U.S. Physical Therapy Reports Third Quarter 2023 Results
- The company reported a record-high third-quarter patient volume, with net patient revenue from physical therapy operations increasing by 9.0% to $127.2 million for the 2023 Third Quarter from $116.7 million for the 2022 Third Quarter.
- Adjusted EBITDA increased by $1.6 million to $18.6 million for the 2023 Third Quarter from $17.0 million for the 2022 Third Quarter.
- Net income attributable to USPH’s shareholders decreased to $9.3 million for the 2023 Third Quarter compared to $9.6 million for the 2022 Third Quarter.
- The company's physical therapy gross profit increased by 5.4% in the 2023 Third Quarter as compared to the 2022 Third Quarter and has increased by 10.9% for the nine months ended September 30, 2023, versus the nine months ended September 30, 2022.
- The net rate per patient visit decreased to $102.37 in the 2023 Third Quarter compared to $104.01 in the 2022 Third Quarter.
- Earnings per share decreased to $0.51 for the 2023 Third Quarter compared to $0.72 for the 2022 Third Quarter.
- IIP services revenue was $19.5 million for the 2023 Third Quarter compared to $20.2 million in the 2022 Third Quarter.
Reports Record-High Third Quarter Patient Volume
THIRD QUARTER FINANCIAL HIGHLIGHTS
-
Adjusted EBITDA, a non-Generally Accepted Accounting Principles (“GAAP”) measure, was
$18.6 million $1.6 million $17.0 million -
Net income attributable to USPH’s shareholders, a GAAP measure, was
$9.3 million $9.6 million $0.51 $0.72 -
Operating Results per share, a non-GAAP measure, were
$0.62 $0.58 -
Net patient revenue from physical therapy operations increased
9.0% to$127.2 million $116.7 million -
Average visits per clinic per day was 29.7 in the 2023 Third Quarter, a record-high for a third quarter in the Company’s history, compared to 28.8 average visits per clinic per day in the 2022 Third Quarter. Total patient visits increased
10.8% in the 2023 Third Quarter as compared to the 2022 Third Quarter, with patient visits at mature clinics up1.3% . -
Net rate per patient visit was
$102.37 $104.01 $102.03 -
Physical therapy total operating costs per patient visit were
$84.49 0.8% from$85.14 $60.35 1.0% from$60.99 -
The Company’s physical therapy gross profit increased
5.4% in the 2023 Third Quarter as compared to the 2022 Third Quarter and has increased10.9% for the nine months ended September 30, 2023, versus the nine months ended September 30, 2022. -
Industrial injury prevention (“IIP”) services revenue was
$19.5 million $20.2 million 22.7% in the 2023 Third Quarter from21.9% in the 2022 Third Quarter. - During the 2023 Third Quarter, the Company added 19 clinics, including the acquisitions described below, and closed three clinics, bringing its total clinic count to 672 as of September 30, 2023, as compared to 614 clinics as of September 30, 2022.
-
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 September 29, 2023, the Company acquired
70% equity interests in two physical therapy practices with the current practice owners retaining30% equity interests for a combined purchase price of$13.9 million $7.2 million -
On October 31, 2023, the Company, through one of its IIP subsidiaries, acquired an IIP services and ergonomics software business for approximately
$4.0 million 55% of the ergonomics software business. The combined businesses currently generate approximately$2.6 million -
On November 6, 2023, the Company’s Board of Directors declared a quarterly dividend of
$0.43 -
Management currently expects the Company’s Adjusted EBITDA for 2023 to be within its provided guidance range of
$75.0 million $80.0 million
MANAGEMENT’S COMMENTS
Chris Reading, Chief Executive Officer, said, “Our team continues to produce excellent results despite the pressure from Medicare rate reductions, inflationary impacts, and an improving but still challenging hiring environment. Our clinic volumes were once again at record levels in the third quarter and our total operating costs per visit continued to trend below last year. We also added 19 clinics from acquisitions and de novos during the quarter, and purchased an IIP services and ergonomics software business subsequent to quarter-end that provides us an opportunity to expand the reach of our ergonomics program. We achieved rate increases in all payor categories other than Medicare in the third quarter and will continue to focus on this initiative to drive greater progress in our net rate as we go forward.”
