U.S. Physical Therapy Reports Third Quarter 2024 Results
Reports Record Quarterly Patient Volume
FINANCIAL HIGHLIGHTS
-
Adjusted EBITDA (1), a non-Generally Accepted Accounting Principles (“GAAP”) measure, was
$21.1 million for the three months endedSeptember 30, 2024 (“2024 Third Quarter”), an increase of$2.5 million from$18.6 million in the three months endedSeptember 30, 2023 (“2023 Third Quarter”). -
Operating Results (1), a non-GAAP measure, was
$10.4 million in the 2024 Third Quarter, an increase of$1.1 million from$9.2 million in the 2023 Third Quarter. On a per share basis, Operating Results was$0.69 in the 2024 Third Quarter compared to$0.62 in the 2023 Third Quarter. -
Net income attributable to USPH’s shareholders (“USPH Net Income”), a GAAP measure, was
$6.6 million for the 2024 Third Quarter and earnings per share was$0.39 . USPH Net Income and earnings per share included a charge of$2.5 million , net of$0.9 million tax, or$0.16 per share, associated with the closure of 32 clinics during the 2024 Third Quarter. Excluding these clinic closure costs, USPH Net Income was$9.1 million (1) compared to$9.3 million (1) in the comparable prior year period while earnings per share was$0.55 (1) and$0.51 (1) over the same periods, respectively. -
Total revenue from physical therapy operations for the 2024 Third Quarter increased
$12.2 million , or 9.3%, to$142.7 million . -
Net rate per patient visit for the 2024 Third Quarter increased to
$105.65 from$102.37 for the 2023 Third Quarter, an increase of 3.2%, despite the 1.8% Medicare rate reduction which went into effect at the beginning of 2024. 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 patient visits per clinic was 30.1 for the 2024 Third Quarter, a record-high for a third quarter, compared to 29.7 in the comparable prior year quarter. Total patient visits were 1,317,051 in the 2024 Third Quarter, a 6.0% increase from the 2023 Third Quarter.
-
Industrial injury prevention services (“IIP”) revenue was
$25.3 million for the 2024 Third Quarter, an increase of 29.9% as compared to the 2023 Third Quarter. IIP income was$5.6 million in the 2024 Third Quarter, an increase of$1.2 million , or 27.1%, from$4.4 million in the 2023 Third Quarter. -
During the 2024 Third Quarter, the Company added 12 clinics and closed 32 clinics bringing its total owned and/or managed clinic count to 700 as of
September 30, 2024 . Results for the 32 closed clinics are included in the 2024 Third Quarter results as they were mostly closed at the end of the quarter. The closures optimize the Company’s portfolio to focus management’s efforts on growth initiatives and acquisition opportunities. -
On
August 31, 2024 , the Company acquired a 70% equity interest in an eight-clinic practice with the practice owners retaining a 30% equity interest. The business currently generates$5.5 million in annual revenues. -
On
October 31, 2024 , the Company acquired a 50% equity interest in a management services organization that provides management and administrative services to 50 physical therapy clinics with the owners retaining a 50% equity interest. Through its managed therapy providers, the Company currently generates approximately$64.0 million in annual revenue and approximately$12.0 million in annual EBITDA on a consolidated basis. -
The Company’s Board of Directors declared a quarterly dividend of
$0.44 per share payable onDecember 6, 2024 , to shareholders of record onNovember 15, 2024 .
|
__________________________ |
|
|
(1) |
These are Non-GAAP Measures. See pages 12 to 14 of this release for the definition and reconciliation of Adjusted EBITDA, Operating Results and other Non-GAAP measures to the most directly comparable GAAP measure. |
MANAGEMENT’S COMMENTS
2024 THIRD QUARTER VERSUS 2023 THIRD QUARTER
Additional supplemental tables of financial and performance metrics are presented on page 15 of this release.
|
Physical Therapy Operations |
||||||||
|
For the Three Months Ended |
|
Variance |
||||||
|
|
|
|
|
$ |
|
% |
||
|
(In thousands, except percentages) |
||||||||
|
Revenue related to: |
||||||||
|
|
|
|
|
4.6% |
||||
|
Clinic additions (2) |
11,337 |
3,585 |
7,752 |
* |
(9) |
|||
|
Clinics sold or closed (3) |
1,636 |
3,046 |
(1,410) |
* |
(9) |
|||
|
Net Patient Revenue |
139,146 |
127,243 |
11,903 |
9.4% |
||||
|
Other (4) |
3,568 |
3,278 |
290 |
8.8% |
||||
|
Total |
142,714 |
130,521 |
12,193 |
9.3% |
||||
|
Operating costs (4)(7) |
119,207 |
107,016 |
12,191 |
11.4% |
||||
|
Gross profit (7) |
|
|
|
0.0% |
||||
|
Financial and operating metrics (not in thousands): |
||||||||
|
Net rate per patient visit (1) |
|
|
|
3.2% |
||||
|
Patient visits (1) |
1,317,051 |
1,242,954 |
74,097 |
6.0% |
||||
|
Average daily visits per clinic (1) |
30.1 |
29.7 |
0.4 |
1.3% |
||||
|
Gross margin |
16.5% |
18.0% |
||||||
|
Gross margin, excluding closure costs, Non-GAAP (6)(8) |
18.9% |
18.0% |
||||||
|
Salaries and related costs per visit, clinics (5) |
|
|
|
3.5% |
||||
|
Operating costs per visit, clinics (5)(7) |
|
|
|
5.3% |
||||
|
Operating costs per visit, clinics, excluding closure costs (5)(6) |
|
|
|
2.2% |
||||
|
|
||||||||
|
__________________________ |
||||||||
|
(1) See Glossary of Terms - Revenue Metrics for definitions. |
||||||||
|
(2) Includes 33 clinics added during the nine months ended |
||||||||
|
(3) Includes 43 clinics closed during the nine months ended |
||||||||
|
(4) Includes revenues and costs from management contracts. |
||||||||
|
(5) Per visit costs excludes management contract costs. |
||||||||
|
(6) Excludes |
||||||||
|
(7) Includes |
||||||||
|
(8) Refer to reconciliation of non-GAAP measures to most comparable GAAP measures for more information. |
||||||||
|
(9) 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 Third Quarter was
|
__________________________ |
|
|
(1) |
These are Non-GAAP Measures. Refer to reconciliation of non-GAAP measures to most comparable GAAP measures for more information. |
|
Industrial Injury Prevention Services |
|||||||
|
For the Three Months Ended |
|
Variance |
|||||
|
|
|
|
|
$ |
|
% |
|
|
(In thousands, except percentages) |
|||||||
|
Net revenue |
|
|
|
29.9% |
|||
|
Operating costs |
19,695 |
15,062 |
4,633 |
30.8% |
|||
|
Gross profit |
|
|
|
27.1% |
|||
|
Gross margin |
22.2% |
22.7% |
|||||
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 non-cash expense (an increase in the related liabilities) of
The provision for income taxes was
|
__________________________ |
|
|
(1) |
These are Non-GAAP Measures. Refer to reconciliation of non-GAAP measures to most comparable GAAP measures for more information. |
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 (1) was
|
__________________________ |
|
|
(1) |
These are Non-GAAP Measures. See pages 12 to 14 of this release for the definition and reconciliation of Adjusted EBITDA, Operating Results and other Non-GAAP measures to the most directly comparable GAAP measure. |
NINE MONTHS ENDED
Total net revenue for the nine 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 (1) increased
For additional information on 2024 Nine Months results, please refer to the Company’s Quarterly Report on Form 10-Q which is expected to be filed with the
|
__________________________ |
|
|
(1) |
These are Non-GAAP Measures. See pages 12 to 14 of this release for the definition and reconciliation of Adjusted EBITDA, Operating Results and other Non-GAAP measures to the most directly comparable GAAP measure. |
BALANCE SHEET AND CASH FLOW
Total cash and cash equivalents were
RECENT ACQUISITIONS
On
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
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;
- 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;
- 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;
- 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;
- contingent consideration provisions in certain our acquisition agreements, 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 and preserve data privacy;
- 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;
- maintaining clients for which we perform management, IIP 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;
- enforcing our noncompetition covenants with employed therapists;
- 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
|
|
|||||||||||
|
For the Three Months Ended |
|
For the Nine Months Ended |
|||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||
|
|
|
|
|
|
|
||||||
|
Net patient revenue |
$ |
139,146 |
$ |
127,243 |
$ |
410,492 |
$ |
383,104 |
|||
|
Other revenue |
|
28,887 |
|
22,764 |
|
80,406 |
|
66,897 |
|||
|
Net revenue |
|
168,033 |
|
150,007 |
|
490,898 |
|
450,001 |
|||
|
Operating cost: |
|||||||||||
|
Salaries and related costs |
|
99,835 |
|
89,846 |
|
289,900 |
|
262,757 |
|||
|
Rent, supplies, contract labor and other |
|
33,914 |
|
30,678 |
|
100,430 |
|
91,490 |
|||
|
Provision for credit losses |
|
1,721 |
|
1,525 |
|
5,065 |
|
4,600 |
|||
|
Clinic closure costs - lease and other |
|
3,432 |
|
29 |
|
4,109 |
|
161 |
|||
|
Total operating cost |
|
138,902 |
|
122,078 |
|
399,504 |
|
359,008 |
|||
|
Gross profit |
|
29,131 |
|
27,929 |
|
91,394 |
|
90,993 |
|||
|
Corporate office costs |
|
14,385 |
|
12,048 |
|
42,719 |
|
38,052 |
|||
|
Operating income |
|
14,746 |
|
15,881 |
|
48,675 |
|
52,941 |
|||
|
Other income (expense): |
|||||||||||
|
Interest expense, debt and other |
|
(2,018) |
|
(2,101) |
|
(5,966) |
|
(7,293) |
|||
|
Interest income from investments |
|
1,018 |
|
1,673 |
|
3,635 |
|
2,191 |
|||
|
Change in fair value of contingent earn-out consideration |
|
(1,899) |
|
187 |
|
(5,332) |
|
197 |
|||
|
Change in revaluation of put-right liability |
|
168 |
|
(145) |
|
(136) |
|
(344) |
|||
|
Equity in earnings of unconsolidated affiliate |
|
231 |
|
206 |
|
750 |
|
806 |
|||
|
Relief Funds |
|
- |
|
- |
|
- |
|
467 |
|||
|
Other |
|
90 |
|
78 |
|
261 |
|
305 |
|||
|
Total other income (expense) |
|
(2,410) |
|
(102) |
|
(6,788) |
|
(3,671) |
|||
|
Income before taxes |
|
12,336 |
|
15,779 |
|
41,887 |
|
49,270 |
|||
|
Provision for income taxes |
|
2,559 |
|
3,557 |
|
8,781 |
|
10,757 |
|||
|
Net income |
|
9,777 |
|
12,222 |
|
33,106 |
|
38,513 |
|||
|
Less: Net income attributable to non-controlling interest: |
|||||||||||
|
Redeemable non-controlling interest - temporary equity |
|
(1,998) |
|
(1,976) |
|
(7,539) |
|
(7,616) |
|||
|
Non-controlling interest - permanent equity |
|
(1,151) |
|
(992) |
|
(3,387) |
|
(3,314) |
|||
|
|
(3,149) |
|
(2,968) |
|
(10,926) |
|
(10,930) |
||||
|
Net income attributable to USPH shareholders |
$ |
6,628 |
$ |
9,254 |
$ |
22,180 |
$ |
27,583 |
|||
|
Basic and diluted earnings per share attributable to USPH shareholders (1) |
$ |
0.39 |
$ |
0.51 |
$ |
1.32 |
$ |
1.72 |
|||
|
Shares used in computation - basic and diluted |
|
15,077 |
|
14,987 |
|
15,055 |
|
13,918 |
|||
|
Dividends declared per common share |
$ |
0.44 |
$ |
0.43 |
$ |
1.32 |
$ |
1.29 |
|||
|
(1) See page 13 of this press release for the calculation of basic and diluted earnings per share. |
|||||||||||
|
|
|||||||||||
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
|
|||||||||||
|
Net income |
$ |
9,777 |
$ |
12,222 |
$ |
33,106 |
$ |
38,513 |
|||
|
Other comprehensive (loss) gain: |
|||||||||||
|
Unrealized (loss) gain on cash flow hedge |
|
(3,687) |
|
1,276 |
|
(1,937) |
|
2,340 |
|||
|
Tax effect at statutory rate (federal and state) |
|
942 |
|
(326) |
|
495 |
|
(598) |
|||
|
Comprehensive income |
$ |
7,032 |
$ |
13,172 |
$ |
31,664 |
$ |
40,255 |
|||
|
|
|||||||||||
|
Comprehensive income attributable to non-controlling interest |
|
(3,149) |
|
(2,968) |
|
(10,926) |
|
(10,930) |
|||
|
Comprehensive income attributable to USPH shareholders |
$ |
3,883 |
$ |
10,204 |
$ |
20,738 |
$ |
29,325 |
|||
|
|
|||||
|
|
|
|
|||
|
ASSETS |
(unaudited) |
|
|
||
|
Current assets: |
|
|
|
||
|
Cash and cash equivalents |
$ |
116,959 |
$ |
152,825 |
|
|
Patient accounts receivable, less provision for credit losses of |
|
57,022 |
|
51,866 |
|
|
Accounts receivable - other |
|
20,056 |
|
17,854 |
|
|
Other current assets |
|
10,833 |
|
10,830 |
|
|
Total current assets |
|
204,870 |
|
233,375 |
|
|
Fixed assets: |
|||||
|
Furniture and equipment |
|
66,782 |
|
63,982 |
|
|
Leasehold improvements |
|
48,385 |
|
46,941 |
|
|
Fixed assets, gross |
|
115,167 |
|
110,923 |
|
|
Less accumulated depreciation and amortization |
|
(88,602) |
|
(84,821) |
|
|
Fixed assets, net |
|
26,565 |
|
26,102 |
|
|
Operating lease right-of-use assets |
|
103,938 |
|
103,431 |
|
|
Investment in unconsolidated affiliate |
|
12,168 |
|
12,256 |
|
|
|
|
554,642 |
|
509,571 |
|
|
Other identifiable intangible assets, net |
|
124,309 |
|
109,682 |
|
|
Other assets |
|
2,699 |
|
2,821 |
|
|
Total assets |
$ |
1,029,191 |
$ |
997,238 |
|
|
|
|||||
|
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST |
|||||
|
Current liabilities: |
|||||
|
Accounts payable - trade |
$ |
6,361 |
$ |
3,898 |
|
|
Accrued expenses |
|
64,506 |
|
55,344 |
|
|
Current portion of operating lease liabilities |
|
34,828 |
|
35,252 |
|
|
Current portion of term loan and notes payable |
|
9,605 |
|
7,691 |
|
|
Total current liabilities |
|
115,300 |
|
102,185 |
|
|
Notes payable, net of current portion |
|
534 |
|
1,289 |
|
|
Term loan, net of current portion and deferred financing costs |
|
132,382 |
|
137,702 |
|
|
Deferred taxes |
|
24,913 |
|
24,815 |
|
|
Operating lease liabilities, net of current portion |
|
77,001 |
|
76,653 |
|
|
Other long-term liabilities |
|
8,343 |
|
2,356 |
|
|
Total liabilities |
|
358,473 |
|
345,000 |
|
|
|
|||||
|
Redeemable non-controlling interest - temporary equity |
|
186,602 |
|
174,828 |
|
|
|
|||||
|
Commitments and Contingencies |
|||||
|
|
|||||
|
|
|||||
|
Preferred stock, |
|
- |
|
- |
|
|
Common stock, |
|
172 |
|
172 |
|
|
Additional paid-in capital |
|
287,002 |
|
281,096 |
|
|
Accumulated other comprehensive gain |
|
1,339 |
|
2,782 |
|
|
Retained earnings |
|
225,873 |
|
223,772 |
|
|
|
|
(31,628) |
|
(31,628) |
|
|
Total USPH shareholders’ equity |
|
482,758 |
|
476,194 |
|
|
Non-controlling interest - permanent equity |
|
1,358 |
|
1,216 |
|
|
Total USPH shareholders' equity and non-controlling interest - permanent equity |
|
484,116 |
|
477,410 |
|
|
Total liabilities, redeemable non-controlling interest, USPH shareholders' equity and non-controlling interest - permanent equity |
$ |
1,029,191 |
$ |
997,238 |
|
|
|
|||||
|
|
For the Nine Months Ended |
||||
|
|
|
|
|
||
|
OPERATING ACTIVITIES |
|
|
|
||
|
Net income including non-controlling interest |
$ |
33,106 |
|
$ |
38,513 |
|
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: |
|
||||
|
Depreciation and amortization |
|
12,996 |
|
|
11,582 |
|
Provision for credit losses |
|
5,065 |
|
|
4,600 |
|
Equity-based awards compensation expense |
|
5,837 |
|
|
5,451 |
|
Amortization of debt issue costs |
|
317 |
|
|
315 |
|
Change in deferred income taxes |
|
605 |
|
|
5,393 |
|
Change in revaluation of put-right liability |
|
136 |
|
|
344 |
|
Change in fair value of contingent earn-out consideration |
|
5,332 |
|
|
(197) |
|
Equity of earnings in unconsolidated affiliate |
|
(750) |
|
|
(806) |
|
Other |
|
||||
|
Loss (gain) on sale of fixed assets |
|
280 |
|
|
(106) |
|
Others |
|
(169) |
|
|
- |
|
Changes in operating assets and liabilities: |
|
||||
|
Increase in patient accounts receivable |
|
(8,870) |
|
|
(5,415) |
|
Increase in accounts receivable - other |
|
(960) |
|
|
(1,631) |
|
(Increase) decrease in other current and long term assets |
|
(1,808) |
|
|
2,489 |
|
Increase (decrease) in accounts payable and accrued expenses |
|
5,003 |
|
|
(5,609) |
|
(Decrease) increase in other long-term liabilities |
|
(589) |
|
|
220 |
|
Net cash provided by operating activities |
|
55,531 |
|
|
55,143 |
|
|
|
||||
|
INVESTING ACTIVITIES |
|
||||
|
Purchase of fixed assets |
|
(6,697) |
|
|
(7,074) |
|
Purchase of majority interest in businesses, net of cash acquired |
|
(41,196) |
|
|
(22,994) |
|
Purchase of redeemable non-controlling interest, temporary equity |
|
(6,957) |
|
|
(7,804) |
|
Purchase of non controlling interest, permanent equity |
|
(756) |
|
|
(262) |
|
Proceeds on sale of redeemable non-controlling interest, temporary equity |
|
229 |
|
|
815 |
|
Proceeds on sale of non-controlling interest, permanent equity |
|
26 |
|
|
30 |
|
Distributions from unconsolidated affiliate |
|
838 |
|
|
681 |
|
Other |
|
(84) |
|
|
7 |
|
Net cash used in investing activities |
|
(54,597) |
|
|
(36,601) |
|
|
|
||||
|
FINANCING ACTIVITIES |
|
||||
|
Cash dividends paid to shareholders |
|
(19,898) |
|
|
(17,683) |
|
Distributions to non-controlling interest, permanent and temporary equity |
|
(11,399) |
|
|
(11,777) |
|
Principal payments on notes payable |
|
(1,726) |
|
|
(2,874) |
|
Payments on term loan |
|
(3,750) |
|
|
(2,813) |
|
Payments on revolving facility |
|
- |
|
|
(55,000) |
|
Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs |
|
- |
|
|
163,646 |
|
Proceeds from revolving facility |
|
- |
|
|
24,000 |
|
Other |
|
(27) |
|
|
50 |
|
Net cash (used in) provided by financing activities |
|
(36,800) |
|
|
97,549 |
|
|
|
||||
|
Net (decrease) increase in cash and cash equivalents |
|
(35,866) |
|
|
116,091 |
|
Cash and cash equivalents - beginning of period |
|
152,825 |
|
|
31,594 |
|
Cash and cash equivalents - end of period |
$ |
116,959 |
|
$ |
147,685 |
|
|
|
||||
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
||||
|
Cash paid during the period for: |
|
||||
|
Income taxes |
$ |
5,759 |
|
$ |
2,731 |
|
Interest paid |
|
5,630 |
|
|
6,992 |
|
Non-cash investing and financing transactions during the period: |
|
||||
|
Purchase of interest in businesses - seller financing portion |
|
7,395 |
|
|
1,860 |
|
Initial contingent consideration related to purchase of interest of businesses |
|
5,940 |
|
|
200 |
|
Offset of notes receivable associated with purchase of redeemable non-controlling interest |
|
627 |
|
|
- |
|
Notes payable related to purchase of redeemable non-controlling interest, temporary equity |
|
66 |
|
|
1,017 |
|
Notes payable related to purchase of non-controlling interest, permanent equity |
|
- |
|
|
200 |
|
Notes receivable related to sale of redeemable non-controlling interest, temporary equity |
|
2,075 |
|
|
3,064 |
|
Notes receivable related to the sale of non-controlling interest, permanent equity |
$ |
282 |
|
$ |
397 |
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, Operating Results and other non-GAAP measures. Management believes providing Adjusted EBITDA, Operating Results, and other non-GAAP measures 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, Operating Results and other non-GAAP measures, 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, payments received from the federal government under the Corona virus Aid, Relief and Economic Security Act (“Relief Funds”), changes in revaluation of put-right liability, equity-based awards compensation expense, clinic closure costs, business acquisition related costs and 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, business acquisition related costs 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, Operating Results and other non-GAAP measures are not measures of financial performance under GAAP. Adjusted EBITDA, Operating Results and other non-GAAP measures 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.
|
|
|||||||||||
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
(In thousands, except per share data) |
|||||||||||
|
Adjusted EBITDA (a non-GAAP measure) |
|
|
|
|
|
|
|
||||
|
Net income attributable to USPH shareholders |
$ |
6,628 |
$ |
9,254 |
$ |
22,180 |
$ |
27,583 |
|||
|
Adjustments: |
|||||||||||
|
Provision for income taxes |
|
2,559 |
|
3,557 |
|
8,781 |
|
10,757 |
|||
|
Depreciation and amortization |
|
4,387 |
|
3,966 |
|
12,996 |
|
11,582 |
|||
|
Interest expense, debt and other, net |
|
2,018 |
|
2,101 |
|
5,966 |
|
7,293 |
|||
|
Equity-based awards compensation expense |
|
1,921 |
|
1,859 |
|
5,837 |
|
5,451 |
|||
|
Interest income from investments |
|
(1,018) |
|
(1,673) |
|
(3,635) |
|
(2,191) |
|||
|
Change in revaluation of put-right liability |
|
(168) |
|
(187) |
|
136 |
|
(197) |
|||
|
Change in fair value of contingent earn-out consideration |
|
1,899 |
|
145 |
|
5,332 |
|
344 |
|||
|
Relief Funds |
|
- |
|
- |
|
- |
|
(467) |
|||
|
Clinic closure costs (1) |
|
3,432 |
|
29 |
|
4,109 |
|
161 |
|||
|
Business acquisition related costs (2) |
|
314 |
|
- |
|
314 |
|
- |
|||
|
Other income |
|
(90) |
|
(78) |
|
(261) |
|
(305) |
|||
|
Allocation to non-controlling interests |
|
(811) |
|
(361) |
|
(1,789) |
|
(1,138) |
|||
|
$ |
21,071 |
$ |
18,612 |
$ |
59,966 |
$ |
58,873 |
||||
|
Operating Results (a non-GAAP measure) |
|||||||||||
|
Net income attributable to USPH shareholders |
$ |
6,628 |
$ |
9,254 |
$ |
22,180 |
$ |
27,583 |
|||
|
Adjustments: |
|||||||||||
|
Change in fair value of contingent earn-out consideration |
|
1,899 |
|
145 |
|
5,332 |
|
344 |
|||
|
Change in revaluation of put-right liability |
|
(168) |
|
(187) |
|
136 |
|
(197) |
|||
|
Clinic closure costs (1) |
|
3,432 |
|
29 |
|
4,109 |
|
161 |
|||
|
Business acquisition related costs (2) |
|
314 |
|
- |
|
314 |
|
- |
|||
|
Relief Funds |
|
- |
|
- |
|
(467) |
|||||
|
Allocation to non-controlling interests |
|
(429) |
|
(3) |
|
(513) |
|
(19) |
|||
|
Tax effect at statutory rate (federal and state) |
|
(1,290) |
|
4 |
|
(2,396) |
|
46 |
|||
|
$ |
10,386 |
$ |
9,242 |
$ |
29,162 |
$ |
27,451 |
||||
|
Operating Results per share (a non-GAAP measure) |
$ |
0.69 |
$ |
0.62 |
$ |
1.94 |
$ |
1.97 |
|||
|
|
|||||||||||
|
Earnings per share |
|||||||||||
|
Computation of earnings per share - USPH shareholders: |
|||||||||||
|
Net income attributable to USPH shareholders |
$ |
6,628 |
$ |
9,254 |
$ |
22,180 |
$ |
27,583 |
|||
|
Charges to retained earnings: |
|||||||||||
|
Revaluation of redeemable non-controlling interest |
|
(1,097) |
|
(2,242) |
|
(3,158) |
|
(4,988) |
|||
|
Tax effect at statutory rate (federal and state) |
|
280 |
|
573 |
|
807 |
|
1,274 |
|||
|
$ |
5,811 |
$ |
7,585 |
$ |
19,829 |
$ |
23,869 |
||||
|
Earnings per share (basic and diluted) |
$ |
0.39 |
$ |
0.51 |
$ |
1.32 |
$ |
1.72 |
|||
|
Shares used in computation - basic and diluted |
|
15,077 |
|
14,987 |
|
15,055 |
|
13,918 |
|||
|
(1) |
Costs associated with the closure of 32 clinics during the 2024 Third Quarter and 43 clinics during the 2024 Nine Months. Closure costs in the 2023 Third Quarter and 2023 Nine Months were not material. |
|
(2) |
Primarily consists of legal and consulting expenses related to the acquisition of 50% equity interest in a management services organization that provides management and administrative services to 50 physical therapy clinics. |
|
|
|||||||||||||||||
|
Three Months Ended |
|
Three Months Ended |
|||||||||||||||
|
As Reported (GAAP) |
|
Closure Costs (1) |
|
As Adjusted (Non-GAAP) |
|
As Reported (GAAP) |
|
Closure Costs (1) |
|
As Adjusted (Non-GAAP) |
|||||||
|
|
(in thousands, except per share data and percentages) |
||||||||||||||||
|
Operating costs |
$ |
138,902 |
$ |
(3,432) |
$ |
135,470 |
$ |
122,078 |
$ |
(29) |
$ |
122,049 |
|||||
|
Gross profit |
|
29,131 |
|
3,432 |
|
32,563 |
|
27,929 |
|
29 |
|
27,958 |
|||||
|
Gross margin |
|
17.3% |
* |
|
19.4% |
|
18.6% |
* |
|
18.6% |
|||||||
|
Operating income |
|
14,746 |
|
3,432 |
|
18,178 |
|
15,881 |
|
29 |
|
15,910 |
|||||
|
Provision for taxes |
|
2,559 |
|
(958) |
|
1,601 |
|
3,557 |
|
(8) |
|
3,549 |
|||||
|
USPH Net Income |
|
6,628 |
|
2,474 |
|
9,102 |
|
9,254 |
|
21 |
|
9,275 |
|||||
|
Earnings per share |
$ |
0.39 |
$ |
0.16 |
$ |
0.55 |
$ |
0.51 |
$ |
- |
$ |
0.51 |
|||||
|
Segment information - Physical Therapy Operations |
|||||||||||||||||
|
Operating costs |
$ |
119,207 |
$ |
(3,432) |
$ |
115,775 |
$ |
107,016 |
$ |
(29) |
$ |
106,987 |
|||||
|
Gross profit |
$ |
23,507 |
$ |
3,432 |
$ |
26,939 |
$ |
23,505 |
$ |
29 |
$ |
23,534 |
|||||
|
Gross margin |
|
16.5% |
* |
|
18.9% |
|
18.0% |
* |
|
18.0% |
|||||||
|
Nine Months Ended |
Nine Months Ended |
||||||||||||||||
|
As Reported (GAAP) |
Closure Costs (1) |
As Adjusted (Non-GAAP) |
As Reported (GAAP) |
Closure Costs (1) |
As Adjusted (Non-GAAP) |
||||||||||||
|
|
(in thousands, except per share data and percentages) |
||||||||||||||||
|
Operating costs |
$ |
399,504 |
$ |
(4,109) |
$ |
395,395 |
$ |
359,008 |
$ |
(161) |
$ |
358,847 |
|||||
|
Gross profit |
|
91,394 |
|
4,109 |
|
95,503 |
|
90,993 |
|
161 |
|
91,154 |
|||||
|
Gross margin |
|
18.6% |
* |
|
19.5% |
|
20.2% |
* |
|
20.3% |
|||||||
|
Operating income |
|
48,675 |
|
4,109 |
|
52,784 |
|
52,941 |
|
161 |
|
53,102 |
|||||
|
Provision for taxes |
|
8,781 |
|
(1,167) |
|
7,614 |
|
10,757 |
|
(45) |
|
10,712 |
|||||
|
USPH Net Income |
|
22,180 |
|
2,942 |
|
25,122 |
|
27,583 |
|
116 |
|
27,699 |
|||||
|
Earnings per share |
$ |
1.32 |
$ |
0.20 |
$ |
1.52 |
$ |
1.72 |
$ |
0.01 |
$ |
1.73 |
|||||
|
Segment information - Physical Therapy Operations |
|||||||||||||||||
|
Operating costs |
$ |
344,270 |
$ |
(4,109) |
$ |
340,161 |
$ |
313,104 |
$ |
(161) |
$ |
312,943 |
|||||
|
Gross profit |
$ |
76,355 |
$ |
4,109 |
$ |
80,464 |
$ |
78,815 |
$ |
161 |
$ |
78,976 |
|||||
|
Gross margin |
|
18.2% |
* |
|
19.1% |
|
20.1% |
* |
|
20.2% |
|||||||
|
__________________________ |
|
|
(1) |
Costs associated with the closure of 32 and 43 clinics during the 2024 Third Quarter and 2024 Nine Months, respectively. Closure costs for the comparable prior year periods were not material. We believe that presenting this information will allow investors to evaluate the performance of the Company's business more objectively. |
| * Not meaningful | |
|
|
|||||||||||||||
|
Revenue Metrics |
|||||||||||||||
|
Number of C linics (2) |
|
P atient Visit (1) |
|
Patient Visits (1) |
|
Average Daily Visits P er 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 |
661 |
672 |
|
|
1,317,051 |
1,242,954 |
30.1 |
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. |
|
(2) |
The Company also manages clinics owned by third parties through management contracts. In addition to the clinic count shown above, as of |
|
Clinic Count Roll Forward (1) |
|||||||
|
For the Three Months Ended |
|
For the Nine Months Ended |
|||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
Number of clinics, beginning of period |
681 |
656 |
671 |
640 |
|||
|
Additions (2) |
12 |
19 |
33 |
40 |
|||
|
Closed or sold |
(32) |
(3) |
(43) |
(8) |
|||
|
Number of clinics, end of period |
661 |
672 |
661 |
672 |
|||
|
__________________________ |
|
|
(1) |
The Company also manages clinics owned by third parties through management contracts. In addition to the clinic count shown above, as of |
|
(2) |
Includes clinics added through acquisitions. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105887439/en/
email: chendrickson@usph.com
(713) 297-7000
Three
(817) 778-8424
Source:
