USPH - Earnings call transcript Q1 2019 | U.S. Physical Therapy, Inc.

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Operator

Good morning. My name is Thea, and I will be the conference operator today. At this time, I would like to welcome everyone to the U.S. Physical Therapy 2019 First Quarter Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Chris Reading, President and Chief Executive Officer. sir. ahead, go Please

Christopher Reading

McDowell morning, Vice Earnings to Controller. Larry Call. President Jon East; Vice Officer; Executive Good Operating our our First West Bates, and Officers, McAfee, Physical General Quarter Vice and Glenn Financial Chief XXXX With Binstein, and and Graham and you. Reeve, U.S. Chief our welcome Rick Therapy's our and President Thank President me and today, Counsel;

Jon read we quarter, have Before to we Jon? results discuss brief this for a begin our statement. disclosure will

Jon Bates

Chris. risks Commission company's This vary can company's the forward-looking with filings more based presentation involve Thanks, and for contains forward-looking and the information. results the and statements materially the which Securities statements, from on current certain assumptions actual these views those and uncertainties. anticipated. Exchange And company's see are Please

Christopher Reading

Jon. on statements the brief want the Larry to in business more Thanks, make review some have detail. financials then color-based I and

injury as crazy Our partnership weather core persistently of business cold well Therapy and some performed the Physical our record well quarter. across prevention the despite this very much services for quarter country industrial as

in job delivered increase prevention athletic to large XXX our our with year Our increase with volumes same-store Therapy. greater very for prevention a business who, both growth business and XXXX terrific client-based are Volumes our a prevention X.X% therapists, compared in and business increase revenue combination QX. services against produce comp of industrial compared in tough the last margin net points increased were along year, to the Physical at also doing injury our industrial for companies. now the a rate contracts a to that PT a points same-store combined by injury good. X.X% basis XXX quarter, percentage our by and basis was and being for ago Also revenue in positive our driven for PT notable XXX points gross physical profit trainers improved This percentage improved basis management by

expansion big a As control's to now. our I They job earlier, good a right cost to really give and our just team. partners a we've margin are been shout-out discussed doing and and focus want

also cross-sales segment, we industrial complement team vision who most a – great within recently our know, segment terrific portfolio just our we to adding believe of significant a Briotix a you in the client-companies. to opportunity partnership prevention, injury added weeks time that for services, to our will again As acquisition of while a couple prevention ago, shares of with be

in financials before what would good we typically with out as people, a made and Larry exceptional in partnerships long footing very investments we many of like that in we have is to resources So time. the acquired have legacy is in people covers so quarter and with coming right as I The now good seasonally-weakest a greater our our feel detail, off. paying say

deliver service, along Our with which ultimately visits. and volume referral care sales their drive have results, great to staff, definitely continued partners and and and teams, their

cost expansion, are margin control the bearing about better efforts, feel we Additionally, which fruit.

would, Larry, concludes that quarter. go if my brief the review you overview. for financials and So the ahead

Lawrance McAfee

year, most period. year the million, was a the profit to in internal did XX% business gross costs over quarter the Clinics, million. X.X% points the so average our first net million. X.X% XX.X% noteworthy. in and to X.X% that, $XXX.X Mature the million – $XXX.XX. a that the last of so an Total recent quarter Revenue rate visit ago. from first an from from period revenue, X.X% versus through as per increased overall quarter. income $X.X Revenue of to increased XX.X% revenue per most to prevention visits in to year an in the first due PT of Corporate patient industrial operations increased XXXX Thanks. Revenues in profit increased from we year increase The provision from from income percentage came and that's of of increase this of growth. Operating this do taxes gross XX.X% percentages, Average the XXX by the The increased as year. clinic XX% was to the recent last last million. Though in visits went I XX.X% the Chris Operating won't operating Okay. quarter quarter. XX% X.X% income quarter day but $XXX.XX in the XX.X% by last increase compared $XXX.X by XX.X% to X.X% from of of a $XX.X in majority XX.X% from X an first increased reduction quarter for costs injury average to of revenue acquisition the to were grew in to office were basis for for year. XX.X% year

operating novo Our last total clinics, increased $X.XX share increased $X.X on, but hit – Chris year. and compared time they per acquired $X.XX to they as revenue were or Same-store again diluted to XX.X% results in this X.X%. million for de

adjusted XX.X%. adjusted the is XX.X% for $XX percentage million. of of that a In net as from basis increased by quarter $XX.X EBITDA other first XXXX, from to grew to company's XX.X% revenue by points terms EBITDA of financial million XX noteworthy Also measures the

