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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 | |
---|---|---|---|---|---|---|---|---|
1.56 | 1.51% | 105.20 | 105.19 | 103.65 | 104.75 | 44,646 | 01:00:00 |
Patient Volumes Continued at Record Pace
Company Provides 2022 Earnings Guidance and Raises Dividend
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, 2021 (“2021 Fourth Quarter” and “2021 Year”, respectively).
FULL YEAR AND QUARTER HIGHLIGHTS
SUMMARY OF 2021 FOURTH QUARTER AND FULL YEAR 2021 RESULTS
For the 2021 Year, USPH’s net income attributable to its shareholders, a GAAP measure, was $40.8 million as compared to $35.2 million for the 2020 Year and $40.0 million for the 2019 Year. The 2021 Year and the 2020 Year include Relief Funds, net of non-controlling interest and taxes, of $2.9 million and $7.8 million, respectively, and the 2019 Year includes a gain on sale of partnerships and clinics of $4.1 million, net of taxes.
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 for this change is included in the earnings per basic and diluted share calculation. Including the charge for revaluation of non-controlling interest, net of taxes, the amount is $31.1 million, or earnings per diluted share of $2.41, for the 2021 Year, $31.8 million, or earnings per diluted share of $2.48, for the 2020 Year, and $31.3 million, or earnings per diluted share of $2.45, for the 2019 Year. See the schedule on page 17 for the computation of earnings per diluted share.
For the 2021 Fourth Quarter, USPH’s net income attributable to its shareholders was $10.2 million as compared to $13.0 million for the 2020 Fourth Quarter and $7.9 million for the 2019 Fourth Quarter. Inclusive of the charge or credit for revaluation of non-controlling interest, net of taxes, used to compute earnings per diluted share in accordance with GAAP, the amount is $9.4 million, or $0.73 per diluted share, for the 2021 Fourth Quarter, $8.7 million, or $0.68 per diluted share, for the 2020 Fourth Quarter, and $7.1 million, or $0.55 per diluted share, for the 2019 Fourth Quarter.
For the 2021 Year, USPH’s Operating Results, inclusive of Relief Funds, was $43.8 million, or $3.39 per diluted share, an increase of 13.8%, as compared to $38.4 million, or $2.99 per diluted share, for the 2020 Year. For the 2021 Year, USPH’s Operating Results, excluding Relief Funds, was $40.9 million, or $3.17 per diluted share, an increase of 33.5%, as compared to $30.6 million, or $2.39 per diluted share, for the 2020 Year. Operating Results, excluding Relief Funds, for the 2021 Year was also 13.6% higher than the $36.0 million, or $2.82 per diluted share, for the year ended December 31, 2019 (“2019 Year”). Operating Results, a non-GAAP measure, equals net income attributable to USPH diluted shareholders per the consolidated statements of income less gain on sale of partnership interests and clinics plus charges incurred for clinic closure costs and expenses related to executive officer transitions and settlement of a legal matter, all net of taxes. Operating Results per diluted share also excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact. See tables on pages 17 and 18.
For the 2021 Fourth Quarter, USPH’s Operating Results, inclusive of Relief Funds, was $12.2 million, or $0.94 per diluted share, a decrease of 12.4%, as compared to $13.9 million, or $1.08 per diluted share, for the 2020 Year. For the 2021 Fourth Quarter, USPH’s Operating Results, excluding Relief Funds, was $9.3 million, or $0.72 per diluted share, a decrease of 15.1% as compared to $10.9 million, or $0.85 per diluted share, for the 2020 Fourth Quarter. Operating Results, excluding Relief Funds, for the 2021 Fourth Quarter was 13.6% higher than the $8.2 million, or $0.64 per diluted share, for the pre-pandemic three months ended December 31, 2019 (“2019 Fourth Quarter”).
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 2020 Annual Report, the Company’s results were negatively impacted by the effects of the COVID-19 pandemic in 2020. For 2021 Year as compared to 2020 Year, the increase in revenues and expenses are largely due to the Company returning to and now exceeding pre-pandemic patient volumes.
