Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | U S PHYSICAL THERAPY INC /NV | ||
Entity Central Index Key | 0000885978 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 778.6 | ||
Entity Common Stock, Shares Outstanding | 12,774,600 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Address, State or Province | TX |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 23,548 | $ 23,368 |
Patient accounts receivable, less allowance for doubtful accounts of $2,698 and $2,672, respectively | 46,228 | 44,751 |
Accounts receivable - other | 9,823 | 6,742 |
Other current assets | 5,787 | 4,353 |
Total current assets | 85,386 | 79,214 |
Fixed assets: | ||
Furniture and equipment | 54,942 | 52,611 |
Leasehold improvements | 33,247 | 31,712 |
Fixed assets, gross | 88,189 | 84,323 |
Less accumulated depreciation and amortization | 66,099 | 64,154 |
Fixed assets, net | 22,090 | 20,169 |
Operating lease right-of-use assets | 81,586 | 0 |
Goodwill | 317,676 | 293,525 |
Other identifiable intangible assets, net | 52,588 | 48,828 |
Other assets | 1,519 | 1,430 |
Total assets | 560,845 | 443,166 |
Current liabilities: | ||
Accounts payable - trade | 2,494 | 2,019 |
Accrued expenses | 30,855 | 38,493 |
Current portion of operating lease liabilities | 26,486 | 0 |
Current portion of notes payable | 728 | 1,434 |
Total current liabilities | 60,563 | 41,946 |
Notes payable, net of current portion | 4,361 | 402 |
Revolving line of credit | 46,000 | 38,000 |
Deferred taxes | 10,071 | 9,012 |
Deferred rent | 0 | 2,159 |
Operating lease liabilities, net of current portion | 60,258 | 0 |
Other long-term liabilities | 141 | 829 |
Total liabilities | 181,394 | 92,348 |
Redeemable non-controlling interests - temporary equity | 137,750 | 133,943 |
Commitments and contingencies (Note 10) | ||
U.S. Physical Therapy, Inc. ("USPH") shareholders' equity: | ||
Preferred stock, $.01 par value, 500,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value, 20,000,000 shares authorized, 14,989,337 and 14,899,233 shares issued, respectively | 150 | 149 |
Additional paid-in capital | 87,383 | 80,028 |
Retained earnings | 184,352 | 167,396 |
Treasury stock at cost, 2,214,737 shares | (31,628) | (31,628) |
Total USPH shareholders' equity | 240,257 | 215,945 |
Non-controlling interests - permanent equity | 1,444 | 930 |
Total USPH shareholders' equity and non-controlling interests | 241,701 | 216,875 |
Total liabilities, redeemable non-controlling interests, USPH shareholders' equity and non-controlling interests | $ 560,845 | $ 443,166 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Allowance for doubtful accounts, patient accounts receivable | $ 2,698 | $ 2,672 |
U. S. Physical Therapy, Inc. shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 14,989,337 | 14,899,233 |
Treasury stock, shares (in shares) | 2,214,737 | 2,214,737 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues [Abstract] | |||
Net revenues | $ 481,969 | $ 453,911 | $ 414,051 |
Operating costs: | |||
Salaries and related costs | 274,233 | 259,228 | 237,067 |
Rent, supplies, contract labor and other | 90,379 | 88,426 | 82,096 |
Provision for doubtful accounts | 4,858 | 4,603 | 3,672 |
Closure costs | 25 | (9) | 599 |
Total operating costs | 369,495 | 352,248 | 323,434 |
Gross Profit | 112,474 | 101,663 | 90,617 |
Corporate office costs | 45,049 | 41,349 | 35,889 |
Operating income | 67,425 | 60,314 | 54,728 |
Gain on sale of partnership interest | 5,514 | 0 | 0 |
Gain on derecognition of debt | 0 | 1,846 | 0 |
Interest and other income, net | 46 | 93 | 88 |
Interest expense: | |||
Mandatorily redeemable non-controlling interests - change in redemption value | 0 | 0 | (12,894) |
Mandatorily redeemable non-controlling interests - earnings allocable | 0 | 0 | (6,055) |
Debt and other | (2,079) | (2,042) | (2,111) |
Total interest expense | (2,079) | (2,042) | (21,060) |
Income before taxes | 70,906 | 60,211 | 33,756 |
Provision for income taxes | 13,647 | 11,369 | 6,032 |
Net income | 57,259 | 48,842 | 27,724 |
Less: net income attributable to non-controlling interests: | |||
Non-controlling interests - permanent equity | (6,561) | (5,536) | (5,224) |
Redeemable non-controlling interests - temporary equity | (10,659) | (8,433) | (244) |
Net income attributable to non-controlling interests | (17,220) | (13,969) | (5,468) |
Net income attributable to USPH shareholders | $ 40,039 | $ 34,873 | $ 22,256 |
Basic and diluted earnings per share attributable to USPH shareholders (in dollars per share) | $ 2.45 | $ 1.31 | $ 1.76 |
Shares used in computation - basic and diluted (in shares) | 12,756 | 12,666 | 12,570 |
Dividends declared per common share (in dollars per share) | $ 1.14 | $ 0.92 | $ 0.80 |
Net Patient Revenues [Member] | |||
Revenues [Abstract] | |||
Net revenues | $ 433,345 | $ 417,703 | $ 389,226 |
Other Revenues [Member] | |||
Revenues [Abstract] | |||
Net revenues | $ 48,624 | $ 36,208 | $ 24,825 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total Shareholders' Equity [Member] | Non-Controlling Interests [Member] | Total |
Beginning balance at Dec. 31, 2016 | $ 147 | $ 68,687 | $ 150,342 | $ (31,628) | $ 187,548 | $ 1,140 | $ 188,688 |
Beginning balance (in shares) at Dec. 31, 2016 | 14,733 | (2,215) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of restricted stock, net of cancellations | $ 1 | 0 | 0 | $ 0 | 1 | 0 | 1 |
Issuance of restricted stock, net of cancellations (in shares) | 76 | 0 | |||||
Revaluation of redeemable non-controlling interest, net of tax | $ 0 | 0 | (126) | $ 0 | (126) | 0 | (126) |
Compensation expense - equity-based awards | 0 | 5,032 | 0 | 0 | 5,032 | 0 | 5,032 |
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans | 0 | 165 | 0 | 0 | 165 | 0 | 165 |
Sale of non-controlling interest, net of tax and purchases | 0 | 56 | 0 | 0 | 56 | (20) | 36 |
Dividends paid to USPT shareholders | 0 | 0 | (10,066) | 0 | (10,066) | 0 | (10,066) |
Distributions to non-controlling interest partners | 0 | 0 | 0 | 0 | 0 | (5,300) | (5,300) |
Other | 0 | 0 | 0 | 0 | 0 | 160 | 160 |
Net income attributable to non-controlling interests - permanent equity | 0 | 0 | 0 | 0 | 0 | 5,224 | 5,224 |
Net income attributable to USPH shareholders | 0 | 0 | 22,256 | 0 | 22,256 | 0 | 22,256 |
Ending balance at Dec. 31, 2017 | $ 148 | 73,940 | 162,406 | $ (31,628) | 204,866 | 1,204 | 206,070 |
Ending balance (in shares) at Dec. 31, 2017 | 14,809 | (2,215) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of restricted stock, net of cancellations | $ 1 | 0 | 0 | $ 0 | 1 | 0 | 1 |
Issuance of restricted stock, net of cancellations (in shares) | 90 | 0 | |||||
Revaluation of redeemable non-controlling interest, net of tax | $ 0 | 0 | (18,268) | $ 0 | (18,268) | 0 | (18,268) |
Compensation expense - equity-based awards | 0 | 5,939 | 0 | 0 | 5,939 | 0 | 5,939 |
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans | 0 | 373 | 0 | 0 | 373 | 0 | 373 |
Sale of non-controlling interest, net of tax and purchases | 0 | (224) | 0 | 0 | (224) | (48) | (272) |
Dividends paid to USPT shareholders | 0 | 0 | (11,664) | 0 | (11,664) | 0 | (11,664) |
Distributions to non-controlling interest partners | 0 | 0 | 0 | 0 | 0 | (5,812) | (5,812) |
Other | 0 | 0 | 49 | 0 | 49 | 50 | 99 |
Net income attributable to non-controlling interests - permanent equity | 0 | 0 | 0 | 0 | 0 | 5,536 | 5,536 |
Net income attributable to USPH shareholders | 0 | 0 | 34,873 | 0 | 34,873 | 0 | 34,873 |
Ending balance at Dec. 31, 2018 | $ 149 | 80,028 | 167,396 | $ (31,628) | 215,945 | 930 | 216,875 |
Ending balance (in shares) at Dec. 31, 2018 | 14,899 | (2,215) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of restricted stock, net of cancellations | $ 1 | 0 | 0 | $ 0 | 1 | 0 | 1 |
Issuance of restricted stock, net of cancellations (in shares) | 90 | 0 | |||||
Revaluation of redeemable non-controlling interest, net of tax | $ 0 | 0 | (8,771) | $ 0 | (8,771) | 0 | (8,771) |
Compensation expense - equity-based awards | 0 | 6,985 | 0 | 0 | 6,985 | 0 | 6,985 |
Transfer of compensation liability for certain stock issued pursuant to long-term incentive plans | 0 | 636 | 0 | 0 | 636 | 0 | 636 |
Purchase of partnership interests - redeemable non-controlling interests | 0 | (266) | 0 | 0 | (266) | (26) | (292) |
Sale of non-controlling interest, net of tax and purchases | 0 | 0 | 196 | 0 | 196 | 0 | 196 |
Dividends paid to USPT shareholders | 0 | 0 | (14,555) | 0 | (14,555) | 0 | (14,555) |
Distributions to non-controlling interest partners | 0 | 0 | 0 | 0 | 0 | (6,014) | (6,014) |
Other | 0 | 0 | 47 | 0 | 47 | (7) | 40 |
Net income attributable to non-controlling interests - permanent equity | 0 | 0 | 0 | 0 | 0 | 6,561 | 6,561 |
Net income attributable to USPH shareholders | 0 | 0 | 40,039 | 0 | 40,039 | 0 | 40,039 |
Ending balance at Dec. 31, 2019 | $ 150 | $ 87,383 | $ 184,352 | $ (31,628) | $ 240,257 | $ 1,444 | $ 241,701 |
Ending balance (in shares) at Dec. 31, 2019 | 14,989 | (2,215) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES | |||
Net income including non-controlling interests | $ 57,259 | $ 48,842 | $ 27,724 |
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities: | |||
Depreciation and amortization | 10,095 | 9,755 | 9,710 |
Provision for doubtful accounts | 4,858 | 4,603 | 3,672 |
Equity-based awards compensation expense | 6,985 | 5,939 | 5,032 |
Deferred income taxes | 4,651 | 4,813 | (4,864) |
Gain on sale of partnership interest | (5,514) | 0 | 0 |
Gain on derecognition of Debt | 0 | (1,846) | 0 |
Other | 96 | 167 | 621 |
Changes in operating assets and liabilities: | |||
Increase in patient accounts receivable | (6,376) | (3,434) | (3,447) |
Increase in accounts receivable - other | (2,499) | (1,087) | (3,022) |
(Increase) decrease in other assets | (1,878) | 345 | 2,086 |
(Decrease) increase in accounts payable and accrued expenses | (4,209) | 4,876 | 6,979 |
Increase in mandatorily redeemable non-controlling interests | 0 | 0 | 11,579 |
(Decrease) increase in other liabilities | (1,020) | 32 | 456 |
Net cash provided by operating activities | 62,448 | 73,005 | 56,526 |
INVESTING ACTIVITIES | |||
Purchase of fixed assets | (10,189) | (7,193) | (7,095) |
Purchase of majority interest in businesses | (30,597) | (16,367) | (36,682) |
Purchase of redeemable non-controlling interest, temporary equity | (8,651) | 0 | 0 |
Purchase of non-controlling interest, permanent equity | (428) | (350) | 0 |
Sales of non controlling interest-permanent equity | 207 | 0 | 121 |
Proceeds on sale of partnership interest, net | 11,601 | 0 | 0 |
Proceeds on sale of fixed assets | 64 | 1 | 81 |
Net cash used in investing activities | (37,993) | (23,909) | (43,575) |
FINANCING ACTIVITIES | |||
Distributions to non-controlling interests, permanent and temporary equity | (16,235) | (15,646) | (5,572) |
Cash dividends paid to shareholders | (14,555) | (11,664) | (10,066) |
Proceeds from revolving line of credit | 145,000 | 103,000 | 93,000 |
Payments on revolving line of credit | (137,000) | (119,000) | (85,000) |
Payments to settle mandatorily redeemable non-controlling interests | 0 | (265) | (2,361) |
Principal payments on notes payable | (1,433) | (4,044) | (1,227) |
Other | (52) | (42) | 161 |
Net cash used in financing activities | (24,275) | (47,661) | (11,065) |
Net increase in cash and cash equivalents | 180 | 1,435 | 1,886 |
Cash and cash equivalents - beginning of period | 23,368 | 21,933 | 20,047 |
Cash and cash equivalents - end of period | 23,548 | 23,368 | 21,933 |
Cash paid during the period for: | |||
Income taxes | 9,856 | 9,183 | 8,543 |
Interest | 1,890 | 2,357 | 2,113 |
Non-cash investing and financing transactions during the period: | |||
Purchase of businesses - seller financing portion | 4,300 | 950 | 2,150 |
Purchase of business - payable to common shareholders of acquired business | 502 | 0 | 0 |
Notes payable related to purchase of redeemable non-controlling interest, temporary equity | 283 | 0 | 0 |
Notes payable related to purchase of non-controlling interest, permanent equity | 103 | 0 | 0 |
Notes receivable related to sale of partnership interest - redeemable non-controlling interest | $ 2,870 | $ 0 | $ 0 |
Organization, Nature of Operati
Organization, Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Nature of Operations and Basis of Presentation [Abstract] | |
Organization, Nature of Operations and Basis of Presentation | 1. Organization, Nature of Operations and Basis of Presentation U.S. Physical Therapy, Inc. and its subsidiaries (together, the “Company”) operate outpatient physical therapy clinics that provide pre-and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurological-related injuries and rehabilitation of injured workers. As of December 31, 2019, the Company owned and/or operated 583 clinics in 40 states. The clinics’ business primarily originates from physician referrals. The principal sources of payment for the clinics’ services are managed care programs, commercial health insurance, Medicare/Medicaid, workers’ compensation insurance and proceeds from personal injury cases. In addition to the Company’s ownership and operation of outpatient physical therapy clinics, it also manages physical therapy facilities for third parties, such as physicians and hospitals, with 26 such third-party facilities under management as of December 31, 2019. In March 2017, the Company acquired a 55% interest in the initial industrial injury prevention business. On April 30, 2018, the Company acquired a 65% interest in another business in the industrial injury prevention sector. On April 30, 2018, the Company combined the two businesses. After the combination, the Company owned a 59.45% interest in the combined business, Briotix Health, Limited Partnership (“Briotix Health”), the Company’s industrial injury prevention operation. On April 11, 2019, the Company acquired a third company that is a provider of industrial injury prevention services. The acquired company specializes in delivering injury prevention and care, post offer employment testing, functional capacity evaluations and return-to-work services. It performs these services across a network in 45 states including onsite at eleven client locations. The business was then combined with Briotix Health increasing the Company’s ownership position in the partnership to approximately 76.0%. Services provided include onsite injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations and ergonomic assessments. The majority of these services are contracted with and paid for directly by employers, including a number of Fortune 500 companies. Other clients include large insurers and their contractors. These services are performed through Industrial Sports Medicine Professionals, consisting of both physical therapists and specialized certified athletic trainers (ATCs). In addition to the above acquired interests in the industrial injury prevention business, during the last three years, the Company completed the following multi-clinic acquisitions: Acquisition Date % Interest Acquired Number of Clinics 2019 September 2019 Acquisition September 30, 2019 67 % 11 2018 August 2018 Acquisition August 31 70 % 4 2017 January 2017 Acquisition January 1 70 % 17 May 2017 Acquisition May 31 70 % 4 June 2017 Acquisition June 30 60 % 9 October 2017 Acquisition October 31 70 % 9 Also during 2019, the Company purchased the assets and business of one physical therapy clinic in a separate transaction. The clinic operates as a satellite clinic of one of the existing partnerships. Besides the multi-clinic acquisition in 2018, the Company, through several of its majority owned Clinic Partnerships, acquired five separate clinic practices. These practices operate as satellites of the respective existing Clinic Partnerships. During 2017, the Company purchased the assets and business of two physical therapy clinics in separate transactions. One clinic was consolidated with an existing clinic and the other operates as a satellite clinic of one of the existing partnerships. The results of operations of the acquired clinics have been included in the Company’s consolidated financial statements since the date of their respective acquisition. The Company intends to continue to pursue additional acquisition opportunities, develop new clinics and open satellite clinics. The consolidated financial statements include the accounts of U.S. Physical Therapy, Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated. The Company primarily operates through subsidiary clinic partnerships, in which the Company generally owns a 1% general partnership interest and a 24% to 99% limited partnership interest. The managing therapist of each clinic owns the remaining limited partnership interest in the majority of the clinics (hereinafter referred to as “Clinic Partnership”). To a lesser extent, the Company operates some clinics through wholly-owned subsidiaries under profit sharing arrangements with therapists (hereinafter referred to as “Wholly-Owned Facilities”). Clinic Partnerships For non-acquired Clinic Partnerships, the earnings and liabilities attributable to the non-controlling interests, typically owned by the managing therapist, directly or indirectly, are recorded within the balance sheets and income statements as non-controlling interests – permanent equity. For acquired Clinic Partnerships with redeemable non-controlling interests, the earnings attributable to the redeemable non-controlling interests are recorded within the consolidated statements of income line item – net income attributable to redeemable non-controlling interests – temporary equity redeemable non-controlling interests – temporary equity Prior to 2018, for acquired Clinic Partnerships with mandatorily redeemable non-controlling interests, the earnings and liabilities attributable to the non-controlling interest are recorded within the consolidated statements of income line item: Interest expense – mandatorily redeemable non-controlling interests – earnings allocable. Effective December 31, 2017, the Company entered into amendments to its acquired limited partnership agreements replacing the mandatory redemption feature. No monetary consideration was paid to the partners to amend the agreements. The amended limited partnership agreements provide that, upon certain events, the Company has a call right (the “Call Right”) and the selling entity has a put right (the “Put Right”) for the purchase and sale of the limited partnership interest held by the partner. Once triggered, the Put Right and the Call Right do not expire, even upon an individual partner’s death, and contain no mandatory redemption feature. The purchase price of the partner’s limited partnership interest upon the exercise of either the Put Right or the Call Right is calculated per the terms of the respective agreements. The Company accounted for the amendment of its limited partnership agreements as an extinguishment of the outstanding Seller Entity Interests, as defined in Note 5, classified as liabilities through the issuance of new Seller Entity Interests classified in temporary equity. Pursuant to ASC 470-50-40-2, the Company removed the outstanding liability-classified Seller Entity Interests at their carrying amounts, recognized the new temporary-equity-classified Seller Entity Interests at their fair value, and recorded no gain or loss on extinguishment as management believes the redemption value (i.e. the carrying amount) and fair value are the same. In summary, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) were reclassified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2017 consolidated balance sheet. See Note 5 - Redeemable Non-Controlling Interests – for further discussion. Wholly-Owned Facilities For Wholly-Owned Facilities with profit sharing arrangements, an appropriate accrual is recorded for the amount of profit sharing due the clinic partners/directors. The amount is expensed as compensation and included in clinic operating costs—salaries and related costs. The respective liability is included in current liabilities— accrued expenses |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Cash Equivalents The Company maintains its cash and cash equivalents at financial institutions. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The combined account balances at several institutions typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Management believes that this risk is not significant. Long-Lived Assets Fixed assets are stated at cost. Depreciation is computed on the straight-line method over the estimated useful lives of the related assets. Estimated useful lives for furniture and equipment range from three to eight years and for software purchased from three to seven years. Leasehold improvements are amortized over the shorter of the related lease term or estimated useful lives of the assets, which is generally three to five years. Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of The Company reviews property and equipment and intangible assets with finite lives for impairment upon the occurrence of certain events or circumstances that indicate the related amounts may be impaired. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Goodwill Goodwill represents the excess of the amount paid and fair value of the non-controlling interests over the fair value of the acquired business assets, which include certain identifiable intangible assets. Historically, goodwill has been derived from acquisitions and, prior to 2009, from the purchase of some or all of a particular local management’s equity interest in an existing clinic. Effective January 1, 2009, if the purchase price of a non-controlling interest by the Company exceeds or is less than the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. The fair value of goodwill and other identifiable intangible assets with indefinite lives are tested for impairment annually and upon the occurrence of certain events, and are written down to fair value if considered impaired. The Company evaluates goodwill for impairment on at least an annual basis (in its third quarter) by comparing the fair value of its reporting units to the carrying value of each reporting unit including related goodwill. The Company evaluates indefinite lived tradenames using the relief from royalty method in conjunction with its annual goodwill impairment test. The Company operates a one segment business which is made up of various clinics within partnerships. The partnerships are components of regions and are aggregated to the operating segment level for the purpose of determining the Company’s reporting units when performing its annual goodwill impairment test. In 2019, 2018 and 2017, there were six regions. In addition to the six regions, in 2018 and 2019, the impairment test included a separate analysis for the industrial injury prevention business, a separate reporting unit. An impairment loss generally would be recognized when the carrying amount of the net assets of a reporting unit, inclusive of goodwill and other identifiable intangible assets, exceeds the estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using two factors: (i) earnings prior to taxes, depreciation and amortization for the reporting unit multiplied by a price/earnings ratio used in the industry and (ii) a discounted cash flow analysis. A weight is assigned to each factor and the sum of each weight times the factor is considered the estimated fair value. For 2019, the factors (i.e., price/earnings ratio, discount rate and residual capitalization rate) were updated to reflect current market conditions. The evaluation of goodwill in 2019, 2018 and 2017 did not result in any goodwill amounts that were deemed impaired. The Company has not identified any triggering events occurring after the testing date that would impact the impairment testing results obtained. The Company will continue to monitor for any triggering events or other indicators of impairment. Redeemable Non-Controlling Interests The non-controlling interests that are reflected as redeemable non-controlling interests in the consolidated financial statements consist of those that the owners and the Company have certain redemption rights, whether currently exercisable or not, and which currently, or in the future, require that the Company purchase or the owner sell the non-controlling interest held by the owner, if certain conditions are met. The purchase price is derived at a predetermined formula based on a multiple of trailing twelve months earnings performance as defined in the respective limited partnership agreements. The redemption rights can be triggered by the owner or the Company at such time as both of the following events have occurred: 