US Physical Therapy (USPH) The 15th Annual East Coast IDEAS Conference summary

Business overview and market dynamics

• Operates nearly 800 clinics in 44 states, with 85% of revenue from physical therapy and 15% from industrial injury prevention.

• The rehab market exceeds $40 billion, with favorable demographics driven by an aging and active population.

• The industry is highly fragmented, with no company holding more than 10% market share, supporting ongoing consolidation.

• Growth is achieved through both acquisitions and organic expansion, including about 30 de novo clinics opened annually.

• Clinics typically reach break-even in 6–9 months and recover initial investments within 18–24 months.

Financial performance and growth strategy

• Trailing twelve-month revenue is about $700 million, with $85 million in adjusted EBITDA and 18% year-over-year revenue growth.

• Annual dividend of $1.80 per share is paid, with a 2% yield.

• Most free cash flow is allocated to acquisitions, with leverage at 1.4x EBITDA and $147 million in debt.

• Acquisitions average 7.5–8x EBITDA, with over 100 clinics added in 2024 and a strong pipeline for 2025–2026.

• Strategic focus on acquiring profitable, high-quality clinics with aligned values and growth potential.

Revenue mix and payer dynamics

• Commercial insurance accounts for 48% of revenue, Medicare 32%, workers’ comp 11%, and other sources 6%.

• Commercial rates have increased significantly, while Medicare rates are expected to rise from 2026 after several years of cuts.

• Workers’ comp visits yield the highest rates, with this segment growing from 9.5% of revenue in 2023 to 10.9% in early 2025.

• Recent legislative changes may result in a 2.2% Medicare rate increase in 2025 if passed.