year or more and same store
revenue increased 4.9% as the average net rate per visit decreased
by $1.84 or 1.7%.
Other Financial Measures
In the first quarter of 2016 the Company’s Adjusted EBITDA grew
by 24.6% to $12.5 million from $10 million in the 2015 first
quarter. Operating results prior to equity-based compensation (a
non-cash expense), increased by 27.4% to $6.1 million versus $4.8
million, and on a per share basis grew to $0.49 from $0.39. (See
schedule on page 8.)
Chris Reading, Chief Executive Officer, said, “I am very proud
of our entire team who have worked hard to produce great results
for our patients, physicians, industry customers and shareholders.
The end result of these efforts produced record same store visit
growth this quarter of 6.7%. Our partners continue to push to
deliver meaningful growth, underpinned with great care, while
maintaining a close eye on appropriate cost control.”
Larry McAfee, Chief Financial Officer, noted, “Average visits
per clinic per day in the first quarter this year were 24.7, an
increase of 7.9% as compared to 22.9 in the first quarter last
year.”
U.S. Physical Therapy Declares
Quarterly Dividend
The second quarterly dividend of 2016 for $.17 per share will be
paid on June 3 to shareholders of record as of May 17, 2016.
First Quarter 2016 Conference
Call
U.S. Physical Therapy's Management will host a conference call
at 10:30 a.m. Eastern Time, 9:30 a.m. Central Time, on Thursday,
May 5, 2016 to discuss the Company’s Quarter Ended March 31, 2016
results. Interested parties may participate in the call by dialing
1-888-335-5539 or 973-582-2857 and entering reservation number
86462697 approximately 10 minutes before the call is scheduled to
begin. To listen to the live call via web-cast, go to the Company's
website at www.usph.com at least 15 minutes early to register,
download and install any necessary audio software. The conference
call will be archived and can be accessed until July 5, 2016.
Forward-Looking
Statements
This press release contains statements that are considered to be
forward-looking within the meaning under Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
contain forward-looking information relating to the financial
condition, results of operations, plans, objectives, future
performance and business of our Company. These statements (often
using words such as “believes”, “expects”, “intends”, “plans”,
“appear”, “should” and similar words) involve risks and
uncertainties that could cause actual results to differ materially
from those we expect. Included among such statements may be those
relating to new clinics, availability of personnel and the
reimbursement environment. The forward-looking statements are based
on our current views and assumptions and actual results could
differ materially from those anticipated in such forward-looking
statements as a result of certain risks, uncertainties, and
factors, which include, but are not limited to:
- changes as the result of government
enacted national healthcare reform;
- changes in Medicare guidelines and
reimbursement or failure of our clinics to maintain their Medicare
certification status;
- revenue we receive from Medicare and
Medicaid being subject to potential retroactive reduction;
- business and regulatory conditions
including federal and state regulations;
- governmental and other third party
payor investigations and audits;
- compliance with federal and state laws
and regulations relating to the privacy of individually
identifiable patient information, and associated fines and
penalties for failure to comply;
- possible legal actions; which could
subject us to increased operating costs and uninsured
liabilities;
- changes in reimbursement rates or
payment methods from third party payors including government
agencies and deductibles and co-pays owed by patients;
- revenue and earnings expectations;
- general economic conditions;
- availability and cost of qualified
physical and occupational therapists;
- personnel productivity and retaining
personnel;
- competitive, economic or reimbursement
conditions in our markets which may require us to reorganize or
close certain operations and thereby incur losses and/or closure
costs including the possible write-down or write-off of goodwill
and other intangible assets;
- acquisitions, purchase of
non-controlling interests (minority interests) and the successful
integration of the operations of the acquired businesses;
- maintaining adequate internal
controls;
- maintaining necessary insurance
coverage;
- availability, terms, and use of
capital; and
- weather and other seasonal
factors.
Many factors are beyond our control. Given these uncertainties,
you should not place undue reliance on our forward-looking
statements. Please see our periodic reports filed with the
Securities and Exchange Commission for more information on these
factors. Our forward-looking statements represent our estimates and
assumptions only as of the date of this press release. Except as
required by law, we are under no obligation to update any
forward-looking statement, regardless of the reason the statement
is no longer applicable.
