USPH - Earnings call transcript Q4 2024 | U.S. Physical Therapy, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the U.S. Physical Therapy Fourth Quarter 2024 and Full Year Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to Chris Reading, Chairman and CEO. Please go ahead, sir.

Christopher Reading

David. Thanks, welcome, U.S. and to everyone, morning, our Good Physical Quarter and Earnings Call. Year-End XXXX Therapy Fourth the morning Senior East; line our on Counsel; our me With this and President Finance Williams, COO Rick General President and Executive our Vice CFO; Martinez, include our and President, Reeve, COO our Graham Jake West; Binstein, Vice Eric Hendrickson, Carey Accounting.

Jake, we cover begin on the the disclosure. year, color a please. morning and quarter ahead some need you with this go Before I to would, if brief and

Jake Martinez

Exchange Chris. The risks from also current materially the Commission actual you, on on This statements reconciliations presentation defined Thank company's and which includes Chris? measures vary as can filings information. company's more involve and company's are those forward-looking contains and anticipated. certain company's views the the forward-looking Regulation The in non-GAAP may earnings Securities statements, G, and the presentation Please in for release assumptions. be uncertainties. see These presentations the and related website. results certain with company's based the our found

Christopher Reading

I which, with know, way feel proud network across outstanding. a intervention patients of Hey of as XX, therapy patients and and their want impact positively Promoter with more million support in physical whose work we've interact the for a professional begin on by of all is thanking across this everyone, thousands our of our particularly clinicians, teams Jake, Thanks, Net tireless our our year helped to this leadership hundreds patient them you morning our X of personal, encounters. I'm partners, behalf and to lives individual life-improving as facilities we of very about Score way than for

a it partnerships portfolio and been established Care the Google at fourth demand high compared to than XX.X% per clinic across past has services for our year's watermark of at in day the never per quarter, visits these XX been we higher new the in prior X.X our months. In has is quarter. Our XX.X% rating

the outsized absorbed we year-over-year. overall XX% upwards of Our total our we in despite volume in in grew XXXX, And plans our growth That through there rate commercial rate efforts Medicare year. reduction re-contracting in for to volume $XXX.XX, net the combination comp patient from we new as our continue moved progress with well. the our our needle combination of again to work rate some and expect to lifted make the quarter

large our surrounds we to our our rein cost across of we we from our remained cost Our that challenge On on, related have and front, in visit to to in with per the you which employee to very to we work continued part-time support be competitive we've environment that year, that doing, provide expected due difficult portfolio all part which in something partnerships, has our roles continues but than base. adjustments more to along make in. where needed numbers that especially see care we enough are continue can to the outstanding deliver visit therapists, hire daily been

across is way. would time allow and we made Additionally, clinician overall New note -- cost improve acquisitions, a was a well, We us reduce and We're and year. of in with and are York to exceptionally to keep, staff decrease Metro virtual to AI-driven X overhead in promise is the doing our piloting to we efficiency. last note virtually for on local our November more announced that this combination Wyoming, an a of proved also staff entry over patient's and to be Please clinics' into and in we and note promise front which or that our in offices PT a while the with burden good us deal one PT our new spent piloting technology to that. XXXX help helping state the us. completed should Colorado, of EMR year system Pennsylvania, course, team development intend deliver very states, entire a that a variety working generating X including for

In acquisitions fact, us start year. during de the a a alone, added locations, novo fourth approximately this XX in which great clinics quarter new jump combination provide we of for and will in

That prevention has of with One year last in that clip injury completed overall. has provider well. prevention very in at our our to continued well-respected entire business And business nice injury gone our was acquisitions very grow a long-standing, space.

XX%, revenue grew more to growth. quarter, to year, the year for the finish nearly of the XX.X% increasing for an For than much organic with grew approximately the equally year, fourth million gross that strong $XX again which strong a was profit where in revenue overall, XX%

auto a growth, margin of verticals. very our new a as manufacturers. we with impacted contract we landed XX Speaking ramp that quickly large, contract organic near we year-end, expand engagement. premier after little to competitive staffing one of into our continue That industry And FTE up bit nation's approximately winning

cover. of We have a to information lot

we've the underused, exceptionally appreciation over we that I Foundationally, the So our muscles of exceptional drive has tough grind for muscles that negotiations, a cycle ones a that the say we making of were through we into to went for the of us to have challenging partnerships but on and to ones turn that come affirmation that record going for if we delivery and rates you our important and wash progress have thankful to all expect not with high things years, developed sunset shortly. And volume, for are The few patients was with this care. things needed we necessary lifted momentum benefit our along care to We're this me to making have relationships rate head in done, and new rate allow patient of to allow we this development cuts have despite positive new easier at erred area. government, new right side which resources believe, in the were their when I'm volume, the people momentarily, erred, sure let been in. lot the had significant we all going of are we from year. Carey, be to to than which and cover. that lot we clinics, that out And but do for stronger, a maybe territories, industry and have a this; committed we our efforts as through care.

