QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
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(I.R.S. EMPLOYER IDENTIFICATION NO.)
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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(ZIP CODE)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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☑
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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Emerging growth company
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PART I—FINANCIAL INFORMATION
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Item 1.
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3
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3
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4
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5
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6
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7
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8
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Item 2.
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30
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Item 3.
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42
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Item 4.
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43
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PART II—OTHER INFORMATION
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Item 1.
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43
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Item 1A.
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43
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Item 5.
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43
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Item 6.
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44
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45
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ITEM 1. |
FINANCIAL STATEMENTS
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March 31, 2024
|
December 31, 2023
|
|||||||
ASSETS
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(unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
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$
|
|
$
|
|
||||
Patient accounts receivable, less provision for credit
losses of $
|
|
|
||||||
Accounts receivable - other
|
|
|
||||||
Other current assets
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||||||
Total current assets
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||||||
Fixed assets:
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||||||||
Furniture and equipment
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|
|
||||||
Leasehold improvements
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|
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||||||
Fixed assets, gross
|
|
|
||||||
Less accumulated depreciation and amortization
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(
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)
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(
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)
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||||
Fixed assets, net
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|
|
||||||
Operating lease right-of-use assets
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|
||||||
Investment in unconsolidated affiliate |
||||||||
Goodwill
|
|
|
||||||
Other identifiable intangible assets, net
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|
|
||||||
Other assets
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|
|
||||||
Total assets
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$
|
|
$
|
|
||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST
|
||||||||
Current liabilities:
|
||||||||
Accounts payable - trade
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Current portion of operating lease liabilities
|
|
|
||||||
Current portion of term loan and notes payable
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|
|
||||||
Total current liabilities
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|
|
||||||
Notes payable, net of current portion
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|
|
||||||
Term loan, net of current portion and deferred financing costs |
||||||||
Deferred taxes
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|
|
||||||
Operating lease liabilities, net of current portion
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|
|
||||||
Other long-term liabilities
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|
|
||||||
Total liabilities
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|
|
||||||
Redeemable non-controlling interest - temporary equity
|
|
|
||||||
Commitments and Contingencies
|
||||||||
U.S. Physical Therapy, Inc. (“USPH”) shareholders’ equity:
|
||||||||
Preferred stock, $
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated other comprehensive gain
|
||||||||
Retained earnings
|
|
|
||||||
Treasury stock at cost,
|
(
|
)
|
(
|
)
|
||||
Total USPH shareholders’ equity
|
|
|
||||||
Non-controlling interest - permanent equity
|
|
|
||||||
Total USPH shareholders’ equity and non-controlling interest - permanent equity
|
|
|
||||||
Total liabilities, redeemable non-controlling interest, USPH shareholders’ equity and non-controlling interest - permanent
equity
|
$
|
|
$
|
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
Net patient revenue
|
$ | $ | ||||||
Other revenue
|
||||||||
Net revenue
|
||||||||
Operating cost:
|
||||||||
Salaries and related costs
|
||||||||
Rent, supplies, contract labor and other
|
||||||||
Provision for credit losses
|
||||||||
Total operating cost
|
||||||||
Gross profit
|
||||||||
Corporate office costs
|
||||||||
Operating income
|
||||||||
Other income (expense): | ||||||||
Interest expense, debt and other
|
( |
) | ( |
) | ||||
Interest income from investments
|
||||||||
Change in fair value of contingent earn-out consideration
|
( |
) | ||||||
Change in revaluation of put-right liability
|
( |
) | ( |
) | ||||
Equity in earnings of unconsolidated affiliate
|
||||||||
Relief Funds
|
||||||||
Other
|
||||||||
Total other income (expense)
|
( |
) | ||||||
Income before taxes
|
||||||||
Provision for income taxes
|
||||||||
Net income
|
||||||||
Less: Net income attributable to non-controlling interest:
|
||||||||
Redeemable non-controlling interest - temporary equity
|
( |
) | ( |
) | ||||
Non-controlling interest - permanent equity
|
( |
) | ( |
) | ||||
( |
) | ( |
) | |||||
Net income attributable to USPH shareholders
|
$ | $ | ||||||
Basic and diluted earnings per share attributable to USPH shareholders (1)
|
$ | $ | ||||||
Shares used in computation - basic and diluted
|
||||||||
Dividends declared per common share
|
$ | $ |
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive gain (loss):
|
||||||||
Unrealized gain (loss) on cash flow hedge
|
|
(
|
)
|
|||||
Tax effect at statutory rate (federal and state)
|
(
|
)
|
|
|||||
Comprehensive income
|
$
|
|
$
|
|
||||
Comprehensive income attributable to non-controlling interest
|
(
|
)
|
(
|
)
|
||||
