Larry McAfee, Chief Financial Officer, noted, “U.S. Physical Therapy’s free cash flow continues to remain strong. Despite paying a special dividend of $4.8 million in December, the Company ended 2012 with net debt, that is debt less cash, of only $6.4 million.”
U.S. Physical Therapy Raises Quarterly Dividend
The Company will increase its quarterly dividend from $.09 to $.10 per share. The first quarterly dividend of 2013 will be paid on March 29 to shareholders of record as of March 15.
Announcement of a Recently Completed Acquisiton
On February 28, 2013, the Company acquired a 72% interest in a nine clinic physical therapy group. The practice sees approximately 34,000 patient visits per year with annual revenue of about $4 million.
As previously announced, the American Taxpayer Relief Act of 2012 enacted in January includes provisions which will reduce reimbursement for physical therapy services provided to Medicare patients. The new law increases the multiple procedures payment reduction (“MPPR”) to 50% effective April 1, 2013. The estimated impact in 2013 to the Company from this rate reduction is up to $0.18 per diluted share. On March 1, 2013, the sequester became effective which calls for an additional 2% cut in Medicare expenditures. The projected effect to the Company is to further reduce earnings by approximately $.04 per diluted share in 2013.
In January and February, although patient referrals were as planned, the Company’s volume of patient visits was significantly impacted by severe weather and the flu, particularly in the East and Midwest. Significant winter storms have continued in certain parts of the country thus far in March.
Normally, the Company’s management gives earnings guidance for the current year in the news release announcing the prior year’s results. Because of the changes and resulting uncertainties listed above, management, at this time, is deferring giving guidance.