Exhibit 99.1
U.S. Physical Therapy Reports Third Quarter Results
HOUSTON--(BUSINESS WIRE)--Oct. 27, 2005--U.S. Physical Therapy, Inc.
(NASDAQ:USPH), a national operator of physical and occupational therapy
outpatient clinics, today reported results for the third quarter and nine months
ended September 30, 2005.
U.S. Physical Therapy's net earnings for the third quarter of 2005 were
$2.4 million or $0.20 per diluted share as compared to $1.1 million or $0.08 per
diluted share reported for the third quarter of 2004. The third quarter 2004
earnings, as adjusted per the reconciliation schedule attached, were $0.14 per
share.
For the nine months ended September 30, 2005, net earnings were $7.2
million or $0.59 per diluted share versus $4.9 million or $0.40 per diluted
share for the nine months ended September 30, 2004. The adjusted earnings per
share for the comparable nine month period in 2004 were $0.48. See the
Reconciliation of Non-GAAP Financial Measures schedule included for adjusted
2004 calculations.
Third Quarter 2005 as compared to Third Quarter 2004
-- Net revenue rose 15.3% to $34.2 million from $29.6 million due to a
14.3% increase in patient visits to 348,000 from 305,000 and an
increase of $0.58 in net patient revenue per visit from $96.06 to
$96.64.
-- Clinic operating costs were 73.3% of net revenue as compared to 75.8%.
The prior year quarter clinic operating costs include a pre tax charge
of $966,000 related to the operating losses and closure costs of eight
clinics closed in the third quarter of 2004.
-- Corporate office costs as a percentage of net revenue were 11.9%, down
from 14.2% last year.
-- Net income for the quarter increased 125.5% to $2.4 million from $1.1
million. Reported earnings were $0.20 per diluted share for the third
quarter 2005 as compared to $0.08 for the same period in 2004. As
further described in the reconciliation schedule, the third quarter
2004 adjusted net earnings would have been $1.8 million or $0.14 per
diluted share.
-- Same store visits for clinics open for one year or more increased
2.8%. The net rate per visit for those clinics increased 0.8%,
resulting in a same store revenue increase of 3.7%.
Nine Months 2005 as compared to Nine Months 2004
-- Net revenue rose 11.5% to $98.6 million from $88.5 million due to an
11.3% increase in patient visits to 1,004,000 and an increase of $0.38
in net patient revenue per visit to $96.69 from $96.31.
-- Clinic operating costs were 72.3% of net revenue versus 72.2% for the
prior year. Corporate office costs were 12.4% of net revenue versus
14.4%.
-- Net income increased 47.4% to $7.2 million from $4.9 million. Earnings
per share increased to $0.59 per diluted share from $0.40. As per the
reconciliation schedule, the 2004 adjusted net earnings were $5.9
million or $0.48 per diluted share.
-- Same store visits for clinics open for one year or more increased
4.2%. The net rate per visit for those clinics increased 0.5%,
resulting in a same store revenue increase of 4.7%.
Management estimates that hurricanes Katrina and Rita resulted in a
reduction of over 2,000 visits and approximately $200,000 in lost revenue during
the recent quarter. The Company's clinics in Alabama, Mississippi, southern
Louisiana and southeast Texas were affected by the storms and their aftermath.
All affected clinics are now operational, but those clinics in south Louisiana
are seeing a reduced patient count as compared to before hurricane Katrina.
Chris Reading, Chief Executive Officer, said, "We are pleased with our
performance this quarter as the Company posted solid volume, revenue and
earnings growth. As of October 26th, we have opened 21 new clinics in 2005,
bringing our total number of facilities to 285. Our new partner pipeline
continues to improve and we expect our new facility openings to increase looking
forward. We remain active in pursuing all aspects of our earnings growth
strategy."
Larry McAfee, Chief Financial Officer, said, "Free cash flow from
operations remains strong. We closed the third quarter with $18.5 million in
cash and cash equivalents, or approximately $1.51 in net cash and cash
equivalents per outstanding share." Mr. McAfee further noted, "We continue to
purchase the Company's common stock in open market transactions under our share
repurchase program. Year-to-date we have acquired 487,182 shares at prices
ranging from $13.53 to $18.40 for an average price of $16.30. Since the
inception of this buyback program which was initiated in September last year, we
have purchased 860,585 shares or approximately 7% of the Company's previously
outstanding shares."
This press release contains non-GAAP financial measures as defined by
Regulation G of the Securities and Exchange Commission. The attached financial
summary contains a schedule which reconciles these measures to the most directly
comparable GAAP measures. These non-GAAP financial measures may be considered in
addition to, not as a substitute for the financial measures prepared in
accordance with GAAP (generally accepted accounting principles).
