U.S. Physical Therapy Reports Second Quarter 2024 Results
Reports All-Time High Quarterly Patient Volume
Management Updates Guidance
FINANCIAL HIGHLIGHTS
-
Adjusted EBITDA (1), a non-Generally Accepted Accounting Principles (“GAAP”) measure, was
$22.1 million for the three months endedJune 30, 2024 (“2024 Second Quarter”) compared to$21.7 million in the second quarter endedJune 30, 2023 (“2023 Second Quarter”). -
Operating Results (1), a non-GAAP measure, was
$11.0 million in the 2024 Second Quarter compared to$10.4 million in the 2023 Second Quarter. On a per share basis, Operating Results was$0.73 in the 2024 Second Quarter compared to$0.76 in the 2023 Second Quarter, with the decrease attributable to the increase in shares outstanding associated with the Company’s secondary offering completed inMay 2023 . -
Net income attributable to USPH’s shareholders (“USPH Net Income”), a GAAP measure, was
$7.5 million for the 2024 Second Quarter. In accordance with GAAP, the revaluation of redeemable non-controlling interest, net of taxes, is not included in net income but is charged directly to retained earnings; however, this change is included in the computation of earnings per share. Earnings per share for the 2024 Second Quarter was$0.47 . -
Total revenue from physical therapy operations for the 2024 Second Quarter increased
$11.2 million , or 8.5%, to$143.5 million . -
Net rate per patient visit for the 2024 Second Quarter increased to
$105.05 from$102.03 for the 2023 Second Quarter, an increase of 3.0%, despite the 1.8% Medicare rate reduction in effect for the 2024 Second Quarter. Excluding Medicare, the Company’s net rate increased 4.5% in the 2024 Second Quarter as compared to the 2023 Second Quarter. The increase in net rate per patient visit reflects the Company’s strategic priority of increasing reimbursement rates through contract negotiations with commercial and other payors as well as growth in workers compensation as a percent of the Company’s overall mix of business. - Average daily visits per clinic was at an all-time high of 30.6 for the 2024 Second Quarter compared to 30.4 in the comparable prior year quarter. Total patient visits were 1,335,335 in the 2024 Second Quarter, a 5.4% increase from the 2023 Second Quarter.
-
Industrial injury prevention (“IIP”) services revenue was
$23.7 million for the 2024 Second Quarter, an increase of 23.2% as compared to the 2023 Second Quarter, with an increase in gross profit of 27.5% over the same periods. -
During the 2024 Second Quarter, the Company added seven new clinics and closed five clinics bringing its total clinic count to 681 as of
June 30, 2024 , as compared to 656 clinics as ofJune 30, 2023 . -
On
April 30, 2024 , one of the Company’s primary IIP businesses,Briotix Health Limited Partnership , acquired 100% of an IIP services business for a purchase price of$24.0 million . The acquired business currently generates approximately$11.0 million in annual revenues. -
The Company’s Board of Directors declared a quarterly dividend of
$0.44 per share payable onSeptember 13, 2024 , to shareholders of record onAugust 23, 2024 . -
Management updated its guidance for Adjusted EBITDA for 2024, returning guidance to its original range of
$80.0 million to$85.0 million . See “Management Updates 2024 Guidance” below for more information.
| ____________________________ | ||
| (1) | See pages 12 and 13 of this release for the definition and reconciliation of non-GAAP measures, Adjusted EBITDA and Operating Results, to the most directly comparable GAAP measure. | |
MANAGEMENT’S COMMENTS
2024 SECOND QUARTER VERSUS 2023 SECOND QUARTER
Additional supplemental tables of financial and performance metrics are presented on page 14 of this release.
|
Physical Therapy Operations |
|||||||||||
|
For the Three Months Ended |
Variance |
||||||||||
|
|
|
$ |
% |
||||||||
|
(In thousands, except percentages) |
|||||||||||
|
Revenue related to: |
|||||||||||
|
|
$ |
129,349 |
$ |
126,057 |
$ |
3,292 |
2.6% |
||||
|
Clinic additions (2) |
|
10,905 |
|
1,910 |
|
8,995 |
* |
(6) |
|||
|
Clinics sold or closed (3) |
|
17 |
|
1,313 |
|
(1,296) |
* |
(6) |
|||
|
Net Patient Revenue |
|
140,271 |
|
129,280 |
|
10,991 |
8.5% |
||||
|
Other (4) |
|
3,215 |
|
2,959 |
|
256 |
8.7% |
||||
|
Total |
|
143,486 |
|
132,239 |
|
11,247 |
8.5% |
||||
|
Operating costs (4) |
|
114,703 |
|
104,017 |
|
10,686 |
10.3% |
||||
|
Gross profit |
$ |
28,783 |
$ |
28,222 |
$ |
561 |
2.0% |
||||
|
Financial and operating metrics (not in thousands): |
|||||||||||
|
Net rate per patient visit (1) |
$ |
105.05 |
$ |
102.03 |
$ |
3.02 |
3.0% |
||||
|
Patient visits (1) |
|
1,335,335 |
|
1,267,140 |
|
68,195 |
5.4% |
||||
|
Average daily visits per clinic (1) |
|
30.6 |
|
30.4 |
|
0.2 |
0.7% |
||||
|
Gross margin |
|
20.1% |
|
21.3% |
|||||||
|
Salaries and related costs per visit, clinics (5) |
$ |
59.66 |
$ |
57.59 |
$ |
2.07 |
3.6% |
||||
|
Operating costs per visit, clinics (5) |
$ |
84.46 |
$ |
80.61 |
$ |
3.85 |
4.8% |
||||
|
|
|||||||||||
|
(1) See Glossary of Terms - Revenue Metrics for definitions. |
|||||||||||
|
(2) Includes 21 clinics added during the six months ended |
|||||||||||
|
(3) Includes 11 clinics closed during the six months ended |
|||||||||||
|
(4) Includes revenues and costs from management contracts. |
|||||||||||
|
(5) Per visit costs excludes management contract costs. |
|||||||||||
|
(6) Not meaningful. |
|||||||||||
Net revenue from physical therapy operations increased
Operating costs from physical therapy operations increased
Gross profit from physical therapy operations in the 2024 Second Quarter increased
|
Industrial Injury Prevention Services |
||||||||||
|
For the Three Months Ended |
Variance |
|||||||||
|
|
|
$ |
% |
|||||||
|
(In thousands, except percentages) |
||||||||||
|
Net revenue |
$ |
23,704 |
$ |
19,246 |
$ |
4,458 |
23.2% |
|||
|
Operating costs |
|
18,625 |
|
15,261 |
|
3,364 |
22.0% |
|||
|
Gross profit |
$ |
5,079 |
$ |
3,985 |
$ |
1,094 |
27.5% |
|||
|
Gross margin |
|
21.4% |
|
20.7% |
||||||
IIP revenues increased
Corporate Office and Other Expenses
Corporate office costs were
Operating income was
Interest expense decreased
Interest income from investing excess cash (primarily proceeds from the secondary offering sale of the Company’s stock completed in
The Company revalued contingent and put-right liabilities related to certain acquisitions and recognized a net expense of
The provision for income taxes was
USPH Net Income and Non-GAAP Measures
Net income attributable to non-controlling interest (temporary and permanent) was
USPH Net Income was
Non-GAAP Adjusted EBITDA was
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.