X noted exceptional press net which release, years. the cash down we As credit pay quarter, had us to during flow level to enabled the the line the I in lowest in

paid of $X.XX dividend on June Our second XX. be will quarter

Christopher Reading

prepared would up it have you'll Operator, go concludes and if Thanks, Larry. some open you and questions. comments. ahead That our

Operator

first Securities. come from Larry with The CJS will question Instructions] Solow [Operator

LarrySolow

solid year, averages it on start to easier it's seems And a was it above couple think and right, good the – actually Congratulations, last like it growth sales year. never I The not years. great, but I last little the think been was it's bit running we're like historical great, quarter same-store for a So wasn't number this sort of and than comp. better weather was right? was pretty

guess, your, Any year and I on So somewhat pretty right? full good number that? above outlook, that's thoughts

Christopher Reading

Yes.

that's I all on right counts. think

So a in our particularly of the and between wasn't and cold, of that really weather did great partners and the good job. East Coast, in parts snow spite the crazy in Midwest

So as I said, we are the encouraged with start.

period We to and we this are the way. being out to of look now able weather perform to thankfully, forward hopefully continue

Larry Solow

thought. a of know huge but was, error, slightly don’t some more I minuses I And that's move, than just there? if had a pricing sort rounding again, and not pluses maybe

Lawrance McAfee

than rate budgeted. we net the was higher No,

Larry Solow

Okay.

say? hard that you So that anything hold particular in really think or trend can to

Lawrance McAfee

little quarter-to-quarter. moves around a bit it from Well,

at level periods. terms – reasonable a a it's of think probably I future in

Larry Solow

And you've margins acquired industrial of done businesses. a nice job obviously improving the the

better little a Over the would you long in PT? these than margins see we what expect run, be bit

Christopher Reading

Yes.

influenced I ago so. over we've that's and than little little so will had bit X But maybe a a PT. think I it as a not real settle mean, this expect higher well. yes, years bit period little started static we it a since I

Larry Solow

number [crew] try And revenue lastly. higher? Corporate office, performance little get a higher and last you the – of that's the little just out percentage sort as a of basis. then little Will bit a or anything ahead driving of absolute thought maybe than on and I a

Lawrance McAfee

comp the year. was higher than incentive first last quarter Yes,

Christopher Reading

on started of speaking, in months are out made settled. and comparable so That's Xst he the March now, here last pretty was year so much basis. are – additions and last team it. couple pretty everybody Graham But I we year the of a first mean, relatively we all

Operator

Blair. with will William question Larew from Matt come next The

Matt Larew

the about ask count to growth slowed over was X clinic a quarter Wanted fourth from has down here, X little bit. last the quarters and clinic which

You press referenced reduction obviously in and flow in cash release resulting strength borrowing.

of what of pipeline you have looks to sense. expect like could and the been Obviously, to for several give some a partnerships clinic trend if just timing you change slow for maybe, So here the us your give few maybe in a last recently, sense capacity expect quarters maybe of you how maybe in growth was it quarters? us a issue just in clinic and growth the you next plenty how why but terms

Lawrance McAfee

Yes.

when them, in we about our you the clinic some openings that been little combined XXs tuck-ins new XXs think announce combination. – low-to-mid I because for you with hear don’t in look don't that's overall year, guys

pretty been that's steady. So

some clinics. pare have we terms year when throughout the to in of elements the continued We timing do then we've And openings.

here, clinic We're acquired side, we market, be we the continue chasing not used openings got company do. active number, On to done. an the in the honestly things we to to before se get which quite per expect

going to continue So we're long trying to point, capacity do and a benefit long-term run. over your that that benefit and that. to be to we to things a are But of we we'll meaningful are plenty continue think things do we will have do the going be to

Christopher Reading

but you have. have And legacy from clinics more quarter, upside closed – we we the ever there's clinics, with that X. them and closed most the years locations time single last we not have In just when clinics, the they're and of they're ago first opened We don't clinics we they year a close density. X than more groups with little that

