Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 15, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | U S PHYSICAL THERAPY INC /NV | ||
Entity Central Index Key | 0000885978 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 761.9 | ||
Entity Common Stock, Shares Outstanding | 12,761,092 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 23,368 | $ 21,933 |
Patient accounts receivable, less allowance for doubtful accounts of $2,672 and $2,273, respectively | 44,751 | 44,707 |
Accounts receivable - other | 6,742 | 5,655 |
Other current assets | 4,353 | 4,786 |
Total current assets | 79,214 | 77,081 |
Fixed assets: | ||
Furniture and equipment | 52,611 | 51,100 |
Leasehold improvements | 31,712 | 29,760 |
Fixed assets, gross | 84,323 | 80,860 |
Less accumulated depreciation and amortization | 64,154 | 60,475 |
Fixed assets, net | 20,169 | 20,385 |
Goodwill | 293,525 | 271,338 |
Other identifiable intangible assets, net | 48,828 | 48,954 |
Other assets | 1,430 | 1,224 |
Total assets | 443,166 | 418,982 |
Current liabilities: | ||
Accounts payable - trade | 2,019 | 2,165 |
Accrued expenses | 38,493 | 33,342 |
Current portion of notes payable | 1,434 | 4,044 |
Total current liabilities | 41,946 | 39,551 |
Notes payable, net of current portion | 402 | 2,728 |
Revolving line of credit | 38,000 | 54,000 |
Mandatorily redeemable non-controlling interests | 0 | 327 |
Deferred taxes | 9,012 | 10,875 |
Deferred rent | 2,159 | 2,116 |
Other long-term liabilities | 829 | 743 |
Total liabilities | 92,348 | 110,340 |
Redeemable non-controlling interests | 133,943 | 102,572 |
Commitments and contingencies | ||
U.S. Physical Therapy, Inc. ("USPH") shareholders' equity: | ||
Preferred stock, $.01 par value, 500,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value, 20,000,000 shares authorized, 14,899,233 and 14,809,299 shares issued, respectively and 12,684,496 and 12,594,562 shares outstanding, respectively | 149 | 148 |
Additional paid-in capital | 80,028 | 73,940 |
Retained earnings | 167,396 | 162,406 |
Treasury stock at cost, 2,214,737 shares | (31,628) | (31,628) |
Total USPH shareholders' equity | 215,945 | 204,866 |
Non-controlling interests | 930 | 1,204 |
Total USPH shareholders' equity and non-controlling interests | 216,875 | 206,070 |
Total liabilities, redeemable non-controlling interests, USPH shareholders' equity and non-controlling interests | $ 443,166 | $ 418,982 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Allowance for doubtful accounts, patient accounts receivable | $ 2,672 | $ 2,273 |
U. S. Physical Therapy, Inc. shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 14,899,233 | 14,809,299 |
Common stock, shares outstanding (in shares) | 12,684,496 | 12,594,562 |
Treasury stock, shares (in shares) | 2,214,737 | 2,214,737 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues [Abstract] | |||
Net revenues | $ 453,911 | $ 414,051 | $ 356,546 |
Operating costs: | |||
Salaries and related costs | 259,228 | 237,067 | 198,495 |
Rent, supplies, contract labor and other | 88,426 | 82,096 | 71,868 |
Provision for doubtful accounts | 4,603 | 3,672 | 4,040 |
Closure costs | (9) | 599 | 131 |
Total operating costs | 352,248 | 323,434 | 274,534 |
Gross Profit | 101,663 | 90,617 | 82,012 |
Corporate office costs | 41,349 | 35,889 | 32,479 |
Operating income | 60,314 | 54,728 | 49,533 |
Gain on derecognition of debt | 1,846 | 0 | 0 |
Interest and other income, net | 93 | 88 | 93 |
Interest expense: | |||
Mandatorily redeemable non-controlling interests - change in redemption value | 0 | (12,894) | (6,169) |
Mandatorily redeemable non-controlling interests - earnings allocable | 0 | (6,055) | (4,057) |
Debt and other | (2,042) | (2,111) | (1,252) |
Total interest expense | (2,042) | (21,060) | (11,478) |
Income before taxes | 60,211 | 33,756 | 38,148 |
Provision for income taxes | 11,369 | 6,032 | 11,880 |
Net income | 48,842 | 27,724 | 26,268 |
Less: net income attributable to non-controlling interests | |||
Non-controlling interests - permanent equity | (5,536) | (5,224) | (5,717) |
Redeemable non-controlling interests - temporary equity | (8,433) | (244) | 0 |
Less: net income attributable to non-controlling interests | (13,969) | (5,468) | (5,717) |
Net income attributable to USPH shareholders | $ 34,873 | $ 22,256 | $ 20,551 |
Basic and diluted earnings per share attributable to USPH shareholders (in dollars per share) | $ 1.31 | $ 1.76 | $ 1.64 |
Shares used in computation - basic and diluted (in shares) | 12,666 | 12,570 | 12,500 |
Dividends declared per common share (in dollars per share) | $ 0.92 | $ 0.80 | $ 0.68 |
Net Patient Revenues [Member] | |||
Revenues [Abstract] | |||
Net revenues | $ 417,703 | $ 389,226 | $ 348,839 |
Other Revenues [Member] | |||
Revenues [Abstract] | |||
Net revenues | $ 36,208 | $ 24,825 | $ 7,707 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total Shareholders' Equity [Member] | Non-Controlling Interests [Member] | Total |
Beginning balance at Dec. 31, 2015 | $ 146 | $ 64,238 | $ 138,301 | $ (31,628) | $ 171,057 | $ 1,253 | $ 172,310 |
Beginning balance (in shares) at Dec. 31, 2015 | 14,636 | (2,215) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of restricted stock | $ 1 | 0 | 0 | $ 0 | 1 | 0 | 1 |
Issuance of restricted stock (in shares) | 97 | 0 | |||||
Compensation expense - equity-based awards | $ 0 | 4,962 | 0 | $ 0 | 4,962 | 0 | 4,962 |
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans | 0 | 211 | 0 | 0 | 211 | 0 | 211 |
Acquisitions of non-controlling interests, net of tax | 0 | (533) | 0 | 0 | (533) | (112) | (645) |
Adjustment for prior year acquisitions of non-controlling interest - tax true up | 0 | (191) | 0 | 0 | (191) | 0 | (191) |
Dividends payable to USPT shareholders | 0 | 0 | (8,510) | 0 | (8,510) | 0 | (8,510) |
Distributions to non-controlling interest partners | 0 | 0 | 0 | 0 | 0 | (5,718) | (5,718) |
Net income | 0 | 0 | 20,551 | 0 | 20,551 | 5,717 | 26,268 |
Net income attributable to non-controlling interests - permanent equity | 5,717 | ||||||
Net income attributable to USPH shareholders | 20,551 | ||||||
Ending balance at Dec. 31, 2016 | $ 147 | 68,687 | 150,342 | $ (31,628) | 187,548 | 1,140 | 188,688 |
Ending balance (in shares) at Dec. 31, 2016 | 14,733 | (2,215) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of restricted stock | $ 1 | 0 | 0 | $ 0 | 1 | 0 | 1 |
Issuance of restricted stock (in shares) | 76 | 0 | |||||
Revaluation of redeemable non-controlling interest, net of tax | $ 0 | 0 | (126) | $ 0 | (126) | 0 | (126) |
Compensation expense - equity-based awards | 0 | 5,032 | 0 | 0 | 5,032 | 0 | 5,032 |
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans | 0 | 165 | 0 | 0 | 165 | 0 | 165 |
Sale of non-controlling interest, net of tax and purchases | 0 | 56 | 0 | 0 | 56 | (20) | 36 |
Dividends payable to USPT shareholders | 0 | 0 | (10,066) | 0 | (10,066) | 0 | (10,066) |
Distributions to non-controlling interest partners | 0 | 0 | 0 | 0 | 0 | (5,300) | (5,300) |
Other | 0 | 0 | 0 | 0 | 0 | 160 | 160 |
Net income attributable to non-controlling interests - permanent equity | 0 | 0 | 0 | 0 | 0 | 5,224 | 5,224 |
Net income attributable to USPH shareholders | 0 | 0 | 22,256 | 0 | 22,256 | 0 | 22,256 |
Ending balance at Dec. 31, 2017 | $ 148 | 73,940 | 162,406 | $ (31,628) | 204,866 | 1,204 | 206,070 |
Ending balance (in shares) at Dec. 31, 2017 | 14,809 | (2,215) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of restricted stock | $ 1 | 0 | 0 | $ 0 | 1 | 0 | 1 |
Issuance of restricted stock (in shares) | 90 | 0 | |||||
Revaluation of redeemable non-controlling interest, net of tax | $ 0 | 0 | (18,268) | $ 0 | (18,268) | 0 | (18,268) |
Compensation expense - equity-based awards | 0 | 5,939 | 0 | 0 | 5,939 | 0 | 5,939 |
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans | 0 | 373 | 0 | 0 | 373 | 0 | 373 |
Sale of non-controlling interest, net of tax and purchases | 0 | (224) | 0 | 0 | (224) | (48) | (272) |
Dividends payable to USPT shareholders | 0 | 0 | (11,664) | 0 | (11,664) | 0 | (11,664) |
Distributions to non-controlling interest partners | 0 | 0 | 0 | 0 | 0 | (5,812) | (5,812) |
Other | 0 | 0 | 49 | 0 | 49 | 50 | 99 |
Net income attributable to non-controlling interests - permanent equity | 0 | 0 | 0 | 0 | 0 | 5,536 | 5,536 |
Net income attributable to USPH shareholders | 0 | 0 | 34,873 | 0 | 34,873 | 0 | 34,873 |
Ending balance at Dec. 31, 2018 | $ 149 | $ 80,028 | $ 167,396 | $ (31,628) | $ 215,945 | $ 930 | $ 216,875 |
Ending balance (in shares) at Dec. 31, 2018 | 14,899 | (2,215) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES | |||
Net income including non-controlling interests | $ 48,842 | $ 27,724 | $ 26,268 |
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities: | |||
Depreciation and amortization | 9,755 | 9,710 | 8,779 |
Provision for doubtful accounts | 4,603 | 3,672 | 4,040 |
Equity-based awards compensation expense | 5,939 | 5,032 | 4,962 |
Deferred income taxes | 4,813 | (4,864) | 2,979 |
Other | 167 | 621 | 152 |
Gain on derecognition of Debt | (1,846) | 0 | 0 |
Changes in operating assets and liabilities: | |||
Increase in patient accounts receivable | (3,434) | (3,447) | (3,275) |
Increase in accounts receivable - other | (1,087) | (3,022) | (400) |
Decrease (increase) in other assets | 345 | 2,086 | (1,399) |
Increase in accounts payable and accrued expenses | 4,876 | 6,979 | 2,994 |
Increase in mandatorily redeemable non-controlling interests | 0 | 11,579 | 5,598 |
Increase in other liabilities | 32 | 456 | 352 |
Net cash provided by operating activities | 73,005 | 56,526 | 51,050 |
INVESTING ACTIVITIES | |||
Purchase of fixed assets | (7,193) | (7,095) | (8,260) |
Purchase of businesses, net of cash acquired | (16,367) | (36,682) | (23,623) |
(Purchase) Sale of non-controlling interest | (350) | 121 | (670) |
Proceeds on sale of fixed assets | 1 | 81 | 61 |
Net cash used in investing activities | (23,909) | (43,575) | (32,492) |
FINANCING ACTIVITIES | |||
Distributions to non-controlling interests, permanent and temporary equity | (15,646) | (5,572) | (5,718) |
Cash dividends paid to shareholders | (11,664) | (10,066) | (8,510) |
Proceeds from revolving line of credit | 103,000 | 93,000 | 168,000 |
Payments on revolving line of credit | (119,000) | (85,000) | (166,000) |
Payments to settle mandatorily redeemable non-controlling interests | (265) | (2,361) | (1,262) |
Principal payments on notes payable | (4,044) | (1,227) | (800) |
Other | (42) | 161 | 1 |
Net cash used in financing activities | (47,661) | (11,065) | (14,289) |
Net increase in cash and cash equivalents | 1,435 | 1,886 | 4,269 |
Cash and cash equivalents - beginning of period | 21,933 | 20,047 | 15,778 |
Cash and cash equivalents - end of period | 23,368 | 21,933 | 20,047 |
Cash paid during the period for: | |||
Income taxes | 9,183 | 8,543 | 10,584 |
Interest | 2,357 | 2,113 | 784 |
Non-cash investing and financing transactions during the period: | |||
Purchase of business - seller financing portion | 950 | 2,150 | 1,000 |
Acquisition of non-controlling interest - seller financing portion | 0 | 0 | 387 |
Payment to settle redeemable non-controlling interest - financing portion | 0 | 0 | 127 |
Receivable from sale of non-controlling interests | $ 0 | $ 0 | $ (138) |
Organization, Nature of Operati
Organization, Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Nature of Operations and Basis of Presentation [Abstract] | |
Organization, Nature of Operations and Basis of Presentation | 1. Organization, Nature of Operations and Basis of Presentation U.S. Physical Therapy, Inc. and its subsidiaries (together, the “Company”) operate outpatient physical therapy clinics that provide pre-and post-operative care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and neurological-related injuries. As of December 31, 2018, the Company owned and/or operated 591 clinics in 42 states. The clinics’ business primarily originates from physician referrals. The principal sources of payment for the clinics’ services are managed care programs, commercial health insurance, Medicare/Medicaid, workers’ compensation insurance and proceeds from personal injury cases. In addition to the Company’s ownership and operation of outpatient physical therapy clinics, it also manages physical therapy facilities for third parties, such as physicians and hospitals, with 28 such third-party facilities under management as of December 31, 2018. On April 30, 2018, the Company acquired a 65% interest in a business in the industrial injury prevention business. Previously a 55% interest in the initial industrial injury prevention business was acquired by the Company in March 2017. On April 30, 2018, the Company combined the two businesses. After the combination, the Company owns a 59.45% interest in the combined business. Services provided include onsite injury prevention and rehabilitation, performance optimization 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. The Company performs these services through Industrial Sports Medicine Professionals, consisting of both physical therapists and specialized certified athletic trainers (ATCs). The consolidated financial statements include the accounts of U.S. Physical Therapy, Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated. The Company primarily operates through subsidiary clinic partnerships, in which the Company generally owns a 1% general partnership interest and a 49% to 99% limited partnership interest. The managing therapist of each clinic owns the remaining limited partnership interest in the majority of the clinics (hereinafter referred to as “Clinic Partnership”). To a lesser extent, the Company operates some clinics through wholly-owned subsidiaries under profit sharing arrangements with therapists (hereinafter referred to as “Wholly-Owned Facilities”). In addition to the above acquired interests in the industrial injury prevention business, during the last three years, the Company completed the following multi-clinic acquisitions: Date % Interest Acquired Number of Clinics 2018 August 2018 Acquisition August 31 70% 4 2017 January 2017 Acquisition January 1 70% 17 May 2017 Acquisition May 31 70% 4 June 2017 Acquisition June 30 60% 9 October 2017 Acquisition October 31 70% 9 2016 February 2016 Acquisition February 29 55% 8 November 2016 Acquisition November 30 60% 12 Besides the multi-clinic acquisitions above, in 2018, the Company through several of its majority owned Clinic Partnerships, acquired five separate clinic practices. These practices will operate as satellites of the respective existing Clinic Partnerships. Also, during 2017, the Company purchased the assets and business of two physical therapy clinics in separate transactions. One clinic was consolidated with an existing clinic and the other operates as a satellite clinic of one of the existing partnerships. In 2016, the Company acquired two single clinic practices in separate transactions. The results of operations of the acquired clinics have been included in the Company’s consolidated financial statements since the date of their respective acquisition. The Company intends to continue to pursue additional acquisition opportunities, develop new clinics and open satellite clinics. Clinic Partnerships For non-acquired Clinic Partnerships, the earnings and liabilities attributable to the non-controlling interests, typically owned by the managing therapist, directly or indirectly, are recorded within the balance sheets and income statements as non-controlling interests. For acquired Clinic Partnerships with redeemable non-controlling interests, the earnings attributable to the redeemable non-controlling interests are recorded within the consolidated statements of income line item – net income attributable to non-controlling interests redeemable non-controlling interests Prior to 2018, for acquired Clinic Partnerships with mandatorily redeemable non-controlling interests, the earnings and liabilities attributable to the non-controlling interest are recorded within the consolidated statements of income line item: Interest expense – mandatorily redeemable non-controlling interests – earnings allocable Mandatorily redeemable non-controlling interests Effective December 31, 2017, the Company entered into amendments to its acquired limited partnership agreements replacing the mandatory redemption feature. No monetary consideration was paid to the partners to amend the agreements. The amended limited partnership agreements provide that, upon certain events, the Company has a call right (the “Call Right”) and the selling entity has a put right (the “Put Right”) for the purchase and sale of the limited partnership interest held by the partner. Once triggered, the Put Right and the Call Right do not expire, even upon an individual partner’s death, and contain no mandatory redemption feature. The purchase price of the partner’s limited partnership interest upon the exercise of either the Put Right or the Call Right is calculated per the terms of the respective agreements. The Company accounted for the amendment of its limited partnership agreements as an extinguishment of the outstanding Seller Entity Interests, as defined in Footnote 5, classified as liabilities through the issuance of new Seller Entity Interests classified in temporary equity. Pursuant to ASC 470-50-40-2, the Company removed the outstanding liability-classified Seller Entity Interests at their carrying amounts, recognized the new temporary-equity-classified Seller Entity Interests at their fair value, and recorded no gain or loss on extinguishment as management believes the redemption value (i.e. the carrying amount) and fair value are the same. In summary, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) were reclassified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2017 consolidated balance sheet. On December 31, 2017, the remaining balance of $327,000 in the line item – Mandatorily redeemable non-controlling interests Wholly-Owned Facilities For Wholly-Owned Facilities with profit sharing arrangements, an appropriate accrual is recorded for the amount of profit sharing due the clinic partners/directors. The amount is expensed as compensation and included in clinic operating costs—salaries and related costs. The respective liability is included in current liabilities— accrued expenses |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Cash Equivalents The Company maintains its cash and cash equivalents at financial institutions. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The combined account balances at several institutions typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Management believes that this risk is not significant. Long-Lived Assets Fixed assets are stated at cost. Depreciation is computed on the straight-line method over the estimated useful lives of the related assets. Estimated useful lives for furniture and equipment range from three to eight years and for software purchased from three to seven years. Leasehold improvements are amortized over the shorter of the related lease term or estimated useful lives of the assets, which is generally three to five years. Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of The Company reviews property and equipment and intangible assets with finite lives for impairment upon the occurrence of certain events or circumstances that indicate the related amounts may be impaired. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Goodwill Goodwill represents the excess of the amount paid and fair value of the non-controlling interests over the fair value of the acquired business assets, which include certain identifiable intangible assets. Historically, goodwill has been derived from acquisitions and, prior to 2009, from the purchase of some or all of a particular local management’s equity interest in an existing clinic. Effective January 1, 2009, if the purchase price of a non-controlling interest by the Company exceeds or is less than the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. The fair value of goodwill and other identifiable intangible assets with indefinite lives are tested for impairment annually and upon the occurrence of certain events, and are written down to fair value if considered impaired. The Company evaluates goodwill for impairment on at least an annual basis (in its third quarter) by comparing the fair value of its reporting units to the carrying value of each reporting unit including related goodwill. The Company evaluates indefinite lived tradenames using the relief from royalty method in conjunction with its annual goodwill impairment test. The Company operates a one segment business which is made up of various clinics within partnerships. The partnerships are components of regions and are aggregated to the operating segment level for the purpose of determining the Company’s reporting units when performing its annual goodwill impairment test. In 2018, 2017 and 2016, there were six regions. In addition to the six regions, in 2017 and 2018, the impairment test included a separate analysis for the industrial injury prevention business, a separate reporting unit. An impairment loss generally would be recognized when the carrying amount of the net assets of a reporting unit, inclusive of goodwill and other identifiable intangible assets, exceeds the estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using two factors: (i) earnings prior to taxes, depreciation and amortization for the reporting unit multiplied by a price/earnings ratio used in the industry and (ii) a discounted cash flow analysis. A weight is assigned to each factor and the sum of each weight times the factor is considered the estimated fair value. For 2018, the factors (i.e., price/earnings ratio, discount rate and residual capitalization rate) were updated to reflect current market conditions. The evaluation of goodwill in 2018, 2017 and 2016 did not result in any goodwill amounts that were deemed impaired. The Company has not identified any triggering events occurring after the testing date that would impact the impairment testing results obtained. The Company will continue to monitor for any triggering events or other indicators of impairment. Redeemable Non-Controlling Interests The non-controlling interests that are reflected as redeemable non-controlling interests in the consolidated financial statements consist of those owners and the Company which have certain redemption rights, whether currently exercisable or not, and which currently, or in the future, require that the Company purchase or the owner sell the non-controlling interest held by the owner, if certain conditions are met. The purchase price is derived at a predetermined formula based on a multiple of trailing twelve months earnings performance as defined in the respective limited partnership agreements. The redemption rights can be triggered by the owner or the Company at such time as both of the following events have occurred: 1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the transaction, typically three to five years, as defined in the limited partnership agreement. The redemption rights are not automatic or mandatory (even upon death) and require either the owner or the Company to exercise its rights when the conditions triggering the redemption rights have been satisfied. On the date the Company acquires a controlling interest in a partnership and the limited partnership agreement for such partnership contains redemption rights not under the control of the Company, the fair value of the non-controlling interest is recorded in the consolidated balance sheet under the caption – Redeemable non-controlling interests Mandatorily Redeemable Non-Controlling Interests The non-controlling interests that are reflected as mandatorily redeemable non-controlling interests in the consolidated financial statements consist of those owners who have certain redemption rights, whether currently exercisable or not, and which currently, or in the future, require that the Company purchase the non-controlling interest of those owners at a predetermined formula based on a multiple of trailing twelve months earnings performance as defined in the respective limited partnership agreements. The redemption rights are triggered at such time as both of the following events have occurred: 1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the transaction, typically three to five years, as defined in the limited partnership agreement. On the date the Company acquires a controlling interest in a partnership and the limited partnership agreement for such partnership contains mandatory redemption rights, the fair value of the non-controlling interest is recorded in the long-term liabilities section of the consolidated balance sheet under the caption – Mandatorily redeemable non-controlling interests Interest expense – mandatorily redeemable non-controlling interests – change in redemption value and Interest expense – mandatorily redeemable non-controlling interests – earnings allocable As previously mentioned due to amendments of the limited partnership agreements entered into by the Company, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) were amended and are now classified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2018 consolidated balance sheet. Non-Controlling Interests The Company recognizes non-controlling interests, in which the Company has no obligation but the right to purchase the non-controlling interests, as equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income attributable to non-controlling interests is included in consolidated net income on the face of the statements of net income. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the non-controlling equity investment on the deconsolidation date. When the purchase price of a non-controlling interest by the Company exceeds the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. Additionally, operating losses are allocated to non-controlling interests even when such allocation creates a deficit balance for the non-controlling interest partner. Revenue Recognition Revenues Management contract revenues, which are included in other revenues in the consolidated statements of net income, are derived from contractual arrangements whereby we manage a clinic owned by a third party. The Company does not have any ownership interest in these clinics. Typically, revenues are determined based on the number of visits conducted at the clinic and recognized at the point in time when services are performed. Costs, typically salaries for our employees, are recorded when incurred. Revenues Additionally, other revenues include services the Company provides on-site, such as schools and industrial worksites, for physical or occupational therapy services, and athletic trainers and gym membership fees. Contract terms and rates are agreed to in advance between the Company and the third parties. Services are typically performed over the contract period and revenue is recorded at the point of service. If the services are paid in advance, revenue is recorded as a contract liability over the period of the agreement and recognized at the point in time, when the services are performed. In May 2014, March 2016, April 2016, and December 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations, ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer (collectively the “standards”), respectively, which supersede most of the current revenue recognition requirements (“ASC 606”). The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The For ASC 606, there is an implied contract between us and the patient upon each patient visit. Separate contractual arrangements exist between us and third party payors (e.g. insurers, managed care programs, government programs, workers' compensation) which establish the amounts the third parties pay on behalf of the patients for covered services rendered. While these agreements are not considered contracts with the customer, they are used for determining the transaction price for services provided to the patients covered by the third party payors. The payor contracts do not indicate performance obligations for us, but indicate reimbursement rates for patients who are covered by those payors when the services are provided. At that time, the Company is obligated to provide services for the reimbursement rates stipulated in the payor contracts. The execution of the contract alone does not indicate a performance obligation. For self-paying customers, the performance obligation exists when we provide the services at established rates. The difference between the Company’s established rate and the anticipated reimbursement rate is accounted for as an offset to revenue – contractual allowance. The Company determines allowances for doubtful accounts based on the specific agings and payor classifications at each clinic. The provision for doubtful accounts is included in clinic operating costs in the statements of net income. Patient accounts receivable, which are stated at the historical carrying amount net of contractual allowances, write-offs and allowance for doubtful accounts, includes only those amounts the Company estimates to be collectible. The following table details the revenue related to the various categories. Year Ended December 31, 2018 2017 2016 Patient revenues $ 417,703 389,226 348,839 Management contract revenues 8,339 6,275 5,535 Industrial injury prevention services revenues 25,466 14,908 - Other revenues 2,403 3,642 2,172 $ 453,911 $ 414,051 $ 356,546 Medicare Reimbursement The Medicare program reimburses outpatient rehabilitation providers based on the Medicare Physician Fee Schedule (‘‘MPFS’’). For services provided in 2018, a 0.5% increase has been applied to the fee schedule payment rates; for services provided in 2019, a 0.25% increase will be applied to the fee schedule payment rates before applying the mandatory budget neutrality adjustment. For services provided in 2020 through 2025, a 0.0% percent update will be applied each year to the fee schedule payment rates, before applying the mandatory budget neutrality adjustment. Beginning in 2021, payments to individual therapists (Physical/Occupational Therapist in Private Practice) paid under the fee schedule may be subject to adjustment based on performance in the Merit Based Incentive Payment System (“MIPS”), which measures performance based on certain quality metrics, resource use, and meaningful use of electronic health records. Under the MIPS requirements, a provider's performance is assessed according to established performance standards each year and then is used to determine an adjustment factor that is applied to the professional's payment for the corresponding payment year. The provider’s MIPS performance in 2019 will determine the payment adjustment in 2021. Each year from 2019 through 2024, professionals who receive a significant share of their revenues through an alternate payment model (“APM”), (such as accountable care organizations or bundled payment arrangements) that involves risk of financial losses and a quality measurement component will receive a 5% bonus in the corresponding payment year. The bonus payment for APM participation is intended to encourage participation and testing of new APMs and to promote the alignment of incentives across payors. The specifics of the MIPS and APM adjustments will be subject to future notice and comment rule-making. The Budget Control Act of 2011 increased the federal debt ceiling in connection with deficit reductions over the next ten years, and requires automatic reductions in federal spending by approximately $1.2 trillion. Payments to Medicare providers are subject to these automatic spending reductions, subject to a 2% cap. On April 1, 2013, a 2% reduction to Medicare payments was implemented. The Bipartisan Budget Act of 2015, enacted on November 2, 2015, extended the 2% reductions to Medicare payments through fiscal year 2025. The Bipartisan Budget Act of 2018, enacted on February 9, 2018, extends the 2% reductions to Medicare payments through fiscal year 2027. Historically, the total amount paid by Medicare in any one year for outpatient physical therapy, occupational therapy, and/or speech-language pathology services provided to any Medicare beneficiary was subject to an annual dollar limit (i.e., the ‘‘Therapy Cap’’ or ‘‘Limit’’). For 2017, the annual Limit on outpatient therapy services was $1,980 for combined Physical Therapy and Speech Language Pathology services and $1,980 for Occupational Therapy services. As a result of Bipartisan Budget Act of 2018, the Therapy Caps have been eliminated, effective as of January 1, 2018. Under the Middle Class Tax Relief and Job Creation Act of 2012 (‘‘MCTRA’’), since October 1, 2012, patients who met or exceeded $3,700 in therapy expenditures during a calendar year have been subject to a manual medical review to determine whether applicable payment criteria are satisfied. The $3,700 threshold is applied to Physical Therapy and Speech Language Pathology Services; a separate $3,700 threshold is applied to the Occupational Therapy. The MACRA directed CMS to modify the manual medical review process such that those reviews will no longer apply to all claims exceeding the $3,700 threshold and instead will be determined on a targeted basis based on a variety of factors that CMS considers appropriate The Bipartisan Budget Act of 2018 extends the targeted medical review indefinitely, but reduces the threshold to $3,000 through December 31, 2027. For 2028, the threshold amount will be increased by the percentage increase in the Medicare Economic Index (“MEI”) for 2028 and in subsequent years the threshold amount will increase based on the corresponding percentage increase in the MEI for such subsequent year. CMS adopted a multiple procedure payment reduction (‘‘MPPR’’) for therapy services in the final update to the MPFS for calendar year 2011. The MPPR applied to all outpatient therapy services paid under Medicare Part B — occupational therapy, physical therapy and speech-language pathology. Under the policy, the Medicare program pays 100% of the practice expense component of the Relative Value Unit (‘‘RVU’’) for the therapy procedure with the highest practice expense RVU, then reduces the payment for the practice expense component for the second and subsequent therapy procedures or units of service furnished during the same day for the same patient, regardless of whether those therapy services are furnished in separate sessions. Since 2013, the practice expense component for the second and subsequent therapy service furnished during the same day for the same patient was reduced by 50%. In addition, the MCTRA directed CMS to implement a claims-based data collection program to gather additional data on patient function during the course of therapy in order to better understand patient conditions and outcomes. All practice settings that provide outpatient therapy services are required to include this data on the claim form. Since 2013, therapists have been required to report new codes and modifiers on the claim form that reflect a patient’s functional limitations and goals at initial evaluation, periodically throughout care, and at discharge. Reporting of these functional limitation codes and modifiers are required on the claim for payment. Medicare claims for outpatient therapy services furnished by therapy assistants on or after January 1, 2022 must include a modifier indicating the service was furnished by a therapy assistant. CMS was required to develop a modifier to mark services provided by a therapy assistant by January 1, 2019, and then submitted claims have to report the modifier mark starting January 1, 2020. Outpatient therapy services furnished on or after January 1, 2022 in whole or part by a therapy assistant will be paid at an amount equal to 85% of the payment amount otherwise applicable for the service. Statutes, regulations, and payment rules governing the delivery of therapy services to Medicare beneficiaries are complex and subject to interpretation. We believe that we are in compliance, in all material respects, with all applicable laws and regulations and are not aware of any pending or threatened investigations involving allegations of potential wrongdoing that would have a material effect on the our financial statements as of December 31, 2018. Compliance with such laws and regulations can be subject to future government review and interpretation, as well as significant regulatory action including fines, penalties, and exclusion from the Medicare program. Net patient revenue from Medicare were approximately $103.6 million, $92.6 million and $81.8 million, respectively, for 2018, 2017 and 2016. Management Contract Revenues Management contract revenues, which are included in other revenues, are derived from contractual arrangements whereby the Company manages a clinic for third party owners. The Company does not have any ownership interest in these clinics. Typically, revenues are determined based on the number of visits conducted at the clinic and recognized at a point in time when services are performed. Costs, typically salaries for the Company’s employees, are recorded when incurred. Industrial Injury Prevention Revenue Revenues Contractual Allowances Contractual allowances result from the differences between the rates charged for services performed and expected reimbursements by both insurance companies and government sponsored healthcare programs for such services. Medicare regulations and the various third party payors and managed care contracts are often complex and may include multiple reimbursement mechanisms payable for the services provided in Company clinics. The Company estimates contractual allowances based on its interpretation of the applicable regulations, payor contracts and historical calculations. Each month the Company estimates its contractual allowance for each clinic based on payor contracts and the historical collection experience of the clinic and applies an appropriate contractual allowance reserve percentage to the gross accounts receivable balances for each payor of the clinic. Based on the Company’s historical experience, calculating the contractual allowance reserve percentage at the payor level is sufficient to allow the Company to provide the necessary detail and accuracy with its collectability estimates. However, the services authorized and provided and related reimbursement are subject to interpretation that could result in payments that differ from the Company’s estimates. Payor terms are periodically revised necessitating continual review and assessment of the estimates made by management. The Company’s billing system does not capture the exact change in its contractual allowance reserve estimate from period to period in order to assess the accuracy of its revenues and hence its contractual allowance reserves. Management regularly compares its cash collections to corresponding net revenues measured both in the aggregate and on a clinic-by-clinic basis. In the aggregate, historically the difference between net revenues and corresponding cash collections has generally reflected a difference within approximately 1% of net revenues. Additionally, analysis of subsequent periods’ contractual write-offs on a payor basis reflects a difference within approximately 1% between the actual aggregate contractual reserve percentage as compared to the estimated contractual allowance reserve percentage associated with the same period end balance. As a result, the Company believes that a change in the contractual allowance reserve estimate would not likely be more than 1% at December 31, 2018. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount to be recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Tax Cuts and Jobs Act of 2017 (the “TCJA”) was passed by Congress on December 20, 2017 and signed into law by President Trump on December 22, 2017. The TCJA made significant changes to U.S. corporate income tax laws including a decrease in the corporate income tax rate to 21% effective January 1, 2018. As a result, the Company revalued its deferred tax assets and liabilities. Based on a review and analysis as of December 31, 2017, the Company estimated a reduction of its net deferred tax liabilities by $4.3 million thereby reducing its provision for income taxes by such amount for the 2017 year. The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the twelve months ended December 31, 2018, 2017 and 2016. The Company will book any interest or penalties, if required, in interest and other expense, as appropriate. Fair Values of Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and notes payable approximate their fair values due to the short-term maturity of these financial instruments. The carrying amount under the Amended Credit Agreement (as defined in Note 10) approximates its fair value. The interest rate on the Credit Agreement, which is tied to the Eurodollar Rate, is set at various short-term intervals, as detailed in the Credit Agreement. Segment Reporting Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by chief operating decision makers in determining the allocation of resources and in assessing performance. The Company identifies operating segments based on management responsibility and believes it meets the criteria for aggregating its operating segments into a single reportable segment. Use of Estimates In Self-Insurance Program The Company utilizes a self-insurance plan for its employee group health and dental insurance coverage administered by a third party. Predetermined loss limits have been arranged with the insurance company to minimize the Company’s maximum liability and cash outlay. Accrued expenses include the estimated incurred but unreported costs to settle unpaid claims and estimated future claims. Management believes that the current accrued amounts are sufficient to pay claims arising from self-insurance claims incurred through December 31, 2018. Restricted Stock Restricted stock issued to employees and directors is subject to continued employment or continued service on the board, respectively. Generally, restrictions on the stock granted to employees lapse in equal annual installments on the following four anniversaries of the date of grant. For those shares granted to directors, the restrictions will lapse in equal quarterly installments during the first year after the date of grant. For those granted to officers, the restriction will lapse in equal quarterly installments during the four years following the date of grant. Compensation expense for grants of restricted stock is recognized based on the fair value per share on the date of grant amortized over the vesting period. The restricted stock issued is included in basic and diluted shares for the earnings per share computation. Recently Adopted Accounting Guidance In May 2014, March 2016, April 2016, and December 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations, ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer (collectively “the standards”), respectively, which supersede most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The original standards were effective for fiscal years beginning after December 15, 2016; However, in July 2015, the FASB approved a one-year deferral of these standards, with a new effective date for fiscal years beginning after December 15, 2017. The standards require the selection of a retrospective or cumulative effect transition method. The Company implemented the new standards beginning January 1, 2018 using a modified retrospective transition method. Adoption of the new standard did not result in material changes to the presentation of net revenues and bad debt expense in the consolidated statements of income, and the presentation of the amount of income from operations and net income will be unchanged upon adoption of the new standards. The principal change relates to how the new standard requires healthcare providers to estimate the amount of variable consideration to be included in the transaction price up to an amount which is probable that a significant reversal will not occur. The most common forms of variable consideration the Company experiences are amounts for services provided that are ultimately not realizable from a customer. Under the new standards, the Company’s estimate for unrealizable amounts will continue to be recognized as a reduction to revenue. The bad debt expense historically reported will not materially change. Recently Issued Accounting Guidance In August 2018, the Securities Exchange Commission (“SEC”) issued Final Rule 33-10532, Disclosure Update and Simplification, which amends certain disclosure requirements that were redundant, duplicative, overlapping or superseded by other SEC disclosure requirements. The amendments generally eliminated or otherwise reduced certain disclosure requirements of various SEC rules and regulations. However, in some cases, the amendments require additional information to be disclosed, including changes in stockholders’ equity in interim periods. The rule is effective 30 days after its publication in the Federal Register. The rule was posted on October 4, 2018. On September 25, 2018, the SEC released guidance advising it will not object to a registrant adopting the requirement to include changes in stockholders’ equity in the Form 10-Q for the first quarter beginning after the effective date of the rule. The Company is currently assessing the impact that this standard will have on its consolidated financial statements upon adoption and expects to adopt the guidance in its Form 10-Q for the period ended March 31, 2019. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350), which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment change. ASU 2017-04 is effective prospectively for fiscal years, and the interim periods within those years, beginning after December 15, 2019. The Company does not expect adoption of this ASU to have a material impact. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses, which added a new impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, including trade receivables. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. These changes become effective for the Company on January 1, 2020. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In |
Acquisitions of Businesses
Acquisitions of Businesses | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions of Businesses [Abstract] | |
Acquisitions of Businesses | 3. Acquisitions of Businesses During 2018, 2017 and 2016, the Company acquired a majority interest in the following multi-clinic physical therapy practices: Date % Interest Acquired Number of Clinics 2018 August 2018 Acquisition August 31 70% 4 2017 January 2017 Acquisition January 1 70% 17 May 2017 Acquisition May 31 70% 4 June 2017 Acquisition June 30 60% 9 October 2017 Acquisition October 31 70% 9 2016 February 2016 Acquisition February 29 55% 8 November 2016 Acquisition November 30 60% 12 On August 31, 2018, the Company acquired a 70% interest in a four-clinic physical therapy practice. The purchase price for the 70% interest was $7.2 million in cash and $0.4 million in a seller note that is payable in two principal installments totaling $200,000 each, plus accrued interest, in August 2019 and 2020. On April 30, 2018, the Company acquired a 65% interest in a business in the industrial injury prevention market. A 55% interest in the initial industrial injury prevention business acquired by the Company was purchased in March 2017. The purchase price for the 55% interest was $6.2 million in cash and $0.4 million in a seller note that is payable, principal plus accrued interest, in September 2018. On April 30, 2018, the Company combined the two businesses. After the combination, the Company owns a 59.45% interest in the combined business. Services provided include onsite injury prevention and rehabilitation, performance optimization 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. The Company performs these services through Industrial Sports Medicine Professionals, consisting of both physical therapists and highly specialized certified athletic trainers (ATCs). During 2018, the Company, through several of its majority owned Clinic Partnerships, acquired five separate clinic practices. These practices operate as satellites of the existing Clinic Partnership. The aggregate purchase price was $1.0 million inclusive of cash of $850,000 and a note payable of $150,000. The note accrues interest at 4.5% and is payable, principal and accrued interest, on August 31, 2019. The results of operations of the acquired clinics have been included in the Company’s consolidated financial statements since the date of their respective acquisition. The Company intends to continue to pursue additional acquisition opportunities, develop new clinics and open satellite clinics. The purchase price for the 2018 acquisitions has been preliminarily allocated as follows (in thousands): Cash paid, net of cash acquired $ 16,367 Seller notes 950 Total consideration $ 17,317 Estimated fair value of net tangible assets acquired: Total current assets $ 1,691 Total non-current assets 42 Total liabilities (486 ) Net tangible assets acquired $ 1,247 Referral relationships 1,879 Non-compete 386 Tradename 2,172 Goodwill 19,778 Fair value of non-controlling interest (classified as redeemable non-controlling interests) (8,145 ) $ 17,317 On January 1, 2017, the Company acquired a 70% interest in a seventeen-clinic physical therapy practice. The purchase price for the 70% interest was $10.7 million in cash and $0.5 million in a seller note that was payable in two principal installments totaling $250,000 each, plus accrued interest. The first installment was paid in January 2018 and the second installment in January 2019. On May 31, 2017, the Company acquired a 70% interest in a four-clinic physical therapy practice. The purchase price for the 70% interest was $2.3 million in cash and $250,000 in a seller note that is payable in two principal installments totaling $125,000 each, plus accrued interest. The first installment was paid in May 2018 and the second is due in May 2019. On June 30, 2017, the Company acquired a 60% interest in a nine-clinic physical therapy practice. The purchase price for the 60% interest was $15.8 million in cash and $0.5 million in a seller note that is payable in two principal installments totaling $250,000 each, plus accrued interest. The first installment was paid in June 2018 and the second is due in June 2019. On October 31, 2017, the Company acquired a 70% interest in a nine-clinic physical therapy practice and two management contracts with third party providers. The purchase price for the 70% interest was $4.0 million in cash and $0.5 million in a seller note that is payable in two principal installments totaling $250,000 each, plus accrued interest. The first installment was paid in October 2018 and the second is due in October 2019. Also, in 2017, the Company purchased the assets and business of two physical therapy clinics in separate transactions. One clinic was consolidated with an existing clinic and the other operates as a satellite clinic of one of the existing partnerships. The purchase price for the 2017 acquisitions were allocated as follows (in thousands): Cash paid, net of cash acquired $ 36,682 Seller notes 2,150 Total consideration $ 38,832 Estimated fair value of net tangible assets acquired: Total current assets $ 5,853 Total non-current assets 1,527 Total liabilities (2,865 ) Net tangible assets acquired $ 4,515 Referral relationships 4,250 Non-compete 660 Tradename 6,850 Goodwill 46,722 Fair value of non-controlling interest (classified as redeemable non-controlling interests) (13,883 ) Fair value of non-controlling interest (originally classified as mandatorily redeemable non-controlling interests) (10,282 ) $ 38,832 On November 30, 2016, the Company acquired a 60% interest in a 12 clinic physical therapy practice. The purchase price for the 60% interest was $11.0 million in cash and $0.5 million in a seller note that is payable in two principal installments of $250,000 each, plus accrued interest. The first installment was paid in November 2017 and the second installment in November 2018. On February 29, 2016, the Company acquired a 55% interest in an eight-clinic physical therapy practice. The purchase price for the 55% interest was $13.2 million in cash and $0.5 million in a seller note that is payable in two principal installments of $250,000 each, plus accrued interest. The first installment was paid in February 2017 and the second was paid in February 2018. During 2016, two subsidiaries of the Company each acquired a single clinic therapy practice for an aggregate purchase price of $75,000. The purchase prices for the 2016 acquisitions have been allocated as follows (in thousands): The purchase prices for the acquisitions in 2016 have been preliminarily allocated as follows: Cash paid, net of cash acquired $ 23,623 Seller notes 1,000 Total consideration $ 24,623 Fair value of net tangible assets acquired: Total current assets $ 1,372 Total non-current assets 839 Total liabilities (399 ) Net tangible assets acquired $ 1,812 Referral relationships 4,919 Non-compete 847 Tradename 3,802 Goodwill 32,123 Fair value of non-controlling interest (originally classified as mandatorily redeemable non-controlling interests) (18,880 ) $ 24,623 The purchase prices plus the fair value of the non-controlling interests for the acquisition in 2017 and 2016, were allocated to the fair value of the assets acquired, inclusive of identifiable intangible assets, i.e. trade names, referral relationships and non-compete agreements, and liabilities assumed based on the fair values at the acquisition date, with the amount exceeding the fair values being recorded as goodwill are finalized. For the acquisitions in 2018, the Company is in the process of completing its formal valuation analysis to identify and determine the fair value of tangible and identifiable intangible assets acquired and the liabilities assumed. Thus, the final allocation of the purchase price may differ from the preliminary estimates used at December 31, 2018 based on additional information obtained and completion of the valuation of the identifiable intangible assets. Changes in the estimated valuation of the tangible assets acquired, the completion of the valuation of identifiable intangible assets and the completion by the Company of the identification of any unrecorded pre-acquisition contingencies, where the liability is probable and the amount can be reasonably estimated, will likely result in adjustments to goodwill. The Company does not expect the adjustments to be material. For the acquisitions in 2018 and 2017, the values assigned to the referral relationships and non-compete agreements are being amortized to expense equally over the respective estimated lives. For referral relationships, the weighted average amortization period was 10.54 and 10.10 years at December 31, 2018 and December 31, 2017, respectively. For non-compete agreements, the weighted average amortization period was 6.00 and 5.16 years at December 31, 2018 and December 31, 2017, respectively. Generally, the values assigned to tradenames are tested annually for impairment, however with regards to one acquisition in 2013, the tradename was being amortized over the term of the six year agreement in which the Company has acquired the rights to use the specific tradename. In 2016, the remaining value of the tradename was charged to earnings as the Company decided to combine two acquired operations in Georgia; therefore, the tradename under this six year agreement will no longer be used. For the 2018, 2017 and 2016 acquisitions, total current assets primarily represent patient accounts receivable. Total non-current assets are fixed assets, primarily equipment, used in the practices. The consideration paid for each of the acquisitions was derived through arm’s length negotiations. Funding for the cash portions was derived from proceeds from the Company’s revolving credit facility. The results of operations of the acquisitions have been included in the Company’s consolidated financial statements since their respective date of acquisition. Unaudited proforma consolidated financial information for the acquisitions in 2018, 2017 and 2016 acquisitions have not been included as the results, individually and in the aggregate, were not material to current operations. |
Acquisitions and Sale of Non-Co
Acquisitions and Sale of Non-Controlling Interests | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions and Sale of Non-Controlling Interests [Abstract] | |
Acquisitions and Sale of Non-Controlling Interests | 4. Acquisitions and Sale of Non-Controlling Interests During 2018, the Company acquired additional interests in three partnerships included in non-controlling interest. The additional interests purchased in each of the partnerships ranged from 5.5% and 35%. The net after-tax difference of $224,000 was credited to additional paid-in capital. During 2017, the Company acquired additional interests in two partnerships included in non-controlling interest. The additional interests purchased in each of the partnerships was 35%. The aggregate purchase price paid was $13,000. Also, during 2017, the Company sold a 2% interest in a partnership for $138,000. The net after-tax difference of $56,000 was credited to additional paid-in capital. During 2016, the Company acquired additional interests in six partnerships included in non-controlling interest. The interests in the partnerships purchased ranged from 2% to 35%. The aggregate purchase price paid was $0.9 million in cash and $0.4 million in a seller note that was paid in two principal installments of $194,000 each in February 2017 and 2018. The purchase price included $112,000 of undistributed earnings. The remaining $1.2 million, less future tax benefits of $0.5 million, was recognized as an adjustment to additional paid-in capital. During 2016, the Company sold a 4% interest in one partnership and 35% in another. The sales prices included aggregate cash of $138,000 plus notes receivable of $148,000 with payments due monthly based on percentages of distributions and bonuses earned by the purchasers. The total sales price of $286,000, less the tax effect of $110,000, was charged to additional paid-in capital. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interest | 12 Months Ended |
Dec. 31, 2018 | |
Redeemable Non-Controlling Interest [Abstract] | |
Redeemable Non-Controlling Interest | 5. Redeemable Non-Controlling Interest Since October 2017, when the Company acquires a majority interest (the “Acquisition”) in a physical therapy clinic business (referred to as “Therapy Practice”), these Acquisitions occur in a series of steps which are described below. 1. Prior to the Acquisition, the Therapy Practice exists as a separate legal entity (the “Seller Entity”). The Seller Entity is owned by one or more individuals (the “Selling Shareholders”) most of whom are physical therapists that work in the Therapy Practice and provide physical therapy services to patients. 2. In conjunction with the Acquisition, the Seller Entity contributes the Therapy Practice into a newly-formed limited partnership (“NewCo”), in exchange for one hundred percent (100%) of the limited and general partnership interests in NewCo. Therefore, in this step, NewCo becomes a wholly-owned subsidiary of the Seller Entity. 3. The Company enters into an agreement (the “Purchase Agreement”) to acquire from the Seller Entity a majority (ranges from 50% to 90%) of the limited partnership interest and in all 4. The Company and the Seller Entity also execute a partnership agreement (the “Partnership Agreement”) for NewCo that sets forth the rights and obligations of the limited and general partners of NewCo. After the Acquisition, the Company is the general partner of NewCo. 5. As noted above, the Company does not purchase 100% of the limited partnership interests in NewCo and the Seller Entity retains a portion of the limited partnership interest in NewCo (“Seller Entity Interest”). 6. In most cases, some or all of the Selling Shareholders enter into an employment agreement (the “Employment Agreement”) with NewCo with an initial term that ranges from three to five years (the “Employment Term”), with automatic one-year renewals, unless employment is terminated prior to the end of the Employment Term. As a result, a Selling Shareholder becomes an employee (“Employed Selling Shareholder”) of NewCo. The employment of an Employed Selling Shareholder can be terminated by the Employed Selling Shareholder or NewCo, with or without cause, at any time. In a few situations, a Selling Shareholder does not become employed by NewCo and is not involved with NewCo following the closing; in those situations, such Selling Shareholders sell their entire ownership interest in the Seller Entity as of the closing of the Acquisition. 7. The compensation of each Employed Selling Shareholder is specified in the Employment Agreement and is customary and commensurate with his or her responsibilities based on other employees in similar capacities within NewCo, the Company and the industry. 8. The Company and the Selling Shareholder (including both Employed Selling Shareholders and Selling Shareholders not employed by NewCo) execute a non-compete agreement (the “Non-Compete Agreement”) which restricts the Selling Shareholder from engaging in competing business activities for a specified period of time (the “Non-Compete Term”). A Non-Compete Agreement is executed with the Selling Shareholders in all cases. That is, even if the Selling Shareholder does not become an Employed Selling Shareholder, the Selling Shareholder is restricted from engaging in a competing business during the Non-Compete Term. 9. The Non-Compete Term commences as of the date of the Acquisition and expires on the later a. Two years after the date an Employed Selling Shareholders’ employment is terminated (if the Selling Shareholder becomes an Employed Selling Shareholder) or b. Five to six years from the date of the Acquisition, as defined in the Non-Compete Agreement, regardless of whether the Selling Shareholder is employed by NewCo. 10. The Non-Compete Agreement applies to a restricted region which is defined as a 15-mile radius from the Therapy Practice. That is, an Employed Selling Shareholder is permitted to engage in competing businesses or activities outside the 15-mile radius (after such Employed Selling Shareholder no longer is employed by NewCo) and a Selling Shareholder who is not employed by NewCo immediately is permitted to engage in the competing business or activities outside the 15-mile radius. The Partnership Agreement contains provisions for the redemption of the Seller Entity Interest, either at the option of the Company (the “Call Right”) or at the option of the Seller Entity (the “Put Right”) as follows: 1. Put Right a. In the event that any Selling Shareholder’s employment is terminated under certain circumstances prior to the fifth anniversary of the Closing Date, the Seller Entity thereafter may have an irrevocable right to cause the Company to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below. b. In the event that any Selling Shareholder is not employed by NewCo as of the fifth anniversary of the Closing Date and the Company has not exercised its Call Right with respect to the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, Seller Entity thereafter shall have the Put Right to cause the Company to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below. c. In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the Closing Date, the Seller Entity shall have the Put Right, and upon the exercise of the Put Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in “3” below. 2. Call Right a. If any Selling Shareholder’s employment by NewCo is terminated prior to the fifth anniversary of the Closing Date, the Company thereafter shall have an irrevocable right to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, in each case at the purchase price described in “3” below. b. In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the Closing Date, the Company shall have the Call Right, and upon the exercise of the Call Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in “3” below. 3. For the Put Right and the Call Right, the purchase price is derived from a formula based on a specified multiple of NewCo’s trailing twelve months of earnings before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Percentage of any undistributed earnings of NewCo (the “Redemption Amount”). NewCo’s earnings are distributed monthly based on available cash within NewCo; therefore, the undistributed earnings amount is small, if any. 4. The Purchase Price for the initial equity interest purchased by the Company is also based on the same specified multiple of the trailing twelve-month earnings that is used in the Put Right and the Call Right noted above. 5. The Put Right and the Call Right do not have an expiration date, but the Seller Entity Interest is not required to be purchased by the Company or sold by the Seller Entity. 6. The Put Right and the Call Right never apply to Selling Shareholders who do not become employed by NewCo, since the Company requires that such Selling Shareholders sell their entire ownership interest in the Seller Entity at the closing of the Acquisition. An Employed Selling Shareholder’s ownership of his or her equity interest in the Seller Entity predates the Acquisition and the Company’s purchase of its partnership interest in NewCo. The Employment Agreement and the Non-Compete Agreement do not contain any provision to escrow or “claw back” the equity interest in the Seller Entity held by such Employed Selling Shareholder, nor the Seller Entity Interest in NewCo, in the event of a breach of the employment or non-compete terms. More specifically, even if the Employed Selling Shareholder is terminated for “cause” by NewCo, such Employed Selling Shareholder does not forfeit his or her right to his or her full equity interest in the Seller Entity and the Seller Entity does not forfeit its right to any portion of the Seller Entity Interest. The Company’s only recourse against the Employed Selling Shareholder for breach of either the Employment Agreement or the Non-Compete Agreement is to seek damages and other legal remedies under such agreements. There are no conditions in any of the arrangements with an Employed Selling Shareholder that would result in a forfeiture of the equity interest held in the Seller Entity or of the Seller Entity Interest. For the year ended December 31, 2018 and 2017, the following table details the changes in the carrying amount (fair value) of the redeemable non-controlling interests (in thousands): Year Ended December 31, 2018 Year Ended December 31, 2017 Beginning balance $ 102,572 $ - Operating results allocated to redeemable non-controlling interest partners 8,433 244 Distributions to redeemable non-controlling interest partners (9,835 ) (272 ) Changes in the fair value of redeemable non-controlling interest 24,770 201 Purchases of businesses - initial equity related to redeemable non-controlling interest 8,145 13,883 Fair value of redeemable non-controlling interest - amended partnership agreements - 88,516 Other (142 ) - Ending balance $ 133,943 $ 102,572 As previously mentioned due to amended partnership agreements, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) were reclassified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2017 consolidated balance sheet. The following table categorizes the carrying amount (fair value) of the redeemable non-controlling interests (in thousands): December 31, 2018 December 31, 2017 Contractual time period has lapsed but holder's employment has not been terminated $ 42,624 $ 31,821 Contractual time period has not lapsed and holder's employment has not been terminated $ 91,319 $ 70,751 Holder's employment has terminated and contractual time period has expired - $ - Holder's employment has terminated and contractual time period has not expired - $ - $ 133,943 $ 102,572 |
Mandatorily Redeemable Non-Cont
Mandatorily Redeemable Non-Controlling Interest | 12 Months Ended |
Dec. 31, 2018 | |
Mandatorily Redeemable Non-Controlling Interest [Abstract] | |
Mandatorily Redeemable Non-Controlling Interest | 6. Mandatorily Redeemable Non-Controlling Interest Prior to the October 2017, when the Company acquired a majority interest in a Therapy Practice, those Acquisitions occured in a series of steps as described in numbers 1 through 10 of Footnote 5 –Redeemable Non-Controlling Interests. 1. The Partnership Agreement contained provisions for the redemption of the Seller Entity Interest, either at the option of the Company (the “Call Option”) or on a required basis (the “Required Redemption”): a. Required Redemption i. Once the Required Redemption is triggered, the Company was obligated to purchase from the Seller Entity and the Seller Entity was obligated to sell to the Company, the allocable portion of the Seller Entity Interest based on the terminated Selling Shareholder’s pro rata ownership interest in the Seller Entity (the “Allocable Portion”). Required Redemption was triggered when both 1. Termination of an Employed Selling Shareholder’s employment with NewCo, regardless of the reason for such termination, and 2. The expiration of an agreed upon period of time, typically three to five years, as set forth in the relevant Partnership Agreement (the “Holding Period”). ii. In the event an Employed Selling Shareholder’s employment terminated prior to the expiration of the Holding Period, the Required Redemption would occur only b. Call Option i. In the event that an Employed Selling Shareholder’s employment terminated prior to expiration of the Holding Period, the Company has the contractual right, but not the obligation, to acquire the Employed Selling Shareholder’s Allocable Portion of the Seller Entity Interest from the Seller Entity through exercise of the Call Option. c. For the Required Redemption and the Call Option, the purchase price was derived from a formula based on a specified multiple of NewCo’s trailing twelve months of earnings before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Portion of any undistributed earnings of NewCo (the “Redemption Amount”). NewCo’s earnings are distributed monthly based on available cash within NewCo; therefore the undistributed earnings amount is small, if any. d. The Purchase Price for the initial equity interest purchased by the Company was also based on the same specified multiple of the trailing twelve-month earnings that is used in the Required Redemption noted above. e. Although, the Required Redemption and the Call Option do not have an expiration date, the Seller Entity Interest eventually will be purchased by the Company. f. The Required Redemption and the Call Option never apply to Selling Shareholders who do not become employed by NewCo, since the Company requires that such Selling Shareholders sell their entire ownership interest in the Seller Entity at the closing of the Acquisition. 2. An Employed Selling Shareholder’s ownership of his or her equity interest in the Seller Entity predates the Acquisition and the Company’s purchase of its partnership interest in NewCo. The Employment Agreement and the Non-Compete Agreement do not contain any provision to escrow or “claw back” the equity interest in the Seller Entity held by such Employed Selling Shareholder, nor the Seller Entity Interest in NewCo, in the event of a breach of the employment or non-compete terms. More specifically, even if the Employed Selling Shareholder is terminated for “cause” by NewCo, such Employed Selling Shareholder does not forfeit his or her right to his or her full equity interest in the Seller Entity and the Seller Entity does not forfeit its right to any portion of the Seller Entity Interest. The Company’s only recourse against the Employed Selling Shareholder for breach of either the Employment Agreement or the Non-Compete Agreement is to seek damages and other legal remedies under such agreements. There are no conditions in any of the arrangements with an Employed Selling Shareholder that would result in a forfeiture of the equity interest held in the Seller Entity or of the Seller Entity Interest. As previously mentioned due to amended partnership agreements, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) were reclassified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2017 consolidated balance sheet. Year Ended December 31, 2018 Year Ended December 31, 2017 Contractual time period has lapsed but holder's employment has not been terminated $ - $ 327 Contractual time period has not lapsed and holder's employment has not been terminated - - Holder's employment has terminated and contractual time period has expired - - Holder's employment has terminated and contractual time period has not expired - - Redemption value prior to excess distribution earnings $ - $ 327 Excess distributions over earnings and losses - - $ - $ 327 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill [Abstract] | |
Goodwill | 7. Goodwill The changes in the carrying amount of goodwill as of December 31, 2018 and 2017 consisted of the following (in thousands): Year Ended December 31, 2018 Year Ended December 31, 2017 Beginning balance $ 271,338 $ 226,806 Goodwill acquired during the year 19,778 44,292 Goodwill adjustments for purchase price allocation of businesses acquired in prior year 2,409 706 Goodwill written-off - closed clinic - (466 ) Ending balance $ 293,525 $ 271,338 In 2017, the Company wrote off the goodwill |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, net | 8. Intangible Assets, net Intangible assets, net as of December 31, 2018 and 2017 consisted of the following (in thousands): December 31, 2018 December 31, 2017 Tradenames $ 30,256 $ 29,673 Referral relationships, net of accumulated amortization of $9,370 and $7,209, respectively 16,895 16,811 Non-compete agreements, net of accumulated amortization of $4,716 and $4,100, respectively 1,677 2,470 $ 48,828 $ 48,954 Tradenames, referral relationships and non-compete agreements are related to the businesses acquired. The value assigned to tradenames has an indefinite life and is tested at least annually for impairment using the relief from royalty method in conjunction with the Company’s annual goodwill impairment test. The value assigned to referral relationships is being amortized over their respective estimated useful lives which range from 6 to 16 years. Non-compete agreements are amortized over the respective term of the agreements which range from 5 to 6 years. The following table details the amount of amortization expense recorded for intangible assets for the years ended December 31, 2018, 2017 and 2016 (in thousands): Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 Tradenames $ - $ - $ 330 Referral relationships 2,161 1,934 1,512 Non-compete agreements 616 720 525 $ 2,777 $ 2,654 $ 2,367 For one acquisition, the value assigned to tradename was being amortized over the term of the six year agreement in which the Company had acquired the right to use the specific tradename. In 2016, the remaining value of this tradename was charged to earnings and included in amortization expense in the above table as the Company decided to combine two acquired operations in Georgia and the tradename under this six year agreement will no longer be used. The remaining balances of the referral relationships and non-compete agreements is expected to be amortized as follows (in thousands): Referral Relationships Non-Compete Agreements Years Ending December 31, Annual Amount Years Ending December 31, Annual Amount 2019 $ 2,133 2019 $ 632 2020 $ 2,133 2020 $ 418 2021 $ 2,133 2021 $ 340 2022 $ 2,084 2022 $ 163 2023 $ 1,977 2023 $ 94 2024 $ 1,791 2024 $ 30 Thereafter $ 4,644 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | 9. Accrued Expenses Accrued expenses as of December 31, 2018 and 2017 consisted of the following (in thousands): December 31, 2018 December 31, 2017 Salaries and related costs $ 21,726 $ 16,828 Credit balances due to patients and payors 7,293 4,158 Group health insurance claims 3,124 2,929 Income taxes payable - 2,833 Other 6,350 6,594 Total $ 38,493 $ 33,342 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
Notes Payable | 10. Notes Payable Notes payable as of December 31, 2018 and 2017 consisted of the following (in thousands): December 31, 2018 December 31, 2017 Credit Agreement average effective interest rate of 4.1% inclusive of unused fee $ 38,000 $ 54,000 Various notes payable with $1,434 plus accrued interest due in the next year, interest accrues in the range of 3.25% through 5.0% per annum 1,836 6,772 39,836 60,772 Less current portion (1,434 ) (4,044 ) Long term portion $ 38,402 $ 56,728 Effective December 5, 2013, the Company entered into an Amended and Restated Credit Agreement with a commitment for a $125.0 million revolving credit facility. This agreement was amended in August 2015, January 2016, March 2017 and November 2017 (hereafter referred to as “Amended Credit Agreement”). The Amended Credit Agreement is unsecured and has loan covenants, including requirements that the Company comply with a consolidated fixed charge coverage ratio and consolidated leverage ratio. Proceeds from the Amended Credit Agreement may be used for working capital, acquisitions, purchases of the Company’s common stock, dividend payments to the Company’s common stockholders, capital expenditures and other corporate purposes. The pricing grid which is based on the Company’s consolidated leverage ratio with the applicable spread over LIBOR ranging from 1.25% to 2.0% or the applicable spread over the Base Rate ranging from 0.1% to 1%. Fees under the Amended Credit Agreement include an unused commitment fee ranging from 0.25% to 0.3% depending on the Company’s consolidated leverage ratio and the amount of funds outstanding under the Amended Credit Agreement. The January 2016 amendment to the Amended Credit Agreement increased the cash and noncash consideration that the Company could pay with respect to acquisitions permitted under the Amended Credit Agreement to $50,000,000 for any fiscal year, and increased the amount the Company may pay in cash dividends to its shareholders in an aggregate amount not to exceed $10,000,000 in any fiscal year. The March 2017 amendment, among other items, increased the amount the Company may pay in cash dividends to its shareholders in an aggregate amount not to exceed $15,000,000 in any fiscal year. The November 2017 amendment, among other items, adjusted the pricing grid as described above, increased the aggregate amount the Company may pay in cash dividends to its shareholders to an amount not to exceed $20,000,000 and extended the maturity date to November 30, 2021. On December 31, 2018, $38.0 million was outstanding on the Credit Agreement resulting in $87.0 million of availability. As of December 31, 2018, the Company was in compliance with all of the covenants thereunder. The Company generally enters into various notes payable as a means of financing a portion of its acquisitions and purchasing of non-controlling interests. In conjunction with the transactions related to these in 2018, the Company entered into notes payable in the aggregate amount of $1.0 million of which an aggregate principal payment of $0.6 million which is due in 2019 and $0.4 million in 2020. Interest accrues in the range of 4.5% to 5.00% per annum and is payable with each principal installment. Gain on derecognition of debt was $1.8 million for the year 2018, as a liability relating to some former physical therapy partners is no longer deemed payable. . Aggregate annual payments of principal required pursuant to the Credit Agreement and the various notes payable subsequent to December 31, 2018 are as follows (in thousands): During the twelve months ended December 31, 2019 $ 1,434 During the twelve months ended December 31, 2020 402 During the twelve months ended December 31, 2021 38,000 During the twelve months ended December 31, 2022 - $ 39,836 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 11. Income Taxes Significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31, 2018 and 2017 were as follows (in thousands): December 31, 2018 December 31, 2017 Deferred tax assets: Compensation $ 1,842 $ 1,529 Allowance for doubtful accounts 600 478 Lease obligations - closed clinics 34 54 Deferred tax assets $ 2,476 $ 2,061 Deferred tax liabilities: Depreciation and amortization $ (11,309 ) $ (12,590 ) Other (179 ) (346 ) Deferred tax liabilities (11,488 ) (12,936 ) Net deferred tax liability $ (9,012 ) $ (10,875 ) The deferred tax assets and liabilities related to purchased interests not yet finalized may result in an immaterial adjustment. During 2018, the Company recorded deferred tax assets of $6.6 million related to the revaluation of redeemable non-controlling interests and acquisitions of non-controlling interests. In addition, during 2018, the Company recorded an adjustment to the deferred tax assets of $0.1 million as a result of a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts with its federal and state tax returns for 2017. The offset to this adjustment was a reduction in the previously report federal income tax payable of $1.2 million, a decrease in the previously reported state income tax receivable of $0.8 million and a decrease in the current year provision for income taxes of $0.5 million. As of December 31, 2018, the Company has a federal income tax receivable of $0.9 million and state tax receivables of $1.3 million. The tax receivables are included in other current assets on the accompanying consolidated balance sheets. As a result of TCJA, the Company revalued its deferred tax assets and liabilities as of December 31, 2017. Based on a review and analysis as of December 31, 2017, the Company estimated a reduction of its net deferred tax liabilities by $4.3 million thereby reducing its provision for income taxes by such amount for the 2017 year. Also during 2017, the Company recorded an adjustment to the deferred tax assets having the effect of reducing its net deferred tax liability of $1.2 million related to acquisitions of non-controlling interests in 2017 based on a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts. The offset to this adjustment was a reduction in the previously reported tax receivable of approximately $1.7 million and a charge to current year provision for income taxes of $0.3 million. At December 31, 2017, the Company had a federal income tax payable of $2.8 million (included in current liabilities – accrued expenses on the accompanying consolidated balance sheet) and a state income tax receivable of $2.2 million. The tax receivables are included in other current assets on the accompanying consolidated balance sheets. The differences between the federal tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017 and 2016 were as follows (in thousands): December 31, 2018 December 31, 2017 December 31, 2016 U. S. tax at statutory rate $ 9,710 21.0 % $ 9,900 35.0 % $ 11,351 35.0 % Tax legislation adjustment - 0.0 % (4,325 ) (15.3 )% - - State income taxes, net of federal benefit and tax reform 1,722 3.7 % 1,060 3.7 % 945 2.9 % Excess equity compensation deduction (806 ) (1.7 )% (1,139 ) (4.0 )% (911 ) (2.8 )% Non-deductible expenses 743 1.6 % 560 2.0 % 495 1.5 % Other - 0.0 % (24 ) (0.1 )% - - $ 11,369 24.6 % $ 6,032 21.3 % $ 11,880 36.6 % Significant components of the provision for income taxes for the years ended December 31, 2018, 2017 and 2016 were as follows (in thousands): December 31, 2018 December 31, 2017 December 31, 2016 Current: Federal $ 5,357 $ 9,332 $ 7,620 State 1,199 1,564 1,281 Total current 6,556 10,896 8,901 Deferred: Federal 3,771 (5,233 ) 2,548 State 1,042 369 431 Total deferred 4,813 (4,864 ) 2,979 Total income tax provision $ 11,369 $ 6,032 $ 11,880 For The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income in the periods which the deferred tax assets are deductible, management believes that a valuation allowance is not required, as it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. The Company’s U.S. federal returns remain open to examination for 2015 through 2017 and U.S. state jurisdictions are open for periods ranging from 2014 through 2017. The Company does not believe that it has any significant uncertain tax positions at December 31, 2018, nor is this expected to change within the next twelve months due to the settlement and expiration of statutes of limitation. The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the years ended December 31, 2018, 2017 and 2016. |
Equity Based Plans
Equity Based Plans | 12 Months Ended |
Dec. 31, 2018 | |
Equity Based Plans [Abstract] | |
Equity Based Plans | 12. Equity Based Plans The Company has the following equity based plans with outstanding equity grants: The Amended and Restated 1999 Employee Stock Option Plan (the “Amended 1999 Plan”) permits the Company to grant to non-employee directors and employees of the Company up to 600,000 non-qualified options to purchase shares of common stock and restricted stock (subject to proportionate adjustments in the event of stock dividends, splits, and similar corporate transactions). The exercise prices of options granted under the Amended 1999 Plan are determined by the Compensation Committee. The period within which each option will be exercisable is determined by the Compensation Committee. The Amended 1999 Plan was approved by the shareholders of the Company at the 2008 Shareholders Meeting on May 20, 2008. The Amended and Restated 2003 Stock Option Plan (the “Amended 2003 Plan”) permits the Company to grant to key employees and outside directors of the Company incentive and non-qualified options and shares of restricted stock covering up to 2,100,000 shares of common stock (subject to proportionate adjustments in the event of stock dividends, splits, and similar corporate transactions). The material terms of the Amended 2003 Plan was reapproved by the shareholders of the Company at the 2015 Shareholders Meeting on May 19, 2015 and an increase in the number of shares authorized for issuance from 1,750,000 to 2,100,000 was approved at the 2016 Shareholders Meeting on March 17, 2016. A cumulative summary of equity plans as of December 31, 2018 follows: Authorized Restricted Stock Issued Outstanding Stock Options Stock Options Exercised Stock Options Exercisable Shares Available for Grant Equity Plans Amended 1999 Plan 600,000 416,402 - 139,791 - 7,775 Amended 2003 Plan 2,100,000 929,891 - 778,300 - 391,809 2,700,000 1,346,293 - 918,091 - 399,584 During 2018, 2017 and 2016, the Company granted the following shares of restricted stock to directors, officers and employees pursuant to its equity plans as follows: Year Granted Number of Shares Weighted Average Fair Value Per Share 2018 93,801 $ 78.63 2017 79,475 $ 62.19 2016 101,790 $ 51.59 During 2018, 2017 and 2016, the following shares were cancelled due to employee terminations prior to restrictions lapsing: Year Cancelled Number of Shares Weighted Average Fair Value Per Share 2018 3,867 $ 59.51 2017 2,875 $ 63.12 2016 4,965 $ 35.78 Generally, restrictions on the stock granted to employees lapse in equal annual installments on the following four anniversaries of the date of grant. For those shares granted to directors, the restrictions will lapse in equal quarterly installments during the first year after the date of grant. For those granted to officers, the restriction will lapse in equal quarterly installments during the four years following the date of grant. As of December 31, 2018, there were 152,926 shares outstanding for which restrictions had not lapsed. The restrictions will lapse in 2019 through 2022. Compensation expense for grants of restricted stock is recognized based on the fair value on the date of grant. Compensation expense for restricted stock grants was $5.9 million, $5.0 million and $5.0 million, respectively, for 2018, 2017 and 2016. As of December 31, 2018, the remaining $9.0 million of compensation expense will be recognized from 2019 through 2022. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Preferred Stock [Abstract] | |
Preferred Stock | 13. Preferred Stock The Board is empowered, without approval of the shareholders, to cause shares of preferred stock to be issued in one or more series and to establish the number of shares to be included in each such series and the rights, powers, preferences and limitations of each series. There are no provisions in the Company’s Articles of Incorporation specifying the vote required by the holders of preferred stock to take action. All such provisions would be set out in the designation of any series of preferred stock established by the Board. The bylaws of the Company specify that, when a quorum is present at any meeting, the vote of the holders of at least a majority of the outstanding shares entitled to vote who are present, in person or by proxy, shall decide any question brought before the meeting, unless a different vote is required by law or the Company’s Articles of Incorporation. Because the Board has the power to establish the preferences and rights of each series, it may afford the holders of any series of preferred stock, preferences, powers, and rights, voting or otherwise, senior to the right of holders of common stock. The issuance of the preferred stock could have the effect of delaying or preventing a change in control of the Company. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2018 | |
Common Stock [Abstract] | |
Common Stock | 14. Common Stock From September 2001 through December 31, 2008, the Board authorized the Company to purchase, in the open market or in privately negotiated transactions, up to 2,250,000 shares of the Company’s common stock. In March 2009, the Board authorized the repurchase of up to 10% or approximately 1,200,000 shares of its common stock (“March 2009 Authorization”). The Amended Credit Agreement permits share repurchases of up to $15,000,000, subject to compliance with covenants. The Company is required to retire shares purchased under the March 2009 Authorization. Under the March 2009 Authorization, the Company has purchased a total of 859,499 shares. There is no expiration date for the share repurchase program. There are currently an additional estimated 146,555 shares (based on the closing price of $102.35 on December 31, 2018, the last business day in 2018) that may be purchased from time to time in the open market or private transactions depending on price, availability and the Company’s cash position. The Company did not purchase any shares of its common stock during 2018 or 2017. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2018 | |
Defined Contribution Plan [Abstract] | |
Defined Contribution Plan | 15. Defined Contribution Plan The Company has several 401(k) profit sharing plans covering all employees with three months of service. For certain plans, the Company makes matching contributions. The Company may also make discretionary contributions of up to 50% of employee contributions. The Company did not make any discretionary contributions for the years ended December 31, 2018, 2017 and 2016. The Company matching contributions totaled $1.8 million, $1.5 million and $1.1 million, respectively, for the years ended December 31, 2018, 2017 and 2016. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Operating Leases The Company has entered into operating leases for its executive offices and clinic facilities. In connection with these agreements, the Company incurred rent expense of $37.1 million, $34.8 million and $30.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. Several of the leases provide for an annual increase in the rental payment based upon the Consumer Price Index. The majority of the leases provide for renewal periods ranging from one to five years. The agreements to extend the leases typically specify that rental rates would be adjusted to market rates as of each renewal date. The future minimum operating lease commitments for each of the next five years and thereafter and in the aggregate as of December 31, 2018 are as follows (in thousands): 2019 $ 34,139 2020 27,475 2021 18,968 2022 11,592 2023 6,488 Thereafter 3,892 Total $ 102,554 Employment Agreements At December 31, 2018, the Company had outstanding employment agreements with four of its executive officers. These agreements, which presently expire on December 31, 2019, provide for automatic two year renewals at the conclusion of each expiring term or renewal term. All of the agreements contain a provision for annual adjustment of salaries. In addition, the Company has outstanding employment agreements with most of the managing physical therapist partners of the Company’s physical therapy clinics and with certain other clinic employees which obligate subsidiaries of the Company to pay compensation of $31.6 million in 2019 and $7.4 million in the aggregate from 2020 through 2022. In addition, many of the employment agreements with the managing physical therapists provide for monthly bonus payments calculated as a percentage of each clinic’s net revenues (not in excess of operating profits) or operating profits. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 17. Earnings Per Share The computations of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 are as follows (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 Net income attributable to USPh shareholders $ 34,873 $ 22,256 $ 20,551 Charges to additional paid-in capital Revaluation of redeemable non-controlling interests (24,770 ) (201 ) - Tax effect at statutory rate (federal and state) of 26.25% 6,502 75 - $ 16,605 $ 22,130 $ 20,551 Basic and diluted net income per share attributable to USPH shareholders $ 1.31 $ 1.76 $ 1.64 Shares used in computation: Basic and diluted earnings per share - weighted-average shares 12,666 12,570 12,500 |
Reclassification of Prior Year
Reclassification of Prior Year Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Reclassification of Prior Year Presentation [Abstract] | |
Reclassification of Prior Year Presentation | 18. Reclassification of prior year presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. A reclassification adjustment has been made to allocate net income attributable to non-controlling interests for the year ended December 31, 2017 between non-controlling interests – permanent equity and redeemable non-controlling interests – temporary equity. A reclassification adjustment has also been made to Note 5 where amounts from the line redemption value prior to excess distributed earnings were reclassed to different lines within the same table. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Data (Unaudited) [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 19. Selected Quarterly Financial Data (Unaudited) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net patient revenues $ 100,552 $ 105,989 $ 103,354 $ 107,808 Net revenues $ 108,342 $ 115,098 $ 113,122 $ 117,349 Operating income $ 13,051 $ 17,026 $ 15,433 $ 14,804 Net income $ 10,054 $ 13,236 $ 11,879 $ 13,673 Net income attributable to USPH shareholders $ 7,117 $ 9,246 $ 8,102 $ 10,408 Basic and diluted earnings per share attributable to common shareholders: $ 0.27 $ 0.48 $ 0.13 $ 0.43 Shares used in computation - basic and diluted 12,616 12,677 12,685 12,685 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Net patient revenues $ 93,654 $ 97,657 $ 96,273 $ 101,642 Net revenues $ 97,565 $ 104,251 $ 103,032 $ 109,203 Operating income $ 12,200 $ 15,678 $ 12,888 $ 13,962 Net income $ 6,034 $ 6,390 $ 6,594 $ 8,706 Net income attributable to USPH shareholders $ 4,816 $ 4,941 $ 5,150 $ 7,349 Basic and diluted earnings per share attributable to common shareholders: $ 0.38 $ 0.39 $ 0.41 $ 0.57 Shares used in computation - basic and diluted 12,528 12,579 12,581 12,593 |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2018 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES Balance at Beginning of Period Additions Charged to Costs and Expenses Additions Charged to Other Accounts Deductions Balance at End of Period YEAR ENDED DECEMBER 31, 2018: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts(1) $ 2,273 $ 4,603 - $ 4,204 (2 ) $ 2,672 YEAR ENDED DECEMBER 31, 2017: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts $ 1,792 $ 3,672 - $ 3,191 (2 ) $ 2,273 YEAR ENDED DECEMBER 31, 2016: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts $ 1,642 $ 3,906 - $ 3,756 (2 ) $ 1,792 (1) Related to patient accounts receivable and accounts receivable—other. (2) Uncollectible accounts written off, net of recoveries. * All other schedules are omitted because of the absence of conditions under which they are required or because the required information is shown in the financial statements or notes thereto. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Cash Equivalents | Cash Equivalents The Company maintains its cash and cash equivalents at financial institutions. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The combined account balances at several institutions typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Management believes that this risk is not significant. |
Long-Lived Assets | Long-Lived Assets Fixed assets are stated at cost. Depreciation is computed on the straight-line method over the estimated useful lives of the related assets. Estimated useful lives for furniture and equipment range from three to eight years and for software purchased from three to seven years. Leasehold improvements are amortized over the shorter of the related lease term or estimated useful lives of the assets, which is generally three to five years. |
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of | Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of The Company reviews property and equipment and intangible assets with finite lives for impairment upon the occurrence of certain events or circumstances that indicate the related amounts may be impaired. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Goodwill | Goodwill Goodwill represents the excess of the amount paid and fair value of the non-controlling interests over the fair value of the acquired business assets, which include certain identifiable intangible assets. Historically, goodwill has been derived from acquisitions and, prior to 2009, from the purchase of some or all of a particular local management’s equity interest in an existing clinic. Effective January 1, 2009, if the purchase price of a non-controlling interest by the Company exceeds or is less than the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. The fair value of goodwill and other identifiable intangible assets with indefinite lives are tested for impairment annually and upon the occurrence of certain events, and are written down to fair value if considered impaired. The Company evaluates goodwill for impairment on at least an annual basis (in its third quarter) by comparing the fair value of its reporting units to the carrying value of each reporting unit including related goodwill. The Company evaluates indefinite lived tradenames using the relief from royalty method in conjunction with its annual goodwill impairment test. The Company operates a one segment business which is made up of various clinics within partnerships. The partnerships are components of regions and are aggregated to the operating segment level for the purpose of determining the Company’s reporting units when performing its annual goodwill impairment test. In 2018, 2017 and 2016, there were six regions. In addition to the six regions, in 2017 and 2018, the impairment test included a separate analysis for the industrial injury prevention business, a separate reporting unit. An impairment loss generally would be recognized when the carrying amount of the net assets of a reporting unit, inclusive of goodwill and other identifiable intangible assets, exceeds the estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using two factors: (i) earnings prior to taxes, depreciation and amortization for the reporting unit multiplied by a price/earnings ratio used in the industry and (ii) a discounted cash flow analysis. A weight is assigned to each factor and the sum of each weight times the factor is considered the estimated fair value. For 2018, the factors (i.e., price/earnings ratio, discount rate and residual capitalization rate) were updated to reflect current market conditions. The evaluation of goodwill in 2018, 2017 and 2016 did not result in any goodwill amounts that were deemed impaired. The Company has not identified any triggering events occurring after the testing date that would impact the impairment testing results obtained. The Company will continue to monitor for any triggering events or other indicators of impairment. |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The non-controlling interests that are reflected as redeemable non-controlling interests in the consolidated financial statements consist of those owners and the Company which have certain redemption rights, whether currently exercisable or not, and which currently, or in the future, require that the Company purchase or the owner sell the non-controlling interest held by the owner, if certain conditions are met. The purchase price is derived at a predetermined formula based on a multiple of trailing twelve months earnings performance as defined in the respective limited partnership agreements. The redemption rights can be triggered by the owner or the Company at such time as both of the following events have occurred: 1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the transaction, typically three to five years, as defined in the limited partnership agreement. The redemption rights are not automatic or mandatory (even upon death) and require either the owner or the Company to exercise its rights when the conditions triggering the redemption rights have been satisfied. On the date the Company acquires a controlling interest in a partnership and the limited partnership agreement for such partnership contains redemption rights not under the control of the Company, the fair value of the non-controlling interest is recorded in the consolidated balance sheet under the caption – Redeemable non-controlling interests |
Mandatorily Redeemable Non-Controlling Interests | Mandatorily Redeemable Non-Controlling Interests The non-controlling interests that are reflected as mandatorily redeemable non-controlling interests in the consolidated financial statements consist of those owners who have certain redemption rights, whether currently exercisable or not, and which currently, or in the future, require that the Company purchase the non-controlling interest of those owners at a predetermined formula based on a multiple of trailing twelve months earnings performance as defined in the respective limited partnership agreements. The redemption rights are triggered at such time as both of the following events have occurred: 1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the transaction, typically three to five years, as defined in the limited partnership agreement. On the date the Company acquires a controlling interest in a partnership and the limited partnership agreement for such partnership contains mandatory redemption rights, the fair value of the non-controlling interest is recorded in the long-term liabilities section of the consolidated balance sheet under the caption – Mandatorily redeemable non-controlling interests Interest expense – mandatorily redeemable non-controlling interests – change in redemption value and Interest expense – mandatorily redeemable non-controlling interests – earnings allocable As previously mentioned due to amendments of the limited partnership agreements entered into by the Company, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) were amended and are now classified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2018 consolidated balance sheet. |
Non-Controlling Interests | Non-Controlling Interests The Company recognizes non-controlling interests, in which the Company has no obligation but the right to purchase the non-controlling interests, as equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income attributable to non-controlling interests is included in consolidated net income on the face of the statements of net income. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the non-controlling equity investment on the deconsolidation date. When the purchase price of a non-controlling interest by the Company exceeds the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. Additionally, operating losses are allocated to non-controlling interests even when such allocation creates a deficit balance for the non-controlling interest partner. |
Revenue Recognition | Revenue Recognition Revenues Management contract revenues, which are included in other revenues in the consolidated statements of net income, are derived from contractual arrangements whereby we manage a clinic owned by a third party. The Company does not have any ownership interest in these clinics. Typically, revenues are determined based on the number of visits conducted at the clinic and recognized at the point in time when services are performed. Costs, typically salaries for our employees, are recorded when incurred. Revenues Additionally, other revenues include services the Company provides on-site, such as schools and industrial worksites, for physical or occupational therapy services, and athletic trainers and gym membership fees. Contract terms and rates are agreed to in advance between the Company and the third parties. Services are typically performed over the contract period and revenue is recorded at the point of service. If the services are paid in advance, revenue is recorded as a contract liability over the period of the agreement and recognized at the point in time, when the services are performed. In May 2014, March 2016, April 2016, and December 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations, ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer (collectively the “standards”), respectively, which supersede most of the current revenue recognition requirements (“ASC 606”). The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The For ASC 606, there is an implied contract between us and the patient upon each patient visit. Separate contractual arrangements exist between us and third party payors (e.g. insurers, managed care programs, government programs, workers' compensation) which establish the amounts the third parties pay on behalf of the patients for covered services rendered. While these agreements are not considered contracts with the customer, they are used for determining the transaction price for services provided to the patients covered by the third party payors. The payor contracts do not indicate performance obligations for us, but indicate reimbursement rates for patients who are covered by those payors when the services are provided. At that time, the Company is obligated to provide services for the reimbursement rates stipulated in the payor contracts. The execution of the contract alone does not indicate a performance obligation. For self-paying customers, the performance obligation exists when we provide the services at established rates. The difference between the Company’s established rate and the anticipated reimbursement rate is accounted for as an offset to revenue – contractual allowance. The Company determines allowances for doubtful accounts based on the specific agings and payor classifications at each clinic. The provision for doubtful accounts is included in clinic operating costs in the statements of net income. Patient accounts receivable, which are stated at the historical carrying amount net of contractual allowances, write-offs and allowance for doubtful accounts, includes only those amounts the Company estimates to be collectible. The following table details the revenue related to the various categories. Year Ended December 31, 2018 2017 2016 Patient revenues $ 417,703 389,226 348,839 Management contract revenues 8,339 6,275 5,535 Industrial injury prevention services revenues 25,466 14,908 - Other revenues 2,403 3,642 2,172 $ 453,911 $ 414,051 $ 356,546 Medicare Reimbursement The Medicare program reimburses outpatient rehabilitation providers based on the Medicare Physician Fee Schedule (‘‘MPFS’’). For services provided in 2018, a 0.5% increase has been applied to the fee schedule payment rates; for services provided in 2019, a 0.25% increase will be applied to the fee schedule payment rates before applying the mandatory budget neutrality adjustment. For services provided in 2020 through 2025, a 0.0% percent update will be applied each year to the fee schedule payment rates, before applying the mandatory budget neutrality adjustment. Beginning in 2021, payments to individual therapists (Physical/Occupational Therapist in Private Practice) paid under the fee schedule may be subject to adjustment based on performance in the Merit Based Incentive Payment System (“MIPS”), which measures performance based on certain quality metrics, resource use, and meaningful use of electronic health records. Under the MIPS requirements, a provider's performance is assessed according to established performance standards each year and then is used to determine an adjustment factor that is applied to the professional's payment for the corresponding payment year. The provider’s MIPS performance in 2019 will determine the payment adjustment in 2021. Each year from 2019 through 2024, professionals who receive a significant share of their revenues through an alternate payment model (“APM”), (such as accountable care organizations or bundled payment arrangements) that involves risk of financial losses and a quality measurement component will receive a 5% bonus in the corresponding payment year. The bonus payment for APM participation is intended to encourage participation and testing of new APMs and to promote the alignment of incentives across payors. The specifics of the MIPS and APM adjustments will be subject to future notice and comment rule-making. The Budget Control Act of 2011 increased the federal debt ceiling in connection with deficit reductions over the next ten years, and requires automatic reductions in federal spending by approximately $1.2 trillion. Payments to Medicare providers are subject to these automatic spending reductions, subject to a 2% cap. On April 1, 2013, a 2% reduction to Medicare payments was implemented. The Bipartisan Budget Act of 2015, enacted on November 2, 2015, extended the 2% reductions to Medicare payments through fiscal year 2025. The Bipartisan Budget Act of 2018, enacted on February 9, 2018, extends the 2% reductions to Medicare payments through fiscal year 2027. Historically, the total amount paid by Medicare in any one year for outpatient physical therapy, occupational therapy, and/or speech-language pathology services provided to any Medicare beneficiary was subject to an annual dollar limit (i.e., the ‘‘Therapy Cap’’ or ‘‘Limit’’). For 2017, the annual Limit on outpatient therapy services was $1,980 for combined Physical Therapy and Speech Language Pathology services and $1,980 for Occupational Therapy services. As a result of Bipartisan Budget Act of 2018, the Therapy Caps have been eliminated, effective as of January 1, 2018. Under the Middle Class Tax Relief and Job Creation Act of 2012 (‘‘MCTRA’’), since October 1, 2012, patients who met or exceeded $3,700 in therapy expenditures during a calendar year have been subject to a manual medical review to determine whether applicable payment criteria are satisfied. The $3,700 threshold is applied to Physical Therapy and Speech Language Pathology Services; a separate $3,700 threshold is applied to the Occupational Therapy. The MACRA directed CMS to modify the manual medical review process such that those reviews will no longer apply to all claims exceeding the $3,700 threshold and instead will be determined on a targeted basis based on a variety of factors that CMS considers appropriate The Bipartisan Budget Act of 2018 extends the targeted medical review indefinitely, but reduces the threshold to $3,000 through December 31, 2027. For 2028, the threshold amount will be increased by the percentage increase in the Medicare Economic Index (“MEI”) for 2028 and in subsequent years the threshold amount will increase based on the corresponding percentage increase in the MEI for such subsequent year. CMS adopted a multiple procedure payment reduction (‘‘MPPR’’) for therapy services in the final update to the MPFS for calendar year 2011. The MPPR applied to all outpatient therapy services paid under Medicare Part B — occupational therapy, physical therapy and speech-language pathology. Under the policy, the Medicare program pays 100% of the practice expense component of the Relative Value Unit (‘‘RVU’’) for the therapy procedure with the highest practice expense RVU, then reduces the payment for the practice expense component for the second and subsequent therapy procedures or units of service furnished during the same day for the same patient, regardless of whether those therapy services are furnished in separate sessions. Since 2013, the practice expense component for the second and subsequent therapy service furnished during the same day for the same patient was reduced by 50%. In addition, the MCTRA directed CMS to implement a claims-based data collection program to gather additional data on patient function during the course of therapy in order to better understand patient conditions and outcomes. All practice settings that provide outpatient therapy services are required to include this data on the claim form. Since 2013, therapists have been required to report new codes and modifiers on the claim form that reflect a patient’s functional limitations and goals at initial evaluation, periodically throughout care, and at discharge. Reporting of these functional limitation codes and modifiers are required on the claim for payment. Medicare claims for outpatient therapy services furnished by therapy assistants on or after January 1, 2022 must include a modifier indicating the service was furnished by a therapy assistant. CMS was required to develop a modifier to mark services provided by a therapy assistant by January 1, 2019, and then submitted claims have to report the modifier mark starting January 1, 2020. Outpatient therapy services furnished on or after January 1, 2022 in whole or part by a therapy assistant will be paid at an amount equal to 85% of the payment amount otherwise applicable for the service. Statutes, regulations, and payment rules governing the delivery of therapy services to Medicare beneficiaries are complex and subject to interpretation. We believe that we are in compliance, in all material respects, with all applicable laws and regulations and are not aware of any pending or threatened investigations involving allegations of potential wrongdoing that would have a material effect on the our financial statements as of December 31, 2018. Compliance with such laws and regulations can be subject to future government review and interpretation, as well as significant regulatory action including fines, penalties, and exclusion from the Medicare program. Net patient revenue from Medicare were approximately $103.6 million, $92.6 million and $81.8 million, respectively, for 2018, 2017 and 2016. Management Contract Revenues Management contract revenues, which are included in other revenues, are derived from contractual arrangements whereby the Company manages a clinic for third party owners. The Company does not have any ownership interest in these clinics. Typically, revenues are determined based on the number of visits conducted at the clinic and recognized at a point in time when services are performed. Costs, typically salaries for the Company’s employees, are recorded when incurred. Industrial Injury Prevention Revenue Revenues |
Contractual Allowances | Contractual Allowances Contractual allowances result from the differences between the rates charged for services performed and expected reimbursements by both insurance companies and government sponsored healthcare programs for such services. Medicare regulations and the various third party payors and managed care contracts are often complex and may include multiple reimbursement mechanisms payable for the services provided in Company clinics. The Company estimates contractual allowances based on its interpretation of the applicable regulations, payor contracts and historical calculations. Each month the Company estimates its contractual allowance for each clinic based on payor contracts and the historical collection experience of the clinic and applies an appropriate contractual allowance reserve percentage to the gross accounts receivable balances for each payor of the clinic. Based on the Company’s historical experience, calculating the contractual allowance reserve percentage at the payor level is sufficient to allow the Company to provide the necessary detail and accuracy with its collectability estimates. However, the services authorized and provided and related reimbursement are subject to interpretation that could result in payments that differ from the Company’s estimates. Payor terms are periodically revised necessitating continual review and assessment of the estimates made by management. The Company’s billing system does not capture the exact change in its contractual allowance reserve estimate from period to period in order to assess the accuracy of its revenues and hence its contractual allowance reserves. Management regularly compares its cash collections to corresponding net revenues measured both in the aggregate and on a clinic-by-clinic basis. In the aggregate, historically the difference between net revenues and corresponding cash collections has generally reflected a difference within approximately 1% of net revenues. Additionally, analysis of subsequent periods’ contractual write-offs on a payor basis reflects a difference within approximately 1% between the actual aggregate contractual reserve percentage as compared to the estimated contractual allowance reserve percentage associated with the same period end balance. As a result, the Company believes that a change in the contractual allowance reserve estimate would not likely be more than 1% at December 31, 2018. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount to be recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Tax Cuts and Jobs Act of 2017 (the “TCJA”) was passed by Congress on December 20, 2017 and signed into law by President Trump on December 22, 2017. The TCJA made significant changes to U.S. corporate income tax laws including a decrease in the corporate income tax rate to 21% effective January 1, 2018. As a result, the Company revalued its deferred tax assets and liabilities. Based on a review and analysis as of December 31, 2017, the Company estimated a reduction of its net deferred tax liabilities by $4.3 million thereby reducing its provision for income taxes by such amount for the 2017 year. The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the twelve months ended December 31, 2018, 2017 and 2016. The Company will book any interest or penalties, if required, in interest and other expense, as appropriate. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and notes payable approximate their fair values due to the short-term maturity of these financial instruments. The carrying amount under the Amended Credit Agreement (as defined in Note 10) approximates its fair value. The interest rate on the Credit Agreement, which is tied to the Eurodollar Rate, is set at various short-term intervals, as detailed in the Credit Agreement. |
Segment Reporting | Segment Reporting Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by chief operating decision makers in determining the allocation of resources and in assessing performance. The Company identifies operating segments based on management responsibility and believes it meets the criteria for aggregating its operating segments into a single reportable segment. |
Use of Estimates | Use of Estimates In |
Self-Insurance Program | Self-Insurance Program The Company utilizes a self-insurance plan for its employee group health and dental insurance coverage administered by a third party. Predetermined loss limits have been arranged with the insurance company to minimize the Company’s maximum liability and cash outlay. Accrued expenses include the estimated incurred but unreported costs to settle unpaid claims and estimated future claims. Management believes that the current accrued amounts are sufficient to pay claims arising from self-insurance claims incurred through December 31, 2018. |
Restricted Stock | Restricted Stock Restricted stock issued to employees and directors is subject to continued employment or continued service on the board, respectively. Generally, restrictions on the stock granted to employees lapse in equal annual installments on the following four anniversaries of the date of grant. For those shares granted to directors, the restrictions will lapse in equal quarterly installments during the first year after the date of grant. For those granted to officers, the restriction will lapse in equal quarterly installments during the four years following the date of grant. Compensation expense for grants of restricted stock is recognized based on the fair value per share on the date of grant amortized over the vesting period. The restricted stock issued is included in basic and diluted shares for the earnings per share computation. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance In May 2014, March 2016, April 2016, and December 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations, ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer (collectively “the standards”), respectively, which supersede most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The original standards were effective for fiscal years beginning after December 15, 2016; However, in July 2015, the FASB approved a one-year deferral of these standards, with a new effective date for fiscal years beginning after December 15, 2017. The standards require the selection of a retrospective or cumulative effect transition method. The Company implemented the new standards beginning January 1, 2018 using a modified retrospective transition method. Adoption of the new standard did not result in material changes to the presentation of net revenues and bad debt expense in the consolidated statements of income, and the presentation of the amount of income from operations and net income will be unchanged upon adoption of the new standards. The principal change relates to how the new standard requires healthcare providers to estimate the amount of variable consideration to be included in the transaction price up to an amount which is probable that a significant reversal will not occur. The most common forms of variable consideration the Company experiences are amounts for services provided that are ultimately not realizable from a customer. Under the new standards, the Company’s estimate for unrealizable amounts will continue to be recognized as a reduction to revenue. The bad debt expense historically reported will not materially change. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In August 2018, the Securities Exchange Commission (“SEC”) issued Final Rule 33-10532, Disclosure Update and Simplification, which amends certain disclosure requirements that were redundant, duplicative, overlapping or superseded by other SEC disclosure requirements. The amendments generally eliminated or otherwise reduced certain disclosure requirements of various SEC rules and regulations. However, in some cases, the amendments require additional information to be disclosed, including changes in stockholders’ equity in interim periods. The rule is effective 30 days after its publication in the Federal Register. The rule was posted on October 4, 2018. On September 25, 2018, the SEC released guidance advising it will not object to a registrant adopting the requirement to include changes in stockholders’ equity in the Form 10-Q for the first quarter beginning after the effective date of the rule. The Company is currently assessing the impact that this standard will have on its consolidated financial statements upon adoption and expects to adopt the guidance in its Form 10-Q for the period ended March 31, 2019. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350), which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment change. ASU 2017-04 is effective prospectively for fiscal years, and the interim periods within those years, beginning after December 15, 2019. The Company does not expect adoption of this ASU to have a material impact. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses, which added a new impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, including trade receivables. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. These changes become effective for the Company on January 1, 2020. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In February 2016, the FASB issued amended accounting guidance (ASU 2016-02, Leases) which replaced most existing lease accounting guidance under U. S. generally accepted accounting principles. Among other changes, the amended guidance requires that a right-to-use asset, which is an asset that represents the lessee’s right to use, and a lease liability, which is a lessee’s obligation to make lease payments arising for a lease measured on a discounted basis, be recognized on the balance sheet by lessees for those leases with a term of greater than 12 months. The amended guidance is effective for reporting periods beginning after December 15, 2018; However, early adoption is permitted. Entities can use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or recognize the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings. Since the Company leases all but one of its clinic facilities, upon adoption, the Company will recognize significant assets and liabilities on the consolidated balance sheets as a result of the operating lease obligations of the Company. Operating lease expense will still be recognized as rent expense on a straight-line basis over the respective lease terms in the consolidated statements of income. The As part of our implementation process, the Company has assessed lease arrangements, evaluated practical expedient and accounting policy elections, and implemented software to meet the reporting requirements of this standard. The Company has also evaluated the changes in controls and processes that are necessary to implement the new standard. We have evaluated the effect of adopting this guidance on our consolidated financial statements and related disclosures and we estimate the adoption will result in the addition of approximately $78.0 million of assets and $ 82.6 million of liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of income or cash flows. |
Subsequent Event | Subsequent Event The Company has evaluated events occurring after the balance sheet date for possible disclosure as a subsequent event through the date that these consolidated financial statements were issued. No such disclosures were required . |
Organization, Nature of Opera_2
Organization, Nature of Operations and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Nature of Operations and Basis of Presentation [Abstract] | |
Clinic Acquisition | In addition to the above acquired interests in the industrial injury prevention business, during the last three years, the Company completed the following multi-clinic acquisitions: Date % Interest Acquired Number of Clinics 2018 August 2018 Acquisition August 31 70% 4 2017 January 2017 Acquisition January 1 70% 17 May 2017 Acquisition May 31 70% 4 June 2017 Acquisition June 30 60% 9 October 2017 Acquisition October 31 70% 9 2016 February 2016 Acquisition February 29 55% 8 November 2016 Acquisition November 30 60% 12 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Disaggregation of Revenue, Categories | The following table details the revenue related to the various categories. Year Ended December 31, 2018 2017 2016 Patient revenues $ 417,703 389,226 348,839 Management contract revenues 8,339 6,275 5,535 Industrial injury prevention services revenues 25,466 14,908 - Other revenues 2,403 3,642 2,172 $ 453,911 $ 414,051 $ 356,546 |
Acquisitions of Businesses (Tab
Acquisitions of Businesses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions of Businesses [Abstract] | |
Clinic Acquisition | In addition to the above acquired interests in the industrial injury prevention business, during the last three years, the Company completed the following multi-clinic acquisitions: Date % Interest Acquired Number of Clinics 2018 August 2018 Acquisition August 31 70% 4 2017 January 2017 Acquisition January 1 70% 17 May 2017 Acquisition May 31 70% 4 June 2017 Acquisition June 30 60% 9 October 2017 Acquisition October 31 70% 9 2016 February 2016 Acquisition February 29 55% 8 November 2016 Acquisition November 30 60% 12 |
Preliminary Purchase Prices Allocation | The purchase price for the 2018 acquisitions has been preliminarily allocated as follows (in thousands): Cash paid, net of cash acquired $ 16,367 Seller notes 950 Total consideration $ 17,317 Estimated fair value of net tangible assets acquired: Total current assets $ 1,691 Total non-current assets 42 Total liabilities (486 ) Net tangible assets acquired $ 1,247 Referral relationships 1,879 Non-compete 386 Tradename 2,172 Goodwill 19,778 Fair value of non-controlling interest (classified as redeemable non-controlling interests) (8,145 ) $ 17,317 The purchase price for the 2017 acquisitions were allocated as follows (in thousands): Cash paid, net of cash acquired $ 36,682 Seller notes 2,150 Total consideration $ 38,832 Estimated fair value of net tangible assets acquired: Total current assets $ 5,853 Total non-current assets 1,527 Total liabilities (2,865 ) Net tangible assets acquired $ 4,515 Referral relationships 4,250 Non-compete 660 Tradename 6,850 Goodwill 46,722 Fair value of non-controlling interest (classified as redeemable non-controlling interests) (13,883 ) Fair value of non-controlling interest (originally classified as mandatorily redeemable non-controlling interests) (10,282 ) $ 38,832 The purchase prices for the 2016 acquisitions have been allocated as follows (in thousands): The purchase prices for the acquisitions in 2016 have been preliminarily allocated as follows: Cash paid, net of cash acquired $ 23,623 Seller notes 1,000 Total consideration $ 24,623 Fair value of net tangible assets acquired: Total current assets $ 1,372 Total non-current assets 839 Total liabilities (399 ) Net tangible assets acquired $ 1,812 Referral relationships 4,919 Non-compete 847 Tradename 3,802 Goodwill 32,123 Fair value of non-controlling interest (originally classified as mandatorily redeemable non-controlling interests) (18,880 ) $ 24,623 |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Redeemable Non-Controlling Interest [Abstract] | |
Changes in Carrying Amount (Fair Value) of Redeemable Non-Controlling Interest | For the year ended December 31, 2018 and 2017, the following table details the changes in the carrying amount (fair value) of the redeemable non-controlling interests (in thousands): Year Ended December 31, 2018 Year Ended December 31, 2017 Beginning balance $ 102,572 $ - Operating results allocated to redeemable non-controlling interest partners 8,433 244 Distributions to redeemable non-controlling interest partners (9,835 ) (272 ) Changes in the fair value of redeemable non-controlling interest 24,770 201 Purchases of businesses - initial equity related to redeemable non-controlling interest 8,145 13,883 Fair value of redeemable non-controlling interest - amended partnership agreements - 88,516 Other (142 ) - Ending balance $ 133,943 $ 102,572 |
Carrying Amount of (Fair Value) Redeemable Non-Controlling Interest | The following table categorizes the carrying amount (fair value) of the redeemable non-controlling interests (in thousands): December 31, 2018 December 31, 2017 Contractual time period has lapsed but holder's employment has not been terminated $ 42,624 $ 31,821 Contractual time period has not lapsed and holder's employment has not been terminated $ 91,319 $ 70,751 Holder's employment has terminated and contractual time period has expired - $ - Holder's employment has terminated and contractual time period has not expired - $ - $ 133,943 $ 102,572 |
Mandatorily Redeemable Non-Co_2
Mandatorily Redeemable Non-Controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Mandatorily Redeemable Non-Controlling Interest [Abstract] | |
Changes in Carrying Amount of Mandatorily Redeemable Non-Controlling Interest | As previously mentioned due to amended partnership agreements, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) were reclassified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2017 consolidated balance sheet. Year Ended December 31, 2018 Year Ended December 31, 2017 Contractual time period has lapsed but holder's employment has not been terminated $ - $ 327 Contractual time period has not lapsed and holder's employment has not been terminated - - Holder's employment has terminated and contractual time period has expired - - Holder's employment has terminated and contractual time period has not expired - - Redemption value prior to excess distribution earnings $ - $ 327 Excess distributions over earnings and losses - - $ - $ 327 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill as of December 31, 2018 and 2017 consisted of the following (in thousands): Year Ended December 31, 2018 Year Ended December 31, 2017 Beginning balance $ 271,338 $ 226,806 Goodwill acquired during the year 19,778 44,292 Goodwill adjustments for purchase price allocation of businesses acquired in prior year 2,409 706 Goodwill written-off - closed clinic - (466 ) Ending balance $ 293,525 $ 271,338 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, Net | Intangible assets, net as of December 31, 2018 and 2017 consisted of the following (in thousands): December 31, 2018 December 31, 2017 Tradenames $ 30,256 $ 29,673 Referral relationships, net of accumulated amortization of $9,370 and $7,209, respectively 16,895 16,811 Non-compete agreements, net of accumulated amortization of $4,716 and $4,100, respectively 1,677 2,470 $ 48,828 $ 48,954 |
Amortization Expenses | The following table details the amount of amortization expense recorded for intangible assets for the years ended December 31, 2018, 2017 and 2016 (in thousands): Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 Tradenames $ - $ - $ 330 Referral relationships 2,161 1,934 1,512 Non-compete agreements 616 720 525 $ 2,777 $ 2,654 $ 2,367 |
Amortization of Referral Relationships and Non Competition Agreements | The remaining balances of the referral relationships and non-compete agreements is expected to be amortized as follows (in thousands): Referral Relationships Non-Compete Agreements Years Ending December 31, Annual Amount Years Ending December 31, Annual Amount 2019 $ 2,133 2019 $ 632 2020 $ 2,133 2020 $ 418 2021 $ 2,133 2021 $ 340 2022 $ 2,084 2022 $ 163 2023 $ 1,977 2023 $ 94 2024 $ 1,791 2024 $ 30 Thereafter $ 4,644 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Accrued expenses as of December 31, 2018 and 2017 consisted of the following (in thousands): December 31, 2018 December 31, 2017 Salaries and related costs $ 21,726 $ 16,828 Credit balances due to patients and payors 7,293 4,158 Group health insurance claims 3,124 2,929 Income taxes payable - 2,833 Other 6,350 6,594 Total $ 38,493 $ 33,342 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
Credit Agreement and Notes Payable | Notes payable as of December 31, 2018 and 2017 consisted of the following (in thousands): December 31, 2018 December 31, 2017 Credit Agreement average effective interest rate of 4.1% inclusive of unused fee $ 38,000 $ 54,000 Various notes payable with $1,434 plus accrued interest due in the next year, interest accrues in the range of 3.25% through 5.0% per annum 1,836 6,772 39,836 60,772 Less current portion (1,434 ) (4,044 ) Long term portion $ 38,402 $ 56,728 |
Aggregate Annual Payments of Principal Required to Revolving Credit Facility | Aggregate annual payments of principal required pursuant to the Credit Agreement and the various notes payable subsequent to December 31, 2018 are as follows (in thousands): During the twelve months ended December 31, 2019 $ 1,434 During the twelve months ended December 31, 2020 402 During the twelve months ended December 31, 2021 38,000 During the twelve months ended December 31, 2022 - $ 39,836 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Components of Deferred Tax Assets and Liabilities Included in Consolidated Balance Sheets | Significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31, 2018 and 2017 were as follows (in thousands): December 31, 2018 December 31, 2017 Deferred tax assets: Compensation $ 1,842 $ 1,529 Allowance for doubtful accounts 600 478 Lease obligations - closed clinics 34 54 Deferred tax assets $ 2,476 $ 2,061 Deferred tax liabilities: Depreciation and amortization $ (11,309 ) $ (12,590 ) Other (179 ) (346 ) Deferred tax liabilities (11,488 ) (12,936 ) Net deferred tax liability $ (9,012 ) $ (10,875 ) |
Differences Between Federal Tax Rate and Company's Effective Tax Rate for Results of Continuing Operations | The differences between the federal tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017 and 2016 were as follows (in thousands): December 31, 2018 December 31, 2017 December 31, 2016 U. S. tax at statutory rate $ 9,710 21.0 % $ 9,900 35.0 % $ 11,351 35.0 % Tax legislation adjustment - 0.0 % (4,325 ) (15.3 )% - - State income taxes, net of federal benefit and tax reform 1,722 3.7 % 1,060 3.7 % 945 2.9 % Excess equity compensation deduction (806 ) (1.7 )% (1,139 ) (4.0 )% (911 ) (2.8 )% Non-deductible expenses 743 1.6 % 560 2.0 % 495 1.5 % Other - 0.0 % (24 ) (0.1 )% - - $ 11,369 24.6 % $ 6,032 21.3 % $ 11,880 36.6 % |
Significant Components of Provision for Income Taxes for Continuing Operations | Significant components of the provision for income taxes for the years ended December 31, 2018, 2017 and 2016 were as follows (in thousands): December 31, 2018 December 31, 2017 December 31, 2016 Current: Federal $ 5,357 $ 9,332 $ 7,620 State 1,199 1,564 1,281 Total current 6,556 10,896 8,901 Deferred: Federal 3,771 (5,233 ) 2,548 State 1,042 369 431 Total deferred 4,813 (4,864 ) 2,979 Total income tax provision $ 11,369 $ 6,032 $ 11,880 |
Equity Based Plans (Tables)
Equity Based Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Based Plans [Abstract] | |
Cumulative Summary of Equity Plans | A cumulative summary of equity plans as of December 31, 2018 follows: Authorized Restricted Stock Issued Outstanding Stock Options Stock Options Exercised Stock Options Exercisable Shares Available for Grant Equity Plans Amended 1999 Plan 600,000 416,402 - 139,791 - 7,775 Amended 2003 Plan 2,100,000 929,891 - 778,300 - 391,809 2,700,000 1,346,293 - 918,091 - 399,584 |
Restricted Stock Granted and Cancelled | During 2018, 2017 and 2016, the Company granted the following shares of restricted stock to directors, officers and employees pursuant to its equity plans as follows: Year Granted Number of Shares Weighted Average Fair Value Per Share 2018 93,801 $ 78.63 2017 79,475 $ 62.19 2016 101,790 $ 51.59 During 2018, 2017 and 2016, the following shares were cancelled due to employee terminations prior to restrictions lapsing: Year Cancelled Number of Shares Weighted Average Fair Value Per Share 2018 3,867 $ 59.51 2017 2,875 $ 63.12 2016 4,965 $ 35.78 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Future Minimum Operating Lease Commitments | The future minimum operating lease commitments for each of the next five years and thereafter and in the aggregate as of December 31, 2018 are as follows (in thousands): 2019 $ 34,139 2020 27,475 2021 18,968 2022 11,592 2023 6,488 Thereafter 3,892 Total $ 102,554 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computations of Basic and Diluted Earnings Per Share | The computations of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 are as follows (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 Net income attributable to USPh shareholders $ 34,873 $ 22,256 $ 20,551 Charges to additional paid-in capital Revaluation of redeemable non-controlling interests (24,770 ) (201 ) - Tax effect at statutory rate (federal and state) of 26.25% 6,502 75 - $ 16,605 $ 22,130 $ 20,551 Basic and diluted net income per share attributable to USPH shareholders $ 1.31 $ 1.76 $ 1.64 Shares used in computation: Basic and diluted earnings per share - weighted-average shares 12,666 12,570 12,500 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Data (Unaudited) [Abstract] | |
Summary of Selected Quarterly Financial Data | Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net patient revenues $ 100,552 $ 105,989 $ 103,354 $ 107,808 Net revenues $ 108,342 $ 115,098 $ 113,122 $ 117,349 Operating income $ 13,051 $ 17,026 $ 15,433 $ 14,804 Net income $ 10,054 $ 13,236 $ 11,879 $ 13,673 Net income attributable to USPH shareholders $ 7,117 $ 9,246 $ 8,102 $ 10,408 Basic and diluted earnings per share attributable to common shareholders: $ 0.27 $ 0.48 $ 0.13 $ 0.43 Shares used in computation - basic and diluted 12,616 12,677 12,685 12,685 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Net patient revenues $ 93,654 $ 97,657 $ 96,273 $ 101,642 Net revenues $ 97,565 $ 104,251 $ 103,032 $ 109,203 Operating income $ 12,200 $ 15,678 $ 12,888 $ 13,962 Net income $ 6,034 $ 6,390 $ 6,594 $ 8,706 Net income attributable to USPH shareholders $ 4,816 $ 4,941 $ 5,150 $ 7,349 Basic and diluted earnings per share attributable to common shareholders: $ 0.38 $ 0.39 $ 0.41 $ 0.57 Shares used in computation - basic and diluted 12,528 12,579 12,581 12,593 |
Organization, Nature of Opera_3
Organization, Nature of Operations and Basis of Presentation (Details) $ in Thousands | Apr. 30, 2018Business | Dec. 31, 2018USD ($)ClinicStateFacility | Dec. 31, 2017USD ($)Clinic | Dec. 31, 2016Clinic | Mar. 23, 2017 |
Organization, Nature of Operations and Basis of Presentation [Abstract] | |||||
Number of clinics operated | 591 | ||||
Number of states where clinics are operated | State | 42 | ||||
Number of third party facilities | Facility | 28 | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | |||||
Percentage of interest acquired | 35.00% | ||||
Percentage of general partnership interest owned | 1.00% | ||||
Number of clinic practices acquired | 5 | 2 | 2 | ||
Number of clinics consolidated with an existing clinic | 1 | ||||
Number of clinics that operate as a satellite clinic with existing partnerships | 1 | ||||
Mandatorily redeemable non-controlling interests | $ | $ 0 | $ 327 | |||
Minimum [Member] | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | |||||
Percentage of interest acquired | 5.50% | 2.00% | |||
Percentage of limited partnership interest owned | 49.00% | ||||
Maximum [Member] | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | |||||
Percentage of interest acquired | 35.00% | 35.00% | |||
Percentage of limited partnership interest owned | 99.00% | ||||
March 2017 Acquisition [Member] | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | |||||
Percentage of interest acquired | 55.00% | ||||
Industrial Injury Prevention [Member] | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | |||||
Percentage of interest acquired | 65.00% | 55.00% | |||
Number of businesses merged | Business | 2 | ||||
Percentage of combined business interest owned | 59.45% |
Organization, Nature of Opera_4
Organization, Nature of Operations and Basis of Presentation - Schedule of Multi, Clinic Acquisition (Details) - Clinic | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Combination, Description [Abstract] | |||
Percentage of interest acquired | 35.00% | ||
Number of clinics | 5 | 2 | 2 |
August 2018 Acquisition [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition date | Aug. 31, 2018 | ||
Percentage of interest acquired | 70.00% | ||
Number of clinics | 4 | ||
January 2017 Acquisition [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition date | Jan. 1, 2017 | ||
Percentage of interest acquired | 70.00% | ||
Number of clinics | 17 | ||
May 2017 Acquisition [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition date | May 31, 2017 | ||
Percentage of interest acquired | 70.00% | ||
Number of clinics | 4 | ||
June 2017 Acquisition [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition date | Jun. 30, 2017 | ||
Percentage of interest acquired | 60.00% | ||
Number of clinics | 9 | ||
October 2017 Acquisition [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition date | Oct. 31, 2017 | ||
Percentage of interest acquired | 70.00% | ||
Number of clinics | 9 | ||
February 2016 Acquisition [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition date | Feb. 29, 2016 | ||
Percentage of interest acquired | 55.00% | ||
Number of clinics | 8 | ||
November 2016 Acquisition [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition date | Nov. 30, 2016 | ||
Percentage of interest acquired | 60.00% | ||
Number of clinics | 12 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)SegmentRegion | Dec. 31, 2017USD ($)Region | Dec. 31, 2016USD ($)Region | Feb. 09, 2018 | Nov. 02, 2015 | Apr. 01, 2013 | |
Revenue Recognition [Abstract] | ||||||||||||||
Revenue related to the various categories | $ 117,349,000 | $ 113,122,000 | $ 115,098,000 | $ 108,342,000 | $ 109,203,000 | $ 103,032,000 | $ 104,251,000 | $ 97,565,000 | $ 453,911,000 | $ 414,051,000 | $ 356,546,000 | |||
Basis of Presentation [Abstract] | ||||||||||||||
Number of business segments | Segment | 1 | |||||||||||||
Number of regions | Region | 6 | 6 | 6 | |||||||||||
Federal debt ceiling in connection with deficit reductions | 10 years | |||||||||||||
Reductions in federal spending | $ 1,200,000,000,000 | |||||||||||||
Medicare spending cut percentage | 2.00% | |||||||||||||
Expected reduction in Medicare spending percentage | 2.00% | 2.00% | 2.00% | |||||||||||
Combined physical therapy/speech language pathology expenses | $ 3,700 | |||||||||||||
Reduction in combined physical therapy/speech language pathology expenses | $ 3,000 | |||||||||||||
Percentage of practice expense component | 100.00% | |||||||||||||
Percentage reduction for service | 50.00% | |||||||||||||
Percentage of payment for outpatient therapy services | 85.00% | |||||||||||||
Net patient revenue from Medicare accounts | $ 103,600,000 | $ 92,600,000 | $ 81,800,000 | |||||||||||
Difference between net revenues and corresponding cash collections, approximately of net revenues | 1.00% | |||||||||||||
Difference between actual aggregate contractual reserve and estimated contractual allowance reserve percentage | 1.00% | |||||||||||||
Maximum contractual allowance reserve estimate | 1.00% | |||||||||||||
Estimated reduction in deferred tax liabilities | $ (4,300,000) | |||||||||||||
Corporate income tax rate | 21.00% | 35.00% | 35.00% | |||||||||||
Accrued interest and penalties associated with any unrecognized tax benefits | 0 | 0 | $ 0 | $ 0 | $ 0 | |||||||||
Interest expense recognized | 0 | 0 | 0 | |||||||||||
ASU 2016-02 [Member] | Plan [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Right to use assets | 78,000,000 | 78,000,000 | ||||||||||||
Lease Liability | 82,600,000 | $ 82,600,000 | ||||||||||||
Year 2018 [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Percentage of increase in Medicare payment rates | 0.50% | |||||||||||||
Year 2019 [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Percentage of increase in Medicare payment rates | 0.25% | |||||||||||||
From 2019 through 2024 [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Percentage of bonus payment by APM | 5.00% | |||||||||||||
From 2020 through 2025 [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Percentage of increase in Medicare payment rates | 0.00% | |||||||||||||
Employee [Member] | ||||||||||||||
Deferred Compensation Arrangements [Abstract] | ||||||||||||||
Period in which restrictions lapse on stock granted | 4 years | |||||||||||||
Director [Member] | ||||||||||||||
Deferred Compensation Arrangements [Abstract] | ||||||||||||||
Period in which restrictions lapse on stock granted | 1 year | |||||||||||||
Officer [Member] | ||||||||||||||
Deferred Compensation Arrangements [Abstract] | ||||||||||||||
Period in which restrictions lapse on stock granted | 4 years | |||||||||||||
Minimum [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Mandatorily redeemable non-controlling interest, redemption rights, commencement period | 3 years | |||||||||||||
Redeemable non-controlling interest, redemption rights, commencement period | 3 years | |||||||||||||
Minimum [Member] | Furniture & Equipment [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Estimated useful lives | 3 years | |||||||||||||
Minimum [Member] | Software [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Estimated useful lives | 3 years | |||||||||||||
Minimum [Member] | Leasehold Improvements [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Estimated useful lives | 3 years | |||||||||||||
Maximum [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Mandatorily redeemable non-controlling interest, redemption rights, commencement period | 5 years | |||||||||||||
Redeemable non-controlling interest, redemption rights, commencement period | 5 years | |||||||||||||
Maximum [Member] | Year 2017 [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Annual limit on physical therapy and speech language pathology services | $ 1,980 | |||||||||||||
Annual limit occupational therapy services | $ 1,980 | |||||||||||||
Maximum [Member] | Furniture & Equipment [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Estimated useful lives | 8 years | |||||||||||||
Maximum [Member] | Software [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Estimated useful lives | 7 years | |||||||||||||
Maximum [Member] | Leasehold Improvements [Member] | ||||||||||||||
Basis of Presentation [Abstract] | ||||||||||||||
Estimated useful lives | 5 years | |||||||||||||
Patient Revenues [Member] | ||||||||||||||
Revenue Recognition [Abstract] | ||||||||||||||
Revenue related to the various categories | $ 107,808,000 | $ 103,354,000 | $ 105,989,000 | $ 100,552,000 | $ 101,642,000 | $ 96,273,000 | $ 97,657,000 | $ 93,654,000 | $ 417,703,000 | 389,226,000 | 348,839,000 | |||
Management Contract Revenues [Member] | ||||||||||||||
Revenue Recognition [Abstract] | ||||||||||||||
Revenue related to the various categories | 8,339,000 | 6,275,000 | 5,535,000 | |||||||||||
Industrial Injury Prevention Services Revenues [Member] | ||||||||||||||
Revenue Recognition [Abstract] | ||||||||||||||
Revenue related to the various categories | 25,466,000 | 14,908,000 | 0 | |||||||||||
Other Revenues [Member] | ||||||||||||||
Revenue Recognition [Abstract] | ||||||||||||||
Revenue related to the various categories | $ 2,403,000 | $ 3,642,000 | $ 2,172,000 |
Acquisitions of Businesses (Det
Acquisitions of Businesses (Details) | Aug. 31, 2018USD ($)Installment | Apr. 30, 2018Business | Oct. 31, 2017USD ($)Installment | Jun. 30, 2017USD ($)Installment | May 31, 2017USD ($)Installment | Mar. 23, 2017USD ($) | Jan. 01, 2017USD ($)Installment | Nov. 30, 2016USD ($)Installment | Feb. 29, 2016USD ($)Installment | Dec. 31, 2018USD ($)ClinicOperation | Dec. 31, 2017USD ($)ClinicContract | Dec. 31, 2016USD ($)ClinicSubsidiary |
Business Combination, Description [Abstract] | ||||||||||||
Percentage of interest acquired | 35.00% | |||||||||||
Number of clinics | Clinic | 5 | 2 | 2 | |||||||||
Number of acquired operations combined | Operation | 2 | |||||||||||
Number of management contracts | Contract | 2 | |||||||||||
Number of clinics consolidated with an existing clinic | Clinic | 1 | |||||||||||
Number of clinics that operate as a satellite clinic with existing partnerships | Clinic | 1 | |||||||||||
Cash paid, net of cash acquired | $ 16,367,000 | $ 36,682,000 | $ 23,623,000 | |||||||||
Seller notes | 950,000 | 2,150,000 | 1,000,000 | |||||||||
Total consideration | 17,317,000 | 38,832,000 | 24,623,000 | |||||||||
Estimated fair value of net tangible assets acquired: [Abstract] | ||||||||||||
Total current assets | 1,691,000 | 5,853,000 | 1,372,000 | |||||||||
Total non-current assets | 42,000 | 1,527,000 | 839,000 | |||||||||
Total liabilities | (486,000) | (2,865,000) | (399,000) | |||||||||
Net tangible assets acquired | 1,247,000 | 4,515,000 | 1,812,000 | |||||||||
Referral relationships | 1,879,000 | 4,250,000 | 4,919,000 | |||||||||
Non-compete | 386,000 | 660,000 | 847,000 | |||||||||
Tradename | 2,172,000 | 6,850,000 | 3,802,000 | |||||||||
Goodwill | 19,778,000 | 46,722,000 | 32,123,000 | |||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interests) | (8,145,000) | (13,883,000) | ||||||||||
Fair value of non-controlling interest (originally classified as mandatorily redeemable non-controlling interests) | (10,282,000) | (18,880,000) | ||||||||||
Total consideration | $ 17,317,000 | $ 38,832,000 | $ 24,623,000 | |||||||||
Minimum [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Percentage of interest acquired | 5.50% | 2.00% | ||||||||||
Maximum [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Percentage of interest acquired | 35.00% | 35.00% | ||||||||||
Referral Relationships [Member] | Minimum [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Estimated useful lives of acquired intangibles | 10 years 1 month 6 days | 10 years 1 month 6 days | ||||||||||
Referral Relationships [Member] | Maximum [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Estimated useful lives of acquired intangibles | 10 years 6 months 14 days | 10 years 6 months 14 days | ||||||||||
Non-compete Agreements [Member] | Minimum [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Estimated useful lives of acquired intangibles | 5 years 1 month 28 days | 5 years 1 month 28 days | ||||||||||
Non-compete Agreements [Member] | Maximum [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Estimated useful lives of acquired intangibles | 6 years | 6 years | ||||||||||
Tradenames [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Estimated useful lives of acquired intangibles | 6 years | |||||||||||
February 2017 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 194,000 | |||||||||||
February 2018 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 194,000 | |||||||||||
Industrial Injury Prevention [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Percentage of interest acquired | 65.00% | 55.00% | ||||||||||
Cash paid for acquisition of interest in clinic | $ 6,200,000 | |||||||||||
Number of businesses merged | Business | 2 | |||||||||||
Percentage of combined business interest owned | 59.45% | |||||||||||
Seller notes | $ 400,000 | |||||||||||
August 2018 Acquisition [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition date | Aug. 31, 2018 | |||||||||||
Percentage of interest acquired | 70.00% | |||||||||||
Number of clinics | Clinic | 4 | |||||||||||
Cash paid for acquisition of interest in clinic | $ 7,200,000 | |||||||||||
Business acquisition number of installments to payment of purchase consideration | Installment | 2 | |||||||||||
Seller notes | $ 400,000 | |||||||||||
August 2018 Acquisition [Member] | August 2019 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 200,000 | |||||||||||
August 2018 Acquisition [Member] | August 2020 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 200,000 | |||||||||||
January 2017 Acquisition [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition date | Jan. 1, 2017 | |||||||||||
Percentage of interest acquired | 70.00% | |||||||||||
Number of clinics | Clinic | 17 | |||||||||||
Cash paid for acquisition of interest in clinic | $ 10,700,000 | |||||||||||
Business acquisition number of installments to payment of purchase consideration | Installment | 2 | |||||||||||
Seller notes | $ 500,000 | |||||||||||
January 2017 Acquisition [Member] | January 2018 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250,000 | |||||||||||
January 2017 Acquisition [Member] | January 2019 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250,000 | |||||||||||
May 2017 Acquisition [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition date | May 31, 2017 | |||||||||||
Percentage of interest acquired | 70.00% | |||||||||||
Number of clinics | Clinic | 4 | |||||||||||
Cash paid for acquisition of interest in clinic | $ 2,300,000 | |||||||||||
Business acquisition number of installments to payment of purchase consideration | Installment | 2 | |||||||||||
Seller notes | $ 250,000 | |||||||||||
May 2017 Acquisition [Member] | May 2018 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 125,000 | |||||||||||
May 2017 Acquisition [Member] | May 2019 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 125,000 | |||||||||||
June 2017 Acquisition [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition date | Jun. 30, 2017 | |||||||||||
Percentage of interest acquired | 60.00% | |||||||||||
Number of clinics | Clinic | 9 | |||||||||||
Cash paid for acquisition of interest in clinic | $ 15,800,000 | |||||||||||
Business acquisition number of installments to payment of purchase consideration | Installment | 2 | |||||||||||
Seller notes | $ 500,000 | |||||||||||
June 2017 Acquisition [Member] | June 2018 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 250,000 | |||||||||||
June 2017 Acquisition [Member] | June 2019 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250,000 | |||||||||||
October 2017 Acquisition [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition date | Oct. 31, 2017 | |||||||||||
Percentage of interest acquired | 70.00% | |||||||||||
Number of clinics | Clinic | 9 | |||||||||||
Cash paid for acquisition of interest in clinic | $ 4,000,000 | |||||||||||
Business acquisition number of installments to payment of purchase consideration | Installment | 2 | |||||||||||
Seller notes | $ 500,000 | |||||||||||
October 2017 Acquisition [Member] | October 2018 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 250,000 | |||||||||||
October 2017 Acquisition [Member] | October 2019 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250,000 | |||||||||||
February 2016 Acquisition [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition date | Feb. 29, 2016 | |||||||||||
Percentage of interest acquired | 55.00% | |||||||||||
Number of clinics | Clinic | 8 | |||||||||||
Cash paid for acquisition of interest in clinic | $ 13,200,000 | |||||||||||
Business acquisition number of installments to payment of purchase consideration | Installment | 2 | |||||||||||
Seller notes | $ 500,000 | |||||||||||
February 2016 Acquisition [Member] | February 2017 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 250,000 | |||||||||||
February 2016 Acquisition [Member] | February 2018 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250,000 | |||||||||||
November 2016 Acquisition [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition date | Nov. 30, 2016 | |||||||||||
Percentage of interest acquired | 60.00% | |||||||||||
Number of clinics | Clinic | 12 | |||||||||||
Cash paid for acquisition of interest in clinic | $ 11,000,000 | |||||||||||
Business acquisition number of installments to payment of purchase consideration | Installment | 2 | |||||||||||
Seller notes | $ 500,000 | |||||||||||
November 2016 Acquisition [Member] | November 2017 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 250,000 | |||||||||||
November 2016 Acquisition [Member] | November 2018 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250,000 | |||||||||||
Acquisition of Single Clinic Practice [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Aggregate purchase price for the acquired clinic practices | $ 75,000 | |||||||||||
Number of subsidiaries acquired clinic practices | Subsidiary | 2 | |||||||||||
Acquisition of Five Clinic Practices [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Number of clinics | Clinic | 5 | |||||||||||
Cash paid for acquisition of interest in clinic | $ 1,000,000 | |||||||||||
Aggregate purchase price for the acquired clinic practices | 850,000 | |||||||||||
Seller notes | $ 150,000,000,000 | |||||||||||
Acquisition of Five Clinic Practices [Member] | August 2019 [Member] | ||||||||||||
Business Combination, Description [Abstract] | ||||||||||||
Percentage of interest accrued | 4.50% |
Acquisitions and Sale of Non-_2
Acquisitions and Sale of Non-Controlling Interests (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)Partnership | Dec. 31, 2017USD ($)Partnership | Dec. 31, 2016USD ($)InstallmentPartnership | |
Business Combination, Description [Abstract] | |||
Number of partnership in which interest acquired | Partnership | 3 | 2 | 6 |
Number of partnership in which interest sold | Partnership | 1 | ||
Purchase price for additional non controlling interest | $ 13,000 | $ 900,000 | |
Seller notes | $ 400,000 | ||
Number of installments | Installment | 2 | ||
Book value of purchase price | $ 138,000 | $ 112,000 | |
Remaining purchase price | 1,200,000 | ||
Future tax benefits | $ 500,000 | ||
Sale of non-controlling interest percentage in partnership one | 2.00% | 4.00% | |
Sale of additional non-controlling interest percentage in partnership two | 35.00% | ||
Cash proceeds from sale of non-controlling interest | $ 138,000 | ||
Amount of notes receivable from sale of non-controlling interest | 148,000 | ||
Total sale price | 286,000 | ||
Tax effect on sale price | $ 224,000 | $ 56,000 | 110,000 |
Percentage of interest acquired | 35.00% | ||
February 2017 [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition cost payable in two principal installments including accrued interest | 194,000 | ||
