U.S. Physical Therapy(USPH) - 2024 Q2 - Quarterly Report

Financial Performance - Net income attributable to shareholders for Q2 2024 was $7.5 million, down from$10.9 million in Q2 2023, representing a decrease of approximately 31.1%[97] - Earnings per share for Q2 2024 was $0.47, compared to$0.64 in Q2 2023, reflecting a decline of about 26.6%[98] - For the first six months of 2024, net income attributable to shareholders was $15.6 million, down from$18.3 million in the same period of 2023, a decrease of approximately 14.8%[97] - Earnings per share for the first six months of 2024 was $0.93, compared to$1.22 for the same period in 2023, a decline of about 23.9%[98] - The company reported a net income of $11.7 million for Q2 2024, down from$14.9 million in Q2 2023, reflecting a decline of 21.2%[102] Revenue and Growth - Total net revenue for Q2 2024 increased by $15.7 million, or 10.4$167.2 million from $151.5 million in Q2 2023[102] - Net revenue from physical therapy operations increased by$11.2 million, or 8.5%, to $143.5 million for the 2024 Second Quarter compared to$132.2 million for the 2023 Second Quarter[105] - Total net revenue for the 2024 Six Months increased by $22.9 million, or 7.6$322.9 million compared to $300.0 million for the 2023 Six Months[114] - Net patient revenue rose by$15.5 million, or 6.1%, to $271.3 million from$255.9 million in the previous year[114] - Revenues from physical therapy operations increased by $16.5 million, or 6.3$277.9 million, driven by an increase in patient visits and new clinics[115] Operating Costs and Profitability - Operating costs for Q2 2024 rose by $14.1 million, or 11.8$133.3 million compared to $119.3 million in Q2 2023[102] - Total operating cost as a percentage of total net revenue was 79.7$23.7 million, or 10.0%, to $260.6 million, resulting in total operating costs as a percentage of net revenue rising to 80.7$0.8 million, or 1.3%, to $62.3 million, with a gross profit margin of 19.3$13.0 million, or 8.7%, to $161.2 million, with salaries per visit rising to$60.52 from $58.35[118] Clinic Operations - The company completed acquisitions of clinic practices and IIP businesses, increasing the number of clinics from 679 at the beginning of Q2 2024 to 681 by the end of the period[92] - The number of clinics closed or sold in the first six months of 2024 was 11, compared to 5 in the same period of 2023[92] - The company aims to continue acquiring outpatient physical therapy practices and expand its IIP sector[93] - Total patient visits increased by 68,195, or 5.4$22.1 million, up from $21.7 million in Q2 2023, representing a year-over-year increase of 1.8$11.0 million, compared to $10.4 million in Q2 2023, reflecting a growth of 5.8$38.9 million, compared to $40.1 million in the same period of 2023[101] Tax and Interest Expenses - The provision for income taxes was$3.1 million in the 2024 Second Quarter compared to $4.2 million during the 2023 Second Quarter[112] - The effective income tax rate was 29.1$0.7 million to $2.0 million for the 2024 Second Quarter compared to$2.6 million in the 2023 Second Quarter[110] - Interest expense decreased by $1.20 million to$3.90 million due to a lower outstanding balance on the revolving facility[121] Cash Flow and Investments - Net cash provided by operating activities was $33.41 million, a decrease from$38.78 million in the previous year[125] - Cash used in investing activities totaled $48.76 million, primarily for the purchase of interests in businesses and fixed assets[125] - Cash used in financing activities was$24.57 million, mainly due to $13.30 million in cash dividends paid to shareholders[126] - As of June 30, 2024, total cash and cash equivalents were$112.90 million, down from $152.80 million as of December 31, 2023[123] Debt and Interest Rate Management - The company entered into an interest rate swap agreement with a notional value of$150 million, effective June 30, 2022, with a maturity date of June 30, 2027, generating $1.8 million in interest savings for the six months ended June 30, 2024[129] - The outstanding balance on notes payable related to acquisitions was$4.1 million as of June 30, 2024, with varying due dates and interest rates ranging from 3.5% to 8.5% per annum[130] - The company's total indebtedness as of June 30, 2024, included $4.1 million in seller notes and$142.5 million in a term note related to the Credit Agreement[134] - The Revolving Facility had no balance as of June 30, 2024, and is subject to fluctuating interest rates[134] - A 1% change in the interest rate would yield no additional interest expense on the facility due to the interest rate swap arrangement[134]