U.S. Physical Therapy Reports Second Quarter 2023 Results
- Adjusted EBITDA for the second quarter of 2023 was $21.7 million, a slight increase from the same period in 2022.
- Net patient revenue from physical therapy operations increased 9.4% to $129.3 million for the second quarter of 2023.
- The company added 13 clinics and closed four clinics during the second quarter of 2023.
- Management reaffirms 2023 earnings guidance of $75.0 million to $80.0 million.
- Net income attributable to shareholders was $10.9 million, a decrease from the second quarter of 2022.
Reports All-Time High Quarterly Patient Volume
SECOND QUARTER FINANCIAL HIGHLIGHTS
-
Adjusted EBITDA, a non-Generally Accepted Accounting Principles (“GAAP”) measure, was
$21.7 million $0.4 million $21.3 million -
Net income attributable to USPH’s shareholders, a GAAP measure, was
$10.9 million $11.2 million $1.6 million $0.64 $0.87 -
Operating Results per share, a non-GAAP measure, was
$0.76 $0.90 -
Net patient revenue from physical therapy operations increased
9.4% to$129.3 million $118.2 million -
Average visits per clinic per day was an all-time high of 30.4 in the 2023 Second Quarter compared to 29.5 in the 2022 Second Quarter. Total patient visits increased
10.6% in the 2023 Second Quarter as compared to the 2022 Second Quarter, with patient visits at mature clinics up2.6% . -
Net rate per patient visit was
$102.03 $103.18 2% Medicare rate reduction beginning in January 2023 and discontinuation of the sequestration relief on Medicare visits effective in July 2022. -
Physical therapy total operating costs per patient visit were
$80.61 0.6% from$81.09 1.2% to$57.59 $58.29 $60.99 $57.59 $85.14 $80.61 -
The Company’s physical therapy operating margin was
21.5% in the 2023 Second Quarter, increasing for the third consecutive quarter -- up from18.7% in the third quarter of 2022 to20.0% in the fourth quarter of 2022, to21.0% in the first quarter of 2023 and to21.5% in the 2023 Second Quarter. -
Industrial injury prevention (“IIP”) services revenue was
$19.2 million $19.4 million 20.7% in the 2023 Second Quarter as compared to21.2% in the 2022 Second Quarter. -
During the 2023 Second Quarter, the Company added 13 clinics and closed four clinics, bringing its total clinic count to 656 as of June 30, 2023 as compared to 608 clinics as of June 30, 2022. The clinic additions included an acquisition by the Company and one of its local partners of a
75% equity interest in a four-clinic practice that generates approximately$2.6 million $3.1 million -
On May 30, 2023, the Company completed a secondary offering of 1,916,667 shares of its common stock. Upon completion of the offering, the Company received net proceeds of approximately
$163.7 million $35.0 million $0.5 million -
On July 31, 2023, the Company acquired a
70% equity interest in a five-clinic practice for a purchase price of$2.1 million 30% equity interest. The business currently generates approximately$2.4 million -
On August 7, 2023, 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, “Considering the challenges we have had to overcome since the middle of 2022 with significant inflation and interest rate escalation, our team has done an exceptional job. We completed a very successful secondary offering, the first in our Company’s history, positioning us for future growth; we decreased our cost per visit each quarter since the third quarter of last year; we are running at record clinic volumes, well ahead of anything we have ever done before; and we are making progress with respect to contract renegotiations which is helping to offset some of the misplaced Medicare cuts that have been handed down from CMS. The combination of record volumes this quarter, and an improving but still challenging hiring environment, has created a slightly negative impact on our net rate compared to where we expected to be at this point. As we have many times in the past, our team is making the necessary adjustments to address this opportunity as we work for a strong finish to this year.”
