ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(STATE OR OTHER JURISDICTION OF INCORPORATION
OR ORGANIZATION) |
(I.R.S. EMPLOYER IDENTIFICATION NO.)
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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(ZIP CODE)
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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☑
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Accelerated filer
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☐
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Non-accelerated filer
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☐ (Do not check if a smaller reporting company)
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Smaller reporting company
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Emerging growth company
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DOCUMENT
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PART OF FORM 10-K
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Portions of Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders
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Part III
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Page
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PART I
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Item 1.
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4
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Item 1A.
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15
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Item 1B.
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24
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Item 1C.
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24
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Item 2.
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26
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Item 3.
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26
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Item 4.
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27
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PART II
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Item 5.
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28
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Item 6.
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29
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Item 7.
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30
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Item 7A.
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46
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Item 8.
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47
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Item 9.
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86
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Item 9A.
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86
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Item 9B.
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87
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Item 9C.
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87
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PART III
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Item 10.
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87
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Item 11.
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87
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Item 12.
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87
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Item 13.
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87
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Item 14.
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87
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PART IV
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Item 15.
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87
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Item 16.
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95
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96
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• |
changes in Medicare rules and guidelines and reimbursement or failure of our clinics to maintain their Medicare certification and/or enrollment status;
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• |
revenue we receive from Medicare and Medicaid being subject to potential retroactive reduction;
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• |
changes in reimbursement rates or payment methods from third party payors including government agencies, and changes in the deductibles and co-pays owed by patients;
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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;
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• |
competitive, economic or reimbursement conditions in our markets which may require us to reorganize or close certain clinics and thereby incur losses and/or closure costs including the possible write-down or
write-off of goodwill and other intangible assets;
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• |
the impact of future public health crises and epidemics/pandemics, such as was the case with the novel strain of COVID-19 and its variants;
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• |
one of our acquisition agreements contains a put-right related to a future purchase of a majority interest in a separate company;
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• |
the impact of future vaccinations and/or testing mandates at the federal, state and/or local level, which could have an adverse impact on staffing, revenue, costs and the results of operations;
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• |
our debt and financial obligations could adversely affect our financial condition, our ability to obtain future financing and our ability to operate our business;
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• |
changes as the result of government enacted national healthcare reform;
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• |
business and regulatory conditions including federal and state regulations;
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• |
governmental and other third party payor inspections, reviews, investigations and audits, which may result in sanctions or reputational harm and increased costs;
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• |
revenue and earnings expectations;
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• |
contingent consideration provisions in certain our acquisition agreements, the value of which may impact future financial results;
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• |
legal actions, which could subject us to increased operating costs and uninsured liabilities;
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• |
general economic conditions, including but not limited to inflationary and recessionary periods;
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• |
actual or perceived events involving banking volatility or limited liability, defaults or other adverse developments that affect the U.S or the international financial systems, may result in market wide
liquidity problems which could have a material and adverse impact on our available cash and results of operations;
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• |
our business depends on hiring, training, and retaining qualified employees;
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• |
availability and cost of qualified physical therapists;
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• |
competitive environment in the industrial injury prevention services business, which could result in the termination or non-renewal of contractual service arrangements and other adverse financial consequences
for that service line;
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• |
our ability to identify and complete acquisitions, and the successful integration of the operations of the acquired businesses;
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• |
impact on the business and cash reserves resulting from retirement or resignation of key partners and resulting purchase of their non-controlling interest (minority interests);
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• |
maintaining our information technology systems with adequate safeguards to protect against cyber-attacks;
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• |
a security breach of our or our third party vendors’ information technology systems may subject us to potential legal action and reputational harm and may result in a violation of the Health Insurance
Portability and Accountability Act of 1996 of the Health Information Technology for Economic and Clinical Health Act;
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• |
maintaining clients for which we perform management, industrial injury prevention related services, and other services, as a breach or termination of those contractual arrangements by such clients could cause
operating results to be less than expected;
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• |
maintaining adequate internal controls;
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• |
maintaining necessary insurance coverage;
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• |
availability, terms, and use of capital; and
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• |
weather and other seasonal factors.
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ITEM 1. |
BUSINESS
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% Interest
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Number of
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|||||
Acquisition
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Date
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Acquired
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Clinics
|
|||
October 2023 Acquisition
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October 31, 2023
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**
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*
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|||
September 2023 Acquisition 1
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September 29, 2023
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70%
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4
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|||
September 2023 Acquisition 2
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September 29, 2023
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70%
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1
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|||
July 2023 Acquisition
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July 31, 2023
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70%
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7
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|||
May 2023 Acquisition
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May 31, 2023
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45%
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4
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|||
February 2023 Acquisition
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February 28, 2023
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80%
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1
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|||
November 2022 Acquisition
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November 30, 2022
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80%
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13
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|||
October 2022 Acquisition
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October 31, 2022
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60%
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14
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|||
September 2022 Acquisition
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September 30, 2022
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80%
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2
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|||
August 2022 Acquisition
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August 31, 2022
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70%
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6
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|||
March 2022 Acquisition
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March 31, 2022
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70%
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6
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|||
December 2021 Acquisition
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December 31, 2021
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75%
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3
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|||
November 2021 Acquisition
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November 30, 2021
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70%
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*
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|||
September 2021 Acquisition
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September 30, 2021
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100%
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*
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|||
June 2021 Acquisition
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June 30, 2021
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65%
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8
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|||
March 2021 Acquisition
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March 31, 2021
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70%
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6
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* |
IIP business
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** |
On October 31, 2023, we concurrently acquired 100% of an IIP business and a 55% equity interest in an ergonomics software business (“October 2023 Acquisition”).
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For the Year Ended
|
||||||||||||
December 31, 2023
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December 31, 2022
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December 31, 2021
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||||||||||
Number of clinics, beginning of period
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640
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591
|
554
|
|||||||||
Additions
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46
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65
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42
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|||||||||
Closed or sold
|
(15
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)
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(16
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)
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(5
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)
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||||||
Number of clinics, end of period
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671
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640
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591
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For the Year Ended
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||||||||||||||||||||||||
December 31, 2023
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December 31, 2022
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December 31, 2021
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||||||||||||||||||||||
Net Patient
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Net Patient
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Net Patient
|
||||||||||||||||||||||
Payor
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Revenue
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Percentage
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Revenue
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Percentage
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Revenue
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Percentage
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||||||||||||||||||
Managed Care Programs/
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(In thousands, except percentages)
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|||||||||||||||||||||||
Commercial Health Insurance
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$
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244,470
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47.5
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%
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$
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215,822
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46.5
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%
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$
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209,129
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47.7
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%
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||||||||||||
Medicare/Medicaid
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188,329
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36.6
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%
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174,401
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37.5
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%
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155,122
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35.4
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%
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|||||||||||||||
Workers' Compensation Insurance
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48,834
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9.5
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%
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45,010
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9.7
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%
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44,549
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10.2
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%
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|||||||||||||||
Other
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32,923
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6.4
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%
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29,357
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6.3
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%
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29,530
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6.7
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%
|
|||||||||||||||
Total
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$
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514,556
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100.0
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%
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$
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464,590
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100.0
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%
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$
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438,330
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100.0
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%
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• |
Economic Benefits of Therapy Services – Purchasers and providers of healthcare services, such as insurance companies, health maintenance organizations, businesses, and
industries, continuously seek cost savings for traditional healthcare services. We believe that our therapy services provide a cost-effective way to prevent short-term disabilities from becoming chronic conditions, to help avoid invasive
procedures, to speed recovery from surgery and musculoskeletal injuries and eliminate or minimize the need for opioids.
|
• |
Earlier Hospital Discharge – Changes in health insurance reimbursement, both public and private, have encouraged the earlier discharge of patients to reduce costs. We
believe that early hospital discharge practices foster greater demand for outpatient physical therapy services.
|
• |
Aging Population – In general, the elderly population has a greater incidence of disability compared to the population as a whole. As this segment of the population
continues to grow, we believe that demand for rehabilitation services will expand.
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ITEM 1A. |
RISK FACTORS
|
• |
require us to maintain a quarterly fixed charge coverage ratio and minimum working capital ratio;
|
• |
limit our ability to obtain additional financing in the future for working capital, capital expenditures and acquisitions, to fund growth or for general corporate purposes;
|
• |
limit our future ability to refinance our indebtedness on terms acceptable to us or at all;
|
• |
limit our flexibility in planning for or reacting to changes in our business and market conditions or in funding our strategic growth plan; and
|
• |
impose on us financial and operational restrictions.
|
• |
facility and professional licensure/permits, including certificates of need;
|
• |
conduct of operations, including financial relationships among healthcare providers, Medicare fraud and abuse, and physician self-referral;
|
• |
addition of facilities and services; and
|
• |
coding, billing and payment for services.
|
• |
refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from managed care payors;
|
• |
state or federal agencies imposing fines, penalties and other sanctions on us;
|
• |
temporary suspension of payment for new patients to the facility or agency;
|
• |
decertification or exclusion from participation in the Medicare or Medicaid programs or one or more managed care payor networks;
|
• |
the imposition of a new Corporate Integrity Agreement;
|
• |
damage to our reputation;
|
• |
the revocation of a facility’s or agency’s license; and
|
• |
loss of certain rights under, or termination of, our contracts with managed care payors.
|
• |
the difficulty and expense of integrating acquired personnel into our business;
|
• |
the diversion of management’s time from existing operations;
|
• |
the potential loss of key employees of acquired companies;
|
• |
the difficulty of assignment and/or procurement of managed care contractual arrangements; and
|
• |
the assumption of the liabilities and exposure to unforeseen liabilities of acquired companies, including liabilities for failure to comply with healthcare regulations.