About U.S. Physical Therapy,
Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 512
outpatient physical and occupational therapy clinics in 42 states.
The Company's clinics provide preventative and post-operative care
for a variety of orthopedic-related disorders and sports-related
injuries, treatment for neurologically-related injuries and
rehabilitation of injured workers. In addition to owning and
operating clinics, the Company manages 22 physical therapy
facilities for third parties, including hospitals and physician
groups.
More information about U.S. Physical Therapy, Inc. is available
at www.usph.com. The information included on that website is not
incorporated into this press release.
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME (IN
THOUSANDS, EXCEPT PER SHARE DATA) (unaudited)
Three Months Ended
March 31,2016
March 31,2015
Net patient revenues $ 85,049 $ 75,807 Other revenues 1,859
1,434 Net revenues 86,908 77,241 Clinic operating costs:
Salaries and related costs 47,804 43,052 Rent, clinic supplies,
contract labor and other 17,507 16,325 Provision for doubtful
accounts 1,089 990 Closure costs 13 32 Total clinic
operating costs 66,413 60,399 Gross margin 20,495
16,842 Corporate office costs 9,004 7,657 Operating
income 11,491 9,185 Interest and other income, net 20 8 Interest
expense (308 ) (265 ) Income before taxes including
non-controlling interests 11,203 8,928 Provision for income taxes
3,523 2,777 Net income including non-controlling
interests 7,680 6,151 Less: net income attributable to
non-controlling interests (2,352 ) (1,985 ) Net
income attributable to common shareholders $ 5,328 $ 4,166
Basic earnings per share attributable to common
shareholders: $ 0.43 $ 0.34 Diluted earnings per share
attributable to common shareholders: $ 0.43 $ 0.34 Shares
used in computation: Basic 12,448 12,313 Diluted
12,448 12,313 Dividends declared per common
share $ 0.17 $ 0.15
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT
SHARE DATA)
March 31,2016
December 31,2015
(unaudited) ASSETS Current assets: Cash and cash equivalents $
19,206 $ 15,778 Patient accounts receivable, less allowance for
doubtful accounts of $1,568 and $1,444, respectively 38,217 36,231
Accounts receivable - other, less allowance for doubtful accounts
of $-0- and $198, respectively 2,345 2,388 Other current assets
8,298 5,785 Total current assets 68,066 60,182 Fixed
assets: Furniture and equipment 45,654 44,749 Leasehold
improvements 25,547 25,160 71,201 69,909 Less
accumulated depreciation and amortization 54,512
53,255 16,689 16,654 Goodwill 191,051 171,547 Other identifiable
intangible assets, net 34,428 30,296 Other assets 1,200
1,234 $ 311,434 $ 279,913 LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Accounts payable - trade
$ 2,244 $ 1,636 Accrued expenses 20,684 16,596 Current portion of
notes payable 1,253 775 Total current liabilities
24,181 19,007 Notes payable 4,621 4,335 Revolving line of credit
52,500 44,000 Deferred rent 1,391 1,395 Deferred taxes 10,789 8,355
Other long-term liabilities 914 868 Total liabilities
94,396 77,960 Commitments and contingencies Redeemable
non-controlling interests 7,591 8,843 Shareholders' equity:
U.S. Physical Therapy, Inc. shareholders'
equity:
Preferred stock, $.01 par value, 500,000 shares authorized, no
shares issued and outstanding
-
-
Common stock, $.01 par value, 20,000,000 shares authorized,
14,717,463 and 14,635,874 shares issued, respectively 147 146
Additional paid-in capital 46,563 45,251 Retained earnings 152,219
149,016 Treasury stock at cost, 2,214,737 shares (31,628 )
(31,628 )
Total U.S. Physical Therapy, Inc.
