Exhibit 99.1
U.S. Physical Therapy Announces Fourth Quarter and
Year 2003 Financial Results
HOUSTON--(BUSINESS WIRE)--March 4, 2004--U.S. Physical Therapy,
Inc. (NasdaqNM:USPH), a national operator of physical and occupational
therapy outpatient clinics, today reported results for the fourth
quarter and year-ended December 31, 2003.
On January 20 the Company announced that, based on preliminary
internal unaudited financial information, it expected to report $0.10
to $0.12 diluted earnings per share for the fourth quarter and $0.59
to $0.61 diluted earnings per share for the year 2003. Final figures
released today are consistent with those in the announcement.
Fourth Quarter 2003 vs. Fourth Quarter 2002
-- Net revenues rose 8.4 percent to $26.7 million, from $24.6
million, due to an 8 percent increase in patient visits to
280,000 from 259,000 combined with a 1 percent increase to
$93.34 in net patient revenues per visit.
-- Earnings were $0.12 per diluted share for the current quarter
as compared to $0.17 for the prior year period. Net income for
the quarter was $1.4 million versus $2.1 million.
-- Clinic operating costs increased to 73.5 percent of net
revenues compared to 69.4 percent as average visits per day
per clinic decreased to 18.7 from 20.7. A decline in average
daily visits for clinics established prior to 2002, plus the
start-up of 48 new clinics opened in 2003 (as compared to 40
opened in 2002), were the reasons for the increase in
operating cost percentage.
-- Corporate office cost as a percentage of net revenue rose to
13.6 percent compared to 12.2 percent. The increase for the
recent period was attributable to additional costs associated
with salaries, recruitment and relocation costs, severance and
increased accounting fees.
-- Same store visits for clinics opened longer than one year were
down approximately 1 percent. This was offset by a 1 percent
increase in the net rate per visit such that same store
revenues were comparable for the two periods.
Twelve Months Ended December 2003 vs. Twelve Months Ended December
2002
-- Net revenues rose 11.4 percent to $105.6 million, from $94.7
million, due to a 10.7 percent increase in patient visits to
1,112,000 and a 1 percent increase in net patient revenues per
visit to $92.84.
-- Earnings decreased to $0.61 per diluted share from $0.67 in
the prior year. Net income was $7.3 million as compared to
$8.5 million.
-- Clinic operating costs were 70.7 percent of net revenues for
2003 and 68.1 percent for the prior year. Average daily visits
per clinic for the two periods were 19.9 and 22.1,
respectively.
-- Corporate office costs for 2003 were 13.2 percent of net
revenues versus 12 percent in 2002.
-- Same store visits increased 6.7 percent while same store
revenue increased 7.6 percent.
Roy Spradlin, U.S. Physical Therapy's Chief Executive Officer,
stated, "In response to the market softness in patient visits
nationally, we are working with our clinic directors to strengthen
existing and develop new physician, workers' compensation and
industrial rehabilitation relationships in order to expand our
referral base and drive increased patient visits. On a
clinic-by-clinic basis we are evaluating our full and part-time
employee and contract labor staffing levels to ensure that costs are
in line with revenues. Other initiatives include those designed to
improve scheduling efficiencies and lower patient cancellation rates.
While we are encouraged by the improvement in recent weeks in
referrals and patient visits, it is too early to predict if that trend
will result in a return to historic clinic volume levels."
Larry McAfee, Chief Financial Officer, noted, "U.S. Physical
Therapy's cash flow remains strong. Even after internally funding the
opening of a record 48 new clinics in 2003, U.S. Physical Therapy's
cash and short-term investments balance grew from $7.6 million at the
beginning of the year to $16.8 million as of year-end. Cash and
investments, net of debt, exceed $14 million. Return on average equity
was 19.4% for the year."
U.S. Physical Therapy's management will host a conference call at
9:30 am Eastern Time, 8:30 am Central Time on Thursday, March 4 to
discuss the Company's fourth quarter and year 2003 results. Interested
parties may participate in the call by dialing 888-694-4676 or
973-935-8511 approximately 10 minutes before the call is scheduled to
begin. To listen to the live call via web-cast, go to the Company's
website at www.usph.com at least 15 minutes early to register,
download and install any necessary audio software. The conference call
will also be archived and can be accessed for approximately 90 days
after at this website.
