UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 1-11151 U.S. PHYSICAL THERAPY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEVADA 76-0364866 (STATE OR OTHER JURISDICTION ...

U.S. Physical Therapy, Inc. (NYSE:USPH) Q4 2022 Earnings Conference Call February 23, 2023 10:30 AM ET Company Participants Christopher Reading - President and CEO Jake Martinez - SVP and Controller Carey Hendrickson - CFO Eric Williams - Co-COO Graham Reeve - Co-COO Rick Binstein - EVP and General Counsel Conference Call Participants Brian Tanquilut - Jefferies Larry Solow - CJS Securities Matt Larew - William Blair Mike Petusky - Barrington Research Operator Good day and thank you for standing by. Welcome ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2022 was reported at $17 million with operating results per share of $0.58 [24] - Physical therapy revenues reached $117.5 million, an increase of $4.4 million or 3.9% from Q3 2021 [31] - Total salaries and related costs were 58.6% of revenues compared to 56% in the same quarter last year [18] - Interest expense increased from $268,000 in Q3 2021 to $2 million in Q3 2022 due to higher debt and interest rates [36] Business Line Data and Key Metrics Changes - Patient visits per clinic per day averaged 28.8% in Q3 2022, with a 2.8% increase from the prior year quarter [13][26] - Injury prevention revenue reached an all-time high of $20.2 million, a 92.1% increase compared to Q3 2021 [33] - Gross profit for the injury prevention business increased 64.6% year-over-year [17] Market Data and Key Metrics Changes - The payer mix for the quarter included 45.7% commercial insurance, 34.4% Medicare, 4.1% Medicaid, and 9.5% workers' compensation [81] - The average rate for physical therapy operations was $104.1, up from $102.93 in Q3 2021 [29] Company Strategy and Development Direction - The company is focused on reducing administrative burdens and ensuring an adequate supply of therapists to meet the needs of an aging population [5] - There is an ongoing effort to negotiate better payer contracts, with early signs of progress noted [49][50] - The company is actively pursuing acquisitions and has announced a recent acquisition of 14 clinics, indicating a strategy for growth [85] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges due to inflation and labor costs but expressed confidence in strong volumes and rates [25][44] - The company expects full-year results to be within previous guidance ranges despite elevated costs [44] - Management is optimistic about the potential for improved reimbursement rates and is actively working on legislative efforts to support this [76][79] Other Important Information - The company has a strong balance sheet with $150 million in term loans and a $175 million revolving credit facility, providing flexibility for growth opportunities [39][41] - Corporate office costs decreased to $11.9 million, down from $12.9 million in Q3 2021 [34] Q&A Session Summary Question: Is the recent rate growth a sign of progress in negotiating better rates with payers? - Management indicated that it is early progress and that there is still much work to be done on this front [49][50] Question: How are discussions with acquisition targets evolving in the current environment? - Management noted that conversations have not changed significantly, but the environment has shifted, and multiples may need to adjust [52][53] Question: What is the current situation regarding clinician turnover and recruitment? - Management reported improvements in recruitment efforts and noted that while it is not easy, the situation is feeling better than a few months ago [56][57] Question: Can you quantify the impact of cost control efforts and the outlook for contract labor costs? - Management acknowledged that contract labor will continue to be a factor and that cost control efforts are ongoing but will take time to fully implement [62][63] Question: What is the leverage ratio the company aims to maintain regarding acquisitions? - Management stated that they aim to stay below a leverage ratio of 3x, currently operating around 6x [67][68] Question: What is the current view on reimbursement rates for 2023? - Management expressed hope for rational reimbursement approaches and indicated ongoing efforts to advocate for better rates [74][76]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2022 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) TEXAS 77042 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 297-7000 | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- | --- | --- | | Common Stock, $.01 par value | USPH | New Y ...