SIX MONTHS ENDED
Total net revenue for the six months ended
Revenues from physical therapy operations increased
Revenues from IIP increased
Corporate office costs were
Operating income was
Other expenses were
The provision for income tax was
USPH Net Income was
Non-GAAP Adjusted EBITDA decreased
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 2024 Six Months results, please refer to the Company’s Quarterly Report on Form 10-Q which is expected to be filed with the
BALANCE SHEET AND CASH FLOW
Total cash and cash equivalents were
RECENT ACQUISITIONS
On
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 Company’s Board of Directors declared a quarterly dividend of
MANAGEMENT UPDATES 2024 EARNINGS GUIDANCE
Management returned its guidance for Adjusted EBITDA for 2024 to its original range of
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 ourcurrent 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, or may interfere with our ability to file and process claims for payment which could interfere with our collection of revenues from third party payors;
- enforcing our noncompetition covenants;
- 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
GLOSSARY OF TERMS – REVENUE METRICS
Mature clinics
are clinics opened or acquired prior to
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
Founded in 1990,
More information about
|
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|||||||||||
|
For the Three Months Ended |
|
For the Six Months Ended |
|||||||||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
||||||
|
Net patient revenue |
$ |
140,271 |
$ |
129,280 |
$ |
271,346 |
$ |
255,861 |
|||
|
Other revenue |
|
26,919 |
|
22,205 |
|
51,519 |
|
44,133 |
|||
|
Net revenue |
|
167,190 |
|
151,485 |
|
322,865 |
|
299,994 |
|||
|
Operating cost: |
|||||||||||
|
Salaries and related costs |
|
96,334 |
|
86,871 |
|
190,065 |
|
172,911 |
|||
|
Rent, supplies, contract labor and other |
|
35,277 |
|
30,844 |
|
67,193 |
|
60,944 |
|||
|
Provision for credit losses |
|
1,717 |
|
1,563 |
|
3,344 |
|
3,075 |
|||
|
Total operating cost |
|
133,328 |
|
119,278 |
|
260,602 |
|
236,930 |
|||
|
Gross profit |
|
33,862 |
|
32,207 |
|
62,263 |
|
63,064 |
|||
|
Corporate office costs |
|
14,249 |
|
12,145 |
|
28,334 |
|
26,004 |
|||
|
Operating income |
|
19,613 |
|
20,062 |
|
33,929 |
|
37,060 |
|||
|
Other income (expense): |
|||||||||||
|
Interest expense, debt and other |
|
(1,980) |
|
(2,633) |
|
(3,948) |
|
(5,193) |
|||
|
Interest income from investments |
|
1,074 |
|
517 |
|
2,617 |
|
517 |
|||
|
Change in fair value of contingent earn-out consideration |
|
(4,046) |
|
708 |
|
(3,434) |
|
10 |
|||
|
Change in revaluation of put-right liability |
|
(223) |
|
(50) |
|
(303) |
|
(199) |
|||
|
Equity in earnings of unconsolidated affiliate |
|
248 |
|
326 |
|
519 |
|
600 |
|||
|
Relief Funds |
|
- |
|
- |
|
- |
|
467 |
|||
|
Other |
|
109 |
|
165 |
|
171 |
|
229 |
|||
|
Total other income (expense) |
|
(4,818) |
|
(967) |
|
(4,378) |
|
(3,569) |
|||
|
Income before taxes |
|
14,795 |
|
19,095 |
|
29,551 |
|
33,491 |
|||
|
Provision for income taxes |
|
3,083 |
|
4,231 |
|
6,222 |
|
7,200 |
|||
|
Net income |
|
11,712 |
|
14,864 |
|
23,329 |
|
26,291 |
|||
|
Less: Net income attributable to non-controlling interest: |
|||||||||||
|
Redeemable non-controlling interest - temporary equity |
