UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): March 6, 2014
(March 6, 2014)
U.S.
PHYSICAL THERAPY, INC.
(Exact
name of registrant as specified in its charter)
Nevada |
1-11151 |
76-0364866 |
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
1300 West Sam Houston Parkway South, Suite 300, Houston, Texas |
77042 |
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s
telephone number, including area code: (713)
297-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL RESULTS
On March 6, 2014, U.S. Physical Therapy, Inc. (the “Company”) reported its results for the fourth quarter and year ended December 31, 2013. In addition, the Company announced that its board of directors declared a quarterly dividend of $.12 per share to holders of record of common stock as of the close of business on March 19, 2014 payable on April 4, 2014. A copy of the press release is attached hereto as Exhibit 99.1.
While the Company intends to declare dividends in subsequent quarters, any future dividends will be at the discretion of the Company’s board of directors after taking into account various factors, including general economic and business conditions, tax considerations, the Company’s strategic plan, the results of operation and financial condition of the Company, the acquisition and expansion plans of the Company, any contractual, legal or regulatory restrictions on the payment of dividends, and such other factors as the board considers relevant.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including the exhibits, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
ITEM 8.01 OTHER EVENTS
See Item 2.02 above. On March 6, 2014, the Company announced a dividend of $.12 per share to holders of record of its common stock as of the close of business on March 19, 2014 payable on April 4, 2014.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibits |
Description of Exhibits |
99.1 | Registrant's press release dated March 6, 2014 announcing results for the fourth quarter and year ended December 31, 2013.* |
*Furnished herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
U.S. PHYSICAL THERAPY, INC. |
|||
Dated: |
March 6, 2014 |
By: /s/ LAWRANCE W. MCAFEE |
|
Lawrance W. McAfee |
|||
Chief Financial Officer |
|||
(duly authorized officer and principal financial |
|||
and accounting officer) |
INDEX TO EXHIBITS
EXHIBIT |
DESCRIPTION OF EXHIBIT |
99.1 |
Press Release dated March 6, 2014.* |
* Furnished herewith |
Exhibit 99.1
U.S. Physical Therapy Reports 2013 Results
Company Increases Quarterly Dividend by 20% and Issues Earnings Guidance for 2014
HOUSTON--(BUSINESS WIRE)--March 6, 2014--U.S. Physical Therapy, Inc. (NYSE: USPH), a national operator of outpatient physical therapy clinics, today reported results for the fourth quarter and year ended December 31, 2013.
U.S. Physical Therapy’s net income attributable to common shareholders from continuing operations for the three months ended December 31, 2013 was $3.9 million and diluted earnings per share were $0.32.
Net income attributable to common shareholders from continuing operations for the year 2013 was $17.5 million and diluted earnings per share were $1.45.
In the third quarter of 2013, the Company sold the remaining piece of its former Physician Services business, which was treated as a discontinued operation for financial reporting purposes. During the year the Company incurred losses from physician services of $4.8 million, or $0.40 per diluted share, which represents the operational loss of the business and write-down of its net assets, inclusive of intangible assets, less sale proceeds net of appropriate reserves. Net income attributable to common shareholders, inclusive of discontinued operations for 2013, was $12.7 million, or $1.05 per diluted share.
Fourth Quarter 2013 Compared to Fourth Quarter 2012 from Continuing Operations
Year 2013 Compared to Year 2012 from Continuing Operations Unless Otherwise Noted
Larry McAfee, Chief Financial Officer, noted, “The Company experienced a nice pick-up in patient volume in the fourth quarter. Unfortunately this was somewhat overshadowed by the combined $.09 per share impact from the payor refund and the tax adjustment.”
Chris Reading, Chief Executive Officer, said, “2013 was in many ways a challenging year largely as a result of government reimbursement cuts, however, I am proud of our team for rising to the challenge. We were able to finish 2013 with same store volume growth for both the quarter as well as the year. Additionally, this was by far the best development year in the Company’s history. We made five acquisitions adding 42 clinics. These new partnerships, in combination with our strong base of existing partners, position us well for 2014. Given the continued challenges for standalone physical therapy practices, we expect to continue to provide a good home to those owners who wish to partner with a company which will robustly support them.”
