Exhibit 99.1
U.S. Physical Therapy Reports
Fourth Quarter and Year 2006 Results
HOUSTON--(BUSINESS WIRE)--March 16, 2007--U.S. Physical Therapy,
Inc. (NASDAQ:USPH), a national operator of physical and occupational
therapy outpatient clinics, today reported results for the fourth
quarter and year ended December 31, 2006.
U.S. Physical Therapy's earnings from continuing operations were
$2.1 million or $0.18 per share in the fourth quarter and $8.2 million
or $0.70 per share, for the year 2006. The Company's earnings,
including discontinued operations, were $2.1 million or $0.18 per
share and $6.3 million or $0.54 per share, for the quarter and year,
respectively.
Fourth Quarter 2006 compared to Fourth Quarter 2005
-- Net revenue from continuing operations increased to $33.9
million from $32.3 million due to a 5.7% increase in patient
visits from 331,000 to 350,000 and an increase of $0.19 in
average net patient revenue per visit to $96.09.
-- Clinic operating costs from continuing operations were 74% of
net revenue for both the fourth quarter 2006 and 2005. Clinic
salaries and related costs as a percentage of net revenue were
51.3% for the recent quarter as well as the year earlier
period. Rent, clinic supplies, contract labor and other costs
from continuing operations as a percentage of revenue were
21.4% in the recent quarter as compared to 21.0% in the fourth
quarter of 2005.
-- Corporate office costs were reduced to $4.1 million in the
fourth quarter of 2006, or 12.1% of net revenue, versus $4.2
million, or 12.9% of revenue in the fourth quarter of 2005.
The 2006 quarter figure includes $301,000 of equity
compensation expense. There was no equity compensation expense
recorded in the 2005 quarter prior to the Company's adoption
of SFAS No. 123R on January 1, 2006. Excluding equity
compensation expense the corporate cost reduction was $348,000
or 8.4%.
-- Net income from continuing operations increased to $2.1
million from $1.8 million. Earnings from continuing operations
per diluted share increased to $0.18 from $0.15.
-- Net income, after discontinued operations, increased to $2.1
million from $1.6 million. Earnings per diluted share
increased to $0.18 from $0.14.
-- Same store revenues for clinics open or acquired for one year
or more were flat as visits were lower by 1.1% but the average
net rate per visit increased by $.30 to $96.20.
During the fourth quarter of 2006 U.S. Physical Therapy opened 3,
acquired 8 (entering the Arizona market for the first time) and sold 1
clinic for a net addition of 10 clinics bringing the total number of
clinics to 292 as of year end. Chris Reading, Chief Executive Officer,
said, "the results this quarter were produced due to the commitment
and determination of our team. Productivity, which has been a key
focus, has shown steady improvement. Clinic growth this past quarter
was solid with the addition of a great new partnership via acquisition
plus several start-up facilities. We are pleased to finish the year in
strong fashion."
Fiscal Year 2006 compared to Fiscal Year 2005
-- Net revenue from continuing operations rose 7.1% to $135.2
million from $126.3 million due to a 7.2% increase in patient
visits to 1,379,000 and an increase of $0.23 in the average
net patient revenue per visit to $96.72.
-- Clinic operating costs from continuing operations were 73.5%
of net revenue versus 70.7% in the prior year. The increase is
primarily attributable to clinic salaries and related costs
increasing from 49.7% of net revenue to 51.3% of net revenue.
The clinic salary cost increase related to new or acquired
clinics in 2006 and 2005. Rent, supplies, contract labor and
other clinic costs were 20.6% of net revenues for fiscal 2006
compared to 20.0% for 2005. The provision for doubtful
accounts increased from $1.4 million in 2005 to $2.1 million
in 2006.
-- Corporate office costs were $17.3 million or 12.8% of net
revenue versus $16.4 million or 13.0%. The costs in 2006
include $1.0 million of equity compensation expense. There was
no equity compensation expense recorded in the prior year.
Excluding equity compensation expense, corporate costs
declined by $215,000 or 1.3%.
-- Net income from continuing operations decreased to $8.2
million from $9.2 million. Earnings from continuing operations
per diluted share decreased to $0.70 from $0.76.
-- The Company closed 31 clinics during 2006 incurring $3.0
million pre-tax in closure costs, impairment charges and
operating losses.
-- Net income, after discontinued operations, decreased to $6.3
million from $8.8 million. Earnings per diluted share were
$0.54 as compared to $0.73.
-- Same store revenues for clinics opened or acquired for one
year or more increased by 3.9% as same store visits increased
by 3.6% and the average net rate per visit increased by 0.4%.
In the fourth quarter 2006, the Company acquired 100,000 shares of
common stock through an open market purchase at $11.70 per share.
Larry McAfee, Chief Financial Officer, noted that "since the inception
of the current share repurchase program the Company has acquired
1,268,000 shares or approximately 10.0% of the previously outstanding
total shares." Approximately 50,000 shares remain available for
purchase under the program.
The Company ended 2006 with $11.5 million in cash and investments.
Net of $1.4 million of acquired clinics seller notes, the adjusted net
cash balance was approximately $10.1 million or $0.88 per outstanding
share.
U.S. Physical Therapy's management will host a conference call at
2:00 pm Eastern Time, 1:00 pm Central Time on Thursday, March 22, 2007
to discuss the Company's fourth quarter and year 2006 results.
Interested parties may participate in the call by dialing (888)
858-4756 or (973) 582-2824 and enter reservation number 8546328
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 120 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 and cost of qualified physical and occupational
therapists;
-- personnel productivity;
-- changes in Medicare guidelines and reimbursement or failure of
our clinics to maintain their Medicare certification status;
-- 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 payment 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; and
-- 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 292
outpatient physical and/or occupational therapy clinics in 41 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.
(See Attached Tables)
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,
------------------- -------------------
2006 2005(a) 2006 2005(a)
--------- --------- --------- ---------
(unaudited) (unaudited)
Net patient revenues $33,612 $31,728 $133,376 $124,164
Management contract revenues 324 508 1,784 2,022
Other revenues 1 20 34 70
--------- --------- --------- ---------
Net revenues 33,937 32,256 135,194 126,256
Clinic operating costs:
Salaries and related costs 17,406 16,559 69,340 62,708
Rent, clinic supplies,
contract labor and other 7,279 6,787 27,896 25,245
Provision for doubtful
accounts 553 394 2,115 1,351
--------- --------- --------- ---------
25,238 23,740 99,351 89,304
Corporate office costs 4,109 4,156 17,247 16,425
--------- --------- --------- ---------
Operating income from
continuing operations 4,590 4,360 18,596 20,527
Other income (expense):
Interest and investment
income, net 63 90 332 361
Loss in unconsolidated joint
venture -- (16) (31) (34)
Minority interests in
subsidiary limited
partnerships. (1,292) (1,460) (5,647) (5,939)
--------- --------- --------- ---------
(1,229) (1,386) (5,346) (5,612)
Income before income taxes
from continuing operations 3,361 2,974 13,250 14,915
Provision for income taxes 1,275 1,148 5,057 5,737
--------- --------- --------- ---------
Net income from continuing
operations 2,086 1,826 8,193 9,178
Discontinued operations:
Income (loss) from
discontinued operations 28 (325) (2,985) (613)
Tax (expense) benefit from
discontinued operations (10) 121 1,088 226
--------- --------- --------- ---------
18 (204) (1,897) (387)
--------- --------- --------- ---------
Net Income $2,104 $1,622 $6,296 $8,791
========= ========= ========= =========
Earnings per share:
Basic - income from continuing
operations (Note 1) $0.18 $0.15 $0.70 $0.77
Basic - loss from discontinued
operations (Note 1) - (0.01) (0.16) (0.03)
--------- --------- --------- ---------
Total basic earnings per
share $0.18 $0.14 $0.54 $0.74
========= ========= ========= =========
Diluted - income from
continuing operations (Note
1) $0.18 $0.15 $0.70 $0.76
Diluted - loss from
discontinued operations (Note
1) - (0.01) (0.16) (0.03)
--------- --------- --------- ---------
Total diluted earnings per
share $0.18 $0.14 $0.54 $0.73
========= ========= ========= =========
(a) Prior period results have been reclassified to conform with the
current year presentation. Prior year results show the allocation
of earnings to all minority limited partners in minority
interests in subsidiary limited partnerships and the operational
losses of the 2006 closed clinics in discontinued operations.
Minority interest in subsidiary limited partnerships represents
allocation of earnings for all minority limited partners.