February 2018 [Member] | |||
Business Combination, Description [Abstract] | |||
Acquisition cost payable in two principal installments including accrued interest | $ 194,000 | ||
Minimum [Member] | |||
Business Combination, Description [Abstract] | |||
Percentage of interest acquired | 5.50% | 2.00% | |
Maximum [Member] | |||
Business Combination, Description [Abstract] | |||
Percentage of interest acquired | 35.00% | 35.00% |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in Carrying Amount (Fair Value) of Redeemable Non-Controlling Interests [Roll Forward] | |||||
Beginning balance | $ 102,572 | ||||
Operating results allocated to redeemable non-controlling interest partners | 8,433 | $ 244 | $ 0 | ||
Ending balance | 133,943 | 102,572 | |||
Carrying Amount (Fair Value) of Redeemable Non-Controlling Interest [Abstract] | |||||
Contractual time period has lapsed but holder's employment has not been terminated | $ 0 | $ 327 | |||
Contractual time period has not lapsed and holder's employment has not been terminated | 0 | 0 | |||
Holder's employment has terminated and contractual time period has expired | 0 | 0 | |||
Holder's employment has terminated and contractual time period has not expired | 0 | 0 | |||
Redeemable non-controlling interests | 133,943 | 102,572 | 133,943 | 102,572 | |
Redeemable Non-Controlling Interest [Member] | |||||
Changes in Carrying Amount (Fair Value) of Redeemable Non-Controlling Interests [Roll Forward] | |||||
Beginning balance | 102,572 | 0 | |||
Operating results allocated to redeemable non-controlling interest partners | 8,433 | 244 | |||
Distributions to redeemable non-controlling interest partners | (9,835) | (272) | |||
Changes in the fair value of redeemable non-controlling interest | 24,770 | 201 | |||
Purchases of businesses - initial equity related to redeemable non-controlling interest | 8,145 | 13,883 | |||
Fair value of redeemable non-controlling interest - amended partnership agreements | 0 | 88,516 | |||
Other | (142) | 0 | |||
Ending balance | 133,943 | 102,572 | 0 | ||
Carrying Amount (Fair Value) of Redeemable Non-Controlling Interest [Abstract] | |||||
Contractual time period has lapsed but holder's employment has not been terminated | 42,624 | 31,821 | |||
Contractual time period has not lapsed and holder's employment has not been terminated | 91,319 | 70,751 | |||
Holder's employment has terminated and contractual time period has expired | 0 | 0 | |||
Holder's employment has terminated and contractual time period has not expired | 0 | 0 | |||
Redeemable non-controlling interests | $ 102,572 | $ 102,572 | $ 0 | $ 133,943 | $ 102,572 |
Therapy Practice [Member] | Minimum [Member] | |||||
Business Combination, Description [Abstract] | |||||
Business acquisition, percentage of limited partnership acquired | 50.00% | ||||
Therapy Practice [Member] | Maximum [Member] | |||||
Business Combination, Description [Abstract] | |||||
Business acquisition, percentage of limited partnership acquired | 90.00% | ||||
Therapy Practice [Member] | NewCo. [Member] | |||||
Business Combination, Description [Abstract] | |||||
Percentage of equity interest of subsidiary contributed for acquisition | 100.00% | ||||
Business acquisition, percentage of general partnership interest acquired | 100.00% | ||||
Business acquisition, consideration payable, term of note | 2 years | ||||
Employment agreement renewal term | 1 year | ||||
Non-Compete agreement term under condition of termination of employment of employed selling shareholder | 2 years | ||||
Therapy Practice [Member] | NewCo. [Member] | Minimum [Member] | |||||
Business Combination, Description [Abstract] | |||||
Employment agreement term | 3 years | ||||
Non-Compete agreement term regardless of whether the selling shareholder is employed | 5 years | ||||
Therapy Practice [Member] | NewCo. [Member] | Maximum [Member] | |||||
Business Combination, Description [Abstract] | |||||
Employment agreement term | 5 years | ||||
Non-Compete agreement term regardless of whether the selling shareholder is employed | 6 years |
Mandatorily Redeemable Non-Co_3
Mandatorily Redeemable Non-Controlling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Carrying Amount of Redeemable Non-Controlling Interest [Abstract] | ||
Contractual time period has lapsed but holder's employment has not been terminated | $ 0 | $ 327 |
Contractual time period has not lapsed and holder's employment has not been terminated | 0 | 0 |
Holder's employment has terminated and contractual time period has expired | 0 | 0 |
Holder's employment has terminated and contractual time period has not expired | 0 | 0 |
Redemption value prior to excess distributed earnings | 0 | 327 |
Excess distributions over earnings and losses | 0 | 0 |
Redeemable non-controlling interests | $ 0 | $ 327 |
Therapy Practice [Member] | NewCo. [Member] | Minimum [Member] | ||
Business Combination, Description [Abstract] | ||
Required redemption term, under condition of termination of employment of employed selling shareholders | 3 years | |
Therapy Practice [Member] | NewCo. [Member] | Maximum [Member] | ||
Business Combination, Description [Abstract] | ||
Required redemption term, under condition of termination of employment of employed selling shareholders | 5 years |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 271,338 | $ 226,806 |
Goodwill acquired during the year | 19,778 | 44,292 |
Goodwill adjustments for purchase price allocation of businesses acquired in prior year | 2,409 | 706 |
Goodwill written-off - closed clinic | 0 | (466) |
Ending balance | $ 293,525 | $ 271,338 |
Intangible Assets, net (Details
Intangible Assets, net (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2016Operation | Dec. 31, 2017USD ($) | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Total | $ 48,828 | $ 48,954 | |
Number of acquired operations | Operation | 2 | ||
Tradenames [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Total | 30,256 | 29,673 | |
Referral Relationships [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Total | 16,895 | 16,811 | |
Accumulated amortization | $ 9,370 | 7,209 | |
Referral Relationships [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Estimated useful life | 6 years | ||
Referral Relationships [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Estimated useful life | 16 years | ||
Non-compete Agreements [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Total | $ 1,677 | 2,470 | |
Accumulated amortization | $ 4,716 | $ 4,100 | |
Non-compete Agreements [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Estimated useful life | 5 years | ||
Non-compete Agreements [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Estimated useful life | 6 years |
Intangible Assets, net - Amorti
Intangible Assets, net - Amortization Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amortization of Deferred Charges [Abstract] | |||
Total amortization expenses | $ 2,777 | $ 2,654 | $ 2,367 |
Tradenames [Member] | |||
Amortization of Deferred Charges [Abstract] | |||
Total amortization expenses | 0 | 0 | 330 |
Referral Relationships [Member] | |||
Amortization of Deferred Charges [Abstract] | |||
Total amortization expenses | 2,161 | 1,934 | 1,512 |
Non-compete Agreements [Member] | |||
Amortization of Deferred Charges [Abstract] | |||
Total amortization expenses | $ 616 | $ 720 | $ 525 |
Intangible Assets, net - Amor_2
Intangible Assets, net - Amortization of Referral Relationships and Non-Competition Agreements (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Referral Relationships [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity [Abstract] | |
2019 | $ 2,133 |
2020 | 2,133 |
2021 | 2,133 |
2022 | 2,084 |
2023 | 1,977 |
2024 | 1,791 |
Thereafter | 4,644 |
Non-compete Agreements [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity [Abstract] | |
2019 | 632 |
2020 | 418 |
2021 | 340 |
2022 | 163 |
2023 | 94 |
2024 | $ 30 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Salaries and related costs | $ 21,726 | $ 16,828 |
Credit balances due to patients and payors | 7,293 | 4,158 |
Group health insurance claims | 3,124 | 2,929 |
Income taxes payable | 0 | 2,833 |
Other | 6,350 | 6,594 |
Total | $ 38,493 | $ 33,342 |
Notes Payable - Summary of Note
Notes Payable - Summary of Notes Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instruments [Abstract] | ||
Payments/Long term debt, Total | $ 39,836 | $ 60,772 |
Less current portion | (1,434) | (4,044) |
Long term portion | 38,402 | 56,728 |
Credit Facility [Member] | ||
Debt Instruments [Abstract] | ||
Payments/Long term debt, Total | $ 38,000 | 54,000 |
Average effective interest rate | 4.10% | |
3.25% through 5.0% Notes Payable due in Next Year [Member] | ||
Debt Instruments [Abstract] | ||
Payments/Long term debt, Total | $ 1,836 | $ 6,772 |
Annual installments | $ 1,434 | |
3.25% through 5.0% Notes Payable due in Next Year [Member] | Maximum [Member] | ||
Debt Instruments [Abstract] | ||
Percentage of interest accrued | 5.00% | |
3.25% through 5.0% Notes Payable due in Next Year [Member] | Minimum [Member] | ||
Debt Instruments [Abstract] | ||
Percentage of interest accrued | 3.25% |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Nov. 30, 2017 | Mar. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 05, 2013 | |
Debt Instruments [Abstract] | |||||||
Aggregate principal payment due in 2019 | $ 1,434,000 | ||||||
Aggregate principal payment due in 2020 | 402,000 | ||||||
Gain on derecognition of debt | 1,846,000 | $ 0 | $ 0 | ||||
Derecognition of debt, net after tax | $ 1,400,000 | ||||||
Derecognition of debt, net after tax (in dollars per share) | $ 0.11 | ||||||
Notes Payable [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Aggregate amount of notes payable | $ 1,000,000 | ||||||
Aggregate principal payment due in 2019 | 600,000 | ||||||
Aggregate principal payment due in 2020 | $ 400,000 | ||||||
Minimum [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Spread on Libor variable rate | 1.25% | ||||||
Spread on variable rate | 0.10% | ||||||
Percentage of unused commitment fee | 0.25% | ||||||
Minimum [Member] | Notes Payable [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Average effective interest rate | 4.50% | ||||||
Maximum [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Spread on Libor variable rate | 2.00% | ||||||
Spread on variable rate | 1.00% | ||||||
Percentage of unused commitment fee | 0.30% | ||||||
Maximum [Member] | Notes Payable [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Average effective interest rate | 5.00% | ||||||
Credit Facility [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Revolving credit facility commitment | $ 125,000,000 | ||||||
Revolving credit facility maturity date | Nov. 30, 2021 | ||||||
Remaining revolving credit outstanding | $ 87,000,000 | ||||||
Average effective interest rate | 4.10% | ||||||
Credit Agreement [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Cash and noncash consideration with respect to acquisition after amendment | $ 50,000,000 | ||||||
Credit Agreement [Member] | Maximum [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Cash dividends after amendment | $ 20,000,000 | $ 15,000,000 | $ 10,000,000 |
Notes Payable - Summary of Aggr
Notes Payable - Summary of Aggregate Annual Payments of Principal Required to Revolving Credit Facility (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Long Term Debt By Maturity [Abstract] | ||
During the twelve months ended December 31, 2019 | $ 1,434 | |
During the twelve months ended December 31, 2020 | 402 | |
During the twelve months ended December 31, 2021 | 38,000 | |
During the twelve months ended December 31, 2022 | 0 | |
Payments/Long term debt, Total | $ 39,836 | $ 60,772 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities Included in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets [Abstract] | ||
Compensation | $ 1,842 | $ 1,529 |
Allowance for doubtful accounts | 600 | 478 |
Lease obligations - closed clinics | 34 | 54 |
Deferred tax assets | 2,476 | 2,061 |
Deferred tax liabilities [Abstract] | ||
Depreciation and amortization | (11,309) | (12,590) |
Other | (179) | (346) |
Deferred tax liabilities | (11,488) | (12,936) |
Net deferred tax liability | $ (9,012) | $ (10,875) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Examination [Abstract] | |||
Deferred tax assets, related to revaluation and acquisition of redeemable non-controlling interests | $ 6,600 | ||
Estimated reduction in deferred tax liabilities | $ (4,300) | ||
Income tax payable | 0 | 2,833 | |
Adjustment to deferred tax assets | 100 | ||
Decrease in net deferred tax liability related to acquisitions of non-controlling interests | (1,200) | ||
Charge to current year provision for income taxes | 300 | ||
Offset to adjustment, reduction in the previously reported tax receivable | 1,700 | ||
Reduction of the income tax provision | 500 | ||
Increase (decrease) in state income tax provision | (500) | 312 | $ 34 |
Accrued interest and penalties associated with any unrecognized tax benefits | 0 | 0 | 0 |
Interest expense recognized | 0 | 0 | $ 0 |
Federal [Member] | |||
Income Tax Examination [Abstract] | |||
Income tax payable | 2,800 | ||
Offset to adjustment, reduction in the previously reported tax payable | 1,200 | ||
Tax receivable included in other current assets | $ 900 | ||
Periods open for examination | 2015 2016 2017 | ||
State [Member] | |||
Income Tax Examination [Abstract] | |||
Offset to adjustment, reduction in the previously reported tax receivable | $ 800 | ||
Tax receivable included in other current assets | $ 1,300 | $ 2,200 | |
Periods open for examination | 2014 2015 2016 2017 |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Differences Between Federal Tax Rate and Company's Effective Tax Rate for Results of Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||
U.S. tax at statutory rate | $ 9,710 | $ 9,900 | $ 11,351 |
Tax legislation adjustment | 0 | (4,325) | 0 |
State income taxes, net of federal benefit and tax reform | 1,722 | 1,060 | 945 |
Excess equity compensation deduction | (806) | (1,139) | (911) |
Non-deductible expenses | 743 | 560 | 495 |
Other | 0 | (24) | 0 |
Total income tax provision | $ 11,369 | $ 6,032 | $ 11,880 |
U.S. tax at statutory rate | 21.00% | 35.00% | 35.00% |
Tax legislation adjustment | 0.00% | (15.30%) | 0.00% |
State income taxes, net of federal benefit and tax reform | 3.70% | 3.70% | 2.90% |
Excess equity compensation deduction | (1.70%) | (4.00%) | (2.80%) |
Nondeductible expenses | 1.60% | 2.00% | 1.50% |
Other | 0.00% | (0.10%) | 0.00% |
Total | 24.60% | 21.30% | 36.60% |
Income Taxes - Schedule of Sign
Income Taxes - Schedule of Significant Components of Provision for Income Taxes for Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current [Abstract] | |||
Federal | $ 5,357 | $ 9,332 | $ 7,620 |
State | 1,199 | 1,564 | 1,281 |
Total current | 6,556 | 10,896 | 8,901 |
Deferred [Abstract] | |||
Federal | 3,771 | (5,233) | 2,548 |
State | 1,042 | 369 | 431 |
Total deferred | 4,813 | (4,864) | 2,979 |
Total income tax provision | $ 11,369 | $ 6,032 | $ 11,880 |
Equity Based Plans (Details)
Equity Based Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 17, 2016 | Mar. 16, 2016 | |
Share-based Compensation [Abstract] | |||||
Number of shares authorized (in shares) | 2,700,000 | ||||
Number of common shares available for grant (in shares) | 399,584 | ||||
Shares outstanding for which restrictions had not lapsed (in shares) | 152,926 | ||||
Restricted Stock [Member] | |||||
Share-based Compensation [Abstract] | |||||
Compensation expense | $ 5,939 | $ 5,032 | $ 4,962 | ||
Compensation not yet recognized | $ 9,000 | ||||
Amended 2003 Plan [Member] | |||||
Share-based Compensation [Abstract] | |||||
Number of shares authorized (in shares) | 2,100,000 | 2,100,000 | 1,750,000 | ||
Number of common shares available for grant (in shares) | 391,809 | ||||
Employees [Member] | |||||
Share-based Compensation [Abstract] | |||||
Restricted period on the stock granted | 4 years | ||||
Executive Officer [Member] | |||||
Share-based Compensation [Abstract] | |||||
Restricted period on the stock granted | 4 years | ||||
Maximum [Member] | |||||
Share-based Compensation [Abstract] | |||||
Restrictions will lapse in | 2022 | ||||
Maximum [Member] | Non Qualified Stock Options [Member] | |||||
Share-based Compensation [Abstract] | |||||
Number of shares authorized (in shares) | 600,000 | ||||
Maximum [Member] | Amended 2003 Plan [Member] | |||||
Share-based Compensation [Abstract] | |||||
Number of common shares available for grant (in shares) | 2,100,000 | ||||
Minimum [Member] | |||||
Share-based Compensation [Abstract] | |||||
Restrictions will lapse in | 2019 |
Equity Based Plans - Summary of
Equity Based Plans - Summary of Cumulative Summary of Equity Plans (Details) - shares | Dec. 31, 2018 | Mar. 17, 2016 | Mar. 16, 2016 |
Share-based Compensation [Abstract] | |||
Authorized (in shares) | 2,700,000 | ||
Restricted stock issued (in shares) | 1,346,293 | ||
Outstanding stock options (in shares) | 0 | ||
Stock options exercised (in shares) | 918,091 | ||
Stock options exercisable (in shares) | 0 | ||
Shares available for grant (in shares) | 399,584 | ||
Amended 1999 Plan [Member] | |||
Share-based Compensation [Abstract] | |||
Authorized (in shares) | 600,000 | ||
Restricted stock issued (in shares) | 416,402 | ||
Outstanding stock options (in shares) | 0 | ||
Stock options exercised (in shares) | 139,791 | ||
Stock options exercisable (in shares) | 0 | ||
Shares available for grant (in shares) | 7,775 | ||
Amended 2003 Plan [Member] | |||
Share-based Compensation [Abstract] | |||
Authorized (in shares) | 2,100,000 | 2,100,000 | 1,750,000 |
Restricted stock issued (in shares) | 929,891 | ||
Outstanding stock options (in shares) | 0 | ||
Stock options exercised (in shares) | 778,300 | ||
Stock options exercisable (in shares) | 0 | ||
Shares available for grant (in shares) | 391,809 |
Equity Based Plans - Summary _2
Equity Based Plans - Summary of Restricted Stock Granted to Directors, Officers and Employees Pursuant to Its Equity Plans (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |||
Number of shares (in shares) | 93,801 | 79,475 | 101,790 |
Weighted average fair value (in dollars per share) | $ 78.63 | $ 62.19 | $ 51.59 |
Equity Based Plans - Summary _3
Equity Based Plans - Summary of Restricted Stock Cancelled Due to Employee Terminations Prior to Restrictions Lapsing (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |||
Number of shares (in shares) | 3,867 | 2,875 | 4,965 |
Weighted average fair value (in dollars per share) | $ 59.51 | $ 63.12 | $ 35.78 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2009 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2008 | |
Class of Stock Disclosures [Abstract] | ||||
Common stock authorized by the Board of Directors (in shares) | 1,200,000 | 2,250,000 | ||
Total purchased shares (in shares) | 859,499 | 0 | 0 | |
Additional estimated shares (in shares) | 146,555 | |||
Closing price (in dollars per share) | $ 102.35 | |||
Maximum [Member] | ||||
Class of Stock Disclosures [Abstract] | ||||
Percentage of repurchase of common stock | 10.00% | |||
Bank credit agreement to permit share repurchases of common stock | $ 15,000,000 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan [Abstract] | |||
Required time period for employees for profit sharing plan | 3 months | ||
Maximum employer contribution as a percentage of employee contribution | 50.00% | ||
Contribution expense recognized | $ 0 | $ 0 | $ 0 |
Employer matching contribution amount | $ 1.8 | $ 1.5 | $ 1.1 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Officer | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Operating Leased Assets [Abstract] | |||
Rent expense | $ 37.1 | $ 34.8 | $ 30.3 |
Renewal period of employment agreements | 2 years | ||
Expiration date | Dec. 31, 2019 | ||
Future compensation - 2019 | $ 31.6 | ||
Future compensation - 2020 through 2022 | $ 7.4 | ||
Executive Officer [Member] | |||
Operating Leased Assets [Abstract] | |||
Number of officers with the company had employee agreement | Officer | 4 | ||
Minimum [Member] | |||
Operating Leased Assets [Abstract] | |||
Operating leases renewal period | 1 year | ||
Maximum [Member] | |||
Operating Leased Assets [Abstract] | |||
Operating leases renewal period | 5 years |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Operating Lease Commitments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies [Abstract] | |
2019 | $ 34,139 |
2020 | 27,475 |
2021 | 18,968 |
2022 | 11,592 |
2023 | 6,488 |
Thereafter | 3,892 |
Total | $ 102,554 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to USPh shareholders | $ 34,873 | $ 22,256 | $ 20,551 | ||||||||
Charges to additional paid-in capital, revaluation of redeemable non-controlling interests | (24,770) | (201) | 0 | ||||||||
Tax effect at statutory rate (federal and state) of 26.25% | 6,502 | 75 | 0 | ||||||||
Net income attributable to common shareholders | $ 16,605 | $ 22,130 | $ 20,551 | ||||||||
Basic and diluted net income per share attributable to USPH shareholders (in dollars per share) | $ 0.43 | $ 0.13 | $ 0.48 | $ 0.27 | $ 0.57 | $ 0.41 | $ 0.39 | $ 0.38 | $ 1.31 | $ 1.76 | $ 1.64 |
Shares used in computation [Abstract] | |||||||||||
Basic and diluted earnings per share - weighted-average shares (in shares) | 12,685 | 12,685 | 12,677 | 12,616 | 12,593 | 12,581 | 12,579 | 12,528 | 12,666 | 12,570 | 12,500 |
Federal and state statutory income tax rate | 26.25% |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net revenues | $ 117,349 | $ 113,122 | $ 115,098 | $ 108,342 | $ 109,203 | $ 103,032 | $ 104,251 | $ 97,565 | $ 453,911 | $ 414,051 | $ 356,546 |
Operating income | 14,804 | 15,433 | 17,026 | 13,051 | 13,962 | 12,888 | 15,678 | 12,200 | $ 60,314 | $ 54,728 | $ 49,533 |
Net income | 13,673 | 11,879 | 13,236 | 10,054 | 8,706 | 6,594 | 6,390 | 6,034 | |||
Net income attributable to USPH shareholders | $ 10,408 | $ 8,102 | $ 9,246 | $ 7,117 | $ 7,349 | $ 5,150 | $ 4,941 | $ 4,816 | |||
Basic and diluted earnings per share attributable to common shareholders (in dollars per share) | $ 0.43 | $ 0.13 | $ 0.48 | $ 0.27 | $ 0.57 | $ 0.41 | $ 0.39 | $ 0.38 | $ 1.31 | $ 1.76 | $ 1.64 |
Shares used in computation - basic and diluted (in shares) | 12,685 | 12,685 | 12,677 | 12,616 | 12,593 | 12,581 | 12,579 | 12,528 | 12,666 | 12,570 | 12,500 |
Net Patient Revenues [Member] | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||
Net revenues | $ 107,808 | $ 103,354 | $ 105,989 | $ 100,552 | $ 101,642 | $ 96,273 | $ 97,657 | $ 93,654 | $ 417,703 | $ 389,226 | $ 348,839 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | [1] | Dec. 31, 2017 | Dec. 31, 2016 | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Beginning Balance | $ 2,273 | $ 1,792 | $ 1,642 | |||
Additions Charged to Cost and Expenses | 4,603 | 3,672 | 3,906 | |||
Additions Charged to Other Accounts | 0 | 0 | 0 | |||
Deductions | [2] | 4,204 | 3,191 | 3,756 | ||
Ending Balance | $ 2,672 | $ 2,273 | [1] | $ 1,792 | ||
[1] | Related to patient accounts receivable and accounts receivable-other. | |||||
[2] | Uncollectible accounts written off, net of recoveries. |