U S PHYSICAL THERAPY INC NV
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
USPH$99.49+2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001140361-24-037313
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001140361-24-045836
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 147 previous paragraphs and 163 current paragraphs.
78 unchanged; 48 reworded; 37 added; 18 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 58 previous and 58 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (37)
Current report
IIP business.
Current report
** On April 30, 2024, one of our IIP businesses, Briotix Health Limited Partnership, acquired 100% of an IIP business.
Current report
*** On October 31, 2023, we concurrently acquired 100% of an IIP business and a 55% equity interest in an ergonomics software business.
Current report
We also manage clinics owned by third parties through management contracts. In addition to the clinic count shown above, as of September 30, 2024, we managed 39 clinics bringing the total owned/managed clinics to 700.
Current report
On October 31, 2024, we completed the acquisition of a 50% interest in MSO Metro, LLC (“Metro”) pursuant to the Equity Interest Purchase Agreement (the “Purchase Agreement”) dated October 7, 2024 among U.S. Physical Therapy, Ltd. (a subsidiary of the Company), Metro, the members of Metro, and Michael G. Mayrsohn, as Sellers' Representative. We also became the managing member of Metro.
Current report
At the closing, we paid the purchase price of approximately $76.5 million, $75 million of which was funded by its cash on hand and the remaining $1.5 million through the issuance of 18,358 shares of our common stock based on a trailing five-day average as of the day immediately prior to closing. The shares of our common stock were issued in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act. The Purchase Agreement also includes an earnout where the sellers can earn up to another $20.0 million of consideration if certain performance criteria relating to the Metro business are achieved.
Current report
Earnings per share for the 2024 Third Quarter was $0.39. USPH Net Income and earnings per share included a charge of $2.5 million, net of $1.0 million tax, or $0.16 per share, associated with the closure of 32 clinics during the 2024 Third Quarter. Excluding the clinic closure costs, USPH Net Income was $9.1 million(1) compared to $9.3 million(1) in the comparable prior year period while earnings per share was $0.55(1) and $0.51(1) over the same periods, respectively.
Current report
USPH Net Income was $22.2 million for the 2024 Nine Months as compared to $27.6 million for the 2023 Nine Months while earnings per share was $1.32 for the 2024 Nine Months compared to $1.72 for the 2023 Nine Months. USPH Net Income and earnings per share included a charge of $2.9 million, net of $1.2 million tax, or $0.20 per share, associated with the closure of 43 clinics during the 2024 Nine Months. Excluding the clinic closure costs, USPH Net Income was $25.1 million(1)compared to $27.7 million(1) in the comparable period while earnings per share was $1.52(1) and $1.73(1)over the same periods, respectively.
Current report
(1) Costs associated with the closure of 32 clinics during the 2024 Third Quarter and 43 clinics during the 2024 Nine Months. Closure costs in the 2023 Third Quarter and 2023 Nine Months were not material.
Current report
(2) Primarily consists of legal and consulting expenses related to the acquisition of 50% equity interest in a management services organization that provides management and administrative services to 50 physical therapy clinics.
Current report
A reconciliation of additional non-GAAP measures to the most comparable GAAP measures are presented in the tables below.
Current report
(1) Costs associated with the closure of 32 and 43 clinics during the 2024 Third Quarter and 2024 Nine Months, respectively. Closure costs for the comparable prior year periods were not material. We believe that presenting this information will allow investors to evaluate the performance of the Company's business more objectively.
Current report
2024 Third Quarter versus 2023 Third Quarter
Current report
Gross profit for the 2024 Third Quarter was $29.1 million, or 17.3% of net revenue, compared to $27.9 million, or 18.6% of net revenue, for the 2023 Third Quarter. Excluding closure costs(1) of $3.4 million, gross profit from physical therapy operations was $26.9 million, an increase of $3.4 million, or 14.5%, over the 2023 Third Quarter, and the gross profit margin from physical therapy operations was 18.9% in the 2024 Third Quarter, an increase of 90 basis points from 18.0% in the 2023 Third Quarter.
Current report
Adjusted EBITDA, a non-GAAP measure, was $21.1 million for the 2024 Third Quarter, an increase of $2.5 million from $18.6 million in the 2023 Third Quarter.
Current report
Operating Results, a non-GAAP measure, was $10.4 million in the 2024 Third Quarter, an increase of $1.1 million from $9.2 million in the 2023 Third Quarter. On a per share basis, Operating Results was $0.69 in the 2024 Third Quarter compared to $0.62 in the 2023 Third Quarter.
Current report
(6) Excludes $3.4 million of costs associated with the closure of 32 clinics during the 2024 Third Quarter.
Current report
(7) Includes $3.4 million of costs associated with the closure of 32 clinics during the 2024 Third Quarter.
Current report
(8) Refer to reconcilliation of non-GAAP measures to most comparable GAAP measures for more information.
Current report
Operating costs from physical therapy operations increased $12.2 million, or 11.4%, to $119.2 million in the 2024 Third Quarter from $107.0 million in the 2023 Third Quarter primarily driven by the 21 net new clinics added since the comparable prior year period and $3.4 million of costs associated with the closure of 32 clinics during the 2024 Third Quarter. Excluding the clinic closure costs, operating costs increased 8.2%(1), while total operating costs per visit was $88.98 compared to $84.49 over the same periods, respectively. Excluding the clinic closure costs, operating costs per visit was $86.37 in the 2024 Third Quarter.
Current report
Gross profit from physical therapy operations in the 2024 Third Quarter was $23.5 million with a gross profit margin of 16.5%. Excluding closure costs, gross profit from physical therapy operations was $26.9 million(1), an increase of $3.4 million, or 14.5%, over the 2023 Third Quarter, and the gross profit margin from physical therapy operations was 18.9%(1) in the 2024 Third Quarter, an increase of 90 basis points from 18.0% in the 2023 Third Quarter.
Current report
IIP revenues increased $5.8 million, or 29.9%, to $25.3 million for the 2024 Third Quarter as compared to $19.5 million for the 2023 Third Quarter. Excluding our IIP acquisitions during the years 2023 and 2024, IIP revenues increased 12.9%. Gross profit from IIP operations in the 2024 Third Quarter increased $1.2 million, or 27.1%, to $5.6 million from $4.4 million in the 2023 Third Quarter. Excluding our IIP acquisitions during the years 2023 and 2024, IIP gross profit increased 13.2%. The gross profit margin from IIP operations was 22.2% in the 2024 Third Quarter compared to 22.7% in the 2023 Third Quarter.
Current report
Operating income was $14.7 million for the 2024 Third Quarter compared to $15.9 million for the 2023 Third Quarter. Excluding the clinic closure costs, operating income was $18.2 million(1) in the 2024 Third Quarter.
Current report
Change in fair value of contingent earn-out consideration and put-right liability
Current report
2024 Nine Months versus 2023 Nine Months
Current report
Total net revenue for the 2024 Nine increased $40.9 million, or 9.1%, to $490.9 million from $450.0 million for the 2023 Nine Months while operating costs increased $40.5 million, or 11.3%, to $399.5 million from $359.0 million over the same periods, respectively.
Current report
Gross profit, which included $4.1 million of costs associated with the closure of 43 clinics, was $91.4 million, or 18.6% of net revenue, during the 2024 Nine Months compared to $91.0 million, or 20.2% of net revenue, for the 2023 Nine Months. Excluding the clinic closure costs, gross profit for the 2024 Nine Months was $95.5 million(1) or 19.5%(1) of net revenue, compared to $91.1(1) million, or 20.3%(1) of net revenue, for the 2023 Nine Months.
Current report
Non-GAAP Adjusted EBITDA(1) increased $1.1 million to $60.0 million for the 2024 Nine Months from $58.9 million in the 2023 Nine Months while non-GAAP Operating Results(1) increased $1.7 million to $29.2 million, or $1.94 per share, in the 2024 Nine Months from $27.5 million, or $1.97 per share, in the 2023 Nine Months.
Current report
(6) Excludes $4.1 million of costs associated with the closure of 43 clinics closed during the nine months ended September 30, 2024 and $0.2 million of costs associated with the 15 clinics closed during the year ended December 31, 2023.
Current report
(7) Includes $4.1 million of costs associated with the closure of 43 clinics closed during the nine months ended September 30, 2024 and $0.2 million of costs associated with the 15 clinics closed during the year ended December 31, 2023.
Current report
(8) Refer to reconcilliation of non-GAAP measures to most comparable GAAP measures for more information.
Current report
Gross profit from physical therapy operations, which included $4.1 million of costs associated with the 43 clinic closures, was $76.4 million, or 18.2% of net revenue, for the 2024 Nine Months compared to $78.8 million, or 20.2% of net revenue, for the 2023 Nine Months. Excluding the clinic closure costs, physical therapy gross profit was $80.5 million(1), or 19.1% of net revenue(1), in the 2024 Nine Months compared to $79.0 million(1), or 20.2% of net revenue(1), in the 2023 Nine Months.
Current report
Revenues from IIP operations increased $12.2 million, or 21.0%, to $70.3 million for the 2024 Nine Months from $58.1 million for the 2023 Nine Months. Gross profit from IIP operations increased $2.9 million, or 23.5%, to $15.0 million for the 2024 Nine Months from $12.2 million for the 2023 Nine Months while the gross profit margin from IIP operations increased to 21.4% for the 2024 Nine Months from 21.0% for the 2023 Nine Months.
Current report
Corporate office costs were $42.7 million, or 8.7% of net revenue, in the 2024 Nine Months, compared to $38.1 million, or 8.5% of net revenue, in the 2023 Nine Months.
Current report
Operating income was $48.7 million for the 2024 Nine Months compared to $52.9 million for the 2023 Nine Months. Excluding the clinic closure costs, operating income was $52.8 million(1) in the 2024 Nine Months.
Current report
Interest expense was $6.0 million in the 2024 Nine Months compared to $7.3 million in the 2023 Nine Months, with the decrease primarily related to lower outstanding borrowings over the comparative periods.
Current report
On August 31, 2024, we acquired a 70% equity interest in an eight-clinic practice physical therapy with the original practice owners retaining 30% equity interest. The purchase price for the 70% equity interest was approximately $2.0 million. As part of the transaction, we agreed to additional contingent consideration if future operational and financial objectives are met. The maximum payout is $3.6 million. The contingent consideration was valued at $3.6 million on August 31, 2024.
Removed paragraphs (18)
Previous report
as a breach or termination of those contractual arrangements by such clients could cause operating results to be less than expected;
Previous report
Net income attributable to our shareholders was $15.6 million for the 2024 Six Months compared to $18.3 million for the 2023 Six Months. Earnings per share for the 2024 Six Months was $0.93 compared to $1.22 for the 2023 Six Months, due in part to the increase in shares outstanding associated with the Company’s secondary offering completed in May 2023.
Previous report
Adjusted EBITDA was $22.1 million for the 2024 Second Quarter, compared to $21.7 million in the 2023 Second Quarter while Operating Results was $11.0 million in the 2024 Second Quarter compared to $10.4 million in the 2023 Second Quarter. On a per share basis, Operating Results was $0.73 in the 2024 Second Quarter compared to $0.76 in the 2023 Second Quarter, with the decrease primarily attributable to the increase in shares outstanding associated with the Company’s secondary offering completed in May 2023.
Previous report
Adjusted EBITDA was $38.9 million for 2024 Six Months compared to $40.1 million in 2023 Six Months while Operating Results was $18.8 million for the 2024 Six Months compared to $18.1 million for the 2023 Six Months. On a per share basis, Operating Results was $1.25 per share in the 2024 Six Months compared to $1.36 per share in the 2023 Six Months, with the decrease primarily attributable to the increase in shares outstanding associated with our secondary offering completed in May 2023.
Previous report
2024 Second Quarter versus 2023 Second Quarter
Previous report
Operating costs from physical therapy operations increased $10.7 million, or 10.3%, to $114.7 million in the 2024 Second Quarter from $104.0 million in the 2023 Second Quarter primarily driven by costs associated with the 25 net new clinics added since the comparable prior year period. Operating costs were 79.9% of net revenue for the 2024 Second Quarter compared to 78.7% of net revenue for the 2023 Second Quarter. On a per visit basis (excluding management contracts), operating costs increased to $84.46 for the 2024 Second Quarter from $80.61 for the 2023 Second Quarter.
Previous report
Gross profit from physical therapy operations increased $0.6 million, or 2.0%, to $28.8 million in the 2024 Second Quarter from $28.2 million in the 2023 Second Quarter. The gross profit margin from physical therapy operations was 20.1% in the 2024 Second Quarter compared to 21.3% in the 2023 Second Quarter.
Previous report
IIP revenues increased $4.5 million, or 23.2%, to $23.7 million for the 2024 Second Quarter as compared to $19.2 million for the 2023 Second Quarter. Excluding the Company’s IIP acquisition during the 2024 Second Quarter, IIP revenues increased 13.5%. IIP operating costs increased $3.4 million, or 22.0%, versus the comparable prior year period. Gross profit from IIP operations in the 2024 Second Quarter increased $1.1 million, or 27.5%, to $5.1 million from $4.0 million in the 2023 Second Quarter. Excluding the Company’s IIP acquisition in the 2024 Second Quarter, IIP gross profit increased 15.7%. The gross profit margin from IIP operations increased to 21.4% in the 2024 Second Quarter from 20.7% in the 2023 Second Quarter.
Previous report
Operating income was $19.6 million for the 2024 Second Quarter compared to $20.1 million for the 2023 Second Quarter.
Previous report
Interest expense decreased $0.7 million to $2.0 million for the 2024 Second Quarter compared to $2.6 million in the 2023 Second Quarter due to a lower outstanding balance on our Revolving Facility(as defined in Liquidity and Capital Resources – Senior Credit Facilities), which we paid down in May 2023. The interest rate on the Company’s Senior Credit Facilities was 4.7% and 5.7% for the 2024 Second Quarter and 2023 Second Quarter, respectively, with an all-in effective interest rate, including all associated costs, of 5.4% and 6.0% over the same periods, respectively.
Previous report
2024 Six Months versus 2023 Six Months
Previous report
Not meaningful
Previous report
Total net revenue for the 2024 Six Months increased $22.9 million, or 7.6%, to $322.9 million from $300.0 million for the 2023 Six Months while operating costs increased $23.7 million, or 10.0%, to $260.6 million from $236.9 million over the same periods, respectively. As a percentage of net revenue, total operating cost was 80.7% for the 2024 Six Month as compared to79.0% for the 2023 Six Months. Gross profit for the 2024 Six Months was $62.3 million, or 19.3% of net revenue, compared to $63.1 million for the 2023 Six Months, or 21.0% of net revenue.
Previous report
(6) Not meaningful.
Previous report
Gross profit from physical therapy operations in the 2024 Six Months decreased $2.5 million, or 4.5%, to $52.8 million from $55.3 million in the 2023 Six Months. The gross profit margin from physical therapy operations decreased to 19.0% in the 2024 Six Months from 21.2% in the 2023 Six Months.
Previous report
IIP revenues increased $6.4 million, or 16.5%, to $45.0 million for the 2024 Six Months as compared to $38.6 million for the 2023 Six Months. IIP operating costs increased $4.7 million, or 15.2%, versus the comparable prior year period. Gross profit from IIP operations in the 2024 Six Months increased $1.7 million, or 21.4%, to $9.4 million from $7.8 million in the 2023 Six Months. The gross profit margin from IIP operations increased to 20.9% in the 2024 Six Months from 20.1% in the 2023 Six Months.
Previous report
Corporate office costs were $28.3 million in the 2024 Six Months compared to $26.0 million in the 2023 Six Months.
Previous report
Operating income was $33.9 million for the 2024 Six Months compared to $37.1 million for the 2023 Six Months.
Reworded paragraphs (48)
Previous wording
We operate our business through our reportable segments which include (1) the physical therapy operations segment and (2) the industrial injury prevention services (“IIP”) segment. Our physical therapy operations consist of physical therapy and occupational therapy clinics that provide pre- and post-operative care and treatment for orthopedic-related disorders, sports-related injuries, preventive care, rehabilitation of injured workers and neurological injuries. Services provided by the IIP segment include onsite injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional evaluations and ergonomic assessments. The majority of these services are contracted with and paid for directly by employers, including a number of Fortune 500 companies. Other clients include large insurers and their contractors. These services are performed through Industrial Sports Medicine Professionals, consisting of both physical therapists and specialized certified athletic trainers.
Current wording
We operate our business through our reportable segments which include (1) the physical therapy operations segment and (2) the industrial injury prevention services (“IIP”) segment. Our physical therapy operations consist of physical therapy and occupational therapy clinics that provide pre- and post-operative care and treatment for a variety of orthopedic-related disorders, and sports-related injuries, and rehabilitation of injured workers. Services provided by the IIP segment include onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations and ergonomic assessments. The majority of these services are contracted with and paid for directly by employers, including a number of Fortune 500 companies. Other clients include large insurers and their contractors. These services are performed through Industrial Sports Medicine Professionals, consisting of both physical therapists and specialized certified athletic trainers.
Previous wording
During the six months ended June 30, 2024 and for the year ended December 31, 2023, we completed the acquisitions of clinic practices and IIP businesses detailed below:
Current wording
During the nine months ended September 30, 2024, and for the year ended December 31, 2023, we completed the acquisitions of clinic practices and IIP businesses detailed below:
Previous wording
Net income attributable to our shareholders, a Generally Accepted Accounting Principle (“GAAP”) measure, was $7.5 million for the 2024 Second Quarter compared to $10.9 million for the 2023 Second Quarter. In accordance with GAAP, the revaluation of redeemable non-controlling interest, net of taxes, is not included in net income but is charged directly to retained earnings; however, this change is included in the computation of earnings per share. Earnings per share for the 2024 Second Quarter was $0.47 compared to $0.64 for the 2023 Second Quarter, due in part to the increase in shares outstanding associated with the Company’s secondary offering completed in May 2023.
Current wording
USPH Net Income was $6.6 million for the 2024 Third Quarter. In accordance with Generally Accepted Accounting Principles (“GAAP”), the revaluation of redeemable non-controlling interest, net of taxes, is not included in net income but is charged directly to retained earnings; however, this change is included in the computation of earnings per share.
Previous wording
Adjusted EBITDA, a non-GAAP measure is defined as net income attributable to our shareholders before interest income, interest expense, taxes, depreciation, amortization, change in fair value of contingent earn-out consideration, Relief Funds, changes in revaluation of put-right liability, equity-based awards compensation expense, clinic closure costs, other income and related portions for non-controlling interests.
Current wording
Adjusted EBITDA a non-GAAP measure, is defined as net income attributable to our shareholders before interest income, interest expense, taxes, depreciation, amortization, change in fair value of contingent earn-out consideration, payments received from the federal government under the Corona virus Aid, Relief and Economic Security Act (“Relief Funds”), changes in revaluation of put-right liability, equity-based awards compensation expense, clinic closure costs, business acquisition related costs and other income and related portions for non-controlling interests.
Previous wording
Operating Results, a non-GAAP measure equals net income attributable to our shareholders less, changes in revaluation of a put-right liability, Relief Funds, clinic closure costs, changes in fair value of contingent earn-out consideration, and any allocations to non-controlling interests, all net of taxes. Operating Results per share also excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact.
Current wording
Operating Results, a non-GAAP measure, equals net income attributable to our shareholders less, changes in revaluation of a put-right liability, Relief Funds, clinic closure costs, changes in fair value of contingent earn-out consideration, business acquisition related costs and any allocations to non-controlling interests, all net of taxes. Operating Results per share also excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact.
Previous wording
The following tables provide details of the basic and diluted earnings per share computation and reconcile net income attributable to our shareholders calculated in accordance with GAAP to Adjusted EBITDA and Operating Results (non-GAAP measures). Management believes providing Adjusted EBITDA and Operating Results to investors is useful information for comparing the Company’s period-to-period results as well as for comparing with other similar businesses since most do not have redeemable instruments and therefore have different equity structures. Management uses Adjusted EBITDA and Operating Results, which eliminate certain items described above that can be subject to volatility and unusual costs, as the principal measures to evaluate and monitor financial performance period over period.
Current wording
The following tables provide details of the basic and diluted earnings per share computation and reconcile net income attributable to our shareholders calculated in accordance with GAAP to Adjusted EBITDA, Operating Results and other non-GAAP measures. Management believes providing Adjusted EBITDA and Operating Results to investors is useful information for comparing our period-to-period results as well as for comparing with other similar businesses since most do not have redeemable instruments and therefore have different equity structures. Management uses Adjusted EBITDA, Operating Results, and other non-GAAP measures, which eliminate certain items described above that can be subject to volatility and unusual costs, as the principal measures to evaluate and monitor financial performance period over period.
Previous wording
Adjusted EBITDA and Operating Results are not measures of financial performance under GAAP. Adjusted EBITDA and Operating Results should not be considered in isolation or as an alternative to, or substitute for, net income attributable to our shareholders presented in the consolidated financial statements.
Current wording
Adjusted EBITDA, Operating Results and the other non-GAAP measures presented are not measures of financial performance under GAAP. Adjusted EBITDA and Operating Results should not be considered in isolation or as an alternative to, or substitute for, net income attributable to our shareholders presented in the consolidated financial statements.
Previous wording
Total net revenue for the 2024 Second Quarter increased $15.7 million, or 10.4%, to $167.2 million from $151.5 million for the 2023 Second Quarter while operating costs increased $14.1 million, or 11.8%, to $133.3 million from $119.3 million over the same periods, respectively. As a percent of total net revenue, total operating cost was 79.7% for the 2024 Second Quarter, as compared to 78.7% for the 2023 Second Quarter. Gross profit for the 2024 Second Quarter was $33.9 million, or 20.3% of net revenue, compared to $32.2 million, or 21.3% of net revenue, for the 2023 Second Quarter.
Current wording
Total net revenue for the 2024 Third Quarter increased $18.0 million, or 12.0%, to $168.0 million from $150.0 million for the 2023 Third Quarter while operating costs increased $16.8 million, or 13.8%, to $138.9 million from $122.1 million over the same periods, respectively. As a percentage of total net revenue, total operating cost was 82.7% for the 2024 Third Quarter, as compared to 81.4% for the 2023 Third Quarter.
Previous wording
(2) Includes 21 clinics added during the six months ended June 30, 2024 and 46 clinic added during the year ended December 31, 2023.
Current wording
(2) Includes 33 clinics added during the nine months ended September 30, 2024 and 46 clinic added during the year ended December 31, 2023.
Previous wording
(3) Includes 11 clinics closed during the six months ended June 30, 2024 and 15 clinics closed during the year ended December 31, 2023.
Current wording
(3) Includes 43 clinics closed during the nine months ended September 30, 2024 and 15 clinics closed during the year ended December 31, 2023.
Previous wording
Net revenue from physical therapy operations increased $11.2 million, or 8.5%, to $143.5 million for the 2024 Second Quarter from $132.2 million for the 2023 Second Quarter. This increase was primarily due to the increase in visits from the 25 net new clinics added since the comparable prior year period, an increase in visits at mature clinics and an increase in net rate per patient visit. Total patient visits increased 68,195, or 5.4%, to 1,335,335 in the 2024 Second Quarter from 1,267,140 in the 2023 Second Quarter. Average daily visits per clinic was 30.6 for the 2024 Second Quarter compared to 30.4 in the comparable prior year quarter. Net rate per patient visit for the 2024 Second Quarter increased to $105.05 from $102.03 for the 2023 Second Quarter, an increase of 3.0%, despite the 1.8% Medicare rate reduction in effect for the 2024 Second Quarter. The increase in net rate per patient visit was mainly driven by higher reimbursement rates from commercial and other payors which reflects our strategic priority of increasing reimbursement rates through contract negotiations as well as an increase in workers compensation as a percent of our total net patient revenues.
Current wording
Net revenue from physical therapy operations increased $12.2 million, or 9.3%, to $142.7 million for the 2024 Third Quarter from $130.5 million for the 2023 Third Quarter. This increase was due primarily to the increase in visits from the 21 net clinics added since the comparable prior year period, a 2.4% increase in visits at mature clinics and an increase in net rate per patient visit. Total patient visits increased 74,097, or 6.0%, to 1,317,051 in the 2024 Third Quarter from 1,242,954 in the 2023 Third Quarter. Average daily visits per clinic was 30.1 for the 2024 Third Quarter compared to 29.7 in the comparable prior year quarter. Net rate per patient visit for the 2024 Third Quarter increased to $105.65 from $102.37 for the 2023 Third Quarter, an increase of 3.2%, despite the 1.8% Medicare rate reduction which went into effect at the beginning of 2024. The increase in net rate per patient visit was mainly driven by higher reimbursement rates from commercial and other payors as a result of contract negotiations and an increase in workers compensation as a percent of our total net patient revenues.
Previous wording
Other revenues increased approximately $0.3 million, or 8.7%, to $3.2 million for the 2024 Second Quarter from $3.0 million for the 2023 Second Quarter primarily due to the increase in management contract revenue since the comparable prior year period.
Current wording
Other revenues increased approximately $0.3 million, or 8.8%, to $3.6 million for the 2024 Third Quarter from $3.3 million for the 2023 Third Quarter primarily due to the increase in management contract revenue since the comparable prior year period.
Previous wording
Total salaries and related costs increased to $81.5 million in the 2024 Second Quarter from $74.4 million, in the 2023 Second Quarter, an increase of $7.1 million, or 9.5%. Salaries and related costs per visit (excluding management contracts), increased to $59.66 for the 2024 Second Quarter from $57.59 for the 2023 Second Quarter.
Current wording
Salaries and related costs (including management contracts) increased to $84.2 million in the 2024 Third Quarter compared to $77.0 million, in the 2023 Third Quarter, an increase of $7.2 million, or 9.4%. Salaries and related costs per visit (excluding management contracts), increased to $62.47 for the 2024 Third Quarter from $60.35 for the 2023 Third Quarter.
Previous wording
Total rent, supplies, contract labor and other costs related to clinics increased to $31.5 million in the 2024 Second Quarter from $28.1 million in the 2023 Second Quarter, an increase of $3.5 million, or 12.4% due to the 25 net new clinics added since the comparable prior year period. On a per visit basis, rent, supplies, contract labor and other costs (excluding management contracts costs), increased to $23.52 for the 2024 Second Quarter compared to $21.79 for the 2023 Second Quarter.
Current wording
Total rent, supplies, contract labor and other costs related to clinics (excluding management contracts) increased to $29.8 million in the 2024 Third Quarter from $28.5 million in the 2023 Third Quarter, an increase of $1.6 million, or 5.7%. On a per visit basis, rent, supplies, contract labor and other costs (excluding management contracts costs), decreased slightly to $22.59 for the 2024 Third Quarter compared to $22.90 for the 2023 Third Quarter.
Previous wording
The provision for credit losses was $1.7 million for the 2024 Second Quarter and $1.6 million for the 2023 Second Quarter. As a percentage of net revenues, the provision for credit losses was 1.0% for both the 2024 Second Quarter and the 2023 Second Quarter. Our provision for credit losses as a percentage of total patient accounts receivable was 5.5% on June 30, 2024, as compared to 5.0% on December 31, 2023.
Current wording
The provision for credit losses was $1.7 million for the 2024 Third Quarter and $1.5 million for the 2023 Third Quarter. As a percentage of net revenues, the provision for credit losses was 1.2% for both the 2024 Third Quarter and the 2023 Third Quarter.
Previous wording
Corporate office costs were $14.2 million, or 8.5% of revenue in the 2024 Second Quarter compared to $12.1 million, or 8.0% of net revenue in the 2023 Second Quarter.
Current wording
Corporate office costs were $14.4 million, or 8.6% of net revenue, in the 2024 Third Quarter compared to $12.0 million, or 8.0% of revenue in the 2023 Third Quarter.
Previous wording
Interest expense decreased $1.2 million to $3.9 million for the 2024 Six Months compared to $5.2 million in the 2023 Six Months due to a lower outstanding balance on our Revolving Facility, which we paid down in May 2023. The interest rate on our Senior Credit Facility was 4.7% for the 2024 Six Months and 5.7% for the 2023 Six Months, with an all-in effective interest rate, including all associated costs, of 5.4% and 6.9% over the same periods, respectively.
Current wording
Interest expense decreased $0.1 million to $2.0 million for the 2024 Third Quarter compared to $2.1 million in the 2023 Third Quarter due to a lower outstanding balance on our term loan. The interest rate on our credit facility was 4.7% for the 2024 Third Quarter and 4.9% for the 2023 Third Quarter, with an all-in effective interest rate, including all associated costs of 5.4% and 5.6% over the same periods, respectively.
Previous wording
Interest income from investing excess cash (primarily proceeds from the secondary offering sale of our stock completed in May 2023) in a high-yield savings account was $1.1 million during the 2024 Second Quarter compared to $0.5 million in the 2023 Second Quarter.
Current wording
Interest income from investing excess cash (primarily proceeds from the secondary offering sale of our stock completed in May 2023) in a high-yield savings account decreased to $1.0 million during the 2024 Third Quarter from $1.7 million in the 2023 Third Quarter as a result of our lower cash balance, due to cash used for acquisitions, since the comparable prior year period.
Previous wording
We revalued an outstanding put right liability and recognized an expense of $0.2 million for the 2024 Second Quarter compared to an expense of $0.1 million for the 2023 Second Quarter. The put-right (expiring in 2027) relates to the potential future purchase of a company within our IIP business. The company provides physical therapy and rehabilitation services to hospitals and other ancillary providers in a distinct market area.
Current wording
We revalued contingent and put-right liabilities related to certain acquisitions and recognized a net non-cash expense (an increase in the related liabilities) of $1.7 million in the 2024 Third Quarter and less than $0.1 million in the comparable 2023 Third Quarter. The put-right (expiring in 2027) relates to the potential future purchase of a company within our IIP business. The company provides physical therapy and rehabilitation services to hospitals and other ancillary providers in a distinct market area.
Previous wording
We recognized an income of $0.2 million for the 2024 Second Quarter and $0.3 million for the 2023 Second Quarter from a joint venture which provides physical therapy services for patients at hospitals. Since we are deemed to not have a controlling interest in the joint venture, our investment is accounted for using the equity method of accounting.
Current wording
For both the 2024 Third Quarter and the 2023 Third Quarter, we recognized income of $0.2 million from a joint venture which provides physical therapy services for patients at hospitals. Since we are deemed to not have a controlling interest in the joint venture, our investment is accounted for using the equity method of accounting.
Previous wording
The provision for income taxes was $3.1 million in the 2024 Second Quarter compared to $4.2 million during the 2023 Second Quarter while the effective tax rates were 29.1% and 27.9% over the same periods, respectively.
Current wording
The provision for income taxes was $2.6 million in the 2024 Third Quarter compared to $3.6 million during the 2023 Third Quarter while the effective tax rates were 27.9% and 27.8% for the 2024 Third Quarter and the 2023 Third Quarter respectively.
Previous wording
Net income attributable to redeemable non-controlling interest (temporary equity) was $3.3 million in the 2024 Second Quarter compared to $2.9 million in the 2023 Second Quarter. Net income attributable to non-controlling interest (permanent equity) was $0.9 million for the 2024 Second Quarter and $1.0 million for the 2023 Second Quarter.
Current wording
Net income attributable to redeemable non-controlling interest (temporary equity) was $2.0 million for both the 2024 Third Quarter and the 2023 Third Quarter. Net income attributable to non-controlling interest (permanent equity) was $1.2 million for the 2024 Third Quarter and $1.0 million for the 2023 Third Quarter.
Previous wording
(2) Includes 21 clinics added during the six months ended June 30, 2024 and 46 clinic added during the year ended December 31, 2023.
Current wording
(2) Includes 33 clinics added during the nine months ended September 30, 2024 and 46 clinic added during the year ended December 31, 2023.
Previous wording
(3) Includes 11 clinics closed during the six months ended June 30, 2024 and 15 clinics closed during the year ended December 31, 2023.
Current wording
(3) Includes 43 clinics closed during the nine months ended September 30, 2024 and 15 clinics closed during the year ended December 31, 2023.
Previous wording
Revenues from physical therapy operations increased $16.5 million, or 6.3%, to $277.9 million in the 2024 Six Months compared to $261.4 million in 2023 Six Months. This increase was primarily due to an increase in visits from the 25 net new clinics added since the comparable prior year period as well as an increase in net rate per patient visit to $104.23 for 2024 Six Months from $102.56 for the 2023 Six Months. Total patient visits increased 108,707, or 4.4%, to 2,603,337 in the 2024 Six Months from 2,494,630 in the 2023 Six Months. Average daily visits per clinic was 30.0 for the 2024 Six Months compared to 30.1 in the comparable prior year period. The increase in net rate per patient visit was mainly driven by higher reimbursement rates from commercial and other payors which reflects our strategic priority of increasing reimbursement rates through contract negotiations as well as an increase in workers compensation as a percent of our total net patient revenues.
Current wording
Revenues from physical therapy operations increased $28.7 million, or 7.3%, to $420.6 million in the 2024 Nine Months compared to $391.9 million in the 2023 Nine Months. This increase was primarily due to the increase in volume from the 21 net clinics added since the comparable prior year period as well as an increase in net rate per patient visit to $104.71 for 2024 Nine Months from $102.50 for 2023 Nine Months. Total patient visits increased 182,804, or 4.9%, to 3,920,388 in the 2024 Nine Months from 3,737,584 in the 2023 Nine Months. Average daily visits per clinic was 30.0 for both 2024 Nine Months and the comparable prior year period.
Previous wording
Other revenues increased $1.0 million, or 18.6%, to $6.6 million for the 2024 Six Months from $5.5 million for the 2023 Six Months due to an increase in management contract revenue since the comparable prior year period.
Current wording
Other revenues increased $1.3 million, or 15.0%, to $10.1 million for the 2024 Nine Months from $8.8 million for the 2023 Nine Months due to an increase in management contract revenue since the comparable prior year period.
Previous wording
Operating costs from physical therapy operations increased by $19.0 million, or 9.2% to $255.1 million in the 2024 Six Months from $206.1 million in the 2023 Six Months primarily driven by costs associated with the 25 net new clinics added since the comparable prior year period. Operating costs were 81.0% of net revenue for the 2024 Six Months compared to 78.8% of net revenue for the 2023 Six Months. On a per visit basis, operating costs (excluding management contracts) increased to $84.97 for the 2024 Six Months from $81.28 for the 2023 Six Months.
Current wording
Operating costs from physical therapy operations increased by $31.2 million, or 10.0% to $344.3 million in the 2024 Nine Months from $313.1 million in the 2023 Nine Months primarily driven by costs associated with the 21 net new clinics added since the comparable prior year period. On a per visit basis, operating costs (excluding management contracts) increased to $86.32 for the 2024 Nine Months from $82.35 for the 2023 Nine Months.
Previous wording
Total salaries and related costs related to clinics increased to $161.2 million in the 2024 Six Months from $148.3 million, in the 2023 Six Months, an increase of $13.0 million, or 8.7%. Salaries and related costs per visit (excluding management contracts) increased to $60.52 for the 2024 Six Months from $58.35 for the 2023 Six Months.
Current wording
Total salaries and related costs for physical therapy operations increased to $245.4 million in the 2024 Nine Months from $225.3 million, in the 2023 Nine Months, an increase of $20.1 million, or 8.9%. Salaries and related costs per visit (excluding management contracts) increased to $61.17 for the 2024 Nine Months from $59.01 for the 2023 Nine Months.
Previous wording
Total rent, supplies, contract labor and other costs related to clinics increased to $60.5 million in the 2024 Six Months from $54.7 million in the 2023 Six Months, an increase of $5.8 million, or 10.6% mostly due to the 25 net new clinics added since the comparable prior year period. On a per visit, rent, supplies, contract labor and other costs (excluding management contract costs) increased to $23.17 for the 2024 Six Months compared to $21.70 for the 2023 Six Months.
Current wording
Total rent, supplies, contract labor and other costs related to clinics (excluding management contracts) increased to $89.4 million in the 2024 Nine Months from $82.4 million in the 2023 Nine Months, an increase of $7.0 million, or 8.5%. On a per visit, rent, supplies, contract labor and other costs (excluding management contract costs) increased to $22.80 for the 2024 Nine Months compared to $22.04 for the 2023 Nine Months.
Previous wording
The provision for credit losses was $3.3 million for the 2024 Six Months and $3.1 million for the 2023 Six Months. As a percentage of net revenues, the provision for credit losses was 1.0% for both the 2024 Six Months and 2023 Six Months.
Current wording
The provision for credit losses was $5.1 million for the 2024 Nine Months and $4.6 million for the 2023 Nine Months. As a percentage of net revenues, the provision for credit losses was 1.2% for both the 2024 Nine Months and 2023 Nine Months.
Previous wording
Interest income from investing excess cash (primarily proceeds from the secondary offering sale of our stock completed in May 2023) in a high-yield savings account was $2.6 million during the 2024 Six Months compared to $0.5 million during the 2023 Six Months.
Current wording
Interest income from investing excess cash (primarily proceeds from the secondary offering sale of our stock completed in May 2023) in a high-yield savings account was $3.7 million during the 2024 Nine Months compared to $2.2 million during the 2023 Nine Months.
Previous wording
We revalued contingent earn-out consideration related to certain acquisitions resulting in a loss of $3.4 million for the 2024 Six Months compared to a gain of $10 thousand dollars in the comparative prior year period.
Current wording
We revalued contingent earn-out consideration related to certain acquisitions resulting in a loss of $5.3 million for the 2024 Nine Months compared to a loss of $0.3 million in the comparative prior year period.
Previous wording
We recorded an expense of $0.3 million on the revaluation of a put right liability for 2024 Six Months and $0.2 million for the 2023 Six Months. The put-right relates to the potential future purchase of a company that provides physical therapy and rehabilitation services to hospitals and other ancillary providers in a distinct market area.
Current wording
We recorded an expense of $0.1 million on the revaluation of a put right liability for 2024 Nine Months and a gain of $0.2 million for the 2023 Nine Months. The put-right relates to the potential future purchase of a company that provides physical therapy and rehabilitation services to hospitals and other ancillary providers in a distinct market area.
Previous wording
We recognized income from a joint venture which provides physical therapy services for patients at hospitals of $0.5 million for the 2024 Six Months and $0.6 million for the 2023 Six Months. Since we are deemed to not have a controlling interest in the joint venture, our investment is accounted for using the equity method of accounting.
Current wording
We recognized income of $0.8 million from a joint venture which provides physical therapy services for patients at hospitals for both the 2024 Nine Months and the 2023 Nine Months. Since we are deemed to not have a controlling interest in the joint venture, our investment is accounted for using the equity method of accounting.
Previous wording
The provision for income taxes was $6.2 million in the 2024 Six Months compared to $7.2 million during the 2023 Six Months while the effective tax rates were 28.6% and 28.2% over the same periods, respectively.
Current wording
The provision for income taxes was $8.8 million in the 2024 Nine Months compared to $10.8 million during the 2023 Nine Months while the effective tax rates were 28.4% and 28.1% over the same periods, respectively.
Previous wording
Net income attributable to redeemable non-controlling interest (temporary equity) was $5.5 million in the 2024 Six Months compared to $5.6 million in the 2023 Six Months. Net income attributable to non-controlling interest (permanent equity) was $2.2 million for the 2024 Six Months and $2.3 million for the 2023 Six Months.
Current wording
Net income attributable to redeemable non-controlling interest (temporary equity) was $7.5 million in the 2024 Nine Months compared to $7.6 million in the 2023 Nine Months. Net income attributable to non-controlling interest (permanent equity) was $3.4 million for the 2024 Nine Months and $3.3 million for the 2023 Nine Months.
Previous wording
We believe that our business has sufficient cash to allow us to meet our short-term cash requirements. Total cash and cash equivalents were $112.9 million as of June 30, 2024, and $152.8 million as of December 31, 2023. Additionally, we had $142.5 million of outstanding borrowings and $175.0 million in available credit under our Revolving Facility as of June 30, 2024, compared to $144.4 million of outstanding borrowings and $175.0 million in available credit under our Revolving Facility as of December 31, 2023.
Current wording
We believe that our business has sufficient cash to allow us to meet our short-term cash requirements. Total cash and cash equivalents were $117.0 million as of September 30, 2024, and $152.8 million as of December 31, 2023. We had $140.6 million of outstanding borrowings and $175.0 million in available credit under our Revolving Facility as of September 30, 2024, compared to $144.4 million of outstanding borrowings and $175.0 million in available credit under our Revolving Facility as of December 31, 2023.
Previous wording
We make reasonable and appropriate efforts to collect accounts receivable, including applicable deductible and co-payment amounts. Claims are submitted to payors daily, weekly or monthly in accordance with our policy or payor’s requirements. When possible, we submit our claims electronically. The collection process is time consuming and typically involves the submission of claims to multiple payors whose payment of claims may be dependent upon the payment of another payor. Claims under litigation and vehicular incidents can take a year or longer to collect. Medicare and other payor claims relating to new clinics awaiting CMS approval initially may not be submitted for six months or more. When all reasonable internal collection efforts have been exhausted, accounts are written off prior to sending them to outside collection firms. With managed care, commercial health plans and self-pay payor type receivables, the write-off generally occurs after the account receivable has been outstanding for 120 days or longer. As of June 30, 2024, we have accrued $7.5 million related to credit balances, a portion of which is due to patients and payors. The credit balances are expected to be resolved or paid in the next twelve months.
Current wording
We make reasonable and appropriate efforts to collect accounts receivable, including applicable deductible and co-payment amounts. Claims are submitted to payors daily, weekly or monthly in accordance with our policy or payor’s requirements. When possible, we submit our claims electronically. The collection process is time-consuming and typically involves the submission of claims to multiple payors whose payment of claims may be dependent upon the payment of another payor. Claims under litigation and vehicular incidents can take a year or longer to collect. Medicare and other payor claims relating to new clinics awaiting CMS approval initially may not be submitted for six months or more. When all reasonable internal collection efforts have been exhausted, accounts are written off prior to sending them to outside collection firms. With managed care, commercial health plans and self-pay payor type receivables, the write-off generally occurs after the account receivable has been outstanding for 120 days or longer. As of September 30, 2024, we have accrued $6.8 million related to credit balances, a portion of which is due to patients and payors.
Previous wording
Cash provided by operating activities was $33.4 million for the 2024 Six Months as compared to $38.8 million for the 2023 Six Months. This decrease in cash provided was mostly due to the timing of payments related to payroll.
Current wording
Cash provided by operating activities was $55.5 million for the 2024 Nine Months as compared to $55.1 million for the 2023 Nine Months. This decrease in cash provided was mostly due to the timing of payments related to payables and accrued expenses.
Previous wording
Cash used in investing activities for the 2024 Six Months totaled $48.8 million and consisted of $45.5 million used in the purchase of interests in businesses and non-controlling interests (temporary and permanent), and $4.2 million of fixed assets purchases. These uses were partially offset by $0.1 million in proceeds from the sale of non-controlling interests (temporary and permanent), repayments of notes receivable of $0.3 million and $0.5 million distributions received from an unconsolidated affiliate.
Current wording
Cash used in investing activities for the 2024 Nine Months totaled $54.6 million and primarily consisted of $48.9 million used in the purchase of interests in businesses and non-controlling interests (temporary and permanent), and $6.7 million of fixed assets purchases. These uses were partially offset by $0.3 million in proceeds from the sale of non-controlling interests (temporary and permanent), and $0.8 million distributions received from an unconsolidated affiliate.
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
We revalued contingent earn-out consideration related to certain acquisitions resulting in a loss of $4.0 million for the 2024 Second Quarter compared to a gain of $0.7 million for the 2023 Second Quarter.
Previous report — wording carried elsewhere
Change in fair value of contingent earn-out consideration
Previous report — wording carried elsewhere
Change in Revaluation of Put-Right Liability