U.S. Physical Therapy Inc. Reports Operating Results (10-Q)

Author's Avatar
Aug 07, 2009
U.S. Physical Therapy Inc. (USPH, Financial) filed Quarterly Report for the period ended 2009-06-30.

U.S. Physical Therapy Inc. operates outpatient physical and occupational therapy clinics which provide post-operative care and treatment for a variety of orthopedic-related disorders and sports-related injuries. U.S. Physical Therapy Inc. has a market cap of $165.1 million; its shares were traded at around $14.21 with a P/E ratio of 15.1 and P/S ratio of 0.9. U.S. Physical Therapy Inc. had an annual average earning growth of 4.5% over the past 5 years.

Highlight of Business Operations:

Salaries and related costs increased to $26.4 million for the 2009 Second Quarter from $24.8 million for the 2008 Second Quarter, an increase of $1.6 million, or 6.5%. The $1.6 million increase included costs of $1.1 million attributable to the New Clinics. The remaining increase was due to higher costs of $0.5 million at the Mature Clinics. Salaries and related costs as a percentage of net revenues were 51.0% for the 2009 Second Quarter and 52.4% for the 2008 Second Quarter.

Rent, clinic supplies, contract labor and other decreased slightly to $9.7 million for the 2009 Second Quarter from $9.8 million for the 2008 Second Quarter, a decrease of $0.1 million, or 0.2%. The $9.7 million included $0.6 million incurred at the New Clinics. For Mature Clinics, rent, clinic supplies, contract labor and other decreased by $0.7 million due to cost containment efforts. Rent, clinic supplies, contract labor and other as a percentage of net revenues was 18.8% for the 2009 Second Quarter and 20.6% for the 2008 Second Quarter.

Salaries and related costs increased to $51.8 million for the 2009 Six Months from $48.9 million for the 2008 Six Months, an increase of $2.9 million, or 6.0%; however, salaries and related costs as a percentage of net revenues decreased to 51.9% for the 2009 Six Months from 52.8% for the 2008 Six Months. The $2.9 million increase included costs of $1.9 million attributable to the New Clinics. The remaining increase was due to higher costs of $1.0 million at the Mature Clinics.

Rent, clinic supplies, contract labor and other increased to $19.9 million for the 2009 Six Months from $19.3 million for the 2008 Six Months, an increase of $0.6 million, or 3.1%; however, rent, clinic supplies, contract labor and other as a percentage of net revenues decreased to 20.0% for the 2009 Six Months from 20.9% for the 2008 Six Months. The $0.6 million increase included $1.2 million incurred at the New Clinics offset by a decrease of $0.6 million for Mature Clinics.

The increase in cash and cash equivalents of $0.3 million from December 31, 2008 to June 30, 2009 was due primarily to $14.7 million provided by operations. Major uses of cash included: purchase of fixed assets ($2.3 million), distributions to noncontrolling interest partners ($5.1 million), purchases of our common stock ($5.6 million), net reduction on our revolving credit facility ($0.8 million) and payments on seller notes ($0.6 million).

Effective August 27, 2007, we entered into the Credit Agreement with a commitment for a $30.0 million revolving credit facility which was increased to $50.0 million effective June 4, 2008. Effective March 18, 2009, we amended the Credit Agreement to permit the Company to purchase up to $15,000,000 of its common stock subject to compliance with certain covenants, including the requirement that after giving effect to any stock purchase, our consolidated leverage ratio (as defined in the Credit Agreement) be less than 1.0 to 1.0 and that any stock repurchased be retired within seven days of purchase. In addition, the Credit Agreement was amended to adjust the pricing grid which is based on our consolidated leverage ratio with the applicable spread over LIBOR ranging from 1.5% to 2.5%. The Credit Agreement has a four year term maturing August 31, 2011, is unsecured and includes standard financial covenants. Proceeds from the Credit Agreement may be used for acquisitions, working capital, purchases of our common stock, capital expenditures and other corporate purposes. Fees under the Credit Agreement include a closing fee of .25% and an unused commitment fee ranging from .1% to .35% depending on our consolidated leverage ratio and the amount of funds outstanding under the Credit Agreement. On June 30, 2009, the outstanding balance on the revolving credit facility was $10.6 million leaving $39.4 million in availability and we were in compliance with all of the covenants thereunder.

Read the The complete Report