it So, there? you why don't take from

Carey Hendrickson

prior fourth good Thank million, XXXX compared in of and Great. of which $XX.X $XX million year. morning, everyone. you, reported Chris, the for the adjusted quarter EBITDA We to

revenues EBITDA adjusted EBITDA, was using XX.X% and margin, like quarter our quarter minority 'XX fourth fourth adjusted both for 'XX. adjusted the of the Our of

were high a at for visits per any XX.X. our history average Chris in day, quarter Our noted, record as

Our third in particular for of average per XX.X the quarter, visits volume record-high month per visit our to month-by-month XX.X, visits at benefited our had were month. On being a rest day at October the XX.X a that average lower day November XX was underperforming each clinics. with from per action day which clinics close than at and basis, a December

any average XX.X, full which our year, was daily for the clinic per amount highest is full history. visits year the in our For

CMS higher fourth X.X% the XXXX reduction per with XXXX. of that $X.XX fourth Our the quarter at net was in even beginning the effect rate visit $XXX.XX of went by Medicare as the last quarter than rate into of year, of

primarily their up Medicare, XXXX, the year. The the third of a Excluding in visit fourth or of to in quarters and was our the rate rate little was than average quarter, quarter overall $XXX.XX than X.X% and last quarter per our average lower rate. addition Metro $X.XX second was of fourth rate over fourth lower the

fourth Metro, Excluding in net and approximately our X.X% was Medicare up rate the quarter.

our $XXX.XX, increase a net rate net $XXX.XX XXXX. was XXXX rate year, of in $X.XX the over in full the the fourth quarter of For

Medicare course, 'XX. includes reduction rate Of the this in X.X%

year full to If as you in increased X.X% XXXX XXXX. exclude compared net rate that, our

continue our and workers' focus were major with driven on rate-enhancing rate, at our by through other was payers quarter our of of year-over-year, $XX.X benefit which XX.X% X.X% we in rate 'XX, improvements of an or in a strategic our increase We in priority addition for and contract XXXX. Physical focused cash each The maximizing initiatives increased $XX our the was higher net cycle quarter. also million of other focused revenue and approximately commercial Medicare therapy Metro of million December. of months fourth increasing management visits growing business. We're and increase in mature remain had increase and November, rates $XXX.X will November comp fourth payers our our on in and of the revenue from category collections in our reimbursement revenues the last year's clinics, million which negotiations to through on from than

of were Metro. Approximately costs which of of half related million $XX.X operating to was therapy dollar the physical Our million, increase an increase was XX.X%. $XXX.X

was of is increase the in Excluding acquisitions, 'XX, our fourth fourth to of compares salaries which and related per visit $XX.XX 'XX, of X.X%. quarter in an quarter $XX.XX the which cost

X.X%, of cost $XX.XX acquisitions, in in the to increased from visit just If of moving you exclude quarter quarter total our 'XX fourth $XX.XX operating fourth per this the year.

XX.X% last in Our fourth compared quarter 'XX year in PT fourth XX.X% the quarter was margin of to of 'XX. the

fourth Excluding XXXX. XX.X% PT this acquisitions, our quarter in of the margin was being year,

fourth as for team, and IIP the XXXX. noted, the full in growth excellent quarter Our of produced Chris year

prior 'XX, year. with fourth IIP were revenues net the the income IIP up Our up of over XX.X% XX.X% over quarter

IIP single- profit the IIP high made revenues with we still up were gross acquisition our earlier digits. that XX.X% year, Excluding this our up

Ottawa margin fourth little XX.X% as the Chris the new fourth large quarter added quarter. in was client Our muted noted, our And 'XX. the that we margin fourth IIP a in of bit quarter in the

up of income IP full-year, the a ] our XX.X%. IIP [ were up with XX.X% and XX.X% revenues margin For

X.X% in net were revenue quarter full of They of fourth in corporate year Our of were XXXX. the costs revenue and both the net year. 'XX X.X% of our office for and full the the for line quarter fourth

That of our factored which million That were effective into tax our in results expense. of $X.X million XXXX, million. Our $X quarter 'XX. a record rate. not compares fourth did income to the operating In should go-forward quarter million we tax true-up, increased fourth $X the $X.X be

quarter fourth expense, deployed amortization the operating and which were interest quarter also XXXX income higher results is the since cash of we lower by Our which fourth acquisitions. course, invested to non-cash, acquisitions due in impacted increased in our

excellent position. in continues sheet be an balance Our to

with of million our loan that that have at the of middle term and term in rate the We that debt place through will swap agreement rate places extend X.X%, $XXX.X XXXX. on loan a on

