US Physical Therapy (USPH) 2024 Southwest IDEAS Conference summary

Company overview and market position

• Operates 752 clinics in 43 states, with a diversified payer mix and strong national presence.

• 86% of revenue comes from physical therapy, 14% from industrial injury prevention.

• The market is highly fragmented, with significant room for consolidation; the company is the only major strategic consolidator.

• Largest states by clinic count are Texas, Tennessee, Michigan, Virginia, Oregon, and a recent entry into New York with 50 new clinics.

• Addressable market expected to reach $40 billion by 2025, driven by aging and active population demographics.

Growth strategy and partnership model

• Growth driven by both acquisitions and de novo clinic openings, averaging 30–35 new clinics per year.

• Partnership model aligns interests by acquiring 70–80% of partner groups, with founders retaining 20–30% and sharing in monthly cash distributions.

• De novos are managed by local partners with established market knowledge, resulting in high success rates.

• Over 50 acquisitions since 2005, with recent large-scale deals such as the 50-clinic New York acquisition.

• Acquisition multiples typically range from 6x–9x EBITDA, with higher multiples for high-growth assets.

Financial performance and capital allocation

• Maintains a strong balance sheet with $117 million in cash pre-acquisition, net debt of $25 million, and low leverage.

• EBITDA guidance for the year is $80–$85 million; leverage ratio remains manageable post-acquisition.

• Margins in PT business are 18–20%, and 22–23% in industrial injury prevention.

• Dividend yield is maintained between 1.5% and 2%, with annual increases since 2010.

• De novo clinics require modest capital, about $150,000 each, with annual spend around $6 million.