Reports Record-High First Quarter Volume and
Adjusted EBITDA
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 (“IIP”) services,
today reported results for the three months ended March 31, 2023
(“2023 First Quarter”).
FIRST QUARTER RESULTS
SUMMARY
- Adjusted EBITDA, a non-Generally Accepted Accounting Principles
(“GAAP”) measure, increased $1.0 million to $18.5 million for the
2023 First Quarter, an all-time high first quarter amount, from
$17.5 million for the three months ended March 31, 2022 (“2022
First Quarter”). See pages 11 and 12 of this release for the
definition and reconciliation of Adjusted EBITDA to the most
directly comparable GAAP measure.
- Net income attributable to USPH’s shareholders, a GAAP measure,
was $7.4 million for the 2023 First Quarter compared to $8.8
million for the 2022 First Quarter. The decrease in net income is
primarily due to a $2.0 million increase in interest expense as a
result of a higher effective interest rate as well as increased
borrowings to fund acquisitions. 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 diluted share. Earnings per diluted share, in
accordance with GAAP, was $0.58 for the 2023 First Quarter as
compared to $0.67 for the 2022 First Quarter.
- Operating income increased $2.0 million, or 13.1%, to $17.0
million in the 2023 First Quarter from $15.0 million in the 2022
First Quarter.
- Operating Results per diluted share, a non-GAAP measure, was
$0.59 per diluted share for the 2023 First Quarter as compared to
$0.65 for 2022 First Quarter, with the decrease primarily due to
the increase in interest expense previously described. See pages 11
and 12 of this release for the definition and reconciliation of
Operating Results per diluted share to the most directly comparable
GAAP measure.
- Net patient revenue from physical therapy operations increased
15.6% to $126.6 million for the 2023 First Quarter from $109.5
million for the 2022 First Quarter.
- Average visits per clinic per day in the 2023 First Quarter was
29.8, an all-time high for the first quarter and the second highest
average visits amount for any quarter in the Company’s history.
Average visits per clinic per day was 27.9 in the 2022 First
Quarter, which was the previous high average visits amount for a
first quarter.
- Total patient visits increased 15.4% to 1,227,490 in the 2023
First Quarter from 1,063,519 in the 2022 First Quarter. Patient
visits at our mature clinics increased 6.0% in the 2023 First
Quarter as compared to the 2022 First Quarter.
- Net rate per patient visit increased to $103.12 in the 2023
First Quarter as compared to $103.00 in the 2022 First Quarter,
despite a 2% reduction in Medicare rates at the beginning of 2023
and the discontinuance of 2% sequestration relief on Medicare rates
which was present in the first quarter of 2022.
- The Company’s physical therapy operating margin was 21.0% in
the 2023 First Quarter as compared to 20.0% in the 2022 First
Quarter. Physical therapy average operating costs per patient visit
decreased 1.1% to $81.97 per visit in the 2023 First Quarter from
$83.09 in the 2022 First Quarter. Physical therapy salaries and
related costs were $59.14 per visit in the 2023 First Quarter, a
0.7% increase from $58.74 in the 2022 First Quarter, and have
sequentially decreased from $60.99 per visit in the third quarter
of 2022 and $60.04 per visit in the fourth quarter of 2022.
- IIP services revenue was $19.4 million for the 2023 First
Quarter compared to $19.1 million in the 2022 First Quarter. IIP
services operating margin was 19.5% in the 2023 First Quarter as
compared to 21.8% in the 2022 First Quarter.
- On February 28, 2023, the Company acquired 80.0% of the equity
interest in a one-clinic physical therapy practice with the
practice’s founder and owner retaining 20.0% of the interest. The
business generates approximately $3.2 million in annual revenue and
has approximately 27,000 patient visits per year. In addition, the
Company opened seven clinics in the 2023 First Quarter. As of March
31, 2023, the Company operated 647 clinics compared to 601 clinics
on March 31, 2022.
- The Company’s Board of Directors declared a quarterly dividend
of $0.43 per share payable on June 9, 2023, to shareholders of
record on May 18, 2023.
- Management reaffirms that it currently expects the Company’s
Adjusted EBITDA for 2023 to be in the range of $75.0 million to
$80.0 million. The earnings guidance represents projected Adjusted
EBITDA from existing operations and excludes future acquisitions.
See “Management Reaffirms 2023 Earnings Guidance” below for more
information.
