U.S. Physical Therapy Reports Fourth Quarter and Full Year 2023 Results [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Full year 2023 saw non-GAAP growth despite a GAAP net income decline from an impairment charge, while Q4 revenue increased significantly with record patient visits Full Year 2023 vs 2022 Key Financial Metrics | Metric | Full Year 2023 | Full Year 2022 | Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA (Non-GAAP) | $77.7M | $73.6M | +$4.1M | | Operating Results (Non-GAAP) | $36.3M | $35.0M | +$1.3M | | USPH Net Income (GAAP) | $28.2M | $32.2M | -$4.0M | | Earnings Per Share (GAAP) | $1.28 | $2.25 | -$0.97 | Fourth Quarter 2023 vs 2022 Key Financial Metrics | Metric | Q4 2023 | Q4 2022 | Change | | :--- | :--- | :--- | :--- | | Total Net Revenue | $154.8M | $141.2M | +$13.6M (+9.6%) | | Adjusted EBITDA (Non-GAAP) | $19.0M | $17.9M | +$1.1M | | Operating Results (Non-GAAP) | $8.9M | $7.5M | +$1.3M | | USPH Net Income (GAAP) | $0.7M | $2.6M | -$1.9M | - The company achieved **record-high average daily visits per clinic** for both Q4 2023 (**29.9**) and the full year 2023 (**30.0**), with total patient visits growing **10.0%** in Q4 and **11.6%** for the full year[2](index=2&type=chunk) [Management's Comments](index=3&type=section&id=Management's%20Comments) Management highlighted record 2023 volumes, a strong balance sheet for 2024 acquisitions, and confidence in achieving 2024 EBITDA growth despite Medicare rate reductions - CEO Chris Reading noted **record physical therapy volume** for each quarter of 2023 and plans to use the company's strong balance sheet to acquire more partner-owners in 2024[4](index=4&type=chunk) - CFO Carey Hendrickson stated confidence in producing **EBITDA growth** in 2024, despite headwinds from Medicare rate reductions, through continued progress in rate negotiations, volume growth, and cost efficiencies[4](index=4&type=chunk) [Fourth Quarter 2023 Performance Review](index=3&type=section&id=Fourth%20Quarter%202023%20Performance%20Review) Q4 2023 total net revenue increased **9.6%** driven by strong segment performance, but operating results were impacted by a significant non-cash impairment charge [Physical Therapy Operations - Q4](index=3&type=section&id=Physical%20Therapy%20Operations%20-%20Q4) Q4 2023 Physical Therapy revenue grew **9.6%** due to a **10.0%** increase in patient visits, offsetting a **0.6%** decrease in net rate per visit from Medicare cuts, leading to a **7.0%** gross profit increase Physical Therapy Operations Performance (Q4 2023 vs Q4 2022) | Metric | Q4 2023 | Q4 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $134.6M | $122.8M | +9.6% | | Gross Profit | $26.2M | $24.5M | +7.0% | | Patient Visits | 1,267,842 | 1,152,139 | +10.0% | | Net Rate per Visit | $103.68 | $104.28 | -0.6% | | Avg. Daily Visits per Clinic | 29.9 | 29.1 | +2.7% | - The decrease in net rate per visit was primarily due to **Medicare rate reductions**, while all other payor categories saw a combined rate increase of **2.1%**[11](index=11&type=chunk) [Industrial Injury Prevention (IIP) Services - Q4](index=5&type=section&id=Industrial%20Injury%20Prevention%20(IIP)%20Services%20-%20Q4) Q4 2023 IIP segment revenue grew **9.7%**, with slower operating cost growth leading to a **29.8%** increase in gross profit and an expanded gross profit margin IIP Segment Performance (Q4 2023 vs Q4 2022) | Metric | Q4 2023 | Q4 2022 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | $20.2M | $18.4M | +9.7% | | Gross Profit | $4.3M | $3.3M | +29.8% | | Gross Margin | 21.2% | 17.9% | +330 bps | [Corporate, Other Expenses, and Net Income - Q4](index=5&type=section&id=Corporate%2C%20Other%20Expenses%2C%20and%20Net%20Income%20-%20Q4) Q4 2023 corporate costs rose **16.6%** and a **$17.5 million** impairment charge led to a GAAP operating loss and reduced net income, despite non-GAAP Adjusted EBITDA growth - A non-cash impairment charge of **$17.5 million** was recognized in Q4 2023 related to a reporting unit in the IIP segment, compared to a **$9.1 million** charge in Q4 2022[16](index=16&type=chunk) - USPH net income was **$0.7 million**, or a **loss of $0.38 per share**, compared to **$2.6 million**, or a **loss of $0.01 per share**, in Q4 2022, with both periods impacted by impairment charges[21](index=21&type=chunk) - Non-GAAP Adjusted EBITDA increased to **$19.0 million** from **$17.9 million** in Q4 2022, primarily due to clinic additions and increased volume at mature clinics[22](index=22&type=chunk) [Full Year 2023 Performance Review](index=7&type=section&id=Full%20Year%202023%20Performance%20Review) Full year 2023 total net revenue grew **9.3%** driven by Physical Therapy, though GAAP operating and net income decreased due to an impairment, while non-GAAP metrics showed growth Full Year 2023 vs 2022 Consolidated Performance | Metric | Full Year 2023 | Full Year 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Net Revenue | $604.8M | $553.1M | +9.3% | | Gross Profit | $121.5M | $112.0M | +8.5% | | Operating Income | $52.1M | $56.8M | -8.3% | | USPH Net Income | $28.2M | $32.2M | -12.4% | - The company added **46 new clinics** and closed **15** in 2023, bringing the total clinic count to **671** at year-end, up from **640** at the end of 2022[8](index=8&type=chunk) [Segment Performance - Full Year](index=7&type=section&id=Segment%20Performance%20-%20Full%20Year) Full year 2023 Physical Therapy revenue increased **10.6%** driven by record average daily visits, while IIP revenue grew **1.6%** with an improved gross profit margin - Physical Therapy operations revenue grew **10.6%** to **$526.5 million**, driven by a record-high average of **30.0** daily visits per clinic, which offset a decrease in the net rate per visit to **$102.80**[25](index=25&type=chunk) - IIP revenue increased **1.6%** to **$78.3 million**, and its gross profit margin expanded slightly from **20.7%** to **21.0%**[26](index=26&type=chunk) [Non-GAAP Measures - Full Year](index=8&type=section&id=Non-GAAP%20Measures%20-%20Full%20Year) Full year 2023 non-GAAP measures showed underlying operational growth, with Adjusted EBITDA increasing by **$4.1 million** and Operating Results growing by **$1.2 million** Full Year 2023 vs 2022 Non-GAAP Performance | Metric | Full Year 2023 | Full Year 2022 | Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $77.7M | $73.7M | +$4.1M | | Operating Results | $36.3M | $35.0M | +$1.2M | | Operating Results per Share | $2.56 | $2.70 | -$0.14 | - The decrease in Operating Results per share from **$2.70** to **$2.56** was attributable to an increase in shares outstanding following the company's secondary offering in May 2023[2](index=2&type=chunk) [Financial Position and Capital Allocation](index=9&type=section&id=Financial%20Position%20and%20Capital%20Allocation) The company significantly strengthened its balance sheet in 2023, increasing cash to **$152.8 million** from a secondary stock offering, while focusing on acquisitions and increasing its quarterly dividend - Cash and cash equivalents increased to **$152.8 million** as of December 31, 2023, from **$31.6 million** a year prior, primarily due to net proceeds of **$163.6 million** from a secondary stock offering in May 2023[33](index=33&type=chunk)[34](index=34&type=chunk) - The company is in various stages of completing several acquisitions expected to close in or shortly after the first half of 2024, continuing its strategy of acquiring outpatient physical therapy practices and IIP service companies[35](index=35&type=chunk) - The Board of Directors increased the quarterly dividend from **$0.43** to **$0.44 per share**, effective for the first quarter of 2024[8](index=8&type=chunk)[36](index=36&type=chunk) [2024 Business Outlook](index=9&type=section&id=2024%20Business%20Outlook) Management projects 2024 Adjusted EBITDA between **$80 million** and **$85 million**, expecting to offset a **$5.3 million** Medicare rate reduction through strategic initiatives and acquisitions 2024 Adjusted EBITDA Guidance | Metric | Guidance Range | | :--- | :--- | | Adjusted EBITDA | $80M - $85M | - The guidance accounts for an expected **$6.0 million** revenue reduction (**$5.3 million** EBITDA reduction) due to the 2024 Medicare rate cut[37](index=37&type=chunk) - Management expects to offset the Medicare rate reduction through: - Full-year impact of 2023 rate negotiations - Partial-year impact of 2024 rate negotiations - Volume increases at existing clinics - Continued expense control - Contributions from 2023 and 2024 acquisitions[40](index=40&type=chunk) [Consolidated Financial Statements and Reconciliations](index=13&type=section&id=Consolidated%20Financial%20Statements%20and%20Reconciliations) This section presents detailed consolidated financial statements for Q4 and full year 2023, including GAAP to non-GAAP reconciliations and key operational metrics [Consolidated Balance Sheet](index=15&type=section&id=Consolidated%20Balance%20Sheet) As of December 31, 2023, the balance sheet reflects total assets of **$997.2 million** and liabilities of **$345.0 million**, with cash and equity increases driven by a stock offering Key Balance Sheet Items (As of Dec 31) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $152.8M | $31.6M | | Goodwill | $509.6M | $494.1M | | Total Assets | $997.2M | $858.2M | | Total Liabilities | $345.0M | $373.6M | | Total USPH shareholders' equity | $476.2M | $315.8M | [Consolidated Statements of Cash Flows](index=17&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For full year 2023, net cash from operating activities was **$82.0 million**, investing activities used **$45.0 million**, and financing activities provided **$84.3 million** from a stock offering, leading to a **$121.2 million** net cash increase Cash Flow Summary (Full Year) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from Operating Activities | $82.0M | $58.5M | | Net cash used in Investing Activities | ($45.0M) | ($81.3M) | | Net cash from Financing Activities | $84.3M | $25.8M | | **Net increase in cash** | **$121.2M** | **$3.0M** | [Key Operating Metrics](index=21&type=section&id=Key%20Operating%20Metrics) The company's 2023 operational metrics show consistent patient volume growth, with total visits exceeding **5 million** (**11.6%** increase), average daily visits per clinic improving to **30.0**, and a net increase of **31** clinics Annual Patient Visit and Rate Trends | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Total Patient Visits | 5,005,426 | 4,483,282 | | Net Rate Per Patient Visit | $102.80 | $103.63 | | Average Daily Visits Per Clinic | 30.0 | 28.7 | Clinic Count Roll Forward (Full Year 2023) | Description | Count | | :--- | :--- | | Beginning of period | 640 | | Additions | 46 | | Closed or sold | (15) | | **End of period** | **671** |

US Physical Therapy, Inc. (NYSE:USPH) Q3 2023 Earnings Conference Call November 8, 2023 10:30 AM ET Company Participants Christopher Reading - President, CEO & Director Jake Martinez - SVP, Finance & Accounting Carey Hendrickson - CFO Eric Williams - COO, East Conference Call Participants Joanna Gajuk - Bank of America Merrill Lynch Brian Tanquilut - Jefferies Lawrence Solow - CJS Securities Calvin Sternick - JPMorgan Michael Petusky - Barrington Research Operator Good day. Welcome to the US Physical Therap ...

Clinic Operations - As of September 30, 2023, the company operated 672 clinics across 42 states, an increase from 656 clinics at the beginning of the period[155] - The company completed several acquisitions in 2023, including 19 clinics added in the third quarter and 40 clinics added in the nine months ended September 30, 2023[157] - The company has 42 third-party facilities under management as of September 30, 2023, in addition to its owned clinics[155] - The company has made strategic acquisitions, including a 70% interest in 4 clinics in September 2023 and a 45% interest in 4 clinics in May 2023[155] - The company reported a total of 19 new clinics added in the third quarter of 2023, compared to 8 in the same quarter of 2022[157] Financial Performance - For the nine months ended September 30, 2023, net patient revenues from Medicare were approximately $128.5 million, compared to $115.1 million for the same period in 2022, reflecting a growth of about 11.8%[171] - Net income attributable to shareholders for Q3 2023 was $9.3 million, a decrease of 3.1% from $9.6 million in Q3 2022[174] - Basic and diluted earnings per share for Q3 2023 were $0.51, down 29.2% from $0.72 in Q3 2022[174] - Total net revenue for Q3 2023 was $150.0 million, representing a 7.5% increase compared to $139.6 million in Q3 2022[190] - Total net revenue for the first nine months of 2023 was $450.0 million, a 9.2% increase from $412.0 million in the same period of 2022[214] Patient Visits - The number of patient visits increased by 10.8% to 1,242,954 in Q3 2023, compared to 1,122,070 in Q3 2022[193] - The number of patient visits increased by 12.2% to 3,737,584 in the first nine months of 2023 compared to 3,331,143 in the same period of 2022[216] - The average patient visits per day per clinic reached a record-high of 29.7 in Q3 2023, compared to 28.8 in Q3 2022[193] Operating Costs - Operating costs increased to $122.1 million in Q3 2023, representing 81.4% of net revenue, up from $112.8 million or 80.8% in Q3 2022[196] - Operating costs for the first nine months of 2023 were $359.0 million, or 79.8% of net revenue, compared to $327.8 million, or 79.6% in the same period of 2022[220] - Physical therapy operating costs rose by $9.5 million, or 9.9%, to $105.0 million in Q3 2023, driven by new clinics and increased patient visits[198] - Physical therapy operating costs rose by $31.0 million, or 11.2%, to $307.8 million in the 2023 Nine Months, driven by the addition of 58 net new clinics and a 3.2% increase in patient visits at mature clinics[222] Profitability Metrics - Adjusted EBITDA for Q3 2023 was $18.6 million, an increase of $1.6 million from $17.0 million in Q3 2022[187] - For the first nine months of 2023, Adjusted EBITDA was $58.7 million, an increase of $2.9 million from $55.8 million in the same period of 2022[188] - Gross profit for Q3 2023 increased by $1.1 million, or 4.3%, to $27.9 million, with a gross profit margin of 18.6%, down from 19.2% in Q3 2022[203] - Gross profit increased by $6.8 million, or 8.1%, to $91.0 million for the 2023 Nine Months, with a gross profit margin slightly decreasing to 20.2% from 20.4% in the 2022 Nine Months[228] - Operating income rose by 5.9% to $52.9 million, representing 11.8% of net revenues for the 2023 Nine Months, down from 12.1% in the previous year[231] Cash Flow and Liquidity - Cash and cash equivalents increased significantly to $147.7 million as of September 30, 2023, compared to $31.6 million at the end of 2022[240] - The company generated $55.1 million in cash from operating activities during the 2023 Nine Months, while $36.6 million was used in investing activities[246] Tax and Interest Expenses - The provision for income taxes was $3.6 million in Q3 2023, with an effective tax rate of 27.8%, up from 25.2% in Q3 2022[208] - The provision for income taxes was $10.8 million for the 2023 Nine Months, with an effective tax rate of 28.1%, compared to 27.0% in the 2022 Nine Months[236] - Interest expense increased to $7.3 million for the 2023 Nine Months, primarily due to a higher effective interest rate and increased borrowings for acquisitions[234] Future Plans and Risks - The company plans to continue developing new clinics and making additional acquisitions, supported by cash generated from operations[243] - The company is subject to various risks, including changes in Medicare rules and potential retroactive reductions in revenue from Medicare and Medicaid[147] Debt and Financing - As of September 30, 2023, the outstanding balance on the Term Facility was $143.7 million, with $175.0 million of credit availability under the Revolving Facility[257] - The average effective interest rate for borrowings under the Senior Credit Facility was 5.6% for the 2023 Third Quarter and 5.7% for the 2023 Nine Months[257] - The company has outstanding notes payable related to acquisitions totaling $5.3 million, with varying payment schedules and interest rates from 3.25% to 8.0% per annum[262] - A 1% change in the interest rate would yield no additional interest expense on the Revolving Facility due to the interest rate swap arrangement[279] Acquisitions - The company acquired a 70% equity interest in a four-clinic physical therapy practice for approximately $6.0 million, with $5.4 million paid in cash[263] - The company acquired a 70% equity interest in a single clinic physical therapy practice for approximately $7.8 million, with $7.4 million paid in cash[264] - The company acquired a 70% equity interest in a five-clinic practice for approximately $2.1 million, with $1.8 million paid in cash[265] Interest Rate Management - The company has an interest rate swap agreement with a notional value of $150 million, effective from June 30, 2022, which has generated $2.3 million in interest savings since inception[261] - The fair value of the redeemable non-controlling interest was $174.7 million as of September 30, 2023[274] - The company did not purchase any shares of common stock during the three and nine months ended September 30, 2023[277]

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 June 30, 2023 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 OTH ...

US Physical Therapy, Inc. (NYSE:USPH) Q2 2023 Earnings Conference Call August 9, 2023 10:30 AM ET Company Participants Christopher Reading - President, CEO & Director Jake Martinez - SVP, Finance & Accounting Carey Hendrickson - CFO Eric Williams - COO, East Conference Call Participants Brian Tanquilut - Jefferies Joanna Gajuk - Bank of America Merrill Lynch Lawrence Solow - CJS Securities Madeline Mollman - William Blair & Company Operator Good day, and thank you for standing by. Welcome to the U.S. Physic ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the three months ended March 31, 2023, show a 12.8% increase in net revenue to $148.5 million compared to the prior year period. However, net income attributable to shareholders decreased to $7.4 million from $8.8 million, primarily due to higher operating costs and a significant increase in interest expense. The balance sheet reflects growth in total assets to $868.1 million, driven by acquisitions which increased goodwill. Cash flow from operations remained stable at $11.3 million [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets increased to $868.1 million from $858.2 million at year-end 2022, primarily due to a $7.2 million increase in goodwill from acquisitions. Total liabilities rose to $384.4 million from $373.6 million, mainly driven by a $7.0 million increase in the revolving line of credit. Total USPH shareholders' equity saw a modest increase to $318.1 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $117,794 | $111,266 | | **Goodwill** | $501,347 | $494,101 | | **Total Assets** | **$868,127** | **$858,154** | | **Total Current Liabilities** | $90,833 | $85,489 | | **Revolving line of credit** | $38,000 | $31,000 | | **Total Liabilities** | **$384,368** | **$373,586** | | **Total USPH shareholders' equity** | $318,058 | $315,793 | [Consolidated Statements of Net Income](index=4&type=section&id=Consolidated%20Statements%20of%20Net%20Income) For the three months ended March 31, 2023, net revenue increased 12.8% year-over-year to $148.5 million. Despite a higher gross profit of $30.9 million, net income attributable to USPH shareholders declined to $7.4 million from $8.8 million in the prior-year period. This was primarily due to a significant increase in interest expense from $0.5 million to $2.6 million. Consequently, diluted earnings per share fell to $0.58 from $0.67 Q1 2023 vs Q1 2022 Income Statement (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net Revenue | $148,509 | $131,704 | | Gross Profit | $30,857 | $26,588 | | Operating Income | $16,998 | $15,032 | | Interest Expense | ($2,560) | ($540) | | Net Income Attributable to USPH Shareholders | $7,410 | $8,799 | | Diluted EPS | $0.58 | $0.67 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter of 2023, net cash provided by operating activities was $11.3 million, nearly flat compared to $11.6 million in the prior year. Net cash used in investing activities was $12.7 million, primarily for the purchase of businesses ($5.8 million) and redeemable non-controlling interests ($5.2 million). Financing activities provided a net $2.3 million, resulting in a total net increase in cash of $1.0 million for the period Q1 2023 vs Q1 2022 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $11,349 | $11,649 | | Net Cash used in Investing Activities | ($12,681) | ($15,944) | | Net Cash from (used in) Financing Activities | $2,343 | ($43) | | **Net Increase (Decrease) in Cash** | **$1,011** | **($4,338)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and operational structure, which includes two segments: physical therapy operations and industrial injury prevention services. As of March 31, 2023, the company operated 647 clinics. A key event was the February 2023 acquisition of an 80% interest in a single-clinic practice for approximately $6.2 million. The notes also cover revenue recognition, significant goodwill balances, debt facilities, and segment performance, highlighting the ongoing impact of Medicare reimbursement changes on revenue - The company operates through two segments: physical therapy operations and industrial injury prevention services. As of March 31, 2023, it operated **647 clinics** and managed **35 third-party facilities**[23](index=23&type=chunk)[25](index=25&type=chunk) - In February 2023, the company acquired an **80% interest** in a one-clinic physical therapy practice for approximately **$6.2 million**[64](index=64&type=chunk) - Net patient revenue from Medicare was approximately **$41.9 million** for Q1 2023, up from **$35.6 million** in Q1 2022[103](index=103&type=chunk) Segment Revenue and Gross Profit (Q1 2023, in thousands) | Segment | Net Operating Revenue | Gross Profit | | :--- | :--- | :--- | | Physical therapy operations | $129,159 | $27,089 | | Industrial injury prevention services | $19,350 | $3,768 | | **Total Company** | **$148,509** | **$30,857** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 12.8% year-over-year revenue growth in Q1 2023 to acquisitions and a 15.4% increase in patient visits. While operating income grew 13.1% to $17.0 million, net income attributable to shareholders declined from $8.8 million to $7.4 million, primarily due to a $2.0 million increase in interest expense from higher rates and increased borrowings. The company maintains sufficient liquidity with $32.6 million in cash and $137.0 million available under its revolving credit facility. Non-GAAP Adjusted EBITDA rose to $18.5 million from $17.5 million Q1 2023 vs Q1 2022 Key Metrics | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Net Revenue | $148.5M | $131.7M | | Operating Income | $17.0M | $15.0M | | Net Income (to shareholders) | $7.4M | $8.8M | | Diluted EPS | $0.58 | $0.67 | | Adjusted EBITDA (Non-GAAP) | $18.5M | $17.5M | - Revenue from physical therapy operations increased **15.4%** to **$127.4 million**, driven by a **15.4% increase in patient visits**. Net patient revenue per visit was stable at **$103.12**[197](index=197&type=chunk) - Interest expense increased significantly to **$2.6 million** from **$0.5 million** year-over-year, primarily due to a higher effective interest rate (**5.5%**) and increased borrowings to fund acquisitions[213](index=213&type=chunk) - As of March 31, 2023, the company had **$32.6 million** in cash and **$137.0 million** of availability on its Revolving Facility, indicating sufficient liquidity[222](index=222&type=chunk)[235](index=235&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company's primary market risk exposure is to interest rate fluctuations on its variable-rate debt, specifically the $38.0 million drawn on its Revolving Facility. To mitigate this risk on its term loan, the company utilizes an interest rate swap. A hypothetical 1% change in interest rates would result in an approximate $0.4 million annual change in interest expense on the outstanding revolving credit balance - The main market risk is from fluctuating interest rates on variable-rate debt, particularly the **$38.0 million** outstanding on the Revolving Facility[251](index=251&type=chunk) - A **1% change** in the interest rate would impact annual interest expense by approximately **$0.4 million**[251](index=251&type=chunk) - The company uses an interest rate swap to manage interest rate risk associated with its **$147.2 million** term note[251](index=251&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation conducted by management, including the CEO and CFO, the company concluded that its disclosure controls and procedures were effective as of March 31, 2023. There were no material changes in the company's internal control over financial reporting during the first quarter - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures are effective[253](index=253&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[254](index=254&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions, proceedings, and governmental audits in the ordinary course of business. The ultimate outcome of these matters cannot be predicted and could potentially result in sanctions, damages, or other penalties - The company is party to various legal actions and regulatory investigations in the ordinary course of business, with unpredictable outcomes[255](index=255&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's 2022 Annual Report on Form 10-K, with the exception of a new risk factor. This new risk addresses the potential adverse impact of banking volatility on the company's available cash, particularly funds exceeding FDIC insurance limits, and its ability to obtain future financing - A new risk factor has been added concerning banking volatility and its potential to impact the company's access to cash held in operating accounts and its ability to secure future debt or equity financing[257](index=257&type=chunk) - Other than the new banking volatility risk, there have been no material changes to the risk factors previously disclosed in the 2022 Form 10-K[256](index=256&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report. Key exhibits include certifications from the Chief Executive Officer and Chief Financial Officer as required by the Sarbanes-Oxley Act, and interactive data files (XBRL) - The report includes required CEO and CFO certifications (Exhibits 31.1, 31.2, 32) and XBRL data files[259](index=259&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $18.5 million for Q1 2023, an increase of $1 million from $17.5 million in Q1 2022 [14] - Total company revenues increased by 12.8%, from $131.7 million in Q1 2022 to $148.5 million in Q1 2023 [14] - Operating income rose by $2 million, from $15 million in Q1 2022 to $17 million in Q1 2023 [14] - The average visits per clinic per day reached 29.8, the highest first-quarter volume in the company's history [15] - The net rate increased to $113.12, up $0.12 from the previous year despite a 2% Medicare rate reduction [15][16] Business Line Data and Key Metrics Changes - Physical therapy revenues were $127.4 million in Q1 2023, a 15.6% increase from Q1 2022 [16] - Same-store revenue growth was 5.8%, driven by a 6% increase in visits compared to the prior year [16] - Operating costs for physical therapy were $100.6 million, a 13.9% increase year-over-year, but the cost per visit decreased from $83.09 to $81.97 [17] - The industrial injury prevention business generated revenues of $19.4 million, up $300,000 from Q1 2022, but the margin decreased to 19.5% from 21.8% [19] Market Data and Key Metrics Changes - The company experienced nearly 16% revenue growth in physical therapy, alongside double-digit operating income improvement [6] - The company is focusing on renegotiating or terminating low-margin contracts, particularly in Medicare Advantage, to improve profitability [8][16] Company Strategy and Development Direction - The company is committed to dropping low-margin business, particularly in Medicare Advantage contracts, to focus on more profitable opportunities [8][30] - There is an ongoing effort to improve employee retention and reduce turnover, particularly in clinical positions, which has shown significant improvement [10][31] - The company plans to continue expanding its injury prevention business, although growth may be slower this year due to economic uncertainties [11][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining strong volume growth, with expectations for continued improvement in staffing and operational efficiency [23][24] - The company anticipates achieving its adjusted EBITDA guidance of $75 million to $80 million for the year, excluding potential acquisitions [21] - Management acknowledged the challenges posed by inflation and labor scarcity but highlighted the team's resilience and adaptability [3][4] Other Important Information - The company has a strong balance sheet with a $150 million term loan and a $175 million revolving credit facility, maintaining a favorable interest rate environment [20][21] - The company is actively working on front-desk automation to improve employee retention and operational efficiency [10] Q&A Session Summary Question: What factors contributed to the strong same-store volume growth? - Management attributed the growth to favorable weather conditions and improved staffing availability, which allowed for better patient service [22][24] Question: Is the company gaining market share or is the industry recovering? - Management suggested that while the industry may be seeing a recovery, they believe they are also gaining market share due to improved staffing and operational capabilities [27][28] Question: What is the status of rate renegotiations? - Management indicated they are in the early stages of renegotiating rates, with mixed responses from payers, but are willing to walk away from under-paying contracts [29][30] Question: How is the injury prevention business performing? - Management noted that while the injury prevention business remains strong, growth may slow this year due to economic uncertainties affecting new contracts [11][42] Question: What is the expected impact of dropping low-margin contracts? - Management expects the impact to be several million dollars in revenue, but they are confident in replacing that volume with better-paying contracts [38]

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 ...

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, 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) Indicate by check mark whe ...