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED EARNINGS PER SHARE
(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,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
(unaudited) (unaudited)
Numerator:
Net income from continuing
operations $2,086 $1,826 $8,193 $9,178
Net income (loss) from
discontinued operations 18 (204) (1,897) (387)
--------- --------- --------- ---------
Net income $2,104 $1,622 $6,296 $8,791
========= ========= ========= =========
Denominator:
Denominator for basic
earnings per share ---
weighted-average shares 11,511 11,836 11,690 11,923
Effect of dilutive
securities:
Stock options 40 149 41 152
--------- --------- --------- ---------
Denominator for diluted
earnings per share ---
adjusted weighted-average
shares and assumed
conversions 11,551 11,985 11,731 12,075
========= ========= ========= =========
Earnings per share:
Basic - income from
continuing operations $0.18 $0.15 $0.70 $0.77
Basic - loss from
discontinued operations -- (0.01) (0.16) (0.03)
--------- --------- --------- ---------
Total basic earnings per
share $0.18 $0.14 $0.54 $0.74
========= ========= ========= =========
Diluted - income from
continuing operations $0.18 $0.15 $0.70 $0.76
Diluted - loss from
discontinued operations -- (0.01) (0.16) (0.03)
--------- --------- --------- ---------
Total diluted earnings per
share $0.18 $0.14 $0.54 $0.73
========= ========= ========= =========
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
December 31, December 31,
2006 2005(a)
-------------- --------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $10,952 $12,352
Marketable securities - available for
sale 500 2,650
Patient accounts receivable, less
allowance for doubtful accounts of
$1,567 and $1,621, respectively 21,503 19,661
Accounts receivable -- other 775 761
Other current assets 2,251 1,428
-------------- --------------
Total current assets 35,981 36,852
Fixed assets:
Furniture and equipment 23,718 23,010
Leasehold improvements 15,226 14,556
-------------- --------------
38,944 37,566
Less accumulated depreciation and
amortization 25,573 23,825
-------------- --------------
13,371 13,741
Goodwill 20,997 14,339
Other assets 1,108 1,587
-------------- --------------
$71,457 $66,519
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable -- trade $1,601 $1,721
Accrued expenses 7,007 5,150
Current portion of notes payable 562 244
-------------- --------------
Total current liabilities 9,170 7,115
Notes payable 797 483
Deferred rent 1,273 1,263
Other long-term liabilities 829 566
-------------- --------------
Total liabilities 12,069 9,427
Minority interests in subsidiary limited
partnerships 3,871 3,617
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,
13,681,849 and 13,645,167 shares
issued at December 31, 2006 and 2005,
respectively 137 136
Additional paid-in capital 36,304 35,037
Retained earnings 50,704 44,408
Treasury stock at cost, 2,214,737 and
1,809,785 shares held at December 31,
2006 and 2005, respectively (31,628) (26,106)
-------------- --------------
Total shareholders' equity 55,517 53,475
-------------- --------------
$71,457 $66,519
============== ==============
(a) Earnings allocated to all minority limited partners have been
reclassified as minority interests in subsidiary limited
partnerships at December 31, 2005 for comparison purposes.
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended
December 31,
-----------------------------
2006 2005(a)
-------------- --------------
(unaudited) (unaudited)
Operating activities
Net income $6,296 $8,791
Depreciation and amortization 4,494 4,308
Loss on sale or disposal of fixed
assets 512 201
Minority interest in earnings 5,559 5,939
Provision for doubtful accounts 2,197 1,446
Equity-based awards compensation
expense 1,038 --
Tax benefit from exercise of options 105 705
Impairment charge - goodwill 192 145
Deferred income taxes (373) 44
Recognition of deferred rent subsidies (403) (391)
Other -- 45
Changes in working capital (1,145) (2,053)
-------------- --------------
Net cash provided by operating
activities 18,472 19,180
Investing activities
Purchase of fixed assets (4,655) (4,527)
Acquisition of minority interests,
included in goodwill (1,234) (1,513)
Purchase of businesses (5,206) (6,321)
Purchase of marketable securities -
available for sale (700) (13,700)
Proceeds on sale of marketable
securities - available for sale 2,850 12,250
Proceeds on sale of fixed assets 99 178
-------------- --------------
Net cash used in investing
activities (8,846) (13,633)
Financing activities
Payment of notes payable (245) (153)
Repurchase of common stock (5,522) (8,000)
Excess tax benefit from stock options
exercised 105 --
Proceeds from exercise of stock
options 125 1,800
Distributions to minority investors (5,489) (6,195)
-------------- --------------
Net cash used in financing
activities (11,026) (12,548)
Change in cash and cash
equivalents $(1,400) $(7,001)
============== ==============
(a) All earnings allocated to limited minority partners have been
reclassified as minority interests in subsidiary limited
partnerships. The allocated earnings are treated as an adjustment
to net income to arrive at cash provided by operating activities
and the payments of such earnings are included in financing
activities.
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES
RECAP OF CLINIC DEVELOPMENT ACTIVITY
Number of
Opened Closed Sold Acquired Clinics
--------- --------- --------- --------- ---------
As of December 31,
2004 264
First Quarter 2005,
March 31, 2005 6 -- (1) -- 269
Second Quarter 2005,
June 30, 2005 7 (1) (1) 3 277
Third Quarter 2005,
September 30, 2005 5 -- -- -- 282
Fourth Quarter 2005,
December 31, 2005 10 (8) -- 2 286
--------- --------- --------- --------- ---------
Year 2005, December
31, 2005 28 (9) (2) 5 286
========= ========= ========= ========= =========
First Quarter 2006,
March 31, 2006 12 -- -- -- 298
Second Quarter 2006,
June 30, 2006 8 (3) -- -- 303
Third Quarter 2006,
September 30, 2006 7 (28) -- -- 282
Fourth Quarter 2006,
December 31, 2006 3 -- (1) 8 292
--------- --------- --------- --------- ---------
Year Ended, December
31, 2006 30 (31) (1) 8 292
========= ========= ========= ========= =========
CONTACT: U.S. Physical Therapy, Inc., Houston
Chief Financial Officer
Larry McAfee, 713-297-7000
or
Chief Executive Officer
Chris Reading, 713-297-7000