Fourth Quarter 2021 Compared to Fourth Quarter 2020
Three Months Ended
December 31, 2021
December 31, 2020
Revenue related to Mature Clinics
$
101,951
$
100,165
Revenue related to 2021 Clinic Additions
6,275
-
Revenue related to 2020 Clinic Additions
5,273
3,882
Revenue from clinics sold or closed in 2021
(2
)
332
Revenue from clinics sold or closed in 2020
14
158
Net patient revenue from physical therapy operations
113,511
104,537
Other revenue
717
613
Revenue from physical therapy operations
114,228
105,150
Management contract revenue
2,242
2,666
Industrial injury prevention services
13,363
9,650
Total Revenue
$
129,833
$
117,466
Three Months Ended
December 31, 2021
December 31, 2020
Operating cost related to Mature Clinics
$
80,110
$
74,481
Operating cost related to 2021 Clinic Additions
5,129
-
Operating cost related to 2020 Clinic Additions
4,960
3,908
Operating cost related to clinics sold or closed in 2021
1
344
Operating cost related to clinics sold or closed in 2020
16
262
Closure costs
10
6
Physical therapy operations
90,226
79,001
Management contracts
1,814
2,072
Industrial injury prevention services
10,610
7,275
Total operating cost
$
102,650
$
88,348
Three Months Ended
December 31, 2021
December 31, 2020
Physical therapy operations
$
24,012
$
26,156
Management contracts
428
593
Industrial injury prevention services
2,753
2,375
Physical therapy operations - closure costs
(10
)
(6
)
Gross profit
$
27,183
$
29,118
Three Months Ended
December 31, 2021
December 31, 2020
Income before taxes
$
18,389
$
23,196
Less: net income attributable to non-controlling interest:
Redeemable non-controlling interest - temporary equity
(2,689
)
(3,364
)
Non-controlling interest - permanent equity
(1,541
)
(2,233
)
$
(4,230
)
$
(5,597
)
Income before taxes less net income attributable to non-controlling interest
$
14,159
$
17,599
Provision for income taxes
$
3,946
$
4,569
Percentage
27.9
%
26.0
%
2021 Year Compared to 2020 Year
For the Year Ended
December 31, 2021
December 31, 2020
Revenue related to Mature Clinics
$
402,744
$
358,103
Revenue related to 2021 Clinic Additions
13,802
-
Revenue related to 2020 Clinic Additions
21,283
9,664
Revenue from clinics sold or closed in 2021
455
1,242
Revenue from clinics sold or closed in 2020
46
4,331
Net patient revenue from physical therapy operations
438,330
373,340
Other revenue
2,939
2,020
Revenue from physical therapy operations
441,269
375,360
Management contract revenue
9,853
8,410
Industrial injury prevention services
43,900
39,199
Total Revenue
$
495,022
$
422,969
For the Year Ended
December 31, 2021
December 31, 2020
Operating cost related to Mature Clinics
$
305,148
$
273,476
Operating cost related to 2021 Clinic Additions
11,080
-
Operating cost related to 2020 Clinic Additions
19,561
8,416
Operating cost related to clinics sold or closed in 2021
484
1,345
Operating cost related to clinics sold or closed in 2020
25
5,583
Closure costs
30
3,931
Physical therapy operations
336,328
292,751
Management contracts
8,306
6,655
Industrial injury prevention services
33,206
29,113
Total operating cost
$
377,840
$
328,519
Less: Physical therapy operations - closure costs
(30
)
(3,931
)
Total operating cost excluding closure costs
(a non-GAAP measure)
$
377,810
$
324,588
For the Year Ended
December 31, 2021
December 31, 2020
Physical therapy operations
$
104,971
$
86,540
Management contracts
1,547
1,755
Industrial injury prevention services
10,694
10,086
Physical therapy operations - closure costs
(30
)
(3,931
)
Gross profit
$
117,182
$
94,450
Physical therapy operations - closure costs
30
3,931
Gross profit, excluding closure costs (a non-GAAP measure)
$
117,212
$
98,381
For the Year Ended
December 31, 2021
December 31, 2020
Income before taxes
$
73,196
$
65,513
Less: net income attributable to non-controlling interest:
Redeemable non-controlling interest - temporary equity
(11,358
)
(11,175
)
Non-controlling interest - permanent equity
(5,735
)
(6,122
)
$
(17,093
)
$
(17,297
)
Income before taxes less net income attributable to non-controlling interest
$
56,103
$
48,216
Provision for income taxes
$
15,272
$
13,022
Percentage
27.2
%
27.0
%
Relief Funds
On March 27, 2020, in response to the COVID-19 pandemic, the federal government approved the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act provided 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.
For the 2021 Year and 2020 Year, the Company’s consolidated subsidiaries recorded income of approximately $4.6 million and $13.5 million, respectively, 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.
Medicare Accelerated and Advance Payment Program (“MAAPP Funds”)
The CARES Act also allowed also 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 first quarter of 2021, the Company repaid the MAAPP Funds of $14.1 million rather than applying them to future services performed.
Other Financial Measures
For the 2021 Year, the Company’s Adjusted EBITDA, excluding Relief Funds, a non-GAAP measure, was $74.3 million, and for the 2020 Year was $56.5 million, and $72.8 million for the pre-pandemic 2019 Year. For the 2021 Year, the Company’s Adjusted EBITDA, inclusive of Relief Funds, a non-GAAP measure, was $78.9 million, and for the 2020 Year was $70.0 million, and $72.8 million for the pre-pandemic 2019 Year. The 2021 Year and 2020 Year included $4.6 million and $13.5 million, respectively, of Relief Funds.
For the 2021 Fourth Quarter, the Company’s Adjusted EBITDA, excluding Relief Funds, a non-GAAP measure, was $17.0 million, and for the 2020 Fourth Quarter was $18.3 million, and $15.3 for the pre-pandemic 2019 Fourth Quarter. For the 2021 Fourth Quarter, the Company’s Adjusted EBITDA, inclusive of Relief Funds, a non-GAAP measure, was $21.6 million, and for the 2020 Fourth Quarter was $23.5 million, and $15.3 for the pre-pandemic 2019 Fourth Quarter. The 2021 Fourth Quarter and 2020 Fourth Quarter included $4.6 million and $5.2 million, respectively, of Relief Funds. See definition, explanation and calculation of Adjusted EBITDA, a non-GAAP measure, in the schedule on pages 16 through 18.
Acquisitions in Fourth Quarter 2021
As previously reported, USPH acquired an approximate 70.0% interest in a leading provider of industrial injury prevention services on November 30, 2021, with the founders and owners retaining the remaining interest. The purchase price for the approximate 70% equity interest in the industrial injury prevention services business was $63.2 million, not inclusive of a $2.0 million contingent payment in conjunction with the acquisition if specified future operational objectives are met. This business generates approximately $27.0 million in annual revenue at a margin of approximately 20%. As part of the transaction, USPH also agreed to the future purchase of a separate company under the same ownership that provides physical therapy and rehabilitation services to hospitals and other ancillary providers in a distinct market area. The current owners have the right to put this transaction to USPH in approximately five years, with such right having a $3.5 million fair value at December 31, 2021, as reflected on the Company’s balance sheet in Other long-term liabilities. The fair value of this right will be adjusted in future periods, as appropriate, with any change in fair value reflected in the Company’s income statement.
On December 31, 2021, the Company acquired a 75% interest in a three-clinic physical therapy practice in South Carolina, with the practice’s founder and owner retaining 25%. The purchase price for the 75% equity interest was approximately $3.7 million. The business generates more than $2.7 million in annual revenue and has approximately 31,000 patient visits per year.
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
In response to the Company’s strong performance in 2021 and confidence in its future performance, the Company’s Board of Directors increased the Company’s quarterly dividend on February 22, 2022, from $0.38 per share to $0.41 per share, an increase of 7.9%. The Board of Directors subsequently declared a quarterly dividend of $0.41 per share payable on April 8, 2022 to shareholders of record on March 14, 2022.
Management’s Comments
Chris Reading, Chief Executive Officer, said, “I have said this a lot over the past couple of years, but it is worth repeating... I am supremely proud of our entire workforce, across our many partnerships, for the way they have responded to challenge after challenge these past 24 months. This year was no different and yet we were able to navigate through these challenges to create a meaningfully forward year in revenue and profitability and a record year in terms of volumes across our clinic network. It is my distinct privilege to work with so many good people day in and day out. The resolve that has allowed us to excel this past year will be firmly applied to our forward opportunities. Surrounding ourselves with great people who care deeply about all that they do continues to be the secret to our success.”
Carey Hendrickson, Chief Financial Officer, said, “Our team delivered much stronger operating results in 2021 than initially expected coming into the year, a true testament to the quality and resiliency of our team. We are pleased to raise our quarterly dividend rate once again in the first quarter of 2022, which we have raised each year since the inception of our dividend in 2011.”
Management Provides 2022 Earnings Guidance
Management currently expects the Company’s Operating Results for 2022 to be in the range of $42.2 million to $43.5 million, or $3.25 to $3.35 per diluted share, which considers the following:
This earnings range is based on an estimated annual effective tax rate of approximately 27.1%. Please note that the earnings guidance represents projected Operating Results from existing operations and excludes future acquisitions. The annual guidance figures will not be updated unless there is a material development that causes management to believe that Operating Results will be significantly outside the given range.
Fourth and Year 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 February 24, 2022 to discuss results for the Company's 2021 Fourth Quarter and 2021 Year. Interested parties may participate in the call by dialing 1-800-895-3361 or 785-424-1062 and entering reservation number USPHQ42021 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 24, 2022 at U.S. Physical Therapy’s website.
Forward-Looking Statements
This press release contains statements that are considered to be forward-looking within the meaning under Section 21E of the Securities Exchange Act of 1934, as amended. These statements contain forward-looking information relating to the financial condition, results of operations, plans, objectives, future performance and business of our Company. These statements (often using words such as “believes”, “expects”, “intends”, “plans”, “appear”, “should” and similar words) involve risks and uncertainties that could cause actual results to differ materially from those we expect. Included among such statements may be those relating to new clinics, availability of personnel and the reimbursement environment. The forward-looking statements are based on our current views and assumptions and actual results could differ materially from those anticipated in such forward-looking statements as a result of certain risks, uncertainties, and factors, which include, but are not limited to:
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 596 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 37 physical therapy facilities for unaffiliated third parties, including hospitals and physician groups. The Company also has an industrial injury prevention services business which provides onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments. More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
For the Year Ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
(audited)
Net patient revenue
$
113,511
$
104,537
$
438,330
$
373,340
Other revenue
16,322
12,929
56,692
49,629
Net revenue
129,833
117,466
495,022
422,969
Operating cost:
Salaries and related costs
75,296
65,677
278,469
235,629
Rent, supplies, contract labor and other
25,961
21,421
94,036
84,336
Provision for credit losses
1,383
1,244
5,305
4,623
Closure costs - lease and other
10
6
30
2,072
Closure costs - derecognition of goodwill
-
-
-
1,859
Total operating cost
102,650
88,348
377,840
328,519
Gross profit
27,183
29,118
117,182
94,450
Corporate office costs
10,718
10,916
46,533
42,037
Operating income
16,465
18,202
70,649
52,413
Other income and expense
Relief Funds
4,597
5,152
4,597
13,501
Gain on sale of partnership interest and clinics
-
-
-
1,091
Settlement of a legal matter
(2,635
)
-
(2,635
)
-
Resolution of a payor matter
-
-
1,216
-
Equity in earnings of unconsolidated affiliate
112
-
112
-
Interest and other income, net
41
45
199
142
Interest expense - debt and other
(191
)
(203
)
(942
)
(1,634
)
Total other income and expense
1,924
4,994
2,547
13,100
Income before taxes
18,389
23,196
73,196
65,513
Provision for income taxes
3,946
4,569
15,272
13,022
Net income
14,443
18,627
57,924
52,491
Less: net income attributable to non-controlling interest:
Redeemable non-controlling interest - temporary equity
(2,689
)
(3,364
)
(11,358
)
(11,175
)
Non-controlling interest - permanent equity
(1,541
)
(2,233
)
(5,735
)
(6,122
)
(4,230
)
(5,597
)
(17,093
)
(17,297
)
Net income attributable to USPH shareholders
$
10,213
$
13,030
$
40,831
$
35,194
Basic and diluted earnings per share attributable to USPH shareholders
$
0.73
$
0.68
$
2.41
$
2.48
Shares used in computation - basic and diluted
12,912
12,851
12,898
12,835
Dividends declared per common share
$
0.38
$
-
$
1.46
$
0.32
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT PER SHARE DATA)
December 31, 2021
December 31, 2020
ASSETS
(audited)
Current assets:
Cash and cash equivalents
$
28,567
$
32,918
Patient accounts receivable, less allowance for credit losses of $2,768 and $2,008, respectively
46,272
41,906
Accounts receivable - other
16,144
9,039
Other current assets
4,183
3,773
Total current assets
95,166
87,636
Fixed assets:
Furniture and equipment
58,743
55,426
Leasehold improvements
39,194
35,320
Fixed assets, gross
97,937
90,746
Less accumulated depreciation and amortization
74,958
69,081
Fixed assets, net
22,979
21,665
Operating lease right-of-use assets
96,427
81,595
Investment in unconsolidated affiliate
12,215
-
Goodwill
434,679
345,646
Other identifiable intangible assets, net
86,382
56,280
Other assets
1,578
1,539
Total assets
$
749,426
$
594,361
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST
Current liabilities:
Accounts payable - trade
$
3,268
$
1,335
Accounts payable - due to seller of acquired business
3,203
-
Accrued expenses
45,705
59,746
Current portion of operating lease liabilities
30,475
27,512
Current portion of notes payable
830
4,899
Total current liabilities
83,481
93,492
Notes payable, net of current portion
3,587
596
Revolving line of credit
114,000
16,000
Deferred taxes
14,385
7,779
Operating lease liabilities, net of current portion
74,185
61,985
Other long-term liabilities
7,345
4,539
Total liabilities
296,983
184,391
Redeemable non-controlling interest - temporary equity
155,262
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,
15,126,160 and 15,066,282 shares issued, respectively
151
151
Additional paid-in capital
103,510
95,622
Retained earnings
223,573
212,015
Treasury stock at cost, 2,214,737 shares
(31,628
)
(31,628
)
Total USPH shareholders’ equity
295,606
276,160
Non-controlling interest - permanent equity
1,575
1,470
Total USPH shareholders' equity and non-controlling interest - permanent equity
297,181
277,630
Total liabilities, redeemable non-controlling interest,
USPH shareholders' equity and non-controlling interest - permanent equity
$
749,426
$
594,361
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Year Ended
December 31, 2021
December 31, 2020
OPERATING ACTIVITIES
Net income including non-controlling interest and earnings from unconsolidated affiliates, net
$
57,924
$
52,491
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:
Depreciation and amortization
11,591
10,533
Provision for credit losses
5,305
4,623
Equity-based awards compensation expense
7,867
7,917
Deferred income taxes
5,688
(258
)
Gain on sale of partnership interest
-
(1,091
)
Derecognition (write-off) of goodwill - closed clinics
-
1,859
Earnings in unconsolidated affiliate
(112
)
-
Other
(134
)
281
Changes in operating assets and liabilities:
(Increase) decrease in patient accounts receivable
(9,417
)
899
(Increase) decrease in accounts receivable - other
(1,538
)
1,661
(Increase) decrease in other assets
(633
)
4,161
Increase (decrease) in accounts payable and accrued expenses
4,657
12,427
Increase (decrease) in other long-term liabilities
(4,792
)
4,492
Net cash provided by operating activities
76,406
99,995
INVESTING ACTIVITIES
Purchase of fixed assets
(8,201
)
(7,639
)
Purchase of majority interest in businesses, net of cash acquired
(86,823
)
(23,907
)
Purchase of redeemable non-controlling interest, temporary equity
(28,465
)
(20,385
)
Purchase of non-controlling interest, permanent equity
(1,274
)
(238
)
Proceeds on sale of redeemable non-controlling interest, temporary equity
69
127
Proceeds on sales of partnership interest, clinics and fixed assets
275
839
Distributions from unconsolidated affiliate
152
-
Sales of non-controlling interest-permanent
131
-
Net cash used in investing activities
(124,136
)
(51,203
)
FINANCING ACTIVITIES
Distributions to non-controlling interest, permanent and temporary equity
(16,931
)
(18,331
)
Cash dividends paid to shareholders
(18,765
)
(4,110
)
Proceeds from revolving line of credit
316,000
214,000
Payments on revolving line of credit
(218,000
)
(244,000
)
Principal payments on notes payable
(4,899
)
(1,037
)
(Payment) receipt of Medicare Accelerated and Advance Funds
(14,054
)
14,054
Short swing profit settlement
20
-
Other
8
2
Net cash provided by (used in) financing activities
43,379
(39,422
)
Net (decrease) increase in cash and cash equivalents
(4,351
)
9,370
Cash and cash equivalents - beginning of period
32,918
23,548
Cash and cash equivalents - end of period
$
28,567
$
32,918
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Income taxes
$
12,214
$
7,677
Interest
$
1,352
$
1,202
Non-cash investing and financing transactions during the period:
Purchase of businesses - seller financing portion
$
3,050
$
1,121
Purchase of business - payable to common shareholders of acquired business
$
-
$
502
Notes payable related to purchase of redeemable non-controlling interest, temporary equity
$
1,759
$
136
Notes payable due to purchase of non-controlling interest, permanent equity
$
-
$
699
Notes receivable related to sale of partnership interest - redeemable non-controlling interest
$
914
$
-
Note receivables related to sale of partnership interest
$
-
$
994
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES NON-GAAP MEASURES (IN THOUSANDS, EXCEPT PER SHARE DATA) (unaudited)
The following tables provide detail of the diluted earnings per share computation and reconcile net income attributable to USPH shareholders calculated in accordance with GAAP to Operating Results and Adjusted EBITDA. Management believes providing Operating Results and Adjusted EBITDA to investors is useful information for comparing the Company's period-to-period results.
Operating Results, a non-GAAP measure, equals net income attributable to USPH diluted shareholders per the consolidated statements of income less gain on sale of partnership interests and clinics plus charges incurred for clinic closure costs and expenses related to executive officer transitions and settlement of a legal matter, all net of taxes and non-controlling interest, if applicable. Operating Results per diluted share, 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.
Adjusted EBITDA is defined as net income attributable to USPH shareholders before interest income, interest expense, taxes, depreciation, amortization, equity-based awards compensation expense, settlement of a legal matter 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.
Management uses Operating Results and Adjusted EBITDA (with and without Relief Funds), which eliminates certain items described above that can be subject to volatility and unusual costs, as one the principal measures to evaluate and monitor financial performance period over period. Management believes that Operating Results and Adjusted EBITDA is useful information for investors to use in comparing the Company's period-to-period results as well as for comparing with other similar businesses since most do not have redeemable instruments and therefore have different equity structures.
Operating Results and Adjusted EBITDA are not measures of financial performance under GAAP. Adjusted EBITDA and Operating Results should not be considered in isolation or as an alternative to, or substitute for, net income attributable to USPH shareholders presented in the consolidated financial statements.
In this earnings release, Management purposefully defined Gross profit excluding closure costs (a non-GAAP measure) and Operating cost excluding closure costs (a non-GAAP measure) as a metric to see the business through the eyes of Management excluding the variability of closure costs. Although closure costs are a recurring cost of our business, due to the business environment in 2020 (primarily the COVID-19 pandemic), Management determined that a number of clinics needed to be closed resulting in unusually high closure costs. Presenting Gross profit excluding closure costs and Operating cost excluding closure costs allows the reader to evaluate our revenue generation performance relative to direct costs of revenue. A reconciliation between the Gross Profit in accordance with GAAP to Gross profit excluding closure costs and Operating cost in accordance with GAAP to Operating cost excluding closure costs has been included in the body of the release.
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
OPERATING RESULTS AND ADJUSTED EBITDA
2021 PERIODS COMPARED TO 2020 PERIODS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
2021
2020
Computation of earnings per share - USPH shareholders:
Net income attributable to USPH shareholders
$
10,213
$
13,030
$
40,831
$
35,194
Credit (charges) to retained earnings:
Revaluation of redeemable non-controlling interest
(1,121
)
(5,807
)
(13,011
)
(4,632
)
Tax effect at statutory rate (federal and state) of 25.55% and 26.25%, respectively
286
1,524
3,324
1,216
$
9,378
$
8,747
$
31,144
$
31,778
Earnings per share (basic and diluted)
$
0.73
$
0.68
$
2.41
$
2.48
Adjustments:
Closure costs
10
6
30
3,931
Expenses related to executive officer transitions
-
1,129
1,301
1,331
Gain on sale of partnership interest and clinics
-
-
-
(1,091
)
Relief Funds
(4,597
)
(5,151
)
(4,597
)
(13,500
)
Settlement of a legal matter
2,635
-
2,635
-
Allocation to non-controlling interests
676
1,139
676
3,116
Revaluation of redeemable non-controlling interest
1,121
5,807
13,011
4,632
Tax effect at statutory rate (federal and state) of 25.55% and 26.25%, respectively
40
(769
)
(3,336
)
415
Operating Results (excluding Relief Funds) (a non-GAAP measure)
$
9,263
$
10,908
$
40,864
$
30,612
Relief Funds
$
4,597
5,151
$
4,597
13,500
Allocation to non-controlling interests
(715
)
(1,140
)
(715
)
(2,893
)
Tax effect at statutory rate (federal and state) of 25.55% and 26.25% respectively
(992
)
(1,053
)
(992
)
(2,784
)
Operating Results (including Relief Funds) (a non-GAAP measure)
$
12,153
$
13,866
$
43,754
$
38,435
Basic and diluted Operating Results per share (excluding Relief Funds)
(a non-GAAP measure)
$
0.72
$
0.85
$
3.17
$
2.39
Basic and diluted Operating Results per share (including Relief Funds)
(a non-GAAP measure)
$
0.94
$
1.08
$
3.39
$
2.99
Shares used in computation - basic and diluted
12,912
12,851
12,898
12,835
Three Months Ended December 31,
Year Ended December 31,
2021
2020
2021
2020
Net income attributable to USPH shareholders
$
10,213
$
13,030
$
40,831
$
35,194
Adjustments:
Depreciation and amortization
3,071
2,654
11,591
10,533
Closure cost - derecognition of goodwill
-
-
-
1,859
Relief Funds
(4,597
)
(5,151
)
(4,597
)
(13,500
)
Settlement of a legal matter
2,635
-
2,635
-
Interest income
(41
)
(45
)
(199
)
(142
)
Interest expense - debt and other
191
203
942
1,634
Provision for income taxes
3,946
5,023
15,272
13,022
Equity-based awards compensation expense
1,587
2,592
7,867
7,917
Adjusted EBITDA (excluding Relief Funds) (a non-GAAP measure)
$
17,005
$
18,306
$
74,342
$
56,517
Relief Funds
4,597
5,151
4,597
13,500
Adjusted EBITDA (including Relief Funds) (a non-GAAP measure)
$
21,602
$
23,457
$
78,939
$
70,017
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
OPERATING RESULTS AND ADJUSTED EBITDA
2021 PERIODS COMPARED TO 2019 PERIODS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
Three Months Ended December 31,
Year Ended December 31,
2021
2019
2021
2019
Computation of earnings per share - USPH shareholders:
Net income attributable to USPH shareholders
$
10,213
$
7,929
$
40,831
$
40,039
Credit (charges) to retained earnings:
Revaluation of redeemable non-controlling interest
(1,121
)
(1,141
)
(13,011
)
(11,893
)
Tax effect at statutory rate (federal and state) of 25.55% and 26.25%, respectively
286
299
3,324
3,121
$
9,378
$
7,087
$
31,144
$
31,267
Earnings per share (basic and diluted)
$
0.73
$
0.55
$
2.41
$
2.45
Adjustments:
Closure costs
10
-
30
-
Expense related to COO transition
-
-
1,301
-
(Gain) adjustment on sale of partnership interest and clinics
-
309
-
(5,514
)
Relief Funds
(4,597
)
-
(4,597
)
-
Settlement of a legal matter
2,635
-
2,635
-
Allocation to non-controlling interests
676
-
676
-
Revaluation of redeemable non-controlling interest
1,121
1,141
13,011
11,893
Tax effect at statutory rate (federal and state) of 25.55% and 26.25%, respectively
40
(380
)
(3,336
)
(1,674
)
Operating Results (excluding Relief Funds) (a non-GAAP measure)
$
9,263
$
8,157
$
40,864
$
35,972
Relief Funds
$
4,597
$
-
$
4,597
$
-
Allocation to non-controlling interests
(715
)
-
(715
)
-
Tax effect at statutory rate (federal and state) of 25.55% and 26.25% respectively
(992
)
-
(992
)
-
Operating Results (including Relief Funds) (a non-GAAP measure)
$
12,153
$
8,157
$
43,754
$
35,972
Basic and diluted Operating Results per share (excluding Relief Funds)
(a non-GAAP measure)
$
0.72
$
0.64
$
3.17
$
2.82
Basic and diluted Operating Results per share (including Relief Funds)
(a non-GAAP measure)
$
0.94
$
0.64
$
3.39
$
2.82
Shares used in computation - basic and diluted
12,912
12,774
12,898
12,756
Three Months Ended December 31,
Year Ended December 31,
2021
2019
2021
2019
Net income attributable to USPH shareholders
$
10,213
$
7,929
$
40,831
$
40,039
Adjustments:
Depreciation and amortization
3,071
2,718
11,591
10,095
Closure cost - derecognition of goodwill
-
-
-
-
Relief Funds
(4,597
)
-
(4,597
)
-
Settlement of a legal matter
2,635
-
2,635
-
Interest income
(41
)
(19
)
(199
)
(46
)
Interest expense - debt and other
191
557
942
2,079
Provision for income taxes
3,946
2,424
15,272
13,647
Equity-based awards compensation expense
1,587
1,723
7,867
6,985
Adjusted EBITDA (excluding Relief Funds) (a non-GAAP measure)
$
17,005
$
15,332
$
74,342
$
72,799
Relief Funds
4,597
-
4,597
-
Adjusted EBITDA (including Relief Funds) (a non-GAAP measure)
$
21,602
$
15,332
$
78,939
$
72,799
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
June 30, 2021
575
September 30, 2021
579
December 31, 2021
591
View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005211/en/
U.S. Physical Therapy, Inc. Carey Hendrickson, Chief Financial Officer chendrickson@usph.com Chris Reading, Chief Executive Officer (713) 297-7000 Three Part Advisors Joe Noyons (817) 778-8424
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