U.s. Physical Therapy, Inc. · NYSE:USPH
U.s. Physical Therapy — Bank of America Conference 2023
30 slides from U.s. Physical Therapy's conference presentation, May 2023
Slide 1: Investor Presentation May 2023
Investor Presentation May 2023
Slide 2: Disclaimer
Disclaimer 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 o
Slide 3: Investment Highlights
Investment Highlights Leading Physical Therapy Company As of March 31, 2023, operated 647 outpatient physical and occupational therapy clinics across 40 states One of the largest PT clinic owner/operator platforms Growing Industrial Injury Prevention business One of two publicly-traded, pure
Slide 4: Expanding National Footprint of Physical Therapy Clinics
Expanding National Footprint of Physical Therapy Clinics WA 11 MT VT ME 2 ND 1 8 OR 2 32 ID MN MA 17 SD 6 WI 2 WY 1 7 MI 7 50 IA PA CT NV 2 29 NJ 16 OH 4 IN 11 7 8 WV DE VA 9 MO 5 47 KS 10 19 MD NC 28 TN 1 AZ OK 81 20 6 AR SC 5 15 AL GA MS 22 AK 12 LA 2 4 TX 86 11 FL 37 HI 4 HI 4 Added 93 clinics in
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 ~50% of Americans over 18 years old develop a musculoskeletal injury that lasts more than 3 months Wi
Slide 6: Setting for Physical Therapy Care
Setting for Physical Therapy Care Within physical therapy, outpatient clinics are the leading setting for care Outpatient Clinics Hospitals; Home Offices of Other State, Local, Health Total Physicians and Private Orthopedic rehab is the primary driver of physical therapy services, representing appro
Slide 7: Payors See Significant ROI for Physical Therapy
Payors See Significant ROI for Physical Therapy With PT Without PT Hip replacement surgery Hip replacement surgery ($56,000) ($56,000) Inpatient care Inpatient care ($15,000) ($15,000) Outpatient Physical Readmission Readmission Rate of Home Rate of Therapy Clinic 10% 20% Full Recovery Full Recovery
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 USPh is well-positioned to capitalize in a more challenged macro environment 1,900+ 900+ 647 Clinics(2) Clinics(2) C
Slide 9: Growth Strategy
Growth Strategy 1 Drive organic growth through de novo PT/OT clinic openings, utilize true partnership model 2 Maximize profits of existing facilities by growing patient volume, improving pricing, increasing efficiencies and adding programs and services 3 Augment organic growth through strategic acq
Slide 10: 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 Organic growth includes lower cost de novo start up clinics Strategic acquisitions
Slide 11: USPh Partnership Advantages
USPh Partnership Advantages Accounting Capital and Resources to Enhance Development Rate HR Less Personal Financial Real Estate Risk Construction Aligned Practice Incentives Purchasing Unlimited Earnings Potential Marketing Enhanced Benefits Compliance Package Legal Business Intelligence and Collabo
Slide 12: Acquisition Strategy
Acquisition Strategy Completed 47 acquisitions since 2005 ranging in size from 3 to 52 clinics Acquisitions include five industrial injury prevention services businesses Seeking & evaluating M&A transactions is part of USPh’s DNA Acquisition criteria: Owner therapists continue to operate clinics and
Slide 13: New Clinics / Brands Since January 2022
New Clinics / Brands Since January 2022 From 1/1/2022 – 3/31/2023 2 4 2 14 WA ME MT ND OR VT MN ID SD WI MA 7 MI CT WY IA PA NJ NV OH MD IN DE WV MO VA KS 6 NC TN AZ 5 OK AR SC 6 AL GA MS TX LA FL AK HI 2 15 56 clinics added since January 1, 2022 13
Slide 14: Scale Advantages Create a Robust Business Case for Consolidation
Scale Advantages Create a Robust Business Case for Consolidation Referrals Payor Networks Higher likelihood of referrer Increased likelihood of selection for activity and advocacy payor networks ▪ Scale is cited as a core criterion by specialty network managers and payors. ▪ Some limited leverage in
Slide 15: Revenue Mix by Segment and Payor Type
Revenue Mix by Segment and Payor Type Revenue Mix by Segment Type Physical Therapy Revenue Mix by Payor Type Quarter Ended March 31, 2023 Quarter Ended March 31, 2023 6% 13% 9% 48% 33% 87% 4% Private Insurance & Managed Care Physical Therapy Operations Medicaid Industrial Injury Prevention Medicare
Slide 16: USPh Physical Therapy Growth Drivers
USPh Physical Therapy Growth Drivers Both prior to and post COVID-19, each driver has shown robust growth Number of Clinics (1) Daily Patient Visits Per Clinic 2012-1Q23: CAGR +4.0% 2012-1Q23: CAGR +3.1% 700 640 647 35 578 591 583 554 591 29.1 28.7 29.8 600 540 30 27.6 24.6 508 25 25.9 26.6 472 489
Slide 17: Daily Volumes Progression
Daily Volumes Progression Average Visits per Clinic per Day COVID Trough 35 30.0 29.5 29.8 29.5 29.1 29.8 30 27.9 28.8 27.7 27.1 26.2 25.8 25 20 18.9 15 10 5 0 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 First Quarter 2023 average daily visits per clinic were a record-high for
Slide 18: Physical Therapy Operations
Physical Therapy Operations Annual Gross Margin Percentage Quarterly Gross Margin Percentage 26.0% 26.0% 23.6% 23.8% 24.0% 24.0% 23.1% 22.7% 22.0% 22.0% 22.0% 21.0% 20.2% 20.0% 20.0% 20.0% 20.0% 18.7% 18.0% 18.0% 16.0% 16.0% 14.0% 14.0% 12.0% 12.0% 2018 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4
Slide 19: Industrial Injury Prevention
Industrial Injury Prevention Industrial Injury Prevention services include industrial sports medicine and injury prevention; post offer testing; ergonomic services; occupational health and medical services; specialized solutions Since USPh’s initial entry into the Industrial Injury Prevention servic
Slide 20: Industrial Injury Prevention
Industrial Injury Prevention Revenue ($ in millions) Margin Percentage (%) $90.0 30.0% $80.0 $77.1 25.7% 25.0% 24.4% $70.0 22.4% 20.4% 20.7% $60.0 20.0% $50.0 $43.9 15.0% $39.2 13.3% $40.0 $37.5 $30.0 $25.5 10.0% $20.0 5.0% $10.0 $4.9 $0.0 0.0% 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021
Slide 21: Strong Cash Flow and Balance Sheet
Strong Cash Flow and Balance Sheet Adjusted EBITDA(1) ($ in millions) Liquidity ($ in millions) (as of 3/31/23) Highest Q1 Adj. ~6% Growth EBITDA in Even with Year $169.6 Company Over Year History $18.5 Inflation Effects $137.0 $17.5 $32.6 1Q22 1Q23 Liquidity Adj EBITDA Cash Revolver Capacity Strong
Slide 22: Strong Return to Shareholders
Strong Return to Shareholders USPh Share Price (9/30/2003 – 5/5/2023) $120.00 $114.10 CEO joined Company in Fall of 2003 $100.00 $80.00 Total Cumulative Return through May 5, 2023 $60.00 including dividends is $111.84 $40.00 $20.00 $12.21 Cumulative Total Shareholder Return Percentage is 916.0
Slide 23: Executive Management
Executive Management ▪ Joined USPh as COO in November 2003 Chris Reading ▪ Promoted to CEO and Board in November 2004 Chief Executive ▪ Previously Senior Vice President of Operations with HealthSouth, managed over 200 facilities including OP, Officer ASC, DX Imaging and rehab hospital operations ▪ B
Slide 24: 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 Attractive Dividend Yield 24
Slide 25: Appendix
~ APPENDIX > a ONE PARTNER : al Bi ‘Vis
Slide 26: First Quarter 2023 and 2022 Results
First Quarter 2023 and 2022 Results First Quarter Ended March 31, 2023 2022 (in thousands, except per share data) Net Revenue $ 148,509 $ 131,704 Gross profit 30,857 26,588 Operating income 16,998 15,032 GAAP Net income 11,427 11,982 Net Income attributable to USPH shareholders 7,410 8,799 Earnings
Slide 27: Segment Information – First Quarter 2023 and 2022 Results
Segment Information – First Quarter 2023 and 2022 Results First Quarter Ended March 31, 2023 2022 (in thousands, except percentages) Gross profit $ 30,857 $ 26,588 PT Gross profit $ 26,759 $ 22,041 PT Gross margin % 21.0% 20.0% Industrial injury prevention gross profit $ 3,768 $ 4,152 Industrial inj
Slide 28: Reconciliation of Non-GAAP Financial Measures – Operating Results
Reconciliation of Non-GAAP Financial Measures – Operating Results Three Months Ended March 31, Earnings per share 2023 2022 Computation of earnings per share - USPH shareholders: Net income attributable to USPH shareholders $ 7,410 $ 8,799 Charges to retained earnings: Revaluation of redeemable non-
Slide 29: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA Three Months Ended March 31, 2023 2022 Adjusted EBITDA Net income attributable to USPH shareholders $ 7,410 $ 8,799 Adjustments: Depreciation and amortization 3,788 3,824 Change in fair value of contingent earn-out consideration 698 - I
Slide 30: Thank you
USP ONE PARTNER Thank you
U.S. Physical Therapy — Bank of America Conference 2023 on 6ix