shareholders' equity
167,301 162,785 Non-controlling interests 42,146
30,325 Total equity 209,447 193,110 $ 311,434 $
279,913
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN
THOUSANDS, EXCEPT PER SHARE DATA) (unaudited)
Three Months Ended
March 31, 2016
March 31, 2015
OPERATING ACTIVITIES Net income including non-controlling
interests $ 7,680 $ 6,151 Adjustments to reconcile net income
including non-controlling interests to net cash provided by
operating activities: Depreciation and amortization 2,091 1,807
Provision for doubtful accounts 1,089 990 Equity-based awards
compensation expense 1,221 990 Loss on sale of business and sale or
abandonment of assets, net (19 ) 17 Excess tax benefit from
equity-based awards (323 ) (271 ) Deferred income tax 2,709 565
Other - 35 Changes in operating assets and liabilities: Increase in
patient accounts receivable (2,185 ) (2,185 ) Decrease in accounts
receivable - other 43 125 (Increase) decrease in other assets
(2,282 ) 106 Increase (decrease) in accounts payable and accrued
expenses 4,322 (5,976 ) Increase in other liabilities 365
665 Net cash provided by operating activities
14,711 3,019
INVESTING ACTIVITIES Purchase of fixed assets
(1,738 ) (1,419 ) Purchase of businesses, net of cash acquired
(12,899 ) (6,445 ) Acquisitions of non-controlling interests
(including redeemable non-controlling interests) (1,524 ) (359 )
Proceeds on sale of fixed assets, net 42 8
Net cash used in investing activities (16,119 ) (8,215 )
FINANCING ACTIVITIES Distributions to non-controlling
interests (including redeemable non-controlling interests) (1,613 )
(1,589 ) Cash dividends to shareholders (2,125 ) - Proceeds from
revolving line of credit 49,000 34,000 Payments on revolving line
of credit (40,500 ) (27,000 ) Principal payment on notes payable
(250 ) (200 ) Tax benefit from stock based awards 323 271 Other
1 - Net cash provided by financing
activities 4,836 5,482 Net increase in cash 3,428 286 Cash -
beginning of period 15,778 14,271 Cash
- end of period $ 19,206 $ 14,557
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid
during the period for: Income taxes $ 2,265 $ 1,275 Interest $ 248
$ 235 Non-cash investing and financing transactions during the
period: Purchase of business - seller financing portion $ 500 $ 500
Purchase of non-controlling interest - seller financing portion $
514 $ -
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
ADJUSTED EBITDA AND ADJUSTED NET
INCOME
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
The following tables reconcile net income attributable to
common shareholders calculated in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”), to Adjusted EBITDA and Adjusted Net Income. Management
believes providing Adjusted EBITDA and Adjusted Net Income to
investors is useful information for comparing the Company’s
period-to-period results. Adjusted EBITDA is defined as earnings
before interest, taxes, depreciation, amortization and equity
compensation expense. Adjusted Net Income is defined as net income
attributable to common shareholders less equity-based compensation,
net of tax. Adjusted EBITDA and Adjusted Net Income are not
measures of financial performance under GAAP. Adjusted EBITDA and
Adjusted Net Income should not be considered in isolation or as an
alternative to, or substitute for, net income attributable to
common shareholders presented in the consolidated financial
statements.
Three Months EndedMarch 31,
2016 2015 Net income
attributable to common shareholders $ 5,328 $ 4,166
Adjustments: Depreciation and amortization 2,092 1,807 Interest
expense, net of interest income 288 257 Provision for income taxes
3,523 2,777 Equity-based awards compensation expense 1,221
990 Adjusted EBITDA $ 12,452 $ 9,997
Three Months EndedMarch 31,
2016 2015 Net income attributable to common shareholders $
5,328 $ 4,166 Equity-based awards compensation expense, net of tax
735 594 Adjusted net income $ 6,063 $ 4,760
Basic and diluted earnings per share attributable to common
shareholders: $ 0.49 $ 0.39 Shares used in computation:
Basic and diluted 12,448 12,313
U.S.
PHYSICAL THERAPY, INC. AND SUBSIDIARIES RECAP OF CLINIC
COUNT Number of Date
Clinics March 31, 2015 494 June 30, 2015 501
September 30, 2015 506 December 31, 2015 508 March 31, 2016
512
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U.S. Physical Therapy, Inc.Larry McAfee, (713) 297-7000Chief
Financial OfficerorChris Reading, (713) 297-7000Chief Executive
OfficerorThree Part AdvisorsJoe Noyons, (817) 778-8424
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