U.S. Physical Therapy Reports Fourth Quarter and Full Year 2023 Results
- None.
- None.
Insights
The reported increase in Adjusted EBITDA and Operating Results for U.S. Physical Therapy, Inc. (USPH) indicates a positive operational performance trend year-over-year. While net income saw a decrease, largely due to non-cash impairment charges, the underlying operational metrics such as patient visits and clinic additions are strong. The growth in patient visits and the strategic expansion through acquisitions and de novos reflect a robust demand for USPH's services and an effective growth strategy.
However, a slight decrease in the net rate per patient visit and an increase in shares outstanding suggest some pressure on per-share metrics. The dividend rate increase signals confidence by the board in the company's financial health and future prospects. Investors should note the impact of the Medicare rate reduction on future EBITDA growth, as well as the company's focus on rate negotiations and cost efficiencies to mitigate these headwinds.
The outpatient physical therapy sector is experiencing increased demand, as evidenced by USPH's record-high average daily visits per clinic. The company's ability to grow its clinic count while maintaining operational efficiency is commendable. The strategic closure of underperforming clinics and the addition of new ones through acquisitions and de novos are indicative of a proactive management approach to optimize its clinic portfolio.
From a market perspective, the increase in dividends could make USPH's stock more attractive to income-focused investors. Additionally, the company's guidance for 2024 Adjusted EBITDA suggests a positive outlook, despite the challenges posed by Medicare rate reductions. Investors should closely monitor the company's ability to negotiate rates and manage costs, as these factors will be crucial for sustained profitability and market performance.
USPH's financial results reflect broader economic trends, including the impact of healthcare policy changes such as Medicare rate adjustments. The company's response to these changes through rate negotiations and volume growth strategies demonstrates adaptability in a shifting economic landscape. The increased patient volumes and clinic additions could be partially attributed to demographic trends, such as an aging population requiring more physical therapy services.
Investors should consider the long-term economic implications of healthcare policies on companies like USPH. The ability to successfully navigate these changes and continue to grow in a challenging environment could be a positive indicator of the company's economic resilience and management effectiveness.
Company Provides 2024 Guidance
FINANCIAL HIGHLIGHTS
-
Adjusted EBITDA (1), a non-Generally Accepted Accounting Principles (“GAAP”) measure, was
$77.7 million $4.1 million -
Operating Results (1), a non-GAAP measure, for Full Year 2023 were
$36.3 million $1.3 million $35.0 million $2.56 $2.70 -
Net income attributable to USPH’s shareholders (“USPH net income”), a GAAP measure, was
$28.2 million $32.2 million $17.5 million $9.1 million $1.28 $2.25 -
Adjusted EBITDA for Fourth Quarter 2023 was
$19.0 million $1.1 million -
Operating Results for Fourth Quarter 2023 were
$8.9 million $1.3 million -
USPH net income for Fourth Quarter 2023 was
$0.7 million $2.6 million $0.38 $0.01 -
Total net revenue for Fourth Quarter 2023 increased
$13.6 million 9.6% , to$154.8 million -
Net rate per patient visit for Fourth Quarter 2023 was
$103.68 -
Average daily visits per clinic were 29.9 for the Fourth Quarter 2023 and 30.0 for Full Year 2023, both record-high average daily visits per clinic in the Company’s history for each respective period. Total patient visits were 1,267,842 in Fourth Quarter 2023, a
10.0% increase from Fourth Quarter 2022. Full Year 2023 patient visits were 5,005,426, an11.6% increase over Full Year 2022. -
Fourth Quarter 2023 gross profit was
$30.5 million $2.7 million - During the Full Year 2023, the Company added 46 new clinics through acquisitions and de novos, and closed 15 clinics bringing its total clinic count to 671 as of December 31, 2023, as compared to 640 clinics on December 31, 2022.
-
The Company’s Board of Directors raised the Company’s quarterly dividend rate from
$0.43 $0.44 -
Management currently expects the Company’s Adjusted EBITDA for 2024 to be in the range of
$80 million $85 million
| ___________________________ | ||
(1) |
See pages 12 and 13 of this release for the definition and reconciliation of non-GAAP Adjusted EBITDA and Operating Results to the most directly comparable GAAP measure. |
|
MANAGEMENT’S COMMENTS
Chris Reading, Chief Executive Officer, said, “Our team finished the year strong with record physical therapy volume for each quarter of 2023 as well as the year. Injury prevention also finished the year with some acceleration in both progress and opportunity. Looking forward, we have a great balance sheet bolstered by our capital raise in 2023 and you will see us put that to good use this year attracting more partner-owners looking for a great home for their teams and companies. Our partners across the entirety of our Company make a huge difference for us and for that we are all grateful. While we have been operating in a changing and challenging environment, we have the people and the resources to continue to grow.”
Carey Hendrickson, Chief Financial Officer, added, “We have tremendous confidence in our team to produce EBITDA growth in 2024, despite headwinds from the Medicare rate reduction, with continued progress in rate negotiations, growth in volumes at our existing clinics and a continued focus on cost efficiencies. We’ll also benefit from a full year of operations from clinics we acquired in 2023 and a partial year of operations from acquisitions we expect to complete in 2024.”
FOURTH QUARTER 2023 VERSUS FOURTH QUARTER 2022
Additional supplemental tables of financial and performance metrics are presented on page 14 of this release.
Physical Therapy Operations |
||||||||||||
Fourth Quarter Ended December 31, |
|
Variance |
|
|||||||||
2023 |
|
2022 |
|
$ |
|
% |
|
|||||
(In thousands, except percentages) |
|
|||||||||||
Revenue related to: |
|
|
|
|
|
|
|
|
||||
Mature Clinics (1) |
$ |
112,721 |
$ |
111,066 |
$ |
1,655 |
|
|||||
Clinic additions (2) |
|
18,650 |
|
7,964 |
|
10,686 |
* |
(6) |
||||
Clinics sold or closed (3) |
|
81 |
|
1,116 |
|
(1,035) |
* |
(6) |
||||
Net patient revenue |
|
131,452 |
|
120,146 |
|
11,306 |
|
|||||
Other (4) |
|
3,177 |
|
2,644 |
|
533 |
|
|||||
Total |
|
134,629 |
|
122,790 |
|
11,839 |
|
|||||
Operating costs (4) |
|
108,380 |
|
98,247 |
|
10,133 |
|
|||||
Gross profit |
$ |
26,249 |
$ |
24,543 |
$ |
1,706 |
|
|||||
Financial and operating metrics (not in thousands): |
||||||||||||
Net rate per patient visit (1) |
$ |
103.68 |
$ |
104.28 |
$ |
(0.60) |
(0.6)% |
|||||
Patient visits (1) |
|
1,267,842 |
|
1,152,139 |
|
115,703 |
|
|||||
Average daily visits per clinic (1) |
|
29.9 |
|
29.1 |
|
0.8 |
|
|||||
Gross margin |
|
|
|
|
|
|||||||
Salaries and related costs per visit, clinics (5) |
$ |
59.72 |
$ |
60.04 |
$ |
(0.32) |
(0.5)% |
|||||
Operating costs per visit, clinics (5) |
$ |
84.09 |
$ |
84.05 |
$ |
0.04 |
|
|||||
| ___________________________ | ||||||||||||
(1) See Glossary of Terms - Revenue Metrics for definition. |
||||||||||||
(2) Clinic additions during the Full Year 2023 and Full Year 2022. |
||||||||||||
(3) Revenue from closed clinics includes revenues from the 15 and 16 clinics closed during the Full Year 2023 and Full Year 2022, respectively. |
||||||||||||
(4) Includes revenues and costs from management contracts. |
||||||||||||
(5) Excludes management contract costs. |
||||||||||||
(6) Not meaningful. |
||||||||||||
Net revenue from physical therapy operations increased
Net rate per patient visit was
Operating costs from physical therapy operations increased
Gross profit from physical therapy operations in the Fourth Quarter 2023 increased
Industrial Injury Prevention Services (“IIP”) |
||||||||||
Fourth Quarter Ended December 31, |
|
Variance |
||||||||
2023 |
|
2022 |
|
$ |
|
% |
||||
(In thousands, except percentages) |
||||||||||
Net revenue |
$ |
20,172 |
$ |
18,392 |
$ |
1,780 |
|
|||
Operating costs |
|
15,905 |
|
15,104 |
|
801 |
|
|||
Gross profit |
$ |
4,267 |
$ |
3,288 |
$ |
979 |
|
|||
Gross margin |
|
|
|
|
|
|||||
IIP revenues increased
Corporate Office and Other Expenses
Corporate costs increased
A non-cash impairment charge of
Operating loss was
Total other income (expense), net, was
-
Interest expense, net of
$0.9 million $2.0 million $2.2 million 4.7% for the Fourth Quarter 2023, with an all-in effective interest rate, including all associated costs, of5.4% . -
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
$1.6 million -
The Company revalued the contingent earn-out consideration related to certain acquisitions and recognized
$1.7 million $0.5 million -
The revaluation of a put-right liability resulted in
$2.9 million $0.8 million
The provision for income taxes was
USPH Net Income and Non-GAAP Measures
Net income (loss) attributable to non-controlling interest (temporary and permanent) was
USPH net income was
Non-GAAP Adjusted EBITDA increased
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.
