U.S. Physical Therapy expands in Pennsylvania with new acquisition

HOUSTON - U.S. Physical Therapy, Inc. (NYSE:USPH), a prominent operator of outpatient physical therapy clinics, has expanded its footprint with the acquisition of a physical therapy practice in Pennsylvania. The company has taken a 70% stake in the practice, which boasts eight clinic locations and generates an estimated $5.5 million in annual revenues. The current owners will retain a 30% interest in the business.

The acquisition is part of U.S. Physical Therapy's ongoing growth strategy. The company, founded in 1990, currently operates 687 outpatient clinics across 42 states, offering a range of services including orthopedic care, sports injury treatment, neurological injury rehabilitation, and industrial injury prevention.

The Pennsylvania practice aligns with the company's service offerings, specializing in physical and hand therapy. This move not only increases the company's clinic count but also broadens its reach in the Northeastern United States.

The financial details of the acquisition were not disclosed. However, the transaction is expected to contribute to the company's revenue stream and enhance its market presence in the region.

U.S. Physical Therapy's industrial injury prevention business is also a key component of its operations, providing onsite services such as injury prevention and rehabilitation, performance optimization, and ergonomic assessments for clients' employees.

This acquisition is based on a press release statement and reflects U.S. Physical Therapy's commitment to expanding its services and increasing accessibility to physical therapy care for patients across the United States.

In other recent news, U.S. Physical Therapy reported a record-breaking second quarter in 2024, with the highest number of clinic visits per day in the company's history. Despite challenges such as rising labor costs and potential Medicare reimbursement rate reductions, the company achieved significant growth in volume and financial improvements. The adjusted EBITDA for Q2 2024 reached $22.1 million, and physical therapy revenues saw an increase of 8.5% compared to the same period last year.

The company also maintains a solid balance sheet, with $142.5 million in debt and $90 million in excess cash set aside for growth initiatives. In terms of future expectations, analysts project a full-year 2024 EBITDA between $80 million to $85 million. The company is actively negotiating higher rates with commercial payers to counter potential Medicare reimbursement rate cuts and investing in recruitment and school partnerships to address labor shortages. These recent developments underscore U.S. Physical Therapy's strategic focus on growth and efficiency amidst a challenging industry landscape.

InvestingPro Insights

As U.S. Physical Therapy, Inc. (NYSE:USPH) continues to grow through strategic acquisitions like the recent Pennsylvania practice, it's important for investors to consider the company's financial health and market position. According to InvestingPro data, USPH has a market capitalization of $1.29 billion, indicating a significant presence in the healthcare sector. The company's P/E ratio stands at a high 81, with an adjusted P/E ratio over the last twelve months as of Q2 2024 at 53.53, which may suggest that investors are expecting high earnings growth in the future. Additionally, the company's revenue has grown by 8.04% over the last twelve months as of Q2 2024, a healthy sign of its expanding operations.

InvestingPro Tips reveal that USPH has a track record of raising its dividend for 3 consecutive years and has maintained dividend payments for 14 consecutive years, which could be appealing to income-focused investors. Furthermore, the company operates with a moderate level of debt and has cash flows that can sufficiently cover interest payments, indicating a stable financial structure. However, 5 analysts have revised their earnings downwards for the upcoming period, which suggests that investors may need to keep a close eye on future earnings reports.

For those interested in a deeper analysis, there are additional InvestingPro Tips available on the platform (https://www.investing.com/pro/USPH), which could provide further guidance on the company's performance and potential investment opportunities.

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