Carey Hendrickson, Chief Financial Officer, said, “Our balance sheet is in an outstanding position with
2023 THIRD QUARTER VERSUS 2022 THIRD QUARTER
Total net revenue for the 2023 Third Quarter was
Three Months Ended September 30, |
|
Variance |
|
||||||||||
2023 |
|
2022 |
|
$ |
|
% |
|||||||
Revenue related to: |
(in thousands, except percentages) |
||||||||||||
Mature Clinics (1) |
$ |
111,943 |
$ |
111,598 |
$ |
345 |
|
0.3 |
% |
||||
2023 clinic additions |
|
3,598 |
|
- |
|
3,598 |
|
* |
(2) |
||||
2022 clinic additions |
|
11,674 |
|
3,899 |
|
7,775 |
|
* |
(2) |
||||
Clinics sold or closed (3) |
|
28 |
|
1,213 |
|
(1,185 |
) |
* |
(2) |
||||
Net patient revenue from physical therapy operations |
|
127,243 |
|
116,710 |
|
10,533 |
|
9.0 |
% |
||||
Other revenue |
|
889 |
|
753 |
|
136 |
|
18.1 |
% |
||||
Physical therapy operations |
|
128,132 |
|
117,463 |
|
10,669 |
|
9.1 |
% |
||||
Industrial injury prevention services |
|
19,486 |
|
20,155 |
|
(669 |
) |
(3.3 |
)% |
||||
Management contracts |
|
2,389 |
|
1,984 |
|
405 |
|
20.4 |
% |
||||
$ |
150,007 |
$ |
139,602 |
$ |
10,405 |
|
7.5 |
% |
|||||
___________________________
| (1) | See Glossary of Terms – Revenue Metrics for the definition. |
|
| (2) | Not meaningful. |
|
| (3) | Revenue from closed clinics includes revenue from the eight and 16 clinics closed during the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively. |
-
Revenue from physical therapy operations increased
$10.7 million 9.1% , to$128.1 million $117.5 million 10.8% to 1,242,954 for the 2023 Third Quarter from 1,122,070 in the 2022 Third Quarter, with visits at mature clinics up1.3% over the same periods.
Net rate per patient visit was
-
IIP services revenue decreased
$0.7 million 3.3% , to$19.5 million $20.2 million
Operating costs were
Three Months Ended September 30, |
|
Variance |
|||||||||||
2023 |
|
2022 |
|
$ |
|
% |
|||||||
Operating costs related to: |
(In thousands, except percentages) |
||||||||||||
Mature Clinics (1) |
$ |
91,822 |
|
$ |
90,811 |
$ |
1,011 |
|
|
1.1 |
% |
||
2023 Clinic additions |
|
3,395 |
|
|
- |
|
|
3,395 |
|
|
* |
(2) |
|
2022 Clinic additions |
|
9,665 |
|
|
3,482 |
|
6,183 |
|
|
* |
(2) |
||
Clinics sold or closed (3) |
|
137 |
|
|
1,238 |
|
|
(1,101 |
) |
|
* |
(2) |
|
Physical therapy operations |
|
105,019 |
|
|
95,531 |
|
|
9,488 |
|
|
9.9 |
% |
|
Industrial injury prevention services |
|
15,062 |
|
|
15,750 |
|
|
(688 |
) |
|
(4.4 |
)% |
|
Management contracts |
|
1,997 |
|
|
1,537 |
|
|
460 |
|
|
29.9 |
% |
|
|
$ |
122,078 |
|
$ |
112,818 |
|
$ |
9,260 |
|
|
8.2 |
% |
|
___________________________
| (1) | See Glossary of Terms – Revenue Metrics for the definition. |
|
| (2) | Not meaningful. |
|
| (3) | Operating costs from closed clinics include costs from the eight and 16 clinics closed or sold during the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively. |
-
Operating costs from physical therapy operations increased
$9.5 million 9.9% , to$105.0 million $95.5 million -
Operating costs from IIP services were down
$0.7 million 4.4% , versus the comparable prior year period.
