Company Declares $.15 Per Share Quarterly
Dividend
U.S. Physical Therapy, Inc. (NYSE: USPH), a national operator of
outpatient physical therapy clinics, today reported results for the
first quarter ended March 31, 2015.
U.S. Physical Therapy’s net income attributable to common
shareholders prior to revaluation of redeemable non-controlling
interests, net of tax (“operating results”) was $4.2 million for
the first quarter of 2015 and for the first quarter of 2014.
Diluted earnings per share from operating results were $.34 in the
recent quarter as compared to $.35 in the comparable 2014 period.
As noted in the Company’s press release on March 5, the unusually
severe winter weather prevalent in many parts of the country during
the first quarter adversely impacted operations. Management
estimates that more than 20,000 patient visits were cancelled with
an earnings impact of $.07 to $.09 per share.
First Quarter 2015 Compared to First
Quarter 2014
- Net revenues increased 10.7% from $69.8
million in the first quarter of 2014 to $77.2 million in the first
quarter of 2015, due to an increase in total patient visits of
10.7% from 643,900 to 712,900 and a slight increase in the average
net revenue per visit to $106.34 from $106.23. Net revenues from
new clinics opened or acquired in the past 12 months was $6.2
million.
- Total clinic operating costs were $60.4
million, or 78.2% of net revenues, in the first quarter of 2015, as
compared to $53.1 million, or 76.1% of net revenues, in the 2014
period. The increase was primarily attributable to $5.5 million in
operating costs of new clinics opened or acquired in the past 12
months. Total clinic salaries and related costs, including those
from new clinics, were 55.7% of net revenues in the recent quarter
versus 54.4% in the 2014 period. Rent, clinic supplies, contract
labor and other costs as a percentage of net revenues were 21.1%
for the recent quarter versus 20.4% in the 2014 period. The
provision for doubtful accounts as a percentage of net revenues was
1.3% for the 2015 period and 1.4% in the 2014 period.
- The gross margin for the first quarter
of 2015 was $16.8 million or 21.8%, as compared to $16.6 million or
23.9% for the 2014 quarter.
- Corporate office costs were $7.7
million in the first quarter of 2015 compared to $7.1 million in
the 2014 first quarter. Corporate office costs were 9.9% of net
revenues for the 2015 quarter compared to 10.2% of net revenues for
the 2014 quarter.
- Operating income for the recent quarter
was $9.2 million compared to $9.5 million in the 2014 first
quarter.
- Interest expense was $0.3 million in
the first quarter of 2015 and 2014.
- The provision for income taxes for the
2015 period was $2.8 million and for the 2014 period $2.9 million.
The provision for income taxes as a percentage of income before
taxes less net income attributable to non-controlling interest was
40.0% in the 2015 first quarter and 41.0% in the 2014 first
quarter.
- Net income attributable to
non-controlling interests was $2.0 million in the recent quarter as
compared to $2.1 million in the year earlier period.
- Operating results attributable to
common shareholders for the three months ended March 31, 2015 and
2014 was consistent at $4.2 million for each period. Diluted
earnings per share from operating results were $0.34 for the 2015
period and $0.35 for the 2014 period.
- Same store visits increased 3.8% for de
novo and acquired clinics open for one year or more and same store
revenue increased 4.2% as the average net rate per visit increased
by $.40.
Chris Reading, Chief Executive Officer, said, “This was
undoubtedly a difficult quarter from a weather perspective yet
there were a number of bright spots including solid same store
visit growth, strong referral volume and a couple of acquisitions
closed in the early part of this year. I continue to have great
confidence in our team and in our collective ability to execute on
our plan for 2015.”
Larry McAfee, Chief Financial Officer, noted, “By mid-March,
after the winter storms subsided, the Company’s average daily
patient visits rose significantly such that we ended the first
quarter at a solid run rate. Absent the severe weather, patient
visits in the first quarter would have been higher as same store
patient referrals increased a strong 4.6%.”
U.S. Physical Therapy Declares
Quarterly Dividend
The second quarterly dividend of 2015 for $.15 per share will be
paid on June 5 to shareholders of record as of May 18.
First Quarter 2015 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 Thursday,
May 7, 2015 to discuss the Company’s Quarter Ended March 31, 2015
results. Interested parties may participate in the call by dialing
1-888-335-5539 or 973-582-2857 and entering reservation number
22675485 approximately 10 minutes before the call is scheduled to
begin. To listen to the live call via web-cast, 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 July 7, 2015.
Forward-Looking
Statements
This press release contains statements that are considered to be
forward-looking within the meaning under Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
contain forward-looking information relating to the financial
condition, results of operations, plans, objectives, future
performance and business of our Company. These statements (often
using words such as “believes”, “expects”, “intends”, “plans”,
“appear”, “should” and similar words) involve risks and
uncertainties that could cause actual results to differ materially
from those we expect. Included among such statements may be those
relating to new clinics, availability of personnel and the
reimbursement environment. The forward-looking statements are based
on our current views and assumptions and actual results could
differ materially from those anticipated in such forward-looking
statements as a result of certain risks, uncertainties, and
factors, which include, but are not limited to:
- changes as the result of government
enacted national healthcare reform;
- changes in Medicare guidelines and
reimbursement or failure of our clinics to maintain their Medicare
certification status;
- business and regulatory conditions
including federal and state regulations;
- governmental and other third party
payor investigations and audits;
- 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;
- changes in reimbursement rates or
payment methods from third party payors including government
agencies and deductibles and co-pays owed by patients;
- transition to ICD-10 coding
system;
- revenue and earnings expectations;
- general economic conditions;
- availability and cost of qualified
physical and occupational therapists;
- personnel productivity;
- competitive, economic or reimbursement
conditions in our markets which may require us to reorganize or
close certain operations and thereby incur losses and/or closure
costs including the possible write-down or write-off of goodwill
and other intangible assets;
- acquisitions, purchase of
non-controlling interests (minority interests) and the successful
integration of the operations of the acquired businesses;
- maintaining adequate internal
controls;
- 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. Please see our periodic reports filed with the
Securities and Exchange Commission for more information on these
factors. Our forward-looking statements represent our estimates and
assumptions only as of the date of this press release. Except as
required by law, we are under no obligation to update any
forward-looking statement, regardless of the reason the statement
is no longer applicable.
About U.S. Physical Therapy,
Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 497
outpatient physical and occupational therapy clinics in 42 states.
The Company's clinics provide preventative and post-operative care
for a variety of orthopedic-related disorders and sports-related
injuries, treatment for neurologically-related injuries and
rehabilitation of injured workers. In addition to owning and
operating clinics, the Company manages 17 physical therapy
facilities for third parties, including hospitals and physician
groups.
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
SUBSIDIARIESCONSOLIDATED STATEMENTS OF NET INCOME(IN
THOUSANDS, EXCEPT PER SHARE DATA)(unaudited)
Three Months Ended March 31, 2015 March 31,
2014 Net patient revenues $ 75,807 $ 68,397 Other revenues
1,434 1,370 Net revenues 77,241 69,767
Clinic operating costs: Salaries and related costs 43,052 37,942
Rent, clinic supplies, contract labor and other 16,325 14,216
Provision for doubtful accounts 990 950 Closure costs 32
13 Total clinic operating costs 60,399
53,121 Gross margin 16,842 16,646 Corporate
office costs 7,657 7,132 Operating
income 9,185 9,514 Interest and other income, net 8 1 Interest
expense (265 ) (253 ) Income before taxes 8,928 9,262
Provision for income taxes 2,777 2,939
Net income including non-controlling interests 6,151 6,323 Less:
net income attributable to non-controlling interests (1,985
) (2,095 ) Net income attributable to common shareholders $
4,166 $ 4,228 Basic earnings per share attributable
to common shareholders: From operations prior to revaluation of
redeemable non-controlling interests, net of tax $ 0.34 $ 0.35
Charges to additional paid-in-capital - revaluation of redeemable
non-controlling interests, net of tax - (0.08
) Basic $ 0.34 $ 0.27 Diluted earnings per
share attributable to common shareholders: From operations prior to
revaluation of redeemable non-controlling interests, net of tax $
0.34 $ 0.35 Charges to additional paid-in-capital - revaluation of
redeemable non-controlling interests, net of tax -
(0.08 ) Diluted $ 0.34 $ 0.27 Shares used in
computation: Basic 12,313 12,129
Diluted 12,313 12,144 Dividends
declared per common share $ 0.15 $ 0.12
U.S. PHYSICAL THERAPY, INC AND
SUBSIDIARIES
CONSOLIDATED EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
(unaudited)
Three Months Ended March 31, 2015 March 31,
2014 Earnings attributable to common shareholders: From
operations prior to revaluation of redeemable non-controlling
interests, net of tax $ 4,166 $ 4,228 Charges to additional
paid-in-capital - revaluation of redeemable non-controlling
interests, net of tax - (967 ) $ 4,166 $ 3,261
Basic earnings per share attributable to common shareholders: From
operations prior to revaluation of redeemable non-controlling
interests, net of tax $ 0.34 $ 0.35 Charges to additional
paid-in-capital - revaluation of redeemable non-controlling
interests, net of tax - (0.08 ) $ 0.34 $ 0.27
Diluted earnings per share attributable to common shareholders:
From operations prior to revaluation of redeemable non-controlling
interests, net of tax $ 0.34 $ 0.35 Charges to additional
paid-in-capital - revaluation of redeemable non-controlling
interests, net of tax - (0.08 ) $ 0.34 $ 0.27
Shares used in computation: Basic earnings per share -
weighted-average shares 12,313 12,129 Effect of dilutive securities
- stock options - 15
Denominator for diluted earnings per share
- adjusted weighted-average shares
12,313 12,144
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN THOUSANDS,
EXCEPT SHARE DATA) March 31, 2015 December 31,
2014 ASSETS (unaudited) Current assets: Cash and cash
equivalents $ 14,557 $ 14,271 Patient accounts receivable, less
allowance for doubtful accounts of $1,633 and $1,669, respectively
34,673 32,891 Accounts receivable - other, less allowance for
doubtful accounts of $198 and $198, respectively 1,378 1,503 Other
current assets 5,291 6,186 Total
current assets 55,899 54,851 Fixed assets: Furniture and equipment
42,542 42,003
Leasehold improvements
23,565 22,806 66,107 64,809 Less
accumulated depreciation and amortization 50,212
49,045 15,895 15,764 Goodwill 159,176 147,914 Other
intangible assets, net 24,537 24,907 Other assets 1,916
1,115 $ 257,423 $ 244,551
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts
payable - trade $ 2,292 $ 1,782 Accrued expenses 18,178 22,839
Current portion of notes payable 932 883
Total current liabilities 21,402 25,504 Notes payable 483
234 Revolving line of credit 41,500 34,500 Deferred rent 984 991
Other long-term liabilities 9,480 8,732
Total liabilities 73,849 69,961 Commitments and contingencies
Redeemable non-controlling interests 7,373 7,376 Shareholders'
equity:
U.S. Physical Therapy, Inc. 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, 14,613,374 and 14,487,346 shares
issued, respectively
145 145 Additional paid-in capital 45,080 43,577 Retained earnings
136,491 134,186 Treasury stock at cost, 2,214,737 shares
(31,628 ) (31,628 )
Total U.S. Physical Therapy, Inc.
shareholders' equity
150,088 146,280 Non-controlling interests 26,113
20,934 Total equity 176,201
167,214 $ 257,423 $ 244,551
U.S. PHYSICAL THERAPY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN
THOUSANDS, EXCEPT PER SHARE DATA)(unaudited)
Three Months Ended March 31, 2015 March 31,
2014 OPERATING ACTIVITIES Net income including
non-controlling interests $ 6,151 $ 6,323 Adjustments to reconcile
net income including non-controlling interests to net cash provided
by operating activities: Depreciation and amortization 1,807 1,387
Provision for doubtful accounts 991 950 Equity-based awards
compensation expense 990 735 Loss on sale of business and sale or
abandonment of assets, net 17 19 Excess tax benefit from
shared-based compensation (271 ) (126 ) Deferred income tax 565
1,580 Write-off of goodwill - closed clinic 34 - Changes in
operating assets and liabilities: Increase in patient accounts
receivable (2,185 ) (3,002 ) Decrease in accounts receivable -
other 125 146 Decrease in other assets 106 735 (Decrease) in
accounts payable and accrued expenses (5,976 ) (5,241 ) Increase in
other Long term liabilities 665 184 Net
cash provided by operating activities 3,019 3,690
INVESTING
ACTIVITIES Purchase of fixed assets (1,419 ) (849 ) Purchase of
businesses, net of cash acquired (6,445 ) (125 ) Acquisitions of
non-controlling interests (359 ) (2,833 ) Proceeds on sale of
business and fixed assets, net 8 16 Net
cash used in investing activities (8,215 ) (3,791 )
FINANCING
ACTIVITIES Distributions to non-controlling interests
(including redeemable non-controlling interests) (1,589 ) (1,413 )
Proceeds from revolving line of credit 34,000 29,000 Payments on
revolving line of credit (27,000 ) (23,500 ) Payment of notes
payable (200 ) (250 ) Tax benefit from share-based compensation 271
126 Other - 1 Net cash provided by
financing activities 5,482 3,964 Net increase in cash and cash
equivalents 286 3,863 Cash and cash equivalents - beginning of
period 14,271 12,898 Cash - end of
period $ 14,557 $ 16,761
SUPPLEMENTAL DISCLOSURES
OF CASH FLOW INFORMATION Cash paid during the period for:
Income taxes $ 1,275 $ 242 Interest $ 235 $ 345 Non-cash investing
and financing transactions during the period: Purchase of business
- seller financing portion $ 500 $ - Revaluation of redeemable
non-controlling interests $ - $ 1,639
U.S.
PHYSICAL THERAPY, INC. AND SUBSIDIARIESRECAP OF CLINIC
COUNT Number of Date Clinics
March 31, 2014 472 June 30, 2014 486 September 30, 2014 489
December 31, 2014 489 March 31, 2015 494
U.S. Physical Therapy, Inc.Larry McAfee, (713) 297-7000Chief
Financial OfficerorChris Reading, (713) 297-7000Chief Executive
OfficerorWestwicke PartnersBob East, (443) 213-0502
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