Management Raises Full Year 2024
Guidance
U.S. Physical Therapy, Inc. (“USPH” or the “Company”) (NYSE:
USPH), a national operator of outpatient physical therapy clinics
and provider of industrial injury prevention services, today
reported results for the first quarter ended March 31, 2024.
FINANCIAL HIGHLIGHTS
- Adjusted EBITDA (1), a non-Generally Accepted Accounting
Principles (“GAAP”) measure, was $16.7 million for the first
quarter ended March 31, 2024 (“2024 First Quarter”) compared to
$18.5 million in the first quarter ended March 31, 2023 (“2023
First Quarter”), with the variance due to the Medicare rate
reductions that took effect at the beginning of 2024 and the impact
of significant adverse weather events in January 2024. The Medicare
rate reductions decreased Adjusted EBITDA by approximately $1.7
million while the adverse weather resulted in a decrease in
Adjusted EBITDA of approximately $1.3 million.
- Operating Results (1), a non-GAAP measure, was $7.7 million in
each of the 2024 First Quarter and 2023 First Quarter. On a per
share basis, Operating Results was $0.51 in the 2024 First Quarter
compared to $0.59 in the 2023 First Quarter, with the decrease
attributable to the increase in shares outstanding associated with
the Company’s secondary offering completed in May 2023. The impact
of the Medicare rate reduction and weather on 2024 First Quarter
Operating Results was approximately $2.2 million, or $0.15 per
share.
- Net income attributable to USPH’s shareholders (“USPH net
income”), a GAAP measure, was $8.0 million for the 2024 First
Quarter compared to $7.4 million for the 2023 First Quarter. In
accordance with GAAP, the revaluation of redeemable non-controlling
interest, net of taxes, is not included in net income but is
charged directly to retained earnings; however, this change is
included in the computation of earnings per share. Earnings per
share for the 2024 First Quarter was $0.46 compared to $0.58 for
the 2023 First Quarter.
- Total revenue from physical therapy operations for the 2024
First Quarter increased $5.3 million, or 4.1%, to $134.4
million.
- Net rate per patient visit for the 2024 First Quarter increased
to $103.37 from $103.12 for the 2023 First Quarter despite the 3.5%
Medicare rate reduction in effect for most of the 2024 First
Quarter. The increase in net rate per patient visit reflects the
Company’s strategic priority of increasing reimbursement rates
through contract negotiations with commercial and other payors as
well as growth in workers compensation as percent of the Company’s
overall mix of business.
- Average daily visits per clinic was 29.5 for the 2024 First
Quarter compared to 29.8 in the comparable prior year quarter.
Total patient visits were 1,268,002 in the 2024 First Quarter, a
3.3% increase from 2023 First Quarter. Average daily visits per
clinic in January 2024 of 27.4 were lower than the prior year of
28.9, while average daily visits per clinic in February and March
of 2024 were higher than the prior year, the highest volumes for
those two months in the Company’s history.
- Industrial injury prevention (“IIP”) services revenue was $21.3
million for the 2024 First Quarter, an increase of 9.8% as compared
to the 2023 First Quarter, with an increase in gross profit of
15.1%.
- During the 2024 First Quarter, the Company added 14 new
clinics, including the acquisition described below, and closed six
clinics bringing its total clinic count to 679 as of March 31,
2024, as compared to 647 clinics as of March 31, 2023.
- On March 29, 2024, the Company acquired a 50% equity interest
in a nine-clinic practice for a purchase price of $16.4 million,
with the original practice owners retaining a 50% equity interest.
The acquired business currently generates approximately $11.4
million in annual revenues and approximately 65,000 annual
visits.
- On April 30, 2024, one of the Company’s primary IIP businesses,
Briotix Health Limited Partnership, acquired 100% of an IIP
services business for a purchase price of $24.0 million. The
acquired business currently generates approximately $11.0 million
in annual revenues.
- The Company’s Board of Directors declared a quarterly dividend
of $0.44 per share payable on June 14, 2024, to shareholders of
record on May 23, 2024.
