US Physical Therapy Inc (USPH) Q2 2024 Earnings Call Highlights: Navigating Growth Amid Labor ...

GuruFocus News
4 min read

In This Article:

  • Revenue: Physical therapy revenues were $143.5 million, an increase of 8.5% from the second quarter of 2023.

  • Net Rate: $105.05 per visit, up $3.02 or 3% from the second quarter of last year.

  • Adjusted EBITDA: $22.1 million, compared to $23.6 million in the prior year.

  • Adjusted EBITDA Margin: 16.4% in the second quarter, compared to 17.7% in the prior year.

  • Operating Results: $11 million, an increase of $600,000 over the second quarter of 2023.

  • Physical Therapy Operating Costs: $114.7 million, an increase of 10.3% over the second quarter of last year.

  • Physical Therapy Margin: 20.1% in the second quarter of 2024.

  • Injury Prevention Revenue Growth: Up 23.2% over the second quarter of 2023.

  • Injury Prevention Margin: Increased to 21.4% from 20.7% in the second quarter of 2023.

  • Debt: $142.5 million on the term loan with a swap rate of 4.7%.

  • Cash and Credit Facility: $90 million excess cash and $175 million revolving credit facility with no draw.

  • Guidance Update: Full-year 2024 EBITDA guidance returned to $80 million to $85 million.

Release Date: August 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • US Physical Therapy Inc (NYSE:USPH) reported the highest visit per clinic per day quarter in its history, with April reaching a peak of 31.2 visits.

  • The company exceeded its budgeted total visits by approximately 6,600 and surpassed last year's same period by over 108,000 visits.

  • Net rate per visit increased to $105.05, up more than $3 compared to the same quarter in 2023, due to successful contract renegotiations.

  • Injury prevention revenues grew by more than 23%, with a margin improvement of about 70 basis points to 21.4%.

  • The company has a strong balance sheet with $90 million of excess cash ready for growth initiatives and a favorable debt rate of 4.7% due to a swap agreement.

Negative Points

  • US Physical Therapy Inc (NYSE:USPH) faced challenges with higher PT-related labor costs, with therapists' incentives up by 4% and front office personnel costs up by 5%.

  • The company experienced greater-than-expected use of contract and travel-based labor, impacting performance and margins.

  • Adjusted EBITDA for Q2 2024 was $22.1 million, down from $23.6 million in the prior year, with a margin decrease from 17.7% to 16.4%.

  • The company had to adjust its EBITDA guidance for the full year due to ongoing labor cost challenges.

  • A significant acquisition deal fell through due to unforeseen circumstances, impacting expected revenue and EBITDA.

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