MANAGEMENT’S COMMENTS
Chris Reading, Chief Executive Officer, said, “I am supremely
proud of our team for the way they have focused on making a
difference for our patients as well as our business. The
inflationary environment in the second half of 2022 was extremely
challenging, but our partners, staff, leadership, and support teams
remained committed to making the necessary adjustments, allowing us
to deliver record volumes in what is normally a slower quarter. Our
staffing has improved markedly, and our turnover rate has continued
to decline to better than pre-pandemic levels for licensed clinical
staff. Development activity and related opportunities remain
strong.”
Carey Hendrickson, Chief Financial Officer, said, “Our
outstanding physical therapy volume in the first quarter, which is
typically our seasonally lowest volume quarter of the year,
combined with stabilizing expenses, resulted in the best Operating
Results and Adjusted EBITDA for a first quarter in our history. Our
physical therapy operating costs per visit declined in the first
quarter from the higher levels we experienced in the third and
fourth quarters of 2022 when we began to feel the effects of
inflation, and were actually lower than in the first quarter of the
prior year resulting in margin improvement year over year.”
FIRST QUARTER RESULTS
Total net revenue for 2023 First Quarter was $148.5 million, an
increase of 12.8%, compared to $131.7 million for the 2022 First
Quarter. See table below for a breakdown of total net revenue.
Three Months Ended March
31,
Variance
2023
2022
$
%
Revenue related to:
(In thousands, except
percentages)
Mature clinics (1)
$
114,502
$
108,229
$
6,273
5.8
%
2023 clinic additions
371
-
371
*
(2)
2022 clinic additions
11,708
195
11,513
*
(2)
Clinics sold or closed in 2022
-
1,114
(1,114
)
*
(2)
Net patient revenue from physical therapy
operations
126,581
109,538
17,043
15.6
%
Other revenue
799
872
(73
)
-8.4
%
Physical therapy operations
127,380
110,410
16,970
15.4
%
Management contracts
1,779
2,226
(447
)
-20.1
%
IIP services
19,350
19,068
282
1.5
%
Net revenue
$
148,509
$
131,704
$
16,805
12.8
%
___________________________
(1)
See Glossary of Terms - Revenue Metrics
for the definition.
(2)
Not meaningful.
- Revenue from physical therapy operations increased $17.0
million, or 15.4%, to $127.4 million for the 2023 First Quarter
from $110.4 million for the 2022 First Quarter primarily due to a
15.4% increase in the number of patient visits to 1,227,490 for the
2023 First Quarter from 1,063,519 in the 2022 First Quarter. Net
patient revenue per visit increased to $103.12 in the 2023 First
Quarter from $103.00 in the 2022 First Quarter.
- IIP services revenue increased to $19.4 million for the 2023
First Quarter as compared to $19.1 million for the 2022 First
Quarter.
Operating cost was $117.7 million for the 2023 First Quarter, or
79.2% of net revenue, compared to $105.1 million, or 79.8% of net
revenue, for the 2022 First Quarter. Salaries and related costs
were 57.9% of net revenue for the 2023 First Quarter versus 57.1%
for the 2022 First Quarter. Rent, supplies, contract labor and
other costs as a percentage of total revenue were 20.3% for the
2023 First Quarter versus 21.8% for the 2022 First Quarter. The
provision for credit losses as a percentage of total revenue was
1.0% for both 2023 First Quarter and 2022 First Quarter. See table
below for a more detailed breakdown of operating costs.
Three Months Ended March
31,
Variance
2023
2022
$
%
(In thousands, except
percentages)
Operating costs related to:
Mature clinics (1)
$
91,025
$
86,978
$
4,047
4.7
%
2023 clinic additions
432
-
432
*
(2)
2022 clinic additions
9,100
389
8,711
*
(2)
Clinics sold or closed in 2022
64
1,002
(940
)
*
(2)
Physical therapy operations
100,621
88,369
12,252
13.9
%
Management contracts
1,449
1,831
(382
)
-20.9
%
Industrial injury prevention services
15,582
14,916
666
4.5
%
Operating costs
$
117,652
$
105,116
$
12,536
11.9
%
___________________________
(1)
See Glossary of Terms - Revenue Metrics
for the definition.
(2)
Not meaningful.
- Physical therapy operating costs increased $12.3 million or
13.9% primarily driven by the impact of a full quarter of 2022 and
2023 clinic additions. Additionally, costs associated with mature
clinics increased 4.7% primarily due to higher salaries and related
costs related to a 6.0% increase in patient visits at mature
clinics.
