Houston, TX – U.S. Physical Therapy, Inc. (NYSE: USPH), a national operator of outpatient physical therapy clinics and provider of industrial injury prevention (“IIP”) services, recently reported results for the second quarter and six months ended June 30, 2022 (“2022 Second Quarter”).
- Operating Results per diluted share, a non-GAAP measure (defined below), was $0.90 per diluted share for the 2022 Second Quarter, the second highest quarterly amount in the Company’s history. For the three months ended June 30, 2021 (“2021 Second Quarter”), Operating Results per diluted share was $0.96, the highest quarterly amount in the Company’s history.
- Adjusted EBITDA, a non-GAAP measure (defined below), was $21.3 million for the 2022 Second Quarter, a slight decrease from $21.4 million for the 2021 Second Quarter. See pages 14 and 15 for a discussion and reconciliation to results according to GAAP.
- For the 2022 Second Quarter, USPH’s net income attributable to its shareholders, a Generally Accepted Accounting Principles (“GAAP”) measure, was $11.2 million compared to $12.4 million for the 2021 Second Quarter. 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 on a GAAP basis, was $0.87 for the 2022 Second Quarter as compared to $0.82 for the 2021 Second Quarter.
- Average visits per clinic per day in the 2022 Second Quarter was 29.5, an increase from the first quarter of 2022 of 27.9 and slightly less than the Company-high 30.0 in the 2021 Second Quarter.
- Total patient visits were 1,145,554 for the 2022 Second Quarter, an increase of 5.7% from 1,084,070 for the 2021 Second Quarter.
- The net rate per patient visit was $103.18 in the 2022 Second Quarter as compared to $104.46 in the 2021 Second Quarter due to rate reductions implemented by Medicare in 2022.
- Net patient revenue from physical therapy operations was $118.2 million for the 2022 Second Quarter, an increase of 4.4% from $113.2 million for the 2021 Second Quarter.
- Industrial injury prevention (“IIP”) services revenue was an all-time high of $19.4 million for the 2022 Second Quarter, representing a 93.7% increase over the 2021 Second Quarter. Excluding $6.8 million of revenue related to the November 2021 IIP acquisition, IIP services revenue increased 25.5% period over period.
- Total revenue of $140.7 million for the 2022 Second Quarter was 10.8% higher than total revenue of $126.9 million for the 2021 Second Quarter.
- Physical therapy total operating costs were $81.09 per visit in the 2022 Second Quarter as compared to $76.50 per visit in the 2021 Second Quarter, an increase of 6.0%. Physical therapy salaries and related costs were $58.29 per visit in the 2022 Second Quarter as compared to $55.95 per visit in the Second Quarter 2021, an increase of 4.2%.
- Total operating cost was 78.1% of total revenue in the 2022 Second Quarter, as compared to 73.0% for the 2021 Second Quarter. Total salaries and related costs were 56.8% of total revenue for the 2022 Second Quarter versus 54.3% for the 2021 Second Quarter.
- On June 21, 2022, the Company announced the closing of a $325 million, five-year credit facility that includes a $150 million term loan and a $175 million revolver. Based on strong lender support, the credit facility was upsized from its $300 million launch amount. This is an increase and extension of the Company’s previous $150 million credit facility. The Company concurrently announced that it entered into an interest rate swap agreement in May, with a June 30 effective date, to lock the 1-month term SOFR rate on $150 million of its debt at a 5-year swap rate of 2.815%. The total interest rate in any particular period will also include an applicable margin based on the Company’s consolidated leverage ratio.
- The Company’s Board of Directors declared a quarterly dividend of $0.41 per share payable on September 16, 2022 to shareholders of record on August 18, 2022.
- Management updated the Company’s guidance to reflect the impact of its recent financing transaction on interest expense as well as inflation in wages and other costs it began experiencing in the 2022 Second Quarter. Management currently expects its Adjusted EBITDA for the full year of 2022 to be in the range of $73.5 million to $75.4 million with Operating Results per share, which reflects the increase in interest expense, to be in the range of $2.65 to $2.75.
Chris Reading, Chief Executive Officer, said, “Despite an increasingly difficult operating environment, our team produced the second highest quarterly results in our Company’s history. In the second quarter, we began to feel the impact of rising costs and while we are working hard and making some adjustments to alleviate some of those, we believe our costs will be higher than originally expected for the remainder of the year which has been reflected in our updated guidance numbers. Further, we took the important and necessary step to expand our credit facility which gives us more dry powder to use for acquisitions and other investments. On that front, we have been very active and expect to close a number of deals before year’s end which should be very positive for 2023 and forward.”
Carey Hendrickson, Chief Financial Officer, said, “We are very pleased to have completed the financing transaction in the second quarter, which was important to provide us the capital we need for growth. The related interest rate swap, which fixed the interest rate on $150 million of our debt for five years, provides us certainty in the rising interest rate environment at a rate that we believe is favorable over the five-year period.”
The complete results release is available here: U.S. Physical Therapy Second Quarter 2022 Results (PDF)