- Management increased full-year guidance and now expects
Adjusted EBITDA for 2024 to be in the range of $82.5 million to
$87.5 million. See “Management Updates 2024 Guidance” below for
more information.
________________________
(1)
See pages 11 and 12 of this
release for the definition and reconciliation of non-GAAP measures,
Adjusted EBITDA and Operating Results, to the most directly
comparable GAAP measure.
MANAGEMENT’S COMMENTS
Chris Reading, Chief Executive Officer, said, “After a
relatively slow January, visits have rebounded nicely and we are
ahead of plan thus far for the year, which has been reflected in
our guidance update. Demand remains strong for our life-improving
physical therapy services, and we are excited about the newest
additions to our PT and IIP family of companies. Also importantly,
we are seeing our contract renegotiations and focus on workers comp
bear some nice fruit. We remain focused on growing our most
profitable markets, deploying capital for additional acquisitions,
continuing our work on pricing and, most importantly, serving those
well who are entrusted to our care.”
Carey Hendrickson, Chief Financial Officer, added, “Our revenue
and EBITDA in the first quarter of 2024 were higher than our
internal expectations due to strong volumes in February and March
and continued progress in our net rate, giving us confidence to
raise the range of our full year EBITDA expectations by more than
the approximate $2.0 million positive EBITDA impact of the
previously reported Medicare rate adjustment effective March
9.”
2024 FIRST QUARTER VERSUS 2023 FIRST
QUARTER
Additional supplemental tables of financial and performance
metrics are presented on page 13 of this release.
Physical Therapy Operations
Three Months Ended
Variance
March 31, 2024
March 31, 2023
$
%
(In thousands, except
percentages)
Revenue related to:
Mature Clinics (1)
$
123,267
$
125,485
$
(2,218)
(1.8)%
Clinic additions (2)
7,561
371
7,190
*
(6)
Clinics sold or closed (3)
247
725
(478)
*
(6)
Net Patient Revenue
131,075
126,581
4,494
3.6%
Other (4)
3,350
2,578
772
29.9%
Total
134,425
129,159
5,266
4.1%
Operating costs (4)
110,361
102,070
8,291
8.1%
Gross profit
$
24,064
$
27,089
$
(3,025)
(11.2)%
Financial and
operating metrics (not in thousands):
Net rate per patient visit (1)
$
103.37
$
103.12
$
0.25
0.2%
Patient visits (1)
1,268,002
1,227,490
40,512
3.3%
Average daily visits per clinic (1)
29.5
29.8
(0.3)
(1.0)%
Gross margin
17.9%
21.0%
Salaries and related costs per visit,
clinics (5)
$
61.42
$
59.14
$
2.28
3.9%
Operating costs per visit, clinics (5)
$
85.50
$
81.97
$
3.53
4.3%
(1) See Glossary of Terms - Revenue
Metrics for definitions.
(2) Includes 14 clinics added during the
2024 First Quarter and 46 clinics added during the year ended
December 31, 2023.
(3) Includes six clinics closed during the
2024 First Quarter and 15 clinics closed during the year ended
December 31, 2023.
(4) Includes revenues and costs from
management contracts.
(5) Per visit costs excludes management
contract costs.
(6) Not meaningful.
Net revenue from physical therapy operations increased $5.3
million, or 4.1%, to $134.4 million for the 2024 First Quarter from
$129.2 million for the 2023 First Quarter. This increase was
primarily due to the increase in visits from the 32 net new clinics
added since the comparable prior year period partially offset by an
approximate $3.6 million adverse impact of weather in January 2024.
Additionally, net rate per patient visit increased to $103.37 for
the 2024 First Quarter from $103.12 for the 2023 First Quarter.
This increase was mainly driven by higher reimbursement rates from
commercial and other payors as a result of contract negotiations
and an increase in workers compensation as a percent of the
Company’s total net patient revenues, partially offset by the
Medicare rate reductions that took effect at the beginning of the
year which decreased net patient revenues by approximately $1.9
million for the 2024 First Quarter. The Medicare rate reductions
will be less impactful in future quarters as the Consolidated
Appropriations Act of 2024 adjusted the Medicare rate reduction to
approximately 1.8% from approximately 3.5%, effective on March 9,
2024. Other revenues increased $0.8 million, or 29.9%, to $3.4
million for the 2024 First Quarter from $2.6 million for the 2023
First Quarter due to the increase in the number of management
contracts since the comparable prior year period.