Comprehensive income attributable to USPH shareholders
|
$
|
|
$
|
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
OPERATING ACTIVITIES
|
||||||||
Net income including non-controlling interest
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Provision for credit losses
|
|
|
||||||
Equity-based awards compensation expense
|
|
|
||||||
Amortization of debt issue costs
|
||||||||
Change in deferred income taxes
|
|
|
||||||
Change in revaluation of put-right liability
|
||||||||
Change in fair value of contingent earn-out consideration |
( |
) | ||||||
Equity of earnings in unconsolidated affiliate
|
( |
) | ( |
) | ||||
Loss on sale of fixed assets
|
||||||||
Other
|
||||||||
Changes in operating assets and liabilities:
|
||||||||
Increase in patient accounts receivable
|
(
|
)
|
(
|
)
|
||||
Increase in accounts receivable - other
|
(
|
)
|
(
|
)
|
||||
(Decrease) increase in other current and long term assets
|
(
|
)
|
|
|||||
Decrease in accounts payable and accrued expenses
|
(
|
)
|
(
|
)
|
||||
Increase (decrease) in other long-term liabilities
|
|
(
|
)
|
|||||
Net cash provided by operating activities
|
|
|
||||||
INVESTING ACTIVITIES
|
||||||||
Purchase of fixed assets
|
(
|
)
|
(
|
)
|
||||
Purchase of majority interest in businesses, net of cash acquired
|
(
|
)
|
(
|
)
|
||||
Purchase of redeemable non-controlling interest, temporary equity
|
(
|
)
|
(
|
)
|
||||
Purchase of non controlling interest, permanent equity
|
(
|
)
|
|
|||||
Proceeds on sale of non-controlling interest, permanent equity |
||||||||
Proceeds on sale of partnership interest - redeemable non-controlling interest, temporary equity
|
||||||||
Distributions from unconsolidated affiliate
|
||||||||
Other
|
||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
FINANCING ACTIVITIES
|
||||||||
Proceeds from revolving facility
|
||||||||
Distributions to non-controlling interest, permanent and temporary equity
|
(
|
)
|
(
|
)
|
||||
Principal payments on notes payable
|
(
|
)
|
(
|
)
|
||||
Payments on term loan
|
( |
) | ( |
) | ||||
Net cash (used in) provided by financing activities
|
(
|
)
|
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(
|
)
|
|
|||||
Cash and cash equivalents - beginning of period
|
|
|
||||||
Cash and cash equivalents - end of period
|
$
|
|
$
|
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
Cash paid during the period for:
|
||||||||
Income taxes
|
$
|
|
$
|
|
||||
Interest paid
|
$
|
|
$
|
|
||||
Non-cash investing and financing transactions during the period:
|
||||||||
Purchase of interest in businesses - seller financing portion
|
$
|
|
$
|
|
||||
Notes payable related to purchase of redeemable non-controlling interest, temporary equity
|
$ | $ | ||||||
Offset of notes receivable associated with purchase of redeemable non-controlling interest
|
$ |
$ |
||||||
Notes receivable related to sale of redeemable non-controlling interest, temporary equity
|
$
|
|
$
|
|
||||
Notes receivable related to the sale of non-controlling interest, permanent equity
|
$ | $ | ||||||
Dividends payable to USPH shareholders
|
$ |
$ |
|
U.S.Physical Therapy, Inc.
|
|||||||||||||||||||||||||||||||||||||||
Common Stock | Additional |
Accumulated Other
|
Retained | Treasury Stock |
Total Shareholders’
|
Non-Controlling
|
||||||||||||||||||||||||||||||||||
Shares | Amount |
Paid-In Capital
|
Comprehensive Gain
|
Earnings | Shares | Amount | Equity | Interests | Total | |||||||||||||||||||||||||||||||
Balance December 31, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||||
Net income attributable to USPH shareholders
|
- | - | ||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest - permanent equity
|
- | - | ||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of cancellations
|
||||||||||||||||||||||||||||||||||||||||
Revaluation of redeemable non-controlling interest
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||||||||
Compensation expense - equity-based awards
|
- | - | ||||||||||||||||||||||||||||||||||||||
Sale of non-controlling interest
|
-
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||||||||||
Purchase of partnership interests - non-controlling interest
|
- | ( |
) | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Dividends payable to USPH shareholders
|
-
|
|
|
|
(
|
)
|
-
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||||||||
Distributions to non-controlling interest partners - permanent equity
|
-
|
|
|
|
|
-
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||
Deferred taxes related to redeemable non-controlling interest - temporary equity
|
-
|
|
|
|
(
|
)
|
-
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||||||||
Other comprehensive gain
|
- |
|
|
-
|
|
|
|
|||||||||||||||||||||||||||||||||
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans
|
- | - | ||||||||||||||||||||||||||||||||||||||
Other |
- | ( |
) | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Balance March 31, 2024
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
U.S.Physical Therapy, Inc.
|
||||||||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
|
Accumulated Other | Retained |
Treasury Stock
|
Total Shareholders’
|
Non-Controlling
|
||||||||||||||||||||||||||||||||||
|
Shares | Amount |
Paid-In Capital
|
Comprehensive Loss |
Earnings
|
Shares | Amount | Equity | Interests | Total | ||||||||||||||||||||||||||||||
Balance December 31, 2022
|
|
$
|
|
$
|
|
$ |
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||||||||||||
Net income attributable to USPH shareholders
|
- | - | ||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest - permanent equity
|
- | - | ||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of cancellations
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Revaluation of redeemable non-controlling interest, net of tax
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||||||||||||
Compensation expense - equity-based awards
|
-
|
|
|
-
|
|
|
|
|||||||||||||||||||||||||||||||||
Dividends payable to USPH shareholders
|
- | ( |
) | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Distributions to non-controlling interest partners - permanent equity
|
-
|
|
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||
Deferred taxes related to redeemable non-controlling interest - temporary equity
|
- | - | ||||||||||||||||||||||||||||||||||||||
Other comprehensive gain | - | ( |
) | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Other
|
-
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance March 31, 2023
|
|
$ |
|
$ |
|
$ | $ |
|
(
|
)
|
$ |
(
|
)
|
$ |
|
$ |
|
$ |
|
1.
|
Basis of Presentation and Significant Accounting Policies
|
Acquisition
|
Date
|
% Interest
Acquired
|
Number of
Clinics
|
||||||
March 2024 Acquisition
|
|||||||||
October 2023 Acquisition
|
|||||||||
September 2023 Acquisition 1 |
|
||||||||
September 2023 Acquisition 2 |
|
||||||||
July 2023 Acquisition |
|
||||||||
May 2023 Acquisition | |||||||||
February 2023 Acquisition |
*
|
|
**
|
|
●
|
Level 1 – Quoted prices in active markets for identical assets or
liabilities.
|
●
|
Level 2 – Inputs, other than the quoted prices in active markets, that
are observable either directly or indirectly.
|
●
|
Level 3 – Unobservable inputs based on the Company’s own assumptions.