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ITEM 1B. |
UNRESOLVED STAFF COMMENTS
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ITEM 1C. |
CYBERSECURITY
|
● |
Current cybersecurity landscape and emerging threats;
|
● |
Status of ongoing cybersecurity initiatives and strategies;
|
● |
Incident reports and learnings from any cybersecurity events; and
|
● |
Compliance with regulatory requirements and industry standards.
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ITEM 2. |
PROPERTIES
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ITEM 3. |
LEGAL PROCEEDINGS
|
ITEM 4. |
MINE SAFETY DISCLOSURES
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ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Declaration Date
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Record Date
|
Payment Date
|
Dividend Per Share
|
Aggregate Amount
(in thousands) |
||||||||
02/21/2023
|
03/10/2023
|
04/07/2023
|
$
|
0.43
|
$
|
5,617
|
||||||
05/02/2023
|
05/18/2023
|
06/09/2023
|
$
|
0.43
|
$
|
5,621
|
||||||
08/07/2023
|
08/18/2023
|
09/08/2023
|
$
|
0.43
|
$
|
6,445
|
||||||
11/06/2023
|
11/16/2023
|
12/08/2023
|
$
|
0.43
|
$
|
6,445
|
12/18
|
12/19
|
12/20
|
12/21
|
12/22
|
12/23
|
|
U. S. Physical Therapy, Inc.
|
100
|
112
|
117
|
93
|
79
|
91
|
NYSE Healthcare Index
|
100
|
119
|
132
|
161
|
155
|
159
|
ITEM 6. |
RESERVED
|
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
% Interest
|
Number of
|
||||
Acquisition
|
Date
|
Acquired
|
Clinics
|
|||
October 2023 Acquisition
|
October 31, 2023
|
**
|
*
|
|||
September 2023 Acquisition 1
|
September 29, 2023
|
70%
|
4
|
|||
September 2023 Acquisition 2
|
September 29, 2023
|
70%
|
1
|
|||
July 2023 Acquisition
|
July 31, 2023
|
70%
|
7
|
|||
May 2023 Acquisition
|
May 31, 2023
|
45%
|
4
|
|||
February 2023 Acquisition
|
February 28, 2023
|
80%
|
1
|
|||
November 2022 Acquisition
|
November 30, 2022
|
80%
|
13
|
|||
October 2022 Acquisition
|
October 31, 2022
|
60%
|
14
|
|||
September 2022 Acquisition
|
September 30, 2022
|
80%
|
2
|
|||
August 2022 Acquisition
|
August 31, 2022
|
70%
|
6
|
|||
March 2022 Acquisition
|
March 31, 2022
|
70%
|
6
|
|||
December 2021 Acquisition
|
December 31, 2021
|
75%
|
3
|
|||
November 2021 Acquisition
|
|
November 30, 2021
|
|
70%
|
|
*
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September 2021 Acquisition
|
|
September 30, 2021
|
|
100%
|
|
*
|
June 2021 Acquisition
|
|
June 30, 2021
|
|
65%
|
|
8
|
March 2021 Acquisition
|
|
March 31, 2021
|
|
70%
|
|
6
|
* |
IIP business
|
**
|
On October 31, 2023, we concurrently acquired 100% of an IIP business and a 55% equity interest in
an ergonomics software business (“October 2023 Acquisition”).
|
For the Year Ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
Number of clinics, beginning of period
|
640
|
591
|
554
|
|||||||||
Additions
|
46
|
65
|
42
|
|||||||||
Closed or sold
|
(15
|
)
|
(16
|
)
|
(5
|
)
|
||||||
Number of clinics, end of period
|
671
|
640
|
591
|
Mature Clinics are clinics opened or acquired prior to January 1, 2022, and are still operating as of December 31, 2023.
|
Net rate per patient visit is net patient revenue related to our physical therapy operations divided by total number of
patient visits (defined below) during the periods presented.
|
Patient visits is the number of unique patient visits during the periods presented.
|
Average daily visits per clinic is patient visits divided by the number of days in which normal business operations were
conducted during the periods presented and further divided by the average number clinics in operation during the periods presented.
|
Full Year 2023 refers to the year ended December 31, 2023.
|
Full Year 2022 refers to the year ended December 31, 2022.
|
For the Year Ended
|
||||||||
December 31, 2023
|
December 31, 2022
|
|||||||
(In thousands, except per share data)
|
||||||||
Earnings per share
|
||||||||
Computation of earnings per share - USPH shareholders:
|
||||||||
Net income attributable to USPH shareholders
|
$
|
28,239
|
$
|
32,158
|
||||
Charges to retained earnings:
|
||||||||
Revaluation of redeemable non-controlling interest
|
(13,565
|
)
|
(3,890
|
)
|
||||
Tax effect at statutory rate (federal and state)
|
3,466
|
994
|
||||||
$
|
18,140
|
$
|
29,262
|
|||||
Earnings per share (basic and diluted)
|
$
|
1.28
|
$
|
2.25
|
||||
Shares used in computation - basic and diluted
|
14,188
|
12,985
|
For the Year Ended
|
||||||||
December 31, 2023
|
December 31, 2022
|
|||||||
(In thousands, except per share data)
|
||||||||
Adjusted EBITDA (a non-GAAP measure)
|
||||||||
Net income attributable to USPH shareholders
|
$
|
28,239
|
$
|
32,158
|
||||
Adjustments:
|
||||||||
Provision for income taxes
|
12,156
|
12,164
|
||||||
Depreciation and amortization
|
15,695
|
14,743
|
||||||
Interest expense, debt and other, net
|
9,303
|
5,779
|
||||||
Interest income from investments
|
(3,774
|
)
|
-
|
|||||
Impairment of goodwill and other intangible assets
|
17,495
|
9,112
|
||||||
Equity-based awards compensation expense
|
7,236
|
7,264
|
||||||
Change in revaluation of put-right liability
|
(2,582
|
)
|
5
|
|||||
Change in fair value of contingent earn-out consideration
|
1,550
|
(2,520
|
)
|
|||||
Relief Funds*
|
(467
|
)
|
-
|
|||||
Other income
|
(390
|
)
|
(859
|
)
|
||||
Allocation to non-controlling interests
|
(6,744
|
)
|
(4,185
|
)
|
||||
77,717
|
73,661
|
|||||||
Operating Results (a non-GAAP measure)
|
||||||||
Net income attributable to USPH shareholders
|
$
|
28,239
|
$
|
32,158
|
||||
Adjustments:
|
||||||||
Impairment of goodwill and other intangible assets
|
17,495
|
9,112
|
||||||
Change in fair value of contingent earn-out consideration
|
1,550
|
(2,520
|
)
|
|||||
Change in revaluation of put-right liability
|
(2,582
|
)
|
5
|
|||||
Relief Funds*
|
(467
|
)
|
-
|
|||||
Allocation to non-controlling interest
|
(5,215
|
)
|
(2,734
|
)
|
||||
Tax effect at statutory rate (federal and state)
|
(2,755
|
)
|
(987
|
)
|
||||
$
|
36,265
|
$
|
35,034
|
|||||
Operating Results per share (a non-GAAP measure)
|
$
|
2.56
|
$
|
2.70
|
For the Year Ended December 31,
|
Variance
|
|||||||||||||||||
2023
|
2022
|
$ |
|
%
|
||||||||||||||
(In thousands, except percentages)
|
||||||||||||||||||
Revenue related to:
|
||||||||||||||||||
Mature Clinics (1)
|
$
|
452,459
|
$
|
421,806
|
$
|
30,653
|
7.3
|
%
|
||||||||||
Clinic additions (2)
|
60,495
|
39,990
|
20,505
|
*
|
(6)
|
|||||||||||||
Clinics sold or closed (3)
|
1,602
|
2,794
|
(1,192
|
)
|
*
|
(6)
|
||||||||||||
Net Patient Revenue
|
514,556
|
464,590
|
49,966
|
10.8
|
%
|
|||||||||||||
Other (4)
|
11,992
|
11,502
|
490
|
4.3
|
%
|
|||||||||||||
Total
|
526,548
|
476,092
|
50,456
|
10.6
|
%
|
|||||||||||||
Operating costs (4)
|
421,484
|
380,035
|
41,449
|
10.9
|
%
|
|||||||||||||
Gross profit
|
$
|
105,064
|
$
|
96,057
|
$
|
9,007
|
9.4
|
%
|
||||||||||
Financial and operating metrics (not in thousands):
|
||||||||||||||||||
Net rate per patient visit (1)
|
$
|
102.80
|
$
|
103.63
|
$
|
(0.83
|
)
|
(0.8
|
)%
|
|||||||||
Patient visits (1)
|
5,005,426
|
4,483,282
|
522,144.0
|
11.6
|
%
|
|||||||||||||
Average daily visits per clinic (1)
|
30.0
|
28.7
|
1.3
|
4.5
|
%
|
|||||||||||||
Gross margin
|
20.0
|
%
|
20.2
|
%
|
|
|
|
|
||||||||||
Salaries and related costs per visit, clinics (5)
|
$
|
59.19
|
$
|
59.52
|
$
|
(0.33
|
)
|
(0.6
|
)%
|
|||||||||
Operating costs per visit, clinics (5)
|
$
|
82.79
|
$
|
83.34
|
$
|
(0.55
|
)
|
(0.7
|
)%
|
|||||||||
Working days
|
254
|
255
|
(1
|
)
|
(0.4
|
)%
|
||||||||||||
Number of clinics at the end of the period
|
671
|
640
|
31
|
4.8
|
%
|
(1) |
See defined terms above for definitions.
