Management Revises 2019 Earnings
Guidance
U.S. Physical Therapy, Inc. ("USPH" or the “Company”) (NYSE:
USPH), a national operator of outpatient physical therapy clinics,
today reported results for the third quarter and nine months ended
September 30, 2019.
For the third quarter ended September 30, 2019, USPH’s Operating
Results (as defined below) increased 11.7% to $9.0 million, or
$0.71 per diluted share, as compared to $8.1 million, or $0.64 per
diluted share, in the third quarter of 2018. For the nine months
ended September 30, 2019, USPH’s Operating Results increased 13.7%
to $27.8 million, or $2.18 per diluted share, as compared to $24.5
million, or $1.93 per diluted share, in the first nine months of
2018. Operating Results, a non-Generally Accepted Accounting
Principle (“GAAP”) measure, equals net income attributable to USPH
shareholders per the consolidated statements of net income less the
gain on the sale of a partnership interest as described below. The
earnings per share from Operating Results also excludes the impact
of the revaluation of redeemable non-controlling interest. On June
30, 2019, the Company sold its 50% interest in one physical therapy
partnership to the group’s founders for $11.6 million and
recognized a pre-tax gain of $5.8 million on the sale.
For the third quarter ended September 30, 2019, USPH’s net
income attributable to its shareholders was $9.0 million, as
compared to $8.1 million in the third quarter of 2018. Inclusive of
the charge for revaluation of non-controlling interest, net of tax,
used to compute diluted earnings per share, in accordance with
GAAP, in the recent quarter, the amount is $8.4 million, or $0.66
per share, as compared to $1.7 million, or $0.13 per share for the
third quarter of 2018. For the nine months ended September 30,
2019, USPH’s net income attributable to its shareholders, in
accordance with GAAP, was $32.1 million as compared to $24.5
million for the comparable period of 2018. Inclusive of the charge
for revaluation of non-controlling interest, net of tax, used to
compute diluted earnings per share, in accordance with GAAP, in the
recent nine months, the amount is $24.2 million, or $1.90 per
share, as compared to $11.1 million, or $0.88 per share for the
third quarter of 2018. In accordance with current accounting
guidance, the revaluation of redeemable non-controlling interest,
net of tax, is not included in net income but charged directly to
retained earnings but is included in the earnings per basic and
diluted share calculation. See the schedule on page 12 for the
computation of diluted earnings per share.
Third Quarter 2019 Compared to Third
Quarter 2018
- Net revenues increased $4.1 million, or 3.7%, from $113.1
million in the third quarter of 2018, to $117.2 million in the
third quarter of 2019, due to an increase in net patient revenues
from physical therapy operations, internal growth, new clinic
development and an acquisition, and an increase in the revenue from
the industrial injury prevention business, due to internal growth
and an acquisition. Included in the third quarter of 2018 was
revenue of $5.9 million for clinics within the partnership sold on
June 30, 2019. The third quarter of 2019 had 64 business days
versus 63 in the third quarter of 2018.
- Despite the loss of net patient revenues in the clinics of the
sold partnership mentioned previously, net patient revenues from
physical therapy operations increased $1.0 million, or 1.0%, to
$104.4 million in the third quarter of 2019 from $103.4 million in
the third quarter of 2018 due to an increase in total patient
visits of 1.7% from 980,000 to 996,000 offset by a decrease in the
average net patient revenue per visit of $0.68 to $104.80 from
$105.48. The reduction in net rate is largely attributable to an
$825,000 overpayment relating to a single payor for one partnership
of which $525,000 affected the third quarter of 2019. The
overpayment was discovered by management this summer. It occurred
over several years and following a thorough review was accounted
for in the two recent quarterly periods. Of the $1.0 million
increase in net patient revenues, $1.6 million of the increase
related to clinics opened or acquired after September 30, 2018
(“New Clinics”). Net patient revenues related to clinics opened or
acquired prior to October 1, 2018 excluding the clinics sold
(“Mature Clinics”), increased by $5.3 million. Net patient revenues
related to the clinics sold was $5.9 million in the third quarter
of 2018. Revenue from physical therapy management contracts was
$2.2 million for the third quarter of 2019 and $1.9 million for the
third quarter 2018.