2023 SECOND QUARTER VERSUS 2022 SECOND QUARTER
Total net revenue for 2023 Second Quarter was
For the Three Months Ended June 30, |
|
Variance |
|
||||||||||
2023 |
|
2022 |
|
$ |
|
% |
|||||||
(In thousands, except percentages) |
|||||||||||||
Revenue related to: |
|
|
|
|
|
|
|
||||||
Mature Clinics (1) |
$ |
115,053 |
$ |
113,538 |
$ |
1,515 |
|
1.3 |
% |
||||
2023 clinic additions |
|
1,910 |
|
- |
|
1,910 |
|
* |
(2) |
||||
2022 clinic additions |
|
12,271 |
|
3,201 |
|
9,070 |
|
* |
(2) |
||||
Clinics sold or closed (3) |
|
46 |
|
1,457 |
|
(1,411 |
) |
* |
(2) |
||||
Net patient revenue from physical therapy operations |
|
129,280 |
|
118,196 |
|
11,084 |
|
9.4 |
% |
||||
Other revenue |
|
792 |
|
898 |
|
(106 |
) |
(11.8 |
)% |
||||
Physical therapy operations |
|
130,072 |
|
119,094 |
|
10,978 |
|
9.2 |
% |
||||
Industrial injury prevention services |
|
19,246 |
|
19,437 |
|
(191 |
) |
(1.0 |
)% |
||||
Management contracts |
|
2,167 |
|
2,125 |
|
42 |
|
2.0 |
% |
||||
$ |
151,485 |
$ |
140,656 |
$ |
10,829 |
|
7.7 |
% |
|||||
| ____________________ | |
(1) |
See Glossary of Terms – Revenue Metrics for the definition. |
(2) |
Not meaningful. |
(3) |
Revenue from closed clinics includes revenue from the five and 16 clinics closed during the six months ended June 30, 2023 and the year ended December 31, 2022, respectively. |
-
Revenue from physical therapy operations increased
$11.0 million 9.2% , to$130.1 million $119.1 million 10.6% to 1,267,140 for the 2023 Second Quarter from 1,145,554 in the 2022 Second Quarter. Patient visits at our mature clinics increased2.6% in the 2023 Second Quarter as compared to the 2022 Second Quarter. Net rate per patient visit was$102.03 $103.18 2% Medicare rate reduction beginning in January 2023 and discontinuation of the sequestration relief on Medicare visits effective in July 2022. -
IIP services revenue decreased slightly to
$19.2 million $19.4 million
Operating costs were
For the Three Months Ended June 30, |
|
Variance |
|||||||||||
2023 |
|
2022 |
|
$ |
|
% |
|||||||
Operating costs related to: |
(In thousands, except percentages) |
||||||||||||
Mature Clinics (1) |
$ |
90,965 |
|
$ |
89,364 |
$ |
1,601 |
|
|
1.8 |
% |
||
2023 clinic additions |
|
1,832 |
|
|
- |
|
|
1,832 |
|
|
* |
(2) |
|
2022 clinic additions |
|
9,192 |
|
|
2,713 |
|
6,479 |
|
|
* |
(2) |
||
Clinics sold or closed (3) |
|
157 |
|
|
821 |
|
|
(664 |
) |
|
* |
(2) |
|
Physical therapy operations |
|
102,146 |
|
|
92,898 |
|
|
9,248 |
|
|
10.0 |
% |
|
Industrial injury prevention services |
|
15,261 |
|
|
15,315 |
|
|
(54 |
) |
|
(0.4 |
)% |
|
Management contracts |
|
1,871 |
|
|
1,622 |
|
|
249 |
|
|
15.4 |
% |
|
|
$ |
119,278 |
|
$ |
109,835 |
|
$ |
9,443 |
|
|
8.6 |
% |
|
|
|
|
|
|
|
|
|
||||||
| ___________________ | |
(1) |
See Glossary of Terms – Revenue Metrics for the definition. |
(2) |
Not meaningful. |
(3) |
Operating costs from closed clinics include costs from the five and 16 clinics closed or sold during the six months ended June 30, 2023 and the year ended December 31, 2022, respectively. |
-
Operating costs from physical therapy operations increased
$9.2 million 10.0% , to$102.1 million $92.9 million - Operating costs from IIP services were down slightly versus the comparable prior year period.
Gross profit for the 2023 Second Quarter increased
For the Three Months Ended June 30, |
|
|||||||||||||||||
2023 |
|
2022 |
Variance |
|||||||||||||||
|
$ |
|
Margin % |
|
$ |
|
Margin % |
|
$ |
|
% |
|||||||
|
(In thousands, except percentages) |
|||||||||||||||||
Physical therapy operations |
$ |
27,926 |
|
21.5 |
% |
|
$ |
26,196 |
|
22.0 |
% |
|
$ |
1,730 |
|
|
6.6 |
% |
Industrial injury prevention services |
|
3,985 |
|
20.7 |
% |
|
|
4,122 |
|
21.2 |
% |
|
|
(137 |
) |
|
(3.3 |
)% |
Management contracts |
|
296 |
|
13.7 |
% |
|
|
503 |
|
23.7 |
% |
|
(207 |
) |
|
(41.2 |
)% |
|
Gross profit |
$ |
32,207 |
|
21.3 |
% |
|
$ |
30,821 |
|
21.9 |
% |
|
$ |
1,386 |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||||
Corporate office costs were
Operating income was flat at
Total other (expense) income was
-
Interest expense, net of
$0.8 million $2.6 million $1.0 million 6.0% for the 2023 Second Quarter. -
