ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(STATE OR OTHER JURISDICTION OF INCORPORATION
OR ORGANIZATION) |
(I.R.S. EMPLOYER IDENTIFICATION NO.)
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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(ZIP CODE)
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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☑
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Accelerated filer
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☐
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Non-accelerated filer
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☐ (Do not check if a smaller reporting company)
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Smaller reporting company
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Emerging growth company
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DOCUMENT
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PART OF FORM 10-K
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Portions of Definitive Proxy Statement for the 2021 Annual Meeting of Shareholders
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Part III
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Page
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PART I
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Item 1.
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2
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Item 1A.
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12
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Item 1B.
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18
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Item 2.
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18
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Item 3.
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19
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Item 4.
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19
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PART II
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||
Item 5.
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19
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Item 6.
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22
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Item 7.
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36
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Item 8.
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37
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44
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Item 9.
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67
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Item 9A.
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67
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Item 9B.
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68
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PART III
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Item 10.
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68 | |
Item 11.
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68 | |
Item 12.
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68 | |
Item 13.
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69
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Item 14.
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69
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PART IV
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Item 15.
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69
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Item 16.
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69 |
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76
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• |
the multiple effects of the impact of public health crises and epidemics/pandemics, such as the novel strain of COVID-19 and its variants, for which the total financial magnitude cannot be
currently estimated;
|
• |
changes in Medicare rules and guidelines and reimbursement or failure of our clinics to maintain their Medicare certification and/or enrollment status;
|
• |
revenue we receive from Medicare and Medicaid being subject to potential retroactive reduction;
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• |
changes in reimbursement rates or payment methods from third party payors including government agencies, and changes in the deductibles and co-pays owed by patients;
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• |
compliance with federal and state laws and regulations relating to the privacy of individually identifiable patient information, and associated fines and penalties for failure to comply;
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• |
competitive, economic or reimbursement conditions in our markets which may require us to reorganize or close certain clinics and thereby incur losses and/or closure costs including the possible
write-down or write-off of goodwill and other intangible assets;
|
• |
the impact of COVID-19 related vaccination and/or testing mandates at the federal, state and/or local level, which could have an adverse impact on staffing, revenue, costs and the results of
operations:
|
• |
changes as the result of government enacted national healthcare reform;
|
• |
business and regulatory conditions including federal and state regulations;
|
• |
governmental and other third party payor inspections, reviews, investigations and audits, which may result in sanctions or reputational harm and increased costs;
|
• |
revenue and earnings expectations;
|
• |
legal actions, which could subject us to increased operating costs and uninsured liabilities;
|
• |
general economic conditions;
|
• |
availability and cost of qualified physical therapists;
|
• |
personnel productivity and retaining key personnel;
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• |
competitive environment in the industrial injury prevention services business, which could result in the termination or non-renewal of contractual service arrangements and other adverse financial
consequences for that service line;
|
• |
acquisitions, and the successful integration of the operations of the acquired businesses;
|
• |
impact on the business and cash reserves resulting from retirement or resignation of key partners and resulting purchase of their non-controlling interest (minority interests);
|
• |
maintaining our information technology systems with adequate safeguards to protect against cyber-attacks;
|
• |
a security breach of our or our third party vendors’ information technology systems may subject us to potential legal action and reputational harm and may result in a violation of the Health
Insurance Portability and Accountability Act of 1996 of the Health Information Technology for Economic and Clinical Health Act;
|
• |
maintaining clients for which we perform management and other services, as a breach or termination of those contractual arrangements by such clients could cause operating results to be less than
expected;
|
• |
maintaining adequate internal controls;
|
• |
maintaining necessary insurance coverage;
|
• |
availability, terms, and use of capital; and
|
• |
weather and other seasonal factors.
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Acquisition
|
Date
|
% Interest
Acquired |
Number of
Clinics
|
|||
December 2021 Acquisition
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December 31, 2021
|
75%
|
3
|
|||
November 2021 Acquisition
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November 30, 2021
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70%
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*
|
|||
September 2021 Acquisition
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September 30, 2021
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100%
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*
|
|||
June 2021 Acquisition
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June 30, 2021
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65%
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8
|
|||
March 2021 Acquisition
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March 31, 2021
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70%
|
6
|
|||
November 2020 Acquisition
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November 30, 2020
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75%
|
3
|
|||
September 2020 Acquisition
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September 30, 2020
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70%
|
**
|
|||
February 2020 Acquisition
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February 27, 2020
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65% ***
|
4
|
|||
September 2019 Acquisition
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September 30, 2019
|
67%
|
11
|
|||
April 2019 Acquisition
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April 11, 2019
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100%
|
*
|
* |
Industrial injury prevention services business
|
** |
The business includes six management contracts which have been in place for a number of years. As of the date acquired, the contracts had a remaining term
of five years.
|
*** |
The four clinics are in four separate partnerships. The Company's interest in the four partnerships range from 10.0% to 83.8%, with an overall 65.0% based
on the initial purchase transaction.
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December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||||||||||||||
Payor
|
Net Patient
Revenue |
Percentage
|
Net Patient
Revenue |
Percentage
|
Net Patient
Revenue |
Percentage
|
||||||||||||||||||
Managed Care Programs/ Commercial Health Insurance
|
$
|
209,129
|
47.7
|
%
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$
|
177,877
|
47.7
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%
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$
|
204,051
|
47.1
|
%
|
||||||||||||
Medicare/Medicaid
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155,122
|
35.4
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%
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118,030
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31.6
|
%
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132,611
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30.6
|
%
|
|||||||||||||||
Workers' Compensation Insurance
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44,549
|
10.2
|
%
|
48,628
|
13.0
|
%
|
63,542
|
14.7
|
%
|
|||||||||||||||
Other
|
29,530
|
6.7
|
%
|
28,805
|
7.7
|
%
|
33,141
|
7.6
|
%
|
|||||||||||||||
Total
|
$
|
438,330
|
100.0
|
%
|
$
|
373,340
|
100.0
|
%
|
$
|
433,345
|
100.0
|
%
|
ITEM 1A. |
RISK FACTORS.
|
•
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facility and professional licensure/permits, including certificates of need;
|
• |
conduct of operations, including financial relationships among healthcare providers, Medicare fraud and abuse, and physician self-referral;
|
• |
addition of facilities and services; and
|
• |
coding, billing and payment for services.
|
• |
refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from managed care payors;
|
• |
state or federal agencies imposing fines, penalties and other sanctions on us;
|
• |
temporary suspension of payment for new patients to the facility or agency;
|
• |
decertification or exclusion from participation in the Medicare or Medicaid programs or one or more managed care payor networks;
|
• |
the imposition of a new Corporate Integrity Agreement;
|
• |
damage to our reputation;
|
• |
the revocation of a facility’s or agency’s license; and
|
• |
loss of certain rights under, or termination of, our contracts with managed care payors.
|
• |
the difficulty and expense of integrating acquired personnel into our business;
|
• |
the diversion of management’s time from existing operations;
|
• |
the potential loss of key employees of acquired companies;
|
• |
the difficulty of assignment and/or procurement of managed care contractual arrangements; and
|
• |
the assumption of the liabilities and exposure to unforeseen liabilities of acquired companies, including liabilities for failure to comply with healthcare regulations.
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ITEM 1B. |
UNRESOLVED STAFF COMMENTS.
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ITEM 2. |
PROPERTIES.
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ITEM 3. |
LEGAL PROCEEDINGS.
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ITEM 4. |
MINE SAFETY DISCLOSURES.
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ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
|
12/16
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12/17
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12/18
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12/19
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12/20
|
12/21
|
|||||||
U.S Physical Therapy. Incs.
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100
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103
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146
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156
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171
|
136
|
||||||
NYSE Composite
|
100
|
116
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103
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123
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131
|
155
|
||||||
NYSE Healthcare Index
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100
|
119
|
127
|
151
|
168
|
203
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ITEM 6. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
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Acquisition
|
Date
|
% Interest
Acquired
|
Number of
Clinics
|
||||
December 2021 Acquisition
|
December 31, 2021
|
75%
|
3
|
||||
November 2021 Acquisition
|
November 30, 2021
|
70%
|
*
|
||||
September 2021 Acquisition
|
September 30, 2021
|
100%
|
*
|
||||
June 2021 Acquisition
|
June 30, 2021
|
65%
|
8
|
||||
March 2021 Acquisition
|
March 31, 2021
|
70%
|
6
|
||||
November 2020 Acquisition
|
November 30, 2020
|
75%
|
3
|
||||
September 2020 Acquisition
|
September 30, 2020
|
70%
|
**
|
||||
February 2020 Acquisition
|
February 27, 2020
|
65% ***
|
4
|
||||
September 2019 Acquisition
|
|
September 30, 2019
|
|
67%
|
|
11
|
|
April 2019 Acquisition
|
April 11, 2019
|
100%
|
*
|
* |
Industrial injury prevention business
|
** |
The business includes six management and services contracts which have been in place for a number of years. As of the date acquired, the contracts had a remaining term of
five years.
|
*** |
The four clinics are in four separate partnerships. The Company's interest in the four partnershipsrange from 10.0% to 83.8%, with an overall 65.0% based on the initial
purchase transaction.