- Revenue from the industrial injury prevention business
increased 36.6% to $9.9 million in the third quarter of 2019
compared to $7.3 million in the third quarter 2018 due to internal
growth and an acquisition in April 2019. Other miscellaneous
revenue was $0.7 million in the third quarter of 2019 and $0.6
million in the third quarter of 2018.
- Total operating costs were $89.9 million, or 76.7% of net
revenues, in the third quarter of 2019 as compared to $87.1
million, or 76.9% of net revenues, in the third quarter of 2018.
The $2.8 million increase was attributable to $1.4 million in
operating costs related to Mature Clinics, an increase of $3.9
million related to New Clinics, an increase of $2.8 million related
to the industrial injury prevention business including a recent
acquisition and $0.3 million in integration costs incurred related
to the recent acquisition and an increase in management contracts
costs of $0.2 million offset by a reduction in expenses related to
the clinics sold of $5.5 million. Total salaries and related costs,
including physical therapy operations and the industrial injury
prevention business, were 56.9% of net revenues in the recent
quarter versus 57.0% in the third quarter of 2018. Rent, supplies,
contract labor and other costs as a percentage of net revenues were
18.9% in the third quarter of 2019 versus 19.1% in the third
quarter of 2018. The provision for doubtful accounts as a
percentage of net revenue was 0.8% for both periods.
- The gross profit for the third quarter of 2019 grew by 5.0%, or
$1.3 million, to $27.4 million, as compared to $26.1 million in the
third quarter of 2018. The gross profit percentage was 23.3% of net
revenue in the recent period as compared to 23.1% in the 2018 third
quarter. The gross profit percentage for the Company’s physical
therapy clinics increased by 110 basis points to 23.9% in the
recent quarter as compared to 22.8% in the third quarter of 2018.
The gross profit percentage on physical therapy management
contracts increased by 130 basis points to 11.2% in the 2019 third
quarter as compared to 9.9% in the 2018 third quarter. The gross
profit for the industrial injury prevention business, after $0.3
million in acquisition integration costs, was $2.0 million, or
19.9%, in the recent quarter as compared to $2.2 million, or 29.7%,
in the 2018 period.
- Corporate office costs were $10.6 million in the third quarter
of 2019 and in the third quarter of 2018. Corporate office costs
were 9.0% of net revenues for the third quarter of 2019 quarter as
compared to 9.4% for the third quarter of 2018.
- Operating income for the third quarter of 2019 increased 9.0%
to $16.8 million as compared to $15.4 million in the third quarter
of 2018. Operating income as a percentage of net revenue increased
by 70 basis points from 13.6% in the 2018 period to 14.3% in the
recent quarter.
- Interest expense was $0.6 million in the third quarter of 2019
and in the third quarter of 2018.
- The provision for income tax for the third quarter of 2019 was
$3.2 million and $3.0 million in the 2018 third quarter. The
provision for income tax as a percentage of income before taxes
less net income attributable to non-controlling interest was 26.1%
for the third quarter of 2019 and 27.0% for the third quarter of
2018.
- Net income attributable to non-controlling interests (permanent
equity) was $1.6 million in the third quarter of 2019 and $1.3
million in the third quarter of 2018. Net income attributable to
redeemable non-controlling interests (temporary equity) was $2.4
million in the third quarter of 2019 and $2.5 million in the 2018
third quarter.
- Same store revenues for de novo and acquired clinics open for
one year or more increased 4.0% in the most recent quarter. Visits
increased 4.0% for de novo and acquired clinics open for one year
or more while the same store net rate remained consistent. Revenues
and visits were adjusted to reflect the same number of operating
days in both periods.
First Nine Months 2019 Compared to
First Nine Months 2018
- Net revenues increased $23.3 million, or 6.9%, from $336.6
million in the first nine months of 2018, to $359.9 million in the
first nine months of 2019, primarily due to an increase in net
patient revenues from physical therapy operations due to internal
growth and new clinic development plus an acquisition, and an
increase in the revenue from the industrial injury prevention
business due to internal growth and acquisitions.
