U.S. Physical Therapy(US:USPH)2025-08-08 12:22Financial Performance - Net Income for Q2 2025 was $12.4 million, up from $7.5 million in Q2 2024, with earnings per share increasing to $0.58 from $0.47[206] - For the first six months of 2025, Net Income reached $22.3 million compared to $15.6 million in the same period of 2024, with earnings per share rising to $1.38 from $0.93[208] - Net income attributable to USPH shareholders for Q2 2025 was $12,393,000, a 65.5% increase from $7,506,000 in Q2 2024[210] - Basic and diluted earnings per share increased to $0.58 in Q2 2025 from $0.47 in Q2 2024, representing a 23.4% growth[210] - Total revenue for the first half of 2025 was $46,402,000, compared to $38,895,000 in the first half of 2024, reflecting a 19.4% increase[216] - Total net revenue for the 2025 Second Quarter increased by $30.2 million, or 18.0%, to $197.3 million from $167.2 million for the 2024 Second Quarter[225] - Net patient revenue rose by $23.9 million, or 17.0%, to $164.2 million, while other revenue increased by $6.2 million, or 23.2%, to $33.2 million[225] - Gross profit for the 2025 Second Quarter was $41.6 million, representing 21.1% of net revenue, compared to $33.9 million, or 20.3% of net revenue, for the 2024 Second Quarter[226] - Gross profit from physical therapy operations for the 2025 Six Months was $60.7 million with a gross profit margin of 18.7%, compared to $52.8 million with a gross profit margin of 19.0% for the 2024 Six Months[263] Operational Metrics - The total number of clinics increased to 768 by the end of Q2 2025, up from 720 at the end of 2024, reflecting a net addition of 48 clinics year-to-date[197] - The number of clinics increased to 732 in Q2 2025 from 681 in Q2 2024, indicating a growth of 7.5%[222] - Patient visits in Q2 2025 totaled 1,558,756, a 16.7% increase from 1,335,335 visits in Q2 2024[222] - Average daily visits per clinic per day are calculated based on patient visits, excluding home-care visits, divided by operational days and average clinics[207] - Total patient visits reached 1,558,756 for the 2025 Second Quarter, a 16.7% increase from the 2024 Second Quarter[232] Acquisitions and Expansion - The company completed several acquisitions, including a 65% interest in three clinics in February 2025 and a 75% interest in eight clinics in November 2024[195] - The company aims to continue acquiring multi-clinic outpatient practices and expand its industrial injury prevention services[197] - On April 30, 2025, the company acquired an outpatient home-care practice for approximately $2.3 million, with potential additional contingent consideration of up to $1.8 million[300] - The company acquired a 65% interest in a physical practice for approximately $3.8 million, with a maximum contingent consideration of $1.3 million[302] - The company acquired a 75% equity interest in an eight-clinic practice for approximately $15.9 million, with a note payable of $0.2 million due on December 1, 2026[303] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.45 per share, payable on September 12, 2025[198] - The share repurchase program authorized the buyback of up to $25 million of common stock, effective August 5, 2025[199] Cost and Revenue Management - Operating income increased by $9.4 million, or 60.2%, to $24.9 million for the 2025 Second Quarter compared to $15.6 million for the 2024 Second Quarter[225] - Operating costs increased by $18.4 million, or 16.0%, to $133.1 million for the 2025 Second Quarter, with operating costs as a percentage of net revenue decreasing to 79.1% from 79.9%[235] - Corporate office costs increased to $17.5 million for the 2025 Second Quarter from $14.2 million for the 2024 Second Quarter, representing an increase of 23.2%[242] - Rent, supplies, contract labor, and other costs related to clinics increased to $59.9 million in the 2025 Six Months from $52.5 million in the 2024 Six Months, an increase of $7.4 million, or 14.1%[261] Tax and Interest Expenses - The provision for income taxes was $4.9 million for the 2025 Second Quarter, up from $3.1 million during the 2024 Second Quarter, with effective tax rates of 28.5% and 29.1%, respectively[248] - Interest expense increased by $0.4 million to $2.4 million for the 2025 Second Quarter compared to $2.0 million for the 2024 Second Quarter, reflecting a higher average outstanding balance[245] - Interest expense increased by $0.8 million to $4.7 million for the 2025 Six Months compared to $3.9 million for the 2024 Six Months[268] Cash Flow and Financial Position - Net cash provided by operating activities was $30.2 million for the 2025 Six Months compared to $33.4 million for the 2024 Six Months[282] - Cash used in investing activities for the 2025 Six Months totaled $19.3 million, primarily for the purchase of interests in businesses and non-controlling interests[284] - As of June 30, 2025, total cash and cash equivalents were $34.1 million, down from $112.9 million at June 30, 2024[276] Debt and Interest Rate Management - The company has outstanding notes payable of $1.4 million related to acquisitions, with varying interest rates from 4.5% to 8.5% per annum[299] - The average interest rate for Senior Credit Facilities was 5.1% in Q2 2025, up from 4.7% in Q2 2024[298] - The company entered into an interest rate swap agreement with a notional value of $150 million, effective June 30, 2022, with a maturity date of June 30, 2027, paying a fixed rate of 2.815%[295] - As of June 30, 2025, the fair value of the interest rate swap was $1.6 million, reflecting a decrease of $1.6 million from December 31, 2024, and generated $1.0 million in interest savings for the first half of 2025[297] - A 1% change in interest rates would result in a $0.2 million change in interest expense on the Senior Credit Facilities due to the interest rate swap[310]