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
(In thousands, except per share data)
|
||||||||
Earnings per share
|
||||||||
Computation of earnings per share - USPH shareholders:
|
||||||||
Net income attributable to USPH shareholders
|
$ | $ | ||||||
Charges to retained earnings:
|
||||||||
Revaluation of redeemable non-controlling interest
|
( |
) | ||||||
Tax effect at statutory rate (federal and state)
|
( |
) | ||||||
$ | $ | |||||||
Earnings per share (basic and diluted)
|
$ | $ | ||||||
Shares used in computation - basic and diluted
|
% Interest
|
Number of
|
|||||||||
Acquisition
|
Date
|
Acquired
|
Clinics
|
|||||||
March 2024 Acquisition
|
|
|
|
|
Physical Therapy
|
||||
Operations
|
||||
(In thousands)
|
||||
Cash paid, net of cash acquired
|
$
|
|
||
Seller note
|
|
|||
Deferred payments
|
|
|||
Contingent payments
|
|
|||
Total consideration
|
$
|
|
||
|
||||
Estimated fair value of net tangible assets acquired:
|
||||
Total current assets
|
$
|
|
||
Total non-current assets
|
|
|||
Total liabilities
|
(
|
)
|
||
Net tangible assets acquired
|
|
|||
Customer and referral relationships
|
|
|||
Non-compete agreement
|
|
|||
Tradenames
|
|
|||
Goodwill
|
|
|||
Fair value of non-controlling interest (classified as redeemable non-controlling interest)
|
(
|
)
|
||
$
|
|
% Interest
|
Number of
|
||||||||
Acquisition
|
Date
|
Acquired
|
Clinics
|
||||||
October 2023 Acquisition
|
|
|
|||||||
September 2023 Acquisition 1
|
|
|
|||||||
September 2023 Acquisition 2
|
|
|
|||||||
July 2023 Acquisition
|
|
|
|||||||
May 2023 Acquisition
|
|
|
|||||||
February 2023 Acquisition
|
|
|
* |
IIP business.
|
** |
On October 31, 2023, the Company concurrently acquired
|
Physical Therapy
|
||||||||||||
IIP
|
Operations
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Cash paid, net of cash acquired
|
$
|
|
$
|
|
$
|
|
||||||
Seller note
|
|
|
|
|||||||||
Deferred payments
|
|
|
|
|||||||||
Contingent payments
|
|
|
|
|||||||||
Total consideration
|
$
|
|
$
|
|
$
|
|
||||||
|
||||||||||||
Estimated fair value of net tangible assets acquired:
|
||||||||||||
Total current assets
|
$
|
|
$
|
|
$
|
|
||||||
Total non-current assets
|
|
|
|
|||||||||
Total liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net tangible assets acquired
|
|
|
|
|||||||||
Customer and referral relationships
|
|
|
|
|||||||||
Non-compete agreement
|
|
|
|
|||||||||
Tradenames
|
|
|
|
|||||||||
Goodwill
|
|
|
|
|||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interest)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
$
|
|
$
|
|
$
|
|
1. |
Prior to the Acquisition, the Therapy Practice exists as a separate legal entity (the “Seller Entity”). The Seller Entity is owned by one or more individuals
(the “Selling Shareholders”) most of whom are physical therapists that work in the acquired Therapy Practice and provide physical therapy services to patients.
|
2. |
In conjunction with the Acquisition, the Seller Entity contributes the Therapy Practice into a newly-formed limited partnership (“NewCo”), in exchange for one
hundred percent (
|
3. |
The Company enters into an agreement (the “Purchase Agreement”) to acquire from the Seller Entity a majority (ranges from
|
4. |
The Company and the Seller Entity also execute a partnership agreement (the “Partnership Agreement”) for NewCo that sets forth the rights and obligations of the
limited and general partners of NewCo. After the Acquisition, the Company is the general partner of NewCo.
|
5. |
As noted above, the Company does not purchase
|
6. |
In most cases, some or all of the Selling Shareholders enter into an employment agreement (the “Employment Agreement”) with NewCo with an initial term that
ranges from
to |
7. |
The compensation of each Employed Selling Shareholder is specified in the Employment Agreement and is customary and commensurate with his or her responsibilities
based on other employees in similar capacities within NewCo, the Company and the industry.
|
8. |
The Company and the Selling Shareholder (including both Employed Selling Shareholders and Selling Shareholders not employed by NewCo) execute a non-compete
agreement (the “Non-Compete Agreement”) which restricts the Selling Shareholder from engaging in competing business activities for a specified period of time (the “Non-Compete Term”). A Non-Compete Agreement is executed with the Selling
Shareholders in all cases. That is, even if the Selling Shareholder does not become an Employed Selling Shareholder, the Selling Shareholder is restricted from engaging in a competing business during the Non-Compete Term.
|
9. |
The Non-Compete Term commences as of the date of the Acquisition and expires on the later
of :
|
a. |
|
b. |
|
10. |
The Non-Compete Agreement applies to a restricted region which is a defined mileage radius from the Therapy Practice. That is, an Employed Selling Shareholder is
permitted to engage in competing Therapy Practices or activities outside the designated geography (after such Employed Selling Shareholder no longer is employed by NewCo) and a Selling Shareholder who is not employed by NewCo immediately is
permitted to engage in the competing Therapy Practice or activities outside the designated geography.
|
1. |
Put Right
|
a. |
In the event that any Selling Shareholder’s employment is terminated under certain circumstances prior to the fifth anniversary of the Closing Date, the Seller
Entity thereafter may have an irrevocable right to cause the Company to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below.
|
b. |
In the event that any Selling Shareholder is not employed by NewCo as of the fifth anniversary of the Closing Date and the Company has not exercised its Call
Right with respect to the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, Seller Entity thereafter shall have the Put Right to cause the Company to purchase from Seller Entity the Terminated Selling
Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below.
|
c. |
In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the Closing Date, the Seller
Entity has the Put Right, and upon the exercise of the Put Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in “3” below.
|
2. |
Call Right
|
a. |
If any Selling Shareholder’s employment by NewCo is terminated prior to the fifth anniversary of the Closing Date, the Company thereafter has an irrevocable
right to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, in each case at the purchase price described in “3” below.
|
b. |
In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the Closing Date, the Company
has the Call Right, and upon the exercise of the Call Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in “3” below.
|
3. |
For the Put Right and the Call Right, the purchase price is derived from a formula based on a specified multiple of NewCo’s trailing twelve months of earnings
before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Percentage of any undistributed earnings of NewCo (the “Redemption Amount”). NewCo’s earnings are distributed monthly based on
available cash within NewCo; therefore, the undistributed earnings amount is small, if any.
|
4. |
The Purchase Price for the initial equity interest purchased by the Company, also based on
the same specified multiple of the trailing twelve-month earnings that is used in the Put Right and the Call Right noted above.
|
5. |
The Put Right and the Call Right do not have an expiration date, and the Seller Entity Interest is not required to be purchased by the Company or sold by the
Seller Entity unless either the Put Right or the Call Right is exercised.
|
6. |
The Put Right and the Call Right never apply to Selling Shareholders who do not become employed by NewCo, since the Company requires that such Selling
Shareholders sell their entire ownership interest in the Seller Entity at the closing of the Acquisition.
|
1. |
Prior to the acquisition, the Progressive Subsidiaries were owned by a legal entity (“Progressive Parent”) controlled by its individual
owners (the “ Progressive Selling Shareholders”), who work in and manage the Progressive business.
|
2. |
In conjunction with the acquisition, the Progressive Selling Shareholders caused the Progressive Parent to transfer its ownership of the
Progressive Subsidiaries into a newly-formed limited liability company (“Progressive NewCo”), in exchange for one hundred percent (
|
3. |
The Company entered into an agreement (the “Progressive Purchase Agreement”) to acquire from the Progressive Selling Shareholders a
majority of the membership interest in Progressive NewCo. The consideration for the acquisition is primarily payable in the form of cash at closing, a relatively small portion paid in cash after the closing contingent on certain
performance criteria, and a small note in lieu of an escrow (the “Progressive Purchase Price”).
|
4. |
The Company and the Progressive Selling Shareholders also executed an operating agreement (the “Progressive Operating Agreement”)
for Progressive NewCo that sets forth the rights and obligations of the members of Progressive NewCo.
|
5. |
As noted above, the Company did not purchase
|
6. |
The Company and the Progressive Selling Shareholders executed a non-compete agreement (the “Progressive Non-Compete Agreement”)
which restricts the Progressive Selling Shareholders from competing for a specified period of time (the “Progressive Non-Compete Term”).
|
7. |
The Progressive Non-Compete Term commences as of the date of the Progressive acquisition and expires on the later of:
|
a. |
|
b. |
|
8. |
The Progressive Non-Compete Agreement applies to the entire United States.
|
9. |
The Progressive Put Right (as defined below) and the Progressive Call Right (as defined below) do not have an expiration
date. The Progressive Operating Agreement contains provisions for the redemption of the Progressive Selling Shareholder’s Interest, either at the option of the Company (the “Progressive Call Right”) or at the option of the
Progressive Selling Shareholder (the “Progressive Put Right”) as follows:
|
1. |
Progressive Put Right
|
a. |
Each of the Progressive Selling Shareholders has the right to sell
|
b. |
In the event that any Progressive Selling Shareholder terminates his management relationship with Progressive NewCo for any
reason on or after the seventh anniversary of the Closing Date, the Progressive Selling Shareholder has the Put Right, and upon the exercise of the Progressive Put Right, the Progressive Selling Shareholder’s Interest shall be
redeemed by the Company at the purchase price described in “3” below.
|
2. |
Progressive Call Rights
|
a. |
If any Progressive Selling Shareholder’s ceases to perform management services on behalf of Progressive NewCo, the Company
thereafter shall have an irrevocable right to purchase from such Progressive Selling Shareholder his Interest, in each case at the purchase price described in “3” below.
|
3. |
For the Progressive Put Right and the Progressive Call Right, the purchase price is derived from a formula based on a specified
multiple of Progressive NewCo’s trailing twelve months of earnings before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Percentage of any undistributed earnings of
Progressive NewCo. Progressive NewCo’s earnings are distributed monthly based on available cash within Progressive NewCo; therefore, the undistributed earnings amount is small, if any.
|
4. |
The Progressive Purchase Price for the initial equity interest purchased by the Company is also based on the same specified
multiple of the trailing twelve-month earnings that is used in the Progressive Put Right and the Progressive Call Right noted above.
|
5. |
The Progressive Put Right and the Progressive Call Right do not have an expiration date.
|
Three Months Ended
|
Year Ended
|
|||||||
March 31, 2024
|
December 31, 2023
|
|||||||
(In thousands)
|
||||||||
Beginning balance
|
$ | $ | ||||||
Net income allocated to redeemable non-controlling interest partners
|
||||||||
Distributions to redeemable non-controlling interest partners
|
( |
) | ( |
) | ||||
Changes in the fair value of redeemable non-controlling interest
|
||||||||
Purchases of redeemable non-controlling interest
|
( |
) | ( |
) | ||||
Acquired interest
|
||||||||
Sales of redeemable non-controlling interest
|
||||||||
Changes in notes receivable related to redeemable non-controlling interest
|
( |
) | ( |
) | ||||
Ending balance
|
$ | $ |
March 31, 2024
|
December 31, 2023
|
|||||||
(In thousands)
|
||||||||
Contractual time period has lapsed but holder’s employment has not terminated
|
$
|
|
$
|
|
||||
Contractual time period has not lapsed and holder’s employment has not terminated
|
|
|
||||||
Holder’s employment has terminated and contractual time period has expired
|
|
|
||||||
Holder’s employment has terminated and contractual time period has not expired
|
|
|
||||||
$
|
|
$
|
|
Three Months Ended
|
Year Ended
|
|||||||
March 31, 2024
|
December 31, 2023
|
|||||||
(In thousands) | ||||||||
Beginning balance
|
$
|
|
$
|
|
||||
Acquisitions
|
|
|
||||||
Adjustments for purchase price allocation of businesses acquired in prior year
|
(
|
)
|
|
|||||
Impairment of goodwill | ( |
) | ||||||
Ending balance
|
$
|
|
$
|
|
March 31, 2024
|
December 31, 2023
|
|||||||||||||||||||||||
Gross Amount
|
Accumulated Amortization
|
Net Carrying
Amount
|
Gross Amount
|
Accumulated Amortization
|
Net Carrying
Amount
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Customer and referral relationships
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Tradenames
|
|
|
|
|
|
|
||||||||||||||||||
Non-compete agreements
|
|
(
|
)
|
|
|
(
|
)
|
|
||||||||||||||||
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
(In thousands) | ||||||||
Customer and referral relationships
|
$ | $ | ||||||
Non-compete agreements
|
||||||||
$ | $ |
For the Year Ended December 31, |
Customer and Referral
Relationships
|
Non-Compete
Agreements
|
||||||
(In thousands) |
||||||||
2024
(excluding the three months ended March 31, 2024)
|
$
|
|
$
|
|
||||
2025
|
|
|
|
|
||||
2026
|
|
|
|
|
||||
2027
|
|
|
|
|
||||
2028
|
|
|
|
|
||||
Thereafter
|
$
|
|
$
|
|
March 31, 2024
|
December 31, 2023
|
|||||||
(In thousands) |
||||||||
Salaries and related costs
|
$
|
|
$
|
|
||||
Credit balances due to patients and payors
|
|
|
||||||
Dividend payable |
||||||||
Group health insurance claims
|
|
|
||||||
Federal income taxes payable |
||||||||
Contingency payable
|
|
|
||||||
Other property taxes payable | ||||||||
Purchase of redeemable non-controlling interests |
||||||||
Interest payable | ||||||||
Closure costs | ||||||||
Other
|
|
|
||||||
Total
|
$
|
|
$
|
|
|
March 31, 2024
|
December 31, 2023
|
||||||||||||||||||||||
|
Principal
Amount
|
Unamortized
discount and
debt issuance
cost
|
Net Debt
|
Principal
Amount
|
Unamortized
discount and
debt issuance
cost
|
Net Debt
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Term Facility
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Revolving Facility
|
|
|
|
|
|
|
||||||||||||||||||
Other (1)
|
|
|
|
|
|
|
||||||||||||||||||
Total debt
|
|
|
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
Less: Current portion of long-term debt
|
|
(
|
)
|
|
|
(
|
)
|
|
||||||||||||||||
Long-term debt, net of current portion
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
(1)
|
|
1)
|
Revolving Facility: $ |
2)
|
Term Facility: $
|
|
Three Months Ended
|
|||||||
|
March 31, 2024
|
March 31, 2023
|
||||||
(In thousands) | ||||||||
Net income |
$ | $ | ||||||
Other comprehensive gain (loss):
|
||||||||
Unrealized gain (loss) on cash flow hedge
|
|
(
|
)
|
|||||
Tax effect at statutory rate (federal and state)
|
(
|
)
|
|
|||||
Comprehensive income
|
|
|
||||||
Comprehensive income attributable to non-controlling interest | ( |
) | ( |
) | ||||
Comprehensive income attributable to USPH shareholders | $ | $ |
March 31,
2024
|
March 31,
2023
|
|||||||
Interest rate swap:
|
(In thousands)
|
|||||||
Other current assets
|
$
|
|
$
|
|
||||
Other assets
|
|
|
||||||
$
|
|
$
|
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
(In thousands) | ||||||||
Operating lease cost
|
$ | $ | ||||||
Short-term lease cost
|
||||||||
Variable lease cost
|
||||||||
Total lease cost *
|
$ | $ |
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
(In thousands) | ||||||||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$ | $ | ||||||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$ | $ |
Fiscal Year
|
Amount
(In thousands)
|
|||
2024 (excluding the three months ended March 31, 2024) | $ | |||
2025
|
||||
2026
|
||||
2027
|
||||
2028 and thereafter
|
||||
Total lease payments
|
$ | |||
Less: imputed interest
|
||||
Total operating lease liabilities
|
$ |
March 31, 2024
|
March 31, 2023
|
|||||
Weighted-average remaining lease term - Operating leases
|
|
|
||||
Weighted-average discount rate - Operating leases
|
|
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
|
(In thousands) | |||||||
Net revenue: | ||||||||
Physical therapy operations
|
$ | $ | ||||||
Industrial injury prevention services
|
||||||||
Total Company
|
$ | $ | ||||||
|
||||||||
Operating Costs:
|
||||||||
Salaries and related costs:
|
||||||||
Physical therapy operations
|
$ | $ | ||||||
Industrial injury prevention services
|
||||||||
Total salaries and related costs
|
$ | $ | ||||||
Rent supplies, contract labor and other:
|
||||||||
Physical therapy operations
|
$ | $ | ||||||
Industrial injury prevention services
|
||||||||
Total rent, supplies, contract labor and other
|
$ | $ | ||||||
Provision for credit losses:
|
||||||||
Physical therapy operations
|
$ | $ | ||||||
Industrial injury prevention services
|
||||||||
Total provision for credit losses
|
$ | $ | ||||||
Total Company |
$ | $ | ||||||
Gross profit:
|
||||||||
Physical therapy operations
|
$ | $ | ||||||
Industrial injury prevention services
|
||||||||
Total Company
|
$ | $ | ||||||
|
||||||||
Total Assets:
|
||||||||
Physical therapy operations
|
$ | $ | ||||||
Industrial injury prevention services
|
||||||||
Total Company
|
$ | $ |
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
• |
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;
|
• |
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, industrial injury prevention 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;
|
•
|
if our noncompetition covenants with employed therapists are nullified, we may lose staff to competitors; |
• |
maintaining adequate internal controls;
|
• |
maintaining necessary insurance coverage;
|
• |
availability, terms, and use of capital; and
|
• |
weather and other seasonal factors.
|
|
% Interest
|
Number of
|
||||
Acquisition
|
Date
|
Acquired
|
Clinics
|
|||
March 2024 Acquisition
|
March 29, 2024
|
50%
|
9
|
|||
October 2023 Acquisition
|
October 31, 2023
|
**
|
*
|
|||
September 2023 Acquisition 1
|
September 29, 2023
|
70%
|
4
|
|||
September 2023 Acquisition 2
|
September 29, 2023
|
70%
|
1
|
|||
July 2023 Acquisition
|
July 31, 2023
|
70%
|
7
|
|||
May 2023 Acquisition
|
May 31, 2023
|
45%
|
4
|
|||
February 2023 Acquisition
|
February 28, 2023
|
80%
|
1
|
* |
IIP business.
|
** |
On October 31, 2023, we concurrently acquired 100% of an IIP business and a 55% equity interest in an ergonomics software business.
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
Number of clinics, beginning of period
|
671
|
640
|
||||||
Additions (1)
|
14
|
8
|
||||||
Closed or sold
|
(6
|
)
|
(1
|
)
|
||||
Number of clinics, end of period
|
679
|
647
|
(1) |
Includes clinics added through acquisitions.
|
• |
Mature clinics are clinics opened or acquired prior to January 1, 2023, and are still operating as of March 31, 2024.
|
• |
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.
|
• |
2024 First Quarter refers to the three months ended March 31, 2024.
|
• |
2023 First Quarter refers to the three months ended March 31, 2023.
|
Three Months Ended
|
Variance
|
|||||||||||||||||||||||
March 31, 2024
|
March 31, 2023
|
$ | % |
|||||||||||||||||||||
(In thousands, except percentages)
|
||||||||||||||||||||||||
Net patient revenue
|
$
|
131,075
|
84.2
|
%
|
$
|
126,581
|
85.2
|
%
|
$
|
4,494
|
3.6
|
%
|
||||||||||||
Other revenue
|
24,600
|
15.8
|
%
|
21,928
|
14.8
|
%
|
2,672
|
12.2
|
%
|
|||||||||||||||
Net revenue
|
155,675
|
100.0
|
%
|
148,509
|
100.0
|
%
|
7,166
|
4.8
|
%
|
|||||||||||||||
Operating Cost:
|
||||||||||||||||||||||||
Salaries and related costs
|
93,731
|
60.2
|
%
|
86,040
|
57.9
|
%
|
7,691
|
8.9
|
%
|
|||||||||||||||
Rent, supplies, contract labor and other
|
31,916
|
20.5
|
%
|
30,100
|
20.3
|
%
|
1,816
|
6.0
|
%
|
|||||||||||||||
Provision for credit losses
|
1,627
|
1.0
|
%
|
1,512
|
1.0
|
%
|
115
|
7.6
|
%
|
|||||||||||||||
Total operating cost
|
127,274
|
81.8
|
%
|
117,652
|
79.2
|
%
|
9,622
|
8.2
|
%
|
|||||||||||||||
Gross Profit
|
28,401
|
18.2
|
%
|
30,857
|
20.8
|
%
|
(2,456
|
)
|
-8.0
|
%
|
||||||||||||||
Corporate office costs
|
14,085
|
9.0
|
%
|
13,859
|
9.3
|
%
|
226
|
1.6
|
%
|
|||||||||||||||
Operating Income
|
14,316
|
9.2
|
%
|
16,998
|
11.4
|
%
|
(2,682
|
)
|
-15.8
|
%
|
||||||||||||||
Other (expense) income:
|
||||||||||||||||||||||||
Interest expense, debt and other
|
(1,968
|
)
|
-1.3
|
%
|
(2,560
|
)
|
-1.7
|
%
|
592
|
-23.1
|
%
|
|||||||||||||
Interest income from investments
|
1,543
|
1.0
|
%
|
64
|
0.0
|
%
|
1,479
|
2310.9
|
%
|
|||||||||||||||
Change in fair value of contingent earn-out consideration
|
612
|
0.4
|
%
|
(698
|
)
|
-0.5
|
%
|
1,310
|
-187.7
|
%
|
||||||||||||||
Change in revaluation of put-right liability
|
(80
|
)
|
-0.1
|
%
|
(149
|
)
|
-0.1
|
%
|
69
|
-46.3
|
%
|
|||||||||||||
Equity in earnings of unconsolidated affiliate
|
271
|
0.2
|
%
|
274
|
0.2
|
%
|
(3
|
)
|
-1.1
|
%
|
||||||||||||||
Relief Funds
|
-
|
0.0
|
%
|
467
|
0.3
|
%
|
(467
|
)
|
-100.0
|
%
|
||||||||||||||
Other
|
62
|
0.0
|
%
|
-
|
0.0
|
%
|
62
|
*
|
(1) | |||||||||||||||
Total other (expense) income
|
440
|
0.3
|
%
|
(2,602
|
)
|
-1.8
|
%
|
3,042
|
-116.9
|
%
|
||||||||||||||
Income before taxes
|
14,756
|
9.5
|
%
|
14,396
|
9.7
|
%
|
360
|
2.5
|
%
|
|||||||||||||||
Provision for income taxes
|
3,139
|
2.0
|
%
|
2,969
|
2.0
|
%
|
170
|
5.7
|
%
|
|||||||||||||||
Net income
|
11,617
|
7.5
|
%
|
11,427
|
7.7
|
%
|
190
|
1.7
|
%
|
|||||||||||||||
Less: Net income attributable to non-controlling interest:
|
||||||||||||||||||||||||
Redeemable non-controlling interest - temporary equity
|
(2,227
|
)
|
-1.4
|
%
|
(2,720
|
)
|
-1.8
|
%
|
493
|
-18.1
|
%
|
|||||||||||||
Non-controlling interest - permanent equity
|
(1,344
|
)
|
-0.9
|
%
|
(1,297
|
)
|
-0.9
|
%
|
(47
|
)
|
3.6
|
%
|
||||||||||||
(3,571
|
)
|
-2.3
|
%
|
(4,017
|
)
|
-2.7
|
%
|
446
|
-11.1
|
%
|
||||||||||||||
Net income attributable to USPH shareholders
|
$
|
8,046
|
5.2
|
%
|
$
|
7,410
|
5.0
|
%
|
$
|
636
|
8.6
|
%
|
(1)
|
Not meaningful.
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
(In thousands, except per share data)
|
||||||||
Earnings per share
|
||||||||
Computation of earnings per share - USPH shareholders:
|
||||||||
Net income attributable to USPH shareholders
|
$
|
8,046
|
$
|
7,410
|
||||
Charges to retained earnings:
|
||||||||
Revaluation of redeemable non-controlling interest
|
(1,439
|
)
|
119
|
|||||
Tax effect at statutory rate (federal and state)
|
368
|
(30
|
)
|
|||||
$
|
6,975
|
$
|
7,499
|
|||||
Earnings per share (basic and diluted)
|
$
|
0.46
|
$
|
0.58
|
||||
Shares used in computation - basic and diluted
|
15,017
|
13,025
|
|
Three Months Ended
|
|||||||
|
March 31, 2024
|
March 31, 2023
|
||||||
(In thousands, except per share data)
|
||||||||
Adjusted EBITDA (a non-GAAP measure)
|
||||||||
Net income attributable to USPH shareholders
|
$
|
8,046
|
$
|
7,410
|
||||
Adjustments:
|
||||||||
Provision for income taxes
|
3,139
|
2,969
|
||||||
Depreciation and amortization
|
4,095
|
3,788
|
||||||
Interest expense, debt and other, net
|
1,968
|
2,560
|
||||||
Interest income from investments
|
(1,543
|
)
|
(64
|
)
|
||||
Equity-based awards compensation expense
|
1,997
|
1,806
|
||||||
Change in revaluation of put-right liability
|
80
|
149
|
||||||
Change in fair value of contingent earn-out consideration
|
(612
|
)
|
698
|
|||||
Relief Funds
|
-
|
(467
|
)
|
|||||
Other income
|
(62
|
)
|
-
|
|||||
Allocation to non-controlling interests
|
(432
|
)
|
(371
|
)
|
||||
$
|
16,676
|
$
|
18,478
|
|||||
Operating Results (a non-GAAP measure)
|
||||||||
Net income attributable to USPH shareholders
|
$
|
8,046
|
$
|
7,410
|
||||
Adjustments:
|
||||||||
Change in fair value of contingent earn-out consideration
|
(612
|
)
|
698
|
|||||
Change in revaluation of put-right liability
|
80
|
149
|
||||||
Relief Funds
|
-
|
(467
|
)
|
|||||
Allocation to non-controlling interests
|
-
|
33
|
||||||
Tax effect at statutory rate (federal and state)
|
136
|
(105
|
)
|
|||||
$
|
7,650
|
$
|
7,718
|
|||||
Operating Results per share (a non-GAAP measure)
|
$
|
0.51
|
$
|
0.59
|
Three Months Ended | Variance | |||||||||||||||
March 31, 2024
|
March 31, 2023
|
$
|
% | |||||||||||||
(In thousands, except percentages)
|
||||||||||||||||
Revenue related to:
|
||||||||||||||||
Mature Clinics (1)
|
$
|
123,267
|
$
|
125,485
|
$
|
(2,218
|
)
|
(1.8
|
)%
|
|||||||
Clinic additions (2)
|
7,561
|
371
|
7,190
|
*
|
(6) | |||||||||||
Clinics sold or closed (3)
|
247
|
725
|
(478
|
)
|
*
|
(6) | ||||||||||
Net Patient Revenue
|
131,075
|
126,581
|
4,494
|
3.6
|
%
|
|||||||||||
Other (4)
|
3,350
|
2,578
|
772
|
29.9
|
%
|
|||||||||||
Total
|
134,425
|
129,159
|
5,266
|
4.1
|
%
|
|||||||||||
Operating costs (4)
|
110,361
|
102,070
|
8,291
|
8.1
|
%
|
|||||||||||
Gross profit
|
$
|
24,064
|
$
|
27,089
|
$
|
(3,025
|
)
|
(11.2
|
)%
|
|||||||
Financial and operating metrics (not in thousands):
|
||||||||||||||||
Net rate per patient visit (1)
|
$
|
103.37
|
$
|
103.12
|
$
|
0.25
|
0.2
|
%
|
||||||||
Patient visits (1)
|
1,268,002
|
1,227,490
|
40,512
|
3.3
|
%
|
|||||||||||
Average daily visits per clinic (1)
|
29.5
|
29.8
|
(0.3
|
)
|
(1.0
|
)%
|
||||||||||
Gross margin
|
17.9
|
%
|
21.0
|
%
|
||||||||||||
Salaries and related costs per visit, clinics (5)
|
$
|
61.42
|
$
|
59.14
|
$
|
2.28
|
3.9
|
%
|
||||||||
Operating costs per visit, clinics (5)
|
$
|
85.50
|
$
|
81.97
|
$
|
3.53
|
4.3
|
%
|
Three Months Ended
|
Variance
|
|||||||||||||||
March 31, 2024
|
March 31, 2023
|
$ |
% |
|||||||||||||
(In thousands, except percentages)
|
||||||||||||||||
Net revenue
|
$
|
21,250
|
$
|
19,350
|
$
|
1,900
|
9.8
|
%
|
||||||||
Operating costs
|
16,913
|
15,582
|
1,331
|
8.5
|
%
|
|||||||||||
Gross profit
|
$
|
4,337
|
$
|
3,768
|
$
|
569
|
15.1
|
%
|
||||||||
Gross margin
|
20.4
|
%
|
19.5
|
%
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
(In thousands, except percentages)
|
||||||||
Income before taxes
|
$
|
14,756
|
$
|
14,396
|
||||
Less: Net income attributable to non-controlling interest:
|
||||||||
Redeemable non-controlling interest - temporary equity
|
(2,227
|
)
|
(2,720
|
)
|
||||
Non-controlling interest - permanent equity
|
(1,344
|
)
|
(1,297
|
)
|
||||
$
|
(3,571
|
)
|
$
|
(4,017
|
)
|
|||
Income before taxes less net income attributable to non-controlling interest
|
$
|
11,185
|
$
|
10,379
|
||||
Provision for income taxes
|
$
|
3,139
|
$
|
2,969
|
||||
Effective income tax rate
|
28.1
|
%
|
28.6
|
%
|
|
Three Months Ended
|
|||||||
|
March 31, 2024
|
March 31, 2023
|
||||||
Net cash provided by operating activities
|
$
|
4,419
|
$
|
11,349
|
||||
Net cash used in investing activities
|
(20,464
|
)
|
(12,681
|
)
|
||||
Net cash (used in) provided by financing activities
|
(4,490
|
)
|
2,343
|
1)
|
Revolving Facility: $175 million, five-year, revolving credit facility (“Revolving Facility”), which includes a $12 million sublimit for the issuance of standby letters of credit and a $15 million
sublimit for swingline loans (each, a “Swingline Loan”).
|
2)
|
Term Facility: $150 million term loan facility (the “Term Facility”). The Term Facility amortizes in quarterly installments of: (a) 0.625% in each of the first two years, (b) 1.250% in the third and
fourth year, and (c) 1.875% in the fifth year of the Credit Agreement. The remaining outstanding principal balance of all term loans is due on the maturity date.
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 4. |
CONTROLS AND PROCEDURES.
|
ITEM 1. |
LEGAL PROCEEDINGS.
|
ITEM 1A. |
RISK FACTORS.
|
ITEM 5. |
OTHER INFORMATION.
|
ITEM 6. |
EXHIBITS.
|
Exhibit
Number
|
Description
|
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2024, effective March 6, 2024 [incorporated by reference to Exhibit 99.1 to the Company Current Report on Form 8-K
filed with the SEC on March 7, 2024].
|
|
U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2024, effective March 6, 2024 [incorporated by reference to Exhibit 99.2 to the Company Current Report on Form
8-K filed with the SEC on March 7, 2024].
|
|
U. S. Physical Therapy, Inc. Objective Cash/RSA Bonus Plan for Senior Management for 2024, effective March 6, 2024 [incorporated by reference to Exhibit 99.3 to the Company Current Report on Form 8-K
filed with the SEC on March 7, 2024].
|
|
U. S. Physical Therapy, Inc. Discretionary Cash/RSA Bonus Plan for Senior Management for 2024, effective March 6, 2024 [incorporated by reference to Exhibit 99.4 to the Company Current Report on Form 8-K
filed with the SEC on March 7, 2024].
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
|
|
Certification Pursuant to 18 U.S.C 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
U.S. PHYSICAL THERAPY, INC.
|
||
Date: May 8, 2024
|
By:
|
/s/ Carey Hendrickson
|
Carey Hendrickson
|
||
Chief Financial Officer
|
||
(Principal financial and accounting officer)
|