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
- Operating Results per diluted share, excluding Relief Funds
(defined below), a non-GAAP measure (defined below), was $3.17 per
diluted share for the 2021 Year, as compared to the Company’s
guidance range of $3.05 to $3.15 per share. It exceeded the $2.39
reported on the same basis for the year ended December 31, 2020
(“2020 Year”) and the $2.82 reported for the pre-pandemic year
ended December 31, 2019 (“2019 Year”).
- For the 2021 Fourth Quarter, Operating Results per diluted
share, excluding Relief Funds, a non-GAAP measure (defined below),
was $0.72. For the three months ended December 31, 2020 (“2020
Fourth Quarter”), Operating Results per diluted share was $0.85,
aided by reduced expense levels due to the pandemic and a slight
rate adjustment related to earlier 2020 periods, and $0.64 for the
pre-pandemic three months ended December 31, 2019 (“2019 Fourth
Quarter”).
- For the 2021 Year, USPH’s net income attributable to its
shareholders, a Generally Accepted Accounting Principles (“GAAP”)
measure, was $40.8 million compared to $35.2 million for the 2020
Year and $40.0 million for the 2019 Year. GAAP requires the Company
to include a charge for the revaluation of its non-controlling
interest, net of taxes, in its computation of earnings per diluted
share. Earnings per diluted share including such charge was $2.41
for the 2021 Year, as compared to $2.48 for the 2020 Year, and
$2.45 for the 2019 Year.
- For the 2021 Fourth Quarter, USPH’s net income attributable to
its shareholders, a GAAP measure, was $10.2 million compared to
$13.0 million for the 2020 Fourth Quarter and $7.9 million for the
2019 Fourth Quarter. Earnings per diluted share on a GAAP basis,
which includes a charge for revaluation of non-controlling
interest, net of taxes, was $0.73 for the 2021 Fourth Quarter as
compared to $0.68 for the 2020 Fourth Quarter and $0.55 for the
2019 Fourth Quarter.
- Adjusted EBITDA, excluding Relief Funds, a non-GAAP measure
(defined below), was $74.3 million for the 2021 Year, as compared
to $56.5.million for the 2020 Year and $72.8 million for the
pre-pandemic 2019 Year. See pages 16 through 18 for a discussion
and reconciliation to results according to GAAP.
- Adjusted EBITDA, excluding Relief Funds, a non-GAAP measure
(defined below), was $17.0 million for the 2021 Fourth Quarter, as
compared to $18.3 million for the 2020 Fourth Quarter and $15.3
million for the pre-pandemic 2019 Fourth Quarter. See pages 16
through 18 for a discussion and reconciliation to results according
to GAAP.
- Average visits per clinic per day continued at a record pace in
the fourth quarter of 2021, finishing at 29.8 for the 2021 Fourth
Quarter, bested in the Company’s history only by the 30.0 average
visits per clinic per day in the second quarter of 2021. Average
visits per clinic per day were 27.7 for the 2020 Fourth Quarter and
28.0 for the pre-pandemic 2019 Fourth Quarter. The Company’s
average visits per clinic per day exceeded 29.0 for the first time
in the Company’s history in March 2021 and continued at that level
or higher for the final ten months of the 2021 Year.
- For the 2021 Year, average visits per clinic per day were the
highest in the Company’s history at 29.1, exceeding the previous
high of 27.6 in the 2019 Year.
- The net rate per patient visit was $103.53 for the 2021 Fourth
Quarter. Net rate per patient visit was $107.05 for the 2020 Fourth
Quarter, which included a slight adjustment related to earlier 2020
periods, and $105.10 for the 2019 Fourth Quarter.
- Net patient revenue from physical therapy operations was $113.5
million for the 2021 Fourth Quarter, an increase of 8.6% from
$104.5 million for the 2020 Fourth Quarter. Net patient revenue for
the 2021 Fourth Quarter was 4.2% higher than net patient revenue
from physical therapy operations of $108.9 million in the
pre-pandemic 2019 Fourth Quarter.
- Industrial injury prevention services revenue was an all-time
high of $13.4 million for the 2021 Fourth Quarter, representing a
38.5% increase over the 2020 Fourth Quarter and a 29.4% increase
over the 2019 Fourth Quarter.
- Total revenue of $129.8 million for the 2021 Fourth Quarter was
10.5% higher than total revenue of $117.5 million for the 2020
Fourth Quarter and 6.3% higher than total revenue of $122.1 million
for the 2019 Fourth Quarter.
- Total operating cost was 79.1% of total revenue in the 2021
Fourth Quarter, as compared to 75.2% for the 2020 Fourth Quarter
and 77.9% of total revenue in the pre-pandemic 2019 Fourth Quarter.
Total salaries and related costs were 58.0% of total revenue for
the 2021 Fourth Quarter versus 55.9% for the 2020 Fourth Quarter
and 57.8% for the pre-pandemic 2019 Fourth Quarter.
- On November 30, 2021, USPH acquired an approximate 70.0%
interest in a leading provider of industrial injury prevention
services at a purchase price of approximately $63.2 million. The
business generates approximately $27.0 million in annual revenue at
a margin of approximately 20%. On December 31, 2021, the Company
acquired a 75.0% interest in a three-clinic physical therapy
practice in South Carolina at a purchase price of approximately
$3.7 million. This practice generates more than $2.7 million in
annual revenue and has approximately 31,000 patient visits per
year.
- The Company paid $31.1 million for all or a portion of the
non-controlling interest held by certain of its equity partners in
the 2021 Year, representing approximately $4.1 million of EBITDA,
with $14.0 million of the purchases in Fourth Quarter 2021.
- The Company’s Board of Directors raised the Company’s quarterly
dividend from $0.38 per share to $0.41 per share, an increase of
7.9%, effectively immediately, and declared a quarterly dividend
for the first quarter of 2022 at the higher rate.
- Management currently expects the Company’s Operating Results
for 2022 to be in the range of $3.25 to $3.35, which includes the
Medicare rate reductions occurring in 2022. The earnings guidance
represents projected Operating Results from existing operations and
excludes future acquisitions. See “Management Provides 2022
Earnings Guidance” below for more information.
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
- Reported total revenue for the 2021 Fourth Quarter was $129.8
million, an increase of 10.5% as compared to $117.5 million for the
2020 Fourth Quarter. See table below for a detail of reported total
revenue (in thousands):
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
- Net patient revenue from physical therapy operations increased
$9.0 million, or 8.6%, to $113.5 million for the 2021 Fourth
Quarter from $104.5 million for the 2020 Fourth Quarter. Included
in net patient revenue are revenues related to clinics sold or
closed in 2021 and 2020 of $12,000 for the 2021 Fourth Quarter and
$0.5 million for the 2020 Fourth Quarter. During the 2021 Year, the
Company sold its interest in 2 clinics and closed 3 clinics. During
the 2020 Year, the Company sold its interest in 14 clinics and
closed 34 clinics. For comparison purposes, net patient revenue
from physical therapy operations, excluding revenue from the
clinics sold or closed, was approximately $113.5 million for Fourth
Quarter 2021 and $104.0 million for the Fourth Quarter 2020. Net
patient revenue related to clinics opened or acquired prior to 2020
and still in operation at December 31, 2021 (“Mature Clinics”)
increased $1.8 million, or 1.8%, to $102.0 million for the 2021
Fourth Quarter compared to $100.2 million for the 2020 Fourth
Quarter.
- The average net patient revenue per visit was $103.53 for the
2021 Fourth Quarter as compared to $107.05 for the 2020 Fourth
Quarter, which included a slight rate adjustment related to earlier
2020 periods. Total patient visits increased 12.3% to 1,096,389 for
the 2021 Fourth Quarter from 976,492 for the 2020 Fourth
Quarter.
- Visits for Mature Clinics (same store) for the 2021 Fourth
Quarter increased 10.9% as compared to the 2020 Fourth Quarter
while the net rate per visit decreased 8.2%. The 2020 Fourth
Quarter net rate included a slight upward adjustment related to
earlier 2020 periods.
- Management contract revenue decreased 15.9% to $2.2 million for
the 2021 Fourth Quarter as compared to $2.7 million for the 2020
Fourth Quarter.
- Industrial injury prevention services revenue increased 38.5%
to $13.4 million for the 2021 Fourth Quarter as compared to $9.7
million for the 2020 Fourth Quarter. Of the $13.4 million, $2.2
million related to the acquisition on November 30, 2021.
- Total operating cost was $102.7 million for the 2021 Fourth
Quarter, or 79.1% of total revenue, as compared to $88.3 million,
or 75.2% of total revenue, for the 2020 Fourth Quarter, when costs
were at reduced levels due to the pandemic. The Company took a
number of steps throughout the 2020 Year to reduce costs as its
patient volumes were negatively impacted by the effects of the
COVID-19 pandemic. For comparison purposes, total operating cost
was 77.9% of total revenue in the pre-pandemic 2019 Fourth Quarter.
Operating cost related to Mature Clinics increased by $5.6 million
for the 2021 Fourth Quarter compared to the 2020 Fourth Quarter. In
addition, operating cost related to the industrial injury
prevention services business increased by $3.3 million. See table
below for a detail of operating cost (in thousands):
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
- Total salaries and related costs, including all operations,
were 58.0% of total revenue for the 2021 Fourth Quarter versus
55.9% for the 2020 Fourth Quarter. For comparison purposes, total
salaries and related costs were 57.8% of total revenue in the
pre-pandemic 2019 Fourth Quarter. Rent, supplies, contract labor
and other costs as a percentage of total revenue were 20.0% for the
2021 Fourth Quarter versus 18.2% for the 2020 Fourth Quarter. The
provision for credit losses as a percentage of total revenue was
1.1% for both the 2021 Fourth Quarter and the 2020 Fourth
Quarter.
- Gross profit for the 2021 Fourth Quarter, was $27.2 million, a
decrease of $1.9 million, or approximately 6.6%, as compared to
$29.1 million for the 2020 Fourth Quarter. The gross profit
percentage was 20.9% of total revenue for the 2021 Fourth Quarter
as compared to 24.8% for the 2020 Fourth Quarter. The gross profit
percentage for the Company’s physical therapy operations was 21.0%
for the 2021 Fourth Quarter as compared to 24.9% for the 2020
Fourth Quarter. The gross profit percentage on management contracts
was 19.1% for the 2021 Fourth Quarter as compared to 22.2% for the
2020 Fourth Quarter. The gross profit percentage for industrial
injury prevention services was 20.6% for the 2021 Fourth Quarter as
compared to 24.6% for the 2020 Fourth Quarter. The table below
details the gross profit (in thousands):
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
- Corporate office costs were $10.7 million for the 2021 Fourth
Quarter compared to $10.9 million for the 2020 Fourth Quarter.
Corporate office costs were 8.3% of total revenue for the 2021
Fourth Quarter as compared to 9.3% for the 2020 Fourth
Quarter.
- Operating income for the 2021 Fourth Quarter was $16.5 million,
a decrease of $1.7 million, or 9.5%, as compared to $18.2 million
for the 2020 Fourth Quarter. Operating income as a percentage of
total revenue was 12.7% for the 2021 Fourth Quarter as compared to
15.5% for the 2020 Fourth Quarter.
- Relief Funds for the 2021 Fourth Quarter were $4.6 million
compared to $5.2 million in the 2020 Fourth Quarter. See discussion
of Relief Funds below.
- In the 2021 Fourth Quarter, the Company increased a reserve
related to a legal matter by $2.6 million and, in January 2022,
paid $2.75 million related to this matter.
- Interest expense was $0.2 million for both the 2021 Fourth
Quarter and the 2020 Fourth Quarter.
- The provision for income tax was $3.9 million for the 2021
Fourth Quarter and $4.6 million for the 2020 Fourth Quarter. The
provision for income tax as a percentage of income before taxes
less net income attributable to non-controlling interest (effective
tax rate) was 27.9% for the 2021 Fourth Quarter and 26.0% for the
2020 Fourth Quarter. See table below ($ in thousands):
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
%
- Net income attributable to redeemable non-controlling interest
(temporary equity) was $2.7 million for the 2021 Fourth Quarter and
$3.4 million for the 2020 Fourth Quarter. Net income attributable
to non-controlling interest (permanent equity) was $1.5 million for
the 2021 Fourth Quarter and $2.2 million for the 2020 Fourth
Quarter. The decrease reflects the Company’s purchase of $31.1
million for all or a portion of the non-controlling interests from
equity partners during the 2021 Year.
2021 Year Compared to 2020
Year
- Reported total revenue for the 2021 Year increased $72.1
million, or 17.0% to $495.0 million as compared to $423.0 million
for the 2020 Year. See table below for a detail of reported total
revenue (in thousands):
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
- Net patient revenue from physical therapy operations increased
$65.0 million, or 17.4%, to $438.3 million for the 2021 Year from
$373.3 million in the 2020 Year. Included in net patient revenue
from physical therapy operations are revenues related to clinics
sold or closed in 2021 and 2020 of $0.5 million for the 2021 Year
and $5.5 million for the 2020 Year. During the 2021 Year, the
Company sold its interest in 2 clinics and closed 3 clinics. During
the 2020 Year, the Company sold its interest in 14 clinics and
closed 34 clinics. For comparison purposes, excluding revenue from
the clinics sold or closed, net patient revenue from physical
therapy operations was approximately $437.8 million for the 2021
Year and $367.8 million for the 2020 Year. Revenue related to
Mature Clinics increased $44.6 million, or 12.5%, for the 2021 Year
compared to the 2020 Year.
- The average net patient revenue per visit was $103.88 for the
2021 Year as compared to $105.66 for the 2020 Year, including all
clinics operational during such periods. Total patient visits were
4,219,576 for the 2021 Year and 3,533,371 for the 2020 Year, an
increase of 19.4%.
- Visits for Mature Clinics (same store) for the 2021 Year
increased 17.8% as compared to the 2020 Year while the net rate per
visit decreased 4.6%.
- Management contract revenue was $9.9 million for the 2021 Year,
an increase of 17.2%, as compared to $8.4 million for the 2020
Year.
- Revenue from the industrial injury prevention services business
increased 12.0% to $43.9 million for the 2021 Year as compared to
$39.2 million for the 2020 Year.
- Other revenue was $2.9 million for the 2021 Year and $2.0
million for the 2020 Year. Other revenue includes a variety of
services, including athletic trainers provided for schools and
athletic events.
- Total operating cost, excluding closure costs, a non-GAAP
measure, was $377.8 million for the 2021 Year, or 76.3% of total
revenue, as compared to $324.6 million for the 2020 Year, or 76.7%
of total revenue. For comparison purposes, total operating cost
excluding closure costs, were 76.7% of total revenue in the
pre-pandemic 2019 Year. Operating cost related to Mature Clinics
increased by $31.7 million for the 2021 Year compared to the 2020
Year. In addition, operating cost related to the industrial injury
prevention services business increased by $4.1 million. See table
below for a detail of operating cost, excluding closure costs (in
thousands):
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
- Total salaries and related costs, including all operations,
were 56.3% of total revenue for the 2021 Year and 55.7% for the
2020 Year. For comparison purposes, total salaries and related
costs were 56.9% of total revenue in the pre-pandemic the year
2019. Rent, supplies, contract labor and other costs as a
percentage of total revenue was 19.0% for the 2021 Year versus
19.9% for the 2020 Year. The provision for credit losses as a
percentage of total revenue was 1.1% for both the 2021 Year and
2020 Year.
- Gross profit excluding closure costs, a non-GAAP measure, was
$117.2 million for the 2021 Year, an increase of $18.8 million, or
19.1%, as compared to $98.4 million for the 2020 Year. The gross
profit percentage, excluding closure costs, was 23.7% of total
revenue for 2021 Year, an increase of 40 basis points, as compared
to 23.3% for the 2020 Year. The gross profit percentage for the
Company’s physical therapy operations, excluding closure costs, was
23.8% for the 2021 Year, an increase of 70 basis points as compared
to 23.1% for the 2020 Year. The gross profit percentage on
management contracts revenue was 15.7% for the 2021 Year as
compared to 20.9% for the 2020 Year. The gross profit percentage
for the industrial injury prevention services business was 24.4%
for the 2021 Year as compared to 25.7% for the 2020 Year. The table
below details the gross profit, excluding closure costs (in
thousands):
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
- Corporate office costs were $46.5 million for the 2021 Year
compared to $42.0 million for the 2020 Year. Corporate office costs
were 9.4% of total revenue for the 2021 Year as compared to 9.9%
for the 2020 Year. The 2020 Year included temporary salary
reductions and furloughs related to the pandemic. The 2021 Year
included $1.3 million in equity compensation expense related to the
accelerated vesting of restricted stock previously granted to the
Chief Operating Officer – West upon his retirement in July 2021.
Excluding the equity compensation related to the Chief Operating
Officer – West, Corporate office costs were 9.1% of total revenue
for the 2021 Year.
- Operating income for the 2021 Year was $70.6 million, an
increase of $18.2 million, or 34.8%, as compared to $52.4 million
for the 2020 Year. Operating income as a percentage of total
revenue increased 190 basis points from 12.4% for the 2020 Year to
14.3% for the 2021 Year.
- Relief Funds for the 2021 Year were $4.6 million compared to
$13.5 million in the 2020 Year. See discussion of Relief Funds
below.
- Other income for the 2021 Year includes $1.2 million of income
related to the positive resolution of a payor matter and other
expense includes a $2.6 million increase in a reserve related to a
legal matter. In January 2022, the Company paid $2.75 million
related to this legal matter.
- Interest expense was $0.9 million for the 2021 Year and $1.6
million for the 2020 Year.
- The provision for income tax was $15.3 million for the 2021
Year and $13.0 million for the 2020 Year. The provision for income
tax as a percentage of income before taxes less net income
attributable to non-controlling interest (effective tax rate) was
27.2% for the 2021 Year and 27.0% for the 2020 Year. See table
below ($ in thousands):
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
%
- Net income attributable to redeemable non-controlling interest
(temporary equity) was $11.4 million for the 2021 Year and $11.2
million for the 2020 Year. Net income attributable to
non-controlling interest (permanent equity) was $5.7 million for
the 2021 Year and $6.1 million for the 2020 Year.
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:
- The previously-announced Medicare rate reduction for the full
year of 2022 of approximately 0.75%, which is expected to reduce
the Company’s 2022 revenue by approximately $1.1 million, or $0.06
per share after non-controlling interest and taxes
- The previously announced phase-out of sequestration relief
which results in a 1% reduction in the rate applied to all Medicare
payments for the second quarter of 2022 and a 2% reduction in the
rate applied to all Medicare payments in the third and fourth
quarters of 2022; this is expected to reduce the Company's 2022
revenue by approximately $1.9 million, or $0.09 per share after
non-controlling interest and taxes
- The previously-announced 15% decrease in rate for care provided
to a Medicare patient by a physical therapy assistant effective
January 1, 2022, which is expected to reduce the Company’s 2022
revenue by approximately $1.2 million, or $0.06 per share after
non-controlling interest and taxes
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:
- the multiple effects of the impact of public health crises and
epidemics/pandemics, such as the novel strain of COVID-19 and its
variants, for which the total financial magnitude cannot be
currently estimated;
- 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 COVID-19 related vaccination 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:
- 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;
- legal actions, which could subject us to increased operating
costs and uninsured liabilities;
- general economic conditions;
- availability and cost of qualified physical therapists;
- personnel productivity and retaining key personnel;
- competitive 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;
- 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;
- maintaining clients for which we perform management and other
services, as a breach or termination of those contractual
arrangements by such clients could cause operating results to be
less than expected;
- maintaining adequate internal controls;
- maintaining necessary insurance coverage;
- availability, terms, and use of capital; and
- weather and other seasonal factors.
See Risk Factors in Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2020.
Many factors are beyond our control. Given these uncertainties,
you should not place undue reliance on our forward-looking
statements. Please see the other sections of this report and our
other periodic reports filed with the Securities and Exchange
Commission (the “SEC”) for more information on these factors. Our
forward-looking statements represent our estimates and assumptions
only as of the date of this report. Except as required by law, we
are under no obligation to update any forward-looking statement,
regardless of the reason the statement may no longer be
accurate.
About U.S. Physical Therapy,
Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 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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