What changed in this filing

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Item 1. Financial Statements

2024-11-08 compared with 2024-08-14 · 222 added, 181 removed, 1010 unchanged (29% of the section changed)

3 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS )

June 30 , 2024

September 30 , 2024

December 31, 2023

50 unchanged sentences

For the Three Months Ended

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

September 30,2024

September 30, 2023

Net patient revenue

4 unchanged sentences

Provision for credit losses

Clinic closure costs - lease and other

Total operating cost

24 unchanged sentences

For the Three Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Other comprehensive ( loss ) gain:

9 unchanged sentences

(IN THOUSANDS)

For the Six Months Ended

June 30 , 2024

June 30 , 2023

For the Nine Months Ended

September 30 , 2024

September 30 , 2023

OPERATING ACTIVITIES

9 unchanged sentences

Equity of earnings in unconsolidated affiliate

Loss on sale of fixed assets

Loss (gain) on sale of fixed assets

Changes in operating assets and liabilities:

2 unchanged sentences

(Increase) decrease in other current and long term assets

(Decrease) increase in accounts payable and accrued expenses

Increase in other long-term liabilities

Increase (decrease) in accounts payable and accrued expenses

(Decrease) increase in other long-term liabilities

Net cash provided by operating activities

4 unchanged sentences

Purchase of non controlling interest, permanent equity

Proceeds on sale of redeemable non-controlling interest, temporary equity

Proceeds on sale of non-controlling interest, permanent equity

Proceeds on sale of partnership interest - redeemable non-controlling interest

Distributions from unconsolidated affiliate

Proceeds on sale of fixed assets

Net cash used in investing activities

FINANCING ACTIVITIES

Proceeds from revolving facility

Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs

Distributions to non-controlling interest, permanent and temporary equity

Cash dividends paid to shareholders

Distributions to non-controlling interest, permanent and temporary equity

Principal payments on notes payable

Payments on term loan

Payments on revolving facility

P ayments on revolving facility

Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs

P roceeds from revolving facility

Net cash (used in) provided by financing activities

7 unchanged sentences

Purchase of interest in businesses - seller financing portion

Deferred payments related to purchase of interest in business

Fair market value of initial contingent consideration related to purchase of interest of businesses

Initial contingent consideration related to purchase of interest of businesses

Offset of notes receivable associated with purchase of redeemable non-controlling interest

Notes payable related to purchase of non-controlling interest, temporary equity

Notes payable related to purchase of redeemable non-controlling interest, temporary equity

Notes payable related to purchase of non-controlling interest, permanent equity

Notes receivable related to sale of redeemable non-controlling interest, temporary equity

10 unchanged sentences

Non-Controlling

For the three months ended June 30, 2024

For the three months ended September 30, 2024

Paid-In Capital

Comprehensive Gain

Balance March 31, 2024

Balance June 30, 2024

Net income attributable to USPH shareholders

9 unchanged sentences

Other comprehensive gain

Transfer of RNCI due to separation agreement

Balance June 30, 2024

Balance September 30, 2024

U .S.Physical Therapy, Inc.

3 unchanged sentences

Non-Controlling

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

Paid-In Capital

14 unchanged sentences

Transfer of RNCI due to separation agreement

Balance June 30, 2024

Balance September 30, 2024

U.S.Physical Therapy, Inc.

3 unchanged sentences

Non-Controlling

For the three months ended June 30, 2023

For the three months ended September 30, 2023

Paid-In Capital

Comprehensive Gain

Balance March 31, 2023

Balance June 30, 2023

Net income attributable to USPH shareholders

Net income attributable to non-controlling interest - permanent equity

Issuance of restricted stock, net of cancellations

Issuance of common stock, pursuant to the secondary public offering, net of issuance costs

1 unchanged sentence

Compensation expense - equity-based awards

Sale of non-controlling interest

Purchase of partnership interests - non-controlling interest

3 unchanged sentences

Other comprehensive gain

Balance June 30, 2023

Balance September 30, 2023

U.S.Physical Therapy, Inc.

