U.S. Physical Therapy Reports Third Quarter 2025 Results

HOUSTON--( BUSINESS WIRE)--U.S. Physical Therapy, Inc. (“USPH” or the “Company”) (NYSE, NYSE Texas: USPH), a national operator of outpatient physical therapy clinics and provider of industrial injury prevention services, today reported results for the three and nine months ended September 30, 2025.

FINANCIAL HIGHLIGHTS

(1)

MANAGEMENT’S COMMENTS

Chris Reading, Chief Executive Officer, said, “This was a very solid quarter for us across the board with record visits per clinic per day, continued clinic expansion with 84 net owned additions since the third quarter of 2024, and sustained double-digit growth in our injury prevention business. Importantly, we are also making progress on some key initiatives that will benefit our 2026 growth and performance, along with an expected and overdue Medicare pricing lift.”

2025 Third Quarter Versus 2024 Third Quarter

Additional supplemental tables of financial and performance metrics are presented on page 15 of this release.

Physical Therapy Operations

Three Months Ended

Variance

September 30, 2025

September 30, 2024

(In thousands, except percentages)

Revenue related to:

Mature Clinics (1)

131,831

131,532

299

0.2%

Clinic additions (2)

32,051

4,535

27,516

(9)

Clinics sold or closed (3)

142

3,079

(2,937)

(9)

Net Patient Revenue

164,024

139,146

24,878

17.9%

Other (4)

4,086

3,568

518

14.5%

Total

168,110

142,714

25,396

17.8%

Operating costs (5) (7)

136,917

118,715

18,202

15.3%

Gross profit

31,193

23,999

7,194

30.0%

Financial and operating metrics (not in thousands):

Net rate per patient visit (1)

105.54

105.65

(0.11)

(0.1)%

Patient visits (1)

1,554,207

1,317,051

237,156

18.0%

Average daily visits per clinic (1)

32.2

30.1

2.1

7.0%

Adjusted gross profit margin (4)(5)(6)

18.6%

19.2%

Salaries and related costs per visit (6)(8)

62.07

62.47

(0.40)

(0.6)%

Operating costs per visit (6)(8)

86.88

86.00

0.88

1.0%

(1) See Glossary of Terms - Revenue Metrics for definitions.

(2) Includes 36 owned clinics added during the nine months ended September 30, 2025, and 96 owned clinics added during the year ended December 31, 2024. See Clinic Count Roll Forward on page 15 for additional information.

(3) Includes 13 owned clinics closed during the nine months ended September 30,2025 and 45 owned clinics closed during the year ended December 31, 2024. See Clinic Count Roll Forward on page 15 for additional information.

(4) Includes revenues from management contracts.

(5) Includes costs from management contracts.

(6) Excludes $0.1 million of certain incentive costs related to the Metro acquisition and gains or losses related to clinic closures, as applicable. See the reconciliation of non-GAAP measures to the most directly comparable GAAP measure on page 14.

(7) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments. Prior year amounts were reallocated to conform with current presentation.

(8) Per visit costs exclude management contract costs.

(9) Not meaningful.

Net revenue from physical therapy operations increased $25.4 million, or 17.8%, to $168.1 million for the 2025 Third Quarter from $142.7 million for the 2024 Third Quarter. This growth was due to the increase in visits from the 84 net owned clinics added since the comparable prior year period. Net rate per patient visit for the 2025 Third Quarter was $105.54 compared to $105.65 for the 2024 Third Quarter.

Operating costs from physical therapy operations increased $18.2 million, or 15.3%, to $136.9 million for the 2025 Third Quarter from $118.7 million for the 2024 Third Quarter primarily driven by the 84 net owned clinics added since the comparable prior year period. Excluding certain incentive costs related to the Metro acquisition and gains and losses related to clinic closures for both periods, salaries and related costs per visit was $62.07 for the 2025 Third Quarter compared to $62.47 for the 2024 Third Quarter while total operating costs per visit was $86.88 in the 2025 Third Quarter compared to $86.00 in the comparable prior year period.