- Net patient revenues from physical therapy operations increased
$14.5 million, or 4.7%, to $324.4 million in the first nine months
of 2019 from $309.9 million in the first nine months of 2018 due to
an increase in total patient visits of 4.1% from 2,935,000 to
3,055,000 and an increase in the average net patient revenue per
visit to $106.17 from $105.60. The net rate was affected by an
$825,000 overpayment relating to a single payor for one
partnership. The overpayment was discovered by management this
summer. It occurred over several years and following a thorough
review was accounted for in the two recent quarterly periods. Of
the $14.5 million increase in net patient revenues, $16.5 million
related to Mature Clinics and $3.7 million related to New Clinics.
The net patient revenues related to the clinics sold on June 30,
2019 had the effect of reducing total net revenues by $5.7 million
in the first nine months of 2019 (only six months included - $17.9
million) compared to the same period in 2018 (nine months included
- $12.2 million). Revenue from physical therapy management
contracts was $6.5 million for the first nine months of 2019 and
$6.3 million for the 2018 comparable period.
- Revenue from the industrial injury prevention business
increased 47.4% to $27.1 million in the first nine months of 2019
compared to $18.4 million in the first nine months of 2018 due to
internal growth and recent acquisitions. Other miscellaneous
revenue was $1.8 million in the first nine months of 2019 and $1.9
million in the first nine months of 2018.
- Total operating costs were $274.3 million, or 76.2% of net
revenues, in the first nine months of 2019 as compared to $260.1
million, or 77.3% of net revenues, in the first nine months of
2018. The $14.2 million increase was attributable to $7.9 million
in operating costs related to Mature Clinics, an increase of $4.1
million related to New Clinics, an increase of $6.9 million related
to the industrial injury prevention business and an increase in
management contracts costs of $0.6 million offset by a reduction in
expenses related to the clinics sold of $5.3 million. Total
salaries and related costs, including physical therapy operations
and the industrial injury prevention business, were 56.6% of net
revenues in the recent quarter versus 56.9% in the first nine
months of 2018. Rent, supplies, contract labor and other costs as a
percentage of net revenues were 18.7% in the first nine months of
2019 versus 19.5% in the first nine months of 2018. The provision
for doubtful accounts as a percentage of net revenue was 0.9% for
both periods.
- The gross profit for the first nine months of 2019 grew by
11.9% or $9.1 million to $85.5 million, as compared to $76.4
million in the first nine months of 2018. The gross profit
percentage increased by 110 basis points to 23.8% of net revenue in
the recent period as compared to 22.7% in the first nine months of
2018. The gross profit percentage for the Company’s physical
therapy clinics increased by 130 basis points to 23.9% in the
recent period as compared to 22.6% in the first nine months of
2018. The gross profit percentage on physical therapy management
contracts was 15.0% in the 2019 first nine months as compared to
22.0% in the 2018 first nine months. The gross profit for the
industrial injury prevention business was $6.5 million, or 24.0%,
in the 2019 first nine months as compared to $4.5 million, or
24.2%, in the comparable 2018 period.
- Corporate office costs were $33.4 million in the first nine
months of 2019 compared to $30.9 million in the first nine months
of 2018. Corporate office costs were 9.3% of net revenues for the
first nine months of 2019 as compared to 9.2% for the first nine
months of 2018.
- Operating income for the first nine months of 2019 increased
14.6% to $52.1 million as compared to $45.5 million in the first
nine months of 2018. Operating income as a percentage of net
revenue increased by 100 basis points from 13.5% in the 2018 period
to 14.5% in the first nine months of 2019.
- The gain of $5.8 million in the first nine months of 2019
resulted from a sale of partnership interest. See prior
discussion.
- Interest expense was $1.5 million in the first nine months of
2019 and $1.7 million in first nine months of 2018.