- IIP services operating costs increased by $0.7 million, or
4.5%, to $15.6 million as compared to $14.9 million in the 2022
First Quarter.
Gross profit for the 2023 First Quarter increased $4.3 million,
or 16.1%, to $30.9 million from $26.6 million for the 2022 First
Quarter. Gross profit margin increased to 20.8% in the 2023 First
Quarter from 20.2% in the 2022 First Quarter. The following table
provides a more detailed breakdown of gross profit and related
gross profit margins:
Three Months Ended March
31,
2023
2022
Variance
In USD
Margin %
In USD
Margin %
$
%
(In thousands, except
percentages)
Physical therapy operations
$
26,759
)
21.0
%
$
22,041
)
20.0
%
$
4,718
21.4
%
Management contracts
330
18.5
%
395
17.7
%
(65
)
-16.5
%
Industrial injury prevention services
3,768
19.5
%
4,152
21.8
%
(384
)
-9.2
%
Gross profit
$
30,857
20.8
%
$
26,588
20.2
%
$
4,269
16.1
%
Corporate office costs were $13.9 million, or 9.3% of net
revenue, for the 2023 First Quarter compared to $11.6 million, or
8.8% of net revenue, for the 2022 First Quarter.
Operating income increased $2.0 million, or 13.1%, to $17.0
million for the 2023 First Quarter from $15.0 million in the 2022
First Quarter. In both comparative periods, the operating income
was 11.4% of net revenue.
For 2023 First Quarter, other expenses were $2.6 million
compared to other income of $0.4 million in 2022 First Quarter.
- During the 2023 First Quarter, the Company recognized $0.5
million of income received under the Coronavirus Aid, Relief and
Economic Security Act (“Relief Funds”). The Relief Funds were
received in prior years but were subject to certain compliance
requirements which were met in 2023 First Quarter. The Company does
not expect to receive or recognize any future Relief Funds. No such
income was recognized in the comparable prior year period.
- During the 2023 First Quarter, the Company revalued the
contingent earn-out consideration related to an acquisition and
recognized an increase in the related liability of $0.7
million.
- The revaluation of the put-right liability resulted in an
increase of $0.1 million to the related liability for the 2023
First Quarter. The put right relates to the potential future
purchase of a company that provides physical therapy and
rehabilitation services to hospitals and other ancillary providers
in a distinct market area. The owners have the right to put this
transaction to the Company in approximately five years from
November 2021.
- Equity in earnings of the unconsolidated affiliate was $0.3
million in both the 2023 First Quarter and the 2022 First
Quarter.
- Interest expense, net of $0.6 million savings from the interest
rate swap arrangement discussed below, was $2.6 million for the
2023 First Quarter compared to $0.5 million in the 2022 First
Quarter. The increase in interest expense was primarily due to a
higher effective interest rate as well as increased borrowings to
fund acquisitions. The overall effective interest rate on the
Company’s debt was 5.5% for the 2023 First Quarter.
The provision for income tax was $3.0 million for the 2023 First
Quarter compared to $3.5 million for the 2022 First Quarter. The
provision for income tax as a percentage of income before taxes
less net income attributable to non-controlling interest (effective
tax rate) was 28.6% for the 2023 First Quarter and 28.4% for the
2022 First Quarter. A reconciliation of our income tax expense and
effective income tax rate is as follows:
Three Months Ended March
31,
2023
2022
(In thousands, except
percentages)
Income before taxes
$
14,396
$
15,480
Less: net loss (income) attributable to
non-controlling interest:
Redeemable non-controlling interest -
temporary equity
(2,720
)
(2,557
)
Non-controlling interest - permanent
equity
(1,297
)
(626
)
$
(4,017
)
$
(3,183
)
Income before taxes less net income
attributable to non-controlling interest
$
10,379
$
12,297
Provision for income taxes
$
2,969
$
3,498
Effective income tax rate
28.6
%
28.4
%
Net income attributable to redeemable non-controlling interest
(temporary equity) was $2.7 million for the 2023 First Quarter and
$2.6 million for the 2022 First Quarter. Net income attributable to
non-controlling interest (permanent equity) was $1.3 million for
the 2023 First Quarter and $0.6 million for the 2022 First
Quarter.
Adjusted EBITDA, a non-GAAP measure, increased $1.0 million to
$18.5 million for the 2023 First Quarter, an all-time high first
quarter amount, from $17.5 million for the 2022 First Quarter.
Operating Results, excluding Relief Funds, a non-GAAP measure,
was $7.7 million, or $0.59 per share, in 2023 First Quarter as
compared to $8.4 million, or $0.65 per share, in 2022 First
Quarter, with the decrease primarily due to the increase in
interest expense previously described.
BALANCE SHEET AND CASH
FLOW
As of March 31, 2023, the Company had $32.6 million in cash and
cash equivalents, total net working capital of $27.0 million and
$137.0 million in available credit under the Company’s Revolving
Facility. During the 2023 First Quarter, $11.3 million of cash was
provided by operations. The major uses of cash for investing and
financing activities included: purchase of majority interest in
businesses (5.8 million), purchase of non-controlling interests
from existing partners ($5.2 million), purchase of fixed assets
($2.1 million), and distributions to non-controlling interests
($3.3 million).
The Company entered into an interest rate swap effective on June
30, 2022, which will mature on June 30, 2027. It has a $150.0
million notional value adjusted concurrently with scheduled
principal payments made on the Company’s term loan. On March 31,
2023, the fair value of the interest rate swap was $3.6 million, a
decrease of $1.8 million, net of tax, as compared to December 31,
2022. The fair value of the interest rate swap is included in other
assets (current and long term) in the accompanying consolidated
balance sheet while the decrease in fair value is presented as
unrealized loss in the accompanying consolidated statements of
comprehensive income. The interest rate swap arrangement has
generated $0.7 million in interest savings since its inception. The
average interest rate for the term loan during the 2023 First
Quarter was 4.9%.
QUARTERLY DIVIDEND
The Board of Directors declared a quarterly dividend of $0.43
per share payable on June 9, 2023, to shareholders of record on May
18, 2023.
MANAGEMENT REAFFIRMS 2023 EARNINGS
GUIDANCE
Management reaffirms that it currently expects the Company’s
Adjusted EBITDA for 2023 to be in the range of $75.0 million to
$80.0 million. Please note that the earnings guidance represents
projected Adjusted EBITDA from existing operations and excludes
future acquisitions. 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 4, 2023, to discuss results
the Company’s financial results for the quarter ended March 31,
2023. Interested parties may participate in the call by dialing
(800) 895-3361 Primary or (785) 424-1062 Alternate and entering
reservation number USPHQ123 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. The
conference call will be archived and can be accessed until August
4, 2023, 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:
- the multiple effects of the impact of public health crises and
epidemics/pandemics, such as the novel strain of COVID-19 and its
variants, for which the total financial magnitude cannot be
currently estimated;
- 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;
- 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 COVID-19 related vaccination 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;
- 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 vendor 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 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, 2022, filed with the Securities and
Exchange Commission (“SEC”) on February 28, 2023 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, 2021, 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 visits per day 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
647 outpatient physical therapy clinics in 40 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 35 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 DATA)
Three Months Ended
March 31, 2023
March 31, 2022
Net patient revenue
$
126,581
$
109,538
Other revenue
21,928
22,166
Net revenue
148,509
131,704
Operating cost:
Salaries and related costs
86,040
75,149
Rent, supplies, contract labor and
other
30,100
28,662
Provision for credit losses
1,512
1,305
Total operating cost
117,652
105,116
Gross profit
30,857
26,588
Corporate office costs
13,859
11,556
Operating income
16,998
15,032
Other income and expense:
Relief Funds
467
-
Change in fair value of contingent
earn-out consideration
(698
)
-
Equity in earnings of unconsolidated
affiliate
274
339
Other and interest income
64
46
Change in revaluation of put-right
liability
(149
)
603
Interest expense - debt and other, net
(2,560
)
(540
)
Total other income and expense
(2,602
)
448
Income before taxes
14,396
15,480
Provision for income taxes
2,969
3,498
Net income
11,427
11,982
Less: net loss (income) attributable to
non-controlling interest:
Redeemable non-controlling interest -
temporary equity
(2,720
)
(2,557
)
Non-controlling interest - permanent
equity
(1,297
)
(626
)
(4,017
)
(3,183
)
Net income attributable to USPH
shareholders
$
7,410
$
8,799
Basic and diluted earnings per share
attributable to USPH shareholders
$
0.58
$
0.67
Shares used in computation - basic and
diluted
13,024
12,937
Dividends declared per common share
$
0.43
$
0.41
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
Three Months Ended
March 31, 2023
March 31, 2022
Net income
$
11,427
$
11,982
Other comprehensive loss
Unrealized loss on cash flow hedge
(1,817
)
-
Tax effect at statutory rate (federal and
state)
464
-
Comprehensive income
$
10,074
$
11,982
Comprehensive income attributable to