3 unchanged sentences

Non-Controlling

For the six months ended June 30, 2023

For the nine months ended September 30, 2023

Paid-In Capital

1 unchanged sentence

Balance December 31, 2022

Issuance of restricted stock, pursuant to the secondary offering, net of cancellations

Net income attributable to USPH shareholders

Net income attributable to non-controlling interest - permanent equity

Issuance of restricted stock, net of cancellations

Issuance of common stock, pursuant to the secondary public offering, net of issuance costs

1 unchanged sentence

Compensation expense - equity-based awards

Sale of non-controlling interest

Purchase of partnership interests - non-controlling interest

3 unchanged sentences

Other comprehensive gain

Balance June 30, 2023

Balance September 30, 2023

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

7 unchanged sentences

include the physical therapy operations segment and the industrial injury prevention services (“IIP”) segment.

The Company’s physical therapy operations consist of physical therapy and occupational therapy clinics that provide pre-and

post-operative care and treatment for orthopedic-related disorders, sports-related injuries, preventive care, rehabilitation of injured workers and neurological injuries.

Services provided by the IIP segment include onsite injury prevention and

rehabilitation, performance optimization and ergonomic assessments.

As of June 30, 2024,

the Company operated 681 clinics in 42

In addition to the 681 clinics, the Company also managed 41 physical therapy practices for unrelated physician groups and hospitals as of June 30, 2024.

D uring the six months ended June 30, 2024, and for the year-ended December 31,

2023, the Company completed the acquisitions of the following clinic practices and IIP businesses:

Our physical therapy operations consist of physical therapy and occupational therapy clinics that provide pre- and post-operative

care and treatment for a variety of orthopedic-related disorders, and sports-related injuries, and rehabilitation of injured workers.

Services provided by the IIP segment include onsite services for clients’ employees including injury

prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations and ergonomic assessments.

The majority of these services are contracted with and paid for directly by employers, including

a number of Fortune 500 companies.

Other clients include large insurers and their contractors.

These services are performed through Industrial Sports Medicine Professionals, consisting of both physical therapists and specialized certified

athletic trainers.

As of September 30,

2024, the Company operated 661 clinics in 42 states.

In addition to the 661 clinics, the Company also managed 39 physical therapy practices for unrelated physician groups and hospitals as of September 30, 2024.

D uring the nine months ended September 30, 2024, and for the year-ended

December 31, 2023, the Company completed the acquisitions of the following clinic practices and IIP businesses:

August 2024 Acquisition

August 31, 2024

April 2024 Acquisition

55 unchanged sentences

a current period operating, or cash

flow, loss combined with a history of such losses or a projection of continuing losses;

flow, combined with a history of such losses or a projection of continuing losses;

or a sale or disposition of a significant portion of a reporting unit.

The occurrence of one of these triggering events or conditions could significantly

impact an impairment assessment, necessitating an impairment charge.

The occurrence of one of these triggering events or conditions could significantly impact an

impairment assessment, necessitating an impairment charge.

evaluates indefinite-lived tradenames in conjunction with its annual goodwill impairment test.

9 unchanged sentences

reporting unit, inclusive of goodwill and other identifiable intangible assets, exceeds the estimated fair value of the reporting unit.

For the three and six months ended June 30, 2024, no triggering events or indicators were identified that would require impairment assessments for such period.

During the three and twelve months ended December 31, 2023, the Company

recorded a charge of $ 15.8 million for goodwill impairment and a charge of $ 1.7 million for impairment of a tradename.

The charges for impairment were related to one reporting unit in the IIP business.

The impairment is related to a change in the

reporting unit’s current and projected operating income as well as various market inputs based on current market conditions.

The Company did no t

recognize any impairment as a result of the Company’s annual assessment of goodwill and tradename for the other seven reporting units.

The Company also noted no impairment to long-lived assets for all reporting units.

For both the three and nine months ended September 30, 2024, the Company recorded goodwill impairment of $ 0.1 million

related to a closed clinic.

During the three and twelve months ended December 31, 2023, the Company recorded a charge of $ 15.8

million for goodwill impairment and a charge of $ 1.7 million for the impairment of a tradename.

The charges for impairment were

related to one reporting unit in the IIP business.

The impairment was related to a change in the reporting unit’s current and projected operating income as well as various market inputs based on current market conditions.