|
• |
The CARES Act allowed for qualified healthcare providers to receive advanced payments under the existing Medicare Accelerated and Advance Payments Program (“MAAPP funds”)
during the COVID-19 pandemic. Under this program, healthcare providers could choose to receive advanced payments for future Medicare services provided. We applied for and received approval to receive MAAP funds from Centers for Medicare
& Medicaid Services (“CMS”) in April 2020. We recorded the $14.1 million in advance payments received as a liability. During the quarter ended March 31, 2021, we repaid the MAAPP funds of $14.1 million rather than applying them to
future services performed.
|
• |
We elected to defer depositing the employer’s share of Social Security taxes for payments due from March 27, 2020, through December 31, 2020, interest-free and penalty-free. In
December 2021, we paid $4.1 million related to these deferred payments. As of December 31, 2021, $4.2 million related to these deferred payments is included in accrued liabilities.
|
• |
The CARES Act provided additional waivers, reimbursement, grants and other funds to assist health care providers during the COVID-19 pandemic, including $100.0 billion in
appropriations for the Public Health and Social Services Emergency Fund, also referred to as the Provider Relief Fund, to be used for preventing, preparing, and responding to the coronavirus, and for reimbursing eligible health care
providers for lost revenues and health care related expenses that are attributable to COVID-19. For the years ended December 31, 2021, and December 31, 2020, the Company’s consolidated subsidiaries recorded income of approximately $4.6
million and $13.5 million, respectively, of payments under the CARES Act (“Relief Funds”). Under the Company’s accounting policy, these payments were recorded as Other income – Relief Funds. These funds are not required to be repaid
upon attestation and compliance with certain terms and conditions, which could change materially based on evolving grant compliance provisions and guidance provided by the U.S. Department of Health and Human Services. Currently, the
Company can attest and comply with the terms and conditions. We will continue to monitor the evolving guidelines and may record adjustments as additional information is released.
|
Year Ended
|
||||||||||||
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
Net patient revenue
|
$
|
438,330
|
$
|
373,340
|
$
|
433,345
|
||||||
Other revenue
|
2,939
|
2,020
|
2,486
|
|||||||||
Physical therapy operations
|
441,269
|
375,360
|
435,831
|
|||||||||
Management contract revenue
|
9,853
|
8,410
|
8,676
|
|||||||||
Industrial injury prevention services revenue
|
43,900
|
39,199
|
37,462
|
|||||||||
$
|
495,022
|
$
|
422,969
|
$
|
481,969
|
December 31,
|
||||||||
2021
|
2020
|
|||||||
Gross patient accounts receivable
|
$
|
129,524
|
$
|
119,180
|
||||
Less contractual allowances
|
80,484
|
75,266
|
||||||
Subtotal - accounts receivable
|
49,040
|
43,914
|
||||||
Less allowance for credit losses
|
2,768
|
2,008
|
||||||
Net patient accounts receivable
|
$
|
46,272
|
$
|
41,906
|
December 31, 2021
|
December 31, 2020
|
|||||||||||||||||||||||
Payor
|
Current to
120 Days |
120+ Days
|
Total
|
Current to
120 Days |
120+ Days
|
Total
|
||||||||||||||||||
Managed Care/ Commercial Plans
|
$
|
13,985
|
$
|
2,381
|
$
|
16,366
|
$
|
13,053
|
$
|
1,774
|
$
|
14,827
|
||||||||||||
Medicare/Medicaid
|
13,442
|
1,636
|
15,078
|
10,707
|
1,196
|
11,903
|
||||||||||||||||||
Workers Compensation*
|
5,600
|
1,312
|
6,912
|
6,576
|
926
|
7,502
|
||||||||||||||||||
Self-pay
|
4,371
|
3,316
|
7,687
|
4,086
|
3,146
|
7,232
|
||||||||||||||||||
Other**
|
1,168
|
1,829
|
2,997
|
1,108
|
1,342
|
2,450
|
||||||||||||||||||
Totals
|
$
|
38,566
|
$
|
10,474
|
$
|
49,040
|
$
|
35,530
|
$
|
8,384
|
$
|
43,914
|
* |
Workers compensation is paid by state administrators or their designated agents.
|
** |
Other includes primarily litigation claims and, to a lesser extent, vehicular insurance claims.
|
2021
|
Year ended December 31, 2021
|
2020
|
Year ended December 31, 2020
|
2021 Additions
|
Clinics opened or acquired during the year ended December 31, 2021
|
2020 Additions
|
Clinics opened or acquired during the year ended December 31, 2020
|
Clinics Additions
|
Clinics opened or acquired during the year ended December 31, 2021 and 2020
|
Mature Clinics
|
Clinics opened or acquired prior to January 1, 2020 and are still operating
|
For the Years Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Number of clinics, at the end of period
|
591
|
554
|
||||||
Working Days
|
254
|
256
|
||||||
Average visits per day per clinic
|
29.1
|
24.6
|
||||||
Total patient visits
|
4,219,576
|
3,533,371
|
||||||
Net patient revenue per visit
|
$
|
103.88
|
$
|
105.66
|
For the Year Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Computation of earnings per share - USPH shareholders:
|
||||||||
Net income attributable to USPH shareholders
|
$ |
40,831
|
$
|
35,194
|
||||
(Charges) credit to retained earnings:
|
||||||||
Revaluation of redeemable non-controlling interest
|
(13,011
|
)
|
(4,632
|
)
|
||||
Tax effect at statutory rate (federal and state) of 25.55% and 26.25%, respectively
|
3,324
|
1,216
|
||||||
$ |
31,144
|
$
|
31,778
|
|||||
Earnings per share (basic and diluted)
|
$ |
2.41
|
$
|
2.48
|
For the Year Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Computation of earnings per share - USPH shareholders:
|
||||||||
Net income attributable to USPH shareholders
|
$
|
40,831
|
$
|
35,194
|
||||
Credit (charges) to retained earnings:
|
||||||||
Revaluation of redeemable non-controlling interest
|
(13,011
|
)
|
(4,632
|
)
|
||||
Tax effect at statutory rate (federal and state) of 25.55% and 26.25%, respectively
|
3,324
|
1,216
|
||||||
$
|
31,144
|
$
|
31,778
|
|||||
Earnings per share (basic and diluted)
|
$
|
2.41
|
$
|
2.48
|
||||
Adjustments:
|
||||||||
Closure costs
|
30
|
3,931
|
||||||
Expenses related to executive officers transition
|
1,301
|
1,331
|
||||||
Gain on sale of partnership interest and clinics
|
-
|
(1,091
|
)
|
|||||
Relief Funds
|
(4,597
|
)
|
(13,500
|
)
|
||||
Settlement of a liability
|
2,635
|
-
|
||||||
Allocation to non-controlling interest
|
676
|
3,116
|
||||||
Revaluation of redeemable non-controlling interest
|
13,011
|
4,632
|
||||||
Tax effect at statutory rate (federal and state) of 25.55% and 26.25%, respectively
|
(3,336
|
)
|
415
|
|||||
Operating Results (excluding Relief Funds) (a non-GAAP measure)
|
$
|
40,864
|
$
|
30,612
|
||||
Relief Funds
|
$
|
4,597
|
$
|
13,500
|
||||
Allocation to non-controlling interest
|
(715
|
)
|
(2,893
|
)
|
||||
Tax effect at statutory rate (federal and state) of 25.55% and 26.25%, respectively
|
(992
|
)
|
(2,784
|
)
|
||||
Operating Results (including Relief Funds) (a non-GAAP measure)
|
$
|
43,754
|
$
|
38,435
|
||||
Basic and diluted Operating Results per share (excluding Relief Funds) (a non-GAAP measure)
|
$
|
3.17
|
$
|
2.39
|
||||
Basic and diluted Operating Results per share (including Relief Funds) (a non-GAAP measure)
|
$
|
3.39
|
$
|
2.99
|
||||
Shares used in computation - basic and diluted
|
12,898
|
12,835
|
Year Ended
|
||||||||
December 31, 2021
|
December 31, 2020
|
|||||||
Revenue related to Mature Clinics
|
$
|
402,744
|
$
|
358,103
|
||||
Revenue related to 2021 Clinic Additions
|
13,802
|
-
|
||||||
Revenue related to 2020 Clinic Additions
|
21,283
|
9,664
|
||||||
Revenue from clinics sold or closed in 2021
|
455
|
1,242
|
||||||
Revenue from clinics sold or closed in 2020
|
46
|
4,331
|
||||||
Net patient revenue from physical therapy operations
|
438,330
|
373,340
|
||||||
Other revenue
|
2,939
|
2,020
|
||||||
Revenue from physical therapy operations
|
441,269
|
375,360
|
||||||
Management contract revenue
|
9,853
|
8,410
|
||||||
Industrial injury prevention services
|
43,900
|
39,199
|
||||||
Net Revenue
|
$
|
495,022
|
$
|
422,969
|
Year Ended
|
||||||||
December 31, 2021
|
December 31, 2020
|
|||||||
Operating cost related to Mature Clinics
|
$
|
305,148
|
$
|
273,476
|
||||
Operating cost related to 2021 Clinic Additions
|
11,080
|
-
|
||||||
Operating cost related to 2020 Clinic Additions
|
19,561
|
8,416
|
||||||
Operating cost related to clinics sold or closed in 2021
|
484
|
1,345
|
||||||
Operating cost related to clinics sold or closed in 2020
|
25
|
5,583
|
||||||
Closure costs
|
30
|
3,931
|
||||||
Physical therapy operations
|
336,328
|
292,751
|
||||||
Physical therapy management contracts
|
8,306
|
6,655
|
||||||
Industrial injury prevention services
|
33,206
|
29,113
|
||||||
Total operating cost
|
$
|
377,840
|
$
|
328,519
|
||||
Less: Physical therapy operations - closure costs
|
(30
|
)
|
(3,931
|
)
|
||||
Total operating cost excluding closure costs (a non-GAAP measure)
|
$
|
377,810
|
$
|
324,588
|
Year Ended
|
||||||||
December 31, 2021
|
December 31, 2020
|
|||||||
Physical therapy operations
|
||||||||
Salaries and related costs related to Mature Clinics
|
$
|
222,431
|
$
|
195,962
|
||||
Salaries and related costs related to 2021 Clinic Additions
|
7,258
|
-
|
||||||
Salaries and related costs related to 2020 Clinic Additions
|
13,940
|
5,495
|
||||||
Salaries and related costs related to clinics sold or closed in 2021
|
293
|
805
|
||||||
Salaries and related costs related to clinics sold or closed in 2020
|
18
|
3,009
|
||||||
Total Physical therapy operations
|
243,940
|
205,271
|
||||||
Physical therapy management contracts
|
7,316
|
5,921
|
||||||
Industrial injury prevention services
|
27,213
|
24,437
|
||||||
Total salaries and related costs
|
$
|
278,469
|
$
|
235,629
|
Year Ended
|
||||||||
December 31, 2021
|
December 31, 2020
|
|||||||
Physical therapy operations
|
||||||||
Rent, supplies, contract labor and other costs related to Mature Clinics
|
$
|
77,770
|
$
|
73,348
|
||||
Rent, supplies, contract labor and other costs related to 2021 Clinic Additions
|
3,653
|
-
|
||||||
Rent, supplies, contract labor and other costs related to 2020 Clinic Additions
|
5,436
|
2,846
|
||||||
Rent, supplies, contract labor and other costs related to clinics sold or closed in 2021
|
187
|
528
|
||||||
Rent, supplies, contract labor and other costs related to clinics sold or closed in 2020
|
8
|
2,328
|
||||||
Total Physical therapy operations
|
87,054
|
79,050
|
||||||
Physical therapy management contracts
|
989
|
734
|
||||||
Industrial injury prevention services
|
5,993
|
4,552
|
||||||
Total rent, supplies, contract labor and other costs
|
$
|
94,036
|
$
|
84,336
|
Year Ended
|
||||||||
December 31, 2021
|
December 31, 2020
|
|||||||
Physical therapy operations
|
$
|
104,971
|
$
|
86,540
|
||||
Management contracts
|
1,547
|
1,755
|
||||||
Industrial injury prevention services
|
10,694
|
10,086
|
||||||
Physical therapy operations - closure costs
|
(30
|
)
|
(3,931
|
)
|
||||
Gross profit
|
$
|
117,182
|
$
|
94,450
|
||||
Physical therapy operations - closure costs
|
30
|
3,931
|
||||||
Gross profit, excluding closure costs (a non-GAAP measure)
|
$
|
117,212
|
$
|
98,381
|
Year Ended
|
||||||||
December 31, 2021
|
December 31, 2020
|
|||||||
Income before taxes
|
$
|
73,196
|
$
|
65,513
|
||||
Less: net income attributable to non-controlling interest:
|
||||||||
Redeemable non-controlling interest - temporary equity
|
(11,358
|
)
|
(11,175
|
)
|
||||
Non-controlling interest - permanent equity
|
(5,735
|
)
|
(6,122
|
)
|
||||
$
|
(17,093
|
)
|
$
|
(17,297
|
)
|
|||
Income before taxes less net income attributable to non-controlling interest
|
$
|
56,103
|
$
|
48,216
|
||||
Provision for income taxes
|
$
|
15,272
|
$
|
13,022
|
||||
Effective tax rate
|
27.2
|
%
|
27.0
|
%
|
Total
|
2022
|
2023
|
2024
|
2025
|
2026
|
Thereafter
|
||||||||||||||||||||||
Credit Agreement
|
$
|
114,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
114,000
|
$
|
-
|
$
|
-
|
||||||||||||||
Notes Payable
|
4,417
|
830
|
3,587
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Interest Payable
|
292
|
74
|
218
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Employee Agreements
|
61,278
|
52,837
|
8,321
|
120
|
-
|
-
|
-
|
|||||||||||||||||||||
Operating Leases
|
136,992
|
41,270
|
33,637
|
25,527
|
17,111
|
10,575
|
8,872
|
|||||||||||||||||||||
$
|
316,979
|
$
|
95,011
|
$
|
45,763
|
$
|
25,647
|
$
|
131,111
|
$
|
10,575
|
$
|
8,872
|
• |
the multiple effects of the impact of public health crises and epidemics/pandemics, such as the novel strain of COVID-19 and its variants, for which the total financial magnitude cannot be
currently estimated;
|
• |
changes in Medicare rules and guidelines and reimbursement or failure of our clinics to maintain their Medicare certification and/or enrollment status;
|
• |
revenue we receive from Medicare and Medicaid being subject to potential retroactive reduction;
|
• |
changes in reimbursement rates or payment methods from third party payors including government agencies, and changes in the deductibles and co-pays owed by patients;
|
• |
compliance with federal and state laws and regulations relating to the privacy of individually identifiable patient information, and associated fines and penalties for failure to comply;
|
• |
competitive, economic or reimbursement conditions in our markets which may require us to reorganize or close certain clinics and thereby incur losses and/or closure costs including the possible
write-down or write-off of goodwill and other intangible assets;
|
• |
the impact of COVID-19 related vaccination and/or testing mandates at the federal, state and/or local level, which could have an adverse impact on staffing, revenue, costs and the results of
operations:
|
• |
changes as the result of government enacted national healthcare reform;
|
• |
business and regulatory conditions including federal and state regulations;
|
• |
governmental and other third party payor inspections, reviews, investigations and audits, which may result in sanctions or reputational harm and increased costs;
|
• |
revenue and earnings expectations;
|
• |
legal actions, which could subject us to increased operating costs and uninsured liabilities;
|
• |
general economic conditions;
|
• |
availability and cost of qualified physical therapists;
|
• |
personnel productivity and retaining key personnel;
|
• |
competitive environment in the industrial injury prevention services business, which could result in the termination or non-renewal of contractual service arrangements and other adverse financial
consequences for that service line;
|
• |
acquisitions, and the successful integration of the operations of the acquired businesses;
|
• |
impact on the business and cash reserves resulting from retirement or resignation of key partners and resulting purchase of their non-controlling interest (minority interests);
|
• |
maintaining our information technology systems with adequate safeguards to protect against cyber-attacks;
|
• |
a security breach of our or our third party vendors’ information technology systems may subject us to potential legal action and reputational harm and may result in a violation of the Health
Insurance Portability and Accountability Act of 1996 of the Health Information Technology for Economic and Clinical Health Act;
|
• |
maintaining clients for which we perform management and other services, as a breach or termination of those contractual arrangements by such clients could cause operating results to be less than
expected;
|
• |
maintaining adequate internal controls;
|
• |
maintaining necessary insurance coverage;
|
• |
availability, terms, and use of capital; and
|
• |
weather and other seasonal factors.
|
Reports of Independent Registered Public Accounting Firm—Grant Thornton LLP (PCAOB ID Number )
|
38
|
|
|
Audited Financial Statements:
|
|
|
|
40 | |
|
|
41 | |
|
|
42 | |
|
|
43 | |
|
|
44 |
•
|
We tested the design and operating effectiveness of controls relating to billing and cash collection, net rate trend analysis by
clinic and cash collection versus net revenue trend analysis.
|
•
|
For a sample of patient visits, we inspected and compared underlying documents for each transaction, which included gross billing rates
and cash collected (net revenue).
|
•
|
For a sample of patient visits, we traced gross billings and net revenue to net revenue recorded in the general ledger and to each report
used in determining and assessing the contractual adjustment calculation.
|
•
|
We compared cash collections to recorded net revenue over a twelve month period ending December 31, 2021 and again for the twelve month
period ending in the first month subsequent to period end, to identify whether there were unusual trends that would indicate that the usage of historical collection patterns would no longer be reasonable to predict future collection
patterns.