The Company revalued the contingent earn-out consideration related to an acquisition and recognized
$0.7 million -
The revaluation of a put-right liability resulted in
$0.1 million -
Equity in earnings of the unconsolidated affiliate was
$0.3 million -
Other and interest income for the 2023 Second Quarter included
$0.5 million $0.6 million
The provision for income tax was
Three Months Ended June 30, |
|||||||
2023 |
|
2022 |
|||||
(In thousands, except percentages) |
|||||||
Income before taxes |
$ |
19,095 |
|
$ |
19,495 |
|
|
Less: net loss (income) attributable to non-controlling interest: |
|||||||
Redeemable non-controlling interest - temporary equity |
|
(2,920 |
) |
|
(2,626 |
) |
|
Non-controlling interest - permanent equity |
|
(1,025 |
) |
|
(1,435 |
) |
|
$ |
(3,945 |
) |
$ |
(4,061 |
) |
||
Income before taxes less net income attributable to non-controlling interest |
$ |
15,150 |
|
$ |
15,434 |
|
|
Provision for income taxes |
$ |
4,231 |
|
$ |
4,239 |
|
|
Percentage |
|
27.9 |
% |
|
27.5 |
% |
|
Net income attributable to non-controlling interest was
Adjusted EBITDA, a non-GAAP measure, was
Operating Results, a non-GAAP measure, was
SIX MONTHS ENDED JUNE 30, 2023 VERSUS SIX MONTHS ENDED JUNE 30, 2022
Total net revenue for six months ended June 30, 2023 (“2023 Six Months”) was
Six Months Ended June 30, |
|
Variance |
|
||||||||||
2023 |
|
2022 |
|
$ |
|
% |
|||||||
Revenue related to: |
(In thousands, except percentages) |
||||||||||||
Mature Clinics (1) |
$ |
229,072 |
$ |
221,187 |
$ |
7,885 |
|
3.6 |
% |
||||
2023 clinic additions |
|
2,282 |
|
- |
|
2,282 |
|
* |
(2) |
||||
2022 clinic additions |
|
24,291 |
|
3,395 |
|
20,896 |
|
* |
(2) |
||||
Clinics sold or closed (3) |
|
216 |
|
3,152 |
|
(2,936 |
) |
* |
(2) |
||||
Net patient revenue from physical therapy operations |
|
255,861 |
|
227,734 |
|
28,127 |
|
12.4 |
% |
||||
Other revenue |
|
1,591 |
|
1,770 |
|
(179 |
) |
(10.1 |
)% |
||||
Physical therapy operations |
|
257,452 |
|
229,504 |
|
27,948 |
|
12.2 |
% |
||||
Industrial injury prevention services |
|
38,596 |
|
38,505 |
|
91 |
|
0.2 |
% |
||||
Management contracts |
|
3,946 |
|
4,351 |
|
(405 |
) |
(9.3 |
)% |
||||
$ |
299,994 |
$ |
272,360 |
$ |
27,634 |
|
10.1 |
% |
|||||
| ___________________ | |
(1) |
See Glossary of Terms - Revenue Metrics for the definition. |
(2) |
Not meaningful. |
(3) |
Revenue from closed clinics includes revenue from the five and 16 clinics closed or sold during the six months ended June 30, 2023 and the year ended December 31, 2022, respectively. |
-
Revenue from physical therapy operations increased
$27.9 million 12.2% , to$257.5 million $229.5 million 12.9% to 2,494,630 for the 2023 Six Months from 2,209,073 for the 2022 Six Months. Patient visits at our mature clinics increased4.2% for the 2023 Six Months as compared to the 2022 Six Months. Net rate per patient visit decreased to$102.56 $103.09 2% Medicare rate reduction beginning in January 2023 and discontinuation of sequestration relief on Medicare visits effective in July 2022. -
Revenue from IIP services increased slightly to
$38.6 million $38.5 million
Operating cost was
For the Six Months Ended June 30, |
|
Variance |
|||||||||||
2023 |
|
2022 |
|
$ |
|
% |
|||||||
Operating costs related to: |
(In thousands, except percentages) |
||||||||||||
Mature Clinics (1) |
$ |
181,469 |
|
$ |
175,717 |
$ |
5,752 |
|
|
3.3 |
% |
||
2023 clinic additions |
|
2,291 |
|
|
- |
|
|
2,291 |
|
|
* |
(2) |
|
2022 clinic additions |
|
18,509 |
|
|
3,114 |
|
15,395 |
|
|
* |
(2) |
||
Clinics sold or closed (3) |
|
498 |
|
|
2,437 |
|
|
(1,939 |
) |
|
* |
(2) |
|
Physical therapy operations |
|
202,767 |
|
|
181,268 |
|
|
21,499 |
|
|
11.9 |
% |
|
Industrial injury prevention services |
|
30,842 |
|
|
30,230 |
|
|
612 |
|
|
2.0 |
% |
|
Management contracts |
|
3,321 |
|
|
3,453 |
|
|
(132 |
) |
|
(3.8 |
)% |
|
|
$ |
236,930 |
|
$ |
214,951 |
|
$ |
21,979 |
|
|
10.2 |
% |
|
|
|
|
|
|
|
|
|
||||||
| ___________________ | |
(1) |
See Glossary of Terms - Revenue Metrics for the definition. |
(2) |
Not meaningful. |
(3) |
Operating costs from closed clinics include costs from the five and 16 clinics closed or sold during the six months ended June 30, 2023 and the year ended December 31, 2022, respectively. |