$XX In term addition on also just revolving million facility it credit loan, had drawn XX, that million at XXXX. December we to the $XXX have

will $XX.X and focus primary we acquisitions, with of into ] more continue the to capital of of Board $X.XX XXXX, from to deployed we of rate $X cash balance allocation cash million And [ Acquisitions per share, share interest our Also, bought million. existing in effective $X.XX capital quarterly million dividend was our be for Our at from is December our note, structure back it. well-positioned our partners. our of $X.XX our end and dividend. increased $XXX quarter first (sic) per than

expect to $XX range XXXX our EBITDA Looking be to million. XXXX, we full million the to of $XX in year

the a X.X% as XXXX in still partial IIP rate $X.X increases clinics our acquisitions growth completed in will EBITDA we enter Medicare year double-digit complete with have that expect We XXXX, contribution rate the full volume EBITDA, in approximately payer the but existing year completed ones in full the XXXX, $X.X business. continued then million from we increases and to continued of XXXX, in impact in the that year which impact our reduction, revenue growth million of and as we the we of in year, a we headwind and of we've the equates good noted,

to normal press to take quarter just around we'll we in EBITDA quarter. With release, and seasonal likely our years that's noted quarter the Chris, that, lowest first year with EBITDA back the expect As somewhere factors, consistent to in the of be call XX% the of previous turn our the first questions. we year full due I'll

Christopher Reading

let's Carey. Great open job. up for it Thanks, ahead Operator, and Yes. questions. go

Operator

with Tanquilut Brian from question first our Jefferies. take We'll Instructions] [Operator

Brian Tanquilut

like as the impact also in of clinics that knowing then think growth your Medicare a how I a guidance, your of I closed. maybe you're cut my trajectory one? know cut, coming about rate in? question, first then about number there's thinking curious Maybe rate are rate XX that volume Medicare but assumptions there's the that And Carey, growth, kind you And the

Carey Hendrickson

Yes.

to want you Did ahead. go -- start I'll Chris? So something, say

Christopher Reading

ahead, Carey. go No,

Carey Hendrickson

in of clinics. I'll XXXX to in with in That $X.X about start They the they of makes about million months EBITDA impact $X.X the on them. a X -- loss closure the of closure had prior a that those our clinics, XXXX. million closing positive first

for So that XXXX. positive will a be

all Medicare rate, continue the other we to have to do payers. we're but our going X.X% as grow far rate reduction, As of

in got those We some some now increase the middle our based that see are the looking in some XXXX. right constantly to to we're -- on of right larger of and negotiations negotiations rates we're in on of increases states now. We've contract expect

we expecting -- mature to So we had Medicare in XXXX. maybe minimum. Chris, Medicare, quarter certainly confident you expect rate somewhere and can rate in the did rate, increase I from visit our had at the increase X% to XXXX, 'XX any continued to that compare volume you 'XX XXXX, rate go with our when our going at it we still I but we're X.X% even to growth a in -- fourth reduction, of not in in the achieve And think that larger a as in clinics, expect X% in growth in in other I'm the just think we reduction rate range -- then, we that far at see that? because X% to comments than XXXX that. into the as we year

Christopher Reading

I these progress continued that's areas. continues And team the all to make all in on right. those expect fundamental we think and issues, No, work to foundational

Brian Tanquilut

Chris, of retention then, bit a and and as an Understand. a think maybe of And still inflation, about obviously, maybe and I there. recruiting little challenge wage focus area

the we end trend? that the on anything what us curious, you could just there? to of getting are dynamics So close your think yes, you Or share with -- thoughts are And there? do

Christopher Reading

look the those, are wish of of internal Certainly, of lot project I the a factors. difficult I Brian, external to there distribution us number like. knew. entering number what and school, graduates, people I for Yes. therapy mean, it's physical is to factors, there of geographic demand are going

yourself more this for in we've in upgraded a we're side. We significant that infrastructure, They're made So, project that improvement some individuals. little how stability bit in and others. year And by to majority addressing seeing it's to now. from difficult side. the very, me measurable of when balance recruiting things hired rate, people. our on is We to the ability tell improvement, competitors, the We in a the right of partners. changed very investments so to to your expect a you lot volume, change. I market always certainly time. But anecdotal seeing we We've applicants terms want we in the our long of sheet on the will recruiting in But some rate area, systems and competitive and than grow have determined improvement seen the a We're definite continue market the to. the they've there. have remain number stability competition differentiate if of to to competitive compared comparison vast we

Operator

CJS PJS Securities. ] We'll Larry with [ take Solow our question from next (sic)

Lawrence Solow

question. Brian's on piggybacking Just

volume bit the than to and was I some 'XX, think for less there it the little because constraints right, some X%, of was on I think, staffing X% outlook and so whatnot. in a just So, that, -- sort this year,

constraint So on pressures Do just in on I the staffing or but will side? that it still be inflationary be know like underway. guess I -- impact overnight, initiatives are will cost it's terms several of is, still but fixed -- you you that the sounds things a question have won't more and staffing think get volume a there,

Christopher Reading

is fully have then perspective. you're -- mean, some locations, a staffed either where I have looking growth I volume one many you're capacity others to you have current relocate. your going things potentially progress exceeding somebody or staffing and and puts XXX always where we side. takes or reason we're another, making mean, speaking, When you recruiting for Look, happen. Generally approaching on Yes. from have intermittently you're the

retention good. been Our has

that to start I'm a we with year. that as And go Having we to address radically last in XX know that, to forward to we in don't expect little a made better prepared than give I the the did be volume different so, that I we're investments as this the fashion going number XX you months. volume able said we've

working the deliver it that delivered to we'll how comes worked out. plays through. hard and and we is on see see very year have that Let's both on And issue, as everybody how

Lawrence Solow

I a moving It like I actual ultimate cut last but thought, there's a not fair. feels without That's and Maybe still moving timeline. of -- can Again, that last we're even threw about maybe moving can than savings exact parts. excess but you $XX that a cost And know you in, target. it right number, several million spoke there? I feel of initiatives that you a $XX lot again then, are press you of in direction takes think is more few highlighted Is or your kind months to resistant kind And we number the ago, quarter, know just out inflation time. but you this million you in is probably in say? comfortable like an fair build out that efficiencies that do There things release.

Christopher Reading

Yes, I fair. think it's

work on to got is perfect. fair. do. we're area it's the said that challenging. think, one We've, were going we This think I I at, delivered almost not we and to everything continue Look, it's to we've

have partners' of people. Our side making to enough is the sure tendency err they on

up aggregates to with lot somewhere million $XX to it probably how to to and moment quickly. $XX inflation, between that take clinic right with a enough -- per be take to of got a it's we've pretty way not side a to err yet people think slack And to $XX the day doesn't moment care I $XX on staff. generally out resources. And figure million

things that addition basic virtualization in the the partners with of around front time, hopeful more that to think system make the operations period virtually. And team and will a helps of sure bit match in a demands. daily locations clinician particularly potentially volume We're productive. on locations then across back documentation number more today And ours so, ability very the and with our there the we're precisely scale make bit therefore, our to is working give that to longer us to initiative for desk more hopeful smaller efficient, Scribe handle that using a efficient, little be little that a we're AI we

so little time, And take a going of to course. that's

changes are ongoing. addition has have the to we that those newer, recent to day-to-day more work so in focus more And been And do.

So, we've some got to results. deliver

Lawrence Solow

X just think -- And the it's CMS on the lastly, could what's you and does -- it It obviously, the been government I that, you too at like, in years happen, is of I cut, know of exactly Right. feel mentioned like that that multiyear to sounds going or but again, release X a never your end be headwind. know cuts. we

Christopher Reading

Yes, And prescribed all which this was definitely and particularly we we the to the we to directed fee cut kind beginning, rate that absorbed schedule, be. around with was absorbed, statutorily, of but should the that. at be interest, of should an should original wrongheaded therapy, that wasn't be physical which neutrality be anyway. now We've supposed -- according was we that law beyond toward onerous way cut drafted

We members. a to lot be frequently and discussions key in of continue with Washington have

as physical Medicare saver falls, think is entire a Act, get bill the offset a fee co-pay a is SAFE in be can schedule. be entitled reduce to without to the used patients a a of office. therapy can which screen physician the Act allowing some to potential as designed have -- used SAFE We we in no, increases that

to traction of we this something so, that would lot hoping come year. We're pass And with that. have a

progress. be a will neutral of but the And so making years forward side, we're nice what we and other years, to been hoping tough have out we're be It's in again to come to the series hope future. to it

Operator

Jared from with William Haase question next our Blair. take We'll

Jared Haase

end on ask like year. Looks the Maybe to IIP organic segment. the on an that basis I'll accelerated

Just make understand that wanted what to acceleration. I drove sure

mentioned were double-digit in growth So trend logos visibility new And have guess, in kind kind driven? Can material was that us, of that remind the you basis? I that period? continue. of then do expecting profile on you largely of a obviously, cross-sell what forward-year that just you Any level to

Christopher Reading

visibility job major guess ago. this Yes. flat, years Visibility change year I done years into mean, years think that going had beyond which X that and unforeseen, was it's year X that, we've X it. years X -- pretty we've into really some the over anticipated would had now we've or barring had is double-digits. I We change, consistently good. a been And good some be we several

in of over better cross-selling. brought with I'm exceptional we And our serve. has this largest cross-selling. much, company that the we've so, one in we good them. added us acquisitions done that injury our that The of industries much of of was our for time. CEO that offering proud same week. particularly gotten gotten types industry the have over an and really period at, to in has at And things verticals, job team broadened also our And That They've prevention team time, town

those And significant components. are so X

for that massive It's our many In addition problem are the issues. preventing more prevention country more necessary a and industry fact aware becoming musculoskeletal many, segments. part across of injury that spend a their is to companies

And the earlier in so, it's year. an that combination. acquisition We did

Team has we've April and That is really guys. again, it over think well. a job. the has I a of XXXX. integration gone matured added period those well. probably proud to gone That just of it. was doing team, Really And acquisition nice time, of

Jared Haase

quarter. fourth differentiated super on I I services, you you the you in that was that win great. a maybe win key hear color of same the to related larger That's then, allowing color. helpful the was large any do I'll That's to how cited segment. the your that characteristics I terms hoping question guess, And in just competitive curious, frame ask client?

Christopher Reading

Yes.

auto and the the I these has time. And have out being process. world's Certainly, our talk. look, of the think, but of win had price great margin staff And auto quarter. stood in that has that already. into us. other was of was but this things service lose a a proud up particularly some, biggest in little consistency And some. think I'm serve which think fourth the although a one our the works So, and this well. really, job, team the lot win the year. teams, for over the doing plant as don't They're was prevention a of The our strong one in good margin a number companies, U.S., which They injury compressed particular come and This to have components to in general, they which we contracts the auto we that our by of necessarily, for little staff in really was a auto some partnerships served provide in great industry. It I of play, tighter large you long-standing than coming a It aggressive competitor. relationships manufacturers they we bit, of we quickly, terms competitive were industries, pricing I caused with saw us there are success

Operator

from We'll Partners. take Sanghai with our next Jiten Corre question Sanghai

Ryan Quinn

Quinn guys okay? me hear This Corre. you Can is Ryan from

Christopher Reading

you're Yes, good.

Ryan Quinn

seems about understand million to midpoint And to and that me million to December. XXXX the XXXX EBITDA. of $XX.X better about We're EBITDA XX%, $XX has million $X imply of full the of gets November It of Metro, $XX EBITDA guidance. X which months of at of just year was million about for for budget trying I you kind if noted given margin the like revenue that their about million $XX

of if just million that, Metro a back if 'XX somewhat X an getting to $XX of I'm full guide. million So an EBITDA EBITDA, get comparison, to I which to implied little million add is $XX.X out a number. And higher simplistically bit on $XX months midpoint those than kind I XXXX, apples-to-apples your of get for I year to

day record relates to trying So, like as better the puts visits seems the the are is dynamics and it the I'm it average puts highs understand that as growth and just some just per to but trying the relates it cost extremely takes because to of high, to understand we're better demand budget.

Christopher Reading

Yes.

Carey some Let say has detail me the and on this, the puts and takes. just then of

Our can. budget than guides little provided. These of to it frame that higher the range is try a actually perfect, midpoint the we aren't we and as bit we best

a which takes got a Metro this lift, remember You we're on. that year, lot we've actually pretty out chunk which significant eliminates of to got a reduction Medicare the again, XX%

So, remember that as well.

you to the So, that? around Carey, do through detail want walk

Carey Hendrickson

Yes, sure.

Metro First thank Ryan, all, high. of a is question. the you But for your little estimate

So when have and million $XX had they about -- we they we bought we them, EBITDA, -- have we of XX% -- own of that.

EBITDA their minus plus to $X us is or somewhere million, bit. around So a little

a amount the and EBITDA was too. -- that high that's So quoted you of fourth little quarter

those So, $X they were probably with contribution their in about million or so X months. the fourth quarter from

it out you I into our at pieces. -- break look if So,

in reduction because costs corporate million as I initiatives that million, $X.X a in going at financial in million had up somewhere have -- support from acquisitions, then versus more have we We than go little probably XXXX than our are 'XX going we 'XX. systems were where we got acquisitions, XXXX of If we you around as what we Medicare $X versus contribution say. all to EBITDA. But to million the would more well increase need upgrade. $X in our the growth that is some $X that in have to XXXX to from IIP them look in we an from increase to

you're as probably in down go financial of pretty of to $X But million, good $X Then 'XX. in rate around number the a in our reduction XXXX, could was years. That's there. costs. in upgraded million, it corporate million somewhere it's will what versus percent revenue, that XXXX million, a growing of $X I $X a be haven't We think systems with core -- additional what -- still, million at without Medicare left $XX it the in

Just where -- that but that midpoint gets these are all kind is. you just broad range of strokes, to

that's helpful. hopefully, So,

Ryan Quinn

see to down if then QX just It's color. one it net obviously great but take of $XXX.XX, additional QX little that it's well. to bit patient the a did as visit step more, Appreciate from year-over-year increase a and may. I And rate per that -- sequentially

understand some the and that there. puts bit you takes of can to Like, trying a better? Just us little help understand

Christopher Reading

ahead. go Carey, Yes,

Carey Hendrickson

Yes.

As average call, than average Metro's mentioned overall lower rate. was I the rate on our

above and the lower it's in third about our just $XXX.XX, rate that's quarter instance, than for was, So of $XXX.

increase So, year. going that you we've with it's we rate a still brings but got prior and even all that at have was And in little especially increase as add over Metro quarter And a 'XX quarter, the you you addition of in at of Metro. down compared time. rate, on fourth of nice pretty Medicare considering X.X% it to negotiations well bit. as nice that that fourth able still the when and in, 'XX rate. It a rate to puts low the there that's the rate a fourth quarter in But exclude were the takes increase impact -- when in the

than apples-to-apples at it and other looking kind Medicare. So everything of

quarter. increase maybe high consider second good that still pretty -- not as but the a it quite quarters, in the third and year-over-year as fourth I in good So was still

Ryan Quinn

the a Metro? including little step-up Like comment to decrease? would thinking we for it. cover bit XXXX, and help able Does little the you a be like about what Maybe helpful. folks kind there? be a to EBITDA going to the of excluding here then see going That's bit back the just for some margin it a look XXXX? how should who of Appreciate XXXX, And of budget or are that? just we similar -- Are to name, bridge implied

Carey Hendrickson

be up to just to -- somewhat was We've it I margin the as ends I'd first. to our But have got be of going how similar where in is cost me when depend talk 'XX. similar on in going think, going to IIP just able 'XX. from PT much I in the think relatively it costs to was at similar we I about look margin, we're -- side that in some was margin EBITDA growing our as what our of where what what Well, -- we're our and XXXX let hopefully I to margin it -- relatively going say. headway think bit it it's and talked margin make, it's normal, to for that increases in increases year. in a are to costs our be is PT little well should

Ryan Quinn

see. disclose what I But the would you guys don't actual estimated be? margin

Carey Hendrickson

No, that. talk specifically about we don't that

Ryan Quinn

time you. of both I follow the appreciate up offline. Well, need to Okay.

Operator

from Davides We'll JMP. take Constantine question our Citizens with next

Constantine Davides

about for talk de since about and -- Metro Chris, just add experience the comment with in now more then, logo little it's to market you're that owned And sort that you months XXXX? experience just your thinking of that York maybe on how you've can opportunities New broadly in X on just your a bit novos first there? underneath

Christopher Reading

team Metro I'm job. over at Michael Constantine, -- let Williams to center kick want take great -- Metro. front going few going that. Eric I'm Yes. this a then to daily I doing to me with make Eric comments, is Metro and -- and a is

just to New York is be for York, really lot not see New adjacent market but turn good of We in a us. growth in opportunities, a areas. to going out

So, Eric, touch a do bit we little want where you to are? and Metro on

Eric Williams

other not York. a opportunity an which about job mean, in whole has opportunities the a novo really business, have on at for boroughs just picking area New that lot pipeline Yes. to to solid to team think excited amount penetrating. doors de and Long Metro, density very us. They by for that of Look, evaluating tuck-in has And Northeast grow having some now it's a over we York Metro going we have the haven't Jersey. that a tremendous New strong a Island, management York, we open of up ability have well. up the this into going that but we're of Long really in great New been I done we Island, to be as of New And we're

increases to ability So, I de think it our add novos. dramatically

that year, remember, last Metro from de I substantially here clinics we think think and if did in XXXX. a XX going moving novo is add to I to forward I perspective,

Constantine Davides

clinic? I Physical you just think extend that to a of services you U.S. and do you outpatient broadly home-based opportunity typical thing at kind comment about have One and at on it's they least guys of therapy, maybe of the a how walls beyond some what know lot of can or X

Christopher Reading

to great as definitely of and see Eric. one planned. Go focus, Yes. therapy done then opportunity. want up. meeting but a next me [Indiscernible] a expansion, We've there, let you on it service We we has Metro the Yes, more coming have ahead, -- to be job home-based and start We pick partner several see a got It's big focuses up. going

Eric Williams

there, expertise, side going up home business to but side care with XX% home of clinic to about that. expand side, the on expand well. Yes, a was door and I the care again, Metro their there add lot outpatient the mean of not to just on I was to as the and opens

how are and with product share forward we other we to grew about excited that So, looking having that and looking our at started Michael partners line.

opportunities we at USPH. So, also creates growth for that further think

Constantine Davides

Great. you I if missed comp workers' talk this, can quote you've in -- just then, guess for about been mix guys And just but for that one did time. long last a question. I you a Carey, the apologize market I quarter?

workers' of driving really the market to of that of volume growth part what's reaccelerate ability sort in the some your of respect terms with in to comp? benefits Just

Carey Hendrickson

our Yes. that about to heading talk I'm going Eric because he's let really initiatives. comp up workers'

you So, Eric, why take don't that?

Eric Williams

comp really was over and A of course is much and something rate us. hard really pay increasing Yes, X goes definitely had worked the of success agreements. those number on like we that relationships of the the work focusing this significantly lot a years, the to for we pull-through XXXX Sure. of on last it back initiatives,

in at that increased look XXXX, number go a of the the take can X back of relationships you end ago, significantly pull-through. those place and the we agreements So so of to years had we number tripled

work a up increased you quarter overall that QX fourth went about and Total Visits grew overall On X% ] On [ XX.X%. year-over-year. in on rate. the some annualized very numbers. an Rate at revenues and increased basis, then quarter comp. I'll you year-to-date X.X% give take year-over-year. -- And numbers quarter-over-quarter in visits XX.X% the some year, a look we If and for for XX.X% have basis, increased similar. revenue year-to-date increased XX.X%

some it's time So, managers, versus additional therapy a focused with referral compensation case invested patient little do teaching spent a We traditional and outpatient how lot employers physical what's patient. with been in a our effort. a bit of a partners that them you workers' relationship sources, resources. for We different handling about

we business that that help big difference have still now, agreements us for in making XXXX. which to grow our right in place we that are infrastructure training it's process So we and put a more several and us, in further expect

Carey Hendrickson

was in -- of Constantine, at quarter, from your mix, fourth significant quarter our third specific mix XX% the about as workers' but right little workers' down that That to the of is was XXXX. of a And the was have does. it question doesn't comp bit comp component the business the Metro reason a rest

'XX. it third of If on in XX.X% basis, like apples-to-apples just the quarter in our an you the was quarter, was mix -- fourth

Operator

Research. our next Petusky question take We'll with from Mike Barrington

Michael Petusky

great information. of Lots

Medicare? are I'm speak just be back mean, that integrated? of these that net can contracts Or going time? do are more improve So, they Metro, you as to they can you have fully lifted to Can rate a just decent amount I over that $XXX.XX? curious, there. the

Christopher Reading

be Eric. it will Go Yes, lifted. ahead,

Eric Williams

resources on lot outpatient areas the Yes. -- payers we're the payer There's is home And neck side. the the Medicare. care And have is But contracting actually going lot a that of a through market their the a our in number -- terms didn't again, negotiations ability the on bring their that majority through in going one is of and clinic business number with volume the of we deep rate. is absolutely rate to of where business have on side. the to. Metro expectation A increase of we're vast of is clinics the

opportunities definite rate improvement. for So

Michael Petusky

not I Did say million of assuming are putting clearly, you this Carey, pickup not that from on doing essentially EBITDA in Terrific. right. or of did heard place? were the to sort say were you the All and you a you And sure and guys you then takes guide, have. bridge technology did puts and you I'm when totally the the may sort did $X say the that? mishear I of initiatives I

Carey Hendrickson

be of I that would little our say. a I may No, $X what. million say IIP didn't business, from north

Michael Petusky

Okay.

All Okay. right.

differently. but I how don't what in I can mean, handle do up? that you what in are terms you -- -- like I think know then So, of I the different initiatives, understand Chris, know stage, technology pilot you're pick notes the places you

they're of treating are as therapists Some the doing sort and patients. very notes the heavy

you other less and relaxed can AI virtual notes or how mean, less pilot the of much staffing? I pickup piece the are get the then -- Some about from that. technology from

Christopher Reading

in still notes on desk therapists. I to-be-determined. necessarily the on cost some expect to I reduce perspective help more will the AI TBD, of we'll do the the it virtualization Yes. component think pickup it's will front at our think part stress we from have cost-related than a

help will retention. it I think

it's virtualization front stress desk more little bigger cost free part time, reduce on side think opportunity potentially. But up to the you anytime create And generate going and bit the I you the to think be I going and be we not increments. make that revenue to is how you a welcome progress others, -- a some to yet, feel when add. I from are. the we're think do on I good And -- long enough we some talking real to we're But in from able in that definitely handle enough to deep where a Mike. I feel can have like

Michael Petusky

this. And to just unfortunately, think Okay. question. answer I And last know the I then

Congress Canada XX back would of put may center this in in the for all December I'm I'm assuming Greenland rate plans the be between post the Washington, and at CMS Gaza, that thought go terms 'XX. activities assuming and cut activities. that maybe and in Congress' front Given in look that that our not

So, that you guys something that not can that's for? still have you confirm hope just of kind

Christopher Reading

I'm a that We not it happens, surprise. not our in don't don't to that's it have will I into anything Yes. Is happens an it. and would remains? bet have these predicting budget, be an we Washington possibility there expectation going that that tell outside to that on If you built days. happen.

don't few up because that is fee have end particular to few have the under just going fee gotten the And the up that of a that. propping physician I entire past about a schedule of schedule some draft form, than duress select of it this subsets years, certainly the to proposal think to get kind traction physician do those years. Physical the cost way one those, the they've really be is last that I it's been item gone in lift. and be prohibitive in think that in will addition rather lifts is getting cost therapy prohibitive would the would physicians

aggregate that, you a And so it's when really number. big all

why could happen. don't that's I so on We're expecting but think not And But it. it's it. Yes, to going not it? counting

Operator

take next from Bank from Joanna We'll our America. of question Gajuk

Joanna Gajuk

case. I the the the guess or thanks A color pricing non-Medicare average rate, on per here. follow-ups QX, the on in couple for excluding revenue -- the Metro

revenue that year rate, little the 'XX case the with flat be or for we excluding do the expect on or do a for But a little per bit? guess, piece I coming at rate, the So non-Medicare I assume lower up for down exactly bit you to Metro? what I Metro 'XX, guess, even the on guess, average then

Carey Hendrickson

versus down So or up -- whether average the that I'm be 'XX. correct? sorry, last was, part Is rate will

Joanna Gajuk

like full-year. the year? for what the kind for of Yes. do 'XX And for you the non-Medicare assume then Yes,

Carey Hendrickson

believe be Yes. up 'XX. I 'XX the will versus in rate do

than in noted it I rate same 'XX do 'XX. it maybe up in not 'XX have I to did it do Medicare the -- think expect in 'XX. we I because reduction larger was still, 'XX earlier, may rate as 'XX not But be versus at to have the we

negotiations that as the rate increase X% far underlying of non-Medicare and better somewhere around still than what exactly we on expect predict depends it's not effect. But an I bit because completed when to increase, those if hard when take get a As and actually mark, little hopefully it would that.

we'll as I achieve when XXXX get see think that Medicare there. rate a kind need in got that reduction some to looming of I rates. in Metro think And on nice increase to we you've Eric mentioned, to rate order lift

more, little on got opportunity would I there, I -- we if think. than some real at expect other some we increase of least as have think We've we're rate not our acquisitions. much, there a

Joanna Gajuk

Okay. last Great to hear, I guess, comment. that

cash I topic, I you don't -- guess, on about on think talk flow. So, another

grew down, I was was timing also a cash So, there related issue, timing guess, also is maybe the some there down lot in quarter for guess I 'XX flow flow because and something it cash- is but also the the year-over-year. full such year, and to

flow So, I think should guess we how maybe talk like about more for outlook but about cash history, 'XX? also the importantly,

Carey Hendrickson

than bit, Yes. make to good loan term help I mean, I more pay acquisitions. that flow, think had -- cash us enough really down look, a little we've

Of than -- I have in course, takes, growth we came or flow some any XXXX. I some little we more had say wouldn't puts of bit sheet. cash are necessarily our XXXX, there will balance Year-to-year, on in big that but expect a we from cash already had

increase -- for not significant. as dividend our quite is Just

it's increase, is add but much it that flow. a nice, So to doesn't cash $X.XX our which

as flow -- the dividend perhaps when much the think we have away I be in top of taken from an increase much not to as So of as rest there's growth. cash going line, growth the the

cash flow. I'm good our we standpoint. not -- our think I be from have flow about growth a cash So we'll in worried a position flow growth, about cash

of in standpoint. cash. I think It from good but we may a generate vary bit a year-to-year, that little we're good position a amount

really to forward, capital a front believe too. that Hope is I activity I'm acquisitions to XXXX the in of going And Joanna. amount have structure focused to able what good on do which capital helps, allocate be good we'll I position we're think on. in the acquisition Our a

Joanna Gajuk

different some this this to to Metro would is something something you there's the service that therapy No, whether I as do guess incremental an develop appreciate things it capabilities line, expanded at? need where front, is more or guess, the assets way guess outside buy actually internally? on I it. about is you of color might it some on acquisition mean, new but there kind Or market? a I of, And many helpful. any I home looking you're talking I some, you're

Christopher Reading

Yes.

I time both. market, working in our Actually begin going -- we're spend partner stuff there's physical side, meeting now. elements right partnerships in the that that's Michael's to something we're select where at always think help a care injury therapy be up partners, one and to mentioned, on X In we'll prevention some on. the discussions just looking the Then in expansion with with can that's we're have that March, coming Eric home we to of normal we that featured and and we do think as introduce organically.

we'll So as have opportunities have. think year I good this we

some many, to do competitors, of is job, compared cases, structure really mentioned, undoubtedly, capital forward. great but and difficult Carey beginning our considerably a in who XXXX As tighter, many whose

active. a companies, in and we're really and we we're going for great great be So, to have to good spot, a home continue

to see in across And do what physical all therapy. may be to us care so, you us a in -- different see segment. different, those continue It's that normally I active I you'll but It's a different -- truly just areas. be don't home site, know consider we really it's

Operator

our further for the speakers any program And will no to there the time. line at remarks. turn closing questions I on this are

Christopher Reading

us and day. A David. are on tomorrow, lot Okay, Look, you. now. and time Thank I feel and Thank questions. rest give Bye great available a day great questions. the you. call, Carey free as your for for goes and everybody, of your of Thanks a your have to thanks, today.

Operator

does you disconnect. participation, you for today's now may Thank This conclude your and program.

U.S. Physical Therapy (USPH) 27 Feb 252024 Q4 Earnings call transcript