Financial Data and Key Metrics Changes - The company reported operating results per share of $0.90, marking the second highest quarterly amount in its history [16] - Adjusted EBITDA for Q2 was $21.3 million, slightly down from $24 million in Q2 2021 [17] - Physical therapy revenues reached $119.1 million, an increase of $5 million or 4.3% from the previous year [20] - Gross profit was $30.8 million, down from $34.3 million in Q2 2021, with a gross profit margin of 21.9% [22] - Interest expense increased from $237,000 in Q2 2021 to $987,000 in Q2 2022 due to higher debt and interest rates [23] Business Line Data and Key Metrics Changes - Industrial injury prevention revenue reached an all-time high of $19.4 million, a 93.7% increase year-over-year [21] - Physical therapy patient volumes per day per clinic were 29.5, up from 27.9 in Q1 but slightly below the 30.0 in Q2 2021 [18] - Total visits increased by 5.7% from 1,084,070 in Q2 2021 to 1,145,554 in Q2 2022 [19] Market Data and Key Metrics Changes - The company experienced rising labor and ancillary costs due to the tight labor market and inflationary pressures [10] - The net rate for physical therapy operations was $103.18, down from $104.46 in Q2 2021, attributed to Medicare rate changes [19] Company Strategy and Development Direction - The company secured a new $325 million credit facility to enhance its borrowing capacity for long-term growth plans [9][25] - Investments were made in rate negotiations with payers and in the work comp area to improve recruitment and identify acquisition targets [11] - The company is focused on streamlining operations and improving efficiency, particularly in front desk operations [14][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from rising interest rates and inflation but expressed confidence in the company's resilience and ability to navigate these issues [5][10] - The company anticipates a return to normal seasonal patterns in patient volumes as schools reopen and vacations conclude [13][38] - Guidance for adjusted EBITDA for the full year is set between $73.5 million to $75.4 million, considering inflationary impacts [28] Other Important Information - The company is actively pursuing M&A opportunities, expecting to capitalize on the current market environment to acquire smaller providers facing financial pressures [61][69] - The company has a strong balance sheet, with cash on hand of $48.6 million and no amounts drawn on its revolver as of June 30 [25] Q&A Session Summary Question: Guidance and Volume Trends - Management discussed the impact of seasonal patterns on volumes, noting a decline in June but expecting a rebound as schools reopen [34][36] Question: Rate Negotiations - Management confirmed ongoing efforts to negotiate better rates with payers, with some recent successes expected to impact 2023 more than 2022 [41][42] Question: M&A Strategy - Management expressed confidence in pursuing M&A opportunities, highlighting the potential for consolidation in the industry due to economic pressures on smaller providers [60][69] Question: Labor and Wage Pressures - Management detailed the mix of labor availability and wage pressures, indicating that vacation-related absences are transitory while wage pressures are more persistent [51][52] Question: Economic Downturn Impact - Management reflected on past performance during economic downturns, indicating a strong position to navigate potential challenges ahead [72]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) The financial statements detail the company's Q1 2022 financial position and performance, showing total assets of **$763.9 million**, net revenue of **$131.7 million**, and net income of **$8.8 million** [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$763.9 million** by March 31, 2022, driven by acquisitions, while total liabilities also rose to **$303.6 million** Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $24,229 | $28,567 | | Goodwill | $443,692 | $434,679 | | Total assets | $763,863 | $749,426 | | Revolving line of credit | $118,000 | $114,000 | | Total liabilities | $303,639 | $296,983 | | Total USPH shareholders' equity | $300,971 | $295,606 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net revenue increased **17.2%** to **$131.7 million** in Q1 2022, with net income attributable to shareholders rising to **$8.8 million** Q1 2022 vs. Q1 2021 Income Statement (in thousands, except per share data) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net revenue | $131,704 | $112,368 | | Gross profit | $26,588 | $25,896 | | Operating income | $15,032 | $15,022 | | Net income attributable to USPH shareholders | $8,799 | $8,173 | | Basic and diluted EPS | $0.67 | $0.21 | | Dividends declared per common share | $0.41 | $0.35 | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$11.6 million** in Q1 2022, with **$15.9 million** used in investing activities, ending the quarter with **$24.2 million** cash Q1 2022 vs. Q1 2021 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $11,649 | $17,674 | | Net cash used in investing activities | ($15,944) | ($13,203) | | Net cash used in financing activities | ($43) | ($19,452) | | Net decrease in cash and cash equivalents | ($4,338) | ($14,981) | | Cash and cash equivalents - end of period | $24,229 | $17,937 | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, acquisitions, and financial instruments, highlighting **601 clinics**, a new **6-clinic acquisition**, and **Medicare rate changes** - The company operates through two reportable segments: physical therapy operations and industrial injury prevention services. As of March 31, 2022, the company operated **601 clinics** in 39 states and managed 38 third-party facilities[20](index=20&type=chunk)[23](index=23&type=chunk) - On March 31, 2022, the company acquired a **70% interest** in Madden and Gilbert Physical Therapy, a **six-clinic practice**, for approximately **$11.5 million**[73](index=73&type=chunk) - The company estimates the Medicare rate reduction for the full year of 2022 will be approximately **0.75%**, with a **15% reduction** for services by physical or occupational therapist assistants effective January 1, 2022[100](index=100&type=chunk) - Goodwill increased from **$434.7 million** at year-end 2021 to **$443.7 million** at March 31, 2022, primarily due to **$11.5 million** in goodwill from a new acquisition[128](index=128&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 revenue growth of **17.2%** to **$131.7 million**, driven by acquisitions, with gross profit margin declining to **20.2%** due to higher costs [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Total revenue grew **17.2%** to **$131.7 million** in Q1 2022, driven by acquisitions, but operating costs increased, leading to a gross profit margin decline to **20.2%** Q1 2022 Revenue Breakdown (in thousands) | Revenue Source | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Physical therapy operations | $110,410 | $99,800 | | Industrial injury prevention services | $19,068 | $10,009 | | **Total Revenue** | **$131,704** | **$112,368** | - The average net patient revenue per visit decreased slightly to **$103.00** in Q1 2022 from **$104.72** in Q1 2021, while total patient visits increased **12.2%** to **1,063,519**[174](index=174&type=chunk) - Total operating costs rose to **79.8%** of total revenue in Q1 2022, compared to **77.0%** in Q1 2021, driven by higher salaries and acquisition-related costs[179](index=179&type=chunk) - The gross profit margin declined to **20.2%** in Q1 2022 from **23.0%** in Q1 2021, with physical therapy operations at **20.0%** and industrial injury prevention services at **21.8%**[186](index=186&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 2022 with **$24.2 million** cash and **$32.0 million** available under its **$150 million** credit facility, with cash primarily used for acquisitions - As of March 31, 2022, the company had **$24.2 million** in cash and **$32.0 million** available under its revolving credit facility[193](index=193&type=chunk)[198](index=198&type=chunk) - The credit facility was increased to **$150.0 million** in November 2021, with an accordion feature for an additional **$25.0 million**[195](index=195&type=chunk) - During Q1 2021, the company repaid **$14.1 million** in MAAPP Funds received under the CARES Act[207](index=207&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on its **$118.0 million** variable-rate credit agreement, with a **1%** change impacting annual interest expense by **$1.18 million** - The company is exposed to interest rate risk from its variable-rate Amended Credit Agreement, which had **$118.0 million** outstanding as of March 31, 2022[220](index=220&type=chunk) - A hypothetical **1%** change in the interest rate would impact annual interest expense by **$1.18 million**[220](index=220&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures are effective[222](index=222&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[223](index=223&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company settled a *qui tam* lawsuit in January 2022 for **$2.75 million** related to billing practices, admitting no liability to avoid litigation costs - In January 2022, the company settled a *qui tam* lawsuit concerning alleged 'upcoding' of billings for Medicare patients at a Florida partnership[227](index=227&type=chunk) - The settlement amount was **$2.75 million**, with the company admitting no liability; the expense was primarily recorded in 2021[228](index=228&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including employment agreements and CEO/CFO certifications - Exhibits filed include CEO and CFO certifications as required by the Sarbanes-Oxley Act of 2002[230](index=230&type=chunk) [Signatures](index=40&type=section&id=Signatures) The report was duly authorized and signed on May 9, 2022, by Carey Hendrickson, Chief Financial Officer - The Form 10-Q was signed on May 9, 2022, by Carey Hendrickson, Chief Financial Officer[234](index=234&type=chunk)

