Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- US Physical Therapy Inc reported a revenue growth of 9.8% and a gross profit increase of over 15% for the quarter.
- Record monthly volumes were achieved in February, March, and April, indicating strong demand for services.
- The company successfully negotiated higher reimbursement rates, achieving a non-Medicare rate improvement of 2.8% from Q1 2023.
- US Physical Therapy Inc's injury prevention business saw a revenue increase of almost 10% and a profit increase of 15.1%.
- The company raised its EBITDA guidance for the full year of 2024 by $2.5 million, reflecting confidence in continued strong performance.
Negative Points
- The company faced significant adverse weather events in January 2024, which negatively impacted the comparison to Q1 2023.
- A Medicare rate reduction of approximately 3.5% at the start of the year negatively affected earnings, although it was later adjusted to 1.8%.
- Salaries and related costs were higher in January due to lower operating leverage from reduced volumes.
- Physical therapy operating costs increased by 8.1% compared to the first quarter of the previous year.
- The company experienced a net closure of six facilities, indicating a need to prune less productive or outdated operations.
Q & A Highlights
Q: What were the primary factors that influenced US Physical Therapy Inc's performance in Q1 2024?
A: (Christopher Reading, CEO) The quarter was impacted by significant adverse weather events in January, which made comparisons to Q1 2023 challenging. However, strong volumes in February and March, along with a growing net rate, helped performance exceed internal expectations.
Q: How did the Medicare rate reduction impact the financial results in Q1 2024?
A: (Carey Hendrickson, CFO) The Medicare rate reduction of approximately 3.5% for most of Q1 resulted in a $1.7 million decrease in EBITDA. Despite this, non-Medicare rate improved by 2.8% overall from Q1 2023.
Q: Can you discuss the company's strategy regarding salary costs and how it impacted the financial results?
A: (Carey Hendrickson, CFO) Salary costs were notably higher in January due to reduced operating leverage from lower volumes. However, costs normalized in February and March to levels comparable to Q1 2023, indicating a return to more typical spending patterns.
Q: What is driving the strong volume growth observed in April and expected for the rest of the year?
A: (Christopher Reading, CEO) The volume growth is primarily driven by high demand for services, effective community and social media outreach, and robust clinician performance. Staffing remains a gating factor, but efforts to improve recruitment and retention are ongoing.
Q: How is the injury prevention business segment performing, and what are the growth drivers?
A: (Eric Williams, COO East) The injury prevention segment saw revenue growth of almost 10% and a profit increase of 15.1%. Growth is driven by adding new clients and expanding services within existing clients, particularly in sectors like distribution, retail, and manufacturing.
Q: What are the expectations for M&A activities and the impact on the company's growth strategy?
A: (Christopher Reading, CEO) The company continues to see reasonable prices for tuck-in acquisitions and is engaged in discussions for larger deals. US Physical Therapy Inc. is well-positioned to pursue growth opportunities due to its strong balance sheet and capital position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