|
(3,314) |
|
(2,920) |
|
(5,541) |
|
(5,640) |
|||
|
Non-controlling interest - permanent equity |
|
(892) |
|
(1,025) |
|
(2,236) |
|
(2,322) |
|||
|
|
(4,206) |
|
(3,945) |
|
(7,777) |
|
(7,962) |
||||
|
Net income attributable to USPH shareholders |
$ |
7,506 |
$ |
10,919 |
$ |
15,552 |
$ |
18,329 |
|||
|
Basic and diluted earnings per share attributable to USPH shareholders (1) |
$ |
0.47 |
$ |
0.64 |
$ |
0.93 |
$ |
1.22 |
|||
|
Shares used in computation - basic and diluted |
|
15,072 |
|
13,720 |
|
15,044 |
|
13,375 |
|||
|
Dividends declared per common share |
$ |
0.44 |
$ |
0.43 |
$ |
0.88 |
$ |
0.86 |
|||
|
(1) See page 13 of this press release for the calculation of basic and diluted earnings per share. |
|||||||||||
|
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (IN THOUSANDS) |
|||||||||||
|
|
For the Three Months Ended |
For the Six Months Ended |
|||||||||
|
|
|
|
|
|
|||||||
|
|
|||||||||||
|
Net income |
$ |
11,712 |
$ |
14,864 |
$ |
23,329 |
$ |
26,291 |
|||
|
Other comprehensive (loss) gain: |
|||||||||||
|
Unrealized (loss) gain on cash flow hedge |
|
(31) |
|
2,881 |
|
1,750 |
|
1,064 |
|||
|
Tax effect at statutory rate (federal and state) |
|
8 |
|
(736) |
|
(447) |
|
(272) |
|||
|
Comprehensive income |
$ |
11,689 |
$ |
17,009 |
$ |
24,632 |
$ |
27,083 |
|||
|
|
|||||||||||
|
Comprehensive income attributable to non-controlling interest |
|
(4,206) |
|
(3,945) |
|
(7,777) |
|
(7,962) |
|||
|
Comprehensive income attributable to USPH shareholders |
$ |
7,483 |
$ |
13,064 |
$ |
16,855 |
$ |
19,121 |
|||
|
|
|
|
|
|
|
|
|
||||
|
CONSOLIDATED BALANCE SHEET (IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS) |
|||||
|
2024 |
|
|
|||
|
ASSETS |
(unaudited) |
|
|
||
|
Current assets: |
|
|
|
||
|
Cash and cash equivalents |
$ |
112,911 |
$ |
152,825 |
|
|
Patient accounts receivable, less provision for credit losses of |
|
54,659 |
|
51,866 |
|
|
Accounts receivable - other |
|
21,669 |
|
17,854 |
|
|
Other current assets |
|
12,438 |
|
10,830 |
|
|
Total current assets |
|
201,677 |
|
233,375 |
|
|
Fixed assets: |
|||||
|
Furniture and equipment |
|
65,775 |
|
63,982 |
|
|
Leasehold improvements |
|
48,730 |
|
46,941 |
|
|
Fixed assets, gross |
|
114,505 |
|
110,923 |
|
|
Less accumulated depreciation and amortization |
|
(88,277) |
|
(84,821) |
|
|
Fixed assets, net |
|
26,228 |
|
26,102 |
|
|
Operating lease right-of-use assets |
|
105,484 |
|
103,431 |
|
|
Investment in unconsolidated affiliate |
|
12,243 |
|
12,256 |
|
|
|
|
548,970 |
|
509,571 |
|
|
Other identifiable intangible assets, net |
|
123,903 |
|
109,682 |
|
|
Other assets |
|
4,629 |
|
2,821 |
|
|
Total assets |
$ |
1,023,134 |
$ |
997,238 |
|
|
|
|||||
|
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST |
|||||
|
Current liabilities: |
|||||
|
Accounts payable - trade |
$ |
4,100 |
$ |
3,898 |
|
|
Accrued expenses |
|
58,056 |
|
55,344 |
|
|
Current portion of operating lease liabilities |
|
35,243 |
|
35,252 |
|
|
Current portion of term loan and notes payable |
|
9,700 |
|
7,691 |
|
|
Total current liabilities |
|
107,099 |
|
102,185 |
|
|
Notes payable, net of current portion |
|
1,511 |
|
1,289 |
|
|
Term loan, net of current portion and deferred financing costs |
|
134,188 |
|
137,702 |
|
|
Deferred taxes |
|
26,531 |
|
24,815 |
|
|
Operating lease liabilities, net of current portion |
|
78,329 |
|
76,653 |
|
|
Other long-term liabilities |
|
5,507 |
|
2,356 |
|
|
Total liabilities |
|
353,165 |
|
345,000 |
|
|
|
|||||
|
Redeemable non-controlling interest - temporary equity |
|
184,354 |
|
174,828 |
|
|
|
|||||
|
Commitments and Contingencies |
|||||
|
|
|||||
|
|
|||||
|
Preferred stock, |
|
- |
|
- |
|
|
Common stock, |
|||||
|
17,291,366 and 17,202,291 shares issued, respectively |
|
172 |
|
172 |
|
|
Additional paid-in capital |
|
285,462 |
|
281,096 |
|
|
Accumulated other comprehensive gain |
|
4,084 |
|
2,782 |
|
|
Retained earnings |
|
226,482 |
|
223,772 |
|
|
|
|
(31,628) |
|
(31,628) |
|
|
Total USPH shareholders’ equity |
|
484,572 |
|
476,194 |
|
|
Non-controlling interest - permanent equity |
|
1,043 |
|
1,216 |
|
|
Total USPH shareholders' equity and non-controlling interest - permanent equity |
|
485,615 |
|
477,410 |
|
|
Total liabilities, redeemable non-controlling interest, |
|||||
|
USPH shareholders' equity and non-controlling interest - permanent equity |
$ |
1,023,134 |
$ |
997,238 |
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) |
|||||
|
|
For the Six Months Ended |
||||
|
|
|
|
|
||
|
OPERATING ACTIVITIES |
|
|
|
||
|
Net income including non-controlling interest |
$ |
23,329 |
|
$ |
26,291 |
|
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: |
|
||||
|
Depreciation and amortization |
|
8,609 |
|
|
7,615 |
|
Provision for credit losses |
|
3,344 |
|
|
3,075 |
|
Equity-based awards compensation expense |
|
3,916 |
|
|
3,592 |
|
Amortization of debt issue costs |
|
210 |
|
|
210 |
|
Change in deferred income taxes |
|
770 |
|
|
1,799 |
|
Change in revaluation of put-right liability |
|
303 |
|
|
199 |
|
Change in fair value of contingent earn-out consideration |
|
3,434 |
|
|
(10) |
|
Equity of earnings in unconsolidated affiliate |
|
(519) |
|
|
(600) |
|
Loss on sale of fixed assets |
|
51 |
|
|
63 |
|
Changes in operating assets and liabilities: |
|
||||
|
Increase in patient accounts receivable |
|
(5,110) |
|
|
(5,341) |
|
Increase in accounts receivable - other |
|
(2,351) |
|
|
(85) |
|
(Increase) decrease in other current and long term assets |
|
(1,642) |
|
|
593 |
|
(Decrease) increase in accounts payable and accrued expenses |
|
(1,481) |
|
|
1,125 |
|
Increase in other long-term liabilities |
|
548 |
|
|
253 |
|
Net cash provided by operating activities |
|
33,411 |
|
|
38,779 |
|
|
|
||||
|
INVESTING ACTIVITIES |
|
||||
|
Purchase of fixed assets |
|
(4,174) |
|
|
(4,523) |
|
Purchase of majority interest in businesses, net of cash acquired |
|
(38,695) |
|
|
(8,040) |
|
Purchase of redeemable non-controlling interest, temporary equity |
|
(6,230) |
|
|
(7,804) |
|
Purchase of non controlling interest, permanent equity |
|
(527) |
|
|
(39) |
|
Proceeds on sale of non-controlling interest, permanent equity |
|
26 |
|
|
- |
|
Proceeds on sale of partnership interest - redeemable non-controlling interest |
|
69 |
|
|
237 |
|
Distributions from unconsolidated affiliate |
|
532 |
|
|
502 |
|
Proceeds on sale of fixed assets |
|
- |
|
|
7 |
|
Other |
|
244 |
|
|
- |
|
Net cash used in investing activities |
|
(48,755) |
|
|
(19,660) |
|
|
|
||||
|
FINANCING ACTIVITIES |
|
||||
|
Proceeds from revolving facility |
|
- |
|
|
24,000 |
|
Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs |
|
- |
|
|
163,655 |
|
Distributions to non-controlling interest, permanent and temporary equity |
|
(8,318) |
|
|
(8,431) |
|
Cash dividends paid to shareholders |
|
(13,264) |
|
|
(11,238) |
|
Principal payments on notes payable |
|
(1,113) |
|
|
(1,086) |
|
Payments on term loan |
|
(1,875) |
|
|
(1,875) |
|
Payments on revolving facility |
|
- |
|
|
(55,000) |
|
Net cash (used in) provided by financing activities |
|
(24,570) |
|
|
110,025 |
|
|
|
||||
|
Net (decrease) increase in cash and cash equivalents |
|
(39,914) |
|
|
129,144 |
|
Cash and cash equivalents - beginning of period |
|
152,825 |
|
|
31,594 |
|
Cash and cash equivalents - end of period |
$ |
112,911 |
|
$ |
160,738 |
|
|
|
||||
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
||||
|
Cash paid during the period for: |
|
||||
|
Income taxes |
$ |
4,932 |
|
$ |
1,241 |
|
Interest paid |
|
3,708 |
|
|
4,011 |
|
Non-cash investing and financing transactions during the period: |
|
||||
|
Purchase of interest in businesses - seller financing portion |
|
955 |
|
|
360 |
|
Deferred payments related to purchase of interest in business |
|
- |
|
|
180 |
|
Fair market value of initial contingent consideration related to purchase of interest of businesses |
|
2,800 |
|
|
200 |
|
Offset of notes receivable associated with purchase of redeemable non-controlling interest |
|
75 |
|
|
- |
|
Notes payable related to purchase of non-controlling interest, temporary equity |
|
22 |
|
|
- |
|
Notes payable related to purchase of redeemable non-controlling interest, temporary equity |
|
- |
|
|
621 |
|
Notes receivable related to sale of redeemable non-controlling interest, temporary equity |
|
402 |
|
|
2,687 |
|
Notes receivable related to the sale of non-controlling interest, permanent equity |
|
243 |
|
|
- |
|
Dividends paid to USPH shareholders |
$ |
13,264 |
|
$ |
11,238 |
ADJUSTED EBITDA AND OPERATING RESULTS
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 as well as for comparing with other similar businesses since most do not have redeemable instruments and therefore have different equity structures. 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.
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, clinic closure costs, other income 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 a put-right liability, Relief Funds, clinic closure costs, 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 excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact.
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.
|
ADJUSTED EBITDA, OPERATING RESULTS AND EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA) |
|||||||||||
|
|
For the Three Months Ended |
|
For the Six Months Ended |
||||||||
|
|
|
|
|
|
|
|
|
||||
|
(In thousands, except per share data) |
|||||||||||
|
Adjusted EBITDA (a non-GAAP measure) |
|
|
|
|
|
|
|
||||
|
Net income attributable to USPH shareholders |
$ |
7,506 |
$ |
10,919 |
$ |
15,552 |
$ |
18,329 |
|||
|
Adjustments: |
|||||||||||
|
Provision for income taxes |
|
3,083 |
|
4,231 |
|
6,222 |
|
7,200 |
|||
|
Depreciation and amortization |
|
4,514 |
|
3,827 |
|
8,609 |
|
7,615 |
|||
|
Interest expense, debt and other, net |
|
1,980 |
|
2,633 |
|
3,948 |
|
5,193 |
|||
|
Equity-based awards compensation expense |
|
1,919 |
|
1,786 |
|
3,916 |
|
3,592 |
|||
|