Financial Data and Key Metrics Changes - The company reported operating results per share of $0.65 for Q1 2022, compared to $0.64 in Q1 2021 [17] - Adjusted EBITDA reached an all-time high of $17.9 million, a 14.2% increase from the previous year [17][22] - Total company revenue grew by 17.2% for the quarter, with Physical Therapy revenue increasing by 10.6% to $110.4 million [12][22] Business Line Data and Key Metrics Changes - Physical Therapy patient volumes per day per clinic reached 27.9, a record high for Q1, up 3% from 27.1 in the previous year [18] - Injury Prevention (IP) revenues increased by 90% to $19.1 million, with a 22.4% increase excluding the recent acquisition [11][22] - Same-store visit growth was reported at 5.9% for the quarter [9][21] Market Data and Key Metrics Changes - The net rate for Physical Therapy operations was $103, down from $104.72 in Q1 2021, reflecting Medicare rate cuts [20] - Total visits increased by almost 116,000 to 1,063,519, a 12.2% increase from the previous year [21] Company Strategy and Development Direction - The company is focused on growth through acquisitions and has opened 12 de novo facilities so far this year [14][30] - Management emphasized the importance of partnerships and the ability to withstand challenges in the healthcare environment [14][32] - The company is actively pursuing negotiations with private insurance providers to improve reimbursement rates [44] Management's Comments on Operating Environment and Future Outlook - Management noted a strong recovery in March following a slow start to the year due to the Omicron variant and winter weather [8] - The company expects to continue growing volumes and is optimistic about future performance despite ongoing challenges [38] - Management highlighted the competitive landscape, indicating potential market share gains from struggling competitors [91] Other Important Information - Operating costs were $105.1 million, representing 79.8% of net revenues, with salaries and related costs slightly up year-over-year [23][24] - The company ended the quarter with $118 million drawn on its revolving credit facility, maintaining a strong balance sheet [30] Q&A Session Summary Question: Volume growth expectations for Q2 and beyond - Management believes they can continue to grow volumes but avoids specific quarter-to-quarter guidance [38] Question: Impact of Medicare rate cuts - Management confirmed that further Medicare rate cuts are expected in Q2 and Q3 [40] Question: Negotiations with private insurance providers - Management is actively working on negotiations with private insurers for better rates, acknowledging the challenges [44] Question: Margin impacts from labor and rent costs - The increase in contract labor costs was attributed to early-year challenges, with expectations for margins to improve in subsequent quarters [47] Question: Growth in the Injury Prevention business - Management indicated that while growth was strong, it was slightly below internal expectations due to industry-specific challenges [76] Question: Competitive environment and market share - Management noted that they have likely gained market share from hospitals and smaller practices during the pandemic [91] Question: Future acquisition strategy - Management is optimistic about ongoing acquisition discussions, seeing both larger and smaller opportunities in the market [75]

Financial Performance - Net patient revenue for the year ended December 31, 2021, was $438.3 million, an increase from $373.3 million in 2020, reflecting a growth of approximately 17.4%[193] - Total revenue for the year ended December 31, 2021, was $495.0 million, up from $423.0 million in 2020, indicating a growth of approximately 16.9%[193] - The company’s physical therapy operations generated $441.3 million in revenue for the year ended December 31, 2021, compared to $375.4 million in 2020, reflecting a growth of approximately 17.5%[193] - Net income attributable to shareholders rose to $40.8 million in 2021, compared to $35.2 million in 2020, marking an increase of approximately 15.1%[209] - Operating Results, including Relief Funds, were $43.8 million in 2021, a 13.8% increase from $38.4 million in 2020[209] - Total revenue for 2021 