U.s. Physical Therapy, Inc. · NYSE:USPH
U.s. Physical Therapy — Investor Presentation (August 2021)
39 slides from U.s. Physical Therapy's investor presentation, Aug 5, 2021
Slide 1: Investor Presentation August 5, 2021
Investor Presentation August 5, 2021
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 • 576 outpatient physical and occupational therapy clinics across 39 states Established • One of the largest owner/operator of PT clinics Company • Growing Industrial Injury Prevention business • One of two publicly-traded, pure play providers • US rehab market > $30B in annual
Slide 4: 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 5: 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 • Untapped market potential – each year ~50% of Americans over the age of 18 develop a musculoskeletal injury that lasts more than 3
Slide 6: Setting for Physical Therapy Care
Setting for Physical Therapy Care Within physical therapy, outpatient clinics are the leading setting for care. 100% Other Offices of physicians 80% Home health total 60% Hospitals; state, local, and private 40% 20% Outpatient clinics 0% • Orthopedic rehab is the primary driver of physical therapy s
Slide 7: Payers See Significant ROI for Physical Therapy
Payers See Significant ROI for Physical Therapy Without PT Hip replacement Hip replacement surgery ($56,000) surgery ($56,000) Inpatient care Inpatient care ($15,000) ($15,000) Outpatient Physical Home Therapy Clinic Readmission Readmission Rate of 10% Rate of 20% Full Recovery Full Recovery Total T
Slide 8: Competitive Landscape
Competitive Landscape • Highly fragmented U.S. outpatient rehab market with 37,000 + clinics(1) • No company with >10% market share • USPh is one of the largest owner/operator of PT clinics – Select Medical/Physio 1,833 Clinics – ATI 882 Clinics – USPh 576 Clinics (1)Source: “Industry Trends in M&A
Slide 9: 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, improving pricing and increasing efficiencies Augment organic growth through strategic acquisitions 9
Slide 10: USPH Partnership Advantages
USPH Partnership Advantages Less Administrative More Resources Burden Accounting Access to Capital for Development of Additional HR Clinics Real Estate Less Personal Financial Risk Construction Unlimited Earnings Potential Purchasing Full Benefit Package Marketing Ongoing Guida
Slide 11: National Footprint
National Footprint 576 Clinics in 39 States as of July 31, 2021 Cs 11
Slide 12: Acquisition Strategy
Acquisition Strategy • Completed 38 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 12
Slide 13: Scale Advantages Create a Robust Business Case for Consolidation
Scale Advantages Create a Robust Business Case for Consolidation • Increased likelihood of selection for payer networks Scale is cited as a core criterion by specialty network managers and payers. Some limited leverage in negotiations with payers for reimbursement • Higher likelihood of referrer
Slide 14: New Clinics / Brands 2021
New Clinics / Brands 2021 2020 Through 06/30/2021 14
Slide 15: 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 16: USPH Physical Therapy Operations Revenue Mix
USPH Physical Therapy Operations Revenue Mix Percentage of Physical Therapy Percentage of Physical Therapy Operations Revenue For Operations Revenue For Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Other Other Workers Workers 8% 7% Comp Comp 10% 11% Medicaid Medicaid Private 4% 5%
Slide 17: Industrial Injury Prevention
Industrial Injury Prevention • Both internally and through acquisition, USPh has expanded its industry-focused Industrial Injury Prevention business. • In March 2017, April 2018 and April 2019 USPh acquired leading providers of Industrial Injury Prevention services. • Industrial Injury Prevention (B
Slide 18: USPH Total Revenue Mix
USPH Total Revenue Mix Percentage of Revenue For Percentage of Revenue For Three Months Ended June 30, 2021 Year Ended December 31, 2020 Industrial Injury Industrial Injury Prevention Prevention 8% 9% 92% 91% Physical Therapy Physical Therapy (including management contracts) (including management co
Slide 19: USPH Physical Therapy Growth Drivers
USPH Physical Therapy Growth Drivers Prior to Covid-19 pandemic each driver showed robust growth historically Number of Clinics* Daily Patient Visits Per Clinic 578 591 583 554 540 26.6 27.6 508 25.9 24.6 472 489 24.1 25 431 21.7 21.5 22.9 2012-19 CAGR+4.4% 2012-2019 CAGR +3.5% 12 13 14 15 16 17 18
Slide 20: USPH Physical Therapy Operations Margin
USPH Physical Therapy Operations Margin Annual Margins 26.0% 25.3% 25.0% 24.0% 23.6% 23.1% 23.0% 22.7% 22.5% 22.0% 21.0% 20.0% 2017 2018 2019 2020 2021* *2021 is for the six months ended June 30, 2021. 20
Slide 21: USPH Physical Therapy Operations Margin
USPH Physical Therapy Operations Margin Second Quarter Margins 28.0% 27.3% 27.0% 26.0% 24.7% 25.0% 24.2% 23.7% 24.0% 23.0% 21.7% 22.0% 21.0% 20.0% 19.0% 18.0% 17.0% 16.0% 15.0% Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 21
Slide 22: Industrial Injury Prevention
Industrial Injury Prevention Annual Progression $45.0 Revenue (In Millions) 30.0% Margin Percentage (%) $39.1 25.7% 26.3% $40.0 $37.5 25.0% $35.0 22.4% 20.4% $30.0 20.0% $25.5 $25.0 15.0% 13.3% $20.0 $14.9 $15.0 10.0% $10.0 5.0% $5.0 $0.0 0.0% 2017 2018 2019 2020 2017 2018 2019 2020 2021* Note: Reve
Slide 23: Industrial Injury Prevention
Industrial Injury Prevention Second Quarter Progression Revenue (in $millions) Margin Percentage (%) $12.0 35.0% 32.9% $10.3 $10.0 $9.7 30.0% 29.2% $10.0 25.3% 24.4% 25.0% $8.0 $6.3 20.0% $6.0 15.0% $4.4 15.0% $4.0 10.0% $2.0 5.0% $0.0 0.0% Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 Q2 2017 Q2 2018 Q2
Slide 24: Dividend
Dividend • The Company initiated a quarterly dividend in 2011, and subsequently increased the quarterly dividend rate each year. • Temporarily suspended quarterly dividend after Q1 2020 due to uncertainty associated with Covid-19 pandemic • Reinstated the quarterly dividend in Q1 2021 at $0.35 per s
Slide 25: COVID-19
COVID-19 • With the March onset of the pandemic, the Company took a number of actions to preserve cash and mitigate losses including staffing adjustments and clinic closures • Initially, 70 out of 585 clinics were closed (30 temporarily and 40 permanently) based on the presumption of lower patient v
Slide 26: COVID-19 Recovery
COVID-19 RECOVERY Record High Average Visits per Clinic per Day 30.0 28.2 27.5 28.0 27.7 26.9 26.2 27.1 25.8 18.9 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 In April 2020, patient volumes were approximately 45% of pre-COVID volumes. Volumes grew consistently from May through December 2020.
