Management Raises 2021 Earnings
Guidance
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 services, today
reported results for the first quarter ended March 31, 2021 (“2021
First Quarter”).
HIGHLIGHTS
- Operating Results (defined below) per share was $0.64 for the
2021 First Quarter, an increase of $0.34 from Operating Results per
share of $0.30 in the first quarter ended March 31, 2020 (“2020
First Quarter”).
- Adjusted EBITDA (defined below) was $15.6 million in the 2021
First Quarter, an increase of $7.6 million from Adjusted EBITDA of
$8.0 million in the 2020 First Quarter.
- Average visits per clinic per day was 27.1 in the 2021 First
Quarter, up from 26.2 in the 2020 First Quarter.
- The net rate per patient visit increased $1.61 per visit to
$104.72 in the 2021 First Quarter compared to $103.11 in the 2020
First Quarter.
- Net patient revenues was $99.2 million in the 2021 First
Quarter, a slight decrease from $100.1 million in the 2020 First
Quarter, a result of having one less business day in the 2021 First
Quarter than in the 2020 First Quarter and 24 fewer clinics open on
average in the 2021 First Quarter.
- Total revenue was consistent between the 2021 and 2020 First
Quarters at approximately $112.0 million.
- Total operating costs (excluding closure costs) decreased by
$6.8 million to $86.4 million in the 2021 First Quarter compared to
$93.3 million in the 2020 First Quarter.
- March 2021 was the strongest month in the Company’s history
with record highs in visits per clinic per day (29.3), physical
therapy revenue ($40.3 million), total revenue ($43.9 million) and
Operating Income ($8.6 million).
- The Company acquired 70% of the equity interest in a
five-clinic physical therapy practice in the 2021 First
Quarter.
- The Company’s Board of Directors reinstated dividends in the
2021 First Quarter, declaring a dividend of $0.35 per share in
March 2021, which was paid on April 9, 2021. The Company announced
today that its Board of Directors has declared a dividend of the
same amount for the second quarter of 2021.
- Management increased its range of earnings guidance for 2021 to
Operating Results per share of $2.68 to $2.78 from the previous
range of $2.40 to $2.52 due to better than expected performance in
the 2021 First Quarter, the impact of the acquisition closed in the
2021 First Quarter, and the extension of 2% sequestration relief on
Medicare payments through December 31, 2021 (previously scheduled
to end on March 31, 2021).
SUMMARY OF FIRST QUARTER
RESULTS
For the 2021 First Quarter, USPH’s Operating Results was $8.2
million, or $0.64 per diluted share, as compared to $3.9 million,
or $0.30 per diluted share, in the three months ended March 31,
2020 (“2020 First Quarter”). Operating Results, a non-Generally
Accepted Accounting Principles (“GAAP”) measure, equals net income
attributable to USPH shareholders per the consolidated statements
of income plus charges incurred for clinic closure costs and
expenses related to CFO transition, all net of taxes. The earnings
per share from Operating Results also excludes the impact of the
revaluation of redeemable non-controlling interest. See table on
page 12.
For the 2021 First Quarter, USPH’s net income attributable to
its shareholders was $8.2 million, as compared to $1.0 million in
the 2020 First Quarter. Inclusive of the charge for revaluation of
non-controlling interest, net of taxes, used to compute diluted
earnings per share in accordance with GAAP, the amount is $2.8
million, or $0.21 per share, for the 2021 First Quarter as compared
to $2.6 million, or $0.20 per share, for the 2020 First Quarter. In
accordance with current accounting guidance, the revaluation of
redeemable non-controlling interest, net of taxes, is not included
in net income but charged directly to retained earnings; however,
the charge or credit for this change is included in the earnings
per basic and diluted share calculation. See the schedule on page
12 for the computation of diluted earnings per share.