increased by $72.1 million, or 17.0%, to $495.0 million compared to $423.0 million in 2020[212] - Net patient revenue from physical therapy operations rose by $65.0 million, or 17.4%, to $438.3 million in 2021 from $373.3 million in 2020[214] - Operating income for 2021 was $70.6 million, an increase of $18.2 million, or 34.8% compared to 2020, with an operating income margin of 14.3%[229] - Net income for the year ended December 31, 2021, was $57.9 million, an increase of 10.3% from $52.5 million in 2020[297] Dividends and Shareholder Returns - The company declared a dividend of $0.41 per share on February 22, 2022, with total cash payments of dividends in 2021 amounting to approximately $18.8 million[170] - The company declared dividends of $1.46 per common share in 2021, significantly higher than $0.32 per share in 2020[290] - Dividends paid to USPT shareholders in 2021 amounted to $18,765,000, compared to $4,110,000 in 2020, showing a significant increase[294] - The company has a share repurchase program authorized for up to $15 million, with no expiration date[258] - The company did not purchase any shares of its common stock during the years ended December 31, 2021, and 2020[259] Acquisitions and Growth Strategy - The company completed seven acquisitions in the last three years, including three industrial injury prevention services businesses, enhancing its market presence[177] - The company intends to pursue additional acquisition opportunities and develop new clinics to expand its operations[181] - The company acquired a 75% interest in a three-clinic physical therapy practice for approximately $3.7 million in 2021[240] - The company acquired a 70% interest in a leading provider of industrial injury prevention services for approximately $63.2 million, generating annual revenue of $27.0 million[241] - The company completed acquisitions of seven multi-clinic practices and three industrial injury prevention businesses over the last three years[301] Revenue Streams and Operations - Revenue from industrial injury prevention services increased to $43.9 million in 2021 from $39.2 million in 2020, representing a growth of approximately 6.9%[193] - Total patient visits increased to 4,219,576 in 2021, up from 3,533,371 in 2020, representing a growth of about 19.5%[208] - The number of clinics increased to 591 by the end of 2021, compared to 554 at the end of 2020, indicating a growth of 6.7%[208] - Other revenue from physical therapy operations was $2.9 million in 2021, up from $2.0 million in 2020, while management contract revenue increased to $9.9 million from $8.4 million[217] - The company’s physical therapy operations segment includes clinics providing orthopedic-related care, sports-related injuries treatment, and rehabilitation services[300] Financial Position and Liabilities - Total assets increased to $749,426,000 as of December 31, 2021, up from $594,361,000 in 2020, representing a growth of 26.1%[288] - Total liabilities increased to $296,983,000 in 2021, up from $184,391,000 in 2020, marking a rise of 61.0%[288] - The company has total future obligations of $316.98 million, including $114.0 million under the Amended Credit Agreement and $4.4 million in notes payable[253] - As of December 31, 2021, $114.0 million was outstanding under the Amended Credit Agreement, with $61.0 million of availability remaining[238] - The company has outstanding notes payable of $4.4 million, primarily related to business acquisitions, payable in equal annual installments over two years[254] Credit Losses and Allowances - The allowance for credit losses increased to $2.768 million in 2021 from $2.008 million in 2020, reflecting a rise of approximately 38%[195] - The provision for credit losses for net patient receivables was $5.3 million for 2021, compared to $4.6 million for 2020, maintaining a percentage of 1.1% of net patient revenues[224] - The provision for credit losses was $5,305,000 in 2021, compared to $4,623,000 in 2020, reflecting a rise of 14.8%[290] - The allowance for estimated contractual adjustments is based on historical collection experience, with differences between net revenues and cash collections generally reflecting a difference within approximately 1% to 1.5%[355] Cash Flow and Investments - Cash provided by operations was $76.4 million, with net proceeds from the Amended Credit Agreement amounting to $98.0 million[239] - Net cash provided by operating activities for 2021 was $76.4 million, compared to $100.0 million in 2020, reflecting a decrease of 23.6%[297] - The company invested $124.1 million in net cash for investing activities in 2021, significantly higher than $51.2 million in 2020[297] - The company’s financing activities generated a net cash inflow of $43.4 million in 