This press release contains forward-looking statements (often
using words such as "believes," "expects," "intends," "plans,"
"appear," "should" and similar words), which involve numerous risks
and uncertainties. Included among such statements are those relating
to opening of new clinics, availability of personnel and reimbursement
environment. The forward-looking statements are based on the Company's
current views and assumptions and the Company's actual results could
differ materially from those anticipated in such forward-looking
statements as a result of certain risks, uncertainties, and factors,
which include, but are not limited to:
-- general economic, business, and regulatory conditions;
-- competition;
-- payor and reimbursement factors;
-- federal and state regulations;
-- availability, terms, and use of capital;
-- availability of skilled physical and occupational therapists;
and
-- weather.
Given these uncertainties, you should not place undue reliance on
our forward-looking statements. Please see our other periodic reports
filed with the Securities and Exchange Commission for more information
on these factors. Management undertakes no obligation to update any
forward-looking statement, whether as the result of actual results,
changes in assumptions, new information, future events, or otherwise.
About U.S. Physical Therapy, Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 242
outpatient physical and occupational therapy clinics in 35 states and
manages five physical therapy facilities for third parties. The
Company's clinics provide post-operative care for a variety of
orthopedic-related disorders and sports-related injuries, treatment
for neurologically-related injuries, rehabilitation of injured workers
and preventative care. Named for three consecutive years in Forbes
Magazine's Best 200 Small Companies List, U.S. Physical Therapy is
included on the Russell 2000 and Russell 3000 Indexes.
More information is available at www.usph.com.
The forward-looking statements in this news release relating to
management's expectations and beliefs are based on preliminary
information and management assumptions. Such forward-looking
statements are subject to a wide range of risks and uncertainties that
could cause results to differ in material respects, including those
relating to revenue and earnings expectations, acquisitions,
reimbursement rates and coverage, state and national regulatory
compliance, the Company's maintenance of above-average quality of its
services and products and competitive pressures. Further information
regarding factors that could affect the Company's results is included
in the Company's filings with the Securities and Exchange Commission.
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months
Ended Year Ended
December 31, December 31,
---------------- -----------------
2003 2002 2003 2002
---------------- -----------------
(unaudited)
Net patient revenues $26,136 $24,026 $103,225 $92,343
Management contract revenues 563 574 2,210 2,284
Other revenues 6 27 133 112
---------------- -----------------
Net revenues 26,705 24,627 105,568 94,739
Clinic operating costs:
Salaries and related costs 13,749 11,868 52,406 44,856
Rent, clinic supplies and other 5,664 4,860 21,266 18,006
Provision for doubtful accounts 221 354 932 1,669
---------------- -----------------
19,634 17,082 74,604 64,531
Corporate office costs 3,639 2,996 13,967 11,334
---------------- -----------------
Operating income before
non-operating expenses 3,432 4,549 16,997 18,874
Interest expense 48 47 189 214
Minority interests in subsidiary
limited partnerships 1,106 1,201 5,025 4,936
---------------- -----------------
Income before income taxes 2,278 3,301 11,783 13,724
Provision for income taxes 848 1,243 4,452 5,236
---------------- -----------------
Net income $1,430 $2,058 $7,331 $8,488
================ =================
Basic earnings per common share
(Note 1) $0.13 $0.19 $0.66 $0.77
================ =================
Diluted earnings per common share
(Note 1) $0.12 $0.17 $0.61 $0.67
================ =================
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Note 1: The following table sets forth the computation of basic and
diluted earnings per share:
Three Months
Ended Year Ended
December 31, December 31,
-------------- --------------
2003 2002 2003 2002
-------------- --------------
(unaudited)
Numerator:
Net income $1,430 $2,058 $7,331 $8,488
-------------- --------------
Numerator for basic earnings per share 1,430 2,058 7,331 8,488
Effect of dilutive securities:
Interest on convertible subordinated
notes payable 31 31 123 140
-------------- --------------
Numerator for diluted earnings per
share --- income available to common
stockholders after assumed
conversions $1,461 $2,089 $7,454 $8,628
============== ==============
Denominator:
Denominator for basic earnings per
share --- weighted-average shares 11,245 10,930 11,051 10,975
Effect of dilutive securities:
Stock options 394 903 476 1,226
Convertible subordinated notes payable 700 700 700 734
-------------- --------------
Dilutive potential common shares 1,094 1,603 1,176 1,960
-------------- --------------
Denominator for diluted earnings per
share --- adjusted weighted-average
shares and assumed conversions 12,339 12,533 12,227 12,935
============== ==============
Basic earnings per common share $0.13 $0.19 $0.66 $0.77
============== ==============
Diluted earnings per common share $0.12 $0.17 $0.61 $0.67
============== ==============
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31,
-----------------
2003 2002
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $16,822 $7,610
Patient accounts receivable, less allowance for
doubtful accounts of $3,456 and $4,327,
respectively 14,135 13,235
Accounts receivable -- other 266 443
Other current assets 1,802 1,307
-------- --------
Total current assets 33,025 22,595
Fixed assets:
Furniture and equipment 20,598 17,796
Leasehold improvements 10,760 9,310
-------- --------
31,358 27,106
Less accumulated depreciation and amortization 19,550 16,693
-------- --------
11,808 10,413
Goodwill, net of amortization of $335 5,685 5,590
Other assets, net of amortization of $432 and $505,
respectively 1,955 2,435
-------- --------
$52,473 $41,033
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable -- trade $498 $624
Accrued expenses 2,549 2,188
Estimated third-party payor (Medicare) settlements - 33
Notes payable 39 4
Convertible subordinated notes payable 2,333 -
-------- --------
Total current liabilities 5,419 2,849
Notes payable -- long-term portion 83 17
Other long-term liabilities 346 273
Convertible subordinated notes payable - 2,333
-------- --------
Total liabilities 5,848 5,472
Minority interests in subsidiary limited partnerships 3,278 3,024
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value, 500,000 shares
authorized, no shares issued and outstanding - -
Common stock, $.01 par value, 20,000,000 shares
authorized, 12,242,577 and 11,818,711 shares
issued at December 31, 2003 and 2002, respectively 122 118
Additional paid-in capital 26,808 23,313
Retained earnings 28,939 21,608
Treasury stock at cost, 947,100 and 945,300 shares
held at December 31, 2003 and 2002, respectively (12,522) (12,502)
-------- --------
Total shareholders' equity 43,347 32,537
-------- --------
$52,473 $41,033
======== ========
Note 2: Certain prior period amounts have been reclassified for
comparison purposes.
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months
Ended Year Ended
December 31, December 31,
---------------- ----------------
2003 2002 2003 2002
------- -------- ------- --------
Operating activities
Net income $1,430 $2,058 $7,331 $8,488
Depreciation and amortization 955 810 3,591 2,955
Minority interest in earnings 1,106 1,201 5,025 4,936
Provision for doubtful accounts 221 354 932 1,669
Tax benefit from exercise of
options 913 259 2,037 4,228
Deferred income taxes (149) (544) (602) (319)
Other 50 - 14 -
Changes in working capital (445) (112) (796) (2,433)
------- -------- ------- --------
Net cash provided by operating
activities 4,081 4,026 17,532 19,524
Investing activities
Purchase of fixed assets (1,198) (1,698) (5,133) (5,565)
Purchase of intangibles - (9) (31) (1,071)
Other 7 1 136 2
------- -------- ------- --------
Net cash used in investing
activities (1,191) (1,706) (5,028) (6,634)
Financing activities
Payment of notes payable (35) (4) (38) (701)
Repurchase of common stock - (2,691) (20) (10,512)
Proceeds from exercise of stock
options 326 335 1,462 3,006
Distributions to minority
investors (1,042) (1,294) (4,696) (5,161)
Other - (33) - (33)
------- -------- ------- --------
Net cash used in financing
activities (751) (3,687) (3,292) (13,401)
Change in cash and cash
equivalents $2,139 $(1,367) $9,212 $(511)
======= ======== ======= ========
CONTACT: U.S. Physical Therapy, Inc., Houston
Roy W. Spradlin or Larry McAfee, 713-297-7000
or
DRG&E
Investor Relations:
Jack Lascar, 713-529-6600