U.S. Physical Therapy(USPH) - 2024 Q1 - Quarterly Report

Financial Performance - Net patient revenue for Q1 2024 was $131,075,000, a 3.6% increase from$ 126,581,000 in Q1 2023[171]. - Total net revenue for Q1 2024 reached $155,675,000, reflecting a 4.8% growth compared to$ 148,509,000 in Q1 2023[171]. - Operating income decreased by 15.8% to $14,316,000 in Q1 2024 from$ 16,998,000 in Q1 2023[171]. - Net income attributable to USPH shareholders rose by 8.6% to $8,046,000 in Q1 2024 from$ 7,410,000 in Q1 2023[171]. - Total net revenue for the 2024 First Quarter increased by $7.2 million, or 4.8%, to$ 155.7 million compared to $148.5 million for the 2023 First Quarter[173]. - Net income attributable to shareholders for the 2024 First Quarter was$ 8.0 million, up from $7.4 million in the 2023 First Quarter, with earnings per share decreasing to$ 0.46 from $0.58[175]. - Adjusted EBITDA for the 2024 First Quarter was$ 16.7 million, down from $18.5 million in the 2023 First Quarter, primarily due to Medicare rate reductions and adverse weather impacts[183]. - Net revenue from physical therapy operations increased by$ 5.3 million, or 4.1%, to $134.4 million for the 2024 First Quarter from$ 129.2 million for the 2023 First Quarter[188]. - Operating costs from physical therapy operations rose by $8.3 million, or 8.1%, to$ 110.4 million in the 2024 First Quarter, representing 82.1% of net revenue compared to 79.0% in the prior year[190]. - Gross profit from physical therapy operations decreased by $3.0 million, or 11.2%, to$ 24.1 million, with a gross profit margin of 17.9% in the 2024 First Quarter compared to 21.0% in the 2023 First Quarter[195]. Operational Metrics - The number of clinics increased to 679 by the end of Q1 2024, up from 647 at the end of Q1 2023[162]. - Total patient visits increased by 3.3% to 1,268,002 in the 2024 First Quarter, while average daily visits per clinic decreased slightly to 29.5 from 29.8[189]. - The net rate per patient visit increased to $103.37 in the 2024 First Quarter from$ 103.12 in the 2023 First Quarter, driven by higher reimbursement rates[188]. - Salaries and related costs per visit increased to $61.42 in the 2024 First Quarter from$ 59.14 in the 2023 First Quarter, reflecting a 3.9% rise[192]. - The provision for credit losses was $1.6 million for the 2024 First Quarter, consistent with 1.0% of net revenues for both quarters[194]. Costs and Expenses - Salaries and related costs increased by 8.9% to$ 93,731,000 in Q1 2024 from $86,040,000 in Q1 2023[171]. - Operating costs rose by$ 1.3 million, or 8.5%, to $16.9 million in the first quarter of 2024 from$ 15.6 million in the same period last year[196]. - Operating income decreased to $14.3 million in the first quarter of 2024 from$ 17.0 million in the first quarter of 2023[198]. - Interest expense decreased by $0.6 million to$ 2.0 million in the first quarter of 2024, attributed to a lower outstanding balance on the revolver[200]. - Cash provided by operating activities was $4.4 million for the first quarter of 2024, down from$ 11.3 million in the first quarter of 2023[215]. - Cash used in investing activities totaled $20.5 million in the first quarter of 2024, primarily for business acquisitions and fixed asset purchases[217]. Acquisitions and Investments - The company completed several acquisitions, including a 50% interest in 9 clinics in March 2024 and a 70% interest in 4 clinics in September 2023[158]. - On March 29, 2024, the company acquired a 50% equity interest in a physical therapy practice for approximately$ 16.4 million, with $0.5 million structured as a note payable accruing interest at 4.5% per annum, due March 29, 2026[232]. - On September 29, 2023, the company acquired a 70% equity interest in a four-clinic practice for approximately$ 6.0 million, with $0.6 million as a note payable accruing interest at 5.0% per annum, payable in two installments[234]. - The company also acquired a 70% equity interest in a single clinic practice for approximately$ 7.8 million, with $0.4 million as a deferred payment due on June 30, 2025[235]. - On July 31, 2023, the company acquired a 70% equity interest in a five-clinic practice for approximately$ 2.1 million, with $0.3 million as a deferred payment due on June 30, 2025[236]. - The company acquired an 80% interest in a one-clinic practice for approximately$ 6.2 million, with $0.4 million structured as a note payable accruing interest at 4.5% per annum, due February 28, 2025[238]. Financial Position and Debt - As of March 31, 2024, total cash and cash equivalents were$ 132.3 million, down from $152.8 million as of December 31, 2023[209]. - The fair value of the interest rate swap increased by$ 1.3 million to $5.5 million as of March 31, 2024, generating$ 0.9 million in interest savings for the period[230]. - As of March 31, 2024, the outstanding balance on notes payable related to acquisitions is $3.9 million, with$ 3.1 million due in 2025 and $0.8 million due in 2026[231]. - The company's total indebtedness as of March 31, 2024, includes$ 3.9 million in seller notes and $143.4 million in a term note related to the Credit Agreement[241]. Regulatory and Legal Matters - The company is involved in various legal actions and regulatory audits that could materially affect its financial position and operations[245]. - There have been no changes in internal control over financial reporting that materially affected the company during the quarter ended March 31, 2024[244].