- The provision for income tax for the first nine months of 2019
was $11.2 million and $8.7 million in the first nine months of
2018. The provision for income tax as a percentage of income before
taxes less net income attributable to non-controlling interest was
25.9% for the first nine months of 2019 and 26.3% for the first
nine months of 2018.
- Net income attributable to non-controlling interests (permanent
equity) was $5.0 million in the first nine months of 2019 and $3.9
million in the first nine months of 2018. Net income attributable
to redeemable non-controlling interests (temporary equity) was $8.2
million in the first nine months of 2019 and $6.8 million in the
first nine months of 2018.
- Same store revenues for de novo and acquired clinics open for
one year or more increased 5.8% in the first nine months of 2019.
Visits increased 5.3% for de novo and acquired clinics open for one
year or more while the same store net rate increased 0.5%.
Other Financial Measures
For the third quarter of 2019, the Company's Adjusted EBITDA
increased by 8.4% to $17.0 million from $15.6 million in the
comparable 2018 quarter and as a percentage of net revenue
increased by 70 basis points from 13.8% to 14.5%. For the first
nine months of 2019, the Company's Adjusted EBITDA increased by
10.8% to $51.6 million from $46.6 million in the comparable 2018
period and as a percentage of net revenue increased by 60 basis
points from 13.8% to 14.4%. See definition and explanation of
Adjusted EBITDA in the schedule on pages 11 and 12.
Management’s Comments
Chris Reading, Chief Executive Officer, said, “Our Company had a
lot going on in the third quarter and I want to underscore a few
important areas including continued strong same store visit growth;
improved margins in our physical therapy business; the first
quarter following the sale of a portion of a physical therapy
partnership that was no longer part of our long-term plan; and
continued growth of our industrial injury prevention business
following a third acquisition with integration related activities
and costs plus further meaningful investment in the infrastructure
and management of that business designed to position us for
long-term growth.”
Reading continued, “As we have done for many years, we have
tried to thoughtfully add to our strong foundation of
partner-centric companies, pare areas which are no longer bearing
adequate fruit or are outside of the framework of our long-term
vision, and most important to invest our time, money and other
resources where we believe we can further create substantial
long-term shareholder value. We look forward to discussing our
progress in all of those key areas on our earnings call later
today.”
Management Revises 2019 Earnings
Guidance
U.S. Physical Therapy’s management is revising 2019 earnings
guidance from Operating Results, a non-GAAP measure, to the range
of $ 35.6 million to $37.0 million or $2.80 to $2.90 per share. The
change is attributable to now expected lower than previously
anticipated earnings from the Company’s industrial injury
prevention business in the fourth quarter and a slightly lower
average net rate from physical therapy operations in the period. On
March 7th, the Company issued initial 2019 earnings guidance in the
range of $35.1 million to $36.4 million or $2.76 to $2.85 per
share. On April 11th, in conjunction with an acquisition, the
Company raised guidance to the range of $35.9 million to $37.3
million or $2.82 to $2.92 per share. On August 8th, the Company
issued guidance in the range of $36.6 million to $37.9 million or
$2.87 to $2.97 per share. All earnings ranges are based on an
assumed annual statutory corporate tax rate of 26.5%. Please note
that the Company’s earnings guidance represents projected Operating
Results from existing operations but excludes future acquisitions.
The annual guidance figures may not be updated unless there is a
material development that causes management to believe that
Operating Results will be significantly outside the given
range.
U.S. Physical Therapy Quarterly
Dividend
The fourth quarterly dividend for 2019 of $0.30 per share will
be paid on December 13, 2019 to shareholders of record as of
November 18, 2019. U.S. Physical Therapy began paying quarterly
dividends in 2011 and has increased the dividend amount at least
annually every year since.
Operating Leases – Right-to-Use Assets
and Lease Liability
The Company implemented the new lease accounting standard
beginning January 1, 2019. As of September 30, 2019, the adoption
has resulted in $79.8 million of right-to-use assets and $84.6
million of operating lease liabilities, of which $25.6 million was
classified as a current liability, in the consolidated balance
sheet. For a detailed discussion of the new lease accounting
standard refer to the Company’s Annual Report on Form 10-K filed
with the SEC on March 18, 2019.
Third Quarter 2019 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 November 7,
2019 to discuss the Company's Quarter and Nine Months Ended
September 30, 2019 results. Interested parties may participate in
the call by dialing 1-888-335-5539 or 973-582-2857 and entering
reservation number 5745049 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 February
7, 2020 at U.S. Physical Therapy’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 as the result of government enacted national healthcare
reform;
- changes in Medicare rules and guidelines and reimbursement or
failure of our clinics to maintain their Medicare certification
and/or enrollment 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 inspections, reviews,
investigations and audits, which may result in sanctions or
reputational harm and increased costs;
- 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;
- 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;
- revenue and earnings expectations;
- legal actions, which could subject us to increased operating
costs and uninsured liabilities;
- general economic conditions;
- availability and cost of qualified physical therapists;
- personnel productivity and retaining key personnel;
- 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;
- acquisitions, purchase of non-controlling interests (minority
interests) and the successful integration of the operations of the
acquired businesses;
- 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;
- 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 accurate.
About U.S. Physical Therapy,
Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 574
outpatient physical therapy clinics in 41 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 26 physical therapy facilities for unaffiliated
third parties, including hospitals and physician groups. The
Company also has an industrial injury prevention 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
CONSOLIDATED STATEMENTS OF
INCOME
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(unaudited)
Three Months Ended
Nine Months Ended
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
Net patient revenues
$
104,392
$
103,354
$
324,405
$
309,895
Other revenues
12,859
9,768
35,450
26,667
Net revenues
117,251
113,122
359,855
336,562
Operating costs:
Salaries and related costs
66,748
64,524
203,684
191,410
Rent, supplies, contract labor and
other
22,166
21,654
67,236
65,598
Provision for doubtful accounts
962
890
3,408
3,102
Closure costs
3
(22
)
12
8
Total operating costs
89,879
87,046
274,340
260,118
Gross profit
27,372
26,076
85,515
76,444
Corporate office costs
10,556
10,643
33,376
30,934
Operating income
16,816
15,433
52,139
45,510
Other income and expense
Gain on sale of partnership interest
-
-
5,823
-
Interest and other income, net
7
16
27
70
Interest expense - debt and other
(557
)
(579
)
(1,522
)
(1,677
)
Income before taxes
16,266
14,870
56,467
43,903
Provision for income taxes
3,197
2,991
11,223
8,734
Net income
13,069
11,879
45,244
35,169
Less: net income attributable to
non-controlling interests:
Non-controlling interests - permanent
equity
(1,643
)
(1,321
)
(4,982
)
(3,902
)
Redeemable non-controlling interests -
temporary equity
(2,379
)
(2,456
)
(8,152
)
(6,802
)
(4,022
)
(3,777
)
(13,134
)
(10,704
)
Net income attributable to USPH
shareholders
$
9,047
$
8,102
$
32,110
$
24,465
Basic and diluted earnings per share
attributable to USPH shareholders
$
0.66
$
0.13
$
1.90
$
0.88
Shares used in computation - basic and
diluted
12,774
12,685
12,750
12,660
Dividends declared per common share
$
0.30
$
0.23
$
0.84
$
0.69
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(IN THOUSANDS, EXCEPT SHARE
DATA)
September 30, 2019
December 31, 2018
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
27,856
$
23,368
Patient accounts receivable, less
allowance for doubtful accounts of $2,569 and $2,672,
respectively
47,118
44,751
Accounts receivable - other
10,462
6,742
Other current assets
7,098
4,353
Total current assets
92,534
79,214
Fixed assets:
Furniture and equipment
54,464
52,611
Leasehold improvements
31,948
31,712
Fixed assets, gross
86,412
84,323
Less accumulated depreciation and
amortization
65,040
64,154
Fixed assets, net
21,372
20,169
Operating lease right-of-use assets
79,793
-
Goodwill
316,639
293,525
Other identifiable intangible assets,
net
53,385
48,828
Other assets
1,470
1,430
Total assets
$
565,193
$
443,166
LIABILITIES, REDEEMABLE
NON-CONTROLLING INTERESTS, USPH SHAREHOLDERS’ EQUITY AND
NON-CONTROLLING INTERESTS
Current liabilities:
Accounts payable - trade
$
2,863
$
2,019
Accrued expenses
33,573
38,493
Current portion of operating lease
liabilities
25,644
-
Current portion of notes payable
718
1,434
Total current liabilities
62,798
41,946
Notes payable, net of current portion
4,292
402
Revolving line of credit
51,000
38,000
Deferred taxes
10,336
9,012
Deferred rent
-
2,159
Operating lease liabilities, net of
current portion
58,921
-
Other long-term liabilities
718
829
Total liabilities
188,065
92,348
Redeemable non-controlling interests
139,801
133,943
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, 14,988,894 and 14,899,233 shares issued,
respectively
150
149
Additional paid-in capital
85,828
80,028
Retained earnings
181,135
167,396
Treasury stock at cost, 2,214,737
shares
(31,628
)
(31,628
)
Total USPH shareholders’ equity
235,485
215,945
Non-controlling interests
1,842
930
Total USPH shareholders' equity and
non-controlling interests
237,327
216,875
Total liabilities, redeemable
non-controlling interests, USPH shareholders' equity and
non-controlling interests
$
565,193
$
443,166
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(unaudited)
Nine Months Ended
September 30, 2019
September 30, 2018
OPERATING ACTIVITIES
Net income including non-controlling
interests
$
45,244
$
35,169
Adjustments to reconcile net income
including non-controlling interests to net cash provided by
operating activities:
Depreciation and amortization
7,377
7,335
Provision for doubtful accounts
3,408
3,102
Equity-based awards compensation
expense
5,262
4,453
Deferred income taxes
3,680
(3,099
)
Gain on sale of partnership interest
(5,823
)
-
Other
120
128
Changes in operating assets and
liabilities:
Increase in patient accounts
receivable
(8,171
)
(1,092
)
Increase in accounts receivable -
other
(1,006
)
(3,954
)
(Increase) decrease in other assets
(2,744
)
233
(Decrease) increase in accounts payable
and accrued expenses
(440
)
9,742
(Decrease) increase in other
liabilities
(443
)
1,988
Net cash provided by operating
activities
46,464
54,005
INVESTING ACTIVITIES
Purchase of fixed assets
(7,428
)
(5,307
)
Purchase of majority interest in
businesses
(30,365
)
(16,303
)
Purchase of redeemable non-controlling
interest, temporary equity
(5,699
)
-
Purchase of non-controlling interest,
permanent equity
(138
)
(272
)
Proceeds on sale of partnership interest,
net
11,601
-
Proceeds on sale of fixed assets
64
2
Net cash used in investing activities
(31,965
)
(21,880
)
FINANCING ACTIVITIES
Distributions to non-controlling
interests, permanent and temporary equity
(10,862
)
(10,470
)
Cash dividends paid to shareholders
(10,723
)
(8,746
)
Proceeds from revolving line of credit
110,000
79,000
Payments on revolving line of credit
(97,000
)
(79,000
)
Payments to settle mandatorily redeemable
non-controlling interests
-
(265
)
Principal payments on notes payable
(1,409
)
(2,294
)
Other
(17
)
(42
)
Net cash used in financing activities
(10,011
)
(21,817
)
Net increase in cash and cash
equivalents
4,488
10,308
Cash and cash equivalents - beginning of
period
23,368
21,933
Cash and cash equivalents - end of
period
$
27,856
$
32,241
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the period for:
Income taxes
$
9,458
$
8,957
Interest
$
1,412
$
1,705
Non-cash investing and financing
transactions during the period:
Purchase of businesses - seller financing
portion
$
4,300
$
950
Purchase of business - payable to common
shareholders of acquired business
$
502
$
-
Notes payable related to purchase of
redeemable non-controlling interest, temporary equity
$
283
$
-
Notes receivable related to sale of
partnership interest - redeemable non-controlling interest
$
2,870
$
-
U. S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
OPERATING RESULTS AND ADJUSTED EBITDA (IN
THOUSANDS, EXCEPT PER SHARE DATA) (unaudited)
The following tables provide detail of the diluted earnings per
share computation and reconcile net income attributable to USPH
shareholders calculated in accordance with GAAP to Operating
Results and Adjusted EBITDA. Management believes providing
Operating Results and Adjusted EBITDA to investors is useful
information for comparing the Company's period-to-period
results.
Operating Results per share, a non-GAAP measure, equals net
income attributable to USPH shareholders per the consolidated
statement of net income, and excludes the impact of the gain on the
sale of a partnership interest and the revaluation of redeemable
non-controlling interest, net of tax, to calculate earnings per
share. In accordance with current accounting guidance, the
revaluation of redeemable non-controlling interest, net of tax, is
not included in net income but charged directly to retained
earnings and is included in the earnings per basic and diluted
share calculation.
Management uses Operating Results, which eliminates certain
items described above that can be subject to volatility and unusual
costs, as one of the principal measures to evaluate and monitor
financial performance period over period. Management believes that
Operating Results is useful information for investors to use in
comparing the Company's period-to-period results as well as for
comparing with other similar businesses since most do not have
mandatorily redeemable instruments and therefore have different
liability and equity structures.
Adjusted EBITDA is defined as net income attributable to USPH
shareholders before interest income, interest expense, taxes,
depreciation, amortization, equity-based awards compensation
expense and gain on sale of partnership interest. Management
believes reporting Adjusted EBITDA is useful information for
investors in comparing the Company’s period-to-period results as
well as comparing with similar businesses which report adjusted
EBITDA as defined by their company.
Operating Results and Adjusted EBITDA 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.
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Computation of earnings per share - USPH
shareholders:
Net income attributable to USPH
shareholders
$
9,047
$
8,102
$
32,110
$
24,465
Charges to retained earnings:
Revaluation of redeemable non-controlling
interest
$
(922
)
$
(8,680
)
(10,752
)
(18,105
)
Tax effect at statutory rate (federal and
state) of 26.25%
242
2,279
2,822
4,753
$
8,367
$
1,701
$
24,180
$
11,113
Earnings per share (basic and diluted)
0.66
$
0.13
$
1.90
$
0.88
Adjustments:
Gain on sale of partnership interest
-
-
(5,823
)
-
Revaluation of redeemable non-controlling
interest
922
8,680
10,752
18,105
Tax effect at statutory rate (federal and
state) of 26.25%
(242
)
(2,279
)
(1,293
)
(4,753
)
Operating Results
$
9,047
$
8,102
$
27,816
$
24,465
Basic and diluted Operating Results per
share
$
0.71
$
0.64
$
2.18
$
1.93
Shares used in computation - basic and
diluted
12,774
12,685
12,750
12,660
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Net income attributable to USPH
shareholders
$
9,047
$
8,102
$
32,110
$
24,465
Adjustments:
Depreciation and amortization
2,457
2,469
7,377
7,335
Gain on sale of partnership interest
-
-
(5,823
)
-
Interest income
(7
)
(16
)
(27
)
(70
)
Interest expense - debt and other
557
579
1,522
1,677
Provision for income taxes
3,197
2,991
11,223
8,734
Equity-based awards compensation
expense
1,704
1,516
5,262
4,453
Adjusted EBITDA
$
16,955
$
15,641
$
51,644
$
46,594
U.S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
RECAP OF CLINIC COUNT
March 31, 2018
580
June 30, 2018
581
September 30, 2018
588
December 31, 2018
591
March 31, 2019
590
June 30, 2019
564
September 30, 2019
574
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107005206/en/
U.S. Physical Therapy, Inc. Larry McAfee, Chief Financial
Officer Chris Reading, Chief Executive Officer (713) 297-7000 Three
Part Advisors Joe Noyons (817) 778-8424
US Physical Therapy (NYSE:USPH)
Historical Stock Chart
From Jun 2024 to Jul 2024
US Physical Therapy (NYSE:USPH)
Historical Stock Chart
From Jul 2023 to Jul 2024