Houston, TX – U.S. Physical Therapy, Inc. (NYSE: USPH) recently reported results for the third quarter and nine months ended September 30, 2022.
Operating Results per diluted share, a non-GAAP measure (defined below), was $0.58 for the 2022 Third Quarter. For the three months ended September 30, 2021 (“2021 Third Quarter”), Operating Results per diluted share was $0.78.
Adjusted EBITDA, a non-GAAP measure (defined below), was $17.0 million for the 2022 Third Quarter and $19.6 million for the 2021 Third Quarter. See pages 15 and 16 for a discussion and reconciliation to results according to GAAP.
For the 2022 Third Quarter, USPH’s net income attributable to its shareholders, a Generally Accepted Accounting Principles (“GAAP”) measure, was $9.6 million compared to $10.0 million for the 2021 Third Quarter. GAAP requires the Company to include a charge for the revaluation of its redeemable non-controlling interest, net of taxes, in its computation of earnings per diluted share. Earnings per diluted share, on a GAAP basis, was $0.72 for the 2022 Third Quarter as compared to $0.66 for the 2021 Third Quarter. The 2022 Third Quarter included a change in the fair value of a continent earn-out payment which had the effect of increasing net income by $1.5 million, net of tax.
Total revenue of $139.6 million for the 2022 Third Quarter was 10.9% higher than total revenue of $125.9 million for the 2021 Third Quarter.
Net patient revenue from physical therapy operations was $116.7 million for the 2022 Third Quarter, an increase of 3.9% from $112.3 million for the 2021 Third Quarter.
Average visits per clinic per day in the 2022 Third Quarter was 28.8, the second highest average visits per day for a third quarter in the Company’s history, surpassed only by 29.5 average visits per day in the third quarter of 2021. The Company lost approximately 3,500 visits due to the effects of Hurricane Ian in the last week of September 2022.
Total patient visits were 1,122,070 for the 2022 Third Quarter, an increase of 2.8% from 1,091,329 for the 2021 Third Quarter.
The net rate per patient visit was $104.01 in the 2022 Third Quarter, a $1.08 per visit increase from $102.93 in the 2021 Third Quarter and an $0.83 per visit increase from $103.18 for the three months ended June 30, 2022 (“2022 Second Quarter”).
Physical therapy total operating costs were $85.14 per visit in the 2022 Third Quarter as compared to $79.02 per visit in the 2021 Third Quarter, an increase of 7.7%. Physical therapy salaries and related costs were $60.99 per visit in the 2022 Third Quarter as compared to $56.63 per visit in the Third Quarter 2021, an increase of 7.7%. The cost increases are primarily due to continuing labor rate pressures as well as the inflationary economic environment.
Industrial injury prevention (“IIP”) services revenue was an all-time high of $20.2 million for the 2022 Third Quarter, representing a 92.1% increase over the 2021 Third Quarter. Excluding $6.8 million of revenue related to the November 2021 IIP acquisition (“IIP Acquisition”), IIP services revenue increased 27.1% period over period.
The Company completed two acquisitions in the 2022 Third Quarter and recently announced an additional acquisition that closed subsequent to the end of the third quarter. On August 31, 2022, the Company acquired 70% of the equity interest in a six-clinic physical therapy practice with approximately $2.5 million in annual revenue and approximately 26,000 patient visits per year. On September 30, 2022, the Company acquired 80% of the equity interest in a two-clinic physical therapy practice with approximately $2.5 million in annual revenue and approximately 17,000 patient visits per year. On October 31, the Company acquired 60% of the equity interest in a fourteen-clinic physical therapy practice with approximately $9.2 million in annual revenue and approximately 84,000 patient visits per year.
The Company’s Board of Directors declared a quarterly dividend of $0.41 per share payable on December 16, 2022, to shareholders of record on November 21, 2022.
Chris Reading, Chief Executive Officer, said, “While our third quarter results were impacted by higher labor and other inflation-driven costs, volumes have remained solid, and I am encouraged by some early progress with respect to payer contract negotiations. On the development front, we are very excited to continue to add exceptional practices to our partner-centric portfolio of companies. Our industrial injury prevention business has almost doubled from the same period a year ago and our organic growth in that business has been considerable this year as well.”
Carey Hendrickson, Chief Financial Officer, said, “The cost mitigation efforts we began early in the third quarter are ongoing; however, we expect elevated costs to continue to impact our near-term results. With solid volumes and rates, we expect our full year results to be within our previous guidance ranges for Operating Results and Adjusted EBITDA, but most likely on the low end of our ranges.”
As previously disclosed, the Company’s guidance range for Adjusted EBITDA for the full year of 2022 is a range of $73.5 million to $75.4 million and for Operating Results is a range of $34.4 million to $35.8 million, or $2.65 to $2.75 per share.
The complete results release is available here: US Physical Therapy Third Quarter 2022 Results (PDF)