U.s. Physical Therapy, Inc. · NYSE:USPH
U.s. Physical Therapy — Investor Presentation (November 2019)
30 slides from U.s. Physical Therapy's investor presentation, Nov 7, 2019
Slide 1: Investor Presentation
INVESTOR PRESENTATION November 7, 2019
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements, which involve numerous risks and uncertainties. Included are statements relating to opening of new clinics, availability of personnel and reimbursement environment. The forward-looking statements are based on the Compa
Slide 3: Investment Highlights
Investment Highlights • 578 outpatient physical and occupational therapy clinics Established across 41 states Company • 3rd largest owner/operator of PT clinics • Only publicly-traded, pure play provider • US rehab market > $30B in annual revenue Attractive Market • Highly fragmented; No company wit
Slide 4: Large and Growing Market Opportunity
Large and Growing Market Opportunity • $30B+ U.S. rehab market with projected growth • Favorable demographics – physically active, aging and obese population segments • Healthcare delivery shifting towards lower cost, high quality outpatient providers 4
Slide 5: Growth Strategy
Growth Strategy Drive organic growth through de novo PT/OT clinic openings, utilize true partnership model Maximize profits of existing facilities by growing patient volume; realize efficiencies through higher clinical productivity Augment organic growth through strategic acquisitions 5
Slide 6: National Footprint
National Footprint 578 Clinics in 41 States as of October 31, 2019
Slide 7: Competitive Landscape
Competitive Landscape • Highly fragmented U.S. outpatient rehab market with 18,000 + clinics • No company with >10% market share • USPh ranks third nationally – Select Medical/Physio 1707 Clinics – ATI 700 Clinics – USPh 578 Clinics Note: Owned Clinics 7
Slide 8: Focused Business Model
Focused Business Model • Specialize in trauma, sports, work-related and pre and post surgical cases • Partner with experienced physical therapists – Drive volume via referrals – Augment sales with marketing reps • Historical focus on organic growth via lower cost de novo (start-up) clinics • Strateg
Slide 9: USPH Partnership Advantages
USPH Partnership Advantages Less Administrative More Resources Access to Capital for Accounting Development of Additional HR Burden Clinics Real Estate No Personal Financial Risk Construction Unlimited Earnings Potential Purchasing Full Benefit Package Marketing Ongoing Guidanc
Slide 10: Video Placeholder
Video Placeholder 10 10
Slide 11: Acquisition Strategy
Acquisition Strategy • Completed 33 acquisitions since 2005 • Range in size from 3 to 52 clinics • Acquisition criteria: Owner therapists continue to operate clinics and retain significant equity interest Immediately accretive to earnings Further de novo growth opportunities 11
Slide 12: New Clinics / Brands 2019
New Clinics / Brands 2019 as of 10/31/2019 12
Slide 13: Executive Management
Executive Management • Chris Reading – Chief Executive Officer – Joined USPh as COO in November 2003 – Promoted to CEO and Board in November 2004 – Previously Senior Vice President of Operations with HealthSouth, managed over 200 facilities including OP, ASC, DX Imaging and rehab hospital operations
Slide 14: Diversified Payor Mix
Diversified Payor Mix Percentage of Fee for Service 2019 Net Patient Revenue Through September 30, 2019 7% 15% Private Insurance & Managed Care 47% Medicare & Medicaid Workers Comp Other 31% 14
Slide 15: Industrial Injury Prevention and Worker's Comp
Industrial Injury Prevention and Worker’s Comp • Both internally and through acquisition, USPh has expanded its industry focused Industrial Injury Prevention and Worker’s Comp business. • In March 2017, April 2018 and April 2019 USPh acquired leading providers of Industrial Injury Prevention service
Slide 16: Strong Cash Flow and Balance Sheet
Strong Cash Flow and Balance Sheet • Both de novo clinics and acquisitions financed primarily through free cash flow • USPH trailing twelve months ended September 2019 adjusted EBITDA of $67.1 million. (1) (1) Adjusted EBITDA is defined as net income contributable to USPh shareholders before interes
Slide 17: Dividend
Dividend • In 2011 initiated quarterly dividend • Increased dividend every year • Paid special dividend in 2012 • Raised dividend in June 2019 by 30% compared to the third quarter of 2018. • Dividends do not impact ability to continue to grow internally through de novo clinic development and externa
Slide 18: Strong Return to Shareholders
Strong Return to Shareholders *Current Management Team joined Company in Fall of 2003. Total Cumulative Return through September 30, 2019 including dividends is $124.14. Total Cumulative Return Percentage is 1018%. Market Cap Increase during time period is from $154.7 million to $1.7 billion or by $
Slide 19: Nine Months Results
Nine Months Results Nine Months Ended September 30, 2019 September 30, 2018 Change Revenue $ 359.9 M $ 336.6 M 6.9% Gross Margin $ 85.5 M $ 76.4 M 11.9% Operating Income $ 52.1 M $ 45.5 M 14.6% Net Income (GAAP) $ 32.1 M $ 24.5 M 31.2% Operating Results $ 27.8 M $ 24.5 M 13.7% EPS (Operati
Slide 20: Third Quarter Results
Third Quarter Results Three Months Ended September 30, 2019 September 30, 2018 Change Revenue $ 117.3 M $ 113.1 M 3.7% Gross Margin $ 27.4 M $ 26.1 M 5.0% Operating Income $ 16.8 M $ 15.4 M 9.0% Net Income (GAAP) $ 9.0 M $ 8.1 M 11.7% Operating Results $ 9.0 M $ 8.1 M 11.7% EPS (Operating
Slide 21: Year Results
Year Results December 31, 2018 December 31, 2017 Change Revenue $ 453.9 M $ 414.1 M 9.6% Gross Margin $ 101.7 M $ 90.6 M 12.2% Operating Income $ 60.3 M $ 54.7 M 10.2% Net Income (GAAP) $ 34.9 M $ 22.3 M 56.7% Operating Results $ 33.5 M $ 26.2 M 28.1% EPS (Operating Results)* $ 2.65 $ 2.08
Slide 22: Summary
Summary Only publicly-traded, pure play operator of rehab clinics Proven business model, driven by organic growth and acquisitions Significant scale with national footprint Large and growing market/favorable demographics Strong cash flow and balance sheet 22
Slide 23: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA Three Months Ended September 30, (amounts in 000’s) 2019 2018 Net revenues $ 117,251 $ 113,122 Net Income attributable to U.S. Physical Therapy 9,047 8,102 Depreciation and amortization 2,457 2,469 Interest income (7) (16) Interest expe
Slide 24: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA Nine Months Ended September 30, (amounts in 000’s) 2019 2018 Net revenues $ 359,855 $ 336,562 Net Income attributable to U.S. Physical Therapy 32,110 24,465 Adjustments: Depreciation & amortization 7,377 7,335 Interest income (27) (70)
Slide 25: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA Trailing Twelve Months Ended September 30, (amounts in 000’s) 2019 2018 Net revenues $ 477,204 $ 445,567 Net Income attributable to U.S. Physical Therapy 42,518 31,814 Adjustments: Depreciation & amortization 9,797 9,776 Interest income
Slide 26: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA Year Ended December 31, (amounts in 000’s) 2018 2017 Net revenues $ 453,911 $ 414,051 Net Income attributable to U.S. Physical Therapy 34,873 22,256 Adjustments: Depreciation & amortization 9,755 9,710 Interest income (93) (88) Derecogn
Slide 27: Reconciliation of Non-GAAP Financial Measures – Operating Results
Reconciliation of Non-GAAP Financial Measures – Operating Results Three Months Ended September 30 2019 2018 Computation of earnings per share – USPH shareholders Net Income attributable to USPh Shareholders $ 9,047 $ 8,102 Charges to retained earnings: Revaluation of redeemable non-controlling inter
Slide 28: Reconciliation of Non-GAAP Financial Measures – Operating Results
Reconciliation of Non-GAAP Financial Measures – Operating Results Nine Months Ended September 30 2019 2018 Computation of earnings per share – USPH shareholders Net Income attributable to USPh Shareholders $ 32,110 $ 24,465 Charges to retained earnings: Revaluation of redeemable non-controlling inte
Slide 29: Reconciliation of Non-GAAP Financial Measures – Operating Results
Reconciliation of Non-GAAP Financial Measures – Operating Results Year Ended December 31 2018 2017 Computation of earnings per share – USPH shareholders Net Income attributable to USPh Shareholders $ 34,873 $ 22,256 Charges to retained earnings: Revaluation of redeemable non-controlling interest (24
Slide 30: NYSE: USPH
USP) US. PhYSICAL THERAPY, INC. NYSE: USPH
U.S. Physical Therapy — Investor Presentation (November 2019) on 6ix