Gross profit for the 2023 Third Quarter increased
Three Months Ended September 30, |
|
|||||||||||||||||
2023 |
|
2022 |
Variance |
|||||||||||||||
|
$ |
|
Margin % |
|
$ |
|
Margin % |
|
$ |
|
% |
|||||||
|
(In thousands, except percentages) |
|||||||||||||||||
Physical therapy operations |
$ |
23,113 |
|
18.0 |
% |
|
$ |
21,932 |
|
18.7 |
% |
|
$ |
1,181 |
|
|
5.4 |
% |
Industrial injury prevention services |
|
4,424 |
|
22.7 |
% |
|
|
4,405 |
|
21.9 |
% |
|
|
19 |
|
|
0.4 |
% |
Management contracts |
|
392 |
|
16.4 |
% |
|
|
447 |
|
22.5 |
% |
|
(55 |
) |
|
(12.3 |
)% |
|
Gross profit |
$ |
27,929 |
|
18.6 |
% |
|
$ |
26,784 |
|
19.2 |
% |
|
$ |
1,145 |
|
|
4.3 |
% |
Corporate office costs were
Operating income for the 2023 Third Quarter was
Total other (expense) income, net, was
-
Interest expense, net of
$0.9 million $2.1 million $2.0 million 4.9% for the 2023 Third Quarter, with an all-in effective interest rate, including all associated costs, of5.6% . -
Interest income from investing excess cash (proceeds from the secondary offering sale of the Company’s stock completed in May 2023) in a high-yield savings account was
$1.7 million -
The Company revalued the contingent earn-out consideration related to acquisitions and recognized
$0.2 million $2.0 million -
The revaluation of a put-right liability resulted in
$0.1 million $0.8 million
The provision for income taxes was
Three Months Ended September 30, |
|||||||
|
2023 |
|
|
|
2022 |
|
|
(In thousands, except percentages) |
|||||||
Income before taxes |
$ |
15,779 |
|
$ |
16,036 |
|
|
Less: Net income attributable to non-controlling interest: |
|||||||
Redeemable non-controlling interest - temporary equity |
|
(1,976 |
) |
|
(2,037 |
) |
|
Non-controlling interest - permanent equity |
|
(992 |
) |
|
(1,227 |
) |
|
|
(2,968 |
) |
|
(3,264 |
) |
||
Income before taxes less net income attributable to non-controlling interest |
|
12,811 |
|
|
12,772 |
|
|
Provision for income taxes |
$ |
3,557 |
|
$ |
3,215 |
|
|
Effective income tax rate |
|
27.8 |
% |
|
25.2 |
% |
|
Net income attributable to non-controlling interest (temporary and permanent) was
Adjusted EBITDA, a non-GAAP measure, increased
NINE MONTHS ENDED SEPTEMBER 30, 2023 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2022
Total net revenue for nine months ended September 30, 2023 (“2023 Nine Months”) was
Nine Months Ended September 30, |
|
Variance |
|
||||||||||
2023 |
|
2022 |
|
$ |
|
% |
|||||||
Revenue related to: |
(in thousands, except percentages) |
|
|||||||||||
Mature Clinics (1) |
$ |
340,830 |
$ |
332,629 |
$ |
8,201 |
|
2.5 |
% |
||||
2023 clinic additions |
|
5,888 |
|
- |
|
5,888 |
|
* |
(2) |
||||
2022 clinic additions |
|
35,965 |
|
7,294 |
|
28,671 |
|
* |
(2) |
||||
Clinics sold or closed (3) |
|
421 |
|
4,521 |
|
(4,100 |
) |
* |
(2) |
||||
Net patient revenue from physical therapy operations |
|
383,104 |
|
344,444 |
|
38,660 |
|
11.2 |
% |
||||
Other revenue |
|
2,479 |
|
2,523 |
|
(44 |
) |
(1.7 |
)% |
||||
Physical therapy operations |
|
385,583 |
|
346,967 |
|
38,616 |
|
11.1 |
% |
||||
Industrial injury prevention services |
|
58,082 |
|
58,660 |
|
(578 |
) |
(1.0 |
)% |
||||
Management contracts |
|
6,336 |
|
6,335 |
|
1 |
|
0.0 |
% |
||||
$ |
450,001 |
$ |
411,962 |
$ |
38,039 |
|
9.2 |
% |
|||||
___________________________
| (1) | See Glossary of Terms - Revenue Metrics for the definition. |
|
(2) |
Not meaningful. |
|
(3) |
Revenue from closed clinics includes revenue from the eight and 16 clinics closed or sold during the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively. |
-
Revenue from physical therapy operations increased
$38.6 million 11.1% , to$385.6 million $347.0 million 12.2% to 3,737,584 for the 2023 Nine Months from 3,331,143 for the 2022 Nine Months, with patient visits at our mature clinics up3.2% over the same periods.
Net rate per patient visit decreased to
-
Revenue from IIP services decreased slightly to
$58.1 million $58.7 million
Operating costs were
Nine Months Ended September 30, |
|
Variance |
|||||||||||
2023 |
|
2022 |
|
$ |
|
% |
|||||||
Operating costs related to: |
(In thousands, except percentages) |
||||||||||||
Mature Clinics (1) |
$ |
273,031 |
|
$ |
266,324 |
$ |
6,707 |
|
|
2.5 |
% |
||
2023 Clinic additions |
|
5,701 |
|
|
- |
|
|
5,701 |
|
|
* |
(2) |
|
2022 Clinic additions |
|
28,175 |
|
|
6,597 |
|
21,578 |
|
|
* |
(2) |
||
Clinics sold or closed (3) |
|
880 |
|
|
3,877 |
|
|
(2,997 |
) |
|
* |
(2) |
|
Physical therapy operations |
|
307,787 |
|
|
276,798 |
|
|
30,989 |
|
|
11.2 |
% |
|
Industrial injury prevention services |
|
45,904 |
|
|
45,980 |
|
|
(76 |
) |
|
(0.2 |
)% |
|
Management contracts |
|
5,317 |
|
|
4,991 |
|
|
326 |
|
|
6.5 |
% |
|
|
$ |
359,008 |
|
$ |
327,769 |
|
$ |
31,239 |
|
|
9.5 |
% |
|
___________________________
| (1) | See Glossary of Terms - Revenue Metrics for the definition. | |
| (2) | Not meaningful. |
|
| (3) | Operating costs from closed clinics include costs from the eight and 16 clinics closed or sold during the nine months ended September 30, 2023, and the year ended December 31, 2022, respectively. |
-
Physical therapy operating costs increased
$31.0 million 11.2% , to$307.8 million $276.8 million 3.2% increase in patient visits at mature clinics. -
Operating costs from IIP services decreased slightly to
$45.9 million $46.0 million
Gross profit increased
Nine Months Ended September 30, |
|
|||||||||||||||||
2023 |
|
2022 |
Variance |
|||||||||||||||
|
$ |
|
Margin % |
|
$ |
|
Margin % |
$ |
|
% |
||||||||
|
(In thousands, except percentages) |
|||||||||||||||||
Physical therapy operations |
$ |
77,796 |
|
20.2 |
% |
|
$ |
70,169 |
|
20.2 |
% |
$ |
7,627 |
|
|
10.9 |
% |
|
Industrial injury prevention services |
|
12,178 |
|
21.0 |
% |
|
|
12,680 |
|
21.6 |
% |
|
(502 |
) |
|
(4.0 |
)% |
|
Management contracts |
|
1,019 |
|
16.1 |
% |
|
|
1,344 |
|
21.2 |
% |
|
(325 |
) |
|
(24.2 |
)% |
|
Gross profit |
$ |
90,993 |
|
20.2 |
% |
|
$ |
84,193 |
|
20.4 |
% |
$ |
6,800 |
|
|
8.1 |
% |
|
Corporate office costs were
Operating income increased
-
Total other (expense) income, net, was
( during the 2023 Nine Months compared to$3.7) million $1.0 million -
Interest expense, net of
$2.3 million $7.3 million $3.5 million 5.1% for the 2023 Nine Months, with an all-in interest rate, including all associated costs, of5.7% . -
Interest income from investing excess cash (proceeds from the secondary offering sale of the Company’s stock completed in May 2023) in a high-yield savings account was
$2.2 million -
The Company revalued the contingent earn-out consideration related to acquisitions and recognized
$0.2 million $2.0 million -
The revaluation of a put-right liability resulted in
$0.3 million $0.8 million -
During the 2023 Nine Months, the Company recognized
$0.5 million
The provision for income taxes was
Nine Months Ended September 30, |
|||||||
|
|
2023 |
|
|
|
2022 |
|
(In thousands, except percentages) |
|||||||
Income before taxes |
$ |
49,270 |
|
$ |
51,011 |
|
|
Less: net income attributable to non-controlling interest: |
|||||||
Redeemable non-controlling interest - temporary equity |
|
(7,616 |
) |
|
(7,220 |
) |
|
Non-controlling interest - permanent equity |
|
(3,314 |
) |
|
(3,288 |
) |
|
|
(10,930 |
) |
|
(10,508 |
) |
||
Income before taxes less net income attributable to non-controlling interest |
|
38,340 |
|
|
40,503 |
|
|
Provision for income taxes |
$ |
10,757 |
|
$ |
10,952 |
|
|
Percentage |
|
28.1 |
% |
|
27.0 |
% |
|
Net income attributable to non-controlling interest (temporary and permanent) was
Adjusted EBITDA, a non-GAAP measure, was
Operating Results, a non-GAAP measure, was
See pages 15 and 16 of this release for the definition and reconciliation of Adjusted EBITDA and Operating Results to the most directly comparable GAAP measure.
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
During the 2023 Nine 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 July 31, 2023, the Company acquired a
On September 29, 2023, the Company acquired
On October 31, 2023, the Company, through one of its IIP subsidiaries, acquired an IIP services and ergonomics software business for approximately
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
On November 6, 2023, the Company’s Board of Directors declared a quarterly dividend of
2023 EARNINGS GUIDANCE
Management currently expects the Company’s Adjusted EBITDA for 2023 to be within its previously provided guidance range of
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;
- 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 675 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 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|||||||||||||||
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|||||||||
|
|
|
|
|
|
||||||||||
Net patient revenue |
$ |
127,243 |
|
$ |
116,710 |
|
$ |
383,104 |
|
$ |
344,444 |
|
|||
Other revenue |
|
22,764 |
|
|
22,892 |
|
|
66,897 |
|
|
67,518 |
|
|||
Net revenue |
|
150,007 |
|
|
139,602 |
|
|
450,001 |
|
|
411,962 |
|
|||
Operating cost: |
|||||||||||||||
Salaries and related costs |
|
89,846 |
|
|
81,786 |
|
|
262,757 |
|
|
236,874 |
|
|||
Rent, supplies, contract labor and other |
|
30,707 |
|
|
29,696 |
|
|
91,651 |
|
|
86,703 |
|
|||
Provision for credit losses |
|
1,525 |
|
|
1,336 |
|
|
4,600 |
|
|
4,192 |
|
|||
Total operating cost |
|
122,078 |
|
|
112,818 |
|
|
359,008 |
|
|
327,769 |
|
|||
Gross profit |
|
27,929 |
|
|
26,784 |
|
|
90,993 |
|
|
84,193 |
|
|||
Corporate office costs |
|
12,048 |
|
|
11,889 |
|
|
38,052 |
|
|
34,186 |
|
|||
Operating income |
|
15,881 |
|
|
14,895 |
|
|
52,941 |
|
|
50,007 |
|
|||
Other (expense) income |
|||||||||||||||
Interest expense, debt and other |
|
(2,101 |
) |
|
(2,013 |
) |
|
(7,293 |
) |
|
(3,540 |
) |
|||
Interest income |
|
1,673 |
|
|
- |
|
|
2,191 |
|
|
- |
|
|||
Change in fair value of contingent earn-out consideration |
|
187 |
|
|
2,000 |
|
|
197 |
|
|
2,000 |
|
|||
Change in revaluation of put-right liability |
|
(145 |
) |
|
785 |
|
|
(344 |
) |
|
771 |
|
|||
Equity in earnings of unconsolidated affiliate |
|
206 |
|
|
304 |
|
|
806 |
|
|
983 |
|
|||
Relief Funds |
|
- |
|
|
- |
|
|
467 |
|
|
- |
|
|||
Other |
|
78 |
|
|
65 |
|
|
305 |
|
|
790 |
|
|||
Total other (expense) income |
|
(102 |
) |
|
1,141 |
|
|
(3,671 |
) |
|
1,004 |
|
|||
Income before taxes |
|
15,779 |
|
|
16,036 |
|
|
49,270 |
|
|
51,011 |
|
|||
Provision for income taxes |
|
3,557 |
|
|
3,215 |
|
|
10,757 |
|
|
10,952 |
|
|||
Net income |
|
12,222 |
|
|
12,821 |
|
|
38,513 |
|
|
40,059 |
|
|||
Less: Net income attributable to non-controlling interest: |
|||||||||||||||
Redeemable non-controlling interest - temporary equity |
|
(1,976 |
) |
|
(2,037 |
) |
|
(7,616 |
) |
|
(7,220 |
) |
|||
Non-controlling interest - permanent equity |
|
(992 |
) |
|
(1,227 |
) |
|
(3,314 |
) |
|
(3,288 |
) |
|||
|
(2,968 |
) |
|
(3,264 |
) |
|
(10,930 |
) |
|
(10,508 |
) |
||||
Net income attributable to USPH shareholders |
$ |
9,254 |
|
$ |
9,557 |
|
$ |
27,583 |
|
$ |
29,551 |
|
|||
Basic and diluted earnings per share attributable to USPH shareholders (1) |
$ |
0.51 |
|
$ |
0.72 |
|
$ |
1.72 |
|
$ |
2.27 |
|
|||
Shares used in computation - basic and diluted |
|
14,987 |
|
|
13,001 |
|
|
13,918 |
|
|
12,979 |
|
|||
Dividends declared per common share |
$ |
0.43 |
|
$ |
0.41 |
|
$ |
1.29 |
|
$ |
1.23 |
|
|||
(1) See page 16 of this press release for the calculation of basic and diluted earnings per share. |
|||||||||||||||
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (IN THOUSANDS) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
12,222 |
|
$ |
12,821 |
|
$ |
38,513 |
|
$ |
40,059 |
|
|||
Other comprehensive loss |
|||||||||||||||
Unrealized gain on cash flow hedge |
|
1,276 |
|
|
6,473 |
|
|
2,340 |
|
|
5,942 |
|
|||
Tax effect at statutory rate (federal and state) |
|
(326 |
) |
|
(1,654 |
) |
|
(598 |
) |
|
(1,518 |
) |
|||
Comprehensive income |
$ |
13,172 |
|
$ |
17,640 |
|
$ |
40,255 |
|
$ |
44,483 |
|
|||
|
|||||||||||||||
Comprehensive income attributable to non-controlling interest |
|
(2,968 |
) |
|
(3,264 |
) |
|
(10,930 |
) |
|
(10,508 |
) |
|||
Comprehensive income attributable to USPH shareholders |
$ |
10,204 |
|
$ |
14,376 |
|
$ |
29,325 |
|
$ |
33,975 |
|
|||
|
|
|
|
|
|
|
|
||||||||
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS) |
|||||||
September 30,
|
|
December 31,
|
|||||
ASSETS |
(unaudited) |
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
147,685 |
|
$ |
31,594 |
|
|
Patient accounts receivable, less allowance for credit losses of |
|
52,958 |
|
|
51,934 |
|
|
Accounts receivable - other |
|
18,469 |
|
|
16,671 |
|
|
Other current assets |
|
9,387 |
|
|
11,067 |
|
|
Total current assets |
|
228,499 |
|
|
111,266 |
|
|
Fixed assets: |
|||||||
Furniture and equipment |
|
64,507 |
|
|
62,074 |
|
|
Leasehold improvements |
|
46,212 |
|
|
42,877 |
|
|
Fixed assets, gross |
|
110,719 |
|
|
104,951 |
|
|
Less accumulated depreciation and amortization |
|
84,651 |
|
|
80,203 |
|
|
Fixed assets, net |
|
26,068 |
|
|
24,748 |
|
|
Operating lease right-of-use assets |
|
102,665 |
|
|
103,004 |
|
|
Investment in unconsolidated affiliate |
|
12,256 |
|
|
12,131 |
|
|
Goodwill |
|
522,907 |
|
|
494,101 |
|
|
Other identifiable intangible assets, net |
|
112,112 |
|
|
108,755 |
|
|
Other assets |
|
5,679 |
|
|
4,149 |
|
|
Total assets |
$ |
1,010,186 |
|
$ |
858,154 |
|
|
|
|||||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST |
|||||||
Current liabilities: |
|||||||
Accounts payable - trade |
$ |
4,509 |
|
$ |
3,300 |
|
|
Accounts payable - due to seller of acquired business |
|
- |
|
|
3,204 |
|
|
Accrued expenses |
|
35,846 |
|
|
37,413 |
|
|
Current portion of operating lease liabilities |
|
34,446 |
|
|
33,709 |
|
|
Current portion of term loan and notes payable |
|
7,555 |
|
|
7,863 |
|
|
Total current liabilities |
|
82,356 |
|
|
85,489 |
|
|
Notes payable, net of current portion |
|
2,037 |
|
|
1,913 |
|
|
Revolving facility |
|
- |
|
|
31,000 |
|
|
Term loan, net of current portion and deferred financing costs |
|
139,459 |
|
|
142,918 |
|
|
Deferred taxes |
|
26,487 |
|
|
21,303 |
|
|
Operating lease liabilities, net of current portion |
|
76,884 |
|
|
77,934 |
|
|
Other long-term liabilities |
|
14,758 |
|
|
13,029 |
|
|
Total liabilities |
|
341,981 |
|
|
373,586 |
|
|
|
|||||||
Redeemable non-controlling interest - temporary equity |
|
174,697 |
|
|
167,515 |
|
|
|
|||||||
Commitments and Contingencies |
|||||||
|
|||||||
U.S. Physical Therapy, Inc. ("USPH") shareholders’ equity: |
|||||||
Preferred stock, |
|
- |
|
|
- |
|
|
Common stock, respectively |
|
172 |
|
|
152 |
|
|
Additional paid-in capital |
|
279,124 |
|
|
110,317 |
|
|
Accumulated other comprehensive gain |
|
5,746 |
|
|
4,004 |
|
|
Retained earnings |
|
238,557 |
|
|
232,948 |
|
|
Treasury stock at cost, 2,214,737 shares |
|
(31,628 |
) |
|
(31,628 |
) |
|
Total USPH shareholders’ equity |
|
491,971 |
|
|
315,793 |
|
|
Non-controlling interest - permanent equity |
|
1,537 |
|
|
1,260 |
|
|
Total USPH shareholders' equity and non-controlling interest - permanent equity |
|
493,508 |
|
|
317,053 |
|
|
Total liabilities, redeemable non-controlling interest, |
|||||||
USPH shareholders' equity and non-controlling interest - permanent equity |
$ |
1,010,186 |
$ |
858,154 |
|||
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) |
|||||||
|
Nine Months Ended |
||||||
|
September 30,
|
|
September 30,
|
||||
OPERATING ACTIVITIES |
|
|
|||||
Net income including non-controlling interest |
$ |
38,513 |
|
|
$ |
40,059 |
|
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: |
|
||||||
Depreciation and amortization |
|
11,582 |
|
|
|
10,950 |
|
Provision for credit losses |
|
4,600 |
|
|
|
4,192 |
|
Equity-based awards compensation expense |
|
5,451 |
|
|
|
5,462 |
|
Change in deferred income taxes |
|
5,393 |
|
|
|
6,077 |
|
Change in revaluation of put-right liability |
|
344 |
|
|
|
(771 |
) |
Change in fair value of contingent earn-out consideration |
|
(197 |
) |
|
|
(2,000 |
) |
Equity of earnings in unconsolidated affiliate |
|
(806 |
) |
|
|
(983 |
) |
Gain on sale of clinics and fixed assets |
|
(106 |
) |
|
|
(643 |
) |
Changes in operating assets and liabilities: |
|
||||||
Increase in patient accounts receivable |
|
(5,415 |
) |
|
|
(7,585 |
) |
Increase in accounts receivable - other |
|
(1,631 |
) |
|
|
(4,551 |
) |
Increase (decrease) in other current and long term assets |
|
2,489 |
|
|
|
(4,273 |
) |
Decrease in accounts payable and accrued expenses |
|
(5,609 |
) |
|
|
(4,568 |
) |
Increase (decrease) in other long-term liabilities |
|
535 |
|
|
|
(128 |
) |
Net cash provided by operating activities |
|
55,143 |
|
|
|
41,238 |
|
|
|
||||||
INVESTING ACTIVITIES |
|
||||||
Purchase of fixed assets |
|
(7,074 |
) |
|
|
(7,290 |
) |
Purchase of majority interest in businesses, net of cash acquired |
|
(22,994 |
) |
|
|
(18,573 |
) |
Purchase of redeemable non-controlling interest, temporary equity |
|
(7,804 |
) |
|
|
(14,096 |
) |
Purchase of non-controlling interest-permanent equity |
|
(262 |
) |
|
|
(280 |
) |
Proceeds on sale of partnership interest, clinics, and fixed assets |
|
7 |
|
|
|
740 |
|
Proceeds on sale of non-controlling interest, permanent equity |
|
30 |
|
|
|||
Proceeds on sale of partnership interest - redeemable non-controlling interest, temporary equity |
|
815 |
|
|
|
401 |
|
Distributions from unconsolidated affiliate |
|
681 |
|
|
|
1,220 |
|
Net cash used in investing activities |
|
(36,601 |
) |
|
|
(37,878 |
) |
|
|
||||||
FINANCING ACTIVITIES |
|
||||||
Distributions to non-controlling interest, permanent and temporary equity |
|
(11,777 |
) |
|
|
(11,760 |
) |
Cash dividends paid to shareholders |
|
(17,683 |
) |
|
|
(15,990 |
) |
Proceeds from revolving facility |
|
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 |
|
163,646 |
|
|
|
- |
|
Payments on revolving facility |
|
(55,000 |
) |
|
|
(175,000 |
) |
Principal payments on notes payable |
|
(2,874 |
) |
|
|
(496 |
) |
Payments on term loan |
|
(2,813 |
) |
|
|
(1,779 |
) |
Other |
|
50 |
|
|
|
12 |
|
Net cash provided by financing activities |
|
97,549 |
|
|
|
5,987 |
|
|
|
||||||
Net decrease in cash and cash equivalents |
|
116,091 |
|
|
|
9,347 |
|
Cash and cash equivalents - beginning of period |
|
31,594 |
|
|
|
28,567 |
|
Cash and cash equivalents - end of period |
$ |
147,685 |
|
|
$ |
37,914 |
|
|
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
||||||
Cash paid during the period for: |
|
||||||
Income taxes |
$ |
2,731 |
|
|
$ |
7,529 |
|
Interest paid |
|
6,992 |
|
|
|
2,159 |
|
Non-cash investing and financing transactions during the period: |
|
||||||
Purchase of businesses - seller financing portion |
|
1,860 |
|
|
|
824 |
|
Notes payable related to purchase of redeemable non-controlling interest, temporary equity |
|
1,017 |
|
|
|
1,074 |
|
Notes receivable related to sale of redeemable non-controlling interest, temporary equity |
|
3,064 |
|
|
|
1,580 |
|
Notes payable related to the purchase of non-controlling interest, permanent equity |
|
200 |
|
|
|
576 |
|
Notes receivable related to the sale of non-controlling interest, permanent equity |
$ |
397 |
|
|
$ |
- |
|
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 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. 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, 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 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 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 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) (UNAUDITED) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
||||||||
(In thousands, except per share data) |
|||||||||||||||
Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Net income attributable to USPH shareholders |
$ |
9,254 |
|
$ |
9,557 |
|
$ |
27,583 |
|
$ |
29,551 |
|
|||
Adjustments: |
|||||||||||||||
Provision for income taxes |
|
3,557 |
|
|
3,215 |
|
|
10,757 |
|
|
10,953 |
|
|||
Depreciation and amortization |
|
3,966 |
|
|
3,652 |
|
|
11,582 |
|
|
10,950 |
|
|||
Interest expense, debt and other |
|
2,101 |
|
|
2,013 |
|
|
7,293 |
|
|
3,540 |
|
|||
Equity-based awards compensation expense |
|
1,859 |
|
|
1,802 |
|
|
5,451 |
|
|
5,462 |
|
|||
Change in revaluation of put-right liability |
|
145 |
|
|
(785 |
) |
|
344 |
|
|
(771 |
) |
|||
Change in fair value of contingent earn-out consideration |
|
(187 |
) |
|
(2,000 |
) |
|
(197 |
) |
|
(2,000 |
) |
|||
Interest income |
|
(1,673 |
) |
|
- |
|
|
(2,191 |
) |
|
- |
|
|||
Other (income) expense |
|
(78 |
) |
|
(65 |
) |
|
(305 |
) |
|
(790 |
) |
|||
Relief Funds |
|
- |
|
|
- |
|
|
(467 |
) |
|
- |
|
|||
Allocation to non-controlling interests |
|
(358 |
) |
|
(402 |
) |
|
(1,119 |
) |
|
(1,098 |
) |
|||
Adjusted EBITDA (a non-GAAP measure) |
$ |
18,586 |
|
$ |
16,987 |
|
$ |
58,731 |
|
$ |
55,797 |
|
|||
Operating Results |
|||||||||||||||
Net income attributable to USPH shareholders |
$ |
9,254 |
|
$ |
9,557 |
|
$ |
27,583 |
|
$ |
29,551 |
|
|||
Adjustments: |
|||||||||||||||
Change in fair value of contingent earn-out consideration |
|
(187 |
) |
|
(2,000 |
) |
|
(197 |
) |
|
(2,000 |
) |
|||
Change in revaluation of put-right liability |
|
145 |
|
|
(785 |
) |
|
344 |
|
|
(771 |
) |
|||
Relief Funds |
|
- |
|
|
- |
|
|
(467 |
) |
|
- |
|
|||
Allocation to non-controlling interest |
|
- |
|
|
33 |
|
|||||||||
Tax effect at statutory rate (federal and state) |
|
11 |
|
|
711 |
|
|
73 |
|
|
708 |
|
|||
Operating Results (a non-GAAP measure) |
$ |
9,223 |
|
$ |
7,483 |
|
$ |
27,369 |
|
$ |
27,488 |
|
|||
Operating Results per share (a non-GAAP measure) |
$ |
0.62 |
|
$ |
0.58 |
|
$ |
1.97 |
|
$ |
2.12 |
|
|||
Earnings per share |
|||||||||||||||
Computation of earnings per share - USPH shareholders: |
|||||||||||||||
Net income attributable to USPH shareholders |
$ |
9,254 |
|
$ |
9,557 |
|
$ |
27,583 |
|
$ |
29,551 |
|
|||
Charges to retained earnings: |
|||||||||||||||
Revaluation of redeemable non-controlling interest |
|
(2,242 |
) |
|
(196 |
) |
|
(4,988 |
) |
|
(193 |
) |
|||
Tax effect at statutory rate (federal and state) |
|
573 |
|
|
50 |
|
|
1,274 |
|
|
49 |
|
|||
$ |
7,585 |
|
$ |
9,411 |
|
$ |
23,869 |
|
$ |
29,407 |
|
||||
Earnings per share (basic and diluted) |
$ |
0.51 |
|
$ |
0.72 |
|
$ |
1.72 |
|
$ |
2.27 |
|
|||
Shares used in computation - basic and diluted |
|
14,987 |
|
|
13,001 |
|
|
13,918 |
|
|
12,979 |
|
|||
* 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 |
672 |
614 |
|
|
1,242,954 |
1,122,070 |
29.7 |
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/20231107405544/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 net patient revenue from physical therapy operations in the 2023 Third Quarter?
What was the percentage increase in adjusted EBITDA for USPH?
What was the change in net income attributable to USPH's shareholders for the 2023 Third Quarter?
