Financial Data and Key Metrics Changes - The company achieved a record average of 32.7 visits per clinic per day, up from 30.6 in the same quarter last year, marking a 7% year-over-year increase [4][12] - Adjusted EBITDA increased to $26.9 million, up $4.7 million from the previous year, with an adjusted EBITDA margin expanding to 17.5% from 16.4% [13][20] - Physical therapy revenues reached $168.3 million, representing a 17.3% increase compared to the same period last year [16] - The gross profit margin for physical therapy improved to 21.1%, up from 20.1% in the prior year [12][16] Business Line Data and Key Metrics Changes - Injury prevention (IIP) revenues increased by 22.6%, with gross profit up 25.8% compared to the prior year [6][17] - IIP net revenues grew by $5.3 million, reflecting strong organic growth attributed to new contracts [17] - The company added over 50 net clinics compared to the prior year period, contributing to the overall growth in patient visits [6][16] Market Data and Key Metrics Changes - The net rate per patient visit was $105.33, slightly up from $105.05 in the same quarter last year, despite a 2.9% Medicare rate reduction [14][15] - Workers' compensation represented 10.4% of net patient revenues, with visits increasing by 8.4% year-over-year [15] Company Strategy and Development Direction - The company plans to focus on expanding its injury prevention business, which has shown strong organic growth and margin improvement [10][17] - The introduction of cash-based programs has generated approximately $900,000 in additional revenue, indicating a new revenue stream [22] - The company has raised its full-year 2025 adjusted EBITDA guidance from $88-$93 million to $93-$97 million, reflecting confidence in continued growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting strong demand for services despite some staffing challenges [26] - The company is actively working on increasing reimbursement rates through targeted contract negotiations [15] - Management highlighted the positive impact of AI tools on operational efficiency, particularly in clinical documentation [38][39] Other Important Information - The company has authorized a share repurchase program of up to $25 million, providing flexibility for capital allocation [19] - Implementation costs for a new enterprise-wide financial and human resources system will continue through 2026, with $221,000 incurred year-to-date [18] Q&A Session Summary Question: How would you characterize demand for your services? - Management indicated that demand is solid across most markets, although some areas face staffing challenges [26] Question: How do you view capital deployment for de novo builds? - Management expects this to be one of the strongest years for de novo openings, with adjustments made to recruiting efforts [29] Question: Can you provide an update on labor management strategies? - The company has seen a 25% increase in student clinical rotations and is implementing mentorship programs to reduce turnover [45][46] Question: What is the outlook for Medicare rates in 2026? - Management anticipates a positive increase in Medicare rates, estimating a 1% to 1.75% increase, translating to $2 million to $3 million in additional revenue [58][59] Question: How is the injury prevention segment performing? - The injury prevention segment is ahead of budget, with strong organic growth and continued capital deployment expected [68]

Financial Data and Key Metrics Changes - The company achieved a record average of 32.7 visits per clinic per day in Q2 2025, up from 30.6 in Q2 2024, marking a 7% increase [10][21] - Adjusted EBITDA increased to $26.9 million, up $4.7 million from the same quarter last year, with an adjusted EBITDA margin expanding to 17.5% from 16.4% [24][34] - Physical therapy revenues reached $168.3 million, representing a 17.3% increase compared to the prior year [27][28] - Gross profit margin improved to 21.1%, up from 20.1% in Q2 2024 [22][28] Business Line Data and Key Metrics Changes - Injury prevention (IIP) revenues increased by 22.6%, with gross profit rising by 25.8% compared to the prior year [13][29] - The company added over 50 net clinics compared to the prior year period, contributing to the growth in physical therapy visits [14] - Home care visits totaled 28,493 in Q2 2025, marking the first time these visits were reported separately [25] Market Data and Key Metrics Changes - Workers' compensation represented 10.4% of net patient revenues, with visits increasing by 8.4% year over year [27] - The net rate per patient visit was $105.33, slightly up from $105.05 in Q2 2024, despite a 2.9% Medicare rate reduction [26] Company Strategy and Development Direction - The company plans to focus on expanding its injury prevention business and has identified several large contracts in the auto industry [14][18] - The company has initiated a staged rollout of cash-based programs, generating approximately $900,000 in additional revenue [37] - A share repurchase program was authorized, allowing for the repurchase of up to $25 million of shares through December 31, 2026, while acquisitions remain the primary capital allocation priority [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for services, noting solid demand across most markets despite some staffing challenges [41] - The company raised its full-year 2025 adjusted EBITDA guidance to a range of $93 million to $97 million, reflecting strong performance in the first half of the year [34] - Management acknowledged the impact of Medicare cuts, estimating a $25 million hit to profit lines, but remains positive about future reimbursement rate increases [15][72] Other Important Information - The company is implementing a new enterprise-wide financial and human resources system, with associated costs expected to continue through 2026 [30] - The balance sheet remains strong, with $135 million in term loans and a $175 million revolving credit facility [32] Q&A Session Summary Question: How would you characterize demand for your services? - Demand is solid across most markets, but there are challenges in managing costs while meeting demand [41] Question: How do you view capital deployment for de novo builds? - This year is expected to be one of the strongest for de novo builds, with adjustments made to recruiting efforts [43] Question: Can you provide an update on labor management strategies? - A 25% increase in student clinical rotations has been observed, contributing to lower turnover rates [59][61] Question: What is the expected impact of Medicare rate increases? - The company anticipates a 1% to 1.75% increase in Medicare rates, translating to a potential $2 million to $3 million positive impact on revenue [71][72] Question: How is the IIP segment performing? - The IIP segment is performing ahead of expectations, with strong organic growth and continued capital deployment planned [82] Question: What are the dynamics of the home PT business? - The home PT business is new and will be reported separately, with initial results showing promise [25][52]