The Company did no t recognize any impairment as a result of the Company’s annual assessment of goodwill and tradename for the other seven reporting units.

The Company also noted no

impairment to long-lived assets for all reporting units.

Company will continue to monitor for any triggering events or other indicators of impairment.

21 unchanged sentences

1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the

transaction, typically three to five years ,

transaction, typically three to six years ,

as defined in the limited partnership agreement.

51 unchanged sentences

Management contract revenue was $ 2.5 million and $ 2.4 million for the three months ended

June 30, 2024 and June 30, 2023, respectively, and was $ 4.8 million and $ 3.9 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

September 30, 2024 and September 30, 2023, respectively, and was $ 7.3 million and $ 6.3 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.

Additionally, other revenue from physical therapy

20 unchanged sentences

The Company’s billing system does not capture the exact change in its contractual allowance reserve estimate from period

In order to assess the accuracy of its revenues.

Management regularly compares its cash collections to corresponding net revenues measured both in the aggregate and on a clinic-by-clinic basis.

In order to assess the accuracy of its revenues, management regularly compares its cash collections to corresponding net revenues measured both in the aggregate and on a clinic-by-clinic basis.

In the aggregate, historically the

21 unchanged sentences

settlement with the relevant tax authority.

The Company did no t have any accrued interest or penalties associated with any unrecognized tax benefits no r was any interest expense recognized during the three and six months ended June 30, 2024, and June 30, 2023.

The Company records any interest or penalties, if required, in interest and other expense, as

The Company did no t have any accrued interest or penalties associated with any unrecognized tax benefits no r was any interest expense recognized during the three and nine months ended September 30, 2024, and September 30, 2023.

The Company records any interest or penalties, if required, in interest and other

expense, as appropriate.

Fair Value of Financial Instruments

16 unchanged sentences

It is marked to fair value on a recurring basis using Level 3 inputs.

In determining the value of the put right as of June 30 , 2024 , the Company used a Monte Carlo simulation model utilizing unobservable inputs including asset volatility of 20.0 % and a discount rate of 11.69 %.

The value of this put

right increased $ 0.2 million for the three months ended June 30, 2024 , and increased $ 0.3

million for the six months ended June 30 , 2024 .

The put right

was valued at approximately $ 1.2 million on June 30, 2024, and approximately $ 1.0 million on December 31, 2023.

In determining the value of the put right as of September 30 , 2024 , the Company used a Monte Carlo simulation model utilizing unobservable inputs including asset volatility of 20.0 % and a discount rate of 10.96 %.

The value of this put right decreased $ 0.2 million for the three months ended September 30, 2024 , and increased $ 0.1 million for the nine months ended September 30 , 2024 .

The put right was valued at approximately $ 1.1 million on

September 30, 2024, and approximately $ 1.0 million on December 31, 2023.

The valuation of the Company’s interest rate derivative is measured as the present value of all expected future cash flows based on SOFR-based yield curves.

9 unchanged sentences

inputs not observable in the market.

The unobservable inputs used in the valuation of the contingencies as of June 30 , 2024 , include asset

The unobservable inputs used in the valuation of the contingencies as of September 30 , 2024 , include asset

volatility of 15.0 % and a discount rate of 6.0 %.

4 unchanged sentences

The Company determined the fair value of its contingent consideration obligations to be $ 22.7

million on June 30, 2024, and $ 12.5 million on December 31, 2023.

million on September 30, 2024, and $ 12.5 million on December 31, 2023.

Restricted Stock

47 unchanged sentences

For the Three Months Ended

For the Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

For the Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

(In thousands, except per share data)

12 unchanged sentences

Borrowings) or proceeds from the secondary equity offering completed in May 2023.

The purchase price plus the fair value of the non-controlling interest for the acquisitions after June 30, 2023, were allocated to the fair value of the assets acquired, inclusive of

identifiable intangible assets (i.e.

tradenames, referral relationships and non-compete agreements) and liabilities assumed based on the estimated fair values at the acquisition date, with the amount in excess of fair values being recorded as

The Company is in the process of completing its formal valuation analysis of the acquisitions, to identify and determine the fair value of tangible and identifiable intangible assets acquired and the liabilities assumed.

