US Physical Therapy (USPH) 15th Annual Midwest IDEAS Investor Conference summary

Business model and growth strategy

• Operates nearly 700 outpatient orthopedic physical therapy facilities across 42 states, using a partnership model where local partners retain about 30% equity and their own brands.

• Grows through both organic expansion (adding 25–30 new facilities annually) and selective acquisitions, focusing on high-quality providers rather than distressed assets.

• Acquisitions maintain local brands to avoid community disruption and leverage established reputations.

• Partners manage local care and relationships, while centralized support handles back-office functions, compliance, and growth initiatives.

• Clinics are capital efficient, with startup costs of $170,000–$180,000 and payback within three years.

Market dynamics and competitive landscape

• The U.S. physical therapy market is estimated at $30–$40 billion, with about 37,000 clinics and no single provider holding more than 10% market share.

• Market remains highly fragmented, with consolidation ongoing but significant runway remaining.

• Company is seen as a high-integrity consolidator, offering long-term stability compared to private equity buyers.

• Expansion into states like California and New York is now possible due to changing regulations and market conditions.

Financial performance and capital structure

• Maintains a strong balance sheet with over $100 million in cash, $140 million in fixed, hedged borrowings, and a $175 million credit facility.

• Cash flow is robust, supporting both growth and a dividend (currently about 2% yield, paid since 2011/2012).

• Blended acquisition multiples average 7–7.5x EBITDA; clinics generate strong cash flow and high returns on invested capital.

• Minimal net debt and disciplined capital deployment have enabled hundreds of millions in growth investment.