USPH - Earnings call transcript Q2 2019 | U.S. Physical Therapy, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the U.S. Physical Therapy Second Quarter 2019 Earnings Conference Call. At this time, I would like to inform all participants that your lines will be in a listen-only mode. After the speaker's remarks, there will be a question-and-answer period. [Operator Instructions]

to host like Mr. today's now would introduce for our call, I Reading, Executive Chris Officer. Chief sir. ahead go Please

Chris Reading

General Thank Vice you. Call. our Jon and Vice and Quarter and the Good Graham morning Controller; Larry Vice President and President Therapy's U.S. call, Binstein, Counsel Chief Officer; Rick Year-to-date President Second and Physical Reeve, Chief and XXXX Glenn our our Bates, Earnings McAfee, With and Financial on welcome me our Executive everyone McDowell to Officers; Operating

Before statement. begin the and we comments our quarter cover the on to need a year, Jon? we brief disclosure

Jon Bates

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

Chris Reading

with year-to-date on Jon. and color the I'll some and start quarter ahead go Thanks, period.

strong and quarter Second quarter for good was a start to year. us another the overall very

the our increased X.X% per with in along revenue PT revenue across the prevention grew injury Revenue same-store strong X.X% quarter growth day. from platform per on and space, clinic overall the by visits XX%. industrial business healthy Net for

own period. can that's pretty darn compared but You good your adjective ago I apply and a were to that, to think year that's where we

and business a and we was spring we months two what time, another XXXX started that deals, on have far. when Since of late in few in finalized deal terrific recap February The bolted just the ago. thus quick Briotix a of of Just have one that done XXXX.

business within POET, service our to we well acquisition to business. as medical programs our growth, has most testing, post-offer Both is continued very of core offerings clinics. on-site Our service organic and as benefit a which prevention BTE's and our these part include we refined expect expansion injury helped of to ultimately as employment will prevention broaden refer injury which recent

Notably On clinic from make have day one was side, areas. growth of the continued per visits also the focus year plus quarter key first therapy per year. to this and prior healthy physical we from progress in a

and partners driver overall team well worked our underpinned strong development, around with by which very respect have patient concert in the group numbers sales new year ops our and to as our their has relationship communication that and the for current great Our the been staff, and quarter. same-store growth is and as care

and the industrial margins the and basis us improve physical for together therapy our came quarter points all helped boosted injury to healthy for points That XXX prevention quarter. in margins basis XXX by

development. Shifting briefly to

The will of strong right in year it second in And for up openings us. be opportunities. largest is good now our and all pick De and the with should half. looking busy acquisition novo are very half most areas seen as second the I've partnerships successful across as related

give while the openings, So do looking on and opportunities past; talent and us realizing continue forward organic ramp us. much. our which opportunity, reach will renewed and we our those, we more pool which creativity, our energy, we and over yet up grow the to are of in achieving always will our further core focused done business remain best-performing geographic internally we've done, presence centric we expect and We to partner will current what in markets. with improvement which believe to get bringing deals expand specifically time our market very targeted innovation good ahead enjoy which And to existing to objectives

That concludes my prepared remarks.

more in financials our go guidance to want and So the ahead and Larry cover detail? you

Larry McAfee

in to $XXX.X revenue the half. from the increased an increase In first then recent therapy business. prevention the $XX.X the due Okay. quarter quarter revenue physical and industrial I'll both about operations million and start to with injury talk million

over X% $XXX.XX. physical increased Revenues X.XXX to patient one as our per to increased therapy million visits $XXX.X X% from million million, increased $X rate and visit to by net

that older that mature from revenue most came of noticed clinics. increase I've

Our for prevention both increased industrial internal management due periods. million flat to injury from was Chris revenue the to contracts April the XX% revenue mentioned significant plus growth $XX.X business acquisition.

were during much Total period. supplies, versus contract year Salaries of XX.X% labor XX.X% with in related a reduced XX.X% were our We a other terms XX.X% to XX.X% a costs did XX.X%. as job compared from ago. And costs year down and the were better controlling operating margin costs ago. rent and costs to increases

The for gross profit to PT margin XXX And XX.X% quarter by by increased XX.X%. increased percentage grew to gross gross the by industrial XXX grew basis The for points points Chris basis XX.X%. mentioned, XXX injury the margin The million. second profit points to XX.X%. prevention gross $XX.X as business basis to

is when prevention you injury injured industrial As release, combined treatment both the at outcome increased I the year-over-year. the noted revenue business XX% in look impressive by I press of workers most that the -- think and revenue

revenue were costs to second X.X% X.X% of quarter, last in compared office the Corporate year.

quarter million basis and a Our by operating as increased XX.X% of percentage operating to to income income XX XX.X%. $XX.X points for revenue increased the

sold $XXX,XXX was the was company in income As second proceeds we all had to cash and June a a ago. million the expense million. gain XX.X%. disclosed therapy The founders. $XX.X previously XX% higher on for sales $XXX,XXX, physical than group's provision XX, was taxes was pre-tax of year Interest interest quarter its partnership one The $X.X which of the in

$X.XX $XX.X compares sale year ago. quarter $X.XX and a Our increased that results to million, gain record from operating to which excludes a the or per share, the XX.X%

clinics increased X.X%, revenue more a visits and year de increased rate and Our open same-store for X.X% the or increased for acquired novo X.X%.

$XX.X half clinics. cover of Revenue I'll coming million the business that Total increased prevention physical revenue or by XX.X%. grew X.X% Industrial now briefly increased operations from X.X%. from revenue first therapy results. most mature injury

XX.X%. XX% from XX.X% supplies, compared reduced dropped to related Rent Salaries first XX.X%. year year to to were costs in the ago. XX.X% of contract costs labor operating and reduced were half a XX.X% to and other the Our as versus

year for increased half profit XX.X% operations XXX grew XX.X% XXX of The ago. and basis grew the $XX.X million. first grew gross margin profit points. prevention a gross to versus margins by XX% the points year basis Our to the XXX basis PT percentage gross points gross injury by industrial

Corporate revenue. were of versus office costs X.X% X.X%

of increased Our a operating Operating income to revenue million. as increased XX.X% basis income to $XX.X XXX XX.X%. points percentage

half year first the for rate tax the was XX.X%. of The

results million same-store in and ago, or increased revenues the months, our For to a first half XX.X% X.X%. six $X.XX $XX.X increased year our operating compared to share per $X.XX the

the XX.X% to adjusted EBITDA our measures as revenue by million a points and XX financial of increased other of by second to terms in increased quarter XX.X%. basis $XX.X In percentage

XX.X% adjusted EBITDA percentage revenue to as increased $XX.X million months of For and XX basis by a the six XX.X%. points increased to

be guidance million again results million XXXX. earnings per expect share. to to of We announced $XX.X we're now today We the and $XX.X for that operating in range raising or $X.XX $X.XX

$X.XX Our $X.XX and to issued $X.XX. the the March we April was by range. when in again, low ends updated $X.XX it both for original guidance We of today to earnings raised and on acquisition $X.XX the in did high to BTE

be from plans will $X.XX X the quarter announced in increase Our That per what $X.XX the the third increase share in it $X.XX XX. XX% third to quarter had the quarter company to dividend quarters in second on from third On and paid that $X.XX first year. of quarter. September represents dividend July an of the in paid last the $X.XX the third been

Chris Reading

it for Thanks, and operator questions. Larry. open With that up let's go ahead

Operator

comes from first Our question you. Tanquilut the Instructions] Thank [Operator Jefferies. of of Brian line

Brian Tanquilut

morning, guys good Hey, and Good quarter. congratulations.

Chris Reading

Brian. you, Thank

Brian Tanquilut

Hey, Chris. right. All

helping the with to kind above question X.X%. sustain out your your same-store views any in first that came driving my anything that push strength because initiative like historical this obviously the any -- on quarter would call what's guess ability I Is in there average? is there it's So gains? market at Or on share that of volumes you or that's

Chris Reading

Everybody well. obviously team the well. is a working job as are Partners sales together doing great

are the on side. support doing folks well Our

are what would initiatives focused call new and not working. there's that. I We're So just it's any that driving

Brian Tanquilut

physical there Chris, I home changes reliance upcoming rules on are home and are their PTs. more in the assistants reduce nursing And it. use nursing therapy Got guys looking to then think and

that And side? PTA already getting employment from the any an for where better you on market's Are then you out -- PTs? or of the of you playing seeing does perspective for kind squeeze that

Chris Reading

the repeat last side? what part? you Does on Can the PTA that

Brian Tanquilut

be that and heavier try PTAs, on the going is to PTAs On I their mean I the the think assumption are the home companies on models staffing to PTs. up lighten shift because nursing to

hurt to your does staffing, forward? your how and your dynamic that costs help staff So going or ability

Chris Reading

Yes.

it's up. home been helped health times market I the in think or there swings to employment hurt related the there that other past market taking been big us in areas open and in the have where or have when

I of tell recognized we've that you can't So that any yet.

so this had think labor a pretty terms Board amount group's with Committee call the management that this the year. am debt, a far fact the good But the I of given day. when the now coming I mentioned fair out pleased in right to PTs really market's cost we the and are and of other I Audit good done job

PTAs a we PTAs everybody less pay what particularly differentially the you'll a for shout-out expect give long-term, years opposite. side. to out to with do want CMS we'll I PTs, I see as that think So few for us on us But versus

not completely, but where PT-centric go need we'll more with right and a to of PTAs We'll probably now we we probably some more structure. that have offload and -- employment

in I that goes So what if say health. us, for well plays out you think home

Brian Tanquilut

last it. quarter you awesome. the my divested partnership. guess practice And one-to-one Got question, one That's during I or

bit the was like you unit and the business walking sell it per unit of up. us that there metrics looks Was are a also instance? If decision -- driver that factor mind the the a kind partners specific some to like per little in just and in of those? what And background to through driving how don't revenue of

Chris Reading

Yes.

on the all, I need deal market can the the no bit, didn't that the it. parts I in a quarter deal. several say First of I day of until there's original so of quarter. kept the any say key What metrics little in what limit is, will about effect that of finalize and we to last

minority three They're us. come doing with well. partners had We

on us. both Houston to in we believe that well. that could very and was they're well progress assets for sides where to -- were and an we on sell it that's opportunity desired fact side In amount we has a where and that gone be acquired focus doing make week other tremendous some can the And going this were

say I lot whole can't a than So more that.

Brian Tanquilut

I quarter this quite and as percentage Any question also the in increase Thank just a rent you. guess significantly? worries. Larry, coming interest No for for my the really down reason quickly. last Okay. expense minority

Larry McAfee

some of doing employees better utilities larger The means -- just interest for rent payroll in done Minority It our partnerships PRNs whatnot. of of moves not a unusual. reduction we've quarter-to-quarter. that around some costs which contract limiting better is job were a is as and too

Brian Tanquilut

All right, you got Thank Congrats guys. again. it.

Chris Reading

Brian. Thanks

Operator

question Our comes line next Solow of Securities. from Larry of the CJS

Larry Solow

on a morning. and thoughts guys. your I really those strong Thanks Good echo quarter all metrics. basically

on the is So Chris a congrats are guys feel company's on outperforming how Clearly industry any issues. lot that. of doing? you significant

I imagine unemployment how be last low you maybe the just year helping has got over record would do with industry years everybody, trending-wise? the so not few feel to this been that but how But

Chris Reading

and get to company a CEOs fine. talk they've is, look people over their The The in the statistics. really used and only we at done other that to They've with way some of we company having than well. Select to deep at done sharing aren’t an beer just other opportunity look only

don't how you maybe have them just So as doing. I point is a for everybody to really broad a sense I would else comparable.

on can I else. kind and not what everybody to to how of we we're and need worry can do think control what focused about we control we

Larry Solow

on a when flat. overall? Yeah. would the same-store be think I it started thought sort both and Understood. year How basis about we of pricing we

pricing? more more Is Or had better of a better being little driving sort efficiencies built mix? You that uptick this quarter. uptick a units in what's or bigger and QX that

Chris Reading

bit in on I flat. blend is a the on some the are think quarter-to-quarter, it's uptick gains think on the worked are. but pricing an squeeze as from coming quarter move around second year-to-date focus wouldn't We we group's I of where pricing, Units don't little much maybe hard utilization. out a we but kind to basis

Larry Solow

opportunities I of that the any Okay. the of sort sort Is prevention is that other impressive. or industrial really, realize Your -- business. core Does And core impressive unit? your business? separate lead But the cross up-selling in How strength does in? PT there about which business sort of it's was really that growth. from helped

Chris Reading

with our yet. wouldn't Not deal be. post-offer BTE network that Yeah. The we we intact that we particularly that testing, did change and There when keep we current pledged the that. deal can

don't expect past we do with that to in forward as to. facilities in the our We will We facilities prior business benefactor haven't grow the large we be deal. a haven't BTE and expect that party contracted our where USPH we

We're to why treatment business. very initially we the we companies I think suck to see there. to anybody that related in didn't So those because claimed just there's some opportunities bought it slow each other, from had we that's think opportunity. injury firewalled We kept of kind markets beginning and want over

should really less I the injuries. good be think a that's on therefore and side, there job prevention

the up from benefit they with relationships partners over Briotix the we're But synergy which then the seeing markets opportunities group. more that bubbled more being have, local our in are time, that

and think a PT date. I impact numbers our don't on side think big been to it So complementary. just or works any it's on it's driver I of well the

Larry McAfee

Just evaluation to post-offer performed explain tests physical BTE's the was therapy the of And majority clinics. in business. that actually are

So XXX. hundred, contract a couple of they actually sell

Chris Reading

bunch. a It's Yeah.

Larry McAfee

will And as to Chris we as some of we we but said network keep USPH that be direct It's XXX clinics. business that in other new get we place, in to contracts able clinics. the said, markets,

Larry Solow

Is And good opportunities that the know on I of enough. on we acquisitions. business? you've or you. then you -- lots much in sides question Got both PT tuck-ins piece. terms Chris industrial on focused you Fair Or mentioned Can the couple last the just assume of both? -- that opportunities for but size are pretty obviously done on come, will more a side of

Chris Reading

PT the what we it right got the on when activity think spring. did order we business. in just of first done, deal and to side digest We've year of did lot that's now. last A a And I we've

done team creating acquired newly job company And whole has so our a sales within group has organic opportunities. including just that the just done, phenomenal

So we up, integrate our get it's grow to for digested, acquisition. once and focused. opportunities we as but right we'll we'll more most there, now, that And PT recent that get we'll continue look head

Larry Solow

Great. appreciate guys. Thanks. it, I

Chris Reading

you. Thank

Operator

Matt from next of William comes Our Larew line question the from Blair.

Matt Larew

internal wanted to of had on costs cost in Good morning. number providers Larry, little service in terms I health ask A cost benefits question a first side. a of and the might some timing employees the the of anything of containment that half change up first or there the year. pick Was the the cost related half that in think you drove back of year? lighter

Larry McAfee

our No. any benefit care cost employees. get We for didn't from health

In fact, claims we our expected. than higher were

contract I So swing factor has biggest really that much. the think been around that was probably controlling labor, it's

Matt Larew

Yeah.

more the over industrial for Chris, more side et Okay. development. you you help it contracts being is terms just looking or the this the aggressively focus that But beyond Just or on near-term think guess year think to most next scale – I it And Is to us what larger prevention in building service expansion? about for think platform year think have you're of the PT opportunities? the acquire point alluded the broadening line extension? as of you how do geographic then At business. cetera, two at you national injury

Chris Reading

all in Well, Yeah. in but to a national good that We're regional over the acquisitions and have locations now companies. all perspective, I Fortune haven't in give some don't down XX exact within companies XXX presence. and to pretty we business, just this done sized had have some sizes number, of onsite states X,XXX

I know lines. focused cross-sell and service recently we broader both with BTE our recent added company – and opportunity, a we're we're there we yet, as we we're And on whether and like certainly still grow on so develop We'll be directions product now. that. of any bolt the that don't early. doing this we're great organic and in continued cross-sell What that a process we're said, lines I to sense growth making continued going as job we're a that's started I opportunity. There's give team that us those will continue we And regional have at good we've we'll I of and a most Briotix do the the good what acquisition between new really and company. within But makes all digestion to have, so may hasn't other those – But right and organic is services yet. know And good what massive some they're we lines. to there's most particularly have forward. go products to don't companies, opportunity and progress as doing look