Gross profit from physical therapy operations increased $7.2 million or 30.0% to $31.2 million for the 2025 Third Quarter as compared to $24.0 million for the 2024 Third Quarter. Excluding certain incentive costs related to the Metro acquisition and gains and losses related to clinic closures for both periods, the adjusted gross profit margin increased $3.7 million or 13.5% over the comparable periods. See the reconciliation of non-GAAP measures to the more directly comparable GAAP measure provided on pages 13 to 14 for more information.

Industrial Injury Prevention Services

Three Months Ended

Variance

September 30, 2025

September 30, 2024

(In thousands, except percentages)

Net revenue

29,022

25,319

3,703

14.6%

Operating costs (1)

23,343

20,187

3,156

15.6%

Gross profit

5,679

5,132

547

10.7%

Gross profit margin

19.6%

20.3%

(1) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments. Prior year amounts were reallocated to conform with current presentation.

IIP revenue increased $3.7 million, or 14.6%, to $29.0 million for the 2025 Third Quarter as compared to $25.3 million for the 2024 Third Quarter. Gross profit from IIP operations for the 2025 Third Quarter increased $0.5 million, or 10.7%, to $5.7 million from $5.1 million for the 2024 Third Quarter. Gross profit margin from IIP operations was 19.6% for the 2025 Third Quarter compared to 20.3% for the 2024 Third Quarter.

Corporate Office Costs and Other Expenses

Corporate office costs increased to $17.4 million for the 2025 Third Quarter from $14.4 million for the 2024 Third Quarter, primarily to support the larger number of clinics, as well as costs associated with acquisition integration and the implementation of a new financial and human resources system. Implementation costs associated with the new financial and human resources system are expected to continue through the end of 2026. As a percentage of net revenue, corporate office costs was 8.8% for the 2025 Third Quarter compared to 8.6% for the 2024 Third Quarter. Excluding the acquisition integration costs and the costs associated with the implementation of the new financial and human resources system of $0.7 million, corporate office costs was 8.5% of net revenue for the 2025 Third Quarter.

The Company revalued contingent consideration related to certain acquisitions and recognized a net gain (a decrease in the related liabilities) of $5.9 million for the 2025 Third Quarter compared to a net loss (an increase in the related liabilities) of $1.9 million for the 2024 Third Quarter.

Operating income was $25.3 million for the 2025 Third Quarter compared to $12.8 million for the 2024 Third Quarter. Excluding the impact of change in value of contingent consideration as discussed above, operating income increased to $19.5 million for the 2025 Third Quarter from $14.7 million in the 2024 Third Quarter.

Interest expense increased by $0.4 million to $2.4 million for the 2025 Third Quarter compared to $2.0 million for the 2024 Third Quarter due to a higher average outstanding balance on our revolving credit facility for the 2025 Third Quarter. The interest rate associated with borrowings on the Company’s credit facilities was 5.0% for the 2025 Third Quarter and 4.7% for the 2024 Third Quarter, with an all-in-effective interest rate (including all associated costs), of 5.7% and 5.4% over the same periods, respectively.

Interest income was less than $0.1 million during the 2025 Third Quarter compared to $1.0 million for the 2024 Third Quarter as the excess cash on the balance sheet at the end of the 2024 Third Quarter has since been deployed to fund acquisitions.

The Company revalued a put-right liability related to the future purchase of an IIP business and recognized a net non-cash expense (an increase in the related liability) of $0.7 million for the 2025 Third Quarter compared to net non-cash gain (a decrease in the related liability) of $0.2 million for the 2024 Third Quarter.

The provision for income taxes was $5.2 million for the 2025 Third Quarter compared to $2.6 million during the 2024 Third Quarter while the effective tax rate was 28.5% and 27.9% over the same periods, respectively.

USPH Net Income and Non-GAAP Measures

Net income attributable to non-controlling interest (temporary and permanent) was $4.5 million for the 2025 Third Quarter compared to $3.1 million for the 2024 Third Quarter.

USPH Net Income was $13.1 million for the 2025 Third Quarter compared to $6.6 million for the 2024 Third Quarter. In accordance with GAAP, the revaluation of redeemable noncontrolling interest, net of taxes, is not included in net income but is charged directly to retained earnings; however, this change is included in the computation of earnings per share. Earnings per share was $0.48 for the 2025 Third Quarter and $0.39 the 2024 Third Quarter.