Slide 27: Strong Cash Flow and Balance Sheet
Strong Cash Flow and Balance Sheet • At June 30, 2021, we had $20.4 million in cash and $38.0 million outstanding on our line of credit. • Both de novo clinics and acquisitions financed primarily through free cash flow. • In 2020, the Company generated Adjusted EBITDA of (1) $70.0 million inclusive
Slide 28: Strong Return to Shareholders
Strong Return to Shareholders Average Annual Rate of Return to Shareholders 54.3% Per Year $130.00 * CEO joined Company in Fall of 2003; COO-East in $120.00 Spring of 2018; and CFO in Fall of 2020; COO West $110.00 joined Company in July 2021. $100.00 $90.00 Total Cumulative Return through December,
Slide 29: Second Quarter 2021 Results
Second Quarter 2021 Results Three Months Ended June 30, 2021 June 30, 2020 Revenue $ 126.9 M $ 83.9 M Gross Margin $ 34.3 M $ 19.3 M Operating Income $ 22.2 M $ 10.3 M Net Income (GAAP)* $ 12.4 M $ 10.2 M Operating Results (without Relief Funds)** $ 12.4 M $ 5.0 M Operating Results (with Relief Fund
Slide 30: Six Months Ended June 30, 2021 Results
Six Months Ended June 30, 2021 Results Six Months Ended June 30, 2021 June 30, 2020 Revenue $ 239.3 M $ 196.6 M Gross Margin $ 60.2 M $ 35.0 M Operating Income $ 37.3 M $ 14.3 M Net Income (GAAP)* $ 20.6 M $ 11.2 M Operating Results (without Relief Funds)** $ 20.6 M $ 8.9 M Operating Results (with R
Slide 31: Full Year 2020 Results
Full Year 2020 Results Year Ended December 31, 2020 December 31, 2019 Revenue $ 423.0 M $ 482.0 M Gross Margin $ 94.5 M $ 112.5 M Operating Income $ 52.4 M $ 67.4 M Net Income (GAAP)* $ 35.2 M $ 40.0 M Operating Results (w/o Relief Funds)** $ 30.6 M $ 36.0 M Operating Results (w/Relief Funds) $ 38.4
Slide 32: Summary
Summary 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 32
Slide 33: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA Three Months Ended June 30, Q2 2021 Q2 2020 Net revenue $ 126,928 $ 83,857 Net income attributable to USPh $ 12,436 $ 10,232 Depreciation and amortization $ 2,803 $ 2,726 Relief funds $ - $ (7,958) Interest income $ (46) $ (4) Interest
Slide 34: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA Three Months Ended June 30, Q2 2021 Q2 2020 Net revenue $ 239,296 $ 196,574 Net income attributable to USPh $ 20,609 $ 11,248 Depreciation and amortization $ 5,484 $ 5,333 Relief funds $ - $ (7,958) Interest income $ (100) $ (47) Closur
Slide 35: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA Year Ended December 31, (amounts in 000’s) 2020 2019 Net Revenues $ 422,969 $ 481,969 Net Income Attributable to USPh $ 35,194 $ 40,039 Depreciation and Amortization $ 10,533 $ 10,095 Relief Funds $ (13,500) $ - Interest Income $ (142)
Slide 36: Reconciliation of Non-GAAP Financial Measures – Operating Results
Reconciliation of Non-GAAP Financial Measures – Operating Results Three Months Ended June 30, (in 000’s except per share data) Computation of earnings per share – USPH shareholders: 2021 2020 Net Income attributable to USPh Shareholders $ 12,436 $ 10,232 Charges (credits) to retained earnings: Reval
Slide 37: Reconciliation of Non-GAAP Financial Measures – Operating Results
Reconciliation of Non-GAAP Financial Measures – Operating Results Six Months Ended June 30, (in 000’s, except per share data) Computation of earnings per share – USPH shareholders: 2021 2020 Net Income attributable to USPh Shareholders $ 20,609 $ 11,248 Charges (credits) to retained earnings: Revalu
Slide 38: Reconciliation of Non-GAAP Financial Measures – Operating Results
Reconciliation of Non-GAAP Financial Measures – Operating Results Year Ended December 31, (in 000’s, except per share data) Computation of earnings per share – USPH shareholders: 2020 2019 Net Income attributable to USPh Shareholders $ 35,194 $ 40,039 Charges (credits) to retained earnings: Revaluat
Slide 39: USPH One Partner
USP ONE PARTNER
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