|
(2)
|
Clinic additions during the years ended 2023 and 2022.
|
(3)
|
Revenue from closed clinics includes revenues from the 15 and 16 clinics closed during the full year December 31, 2023 and 2022, respectively.
|
(4)
|
Includes revenues and costs from management contracts.
|
(5)
|
Excludes management contract costs.
|
(6)
|
Not meaningful.
|
For the Year Ended December 31,
|
||||||||
202
|
2022
|
|||||||
(In thousands, except percentages)
|
||||||||
Net revene
|
$
|
78,254
|
$
|
77,052
|
||||
Operating costs
|
61,809
|
61,085
|
||||||
Gross profit
|
$
|
16,445
|
$
|
15,967
|
||||
Gross margin
|
21.0
|
%
|
20.7
|
%
|
For the Year Ended
|
||||||||
December 31, 2023
|
December 31, 2022
|
|||||||
(In thousands, except percentages)
|
||||||||
Income before taxes
|
$
|
49,376
|
$
|
55,571
|
||||
Less: Net income attributable to non-controlling interest:
|
||||||||
Redeemable non-controlling interest - temporary equity
|
(4,426
|
)
|
(6,902
|
)
|
||||
Non-controlling interest - permanent equity
|
(4,555
|
)
|
(4,347
|
)
|
||||
$
|
(8,981
|
)
|
$
|
(11,249
|
)
|
|||
Income before taxes less net income attributable to non-controlling interest
|
$
|
40,395
|
$
|
44,322
|
||||
Provision for income taxes
|
$
|
12,156
|
$
|
12,164
|
||||
Effective income tax rate
|
30.1
|
%
|
27.4
|
%
|
Year Ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
Net cash provided by operating activities
|
$
|
81,978
|
$
|
58,537
|
$
|
76,406
|
||||||
Net cash used in investing activities
|
45,015
|
81,269
|
124,136
|
|||||||||
Net cash provided by financing activities
|
84,268
|
25,759
|
43,379
|
1) |
Revolving Facility: $175 million, five-year, revolving credit facility (“Revolving Facility”), which includes a $12 million sublimit for the issuance of standby letters of credit and a $15 million sublimit for
swingline loans (each, a “Swingline Loan”).
|
2) |
Term Facility: $150 million term loan facility (the “Term Facility”). The Term Facility amortizes in quarterly installments of: (a) 0.625% in each of the first two years, (b) 1.250% in the third and fourth year,
and (c) 1.875% in the fifth year of the Credit Agreement. The remaining outstanding principal balance of all term loans is due on the maturity date.
|
Total
|
2024
|
2025
|
2026
|
2027
|
2028
|
Thereafter
|
||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||
Term facility (1)
|
$
|
144,375
|
5,625
|
7,500
|
9,375
|
$
|
121,875
|
$
|
-
|
$
|
-
|
|||||||||||||||||
Notes payable (2)
|
3,775
|
2,486
|
1,289
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Interest expense on Term Facility and notes payable (3)
|
20,958
|
6,725
|
6,508
|
6,210
|
1,515
|
-
|
-
|
|||||||||||||||||||||
Operating leases (4)
|
144,666
|
46,845
|
36,447
|
27,406
|
18,495
|
10,025
|
5,448
|
|||||||||||||||||||||
$
|
313,774
|
$
|
61,681
|
$
|
51,744
|
$
|
42,991
|
$
|
141,885
|
$
|
10,025
|
$
|
5,448
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Reports of Independent Registered Public Accounting Firm—Grant Thornton LLP (PCAOB ID Number )
|
48 |
Audited Financial Statements:
|
|
51 | |
52 | |
53 | |
54 | |
55 | |
56 |
• |
We tested the design and operating effectiveness of controls relating to billing and cash collections, net rate trend analysis and cash collections versus net revenue trend
analysis.
|
• |
For a sample of patient visits, we inspected and compared underlying documents for each transaction, which included gross billing rates and cash collected (net revenue).
|
• |
For a sample of patient visits, we traced gross billings and net revenue to net revenue recorded in the general ledger and to each report used in determining and assessing the
contractual adjustment calculation.
|
• |
We compared cash collections to recorded net revenue over the twelve month period ended December 31, 2023 and again for the twelve month period ended in the first month
subsequent to period end, to identify whether there were unusual trends that would indicate that the usage of historical collection patterns would no longer be reasonable to predict future collection patterns.
|
• |
We tested the design and operating effectiveness of controls over management’s review of the assumptions used to project future cash flows, the selection of appropriate discount
rate, royalty rates, and valuation methodologies applied.
|
• |
We utilized valuation specialists to evaluate:
|
o |
The appropriateness of the methodologies applied,
|
o |
The reasonableness of the discount rate, royalty rates, and
|
o |
The qualifications of the third-party valuation specialist engaged by the Company based on their credentials and experience.
|
• |
We assessed the reasonableness of assumptions applied by management in their future cash flows, including revenue growth rates, EBITDA, and EBITDA margins.
|
December 31, 2023
|
December 31, 2022
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Patient accounts receivable, less provision for credit losses of $
|
|
|
||||||
Accounts receivable - other
|
|
|
||||||
Other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Fixed assets:
|
||||||||
Furniture and equipment
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
Fixed assets, gross
|
|
|
||||||
Less accumulated depreciation and amortization
|
(
|
)
|
(
|
)
|
||||
Fixed assets, net
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Investment in unconsolidated affiliate |
||||||||
Goodwill
|
|
|
||||||
Other identifiable intangible assets, net
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH
SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST
|
||||||||
Current liabilities:
|
||||||||
Accounts payable - trade
|
$
|
|
$
|
|
||||
Accounts payable - due to seller of acquired business
|
||||||||
Accrued expenses
|
|
|
||||||
Current portion of operating lease liabilities
|
|
|
||||||
Current portion of term loan and notes payable
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Notes payable, net of current portion
|
|
|
||||||
Revolving facility
|
|
|
||||||
Term loan, net of current portion and deferred financing costs | ||||||||
Deferred taxes
|
|
|
||||||
Operating lease liabilities, net of current portion
|
|
|
||||||
Other long-term liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Redeemable non-controlling interest - temporary equity
|
|
|
||||||
Commitments and Contingencies
|
||||||||
U.S. Physical Therapy, Inc. (“USPH”) shareholders’ equity: | ||||||||
Preferred stock, $
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated other comprehensive gain
|
||||||||
Retained earnings
|
|
|
||||||
Treasury stock at cost,
|
(
|
)
|
(
|
)
|
||||
Total USPH shareholders’ equity
|
|
|
||||||
Non-controlling interest - permanent equity
|
|
|
||||||
Total USPH shareholders’ equity and non-controlling interest - permanent equity
|
|
|
||||||
Total liabilities, redeemable non-controlling interest, USPH shareholders’ equity and
non-controlling interest - permanent equity
|
$
|
|
$
|
|
For the Year Ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
Net patient revenue
|
$
|
|
$
|
|
$
|
|
||||||
Other revenue
|
|
|
|
|||||||||
Net revenue
|
|
|
|
|||||||||
Operating cost: | ||||||||||||
Salaries and related costs
|
|
|
|
|||||||||
Rent, supplies, contract labor and other
|
|
|
|
|||||||||
Provision for credit losses
|
|
|
|
|||||||||
Total operating cost
|
|
|
|
|||||||||
Gross profit
|
|
|
|
|||||||||
Corporate office costs |
||||||||||||
Impairment of goodwill and other intangible assets
|
||||||||||||
Operating income
|
|
|
|
|||||||||
Other (expense) income
|
||||||||||||
Interest expense, debt and other
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Interest income from investments
|
|
|
|
|||||||||
Change in fair value of contingent earn-out consideration
|
( |
) | ||||||||||
Change in revaluation of put-right liability
|
( |
) | ||||||||||
Equity in earnings of unconsolidated affiliate
|
|
|
|
|||||||||
Relief Funds
|
|
|
|
|||||||||
Settlement of a legal matter
|
( |
) | ||||||||||
Resolution of a payor matter
|
|
|
|
|||||||||
Other
|
||||||||||||
Total other (expense) income
|
(
|
)
|
(
|
)
|
|
|||||||
Income before taxes
|
|
|
|
|||||||||
Provision for income taxes
|
|
|
|
|||||||||
Net income
|
|
|
|
|||||||||
Less: Net income attributable to non-controlling interest:
|
||||||||||||
Redeemable non-controlling interest - temporary equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Non-controlling interest - permanent equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
Net income attributable to USPH shareholders
|
$
|
|
$
|
|
$
|
|
||||||
Basic and diluted earnings per share attributable to USPH shareholders
|
$
|
|
$
|
|
$
|
|
||||||
Shares used in computation - basic and diluted
|
|
|
|
|||||||||
Dividends declared per common share
|
$
|
|
$
|
|
$
|
|
Year Ended | ||||||||||||
|
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
|||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Other comprehensive loss
|
||||||||||||
Unrealized (loss) gain on cash flow hedge
|
(
|
)
|
|
|
||||||||
Tax effect at statutory rate (federal and state)
|
|
(
|
)
|
|
||||||||
Comprehensive income
|
$
|
|
$
|
|
$
|
|
||||||
Comprehensive income attributable to non-controlling interest
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Comprehensive income attributable to USPH shareholders
|
$
|
|
$
|
|
$
|
|
U.S. Physical Therapy, Inc. |
||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional | Accumulated Other |
Retained | Treasury Stock | Total Shareholders’ | Non-Controlling | ||||||||||||||||||||||||||||||||||
Shares | Amount | Paid-In Capital | Comprehensive Gain |
Earnings | Shares | Amount | Equity | Interests | Total | |||||||||||||||||||||||||||||||
Balance January 1, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$ | $ | ||||||||||||||||||||||
Net income attributable to USPH shareholders
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest - permanent equity
|
- | - | ||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of cancellations
|
||||||||||||||||||||||||||||||||||||||||
Revaluation of redeemable non-controlling interest
|
|
|
|
(
|
)
|
|
|
(
|
)
|
( |
) | |||||||||||||||||||||||||||||
Purchase of non-controlling interest
|
- | ( |
) | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Sale of non-controlling interest
|
- | - | ||||||||||||||||||||||||||||||||||||||
Compensation expense - equity-based awards
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||||||
Dividends paid to USPH shareholders
|
-
|
|
|
(
|
)
|
-
|
|
(
|
)
|
( |
) | |||||||||||||||||||||||||||||
Distributions to non-controlling interest partners - permanent equity
|
-
|
|
|
|
-
|
|
|
( |
) | ( |
) | |||||||||||||||||||||||||||||
Short swing profit settlement
|
- | |||||||||||||||||||||||||||||||||||||||
Other
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||||||
Balance December 31, 2021
|
|
$
|
|
$
|
|
$ |
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$ | $ |
U.S. Physical Therapy, Inc. | ||||||||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
|
Accumulated Other |
Retained
|
Treasury Stock
|
Total Shareholders’
|
Non-Controlling
|
||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Paid-In Capital | Comprehensive Gain | Earnings |
Shares
|
Amount
|
Equity | Interests | Total | |||||||||||||||||||||||||||||||
Balance January 1, 2022 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
Net income attributable to USPH shareholders
|
- | - | ||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest - permanent equity
|
- | - | ||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of cancellations
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Revaluation of redeemable non-controlling interest
|
|
|
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||
Purchase of non-controlling interest
|
- | ( |
) | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Compensation expense - equity-based awards
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||||||
Transfer of compensation liability for certain stock
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||||||
Dividends paid to USPH shareholders
|
-
|
|
|
(
|
)
|
-
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||
Distributions to non-controlling interest partners - permanent equity
|
-
|
|
|
|
-
|
|
|
( |
) | ( |
) | |||||||||||||||||||||||||||||
Deferred taxes related to redeemable non-controlling interest - temporary equity
|
- | |||||||||||||||||||||||||||||||||||||||
Other comprehensive gain
|
- | |||||||||||||||||||||||||||||||||||||||
Other
|
-
|
|
|
(
|
)
|
-
|
|
|
|
|||||||||||||||||||||||||||||||
Balance December 31, 2022
|
|
$
|
|
$
|
|
$ |
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$ | $ |
U.S. Physical Therapy, Inc. | ||||||||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
|
Accumulated Other
|
Retained |
Treasury Stock
|
Total Shareholders’
|
Non-Controlling
|
||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Paid-In Capital | Comprehensive Loss |
Earnings
|
Shares
|
Amount
|
Equity | Interests | Total |
|||||||||||||||||||||||||||||||
Balance January 1, 2023 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
Net income attributable to USPH shareholders
|
- | - | ||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest - permanent equity
|
- | - | ||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of cancellations
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Issuance of common stock, pursuant to the secondary public offering, net of issuance costs
|
||||||||||||||||||||||||||||||||||||||||
Revaluation of redeemable non-controlling interest
|
|
|
|
(
|
)
|
|
|
(
|
)
|
( |
) | |||||||||||||||||||||||||||||
Compensation expense - equity-based awards
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||||||
Sale of non-controlling interest | - | - | ||||||||||||||||||||||||||||||||||||||
Purchase of partnership interests - non-controlling interest
|
- | ( |
) | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Dividends payable to USPH shareholders
|
-
|
|
|
(
|
)
|
-
|
|
(
|
)
|
( |
) | |||||||||||||||||||||||||||||
Distributions to non-controlling interest partners - permanent equity
|
-
|
|
|
|
-
|
|
|
( |
) | ( |
) | |||||||||||||||||||||||||||||
Deferred taxes related to redeeemable non-controlling interest - temporary equity
|
- | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss |
- | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Other |
- | ( |
) | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Balance December 31, 2023
|
|
$
|
|
$
|
|
$ |
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$ | $ |
Year Ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net income including non-controlling interest
|
$
|
|
$
|
|
$
|
|
||||||
Adjustments to reconcile net income including non-controlling interest to net cash provided by
operating activities:
|
||||||||||||
Depreciation and amortization
|
|
|
|
|||||||||
Provision for credit losses
|
|
|
|
|||||||||
Equity-based awards compensation expense
|
|
|
|
|||||||||
Amortization of debt issue costs
|
|
|
|
|||||||||
Change in deferred income taxes
|
|
|
|
|||||||||
Change in revaluation of put-right liability
|
( |
) | ||||||||||
Change in fair value of contingent earn-out consideration
|
( |
) | ||||||||||
Equity of earnings in unconsolidated affiliate
|
( |
) | ( |
) | ( |
) | ||||||
Loss (gain) on sale of clinics and fixed assets
|
( |
) | ||||||||||
Impairment of goodwill and other intangible assets
|
||||||||||||
Other
|
|
(
|
)
|
(
|
)
|
|||||||
Changes in operating assets and liabilities:
|
||||||||||||
Increase in patient accounts receivable
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Increase in accounts receivable - other
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Increase (decrease) in other current and long term assets
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Decrease (increase) in accounts payable and accrued expenses
|
|
(
|
)
|
|
||||||||
Decrease (increase) in other long-term liabilities
|
|
|
(
|
)
|
||||||||
Net cash provided by operating activities
|
|
|
|
|||||||||
INVESTING ACTIVITIES
|
||||||||||||
Purchase of fixed assets
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of majority interest in businesses, net of cash acquired
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of redeemable non-controlling interest, temporary equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of non controlling interest, permanent equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds on sale of non-controlling interest, permanent equity
|
||||||||||||
Proceeds on sale of partnership interest - redeemable non-controlling interest, temporary equity
|
|
|
|
|||||||||
Distributions from unconsolidated affiliate
|
||||||||||||
Proceeds on sale of partnership interest, clinics and fixed assets
|
||||||||||||
Other
|
||||||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
FINANCING ACTIVITIES
|
||||||||||||
Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs
|
||||||||||||
Proceeds from revolving facility
|
||||||||||||
Distributions to non-controlling interest, permanent and temporary equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash dividends paid to shareholders
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Payments on revolving facility
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Principal payments on notes payable
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Payments on term loan
|
( |
) | ( |
) | ||||||||
Proceeds from term loan
|
||||||||||||
Payment of deferred financing costs
|
( |
) | ||||||||||
Payment of Medicare Accelerated and Advance Funds
|
|
|
(
|
)
|
||||||||
Other
|
|
|
|
|||||||||
Net cash provided by financing activities
|
|
|
|
|||||||||
Net increase in cash and cash equivalents
|
|
|
(
|
)
|
||||||||
Cash and cash equivalents - beginning of period
|
|
|
|
|||||||||
Cash and cash equivalents - end of period
|
$
|
|
$
|
|
$
|
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||||||
Cash paid during the period for:
|
||||||||||||
Income taxes
|
$
|
|
$
|
|
$
|
|
||||||
Interest paid
|
$
|
|
$
|
|
$
|
|
||||||
Non-cash investing and financing transactions during the period:
|
||||||||||||
Purchase of businesses - seller financing portion
|
$
|
|
$
|
|
$
|
|
||||||
Liabilities assumed associated with a purchase of a business
|
$ | $ | $ | |||||||||
Notes payable related to purchase of redeemable non-controlling interest, temporary equity
|
$
|
|
$
|
|
$
|
|
||||||
Notes payable related to the purchase of non-controlling interest, permanent equity
|
$
|
|
$
|
|
$
|
|
||||||
Notes receivable related to sale of redeemable non-controlling interest, temporary equity
|
$
|
|
$
|
|
$
|
|
||||||
Notes receivable related to the sale of non-controlling interest, permanent equity
|
$
|
|
$
|
|
$
|
|
% Interest | Number of | |||||
Acquisition | Date | Acquired | Clinics | |||
October 2023 Acquisition | |
|||||
September 2023 Acquisition 1 | ||||||
September 2023 Acquisition 2 | ||||||
July 2023 Acquisition | ||||||
May 2023 Acquisition | ||||||
February 2023 Acquisition | ||||||
November 2022 Acquisition
|
||||||
October 2022 Acquisition
|
||||||
September 2022 Acquisition
|
||||||
August 2022 Acquisition
|
||||||
March 2022 Acquisition
|
||||||
December 2021 Acquisition
|
|
|
|
|
|
|
November 2021 Acquisition
|
|
|
|
|
|
|
September 2021 Acquisition
|
|
|
|
|
|
|
June 2021 Acquisition
|
|
|
|
|
|
|
March 2021 Acquisition
|
|
|
|
|
|
|
* |
|
** | |
•
|
Level 1 – Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.
|
•
|
Level 3 – Unobservable inputs based on the Company’s own assumptions.
|
For the Year Ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
|
(In thousands, except per share data) | |||||||||||
Computation of earnings per share - USPH shareholders: | ||||||||||||
Net income attributable to USPH shareholders
|
$
|
|
$
|
|
$
|
|
||||||
Charges to retained earnings:
|
||||||||||||
Revaluation of redeemable non-controlling interest
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Tax effect at statutory rate (federal and state)
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
|||||||
Earnings per share (basic and diluted)
|
$
|
|
$
|
|
$
|
|
||||||
Shares used in computation:
|
||||||||||||
Basic and diluted earnings per share - weighted-average shares
|
|
|
|
|
|
% Interest
|
Number of
|
|||||||
Acquisition
|
Date
|
Acquired
|
Clinics
|
|||||||
October 2023 Acquisition
|
|
|
|
|||||||
September 2023 Acquisition1
|
|
|
|
|
||||||
September 2023 Acquisition2
|
|
|
|
|
||||||
July 2023 Acquisition
|
|
|
|
|
||||||
May 2023 Acquisition
|
|
|
|
|
||||||
February 2023 Acquisition
|
|
|
|
|
* |
IIP business
|
** |
On October 31,
2023, the Company concurrently acquired
|
For the Year Ended December 31, 2023
|
||||||||||||
Physical Therapy
|
||||||||||||
IIP
|
Operations
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Cash paid, net of cash acquired
|
$
|
|
$
|
|
$
|
|
||||||
Seller note
|
|
|
|
|||||||||
Deferred payments
|
|
|
|
|||||||||
Contingent payments
|
|
|
|
|||||||||
Total consideration
|
$
|
|
$
|
|
$
|
|
||||||
|
||||||||||||
Estimated fair value of net tangible assets acquired:
|
||||||||||||
Total current assets
|
$
|
|
$
|
|
$
|
|
||||||
Total non-current assets
|
|
|
|
|||||||||
Total liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net tangible assets acquired
|
|
|
|
|||||||||
Customer and referral relationships
|
|
|
|
|||||||||
Non-compete agreement
|
|
|
|
|||||||||
Tradenames
|
|
|
|
|||||||||
Goodwill
|
|
|
|
|||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interest)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
$
|
|
$
|
|
$
|
|
|
|
% Interest
|
Number of
|
|||||||
Acquisition
|
Date
|
Acquired
|
Clinics
|
|||||||
November 2022 Acquisition
|
|
|
|
|
||||||
October 2022 Acquisition
|
|
|
|
|
||||||
September 2022 Acquisition
|
|
|
|
|
||||||
August 2022 Acquisition
|
|
|
|
|
||||||
March 2022 Acquisition
|
|
|
|
|
Physical Therapy | ||||
Operations
|
||||
(In thousands) |
||||
Cash paid, net of cash acquired
|
$
|
|
||
Seller notes
|
|
|||
Contingent payments
|
|
|||
Total consideration
|
$
|
|
||
Estimated fair value of net tangible assets acquired:
|
||||
Total current assets
|
$
|
|
||
Total non-current assets
|
|
|||
Total liabilities
|
(
|
)
|
||
Net tangible assets acquired
|
(
|
)
|
||
Customer and referral relationships
|
|
|||
Non-compete agreements
|
|
|||
Tradenames
|
|
|||
Goodwill
|
|
|||
Fair value of non-controlling interest (classified as redeemable non-controlling interest)
|
(
|
)
|
||
$
|
|
% Interest |
Number of | |||||||||
Acquisition | Date | Acquired | Clinics |
|||||||
December 2021 Acquisition | ||||||||||
November 2021 Acquisition
|
|
|
|
|
||||||
September 2021 Acquisition
|
|
|
|
|
||||||
June 2021 Acquisition
|
|
|
|
|
||||||
March 2021 Acquisition |
* |
IIP business
|
Physical Therapy
|
|
|||||||||||
IIP | Operations | Total | ||||||||||
(In thousands) | (In thousands) | (In thousands) |
||||||||||
Cash paid, net of cash acquired
|
$
|
|
$
|
|
$
|
|
||||||
Seller notes
|
|
|
|
|||||||||
Contingent payments
|
||||||||||||
Other payable
|
||||||||||||
Seller put right
|
|
|
||||||||||
Total consideration
|
$
|
|
$
|
|
$
|
|
||||||
|
||||||||||||
Estimated fair value of net tangible assets acquired:
|
||||||||||||
Total current assets
|
$
|
|
$
|
|
$
|
|
||||||
Total non-current assets
|
|
|
|
|||||||||
Total liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net tangible assets acquired
|
|
|
|
|
|
|
||||||
Customer and referral relationships
|
|
|
|
|||||||||
Non-compete agreements
|
|
|
|
|||||||||
Tradenames
|
|
|
|
|||||||||
Goodwill
|
|
|
|
|||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interest)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
$
|
|
$
|
|
$
|
|
1. |
Prior to the Acquisition, the Therapy Practice exists as a separate legal entity (the “Seller Entity”). The Seller Entity is owned by one
or more individuals (the “Selling Shareholders”) most of whom are physical therapists that work in the Acquired Therapy Practice and provide physical therapy services to patients.
|
2. |
In conjunction with the Acquisition, the Seller Entity contributes the acquired Therapy Practice into a newly-formed limited partnership
(“NewCo”), in exchange for one hundred percent (
|
3. | The Company enters into an agreement (the “Purchase Agreement”) to acquire from the Seller Entity a majority (ranges from |
4. |
The Company and the Seller Entity also execute a partnership agreement (the “Partnership Agreement”) for NewCo that sets forth the rights
and obligations of the limited and general partners of NewCo. After the Acquisition, the Company is the general partner of NewCo.
|
5. |
As noted above, the Company does not purchase 100% of the limited partnership interests in NewCo and the Seller Entity retains a portion
of the limited partnership interest in NewCo (“Seller Entity Interest”).
|
6. |
In most cases, some or all of the Selling Shareholders enter into an employment agreement (the “Employment Agreement”) with NewCo with an
initial term that ranges from
to |
7. |
The compensation of each Employed Selling Shareholder is specified in the Employment Agreement and is customary and commensurate with his
or her responsibilities based on other employees in similar capacities within NewCo, the Company and the industry.
|
8. |
The Company and the Selling Shareholder (including both Employed Selling Shareholders and Selling Shareholders not employed by NewCo)
execute a non-compete agreement (the “Non-Compete Agreement”) which restricts the Selling Shareholder from engaging in competing Therapy Practice activities for a specified period of time (the “Non-Compete Term”). A Non-Compete Agreement is
executed with the Selling Shareholders in all cases. That is, even if the Selling Shareholder does not become an Employed Selling Shareholder, the Selling Shareholder is restricted from engaging in a competing Therapy Practice during the
Non-Compete Term.
|
9. |
The Non-Compete Term commences as of the date of the Acquisition and expires on the later of:
|
a. |
|
b. |
|
10. |
The Non-Compete Agreement applies to a restricted region which is defined as a mileage radius from the Acquired Therapy Practice. That is,
an Employed Selling Shareholder is permitted to engage in competing Therapy Practices or activities outside the designated geography (after such Employed Selling Shareholder no longer is employed by NewCo) and a Selling Shareholder who is
not employed by NewCo immediately is permitted to engage in the competing Therapy Practice or activities outside the designated geography.
