U.S. Physical Therapy, Inc. Conference Call Transcript

U.S. Physical Therapy, Inc. Conference Call Transcript August 14, 2024; 10:30 am ET Operator: Good day and thank you for standing by. Welcome to the U.S. Physical Therapy second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question-and-answer session. In order to ask a question during the session, please press the star () key, followed by the number one (1) on your telephone. Please be advised that today's conference is being recorded. Should you require any further assistance, please press star () zero (0). I now like to turn the call over to Chris Reading, president and CEO. Please go ahead, sir. Chris Reading: Thanks, Jamie. Good morning and welcome everyone to our second quarter 2024 U.S. Physical Therapy earnings call. With me on the line this morning, I've got Carey Hendrickson, the Chief Financial Officer; Eric Williams, President and COO of East; Graham Reeve, our Chief Operating Officer, West; Rick Binstein, our Executive Vice President and General Counsel. Before I make some prepared remarks relating to our quarter and year, I'll ask Jake Martinez to cover a brief disclosure. Jake Martinez: Thank you, Chris. This presentation includes forward-looking statements which involve certain risks and uncertainties. These forward-looking statements are based on the Company's current views and assumptions. The Company's actual results may vary materially from those anticipated. Please see the Company's filings with the Securities and Exchange Commission for more information. This presentation also contains certain non-GAAP measures as defined in Regulation G. The related reconciliations can be found in the Company's earnings release and the Company presentations on our website. Chris? Chris Reading: Thanks, Jake. So, let's get started. My discussion this morning will cover a variety of highlights. We definitely made some progress in some key areas. We will also touch on one of our primary challenges as well. Let's start with the fact that this was a very solid quarter from falling into perspective. The best visit per clinic per day, quarter in our history. April was our high month at 31.2, marking a high also for the year, followed by May nicely over 30, June just under 30, at 29.8. And all this follows normal seasonal progression with school finishing and summer vacations kicking off for a bit before things get back to normal - which they are now here in Texas, with school starting back this week in many places. Speaking a minute to our expectations, our total visits are ahead of where we budgeted them to be the midpoint this year, better by approximately 6,600 visits and ahead of last year, same period, by over 108,000 visits. Our partnerships are doing a great job addressing demand and doing a terrific job with patients in what continues to be a rather tight labor market. More on that in a minute. Kudos are due to our contracting team. We're starting to see their hard work over the past 18 months really beginning to bear fruit. Net rate for the quarter progressed nicely and finished at $105.05 per visit, up a little bit more than $3.00 per visit over the same quarter of 2023. As you might remember last year, we renegotiated a large volume of commercial and more complicated contracts. While those adjustments took a little time to phase in and show up, we're now seeing nice progression and expect that to continue as the year goes forward. We have also seen our work comp volume move up, and while the aggregate percentage has changed a little, it really shows up when you see the number and rate of year-over-year change in work comp visits, which I'll have Eric cover as we open it up for a discussion after these prepared remarks. The combination of rate for commercial plans and our faster than average work comp growth is resulting in a very nice uptick in our net rate so far for the year. And actually, we expect that to conti