U.S. Physical Therapy's management will host a conference call at 10:30 am
Eastern Time, 9:30 am Central Time on October 27, 2005 to discuss the Company's
third quarter and nine-months 2005 results. Interested parties may participate
in the call by dialing 800-938-0653 or 973-321-1100 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 be archived and can be accessed for approximately 90 days at this website.
Forward-Looking Statements
This press release contains statements that are considered to be
forward-looking within the meaning under Section 21E of the Securities Exchange
Act of 1934. These statements contain forward-looking information relating to
the financial condition, results of operations, plans, objectives, future
performance and business of our Company. These statements (often using words
such as "believes", "expects", "intends", "plans", "appear", "should" and
similar words) involve risks and uncertainties that could cause actual results
to differ materially from those we project. Included among such statements are
those relating to opening new clinics, availability of personnel and the
reimbursement environment. The forward-looking statements are based on our
current views and assumptions and 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:
-- revenue and earnings expectations;
-- general economic, business, and regulatory conditions including
federal and state regulations;
-- availability of qualified physical and occupational therapists;
-- the failure of our clinics to maintain their Medicare certification
status or changes in Medicare guidelines;
-- competitive and/or economic conditions in our markets which may
require us to close certain clinics and thereby incur closure costs
and losses including the possible write-off or write-down of goodwill;
-- changes in reimbursement rates or methods from third party payors
including government agencies and deductibles and co-pays owed by
patients;
-- maintaining adequate internal controls;
-- availability, terms, and use of capital;
-- future acquisitions;
-- weather and other seasonal factors.
Many factors are beyond our control. Given these uncertainties, you should
not place undue reliance on our forward-looking statements. Please see periodic
reports filed with the Securities and Exchange Commission (the "SEC") for more
information on these factors. Our forward-looking statements represent our
estimates and assumptions only as of the date of this report. Except as required
by law, we are under no obligation to update any forward- looking statement,
regardless of the reason the statement is no longer accurate.
About U.S. Physical Therapy, Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 285 outpatient
physical and/or occupational therapy clinics in 36 states. The Company's clinics
provide preventative and post-operative care for a variety of orthopedic-related
disorders and sports-related injuries, treatment for neurologically-related
injuries and rehabilitation of injured workers. In addition to owning and
operating clinics, the Company manages physical therapy facilities for third
parties, including hospitals and physician groups. U.S. Physical Therapy, Inc.
has been named for four consecutive years in Forbes Magazine's Best 200 Small
Companies List.
More information about U.S. Physical Therapy, Inc. is available at
www.usph.com. The information included on that website is not incorporated into
this press release.
(See Attached Tables)
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2005 2004 2005 2004
---------- --------- --------- ----------
(unaudited) (unaudited)
Net patient revenues $33,645 $29,253 $97,062 $86,882
Management contract revenues 502 379 1,514 1,547
Other revenues 25 7 50 24
---------- --------- --------- ----------
Net revenues 34,172 29,639 98,626 88,453
Clinic operating costs:
Salaries and related costs 17,558 15,140 49,890 44,253
Rent, clinic supplies and
other 6,895 6,176 20,090 18,207
Provision for doubtful
accounts 363 316 1,025 1,027
---------- --------- --------- ----------
24,816 21,632 71,005 63,487
Closure costs and impairment
charge 182 815 266 815
Loss (gain) on sale or
disposal of fixed assets 64 7 23 (443)
Corporate office costs 4,072 4,213 12,269 12,752
---------- --------- --------- ----------
Operating income 5,038 2,972 15,063 11,842
Other income (expense):
Interest income (expense),
net 84 65 271 65
Loss in unconsolidated
joint venture (18) -- (18) --
Minority interests in
subsidiary
limited partnerships (1,180) (1,328) (3,663) ( 4,055)
---------- --------- --------- ----------
(1,114) (1,263) (3,410) (3,990)
Income before income taxes 3,924 1,709 11,653 7,852
Provision for income taxes 1,547 655 4,484 2,987
---------- --------- --------- ----------
Net income $2,377 $1,054 $7,169 $4,865
========== ========= ========= ==========
Basic earnings per common
share (Note 2) $0.20 $0.09 $0.60 $0.41
========== ========= ========= ==========
Diluted earnings per common
share (Note 2) $0.20 $0.08 $0.59 $0.40
========== ========= ========= ==========
Note 1: Certain prior period amounts have been reclassified for
comparison purposes.