Operating costs from physical therapy operations increased $8.3
million, or 8.1%, to $110.4 million in the 2024 First Quarter from
$102.1 million in the 2023 First Quarter primarily driven by costs
associated with the 32 net new clinics added since the comparable
prior year period. Salaries and related costs per visit increased
to $61.42 in the 2024 First Quarter from $59.14 in the 2023 First
Quarter while total operating costs per visit increased to $85.50
from $81.97 over the same periods, respectively.
Gross profit from physical therapy operations in the 2024 First
Quarter decreased $3.0 million, or 11.2%, to $24.1 million from
$27.1 million in the 2023 First Quarter. The gross profit margin
from physical therapy operations was 17.9% in the 2024 First
Quarter.
Industrial Injury Prevention Services (“IIP”)
Three Months Ended
Variance
March 31, 2024
March 31, 2023
$
%
(In thousands, except
percentages)
Net revenue
$
21,250
$
19,350
$
1,900
9.8%
Operating costs
16,913
15,582
1,331
8.5%
Gross profit
$
4,337
$
3,768
$
569
15.1%
Gross margin
20.4%
19.5%
IIP revenues increased $1.9 million, or 9.8%, to $21.3 million
for the 2024 First Quarter as compared to $19.4 million for the
2023 First Quarter. IIP operating costs increased $1.3 million, or
8.5%, versus the comparable prior year period. Gross profit from
IIP operations in the 2024 First Quarter increased $0.6 million, or
15.1%, to $4.3 million from $3.8 million in the 2023 First Quarter.
The gross profit margin from IIP operations increased to 20.4% in
the 2024 First Quarter from 19.5% in the 2023 First Quarter.
Corporate Office and Other Expenses
Corporate costs increased $0.2 million, or 1.6%, to $14.1
million in the 2024 First Quarter from $13.9 million in 2023 First
Quarter due to an increase in support costs related to the larger
number of clinics and the timing of certain expenses.
Operating income was $14.3 million for the 2024 First Quarter
compared to $17.0 million for the 2023 First Quarter.
Total other income (expense), net, was $0.4 million in the 2024
First Quarter compared to ($2.6) million in the 2023 First
Quarter.
- Interest expense decreased $0.6 million to $2.0 million (net of
$0.9 million savings from the Company’s interest rate swap
arrangement) for the 2024 First Quarter compared to $2.6 million
(net of $0.6 million savings from the interest rate swap agreement)
in the 2023 First Quarter due to a lower outstanding balance on our
revolver, which we paid down in May 2023. The interest rate on the
Company’s term loan was 4.7% for the 2024 First Quarter and 4.9%
for the 2023 First Quarter, with an all-in effective interest rate,
including all associated costs, of 5.3% and 5.5% over the same
periods, respectively.
- Interest income from investing excess cash (primarily proceeds
from the secondary offering sale of the Company’s stock completed
in May 2023) in a high-yield savings account was $1.5 million
during the 2024 First Quarter.
- The Company revalued contingent and put-right liabilities
related to certain acquisitions and recognized a net gain of $0.5
million (a decrease in the related liabilities) in the 2024 First
Quarter compared to a net expense of $0.8 million (an increase in
the related liabilities) in the 2023 First Quarter.
The provision for income taxes was $3.1 million in the 2024
First Quarter compared to $3.0 million during the 2023 First
Quarter while the effective tax rates were 28.1% and 28.6% over the
same periods, respectively.
USPH Net Income and Non-GAAP Measures
Net income attributable to non-controlling interest (temporary
and permanent) was $3.6 million in the 2024 First Quarter compared
to $4.0 million in the 2023 First Quarter.
USPH net income was $8.0 million for the 2024 First Quarter as
compared to $7.4 million for the 2023 First Quarter. In accordance
with GAAP, the revaluation of non-controlling interest, net of
taxes, is not included in net income but is charged directly to
retained earnings; however, this change is included in the
computation of earnings per share. Earnings per share for 2024
First Quarter was $0.46 compared to $0.58 for 2023 First
Quarter.