Thus, the final

allocation of the purchase price may differ from the preliminary estimates used on June 30, 2024, based on additional information obtained and completion of the valuation of the identifiable intangible assets.

Changes in the estimated valuation of

the tangible assets acquired, the completion of the valuation of identifiable intangible assets and the completion by the Company of the identification of any unrecorded pre-acquisition contingencies, where the liability is probable and the amount

can be reasonably estimated, will likely result in adjustments to goodwill.

The purchase price plus the fair value of the non-controlling interest for the acquisitions after September 30, 2023, were allocated to the fair value of the assets acquired,

inclusive of identifiable intangible assets (i.e.

tradenames, referral relationships and non-compete agreements) and liabilities assumed based on the estimated fair values at the acquisition date, with the amount in excess of fair values being

recorded as goodwill.

The Company is in the process of completing its formal valuation analysis of the above-mentioned acquisitions, to identify and determine the fair value of tangible and identifiable intangible assets acquired and the

liabilities assumed.

Thus, the final allocation of the purchase price may differ from the preliminary estimates used on September 30, 2024, based on additional information obtained and completion of the valuation of the identifiable intangible

Changes in the estimated valuation of the tangible assets acquired, the completion of the valuation of identifiable intangible assets and the completion by the Company of the identification of any unrecorded pre-acquisition contingencies,

where the liability is probable and the amount can be reasonably estimated, will likely result in adjustments to goodwill.

The Company does not expect the adjustments to be material.

The Company continues to evaluate the components for the purchase price allocations for other acquisitions in

2023 and 2024.

The results of operations of the acquisi tions below have been included in the Company’s unaudited consolidated financial statements since their respective date of acquisition.

The Company continues to evaluate the components for the purchase

price allocations for other acquisitions in 2023 and 2024.

The results of operations of the acquisi tions below have been included in the Company’s unaudited consolidated financial statements from their respective date of acquisition.

Unaudited proforma consolidated financial information for the

1 unchanged sentence

2024 Acquisitions

August 2024 Acquisition

August 31, 2024

April 2024 Acquisition

5 unchanged sentences

IIP business.

On August 31, 2024, the

Company acquired a 70 % equity interest in an eight -clinic

practice physical therapy and the original practice owners retained a 30 % equity interest.

The purchase price for the 70% equity interest

was approximately $ 2.0 million.

As part of the transaction, the Company agreed to additional contingent consideration if future operational

and financial objectives are met.

The maximum amount of additional contingent consideration due under this agreement is $ 3.6 million.

contingent consideration was valued at $ 3.6 million on August 31, 2024.

On April 30, 2024 , the Company acquired 100 % of an IIP business through one of its primary IIP businesses, Briotix Health Limited Partnership, for a purchase price of approximately $ 24.0 million, of which $ 0.5 million was in the form of a note

3 unchanged sentences

There is no maximum payout.

The contingent consideration was valued at $ 2.1 million as of June 30, 2024.

The contingent consideration was valued at $ 2.4 million as of September 30, 2024.

On March 29, 2024, the Company acquired a 50 % equity interest in a nine -clinic

9 unchanged sentences

The contingent consideration was valued at $ 0.5

million on June 30, 2024.

Besides the multi-clinic acquisition referenced above, the Company purchased the assets and business of three physical therapy clinics, which were tucked into larger partnerships in separate transactions.

million on September 30, 2024.

Besides the multi-clinic acquisition referenced above, the Company purchased the assets and business of six physical therapy clinics, which were tucked into larger partnerships in separate transactions.

The following table provides details on the preliminary purchase price

15 unchanged sentences

Total current assets primarily represent accounts receivable while total non-current assets consist of fixed assets and equipment used in the practice.

For the acquisitions in 2024, the values assigned to the customer and referral relationships and non-compete agreement are being amortized on a straight-line basis over their respective estimated lives.

For customer and referral relationships,

the weighted-average amortization period is 12.0 years.

For the non-compete agreements, the weighted-average amortization period is

For the acquisitions in the first nine months of 2024, the values assigned to the customer and referral relationships and non-compete agreement are being amortized on a straight-line basis over their respective estimated lives.