Matt Larew

business touch and maybe injury referenced industrial And ask, potential wanted prevention cross-sell opportunities. I helpful. then just on again maybe That's to you

independently maybe and for are relative unfold just what today? sense look can to process time that you might So give businesses would what that over a doing us how like the

Christopher Reading

Yes.

a So question. – good it's

the injury acquired partnership, into on which a lot operation. therapy was general physical effectively So a folks actually people buying a and concern both for prevention great the we was to our prevent that a just They year some there the behind we partnership, company is – first introduce the didn't of were And prevention. sides that. after first There first Briotix company, injuries. didn't we of scoop those maybe job reason do

artificial curtains removed. – those curtains those been have So

leads company. sides field are both between to We of partners get our the and in now from beginning interaction the

are Now acquired, different actually the physical the the products majority delivered products country. providers offer company services, we those of services some a and therapy around because of and network they by just

have benefit over expect absolute clinics time that we our an that So from program. net will

companies want they've they reliable a and Now for great say, to services continue they'll had of other get just us. I those just have, to as network performed before we've very who business lot been

integration We're to our couple over obviously disclosed that that – and will but a getting of business so we that started that a expect expect grow weeks clinics we time. we And with period of just ago. benefit

early, very it. So but are we excited about we're very

Matt Larew

at maybe in QX your of that underlying and cost of then saw in was cost in be, openings mentioned response final figures legacy up 'XX you had flattish costs to per that of the bunch reduction would visit of And a and work. terms some some one the loosened end of just obscuring partnerships, obviously you've

on here the should So just side maybe year? of some to what give throughout visit and us a key how efficiency per for on cost trend are you're sense expect areas the we the focused

Christopher Reading

Okay.

I think a on push, – facilities. which other side, network the we a our the a On really is market and continued have have have across the staff hour labor to pull. inflation we on X opportunity/challenge, part-time manage we competing our side, to have we down of little one broad

as mentioned, board. people right got the So on we've I

I But think have we transparency we still input. realtime our have effective more and challenges.

higher gotten a that Our improved. some and to change has we've it's bit margin little And acquired partners expansion. tend that over time to changed run and tends and

that moment to So I expect any encouraged cost. going I'm massive we're dramatic now. our see to don't respect with right

we to pretty manage that have that and be regulatory think And some then I'll I we're that within of if as have can now a and doing us keep can continue, right in We narrow kind as we boundaries effectively range happy. those.

Lawrance McAfee

way you I do – costs mean, which really increasing typically was? is your by therapist, down have we per see visits per what quarter-over-quarter the Glenn, day go the

Glenn McDowell

a by therapist slightly QX was of ran of Yes. In and the we number on QX XX.XX ran visit 'XX, at and at loss XX.XX, weather 'XX, In business basis. that that we we per had. impacted

Lawrance McAfee

last But at we in the first quarter ran year, XX.XX.

of X/XX a looking visit improvement, apples-to-apples. was there a at So if you're

our said, well, – frankly margins margins have been very our weather if had like the been better, So Glenn – were would first, good. and

XXX not have would big really, been the then improvement then of it points; severe swing. weather. we hadn't that's had kind a better – but that if basis seen ever haven't even We And

Operator

Barrington Instructions] next Research. [Operator with The will Mike question come Petusky from

Michael Petusky

not conjunction year. So the to that at a Was acquisition announced down want EPS the that guidance? drill the accretion point? that for from increase good that guidance did – guys was it's guys it's guidance essentially of in a into quarter with sense of the EPS Larry, already weeks essentially went ago in because the have language. not was – a that just you you on that the the in What release acquisition? you to Or where the assume reflection actually What I with – me increased few clear

Lawrance McAfee

solely acquisition. year, a guidance in increase look That results not based year guidance And is on this accretion full at we obviously in was which the regularly. from that

maybe we end guidance revise time a possibly of could the Next do the we after deal or again. quarter, second

Christopher Reading

Well, time, and Larry, in point we we had had – at February that – January

Lawrance McAfee

We March a was results didn't have and super March month.

I quarter. to not probably do revise It's don't times we want year. for have guidance So have to us every – it could unusual couple a to

Michael Petusky

Well, like particularly end, you It at essentially really revised. the been it. what feels guys is the at could Right. that it have was feels getting low current tempted range, I feels guidance have conservative. It to like

Lawrance McAfee

matter. doesn't it Mike,

the anyway. higher always than is range number Your

Michael Petusky

Fair enough.

Okay.

the for lower moving year? effective Larry, rate the than... rate tax Obviously, little a tax guidance your what's So on, was assumed in

Lawrance McAfee

– we used Okay. it We said Jon – think was – used XX.X%. was I XX just it

it's the the the at in is date, benefit. than of [passed] a higher that you and have a sense? was quarter, at lower it because make price restricted Does bigger lot you first tax shares the get Now time if grant

Michael Petusky

then to call the higher absolutely. normal, out at? sense a And there out a or question. was than little any yes, no, quick just what come yes, Yes, anything for might absolutely, year CapEx

Lawrance McAfee

it. Honestly, notice didn't I

Michael Petusky

anything just the about for Okay. quarter, last mix And Payer question. that?

Lawrance McAfee

Yes, got payer here. I mix

Comp was XX.X% Prior Medicaid Let's X.X%. care, see. and the managed XX.X%, XX.X%, to then was insurance Medicare other basically was companies Worker's and combined was

Operator

from Mitra The next with is Sidoti. question Ramgopal

Lalishwar Ramgopal

Just questions. couple

visits and wondering there just if I numbers initiatives same-store the driving terms might particular in you implementing? the was solid in that was been anything quarter of really be in again, might all have First

Christopher Reading

support and work, doing sales teams doing our marketing really Good job. good partners good and just team sales management the and and a

care on get people the So created partners with facilities that. give I and credit and our at starts focused. relationships think And I it good to are that

a think terrific I they're doing job.

Lalishwar Ramgopal

the next to make Okay. anything technology, great. remainder that to business, of significant No, or sales build along year as And the whether that's force the IPP Chris, need continue it's out those and look you any there you you over is as on on lines? investments front,

Christopher Reading

Yes.

continue lockstep. just one we won't be it big and So

about in to investments. needed that business. bit last So that we a we where invest talked we year We to continue a to little got point it some make

not accounting lot technology are resources additional bringing opportunity. we're going area. more area as probably some And bring probably, in we're to on same we So the at – well. of folks for We're the some instance, on time, in – the a seeing

potential Our started pipeline of discussion looks clients really out, in really We we're and people good a think, on with. good there that I footing. year in terms the

in to massive I continue us in going bringing we'll are scale. any place be right yes, just all to or the monumental. now help that to and folks don't see grow major need It's need But in So continue add are to building that blocks to scale. team. technology the we changes switches to to

Lalishwar Ramgopal

as No, guess, do number now? nicely forward? reimbursement the there, see a relates per going that for how seems revenue you over up been it like a probably. steady for know that's but over always just be wildcard – guys Okay. to – last it's I great. the visit, And years of really that's it can you I again,

Christopher Reading

bit that. been flat some little be going right bit. while been to couple done a my got that expectation, progress and that But the can at If little we're just last that's that. some themes for that, I told We've acquired helping better what truthful. We've deals now. and So than been a relatively We're better you general nice I we've and some than we've what years. little do we think really it's people move We're everybody done, it's some a I'll a environment when saying. good I've really and than conference, And gotten increases for the to net-net, ago about a happy. spoke making been little it's number so better your people where telling have a in, we I in I'll do be I that's tell and pretty continue our partners of getting

Operator

The next from Hambly with Stephens. Dana is question

Dana Hambly

the you about injury margin prevention. in the mentioned jump Chris, in in comments gross industrial prepared your the profit

you that services I more would You nuance performed flush jump prevention athletic a talked gross out about and being just trainers. me by that could understand the the wonder why if help such margin? drive in of big

Christopher Reading

I'm question. good a It's it. yes. asking you're yes, Yes, that pleased

don't very do clinics. don't of equipment, trainer the were by happens acquired used have that educational did based number started, in addition. athletic their happens college in a taking great care we we year industrial second exclusively to that When expense whether have prevention works therapists and services team, business, just physical other that's on so trainers. what business. partnership into for injury dissimilar taking pro. We our it a when been almost trainers a We athletic acquisition, company is virtually about Briotix majority vast but the In bit we people. of of well. be And are team, first a ago, model not a care people Briotix, So do, It's more our rolled of they our just it athletic lot demand and that therapists. it We're done prevention most have, a business. be than a background or that physical sole part, and expensive things, expense. we to a an It two, prevention-based

will do that. I just athletic for clients we'll And prevention reasons we a differential deliver therapy, think, be, But job a a physical do of a with and delivered need to where want, they be where cost percentage, think, to side portfolio so greater it little trainers. on of And continue a particular it's and I bit the our growing percentage, will there. by great

Lawrance McAfee

business, a And and thing revenue, because you're administrative to to staff. Briotix Another is, corporate the separate spread that. the going you as grow you you're to grow grow going has extent margins

grow going your as line. not as You're you're costs rapidly business to the that for top growing corporate

Therapy. So it's just like U.S. Physical

Dana Hambly

Sure. All BTE makes compare and And contrast acquisition the can sense. Briotix That with business? you right. the

Christopher Reading

compare ways? what you when So – in

Dana Hambly

or is very capabilities some product it new offering different BTE? with in bringing similar a mean, a I – you the

Christopher Reading

mostly capabilities. new It’s

In little fact, minimal, the pretty was overlap overlap. very really

addition team about. an excited really such it great Really, strong made really what guys. which is this having the we're team, a just BTE So with

a product Just different totally almost offering.

deep testing clinic testing product which they didn't of. post-offer speak to their in a robust medical And which which impressive, of rolled they have post-offer have one, a They So have a client-companies, companies. client their has job for and screening. new done on-site us. for capabilities, We out for is some great is very

new elements for X really puzzle those So that us are excited really about. pieces we're

Dana Hambly

be And not lot last burden a quarter, reason about Okay. mentioned for Chris, this pessimism talked your efficient you then regulatory or on front? all could burdens. year Versus the what any optimism more therapists the quarter you last regulatory if for about

Christopher Reading

I do fly have I say on every about for I meet No, I We Baltimore as as do of with to the to political shine meet sun's and kind with day. optimism Monday to much CMS reason. Yes. on front, Monday. back going CMS. turn a it's might it gridlocked that the on

to of then referred not plan signed the our in those the which care, peel physical as happens have our the what the chase sent going and But discussion that course, affect do we're have going over affects try down. time, we going of time but after therapists who to been much staff not And doctor to to therapy. diagnosed has and of with to of We be necessity eliminating serious back. over, administrative patients. them it's to But it things others as it's an Medicare for no, terms have about patient quick. get to and them, is, This onion that's period and to of to going to talk additional a has are which

Dana Hambly

Okay. from last one And then Larry. me,

that were there BTE transaction out? to were significant the With call any costs enough acquisition,

Lawrance McAfee

We to weather worth. – quarter, Yes. didn't a like because well. it a make was There or $X.XX we was big deal $X.XX good actually the it as such of a we didn't probably about just $X.XX lost

Christopher Reading

than had We of normal. this just more the because in complexity of structure the cost field

Dana Hambly

Okay.

about drag? saying You're $X.XX

Lawrance McAfee

That was to $X.XX cost for $X.XX and in $X.XX transaction weather.

Dana Hambly

much. very Thanks

Christopher Reading

Thanks.

Operator

further And questions. at this time, there are no

Christopher Reading

an guys. have the you for right, and day. Thank all questions, good All awesome

Operator

conference Ladies you gentlemen, participating thank for today's call. in and

You now may disconnect.

Christopher Reading	President, CEO & Director
Jon Bates	VP & Corporate Controller
Lawrance McAfee	EVP, CFO & Director
Glenn McDowell	COO, West
Graham Reeve	Chief Operating Officers, West and East
Rick Binstein	Vice President and General Counsel
Larry Solow	CJS Securities
Lalishwar Ramgopal	Sidoti & Company
Matt Larew	William Blair
Dana Hambly	Stephens Inc.
Michael Petusky	Barrington Research

U.S. Physical Therapy (USPH) 4 May 192019 Q1 Earnings call transcript