U.S. Physical Therapy Reports Record First Quarter Revenue, Reaffirms Full Year Guidance

Published: 2026-05-06 16:16:04 ET USPH

Published on 05/06/2026 at 04:16 pm EDT

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 (“IIP”), today reported results for the first quarter ended March 31, 2026 (“Q1 2026”).

Chris Reading, Chairman and Chief Executive Officer commented, “I want to begin by thanking our partners and clinical teams for their tremendous care and their continued efforts on behalf of our patients and across several important initiatives this year. These include a partial virtualization of our front desk; company-wide rollout of ambient-listening technology to improve documentation efficiency and allow for more patient-centric interaction; remote therapeutic monitoring for our traditional Medicare patients to facilitate greater home program adherence positively impacting care and outcomes; and targeted cash-based program expansion across our top partnerships impacting care and outcomes as well as overall margin. These initiatives, along with our very important hospital alliance focus, will bear fruit particularly in the second half of the year.”

Mr. Reading continued “Additionally, and importantly, we recently completed our expanded and upgraded credit facility which gives us tremendous capacity for continued growth in physical therapy, industrial injury prevention, and our new and very focused efforts to expand our hospital alliance footprint. In this first quarter we had very positive announcements across all of those initiatives with more good things to come.”

These are non-GAAP Measures. Please refer to the section titled “Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measure” for the definition and reconciliation of Adjusted EBITDA, Operating Results and other non-GAAP measures to the most directly comparable GAAP measure.

FIRST QUARTER RESULTS

(1)

BALANCE SHEET AND CASH FLOW

FULL YEAR EARNINGS GUIDANCE

Management reaffirmed the Company’s full year 2026 adjusted EBITDA guidance of $102.0 million to $106.0 million, which includes the partial year impact of two previously announced hospital affiliations and the January 1, 2026 Medicare rate increase.

The two previously announced strategic hospital alliances are expected to be accretive to the Company’s revenue, EBITDA, and margins. Upon full integration of the 60 Metro clinics, the incremental annualized EBITDA contribution to Metro is expected to be at least $12 million, with the corresponding impact to USPH estimated to be at least $6 million, reflecting its 50% ownership interest in Metro. Upon full integration of the second subsidiary partner’s ten clinics, the incremental annualized EBITDA contribution to the subsidiary partner is expected to be at least $2 million, with the corresponding impact to USPH estimated to be at least $1.3 million, reflecting its 65% ownership interest in the subsidiary partner. The Company’s 2026 guidance reflects the phased ramp-up of these affiliations beginning May 2026.

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 May 7, 2026, to discuss the Company’s financial results for the first quarter ended March 31, 2026. Interested parties may participate in the call by dialing (800) 445-7795 (Primary) or (785) 424-1699 (Alternate) and conference ID of USPHQ126. 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 August 5, 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, 2025, filed with the Securities and Exchange Commission (“SEC”) on February 27, 2026 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, 2025, 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 783 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 DATA)

Three Months Ended

March 31, 2026

March 31, 2025

Net patient revenue

164,328

152,547

Other revenue

33,958

31,241

Net revenue

198,286

183,788

Operating cost

Salaries and related costs

119,488

111,249

Rent, supplies, contract labor and other

38,452

33,844

Depreciation and amortization

5,658

5,540

Provision for credit losses

2,004

1,848

Clinic closure costs - lease and other

(68

)

242

Total operating cost

165,534

152,723

Gross profit

32,752

31,065

Corporate office costs

18,274

16,245

Loss (gain) on change in fair value of contingent earn-out consideration

1,997

(4,822

)

Operating income

12,481

19,642

Other (expense) income

Interest expense, debt and other

(2,791

)

(2,279

)

Interest income from investments

Change in revaluation of put-right liability

363

(404

)

Equity in earnings of unconsolidated affiliate

363

393

Loss on sale of a partnership

(123

)

Other

131

Total other expense

(1,918

)

(2,314

)

Income before taxes

10,563

17,328

Provision for income taxes

2,407

3,860

Net income

8,156

13,468

Less: Net income attributable to non-controlling interest:

Redeemable non-controlling interest - temporary equity

(2,514

)

(2,012

)

Non-controlling interest - permanent equity

(604

)

(1,557

)

(3,118

)

(3,569

)

Net income attributable to USPH shareholders

5,038

9,899

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

(0.12

)

0.80

Shares used in computation - basic and diluted

15,167

15,132

Dividends declared per common share

0.46

0.45

(1) See Reconciliation of GAAP to Non-GAAP Measures section 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

March 31, 2026

March 31, 2025

Net income

8,156

13,468

Other comprehensive gain:

Unrealized gain (loss) on cash flow hedge

360

(1,331

)

Tax effect at statutory rate (federal and state)

(96

)

340

Comprehensive income

8,420

12,477

Comprehensive income attributable to non-controlling interest

(3,118

)

(3,569

)

Comprehensive income attributable to USPH shareholders

5,302

8,908

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

Three Months Ended

Variance

March 31, 2026

March 31, 2025

(In thousands, except percentages and per visit data)

Physical Therapy Operations

Revenue related to:

Mature Clinics (1)

153,579

149,866

3,713

2.5

Clinic additions (2)

10,540

847

9,693

(10)

Clinics sold or closed (3)

209

1,834

(1,625

)

(10)

Net patient revenue

164,328

152,547

11,781

7.7

Other (4)

3,348

3,861

(513

)

(13.3

Total

167,676

156,408

11,268

7.2

Operating costs (5)(7)

141,179

130,449

10,730

8.2

Gross profit

26,497

25,959

538

2.1

IIP

Net revenue

30,610

27,380

3,230

11.8

Operating costs (7)

24,355

22,274

2,081

9.3

Gross profit

6,255

5,106

1,149

22.5

Financial and operating metrics (not in thousands):

Net rate per patient visit (1)

106.49

105.66

0.83

0.8

Patient visits (1)

1,543,144

1,443,805

99,339

6.9

Average daily visits per clinic (1)

31.8

31.2

0.6

1.9

Physical therapy operations gross profit margin (7)

15.8

16.6

Physical therapy operations adjusted gross profit margin (4)(5)(6)(7)(9)

16.1

16.8

IIP gross profit margin (7)

20.4

18.6

Adjusted salaries and related costs per visit (6)(8)

64.20

63.53

0.67

1.1

Adjusted operating costs per visit (6)(7)(8)(9)

90.31

88.77

1.54

1.7

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

(2) Includes 13 owned clinics added during Q1 2026 and 47 owned clinics added during the year ended December 31, 2025. See Clinic Count Roll Forward included in the Supplemental Financial and Performance Metrics table for additional information.

(3) Includes four owned clinics closed during Q1 2026 and 23 owned clinics closed during the year ended December 31, 2025. See Clinic Count Roll Forward included in the Supplemental Financial and Performance Metrics table for additional information.

(4) Includes revenues from management contracts.

(5) Includes costs from management contracts.

(6) Excludes incentive costs related to the Metro acquisition. See the section titled Reconciliation of non-GAAP measures to the most directly comparable GAAP measure.

(7) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments for Q1 2025 amounts to conform with current presentation.

(8) Per visit costs exclude management contract costs.

(9) Excludes certain legal costs related to business acquisitions and clinic closure costs. See the section titled Reconciliation of non-GAAP measures to the most directly comparable GAAP measure.

(10) 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)

2026

2025

2026

2025

2026

2025

First quarter

106.49

105.66

1,543,144

1,443,805

31.8

31.2

Second quarter

105.33

1,558,756

32.7

Third quarter

105.54

1,554,207

32.2

Fourth quarter

106.49

1,593,336

32.7

Year

105.76

6,150,104

32.2

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

(2) Excludes home-care visits.

Clinic Count Roll Forward (1)

2026

2025

Owned

Managed

Total

Owned

Managed

Total

Number of clinics, beginning of period

746

780

722

761

Q1 additions

Q1 closed or sold

(4)

(8)

(12)

(7)

(2)

(9)

Number of clinics, end of period

755

783

729

766

Q2 additions

Q2 closed or sold

(3)

(1)

(4)

Number of clinics, end of period

732

768

Q3 additions

Q3 closed or sold

(3)

(4)

(7)

Number of clinics, end of period

745

779

Q4 additions

Q4 closed or sold

(10)

Number of clinics, end of period

746

780

Q1 2026 and Q1 2025 additions

Q1 2026 and Q1 2025 closed or sold

(4)

(8)

(12)

(7)

(2)

(9)

(1) Excludes the home care business.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)

March 31, 2026

December 31, 2025

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

28,439

35,570

Patient accounts receivable, less provision for credit losses of $3,902 and $3,775, respectively

69,082

64,249

Accounts receivable - other

27,642

24,087

Other current assets

13,946

16,084

Total current assets

139,109

139,990

Fixed assets:

Furniture and equipment

70,376

67,891

Leasehold improvements

61,375

58,985

Fixed assets, gross

131,751

126,876

Less accumulated depreciation and amortization

(93,129

)

(91,225

)

Fixed assets, net

38,622

35,651

Operating lease right-of-use assets

149,202

144,197

Investment in unconsolidated affiliate

12,443

12,275

Goodwill

715,874

692,392

Other identifiable intangible assets, net

179,819

172,861

Other assets

6,988

6,644

Total assets

1,242,057

1,204,010

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

NON-CONTROLLING INTEREST

Current liabilities:

Accounts payable - trade

6,758

6,059

Accrued expenses

56,960

80,982

Current portion of operating lease liabilities

42,779

42,134

Current portion of term loan and notes payable

10,801

9,865

Total current liabilities

117,298

139,040

Notes payable, net of current portion

569

417

Revolving facility

74,500

30,500

Term loan, net of current portion and deferred financing costs

118,971

121,677

Deferred taxes

30,775

28,391

Operating lease liabilities, net of current portion

115,212

110,572

Other long-term liabilities

1,861

3,214

Total liabilities

459,186

433,811

Redeemable non-controlling interest - temporary equity

313,437

293,311

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,

17,526,431 and 17,418,621 shares issued, respectively

175

174

Additional paid-in capital

288,140

285,522

Accumulated other comprehensive gain

978

714

Retained earnings

216,876

227,216

Treasury stock at cost, 2,296,059 shares

(37,194

)

(37,194

)

Total USPH shareholders’ equity

468,975

476,432

Non-controlling interest - permanent equity

459

456

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

469,434

476,888

Total liabilities, redeemable non-controlling interest,

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

1,242,057

1,204,010

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

Three Months Ended

March 31, 2026

March 31, 2025

OPERATING ACTIVITIES

Net income including non-controlling interest

8,156

13,468

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

Depreciation and amortization

6,000

5,867

Provision for credit losses

2,004

1,848

Equity-based awards compensation expense

2,310

1,771

Amortization of debt issue costs

105

106

Change in deferred income taxes

3,288

5,242

Change in revaluation of put-right liability

(363

)

404

Change in fair value of contingent earn-out consideration

1,997

(4,822

)

Equity of earnings in unconsolidated affiliate

(363

)

(393

)

Loss on sale of clinics and fixed assets

Loss on sale of a partnership

123

Changes in operating assets and liabilities:

Patient accounts receivable, net

(5,887

)

(7,341

)

Accounts receivable - other

(2,596

)

774

Other current and long term assets

2,178

(6,209

)

Accounts payable and accrued expenses

(11,992

)

(14,229

)

Other long-term liabilities

(1,128

)

(1,284

)

Net cash provided by (used in) operating activities

3,808

(4,675

)

INVESTING ACTIVITIES

Purchase of fixed assets

(5,373

)

(2,579

)

Purchase of majority interest in businesses, net of cash acquired

(21,203

)

(4,211

)

Purchase of redeemable non-controlling interest, temporary equity

(5,113

)

(907

)

Purchase of non controlling interest, permanent equity

(8,973

)

Proceeds on sale of non-controlling interest, permanent equity

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

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

221

Distributions from unconsolidated affiliate

195

310

Proceeds on sale of partnership interest, clinics and fixed assets

700

Other

324

Net cash (used in) investing activities

(39,801

)

(6,628

)

FINANCING ACTIVITIES

Proceeds from revolving facility

77,000

17,000

Payments on revolving facility

(33,000

)

Distributions to non-controlling interest, permanent and temporary equity

(4,401

)

(3,653

)

Payments on term loan

(1,875

)

(3,750

)

Principal payments on notes payable

(575

)

(473

)

Payment of contingent consideration

(8,287

)

Net cash provided by financing activities

28,862

9,124

Net (decrease) in cash and cash equivalents

(7,131

)

(2,179

)

Cash and cash equivalents - beginning of period

35,570

41,362

Cash and cash equivalents - end of period

28,439

39,183

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the period for:

Income taxes

332

7,359

Interest paid

2,837

2,205

Non-cash investing and financing transactions during the period:

Purchase of businesses - seller financing portion

500

Purchase of redeemable non-controlling interest, temporary equity, recorded in accrued liabilities

6,672

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

1,259

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

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

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

3,649

646

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

527

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

180

Dividends payable to USPH shareholders

7,006

6,836

U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURE

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 PERCENTAGES AND PER SHARE DATA)

Three Months Ended

March 31, 2026

March 31, 2025

Adjusted EBITDA (a non-GAAP measure)

Net income attributable to USPH shareholders

5,038

9,899

Adjustments:

Provision for income taxes

2,407

3,860

Depreciation and amortization

6,000

5,867

Interest expense, debt and other, net

2,791

2,279

Interest income from investments

(16

)

(24

)

Equity-based awards compensation expense

2,310

1,771

Change in revaluation of put-right liability

(363

)

404

Loss (gain) on change in fair value of contingent earn-out consideration

1,997

(4,822

)

Clinic closure costs (1)

(68

)

242

Business acquisition related costs (2)

537

480

ERP implementation costs (3)

308

Loss on sale of a partnership

123

Other income

(131

)

(75

)

Allocation to non-controlling interests

(569

)

(527

)

20,241

19,539

Operating Results (a non-GAAP measure)

Net income attributable to USPH shareholders

5,038

9,899

Adjustments:

Loss (gain) on change in fair value of contingent earn-out consideration

1,997

(4,822

)

Change in revaluation of put-right liability

(363

)

404

Clinic closure costs (1)

145

242

Business acquisition related costs (2)

537

480

ERP implementation costs (3)

308

Loss on sale of a partnership

123

Allocation to non-controlling interest

)

(10

)

Tax effect at statutory rate (federal and state)

(696

)

935

6,963

7,313

Operating Results per share (a non-GAAP measure)

0.46

0.48

Earnings per share

Computation of earnings per share - USPH shareholders:

Net income attributable to USPH shareholders

5,038

9,899

Charges to retained earnings:

Revaluation of redeemable non-controlling interest

(9,369

)

2,903

Tax effect at statutory rate (federal and state)

2,487

(742

)

(1,844

)

12,060

Earnings (loss) per share (basic and diluted)

(0.12

)

0.80

Shares used in computation - basic and diluted

15,167

15,132

(1) Costs associated with the closure of four and seven clinics (owned) during Q1 2026 and Q1 2025, respectively and for purposes of Operating Results includes accelerated depreciation related to closed clinics. See Clinic Count Roll Forward for additional information.

(2) Primarily consists of retention bonuses, as well as legal and consulting expenses related to the acquisition of equity interests in certain partnerships, and includes costs associated with entering into hospital affiliation contracts.

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

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

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

Three Months Ended

March 31, 2026

As Reported (GAAP)

Clinic Closure Costs (1)

Metro Incentive Costs (2)

Business Acquisition Related Costs (3)

ERP Implementation Costs (4)

Change in Fair Value of Contingent Earn-out Consideration

As Adjusted (Non-GAAP)

(in thousands, except per visit data and percentages)

Corporate office costs

18,274

(430

)

(308

)

17,536

Corporate office costs as a percentage of revenue

9.2

(0.2

8.8

Operating income

12,481

145

260

537

308

1,997

15,728

Segment information - Physical Therapy Operations

Salaries and related costs, clinics (5)

99,325

(260

)

99,065

Operating costs, clinics (5)

139,872

(145

)

(260

)

(107

)

139,360

Gross profit

26,497

145

260

107

27,009

Gross profit margin

15.8

16.1

Number of visits

1,543,144

Salaries and related costs per visit (5)

64.37

(0.17

)

64.20

Operating costs per visit (5)

90.64

(0.09

)

(0.17

)

(0.07

)

90.31

(1) Costs associated with the closure of four clinics (owned) during Q1 2026. Also includes accelerated depreciation related to closed clinics. See Clinic Count Roll Forward for additional information.

(2) Certain earnout bonuses and incentive costs related to the Metro acquisition.

(3) Includes expenses related to the acquisitions of equity interests in certain partnerships and includes costs associated with entering into hospital affiliation contracts.

(4) Includes costs related to a one-time financial and human resources systems upgrade.

(5) Excludes costs related to management contracts.

* Not meaningful

Three Months Ended

March 31, 2025

As Reported (GAAP)

Clinic Closure Costs (1)

Metro Incentive Costs (2)

Business Acquisition Related Costs (3)

ERP Implementation Costs (4)

Change in Fair Value of Contingent Earn-out Consideration

As Adjusted (Non-GAAP)

(in thousands, except per visit data and percentages)

Corporate office costs

16,245

(480

)

(62

)

15,703

Corporate office costs as a percentage of revenue

8.8

(0.3

8.5

Operating income

19,642

242

480

(4,822

)

15,679

Segment information - Physical Therapy Operations

Salaries and related costs, clinics (5)

91,799

(75

)

91,724

Operating costs, clinics (5)(6)

128,479

(242

)

(75

)

128,162

Gross profit

25,959

242

26,276

Gross profit margin

16.6

16.8

Number of visits

1,443,805

Salaries and related costs per visit (5)

63.58

(0.05

)

63.53

Operating costs per visit (5) (6)

88.99

(0.17

)

(0.05

)

88.77

(1) Costs associated with the closure of seven clinics (owned) during Q1 2025. See Clinic Count Roll Forward for additional information.

(2) Certain earnout bonuses and incentive costs related to the Metro acquisition.

(3) Includes expenses related to the acquisitions of equity interests in certain partnerships.

(4) Includes costs related to a one-time financial and human resources systems upgrade.

(5) Excludes costs related to management contracts.

(6) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments for Q1 2025 amounts to conform with current presentation.

* Not meaningful

View source version on businesswire.com: https://www.businesswire.com/news/home/20260505846206/en/