USPH - U.S. Physical Therapy crashes 23% as cost concerns prompt revised guidance

U.S. Physical Therapy ( NYSE: USPH ), an operator of outpatient physical therapy clinics, dropped ~23% in the morning hours Thursday after the company missed forecasts for 2Q 2022 financials and revised the full-year guidance to reflect rising costs.

Revenue for the quarter increased ~11% YoY to $140.7M, as total patient visits improved ~6% from 1Q 2022 to ~1.1M, and average visits per clinic per day rose to 29.5, up from 27.9 in the preceding quarter.

However, driven by the Medicare rate reductions, the net rate per patient visit dropped to $103.8, marking a decline from $104.46 in the preceding quarter.

Meanwhile, net income fell ~10% YoY to $11.2M as operating costs made up ~78.1% of revenue compared to ~73.0% in 1Q 2021. Salaries and related costs accounted for 56.8% of total revenue, compared to 54.3% in 1Q 2021.

Noting the rising impact of costs in 2Q 2022, Chief Executive Chris Reading said: “….we believe our costs will be higher than originally expected for the remainder of the year which has been reflected in our updated guidance numbers.”

For 2022, U.S. Physical Therapy ( USPH ) projects its adj. EBITDA to reach $73.5M – $75.4M and non-GAAP operating results to approach $34.4M – $35.8M.

Noting a recent decision to expand a credit facility, Reading said that the move positions the company to seek more acquisitions and other investments.

In April, U.S. Physical Therapy ( USPH ) acquired 70% of the equity interests in Madden and Gilbert Physical Therapy for ~$11.5M.

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