Non-GAAP Adjusted EBITDA was $16.7 million for the 2024 First
Quarter compared to $18.5 million for the 2023 First Quarter due to
the Medicare rate reduction and adverse impact of weather events in
January previously discussed. Non-GAAP Operating Results was $7.7
million, or $0.51 per share, in the 2024 First Quarter as compared
to $7.7 million, or $0.59 per share, in the 2023 First Quarter,
with the decrease attributable to the increase in shares
outstanding associated with the Company’s secondary offering
completed in May 2023, as well as the Medicare rate reduction and
adverse impact of weather events in January.
See pages 11 and 12 of this release for the definition and
reconciliation of Adjusted EBITDA and Operating Results to the most
directly comparable GAAP measure.
BALANCE SHEET AND CASH
FLOW
Total cash and cash equivalents were $132.3 million as of March
31, 2024, compared to $32.6 million at March 31, 2023.
Additionally, the Company had $143.4 million of outstanding
borrowings and $175.0 million in available credit under its credit
facilities as of March 31, 2024, compared to $185.2 million of
outstanding borrowings and $137.0 million in available credit under
its credit facilities as of March 31, 2023. At December 31, 2023,
the Company had total cash and cash equivalents of $152.8 million,
$144.4 million of outstanding borrowings and $175.0 million in
available credit under its credit facilities.
RECENT ACQUISITIONS
On March 29, 2024, the Company acquired a 50% equity interest in
a nine-clinic practice for a purchase price of $16.4 million, with
the practice owners retaining a 50% equity interest. The business
currently generates approximately $11.4 million in annual revenues
and approximately 65,000 annual visits.
On April 30, 2024, one of the Company’s primary IIP companies,
Briotix Health Limited Partnership, acquired 100% of an IIP
services business for a purchase price of $24.0 million. The
business currently generates approximately $11.0 million in annual
revenues.
The Company’s strategy is to continue acquiring multi-clinic
outpatient physical therapy practices, to develop outpatient
physical therapy clinics as satellites in existing partnerships and
to continue acquiring companies that provide industrial injury
prevention services.
QUARTERLY DIVIDEND
The Company’s Board of Directors declared a quarterly dividend
of $0.44 per share payable on June 14, 2024, to shareholders of
record on May 23, 2024.
MANAGEMENT RAISES 2024 EARNINGS
GUIDANCE
Management currently expects Adjusted EBITDA for 2024 to be in
the range of $82.5 million to $87.5 million. The $2.5 million
increase in guidance is attributable to the change in the Medicare
rate reduction from 3.5%, which was effective from January 1
through March 8, to 1.8% effective March 9, as adjusted by the
Consolidated Appropriations Act of 2024, as well as the Company’s
strong performance in the 2024 First Quarter relative to
management’s expectations. Consistent with the previously-provided
guidance, the updated guidance includes the expected EBITDA
contribution from acquisitions that either have closed or are
expected to close in or shortly after the first half of 2024.
The annual guidance figures will not be updated unless there is
a material development that causes management to believe that
Adjusted EBITDA will be significantly outside the given range.
CONFERENCE CALL
INFORMATION
U.S. Physical Therapy’s management will host a conference call
at 10:30 a.m. ET / 9:30 a.m. CT, on May 8, 2024, to discuss the
Company’s financial results for the first quarter ended March 31,
2024. Interested parties may participate in the call by dialing
(800) 267-6316 (Primary) or (203) 518-9783 (Alternate) and
conference ID of USPHQ124. Please call approximately 10 minutes
before the call is scheduled to begin. To listen to the live call,
go to the Company’s website at www.usph.com at least 15 minutes
early to register, download and install any necessary audio
software. If you are unable to listen live, a playback of the
conference call can be accessed until August 8, 2024, at the
Company’s website.
