Form 8-K U S PHYSICAL THERAPY For: May 05

U.S. Physical Therapy Reports Record

First Quarter Results

 

 Company Declares $.17 Per Share Quarterly Dividend

Houston, TX, May 5, 2016 – U.S. Physical Therapy, Inc. ("USPH") (NYSE: USPH), a national operator of outpatient physical therapy clinics, today reported results for the first quarter ended March 31, 2016.

USPH's net income attributable to common shareholders, net of tax ("operating results") increased 27.9% to $5.3 million for the first quarter of 2016 as compared to $4.2 million for the first quarter of 2015.  Diluted earnings per share from operating results rose to $0.43 from $0.34.

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Net revenues increased by $9.7 million or 12.5% from $77.2 million in the first quarter of 2015 to $86.9 million in the first quarter of 2016, due to an increase in total patient visits of 13.4% from 712,900 to 808,300 and offset by a decrease in the average net revenue per visit to $105.22 from $106.34. Net revenues from new clinics opened or acquired in the past 12 months was $5.8 million.

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May 5, 2016

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Total clinic operating costs were $66.4 million, or 76.4% of net revenues, in the first quarter of 2016, as compared to $60.4 million, or 78.2% of net revenues, in the 2015 period. Most of the dollar expense increase was attributable to $4.9 million in operating costs of new clinics opened or acquired in the past 12 months.  Total clinic salaries and related costs, including those from new clinics, were 55.0% of net revenues in the recent quarter versus 55.7% in the 2015 period. Rent, clinic supplies, contract labor and other costs as a percentage of net revenues were 20.1% for the recent quarter versus 21.1% in the 2015 period.  The provision for doubtful accounts as a percentage of net revenues was 1.3% for the 2016 and 2015 periods.

·	The gross margin for the first quarter of 2016 was $20.5 million, or 23.6%, as compared to $16.8 million, or 21.8%, for the 2015 quarter.

·	Corporate office costs were $9.0 million in the first quarter of 2016 compared to $7.7 million in the 2015 first quarter. Corporate office costs were 10.4% of net revenues for the 2016 quarter compared to 9.9% of net revenues for the 2015 period.

·	Operating income for the recent quarter increased 25.1% to $11.5 million compared to $9.2 million in the 2015 first quarter.

·	Interest expense was $0.3 million in the first quarter of 2016 and 2015.

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The provision for income taxes for the 2016 period was $3.5 million and for the 2015 quarter was $2.8 million.  The provision for income taxes as a percentage of income before taxes less net income attributable to non-controlling interest was 39.8% in the 2016 first quarter and 40.0% in the 2015 first quarter.

·	Net income attributable to non-controlling interests was $2.4 million in the recent quarter as compared to $2.0 million in the year earlier period.

·	Operating results attributable to common shareholders for the three months ended March 31, 2016 were $5.3 million and $4.2 million in the 2015 period. Diluted earnings per share from operating results were $0.43 for the 2016 period and $0.34 for the 2015 period.

·	Same store visits increased 6.7% for de novo and acquired clinics open for one year or more and same store revenue increased 4.9% as the average net rate per visit decreased by $1.84 or 1.7%.

In the first quarter of 2016 the Company's Adjusted EBITDA grew by 24.6% to $12.5 million from $10 million in the 2015 first quarter.  Operating results prior to equity-based compensation (a non-cash expense), increased by 27.4% to $6.1 million versus $4.8 million, and on a per share basis grew to $0.49 from $0.39. (See schedule on page 8.)

Chris Reading, Chief Executive Officer, said, "I am very proud of our entire team who have worked hard to produce great results for our patients, physicians, industry customers and shareholders.  The end result of these efforts produced record same store visit growth this quarter of 6.7%.  Our partners continue to push to deliver meaningful growth, underpinned with great care, while maintaining a close eye on appropriate cost control."

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Larry McAfee, Chief Financial Officer, noted, "Average visits per clinic per day in the first quarter this year were 24.7, an increase of 7.9% as compared to 22.9 in the first quarter last year."

The second quarterly dividend of 2016 for $.17 per share will be paid on June 3 to shareholders of record as of May 17, 2016.

U.S. Physical Therapy's Management will host a conference call at 10:30 a.m. Eastern Time, 9:30 a.m. Central Time, on Thursday, May 5, 2016 to discuss the Company's Quarter Ended March 31, 2016 results. Interested parties may participate in the call by dialing 1-888-335-5539 or 973-582-2857 and entering reservation number 86462697 approximately 10 minutes before the call is scheduled to begin. To listen to the live call via web-cast, go to the Company's website at www.usph.com at least 15 minutes early to register, download and install any necessary audio software. The conference call will be archived and can be accessed until July 5, 2016.

This press release contains statements that are considered to be forward-looking within the meaning under Section 21E of the Securities Exchange Act of 1934, as amended. These statements contain forward-looking information relating to the financial condition, results of operations, plans, objectives, future performance and business of our Company.  These statements (often using  words such as "believes", "expects", "intends",  "plans", "appear",  "should" and  similar words) involve risks and uncertainties that could cause actual results to differ materially from those we expect. Included among such statements may be those relating to new clinics, availability of personnel and the reimbursement environment.  The forward-looking statements are based on our current views and assumptions and actual results could differ materially from those anticipated in such forward-looking statements as a result of certain risks, uncertainties, and factors, which include, but are not limited to:

·	changes as the result of government enacted national healthcare reform;

·	changes in Medicare guidelines and reimbursement or failure of our clinics to maintain their Medicare certification status;

·	revenue we receive from Medicare and Medicaid being subject to potential retroactive reduction;

·	business and regulatory conditions including federal and state regulations;

·	governmental and other third party payor investigations and audits;

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·	compliance with federal and state laws and regulations relating to the privacy of individually identifiable patient information, and associated fines and penalties for failure to comply;

·	possible legal actions; which could subject us to increased operating costs and uninsured liabilities;

·	changes in reimbursement rates or payment methods from third party payors including government agencies and deductibles and co-pays owed by patients;

·	revenue and earnings expectations;

·	general economic conditions;

·	availability and cost of qualified physical and occupational therapists;

·	personnel productivity and retaining personnel;

·	competitive, economic or reimbursement conditions in our markets which may require us to reorganize or close certain operations and thereby incur losses and/or closure costs including the possible write-down or write-off of goodwill and other intangible assets;

·	acquisitions, purchase of non-controlling interests (minority interests) and the successful integration of the operations of the acquired businesses;

·	maintaining adequate internal controls;

·	maintaining necessary insurance coverage;

·	availability, terms, and use of capital; and

·	weather and other seasonal factors.

Many factors are beyond our control. Given these uncertainties, you should not place undue reliance on our forward-looking statements. Please see our periodic reports filed with the Securities and Exchange Commission for more information on these factors. Our forward-looking statements represent our estimates and assumptions only as of the date of this press release. Except as required by law, we are under no obligation to update any forward-looking statement, regardless of the reason the statement is no longer applicable.

Founded in 1990, U.S. Physical Therapy, Inc. operates 512 outpatient physical and occupational therapy clinics in 42 states. The Company's clinics provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurologically-related injuries and rehabilitation of injured workers. In addition to owning and operating clinics, the Company manages 22 physical therapy facilities for third parties, including hospitals and physician groups.

More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.

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