2021, compared to a net cash outflow of $39.4 million in 2020[297] Regulatory and Market Conditions - The company expects a reduction of approximately 0.75% in Medicare payment rates for physical/occupational therapy services for the full year of 2022[342] - The company anticipates a 3% reduction in Medicare payment rates for the years 2023 and 2024, unless changes are made by regulatory or Congressional actions[343] - Medicare claims for outpatient therapy services furnished by therapist assistants will be paid at 85% of the payment amount otherwise applicable for the service starting January 1, 2022[349] Goodwill and Impairment - The company’s goodwill increased to $434,679,000 in 2021, up from $345,646,000 in 2020, indicating a growth of 25.7%[288] - The evaluation of goodwill in 2021 did not result in any impairment, with the company determining that goodwill and tradenames were not impaired as of December 31, 2021[326][327] Revenue Recognition - The company has implemented new revenue recognition standards effective January 1, 2018, which did not materially change reported revenues[334] - The company recognizes revenues when services are rendered, with net patient revenues reflecting amounts realizable from third-party payors and patients[339] - The company has agreements with third-party payors that establish payment amounts different from its established rates, impacting revenue recognition[335]

Financial Data and Key Metrics Changes - Operating income increased by $18.2 million or 34.8% compared to 2020, with reported revenue rising 17% to $495 million [5][12] - Physical therapy net revenue increased by 17.4%, while the net rate dropped from $105.66 in 2020 to $103.88 in 2021 due to reduced Medicare pricing [6][23] - Gross profit reached $117.2 million in 2021, a 19.1% increase, with a gross margin of 23.7% [11][26] - Adjusted EBITDA for the full year was $74.3 million, a 31.5% increase from 2020 [21] Business Line Data and Key Metrics Changes - Physical therapy revenues were $441.3 million for the full year, a 17.6% increase over 2020, and $114.2 million for Q4 2021, an 8.6% increase [24] - Injury prevention services revenue increased by 12% for the year and 38.5% in Q4 2021, reaching all-time highs of $43.9 million for the full year [24][26] Market Data and Key Metrics Changes - The company experienced strong visit volumes, with visits per clinic per day averaging 29.1 for the full year and peaking at 29.8 in Q4 2021 [22] - The net rate for physical therapy operations was $103.88 for the full year, reflecting a 3.5% Medicare rate cut [23] Company Strategy and Development Direction - The company plans to focus on managing through Medicare rate reductions in 2022, with guidance for operating results per share set between $3.25 and $3.35 [32][34] - Significant acquisition-related capital was deployed in 2021, with a focus on growth opportunities in the physical therapy and injury prevention sectors [13][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2022 prospects despite challenges from COVID-19 and inflation, noting a strong performance in 2021 [32][19] - The labor market remains challenging, but turnover rates for licensed clinicians have decreased compared to pre-pandemic levels [17][18] Other Important Information - The Board of Directors approved an increase in the first quarter dividend from $0.38 to $0.41 per share, reflecting confidence in the company's growth [14] - The company ended 2021 with a strong balance sheet, including $114 million in revolving credit facilities and a net debt of $94 million [30][31] Q&A Session Summary Question: Guidance on same-store sales volumes and margin expectations - Management indicated a 2% to 3% increase in volume for Mature Clinics, with net rates expected to decline slightly [40] Question: Impact of COVID-19 on first quarter performance - Management acknowledged that the first quarter would likely be lighter due to COVID and weather impacts, but noted improvements in COVID cases [39] Question: Turnover rates and staffing challenges - Management confirmed that turnover is higher for back-office staff, while clinical turnover rates have improved compared to pre-pandemic levels [44][55] Question: Industrial Injury Prevention segment and trade shows - Management expressed hope for the return of trade shows and noted ongoing conversations for new client acquisitions in the segment [61] Question: M&A activity and market conditions - Management reported increased inbound interest for M&A, indicating a busy environment for potential acquisitions [64]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____TO _____ COMMISSION FILE NUMBER 1-11151 U.S. PHYSICAL THERAPY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (STATE OR OTHER JURISDICTI ...