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]

Summary of US Physical Therapy Conference Call Company Overview - **Company Name**: US Physical Therapy (USPH) - **Stock Exchange**: NYSE - **Number of Locations**: Nearly 800 clinics across 44 states in the US - **Business Segments**: 85% revenue from physical therapy, 15% from industrial injury prevention [2][7] Core Business Insights - **Market Size**: The rehabilitation market is valued at over $40 billion, with favorable demographic trends due to an aging population [7][8] - **Growth Strategy**: The company focuses on both organic growth and acquisitions, with a proven business model that includes de novo clinic openings and partnerships with experienced therapists [10][29] - **Financial Performance**: - TTM revenue of approximately $700 million - Adjusted EBITDA of $85 million - Year-over-year revenue growth of 18% [11][12] Industry Dynamics - **Market Fragmentation**: No single company owns more than 10% of the market, indicating opportunities for consolidation [9] - **Demographic Trends**: An aging and increasingly obese population is expected to drive demand for physical therapy services [8][70] Financial Metrics - **Revenue Breakdown**: - Commercial insurance: 47-48% - Medicare: 33% - Workers' compensation: 10.9% (increased from 9.5% in 2023) [19][28] - **Pricing Strategy**: - Average visit rates: - Commercial: ~$103-104 - Medicare: ~$93-94 - Workers' comp: >$150 [26] - **Dividend**: Annual dividend of $1.80, yielding about 2% [57] Regulatory Environment - **Medicare Rates**: Anticipated increases in Medicare rates starting in 2026, following years of reductions [20][24] Acquisition Strategy - **Acquisition History**: Over 50 acquisitions since 2005, with an average acquisition multiple of 7.5 to 8 times EBITDA [29][30] - **Recent Acquisitions**: Notable acquisition of Metro Physical Therapy, adding over 50 clinics [16][29] Operational Efficiency - **Partnership Model**: The company retains 70% ownership in acquired clinics, allowing founders to maintain a vested interest [32][34] - **Staff Retention**: The company has a lower attrition rate (17%) compared to the industry average (30%) [64][66] Growth Projections - **Organic Growth**: Expected growth of 4-6% annually, with additional growth from acquisitions [72] - **Industrial Injury Prevention**: This segment has grown significantly, projected to reach $120-$125 million in revenue with a 15% organic growth rate [51][52] Challenges and Opportunities - **Staffing Needs**: The company is enhancing recruitment efforts to meet increasing demand, particularly from an aging population [64][70] - **Technological Integration**: Exploring remote monitoring and AI solutions to complement in-person therapy [73][74] Conclusion US Physical Therapy is positioned for continued growth through strategic acquisitions, a strong partnership model, and favorable demographic trends. The company is actively addressing staffing challenges and leveraging technology to enhance service delivery while maintaining a focus on financial performance and shareholder returns.

Financial Data and Key Metrics Changes - The company reported a record high average visits per day for the first quarter at 31.4, with a strong finish in March at 33.2 visits per clinic per day [7][32] - Adjusted EBITDA increased by 16.5% despite headwinds, with a notable performance in March [16] - The net rate for the first quarter was $105.66, an increase of $2.29 per visit compared to the previous year, despite a 2.9% Medicare rate cut [33][34] - Physical therapy revenues reached $156.4 million, up 16.4% year-over-year, driven by higher net rates and acquisitions [36] - The physical therapy margin was 16.3%, down from 17.9% in the previous year, but exceeded 20% in March [38] Business Line Data and Key Metrics Changes - The injury prevention (IIP) segment saw revenue growth of 28.8% year-over-year, with gross profit up 13.1% [39] - The workers' compensation revenue mix increased from 9.3% in Q1 2023 to 10.9% in Q1 2025, the highest since 2020 [35] - The company added 14 centers in the quarter, contributing to growth in both organic and acquisition-driven revenue [23] Market Data and Key Metrics Changes - The company faced significant weather-related disruptions, losing approximately 26,000 visits in the first quarter, primarily in January and February [32][46] - The impact of weather was particularly pronounced in major markets like Nashville and Texas, affecting overall performance [46] Company Strategy and Development Direction - The company is focused on increasing reimbursement rates through contract negotiations and expanding its workers' compensation business [34] - There is an emphasis on acquisitions as a primary focus for capital allocation, with ongoing diligence on several potential deals [41] - The company is exploring home care capabilities, leveraging the Metro acquisition to enhance service offerings [107][110] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand recovery following weather disruptions, with expectations for strong performance moving forward [47][48] - The company is preparing for potential economic downturns, citing past experiences and a solid demand outlook [52][54] - Management is hopeful about updating guidance in the coming months, indicating that current performance exceeds internal projections [27][28] Other Important Information - The company has a favorable debt position with $129.4 million in term loans at a 4.7% interest rate and a $175 million revolving credit facility with only $28 million drawn [40][41] - Corporate office costs were 8.8% of net revenue, down from 9% in the previous year, indicating improved cost management [39] Q&A Session Summary Question: What was the guiding volume inside the negative number for mature clinic revenue? - Management indicated that weather had a significant impact, particularly in established markets, leading to a decline in visits [46][49] Question: How has the business performed during past economic downturns? - Management noted that during the 2008-2009 recession, the company continued to grow and acquire facilities despite some negative impacts on same-store volume [52][54] Question: What are the drivers behind the IIP outperformance? - Management highlighted the effectiveness of injury prevention programs and the organic growth from existing clients as key drivers [60][62] Question: Can you provide more color on the commercial side and workers' compensation rates? - Management confirmed that commercial rates increased by over 3%, with workers' compensation rates also showing strong growth [86] Question: What are the biggest learnings from the Metro leadership meetings? - Management emphasized the strong leadership and growth plans at Metro, which could be beneficial for other partnerships [106][108]

Core Insights - The U.S. outpatient physical and occupational therapy centers industry is valued at $53 billion and is characterized by high fragmentation, with the top 50 competitors accounting for only 29% of total revenues, indicating potential for consolidation [2][3] - Moderate growth is anticipated, driven by factors such as a stable reimbursement environment, outpatient efficiencies, an alternative to opioid therapy, and increasing demand due to an aging population [2][4] Industry Overview - The industry primarily consists of small to medium regional providers, with an average annual revenue of $871,000 [3] - There is a notable increase in mergers and acquisitions (M&A) activity from both strategic buyers and private equity investors [3] - Physical therapists operate in various settings, including hospitals, private practices, outpatient clinics, homes, schools, sports facilities, workplaces, and nursing homes [3] Market Characteristics - The report includes an analysis of industry characteristics, national receipts, growth forecasts from 2007 to 2030, and the impact of the COVID-19 pandemic on operations and revenues [4] - Key industry trends include diversification, technological advancements, consolidation potential, and increased patient engagement tools [8] Financial Metrics - The report provides extensive operating ratios, including metrics such as the number of facilities, receipts, annual payroll, and average receipts per facility from 2002 to 2022 [8] - A sample profit and loss statement for an average physical therapy center in 2024 is included, along with gross profit margins for U.S. Physical Therapy from 2007 to 2023 [8] Growth Forecasts - The analysis projects industry size and growth from 2007 to 2030, with specific forecasts for 2025 and 2030 [13] - Factors influencing demand include the aging population, obesity rates, and the supply of therapists [13] Competitor Analysis - In-depth profiles of key competitors such as U.S. Physical Therapy, ATI Physical Therapy, Select Medical, and others are provided, detailing their operations and financial performance [4][18]