Exhibit 99.1
U.S. Physical Therapy Announces Clinic Closings and Corporate
Staff Reduction
HOUSTON--(BUSINESS WIRE)--Sept. 6, 2006--U.S. Physical Therapy,
Inc. (NASDAQ:USPH), a national operator of physical and occupational
therapy outpatient clinics, today announced that it has decided to
close 26 unprofitable clinics and has reduced its corporate staff by
19 positions. The company will book a charge in the current quarter
for closure costs and severance estimated to be $1.2 million after
tax.
Chris Reading, Chief Executive Officer, said "After extensive
analysis we have made the decision to close our smallest, low patient
volume, clinics. Many of these clinics are located in markets we do
not feel can support an acceptable level of patient volume and
profitability. As a result of these closures, we will focus our
resources on facilities, and within markets, where we believe growth
opportunities continue to exist."
The 26 clinics to be closed are spread across 13 states. Through
July the clinics to be closed saw on average approximately 6 patients
per day per clinic as compared to an average of over 19 patients per
day per clinic for the rest of U.S. Physical Therapy's 277 facilities.
Larry McAfee, Chief Financial Officer, noted "the clinics to be
closed generated less than $1.9 million in revenue in the first half
of 2006. These clinics incurred losses, before management fees or
corporate overhead allocation, totaling approximately $440 thousand
after taxes during the six month period. Most of the locations are
older non-partnership facilities."
Mr. Reading said "The newer clinics we have opened in recent years
have, in general, ramped up nicely. We remain a growth company.
Management is firmly committed to continuing to open additional
locations with strong clinician partners as well as to make further
acquisitions."
The annual savings from the corporate staff reduction is projected
to exceed $600 thousand after taxes.
Through the six months ended June 30, 2006, U.S. Physical Therapy
reported revenues of $70.4 million and net income of $3.6 million or
$.30 in earnings per diluted share.
As noted, the Company estimates that these closures will result in
the Company recognizing an aggregate pre-tax charge to earnings of
approximately $2.0 million (after tax $1.2 million), net of the
portion related to minority interest holders, for the current quarter.
The charge consists of write-offs of leasehold improvements and assets
of $326,000; write-off of goodwill of $69,000; accrual for lease
obligations of $1.3 million and severance costs of $300,000. Of the
total estimated $2.0 million pre-tax earnings charge, the Company
estimates $1.6 million will result in future cash expenditures.
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;
-- salary costs and personnel productivity;
-- 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 outpatient
physical and/or occupational therapy clinics in 39 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.
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.
CONTACT: U.S. Physical Therapy, Inc.
Larry McAfee or Chris Reading, 713-297-7000
or
Investors Relations:
DRG&E
Jack Lascar, 713-529-6600