U.S. Physical Therapy(USPH) - 2021 Q4 - Annual Report

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]