non-controlling interest
(4,017
)
(3,183
)
Comprehensive income attributable to USPH
shareholders
$
6,057
$
8,799
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEET
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
March 31, 2023
December 31, 2022
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
32,605
$
31,594
Patient accounts receivable, less
allowance for credit losses of $2,674 and $2,829, respectively
56,647
51,934
Accounts receivable – other
17,816
16,671
Other current assets
10,726
11,067
Total current assets
117,794
111,266
Fixed assets:
Furniture and equipment
63,139
62,074
Leasehold improvements
43,525
42,877
Fixed assets, gross
106,664
104,951
Less accumulated depreciation and
amortization
82,026
80,203
Fixed assets, net
24,638
24,748
Operating lease right-of-use assets
100,604
103,004
Investment in unconsolidated affiliate
12,160
12,131
Goodwill
501,347
494,101
Other identifiable intangible assets,
net
108,991
108,755
Other assets
2,593
4,149
Total assets
$
868,127
$
858,154
LIABILITIES, REDEEMABLE
NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND
NON-CONTROLLING INTEREST
Current liabilities:
Accounts payable – trade
$
4,233
$
3,300
Accounts payable - due to seller of
acquired business
-
3,204
Accrued expenses
45,220
37,413
Current portion of operating lease
liabilities
33,650
33,709
Current portion of term loan and notes
payable
7,730
7,863
Total current liabilities
90,833
85,489
Notes payable, net of current portion
2,583
1,913
Revolving line of credit
38,000
31,000
Term loan, net of current portion and
deferred financing costs
142,098
142,918
Deferred taxes
21,524
21,303
Operating lease liabilities, net of
current portion
75,460
77,934
Other long-term liabilities
13,870
13,029
Total liabilities
348,368
373,586
Redeemable non-controlling interest -
temporary equity
164,283
167,515
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,
15,277,320 and 15,216,326 shares issued,
respectively
152
152
Additional paid-in capital
112,123
110,317
Accumulated other comprehensive gain
2,651
4,004
Retained earnings
234,760
232,948
Treasury stock at cost, 2,214,737
shares
(31,628
)
(31,628
)
Total USPH shareholders’ equity
318,058
315,793
Non-controlling interest - permanent
equity
1,418
1,260
Total USPH shareholders' equity and
non-controlling interest - permanent equity
319,476
317,053
Total liabilities, redeemable
non-controlling interest,
USPH shareholders' equity and
non-controlling interest - permanent equity
$
868,127
$
858,154
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
Three Months Ended
March 31, 2023
March 31, 2022
OPERATING ACTIVITIES
Net income including non-controlling
interest
$
11,427
$
11,982
Adjustments to reconcile net income
including non-controlling interest to
net cash provided by operating
activities:
Depreciation and amortization
3,788
3,824
Provision for credit losses
1,512
1,305
Equity-based awards compensation
expense
1,806
1,846
Deferred income taxes
221
2,132
Change in revaluation of put-right
liability
149
(603
)
Change in fair value of contingent
earn-out consideration
698
-
Earnings in unconsolidated affiliate
(274
)
(339
)
Other
125
93
Changes in operating assets and
liabilities:
Increase in patient accounts
receivable
(5,999
)
(4,676
)
Increase in accounts receivable –
other
(796
)
(2,145
)
Increase (decrease) in other assets
1,897
(735
)
(Decrease) increase in accounts payable
and accrued expenses
(1,846
)
1,445
Decrease in other long-term
liabilities
(1,359
)
(2,480
)
Net cash provided by operating
activities
11,349
11,649
INVESTING ACTIVITIES
Purchase of fixed assets
(2,059
)
(2,528
)
Purchase of majority interest in
businesses, net of cash acquired
(5,796
)
(11,242
)
Purchase of redeemable non-controlling
interest, temporary equity
(5,178
)
(2,211
)
Purchase of non-controlling
interest-permanent
-
(99
)
Proceeds on sale of partnership interest -
redeemable non-controlling interest
107
4
Distributions from unconsolidated
affiliate
245
132
Net cash used in investing activities
(12,681
)
(15,944
)
FINANCING ACTIVITIES
Distributions to non-controlling interest,
permanent and temporary equity
(3,297
)
(3,711
)
Proceeds from revolving line of credit
7,000
35,000
Proceeds from term loan
-
(31,000
)
Payments on term loan
(938
)
-
Principal payments on notes payable
(422
)
(332
)
Net cash provided by (used in) financing
activities
2,343
(43
)
Net decrease in cash and cash
equivalents
1,011
(4,338
)
Cash and cash equivalents - beginning of
period
31,594
28,567
Cash and cash equivalents - end of
period
$
32,605
$
24,229
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the period for:
Income taxes
$
442
$
81
Interest paid
1,377
525
Non-cash investing and financing
transactions during the period:
Purchase of businesses - seller financing
portion
360
300
Notes payable related to purchase of
redeemable non-controlling interest, temporary equity
611
246
Notes payable related to purchase of
non-controlling interest, permanent equity
-
296
Notes receivable related to sale of
partnership interest - redeemable non-controlling interest
532
-
Dividends payable to USPH shareholders
$
5,617
$
5,327
U. S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIES
OPERATING RESULTS AND ADJUSTED
EBITDA
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
(unaudited)
The following tables provide details 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.
