U.S. Physical Therapy Reports First Quarter 2023 Results
- Adjusted EBITDA increased $1.0 million to $18.5 million, a record high for Q1. Net patient revenue from physical therapy operations increased 15.6% to $126.6 million. Average visits per clinic per day reached an all-time high of 29.8. Physical therapy operating margin improved to 21.0%.
- Net income decreased to $7.4 million due to increased interest expense and higher borrowing for acquisitions. Earnings per diluted share decreased to $0.58. IIP services operating margin decreased to 19.5%.
Reports Record-High First Quarter Volume and Adjusted EBITDA
FIRST QUARTER RESULTS SUMMARY
-
Adjusted EBITDA, a non-Generally Accepted Accounting Principles (“GAAP”) measure, increased
$1.0 million $18.5 million $17.5 million -
Net income attributable to USPH’s shareholders, a GAAP measure, was
$7.4 million $8.8 million $2.0 million $0.58 $0.67 -
Operating income increased
$2.0 million 13.1% , to$17.0 million $15.0 million -
Operating Results per diluted share, a non-GAAP measure, was
$0.59 $0.65 -
Net patient revenue from physical therapy operations increased
15.6% to$126.6 million $109.5 million - 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 increased6.0% in the 2023 First Quarter as compared to the 2022 First Quarter. -
Net rate per patient visit increased to
$103.12 $103.00 2% reduction in Medicare rates at the beginning of 2023 and the discontinuance of2% 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 to20.0% in the 2022 First Quarter. Physical therapy average operating costs per patient visit decreased1.1% to$81.97 $83.09 $59.14 0.7% increase from$58.74 $60.99 $60.04 -
IIP services revenue was
$19.4 million $19.1 million 19.5% in the 2023 First Quarter as compared to21.8% 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 retaining20.0% of the interest. The business generates approximately$3.2 million -
The Company’s Board of Directors declared a quarterly dividend of
$0.43 -
Management reaffirms that it currently expects the Company’s Adjusted EBITDA for 2023 to be in the range of
$75.0 million $80.0 million
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
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 15.4% , to$127.4 million $110.4 million 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 $103.00 -
IIP services revenue increased to
$19.4 million $19.1 million
Operating cost was
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 13.9% primarily driven by the impact of a full quarter of 2022 and 2023 clinic additions. Additionally, costs associated with mature clinics increased4.7% primarily due to higher salaries and related costs related to a6.0% increase in patient visits at mature clinics. -
IIP services operating costs increased by
$0.7 million 4.5% , to$15.6 million $14.9 million
Gross profit for the 2023 First Quarter increased
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
Operating income increased
For 2023 First Quarter, other expenses were
-
During the 2023 First Quarter, the Company recognized
$0.5 million -
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 -
Equity in earnings of the unconsolidated affiliate was
$0.3 million -
Interest expense, net of
$0.6 million $2.6 million $0.5 million 5.5% for the 2023 First Quarter.
The provision for income tax was
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
Adjusted EBITDA, a non-GAAP measure, increased
Operating Results, excluding Relief Funds, a non-GAAP measure, was
BALANCE SHEET AND CASH FLOW
As of March 31, 2023, the Company had
The Company entered into an interest rate swap effective on June 30, 2022, which will mature on June 30, 2027. It has a
QUARTERLY DIVIDEND
The Board of Directors declared a quarterly dividend of
MANAGEMENT REAFFIRMS 2023 EARNINGS GUIDANCE
Management reaffirms that it currently expects the Company’s Adjusted EBITDA for 2023 to be in the range of
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
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,
|
|
December 31,
|
||||
ASSETS |
(unaudited) |
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
32,605 |
|
|
$ |
31,594 |
|
Patient accounts receivable, less allowance for credit losses of |
|
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, |
|
- |
|
|
|
- |
|
Common stock, |
|
|
|
||||
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,
|
|
March 31,
|
||||
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
Source: U.S. Physical Therapy, Inc.
FAQ
What was the increase in Adjusted EBITDA for Q1?
What was the percentage increase in net patient revenue from physical therapy operations?
What was the physical therapy operating margin for Q1?
What was the decrease in net income compared to the previous year's Q1?
What was the decrease in earnings per diluted share compared to the previous year's Q1?
How many clinics did the company operate as of March 31, 2023?
What is the company's earnings guidance for 2023?