|
/s/
|
|
|
March 1, 2022
|
December 31, 2021
|
December 31, 2020
|
|||||||
ASSETS
|
(audited) | (audited) | ||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Patient accounts receivable, less allowance for credit losses of $
|
|
|
||||||
Accounts receivable - other
|
|
|
||||||
Other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Fixed assets:
|
||||||||
Furniture and equipment
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
Fixed assets, gross
|
|
|
||||||
Less accumulated depreciation and amortization
|
|
|
||||||
Fixed assets, net
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Investment in unconsolidated affiliate |
||||||||
Goodwill
|
|
|
||||||
Other identifiable intangible assets, net
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH
SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST
|
||||||||
Current liabilities:
|
||||||||
Accounts payable - trade
|
$
|
|
$
|
|
||||
Accounts payable - due to seller of acquired business
|
||||||||
Accrued expenses
|
|
|
||||||
Current portion of operating lease liabilities
|
|
|
||||||
Current portion of notes payable
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Notes payable, net of current portion
|
|
|
||||||
Revolving line of credit
|
|
|
||||||
Deferred taxes
|
|
|
||||||
Operating lease liabilities, net of current portion
|
|
|
||||||
Other long-term liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Redeemable non-controlling interest - temporary equity
|
|
|
||||||
Commitments and Contingencies
|
||||||||
U.S. Physical Therapy, Inc. (“USPH”) shareholders’ equity:
|
||||||||
Preferred stock, $
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Treasury stock at cost,
|
(
|
)
|
(
|
)
|
||||
Total USPH shareholders’ equity
|
|
|
||||||
Non-controlling interest - permanent equity
|
|
|
||||||
Total USPH shareholders' equity and non-controlling interest - permanent equity
|
|
|
||||||
Total liabilities, redeemable non-controlling interest, USPH shareholders' equity and
non-controlling interest - permanent equity
|
$
|
|
$
|
|
Year Ended
|
||||||||||||
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
Net patient revenue
|
$
|
|
$
|
|
$
|
|
||||||
Other revenue
|
|
|
|
|||||||||
Net revenue
|
|
|
|
|||||||||
Operating cost:
|
||||||||||||
Salaries and related costs
|
|
|
|
|||||||||
Rent, supplies, contract labor and other
|
|
|
|
|||||||||
Provision for credit losses
|
|
|
|
|||||||||
Closure costs - lease and other
|
|
|
|
|||||||||
Closure costs - derecognition of goodwill
|
|
|
|
|||||||||
Total operating cost
|
|
|
|
|||||||||
Gross profit
|
|
|
|
|||||||||
Corporate office costs
|
|
|
|
|||||||||
Operating income
|
|
|
|
|||||||||
Other income and expense
|
||||||||||||
Relief Funds
|
|
|
|
|||||||||
Gain on sale of partnership interest and clinics
|
|
|
|
|||||||||
Settlement of a legal matter
|
( |
) | ||||||||||
Resolution of a payor matter
|
||||||||||||
Equity in earnings of unconsolidated affiliate
|
|
|
|
|||||||||
Interest and other income, net
|
|
|
|
|||||||||
Interest expense - debt and other
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Total other income and expense
|
|
|
|
|||||||||
Income and equity in earnings of unconsolidated affiliates before taxes
|
|
|
|
|||||||||
Provision for income taxes
|
|
|
|
|||||||||
Net income
|
|
|
|
|||||||||
Less: net income attributable to non-controlling interest:
|
||||||||||||
Redeemable non-controlling interest - temporary equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Non-controlling interest - permanent equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
Net income attributable to USPH shareholders
|
$
|
|
$
|
|
$
|
|
||||||
Basic and diluted earnings per share attributable to USPH shareholders
|
$
|
|
$
|
|
$
|
|
||||||
Shares used in computation - basic and diluted
|
|
|
|
|||||||||
Dividends declared per common share
|
$
|
|
$
|
|
$
|
|
U.S. Physical Therapy, Inc.
|
||||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In Capital
|
Retained
Earnings
|
Treasury Stock
|
Total Shareholders’
Equity
|
Non-Controlling
Interests
|
Total |
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||
Balance January 1, 2019
|
|
$
|
|
$
|
|
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$ | $ | ||||||||||||||||||||
Issuance of restricted stock, net of cancellations
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Revaluation of redeemable non-controlling interest, net of tax
|
|
|
|
(
|
)
|
|
|
(
|
)
|
( |
) | |||||||||||||||||||||||||
Compensation expense - equity-based awards
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Purchase of partnership interests - non-controlling interest
|
- | ( |
) | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Sale of non-controlling interest, net of purchases and tax
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Dividends paid to USPT shareholders
|
-
|
|
|
(
|
)
|
-
|
|
(
|
)
|
( |
) | |||||||||||||||||||||||||
Distributions to non-controlling interest partners - permanent equity
|
-
|
|
|
|
-
|
|
|
( |
) | ( |
) | |||||||||||||||||||||||||
Other
|
-
|
|
|
|
-
|
|
|
( |
) | |||||||||||||||||||||||||||
Net income attributable to non-controlling interest - permanent equity
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Net income attributable to USPH shareholders
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Balance December 31, 2019
|
|
$
|
|
$
|
|
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$ | $ |
U.S. Physical Therapy, Inc.
|
||||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In Capital
|
Retained
Earnings
|
Treasury Stock
|
Total Shareholders’
Equity
|
Non-Controlling
Interests
|
Total |
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of cancellations
|
|
$ |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
$ |
$ |
||||||||||||||||||||||
Revaluation of redeemable non-controlling interest, net of tax
|
|
|
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Compensation expense - equity-based awards
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Purchase of partnership interests - non-controlling interest
|
-
|
|
|
|
-
|
|
|
( |
) | ( |
) | |||||||||||||||||||||||||
Sale of non-controlling interest, net of purchases and tax
|
-
|
|
(
|
)
|
|
-
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Dividends paid to USPT shareholders
|
-
|
|
|
(
|
)
|
-
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Distributions to non-controlling interest partners - permanent equity
|
-
|
|
|
|
-
|
|
|
( |
) | ( |
) | |||||||||||||||||||||||||
Other
|
-
|
|
|
(
|
)
|
-
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Net income attributable to non-controlling interest - permanent equity
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Net income attributable to USPH shareholders
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Balance December 31, 2020
|
|
$ |
|
$ |
|
$ |
|
(
|
)
|
$ |
(
|
)
|
$ |
|
$ |
$ |
U.S. Physical Therapy, Inc.
|
||||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In Capital
|
Retained
Earnings
|
Treasury Stock
|
Total Shareholders’
Equity
|
Non-Controlling
Interests
|
Total |
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of cancellations
|
|
$ |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
$ |
$ |
||||||||||||||||||||||
Revaluation of redeemable non-controlling interest, net of tax
|
|
|
|
(
|
)
|
|
|
(
|
)
|
( |
) | |||||||||||||||||||||||||
Compensation expense - equity-based awards
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Purchase of partnership interests - non-controlling interest
|
-
|
|
(
|
)
|
|
-
|
|
(
|
)
|
( |
) | ( |
) | |||||||||||||||||||||||
Sale of non-controlling interest, net of purchases and tax
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Dividends paid to USPT shareholders
|
-
|
|
|
(
|
)
|
-
|
|
(
|
)
|
( |
) | |||||||||||||||||||||||||
Distributions to non-controlling interest partners - permanent equity
|
-
|
|
|
|
-
|
|
|
( |
) | ( |
) | |||||||||||||||||||||||||
Short swing profit settlement |
- | - | ||||||||||||||||||||||||||||||||||
Other
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Net income attributable to non-controlling interest - permanent equity
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Net income attributable to USPH shareholders
|
-
|
|
|
|
-
|
|
|
|||||||||||||||||||||||||||||
Balance December 31, 2021
|
|
$ |
|
$ |
|
$ |
|
(
|
)
|
$ |
(
|
)
|
$ |
|
$ |
$ |
Year Ended
|
||||||||||||
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net income including non-controlling interest and earnings from unconsolidated affiliates, net
|
$
|
|
$
|
|
$
|
|
||||||
Adjustments to reconcile net income including non-controlling interest to net cash provided by
operating activities:
|
||||||||||||
Depreciation and amortization
|
|
|
|
|||||||||
Provision for credit losses
|
|
|
|
|||||||||
Equity-based awards compensation expense
|
|
|
|
|||||||||
Deferred income taxes
|
|
(
|
)
|
|
||||||||
Gain on sale of partnership interest
|
|
(
|
)
|
(
|
)
|
|||||||
Derecognition (write-off) of goodwill - closed clinics
|
|
|
|
|||||||||
Earnings in unconsolidated affiliate
|
( |
) | ||||||||||
Other
|
(
|
)
|
|
|
||||||||
Changes in operating assets and liabilities:
|
||||||||||||
(Increase) decrease in patient accounts receivable
|
(
|
)
|
|
(
|
)
|
|||||||
(Increase) decrease in accounts receivable - other
|
(
|
)
|
|
(
|
)
|
|||||||
(Increase) decrease in other assets
|
(
|
)
|
|
(
|
)
|
|||||||
Increase (decrease) in accounts payable and accrued expenses
|
|
|
(
|
)
|
||||||||
Increase (decrease) in other long-term liabilities
|
(
|
)
|
|
(
|
)
|
|||||||
Net cash provided by operating activities
|
|
|
|
|||||||||
INVESTING ACTIVITIES
|
||||||||||||
Purchase of fixed assets
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of majority interest in businesses, net of cash acquired
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of redeemable non-controlling interest, temporary equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of non-controlling interest, permanent equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds on sale of redeemable non-controlling interest, temporary equity
