US Physical Therapy (USPH) investor relations material

Business model and growth strategy

• Operates a national outpatient orthopedic physical therapy network with nearly 800 facilities, using a partner model where local owners retain significant interest and brand identity.

• Focuses on acquiring and scaling mid-sized practices, providing back office support and leveraging higher commercial reimbursement rates.

• Maintains a strong balance sheet with low leverage, disciplined capital deployment, and a history of double-digit growth despite industry headwinds.

• Expands through both organic growth and strategic acquisitions, targeting markets with favorable reimbursement and growth potential.

• Partners are incentivized to grow the business and benefit from monthly cash distributions and future buyouts at attractive multiples.

Market dynamics and industry trends

• The rehab market is highly fragmented, estimated at $40 billion, with no player holding more than 10% market share.

• Demographic trends and cost-saving studies support strong long-term demand for physical therapy as a primary care gatekeeper for musculoskeletal issues.

• The company is recognized for its public profile and reputation, differentiating itself from heavily leveraged private equity competitors.

• Consolidation is ongoing, with a focus on acquiring practices with aligned values and growth ambitions.

• Avoids oversaturated or challenging markets, such as Illinois and California, in favor of more attractive opportunities.

Financial performance and operational highlights

• Despite a $50 million EBITDA impact from Medicare reimbursement cuts over five years, achieved high double-digit growth and record clinic visits.

• Updated EBITDA guidance for the year is $93–97 million, with recent quarters setting all-time records for visits per clinic per day.

• Margins have rebounded to around 21% in the latest quarter, with ongoing efficiency initiatives including AI-assisted documentation and virtualized front desk operations.

• Commercial reimbursement rates typically increase post-acquisition, with recent examples showing per-visit rates rising from $101 to $107.

• Maintains a dividend policy and has authorized a share repurchase plan in response to stock price pressures.