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED EARNINGS PER SHARE
(In thousands, except per share data)
Note 2: The following table sets forth the computation of basic and
diluted earnings per share:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
2005 2004 2005 2004
---------- -------- --------- ----------
(unaudited) (unaudited)
Numerator:
Net income $2,377 $1,054 $7,169 $4,865
---------- -------- --------- ----------
Numerator for basic
earnings per share 2,377 1,054 7,169 4,865
Effect of dilutive
securities:
Interest on convertible
subordinated
notes payable -- -- -- 45
---------- -------- --------- ----------
Numerator for diluted
earnings per share ---
income available to common
stockholders
After assumed conversions $2,377 $1,054 $7,169 $4,910
========== ======== ========= ==========
Denominator:
Denominator for basic
earnings per share ---
weighted-average shares 11,982 12,328 11,953 11,772
Effect of dilutive
securities:
Stock options 158 202 151 310
Convertible subordinated
notes payable -- -- -- 338
---------- -------- --------- ----------
Dilutive potential common
shares 158 202 151 648
---------- -------- --------- ----------
Denominator for diluted
earnings per share ---
adjusted weighted-average
shares and
assumed conversions 12,140 12,530 12,104 12,420
========== ======== ========= ==========
Basic earnings per common
share $0.20 $0.09 $0.60 $0.41
========== ======== ========= ==========
Diluted earnings per common
share $0.20 $0.08 $0.59 $0.40
========== ======== ========= ==========
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
September 30, December 31,
2005 2004
------------- -------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $18,525 $20,553
Patient accounts receivable, less
allowance for doubtful accounts of
$1,794 and $2,447, respectively 19,378 17,669
Accounts receivable -- other 829 549
Other current assets 1,132 1,835
------------- -------------
Total current assets 39,864 40,606
Fixed assets:
Furniture and equipment 22,961 22,781
Leasehold improvements 14,126 13,912
------------- -------------
37,087 36,693
Less accumulated depreciation and
amortization 23,756 23,043
------------- -------------
13,331 13,650
Goodwill 12,609 6,127
Other assets 1,643 1,225
------------- -------------
$67,447 $61,608
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable -- trade $1,131 $1,181
Accrued expenses 6,414 4,367
Notes payable 167 70
------------- -------------
Total current liabilities 7,712 5,618
Notes payable -- long-term portion 292 --
Deferred rent 1,392 1,518
Other long-term liabilities 1,163 982
------------- -------------
Total liabilities 10,559 8,118
Minority interests in subsidiary limited
partnerships 2,788 3,311
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, 13,602,823 and
13,436,557 shares issued at September
30, 2005 and December 31, 2004,
respectively 136 134
Additional paid-in capital 34,390 32,534
Retained earnings 42,786 35,617
Treasury stock at cost, 1,643,885 and
1,320,503 shares held at September 30,
2005 and December 31, 2004, respectively (23,212) (18,106)
------------- -------------
Total shareholders' equity 54,100 50,179
------------- -------------
$67,447 $61,608
============= =============
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
-----------------------
2005 2004
----------- -----------
(unaudited)
Operating activities
Net income $7,169 $4,865
Depreciation and amortization 3,213 2,873
(Gain) Loss on sale or disposal of fixed
assets 23 (261)
Minority interest in earnings 3,663 4,055
Provision for doubtful accounts 1,025 1,027
Tax benefit from exercise of options 650 1,550
Impairment charge - goodwill 145 --
Deferred income taxes 76 (136)
Deferred rent (280) --
Other 44 --
Changes in working capital (437) (107)
----------- -----------
Net cash provided by operating
activities 15,291 13,866
Investing activities
Purchase of fixed assets (3,006) (3,307)
Acquisition of minority interests, included
in goodwill (1,319) (253)
Purchase of business (5,000) --
Proceeds on sale of fixed assets 201 499
----------- -----------
Net cash used in investing activities (9,124) (3,061)
Financing activities
Payment of notes payable (111) (39)
Repurchase of common stock (5,106) (657)
Proceeds from exercise of stock options 1,208 1,704
Distributions to minority investors (4,186) (3,859)
----------- -----------
Net cash used in financing activities (8,195) (2,851)
Change in cash and cash equivalents $(2,028) $7,954
=========== ===========
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except share and per share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
2004 2004
--------------- ---------------
(unaudited) (unaudited)
Net Income $1,054 $4,865
--------------- ---------------
Reconciling Items:
Closed clinic operating losses (151) (393)
Clinic closure costs (815) (815)
CEO severance and recruiting fees (208) (925)
Gain (loss) on sale of assets (7) 443
--------------- ---------------
(1,181) (1,690)
Tax benefit from reconciling items, net 425 608
--------------- ---------------
Net expense from reconciling items (756) (1,082)
--------------- ---------------
Adjusted Net Income $1,810 $5,947
Diluted shares 12,530,000 12,420,000
=============== ===============
Diluted earnings per common share as
reported $0.08 $0.40
=============== ===============
Net expense per share reconciling items $0.06 $0.08
--------------- ---------------
Adjusted earnings per common share $0.14 $0.48
=============== ===============
CONTACT: U.S. Physical Therapy, Inc., Houston
Larry McAfee or Chris Reading, 713-297-7000
or
DRG&E
Investors Relations:
Jack Lascar, 713-529-6600