U. S. Physical Therapy Reports Third Quarter and Nine Months Results

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U. S. Physical Therapy Reports Third Quarter and Nine Months Results

Declares Quarterly Dividend

HOUSTON--(BUSINESS WIRE)-- U.S. Physical Therapy, Inc. (NYS: USPH) , a national operator of outpatient physical therapy clinics, today reported results for the third quarter and nine months ended September 30, 2012.


U.S. Physical Therapy's net income for the nine months ended September 30, 2012 increased 9.0% to $13.9 million from $12.7 million for the nine months ended September 30, 2011. Diluted earnings per share rose to $1.17 for the 2012 period versus $1.06 for the 2011 period.

U.S. Physical Therapy's net income for the third quarter ended September 30, 2012 increased 11.3% to $4.6 million from $4.1 million for the 2011 third quarter. Diluted earnings per share were $.38 for the 2012 quarter as compared to $.34 for the 2011 period.

Nine Months 2012 compared to Nine Months 2011

  • Net revenues increased 7.4% from $176,328,000 in the first nine months of 2011 to $189,394,000 in the first nine months of 2012, primarily due to an increase in patient visits of 8.5% from 1,605,000 to 1,741,000. The average net patient revenue per visit for the 2012 period was $105.31 as compared to $104.59 in the comparable 2011 period. The increase in net revenues was partially offset by a decrease in other revenues of $2,385,000 due to a reduction in revenue from physician services.
  • Total clinic operating costs were $140,898,000, or 74.4% of net revenues, in the 2012 period, as compared to $130,482,000, or 74.0% of net revenues, in the 2011 period. The increase was primarily attributable to $6,711,000 for increased costs related to the clinics acquired in July 2011 due to a full nine months of operations in 2012 versus two months in the 2011 period and $4,002,000 in operating costs of new clinics opened or acquired in the past 12 months. Clinic salaries and related costs were 52.2% of net revenues in the recent period versus 52.8% in the 2011 period. Rent, clinic supplies, contract labor and other costs as a percentage of net revenues were 20.2% in the recent period versus 19.7% in the 2011 period. The provision for doubtful accounts as a percentage of net revenues was 1.9% for the 2012 period versus 1.4% in the 2011 period. In the first nine months of 2012, the gross margin from the Company's core physical therapy business increased by $4,966,000 or 11.4% as compared to the first nine months of 2011 which was partially offset by a $2,316,000 decrease in margin from the physician services business.
  • Corporate office costs increased 5.7% to $18,635,000 in the 2012 period from $17,630,000 in the 2011period. However, corporate office costs were reduced as a percentage of net revenues to 9.8% in the 2012 period as compared to 10.0% in the 2011 period.
  • Operating income for the first nine months of 2012 rose to $29,861,000 compared to $28,216,000 in the 2011 nine months.
  • Interest expense increased to $449,000 in the 2012 period from $331,000 in the 2011 period due to higher average borrowings in 2012.
  • Net income attributable to non-controlling interests was $6,534,000 year-to-date in 2012 as compared to $6,896,000 in the year earlier period.
  • The provision for income taxes as a percentage of income before taxes less net income attributable to non-controlling interests was 39.3% in both the 2012 and 2011 periods.
  • Reported net income attributable to common shareholders in the 2012 period was $13,890,000 compared to $12,745,000 in the 2011 period. Diluted earnings per share increased to $1.17 from $1.06.
  • Same store revenues for de novo and acquired clinics open for one year or more increased 5.0%, adjusted to reflect same number of days in each period. The 2012 period included 191 days of operations while the 2011 period included 192. Higher same store visits and slightly higher average net rate per visit accounted for the same store revenues increase.

