Reports All-Time High Quarterly Patient
Volume
Management Updates 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 three and six months ended June 30,
2024.
FINANCIAL HIGHLIGHTS
- Adjusted EBITDA (1), a non-Generally Accepted Accounting
Principles (“GAAP”) measure, was $22.1 million for the three months
ended June 30, 2024 (“2024 Second Quarter”) compared to $21.7
million in the second quarter ended June 30, 2023 (“2023 Second
Quarter”).
- Operating Results (1), a non-GAAP measure, was $11.0 million in
the 2024 Second Quarter compared to $10.4 million in the 2023
Second Quarter. On a per share basis, Operating Results was $0.73
in the 2024 Second Quarter compared to $0.76 in the 2023 Second
Quarter, with the decrease attributable to the increase in shares
outstanding associated with the Company’s secondary offering
completed in May 2023.
- Net income attributable to USPH’s shareholders (“USPH Net
Income”), a GAAP measure, was $7.5 million for the 2024 Second
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 Second Quarter was $0.47.
- Total revenue from physical therapy operations for the 2024
Second Quarter increased $11.2 million, or 8.5%, to $143.5
million.
- Net rate per patient visit for the 2024 Second Quarter
increased to $105.05 from $102.03 for the 2023 Second Quarter, an
increase of 3.0%, despite the 1.8% Medicare rate reduction in
effect for the 2024 Second Quarter. Excluding Medicare, the
Company’s net rate increased 4.5% in the 2024 Second Quarter as
compared to the 2023 Second 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 a percent of the Company’s overall mix of
business.
- Average daily visits per clinic was at an all-time high of 30.6
for the 2024 Second Quarter compared to 30.4 in the comparable
prior year quarter. Total patient visits were 1,335,335 in the 2024
Second Quarter, a 5.4% increase from the 2023 Second Quarter.
- Industrial injury prevention (“IIP”) services revenue was $23.7
million for the 2024 Second Quarter, an increase of 23.2% as
compared to the 2023 Second Quarter, with an increase in gross
profit of 27.5% over the same periods.
- During the 2024 Second Quarter, the Company added seven new
clinics and closed five clinics bringing its total clinic count to
681 as of June 30, 2024, as compared to 656 clinics as of June 30,
2023.
- 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 September 13, 2024, to shareholders
of record on August 23, 2024.
- Management updated its guidance for Adjusted EBITDA for 2024,
returning guidance to its original range of $80.0 million to $85.0
million. See “Management Updates 2024 Guidance” below for more
information.
____________________________ (1) See pages 12 and 13 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, “Physical therapy
volumes, net rate and injury prevention growth and profitability
were all strong for the quarter and a result of our persistent
focus in these areas. While our retention has been good with
respect to our team members, the new employees who join our team as
a result of turnover are coming in at higher rates. This is
especially true of our hourly employees who are more sensitive to
escalating prices elsewhere. Additionally, we have a higher than
anticipated usage of contract therapists in several markets around
the country. We have made significant recent and ongoing
investments in people and processes on the recruiting side of our
efforts with more work to be done -- especially in these more
challenging markets. Our teams are working diligently to optimize
our ability to address demand while maintaining a close eye on cost
and related expense management.”
2024 SECOND QUARTER VERSUS 2023 SECOND
QUARTER
Additional supplemental tables of financial and performance
metrics are presented on page 14 of this release.
Physical Therapy Operations
For the Three Months
Ended
Variance
June 30, 2024
June 30, 2023
$
%
(In thousands, except
percentages)
Revenue related to:
Mature Clinics (1)
$
129,349
$
126,057
$
3,292
2.6%
Clinic additions (2)
10,905
1,910
8,995
*
(6)
Clinics sold or closed (3)
17
1,313
(1,296)
*
(6)
Net Patient Revenue
140,271
129,280
10,991
8.5%
Other (4)
3,215
2,959
256
8.7%
Total
143,486
132,239
11,247
8.5%
Operating costs (4)
114,703
104,017
10,686
10.3%
Gross profit
$
28,783
$
28,222
$
561
2.0%
Financial and
operating metrics (not in thousands):
Net rate per patient visit (1)
$
105.05
$
102.03
$
3.02
3.0%
Patient visits (1)
1,335,335
1,267,140
68,195
5.4%
Average daily visits per clinic (1)
30.6
30.4
0.2
0.7%
Gross margin
20.1%
21.3%
Salaries and related costs per visit,
clinics (5)
$
59.66
$
57.59
$
2.07
3.6%
Operating costs per visit, clinics (5)
$
84.46
$
80.61
$
3.85
4.8%
(1) See Glossary of Terms - Revenue
Metrics for definitions.
(2) Includes 21 clinics added during the
six months ended June 30, 2024 and 46 clinic added during the year
ended December 31, 2023.
(3) Includes 11 clinics closed during the
six months ended June 30, 2024 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 $11.2
million, or 8.5%, to $143.5 million for the 2024 Second Quarter
from $132.2 million for the 2023 Second Quarter. This increase was
due to the increase in visits from the 25 net new clinics added
since the comparable prior year period, an increase in visits at
mature clinics and an increase in net rate per patient visit. The
increase in net rate per patient visit 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.
Operating costs from physical therapy operations increased $10.7
million, or 10.3%, to $114.7 million in the 2024 Second Quarter
from $104.0 million in the 2023 Second Quarter primarily driven by
costs associated with the 25 net new clinics added since the
comparable prior year period. Salaries and related costs per visit
increased to $59.66 in the 2024 Second Quarter from $57.59 in the
2023 Second Quarter while total operating costs per visit increased
to $84.46 from $80.61 over the same periods, respectively.
Gross profit from physical therapy operations in the 2024 Second
Quarter increased $0.6 million, or 2.0%, to $28.8 million from
$28.2 million in the 2023 Second Quarter. The gross profit margin
from physical therapy operations was 20.1% in the 2024 Second
Quarter.
Industrial Injury Prevention
Services
For the Three Months
Ended
Variance
June 30, 2024
June 30, 2023
$
%
(In thousands, except
percentages)
Net revenue
$
23,704
$
19,246
$
4,458
23.2%
Operating costs
18,625
15,261
3,364
22.0%
Gross profit
$
5,079
$
3,985
$
1,094
27.5%
Gross margin
21.4%
20.7%
IIP revenues increased $4.5 million, or 23.2%, to $23.7 million
for the 2024 Second Quarter as compared to $19.2 million for the
2023 Second Quarter. Excluding the Company’s IIP acquisition during
the 2024 Second Quarter, IIP revenues increased 13.5%. IIP
operating costs increased $3.4 million, or 22.0%, versus the
comparable prior year period. Gross profit from IIP operations in
the 2024 Second Quarter increased $1.1 million, or 27.5%, to $5.1
million from $4.0 million in the 2023 Second Quarter. Excluding the
Company’s IIP acquisition in the 2024 Second Quarter, IIP gross
profit increased 15.7%. The gross profit margin from IIP operations
increased to 21.4% in the 2024 Second Quarter from 20.7% in the
2023 Second Quarter.
Corporate Office and Other Expenses
Corporate office costs were $14.2 million, or 8.5% of revenue,
in the 2024 Second Quarter compared to $12.1 million, or 8.0% of
revenue in the 2023 Second Quarter.
Operating income was $19.6 million for the 2024 Second Quarter
compared to $20.1 million for the 2023 Second Quarter.
Interest expense decreased $0.7 million to $2.0 million for the
2024 Second Quarter compared to $2.6 million in the 2023 Second
Quarter due to a lower outstanding balance on our revolver, which
was paid down in May 2023. The interest rate on the Company’s
credit facility was 4.7% for the 2024 Second Quarter and 5.7% for
the 2023 Second Quarter, with an all-in effective interest rate,
including all associated costs of 5.4% and 6.0% 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 $1.1 million
during the 2024 Second Quarter compared to $0.5 million in the 2023
Second Quarter.
The Company revalued contingent and put-right liabilities
related to certain acquisitions and recognized a net expense of
$4.3 million (an increase in the related liabilities) in the 2024
Second Quarter compared to an income of $0.7 million (a decrease in
the related liabilities) in the 2023 Second Quarter.
The provision for income taxes was $3.1 million in the 2024
Second Quarter compared to $4.2 million during the 2023 Second
Quarter while the effective tax rates were 29.1% and 27.9% over the
same periods, respectively.
USPH Net Income and Non-GAAP Measures
Net income attributable to non-controlling interest (temporary
and permanent) was $4.2 million in the 2024 Second Quarter compared
to $3.9 million in the 2023 Second Quarter.
USPH Net Income was $7.5 million for the 2024 Second Quarter as
compared to $10.9 million for the 2023 Second 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 the 2024
Second Quarter was $0.47 compared to $0.64 for the 2023 Second
Quarter, due in part to the increase in shares outstanding
associated with the Company’s secondary offering completed in May
2023.
Non-GAAP Adjusted EBITDA was $22.1 million for the 2024 Second
Quarter compared to $21.7 million for the 2023 Second Quarter.
Non-GAAP Operating Results was $11.0 million, or $0.73 per share,
in the 2024 Second Quarter as compared to $10.4 million, or $0.76
per share, in the 2023 Second Quarter, with the decrease in per
share amounts being attributable to the increase in shares
outstanding associated with the Company’s secondary offering
completed in May 2023.
See pages 12 and 13 of this release for the definition and
reconciliation of Adjusted EBITDA and Operating Results to the most
directly comparable GAAP measure.
SIX MONTHS ENDED JUNE 30, 2024 VERSUS
SIX MONTH ENDED JUNE 30, 2023
Total net revenue for the six months ended June 30, 2024 (“2024
Six Months”) increased $22.9 million, or 7.6%, to $322.9 million
from $300.0 million for the six months ended June 30, 2023 (“2023
Six Months”) while operating costs increased $23.7 million, or
10.0%, to $260.6 million from $236.9 million over the same periods,
respectively. Gross profit for the 2024 Six Months was $62.3
million, or 19.3% of net revenue, compared to $63.1 million for the
2023 Six Months, or 21.0% of net revenue.
Revenues from physical therapy operations increased $16.5
million, or 6.3%, to $277.9 million in the 2024 Six Months compared
to $261.4 million in the 2023 Six Months. This increase was
primarily due to the increase in volume from the 25 net new clinics
added since the comparable prior year period as well as an increase
in net rate per patient visit to $104.23 for 2024 Six Months from
$102.56 for 2023 Six Months. Gross profit from physical therapy
operations decreased $2.5 million, or 4.5%, to $52.8 million for
the 2024 Six Months from $55.3 million for the 2023 Six Months
while the gross profit margin from physical therapy operations
decreased to 19.0% for 2024 Six Months from 21.2% for 2023 Six
Months.
Revenues from IIP increased $6.4 million, or 16.5%, to $45.0
million for the 2024 Six Months from $38.6 million for the 2023 Six
Months. Gross profit from IIP operations increased $1.7 million, or
21.4%, to $9.4 million for the 2024 Six Months from $7.8 million
for the 2023 Six Months while the gross profit margin from IIP
operations increased to 20.9% for the 2024 Six Months from 20.1%
for the 2023 Six Months.
Corporate office costs were $28.3 million, or 8.8% of net
revenue, in the 2024 Six Months, compared to $26.0 million, or 8.7%
of net revenue, in the 2023 Six Months.
Operating income was $33.9 million for the 2024 Six Months
compared to $37.1 million for the 2023 Six Months.
Other expenses were $4.4 million in the 2024 Six Months compared
to $3.6 million in the 2023 Six Months, with the increase primarily
due to increased net expense related to the fair value adjustments
of certain contingent earn-out consideration and put liability
partially offset by lower interest expense as a result of lower
outstanding borrowings and higher interest income from investing
excess cash associated with proceeds from the Company’s secondary
offering completed in May 2023.
The provision for income tax was $6.2 million for the 2024 Six
Months and $7.2 million for the 2023 Six Months. The effective tax
rate was 28.6% and 28.2% over the same periods, respectively.
USPH Net Income was $15.6 million for the 2024 Six Months as
compared to $18.3 million for the 2023 Six Months while earnings
per share was $0.93 for the 2024 Six Months compared to $1.22 for
the 2023 Six Months, due in part to the increase in shares
outstanding associated with the Company’s secondary offering
completed in May 2023.
Non-GAAP Adjusted EBITDA decreased $1.2 million to $38.9 million
for the 2024 Six Months from $40.1 million in the 2023 Six Months
while non-GAAP Operating Results increased $0.6 million to $18.8
million, or $1.25 per share, in the 2024 Six Months from $18.1
million, or $1.36 per share, in the 2023 Six Months, with the
decrease in the per share amounts being attributable to the
increase in shares outstanding associated with the Company’s
secondary offering completed in May 2023.
See pages 12 and 13 of this release for the definition and
reconciliation of Adjusted EBITDA and Operating Results to the most
directly comparable GAAP measure.
For additional information on 2024 Six Months results, please
refer to the Company’s Quarterly Report on Form 10-Q which is
expected to be filed with the Securities and Exchange Commission on
August 14, 2024.
BALANCE SHEET AND CASH
FLOW
Total cash and cash equivalents were $112.9 million as of June
30, 2024, compared to $152.8 million at December 31, 2023.
Additionally, the Company had $142.5 million of outstanding
borrowings and $175.0 million in available credit under its credit
facilities as of June 30, 2024, compared to $144.4 million of
outstanding borrowings and $175.0 million in available credit under
its credit facilities as of December 31, 2023.
RECENT ACQUISITIONS
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 September 13, 2024, to shareholders
of record on August 23, 2024.
MANAGEMENT UPDATES 2024 EARNINGS
GUIDANCE
Management returned its guidance for Adjusted EBITDA for 2024 to
its original range of $80.0 million to $85.0 million. The change in
guidance reflects the lingering tough employment environment for
both clinical and front office staff which has resulted in greater
costs than anticipated in both salaries and contract labor so far
this year.
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 August 14, 2024, to discuss the
Company’s financial results for the second quarter ended June 30,
2024. Interested parties may participate in the call by dialing
(800) 245-3047 (Primary) or (203) 518-9765 (Alternate) and
conference ID of USPHQ224. 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 November 12, 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;
- enforcing our noncompetition covenants;
- 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
680 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)
For the Three Months
Ended
For the Six Months
Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Net patient revenue
$
140,271
$
129,280
$
271,346
$
255,861
Other revenue
26,919
22,205
51,519
44,133
Net revenue
167,190
151,485
322,865
299,994
Operating cost:
Salaries and related costs
96,334
86,871
190,065
172,911
Rent, supplies, contract labor and
other
35,277
30,844
67,193
60,944
Provision for credit losses
1,717
1,563
3,344
3,075
Total operating cost
133,328
119,278
260,602
236,930
Gross profit
33,862
32,207
62,263
63,064
Corporate office costs
14,249
12,145
28,334
26,004
Operating income
19,613
20,062
33,929
37,060
Other income (expense):
Interest expense, debt and other
(1,980)
(2,633)
(3,948)
(5,193)
Interest income from investments
1,074
517
2,617
517
Change in fair value of contingent
earn-out consideration
(4,046)
708
(3,434)
10
Change in revaluation of put-right
liability
(223)
(50)
(303)
(199)
Equity in earnings of unconsolidated
affiliate
248
326
519
600
Relief Funds
-
-
-
467
Other
109
165
171
229
Total other income (expense)
(4,818)
(967)
(4,378)
(3,569)
Income before taxes
14,795
19,095
29,551
33,491
Provision for income taxes
3,083
4,231
6,222
7,200
Net income
11,712
14,864
23,329
26,291
Less: Net income attributable to
non-controlling interest:
Redeemable non-controlling interest -
temporary equity
(3,314)
(2,920)
(5,541)
(5,640)
Non-controlling interest - permanent
equity
(892)
(1,025)
(2,236)
(2,322)
(4,206)
(3,945)
(7,777)
(7,962)
Net income attributable to USPH
shareholders
$
7,506
$
10,919
$
15,552
$
18,329
Basic and diluted earnings per share
attributable to USPH shareholders (1)
$
0.47
$
0.64
$
0.93
$
1.22
Shares used in computation - basic and
diluted
15,072
13,720
15,044
13,375
Dividends declared per common share
$
0.44
$
0.43
$
0.88
$
0.86
(1) See page 13 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)
For the Three Months
Ended
For the Six Months
Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Net income
$
11,712
$
14,864
$
23,329
$
26,291
Other comprehensive (loss) gain:
Unrealized (loss) gain on cash flow
hedge
(31)
2,881
1,750
1,064
Tax effect at statutory rate (federal and
state)
8
(736)
(447)
(272)
Comprehensive income
$
11,689
$
17,009
$
24,632
$
27,083
Comprehensive income attributable to
non-controlling interest
(4,206)
(3,945)
(7,777)
(7,962)
Comprehensive income attributable to USPH
shareholders
$
7,483
$
13,064
$
16,855
$
19,121
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEET
(IN THOUSANDS, EXCEPT SHARES
AND PER SHARE AMOUNTS)
June 30,
2024
December 31, 2023
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
112,911
$
152,825
Patient accounts receivable, less
provision for credit losses of $3,184 and $2,736, respectively
54,659
51,866
Accounts receivable - other
21,669
17,854
Other current assets
12,438
10,830
Total current assets
201,677
233,375
Fixed assets:
Furniture and equipment
65,775
63,982
Leasehold improvements
48,730
46,941
Fixed assets, gross
114,505
110,923
Less accumulated depreciation and
amortization
(88,277)
(84,821)
Fixed assets, net
26,228
26,102
Operating lease right-of-use assets
105,484
103,431
Investment in unconsolidated affiliate
12,243
12,256
Goodwill
548,970
509,571
Other identifiable intangible assets,
net
123,903
109,682
Other assets
4,629
2,821
Total
assets
$
1,023,134
$
997,238
LIABILITIES, REDEEMABLE
NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND
NON-CONTROLLING INTEREST
Current liabilities:
Accounts payable - trade
$
4,100
$
3,898
Accrued expenses
58,056
55,344
Current portion of operating lease
liabilities
35,243
35,252
Current portion of term loan and notes
payable
9,700
7,691
Total current liabilities
107,099
102,185
Notes payable, net of current portion
1,511
1,289
Term loan, net of current portion and
deferred financing costs
134,188
137,702
Deferred taxes
26,531
24,815
Operating lease liabilities, net of
current portion
78,329
76,653
Other long-term liabilities
5,507
2,356
Total
liabilities
353,165
345,000
Redeemable non-controlling interest -
temporary equity
184,354
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,
17,291,366 and 17,202,291 shares issued,
respectively
172
172
Additional paid-in capital
285,462
281,096
Accumulated other comprehensive gain
4,084
2,782
Retained earnings
226,482
223,772
Treasury stock at cost, 2,214,737
shares
(31,628)
(31,628)
Total USPH shareholders’ equity
484,572
476,194
Non-controlling interest - permanent
equity
1,043
1,216
Total USPH shareholders' equity and
non-controlling interest - permanent equity
485,615
477,410
Total
liabilities, redeemable non-controlling interest,
USPH
shareholders' equity and non-controlling interest - permanent
equity
$
1,023,134
$
997,238
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For the Six Months
Ended
June 30, 2024
June 30, 2023
OPERATING ACTIVITIES
Net income including non-controlling
interest
$
23,329
$
26,291
Adjustments to reconcile net income
including non-controlling interest to net cash
provided by operating activities:
Depreciation and amortization
8,609
7,615
Provision for credit losses
3,344
3,075
Equity-based awards compensation
expense
3,916
3,592
Amortization of debt issue costs
210
210
Change in deferred income taxes
770
1,799
Change in revaluation of put-right
liability
303
199
Change in fair value of contingent
earn-out consideration
3,434
(10)
Equity of earnings in unconsolidated
affiliate
(519)
(600)
Loss on sale of fixed assets
51
63
Changes in operating assets and
liabilities:
Increase in patient accounts
receivable
(5,110)
(5,341)
Increase in accounts receivable -
other
(2,351)
(85)
(Increase) decrease in other current and
long term assets
(1,642)
593
(Decrease) increase in accounts payable
and accrued expenses
(1,481)
1,125
Increase in other long-term
liabilities
548
253
Net cash provided by operating
activities
33,411
38,779
INVESTING ACTIVITIES
Purchase of fixed assets
(4,174)
(4,523)
Purchase of majority interest in
businesses, net of cash acquired
(38,695)
(8,040)
Purchase of redeemable non-controlling
interest, temporary equity
(6,230)
(7,804)
Purchase of non controlling interest,
permanent equity
(527)
(39)
Proceeds on sale of non-controlling
interest, permanent equity
26
-
Proceeds on sale of partnership interest -
redeemable non-controlling interest
69
237
Distributions from unconsolidated
affiliate
532
502
Proceeds on sale of fixed assets
-
7
Other
244
-
Net cash used in investing activities
(48,755)
(19,660)
FINANCING ACTIVITIES
Proceeds from revolving facility
-
24,000
Proceeds from issuance of common stock
pursuant to the secondary public offering,
net of issuance costs
-
163,655
Distributions to non-controlling interest,
permanent and temporary equity
(8,318)
(8,431)
Cash dividends paid to shareholders
(13,264)
(11,238)
Principal payments on notes payable
(1,113)
(1,086)
Payments on term loan
(1,875)
(1,875)
Payments on revolving facility
-
(55,000)
Net cash (used in) provided by financing
activities
(24,570)
110,025
Net (decrease) increase in cash and cash
equivalents
(39,914)
129,144
Cash and cash equivalents - beginning of
period
152,825
31,594
Cash and cash equivalents - end of
period
$
112,911
$
160,738
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the period for:
Income taxes
$
4,932
$
1,241
Interest paid
3,708
4,011
Non-cash investing and financing
transactions during the period:
Purchase of interest in businesses -
seller financing portion
955
360
Deferred payments related to purchase of
interest in business
-
180
Fair market value of initial contingent
consideration related to purchase of interest of businesses
2,800
200
Offset of notes receivable associated with
purchase of redeemable non-controlling interest
75
-
Notes payable related to purchase of
non-controlling interest, temporary equity
22
-
Notes payable related to purchase of
redeemable non-controlling interest, temporary equity
-
621
Notes receivable related to sale of
redeemable non-controlling interest, temporary equity
402
2,687
Notes receivable related to the sale of
non-controlling interest, permanent equity
243
-
Dividends paid to USPH shareholders
$
13,264
$
11,238
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, clinic closure costs, 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, clinic closure costs, 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)
For the Three Months
Ended
For the Six Months
Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
(In thousands, except per
share data)
Adjusted EBITDA
(a non-GAAP measure)
Net income attributable to USPH
shareholders
$
7,506
$
10,919
$
15,552
$
18,329
Adjustments:
Provision for income taxes
3,083
4,231
6,222
7,200
Depreciation and amortization
4,514
3,827
8,609
7,615
Interest expense, debt and other, net
1,980
2,633
3,948
5,193
Equity-based awards compensation
expense
1,919
1,786
3,916
3,592
Interest income from investments
(1,074)
(517)
(2,617)
(517)
Change in revaluation of put-right
liability
223
50
303
199
Change in fair value of contingent
earn-out consideration
4,046
(708)
3,434
(10)
Relief Funds
-
-
-
(467)
Closure costs
551
-
677
-
Other income
(109)
(165)
(171)
(229)
Allocation to non-controlling
interests
(515)
(389)
(978)
(761)
$
22,124
$
21,667
$
38,895
$
40,144
Operating Results
(a non-GAAP measure)
Net income attributable to USPH
shareholders
$
7,506
$
10,919
$
15,552
$
18,329
Adjustments:
Change in fair value of contingent
earn-out consideration
4,046
(708)
3,434
(10)
Change in revaluation of put-right
liability
223
50
303
199
Closure costs
551
-
677
-
Relief Funds
-
-
-
(467)
Allocation to non-controlling
interests
(68)
-
(84)
33
Tax effect at statutory rate (federal and
state)
(1,214)
168
(1,106)
63
$
11,044
$
10,429
$
18,776
$
18,147
Operating Results per share (a non-GAAP
measure)
$
0.73
$
0.76
$
1.25
$
1.36
Earnings per
share
Computation of earnings per share - USPH
shareholders:
Net income attributable to USPH
shareholders
$
7,506
$
10,919
$
15,552
$
18,329
Charges to retained earnings:
Revaluation of redeemable non-controlling
interest
(622)
(2,865)
(2,061)
(2,746)
Tax effect at statutory rate (federal and
state)
159
732
527
700
$
7,043
$
8,786
$
14,018
$
16,283
Earnings per share (basic and diluted)
$
0.47
$
0.64
$
0.93
$
1.22
Shares used in computation - basic and
diluted
15,072
13,720
15,044
13,375
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
681
656
$105.05
$102.03
1,335,335
1,267,140
30.6
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 7.
Clinic Count Roll Forward
For the Three Months
Ended
For the Six Months
Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Number of clinics, beginning of period
679
647
671
640
Additions (1)
7
13
21
21
Closed or sold
(5)
(4)
(11)
(5)
Number of clinics, end of period
681
656
681
656
(1) Includes clinics added through acquisitions.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240813703313/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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