Non-GAAP Adjusted EBITDA (1) was $23.9 million for the 2025 Third Quarter, an increase of $2.8 million or 13.2%, from $21.1 million for the 2024 Third Quarter. Non-GAAP Operating Results (1) was $10.1 million, or $0.66 per share, for the 2025 Third Quarter compared to $10.4 million, or $0.69 per share, for the 2024 Third Quarter.

2025 Nine Months Versus 2024 Nine Months

Total net revenue for the 2025 Nine Months increased $87.4 million, or 17.8%, to $578.3 million from $490.9 million for the 2024 Nine Months while operating costs increased $69.2 million, or 17.3%, to $468.7 million from $399.5 million over the same periods, respectively. Gross profit for the 2025 Nine Months was $109.6 million, or 18.9% of net revenue, compared to $91.4 million for the 2024 Nine Months, or 18.6% of net revenue.

Revenues from physical therapy operations increased $72.2 million, or 17.2% in the 2025 Nine Months versus the comparable prior year period due to increased volume from the 84 net owned clinics added since the comparable prior year period as well as an increase in net rate per patient visit to $105.50 for 2025 Nine Months from $104.71 for 2024 Nine Months. Gross profit from physical therapy operations increased $15.0 million, or 19.3%, to $92.9 million for the 2025 Nine Months from $77.8 million for the 2024 Nine Months. Excluding certain incentive costs related to the Metro acquisition and losses related to clinic closures, adjusted gross profit (1), increased $11.5 million or 14.0% over the comparable periods.

Revenues from IIP increased $15.2 million, or 21.6%, from $70.3 million for the 2024 Nine Months to $85.5 million for the 2025 Nine Months. Gross profit from IIP operations increased $3.1 million, or 23.0%, from $13.6 million in the 2024 Nine Months to $16.7 million for the 2025 Nine Months. The gross profit margin from IIP operations was 19.5% for the 2025 Nine Months compared to 19.3% for the 2024 Nine Months. Excluding the IIP acquisition made in April 2024, IIP revenue increased by $10.5 million or 16.0% in the 2025 Nine Months and gross profit increased $2.0 million or 16.1% in the 2025 Nine Months over the comparable prior year period.

Corporate office costs were $51.1 million for the 2025 Nine Months, compared to $42.7 million for the 2024 Nine Months. As a percentage of net revenue, corporate office costs were 8.8% and 8.7% over the same periods, respectively. Excluding the acquisition integration costs and the costs associated with the implementation of the new financial and human resources system of $1.8 million, corporate office costs was 8.5% of net revenue for the 2025 Nine Months.

The Company revalued contingent consideration related to certain acquisitions and recognized a net gain (a decrease in the related liabilities) of $11.5 million for the 2025 Nine Months compared to a net loss of $5.3 million for the 2024 Nine Months (an increase in the related liabilities).

Operating income was $69.9 million for the 2025 Nine Months compared to $43.3 million for the 2024 Nine Months. Excluding the impact of change in value of contingent consideration discussed above, operating income increased to $58.4 million for the 2025 Nine Months from $48.7 million for the 2024 Nine Months, an increase of 20.0%.

Other expenses were $7.1 million for the 2025 Nine Months compared to $1.5 million for the 2024 Nine Months, with the increase primarily due to higher interest expense as a result of increased borrowings and lower interest income as the excess cash on the balance sheet as of September 30, 2024 has been deployed to fund acquisitions since that time. Additionally, the Company revalued a put-right liability related to the future purchase of an IIP business and recognized a net non-cash expense (an increase in the related liability) of $1.4 million for the 2025 Nine Months compared to net non-cash expense of $0.1 million for the 2024 Nine Months.

The provision for income tax was $14.0 million for the 2025 Nine Months and $8.8 million for the 2024 Nine Months. The effective tax rate was 28.4% over the comparable periods.

USPH Net Income was $35.4 million for the 2025 Nine Months as compared to $22.2 million for the 2024 Nine Months while earnings per share was $1.85 for the 2025 Nine Months compared to $1.32 for the 2024 Nine Months.

Non-GAAP Adjusted EBITDA (1) increased $10.3 million to $70.3 million for the 2025 Nine Months from $60.0 million for the 2024 Nine Months while non-GAAP Operating Results (1) increased $0.6 million to $29.7 million, or $1.96 per share, for the 2025 Nine Months from $29.2 million, or $1.94 per share, for the 2024 Nine Months.

(1)

These are Non-GAAP Measures. See pages 13 to 14 of this release for the definition and reconciliation of Adjusted EBITDA, Operating Results, and other non-GAAP measures to the most directly comparable GAAP measure.

For additional information on 2025 Nine Months results, please refer to the Company’s Quarterly Report on Form 10-Q which is expected to be filed with the Securities and Exchange Commission on November 7, 2025.

BALANCE SHEET AND CASH FLOW

Total cash and cash equivalents were $31.1 million as of September 30, 2025, compared to $41.4 million as of December 31, 2024, and $117.0 million as of September 30, 2024. The Company had $159.6 million in outstanding borrowings and $148.5 million in available credit under the Company’s revolving facility as of September 30, 2025. This compares to $151.6 million of outstanding borrowings and $164.0 million in available credit under the Company’s revolving facility as of December 31, 2024.

RECENT ACQUISITIONS

On July 31, 2025, the Company acquired a 60% equity interest in a three-clinic practice with the practice owners retaining a 40% equity interest. The business currently generates approximately $5.3 million in annual revenue and approximately 28,000 in annual visits.

The Company’s strategy is to continue acquiring multi-clinic outpatient physical therapy practices and home-care physical and speech therapy practices, to develop outpatient physical therapy clinics as satellites in existing partnerships, and to continue acquiring companies that provide industrial injury prevention services.

2025 EARNINGS GUIDANCE

Management reaffirmed its full-year 2025 Adjusted EBITDA guidance range of $93.0 million to $97.0 million, reflecting third-quarter results and the Company’s current expectations for the remainder of the year.

QUARTERLY DIVIDEND

The Company’s Board of Directors declared a quarterly dividend of $0.45 per share payable on December 12, 2025, to shareholders of record on November 17, 2025.

CONFERENCE CALL INFORMATION

U.S. Physical Therapy’s management will host a conference call at 10:30 a.m. ET / 9:30 a.m. CT, on November 6, 2025, to discuss the Company’s financial results for the three and nine months ended September 30, 2025. Interested parties may participate in the call by dialing (800) 245-3047 (Primary) or (203) 518-9765 (Alternate) and conference ID of USPHQ325. Please call approximately 10 minutes before the call is scheduled to begin. To listen to the live call, go to the Company’s website at www.usph.com at least 15 minutes early to register, download and install any necessary audio software. If you are unable to listen live, a playback of the conference call can be accessed until February 4, 2026, on the Company’s website.

FORWARD-LOOKING STATEMENTS

This press release contains statements that are considered to be forward-looking within the meaning under Section 21E of the Securities Exchange Act of 1934, as amended. These statements contain forward-looking information relating to the financial condition, results of operations, plans, objectives, future performance and business of our Company. These statements (often using words such as “believes”, “expects”, “intends”, “plans”, “appear”, “should” and similar words) involve risks and uncertainties that could cause actual results to differ materially from those we expect. Included among such statements may be those relating to new clinics, availability of personnel and the reimbursement environment. The forward-looking statements are based on our current views and assumptions and actual results could differ materially from those anticipated in such forward-looking statements as a result of certain risks, uncertainties, and factors, which include, but are not limited to:

Many factors are beyond our control. Given these uncertainties, you should not place undue reliance on our forward-looking statements. For additional information regarding these and other risks and uncertainties, that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 3, 3025 and any risk factors contained in subsequent quarterly and annual reports we file with the SEC. Our forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as required by law, we are under no obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

GLOSSARY OF TERMS – REVENUE METRICS

Mature clinics are clinics (physical clinic locations and home-care business units) opened or acquired prior to January 1, 2024, and are still operating as of the balance sheet date.

Net rate per patient visit is net patient revenue related to our physical therapy operations divided by total number of patient visits (defined below) during the periods presented.

Patient visits is the number of unique patient visits during the periods presented for both physical clinic locations and home-care.

Average daily visits per clinic per day is patient visits (excluding home-care visits) divided by the number of days in which normal business operations were conducted during the periods presented and further divided by the average number of clinics in operation during the periods presented.

ABOUT U.S. PHYSICAL THERAPY, INC.

Founded in 1990, U.S. Physical Therapy, Inc. owns and/or manages 779 outpatient physical therapy clinics in 44 states. USPH clinics provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurologically-related injuries and rehabilitation of injured workers. USPH also has an industrial injury prevention business which provides onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments.

More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Three Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Net patient revenue

164,024

139,146

480,754

410,492

Other revenue

33,108

28,887

97,510

80,406

Net revenue

197,132

168,033

578,264

490,898

Operating cost:

Salaries and related costs

116,619

99,835

341,656

289,900

Rent, supplies, contract labor and other

36,115

29,756

104,086

88,104

Depreciation and amortization

5,495

4,158

16,776

12,326

Provision for credit losses

2,073

1,721

5,916

5,065

(Gain) loss on clinic closures - lease and other

(42)

3,432

269

4,109

Total operating cost

160,260

138,902

468,703

399,504

Gross profit

36,872

29,131

109,561

91,394

Corporate office costs

17,414

14,385

51,135

42,719

(Gain) loss on change in fair value of contingent earn-out consideration

(5,872)

1,899

(11,484)

5,332

Operating income

25,330

12,847

69,910

43,343

Other income (expense):

Interest expense, debt and other

(2,408)

(2,018)

(7,109)

(5,966)

Interest income from investments

1,018

3,635

Change in revaluation of put-right liability

(663)

168

(1,406)

(136)

Equity in earnings of unconsolidated affiliate

361

231

1,155

750

Loss on sale of partnership

(123)

Other

222

344

261

Total other expense

(2,455)

(511)

(7,054)

(1,456)

Income before taxes

22,875

12,336

62,856

41,887

Provision for income taxes

5,233

2,559

14,026

8,781

Net income

17,642

9,777

48,830

33,106

Less: Net income attributable to non-controlling interest:

Redeemable non-controlling interest - temporary equity

(3,790)

(1,998)

(9,716)

(7,539)

Non-controlling interest - permanent equity

(714)

(1,151)

(3,684)

(3,387)

(4,504)

(3,149)

(13,400)

(10,926)

Net income attributable to USPH shareholders

13,138

6,628

35,430

22,180

Basic and diluted earnings per share attributable to USPH shareholders (1)

0.48

0.39

1.85

1.32

Shares used in computation – basic and diluted

15,204

15,077

15,178

15,055

Dividends declared per common share

0.45

0.44

1.35

1.32

(1) See page 13 of this press release for the calculation of basic and diluted earnings per share.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN THOUSANDS)

Three Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Net income

17,642

9,777

48,830

33,106

Other comprehensive income:

Unrealized loss on cash flow hedge

(360)

(3,687)

(2,489)

(1,937)

Tax effect at statutory rate (federal and state)

942

636

495

Comprehensive income

17,374

7,032

46,977

31,664

Comprehensive income attributable to non-controlling interest

(4,504)

(3,149)

(13,400)

(10,926)

Comprehensive income attributable to USPH shareholders

12,870

3,883

33,577

20,738

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)

September 30, 2025

December 31, 2024

ASSETS

(unaudited)

Current assets:

Cash and cash equivalents

31,102

41,362

Patient accounts receivable, less provision for credit losses of $4,263 and $3,506, respectively

67,629

59,040

Accounts receivable - other

23,672

26,626

Other current assets

16,032

10,555

Total current assets

138,435

137,583

Fixed assets:

Furniture and equipment

67,522

68,128

Leasehold improvements

58,015

51,105

Fixed assets, gross

125,537

119,233

Less accumulated depreciation and amortization

(91,315)

(87,093)

Fixed assets, net

34,222

32,140

Operating lease right-of-use assets

139,926

133,936

Investment in unconsolidated affiliate

12,289

12,190

Goodwill

690,412

667,152

Other identifiable intangible assets, net

176,429

179,311

Other assets

4,557

5,155

Total assets

1,196,270

1,167,467

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST

Current liabilities:

Accounts payable - trade

7,417

5,936

Accrued expenses

56,901

59,513

Current portion of operating lease liabilities

41,960

39,835

Current portion of term loan and notes payable

8,802

10,999

Total current liabilities

115,080

116,283

Notes payable, net of current portion

576

903

Revolving facility

26,500

11,000

Term loan, net of current portion and deferred financing costs

124,384

130,627

Deferred taxes

35,695

29,465

Operating lease liabilities, net of current portion

106,178

101,868

Other long-term liabilities

5,414

18,275

Total liabilities

413,827

408,421

Redeemable non-controlling interest - temporary equity

277,661

269,025

Commitments and Contingencies

U.S. Physical Therapy, Inc. ("USPH") shareholders’ equity:

Preferred stock, $.01 par value, 500,000 shares authorized, no shares issued and outstanding

Common stock, $.01 par value, 20,000,000 shares authorized, 17,418,856 and 17,309,120 shares issued, respectively

172

Additional paid-in capital

296,806

290,321

Accumulated other comprehensive gain

945

2,799

Retained earnings

237,272

227,265

Treasury stock at cost, 2,214,737 shares

(31,628)

Total USPH shareholders’ equity

503,567

488,929

Non-controlling interest - permanent equity

1,215

1,092

Total USPH shareholders' equity and non-controlling interest - permanent equity

504,782

490,021

Total liabilities, redeemable non-controlling interest, USPH shareholders' equity and non-controlling interest - permanent equity

1,196,270

1,167,467

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

Nine Months Ended

September 30, 2025

September 30, 2024

OPERATING ACTIVITIES

Net income including non-controlling interest

48,830

33,106

Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:

Depreciation and amortization

17,756

12,996

Provision for credit losses

5,916

5,065

Equity-based awards compensation expense

6,151

5,837

Amortization of debt issue costs

315

317

Change in deferred income taxes

11,163

605

Change in revaluation of put-right liability

1,406

136

Change in fair value of contingent earn-out consideration

(11,484)

5,332

Equity of earnings in unconsolidated affiliate

(1,155)

(750)

Loss on sale of fixed assets

420

280

Loss on sale of a partnership

123

Other

(169)

Changes in operating assets and liabilities:

Patient accounts receivable, net

(13,604)

(8,870)

Accounts receivable - other

3,559

(960)

Other current and long term assets

(8,155)

(1,808)

Accounts payable and accrued expenses

(10,908)

5,003

Other long-term liabilities

(207)

(589)

Net cash provided by operating activities

50,126

55,531

INVESTING ACTIVITIES

Purchase of fixed assets

(10,145)

(6,697)

Purchase of interest in businesses, net of cash acquired

(15,214)

(41,196)

Purchase of redeemable non-controlling interest, temporary equity

(8,579)

(6,957)

Purchase of non-controlling interest, permanent equity

(196)

(756)

Proceeds from the sale of non-controlling interest, permanent equity

Proceeds from the sale of partnership interest - redeemable non-controlling interest, temporary equity

149

229

Repayment of notes receivable related to sales of redeemable non-controlling interest

387

451

Proceeds from the sale of partnership

700

Distributions from unconsolidated affiliate

1,089

838

Other

531

(535)

Net cash (used in) investing activities

(31,269)

(54,597)

FINANCING ACTIVITIES

Proceeds from revolving facility

146,500

Payments on revolving facility

(131,000)

Distributions to non-controlling interest, permanent and temporary equity

(14,610)

(11,399)

Cash dividends paid to shareholders

(20,520)

(19,898)

Payments on term loan

(7,500)

(3,750)

Principal payments on notes payable

(1,994)

(1,726)

Other

(27)

Net cash (used in) financing activities

(29,117)

(36,800)

Net (decrease) in cash and cash equivalents

(10,260)

(35,866)

Cash and cash equivalents - beginning of period

41,362

152,825

Cash and cash equivalents - end of period

31,102

116,959

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the period for:

Income taxes

11,809

5,759

Interest paid

7,305

5,630

Non-cash investing and financing transactions during the period:

Purchase of businesses - seller financing portion

300

955

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

5,731

6,440

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

254

627

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

135

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

2,017

2,075

Notes receivable related to the sale of non-controlling interest, permanent equity

282

U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

ADJUSTED EBITDA AND OPERATING RESULTS

The following tables provide details of the basic and diluted earnings per share computation and reconcile net income attributable to USPH shareholders calculated in accordance with GAAP to Adjusted EBITDA and Operating Results. The tables also provide a reconciliation of additional non-GAAP measures to the most comparable GAAP measure. Management believes providing Adjusted EBITDA and Operating Results to investors is useful for comparing the Company's period-to-period results as well as for comparing with other similar businesses since most do not have redeemable instruments and therefore have different equity structures. Management uses Adjusted EBITDA and Operating Results, which eliminate certain items described above that can be subject to volatility and unusual costs, as the principal measures to evaluate and monitor financial performance period over period.

Adjusted EBITDA, a non-GAAP measure, is defined as net income attributable to USPH shareholders before interest income, interest expense, taxes, depreciation, amortization, change in fair value of contingent earn-out consideration, changes in revaluation of put-right liability, equity-based awards compensation expense, clinic closure costs, business acquisition related costs, costs related to a one-time financial and human resources systems upgrade, loss on sale of a partnership and other income and related portions for non-controlling interests.

Operating Results, a non-GAAP measure, equals net income attributable to USPH shareholders less, changes in revaluation of a put-right liability, clinic closure costs, loss on sale of a partnership, changes in fair value of contingent earn-out consideration, business acquisition related costs, costs related to a one-time financial and human resources systems upgrade and any allocations to non-controlling interests, all net of taxes. Operating Results per share also excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact.

Adjusted EBITDA and Operating Results are not measures of financial performance under GAAP. Adjusted EBITDA, Operating Results and other non-GAAP measures should not be considered in isolation or as an alternative to, or substitute for, net income attributable to USPH shareholders presented in the consolidated financial statements.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

ADJUSTED EBITDA, OPERATING RESULTS AND EARNINGS PER SHARE

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Three Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

(In thousands, except per share data)

Adjusted EBITDA (a non-GAAP measure)

Net income attributable to USPH shareholders

13,138

6,628

35,430

22,180

Adjustments:

Provision for income taxes

5,233

2,559

14,026

8,781

Depreciation and amortization

5,832

4,387

17,756

12,996

Interest expense, debt and other, net

2,408

2,018

7,109

5,966

Equity-based awards compensation expense

2,263

1,921

6,151

5,837

Interest income from investments

(33)

(1,018)

(85)

(3,635)

Change in revaluation of put-right liability

663

(168)

1,406

136

(Gain) loss on change in fair value of contingent earn-out consideration

(5,872)

1,899

(11,484)

5,332

Clinic closure costs (1)

(42)

3,432

269

4,109

Business acquisition related costs (2)

314

870

314

ERP implementation costs (3)

664

885

Loss on sale of partnership

123

Other income

(222)

(90)

(344)

(261)

Allocation to non-controlling interests

(247)

(811)

(1,856)

(1,789)

23,855

21,071

70,256

59,966

Operating Results (a non-GAAP measure)

Net income attributable to USPH shareholders

13,138

6,628

35,430

22,180

Adjustments:

(Gain) loss on change in fair value of contingent earn-out consideration

(5,872)

1,899

(11,484)

5,332

Change in revaluation of put-right liability

663

(168)

1,406

136

Clinic closure costs (1)

(42)

3,432

269

4,109

Business acquisition related costs (2)

314

870

314

ERP implementation costs (3)

664

885

Loss on sale of partnership

123

Allocation to non-controlling interests

397

(429)

279

(513)

Tax effect at statutory rate (federal and state)

1,053

(1,290)

1,955

(2,396)

10,071

10,386

29,733

29,162

Operating Results per share (a non-GAAP measure)

0.66

0.69

1.96

1.94

Earnings per share

Computation of earnings per share - USPH shareholders:

Net income attributable to USPH shareholders

13,138

6,628

35,430

22,180

Charges to retained earnings:

Revaluation of redeemable non-controlling interest

(7,918)

(1,097)

(9,821)

(3,158)

Tax effect at statutory rate (federal and state)

2,023

280

2,509

807

7,243

5,811

28,118

19,829

Earnings per share (basic and diluted)

0.48

0.39

1.85

1.32

Shares used in computation – basic and diluted

15,204

15,077

15,178

15,055

(1) Costs associated with the closure of 13 owned clinics during the 2025 Nine Months and 43 owned clinics during the 2024 Nine Months. See Clinic Count Roll Forward on page 15 for additional information.

(2) Primarily consists of retention bonuses, legal and consulting expenses related to the acquisitions of equity interests in certain partnerships.

(3) Consists of costs related to a one-time financial and human resources systems upgrade.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES

(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)

The tables below reconcile other non-GAAP measures to the most directly comparable GAAP measures for the 2025 Third Quarter and the 2025 Nine Months.

Three Months Ended September 30, 2025

Three Months Ended September 30, 2024

Reported

(GAAP)

Adjustments (1)

Adjusted

(Non-GAAP)

Reported

(GAAP)

Adjustments (1)

Adjusted

(Non-GAAP)

(in thousands, except percentages)

Segment information - Physical Therapy Operations

Salaries and related costs (2)

96,470

96,478

82,281

Operating costs (2)(3)

134,979

135,029

116,698

(3,432)

113,266

Gross profit

31,193

(50)

31,143

23,999

3,432

27,431

Gross profit margin

18.6%

16.8%

19.2%

Number of visits

1,554,207

1,317,051

Salaries and related costs per visit (2)

62.07

62.47

Operating costs per visit (2)(3)

86.85

0.03

86.88

88.61

(2.61)

86.00

Nine Months Ended September 30, 2025

Nine Months Ended September 30, 2024

Reported

(GAAP)

Adjustments (1)

Adjusted

(Non-GAAP)

Reported

(GAAP)

Adjustments (1)

Adjusted

(Non-GAAP)

(in thousands, except percentages)

Segment information - Physical Therapy Operations

Salaries and related costs (2)

282,146

(286)

281,860

239,829

Operating costs (2)(3)

394,060

(555)

393,505

336,917

(4,109)

332,808

Gross profit

92,877

555

93,432

77,830

4,109

81,939

Gross profit margin

18.8%

19.0%

18.5%

19.5%

Number of visits

4,556,768

3,920,388

Salaries and related costs per visit (2)

61.92

(0.06)

61.86

61.17

Operating costs per visit (2)(3)

86.48

(0.12)

86.36

85.94

(1.05)

84.89

(1) Certain incentive costs related to the Metro acquisition and gains or losses related to clinic closures, as applicable.

(2) Excludes costs related to management contracts.

(3) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments. Prior year amounts were reallocated to conform with current presentation.

* Not meaningful

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL AND PERFORMANCE METRICS

Revenue Metrics

Net Rate Per Patient Visit (1)

Patient Visits (1)

Average Visits Per Clinic Per Day (2)

2025

2024

2025

2024

2025

2024

First quarter

105.66

103.37

1,443,805

1,268,002

31.2

29.5

Second quarter

105.33

105.05

1,558,756

1,335,335

32.7

30.6

Third quarter

105.54

105.65

1,554,207

1,317,051

32.2

30.1

Fourth quarter

104.73

1,432,801

31.6

Year

104.71

4,556,768

5,353,189

30.4

(1) See definition of the metrics above in the Glossary of Terms – Revenue Metrics on page 7.

(2) Excludes home-care visits.

Clinic Count Roll Forward (1)

2025

2024

Owned

Managed

Total

Owned

Managed

Total

Number of clinics, beginning of period

722

761

671

714

Q1 additions

Q1 closed or sold

(7)

(2)

(9)

(6)

(2)

(8)

Number of clinics, end of period

729

766

679

720

Q2 additions

Q2 closed or sold

(3)

(1)

(4)

(5)

Number of clinics, end of period

732

768

681

722

Q3 additions

Q3 closed or sold

(3)

(4)

(7)

(32)

(2)

(34)

Number of clinics, end of period

745

779

661

700

Q4 additions

Q4 closed or sold

(2)

Number of clinics, end of period

722

761

Year-to-date 2025 and full-year 2024 additions

Year-to-date 2025 and full-year 2024 sold or closed

(13)

(7)

(20)

(45)

(4)

(49)

(1) Excludes the home care business.