Matt Larew

to deals, one new think opportunities you is as year, PT half have other last be side detail ramping partnerships there back half Okay. just not at the the you this the you where wouldn't that And out to simply Do discussions issue? or then the of from that alluding year. the would traditionally a up potentially extensions look of first – had timing development on folks the line players maybe having in complete Chris is did this again, at the relative of all with terms competition these Or would time in again before? they many

Chris Reading

Yeah.

we're anything, through. come as flow much how lumpy as and in think some we these ebb and have I

in new generally market. think more in seeing deal We're right seeing speaking, I the now. brokers flow the we're market more

sure I And expect some just some continue done. don't And or as right way it's know. and the I been now, of of terms – indefinite whether the we'll all some In season it. busy right we've I'm as in busy it's followed discussions we're really not we're now. your in things that's with of long But really meetings of time. question, good a other I that But as parts in get

Matt Larew

Thanks. Okay.

Operator

of comes question Mitra of the Ramgopal Our Instructions] line next Sidoti. [Operator from

Chris Reading

Mitra. Hi,

Mitra Ramgopal

Chris. Hi, Hi. Yes,

to follow-up it Just potential on approaching before. terms like little identifying I'm a partners seeing you you wondering, And it's some case if more you're heightened might novo seen that opportunities doing just a de some activity wanted of job side. of of also seems have good you the not in just or

Chris Reading

No. Yeah.

four, On of partnerships partnerships, de predominantly, most that novo of the new ground We successful is ago. it, to de opportunities The activity, side, the country. clear, doing just largest novo up. years be from all any probably XXX% our novo stopped partnerships so that within not de we're satellite around the additional our five

those location. staff. And And while of going. take come fruition. half. half, little to things They first as the on take get little the will develop time staying And But so year focused to a is year. a that result of find the develop. it, of the just half the And busy But second be in a a to

Mitra Ramgopal

just Okay. No. curious, And further front, investments, in again for to also, on sales that case even you drive anything a seen. gains? do same the, do you've the you've tremendous great. that And it of that. Is best made? also driving more need Thanks clearing I that's think on terms out. was to I And on the store, force numbers,

Chris Reading

we that's to it new just, That's or a forward. that, not to just continue keep fractional two for continue person right that or a anything or look ongoing. different ball year But think a I try well rolling than whether, ago. And full-time opportunity, person. It's to We'll working or right right? was, now. person the that's so

Mitra Ramgopal

acquisitions, And segments. on just the especially I IIP Okay. No. the just and of Larry, two traditional at look curious the the the on terms side valuations you PT -- great. side, versus potential between was differences That's in when

Larry McAfee

only were But all Well. exactly same they the almost, multiple. three We've done deals.

Chris Reading

PT, lower for the yeah. paid In than multiple, we

Mitra Ramgopal

Okay.

Chris Reading

how continues it's that I so or been know. don't not, far. that's Whether But

Mitra Ramgopal

the I mix great. Larry, you don't That's have then know No. Okay. handy. finally, And payer if

Larry McAfee

Yeah.

traditional was comp a So, it's managed was insurance in Florida, Workers' had little payer. business, private XX.X%. XX.X% XX.X%. because We like bad states Medicaid care, not a Medicare in was Texas Medicaid, of and revenue. and some and pickup

Medicaid other then, Medicaid. a more little And In don't X.X%. bit we though. So many we're doing was states, take

Mitra Ramgopal

Okay. my quarter. for taking questions, great Thanks again,

Larry McAfee

Thanks, Mitra.

Operator

management I'd remarks. like for questions, [Operator further the back this additional showing to Instructions] closing And floor at I'm or time. turn over any no to

Chris Reading

so your Thanks time your great questions. day. everyone. much Okay, and Thanks morning. this for have your for attention And a

Operator

conclude Ladies you. conference and today's call. gentlemen, does Thank this

may disconnect. You now

U.S. Physical Therapy (USPH) 9 Aug 192019 Q2 Earnings call transcript