The Partnership Agreement contains provisions for the redemption of the Seller Entity Interest, either at the option of the Company (the
“Call Right”) or at the option of the Seller Entity (the “Put Right”) as follows:
|
1. |
Put Right
|
a. |
In the event that any Selling Shareholder’s employment is terminated under certain circumstances prior to the fifth anniversary of the
Closing Date, the Seller Entity thereafter may have an irrevocable right to cause the Company to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price
described in “3” below.
|
b. |
In the event that any Selling Shareholder is not employed by NewCo as of the fifth anniversary of the Closing Date and the Company has not
exercised its Call Right with respect to the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, Seller Entity thereafter has the Put Right to cause the Company to purchase from Seller Entity the Terminated
Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below.
|
c.
|
In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of
the Closing Date, the Seller Entity has the Put Right, and upon the exercise of the Put Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price
described in “3” below.
|
2. |
Call Right
|
a. |
If any Selling Shareholder’s employment by NewCo is terminated prior to the fifth anniversary of the Closing Date, the Company thereafter
has an irrevocable right to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, in each case at the purchase price described in “3” below.
|
b. |
In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the
Closing Date, the Company has the Call Right, and upon the exercise of the Call Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in
“3” below.
|
3. |
For the Put Right and the Call Right, the purchase price is derived from a formula based on a specified multiple of NewCo’s trailing
twelve months of earnings before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Percentage of any undistributed earnings of NewCo (the “Redemption Amount”). NewCo’s earnings are
distributed monthly based on available cash within NewCo; therefore, the undistributed earnings amount is small, if any.
|
4. |
The Purchase Price for the initial equity interest purchased by the Company is also based on the same specified multiple of the trailing
twelve-month earnings that is used in the Put Right and the Call Right noted above.
|
5. |
The Put Right and the Call Right do not have an expiration date.
|
6. |
The Put Right and the Call Right never apply to Selling Shareholders who do not become employed by NewCo, since the Company requires that
such Selling Shareholders sell their entire ownership interest in the Seller Entity at the closing of the Acquisition.
An Employed Selling Shareholder’s ownership of his or her equity interest in the Seller Entity predates the Acquisition and the Company’s
purchase of its partnership interest in NewCo. The Employment Agreement and the Non-Compete Agreement do not contain any provision to escrow or “claw back” the equity interest in the Seller Entity held by such Employed Selling Shareholder,
nor the Seller Entity Interest in NewCo, in the event of a breach of the employment or non-compete terms. More specifically, even if the Employed Selling Shareholder is terminated for “cause” by NewCo, such Employed Selling Shareholder does
not forfeit his or her right to his or her full equity interest in the Seller Entity and the Seller Entity does not forfeit its right to any portion of the Seller Entity Interest. The Company’s only recourse against the Employed Selling
Shareholder for breach of either the Employment Agreement or the Non-Compete Agreement is to seek damages and other legal remedies under such agreements. There are no conditions in any of the arrangements with an Employed Selling
Shareholder that would result in a forfeiture of the equity interest held in the Seller Entity or of the Seller Entity Interest.
|
1. |
Prior to the acquisition, the Progressive Subsidiaries were owned by a legal entity (“Progressive Parent”) controlled by its
individual owners (the “Progressive Selling Shareholders”), who work in and manage the Progressive business.
|
2. |
In conjunction with the acquisition, the Progressive Selling Shareholders caused the Progressive Parent to transfer its ownership of
the Progressive Subsidiaries into a newly-formed limited liability company (“Progressive NewCo”), in exchange for one hundred percent (
|
3. |
The Company entered into an agreement (the “Progressive Purchase Agreement”) to acquire from the Progressive Selling Shareholders a
majority of the membership interest in Progressive NewCo. The consideration for the acquisition is primarily payable in the form of cash at closing, a relatively small portion paid in cash after the closing contingent on certain
performance criteria, and a small note in lieu of an escrow (the “Progressive Purchase Price”).
|
4. |
The Company and the Progressive Selling Shareholders also executed an operating agreement (the “Progressive Operating Agreement”) for
Progressive NewCo that sets forth the rights and obligations of the members of Progressive NewCo.
|
5. |
As noted above, the Company did not purchase
|
6. |
The Company and the Progressive Selling Shareholders executed a non-compete agreement (the “Progressive Non-Compete Agreement”) which
restricts the Progressive Selling Shareholders from competing for a specified period of time (the “Progressive Non-Compete Term”).
|
7. |
The Progressive Non-Compete Term commences as of the date of the closing of the Progressive acquisition (the “Progressive Closing
Date”) and expires on the later of:
|
a. |
|
b. |
|
8. |
The Progressive Non-Compete Agreement applies to the entire United States.
|
9. |
The Progressive Put Right (as defined below) and the Progressive Call Right (as defined below) do not have an expiration date. The
Progressive Operating Agreement contains provisions for the redemption of the Progressive Selling Shareholder’s Interest, either at the option of the Company (the “Progressive Call Right”) or at the option of the Progressive Selling
Shareholder (the “Progressive Put Right”) as follows:
|
1. |
Progressive Put Right
|
a.
|
Each of the Progressive Selling Shareholders has the right to sell
|
b. |
In the event that any Progressive Selling Shareholder terminates his management relationship with Progressive NewCo for any reason on
or after the seventh anniversary of the Closing Date, the Progressive Selling Shareholder has the Progressive Put Right, and upon the exercise of the Progressive Put Right, the Progressive Selling Shareholder’s Interest shall be
redeemed by the Company at the purchase price described in “3” below.
|
2. |
Progressive Call Right
|
a. |
If any Progressive Selling Shareholder’s ceases to perform management services on behalf of Progressive NewCo, the Company thereafter
shall have an irrevocable right to purchase from such Progressive Selling Shareholder his Interest, in each case at the purchase price described in “3” below.
|
3. |
For the Progressive Put Right and the Progressive Call Right, the purchase price is derived from a formula based on a specified
multiple of Progressive NewCo’s trailing twelve months of earnings before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Percentage of any undistributed earnings of Progressive
NewCo (the “Progressive Redemption Amount”). Progressive NewCo’s earnings are distributed monthly based on available cash within Progressive NewCo; therefore, the undistributed earnings amount is small, if any.
|
4. |
The Progressive Purchase Price for the initial equity interest purchased by the Company is also based on the same specified multiple
of the trailing twelve-month earnings that is used in the Progressive Put Right and the Progressive Call Right noted above.
|
5. |
The Progressive Put Right and the Progressive Call Right do not have an expiration date.
|
For the Year Ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
(In thousands) | ||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
||||||
Net income allocated to redeemable non-controlling interest
|
|
|
|
|||||||||
Distributions to redeemable non-controlling interest partners
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Changes in the fair value of redeemable non-controlling interest
|
|
|
|
|||||||||
Purchases of redeemable non-controlling interest
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Acquired interest
|
|
|
|
|||||||||
Contributed capital
|
|
|
||||||||||
Sales of redeemable non-controlling interest
|
|
|
|
|||||||||
Changes in notes receivable related to redeemable non-controlling interest
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Adjustments in notes receivables related to the sales of redeemable non-controlling interest
|
|
|
|
|||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
As of the Year Ended | ||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
(In thousands) | ||||||||||||
Contractual time period has lapsed but holder’s employment has not terminated
|
$
|
|
$
|
|
$
|
|
||||||
Contractual time period has not lapsed and holder’s employment has not terminated
|
|
|
|
|||||||||
Holder’s employment has terminated and contractual time period has expired
|
|
|
|
|||||||||
Holder’s employment has terminated and contractual time period has not expired
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
For the Year Ended
|
||||||||
December 31, 2023 | December 31, 2022 | |||||||
(In thousands) | ||||||||
Beginning balance
|
$
|
|
$
|
|
||||
Acquisitions
|
|
|
||||||
Adjustments for purchase price allocation of businesses acquired in prior year
|
|
(
|
)
|
|||||
Impairment of goodwill
|
( |
) | ( |
) | ||||
Ending balance
|
$
|
|
$
|
|
As of the Year Ended
|
||||||||||||||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
Gross
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
Gross
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Customer and referral relationships
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Tradenames
|
|
|
|
|
|
|
||||||||||||||||||
Non-compete agreements
|
|
(
|
)
|
|
|
(
|
)
|
|
||||||||||||||||
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
For the Year Ended | ||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
(In thousands)
|
||||||||||||
Customer and referral relationships
|
$
|
|
$
|
|
$
|
|
||||||
Non-compete agreements
|
|
|
|
|||||||||
|
$
|
|
$
|
|
$
|
|
For the Year Ended December 31,
|
Customer and
Referral Relationships
|
Non-Compete
Agreements
|
||||||
(In thousands)
|
||||||||
2024
|
$
|
|
$
|
|
||||
2025
|
|
|
||||||
2026
|
|
|
||||||
2027
|
|
|
||||||
2028
|
|
|
||||||
Thereafter
|
$
|
|
$
|
|
As of the Year Ended |
||||||||
December 31, 2023
|
December 31, 2022
|
|||||||
(In thousands) |
||||||||
Salaries and related costs
|
$
|
|
$
|
|
||||
Credit balances due to patients and payors
|
|
|
||||||
Group health insurance claims
|
|
|
||||||
Federal income taxes payable
|
|
|
||||||
Contingency payable
|
|
|
||||||
Other property taxes payable |
||||||||
Interest payable |
||||||||
Closure costs
|
||||||||
Other
|
|
|
||||||
|
$
|
|
$
|
|
As of the Year Ended |
||||||||||||||||||||||||
December 31, 2023 |
December 31, 2022 |
|||||||||||||||||||||||
Principal
Amount
|
Unamortized Debt
Issuance Cost
|
Net Debt
|
Principal
Amount
|
|
|
Unamortized Debt
Issuance Cost
|
|
|
Net Debt
|
|||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Term Facility
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Revolving Facilitiy
|
|
|
|
|
|
|
||||||||||||||||||
Other (1)
|
|
|
|
|
|
|
||||||||||||||||||
Total debt
|
|
|
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
Less: Current portion of long-term
debt
|
|
(
|
)
|
|
|
(
|
)
|
|
||||||||||||||||
Long-term debt, net of current portion
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
1)
|
Revolving Facility: $ |
2)
|
Term Facility: $
|
For the Year Ended |
||||||||
December 31, 2023 | December 31, 2022 | |||||||
(In thousands) |
||||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive (loss) gain
|
||||||||
Unrealized (loss) gain on cash flow hedge
|
(
|
)
|
|
|||||
Tax effect at statutory rate (federal and state)
|
|
(
|
)
|
|||||
Comprehensive income
|
$
|
|
$
|
|
||||
Comprehensive income attributable to non-controlling interest
|
(
|
)
|
(
|
)
|
||||
Comprehensive income attributable to USPH shareholders
|
|
|
As of the Year Ended |
||||||||
December 31, 2023
|
December 31, 2022
|
|||||||
(In thousands) |
||||||||
Other current assets
|
$
|
|
$
|
|
||||
Other assets
|
$
|
|
$ | |||||
For the Year Ended
|
||||||||||||
December 31, 2023 |
December 31, 2022
|
December 31, 2021
|
||||||||||
(In thousands) | ||||||||||||
Operating lease cost
|
$ |
$
|
|
$
|
|
|||||||
Short-term lease cost
|
|
|
||||||||||
Variable lease cost
|
|
|
||||||||||
Total lease cost*
|
$ |
$
|
|
$
|
|
*
|
|
For the Year Ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021 | ||||||||||
(In thousands) | ||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$ |
$
|
|
$
|
|
|||||||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$ |
$
|
|
$
|
|
Fiscal Year
|
Amount
(In thousands)
|
|||
2024 |
$
|
|||
2025 |
||||
2026 |
||||
2027 |
||||
2028 and thereafter
|
||||
Total lease payments
|
$
|
|||
Less: imputed interest
|
||||
Total operating lease liabilities
|
$
|
As of the Year Ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021 |
||||||||||
Weighted-average remaining lease term
|
||||||||||||
Weighted-average discount rate
|
% | % | % |
As of the Year Ended |
||||||||
December 31, 2023
|
December 31, 2022
|
|||||||
(In thousands) |
||||||||
Deferred tax assets:
|
||||||||
Compensation
|
$
|
|
$
|
|
||||
Allowance for credit losses
|
|
|
||||||
Lease obligations - including closed clinics
|
|
|
||||||
Deferred tax assets
|
$
|
|
$
|
|
||||
Deferred tax liabilities:
|
||||||||
Depreciation and amortization
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Operating lease right-of-use assets
|
(
|
)
|
(
|
)
|
||||
Gain on cash flow hedge
|
( |
) | ( |
) | ||||
Change in revaluation of put-right liability
|
( |
) | ||||||
Other
|
(
|
)
|
(
|
)
|
||||
Deferred tax liabilities
|
(
|
)
|
(
|
)
|
||||
Net deferred tax liabilities
|
$
|
(
|
)
|
$
|
(
|
)
|
For the Year Ended |
||||||||||||||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021 | ||||||||||||||||||||||
(In Thousands) |
||||||||||||||||||||||||
U. S. tax at statutory rate
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||
State income taxes, net of federal benefit
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Shortfall (excess) equity compensation deduction
|
|
|
%
|
|
|
%
|
(
|
)
|
-
|
%
|
||||||||||||||
Non-deductible expenses
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Return to provision adjustments
|
% | % | % | |||||||||||||||||||||
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
For the Year Ended |
||||||||||||
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
||||||||||
(In Thousands) |
||||||||||||
Current:
|
||||||||||||
Federal
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
State
|
|
|
|
|||||||||
Total current
|
|
(
|
)
|
|
||||||||
Deferred:
|
||||||||||||
Federal
|
|
|
|
|||||||||
State
|
|
|
|
|||||||||
Total deferred
|
|
|
|
|||||||||
Total income tax provision
|
$
|
|
$
|
|
$
|
|
For the Year Ended December 31, | ||||||||||||
2023
|
2022
|
2021
|
||||||||||
(In thousands)
|
||||||||||||
Net revenue:
|
||||||||||||
Physical therapy operations
|
$
|
|
$
|
|
$
|
|
||||||
Industrial injury prevention services
|
|
|
|
|||||||||
Total Company
|
$
|
|
$
|
|
$
|
|
||||||
Operating Costs: | ||||||||||||
Salaries and related costs:
|
||||||||||||
Physical therapy operations
|
$ | $ | $ | |||||||||
Industrial injury prevention services
|
||||||||||||
Total salaries and related costs
|
$ | $ | $ | |||||||||
Rent supplies, contract labor
and other:
|
||||||||||||
Physical therapy operations
|
$ | $ | $ | |||||||||
Industrial injury prevention services
|
||||||||||||
Total rent, supplies, contract labor and other
|
$ | $ | $ | |||||||||
Provision for credit losses:
|
||||||||||||
Physical therapy operations
|
$ | $ | $ | |||||||||
Industrial injury prevention services
|
||||||||||||
Total provision for credit losses
|
$ | $ | $ | |||||||||
Total Company | $ | $ | $ | |||||||||
Gross profit:
|
||||||||||||
Physical therapy operations
|
$
|
|
$
|
|
$
|
|
||||||
Industrial injury prevention services
|
|
|
|
|||||||||
Total Company
|
$
|
|
$
|
|
$
|
|
||||||
|
||||||||||||
Total Assets:
|
||||||||||||
Physical therapy operations
|
$
|
|
$
|
|
$
|
|
||||||
Industrial injury prevention services
|
|
|
|
|||||||||
Total Company
|
$
|
|
$
|
|
$
|
|
|
|
Weighted Average Fair
|
||||||
Year Granted | Number of Shares | Value Per Share | ||||||
2023
|
|
$
|
|
|||||
2022
|
|
$
|
|
|||||
2021
|
|
$
|
|
|
|
Weighted Average Fair
|
||||||
Year Cancelled | Number of Shares | Value Per Share | ||||||
2023
|
|
$
|
|
|||||
2022
|
|
$
|
|
|||||
2021
|
|
$
|
|
ITEM 9. |
CHANGES IN DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
• |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
• |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and
expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
|
• |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICATIONS THAT PREVENT INSPECTION
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11. |
EXECUTIVE COMPENSATION
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMEMNT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
1. |
Financial Statements
|
2. |
Financial Statement Schedules
|
3. |
Exhibits
|
Number
|
|
Description
|
Underwriting Agreement, dated May 24, 2023, by and between U.S. Physical Therapy, and BofA Securities, Inc. and J.P. Morgan Securities LLC., as
representatives of the several underwriters named therein. [incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 25, 2023.]
|
||
|
Articles of Incorporation of the Company [filed as an exhibit to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 and incorporated herein by reference].
|
|
|
||
|
Amendment to the Articles of Incorporation of the Company [filed as an exhibit to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 and incorporated herein by reference].
|
|
|
||
3.3
|
|
Bylaws of the Company, as amended [filed as an exhibit to the Company’s Form 10-KSB for the year ended December 31, 1993 and incorporated herein by reference—Commission File Number—1-11151].
|
|
||
|
Description of Company Securities [filed herewith the Company’s Form 10-K for the year ended December 31, 2019 filed with the SEC on February 28, 2020.]
|
|
|
||
|
1999 Employee Stock Option Plan (as amended and restated May 20, 2008) [incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on April 17, 2008].
|
|
|
||
|
U.S. Physical Therapy, Inc. 2003 Stock Incentive Plan, (as amended and restated effective March 26, 2016) [incorporated herein by reference to Appendix A to the Company's Definitive Proxy Statement on Schedule
14A filed with the SEC on April 7, 2016.]
|
|
|
First Amendment to U.S. Physical Therapy, Inc. 2003 Stock Incentive Plan, (as amended and restated effective March 26, 2016) effective on March 1, 2022 [incorporated herein by reference to Appendix A to the
Company's Definitive Proxy Statement on Schedule 14A filed with the SEC on April 4, 2022.]
|
|
|
Form of Restricted Stock Agreement [incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on March 16, 2016].
|
Number
|
|
Description
|
|
||
|
Objective Long-Term Incentive Plan for Senior Management [incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 8, 2019.]
|
|
|
||
|
Discretionary Long-Term Incentive Plan for Senior Management [incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 8, 2019.]
|
|
|
||
|
Third Amended and Restated Employment Agreement by and between the Company and Christopher J. Reading dated effective May 21, 2019 [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed with the SEC on May 22, 2019]
|
Number
|
|
Description
|
|
||
|
Amended & Restated Employment Agreement commencing by and between the Company and Graham Reeve dated effective May 21, 2019 [incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form
8-K filed with the SEC on March 22, 2019]
|
|
|
||
|
Form of Restricted Stock Agreement [incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on March 22, 2019]
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2020, effective March 3, 2020 [incorporated by reference to Exhibit 99.1 to the Company Current Report on Form 8-K filed
with the SEC on March 6, 2020].
|
|
|
Amendment to Employment Agreement entered into as of March 26, 2020 by and between the Company and Christopher Reading [incorporated by reference to Exhibit 10.3 to the Company Current Report on Form 8-K filed
with the SEC on March 26, 2020].
|
|
|
||
|
Amendment to Employment Agreement entered into as of March 26, 2020 by and between the Company and Graham Reeve [incorporated by reference to Exhibit 10.4 to the Company Current Report on Form 8-K filed with the
SEC on March 26, 2020].
|
|
|
||
|
Employment Agreement by and between the Company and Eric Williams entered into on December 3, 2020 and commencing as of July 1, 2021 [filed by reference to Exhibit 10.1 to the Company Current Report on Form 8-K
filed with the SEC on December 7, 2020.]
|
|
|
||
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2021, effective March 17, 2021 [incorporated by reference to Exhibit 99.1 of the Current Report on Form 8-K filed by U.S.
Physical Therapy, Inc. on March 16, 2021]
|
||
U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2021, effective March 17, 2021 [incorporated by reference to Exhibit 99.2 of the Current Report on Form 8-K filed by
U.S. Physical Therapy, Inc. on March 16, 2021]
|
||
Third Amended and Restated Credit Agreement dated as of June 17, 2022 among the Company, as the borrower, and Bank of America, N.A., as Administrative Agent, Regions Capital Markets as Syndication Agent, BofA
Securities Inc. and Regions Capital Markets as Joint Load Arrangers, BofA Securities Inc., as Sole Bookrunner and the lenders named therein. [incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 10-Q filed
with the SEC on June 21, 2022]
|
||
Employment Agreement by and between the Company and Rick Binstein entered into on March 23, 2022 [incorporated by reference to Exhibit 10.1 to the Company Current Report
on Form 8-K filed with the SEC on March 23, 2022]
|
||
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2022, effective March 14, 2022 [incorporated by reference to Exhibit 99.1 of the Current Report on Form 8-K filed by U.S.
Physical Therapy, Inc. on March 14, 2022]
|
||
U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2022, effective March 14, 2022 [incorporated by reference to Exhibit 99.2 of the Current Report on Form 8-K filed by
U.S. Physical Therapy, Inc. on March 14, 2022]
|
||
U. S. Physical Therapy, Inc. Objective Cash/RSA Bonus Plan for Senior Management for 2022, effective March 14, 2022 [incorporated by reference to Exhibit 99.3 of the Current Report on Form 8-K filed by U.S.
Physical Therapy, Inc. on March 14, 2022]
|
U. S. Physical Therapy, Inc. Discretionary Cash/RSA Bonus Plan for Senior Management for 2022, effective March 14, 2022 [incorporated by reference to Exhibit 99.4 of the Current Report on Form 8-K filed by U.S.
Physical Therapy, Inc. on March 14, 2022]
|
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2023, effective March 2, 2023 [incorporated by reference to Exhibit 99.1 of the Current Report on Form 8-K filed by U.S.
Physical Therapy, Inc. on March 8, 2023]
|
||
U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2023, effective March 2, 2023 [incorporated by reference to Exhibit 99.2 of the Current Report on Form 8-K filed by
U.S. Physical Therapy, Inc. on March 8, 2023]
|
||
U. S. Physical Therapy, Inc. Objective Cash/RSA Bonus Plan for Senior Management for 2023, effective March 2, 2023 [incorporated by reference to Exhibit 99.3 of the Current Report on Form 8-K filed by U.S.
Physical Therapy, Inc. on March 8, 2023]
|
||
U. S. Physical Therapy, Inc. Discretionary Cash/RSA Bonus Plan for Senior Management for 2023, effective March 2, 2023 [incorporated by reference to Exhibit 99.4 of the Current Report on Form 8-K filed by U.S.
Physical Therapy, Inc. on March 8, 2023]
|
||
|
Employment Agreement entered into as of November 9, 2020 by and between U.S. Physical Therapy and Carey Hendrickson [incorporated by reference to Exhibit 10.1 to the Company Current Report on Form 8-K filed with
the SEC on September 23, 2020.]
|
Number
|
|
Description
|
|
Subsidiaries of the Registrant
|
|
|
||
|
Consent of Independent Registered Public Accounting Firm—Grant Thornton LLP
|
|
|
||
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
|
|
|
||
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
|
|
|
||
|
Certification of Periodic Report of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
||
|
U.S. Physical Therapy Compensation Clawback Policy
|
|
101.INS*
|
|
XBRL Instance Document
|
|
||
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
||
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
||
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
||
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
||
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* |
Filed herewith
|
+ |
Management contract or compensatory plan or arrangement.
|
Balance at
Beginning of Period
|
Additions Charged
to Costs and Expenses
|
Additions Charged
to Other Accounts
|
Deductions
|
Balance at
End of Period
|
||||||||||||||||
YEAR ENDED DECEMBER 31, 2023:
|
||||||||||||||||||||
Reserves and allowances deducted from asset accounts:
|
||||||||||||||||||||
Allowance for credit losses(1)
|
$
|
|
$
|
|
|
$
|
|
(2)
|
$
|
|
||||||||||
YEAR ENDED DECEMBER 31, 2022:
|
||||||||||||||||||||
Reserves and allowances deducted from asset accounts:
|
||||||||||||||||||||
Allowance for credit losses
|
$
|
|
$
|
|
|
$
|
|
(2)
|
$
|
|
||||||||||
YEAR ENDED DECEMBER 31, 2021:
|
||||||||||||||||||||
Reserves and allowances deducted from asset accounts:
|
||||||||||||||||||||
Allowance for credit losses
|
$
|
|
$
|
|
|
$
|
|
(2)
|
$
|
|
(1) |
|
(2) |
|
* |
All other schedules are omitted because of the absence of conditions under which they are required or because the required information is
shown in the financial statements or notes thereto.
|
ITEM 16. |
FORM 10-K SUMMARY
|
U.S. PHYSICAL THERAPY, INC.
|
||
(Registrant)
|
||
By:
|
/s/ Carey Hendrickson
|
|
Carey Hendrickson
Chief Financial Officer
|
||
(Principal Financial Officer and Principal Accounting Officer)
|
/s/ Carey Hendrickson
|
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
February 29, 2024
|
Carey Hendrickson |
/s/ Chris J. Reading
|
Chief Executive Officer, President and Director
(Principal Executive Officer)
|
February 29, 2024
|
Chris J. Reading
|
||
/s/ Edward L. Kuntz
|
Chairman of the Board
|
February 29, 2024
|
Edward L. Kuntz
|
||
/s/ Bernard A. Harris
|
Director
|
February 29, 2024
|
Dr. Bernard A. Harris, Jr.
|
||
/s/ Kathleen A. Gilmartin
|
Director
|
February 29, 2024
|
Kathleen A. Gilmartin
|
||
/s/ Anne Motsenbocker
|
Director
|
February 29, 2024
|
Anne Motsenbocker
|
||
/s/ Reginald E. Swanson
|
Director
|
February 29, 2024
|
Reginald E. Swanson
|
||
/s/ Clayton K. Trier
|
Director
|
February 29, 2024
|
Clayton K. Trier
|
/s/ Nancy J. Ham
|
Director
|
February 29, 2024
|
Nancy J. Ham
|