-
Physical therapy operating costs increased
$21.5 million 11.9% to$202.8 million $181.3 million -
Operating costs from IIP services increased by
$0.6 million 2.0% , to$30.8 million $30.2 million
Gross profit for the 2023 Six Months increased
For the Six Months Ended June 30, |
|
|||||||||||||||||
2023 |
|
2022 |
Variance |
|||||||||||||||
|
$ |
|
Margin % |
|
$ |
|
Margin % |
$ |
|
% |
||||||||
|
(In thousands, except percentages) |
|||||||||||||||||
Physical therapy operations |
$ |
54,685 |
|
21.2 |
% |
|
$ |
48,236 |
|
21.0 |
% |
$ |
6,449 |
|
|
13.4 |
% |
|
Industrial injury prevention services |
|
7,754 |
|
20.1 |
% |
|
|
8,275 |
|
21.5 |
% |
|
(521 |
) |
|
(6.3 |
)% |
|
Management contracts |
|
625 |
|
15.8 |
% |
|
|
898 |
|
20.6 |
% |
|
(273 |
) |
|
(30.4 |
)% |
|
Gross profit |
$ |
63,064 |
|
21.0 |
% |
|
$ |
57,409 |
|
21.1 |
% |
$ |
5,655 |
|
|
9.9 |
% |
|
|
|
|
|
|
|
|
|
|||||||||||
Corporate office costs were
Operating income increased
Total other (expense) income was
-
Interest expense, net of
$1.4 million $5.2 million $1.5 million 5.7% for the 2023 Six Months. -
During the 2023 Six Months, the Company recognized
$0.5 million -
Equity in earnings of the unconsolidated affiliate was
$0.6 million $0.7 million -
Other and interest income for the 2023 Six Months included
$0.5 million $0.6 million
The provision for income tax was
Six Months Ended June 30, |
|||||||
|
2023 |
|
2022 |
||||
(In thousands, except percentages) |
|||||||
Income before taxes |
$ |
33,491 |
|
$ |
34,975 |
|
|
Less: net income attributable to non-controlling interest: |
|||||||
Redeemable non-controlling interest - temporary equity |
|
(5,640 |
) |
|
(5,183 |
) |
|
Non-controlling interest - permanent equity |
|
(2,322 |
) |
|
(2,061 |
) |
|
$ |
(7,962 |
) |
$ |
(7,244 |
) |
||
Income before taxes less net income attributable to non-controlling interest |
$ |
25,529 |
|
$ |
27,731 |
|
|
Provision for income taxes |
$ |
7,200 |
|
$ |
7,737 |
|
|
Percentage |
|
28.2 |
% |
|
27.9 |
% |
|
Net income attributable to redeemable non-controlling interest was
Adjusted EBITDA, a non-GAAP measure, was
Operating Results, a non-GAAP measure, was
BALANCE SHEET AND CASH FLOW
Total cash and cash equivalents were
During the 2023 Six Months,
The Company entered into an interest rate swap effective on June 30, 2022, which will mature on June 30, 2027. It has a
RECENT ACQUISITIONS
On May 31, 2023, the Company, together with one of its local partners, acquired a
On July 31, 2023, the Company acquired a
The Company’s strategy is to continue acquiring multi-clinic outpatient physical therapy practices, to develop outpatient physical therapy clinics as satellites in existing partnerships and to continue acquiring companies that provide industrial injury prevention services.
QUARTERLY DIVIDEND
The 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 August 9, 2023, to discuss the Company’s financial results for the three and six months ended June 30, 2023. Interested parties may participate in the call by dialing (866) 952-8559 (Primary) or (785) 424-1743 (Alternate) and conference ID of USPHQ223 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 November 7, 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 impact of future public health crises and epidemics/pandemics, such as was the case with the novel strain of COVID-19 and its variants;
- 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 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;
- 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 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 662 outpatient physical therapy clinics in 41 states. The Company's clinics provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurologically-related injuries and rehabilitation of injured workers. In addition to owning and operating clinics, the Company manages 43 physical therapy facilities for unaffiliated third parties, including hospitals and physician groups. The Company also has an industrial injury prevention services business which provides onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments.