As previously disclosed in a series of filings with the SEC and
further described in detail in our Quarterly Reports on Form 10-Q
for the first three quarters of 2020 and our Annual Report on Form
10-K, the Company’s results were negatively impacted by the effects
of the COVID-19 pandemic in the 2020 First Quarter, especially in
March 2020. Physical therapy patient volumes per day per clinic for
the 2021 First Quarter were 27.1, which is at or near pre-pandemic
levels, compared to 26.2 in the 2020 First Quarter. The Company’s
industrial injury prevention business has been less affected by the
pandemic.
First Quarter 2021 Compared to First
Quarter 2020
- Reported net revenues in the 2021 First Quarter was $112.4
million as compared to $112.7 million in the 2020 First Quarter.
See table below for a detail of reported net revenues (in
thousands):
Three Months Ended
March 31, 2021
March 31, 2020
Revenues:
Net patient revenues
$
99,254
$
100,126
Management contract revenue
2,559
2,149
Other patient revenues
546
566
Physical therapy operations
102,359
102,841
Industrial injury prevention services
10,009
9,876
$
112,368
$
112,717
- Net patient revenues from physical therapy operations decreased
$0.9 million, or 0.9%, to $99.2 million in 2021 First Quarter from
$100.1 million in 2020 First Quarter. Included in net patient
revenues are revenues related to clinics sold or closed in 2021 and
2020 of $0.1 million in 2021 First Quarter and $3.5 million in 2020
First Quarter. During 2021 First Quarter, the Company sold its
interest in 2 clinics and closed 1 clinic. During the full year of
2020, the Company sold its interest in 14 clinics and closed 34
clinics. For comparison purposes, adjusted for revenue from the
clinics sold or closed, net patient revenues from physical therapy
operations was approximately $99.1 million in First Quarter 2021,
inclusive of $5.3 million related to clinics opened or acquired in
the 2021 First Quarter (“2021 Clinic Additions”) and 2020 year
(“2020 Clinic Additions”), together referred to as Clinic
Additions, and $96.6 million in First Quarter 2020. Net patient
revenues related to clinics opened or acquired prior to 2020 and
still in operations at March 31, 2021 (“Mature Clinics) decreased
$1.8 million in the 2021 First Quarter compared to the 2020 First
Quarter. See table below for a detail of net patient revenues from
physical therapy operations (in thousands):
Three Months Ended
March 31, 2021
March 31, 2020
Revenue related to Mature Clinics
$
93,820
$
95,639
Revenue related to 2021 Clinic
Additions
91
-
Revenue related to 2020 Clinic
Additions
5,201
978
Revenue from clinics sold or closed in
2021
116
231
Revenue from clinics sold or closed in
2020
26
3,278
$
99,254
$
100,126
- The average net patient revenue per visit was $104.72 for the
2021 First Quarter as compared to $103.11 for the 2020 First
Quarter, including all clinics operational during such periods.
Total patient visits were 947,788 in the 2021 First Quarter and
971,023 for the 2020 First Quarter.
- Revenue from physical therapy management contracts was $2.6
million for the 2021 First Quarter as compared to $2.1 million in
the 2020 First Quarter.
- Revenue from the industrial injury prevention business was
$10.0 million in the 2021 First Quarter as compared to $9.9 million
in the 2020 First Quarter.
- Other miscellaneous revenue was $0.5 million in the 2021 First
Quarter and $0.6 million in the 2020 First Quarter. Other
miscellaneous revenue includes a variety of services, including
athletic trainers provided for schools and athletic events.
- Total operating costs, excluding closure costs, were $86.4
million in the 2021 First Quarter, or 76.9% of net revenues, a
reduction of 590 basis points as compared to $93.3 million in the
2020 First Quarter, or 82.8% of net revenues. Included in operating
costs for the 2021 First Quarter was $4.8 million related to Clinic
Additions, of which $4.6 million is associated with 2020 Clinic
Additions. Operating costs for Mature Clinics decreased by $6.9
million in the 2021 First Quarter compared to the 2020 First
Quarter. In addition, operating costs related to the industrial
injury prevention business decreased by $0.9 million. See table
below for a detail of operating costs, excluding closure costs (in
thousands):
Three Months Ended
March 31, 2021
March 31, 2020
Operating costs related to Mature
Clinics
$
71,971
$
78,824
Operating costs related to 2021 Clinic
Additions
156
-
Operating costs related to 2020 Clinic
Additions
4,638
759
Operating costs related to clinics sold or
closed in 2021
156
263
Operating costs related to clinics sold or
closed in 2020
(18
)
3,404
Physical therapy management contracts
2,245
1,812
Physical therapy operations
79,148
85,062
Industrial injury prevention services
7,287
8,212
$
86,435
$
93,274
- Total salaries and related costs, including physical therapy
operations and the industrial injury prevention business, were
56.8% of net revenues in the 2021 First Quarter versus 61.2% in the
2020 First Quarter. Rent, supplies, contract labor and other costs
as a percentage of net revenues were 19.1% in the 2021 First
Quarter versus 20.3% in the 2020 First Quarter. The provision for
credit losses as a percentage of net revenue was 1.1% in the 2021
First Quarter and 1.2% in the 2020 First Quarter.
- Gross profit for the 2021 First Quarter, excluding closure
costs, was $25.9 million, an increase of $6.5 million, or
approximately 33.4%, as compared to $19.4 million in the 2020 First
Quarter. The gross profit percentage, excluding closure costs, was
23.1% of net revenue in the 2021 First Quarter, an increase of 590
basis points as compared to 17.2% in the 2020 First Quarter. The
gross profit percentage for the Company’s physical therapy clinics,
excluding closure costs, was 22.9% in the 2021 First Quarter, an
improvement of 560 basis points as compared to 17.3% in the 2020
First Quarter. The gross profit percentage on physical therapy
management contracts was 12.3% in the 2021 First Quarter, a
decrease of 340 basis points as compared to 15.7% in the 2020 First
Quarter. During the quarter, the physical therapy management
contracts business had a charge to provision for credit losses of
$0.1 million. The gross profit percentage for the industrial injury
prevention business was 27.2% in the 2021 First Quarter, an
improvement of 1040 basis points as compared to 16.8% in the 2020
First Quarter. The table below details the gross profit, excluding
closure costs (in thousands):
Three Months Ended
March 31, 2021
March 31, 2020
Gross profit, excluding closure costs:
Physical therapy clinics
$
22,897
$
17,442
Management contracts
314
337
Industrial injury prevention services
2,722
1,664
Gross profit, excluding closure costs
$
25,933
$
19,443
Physical therapy operations - closure
costs
37
3,752
Gross profit
$
25,896
$
15,691
- Corporate office costs were $10.9 million in the 2021 First
Quarter compared to $11.7 million in the 2020 First Quarter.
Corporate office costs were 9.7% of net revenues for the 2021 First
Quarter as compared to 10.4% for the 2020 First Quarter.
- Operating income for the 2021 First Quarter was $15.0 million,
an increase of $11.0 million, or 274.2%, as compared to $4.0
million for the 2020 First Quarter. Operating income as a
percentage of net revenue increased by 980 basis points from 3.6%
in the 2020 period to 13.4% in 2021. The 2020 First Quarter
included $3.8 million related to clinic closures.
- Interest expense was $246,000 in the 2021 First Quarter and
$427,000 in the 2020 First Quarter due to reduced borrowings under
the Company’s revolving credit line.
- The provision for income tax was $2.9 million for the 2021
First Quarter and $0.3 million for the 2020 First Quarter. The
provision for income tax as a percentage of income before taxes
less net income attributable to non-controlling interest (effective
tax rate) was 26.5% for the 2021 First Quarter and 22.3% for the
2020 First Quarter. See table below ($ in thousands):
Three Months Ended
March 31, 2021
March 31, 2020
Income before taxes
$
14,830
$
3,630
Less: net income attributable to
non-controlling interests:
Redeemable non-controlling interests -
temporary equity
(2,453
)
(1,796
)
Non-controlling interests - permanent
equity
(1,260
)
(526
)
$
(3,713
)
$
(2,322
)
Income before taxes less net income
attributable to non-controlling interests
$
11,117
$
1,308
Provision for income taxes
$
2,944
$
292
Percentage
26.5
%
22.3
%
- Net income attributable to redeemable non-controlling interests
(temporary equity) was $2.5 million in the 2021 First Quarter and
$1.8 million in the 2020 First Quarter. Net income attributable to
non-controlling interests (permanent equity) was $1.3 million in
the 2021 First Quarter and $0.5 million in the 2020 First
Quarter.
Medicare Accelerated and Advance
Payment Program (“MAAPP Funds”)
In response to the COVID-19 pandemic, the federal government
approved the Coronavirus Aid, Relief, and Economic Security Act
(“CARES Act”). The CARES Act allowed for qualified healthcare
providers to receive advanced payments under the MAAPP Funds during
the COVID-19 pandemic. Under this program, healthcare providers
could choose to receive advanced payments for future Medicare
services provided. The Company applied for and received approval
from Centers for Medicare & Medicaid Services (“CMS”) in April
2020. The Company recorded the $14.1 million in advance payments
received as a liability. During the 2021 First Quarter, the Company
repaid the MAAPP Funds of $14.1 million rather than applying them
to future services performed.
Relief Funds
On March 27, 2020, the CARES Act was enacted. The CARES Act
provided additional waivers, reimbursement, grants and other funds
to assist health care providers during the COVID-19 pandemic,
including $100.0 billion in appropriations for the Public Health
and Social Services Emergency Fund, also referred to as the
Provider Relief Fund, to be used for preventing, preparing, and
responding to the coronavirus, and for reimbursing eligible health
care providers for lost revenues and health care related expenses
that are attributable to COVID-19.
Through December 31, 2020, the Company’s consolidated
subsidiaries received approximately $13.5 million of payments under
the CARES Act (“Relief Funds”). Under the Company’s accounting
policy, these payments were recorded as Other income – Relief
Funds. These funds are not required to be repaid upon attestation
and compliance with certain terms and conditions, which could
change materially based on evolving grant compliance provisions and
guidance provided by the U.S. Department of Health and Human
Services. Currently, the Company can attest and comply with the
terms and conditions. The Company will continue to monitor the
evolving guidelines and may record adjustments as additional
information is released. There were no Relief Funds received in the
2021 First Quarter.
Other Financial Measures
For the 2021 First Quarter, the Company's Adjusted EBITDA was
$15.6 million compared to $8.0 million in the 2020 First Quarter.
See definition, explanation and calculation of Adjusted EBITDA in
the schedule on pages 11 and 12.
Acquisition in First Quarter
2021
As previously reported, the Company acquired a 70% interest in a
five-clinic physical therapy practice in the 2021 First Quarter
with the practice founder retaining 30%. The practice is in the
process of developing a sixth clinic. The purchase price was
approximately $12.0 million, of which $11.7 million was paid in
cash and a $0.3 million note payable. The business generates $7.0
million in annual revenue and has approximately 46,000 annual
patient visits. 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
On May 3, 2021, the Company’s Board of Directors declared a
dividend of $0.35 per share. The quarterly dividend of $0.35 per
share will be paid on June 11, 2021 to shareholders of record as of
May 14, 2021.
Renewal of Credit
Agreement
As previously reported, on January 29, 2021, the Company
completed the renewal of its bank credit facility, extending the
maturity date from November 30, 2021 to November 30, 2025. The
commitment under the facility remains at $125.0 million; however,
the accordion feature in the agreement was expanded to provide for
capacity up to $150.0 million. Proceeds from the Credit Agreement
may be used for working capital, acquisitions, and for other
purposes.
Management Revises 2021 Earnings
Guidance
Management currently expects the Company’s Operating Results for
2021 to be in the range of $34.5 million to $35.8 million, or $2.68
to $2.78 per share. The increase in the guidance range is
attributable to better than expected performance in the 2021 First
Quarter, the impact of the acquisition closed in the 2021 First
Quarter, and the extension of the 2% sequestration relief applied
to all Medicare payments through December 31, 2021, which was
signed into law on April 14, 2021; such relief was previously
scheduled to end on March 31, 2021.
This earnings range is based on an estimated annual effective
tax rate of approximately 27.0%. Please note that the earnings
guidance represents projected Operating Results from existing
operations and excludes future acquisitions. The 2021 earnings
guidance range excludes expenses associated with the
previously-announced retirement and replacement of one of the
Company’s co-Chief Operating Officers. The annual guidance figures
will not be updated unless there is a material development that
causes management to believe that Operating Results will be
significantly outside the given range.
Management’s Comments
Chris Reading, Chief Executive Officer, said, “I am very pleased
by the way our team has navigated and responded throughout the
entirety of this ever-evolving pandemic period. We were able to
finish this quarter in very strong fashion and we look forward to
making continued progress and getting more good things done. I want
to especially thank our clinicians who have endured more than a
year of frequent adjustments in order to keep our people and our
patients safe. They continue to do an excellent job which is
evidenced at least in part by how our patient volume has grown
throughout this period and now exceeds pre-Covid levels.”
Carey Hendrickson, Chief Financial Officer, said, “Our balance
sheet remains in an excellent position. With continued strong cash
generation in the first quarter, our line of credit balance was
unchanged from the beginning to the end of the quarter and we
maintained an overall net cash position at quarter-end, even with
the $14.1 million payback of MAAPP funds and the $11.7 million
outlay for an acquisition in the first quarter.”
First Quarter 2021 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 May 6, 2021
to discuss results for the Company's 2021 First Quarter. Interested
parties may participate in the call by dialing 1-888-335-5539 or
973-582-2857 and entering reservation number 8072368 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 August 6, 2021 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:
- the multiple effects of the impact of public health crises and
epidemics/pandemics, such as the novel strain of COVID-19
(coronavirus) which the financial magnitude cannot be currently
estimated;
- changes as the result of government enacted national healthcare
reform;
- changes in Medicare rules and guidelines and reimbursement or
failure of our clinics to maintain their Medicare certification
and/or enrollment status, including the Medicare reimbursement
reductions;
- revenue we receive from Medicare and Medicaid being subject to
potential retroactive reductions;
- 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;
- 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 changes in the
deductibles and co-pays owed by patients;
- revenue and earnings expectations;
- legal actions, which could subject us to increased operating
costs and uninsured liabilities;
- general economic conditions;
- availability and cost of qualified physical therapists;
- personnel productivity and retaining key personnel;
- 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;
- competitive environment in the industrial injury prevention
business, which could result in the termination or non-renewal of
contractual service arrangements and other adverse financial
consequences for that service line;
- acquisitions, purchase of non-controlling interests (minority
interests) and the successful integration of the operations of the
acquired businesses;
- maintaining our information technology systems with adequate
safeguards to protect against cyber-attacks;
- a security breach of our or our third party vendors’
information technology systems may subject us to potential legal
action and reputational harm and may result in a violation of the
Health Insurance Portability and Accountability Act of 1996 of the
Health Information Technology for Economic and Clinical Health
Act;
- maintaining adequate internal controls;
- maintaining necessary insurance coverage;
- availability, terms, and use of capital; and
- weather and other seasonal factors.
See Risk Factors in Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2020.
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 564
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 40 physical therapy facilities for unaffiliated
third parties, including hospitals and physician groups. The
Company also has an industrial injury prevention 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
March 31, 2021
March 31, 2020
Net patient revenues
$
99,254
$
100,126
Other revenues
13,114
12,591
Net revenues
112,368
112,717
Operating costs:
Salaries and related costs
63,815
69,004
Rent, supplies, contract labor and
other
21,420
22,909
Provision for credit losses
1,200
1,361
Closure costs - lease and other
37
1,893
Closure costs - derecognition of
goodwill
-
1,859
Total operating costs
86,472
97,026
Gross profit
25,896
15,691
Corporate office costs
10,874
11,677
Operating income
15,022
4,014
Other income and expense
Interest and other income, net
54
43
Interest expense - debt and other
(246
)
(427
)
Total other income and expense
(192
)
(384
)
Income before taxes
14,830
3,630
Provision for income taxes
2,944
292
Net income
11,886
3,338
Less: net income attributable to
non-controlling interests:
Redeemable non-controlling interests -
temporary equity
(2,453
)
(1,796
)
Non-controlling interests - permanent
equity
(1,260
)
(526
)
(3,713
)
(2,322
)
Net income attributable to USPH
shareholders
$
8,173
$
1,016
Basic and diluted earnings per share
attributable to USPH shareholders
$
0.21
$
0.20
Shares used in computation - basic and
diluted
12,870
12,796
Dividends declared per common share
$
0.35
$
0.32
U.S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEET
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(unaudited)
March 31, 2021
December 31, 2020
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
17,937
$
32,918
Patient accounts receivable, less
allowance for credit losses of $2,120 and $2,008, respectively
45,394
41,906
Accounts receivable - other
8,621
9,039
Other current assets
3,846
3,773
Total current assets
75,798
87,636
Fixed assets:
Furniture and equipment
56,754
55,426
Leasehold improvements
35,492
35,320
Fixed assets, gross
92,246
90,746
Less accumulated depreciation and
amortization
70,485
69,081
Fixed assets, net
21,761
21,665
Operating lease right-of-use assets
81,553
81,595
Goodwill
360,176
345,646
Other identifiable intangible assets,
net
57,593
56,280
Other assets
1,509
1,539
Total assets
$
598,390
$
594,361
LIABILITIES, REDEEMABLE
NON-CONTROLLING INTERESTS,
USPH SHAREHOLDERS’ EQUITY AND
NON-CONTROLLING INTERESTS
Current liabilities:
Accounts payable - trade
$
1,955
$
1,335
Accounts payable - purchase of
non-controlling interest
4,828
-
Accrued expenses
51,671
59,746
Current portion of operating lease
liabilities
27,292
27,512
Current portion of notes payable
5,079
4,899
Total current liabilities
90,825
93,492
Notes payable, net of current portion
571
596
Revolving line of credit
16,000
16,000
Deferred taxes
8,212
7,779
Operating lease liabilities, net of
current portion
62,068
61,985
Other long-term liabilities
4,549
4,539
Total liabilities
182,225
184,391
Redeemable non-controlling interests -
temporary equity
138,924
132,340
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,
15,111,309 and 15,066,282 shares issued,
respectively
151
151
Additional paid-in capital
97,286
95,622
Retained earnings
210,375
212,015
Treasury stock at cost, 2,214,737
shares
(31,628
)
(31,628
)
Total USPH shareholders’ equity
276,184
276,160
Non-controlling interests - permanent
equity
1,057
1,470
Total USPH shareholders' equity and
non-controlling interests - permanent equity
277,241
277,630
Total liabilities, redeemable
non-controlling interests,
USPH shareholders' equity and
non-controlling interests - permanent equity
$
598,390
$
594,361
U.S. PHYSICAL THERAPY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
OPERATING ACTIVITIES
Net income including non-controlling
interests
$
11,886
$
3,338
Adjustments to reconcile net income
including non-controlling interests to net cash provided by
operating activities:
Depreciation and amortization
2,681
2,607
Provision for credit losses
1,200
1,361
Equity-based awards compensation
expense
1,651
1,886
Deferred income taxes
2,181
(1,369
)
Gain on sale of partnership interest
96
-
Derecognition (write-off) of goodwill -
closed clinics
-
1,859
Other
-
129
Changes in operating assets and
liabilities:
(Increase) decrease in patient accounts
receivable
(4,688
)
3,209
Decrease (increase) in accounts receivable
- other
220
(1,752
)
Decrease in other assets
221
2,846
Increase in accounts payable and accrued
expenses
3,969
2,027
Increase in other long-term
liabilities
(1,743
)
239
Net cash provided by operating
activities
17,674
16,380
INVESTING ACTIVITIES
Purchase of fixed assets
(1,608
)
(2,754
)
Purchase of majority interest in
businesses, net of cash acquired
(11,747
)
(11,633
)
Purchase of redeemable non-controlling
interest - temporary equity
-
(1,852
)
Proceeds on sales of partnership interest
and clinics
152
316
Net cash used in investing activities
(13,203
)
(15,923
)
FINANCING ACTIVITIES
Distributions to non-controlling
interests, permanent and temporary equity
(5,265
)
(2,341
)
Proceeds from revolving line of credit
60,000
88,000
Payments on revolving line of credit
(60,000
)
(20,000
)
Principal payments on notes payable
(145
)
(114
)
Payment of Medicare Accelerated and
Advance Funds
(14,054
)
-
Other
12
1
Net cash (used in) provided by financing
activities
(19,452
)
65,546
Net (decrease) increase in cash and cash
equivalents
(14,981
)
66,003
Cash and cash equivalents - beginning of
period
32,918
23,548
Cash and cash equivalents - end of
period
$
17,937
$
89,551
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the period for:
Income taxes
$
62
$
242
Interest
$
298
$
349
Non-cash investing and financing
transactions during the period:
Purchase of businesses - seller financing
portion
$
300
$
300
Payable related to purchase of redeemable
non-controlling interest, temporary equity
$
4,829
$
-
Notes receivable related to sale of
partnership interest - redeemable non-controlling interest
$
287
$
-
Dividends payable to USPH shareholders
$
4,514
$
4,110
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-Generally Accepted Accounting Principle
(“GAAP”) measure, equals net income attributable to USPH
shareholders per the consolidated statements of net income plus
charges incurred for closure costs and expenses incurred for the
CFO recruitment, all net of tax. The earnings per share from
Operating Results also excludes the impact of the revaluation of
redeemable non-controlling interest. In accordance with current
accounting guidance, 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.
Management uses Operating Results, which eliminates certain
items described above that can be subject to volatility and unusual
costs, as one of the principal measures to evaluate and monitor
financial performance period over period. Management believes that
Operating Results 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
mandatorily redeemable instruments and therefore have different
liability and equity structures.
Adjusted EBITDA is defined as net income attributable to USPH
shareholders before interest income, interest expense, taxes,
depreciation, amortization, equity-based awards compensation
expense and derecognition of goodwill related to clinic closures.
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.
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
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(unaudited)
Three Months Ended March
31,
2021
2020
Computation of earnings per share - USPH
shareholders:
Net income attributable to USPH
shareholders
$
8,173
$
1,016
Credit (charges) to retained earnings:
Revaluation of redeemable non-controlling
interest
(7,270
)
2,129
Tax effect at statutory rate (federal and
state) of 25.55% and 26.25%, respectively
1,857
(559
)
$
2,760
$
2,586
Earnings per share (basic and diluted)
$
0.21
$
0.20
Adjustments:
Expenses related to CFO transition
-
133
Closure costs
37
3,752
Revaluation of redeemable non-controlling
interest
7,270
(2,129
)
Tax effect at statutory rate (federal and
state) of 25.55% and 26.25%, respectively
(1,867
)
(461
)
Operating Results
$
8,200
$
3,881
Basic and diluted Operating Results per
share
$
0.64
$
0.30
Shares used in computation - basic and
diluted
12,870
12,796
Three Months Ended March
31,
2021
2020
Net income attributable to USPH
shareholders
$
8,173
$
1,016
Adjustments:
Depreciation and amortization
2,681
2,607
Closure costs - derecognition of
goodwill
-
1,859
Interest income
(54
)
(43
)
Interest expense - debt and other
247
427
Provision for income taxes
2,944
292
Equity-based awards compensation
expense
1,651
1,886
Adjusted EBITDA
$
15,642
$
8,044
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
RECAP OF PHYSICAL THERAPY
OPERATIONS
CLINIC COUNT
Date
Number of Clinics
March 31, 2020
567
June 30, 2020
554
September 30, 2020
550
December 31, 2020
554
March 31, 2021
564
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005183/en/
U.S. Physical Therapy, Inc. Carey Hendrickson, Chief Financial
Officer Email: chendrickson@usph.com Chris Reading, Chief Executive
Officer (713) 297-7000 Three Part Advisors Joe Noyons (817)
778-8424
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