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, and related portions for non-controlling
interests. 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, a non-GAAP measure, equals net income
attributable to USPH diluted shareholders per the consolidated
statements of income, less a change in revaluation of the 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 diluted share
also exclude the impact of the revaluation of redeemable
non-controlling interest and the associated tax impact.
Management uses Operating Results and Adjusted EBITDA, which
eliminates certain items described above that can be subject to
volatility and unusual costs, as one the principal measures to
evaluate and monitor financial performance period over period.
Management believes that presenting Operating Results and Adjusted
EBITDA 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 redeemable
instruments and therefore have different equity structures.
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.
U. S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
OPERATING RESULTS AND ADJUSTED
EBITDA
2023 PERIODS COMPARED TO 2022
PERIODS
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(unaudited)
Three Months Ended March
31,
2023
2022 (1)
Adjusted
EBITDA
Net income attributable to USPH
shareholders
$
7,410
$
8,799
Adjustments:
Depreciation and amortization
3,788
3,824
Change in fair value of contingent
earn-out consideration
698
-
Interest income
(64
)
(46
)
Relief funds
(467
)
-
Change in revaluation of put-right
liability
149
(603
)
Interest expense - debt and other, net
2,560
540
Provision for income taxes
2,969
3,498
Equity-based awards compensation
expense
1,806
1,846
Allocation to non-controlling
interests
(371
)
(363
)
Adjusted EBITDA (a non-GAAP
measure)
18,478
17,495
Earnings per
share
Computation of earnings per share - USPH
shareholders:
Net income attributable to USPH
shareholders
$
7,410
$
8,799
Charges to retained earnings:
Revaluation of redeemable non-controlling
interest
119
(153
)
Tax effect at statutory rate (federal and
state)
(30
)
39
$
7,499
$
8,685
Earnings per share (basic and
diluted)
$
0.58
$
0.67
Operating
Results
Net income attributable to USPH
shareholders
$
7,410
$
8,799
Adjustments:
Change in fair value of contingent
earn-out consideration
698
-
Change in revaluation of put-right
liability
149
(603
)
Allocation to non-controlling
interests
33
-
Relief Funds
(467
)
-
Tax effect at statutory rate (federal and
state)
(105
)
154
Operating Results (a non-GAAP
measure)
$
7,718
$
8,350
Basic and diluted Operating Results per
share (a non-GAAP measure)
$
0.59
$
0.65
Shares used in computation - basic and
diluted
13,025
12,937
(1)
Revised to conform to current year
presentation.
U.S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
REVENUE METRICS
Number of Clinics
Net Rate Per Patient Visit
(1)
Patient Visits (1)
Average Visits Per Day Per
Clinic (1)
2023
2022
2023
2022
2023
2022
2023
2022
First quarter
647
601
$
103.12
$
103.00
1,227,490
1,063,519
29.8
27.9
Second quarter
608
$
103.18
1,145,554
29.5
Third quarter
614
$
104.01
1,122,070
28.8
Fourth quarter
640
$
104.28
1,152,139
29.1
(1)
See definition of the metrics above in the
Glossary of Terms – Revenue Metrics on page 6.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503005915/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
US Physical Therapy (NYSE:USPH)
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