Management Earnings Guidance
U.S. Physical Therapy’s management expects the Company’s earnings from continuing operations for the year 2014 to be in the range of $18.8 million to $19.6 million in net income and $1.54 to $1.60 in diluted earnings per share. This guidance range is net of approximately a $.07 to $.08 earnings per share impact from MPPR and Sequestration being in effect for 12 months in 2014 as compared to nine months in 2013. Additionally through March 5, 2014, management estimates that although new patient referrals have been solid, due to the adverse weather conditions in many parts of the country more than 10,000 patient visits have been cancelled since January 1st resulting in an estimated earnings impact of at least $.04 per share. Management’s guidance range represents projected earnings from existing operations only and excludes future potential acquisitions. The annual guidance figures will not be updated unless there is a material development that causes management to believe that earnings will be significantly outside the given range.
U.S. Physical Therapy Declares Quarterly Dividend
The Company is increasing its quarterly dividend rate by 20% from $.10 to $.12 per share. The first quarterly dividend of 2014 for $.12 per share will be paid on April 4 to shareholders of record as of March 19.
Fourth Quarter and Year 2013 Conference Call
U.S. Physical Therapy's management will host a conference call at 10:30 a.m. Eastern Time, 9:30 a.m. Central Time, on Thursday, March 6, 2014 to discuss the Company’s Quarter and Year Ended December 31, 2013 results. Interested parties may participate in the call by dialing 1-888-335-5539 or 973-582-2857 and enter reservation number 34126042 approximately 10 minutes before the call is scheduled to begin. To listen to the live call via web-cast, go to the Company's website at www.usph.com at least 15 minutes early to register, download and install any necessary audio software. The conference call will be archived and can be accessed until May 6, 2014.
Forward-Looking Statements
This press release contains statements that are considered to be forward-looking within the meaning under Section 21E of the Securities Exchange Act of 1934, as amended. These statements contain forward-looking information relating to the financial condition, results of operations, plans, objectives, future performance and business of our Company. These statements (often using words such as “believes”, “expects”, “intends”, “plans”, “appear”, “should” and similar words) involve risks and uncertainties that could cause actual results to differ materially from those we project. Included among such statements are those relating to new clinics, availability of personnel and the reimbursement environment. The forward-looking statements are based on our current views and assumptions and actual results could differ materially from those anticipated in such forward-looking statements as a result of certain risks, uncertainties, and factors, which include, but are not limited to:
Many factors are beyond our control. Given these uncertainties, you should not place undue reliance on our forward-looking statements. Please see our periodic reports filed with the Securities and Exchange Commission for more information on these factors. Our forward-looking statements represent our estimates and assumptions only as of the date of this press release. Except as required by law, we are under no obligation to update any forward-looking statement, regardless of the reason the statement is no longer accurate.
About U.S. Physical Therapy, Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 472 outpatient physical and occupational therapy clinics in 43 states. The Company's clinics provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurologically-related injuries and rehabilitation of injured workers. In addition to owning and operating clinics, the Company manages 18 physical therapy facilities for third parties, including hospitals and physician groups.
More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||||||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Net patient revenues | $ | 67,256 | $ | 61,052 | $ | 258,283 | $ | 244,100 | ||||||||||||||||
Other revenues | 1,349 | 1,329 | 5,775 | 5,551 | ||||||||||||||||||||
Net revenues | 68,605 | 62,381 | 264,058 | 249,651 | ||||||||||||||||||||
Clinic operating costs: | ||||||||||||||||||||||||
Salaries and related costs | 36,522 | 33,630 | 141,840 | 131,604 | ||||||||||||||||||||
Rent, clinic supplies, contract labor and other | 14,726 | 13,051 | 52,887 | 50,102 | ||||||||||||||||||||
Provision for doubtful accounts | 994 | 1,186 | 4,384 | 4,824 | ||||||||||||||||||||
Closure costs | 225 | 135 | 246 | 211 | ||||||||||||||||||||
Total clinic operating costs | 52,467 | 48,002 | 199,357 | 186,741 | ||||||||||||||||||||
Gross margin | 16,138 | 14,379 | 64,701 | 62,910 | ||||||||||||||||||||
Corporate office costs | 6,766 | 6,078 | 25,931 | 24,504 | ||||||||||||||||||||
Operating income from continuing operations | 9,372 | 8,301 | 38,770 | 38,406 | ||||||||||||||||||||
Interest and other income, net | 2 | 2 | 7 | 6 | ||||||||||||||||||||
Interest expense | (140 | ) | (108 | ) | (538 | ) | (557 | ) | ||||||||||||||||
Income before taxes from continuing operations | 9,234 | 8,195 | 38,239 | 37,855 | ||||||||||||||||||||
Provision for income taxes | 3,438 | 2,163 | 12,236 | 11,215 | ||||||||||||||||||||
Net income from continuing operations including non-controlling interests | 5,796 | 6,032 | 26,003 | 26,640 | ||||||||||||||||||||
Discontinued operations, net of tax | (42 | ) | (239 | ) | (5,007 | ) | (423 | ) | ||||||||||||||||
Net income including non-controlling interests | 5,754 | 5,793 | 20,996 | 26,217 | ||||||||||||||||||||
Less: net income attributable to non-controlling interests | (1,893 | ) | (1,750 | ) | (8,273 | ) | (8,284 | ) | ||||||||||||||||
Net income attributable to common shareholders | $ | 3,861 | $ | 4,043 | $ | 12,723 | $ | 17,933 | ||||||||||||||||
Basic earnings per share attributable to common shareholders: | ||||||||||||||||||||||||
From continuing operations | $ | 0.32 | $ | 0.36 | $ | 1.45 | $ | 1.54 | ||||||||||||||||
From discontinued operations | - | (0.02 | ) | (0.40 | ) | (0.02 | ) | |||||||||||||||||
Basic | $ | 0.32 | $ | 0.34 | $ | 1.05 | $ | 1.52 | ||||||||||||||||
Diluted earnings per share attributable to common shareholders: | ||||||||||||||||||||||||
From continuing operations | $ | 0.32 | $ | 0.35 | $ | 1.45 | $ | 1.53 | ||||||||||||||||
From discontinued operations | - | (0.01 | ) | (0.40 | ) | (0.02 | ) | |||||||||||||||||
Diluted | $ | 0.32 | $ | 0.34 | $ | 1.05 | $ | 1.51 | ||||||||||||||||
Shares used in computation: | ||||||||||||||||||||||||
Basic | 12,103 | 11,911 | 12,063 | 11,804 | ||||||||||||||||||||
Diluted | 12,117 | 12,013 | 12,082 | 11,904 | ||||||||||||||||||||
Dividends declared per common share | $ | 0.10 | $ | 0.49 | $ | 0.40 | $ | 0.76 | ||||||||||||||||
Earnings attributable to common shareholders: | ||||||||||||||||||||||||
From continuing operations | $ | 3,903 | $ | 4,230 | $ | 17,492 | $ | 18,212 | ||||||||||||||||
From discontinued operations | (42 | ) | (187 | ) | (4,769 | ) | (279 | ) | ||||||||||||||||
$ | 3,861 | $ | 4,043 | $ | 12,723 | $ | 17,933 | |||||||||||||||||
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
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CONSOLIDATED EARNINGS PER SHARE | ||||||||||||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Earnings attributable to common shareholders: | ||||||||||||||||||||||||
From continuing operations | $ | 3,903 | $ | 4,230 | $ | 17,492 | $ | 18,212 | ||||||||||||||||
From discontinued operations | (42 | ) | (187 | ) | (4,769 | ) | (279 | ) | ||||||||||||||||
$ | 3,861 | $ | 4,043 | $ | 12,723 | $ | 17,933 | |||||||||||||||||
Basic earnings per share attributable to common shareholders: | ||||||||||||||||||||||||
From continuing operations | $ | 0.32 | $ | 0.36 | $ | 1.45 | $ | 1.54 | ||||||||||||||||
From discontinued operations | - | (0.02 | ) | (0.40 | ) | (0.02 | ) | |||||||||||||||||
Basic | $ | 0.32 | $ | 0.34 | $ | 1.05 | $ | 1.52 | ||||||||||||||||
Diluted earnings per share attributable to common shareholders: | ||||||||||||||||||||||||
From continuing operations | $ | 0.32 | $ | 0.35 | $ | 1.45 | $ | 1.53 | ||||||||||||||||
From discontinued operations | - | (0.01 | ) | (0.40 | ) | (0.02 | ) | |||||||||||||||||
Diluted | $ | 0.32 | $ | 0.34 | $ | 1.05 | $ | 1.51 | ||||||||||||||||
Shares used in computation: | ||||||||||||||||||||||||
Basic earnings per share - | ||||||||||||||||||||||||
weighted-average shares | 12,103 | 11,911 | 12,063 | 11,804 | ||||||||||||||||||||
Effect of dilutive securities - | ||||||||||||||||||||||||
Stock options | 14 | 102 | 19 | 100 | ||||||||||||||||||||
Denominator for diluted earnings per share - | ||||||||||||||||||||||||
adjusted weighted-average shares | 12,117 | 12,013 | 12,082 | 11,904 | ||||||||||||||||||||
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE DATA) |
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December 31, | December 31, | |||||||||
2013 | 2012 | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 12,898 | $ | 11,671 | ||||||
Patient accounts receivable, less allowance for doubtful | ||||||||||
accounts of $1,430 and $1,595, respectively | 30,820 | 25,973 | ||||||||
Accounts receivable - other, less allowance for doubtful | ||||||||||
accounts of $198 and $514, respectively | 1,844 | 1,703 | ||||||||
Other current assets | 4,098 | 5,975 | ||||||||
Total current assets | 49,660 | 45,322 | ||||||||
Fixed assets: | ||||||||||
Furniture and equipment | 38,965 | 36,316 | ||||||||
Leasehold improvements | 21,891 | 20,858 | ||||||||
60,856 | 57,174 | |||||||||
Less accumulated depreciation and amortization | 45,896 | 44,158 | ||||||||
14,960 | 13,016 | |||||||||
Goodwill | 143,955 | 100,188 | ||||||||
Other intangible assets, net | 14,479 | 12,146 | ||||||||
Other assets | 1,081 | 1,042 | ||||||||
$ | 224,135 | $ | 171,714 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable - trade | $ | 1,722 | $ | 1,732 | ||||||
Accrued expenses | 20,625 | 14,116 | ||||||||
Current portion of notes payable | 825 | 459 | ||||||||
Total current liabilities | 23,172 | 16,307 | ||||||||
Notes payable | 650 | 175 | ||||||||
Revolving line of credit | 40,000 | 17,400 | ||||||||
Deferred rent | 996 | 894 | ||||||||
Other long-term liabilities | 4,196 | 2,279 | ||||||||
Total liabilities | 69,014 | 37,055 | ||||||||
Commitments and contingencies | ||||||||||
Redeemable non-controlling interests | 4,104 | - | ||||||||
Shareholders' equity: | ||||||||||
U.S. Physical Therapy, Inc. shareholders' equity: |
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Preferred stock, $.01 par value, 500,000 shares authorized, | ||||||||||
no shares issued and outstanding | - | - | ||||||||
Common stock, $.01 par value, 20,000,000 shares authorized, | ||||||||||
14,315,882 and 14,129,651 shares issued, respectively | 143 | 141 | ||||||||
Additional paid-in capital | 40,569 | 37,489 | ||||||||
Retained earnings | 119,206 | 111,321 | ||||||||
Treasury stock at cost, 2,214,737 shares | (31,628 | ) | (31,628 | ) | ||||||
Total U.S. Physical Therapy, Inc. shareholders' equity |
128,290 | 117,323 | ||||||||
Noncontrolling interests | 22,727 | 17,336 | ||||||||
Total equity | 151,017 | 134,659 | ||||||||
$ | 224,135 | $ | 171,714 | |||||||
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) |
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Year Ended December 31, | ||||||||||
2013 | 2012 | |||||||||
OPERATING ACTIVITIES | ||||||||||
Net income including noncontrolling interests | $ | 20,996 | $ | 26,218 | ||||||
Adjustments to reconcile net income including noncontrolling interests | ||||||||||
to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 5,562 | 5,287 | ||||||||
Provision for doubtful accounts | 4,384 | 4,848 | ||||||||
Gain on purchase price settlement | - | - | ||||||||
Equity-based awards compensation expense | 2,743 | 2,102 | ||||||||
Loss (gain) on sale of business and fixed assets | 7,335 | 175 | ||||||||
Excess tax benefit from exercise of stock options | (695 | ) | (1,351 | ) | ||||||
Deferred income tax | 2,369 | 3,738 | ||||||||
Other | - | - | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Increase in patient accounts receivable | (5,389 | ) | (1,663 | ) | ||||||
Increase in accounts receivable - other | (5 | ) | (561 | ) | ||||||
(Increase) decrease in other assets | 1,803 | (585 | ) | |||||||
(Decrease) increase in accounts payable and accrued expenses | 4,833 | (340 | ) | |||||||
(Decrease) increase in other liabilities | 859 | 1,381 | ||||||||
Net cash provided by operating activities | 44,795 | 39,249 | ||||||||
INVESTING ACTIVITIES | ||||||||||
Purchase of fixed assets | (4,637 | ) | (4,234 | ) | ||||||
Purchase of businesses, net of cash acquired | (46,628 | ) | (7,929 | ) | ||||||
Acquisitions of noncontrolling interests | (1,876 | ) | (2,244 | ) | ||||||
Sale of noncontrolling interests | 233 | 239 | ||||||||
Settlement of purchase price | - | - | ||||||||
Proceeds on sale of business and fixed assets, net | 459 | 64 | ||||||||
Net cash used in investing activities | (52,449 | ) | (14,104 | ) | ||||||
FINANCING ACTIVITIES | ||||||||||
Distributions to noncontrolling interests | (9,164 | ) | (9,332 | ) | ||||||
Cash dividends to shareholders | (4,838 | ) | (9,017 | ) | ||||||
Purchase and retire of common stock | - | - | ||||||||
Proceeds from revolving line of credit | 150,800 | 79,900 | ||||||||
Payments on revolving line of credit | (128,200 | ) | (86,000 | ) | ||||||
Payment of notes payable | (459 | ) | (434 | ) | ||||||
Tax benefit from stock options exercised | 695 | 1,351 | ||||||||
Other | 47 | 75 | ||||||||
Net cash provided by (used in) financing activities | 8,881 | (23,457 | ) | |||||||
Net increase in cash and cash equivalents | 1,227 | 1,688 | ||||||||
Cash and cash equivalents - beginning of period | 11,671 | 9,983 | ||||||||
Cash and cash equivalents - end of period | $ | 12,898 | $ | 11,671 | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||||
Cash paid during the period for: | ||||||||||
Income taxes | $ | 4,111 | $ | 6,361 | ||||||
Interest | $ | 352 | $ | 639 | ||||||
Non-cash investing and financing transactions during the period: | ||||||||||
Purchase of business - seller financing portion | $ | 1,300 | $ | 350 | ||||||
U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES RECAP OF CLINIC COUNT |
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Number | ||||
of | ||||
Date | Clinics | |||
December 31, 2010 | 392 | |||
March 31, 2011 | 397 | |||
June 30, 2011 | 398 | |||
September 30, 2011 | 420 | |||
December 31, 2011 | 416 | |||
March 31, 2012 | 414 | |||
June 30, 2012 | 419 | |||
September 30, 2012 | 423 | |||
December 31, 2012 | 431 | |||
March 31, 2013 | 441 | |||
June 30, 2013 | 449 | |||
September 30, 2013 | 447 | |||
December 31, 2013 | 472 | |||
CONTACT:
U.S. Physical Therapy, Inc.
Larry McAfee, (713) 297-7000
Chief
Financial Officer
or
Chris Reading, (713) 297-7000
Chief
Executive Officer
or
The Ruth Group
Stephanie Carrington, (646)
536-7017