U.S. Physical Therapy, Inc. (NYSE: USPH), a national operator of
outpatient physical therapy clinics, today reported results for the
first quarter ended March 31, 2013.
U.S. Physical Therapy’s net income for the three months ended
March 31, 2013 was $3.7 million compared to $4.5 million for the
three months ended March 31, 2012. Diluted earnings per share were
$0.31 for the 2013 period versus $0.38 for the 2012 period. As per
the Company’s March 7, 2013, press release, although patient
referrals in the first quarter were as planned, the volume of
patient visits was significantly impacted by severe weather and the
flu, particularly in January and February in the East and Midwest.
In the latter part of February and throughout March, as the weather
improved, the average number of patient visits per clinic per day
rebounded.
First Quarter 2013 compared to First
Quarter 2012
- Net revenues increased slightly from
$62,582,000 in the first quarter of 2012 to $63,098,000 in the
first quarter of 2013, primarily due to an increase in the average
net patient revenue per visit to $106.43 from $104.55 in the
comparable 2012 period. As described above, due to severe weather
and flu, total patient visits declined slightly to 578,000 for the
2013 period as compared to 579,000 for the 2012 period.
- Total clinic operating costs were
$48,440,000, or 76.8% of net revenues, in the first quarter of
2013, as compared to $46,449,000, or 74.2% of net revenues, in the
2012 period. The increase was primarily attributable to $2,819,000
in operating costs of new clinics opened or acquired in the past 12
months offset by a reduction in operating costs of $828,000 for
those clinics opened or acquired prior to the past 12 months.
Clinic salaries and related costs were 54.5% of net revenues in the
recent quarter versus 52.4% in the 2012 period. Rent, clinic
supplies, contract labor and other costs as a percentage of net
revenues were 20.5% for the recent quarter versus 19.9% in the 2012
period. The provision for doubtful accounts as a percentage of net
revenues was 1.7% for the 2013 period versus 1.8% in the 2012
period.
- Corporate office costs were $6,507,000
in the first quarter of 2013 as compared to $6,262,000 in the 2012
first quarter. Corporate office cost was 10.3% of net revenues in
the 2013 period versus 10.0% in 2012.
- Operating income for the first quarter
of 2013 was $8,151,000 compared to $9,871,000 in the 2012 first
quarter.
- Interest expense was $135,000 in the
first quarter of 2013 versus $162,000 in the first quarter of
2012.
- Net income attributable to
non-controlling interests was $1,888,000 in the recent quarter as
compared to $2,334,000 in the year earlier period.
- The provision for income taxes as a
percentage of income before taxes less net income attributable to
non-controlling interests was 39.3% in both periods.
- Net income for the three months ended
March 31, 2013 was $3.7 million compared to $4.5 million for the
three months ended March 31, 2012. Diluted earnings per share were
$0.31 for the 2013 period versus $0.38 for the 2012 period.
- Same store revenues for de novo and
acquired clinics open for one year or more remained relatively
flat. While the net rate per visit increased 1.4%, visits for de
novo and acquired clinics open for one year or more decreased by
1.7%. Same store revenues and visits were adjusted to reflect the
same number of days in each period as the 2013 quarter included 63
days of operations while the 2012 quarter included 64 days. Patient
visits for the first quarter of 2013 would have been higher were it
not for the effects of severe weather and the flu.
Larry McAfee, Chief Financial Officer, noted, “Because of the
multiple storm systems that battered the East and Midwest earlier
this year and a worse than normal flu season patient volumes were
off in January and February. The Company’s average patient visits
per day per clinic improved from 20.1 in January to 22.1 in March.
With the increased patient volume, monthly earnings rose from
approximately 7 cents per share in January to about 14 cents in
March.”
Chris Reading, Chief Executive Officer, said, “After a rough
start, thanks to the focused efforts of our partners and our
dedicated team, the Company’s operations improved significantly by
the end of the quarter. Additionally, we have been able to complete
two nice acquisitions so far in 2013 and expect a continued active
development program the balance of the year.”
Second Physical Therapy Group
Acquisition of 2013
On April 30, 2013, the Company acquired a 50% interest in a five
clinic physical therapy practice. The group sees more than 35,000
patient visits per year with annual revenue of approximately $4.2
million.
U.S. Physical Therapy Declares
Quarterly Dividend
The second quarterly dividend of 2013 for $.10 per share will be
paid on June 7 to shareholders of record as of May 17.
Management Earnings
Guidance
U.S. Physical Therapy’s management expects the Company’s
earnings for the year 2013 to be in the range of $18.1 million to
$18.8 million in net income and $1.51 to $1.56 in diluted earnings
per share. This guidance range represents projected earnings from
existing operations and excludes future potential acquisitions. The
Company does not provide quarterly earnings guidance. The annual
guidance figures will not be updated unless there is a material
development that causes management to believe that earnings will be
significantly outside the given range.
First Quarter 2013 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 9, 2013 to discuss the Company’s Quarter Ended March 31, 2013
results. Interested parties may participate in the call by dialing
1-888-335-5539 or 973-582-2857 and enter reservation number
31738362 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 9, 2013.
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. 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 project. Included
among such statements are 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 guidelines and
reimbursement or failure of our clinics to maintain their Medicare
certification status;
- revenue and earnings expectations;
- general economic conditions;
- business and regulatory conditions
including federal and state regulations;
- changes as the result of government
enacted national healthcare reform;
- availability and cost of qualified
physical and occupational therapists;
- personnel productivity;
- 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;
- changes in reimbursement rates or
payment methods from third party payors including government
agencies and deductibles and co-pays owed by patients;
- maintaining adequate internal
controls;
- availability, terms, and use of
capital;
- acquisitions, purchase of non
controlling interests (minority interests) and the successful
integration of the operations of the acquired businesses; 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 (the "SEC") 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 accurate.
About U.S. Physical Therapy,
Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 446
clinics in 43 states. The Company's clinics provide preventative
and post-operative care for a variety of orthopedic-related
disorders and sports-related injuries, non-surgical treatment of
osteoarthritis, treatment for neurologically-related injuries and
rehabilitation of injured workers. In addition to owning and
operating clinics, the Company manages 17 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 (unaudited)
Three Months Ended March 31, 2013 2012
(In thousands, except per share data)
Net patient revenues $ 61,505 $ 60,499 Other revenues
1,593 2,083 Net revenues 63,098 62,582
Clinic operating costs: Salaries and related costs 34,415 32,799
Rent, clinic supplies, contract labor and other 12,918 12,484
Provision for doubtful accounts 1,089 1,117 Closure costs 18
49 Total clinic operating costs 48,440 46,449
Gross margin 14,658 16,133 Corporate office costs
6,507 6,262 Operating income
8,151 9,871 Interest and other income, net 2 2 Interest
expense (135 ) (162 ) Income from operations
8,018 9,711 Provision for income taxes 2,409
2,899 Net income including noncontrolling interests
5,609 6,812 Less: net income attributable to noncontrolling
interests (1,888 ) (2,334 ) Net income attributable
to common shareholders $ 3,721 $ 4,478
Earnings per share attributable to common shareholders: Basic $
0.31 $ 0.38 Diluted $ 0.31 $ 0.38
Shares used in computation: Basic 11,955
11,726 Diluted 11,979 11,838
Dividends declared per common share $ 0.10 $
0.09
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31, 2013 2012
(unaudited)
(In thousands, except per share data)
ASSETS Current assets: Cash and cash equivalents $ 10,284 $
11,671 Patient accounts receivable, less allowance for doubtful
accounts of $1,521 and $1,595, respectively 28,969 25,973 Accounts
receivable - other, less allowance for doubtful accounts of $412
and $514, respectively 1,607 1,703 Other current assets
3,862 5,975 Total current assets 44,722 45,322
Fixed assets: Furniture and equipment 36,960 36,316
Leasehold improvements 21,353 20,858
58,313 57,174 Less accumulated depreciation and amortization
44,922 44,158 13,391 13,016 Goodwill 103,581
100,188 Other intangible assets, net 14,230 12,146 Other assets
953 1,042 $ 176,877 $ 171,714
LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts payable - trade $ 1,585 $ 1,732 Accrued
expenses 11,661 14,116 Current portion of notes payable 659
459 Total current liabilities 13,905 16,307
Notes payable 325 175 Revolving line of credit 20,400 17,400
Deferred rent 950 894 Other long-term liabilities 1,617
2,279 Total liabilities 37,197 37,055
Commitments and contingencies 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, 14,283,625 and 14,129,651 shares
issued, respectively 142 141 Additional paid-in capital 37,871
37,489 Retained earnings 113,835 111,321 Treasury stock at cost,
2,214,737 shares (31,628 ) (31,628 )
Total U.S. Physical Therapy, Inc.
shareholders' equity
120,220 117,323 Noncontrolling interests 19,460
17,336 Total equity 139,680
134,659 $ 176,877 $ 171,714
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31, 2013 2012 (In thousands)
OPERATING ACTIVITIES Net
income including noncontrolling interests $ 5,609 $ 6,812
Adjustments to reconcile net income including noncontrolling
interests to net cash provided by operating activities:
Depreciation and amortization 1,352 1,334 Provision for doubtful
accounts 1,089 1,117 Equity-based awards compensation expense 639
547 Loss on sale of business and fixed assets 14 58 Deferred income
tax (219 ) 1,610 Other 33 - Changes in operating assets and
liabilities: Increase in patient accounts receivable (3,429 )
(2,179 ) Decrease (increase) in accounts receivable - other 74 (426
) Decrease in other assets 2,095 38 Decrease in accounts payable
and accrued expenses (2,460 ) (3,728 ) Increase (decrease) in other
liabilities 56 (12 ) Net cash provided by
operating activities 4,853 5,171
INVESTING ACTIVITIES
Purchase of fixed assets (1,270 ) (896 ) Purchase of businesses,
net of cash acquired (4,215 ) (1,090 ) Acquisitions of
noncontrolling interests (956 ) (565 ) Proceeds on sale of business
and fixed assets, net 14 6 Net cash
used in investing activities (6,427 ) (2,545 )
FINANCING
ACTIVITIES Distributions to noncontrolling interests (1,594 )
(1,919 ) Cash dividends to shareholders (1,207 ) (1,058 ) Proceeds
from revolving line of credit 30,600 8,400 Payments on revolving
line of credit (27,600 ) (7,700 ) Payment of notes payable (50 ) -
Tax benefit from stock options exercised 33 58 Other 5
50 Net cash provided by (used in) financing
activities 187 (2,169 ) Net (decrease) increase in cash and
cash equivalents (1,387 ) 457 Cash and cash equivalents - beginning
of period 11,671 9,983 Cash and cash
equivalents - end of period $ 10,284 $ 10,440
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid
during the period for: Income taxes $ 177 $ 576 Interest $ 119 $
283 Non-cash investing and financing transactions during the
period: Purchase of business - seller financing portion $ 400 $ 100
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
DETAIL OF GROSS MARGIN (IN THOUSANDS)
(unaudited)
Three Months Ended March 31, 2013 2012 Gross
margin - physical therapy services $ 14,851 $ 15,966 Gross margin -
physician services (193 ) 167 Gross margin $ 14,658
$ 16,133
U.S.
PHYSICAL THERAPY, INC. AND SUBSIDIARIES RECAP OF CLINIC
COUNT Number of Date Clinics
December 31, 2010 392 March 31, 2011 397 June 30,
2011 398 September 30, 2011 420 December 31, 2011 416 March
31, 2012 414 June 30, 2012 419 September 30, 2012 423 December 31,
2012 431 March 31, 2013 441
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