Interest income from investments |
|
(1,074) |
|
(517) |
|
(2,617) |
|
(517) |
|||
|
Change in revaluation of put-right liability |
|
223 |
|
50 |
|
303 |
|
199 |
|||
|
Change in fair value of contingent earn-out consideration |
|
4,046 |
|
(708) |
|
3,434 |
|
(10) |
|||
|
Relief Funds |
|
- |
|
- |
|
- |
|
(467) |
|||
|
Closure costs |
|
551 |
|
- |
|
677 |
|
- |
|||
|
Other income |
|
(109) |
|
(165) |
|
(171) |
|
(229) |
|||
|
Allocation to non-controlling interests |
|
(515) |
|
(389) |
|
(978) |
|
(761) |
|||
|
$ |
22,124 |
$ |
21,667 |
$ |
38,895 |
$ |
40,144 |
||||
|
Operating Results (a non-GAAP measure) |
|||||||||||
|
Net income attributable to USPH shareholders |
$ |
7,506 |
$ |
10,919 |
$ |
15,552 |
$ |
18,329 |
|||
|
Adjustments: |
|||||||||||
|
Change in fair value of contingent earn-out consideration |
|
4,046 |
|
(708) |
|
3,434 |
|
(10) |
|||
|
Change in revaluation of put-right liability |
|
223 |
|
50 |
|
303 |
|
199 |
|||
|
Closure costs |
|
551 |
|
- |
|
677 |
|
- |
|||
|
Relief Funds |
|
- |
|
- |
|
- |
|
(467) |
|||
|
Allocation to non-controlling interests |
|
(68) |
|
- |
|
(84) |
|
33 |
|||
|
Tax effect at statutory rate (federal and state) |
|
(1,214) |
|
168 |
|
(1,106) |
|
63 |
|||
|
$ |
11,044 |
$ |
10,429 |
$ |
18,776 |
$ |
18,147 |
||||
|
Operating Results per share (a non-GAAP measure) |
$ |
0.73 |
$ |
0.76 |
$ |
1.25 |
$ |
1.36 |
|||
|
Earnings per share |
|||||||||||
|
Computation of earnings per share - USPH shareholders: |
|||||||||||
|
Net income attributable to USPH shareholders |
$ |
7,506 |
$ |
10,919 |
$ |
15,552 |
$ |
18,329 |
|||
|
Charges to retained earnings: |
|||||||||||
|
Revaluation of redeemable non-controlling interest |
|
(622) |
|
(2,865) |
|
(2,061) |
|
(2,746) |
|||
|
Tax effect at statutory rate (federal and state) |
|
159 |
|
732 |
|
527 |
|
700 |
|||
|
$ |
7,043 |
$ |
8,786 |
$ |
14,018 |
$ |
16,283 |
||||
|
Earnings per share (basic and diluted) |
$ |
0.47 |
$ |
0.64 |
$ |
0.93 |
$ |
1.22 |
|||
|
Shares used in computation - basic and diluted |
|
15,072 |
|
13,720 |
|
15,044 |
|
13,375 |
|||
SUPPLEMENTAL FINANCIAL AND PERFORMANCE METRICS
|
Revenue Metrics |
|||||||||||||||
|
Number of Clinics |
Patient Visit (1) |
Patient Visits (1) |
Average Daily Visits Per Clinic (1) |
||||||||||||
|
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
||||||||
|
First Quarter |
679 |
647 |
|
|
|
|
1,268,002 |
|
1,227,490 |
29.5 |
29.8 |
||||
|
Second quarter |
681 |
656 |
|
|
|
|
1,335,335 |
|
1,267,140 |
30.6 |
30.4 |
||||
|
Third quarter |
672 |
|
|
|
|
|
|
1,242,954 |
|
29.7 |
|||||
|
Fourth quarter |
671 |
|
|
|
|
|
|
1,267,842 |
|
29.9 |
|||||
|
Year |
|
|
671 |
|
|
|
|
|
|
|
5,005,426 |
|
|
|
30.0 |
|
(1) See definition of the metrics above in the Glossary of Terms – Revenue Metrics on page 7. |
|||||||||||||||
|
Clinic Count Roll Forward |
|||||||
|
For the Three Months Ended |
For the Six Months Ended |
||||||
|
|
|
|
|
||||
|
Number of clinics, beginning of period |
679 |
647 |
671 |
640 |
|||
|
Additions (1) |
7 |
13 |
21 |
21 |
|||
|
Closed or sold |
(5) |
(4) |
(11) |
(5) |
|||
|
Number of clinics, end of period |
681 |
656 |
681 |
656 |
|||
| (1) Includes clinics added through acquisitions. | |||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240813703313/en/
email: chendrickson@usph.com
(713) 297-7000
Three
(817) 778-8424
Source:
