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Share Name | Share Symbol | Market | Type |
---|---|---|---|
US Physical Therapy Inc | NYSE:USPH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 94.48 | 0 | 01:00:00 |
Company Reinstates Dividend and Provides 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 fourth quarter and year ended December 31, 2020.
For the year ended December 31, 2020, USPH’s Operating Results (as defined below), including Relief Funds (defined below), was $38.4 million, or $2.99 per diluted share, as compared to $36.0 million, or $2.82 per diluted share, in 2019. For the fourth quarter ended December 31, 2020, USPH’s Operating Results, including Relief Funds, was $13.9 million, or $1.08 per diluted share, as compared to $8.2 million, or $0.64 per diluted share, in the fourth quarter of 2019. For the year ended December 31, 2020, USPH’s Operating Results (as defined below), excluding Relief Funds, was $30.6 million, or $2.39 per diluted share, as compared to $36.0 million, or $2.82 per diluted share in 2019. For the fourth quarter ended December 31, 2020, USPH’s Operating Results, excluding Relief Funds, was $10.9 million, or $0.85 per diluted share, as compared to $8.2 million, or $0.64 per diluted share, in the fourth quarter of 2019. 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, less gain on the sale of partnership interests and clinics, plus allocated non-controlling interests, and excludes expenses incurred for the 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 15.
For the year ended December 31, 2020, USPH’s net income attributable to its shareholders, in accordance with GAAP, was $35.2 million as compared to $40.0 million for the comparable period of 2019. For the fourth quarter ended December 31, 2020, USPH’s net income attributable to its shareholders was $13.0 million, as compared to $7.9 million in the fourth quarter of 2019. 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 $31.8 million, or $2.48 per share, for 2020 as compared to $31.3 million, or $2.45 per share, for 2019. 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 $8.7 million, or $0.68 per share, for the fourth quarter of 2020 as compared to $7.1 million, or $0.55 per share, for the fourth quarter of 2019. 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 15 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, the Company’s results were negatively impacted by the effects of the COVID-19 pandemic in 2020. Following the onset of the pandemic, management took a number of steps to reduce costs, make up for operating losses incurred in March and April, and increase profits subsequently. The Company’s physical therapy patient volumes increased consistently from May through December 2020, returning to near-normal levels in the fourth quarter of 2020. The Company’s average physical therapy patient volumes per day per clinic were 26.2, 18.9, 25.8, and 27.7, respectively, in the four quarters of 2020. Physical therapy patient volumes per day per clinic for the fourth quarter of 2020 were 27.7 compared to 28.0 in the fourth quarter of 2019. The Company’s industrial injury prevention business was less affected by the pandemic in 2020, with revenues higher by $1.7 million, or 4.6%, in 2020 as compared to 2019, including an acquisition closed in April 2019.
Year 2020 Compared to Year 2019
For the Year Ended
December 31, 2020
December 31, 2019
Revenues:
Net patient revenues
$
373,340
$
433,345
Management contract revenue
8,410
8,676
Other patient revenues
2,020
2,486
Physical therapy operations
$
383,770
$
444,507
Industrial injury prevention services
39,199
37,462
$
422,969
$
481,969
For the Year Ended
December 31, 2020
December 31, 2019
Related to Mature Clinics
$
359,294
$
404,784
Related to New Clinics
9,664
-
Related to 2019 sold and closed clinics
-
13,019
Related to 2020 sold and closed clinics
4,382
15,542
$
373,340
$
433,345
For the Year Ended
December 31, 2020
December 31, 2019
Physical Therapy Operations
Related to Mature Clinics
$
274,781
$
306,128
Related to New Clinics
8,416
-
Related to 2019 sold and closed clinics
40
12,283
Related to 2020 sold and closed clinics
5,583
14,588
Physical therapy management contracts
6,654
7,389
Total Physical Therapy Operations
295,474
340,388
Industrial injury prevention services
29,114
29,082
Total operating costs, excluding closure costs
$
324,588
$
369,470
For the Year Ended
December 31, 2020
December 31, 2019
Gross profit, excluding closure costs:
Physical therapy clinics
$
86,540
$
102,833
Management contracts
1,755
1,287
Industrial injury prevention services
10,086
8,379
Gross profit, excluding closure costs
$
98,381
$
112,499
For the Year Ended
December 31, 2020
December 31, 2019
Income before taxes
$
65,513
$
70,906
Less: net income attributable to non-controlling interests:
Non-controlling interests - permanent equity
(6,122
)
(6,561
)
Redeemable non-controlling interests - temporary equity
(11,175
)
(10,659
)
$
(17,297
)
$
(17,220
)
Income before taxes less net income attributable to non-controlling interests
$
48,216
$
53,686
Provision for income taxes
$
13,022
$
13,647
Effective tax rate
27.0
%
25.4
%
Fourth Quarter 2020 Compared to Fourth Quarter 2019
Three Months Ended
December 31, 2020
December 31, 2019
Revenues:
Net patient revenues
$
104,537
$
108,941
Management contract revenue
2,666
2,142
Other patient revenues
613
705
Physical therapy operations
107,816
111,788
Industrial injury prevention services
9,650
10,326
$
117,466
$
122,114
Three Months Ended
December 31, 2020
December 31, 2019
Related to Mature Clinics
$
100,495
$
105,237
Related to New Clinics
3,882
-
Related to 2019 sold and closed clinics
3
4
Related to 2020 sold and closed clinics
157
3,699
$
104,537
$
108,940
Three Months Ended
December 31, 2020
December 31, 2019
Physical Therapy Operations
Related to Mature Clinics
$
74,821
$
81,449
Related to New Clinics
3,908
-
Related to 2019 closed and sold clinics
-
1
Related to 2020 closed and sold clinics
266
3,652
Physical therapy management contracts
2,072
1,834
Total Physical Therapy Operations
81,067
86,936
Industrial injury prevention services
7,275
8,206
Total operating costs, excluding closure costs
$
88,342
$
95,142
Three Months Ended
December 31, 2020
December 31, 2019
Gross profit, excluding closure costs:
Physical therapy clinics
$
26,156
$
24,803
Management contracts
593
308
Industrial injury prevention services
2,375
1,861
Gross profit, excluding closure costs
$
29,124
$
26,972
Three Months Ended
December 31, 2020
December 31, 2019
Income before taxes
$
23,196
$
14,439
Less: net income attributable to non-controlling interests:
Non-controlling interests - permanent equity
(2,233
)
(1,579
)
Redeemable non-controlling interests - temporary equity
(3,364
)
(2,507
)
$
(5,597
)
$
(4,086
)
Income before taxes less net income attributable to non-controlling interests
$
17,599
$
10,353
Provision for income taxes
$
4,569
$
2,424
Effective tax rate
26.0
%
23.4
%
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 existing 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 these payments as a liability until all performance obligations have been met as the payments were made on behalf of patients before services were provided. Currently, MAAPP funds received are required to be applied to future Medicare billings commencing in August 2021, with all such remaining amounts required to be repaid by January 2024. Beginning January 2024, any unpaid balance will begin accruing interest. The Company currently intends to repay funds prior to August 2021. Included in cash and cash equivalents and accrued liabilities at December 31, 2020 is $14.1 million of MAAPP Funds.
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 have been recorded as Other income – Relief Funds. For the three months and year ended December 31, 2020, the Company has recognized approximately $5.2 million and $13.5 million, respectively, as Other income – Relief Funds on the accompanying consolidated statement of operations. 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.
Other Financial Measures
For the 2020 Fourth Quarter, the Company's Adjusted EBITDA was $23.5 million compared to $15.3 million in the 2019 Fourth Quarter. For the 2020 Fourth Quarter, the Company's Adjusted EBITDA, excluding Relief Funds, was $18.3 million.
For 2020, the Company's Adjusted EBITDA was $70.0 million compared to $72.8 million in 2019. For 2020, the Company's Adjusted EBITDA, excluding Relief Funds, was $56.5 million.
See definition, explanation and calculation of Adjusted EBITDA in the schedule on pages 14 and 15.
Acquistions in Fourth Quarter 2020
As previously reported, the Company acquired a 75% interest in a three-clinic physical therapy practice in the fourth quarter of 2020 with the practice founder retaining 25%. The purchase price was approximately $9.1 million. The business generates $4.6 million in annual revenue and has approximately 54,000 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 Reinstated
In April 2020, the Company announced the suspension of it quarterly dividend to enhance its operational and financial flexibility during the COVID-19 pandemic. The Company announced today that its Board of Directors has reinstated its quarterly dividend and declared a dividend of $0.35 per share, which is an increase of 9.4% from its previous dividend of $0.32 per share paid in April 2020. The quarterly dividend of $0.35 per share will be paid on April 9, 2021 to shareholders of record as of March 12, 2021.
Renewal of Credit Agreement
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 million. Proceeds from the Credit Agreement may be used for working capital, acquisitions, and for other purposes.
Management Provides 2021 Earnings Guidance
Management currently expects the Company’s Operating Results for 2021 to be in the range of $30.9 million to $32.5 million, or $2.40 to $2.52 per share, which considers the following:
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, “It is difficult at best to adequately summarize the year we have just completed. One thing that isn’t difficult is to highlight the extraordinary efforts of all of our employees across the entirety of our Company for their stellar work during this most challenging and unpredictable year in 2020. I cannot overstate how impressed I am with the continuous examples of sacrifice, leadership, commitment and resolve that have been evident to me throughout this past year (and continuing) as we face the challenges and opportunities before us. While I may not be the best person to predict the end of this COVID-19 virus, I am well positioned to say that I believe that the team we have can work through and overcome whatever obstacles come our way. We also continue to believe that we are well positioned to attract truly excellent partners as we work with grit and strong resolve to grow and scale our Company while we serve those who are entrusted to us with great care.”
Carey Hendrickson, Chief Financial Officer, said, “As a result of the early actions we took when the pandemic began and the outstanding efforts of our team throughout the year, the Company’s net cash flow in 2020 was stronger than initially expected and our results improved consistently from May through December, putting our balance sheet in a strong position as we begin 2021. We are pleased to reinstate and increase the quarterly dividend and to extend our credit agreement with Bank of America for an additional four years on favorable terms.”
Fourth Quarter 2020 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 February 25, 2021 to discuss results for the Company's fourth quarter and year ended December 31, 2020. Interested parties may participate in the call by dialing 1-888-335-5539 or 973-582-2857 and entering reservation number 4396697 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 May 5, 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:
See Risk Factors in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 and the additional risk factor disclosed in our Quarterly Report on Form 10-Q for the period ended March 31, 2020 filed with the SEC on February 28, 2020 and May 21, 2020, respectively.
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 554 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 38 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
For the Year Ended
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Net patient revenues
$
104,537
$
108,940
$
373,340
$
433,345
Other revenues
12,929
13,174
49,629
48,624
Net revenues
117,466
122,114
422,969
481,969
Operating costs:
Salaries and related costs
65,677
70,549
235,629
274,233
Rent, supplies, contract labor and other
21,421
23,143
84,336
90,379
Provision for credit losses
1,244
1,450
4,623
4,858
Closure costs - lease and other
6
13
2,072
25
Closure costs - derecognition of goodwill
-
-
1,859
-
Total operating costs
88,348
95,155
328,519
369,495
Gross profit
29,118
26,959
94,450
112,474
Corporate office costs
10,916
11,673
42,037
45,049
Operating income
18,202
15,286
52,413
67,425
Other income and expense
Relief Funds
5,152
-
13,501
-
Gain on sale of partnership interest and clinics
-
(309
)
1,091
5,514
Interest and other income, net
45
19
142
46
Interest expense - debt and other
(203
)
(557
)
(1,634
)
(2,079
)
Total other income and expense
4,994
(847
)
13,100
3,481
Income before taxes
23,196
14,439
65,513
70,906
Provision for income taxes
4,569
2,424
13,022
13,647
Net income
18,627
12,015
52,491
57,259
Less: net income attributable to non-controlling interests:
Non-controlling interests - permanent equity
(2,233
)
(1,579
)
(6,122
)
(6,561
)
Redeemable non-controlling interests - temporary equity
(3,364
)
(2,507
)
(11,175
)
(10,659
)
(5,597
)
(4,086
)
(17,297
)
(17,220
)
Net income attributable to USPH shareholders
$
13,030
$
7,929
$
35,194
$
40,039
Basic and diluted earnings per share attributable to USPH shareholders
$
0.68
$
0.55
$
2.48
$
2.45
Shares used in computation - basic and diluted
12,851
12,774
12,835
12,756
Dividends declared per common share
$
-
$
0.30
$
0.32
$
1.14
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(unaudited)
December 31, 2020
December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
32,918
$
23,548
Patient accounts receivable, less allowance for credit losses of $2,008 and $2,698, respectively
41,906
46,228
Accounts receivable - other
9,039
9,823
Other current assets
3,773
5,787
Total current assets
87,636
85,386
Fixed assets:
Furniture and equipment
55,426
54,942
Leasehold improvements
35,320
33,247
Fixed assets, gross
90,746
88,189
Less accumulated depreciation and amortization
69,081
66,099
Fixed assets, net
21,665
22,090
Operating lease right-of-use assets
81,595
81,586
Goodwill
345,646
317,676
Other identifiable intangible assets, net
56,280
52,588
Other assets
1,539
1,519
Total assets
$
594,361
$
560,845
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, USPH SHAREHOLDERS’ EQUITY AND
NON-CONTROLLING INTERESTS
Current liabilities:
Accounts payable - trade
$
1,335
$
2,494
Accrued expenses
59,746
30,855
Current portion of operating lease liabilities
27,512
26,486
Current portion of notes payable
4,899
728
Total current liabilities
93,492
60,563
Notes payable, net of current portion
596
4,361
Revolving line of credit
16,000
46,000
Deferred taxes
7,779
10,071
Operating lease liabilities, net of current portion
61,985
60,258
Other long-term liabilities
4,539
141
Total liabilities
184,391
181,394
Redeemable non-controlling interests - temporary equity
132,340
137,750
Commitments and Contingencies (See Note 16)
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, 15,066,282 and 14,989,337 shares issued, respectively
151
150
Additional paid-in capital
95,622
87,383
Retained earnings
212,015
184,352
Treasury stock at cost, 2,214,737 shares
(31,628
)
(31,628
)
Total USPH shareholders’ equity
276,160
240,257
Non-controlling interests - permanent equity
1,470
1,444
Total USPH shareholders' equity and non-controlling interests
277,630
241,701
Total liabilities, redeemable non-controlling interests, USPH shareholders' equity and non-controlling interests
$
594,361
$
560,845
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
Year Ended
December 31, 2020
December 31, 2019
December 31, 2018
OPERATING ACTIVITIES
Net income including non-controlling interests
$
52,491
$
57,259
$
48,842
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities:
Depreciation and amortization
10,533
10,095
9,755
Provision for credit losses
4,623
4,858
4,603
Equity-based awards compensation expense
7,917
6,985
5,939
Deferred income taxes
(258
)
4,651
4,813
Gain on sale of partnership interest
(1,091
)
(5,514
)
(1,846
)
Derecognition of goodwill - closed clinics
1,859
-
-
Other
281
96
167
Changes in operating assets and liabilities:
Decrease (increase) in patient accounts receivable
899
(6,376
)
(3,434
)
Decrease(increase) in accounts receivable - other
1,661
(2,499
)
(1,087
)
Decrease (increase) in other assets
4,161
(1,878
)
345
Increase (decrease) in accounts payable and accrued expenses
12,427
(4,209
)
4,876
Increase (decrease) in other long-term liabilities
4,492
(1,020
)
32
Net cash provided by operating activities
99,995
62,448
73,005
INVESTING ACTIVITIES
Purchase of fixed assets
(7,639
)
(10,189
)
(7,193
)
Purchase of majority interest in businesses, net of cash acquired
(23,907
)
(30,597
)
(16,367
)
Purchase of redeemable non-controlling interest, temporary equity
(20,385
)
(8,651
)
-
Purchase of non-controlling interest, permanent equity
(238
)
(428
)
(350
)
Proceeds on sale of redeemable non-controlling interest, temporary equity
127
207
-
Proceeds on sales of partnership interest, clinics and fixed assets
839
11,665
1
Net cash used in investing activities
(51,203
)
(37,993
)
(23,909
)
FINANCING ACTIVITIES
Distributions to non-controlling interests, permanent and temporary equity
(18,331
)
(16,235
)
(15,646
)
Cash dividends paid to shareholders
(4,110
)
(14,555
)
(11,664
)
Proceeds from revolving line of credit
214,000
145,000
103,000
Payments on revolving line of credit
(244,000
)
(137,000
)
(119,000
)
Payments to settle mandatorily redeemable non-controlling interests
-
-
(265
)
Principal payments on notes payable
(1,037
)
(1,433
)
(4,044
)
Medicare Accelerated and Advance Payment Funds
14,054
-
Other
2
(52
)
(42
)
Net cash used in financing activities
(39,422
)
(24,275
)
(47,661
)
Net increase in cash and cash equivalents
9,370
180
1,435
Cash and cash equivalents - beginning of period
23,548
23,368
21,933
Cash and cash equivalents - end of period
$
32,918
$
23,548
$
23,368
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Income taxes
$
7,677
$
9,856
$
9,183
Interest
$
1,202
$
1,890
$
2,357
Non-cash investing and financing transactions during the period:
Purchase of businesses - seller financing portion
$
1,121
$
4,300
$
950
Purchase of business - payable to common shareholders of acquired business
$
-
$
502
-
Notes payable related to purchase of redeemable non-controlling interest, temporary equity
$
136
$
283
-
Notes payable related to purchase of non-controlling interest, permanent equity
$
699
$
103
-
Notes receivable related to sale of partnership interest - redeemable non-controlling interest
$
-
$
2,870
-
Notes receivables related to sale of partnership interest
$
994
$
-
-
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, less gain on the sale of partnership interests and clinics, less allocated non-controlling interests, excludes expenses incurred for the CFO recruitment and charges related to the acceleration of CFO restricted stock, 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 write-off 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 December 31,
Year Ended December 31,
2020
2019
2020
2019
Computation of earnings per share - USPH shareholders:
Net income attributable to USPH shareholders
$
13,030
$
7,929
$
35,194
$
40,039
Credit (charges) to retained earnings:
Revaluation of redeemable non-controlling interest
(5,807
)
(1,141
)
(4,632
)
(11,893
)
Tax effect at statutory rate (federal and state) of 26.25%
1,524
299
1,216
3,121
$
8,747
$
7,087
$
31,778
$
31,267
Earnings per share (basic and diluted)
$
0.68
$
0.55
$
2.48
$
2.45
Adjustments:
Expenses related to CFO transition
1,129
-
1,331
-
Closure costs
6
-
3,931
-
(Gain) adjustment on sale of partnership interest and clinics
-
309
(1,091
)
(5,514
)
Relief Funds
(5,151
)
-
(13,500
)
-
Allocation to non-controlling interest
1,139
-
3,116
-
Revaluation of redeemable non-controlling interest
5,807
1,141
4,632
11,893
Tax effect at statutory rate (federal and state) of 26.25%
(769
)
(380
)
415
(1,674
)
Operating Results (without Relief Funds)
$
10,908
$
8,157
$
30,612
$
35,972
Relief Funds
5,151
-
13,500
-
Allocation to non-controlling interest
(1,140
)
-
(2,893
)
-
Tax effect at statutory rate (federal and state) of 26.25%
(1,053
)
-
(2,784
)
-
Operating Results (including Relief Funds)
$
13,866
$
8,157
$
38,435
$
35,972
Basic and diluted Operating Results (without Relief Funds) per share
$
0.85
$
0.64
$
2.39
$
2.82
Basic and diluted Operating Results (including Relief Funds) per share
$
1.08
$
0.64
$
2.99
$
2.82
Shares used in computation - basic and diluted
12,851
12,774
12,835
12,756
Three Months Ended December 31,
Year Ended December 31,
2020
2019
2020
2019
Net income attributable to USPH shareholders
$
13,030
$
7,929
$
35,194
$
40,039
Adjustments:
Depreciation and amortization
2,654
2,718
10,533
10,095
Closure costs - write-off of goodwill
-
-
1,859
-
Relief Funds
(5,151
)
-
(13,500
)
-
Interest income
(45
)
(19
)
(142
)
(46
)
Interest expense - debt and other
203
557
1,634
2,079
Provision for income taxes
5,023
2,424
13,022
13,647
Equity-based awards compensation expense
2,592
1,723
7,917
6,985
Adjusted EBITDA (without Relief Funds)
$
18,306
$
15,332
$
56,517
$
72,799
Relief Funds
5,151
-
13,500
-
Adjusted EBITDA
$
23,457
$
15,332
$
70,017
$
72,799
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
RECAP OF PHYSICAL THERAPY OPERATIONS
CLINIC COUNT
Date
Number of Clinics
March 31, 2019
590
June 30, 2019
564
September 30, 2019
574
December 31, 2019
583
March 31, 2020
567
June 30, 2020
554
September 30, 2020
550
December 31, 2020
554
View source version on businesswire.com: https://www.businesswire.com/news/home/20210225005247/en/
U.S. Physical Therapy, Inc. Carey Hendrickson, Chief Financial Officer Chris Reading, Chief Executive Officer (713) 297-7000 Three Part Advisors Joe Noyons (817) 778-8424
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