Third Quarter 2012 compared to Third Quarter 2011

  • Net revenues increased 5.3% from $59,675,000 in the third quarter of 2011 to $62,853,000 in the third quarter of 2012, primarily due to an increase in patient visits of 4.7% from 549,000 to 575,000. The average net patient revenue per visit for the recent quarter was $105.73 as compared to $104.43 in the comparable 2011 period.
  • Total clinic operating costs were $47,484,000, or 75.5% of net revenues, in the third quarter of 2012, as compared to $45,881,000, or 76.9% of net revenues, in the 2011 period. The increase was attributable to $2,197,000 in operating costs of new clinics opened or acquired in the past 12 months. Clinic salaries and related costs were 53.1% of net revenues in the recent quarter versus 54.3% in the 2011 period. Rent, clinic supplies, contract labor and other costs as a percentage of net revenues were 20.4% for the recent quarter versus 20.1% in the 2011 period. The provision for doubtful accounts as a percentage of net revenues was 2.0% for the 2012 period versus 2.4% in the 2011 quarter. In the third quarter of 2012 the gross margin from the Company's core physical therapy business increased by $1,288,000 or 9.1% as compared to the third quarter of 2011.
  • Corporate office costs were $5,977,000 in the third quarter of 2012 as compared to $5,142,000 in the 2011 third quarter. Corporate office costs were 9.5% of net revenues in 2012 period versus 8.6% in 2011.
  • Operating income for the third quarter of 2012 was $9,392,000 compared to $8,652,000 in the 2011 third quarter.
  • Interest expense was comparable between the periods. Interest expense was $142,000 in the third quarter of 2012 versus $149,000 in the third quarter of 2011.
  • Net income attributable to non-controlling interests was $1,735,000 in the recent quarter as compared to $1,754,000 in the year earlier period.
  • Provision for income taxes as a percentage of income before taxes less net income attributable to non-controlling interests was 39.3% in both the 2012 and 2011 quarters.
  • Reported net income attributable to common shareholders in the third quarter of 2012 was $4,563,000 compared to $4,099,000 in the third quarter of 2011. Diluted earnings per share increased to $0.38 for the 2012 period from $0.34 for the 2011 period.
  • Same store revenues for de novo and acquired clinics open for one year or more increased 4.3% adjusted to reflect same number of days in each period. The 2012 period included 63 days of operations while the 2011 period included 64. Higher same store visits and higher average net rate per visit accounted for the same store revenue increase.

Chris Reading, Chief Executive Officer, said, "We continue to build on the strength of our partnership model with another successful quarter of solid operational results and strong same store growth. Development has recently been picking up nicely through a combination of organic de novo and acquired tuck-in clinics. Given the complexities of the current healthcare environment, coupled with the fragmented nature of our industry, we expect that private practices will continue to show interest in our Company as a preferred partner to assist them in these challenging times. We remain well resourced to execute on our future growth plans."

Larry McAfee, Chief Financial Officer, noted, "Continued strong free cash flow from operations has enabled the Company to reduce combined short and long-term debt by more than $7.3 million or 30% thus far in 2012."

U.S. Physical Therapy Declares Quarterly Dividend

The Company announced that a regular quarterly dividend of $0.09 per share will be paid on December 7, 2012 to shareholders of record as of November 16, 2012.

Third Quarter Conference Call

U.S. Physical Therapy's management will host a conference call at 10:30 a.m. Eastern Time, 9:30 a.m. Central Time, on Thursday, November 8, 2012 to discuss the Company's Quarter and Nine Months Ended September 30, 2012 results. Interested parties may participate in the call by dialing 1-888-335-5539 or 973-582-2857 and enter reservation number 39781800 approximately 10 minutes before the call is scheduled to begin. To listen to the live call via web-cast, go to the Company's website at www.usph.com at least 15 minutes early to register, download and install any necessary audio software. The conference call will be archived and can be accessed for approximately 90 days at this website.

Forward-Looking Statements

This press release contains statements that are considered to be forward-looking within the meaning under Section 21E of the Securities Exchange Act of 1934. These statements contain forward-looking information relating to the financial condition, results of operations, plans, objectives, future performance and business of our Company. These statements (often using words such as "believes", "expects", "intends", "plans", "appear", "should" and similar words) involve risks and uncertainties that could cause actual results to differ materially from those we project. Included among such statements are those relating to new clinics, availability of personnel and the reimbursement environment. The forward-looking statements are based on our current views and assumptions and actual results could differ materially from those anticipated in such forward-looking statements as a result of certain risks, uncertainties, and factors, which include, but are not limited to:

  • changes in Medicare guidelines and reimbursement or failure of our clinics to maintain their Medicare certification status;
  • revenue and earnings expectations;
  • general economic conditions;
  • business and regulatory conditions including federal and state regulations;
  • changes as the result of government enacted national healthcare reform;
  • availability and cost of qualified physical and occupational therapists;
  • personnel productivity;
  • competitive, economic or reimbursement conditions in our markets which may require us to reorganize or close certain clinics and thereby incur losses and/or closure costs including the possible write-down or write-off of goodwill and other intangible assets;
  • changes in reimbursement rates or payment methods from third party payors including government agencies and deductibles and co-pays owed by patients;
  • maintaining adequate internal controls;
  • availability, terms, and use of capital;
  • acquisitions, purchase of non controlling interests (minority interests) and the successful integration of the operations of the acquired businesses; and
  • weather and other seasonal factors.

Many factors are beyond our control. Given these uncertainties, you should not place undue reliance on our forward-looking statements. Please see our periodic reports filed with the Securities and Exchange Commission (the "SEC") for more information on these factors. Our forward-looking statements represent our estimates and assumptions only as of the date of this press release. Except as required by law, we are under no obligation to update any forward-looking statement, regardless of the reason the statement is no longer accurate.

About U.S. Physical Therapy, Inc.

Founded in 1990, U.S. Physical Therapy, Inc. operates 423 clinics in 42 states. The Company's clinics provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, non-surgical treatment of osteoarthritis, treatment for neurologically-related injuries and rehabilitation of injured workers. In addition to owning and operating clinics, the Company manages 15 physical therapy facilities for third parties, including hospitals and physician groups.

More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.

     
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF NET INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
 
Three Months Ended September 30,Nine Months Ended September 30,
2012201120122011
 
 
Net patient revenues$60,782$57,332$183,333$167,882
Other revenues 2,071  2,343  6,061  8,446 
Net revenues62,85359,675189,394176,328
 
Clinic operating costs:
Salaries and related costs33,37632,43098,84693,189
Rent, clinic supplies, contract labor and other12,84412,01238,32034,695
Provision for doubtful accounts1,2591,4263,6562,554
Closure costs 5  13  76  44 
Total clinic operating costs 47,484  45,881  140,898  130,482 
 
Gross margin15,36913,79448,49645,846
 
Corporate office costs 5,977  5,142  18,635  17,630 
 
Operating income9,3928,65229,86128,216
 
Interest and other income, net1448
Interest expense (142) (149) (449) (331)
 
Income before taxes9,2518,50729,41627,893
Provision for income taxes 2,953  2,654  8,992  8,252 
 
Net income including noncontrolling interests6,2985,85320,42419,641
Less: net income attributable to noncontrolling interests (1,735) (1,754) (6,534) (6,896)
Net income attributable to common shareholders$4,563 $4,099 $13,890 $12,745 
 
Earnings per share attributable to common shareholders:
Basic$0.39 $0.35 $1.18 $1.08 
 
Diluted$0.38 $0.34 $1.17 $1.06 
 
Shares used in computation:
Basic 11,827  11,886  11,778  11,824 
 
Diluted 11,928  12,011  11,892  12,007 
 
Dividends declared per common share$0.09 $0.08 $0.27 $0.24 

      
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
 
DETAIL OF GROSS MARGIN
(IN THOUSANDS)
(unaudited)
 
Three Months Ended September 30,Nine Months Ended September 30,
2012201120122011
 
Gross margin - physical therapy services$15,449$14,161$48,555$43,589
Gross margin - physician services (80) (367) (59) 2,257
Gross margin$15,369 $13,794 $48,496 $45,846

    
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
 
CONSOLIDATED EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
 
Three Months EndedNine Months Ended
September 30,September 30,
2012201120122011
Numerator:
Net income attributable to common shareholders$4,563$4,099$13,890$12,745
 
Denominator:
Denominator for basic earnings per share -
weighted-average shares11,82711,88611,77811,824
Effect of dilutive securities -
Stock options 101 125 114 183
Denominator for diluted earnings per share -
adjusted weighted-average shares 11,928 12,011 11,892 12,007
 
Earnings per share attributable to common shareholders:
Basic$0.39$0.35$1.18$1.08
 
Diluted$0.38$0.34$1.17$1.06

    
U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
 
September 30,December 31,
20122011
(unaudited)
ASSETS
 
Current assets: Read Full Story

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