Houston, TX – U.S. Physical Therapy, Inc. (NYSE: USPH) recently reported final results for the three months and year ended December 31, 2022. The Company has completed its evaluation of income tax expense for the 2022 Fourth Quarter and 2022 Full Year, and there were no changes to the provision for income taxes, or any other results, as previously presented in its earnings release on February 22, 2023.
Full Year and Quarter Highlights
Adjusted EBITDA, a non-GAAP measure, was $17.9 million for the 2022 Fourth Quarter, an increase of $0.5 million, or 2.8%, from $17.4 million, excluding Relief Funds, for the three months ended December 31, 2021 (“2021 Fourth Quarter”). See definition, explanation and calculation of Adjusted EBITDA, a non-GAAP measure, in the schedules on pages 17 and 18.
Adjusted EBITDA was $73.7 million for the 2022 Year, a decrease of $0.1 million, or 0.2%, from $73.8 million, excluding Relief Funds, for the year ended December 31, 2021 (“2021 Year”).
For the 2022 Fourth Quarter, USPH’s net income attributable to its shareholders, a GAAP measure, was $2.6 million as compared to $10.2 million for the 2021 Fourth Quarter. The 2022 Fourth Quarter included a goodwill impairment charge, further described below, of $4.8 million, net of taxes and allocation to non-controlling interest. For GAAP purposes, a charge for the revaluation of redeemable non-controlling interest, net of taxes, is included in the computation of earnings or loss per diluted share. Loss per diluted share on a GAAP basis, net of taxes, was $0.01 for the 2022 Fourth Quarter as compared to earnings per share of $0.73 for the 2021 Fourth Quarter.
For the 2022 Year, USPH’s net income attributable to its shareholders, a GAAP measure, was $32.2 million as compared to $40.8 million for the 2021 Year. Earnings per diluted share, which includes a charge for revaluation of redeemable non-controlling interest, was $2.25 for the 2022 Year, as compared to $2.41 for the 2021 Year.
Operating Results, a non-GAAP measure, was $0.58 per diluted share for the 2022 Fourth Quarter compared to $0.72 per diluted share, excluding Relief Funds (defined under “Impact of COVID-19/Relief Funds” below), for the 2021 Fourth Quarter. See definition, explanation and calculation of Operating Results, a non-GAAP measure, in the schedules on pages 17 and 18.
Operating Results was $2.70 per diluted share for the 2022 Year. For the 2021 Year, Operating Results, excluding Relief Funds, was $3.17 per diluted share.
Average visits per clinic per day were 29.1 for the 2022 Fourth Quarter and 28.7 for the 2022 Year, the second highest average visits per day for each period in the Company’s history, surpassed only by 29.8 average visits per day in the Fourth Quarter 2021 and 29.1 in the 2021 Year.
Net patient revenue from physical therapy operations was $120.1 million for the 2022 Fourth Quarter, an increase of 5.8% from $113.5 million for the 2021 Fourth Quarter. Net patient revenue from physical therapy operations was $464.6 million for the 2022 Year, an increase of 6.0% from $438.3 million for the 2021 Year.
For the 2022 Fourth Quarter, total patient visits were 1,152,139, an increase of 5.1% from 1,096,389 for the 2021 Fourth Quarter. For the 2022 Year, total patient visits were 4,483,282, an increase of 6.2% from 4,219,576 for the 2021 Year.
The net rate per patient visit was $104.28 in the 2022 Fourth Quarter, a $0.75 per visit increase from $103.53 in the 2021 Fourth Quarter. For the 2022 Year, the net rate per patient visit was $103.63 as compared $103.88 in the 2021 Year. The net rate per patient visit increased throughout 2022, from $103.00 in the first quarter of 2022 to $103.18 in the second quarter, $104.01 in the third quarter and $104.28 in the fourth quarter.
Physical therapy total operating costs were $84.05 per visit in the 2022 Fourth Quarter, a decrease of 1.3% from $85.14 in the third quarter of 2022, and an increase of 2.1% from $82.30 per visit in the Fourth Quarter 2021. Physical therapy salaries and related costs were $60.04 per visit in the Fourth Quarter 2022, a decrease of 1.6% from $60.99 in the third quarter of 2022, and an increase of 1.4% from $59.20 in the Fourth Quarter 2021.
For the 2022 Year, physical therapy total operating costs were $83.34 per visit, an increase of 4.6% from $79.71 for the 2021 Year. Total salaries and related costs were $59.52 per visit, an increase of 4.1% as compared to $57.20 for the 2021 Year.
IIP services revenue increased 37.6% to $18.4 million in the 2022 Fourth Quarter as compared to $13.4 million in the 2021 Fourth Quarter. For the full year, IIP services revenue increased 75.5% to $77.1 million in the 2022 Year as compared to $43.9 million for the 2021 Year. Excluding the Company’s IIP Acquisition in November 2021 (“IIP Acquisition”), IIP services revenue increased 9.1% in the 2022 Fourth Quarter and 20.8% in the 2022 Full Year as compared to the same periods in 2021.
The Company completed two acquisitions in the 2022 Fourth Quarter, resulting in five total acquisitions in the 2022 Year. On October 31, 2022, 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. On November 30, 2022, the Company acquired 80% of the equity interest in a thirteen-clinic physical therapy practice with approximately $12.0 million in annual revenue and approximately 120,000 patient visits per year.
The Company’s Board of Directors raised the Company’s quarterly dividend from $0.41 per share to $0.43 per share, an increase of 4.9%, effectively immediately, and declared a quarterly dividend for the first quarter of 2023 at the higher rate.
Management currently expects the Company’s Adjusted EBITDA for 2023 to be in the range of $75.0 million to $80.0 million. The guidance represents projected Adjusted EBITDA from existing operations and excludes future acquisitions. See “Management Provides 2023 Guidance” below for more information.
Management’s Comments
Chris Reading, Chief Executive Officer, said, “I am proud of the work by our partners, clinicians, and leadership team despite significant macroeconomic headwinds present in the second half of 2022. We are making good progress around contract renegotiations, development has been strong, and staffing has begun to improve. Volumes to start the new year have been ahead of our initial expectations. Our team will continue to work on all these important items as we go forward in 2023.”
Carey Hendrickson, Chief Financial Officer, said, “We are pleased to raise our quarterly dividend rate once again in the first quarter of 2023, which we have raised each year since the inception of our dividend in 2011. While we again have some Medicare rate headwinds as we enter 2023, we have tremendous confidence in our team to produce EBITDA growth this year through increased volumes, continued momentum in rate renegotiations and an ongoing focus on making our operations as efficient as possible.”
The complete results release is available here: US Physical Therapy Fourth Quarter and Full Year 2022 Results (PDF)
Source: USPH