U.S. Physical Therapy, Inc.

U.S. Physical Therapy, Inc. (USPH - Snapshot Report) has acquired controlling stakes in 2 rehabilitation practices in the past 4 months. Earnings remain strong and are projecting growth rates around 19%.

Company Description

U.S. Physical Therapy, Inc. operates outpatient physical and occupational therapy clinics which provide post-operative care and treatment for a variety of orthopedic-related disorders and sports-related injuries.

As of August, the company operates 364 clinics in 41 states. US Physical has more that 1,600 employees, is head quartered in Houston, Texas, and has a market cap of $158 million.

Acquired Stake in Rehab Management Group

On Oct 8 U.S. Physical announced an acquisition of a 65% interest in Rehab Management Group. RMG focuses on nerve and muscle function with services including electro-diagnostic analysis, intra articular joint, and lumbar osteoarthritis programs. The majority stake in RMG, which produces $800 thousand in earnings, was purchased for $3.1 million in cash.

The company also acquired a 65% interest in a Mid-Atlantic outpatient group in June. The group operates 9 clinics, producing over $5.5 million in annual revenue.

Coming Off of 4 solid Quarters

U.S. Physical announced its second earnings surprise in the past 4 quarters on Aug 7. The company met expectations in the other 2 quarters. Earnings per share were 24 cents, while analysts had forecast 23 cents.

Net income rose 24% year-over-year to $2.9 million. An increase of 28% in patient visits drove net revenues up 34% to $47.4 million.

Clinic operating costs rose slightly from 73.6% in the second quarter last year to 74.7% this quarter.

During the first half of the year, the company added a net total of 15 clinics.

Estimates are strong

The consensus estimate has been slowly rising as the U.S. Physical approaches its third-quarter announcement on Nov 6. Estimates for the current year climbed 2 cents over the past 3 months and are now averaging 89 cents per share.

The projections would yield a growth rate of almost 19%. Next years forecast also calls for nearly 19% growth to $1.06 per share.

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