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U.S. Physical Therapy, Inc. (NasdaqGS:USPH), a national operator of outpatient physical therapy clinics, today reported results for the first quarter ended March 31, 2011.
U.S. Physical Therapy’s net income for the quarter ended March 31, 2011 increased 18.1% to $3.7 million from $3.2 million in the first quarter of 2010. Diluted earnings per share rose to $.31 from $.27.
First Quarter 2011 compared to First Quarter 2010
Net revenue increased 12.6% from $50,405,000 in the first quarter of 2010 to $56,741,000 in the first quarter of 2011, due to an increase in patient visits of 9.9% from 469,000 to 515,000, and an increase in average net patient revenue per visit of $0.49 from $104.08 to $104.57. Other revenues included a $1,111,000 year-over-year quarterly increase in physician services revenue.
Gross margin increased 200 basis points to 26.7% for the 2011 first quarter as compared to 24.7% in the 2010 first quarter. Total clinic operating costs were $41,578,000, or 73.3% of net revenue in the first quarter of 2011, as compared to $37,934,000, or 75.3% of net revenue, in the 2010 period. Clinic salaries and related costs were 52.2% of net revenue for the 2011 period versus 53.1% for the 2010 period. Rent, clinic supplies, contract labor and other costs as a percentage of net revenue were 19.9% for the 2011 period versus 20.0% for the 2010 comparable period. The provision for doubtful accounts was 1.1% of net revenue in the first quarter of 2011 as compared to 2.1% in the 2010 first quarter.
Corporate office costs were $6,481,000, or 11.4% of net revenue, in the first quarter of 2011 versus $5,805,000, or 11.5% of net revenue, in the 2010 first quarter.
Operating income increased in the first quarter of 2011 by 30.2% to $8,682,000 from $6,666,000 for the 2010 first quarter. The operating income margin percentage improved 210 basis points to 15.3% for the first quarter of 2011 as compared to 13.2% for the first quarter 2010.
Other income in the first quarter of 2010 included a pre-tax gain of $578,000 from the sale of a five clinic joint venture. That gain equated to net income after taxes of about $350,000 or approximately $.03 in earnings per share.
Provision for income taxes as a percentage of income before taxes less net income attributable to non-controlling interests was 39.3% for both periods.
Net income attributable to common shareholders in the first quarter of 2011 rose 18.1% to $3,746,000 from $3,172,000 in the first quarter of 2010. Diluted earnings per share increased to $.31 from $.27.
Same store revenues for de novo and acquired clinics open for one year or more decreased 1.0%. The average net rate per visit increased by 1.3% while same store visits decreased by 2.0%. Revenue and visit percentages were adjusted to reflect equivalent days of operations between periods.
During the first quarter of 2011, the Company opened six start-up de novo clinics and closed one clinic. The Company ended the period with 397 clinics.
Chris Reading, Chief Executive Officer, said, “I am proud of our team’s focus and execution this quarter producing solid earnings and operating results. Revenue growth, margin improvement, cost control and further expansion of our physician services and Fit2Wrk programs were positives for the quarter. We have a lot that we expect to accomplish and I am encouraged by the strong start to the year.”