Financial Data and Key Metrics Changes - Revenue increased by 7.3% in Q1 2019 to $116.2 million, with PT operations revenue rising by 6.1% to $106.7 million due to a 4.7% increase in patient visits [11][12] - Operating income increased by 18.2% to $15.4 million, with operating income as a percentage of revenue rising by 130 basis points from 12% to 13.3% [12][13] - Adjusted EBITDA grew by 11.7% to $15.6 million, with adjusted EBITDA as a percentage of net revenue increasing by 50 basis points from 12.9% to 13.4% [14] Business Line Data and Key Metrics Changes - Same-store revenue for Physical Therapy increased by 4.7%, with gross profit percentage improving by 120 basis points [6][11] - Industrial injury prevention business revenue increased by 42% to $6.9 million, primarily driven by internal growth rather than acquisitions [11][12] - Gross profit for the industrial injury prevention business improved by 650 basis points compared to Q1 2018 [6] Market Data and Key Metrics Changes - Patient visits exceeded 1 million for the quarter, with average net rate per visit increasing to $106.49 from $105.15 [11] - Average visits per day in clinics increased from 25.7 to 26.9 [11] Company Strategy and Development Direction - The company is focused on margin expansion and cost control, with recent acquisitions aimed at enhancing service offerings and cross-selling opportunities [8][9] - The management expressed confidence in the growth potential of the industrial injury prevention segment, expecting margins to settle higher than those of Physical Therapy [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of adverse weather conditions on performance but expressed optimism about future growth as the weather improves [19] - The company plans to continue investing in its industrial injury prevention business, including hiring additional resources in accounting and technology [53] Other Important Information - The provision for income taxes decreased to 24.3% from 25.8% year-over-year [13] - The company reported exceptional net cash flow, allowing for a significant reduction in its credit line [14] Q&A Session Summary Question: Thoughts on same-store sales growth and weather impact - Management noted that despite poor weather conditions, the performance was strong, and they are optimistic about continuing this trend [19] Question: Pricing trends and expectations - The net rate was higher than budgeted, and while it fluctuates, it is expected to remain at a reasonable level [20][21] Question: Clinic count and growth expectations - Management indicated that clinic openings have been steady, with a focus on meaningful long-term benefits rather than just increasing numbers [28][29] Question: Industrial injury prevention business cross-sell opportunities - Integration between the physical therapy and injury prevention sides is beginning, with expectations for future growth from this collaboration [31][32] Question: Cost per visit trends and efficiency - Management highlighted challenges in managing part-time staff and labor market inflation but remains optimistic about maintaining cost efficiency [35][36] Question: Tax rate assumptions in guidance - The assumed tax rate for guidance was set at 26.5%, with variations in the first quarter due to restricted shares [48] Question: Payer mix for the quarter - The payer mix included 46.4% from insurance companies, 15.5% from Worker's Comp, and 29.4% from Medicare and Medicaid combined [49]

TABLE OF CONTENTS 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, 2018 OR o 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 JURISDICTION ...

Financial Data and Key Metrics Changes - For the fourth quarter, revenue increased by $8.1 million or 7.5% to $117 million, with patient revenues from physical therapy operations rising by 6.1% [10][11] - For the full year, revenue increased by 9.6% to $454 million, with physical therapy operations revenue growing by 7.3% to $417.7 million [12][14] - Operating income for the fourth quarter increased by 6% to $14.8 million, while for the full year, it rose by 10.2% to $60.3 million [10][14] - The gross profit for the fourth quarter grew by $1.1 million to $25.2 million, and for the full year, it increased by 12.2% or $11.1 million [10][14] - Adjusted EBITDA for the fourth quarter grew by 3.1% to $15.5 million, while for the full year, it increased by 7.1% to $62.1 million [15] Business Line Data and Key Metrics Changes - Revenue from the industrial injury prevention business increased almost 52% in the fourth quarter and nearly 71% for the full year [10][13] - Same-store revenue for de novo and acquired clinics open for a year or more increased by 3.9% in the fourth quarter, while visits increased by 3.2% [11] - The gross profit percentage for the industrial injury prevention business grew to 20.4% compared to 13.3% the previous year [14] Market Data and Key Metrics Changes - The payer mix in the fourth quarter was approximately 50% insurance, 14.4% workers' compensation, 28% Medicare and Medicaid combined, and around 8% other [51] - Medicare reimbursement saw a slight decline of 0.5% in 2018, with a modest increase expected for the current year [50] Company Strategy and Development Direction - The company remains committed to its physical therapy business and aims to attract excellent partners and leaders to enhance growth [7] - The integration of the Briotix acquisition has positioned the company to scale and expand its service offerings [6] - The company is focused on reducing administrative burdens and improving efficiency within the healthcare system [8][78] Management's Comments on Operating Environment and Future Outlook - Management expects operating results for 2019 to be in the range of $35.1 million to $36.4 million, with a conservative outlook due to weather impacts [16][65] - The company anticipates a steady operating cost structure in 2019, with no significant changes expected [36] - Management expressed optimism about the potential for organic growth and continued investment in the physical therapy business [39] Other Important Information - The company announced a 17.4% increase in its dividend for 2019, with the first quarterly dividend of $0.27 per share to be paid in April [17] - Cash flow from operations in 2018 was at a record level, fully funding clinic development and acquisitions while reducing net debt by $22.4 million or 58% [16] Q&A Session Summary Question: Guidance for 2019 and volume assumptions - Management expects net rate to remain flat and anticipates lower same-store growth compared to 2018 [20][25] Question: Bad debt expense increase - Bad debt for PT operations ran at about 1%, primarily due to the PG&E bankruptcy [26][28] Question: Wage pressure and salary increases - Management noted some wage pressure but indicated that strategic investments in key areas have led to volume growth [29][30] Question: Clinic openings and acquisitions - The company opened 23 new clinics and is actively pursuing further acquisitions in both PT and industrial injury prevention [40][39] Question: Payer mix and reimbursement pressures - Medicare had a modest increase, and the payer mix was detailed, with insurance being the largest segment [51][50] Question: Sales force and investment needs - The company plans to gradually add to its sales force as opportunities arise, maintaining separate teams for PT and industrial injury prevention [60][64] Question: CapEx for 2019 - Expected CapEx is around $5 million to $6 million, consistent with previous years [70][72]