|
|
|
|
|||||||||
Proceeds on sales of partnership interest, clinics and fixed assets
|
|
|
|
|||||||||
Distributions from unconsolidated affiliate
|
||||||||||||
Sales of non-controlling interest-permanent
|
||||||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
FINANCING ACTIVITIES
|
||||||||||||
Distributions to non-controlling interest, permanent and temporary equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash dividends paid to shareholders
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds from revolving line of credit
|
|
|
|
|||||||||
Payments on revolving line of credit
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Principal payments on notes payable
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
(Payment) receipt of Medicare Accelerated and Advance Funds
|
(
|
)
|
|
|
||||||||
Other
|
|
|
(
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
|
(
|
)
|
(
|
)
|
|||||||
Net (decrease) increase in cash and cash equivalents
|
(
|
)
|
|
|
||||||||
Cash and cash equivalents - beginning of period
|
|
|
|
|||||||||
Cash and cash equivalents - end of period
|
$
|
|
$
|
|
$
|
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||||||
Cash paid during the period for:
|
||||||||||||
Income taxes
|
$
|
|
$
|
|
$
|
|
||||||
Interest
|
$
|
|
$
|
|
$
|
|
||||||
Non-cash investing and financing transactions during the period:
|
||||||||||||
Purchase of businesses - seller financing portion
|
$
|
|
$
|
|
$
|
|
||||||
Purchase of business - payable to common shareholders of acquired business
|
$
|
|
$
|
|
$
|
|
||||||
Notes payable related to purchase of redeemable non-controlling interest, temporary equity
|
$
|
|
$
|
|
$
|
|
||||||
Notes payable due to purchase of non-controlling interest, permanent equity
|
$
|
|
$
|
|
$
|
|
||||||
Notes receivable related to sale of partnership interest - redeemable non-controlling interest
|
$
|
|
$
|
|
$
|
|
||||||
Note receivables related to sale of partnership interest
|
$
|
|
$
|
|
$
|
|
Acquisition
|
|
Date
|
|
% Interest
Acquired
|
|
Number of
Clinics
|
December 2021 Acquisition
|
|
|
|
|
|
|
November 2021 Acquisition
|
|
|
|
|
|
|
September 2021 Acquisition
|
|
|
|
|
|
|
June 2021 Acquisition
|
|
|
|
|
|
|
March 2021 Acquisition
|
|
|
|
|
|
|
November 2020 Acquisition
|
|
|
|
|
|
|
September 2020 Acquisition
|
|
|
|
|
|
|
February 2020 Acquisition
|
|
|
|
|
|
|
September 2019 Acquisition
|
|
|
|
|
|
|
April 2019 Acquisition |
* |
|
** | |
*** | |
|
Year Ended
|
|||||||||||
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
Net patient revenue
|
$
|
|
$
|
|
$
|
|
||||||
Other patient revenue |
|
|
|
|||||||||
Physical therapy operations
|
$ |
|
$ |
|
$ |
|
||||||
Physical therapy management contracts
|
|
|
|
|
|
|
||||||
Industrial injury prevention services
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
Acquisition
|
Date
|
% Interest
Acquired |
Number of
Clinics |
|||
December 2021 Acquisition
|
|
|
|
|||
November 2021 Acquisition |
||||||
September 2021 Acquisition |
||||||
June 2021 Acquisition |
||||||
March 2021 Acquisition |
||||||
November 2020 Acquisition | ||||||
September 2020 Acquisition
|
|
|
|
|||
February 2020 Acquisition
|
|
|
***
|
|
||
September 2019 Acquisition
|
|
|
|
|||
April 2019 Acquisition |
* |
** |
*** |
|
IIPS*
|
Physical Therapy Operations
|
Total
|
||||||||||
Cash paid, net of cash acquired
|
$
|
|
$
|
|
$
|
|
||||||
Seller notes
|
|
|
|
|||||||||
Contingent payments | ||||||||||||
Other payable |
||||||||||||
Seller put right
|
|
|
|
|||||||||
Total consideration
|
$
|
|
$
|
|
$
|
|
||||||
Estimated fair value of net tangible assets acquired:
|
||||||||||||
Total current assets
|
$
|
|
$
|
|
$
|
|
||||||
Total non-current assets
|
|
|
|
|||||||||
Total liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net tangible assets acquired
|
$
|
|
$
|
|
$
|
|
||||||
Customer and referral relationships
|
|
|
|
|||||||||
Non-compete agreements
|
|
|
|
|||||||||
Tradenames
|
|
|
|
|||||||||
Goodwill
|
|
|
|
|||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interest)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
$
|
|
$
|
|
$
|
|
Cash paid, net of cash acquired
|
$
|
|
||
Seller note
|
|
|||
Total consideration
|
$
|
|
||
Estimated fair value of net tangible assets acquired:
|
||||
Total current assets
|
$
|
|
||
Total non-current assets
|
|
|||
Total liabilities
|
(
|
)
|
||
Net tangible assets acquired
|
$
|
|
||
Referral relationships
|
|
|||
Non-compete
|
|
|||
Tradename
|
|
|||
Goodwill
|
|
|||
Fair value of non-controlling interest (classified as redeemable non-controlling interest)
|
(
|
)
|
||
$
|
|
IIPS*
|
Physical Therapy Operations
|
Total
|
||||||||||
Cash paid, net of cash acquired ($
|
$
|
|
$
|
|
$
|
|
||||||
Payable to shareholders of seller
|
|
|
|
|||||||||
Seller note
|
|
|
|
|||||||||
Total consideration
|
$
|
|
$
|
|
$
|
|
||||||
Estimated fair value of net tangible assets acquired:
|
||||||||||||
Total current assets
|
$
|
|
$
|
|
$
|
|
||||||
Total non-current assets
|
|
|
|
|||||||||
Total liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net tangible assets acquired
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||
Referral relationships
|
|
|
|
|||||||||
Non-compete
|
|
|
|
|||||||||
Tradename
|
|
|
|
|||||||||
Goodwill
|
|
|
|
|||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interest)
|
|
(
|
)
|
(
|
)
|
|||||||
$
|
|
$
|
|
$
|
|
1. |
Prior to the Acquisition, the Therapy Practice exists as a separate legal entity (the “Seller Entity”). The Seller Entity is owned by one or more individuals
(the “Selling Shareholders”) most of whom are physical therapists that work in the Acquired Therapy Practice and provide physical therapy services to patients.
|
2. |
In conjunction with the Acquisition, the Seller Entity contributes the Acquired Therapy Practice into a newly-formed limited partnership (“NewCo”), in exchange
for one hundred percent (
|
3. |
The Company enters into an agreement (the “Purchase Agreement”) to acquire from the Seller Entity a majority (ranges from
|
4. |
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
limited and general partners of NewCo. After the Acquisition, the Company is the general partner of NewCo.
|
5. |
As noted above, the Company does not purchase 100% of the limited partnership interests in NewCo and the Seller Entity retains a portion of the limited
partnership interest in NewCo (“Seller Entity Interest”).
|
6. |
In most cases, some or all of the Selling Shareholders enter into an employment agreement (the “Employment Agreement”) with NewCo with an initial term that
ranges from
to |
7. |
The compensation of each Employed Selling Shareholder is specified in the Employment Agreement and is customary and commensurate with his or her responsibilities
based on other employees in similar capacities within NewCo, the Company and the industry.
|
8. |
The Company and the Selling Shareholder (including both Employed Selling Shareholders and Selling Shareholders not employed by NewCo) execute a non-compete
agreement (the “Non-Compete Agreement”) which restricts the Selling Shareholder from engaging in competing Therapy Practice activities for a specified period of time (the “Non-Compete Term”). A Non-Compete Agreement is executed with the
Selling Shareholders in all cases. That is, even if the Selling Shareholder does not become an Employed Selling Shareholder, the Selling Shareholder is restricted from engaging in a competing Therapy Practice during the Non-Compete Term.
|
9. |
The Non-Compete Term commences as of the date of the Acquisition and expires on the later
of:
|
a. |
|
b. |
|
10. |
The Non-Compete Agreement applies to a restricted region which is defined as a mileage radius from the Acquired Therapy Practice. That is, an Employed Selling
Shareholder is permitted to engage in competing Therapy Practicees or activities outside the designated geography (after such Employed Selling Shareholder no longer is employed by NewCo) and a Selling Shareholder who is not employed by NewCo
immediately is permitted to engage in the competing Therapy Practice or activities outside the designated geography.
|
1. |
Put Right
|
a. |
In the event that any Selling Shareholder’s employment is terminated under certain circumstances prior to the fifth anniversary of the Closing Date, the Seller
Entity thereafter may have an irrevocable right to cause the Company to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below.
|
b. |
In the event that any Selling Shareholder is not employed by NewCo as of the fifth anniversary of the Closing Date and the Company has not exercised its Call
Right with respect to the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, Seller Entity thereafter has the Put Right to cause the Company to purchase from Seller Entity the Terminated Selling Shareholder’s
Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below.
|
c.
|
In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the Closing Date, the
Seller Entity has the Put Right, and upon the exercise of the Put Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in “3” below.
|
2. |
Call Right
|
a. |
If any Selling Shareholder’s employment by NewCo is terminated prior to the fifth anniversary of the Closing Date, the Company thereafter has an irrevocable
right to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, in each case at the purchase price described in “3” below.
|
b. |
In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the Closing Date, the Company
has the Call Right, and upon the exercise of the Call Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in “3” below.
|
3. |
For the Put Right and the Call Right, the purchase price is derived from a formula based on a specified multiple of NewCo’s trailing twelve months of earnings
before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Percentage of any undistributed earnings of NewCo (the “Redemption Amount”). NewCo’s earnings are distributed monthly based on
available cash within NewCo; therefore, the undistributed earnings amount is small, if any.
|
4. |
The Purchase Price for the initial equity interest purchased by the Company is also based on the same specified multiple of the trailing twelve-month earnings
that is used in the Put Right and the Call Right noted above.
|
5. |
The Put Right and the Call Right do not have an expiration date.
|
6. |
The Put Right and the Call Right never apply to Selling Shareholders who do not become employed by NewCo, since the Company requires that such Selling
Shareholders sell their entire ownership interest in the Seller Entity at the closing of the Acquisition.
|
1. |
Prior to the acquisition, the Progressive Subsidiaries were owned by a legal entity (“Progressive Parent”) controlled by its individual owners (the “Selling
Shareholders”), who work in and manage the Progressive business.
|
2. |
In conjunction with the acquisition, the Selling Shareholders caused the Progressive Parent to transfer its ownership of the Progressive Subsidiaries into a
newly-formed limited liability company (“NewCo”), in exchange for one hundred percent (
|
3. |
The Company entered into an agreement (the “Purchase Agreement”) to acquire from the Selling Shareholders a majority of the membership interest in NewCo. The
consideration for the acquisition is primarily payable in the form of cash at closing, a relatively small portion paid in cash after the closing contingent on certain performance criteria, and a small note in lieu of an escrow (the
“Purchase Price”).
|
4. |
The Company and the Selling Shareholders also executed an operating agreement (the “Operating Agreement”) for NewCo that sets forth the rights and
obligations of the members of NewCo.
|
5. |
As noted above, the Company did not purchase
|
6. |
The Company and the Selling Shareholders executed a non-compete agreement (the “Non-Compete Agreement”) which restricts the Selling Shareholders from
competing for a specified period of time (the “Non-Compete Term”).
|
7. |
The Non-Compete Term commences as of the date of the Acquisition and expires on the later
of:
|
a. |
|
b. |
|
8. |
The Non-Compete Agreement applies to the entire United States.
|
9. |
The Put Right and the Call Right do not have an expiration date.
|
1. |
Put Right
|
a. |
Each of the Selling Shareholders has the right to sell
|
b. |
In the event that any Selling Shareholder terminates his management relationship with NewCo for any reason on or after the seventh anniversary of the Closing
Date, the Selling Shareholder has the Put Right, and upon the exercise of the Put Right, the Selling Shareholder’s Interest shall be redeemed by the Company at the purchase price described in “3” below.
|
2. |
Call Right
|
a. |
If any Selling Shareholder’s ceases to perform management services on behalf of NewCo, the Company thereafter shall have an irrevocable right to purchase
from such Selling Shareholder his Interest, in each case at the purchase price described in “3” below.
|
3. |
For the Put Right and the Call Right, the purchase price is derived from a formula based on a specified multiple of NewCo’s trailing twelve months of
earnings before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Percentage of any undistributed earnings of NewCo (the “Redemption Amount”). NewCo’s earnings are distributed
monthly based on available cash within NewCo; therefore, the undistributed earnings amount is small, if any.
|
4. |
The Purchase Price for the initial equity interest purchased by the Company is also based on the same specified multiple of the trailing twelve-month
earnings that is used in the Put Right and the Call Right noted above.
|
5. |
The Put Right and the Call Right do not have an expiration date.
|
Year Ended
|
||||||||||||
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
||||||
Operating results allocated to redeemable non-controlling interest partners
|
|
|
|
|||||||||
Distributions to redeemable non-controlling interest partners
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Changes in the fair value of redeemable non-controlling interest
|
|
|
|
|||||||||
Purchases of redeemable non-controlling interest
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Acquired interest
|
|
|
|
|||||||||
Reduction of non-controlling interest due to sale of USPH partnership interest
|
|
(
|
)
|
|||||||||
Sales of redeemable non-controlling interest - temporary equity
|
|
|
|
|||||||||
Notes receivable related to sales of redeemable non-controlling interest - temporary equity
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Adjustments in notes receivable related to the the sales of redeemable non-controlling interest -
temporary equity
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
Contractual time period has lapsed but holder's employment has not terminated
|
$
|
|
$
|
|
$
|
|
||||||
Contractual time period has not lapsed and holder's employment has not terminated
|
|
|
|
|||||||||
Holder's employment has terminated and contractual time period has expired
|
|
|
|
|||||||||
Holder's employment has terminated and contractual time period has not expired
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
Year Ended
December 31, 2021
|
Year Ended
December 31, 2020
|
|||||||
Beginning balance
|
$
|
|
$
|
|
||||
Goodwill acquired
|
|
|
||||||
Goodwill derecognition (write-off) related to closed clinics
|
|
(
|
)
|
|||||
Goodwill adjustments for purchase price allocation of businesses acquired in prior year
|
(
|
)
|
|
|||||
Ending balance
|
$
|
|
$
|
|
December 31, 2021
|
December 31, 2020
|
|||||||
Tradenames
|
$
|
|
$
|
|
||||
Customer and referral relationships, net of accumulated amortization of $
|
|
|
||||||
Non-compete agreements, net of accumulated amortization of $
|
|
|
||||||
$
|
|
$
|
|
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
Customer and referral relationships
|
$
|
|
$
|
|
$
|
|
||||||
Non-compete agreements
|
|
|
|
|||||||||
|
$
|
|
$
|
|
$
|
|
Customer and Referral Relationships
|
Non-Compete Agreements
|
||||||
Years
|
Annual Amount
|
Years
|
Annual Amount
|
||||
Ending December 31,
|
Ending December 31,
|
||||||
2022
|
$
|
|
2022
|
$
|
|
||
2023
|
$
|
|
2023
|
$
|
|
||
2024
|
$
|
|
2024
|
$
|
|
||
2025
|
$
|
|
2025
|
$
|
|
||
2026
|
$
|
|
2026
|
$
|
|
||
Thereafter
|
$
|
|
Thereafter
|
$
|
|
December 31, 2021
|
December 31, 2020
|
|||||||
Salaries and related costs
|
$
|
|
$
|
|
||||
Credit balances due to patients and payors
|
|
|
||||||
Group health insurance claims
|
|
|
||||||
Closure costs
|
|
|
||||||
Federal taxes payable
|
|
|
||||||
MAAPP funds payable
|
|
|
||||||
Contingent payment related to acquisition
|
|
|
||||||
Settlement of a legal matter |
||||||||
Other
|
|
|
||||||
Total
|
$
|
|
$
|
|
December 31, 2021
|
December 31, 2020
|
|||||||
Credit Agreement average effective interest rate of
|
$
|
|
$
|
|
||||
Various notes payable with $
|
|
|
||||||
$
|
|
$
|
|
|||||
Less current portion
|
(
|
)
|
(
|
)
|
||||
Long term portion
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Operating lease cost
|
$
|
|
$
|
|
||||
Short-term lease cost
|
|
|
||||||
Variable lease cost
|
|
|
||||||
Total lease cost*
|
$
|
|
$
|
|
* |
|
Year Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Cash paid for amounts included in the measurement of operating lease liabilities (in thousands)
|
$
|
|
$
|
|
||||
Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands)
|
$
|
|
$
|
|
Fiscal Year
|
Amount
|
|||
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026 |
||||
2027 and therafter
|
|
|||
Total lease payments
|
$
|
|
||
Less: imputed interest
|
|
|||
Total operating lease liabilities
|
$
|
|
Year Ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Weighted-average remaining lease term - Operating leases
|
|
|
||||||
Weighted-average discount rate - Operating leases
|
|
%
|
|
%
|
December 31, 2021
|
December 31, 2020
|
|||||||
Deferred tax assets:
|
||||||||
Compensation
|
$
|
|
$
|
|
||||
Allowance for credit losses
|
|
|
||||||
Acquired net operating losses
|
|
|
||||||
Lease obligations - including closed clinics
|
|
|
||||||
Deferred tax assets
|
$
|
|
$
|
|
||||
Deferred tax liabilities:
|
||||||||
Depreciation and amortization
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Operating lease right-of-use assets
|
(
|
)
|
(
|
)
|
||||
Other
|
(
|
)
|
(
|
)
|
||||
Deferred tax liabilities
|
(
|
)
|
(
|
)
|
||||
Net deferred tax liability
|
$
|
(
|
)
|
$
|
(
|
)
|
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||||||||||||||
U. S. tax at statutory rate
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||
State income taxes, net of federal benefit
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Excess equity compensation deduction
|
(
|
)
|
-
|
%
|
(
|
)
|
|
%
|
(
|
)
|
-
|
%
|
||||||||||||
Non-deductible expenses
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
|
$
|
|
$
|
|
||||||
State
|
|
|
|
|||||||||
Total current
|
|
|
|
|||||||||
Deferred:
|
||||||||||||
Federal
|
|
(
|
)
|
|
||||||||
State
|
|
(
|
)
|
|
||||||||
Total deferred
|
|
(
|
)
|
|
||||||||
Total income tax provision
|
$
|
|
$
|
|
$
|
|
Year Ended December 31, |
||||||||||||
2021
|
2020
|
2019
|
||||||||||
|
|
|||||||||||
Net operating revenue:
|
||||||||||||
Physical therapy operations
|
$
|
|
$
|
|
$
|
|
||||||
Industrial injury prevention services
|
|
|
|
|||||||||
Total Company
|
$
|
|
$
|
|
$
|
|
||||||
|
||||||||||||
Gross profit:
|
||||||||||||
Physical therapy operations (excluding closure costs) (a non-GAAP measure)
|
$
|
|
$
|
|
$
|
|
||||||
Industrial injury prevention services
|
|
|
|
|||||||||
|
$
|
|
$
|
|
$
|
|
||||||
Physical therapy operations - closure costs
|
|
|
|
|||||||||
Gross profit
|
$
|
|
$
|
|
$
|
|
||||||
|
||||||||||||
Total Assets:
|
||||||||||||
Physical therapy operations
|
$
|
|
$
|
|
$
|
|
||||||
Industrial injury prevention services
|
|
|
|
|||||||||
Total Company
|
$
|
|
$
|
|
$
|
|
Authorized
|
Restricted
Stock Issued |
Outstanding
Stock Options |
Stock Options
Exercised |
Stock Options
Exercisable |
Shares Available
for Grant |
|||||||||||||||||||
Equity Plans
|
||||||||||||||||||||||||
Amended 1999 Plan
|
|
|
|
|
|
|
||||||||||||||||||
Amended 2003 Plan
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
Year Granted
|
Number of Shares
|
Weighted Average Fair
Value Per Share |
||||
2021
|
|
$
|
|
|||
2020
|
|
$
|
|
|||
2019
|
|
$
|
|
Year Cancelled
|
Number of Shares
|
Weighted Average Fair
Value Per Share |
||||
2021
|
|
$
|
|
|||
2020
|
|
$
|
|
|||
2019
|
|
$
|
|
Year Ended
|
||||||||||||
December 31, 2021
|
December 31, 2020
|
December 31, 2019
|
||||||||||
Computation of earnings per share - USPH shareholders:
|
||||||||||||
Net income attributable to USPH shareholders
|
$
|
|
$
|
|
$
|
|
||||||
(Charges) credit to retained earnings:
|
||||||||||||
Revaluation of redeemable non-controlling interest
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Tax effect at statutory rate (federal and state) of
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
|||||||
Earnings per share (basic and diluted)
|
$
|
|
$
|
|
$
|
|
||||||
Shares used in computation:
|
||||||||||||
Basic and diluted earnings per share - weighted-average shares
|
|
|
|
• |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
• |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
|
• |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material
effect on the financial statements.
|
ITEM 9B. |
OTHER INFORMATION.
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
ITEM 11. |
EXECUTIVE COMPENSATION.
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|
(a)
|
Documents filed as a part of this report:
|
1.
|
Financial Statements. Reference is made to the Index to Financial Statements and Related Information under Item 8 in Part II hereof, where these documents are listed.
|
2.
|
Financial Statement Schedules. See page 85 for Schedule II — Valuation and Qualifying Accounts. All other schedules are omitted because of the absence of conditions under which they are required or because the required information is
shown in the financial statements or notes thereto.
|
3.
|
Exhibits. The exhibits listed in List of Exhibits on the next page are filed or incorporated by reference as part of this
report.
|
ITEM 16. |
Form 10-K Summary
|
Number
|
|
Description
|
|
Articles of Incorporation of the Company [filed as an exhibit to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 and incorporated herein by reference].
|
|
|
||
|
Amendment to the Articles of Incorporation of the Company [filed as an exhibit to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 and incorporated herein
by reference].
|
|
|
||
3.3
|
|
Bylaws of the Company, as amended [filed as an exhibit to the Company’s Form 10-KSB for the year ended December 31, 1993 and incorporated herein by reference—Commission File
Number—1-11151].
|
|
||
|
Description of Company Securities [filed herewith the Company’s Form 10-K for the year ended December 31, 2019 filed with the SEC on February 28, 2020.]
|
|
|
||
|
1999 Employee Stock Option Plan (as amended and restated May 20, 2008) [incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A,
filed with the SEC on April 17, 2008].
|
|
|
||
|
U.S. Physical Therapy, Inc. 2003 Stock Incentive Plan, (as amended and restated effective March 26, 2016) [incorporated herein by reference to Appendix A to the Company's
Definitive Proxy Statement on Schedule 14A filed with the SEC on April 7, 2016.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Long-Term Incentive Plan for Senior Management for 2013, effective March 27, 2013 [incorporated by reference to Exhibit 99.1 to the Company
Current Report on Form 8-K filed with the SEC on April 1, 2013].
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Cash Bonus Plan for 2013, effective March 27, 2013 [incorporated by reference to Exhibit 99.2 to the Company Current Report on Form 8-K
filed with the SEC on April 1, 2013].
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Cash Bonus Plan for 2013, effective March 27, 2013 [incorporated by reference to Exhibit 99.3 to the Company Current Report on Form
8-K filed with the SEC on April 1, 2013].
|
|
|
||
|
U. S. Physical Therapy, Inc. Long-Term Incentive Plan for Senior Management for 2014, effective March 21, 2014 [incorporated by reference to Exhibit 99.1 to the Company
Current Report on Form 8-K filed with the SEC on March 27, 2014].
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2014, effective March 21, 2014 [incorporated by reference to Exhibit 99.2 to the
Company Current Report on Form 8-K filed with the SEC on March 27, 2014].
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Cash Bonus Plan for Senior Management for 2014, effective March 21, 2014 [incorporated by reference to Exhibit 99.3 to the Company
Current Report on Form 8-K filed with the SEC on March 27, 2014].
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Cash Bonus Plan for Senior Management for 2014, effective March 21, 2014 [incorporated by reference to Exhibit 99.4 to the Company
Current Report on Form 8-K filed with the SEC on March 27, 2014].
|
|
|
||
|
U. S. Physical Therapy, Inc. Long Term Incentive Plan for Senior Management for 2015, effective March 23, 2015 [incorporated by reference to Exhibit 99.1 to the Company’s
Current Report on Form 8-K filed with the SEC on March 27, 2015.]
|
Number
|
|
Description
|
|
U.S. Physical Therapy, Inc. Discretionary Long Term Incentive Plan for Senior Management for 2015, effective March 23, 2015 [incorporated by reference to Exhibit 99.2 to the
Company’s Current Report on Form 8-K filed with the SEC on March 27, 2015.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Cash Bonus Plan for Senior Management for 2015, effective March 23, 2015 [incorporated by reference to Exhibit 99.3 to the Company’s
Current Report on Form 8-K filed with the SEC on March 27, 2015.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Cash Bonus Plan for Senior Management for 2015, effective March 23, 2015 [incorporated by reference to Exhibit 99.4 to the
Company’s Current Report on Form 8-K filed with the SEC on March 27, 2015.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Long Term Incentive Plan for Senior Management for 2016, effective March 10, 2016 [incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed with the SEC on March 16, 2016].
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Long Term Incentive Plan for Senior Management for 2016, effective March 10, 2016 [incorporated by reference to Exhibit 10.2 to the
Company’s Current Report on Form 8-K filed with the SEC on March 16, 2016].
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Cash Bonus Plan for Senior Management for 2016, effective March 10, 2016 [incorporated by reference to Exhibit 10.3 to the Company’s
Current Report on Form 8-K filed with the SEC on March 16, 2016].
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Cash Bonus Plan for Senior Management for 2016, effective March 10, 2016 [incorporated by reference to Exhibit 10.4 to the
Company’s Current Report on Form 8-K filed with the SEC on March 16, 2016].
|
|
|
||
|
Form of Restricted Stock Agreement [incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on March 16, 2016].
|
|
|
||
|
U. S. Physical Therapy, Inc. Long-Term Incentive Plan for Senior Management for 2017, effective March 24, 2017 [incorporated by reference to Exhibit 99.1 to the Company’s
Current Report on Form 8-K/A filed with the SEC on February 9, 2018.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Long –Term Incentive Plan for Senior Management for 2017, effective March 24, 2017 [incorporated by reference to Exhibit 99.2 to
the Company’s Current Report on Form 8-K filed with the SEC on March 30, 2017.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Cash Bonus Plan for Senior Management for 2017, effective March 24, 2017 [incorporated by reference to Exhibit 99.3 to the Company’s
Current Report on Form 8-K filed with the SEC on March 30, 2017.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Cash Bonus Plan for Senior Management for 2017, effective March 24, 2017 [incorporated by reference to Exhibit 99.4 to the
Company’s Current Report on Form 8-K filed with the SEC on March 30, 2017.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2018, effective April 9, 2018 [incorporated by reference to Exhibit 99.1 to the
Company’s Current Report on Form 8-K filed with the SEC on April 12, 2018.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2018, effective April 9, 2018 [incorporated by reference to Exhibit 99.2 to the
Company’s Current Report on Form 8-K filed with the SEC on April 12, 2018.]
|
Number
|
|
Description
|
|
U. S. Physical Therapy, Inc. Objective Cash/RSA Bonus Plan for Senior Management for 2018, effective April 9, 2018 [incorporated by reference to Exhibit 99.3 to the Company’s
Current Report on Form 8-K filed with the SEC on April 12, 2018.]