For customer and

referral relationships, the weighted-average amortization period is 12.0 years.

For the non-compete agreements, the weighted-average

amortization period is 5.0 years.

The values assigned to tradenames are tested annually for impairment.

18 unchanged sentences

September 29, 2023, the Company acquired a 70 % equity interest in a four -clinic physical therapy practice.

The original owner of the practice retained 30 % of the equity interests.

The purchase price for the 70 % equity interest was approximately $ 6.0 million, of which $ 5.4 million

was paid in cash, and $ 0.6 million was in the form of a note payable.

The note accrues interest at 5.0 % per annum and the principal and interest are payable in two installments.

The first payment of principal and interest of $ 0.3 million was paid in January

2024 and the second installment of $ 0.3 million is due on September 30, 2025.

The original owner of the practice retained 30 %

of the equity interests.

The purchase price for the 70 % equity interest was approximately $ 6.0 million, of which $ 5.4 million was paid in cash, and $ 0.6 million was in the form of a note payable.

The note accrues interest at 5.0 % per annum and the principal and interest are payable in two

installments.

The first payment of principal and interest of $ 0.3 million was paid in January 2024 and the second installment of $ 0.3 million is due on September 30, 2025.

In a separate transaction, on September 29, 2023, the Company acquired a 70 %

4 unchanged sentences

On July 31, 2023, the Company acquired a 70 % equity interest in a five -clinic practice.

The practice’s

owners retained a 30 % equity interest.

The practice’s owners retained

a 30 % equity interest.

The purchase price for the 70 % equity interest was approximately $ 2.1 million, of which $ 1.8 million was paid in cash and $ 0.3

4 unchanged sentences

Company, $ 1.1 million was paid in cash by the local partner, and $ 0.3 million was in the form of a note payable.

The note was paid in full on July 1, 2024 ($ 0.2 million was paid by the Company and $ 0.1 million was paid by the local partner).

The note was paid in full on July 1, 2024 ($ 0.2

million was paid by the Company and $ 0.1 million was paid by the local partner).

On February 28, 2023, the Company acquired an 80 % interest in a one -clinic physical therapy practice.

44 unchanged sentences

The consideration for the Acquisition is primarily payable in the form of cash at closing and a two-year note in lieu of an escrow (the “Purchase Price”).

The Purchase Agreement does not contain any future earn-out or other contingent consideration that is payable

to the Seller Entity or the Selling Shareholders.

The Purchase Agreement does not contain any future earn-out or other contingent consideration that is payable to the Seller

Entity or the Selling Shareholders.

The Company and the Seller Entity also execute a partnership agreement (the “Partnership Agreement”) for NewCo that sets forth the rights and obligations of the

115 unchanged sentences

For the Three Months Ended

For the Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

For the Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

(In thousands)

10 unchanged sentences

The following table categorizes the carrying amount (fair value) of the redeemable non-controlling interests:

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

(In thousands)

4 unchanged sentences

The changes in the carrying amount of goodwill consisted of the following:

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

December 31, 2023

4 unchanged sentences

Ending balance

three and six months ended June 30, 2024, and 2023, no triggering events or indicators were identified that would require impairment assessments as of such periods.

During the year ended December 31, 2023, the Company recorded goodwill impairment

of $ 15.8 million related to a reporting unit in the Company’s IIP business.

For the three and nine months ended September 30,

2024, the Company recorded goodwill impairment of $ 0.1 million related to a closed clinic.

During the year ended December 31, 2023,

the Company recorded goodwill impairment of $ 15.8 million related to a reporting unit in the Company’s IIP business.

Intangible Assets, Net

The Company’s intangible assets, net, consisted of the following:

As of June 30, 2024

As of September 30, 2024

As of December 31, 2023

10 unchanged sentences

Non-compete agreements are amortized over the respective term of the agreements which range from 5.0 to 6.0 years.

For the six months ended June 30, 2024, the weighted average

amortization period for customer and referral relationships was 12.6 years and the weighted average amortization period for non-compete

agreements was 5.5 years.

For the nine months ended September 30, 2024, the weighted

average amortization period for customer and referral relationships was 12.7 years and the weighted average amortization period for

non-compete agreements was 5.5 years.

During the year ended December 31, 2023, the Company recognized a charge of $ 1.7 million related to the impairment of a tradename related to an IIP acquisition.

2 unchanged sentences

For the Three Months Ended

For the Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

For the Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

(In thousands)

1 unchanged sentence

Non-compete agreements

Based on the balance of referral relationships and non-compete agreements as of June 30, 2024, the expected

amount to be amortized in 2024 and thereafter by year is as follows:

For the Year Ended December 31,

Based on the balance of referral relationships and non-compete agreements as of September 30, 2024, the

expected amount to be amortized in 2024 and thereafter by year is as follows:

For the Year Ending December 31,

Customer and Referral

1 unchanged sentence

(In thousands)

(excluding the six months ended June 30, 2024)

(excluding the nine months ended September 30, 2024)

Accrued Expenses

Accrued expenses consisted of the following:

June 30, 2024

September 30, 2024

December 31, 2023

1 unchanged sentence

Salaries and related costs

Contingency payable

Credit balances due to patients and payors

Group health insurance claims

Federal income taxes payable

Contingency payable

Other property taxes payable

Interest payable

Group health insurance claims

Closure costs

Interest payable

Amounts outstanding under the Company’s Senior Credit Facilities (as defined below) and notes payable

consisted of the following:

As of June 30, 2024

As of September 30, 2024

As of December 31, 2023

51 unchanged sentences

owned material domestic subsidiaries (each, a “Guarantor”), and the obligations of the Company and any Guarantors are secured by a perfected first priority security interest in substantially all of the existing and future personal property of the Company and each Guarantor, subject to certain exceptions.

As of June 30, 2024, $ 142.5 million was outstanding on the Term Facility while none was outstanding under the Revolving Facility resulting in $ 175.0 million of credit availability.

As of June 30, 2024, the Company was in compliance with all of the covenants contained in the Credit Agreement.

The interest rate on the Company’s Senior Credit Facilities was 4.7 % for the three months ended June 30, 2024, and 5.7 % for the three months ended June 30, 2023, with an all-in effective interest rate, including all associated costs, of 5.4 % and 6.0 % over the same periods,

As of September 30, 2024, $ 140.6 million was outstanding on the Term Facility while none was outstanding under the Revolving Facility

resulting in $ 175.0 million of credit availability.

As of September 30, 2024, the Company was in compliance with all of the covenants contained in the Credit Agreement.

The interest rate on the Company’s Senior Credit Facilities was 4.7 % for the three months ended September 30, 2024, and 5.6 % for the three months ended September 30, 2023, with an all-in effective interest rate, including all associated costs, of 5.4 % and 5.2 % over the same periods,

respectively.

The all-in effective interest rate on the Company’s Senior Credit Facilities for the six months ended June 30, 2024, was 5.4 %

and 5.7 % for the six months ended June 30, 2023.

The Company generally enters into various notes payable as a means of financing a portion of its

acquisitions and purchasing of non-controlling interests.

In conjunction with acquisitions in the years ended December 31, 2022, 2023 and 2024, the Company entered into notes payable in the aggregate amount of $ 4.1 million, of which $ 1.3 million

is due by December 31, 2024, $ 1.6 million is due in 2025 and $ 1.2 million is due in 2026.

Interest accrues in the range of 3.5 % to 8.5 % per annum and is payable with each principal installment.

The all-in effective interest rate on the Company’s Senior Credit Facilities for the nine months ended September 30, 2024, was 5.4 %

and 5.7 % for the nine months ended September 30, 2023.

The Company generally enters into various notes payable as a means of financing acquisitions.

September 30, 2024, the Company’s remaining outstanding balance on these notes amounte d to $ 3.1 million, of which $ 0.8 million is due by December 31, 2024, $ 1.8

million is due in 2025 and $ 0.5 million is due in 2026.

Notes are generally payable in equal annual installments of principal over two years plus any accrued and unpaid interest.

Interest accrues at various interest rates ranging from 4.0 % to 8.5 % per annum.