FULL YEAR 2023 VERSUS FULL YEAR 2022
Total net revenue for the Full Year 2023 increased
Revenues from physical therapy operations increased
Revenues from IIP increased
Corporate office costs were
Operating income was
Other expenses increased
The provision for income tax was
USPH net income was
Non-GAAP Adjusted EBITDA increased
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 full year 2023 results, please refer to the Company’s Annual Report on Form 10-K which is expected to be filed with the Securities and Exchange Commission on February 29, 2024.
BALANCE SHEET AND CASH FLOW
Total cash and cash equivalents were
On May 30, 2023, the Company completed a secondary offering of its common stock resulting in net proceeds of
ACQUISITION ACTIVITIES
The Company is in various stages of completing several acquisitions that management expects to close in or shortly after the first half of 2024. The Company’s strategy is to continue acquiring outpatient physical therapy practices, develop outpatient physical therapy clinics as satellites in existing partnerships, and continue acquiring companies that provide or serve the Company’s industrial injury prevention services.
QUARTERLY DIVIDEND
The Company’s Board of Directors increased the Company’s quarterly dividend on February 27, 2024, from
2024 EARNINGS GUIDANCE
Management expects the Company’s Adjusted EBITDA for 2024 to be in the range of
- the full-year impact of rate negotiations in commercial and other payor categories completed during 2023
- the partial-year impact of rate negotiations in commercial and other payor categories expected to be completed during 2024
- volume increases at the Company’s existing clinics
- continued discipline in expense control
- full-year contribution from acquisitions completed in 2023; and,
- partial-year impact of EBITDA from acquisitions expected to be completed during or shortly after the first half of 2024.
As noted previously, the Company is currently in the process of completing several acquisitions that are expected to close in or shortly after the first half of 2024. The guidance range includes the expected EBITDA contribution from such 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
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;
- 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, 2022, 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 673 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 42 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 CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|||||||||||
Fourth Quarter Ended December 31, |
|
For the Year Ended December 31, |
|||||||||
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||
|
|
|
|
|
|
||||||
Net patient revenue |
$ |
131,452 |
$ |
120,146 |
$ |
514,556 |
$ |
464,590 |
|||
Other revenue |
|
23,349 |
|
21,036 |
|
90,246 |
|
88,554 |
|||
Net revenue |
|
154,801 |
|
141,182 |
|
604,802 |
|
553,144 |
|||
Operating cost: |
|||||||||||
Salaries and related costs |
|
90,633 |
|
82,317 |
|
353,390 |
|
319,191 |
|||
Rent, supplies, contract labor and other |
|
32,080 |
|
29,678 |
|
123,731 |
|
116,381 |
|||
Provision for credit losses |
|
1,572 |
|
1,356 |
|
6,172 |
|
5,548 |
|||
Total operating cost |
|
124,285 |
|
113,351 |
|
483,293 |
|
441,120 |
|||
Gross profit |
|
30,516 |
|
27,831 |
|
121,509 |
|
112,024 |
|||
Corporate office costs |
|
13,901 |
|
11,925 |
|
51,953 |
|
46,111 |
|||
Impairment of goodwill and other intangible assets |
|
17,495 |
|
9,112 |
|
17,495 |
|
9,112 |
|||
Operating (loss) income |
|
(880) |
|
6,794 |
|
52,061 |
|
56,801 |
|||
Other (expense) income |
|||||||||||
Interest expense, debt and other |
|
(2,010) |
|
(2,239) |
|
(9,303) |
|
(5,779) |
|||
Interest income from investments |
|
1,583 |
|
- |
|
3,774 |
|
- |
|||
Change in fair value of contingent earn-out consideration |
|
(1,747) |
|
520 |
|
(1,550) |
|
2,520 |
|||
Change in revaluation of put-right liability |
|
2,926 |
|
(776) |
|
2,582 |
|
(5) |
|||
Equity in earnings of unconsolidated affiliate |
|
149 |
|
192 |
|
955 |
|
1,175 |
|||
Relief Funds |
|
- |
|
- |
|
467 |
|
- |
|||
Other |
|
85 |
|
69 |
|
390 |
|
859 |
|||
Total other (expense) income |
|
986 |
|
(2,234) |
|
(2,685) |
|
(1,230) |
|||
(Loss) income before taxes |
|
106 |
|
4,560 |
|
49,376 |
|
55,571 |
|||
Provision for income taxes |
|
1,399 |
|
1,212 |
|
12,156 |
|
12,164 |
|||
Net (loss) income |
|
(1,293) |
|
3,348 |
|
37,220 |
|
43,407 |
|||
Less: Net (income) loss attributable to non-controlling interest: |
|||||||||||
Redeemable non-controlling interest - temporary equity |
|
3,190 |
|
318 |
|
(4,426) |
|
(6,902) |
|||
Non-controlling interest - permanent equity |
|
(1,241) |
|
(1,059) |
|
(4,555) |
|
(4,347) |
|||
|
1,949 |
|
(741) |
|
(8,981) |
|
(11,249) |
||||
Net income attributable to USPH shareholders |
$ |
656 |
$ |
2,607 |
$ |
28,239 |
$ |
32,158 |
|||
Basic and diluted (loss) earnings per share attributable to USPH shareholders (1) |
$ |
(0.38) |
$ |
(0.01) |
$ |
1.28 |
$ |
2.25 |
|||
Shares used in computation - basic and diluted |
|
14,987 |
|
13,002 |
|
14,188 |
|
12,985 |
|||
Dividends declared per common share |
$ |
0.43 |
$ |
0.41 |
$ |
1.72 |
$ |
1.64 |
|||
(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 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (IN THOUSANDS) |
|||||||||||
|
Fourth Quarter Ended December 31, |
|
For the Year Ended December 31, |
||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
||||||||||
Net (loss) income |
$ |
(1,293) |
$ |
3,348 |
$ |
37,220 |
$ |
43,407 |
|||
Other comprehensive loss |
|||||||||||
Unrealized (loss) gain on cash flow hedge |
|
(3,982) |
|
(564) |
|
(1,642) |
|
5,378 |
|||
Tax effect at statutory rate (federal and state) |
|
1,017 |
|
144 |
|
420 |
|
(1,374) |
|||
Comprehensive income (loss) |
$ |
(4,258) |
$ |
2,928 |
$ |
35,998 |
$ |
47,411 |
|||
|
|||||||||||
Comprehensive income (loss) attributable to non-controlling interest |
|
1,949 |
|
(741) |
|
(8,981) |
|
(11,249) |
|||
Comprehensive income (loss) attributable to USPH shareholders |
$ |
(2,309) |
$ |
2,187 |
$ |
27,017 |
$ |
36,162 |
|||
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS) |
|||||
December 31, 2023 |
|
December 31, 2022 |
|||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
152,825 |
$ |
31,594 |
|
Patient accounts receivable, less provision for credit losses of |
|
51,866 |
|
51,934 |
|
Accounts receivable - other |
|
17,854 |
|
16,671 |
|
Other current assets |
|
10,830 |
|
11,067 |
|
Total current assets |
|
233,375 |
|
111,266 |
|
Fixed assets: |
|||||
Furniture and equipment |
|
63,982 |
|
62,074 |
|
Leasehold improvements |
|
46,941 |
|
42,877 |
|
Fixed assets, gross |
|
110,923 |
|
104,951 |
|
Less accumulated depreciation and amortization |
|
(84,821) |
|
(80,203) |
|
Fixed assets, net |
|
26,102 |
|
24,748 |
|
Operating lease right-of-use assets |
|
103,431 |
|
103,004 |
|
Investment in unconsolidated affiliate |
|
12,256 |
|
12,131 |
|
Goodwill |
|
509,571 |
|
494,101 |
|
Other identifiable intangible assets, net |
|
109,682 |
|
108,755 |
|
Other assets |
|
2,821 |
|
4,149 |
|
Total assets |
$ |
997,238 |
$ |
858,154 |
|
|
|||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST |
|||||
Current liabilities: |
|||||
Accounts payable - trade |
$ |
3,898 |
$ |
3,300 |
|
Accounts payable - due to seller of acquired business |
|
- |
|
3,204 |
|
Accrued expenses |
|
55,344 |
|
37,413 |
|
Current portion of operating lease liabilities |
|
35,252 |
|
33,709 |
|
Current portion of term loan and notes payable |
|
7,691 |
|
7,863 |
|
Total current liabilities |
|
102,185 |
|
85,489 |
|
Notes payable, net of current portion |
|
1,289 |
|
1,913 |
|
Revolving facility |
|
31,000 |
|||
Term loan, net of current portion and deferred financing costs |
|
137,702 |
|
142,918 |
|
Deferred taxes |
|
24,815 |
|
21,303 |
|
Operating lease liabilities, net of current portion |
|
76,653 |
|
77,934 |
|
Other long-term liabilities |
|
2,356 |
|
13,029 |
|
Total liabilities |
|
345,000 |
|
373,586 |
|
|
|||||
Redeemable non-controlling interest - temporary equity |
|
174,828 |
|
167,515 |
|
|
|||||
Commitments and Contingencies |
|||||
|
|||||
U.S. Physical Therapy, Inc. ("USPH") shareholders’ equity: |
|||||
Preferred stock, |
|
- |
|
- |
|
Common stock, |
|
172 |
|
152 |
|
Additional paid-in capital |
|
281,096 |
|
110,317 |
|
Accumulated other comprehensive gain |
|
2,782 |
|
4,004 |
|
Retained earnings |
|
223,772 |
|
232,948 |
|
Treasury stock at cost, 2,214,737 shares |
|
(31,628) |
|
(31,628) |
|
Total USPH shareholders’ equity |
|
476,194 |
|
315,793 |
|
Non-controlling interest - permanent equity |
|
1,216 |
|
1,260 |
|
Total USPH shareholders' equity and non-controlling interest - permanent equity |
|
477,410 |
|
317,053 |
|
Total liabilities, redeemable non-controlling interest, USPH shareholders' equity and non-controlling interest - permanent equity |
$ |
997,238 |
$ |
858,154 |
|
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) |
|||||
For the Year Ended |
|||||
December 31, 2023 |
December 31, 2022 |
||||
OPERATING ACTIVITIES |
|||||
Net income including non-controlling interest |
$ |
37,220 |
$ |
43,407 |
|
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: |
|||||
Depreciation and amortization |
|
15,695 |
|
14,743 |
|
Provision for credit losses |
|
6,172 |
|
5,548 |
|
Equity-based awards compensation expense |
|
7,236 |
|
7,264 |
|
Amortization of debt issue costs |
|
420 |
|
305 |
|
Change in deferred income taxes |
|
4,490 |
|
4,309 |
|
Change in revaluation of put-right liability |
|
(2,582) |
|
5 |
|
Change in fair value of contingent earn-out consideration |
|
1,550 |
|
(2,520) |
|
Equity of earnings in unconsolidated affiliate |
|
(955) |
|
(1,175) |
|
Loss (gain) on sale of clinics and fixed assets |
|
166 |
|
(643) |
|
Impairment of goodwill and other intangible assets |
|
17,495 |
|
9,112 |
|
Other |
|
- |
|
(83) |
|
Changes in operating assets and liabilities: |
|||||
Increase in patient accounts receivable |
|
(5,645) |
|
(10,279) |
|
Increase in accounts receivable - other |
|
(356) |
|
(307) |
|
Increase (decrease) in other current and long-term assets |
|
(197) |
|
(5,940) |
|
Decrease (increase) in accounts payable and accrued expenses |
|
15 |
|
(7,755) |
|
Decrease (increase) in other long-term liabilities |
|
1,254 |
|
2,546 |
|
Net cash provided by operating activities |
|
81,978 |
|
58,537 |
|
INVESTING ACTIVITIES |
|||||
Purchase of fixed assets |
|
(9,294) |
|
(8,248) |
|
Purchase of majority interest in businesses, net of cash acquired |
|
(26,582) |
|
(59,788) |
|
Purchase of redeemable non-controlling interest, temporary equity |
|
(10,986) |
|
(14,987) |
|
Purchase of non-controlling interest, permanent equity |
|
(281) |
|
(280) |
|
Proceeds on sale of non-controlling interest, permanent equity |
|
102 |
|
- |
|
Proceeds on sale of partnership interest - redeemable non-controlling interest, temporary equity |
|
875 |
|
402 |
|
Distributions from unconsolidated affiliate |
|
830 |
|
1,259 |
|
Proceeds on sale of partnership interest, clinics and fixed assets |
|
- |
|
373 |
|
Other |
|
321 |
|
- |
|
Net cash used in investing activities |
|
(45,015) |
|
(81,269) |
|
FINANCING ACTIVITIES |
|||||
Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs |
|
163,646 |
|
- |
|
Proceeds from revolving facility |
|
24,000 |
|
101,000 |
|
Distributions to non-controlling interest, permanent and temporary equity |
|
(16,100) |
|
(15,348) |
|
Cash dividends paid to shareholders |
|
(24,128) |
|
(21,321) |
|
Payments on revolving facility |
|
(55,000) |
|
(184,000) |
|
Principal payments on notes payable |
|
(4,400) |
|
(930) |
|
Payments on term loan |
|
(3,750) |
|
(1,875) |
|
Proceeds from term loan |
|
- |
|
150,000 |
|
Payment of deferred financing costs |
|
- |
|
(1,779) |
|
Payment of Medicare Accelerated and Advance Funds |
|
- |
|
- |
|
Other |
|
- |
|
12 |
|
Net cash provided by financing activities |
|
84,268 |
|
25,759 |
|
Net increase in cash and cash equivalents |
|
121,231 |
|
3,027 |
|
Cash and cash equivalents - beginning of period |
|
31,594 |
|
28,567 |
|
Cash and cash equivalents - end of period |
$ |
152,825 |
$ |
31,594 |
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|||||
Cash paid during the period for: |
|||||
Income taxes |
$ |
4,926 |
$ |
7,615 |
|
Interest paid |
$ |
8,655 |
$ |
5,687 |
|
Non-cash investing and financing transactions during the period: |
|||||
Purchase of businesses - seller financing portion |
$ |
1,815 |
$ |
1,574 |
|
Liabilities assumed associated with a purchase of a business |
|
524 |
|
- |
|
Notes payable related to purchase of redeemable non-controlling interest, temporary equity |
|
1,087 |
|
1,074 |
|
Notes payable related to the purchase of non-controlling interest, permanent equity |
|
200 |
|
296 |
|
Notes receivable related to sale of redeemable non-controlling interest, temporary equity |
|
4,136 |
|
1,580 |
|
Notes receivable related to the sale of non-controlling interest, permanent equity |
$ |
458 |
$ |
- |
|
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
ADJUSTED EBITDA AND OPERATING RESULTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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.
Adjusted EBITDA, a non-GAAP measure, is defined as net income attributable to USPH shareholders before interest income, interest expense, taxes, depreciation, amortization, non-cash asset impairment charge, 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.
Operating Results, a non-GAAP measure, equals net income attributable to USPH shareholders less non-cash asset impairment charge, changes in revaluation of 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 share also exclude the impact of the revaluation of redeemable non-controlling interest and the associated tax impact.
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. Management believes that Adjusted EBITDA and Operating Results are useful measures 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.
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) |
|||||||||||
|
Fourth Quarter Ended December 31, |
|
For the Year Ended December 31, |
||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
(In thousands, except per share data) |
|||||||||||
Adjusted EBITDA (a non-GAAP measure) |
|
|
|
|
|
|
|||||
Net income attributable to USPH shareholders |
$ |
656 |
$ |
2,607 |
$ |
28,239 |
$ |
32,158 |
|||
Adjustments: |
|||||||||||
Provision for income taxes |
|
1,399 |
|
1,212 |
|
12,156 |
|
12,164 |
|||
Depreciation and amortization |
|
4,113 |
|
3,793 |
|
15,695 |
|
14,743 |
|||
Interest expense, debt and other, net |
|
2,010 |
|
2,239 |
|
9,303 |
|
5,779 |
|||
Interest income from investments |
|
(1,583) |
|
- |
|
(3,774) |
|
- |
|||
Impairment of goodwill and other intangible assets |
|
17,495 |
|
9,112 |
|
17,495 |
|
9,112 |
|||
Equity-based awards compensation expense |
|
1,785 |
|
1,802 |
|
7,236 |
|
7,264 |
|||
Change in revaluation of put-right liability |
|
(2,926) |
|
776 |
|
(2,582) |
|
5 |
|||
Change in fair value of contingent earn-out consideration |
|
1,747 |
|
(520) |
|
1,550 |
|
(2,520) |
|||
Relief Funds |
|
- |
|
- |
|
(467) |
|
- |
|||
Other income |
|
(85) |
|
(69) |
|
(390) |
|
(859) |
|||
Allocation to non-controlling interests |
|
(5,625) |
|
(3,098) |
|
(6,744) |
|
(4,185) |
|||
$ |
18,986 |
$ |
17,854 |
$ |
77,717 |
$ |
73,661 |
||||
Operating Results (a non-GAAP measure) |
|
||||||||||
Net income attributable to USPH shareholders |
$ |
656 |
$ |
2,607 |
$ |
28,239 |
$ |
32,158 |
|||
Adjustments: |
|||||||||||
Impairment of goodwill and other intangible assets |
|
17,495 |
|
9,112 |
|
17,495 |
|
9,112 |
|||
Change in fair value of contingent earn-out consideration |
|
1,747 |
|
(520) |
|
1,550 |
|
(2,520) |
|||
Change in revaluation of put-right liability |
|
(2,926) |
|
776 |
|
(2,582) |
|
5 |
|||
Relief Funds |
|
- |
|
- |
|
(467) |
|
- |
|||
Allocation to non-controlling interest |
|
(5,249) |
|
(2,734) |
|
(5,215) |
|
(2,734) |
|||
Tax effect at statutory rate (federal and state) |
|
(2,828) |
|
(1,695) |
|
(2,755) |
|
(987) |
|||
$ |
8,895 |
$ |
7,546 |
$ |
36,265 |
$ |
35,034 |
||||
Operating Results per share (a non-GAAP measure) |
$ |
0.59 |
$ |
0.58 |
$ |
2.56 |
$ |
2.70 |
|||
Earnings per share |
|
||||||||||
Computation of earnings per share - USPH shareholders: |
|||||||||||
Net income attributable to USPH shareholders |
$ |
656 |
$ |
2,607 |
$ |
28,239 |
$ |
32,158 |
|||
Charges to retained earnings: |
|||||||||||
Revaluation of redeemable non-controlling interest |
|
(8,577) |
|
(3,697) |
|
(13,565) |
|
(3,890) |
|||
Tax effect at statutory rate (federal and state) |
|
2,191 |
|
945 |
|
3,466 |
|
994 |
|||
$ |
(5,730) |
$ |
(145) |
$ |
18,140 |
$ |
29,262 |
||||
Earnings per share (basic and diluted) |
$ |
(0.38) |
$ |
(0.01) |
$ |
1.28 |
$ |
2.25 |
|||
Shares used in computation - basic and diluted |
|
14,987 |
|
13,002 |
|
14,188 |
|
12,985 |
|||
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES REVENUE METRICS |
|||||||||||||||
Number of Clinics |
Net Rate Per
|
Patient Visits (1) |
Average Daily Visits
|
||||||||||||
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
||||||||
First quarter |
647 |
601 |
|
|
1,227,490 |
1,063,519 |
29.8 |
27.9 |
|||||||
Second quarter |
656 |
608 |
|
|
1,267,140 |
1,145,554 |
30.4 |
29.5 |
|||||||
Third quarter |
672 |
614 |
|
|
1,242,954 |
1,122,070 |
29.7 |
28.8 |
|||||||
Fourth quarter |
671 |
640 |
|
|
1,267,842 |
1,152,139 |
29.9 |
29.1 |
|||||||
Year |
671 |
|
640 |
|
|
|
|
|
5,005,426 |
|
4,483,282 |
|
30.0 |
|
28.7 |
(1) See definition of the metrics above in the Glossary of Terms – Revenue Metrics on page 7. |
|||||||||||||||
Clinic Count Roll Forward |
|||||||
Fourth Quarter Ended December 31, |
Year Ended December 31, |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Number of clinics, beginning of period |
672 |
614 |
640 |
591 |
|||
Additions |
6 |
32 |
46 |
65 |
|||
Closed or sold |
(7) |
(6) |
(15) |
(16) |
|||
Number of clinics, end of period |
671 |
640 |
671 |
640 |
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228144354/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 USPH's Adjusted EBITDA for the year ended December 31, 2023?
What was the Operating Results for USPH in Full Year 2023?
What was the Net Income for USPH shareholders in Full Year 2023?
How many new clinics did USPH add in 2023?
What is the total clinic count for USPH as of December 31, 2023?
What is the expected Adjusted EBITDA range for USPH in 2024?
