Company Overview & Highlights U.S. Physical Therapy, Inc. (USPH) reported strong Q2 2025 results with record patient visits, significant financial growth, strategic acquisitions, and an upward revision of full-year guidance [Introduction](index=1&type=section&id=1.1%20Introduction) U.S. Physical Therapy, Inc. (USPH) reported its Second Quarter 2025 results, highlighting record patient visits and an upward revision of its full-year 2025 guidance - U.S. Physical Therapy, Inc. (USPH) reported results for the three and six months ended June 30, 2025, on August 6, 2025[1](index=1&type=chunk) - The company is a national operator of outpatient physical therapy clinics and a provider of industrial injury prevention services[1](index=1&type=chunk) - The report announced **all-time record patient visits** and raised full-year 2025 guidance[1](index=1&type=chunk) [Financial Highlights (Q2 & YTD)](index=1&type=section&id=1.2%20Financial%20Highlights%20(Q2%20%26%20YTD)) USPH demonstrated strong financial performance in Q2 2025, with significant increases across key metrics including Adjusted EBITDA, net income, total revenue, and patient visits, leading to an upward revision of full-year guidance. Strategic acquisitions also contributed to growth | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----- | :------ | :------ | :--------- | :--------- | | Adjusted EBITDA (Non-GAAP) | $26.9 million | $22.1 million | $4.7 million | 21.4% | | USPH Net Income (GAAP) | $12.4 million | $7.5 million | $4.9 million | 65.3% | | Earnings Per Share | $0.58 | $0.47 | $0.11 | 23.4% | | Operating Results (Non-GAAP) | $12.4 million | $11.0 million | $1.4 million | 11.8% | | Operating Results Per Share | $0.81 | $0.73 | $0.08 | 10.9% | | Total Revenue (PT Operations) | $168.3 million | $143.5 million | $24.8 million | 17.3% | | Net Rate Per Patient Visit | $105.33 | $105.05 | $0.28 | 0.3% | | Total Patient Visits | 1,558,756 | 1,335,335 | 223,421 | 16.7% | | Average Daily Patient Visits Per Clinic | 32.7 | 30.6 | 2.1 | 6.9% | | IIP Revenue | $29.1 million | $23.7 million | $5.4 million | 22.6% | | IIP Gross Profit | $6.4 million | $5.1 million | $1.3 million | 25.8% | - The Company added **six clinics** and closed four in Q2 2025, bringing its total owned and/or managed clinic count to **768** as of June 30, 2025, up from 722 as of June 30, 2024[2](index=2&type=chunk) - Acquired an **80% equity interest** in an outpatient home-care physical and speech therapy practice on April 30, 2025, generating approximately **$2.1 million in annual revenue**[2](index=2&type=chunk) - Acquired a **60% equity interest** in a three-clinic practice on July 31, 2025, generating **$5.3 million in annual revenue** and approximately **28,000 annual visits**[3](index=3&type=chunk) - Management increased its guidance for Adjusted EBITDA for full-year 2025 to a range of **$93.0 million to $97.0 million**[3](index=3&type=chunk) [Management's Comments](index=3&type=section&id=1.3%20Management's%20Comments) CEO Chris Reading emphasized record patient volumes in the physical therapy business, continued strong growth in industrial injury prevention, and the positive impact of strategic acquisitions, all contributing to the updated earnings guidance - Physical therapy business volumes remain at **record levels**, supported by cost rationalization and improved efficiencies[4](index=4&type=chunk) - The industrial injury prevention business continues its **strong growth path**, both organically and through strategic acquisitions that broaden service offerings and market exposure[4](index=4&type=chunk) - Updated earnings guidance reflects the company's efforts and expected progress[4](index=4&type=chunk) Second Quarter 2025 Financial Performance USPH's Q2 2025 performance saw robust growth in physical therapy and industrial injury prevention, improved operating income, and increased net income, despite rising corporate costs and interest expenses [Physical Therapy Operations (Q2)](index=3&type=section&id=2.1%20Physical%20Therapy%20Operations%20(Q2)) Physical therapy operations experienced robust growth in Q2 2025, with total revenue increasing by 17.3% and gross profit by 22.4%. This growth was driven by an increase in net clinics and a higher net rate per patient visit, despite Medicare rate reductions, leading to an improved adjusted gross profit margin | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----- | :------ | :------ | :--------- | :--------- | | Net Patient Revenue (in thousands) | $164,183 | $140,271 | $23,912 | 17.0% | | Other Revenue (in thousands) | $4,109 | $3,215 | $894 | 27.8% | | Total Revenue (in thousands) | $168,292 | $143,486 | $24,806 | 17.3% | | Operating Costs (in thousands) | $133,059 | $114,703 | $18,356 | 16.0% | | Gross Profit (in thousands) | $35,233 | $28,783 | $6,450 | 22.4% | | Net Rate Per Patient Visit | $105.33 | $105.05 | $0.28 | 0.3% | | Patient Visits | 1,558,756 | 1,335,335 | 223,421 | 16.7% | | Average Daily Visits Per Clinic | 32.7 | 30.6 | 2.1 | 6.9% | | Adjusted Gross Profit Margin | 21.1% | 20.1% | - | 1.0 pp | | Salaries and Related Costs Per Visit | $60.08 | $59.66 | $0.42 | 0.7% | | Operating Costs Per Visit | $83.95 | $84.46 | $(0.51) | (0.6)% | - Revenue growth was primarily due to an increase in visits from **51 net clinics** added since the comparable prior year period and an increase in net rate per patient visit, despite an approximate **2.9% Medicare rate reduction**[9](index=9&type=chunk) - Total operating costs per visit decreased by **0.6%** as higher visit volumes did not result in a proportional increase in fixed costs[10](index=10&type=chunk) [Industrial Injury Prevention Services (Q2)](index=5&type=section&id=2.2%20Industrial%20Injury%20Prevention%20Services%20(Q2)) Industrial Injury Prevention (IIP) services demonstrated strong growth in Q2 2025, with net revenue increasing by 22.6% and gross profit by 25.8%, resulting in an improved gross profit margin of 22.0% | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----- | :------ | :------ | :--------- | :--------- | | Net Revenue (in thousands) | $29,052 | $23,704 | $5,348 | 22.6% | | Operating Costs (in thousands) | $22,661 | $18,625 | $4,036 | 21.7% | | Gross Profit (in thousands) | $6,391 | $5,079 | $1,312 | 25.8% | | Gross Margin | 22.0% | 21.4% | - | 0.6 pp | - Excluding the IIP acquisition made in April 2024, IIP revenue increased by **18.4%** and gross profit increased by **21.8%** in Q2 2025[13](index=13&type=chunk) [Corporate Office and Other Expenses (Q2)](index=5&type=section&id=2.3%20Corporate%20Office%20and%20Other%20Expenses%20(Q2)) Corporate office costs increased in Q2 2025 due to supporting a larger clinic base, acquisition integration, and new system implementation. Operating income significantly improved, largely driven by a net gain from the revaluation of contingent consideration, while interest income declined due to cash deployment for acquisitions - Corporate office costs increased to **$17.5 million** (8.9% of net revenue) in Q2 2025 from **$14.2 million** (8.5% of net revenue) in Q2 2024, primarily to support clinic growth, acquisition integration, and new financial/HR system implementation[14](index=14&type=chunk) - Recognized a net gain of **$0.8 million** from the revaluation of contingent consideration in Q2 2025, a significant improvement from a net loss of **$4.0 million** in Q2 2024[15](index=15&type=chunk) - Operating income was **$24.9 million** for Q2 2025, compared to **$15.6 million** for Q2 2024[16](index=16&type=chunk) - Interest expense increased by **$0.4 million** to **$2.4 million** in Q2 2025 due to a higher average outstanding balance on the revolving credit facility[17](index=17&type=chunk) - Interest income decreased to **less than $0.1 million** in Q2 2025 from **$1.1 million** in Q2 2024, as cash was deployed to fund acquisitions[18](index=18&type=chunk) - The provision for income taxes was **$4.9 million** in Q2 2025 (effective tax rate **28.5%**) compared to **$3.1 million** in Q2 2024 (effective tax rate **29.1%**)[20](index=20&type=chunk) [USPH Net Income and Non-GAAP Measures (Q2)](index=5&type=section&id=2.4%20USPH%20Net%20Income%20and%20Non-GAAP%20Measures%20(Q2)) USPH Net Income, Adjusted EBITDA, and Operating Results all showed substantial year-over-year growth in Q2 2025, reflecting improved overall profitability and operational efficiency | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----- | :------ | :------ | :--------- | :--------- | | Net Income Attributable to Non-Controlling Interest | $5.3 million | $4.2 million | $1.1 million | 26.2% | | USPH Net Income | $12.4 million | $7.5 million | $4.9 million | 65.3% | | Earnings Per Share | $0.58 | $0.47 | $0.11 | 23.4% | | Adjusted EBITDA (Non-GAAP) | $26.9 million | $22.1 million | $4.7 million | 21.4% | | Operating Results (Non-GAAP) | $12.4 million | $11.0 million | $1.4 million | 11.8% | | Operating Results Per Share (Non-GAAP) | $0.81 | $0.73 | $0.08 | 10.9% | Six Months Ended June 30, 2025 Financial Performance For the first six months of 2025, USPH achieved strong revenue and gross profit growth across both physical therapy and industrial injury prevention segments, with improved operating income and net income [Overall Performance (YTD)](index=7&type=section&id=3.1%20Overall%20Performance%20(YTD)) For the first six months of 2025, USPH achieved an 18.0% increase in total net revenue and a 16.7% rise in gross profit, demonstrating strong top-line growth, though the gross profit margin slightly decreased | Metric | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :----- | :------- | :------- | :--------- | :--------- | | Total Net Revenue (in millions) | $381.1 | $322.9 | $58.3 | 18.0% | | Operating Costs (in millions) | $308.4 | $260.6 | $47.8 | 18.4% | | Gross Profit (in millions) | $72.7 | $62.3 | $10.4 | 16.7% | | Gross Profit Margin | 19.1% | 19.3% | - | (0.2) pp | [Physical Therapy Operations (YTD)](index=7&type=section&id=3.2%20Physical%20Therapy%20Operations%20(YTD)) Physical therapy operations revenue increased by 16.8% year-to-date, driven by volume from new clinics and an improved net rate per patient visit. Gross profit also saw a significant increase of 14.9% | Metric | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :----- | :------- | :------- | :--------- | :--------- | | Revenue (in millions) | $325.0 | $278.2 | $46.8 | 16.8% | | Net Rate Per Patient Visit | $105.49 | $104.23 | $1.26 | 1.2% | | Gross Profit (in millions) | $60.7 | $52.8 | $7.9 | 14.9% | | Adjusted Gross Profit Margin | 18.8% | - | - | - | - Revenue growth was attributed to increased volume from **51 net new clinics** added since the comparable prior year period and an increase in net rate per patient visit[25](index=25&type=chunk) [Industrial Injury Prevention Services (YTD)](index=7&type=section&id=3.3%20Industrial%20Injury%20Prevention%20Services%20(YTD)) IIP services continued their strong performance year-to-date, with revenue growing by 25.5% and gross profit by 27.3%, resulting in an improved gross profit margin of 21.2% | Metric | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :----- | :------- | :------- | :--------- | :--------- | | Revenue (in millions) | $56.4 | $44.9 | $11.5 | 25.5% | | Gross Profit (in millions) | $12.0 | $9.4 | $2.6 | 27.3% | | Gross Profit Margin | 21.2% | 20.9% | - | 0.3 pp | - Excluding the April 2024 IIP acquisition, IIP revenue increased by **16.7%** and gross profit by **21.0%** year-to-date[26](index=26&type=chunk) [Corporate Office and Other Expenses (YTD)](index=7&type=section&id=3.4%20Corporate%20Office%20and%20Other%20Expenses%20(YTD)) Corporate office costs increased year-to-date but remained stable as a percentage of net revenue. Operating income saw a substantial increase, partly due to a net gain on contingent consideration revaluation, while other expenses rose due to higher interest costs and lower interest income - Corporate office costs were **$33.7 million** (8.8% of net revenue) in YTD 2025, compared to **$28.3 million** (8.8% of net revenue) in YTD 2024[27](index=27&type=chunk) - Recognized a net gain of **$5.6 million** from the revaluation of contingent consideration in YTD 2025, compared to a net loss of **$3.4 million** in YTD 2024[28](index=28&type=chunk) - Operating income was **$44.6 million** for YTD 2025, compared to **$30.5 million** for YTD 2024[29](index=29&type=chunk) - Other expenses increased to **$4.6 million** in YTD 2025 from **$0.9 million** in YTD 2024, primarily due to higher interest expense from increased borrowings and lower interest income[30](index=30&type=chunk) - The provision for income tax was **$8.8 million** in YTD 2025 (effective tax rate **28.3%**) compared to **$6.2 million** in YTD 2024 (effective tax rate **28.6%**)[31](index=31&type=chunk) [USPH Net Income and Non-GAAP Measures (YTD)](index=7&type=section&id=3.5%20USPH%20Net%20Income%20and%20Non-GAAP%20Measures%20(YTD)) USPH Net Income and non-GAAP measures for the six months ended June 30, 2025, showed solid growth, with USPH Net Income increasing by 43.3% and Adjusted EBITDA by 19.3%, reflecting improved profitability | Metric | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :----- | :------- | :------- | :--------- | :--------- | | USPH Net Income (in millions) | $22.3 | $15.6 | $6.7 | 43.3% | | Earnings Per Share | $1.38 | $0.93 | $0.45 | 48.4% | | Adjusted EBITDA (Non-GAAP) (in millions) | $46.4 | $38.9 | $7.5 | 19.3% | | Operating Results (Non-GAAP) (in millions) | $19.7 | $18.8 | $0.9 | 4.8% | | Operating Results Per Share (Non-GAAP) | $1.30 | $1.25 | $0.05 | 4.0% | Financial Position and Strategic Activities USPH's financial position reflects cash deployment for strategic acquisitions, increased borrowings, and a new share repurchase program, alongside an upward revision of full-year Adjusted EBITDA guidance and a declared quarterly dividend [Balance Sheet and Cash Flow](index=7&type=section&id=4.1%20Balance%20Sheet%20and%20Cash%20Flow) As of June 30, 2025, USPH's cash and cash equivalents decreased compared to prior periods, reflecting the deployment of cash for strategic acquisitions. Outstanding borrowings increased, while available credit under the revolving facility slightly decreased | Metric (in millions) | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | | :----- | :------------ | :----------- | :------------ | | Cash and Cash Equivalents | $34.1 | $41.4 | $112.9 | | Outstanding Borrowings | $159.5 | $151.6 | - | | Available Credit | $150.5 | $164.0 | - | [Recent Acquisitions](index=7&type=section&id=4.2%20Recent%20Acquisitions) USPH continues to execute its growth strategy through strategic acquisitions, recently acquiring an outpatient home-care practice and a three-clinic practice, expanding its service offerings and market presence - On April 30, 2025, the Company acquired an **80% equity interest** in an outpatient home-care physical and speech therapy practice, which currently generates approximately **$2.1 million in annual revenue**[36](index=36&type=chunk) - On July 31, 2025, the Company acquired a **60% equity interest** in a three-clinic practice, which currently generates **$5.3 million in annual revenue** and approximately **28,000 annual visits**[37](index=37&type=chunk) - The Company's strategy is to continue acquiring multi-clinic outpatient physical therapy practices, home-care physical and speech therapy practices, developing satellite clinics, and acquiring industrial injury prevention services companies[38](index=38&type=chunk) [2025 Earnings Guidance](index=8&type=section&id=4.3%202025%20Earnings%20Guidance) Management raised its full-year 2025 Adjusted EBITDA guidance to a range of $93.0 million to $97.0 million, reflecting strong year-to-date performance and confidence in continued solid results - Management increased its Adjusted EBITDA guidance for full-year 2025 to a range of **$93.0 million to $97.0 million**[39](index=39&type=chunk) - The guidance update is based on strong year-to-date performance and management's confidence in delivering solid results[39](index=39&type=chunk) - Annual earnings guidance figures will only be updated if there is a material development causing Adjusted EBITDA to be significantly outside the given range[40](index=40&type=chunk) [Quarterly Dividend](index=8&type=section&id=4.4%20Quarterly%20Dividend) The Board of Directors declared a quarterly dividend of $0.45 per share, payable in September 2025 - The Company's Board of Directors declared a quarterly dividend of **$0.45 per share**[41](index=41&type=chunk) - The dividend is payable on September 12, 2025, to shareholders of record on August 22, 2025[41](index=41&type=chunk) [Share Repurchase Program](index=8&type=section&id=4.5%20Share%20Repurchase%20Program) The Board of Directors approved a new share repurchase program, authorizing the repurchase of up to $25 million of common stock through December 31, 2026 - The Company's Board of Directors approved a share repurchase program effective August 5, 2025[42](index=42&type=chunk) - The program authorizes the repurchase of up to **$25 million of outstanding common stock** over the period ending on December 31, 2026[42](index=42&type=chunk) - Repurchases may occur in the open market or negotiated transactions, depending on factors like stock price performance, capital allocation, and market conditions[42](index=42&type=chunk) Additional Information This section provides essential supplementary information, including conference call details, forward-looking statements with associated risk factors, a glossary of key revenue metrics, and an overview of U.S. Physical Therapy, Inc.'s business operations [Conference Call Information](index=9&type=section&id=5.1%20Conference%20Call%20Information) Details for accessing the conference call are provided, with information available on the Company's website until November 5, 2025 - Conference call information can be accessed on the Company's website until November 5, 2025[43](index=43&type=chunk) [Forward-Looking Statements & Risk Factors](index=9&type=section&id=5.2%20Forward-Looking%20Statements%20%26%20Risk%20Factors) The press release contains forward-looking statements that are subject to various risks and uncertainties, including changes in healthcare regulations, reimbursement rates, competitive conditions, and the ability to integrate acquisitions, which could cause actual results to differ materially - The press release contains forward-looking statements regarding financial condition, results of operations, plans, objectives, future performance, and business[43](index=43&type=chunk) - These statements involve risks and uncertainties, including changes in Medicare rules, reimbursement rates, compliance with federal and state laws, competitive conditions, and the ability to identify and complete acquisitions[44](index=44&type=chunk) - Readers should not place undue reliance on forward-looking statements and are advised to refer to the 'Risk Factors' section in the Company's Annual Report on Form 10-K for additional information[45](index=45&type=chunk) [Glossary of Terms – Revenue Metrics](index=10&type=section&id=5.3%20Glossary%20of%20Terms%20%E2%80%93%20Revenue%20Metrics) This section defines key revenue metrics used in the financial reporting, such as 'Mature clinics,' 'Net rate per patient visit,' 'Patient visits,' and 'Average daily visits per clinic per day,' to ensure clarity and consistency in interpretation - Mature clinics are defined as clinics (physical clinic locations and home-care business units) opened or acquired prior to January 1, 2024, and still operating[46](index=46&type=chunk) - Net rate per patient visit is calculated as net patient revenue from physical therapy operations divided by the total number of patient visits[46](index=46&type=chunk) - Patient visits refer to the number of unique patient visits for both physical clinic locations and home-care during the reported periods[47](index=47&type=chunk) - Average daily visits per clinic per day excludes home-care visits and is calculated based on operating days and the average number of clinics in operation[47](index=47&type=chunk) [About U.S. Physical Therapy, Inc.](index=10&type=section&id=5.4%20About%20U.S.%20Physical%20Therapy,%20Inc.) U.S. Physical Therapy, Inc. is a leading operator and/or manager of outpatient physical therapy clinics across 44 states, providing comprehensive care for various orthopedic and neurological conditions, and also offers industrial injury prevention services - Founded in 1990, U.S. Physical Therapy, Inc. owns and/or manages **774 outpatient physical therapy clinics** in 44 states[48](index=48&type=chunk) - USPH clinics provide preventative and post-operative care for orthopedic-related disorders, sports-related injuries, treatment for neurologically-related injuries, and rehabilitation of injured workers[48](index=48&type=chunk) - The Company also operates an industrial injury prevention business, offering onsite services such as injury prevention, rehabilitation, performance optimization, and ergonomic assessments[48](index=48&type=chunk) Consolidated Financial Statements This section presents the unaudited consolidated financial statements, including statements of income, comprehensive income, balance sheets, and cash flows, for the reported periods, providing a detailed overview of the company's financial health and performance [Unaudited Consolidated Statements of Income](index=11&type=section&id=6.1%20Unaudited%20Consolidated%20Statements%20of%20Income) This section presents the unaudited consolidated statements of income for the three and six months ended June 30, 2025 and 2024, detailing revenue, operating costs, gross profit, operating income, and net income attributable to USPH shareholders | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Net patient revenue | $164,183 | $140,271 | $316,730 | $271,346 | | Other revenue | $33,161 | $26,919 | $64,402 | $51,519 | | **Net revenue** | **$197,344** | **$167,190** | **$381,132** | **$322,865** | | Total operating cost | $155,720 | $133,328 | $308,443 | $260,602 | | **Gross profit** | **$41,624** | **$33,862** | **$72,689** | **$62,263** | | Corporate office costs | $17,476 | $14,249 | $33,721 | $28,334 | | (Gain) loss on change in fair value of contingent earn-out consideration | $(790) | $4,046 | $(5,612) | $3,434 | | **Operating income** | **$24,938** | **$15,567** | **$44,580** | **$30,495** | | Total other expense | $(2,285) | $(772) | $(4,599) | $(944) | | Income before taxes | $22,653 | $14,795 | $39,981 | $29,551 | | Provision for income taxes | $4,933 | $3,083 | $8,793 | $6,222 | | **Net income** | **$17,720** | **$11,712** | **$31,188** | **$23,329** | | Net income attributable to USPH shareholders | $12,393 | $7,506 | $22,292 | $15,552 | | Basic and diluted earnings per share attributable to USPH shareholders | $0.58 | $0.47 | $1.38 | $0.93 | | Dividends declared per common share | $0.45 | $0.44 | $0.90 | $0.88 | [Unaudited Consolidated Statements of Comprehensive Income](index=13&type=section&id=6.2%20Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the unaudited consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024, including net income and other comprehensive income/loss components | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Net income | $17,720 | $11,712 | $31,188 | $23,329 | | Other comprehensive (loss) gain: | | | | | | Unrealized (loss) gain on cash flow hedge | $(798) | $(31) | $(2,129) | $1,750 | | Tax effect | $204 | $8 | $544 | $(447) | | **Comprehensive income** | **$17,126** | **$11,689** | **$29,603** | **$24,632** | | Comprehensive income attributable to non-controlling interest | $(5,327) | $(4,206) | $(8,896) | $(7,777) | | Comprehensive income attributable to USPH shareholders | $11,799 | $7,483 | $20,707 | $16,855 | [Consolidated Balance Sheet](index=14&type=section&id=6.3%20Consolidated%20Balance%20Sheet) This section provides the consolidated balance sheet as of June 30, 2025, and December 31, 2024, detailing the company's assets, liabilities, redeemable non-controlling interest, and USPH shareholders' equity | Metric (in thousands) | June 30, 2025 | Dec 31, 2024 | | :-------------------- | :------------ | :----------- | | **ASSETS** | | | | Total current assets | $140,532 | $137,583 | | Fixed assets, net | $32,121 | $32,140 | | Operating lease right-of-use assets | $137,248 | $133,936 | | Goodwill | $677,595 | $667,152 | | Other identifiable intangible assets, net | $175,627 | $179,311 | | **Total assets** | **$1,179,600** | **$1,167,467** | | **LIABILITIES & EQUITY** | | | | Total current liabilities | $118,842 | $116,283 | | Revolving facility | $24,500 | $11,000 | | Term loan, net of current portion and deferred financing costs | $127,093 | $130,627 | | Deferred taxes | $34,402 | $29,465 | | Operating lease liabilities, net of current portion | $104,279 | $101,868 | | **Total liabilities** | **$414,008** | **$408,421** | | Redeemable non-controlling interest - temporary equity | $263,298 | $269,025 | | Total USPH shareholders' equity | $500,750 | $488,929 | | Non-controlling interest - permanent equity | $1,544 | $1,092 | | **Total liabilities, redeemable non-controlling interest, USPH shareholders' equity and non-controlling interest - permanent equity** | **$1,179,600** | **$1,167,467** | [Unaudited Consolidated Statements of Cash Flow](index=16&type=section&id=6.4%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flow) This section presents the unaudited consolidated statements of cash flow for the six months ended June 30, 2025 and 2024, detailing cash flows from operating, investing, and financing activities, and showing a net decrease in cash and cash equivalents | Metric (in thousands) | YTD 2025 | YTD 2024 | | :-------------------- | :------- | :------- | | Net cash provided by operating activities | $30,186 | $33,411 | | Net cash (used in) investing activities | $(19,334) | $(48,755) | | Net cash (used in) financing activities | $(18,128) | $(24,570) | | Net (decrease) in cash and cash equivalents | $(7,276) | $(39,914) | | Cash and cash equivalents - end of period | $34,086 | $112,911 | - Cash paid for income taxes increased to **$9,833 thousand** in YTD 2025 from **$4,932 thousand** in YTD 2024[60](index=60&type=chunk) - Cash paid for interest increased to **$4,683 thousand** in YTD 2025 from **$3,708 thousand** in YTD 2024[60](index=60&type=chunk) Non-GAAP Financial Measures Reconciliation This section defines and reconciles non-GAAP financial measures, Adjusted EBITDA and Operating Results, to their GAAP equivalents, providing clarity on how management assesses financial performance by excluding certain non-recurring or non-cash items [Adjusted EBITDA and Operating Results](index=18&type=section&id=7.1%20Adjusted%20EBITDA%20and%20Operating%20Results) This section defines and explains the rationale for using non-GAAP financial measures, Adjusted EBITDA and Operating Results, which management utilizes to evaluate and monitor financial performance by excluding certain volatile or unusual costs for better period-to-period comparability - Adjusted EBITDA and Operating Results are non-GAAP measures used by management to compare the Company's period-to-period results and with other similar businesses[62](index=62&type=chunk) - Adjusted EBITDA is defined as net income attributable to USPH shareholders before interest income, interest expense, taxes, depreciation, amortization, and other specific non-recurring or non-cash items[63](index=63&type=chunk) - Operating Results equals net income attributable to USPH shareholders less specific adjustments for revaluation of put-right liability, clinic closure costs, contingent earn-out changes, business acquisition related costs, and ERP implementation costs, net of taxes and non-controlling interests[64](index=64&type=chunk) - These non-GAAP measures should not be considered in isolation or as an alternative to, or substitute for, net income attributable to USPH shareholders presented in the consolidated financial statements[65](index=65&type=chunk) [Reconciliation of Non-GAAP Measures to GAAP](index=19&type=section&id=7.2%20Reconciliation%20of%20Non-GAAP%20Measures%20to%20GAAP) This section provides detailed reconciliations of Adjusted EBITDA and Operating Results to the most directly comparable GAAP measures for the three and six months ended June 30, 2025 and 2024, along with reconciliations for other non-GAAP segment information related to physical therapy operations | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | **Adjusted EBITDA (Non-GAAP)** | **$26,863** | **$22,124** | **$46,402** | **$38,895** | | Net income attributable to USPH shareholders | $12,393 | $7,506 | $22,292 | $15,552 | | Adjustments (e.g., taxes, D&A, interest, equity-based awards, contingent earn-out, clinic closure, acquisition costs, ERP costs, NCI allocation) | $14,470 | $14,618 | $24,110 | $23,343 | | **Operating Results (Non-GAAP)** | **$12,350** | **$11,044** | **$19,663** | **$18,776** | | Operating Results per share (Non-GAAP) | $0.81 | $0.73 | $1.30 | $1.25 | | Physical Therapy Operations (in thousands) | As Reported (GAAP) Q2 2025 | Adjustments Q2 2025 | As Adjusted (Non-GAAP) Q2 2025 | As Reported (GAAP) YTD 2025 | Adjustments YTD 2025 | As Adjusted (Non-GAAP) YTD 2025 | | :--------------------------------------- | :------------------------- | :------------------ | :----------------------------- | :-------------------------- | :------------------- | :------------------------------ | | Salaries and related costs | $93,877 | $(229) | $93,648 | $185,676 | $(294) | $185,382 | | Operating costs | $131,093 | $(229) | $130,864 | $260,064 | $(294) | $259,770 | | Gross profit | $35,233 | $229 | $35,462 | $60,701 | $294 | $60,995 | | Gross margin | 20.9% | * | 21.1% | 18.7% | * | 18.8% | | Salaries and related costs per visit | $60.23 | $(0.15) | $60.08 | $61.84 | $(0.10) | $61.74 | | Operating costs per visit | $84.10 | $(0.15) | $83.95 | $86.62 | $(0.10) | $86.52 | Supplemental Financial and Performance Metrics This section provides detailed supplemental financial and performance metrics, including revenue breakdowns, clinic counts, and operational statistics, offering a comprehensive view of the company's operational trends and growth [Revenue Metrics](index=22&type=section&id=8.1%20Revenue%20Metrics) This section provides a detailed breakdown of key revenue and operational metrics, including clinic count, net rate per patient visit, total patient visits, and average daily visits per clinic, for various quarters in 2024 and 2025 | Metric | Q1 2025 | Q2 2025 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | YTD 2025 | YTD 2024 | | :----- | :------ | :------ | :------ | :------ | :------ | :------ | :------- | :------- | | Number of Clinics (Owned/Managed) | 729 | 732 | 679 | 681 | 661 | 722 | 722 | 722 | | Net Rate Per Patient Visit | $105.66 | $105.33 | $103.37 | $105.05 | $105.65 | $104.73 | $104.71 | $104.71 | | Patient Visits | 1,443,805 | 1,558,756 | 1,268,002 | 1,335,335 | 1,317,051 | 1,432,801 | 3,002,561 | 5,353,189 | | Average Daily Visits Per Clinic | 31.2 | 32.7 | 29.5 | 30.6 | 30.1 | 31.6 | - | 30.4 | - As of June 30, 2025, the Company owned/managed **768 clinics**, including 36 managed clinics, compared to 722 clinics (41 managed) as of June 30, 2024[73](index=73&type=chunk) [Clinic Count Roll Forward](index=22&type=section&id=8.2%20Clinic%20Count%20Roll%20Forward) This section provides a detailed roll forward of owned and managed clinic counts for 2024 and the first two quarters of 2025, illustrating additions and closures | Clinic Activity | Owned 2025 | Managed 2025 | Total 2025 | Owned 2024 | Managed 2024 | Total 2024 | | :-------------- | :--------- | :----------- | :--------- | :--------- | :----------- | :--------- | | Beginning of period | 722 | 39 | 761 | 671 | 43 | 714 | | Q1 additions | 14 | - | 14 | 14 | - | 14 | | Q1 closed or sold | (7) | (2) | (9) | (6) | (2) | (8) | | End of Q1 | 729 | 37 | 766 | 679 | 41 | 720 | | Q2 additions | 6 | - | 6 | 7 | - | 7 | | Q2 closed or sold | (3) | (1) | (4) | (5) | - | (5) | | End of Q2 | 732 | 36 | 768 | 681 | 41 | 722 | | Q3 additions | - | - | - | 12 | - | 12 | | Q3 closed or sold | - | - | - | (32) | (2) | (34) | | End of Q3 | - | - | - | 661 | 39 | 700 | | Q4 additions | - | - | - | 63 | - | 63 | | Q4 closed or sold | - | - | - | (2) | - | (2) | | End of Q4 | - | - | - | 722 | 39 | 761 | | Year-to-date total additions | 20 | - | 20 | 96 | - | 96 | | Year-to-date total closed or sold | (10) | (3) | (13) | (45) | (4) | (49) |

分组1 - U.S. Physical Therapy (USPH) reported quarterly earnings of $0.81 per share, exceeding the Zacks Consensus Estimate of $0.71 per share, and showing an increase from $0.73 per share a year ago, resulting in an earnings surprise of +14.08% [1] - The company achieved revenues of $197.34 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.78%, and up from $167.19 million year-over-year [2] - U.S. Physical Therapy has outperformed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates four times during the same period [2] 分组2 - The stock has underperformed the market, losing about 18.8% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.65 on revenues of $192.33 million, and for the current fiscal year, it is $2.49 on revenues of $762.72 million [7] - The Medical - Outpatient and Home Healthcare industry, to which U.S. Physical Therapy belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Core Insights - Elanco Animal Health Incorporated (ELAN) is currently positioned as a more attractive investment compared to U.S. Physical Therapy (USPH) based on Zacks Rank and valuation metrics [3][7] Valuation Metrics - ELAN has a forward P/E ratio of 17.91, significantly lower than USPH's forward P/E of 30.39 [5] - The PEG ratio for ELAN is 2.93, while USPH's PEG ratio stands at 3.66, indicating ELAN's better valuation relative to its expected earnings growth [5] - ELAN's P/B ratio is 1.17, compared to USPH's P/B of 2.3, further supporting ELAN's superior valuation metrics [6] Earnings Outlook - ELAN has a Zacks Rank of 2 (Buy), reflecting positive revisions in earnings estimates, while USPH has a Zacks Rank of 5 (Strong Sell), indicating a less favorable earnings outlook [3][7] - The improving earnings outlook for ELAN is a critical factor for value investors [3]

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.

Core Insights - Elanco Animal Health Incorporated (ELAN) is currently rated 2 (Buy) by Zacks Rank, indicating a stronger earnings outlook compared to U.S. Physical Therapy (USPH), which is rated 3 (Hold) [3] - Value investors utilize various metrics to assess whether a stock is undervalued, including P/E ratio, P/S ratio, and cash flow per share [4] Valuation Metrics - ELAN has a forward P/E ratio of 16.67, significantly lower than USPH's forward P/E of 31.62, suggesting that ELAN may be undervalued [5] - The PEG ratio for ELAN is 2.73, while USPH's PEG ratio is higher at 3.81, indicating that ELAN's expected earnings growth is more favorable relative to its price [5] - ELAN's P/B ratio stands at 1.09, compared to USPH's P/B of 2.39, further supporting the notion that ELAN is a more attractive value option [6] Overall Assessment - Based on the improving earnings outlook and favorable valuation metrics, ELAN is positioned as the superior value investment compared to USPH [7]

Group 1 - U.S. Physical Therapy, Inc. (USPH) is experiencing significant activity in the options market, particularly with the Jun 20, 2025 $105 Call showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to a rally or sell-off [2] - Currently, U.S. Physical Therapy holds a Zacks Rank 3 (Hold) in the Medical - Outpatient and Home Healthcare industry, which is in the top 27% of the Zacks Industry Rank [3] Group 2 - Over the past 30 days, no analysts have raised their earnings estimates for the current quarter, while one analyst has lowered the estimate, resulting in a decrease of the Zacks Consensus Estimate from 79 cents to 74 cents per share [3] - The high implied volatility may indicate a trading opportunity, as options traders often seek to sell premium on options with high implied volatility, aiming for the underlying stock to not move as much as expected at expiration [4]

Business Segments and Operations - The company operates through two reportable business segments: physical therapy and industrial injury prevention services, with a focus on orthopedic-related disorders and sports injuries [158]. - As of March 31, 2025, the company owned or managed a total of 736 clinics, an increase from 679 clinics as of March 31, 2024, reflecting a net addition of 57 clinics [164]. - The company managed 37 clinics owned by third parties as of March 31, 2025, bringing the total owned/managed clinics to 773 [164]. - The company plans to continue acquiring outpatient physical therapy practices and expand its industrial injury prevention services [165]. - The company completed several acquisitions, including a 65% interest in 3 clinics in February 2025 and a 75% interest in 8 clinics in November 2024 [161]. - The company acquired an outpatient home care therapy practice through its 50% owned subsidiary, generating approximately $2.1 million in annual revenue [166]. Financial Performance - Net revenue for the 2025 First Quarter increased by $28.1 million, or 18.1%, to $183.8 million compared to $155.7 million in the 2024 First Quarter [176]. - Net patient revenue rose to $152.5 million, representing an increase of 16.4% from $131.1 million in the prior year [175]. - Operating income was $19.6 million for the 2025 First Quarter, an increase from $14.9 million in the 2024 First Quarter [211]. - Net income attributable to USPH shareholders was $9.9 million, a 23.0% increase from $8.0 million in the 2024 First Quarter [179]. - Earnings per share for the 2025 First Quarter was $0.80, compared to $0.46 in the 2024 First Quarter [181]. - Adjusted EBITDA for the 2025 First Quarter was $19.5 million, an increase of 16.5% from $16.8 million in the prior year [193]. Revenue and Cost Analysis - Operating costs increased by $25.4 million, or 20.0%, to $152.7 million, driven by the addition of 53 net clinics and an increase in patient visits [176]. - Gross profit for the 2025 First Quarter was $31.1 million, or 16.9% of net revenue, down from 18.2% in the previous year [178]. - The net rate per patient visit increased to $105.66, up $2.29 from $103.37 in the 2024 First Quarter, despite a 2.9% Medicare rate reduction [177]. - Industrial Injury Prevention (IIP) revenue increased by $6.1 million, or 28.8%, to $27.4 million for the 2025 First Quarter compared to $21.3 million for the 2024 First Quarter [208]. - Operating costs increased by $20.6 million, or 18.6%, to $130.9 million in the 2025 First Quarter, primarily due to the addition of 53 net new clinics [202]. - Gross profit from physical therapy operations was $25.5 million with a gross profit margin of 16.3% in the 2025 First Quarter, compared to $24.1 million and a margin of 17.9% in the 2024 First Quarter [207]. Cash Flow and Financing - Total cash and cash equivalents were $39.2 million as of March 31, 2025, down from $132.3 million at March 31, 2024 [220]. - Cash used by operating activities was $4.7 million for the 2025 First Quarter, compared to $4.4 million provided by operating activities for the 2024 First Quarter [226]. - Cash used in investing activities for Q1 2025 totaled $6.6 million, primarily for business interests and fixed asset purchases [227]. - Cash provided by financing activities for Q1 2025 was $9.1 million, mainly from $17.0 million in proceeds from the Revolving Facility [228]. - As of March 31, 2025, $135.9 million was outstanding on the Term Facility, with an interest rate of 4.9% for Q1 2025 [237]. Interest Rates and Debt - The company has a $150 million Term Facility with quarterly amortization and a maturity date of June 17, 2027 [234]. - The interest rate swap agreement has a notional value of $150 million, with a fixed rate of 2.815% [238]. - A 1% change in interest rates would yield an additional $0.1 million in interest expense on seller notes and $0.3 million on Credit Facilities due to the interest rate swap [252]. - The company was in compliance with all covenants in the Credit Agreement as of March 31, 2025 [235]. Employee and Operational Considerations - The company emphasizes the importance of hiring and retaining qualified employees, which is critical for its operations [160]. Dividends - The company declared a quarterly dividend of $0.45 per share, payable on June 13, 2025, to shareholders of record on May 23, 2025 [165]. Medicare Reimbursement - The Medicare reimbursement for therapy services decreased by approximately 2.9% for 2025 compared to the rates in effect for most of 2024, following a 1.8% reduction for the balance of 2024 [169]. - The company faced a 3.5% decrease in Medicare payments for therapy services from January 1 to March 8, 2024, which was later minimized to a 1.8% reduction [169].

Core Viewpoint - U.S. Physical Therapy (USPH) reported quarterly earnings of $0.48 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, but down from $0.51 per share a year ago, indicating a mixed performance in earnings [1] Financial Performance - The company achieved revenues of $183.79 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.60% and showing an increase from $155.68 million year-over-year [2] - Over the last four quarters, U.S. Physical Therapy has exceeded consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - U.S. Physical Therapy shares have declined approximately 19.3% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.79 on revenues of $189.46 million, and for the current fiscal year, it is $2.63 on revenues of $752.89 million [7] - The estimate revisions trend for U.S. Physical Therapy is mixed, which may change following the recent earnings report [6] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which U.S. Physical Therapy belongs, is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

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]

Financial Data and Key Metrics Changes - The company reported a 16.5% increase in adjusted EBITDA despite headwinds, with the first quarter typically being the lightest volume quarter of the year [16][30] - Average visits per clinic per day reached a record high of 31.4, with a strong finish in March at 33.2 visits per clinic per day [6][31] - 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 [32][34] Business Line Data and Key Metrics Changes - Physical therapy revenues increased by 16.4% year-over-year to $156.4 million, driven by higher net rates and acquisitions [35] - The injury prevention (IIP) segment saw a revenue increase of 28.8% year-over-year, with gross profit up 13.1% [38] - The physical therapy margin was reported at 16.3%, down from 17.9% in the previous year, but above 20% in March [37] Market Data and Key Metrics Changes - Workers' compensation as a percentage of revenue increased from 10% in the first quarter of last year to 10.9% this year, the highest since 2020 [34] - The company lost approximately 26,000 visits due to weather impacts in the first quarter, with significant losses in January and February [31][48] Company Strategy and Development Direction - The company is focused on increasing reimbursement rates through contract negotiations and expanding its workers' compensation business [33] - There is an emphasis on acquisitions, with the Metro acquisition contributing significantly to revenue growth [35][21] - The company is exploring home care capabilities, which are seen as a growth opportunity due to patient demand and flexibility for clinicians [110][116] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand and the potential for recovery following weather-related disruptions [48] - The company is preparing for potential economic downturns, citing past experiences and a strong demand outlook [52][54] - Management is hopeful about updating guidance in the coming months as performance improves [27] Other Important Information - The company has a favorable debt position with $129.4 million in term loan debt at a rate of 4.7% and a $175 million revolving credit facility with only $28 million drawn [40] - The corporate office costs were 8.8% of net revenue, down from 9% in the previous year [38] Q&A Session Summary Question: What was the guiding volume inside the negative mature clinic revenue? - Management indicated that weather had a significant impact on mature clinic revenue, particularly in established markets like Nashville and Texas [47][50] 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 of IIP outperformance? - The IIP segment's growth is attributed to effective injury prevention strategies that reduce reported injuries and improve employee satisfaction [62][66] Question: What is the outlook for staffing during a potential recession? - Management stated that staffing availability could improve during a recession, but it is difficult to predict [56][57] Question: Can you provide more details on the commercial rate increases? - Commercial rates increased by over 3%, with workers' compensation rates also showing strong growth [88] Question: What are the expectations for same-store volume growth? - Management expects to see growth in same-store volume for the year, particularly after overcoming weather-related challenges [92] Question: What initiatives are in place to trim excess costs? - The company is actively reviewing its top partnerships to identify areas for improvement and cost control [101]