Full Press Release Details
Physical Therapy Reports 2013 Results
Increases Quarterly Dividend by 20% and Issues Earnings Guidance for 2014
HOUSTON--(BUSINESS WIRE)--March 6, 2014--U.S. Physical Therapy, Inc.
(NYSE: USPH), a national operator of outpatient physical therapy
clinics, today reported results for the fourth quarter and year ended
U.S. Physical Therapy's net income attributable to common shareholders
from continuing operations for the three months ended December 31, 2013
was $3.9 million and diluted earnings per share were $0.32.
Net income attributable to common shareholders from continuing
operations for the year 2013 was $17.5 million and diluted earnings per
In the third quarter of 2013, the Company sold the remaining piece of
its former Physician Services business, which was treated as a
discontinued operation for financial reporting purposes. During the year
the Company incurred losses from physician services of $4.8 million, or
$0.40 per diluted share, which represents the operational loss of the
business and write-down of its net assets, inclusive of intangible
assets, less sale proceeds net of appropriate reserves. Net income
attributable to common shareholders, inclusive of discontinued
operations for 2013, was $12.7 million, or $1.05 per diluted share.
Fourth Quarter 2013 Compared to Fourth Quarter 2012 from
Continuing Operations
Net revenues increased 10.0% from $62,381,000 in the fourth quarter of
2012 to $68,605,000 in the fourth quarter of 2013, due to an increase
in visits of 11.1% from 574,000 to 638,000 offset by a decrease in the
average net patient revenue per visit of $.85 to $105.47 from $106.32.
Total clinic operating costs were $52,467,000, or 76.5% of net
revenues, in the fourth quarter of 2013, as compared to $48,002,000,
or 76.9% of net revenues, in the 2012 period. The increase was
attributable to $4,497,000 in operating costs of new clinics opened or
acquired in the past 12 months offset by a reduction in operating
costs of $32,000 for those clinics opened or acquired prior to the
past 12 months. The fourth quarter 2013 results include a pre-tax
charge of $850,000 for an estimated refund due to a payor for
overpayments to a partnership clinic group over several years. Without
that expense operating costs in the recent quarter for older clinics
would have decreased by $882,000. Total clinic salaries and related
costs, including that from new clinics, were 53.2% of net revenues in
the recent quarter versus 53.9% in the 2012 period. Rent, clinic
supplies, contract labor and other costs as a percentage of net
revenues were 21.5% for the recent quarter versus 20.9% in the 2012
period. The provision for doubtful accounts as a percentage of net
revenues was 1.4% for the 2013 period and 1.9% in the 2012 period.
The gross margin for the fourth quarter of 2013 increased by 12.2% to
$16,138,000 from $14,379,000 in the fourth quarter of 2012. The gross
margin percentage was 23.5% for the 2013 quarter as compared to 23.1%
for the comparable 2012 period.
Corporate office costs were $6,766,000 in the fourth quarter of 2013
as compared to $6,078,000 in the 2012 fourth quarter. Corporate office
costs were 9.9% of net revenues in the 2013 period and 9.7% in the
Operating income for the recent quarter increased by 12.9% to
$9,372,000 compared to $8,301,000 in the 2012 fourth quarter.
Interest expense was $140,000 in the fourth quarter of 2013 versus
$108,000 in the fourth quarter of last year.
The provision for income taxes for the 2013 period includes $569,000
which represents an adjustment of $393,000 related to the year 2012
from the completion of the income tax reconciliation between the tax
returns and provision for 2012 ("tax true-up") and $156,000 to
increase the 2013 effective tax rate to 40%. The provision for income
taxes as a percentage of income before taxes less net income
attributable to non-controlling interest was 33.6% in the 2012 period.
For the 2012 period, the income tax provision was reduced by $350,000
related to the write down of an intercompany loan that was charged to
additional-paid-in-capital and is tax deductible.
Net income attributable to non-controlling interests, inclusive of
discontinued operations, was $1,893,000 in the recent quarter as
compared to $1,750,000 in the year earlier period.
Net income attributable to common shareholders for the three months
ended December 31, 2013 was $3,903,000 compared to $4,230,000 for the
three months ended December 31, 2012. Diluted earnings per share were
$0.32 for the 2013 period and $0.35 for the 2012 period.
Same store visits increased 4.0% for de novo and acquired clinics open
for one year or more while revenue increased 2.4% as the average net
rate per visit decreased by $1.60.
Year 2013 Compared to Year 2012 from Continuing Operations Unless
Net revenues increased 5.8% from $249,651,000 in 2012 to $264,058,000
in 2013, due to a 5.5% increase in visits from 2,314,000 to 2,441,000
and an increase in the average net patient revenue per visit to
$105.83 from $105.50 in 2012.
Total clinic operating costs were $199,357,000 or 75.5% of net
revenues in 2013 as compared to $186,741,000 or 74.8% of net revenues
in 2012. The increase was primarily attributable to $10,220,000 in
operating costs of new clinics opened or acquired in the past 12
months and an increase in operating costs of $6,270,000 for those
clinics opened or acquired in 2012 offset by a decrease in operating
costs of $3,874,000 for those clinics opened or acquired prior to
2012. Included in the 2013 results is a pre-tax charge of $850,000
related to an estimated refund due to a payor for overpayments to a
partnership clinic group over several years. Without this charge,
operating costs for those clinics opened or acquired prior to 2012
would have been reduced by $4,724,000. Clinic salaries and related
costs were 53.7% of net revenues in 2013 versus 52.7% in 2012. Rent,
clinic supplies, contract labor and other costs as a percentage of net
revenues were 20.0% for 2013 versus 20.1% in 2012. The provision for
doubtful accounts as a percentage of net revenues was 1.7% for 2013
versus 1.9% in 2012.
Gross margin for 2013 was $64,701,000, or 24.5%, compared to
$62,910,000, or 25.2%, for 2012.
Corporate office costs were $25,931,000 in 2013 as compared to
$24,504,000 in 2012. Corporate office costs were 9.8% of net revenues
in both 2013 and 2012.