Derivative Instruments

16 unchanged sentences

Consequently, unrealized gains and losses related to the fair value of the interest rate swap are recorded to accumulated other comprehensive income (loss), net of tax.

The impact of the Company’s

derivative instruments on the accompanying Consolidated Statements of Comprehensive Income are presented in the table below.

The impact of the Company’s derivative

instruments on the accompanying Consolidated Statements of Comprehensive Income are presented in the table below.

For the Three Months Ended

For the Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

For the Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

(In thousands)

6 unchanged sentences

income attributable to USPH shareholders

The valuations of the Company’s interest rate derivatives are measured as the

present value of all expected future cash flows based on SOFR-based yield curves.

The valuations of the Company’s interest rate derivatives are measured as

the present value of all expected future cash flows based on SOFR-based yield curves.

The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparty which is a Level

2 fair value measurement.

The carrying and fair value of the Company’s interest rate derivatives (included in other current assets and other assets) were as follows.

The carrying and fair value of the Company’s interest rate derivatives (included in other current assets and other assets) were as

September 30,

(In thousands)

16 unchanged sentences

For the Three Months Ended

For the Six Months Ended

June 30 , 2024

June 30 , 2023

June 30 , 2024

June 30 , 2023

For the Nine Months Ended

September 30 , 2024

September 30 , 2023

September 30 , 2024

September 30 , 2023

(In thousands)

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

June 30, 2024

June 30, 2023

For the Nine Months Ended

September 30, 2024

September 30, 2023

September 30 ,

(In thousands)

1 unchanged sentence

Right-of-use assets obtained in exchange for new operating lease liabilities

The aggregate future lease payments for operating leases as of June 30, 2024, were

The aggregate future lease payments for operating leases as of September 30, 2024,

were as follows.

(In thousands)

2024 (excluding the six months ended June 30, 2024)

2024 (excluding the nine months ended September 30, 2024)

2028 and thereafter

3 unchanged sentences

Average lease terms and discount rates were as follows.

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Weighted-average remaining lease term - Operating leases

42 unchanged sentences

For the Three Months Ended

For the Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

For the Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

(In thousands)

16 unchanged sentences

Total provision for credit losses

Clinic closure costs:

Physical therapy operations

Industrial injury prevention services

Total closure costs

Total Company

3 unchanged sentences

Total Company

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Total Assets:

7 unchanged sentences

The investment

balance of this joint venture as of June 30, 2024, is $ 12.2 million and the earnings amounted to approximately $ 0.2 million and $ 0.5 million for the

three and six months ended June 30, 2024, respectively.

Earnings in the comparable prior periods were $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2023, respectively.

balance of this joint venture as of September 30, 2024, is $ 12.2 million and the earnings amounted to approximately $ 0.2 million and $ 0.8 million for the

three and nine months ended September 30, 2024, respectively.

Earnings in the comparable prior periods were $ 0.2 million and $ 0.8 million for the three and nine months ended September 30, 2023, respectively.

Subsequent Events

On August 12, 2024, the Company’s Board of Directors declared a quarterly dividend of $ 0.44 per share payable on September 13, 2024 , to shareholders of

record on August 23, 2024 .

The Company’s Board of Directors declared a quarterly dividend of $ 0.44 per share payable on December 6, 2024 ,

to shareholders of record on November 15, 2024 .

On October 31, 2024, the Company completed the acquisition of a 50 % interest in MSO Metro, LLC (“Metro”) pursuant to the Equity Interest Purchase Agreement (the “Purchase Agreement”) dated October 7, 2024 among

Physical Therapy, Ltd.

(a subsidiary of the Company), Metro, the members of Metro, and Michael G.

Mayrsohn, as Sellers’ Representative.

The Company also became the managing member of Metro.

At the closing, the Company paid the purchase price of approximately $ 76.5 million, $ 75 million of which was

funded by its cash on hand and the remaining $ 1.5 million through the issuance of 18,358 shares of the Company’s common stock based on a trailing five-day

average as of the day immediately prior to closing.

The shares of the Company’s common stock were issued in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act.

The Purchase Agreement also includes an

earnout where the sellers can earn up to another $ 20.0 million of consideration if certain performance criteria relating to the Metro

business are achieved.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements