U.S. Physical Therapy, Inc. ("USPH" or the “Company”) (NYSE: USPH), a national operator of outpatient physical therapy clinics and provider of industrial injury prevention (“IIP”) services, today reported results for the second quarter and six months ended June 30, 2022 (“2022 Second Quarter”).
QUARTER HIGHLIGHTS
Management’s Comments
Chris Reading, Chief Executive Officer, said, “Despite an increasingly difficult operating environment, our team produced the second highest quarterly results in our Company’s history. In the second quarter, we began to feel the impact of rising costs and while we are working hard and making some adjustments to alleviate some of those, we believe our costs will be higher than originally expected for the remainder of the year which has been reflected in our updated guidance numbers. Further, we took the important and necessary step to expand our credit facility which gives us more dry powder to use for acquisitions and other investments. On that front, we have been very active and expect to close a number of deals before year’s end which should be very positive for 2023 and forward.”
Carey Hendrickson, Chief Financial Officer, said, “We are very pleased to have completed the financing transaction in the second quarter, which was important to provide us the capital we need for growth. The related interest rate swap, which fixed the interest rate on $150 million of our debt for five years, provides us certainty in the rising interest rate environment at a rate that we believe is favorable over the five-year period.”
Second Quarter 2022 Compared to Second Quarter 2021
|
|
Three Months Ended |
|
|||||
June 30, |
June 30, |
|||||||
|
|
2022 |
|
|
2021 |
|
||
Revenue related to Mature Clinics |
|
$ |
108,582 |
|
|
$ |
110,105 |
|
Revenue related to 2022 Clinic Additions |
|
|
3,117 |
|
|
|
- |
|
Revenue related to 2021 Clinic Additions |
|
|
6,191 |
|
|
|
2,414 |
|
Revenue from clinics sold or closed in 2022 |
|
|
306 |
|
|
|
592 |
|
Revenue from clinics sold or closed in 2021 |
|
|
- |
|
|
|
127 |
|
Net patient revenue from physical therapy operations |
|
|
118,196 |
|
|
|
113,238 |
|
Other revenue |
|
|
898 |
|
|
|
918 |
|
Revenue from physical therapy operations |
|
|
119,094 |
|
|
|
114,156 |
|
Revenue from management contracts |
|
|
2,125 |
|
|
|
2,739 |
|
Revenue from industrial injury prevention services |
|
|
19,437 |
|
|
|
10,033 |
|
Total Revenue |
|
$ |
140,656 |
|
|
$ |
126,928 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|||||
|
|
June 30,
|
|
|
June 30,
|
|
||
Operating cost related to Mature Clinics |
|
$ |
84,216 |
|
|
$ |
80,205 |
|
Operating cost related to 2022 Clinic Additions |
|
|
2,692 |
|
|
|
- |
|
Operating cost related to 2021 Clinic Additions |
|
|
5,666 |
|
|
|
2,063 |
|
Operating cost related to clinics sold or closed in 2022 |
|
|
324 |
|
|
|
555 |
|
Operating cost related to clinics sold or closed in 2021 |
|
|
- |
|
|
|
107 |
|
Operating cost related to physical therapy operations |
|
|
92,898 |
|
|
|
82,930 |
|
Operating cost related to management contracts |
|
|
1,622 |
|
|
|
2,203 |
|
Operating cost related to industrial injury prevention services |
|
|
15,315 |
|
|
|
7,491 |
|
Total operating cost |
|
$ |
109,835 |
|
|
$ |
92,624 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|||||
|
|
June 30,
|
|
|
June 30,
|
|
||
|
|
|
|
|
|
|
||
Physical therapy operations |
|
$ |
26,196 |
|
|
$ |
31,226 |
|
Management contracts |
|
|
503 |
|
|
|
536 |
|
Industrial injury prevention services |
|
|
4,122 |
|
|
|
2,542 |
|
Gross profit |
|
$ |
30,821 |
|
|
$ |
34,304 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|||||
|
|
June 30,
|
|
|
June 30,
|
|
||
Income before taxes |
|
$ |
19,495 |
|
|
$ |
22,039 |
|
Less: net income attributable to non-controlling interest: |
|
|
|
|
|
|
|
|
Redeemable non-controlling interest - temporary equity |
|
|
(2,626 |
) |
|
|
(3,611 |
) |
Non-controlling interest - permanent equity |
|
|
(1,435 |
) |
|
|
(1,425 |
) |
|
|
$ |
(4,061 |
) |
|
$ |
(5,036 |
) |
Income before taxes less net income attributable to non-controlling interest |
|
$ |
15,434 |
|
|
$ |
17,003 |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
$ |
4,239 |
|
|
$ |
4,567 |
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
27.5 |
% |
|
|
26.9 |
% |
|
|
|
|
|
|
|
|
|
2022 Six Months Compared to 2021 Six Months
|
|
For the Six Months Ended |
|
|||||
|
|
June 30,
|
|
|
June 30,
|
|
||
Revenue related to Mature Clinics |
|
$ |
211,215 |
|
|
$ |
208,531 |
|
Revenue related to 2022 Clinic Additions |
|
|
3,312 |
|
|
|
- |
|
Revenue related to 2021 Clinic Additions |
|
|
12,346 |
|
|
|
2,465 |
|
Revenue from clinics sold or closed in 2022 |
|
|
861 |
|
|
|
1,104 |
|
Revenue from clinics sold or closed in 2021 |
|
|
- |
|
|
|
392 |
|
Net patient revenue from physical therapy operations |
|
|
227,734 |
|
|
|
212,492 |
|
Other revenue |
|
|
1,770 |
|
|
|
1,464 |
|
Revenue from physical therapy operations |
|
|
229,504 |
|
|
|
213,956 |
|
Revenue - Management contracts |
|
|
4,351 |
|
|
|
5,297 |
|
Revenue - Industrial injury prevention services |
|
|
38,505 |
|
|
|
20,043 |
|
Total Revenue |
|
$ |
272,360 |
|
|
$ |
239,296 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended |
|
|||||
|
|
June 30,
|
|
|
June 30,
|
|
||
Operating cost related to Mature Clinics |
|
$ |
166,468 |
|
|
$ |
156,321 |
|
Operating cost related to 2022 Clinic Additions |
|
|
3,083 |
|
|
|
- |
|
Operating cost related to 2021 Clinic Additions |
|
|
11,466 |
|
|
|
2,128 |
|
Operating cost related to clinics sold or closed in 2022 |
|
|
251 |
|
|
|
979 |
|
Operating cost related to clinics sold or closed in 2021 |
|
|
- |
|
|
|
442 |
|
Operating cost - Physical therapy operations |
|
|
181,268 |
|
|
|
159,870 |
|
Operating cost - Management contracts |
|
|
3,453 |
|
|
|
4,448 |
|
Operating cost - Industrial injury prevention services |
|
|
30,230 |
|
|
|
14,778 |
|
Total operating cost |
|
$ |
214,951 |
|
|
$ |
179,096 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended |
|
|||||
|
|
June 30,
|
|
|
June 30,
|
|
||
Physical therapy operations |
|
$ |
48,236 |
|
|
$ |
54,086 |
|
Management contracts |
|
|
898 |
|
|
|
849 |
|
Industrial injury prevention services |
|
|
8,275 |
|
|
|
5,265 |
|
Gross profit |
|
$ |
57,409 |
|
|
$ |
60,200 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended |
|
|||||
|
|
June 30,
|
|
|
June 30,
|
|
||
Income before taxes |
|
$ |
34,975 |
|
|
$ |
36,869 |
|
Less: net income attributable to non-controlling interest: |
|
|
|
|
|
|
|
|
Redeemable non-controlling interest - temporary equity |
|
|
(5,183 |
) |
|
|
(6,064 |
) |
Non-controlling interest - permanent equity |
|
|
(2,061 |
) |
|
|
(2,685 |
) |
|
|
$ |
(7,244 |
) |
|
$ |
(8,749 |
) |
Income before taxes less net income attributable to non-controlling interest |
|
$ |
27,731 |
|
|
$ |
28,120 |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
$ |
7,737 |
|
|
$ |
7,511 |
|
Percentage |
|
|
27.9 |
% |
|
|
26.7 |
% |
|
|
|
|
|
|
|
|
|
Other Comprehensive Income
Concurrently with the amended credit facility, the Company entered into an interest rate swap agreement in May 2022, which has a $150 million notional value, a maturity date of June 30, 2027 and was effective on June 30, 2022. Beginning in July 2022, the Company pays a fixed rate of interest of 2.815% based on 1-month SOFR. The total interest rate in any period will also include an applicable margin based on the Company’s consolidated leverage ratio. Currently, the Company’s interest rate including the applicable margin is 4.665%. Unrealized gains and losses related to the fair value of the interest rate swap are recorded to accumulated other comprehensive income (loss), net of tax. The fair value of the interest rate swap at June 30, 2022, was $0.5 million, which has been included within current liabilities in the accompanying Consolidated Balance Sheet. The impact of the interest rate swap on the accompanying Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 was an unrealized loss of $0.4 million, net of tax.
Quarterly Dividend
The Board of Directors declared a quarterly dividend of $0.41 per share payable on September 16, 2022, to shareholders of record on August 18, 2022.
Management Revises 2022 Guidance
Management currently expects the Company’s Adjusted EBITDA for the full year of 2022 to be in the range of $73.5 million to $75.4 million and for its Operating Results to be in the range of $34.4 million to $35.8 million, or $2.65 to $2.75 per share. The change in guidance is primarily attributable to two factors:
Please note that the earnings guidance represents projected results from existing operations and excludes future acquisitions. The annual guidance figures will not be updated unless there is a material development that causes management to believe that results will be significantly outside the given ranges.
Second Quarter 2022 Conference Call
U.S. Physical Therapy's management will host a conference call at 10:30 a.m. Eastern Time, 9:30 a.m. Central Time, on August 4, 2022, to discuss results for the Company's 2022 Second Quarter and Six months ended June 30, 2022. Interested parties may participate in the call by dialing 1-800-459-5346 or 203-518-9544 and entering reservation number USPHQ22022 approximately 10 minutes before the call is scheduled to begin. To listen to the live call via webcast, go to the Company's website at www.usph.com at least 15 minutes early to register, download and install any necessary audio software. The conference call will be archived and can be accessed until November 5, 2022, at U.S. Physical Therapy’s website.
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:
In addition to the above, see Risk Factors in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 and the additional risk factor below:
Our debt and financial obligations could adversely affect our financial condition, our ability to obtain future financing, and our ability to operate our business.
We have outstanding debt obligations that could adversely affect our financial condition and limit our ability to successfully implement our business strategy. Furthermore, from time to time, we may need additional financing to support our business and pursue our business strategy, including strategic acquisitions. Our ability to obtain additional financing, if and when required, will depend on investor demand, our operating performance, the condition of the capital markets, and other factors. We cannot assure that additional financing will be available to us on favorable terms when required, or at all.
Our loan agreements contain certain restrictions and requirements that among other things:
Our ability to meet our debt service obligations will depend on our future performance, which will be affected by the other risk factors described in our Annual Report on Form 10-K filed on March 1, 2022. If we do not generate enough cash flow to pay our debt service obligations, we may be required to refinance all or part of our existing debt, sell our assets, borrow more money or raise equity. There is no guarantee that we will be able to take any of these actions on a timely basis, on terms satisfactory to us, or at all.
If we fail to satisfy our debt service obligations or the other restrictions and requirements in our loan agreements, we could be in default. Unless cured or waived, a default would permit lenders to accelerate the maturity of the debt under the credit agreement and to foreclose upon the collateral securing the debt.
Our outstanding loans bear interest at variable rates. In response to the variable rates, we entered into entered into an interest rate swap agreement. See above for further discussion of this swap agreement.
Many factors are beyond our control. Given these uncertainties, you should not place undue reliance on our forward-looking statements. Please see the other sections of this report and our other periodic reports filed with the Securities and Exchange Commission (the “SEC”) for more information on these factors. 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, regardless of the reason the statement may no longer be accurate.
About U.S. Physical Therapy, Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 608 outpatient physical therapy clinics in 39 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 33 physical therapy facilities for unaffiliated third parties, including hospitals and physician groups. The Company also has an industrial injury prevention services business which provides onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments.
More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net patient revenue |
|
$ |
118,196 |
|
|
$ |
113,238 |
|
|
$ |
227,734 |
|
|
$ |
212,492 |
|
Other revenue |
|
|
22,460 |
|
|
|
13,690 |
|
|
|
44,626 |
|
|
|
26,804 |
|
Net revenue |
|
|
140,656 |
|
|
|
126,928 |
|
|
|
272,360 |
|
|
|
239,296 |
|
Operating cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and related costs |
|
|
79,939 |
|
|
|
68,866 |
|
|
|
155,088 |
|
|
|
132,681 |
|
Rent, supplies, contract labor and other |
|
|
28,345 |
|
|
|
22,394 |
|
|
|
57,007 |
|
|
|
43,851 |
|
Provision for credit losses |
|
|
1,551 |
|
|
|
1,364 |
|
|
|
2,856 |
|
|
|
2,564 |
|
Total operating cost |
|
|
109,835 |
|
|
|
92,624 |
|
|
|
214,951 |
|
|
|
179,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
30,821 |
|
|
|
34,304 |
|
|
|
57,409 |
|
|
|
60,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate office costs |
|
|
10,741 |
|
|
|
12,074 |
|
|
|
22,297 |
|
|
|
22,948 |
|
Operating income |
|
|
20,080 |
|
|
|
22,230 |
|
|
|
35,112 |
|
|
|
37,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated affiliate |
|
|
340 |
|
|
|
- |
|
|
|
679 |
|
|
|
- |
|
Other and interest income |
|
|
679 |
|
|
|
46 |
|
|
|
725 |
|
|
|
100 |
|
Change in revaluation of put-right liability |
|
|
(617 |
) |
|
|
- |
|
|
|
(14 |
) |
|
|
- |
|
Interest expense - debt and other, net |
|
|
(987 |
) |
|
|
(237 |
) |
|
|
(1,527 |
) |
|
|
(483 |
) |
Total other income and expense |
|
|
(585 |
) |
|
|
(191 |
) |
|
|
(137 |
) |
|
|
(383 |
) |
Income before taxes |
|
|
19,495 |
|
|
|
22,039 |
|
|
|
34,975 |
|
|
|
36,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
4,239 |
|
|
|
4,567 |
|
|
|
7,737 |
|
|
|
7,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
15,256 |
|
|
|
17,472 |
|
|
|
27,238 |
|
|
|
29,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: net income attributable to non-controlling interest: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable non-controlling interest - temporary equity |
|
|
(2,626 |
) |
|
|
(3,611 |
) |
|
|
(5,183 |
) |
|
|
(6,064 |
) |
Non-controlling interest - permanent equity |
|
|
(1,435 |
) |
|
|
(1,425 |
) |
|
|
(2,061 |
) |
|
|
(2,685 |
) |
|
|
|
(4,061 |
) |
|
|
(5,036 |
) |
|
|
(7,244 |
) |
|
|
(8,749 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to USPH shareholders |
|
$ |
11,195 |
|
|
$ |
12,436 |
|
|
$ |
19,994 |
|
|
$ |
20,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share attributable to USPH shareholders |
|
$ |
0.87 |
|
|
$ |
0.82 |
|
|
$ |
1.55 |
|
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computation - basic and diluted |
|
|
12,998 |
|
|
|
12,902 |
|
|
|
12,968 |
|
|
|
12,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
|
$ |
0.41 |
|
|
$ |
0.35 |
|
|
$ |
0.82 |
|
|
$ |
0.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
15,256 |
|
|
$ |
17,472 |
|
|
$ |
27,238 |
|
|
$ |
29,358 |
|
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on cash flow hedge |
|
|
(531 |
) |
|
|
- |
|
|
|
(531 |
) |
|
|
- |
|
Tax effect at statutory rate (federal and state) of 25.55% |
|
|
136 |
|
|
|
- |
|
|
|
136 |
|
|
|
- |
|
Comprehensive income |
|
$ |
14,725 |
|
|
$ |
17,472 |
|
|
$ |
26,707 |
|
|
$ |
29,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to non-controlling interest |
|
|
(4,061 |
) |
|
|
(5,036 |
) |
|
|
(7,244 |
) |
|
|
(8,749 |
) |
Comprehensive income attributable to USPH shareholders |
|
$ |
10,664 |
|
|
$ |
12,436 |
|
|
$ |
19,463 |
|
|
$ |
20,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED BALANCE SHEET |
||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) |
||||||||
|
|
|
|
|||||
|
|
June 30,
|
|
|
December 31,
|
|
||
ASSETS |
|
(unaudited) |
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
48,572 |
|
|
$ |
28,567 |
|
Patient accounts receivable, less allowance for credit losses of $2,948 and $2,768, respectively |
|
|
50,549 |
|
|
|
46,272 |
|
Accounts receivable - other |
|
|
18,915 |
|
|
|
16,144 |
|
Other current assets |
|
|
3,810 |
|
|
|
4,183 |
|
Total current assets |
|
|
121,846 |
|
|
|
95,166 |
|
Fixed assets: |
|
|
|
|
|
|
|
|
Furniture and equipment |
|
|
60,379 |
|
|
|
58,743 |
|
Leasehold improvements |
|
|
41,038 |
|
|
|
39,194 |
|
Fixed assets, gross |
|
|
101,417 |
|
|
|
97,937 |
|
Less accumulated depreciation and amortization |
|
|
77,188 |
|
|
|
74,958 |
|
Fixed assets, net |
|
|
24,229 |
|
|
|
22,979 |
|
Operating lease right-of-use assets |
|
|
101,274 |
|
|
|
96,427 |
|
Investment in unconsolidated affiliate |
|
|
12,346 |
|
|
|
12,215 |
|
Goodwill |
|
|
442,761 |
|
|
|
434,679 |
|
Other identifiable intangible assets, net |
|
|
92,655 |
|
|
|
86,382 |
|
Other assets |
|
|
1,333 |
|
|
|
1,578 |
|
Total assets |
|
$ |
796,444 |
|
|
$ |
749,426 |
|
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable - trade |
|
$ |
3,793 |
|
|
$ |
3,268 |
|
Accounts payable - due to seller of acquired business |
|
|
3,203 |
|
|
|
3,203 |
|
Accrued expenses |
|
|
41,246 |
|
|
|
45,705 |
|
Current portion of operating lease liabilities |
|
|
32,083 |
|
|
|
30,475 |
|
Current portion of term loan and notes payable |
|
|
4,780 |
|
|
|
830 |
|
Total current liabilities |
|
|
85,105 |
|
|
|
83,481 |
|
Notes payable, net of current portion |
|
|
4,258 |
|
|
|
3,587 |
|
Revolving line of credit |
|
|
- |
|
|
|
114,000 |
|
Term Loan, net of current portion and deferred financing costs |
|
|
144,631 |
|
|
|
- |
|
Deferred taxes |
|
|
19,483 |
|
|
|
14,385 |
|
Operating lease liabilities, net of current portion |
|
|
77,776 |
|
|
|
74,185 |
|
Other long-term liabilities |
|
|
4,858 |
|
|
|
7,345 |
|
Total liabilities |
|
|
336,111 |
|
|
|
296,983 |
|
|
|
|
|
|
|
|
|
|
Redeemable non-controlling interest - temporary equity |
|
|
151,400 |
|
|
|
155,262 |
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
U.S. Physical Therapy, Inc. ("USPH") shareholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value, 500,000 shares authorized, no shares issued and outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $.01 par value, 20,000,000 shares authorized, |
|
|
|
|
|
|
|
|
15,218,982 and 15,126,160 shares issued, respectively |
|
|
152 |
|
|
|
151 |
|
Additional paid-in capital |
|
|
106,801 |
|
|
|
102,688 |
|
Accumulated other comprehensive loss |
|
|
(395 |
) |
|
|
- |
|
Retained earnings |
|
|
232,247 |
|
|
|
224,395 |
|
Treasury stock at cost, 2,214,737 shares |
|
|
(31,628 |
) |
|
|
(31,628 |
) |
Total USPH shareholders’ equity |
|
|
307,177 |
|
|
|
295,606 |
|
Non-controlling interest - permanent equity |
|
|
1,756 |
|
|
|
1,575 |
|
Total USPH shareholders' equity and non-controlling interest - permanent equity |
|
|
308,933 |
|
|
|
297,181 |
|
Total liabilities, redeemable non-controlling interest, |
|
|
|
|
|
|
|
|
USPH shareholders' equity and non-controlling interest - permanent equity |
|
$ |
796,444 |
|
|
$ |
749,426 |
|
|
|
|
|
|
|
|
|
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) |
||||||||
(unaudited) |
||||||||
|
|
Six Months Ended |
|
|||||
|
|
June 30,
|
|
|
June 30,
|
|
||
OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net income including non-controlling interest and earnings from unconsolidated affiliates, net |
|
$ |
27,238 |
|
|
$ |
29,358 |
|
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
7,298 |
|
|
|
5,484 |
|
Provision for credit losses |
|
|
2,856 |
|
|
|
2,564 |
|
Equity-based awards compensation expense |
|
|
3,660 |
|
|
|
3,405 |
|
Deferred income taxes |
|
|
4,307 |
|
|
|
3,160 |
|
Loss on revaluation of put-right liability |
|
|
14 |
|
|
|
- |
|
(Gain) loss on sale of clinics and fixed assets |
|
|
(614 |
) |
|
|
106 |
|
Earnings in unconsolidated affiliate |
|
|
(679 |
) |
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Increase in patient accounts receivable |
|
|
(7,459 |
) |
|
|
(5,325 |
) |
(Increase) decrease in accounts receivable - other |
|
|
(2,862 |
) |
|
|
129 |
|
(Increase) decrease in other assets |
|
|
230 |
|
|
|
(255 |
) |
Decrease in accounts payable and accrued expenses |
|
|
(3,891 |
) |
|
|
(3,672 |
) |
(Decrease) increase in other long-term liabilities |
|
|
(2,587 |
) |
|
|
602 |
|
Net cash provided by operating activities |
|
|
27,511 |
|
|
|
35,556 |
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchase of fixed assets |
|
|
(4,569 |
) |
|
|
(3,301 |
) |
Purchase of majority interest in businesses, net of cash acquired |
|
|
(11,799 |
) |
|
|
(20,402 |
) |
Purchase of redeemable non-controlling interest, temporary equity |
|
|
(8,648 |
) |
|
|
(9,536 |
) |
Purchase of non-controlling interest, permanent equity |
|
|
(156 |
) |
|
|
- |
|
Proceeds on sales of partnership interest, clinics and fixed assets |
|
|
740 |
|
|
|
(168 |
) |
Distributions from unconsolidated affiliate |
|
|
548 |
|
|
|
- |
|
Proceeds on sales of redeemable non-controlling interest-temporary |
|
|
344 |
|
|
|
32 |
|
Net cash used in investing activities |
|
|
(23,540 |
) |
|
|
(33,375 |
) |
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Distributions to non-controlling interest, permanent and temporary equity |
|
|
(7,202 |
) |
|
|
(9,398 |
) |
Cash dividends paid to shareholders |
|
|
(10,659 |
) |
|
|
(9,028 |
) |
Proceeds from revolving line of credit |
|
|
61,000 |
|
|
|
128,000 |
|
Proceeds from term loan |
|
|
150,000 |
|
|
|
- |
|
Payments on revolving line of credit |
|
|
(175,000 |
) |
|
|
(106,000 |
) |
Principal payments on notes payable |
|
|
(338 |
) |
|
|
(4,207 |
) |
(Payment) receipt of Medicare Accelerated and Advance Funds |
|
|
- |
|
|
|
(14,054 |
) |
Payment of deferred financing costs |
|
|
(1,779 |
) |
|
|
- |
|
Other |
|
|
12 |
|
|
|
7 |
|
Net cash used in financing activities |
|
|
16,034 |
|
|
|
(14,680 |
) |
Net decrease in cash and cash equivalents |
|
|
20,005 |
|
|
|
(12,499 |
) |
Cash and cash equivalents - beginning of period |
|
|
28,567 |
|
|
|
32,918 |
|
Cash and cash equivalents - end of period |
|
$ |
48,572 |
|
|
$ |
20,419 |
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
|
|
Income taxes |
|
$ |
4,524 |
|
|
$ |
6,967 |
|
Interest paid |
|
$ |
1,319 |
|
|
$ |
741 |
|
Non-cash investing and financing transactions during the period: |
|
|
|
|
|
|
|
|
Purchase of businesses - seller financing portion |
|
$ |
374 |
|
|
$ |
550 |
|
Purchase of businesses - contingent consideration |
|
$ |
- |
|
|
$ |
1,000 |
|
Notes payable related to purchase of redeemable non-controlling interest, temporary equity |
|
$ |
948 |
|
|
$ |
- |
|
Notes payable due to purchase of non-controlling interest, permanent equity |
|
$ |
296 |
|
|
$ |
- |
|
Notes receivable related to sale of partnership interest |
|
$ |
- |
|
|
$ |
287 |
|
Notes receivable related to sale of partnership interest - redeemable non-controlling interest |
|
$ |
1,476 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
OPERATING RESULTS AND ADJUSTED EBITDA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
The following tables provide detail of the diluted earnings per share computation and reconcile net income attributable to USPH shareholders calculated in accordance with GAAP to Operating Results and Adjusted EBITDA. Management believes providing Operating Results and Adjusted EBITDA to investors is useful information for comparing the Company's period-to-period results.
Operating Results, a non-GAAP measure, equals net income attributable to USPH shareholders per the consolidated statements of income less the change in the revaluation of the put-right liability. In accordance with GAAP, the revaluation of redeemable non-controlling interest, net of tax, is included in the earnings per basic and diluted share calculation, although it is not included in net income but charged directly to retained earnings.
Adjusted EBITDA is defined as net income attributable to USPH shareholders before interest income, interest expense, taxes, depreciation, amortization, gain on revaluation of put-right liability, equity-based awards compensation expense and related portion for non-controlling interests. Management believes reporting Adjusted EBITDA is useful information for investors in comparing the Company’s period-to-period results as well as comparing with similar businesses which report adjusted EBITDA as defined by their company.
Management uses Operating Results and Adjusted EBITDA, which eliminates certain items described above that can be subject to volatility and unusual costs, as one the principal measures to evaluate and monitor financial performance period over period. Management believes that Operating Results and Adjusted EBITDA is useful information for investors to use in comparing the Company's period-to-period results as well as for comparing with other similar businesses since most do not have redeemable instruments and therefore have different equity structures.
Operating Results and Adjusted EBITDA are not measures of financial performance under GAAP. Adjusted EBITDA and Operating Results should not be considered in isolation or as an alternative to, or substitute for, net income attributable to USPH shareholders presented in the consolidated financial statements.
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
||||||||||||||||
OPERATING RESULTS AND ADJUSTED EBITDA |
||||||||||||||||
2022 PERIODS COMPARED TO 2021 PERIODS |
||||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
|
2021 |
* |
|
|
2022 |
|
|
|
2021 |
* |
|
Computation of earnings per share - USPH shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to USPH shareholders |
|
$ |
11,195 |
|
|
$ |
12,436 |
|
|
$ |
19,994 |
|
|
$ |
20,609 |
|
Credit (charges) to retained earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation of redeemable non-controlling interest |
|
|
210 |
|
|
|
(2,549 |
) |
|
|
57 |
|
|
|
(9,819 |
) |
Tax effect at statutory rate (federal and state) of 25.55% |
|
|
(54 |
) |
|
|
651 |
|
|
|
(15 |
) |
|
|
2,508 |
|
|
|
$ |
11,351 |
|
|
$ |
10,538 |
|
|
$ |
20,036 |
|
|
$ |
13,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (basic and diluted) |
|
$ |
0.87 |
|
|
$ |
0.82 |
|
|
$ |
1.55 |
|
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in revaluation of put-right liability |
|
|
617 |
|
|
|
- |
|
|
|
14 |
|
|
|
- |
|
Revaluation of redeemable non-controlling interest |
|
|
(210 |
) |
|
|
2,549 |
|
|
|
(57 |
) |
|
|
9,819 |
|
Tax effect at statutory rate (federal and state) |
|
|
(104 |
) |
|
|
(651 |
) |
|
|
11 |
|
|
|
(2,508 |
) |
Operating Results (a non-GAAP measure) |
|
$ |
11,654 |
|
|
$ |
12,436 |
|
|
$ |
20,004 |
|
|
$ |
20,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted Operating Results per share (a non-GAAP measure) |
|
$ |
0.90 |
|
|
$ |
0.96 |
|
|
$ |
1.54 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computation - basic and diluted |
|
|
12,998 |
|
|
|
12,902 |
|
|
|
12,968 |
|
|
|
12,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to USPH shareholders |
|
$ |
11,195 |
|
|
$ |
12,436 |
|
|
$ |
19,994 |
|
|
$ |
20,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
3,474 |
|
|
|
2,803 |
|
|
|
7,298 |
|
|
|
5,484 |
|
Other and interest income |
|
|
(679 |
) |
|
|
(46 |
) |
|
|
(725 |
) |
|
|
(100 |
) |
Change in revaluation of put-right liability |
|
|
617 |
|
|
|
- |
|
|
|
14 |
|
|
|
|
|
Interest expense - debt and other, net |
|
|
987 |
|
|
|
236 |
|
|
|
1,527 |
|
|
|
483 |
|
Provision for income taxes |
|
|
4,239 |
|
|
|
4,567 |
|
|
|
7,737 |
|
|
|
7,511 |
|
Equity-based awards compensation expense |
|
|
1,814 |
|
|
|
1,754 |
|
|
|
3,660 |
|
|
|
3,405 |
|
Allocation to non-controlling interests |
|
|
(300 |
) |
|
|
(305 |
) |
|
|
(697 |
) |
|
|
(602 |
) |
Adjusted EBITDA (a non-GAAP measure) |
|
$ |
21,347 |
|
|
$ |
21,445 |
|
|
$ |
38,808 |
|
|
$ |
36,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Revised to conform to current year presentation. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
||
RECAP OF PHYSICAL THERAPY OPERATIONS |
||
CLINIC COUNT |
||
Date |
Number of Clinics |
|
|
|
|
March 31, 2021 |
564 |
|
June 30, 2021 |
575 |
|
September 30, 2021 |
579 |
|
December 31, 2021 |
591 |
|
|
|
|
March 31, 2022 |
601 |
|
June 30, 2022 |
608 |
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005175/en/
U.S. Physical Therapy, Inc.
Carey Hendrickson, Chief Financial Officer
email: [email protected]
Chris Reading, Chief Executive Officer
(713) 297-7000
Three Part Advisors
Joe Noyons
(817) 778-8424