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 in Medicare rules and guidelines and reimbursement or
failure of our clinics to maintain their Medicare certification
and/or enrollment status;
- the impact of future public health crises and
epidemics/pandemics, such as was the case with the novel strain of
COVID-19 and its variants;
- revenue we receive from Medicare and Medicaid being subject to
potential retroactive reduction;
- changes in reimbursement rates or payment methods from third
party payors including government agencies, and changes in the
deductibles and co-pays owed by patients;
- 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;
- competitive, economic or reimbursement conditions in our
markets which may require us to reorganize or close certain clinics
and thereby incur losses and/or closure costs including the
possible write-down or write-off of goodwill and other intangible
assets;
- one of our acquisition agreements contains a put right related
to a future purchase of a majority interest in a separate
company;
- the impact of future vaccinations and/or testing mandates at
the federal, state and/or local level, which could have an adverse
impact on staffing, revenue, costs and the results of
operations;
- our debt and financial obligations could adversely affect our
financial condition, our ability to obtain future financing and our
ability to operate our business;
- changes as the result of government enacted national healthcare
reform;
- business and regulatory conditions including federal and state
regulations;
- governmental and other third party payor inspections, reviews,
investigations and audits, which may result in sanctions or
reputational harm and increased costs;
- revenue and earnings expectations;
- some of our acquisition agreements contain contingent
consideration, the value of which may impact future financial
results;
- legal actions, which could subject us to increased operating
costs and uninsured liabilities;
- general economic conditions, including but not limited to
inflationary and recessionary periods;
- actual or perceived events involving banking volatility or
limited liability, defaults or other adverse developments that
affect the U.S. or international financial systems, may result in
market wide liquidity problems which could have a material and
adverse impact on our available cash and results of
operations;
- our business depends on hiring, training, and retaining
qualified employees;
- availability and cost of qualified physical therapists;
- competitive environment in the industrial injury prevention
services business, which could result in the termination or
non-renewal of contractual service arrangements and other adverse
financial consequences for that service line;
- our ability to identify and complete acquisitions, and the
successful integration of the operations of the acquired
businesses;
- impact on the business and cash reserves resulting from
retirement or resignation of key partners and resulting purchase of
their non-controlling interest (minority interests);
- maintaining our information technology systems with adequate
safeguards to protect against cyber-attacks;
- a security breach of our or our third-party vendors’
information technology systems may subject us to potential legal
action and reputational harm and may result in a violation of the
Health Insurance Portability and Accountability Act of 1996 of the
Health Information Technology for Economic and Clinical Health Act,
or may interfere with our ability to file and process claims for
payment which could interfere with our collection of revenues from
third party payors;
- if our noncompetition covenants with employed therapists are
nullified, we may lose staff to competitor;
- maintaining clients for which we perform management, industrial
injury prevention related services, and other services, as a breach
or termination of those contractual arrangements by such clients
could cause operating results to be less than expected;
- 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. For additional information regarding these and other
risks and uncertainties, that could cause actual results to differ
materially from those contained in our forward-looking statements,
please refer to “Risk Factors” in our Annual Report on Form 10-K
for the year ended December 31, 2023, filed with the Securities and
Exchange Commission (“SEC”) on February 29, 2024 and any risk
factors contained in subsequent quarterly and annual reports we
file with the SEC. Our forward-looking statements represent our
estimates and assumptions only as of the date of this report.
Except as required by law, we are under no obligation to update any
forward-looking statement as a result of new information, future
events, or otherwise, except as required by law.
GLOSSARY OF TERMS – REVENUE
METRICS
Mature clinics are clinics opened
or acquired prior to January 1, 2023, and are still operating as of
the balance sheet date.
Net rate per patient visit is net
patient revenue related to our physical therapy operations divided
by total number of patient visits (defined below) during the
periods presented.
Patient visits is the number of
unique patient visits during the periods presented.
Average daily visits per clinic is
patient visits divided by the number of days in which normal
business operations were conducted during the periods presented and
further divided by the average number of clinics in operation
during the periods presented.
ABOUT U.S. PHYSICAL THERAPY,
INC.
Founded in 1990, U.S. Physical Therapy, Inc. currently operates
683 outpatient physical 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 41 physical therapy facilities for unaffiliated
third parties, including hospitals and physician groups. The
Company also has an industrial injury prevention services business
which provides onsite services for clients’ employees including
injury prevention and rehabilitation, performance optimization,
post-offer employment testing, functional capacity evaluations, and
ergonomic assessments.
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
UNAUDITED CONSOLIDATED
STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS)
Three Months Ended
March 31, 2024
March 31, 2023
Net patient revenue
$
131,075
$
126,581
Other revenue
24,600
21,928
Net revenue
155,675
148,509
Operating cost:
Salaries and related costs
93,731
86,040
Rent, supplies, contract labor and
other
31,916
30,100
Provision for credit losses
1,627
1,512
Total operating cost
127,274
117,652
Gross profit
28,401
30,857
Corporate office costs
14,085
13,859
Operating income
14,316
16,998
Other income (expense):
Interest expense, debt and other
(1,968)
(2,560)
Interest income from investments
1,543
64
Change in fair value of contingent
earn-out consideration
612
(698)
Change in revaluation of put-right
liability
(80)
(149)
Equity in earnings of unconsolidated
affiliate
271
274
Relief Funds
-
467
Other
62
-
Total other income (expense)
440
(2,602)
Income before taxes
14,756
14,396
Provision for income taxes
3,139
2,969
Net income
11,617
11,427
Less: Net income attributable to
non-controlling interest:
Redeemable non-controlling interest -
temporary equity
(2,227)
(2,720)
Non-controlling interest - permanent
equity
(1,344)
(1,297)
(3,571)
(4,017)
Net income attributable to USPH
shareholders
$
8,046
$
7,410
Basic and diluted earnings per share
attributable to USPH shareholders (1)
$
0.46
$
0.58
Shares used in computation - basic and
diluted
15,017
13,025
Dividends declared per common share
$
0.44
$
0.43
(1)
See page 12 of this press release for the
calculation of basic and diluted earnings per share.
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
Three Months Ended
March 31, 2024
March 31, 2023
Net income
$
11,617
$
11,427
Other comprehensive gain (loss):
Unrealized gain (loss) on cash flow
hedge
1,781
(1,817)
Tax effect at statutory rate (federal and
state)
(455)
464
Comprehensive income
$
12,943
$
10,074
Comprehensive income attributable to
non-controlling interest
(3,571)
(4,017)
Comprehensive income attributable to USPH
shareholders
$
9,372
$
6,057
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEET
(IN THOUSANDS, EXCEPT SHARES
AND PER SHARE AMOUNTS)
March 31, 2024
December 31, 2023
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
132,290
$
152,825
Patient accounts receivable, less
provision for credit losses of $2,936 and $2,736, respectively
55,363
51,866
Accounts receivable - other
21,774
17,854
Other current assets
11,715
10,830
Total current assets
221,142
233,375
Fixed assets:
Furniture and equipment
65,550
63,982
Leasehold improvements
47,458
46,941
Fixed assets, gross
113,008
110,923
Less accumulated depreciation and
amortization
(86,757)
(84,821)
Fixed assets, net
26,251
26,102
Operating lease right-of-use assets
102,113
103,431
Investment in unconsolidated affiliate
12,160
12,256
Goodwill
534,271
509,571
Other identifiable intangible assets,
net
116,888
109,682
Other assets
4,431
2,821
Total assets
$
1,017,256
$
997,238
LIABILITIES, REDEEMABLE
NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND
NON-CONTROLLING INTEREST
Current liabilities:
Accounts payable - trade
$
4,866
$
3,898
Accrued expenses
53,749
55,344
Current portion of operating lease
liabilities
34,699
35,252
Current portion of term loan and notes
payable
9,222
7,691
Total current liabilities
102,536
102,185
Notes payable, net of current portion
804
1,289
Term loan, net of current portion and
deferred financing costs
135,945
137,702
Deferred taxes
27,337
24,815
Operating lease liabilities, net of
current portion
75,680
76,653
Other long-term liabilities
2,988
2,356
Total liabilities
345,290
345,000
Redeemable non-controlling interest -
temporary equity
190,733
174,828
Commitments and Contingencies
U.S. Physical Therapy, Inc. ("USPH")
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,
17,282,822 and 17,202,291 shares issued,
respectively
172
172
Additional paid-in capital
283,546
281,096
Accumulated other comprehensive gain
4,108
2,782
Retained earnings
223,573
223,772
Treasury stock at cost, 2,214,737
shares
(31,628)
(31,628)
Total USPH shareholders’ equity
479,771
476,194
Non-controlling interest - permanent
equity
1,462
1,216
Total USPH shareholders' equity and
non-controlling interest - permanent equity
481,233
477,410
Total liabilities, redeemable
non-controlling interest,
USPH shareholders' equity and
non-controlling interest - permanent equity
$
1,017,256
$
997,238
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Three Months Ended
March 31, 2024
March 31, 2023
OPERATING ACTIVITIES
Net income, including non-controlling
interest
$
11,617
$
11,427
Adjustments to reconcile net income
including non-controlling interest to net cash provided by
operating activities:
Depreciation and amortization
4,095
3,788
Provision for credit losses
1,627
1,512
Equity-based awards compensation
expense
1,997
1,806
Amortization of debt issue costs
106
106
Change in deferred income taxes
1,943
221
Change in revaluation of put-right
liability
80
149
Change in fair value of contingent
earn-out consideration
(612)
698
Equity of earnings in unconsolidated
affiliate
(271)
(274)
Loss on sale of fixed assets
5
-
Other
-
19
Changes in operating assets and
liabilities:
Increase in patient accounts
receivable
(5,124)
(5,999)
Increase in accounts receivable -
other
(3,985)
(796)
(Decrease) increase in other current and
long-term assets
(433)
1,897
Decrease in accounts payable and accrued
expenses
(6,678)
(1,846)
Increase (decrease) in other long-term
liabilities
52
(1,359)
Net cash provided by operating
activities
4,419
11,349
INVESTING ACTIVITIES
Purchase of fixed assets
(1,838)
(2,059)
Purchase of majority interest in
businesses, net of cash acquired
(15,971)
(5,796)
Purchase of redeemable non-controlling
interest, temporary equity
(2,702)
(5,178)
Purchase of non-controlling interest,
permanent equity
(498)
-
Proceeds on sale of non-controlling
interest, permanent equity
23
-
Proceeds on sale of partnership interest -
redeemable non-controlling interest, temporary equity
67
107
Distributions from unconsolidated
affiliate
367
245
Other
88
-
Net cash used in investing activities
(20,464)
(12,681)
FINANCING ACTIVITIES
Proceeds from revolving facility
-
7,000
Distributions to non-controlling interest,
permanent and temporary equity
(3,160)
(3,297)
Principal payments on notes payable
(392)
(422)
Payments on term loan
(938)
(938)
Net cash (used in) provided by financing
activities
(4,490)
2,343
Net (decrease) increase in cash and cash
equivalents
(20,535)
1,011
Cash and cash equivalents - beginning of
period
152,825
31,594
Cash and cash equivalents - end of
period
$
132,290
$
32,605
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the period for:
Income taxes
$
367
$
442
Interest paid
1,844
1,377
Non-cash investing and financing
transactions during the period:
Purchase of interest in businesses -
seller financing portion
500
360
Notes payable related to purchase of
redeemable non-controlling interest, temporary equity
-
611
Offset of notes receivable associated with
purchase of redeemable non-controlling interest
75
-
Notes receivable related to sale of
redeemable non-controlling interest, temporary equity
315
532
Notes receivable related to the sale of
non-controlling interest, permanent equity
243
-
Dividends payable to USPH shareholders
$
6,630
$
5,617
U. S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES ADJUSTED EBITDA AND OPERATING RESULTS
The following tables provide details of the basic and diluted
earnings per share computation and reconcile net income
attributable to USPH shareholders calculated in accordance with
GAAP to Adjusted EBITDA and Operating Results (non-GAAP measures).
Management believes providing Adjusted EBITDA and Operating Results
to investors is useful information for comparing the Company's
period-to-period results as well as for comparing with other
similar businesses since most do not have redeemable instruments
and therefore have different equity structures. Management uses
Adjusted EBITDA and Operating Results, which eliminate certain
items described above that can be subject to volatility and unusual
costs, as the principal measures to evaluate and monitor financial
performance period over period.
Adjusted EBITDA, a non-GAAP measure, is defined as net income
attributable to USPH shareholders before interest income, interest
expense, taxes, depreciation, amortization, change in fair value of
contingent earn-out consideration, Relief Funds, changes in
revaluation of put-right liability, equity-based awards
compensation expense, other income and related portions for
non-controlling interests.
Operating Results, a non-GAAP measure, equals net income
attributable to USPH shareholders less, changes in revaluation of a
put-right liability, Relief Funds, changes in fair value of
contingent earn-out consideration, and any allocations to
non-controlling interests, all net of taxes. Operating Results per
share also excludes the impact of the revaluation of redeemable
non-controlling interest and the associated tax impact.
Adjusted EBITDA and Operating Results are not measures of
financial performance under GAAP. Adjusted EBITDA and Operating
Results should not be considered in isolation or as an alternative
to, or substitute for, net income attributable to USPH shareholders
presented in the consolidated financial statements.
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
ADJUSTED EBITDA, OPERATING
RESULTS AND EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
Three Months Ended
March 31, 2024
March 31, 2023
(In thousands, except per
share data)
Adjusted EBITDA
(a non-GAAP measure)
Net income attributable to USPH
shareholders
$
8,046
$
7,410
Adjustments:
Provision for income taxes
3,139
2,969
Depreciation and amortization
4,095
3,788
Interest expense, debt and other, net
1,968
2,560
Interest income from investments
(1,543)
(64)
Equity-based awards compensation
expense
1,997
1,806
Change in revaluation of put-right
liability
80
149
Change in fair value of contingent
earn-out consideration
(612)
698
Relief Funds
-
(467)
Other income
(62)
-
Allocation to non-controlling
interests
(432)
(371)
$
16,676
$
18,478
Operating Results
(a non-GAAP measure)
Net income attributable to USPH
shareholders
$
8,046
$
7,410
Adjustments:
Change in fair value of contingent
earn-out consideration
(612)
698
Change in revaluation of put-right
liability
80
149
Relief Funds
-
(467)
Allocation to non-controlling
interests
-
33
Tax effect at statutory rate (federal and
state)
136
(105)
$
7,650
$
7,718
Operating Results per share (a non-GAAP
measure)
$
0.51
$
0.59
Earnings per
share
Computation of earnings per share - USPH
shareholders:
Net income attributable to USPH
shareholders
$
8,046
$
7,410
Charges to retained earnings:
Revaluation of redeemable non-controlling
interest
(1,439)
119
Tax effect at statutory rate (federal and
state)
368
(30)
$
6,975
$
7,499
Earnings per share (basic and diluted)
$
0.46
$
0.58
Shares used in computation - basic and
diluted
15,017
13,025
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL AND
PERFORMANCE METRICS
Revenue Metrics
Number of Clinics
Net Rate Per Patient
Visit (1)
Patient Visits (1)
Average Daily Visits
Per Clinic (1)
2024
2023
2024
2023
2024
2023
2024
2023
First Quarter
679
647
$103.37
$103.12
1,268,002
1,227,490
29.5
29.8
Second quarter
656
$102.03
1,267,140
30.4
Third quarter
672
$102.37
1,242,954
29.7
Fourth quarter
671
$103.68
1,267,842
29.9
Year
671
$102.80
5,005,426
30.0
(1)
See definition of the metrics above in the
Glossary of Terms – Revenue Metrics on page 6.
Clinic Count Roll Forward
Three Months Ended
March 31, 2024
March 31, 2023
Number of clinics, beginning of period
671
640
Additions
14
8
Closed or sold
(6)
(1)
Number of clinics, end of period
679
647
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507494696/en/
U.S. Physical Therapy, Inc. Carey Hendrickson, Chief Financial
Officer email: chendrickson@usph.com Chris Reading, Chief Executive
Officer (713) 297-7000 Three Part Advisors Joe Noyons (817)
778-8424
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