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Cash/RSA Bonus Plan for Senior Management for 2018, effective April 9, 2018 [incorporated by reference to Exhibit 99.4 to the
Company’s Current Report on Form 8-K filed with the SEC on April 12, 2018.]
|
|
|
||
|
Second Amended and Restated Credit Agreement dated as of November 10, 2017 among the Company, as Borrower, Bank of America, N.A. as Administrative Agent and the Lenders Patty
(incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 14, 2017).
|
|
|
||
|
Second Amended and Restated Employment Agreement by and between the Company and Christopher J. Reading dated effective February 9, 2016 [incorporated by reference to Exhibit
10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 12, 2016].
|
|
|
||
|
Second Amended and Restated Employment Agreement by and between the Company and Lawrance W. McAfee dated effective February 9, 2016 [incorporated by reference to Exhibit 10.2
to the Company’s Current Report on Form 8-K, filed with the SEC on February 12, 2016].
|
|
|
||
|
Amended and Restated Employment Agreement by and between the Company and Glenn D. McDowell dated effective February 9, 2016 [incorporated by reference to Exhibit 10.3 to the
Company’s Current Report on Form 8-K, filed with the SEC on February 12, 2016].
|
|
|
||
|
Employment Agreement commencing on March 1, 2018 by and between the Company and Graham Reeve [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed with the SEC on March 7, 2018].
|
|
|
||
|
Objective Long-Term Incentive Plan for Senior Management [incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 8,
2019.]
|
|
|
||
|
Discretionary Long-Term Incentive Plan for Senior Management [incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the SEC on
March 8, 2019.]
|
|
|
||
|
Objective Cash/RSA Bonus Plan for Senior Management [incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K filed with the SEC on March 8,
2019.]
|
|
|
||
|
Discretionary Cash/RSA Bonus Plan for Senior Management [incorporated by reference to Exhibit 99.4 to the Company’s Current Report on Form 8-K filed with the SEC on March 8,
2019.]
|
|
|
||
|
Third Amended and Restated Employment Agreement by and between the Company and Christopher J. Reading dated effective May 21, 2019 [incorporated by reference to Exhibit 10.1
to the Company’s Current Report on Form 8-K filed with the SEC on May 22, 2019]
|
|
|
||
|
Third Amended and Restated Employment Agreement by and between the Company and Lawrance W. McAfee dated effective May 21, 2019 [incorporated by reference to Exhibit 10.2 to
the Company’s Current Report on Form 8-K filed with the SEC on May 22, 2019]
|
Number
|
|
Description
|
|
Second Amended and Restated Employment Agreement by and between the Company and Glenn D. McDowell dated effective May 21, 2019 [incorporated by reference to Exhibit 10.3 to
the Company’s Current Report on Form 8-K filed with the SEC on March 22, 2019]
|
|
|
||
|
Amended & Restated Employment Agreement commencing by and between the Company and Graham Reeve dated effective May 21, 2019 [incorporated by reference to Exhibit 10.4 to
the Company’s Current Report on Form 8-K filed with the SEC on March 22, 2019]
|
|
|
||
|
Restricted Stock Agreement [incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on March 22, 2019]
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2020, effective March 3, 2020 [incorporated by reference to Exhibit 99.1 to the
Company Current Report on Form 8-K filed with the SEC on March 6, 2020].
|
|
|
||
|
Amendment to Employment Agreement entered into as of March 26, 2020 by and between the Company and Christopher Reading [incorporated by reference to Exhibit 10.3 to the
Company Current Report on Form 8-K filed with the SEC on March 26, 2020].
|
|
|
Amendment to Employment Agreement entered into as of March 26, 2020 by and between the Company and Lawrance McAfee [incorporated by reference to Exhibit 10.3 to the Company
Current Report on Form 8-K filed with the SEC on March 26, 2020].
|
|
|
Amendment to Employment Agreement entered into as of March 26, 2020 by and between the Company and Glenn McDowell [incorporated by reference to Exhibit 10.3 to the Company
Current Report on Form 8-K filed with the SEC on March 26, 2020].
|
|
|
||
|
Amendment to Employment Agreement entered into as of March 26, 2020 by and between the Company and Graham Reeve [incorporated by reference to Exhibit 10.4 to the Company
Current Report on Form 8-K filed with the SEC on March 26, 2020].
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2020, effective March 3, 2020 [incorporated by reference to Exhibit 99.1 to the
Company Current Report on Form 8-K filed with the SEC on March 6, 2020].
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2020, effective March 3, 2020 [incorporated by reference to Exhibit 99.2 to the
Company Current Report on Form 8-K filed with the SEC on March 6, 2020].
|
|
|
||
|
U. S. Physical Therapy, Inc. Objective Cash/RSA Bonus Plan for Senior Management for 2020, effective March 3, 2020 [incorporated by reference to Exhibit 99.3 to the Company
Current Report on Form 8-K filed with the SEC on March 6, 2020].
|
|
|
||
|
U. S. Physical Therapy, Inc. Discretionary Cash/RSA Bonus Plan for Senior Management for 2020, effective March 3, 2020 [incorporated by reference to Exhibit 99.4 to the
Company Current Report on Form 8-K filed with the SEC on March 6, 2020].
|
|
|
||
|
Employment Agreement entered into as of November 9, 2020 by and between U.S. Physical Therapy and Carey Hendrickson [incorporated by reference to Exhibit 10.1 to the Company
Current Report on Form 8-K filed with the SEC on September 23, 2020.]
|
|
|
||
|
Consulting Agreement entered into as of September 22, 2020 by and between U.S. Physical Therapy and Lawrence McAfee [incorporated by reference to Exhibit 10.1 to the Company
Current Report on Form 8-K filed with the SEC on September 23, 2020.]
|
|
10.52+ |
|
Employment Agreement by and between the Company and Eric Williams entered into on December 3, 2020 and commencing as of July 1, 2021 [filed by reference to Exhibit 10.1 to
the Company Current Report on Form 8-K filed with the SEC on December 7, 2020.]
|
|
First Amendment to Second Amended and Restated Credit Agreement [filed by reference to Exhibit 10.1 to the Company Current Report on Form 8-K filed with the SEC on February
4, 2021.]
|
|
|
||
|
Second Amendment to Second Amended and Restated Credit Agreement. *
|
Number
|
Description
|
|
Subsidiaries of the Registrant
|
||
Consent of Independent Registered Public Accounting Firm—Grant Thornton LLP
|
||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
|
||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
|
||
Certification of Controller pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
|
||
Certification of Periodic Report of the Chief Executive Officer, Chief Financial Officer and Controller pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as
amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
+
|
Management contract or compensatory plan or arrangement.
|
Balance at
Beginning of Period
|
Additions Charged
to Costs and Expenses
|
Additions Charged
to Other Accounts
|
Deductions
|
Balance at
End of Period
|
||||||||||||||||
YEAR ENDED DECEMBER 31, 2021:
|
||||||||||||||||||||
Reserves and allowances deducted from asset accounts:
|
||||||||||||||||||||
Allowance for credit losses(1)
|
$
|
|
$
|
|
|
$
|
|
(2)
|
$
|
|
||||||||||
YEAR ENDED DECEMBER 31, 2020:
|
||||||||||||||||||||
Reserves and allowances deducted from asset accounts:
|
||||||||||||||||||||
Allowance for credit losses
|
$
|
|
$
|
|
|
$
|
|
(2)
|
$
|
|
||||||||||
YEAR ENDED DECEMBER 31, 2019:
|
||||||||||||||||||||
Reserves and allowances deducted from asset accounts:
|
||||||||||||||||||||
Allowance for credit losses
|
$
|
|
$
|
|
|
$
|
|
(2)
|
$
|
|
(1) |
|
(2) |
|
* |
All other schedules are omitted because of the absence of conditions under which they are required or because the required information is shown in the financial
statements or notes thereto.
|
U.S. PHYSICAL THERAPY, INC.
|
||
(Registrant)
|
||
By:
|
/s/ Carey Hendrickson
|
|
Carey Hendrickson
|
||
Chief Financial Officer
|
||
(Principal Financial Officer and Principal Accounting Officer)
|
||
By:
|
/s/ Jon C. Bates
|
|
Jon C. Bates
|
||
Vice President/Controller
|
/s/ Chris J. Reading
|
Chief Executive Officer, President and Director
(Principal Executive Officer)
|
March 1, 2022
|
Chris J. Reading
|
||
|
|
|
/s/ Edward L. Kuntz
|
Chairman of the Board
|
March 1, 2022
|
Edward L. Kuntz
|
||
|
|
|
/s/ Mark J. Brookner
|
Director
|
March 1, 2022
|
Mark J. Brookner
|
|
|
|
|
|
/s/ Harry S. Chapman
|
Director
|
March 1, 2022
|
Harry S. Chapman
|
|
|
|
|
|
/s/ Bernard A. Harris
|
Director
|
March 1, 2022
|
Dr. Bernard A. Harris, Jr.
|
|
|
/s/ Kathleen A. Gilmartin
|
Director
|
March 1, 2022
|
Kathleen A. Gilmartin
|
|
|
|
|
|
/s/ Anne Motsenbocker
|
Director
|
March 1, 2022
|
Anne Motsenbocker
|
|
|
|
|
|
/s/ Reginald E. Swanson
|
Director
|
March 1, 2022
|
Reginald E. Swanson
|
|
|
/s/ Clayton K. Trier
|
Director
|
March 1, 2022
|
Clayton K. Trier
|
|
|