Core Insights - Select Medical Corporation and the Philadelphia Eagles have renewed their partnership, extending it for multiple years, with NovaCare Rehabilitation continuing as the team's Official Physical Therapy Partner [1] Company Overview - Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the U.S., with 104 critical illness recovery hospitals, 38 rehabilitation hospitals, and 1,917 outpatient rehabilitation clinics as of December 31, 2025 [1] - NovaCare Rehabilitation operates 440 physical therapy centers nationwide, with 150 located in the Delaware Valley [1] Partnership Details - The renewed agreement includes NovaCare serving as the presenting sponsor for fan content on the Eagles' digital platforms, including sweepstakes and post-game content [1] - Additional brand exposure will be provided through radio spots, end zone videoboards, and signage at Lincoln Financial Field during home games [1] - NovaCare will continue its involvement in community programs, such as the Eagles Autism Challenge [1] Strategic Importance - The partnership emphasizes a shared commitment to excellence and enhancing fan experiences, reflecting a strong bond developed over 25 years [1] - The extension allows both organizations to expand their community engagement and partnership initiatives [1]

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]

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]