More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
|||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|||||||||||||||
Three Months Ended |
|
Six Months Ended |
|||||||||||||
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|||||||||
|
|
|
|
|
|
||||||||||
Net patient revenue |
$ |
129,280 |
|
$ |
118,196 |
|
$ |
255,861 |
|
$ |
227,734 |
|
|||
Other revenue |
|
22,205 |
|
|
22,460 |
|
|
44,133 |
|
|
44,626 |
|
|||
Net revenue |
|
151,485 |
|
|
140,656 |
|
|
299,994 |
|
|
272,360 |
|
|||
Operating cost: |
|||||||||||||||
Salaries and related costs |
|
86,871 |
|
|
79,939 |
|
|
172,911 |
|
|
155,088 |
|
|||
Rent, supplies, contract labor and other |
|
30,844 |
|
|
28,345 |
|
|
60,944 |
|
|
57,007 |
|
|||
Provision for credit losses |
|
1,563 |
|
|
1,551 |
|
|
3,075 |
|
|
2,856 |
|
|||
Total operating cost |
|
119,278 |
|
|
109,835 |
|
|
236,930 |
|
|
214,951 |
|
|||
Gross profit |
|
32,207 |
|
|
30,821 |
|
|
63,064 |
|
|
57,409 |
|
|||
Corporate office costs |
|
12,145 |
|
|
10,741 |
|
|
26,004 |
|
|
22,297 |
|
|||
Operating income |
|
20,062 |
|
|
20,080 |
|
|
37,060 |
|
|
35,112 |
|
|||
Other (expense) income |
|||||||||||||||
Interest expense - debt and other, net |
|
(2,633 |
) |
|
(987 |
) |
|
(5,193 |
) |
|
(1,527 |
) |
|||
Change in fair value of contingent earn-out consideration |
|
708 |
|
|
- |
|
|
10 |
|
|
- |
|
|||
Equity in earnings of unconsolidated affiliate |
|
326 |
|
|
340 |
|
|
600 |
|
|
679 |
|
|||
Change in revaluation of put-right liability |
|
(50 |
) |
|
(617 |
) |
|
(199 |
) |
|
(14 |
) |
|||
Relief Funds |
|
- |
|
|
- |
|
|
467 |
|
|
- |
|
|||
Other and interest income |
|
682 |
|
|
679 |
|
|
746 |
|
|
725 |
|
|||
Total other (expense) income |
|
(967 |
) |
|
(585 |
) |
|
(3,569 |
) |
|
(137 |
) |
|||
Income before taxes |
|
19,095 |
|
|
19,495 |
|
|
33,491 |
|
|
34,975 |
|
|||
Provision for income taxes |
|
4,231 |
|
|
4,239 |
|
|
7,200 |
|
|
7,737 |
|
|||
Net income |
|
14,864 |
|
|
15,256 |
|
|
26,291 |
|
|
27,238 |
|
|||
Less: Net income attributable to non-controlling interest: |
|||||||||||||||
Redeemable non-controlling interest - temporary equity |
|
(2,920 |
) |
|
(2,626 |
) |
|
(5,640 |
) |
|
(5,183 |
) |
|||
Non-controlling interest - permanent equity |
|
(1,025 |
) |
|
(1,435 |
) |
|
(2,322 |
) |
|
(2,061 |
) |
|||
|
(3,945 |
) |
|
(4,061 |
) |
|
(7,962 |
) |
|
(7,244 |
) |
||||
Net income attributable to USPH shareholders |
$ |
10,919 |
|
$ |
11,195 |
|
$ |
18,329 |
|
$ |
19,994 |
|
|||
Basic and diluted earnings per share attributable to USPH shareholders (1) |
$ |
0.64 |
|
$ |
0.87 |
|
$ |
1.22 |
|
$ |
1.55 |
|
|||
Shares used in computation - basic and diluted |
|
13,720 |
|
|
12,998 |
|
|
13,375 |
|
|
12,968 |
|
|||
Dividends declared per common share |
$ |
0.43 |
|
$ |
0.41 |
|
$ |
0.86 |
|
$ |
0.82 |
|
|||
(1) |
See page 16 for the calculation of basic and diluted earnings per share. |
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
|||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||||||||||||||
(IN THOUSANDS) |
|||||||||||||||
Three Months Ended |
|
Six Months Ended |
|||||||||||||
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|||||||||
|
|
|
|
|
|
||||||||||
Net income |
$ |
14,864 |
|
$ |
15,256 |
|
$ |
26,291 |
|
$ |
27,238 |
|
|||
Other comprehensive loss |
|||||||||||||||
Unrealized gain on cash flow hedge |
|
2,881 |
|
|
(531 |
) |
|
1,064 |
|
|
(531 |
) |
|||
Tax effect at statutory rate (federal and state) of |
|
(736 |
) |
|
136 |
|
|
(272 |
) |
|
136 |
|
|||
Comprehensive income |
$ |
17,009 |
|
$ |
14,861 |
|
$ |
27,083 |
|
$ |
26,843 |
|
|||
Comprehensive income attributable to non-controlling interest |
|
(3,945 |
) |
|
(4,061 |
) |
|
(7,962 |
) |
|
(7,244 |
) |
|||
Comprehensive income attributable to USPH shareholders |
$ |
13,064 |
|
$ |
10,800 |
|
$ |
19,121 |
|
$ |
19,599 |
|
|||
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
|||||||
CONSOLIDATED BALANCE SHEET |
|||||||
(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS) |
|||||||
|
June 30, 2023 |
|
December 31, 2022 |
||||
ASSETS |
(unaudited) |
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
160,738 |
|
|
$ |
31,594 |
|
Patient accounts receivable, less allowance for credit losses of |
|
54,285 |
|
|
|
51,934 |
|
Accounts receivable - other |
|
16,852 |
|
|
|
16,671 |
|
Other current assets |
|
9,924 |
|
|
|
11,067 |
|
Total current assets |
|
241,799 |
|
|
|
111,266 |
|
Fixed assets: |
|
|
|
||||
Furniture and equipment |
|
63,429 |
|
|
|
62,074 |
|
Leasehold improvements |
|
45,096 |
|
|
|
42,877 |
|
Fixed assets, gross |
|
108,525 |
|
|
|
104,951 |
|
Less accumulated depreciation and amortization |
|
83,548 |
|
|
|
80,203 |
|
Fixed assets, net |
|
24,977 |
|
|
|
24,748 |
|
Operating lease right-of-use assets |
|
101,582 |
|
|
|
103,004 |
|
Investment in unconsolidated affiliate |
|
12,229 |
|
|
|
12,131 |
|
Goodwill |
|
506,703 |
|
|
|
494,101 |
|
Other identifiable intangible assets, net |
|
107,592 |
|
|
|
108,755 |
|
Other assets |
|
4,699 |
|
|
|
4,149 |
|
Total assets |
$ |
999,581 |
|
|
$ |
858,154 |
|
|
|
|
|
||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable - trade |
$ |
3,674 |
|
|
$ |
3,300 |
|
Accounts payable - due to seller of acquired business |
|
- |
|
|
|
3,204 |
|
Accrued expenses |
|
43,338 |
|
|
|
37,413 |
|
Current portion of operating lease liabilities |
|
31,274 |
|
|
|
33,709 |
|
Current portion of term loan and notes payable |
|
7,530 |
|
|
|
7,863 |
|
Total current liabilities |
|
85,816 |
|
|
|
85,489 |
|
Notes payable, net of current portion |
|
2,194 |
|
|
|
1,913 |
|
Revolving line of credit |
|
- |
|
|
|
31,000 |
|
Term loan, net of current portion and deferred financing costs |
|
141,266 |
|
|
|
142,918 |
|
Deferred taxes |
|
23,102 |
|
|
|
21,303 |
|
Operating lease liabilities, net of current portion |
|
78,912 |
|
|
|
77,934 |
|
Other long-term liabilities |
|
12,779 |
|
|
|
13,029 |
|
Total liabilities |
|
344,069 |
|
|
|
373,586 |
|
|
|
|
|
||||
Redeemable non-controlling interest - temporary equity |
|
165,514 |
|
|
|
167,515 |
|
|
|
|
|
||||
Commitments and Contingencies |
|
|
|
||||
|
|
|
|
||||
U.S. Physical Therapy, Inc. ("USPH") shareholders’ equity: |
|
|
|
||||
Preferred stock, |
|
- |
|
|
|
- |
|
Common stock, |
|
|
|
||||
17,202,053 and 15,216,326 shares issued, respectively |
|
172 |
|
|
|
152 |
|
Additional paid-in capital |
|
277,493 |
|
|
|
110,317 |
|
Accumulated other comprehensive gain |
|
4,796 |
|
|
|
4,004 |
|
Retained earnings |
|
237,665 |
|
|
|
232,948 |
|
Treasury stock at cost, 2,214,737 shares |
|
(31,628 |
) |
|
|
(31,628 |
) |
Total USPH shareholders’ equity |
|
488,498 |
|
|
|
315,793 |
|
Non-controlling interest - permanent equity |
|
1,500 |
|
|
|
1,260 |
|
Total USPH shareholders' equity and non-controlling interest - permanent equity |
|
489,998 |
|
|
|
317,053 |
|
Total liabilities, redeemable non-controlling interest, |
|
|
|
||||
USPH shareholders' equity and non-controlling interest - permanent equity |
$ |
999,581 |
|
|
$ |
858,154 |
|
|
|
|
|
||||
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
|||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(IN THOUSANDS) |
|||||||
|
June 30, 2023 |
|
June 30, 2022 |
||||
OPERATING ACTIVITIES |
|
|
|
||||
Net income including non-controlling interest |
$ |
26,291 |
|
|
$ |
27,238 |
|
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
7,615 |
|
|
|
7,298 |
|
Provision for credit losses |
|
3,075 |
|
|
|
2,856 |
|
Equity-based awards compensation expense |
|
3,592 |
|
|
|
3,660 |
|
Change in deferred income taxes |
|
1,799 |
|
|
|
4,307 |
|
Change in revaluation of put-right liability |
|
199 |
|
|
|
14 |
|
Earnings in unconsolidated affiliate |
|
(600 |
) |
|
|
(679 |
) |
Loss (gain) on sale of clinics and fixed assets |
|
63 |
|
|
|
(614 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Increase in patient accounts receivable |
|
(5,341 |
) |
|
|
(7,459 |
) |
Increase in accounts receivable - other |
|
(85 |
) |
|
|
(2,862 |
) |
Decrease in other assets |
|
593 |
|
|
|
230 |
|
Increase (decrease) in accounts payable and accrued expenses |
|
1,335 |
|
|
|
(3,891 |
) |
Increase (decrease) in other long-term liabilities |
|
243 |
|
|
|
(2,587 |
) |
Net cash provided by operating activities |
|
38,779 |
|
|
|
27,511 |
|
|
|
|
|
||||
INVESTING ACTIVITIES |
|
|
|
||||
Purchase of fixed assets |
|
(4,523 |
) |
|
|
(4,569 |
) |
Purchase of majority interest in businesses, net of cash acquired |
|
(8,040 |
) |
|
|
(11,799 |
) |
Purchase of redeemable non-controlling interest, temporary equity |
|
(7,804 |
) |
|
|
(8,648 |
) |
Purchase of non-controlling interest-permanent equity |
|
(39 |
) |
|
|
(156 |
) |
Proceeds on sale of partnership interest - redeemable non-controlling interest |
|
237 |
|
|
|
740 |
|
Proceeds on sales of redeemable non-controlling interest-temporary |
|
- |
|
|
|
344 |
|
Distributions from unconsolidated affiliate |
|
502 |
|
|
|
548 |
|
Proceeds on sale of fixed assets |
|
7 |
|
|
|
- |
|
Net cash used in investing activities |
|
(19,660 |
) |
|
|
(23,540 |
) |
|
|
|
|
||||
FINANCING ACTIVITIES |
|
|
|
||||
Distributions to non-controlling interest, permanent and temporary equity |
|
(8,431 |
) |
|
|
(7,202 |
) |
Cash dividends paid to shareholders |
|
(11,238 |
) |
|
|
(10,659 |
) |
Proceeds from revolving line of credit |
|
24,000 |
|
|
|
61,000 |
|
Proceeds from term loan |
|
- |
|
|
|
150,000 |
|
Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs |
|
163,655 |
|
|
|
- |
|
Payments on revolving line of credit |
|
(55,000 |
) |
|
|
(175,000 |
) |
Principal payments on notes payable |
|
(1,086 |
) |
|
|
(338 |
) |
Payment on term loan |
|
(1,875 |
) |
|
|
(1,779 |
) |
Other |
|
- |
|
|
|
12 |
|
Net cash provided by financing activities |
|
110,025 |
|
|
|
16,034 |
|
|
|
|
|
||||
Net increase in cash and cash equivalents |
|
129,144 |
|
|
|
20,005 |
|
Cash and cash equivalents - beginning of period |
|
31,594 |
|
|
|
28,567 |
|
Cash and cash equivalents - end of period |
$ |
160,738 |
|
|
$ |
48,572 |
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
||||
Cash paid during the period for: |
|
|
|
||||
Income taxes |
$ |
1,241 |
|
|
$ |
4,524 |
|
Interest paid |
|
4,011 |
|
|
|
1,319 |
|
Non-cash investing and financing transactions during the period: |
|
|
|
||||
Purchase of businesses - seller financing portion |
|
360 |
|
|
|
374 |
|
Notes payable related to purchase of redeemable non-controlling interest, temporary equity |
|
621 |
|
|
|
948 |
|
Notes payable related to purchase of non-controlling interest, permanent equity |
|
- |
|
|
|
296 |
|
Notes receivable related to sale of partnership interest - redeemable non-controlling interest |
$ |
2,687 |
|
|
$ |
1,476 |
|
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
ADJUSTED EBITDA AND OPERATING RESULTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(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.
Operating Results, a non-GAAP measure, equals net income attributable to USPH diluted shareholders per the consolidated statements of income, less 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 diluted 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 eliminates 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 presenting Adjusted EBITDA and Operating Results are 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 |
|||||||||||||||
ADJUSTED EBITDA, EARNINGS PER SHARE AND OPERATING RESULTS |
|||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) |
|||||||||||||||
(UNAUDITED) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
||||||||
Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Net income attributable to USPH shareholders |
$ |
10,919 |
|
$ |
11,195 |
|
$ |
18,329 |
|
$ |
19,994 |
|
|||
Adjustments: |
|||||||||||||||
Provision for income taxes |
|
4,231 |
|
|
4,240 |
|
|
7,200 |
|
|
7,737 |
|
|||
Depreciation and amortization |
|
3,827 |
|
|
3,474 |
|
|
7,615 |
|
|
7,298 |
|
|||
Interest expense - debt and other, net |
|
2,633 |
|
|
987 |
|
|
5,193 |
|
|
1,527 |
|
|||
Equity-based awards compensation expense |
|
1,786 |
|
|
1,814 |
|
|
3,592 |
|
|
3,660 |
|
|||
Change in fair value of contingent earn-out consideration |
|
(708 |
) |
|
- |
|
|
(10 |
) |
|
- |
|
|||
Interest and other income |
|
(682 |
) |
|
(679 |
) |
|
(746 |
) |
|
(725 |
) |
|||
Change in revaluation of put-right liability |
|
50 |
|
|
617 |
|
|
199 |
|
|
14 |
|
|||
Relief Funds |
|
- |
|
|
- |
|
|
(467 |
) |
|
- |
|
|||
Allocation to non-controlling interests |
|
(389 |
) |
|
(333 |
) |
|
(761 |
) |
|
(697 |
) |
|||
Adjusted EBITDA (a non-GAAP measure) |
$ |
21,667 |
|
$ |
21,315 |
|
$ |
40,144 |
|
$ |
38,808 |
|
|||
Earnings per share |
|||||||||||||||
Computation of earnings per share - USPH shareholders: |
|||||||||||||||
Net income attributable to USPH shareholders |
$ |
10,919 |
|
$ |
11,195 |
|
$ |
18,329 |
|
$ |
19,994 |
|
|||
Charges to retained earnings: |
|||||||||||||||
Revaluation of redeemable non-controlling interest |
|
(2,865 |
) |
|
210 |
|
|
(2,746 |
) |
|
57 |
|
|||
Tax effect at statutory rate (federal and state) |
|
732 |
|
|
(54 |
) |
|
700 |
|
|
(15 |
) |
|||
$ |
8,786 |
|
$ |
11,351 |
|
$ |
16,283 |
|
$ |
20,036 |
|
||||
Earnings per share (basic and diluted) |
$ |
0.64 |
|
$ |
0.87 |
|
$ |
1.22 |
|
$ |
1.55 |
|
|||
|
|||||||||||||||
Operating Results |
|||||||||||||||
Net income attributable to USPH shareholders |
$ |
10,919 |
|
$ |
11,195 |
|
$ |
18,329 |
|
$ |
19,994 |
|
|||
Adjustments: |
|||||||||||||||
Change in fair value of contingent earn-out consideration |
|
(708 |
) |
|
- |
|
|
(10 |
) |
|
- |
|
|||
Change in revaluation of put-right liability |
|
50 |
|
|
617 |
|
|
199 |
|
|
14 |
|
|||
Relief Funds |
|
- |
|
|
- |
|
|
(467 |
) |
|
- |
|
|||
Allocation to non-controlling interest |
|
- |
|
|
- |
|
|
33 |
|
||||||
Tax effect at statutory rate (federal and state) |
|
168 |
|
|
(158 |
) |
|
63 |
|
|
(4 |
) |
|||
Operating Results (a non-GAAP measure) |
$ |
10,429 |
|
$ |
11,654 |
|
$ |
18,147 |
|
$ |
20,004 |
|
|||
Operating Results per share (a non-GAAP measure) |
$ |
0.76 |
|
$ |
0.90 |
|
$ |
1.36 |
|
$ |
1.54 |
|
|||
Shares used in computation - basic and diluted |
|
13,720 |
|
|
12,998 |
|
|
13,375 |
|
|
12,968 |
|
|||
(1) |
Revised to conform to current year presentation. |
.
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
|||||||||||||||
REVENUE METRICS |
|||||||||||||||
Number of Clinics |
Net Rate Per Patient
|
Patient Visits (1) |
Average Visits Per Day
|
||||||||||||
|
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 |
614 |
|
1,122,070 |
28.8 |
|||||||||||
Fourth quarter |
640 |
|
1,152,139 |
29.1 |
|||||||||||
(1) |
See definition of the metrics above in the Glossary of Terms – Revenue Metrics on page 9 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230808894527/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 U.S. Physical Therapy, Inc.'s Adjusted EBITDA for the second quarter of 2023?
How much did net patient revenue from physical therapy operations increase for the second quarter of 2023?
How many clinics did U.S. Physical Therapy, Inc. add and close during the second quarter of 2023?
What is U.S. Physical Therapy, Inc.'s earnings guidance for 2023?