1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the transaction, typically three to five years, as defined in the limited partnership agreement. The redemption rights are not automatic or mandatory (even upon death) and require either the owner or the Company to exercise its rights when the conditions triggering the redemption rights have been satisfied. On the date the Company acquires a controlling interest in a partnership, and the limited partnership agreement for such partnership contains redemption rights not under the control of the Company, the fair value of the non-controlling interest is recorded in the consolidated balance sheet under the caption – Redeemable non-controlling interests. Then, in each reporting period thereafter until it is purchased by the Company, the redeemable non-controlling interest is adjusted to the greater of its then current redemption value or initial carrying value, based on the predetermined formula defined in the respective limited partnership agreement. As a result, the value of the non-controlling interest is not adjusted below its initial carrying value. The Company records any adjustment in the redemption value, net of tax, directly to retained earnings and are not reflected in the consolidated statements of income. Although the adjustments are not reflected in the consolidated statements of income, current accounting rules require that the Company reflects the adjustments, net of tax, in the earnings per share calculation. The amount of net income attributable to redeemable non-controlling interest owners is included in consolidated net income on the face of the consolidated statements of net income. Management believes the redemption value (i.e. the carrying amount) and fair value are the same. Mandatorily Redeemable Non-Controlling Interests The non-controlling interests that are reflected as mandatorily redeemable non-controlling interests in the consolidated statements of income consist of those owners who have certain redemption rights, whether currently exercisable or not, and which currently, or in the future, require that the Company purchase the non-controlling interest of those owners at a predetermined formula based on a multiple of trailing twelve months earnings performance as defined in the respective limited partnership agreements. The redemption rights are triggered at such time as both of the following events have occurred: 1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the transaction, typically three to five years, as defined in the limited partnership agreement. Prior to September 30 th Mandatorily redeemable non-controlling interests Interest expense – mandatorily redeemable non-controlling interests – change in redemption value and Interest expense – mandatorily redeemable non-controlling interests – earnings allocable As previously mentioned due to amendments of the limited partnership agreements entered into by the Company, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) have been amended and are now classified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2019 consolidated balance sheet. Non-Controlling Interests The Company recognizes non-controlling interests, in which the Company has no obligation but the right to purchase the non-controlling interests, as permanent equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income attributable to non-controlling interests is included in consolidated net income on the face of the statements of net income. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the non-controlling equity investment on the deconsolidation date. When the purchase price of a non-controlling interest by the Company exceeds the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. Additionally, operating losses are allocated to non-controlling interests even when such allocation creates a deficit balance for the non-controlling interest partner. Revenue Recognition In May 2014, March 2016, April 2016, and December 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations, ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer (collectively the “standards”), respectively, which supersede most of the current revenue recognition requirements (“ASC 606”). The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company implemented the new standards beginning January 1, 2018 using a modified retrospective transition method. The principal change relates to how the new standard requires healthcare providers to estimate the amount of variable consideration to be included in the transaction price up to an amount which is probable that a significant reversal will not occur. The most common forms of variable consideration the Company experiences are amounts for services provided that are ultimately not realizable from a customer. There were no changes to revenues or other revenues upon implementation. Under the new standards, the Company’s estimate for unrealizable amounts will continue to be recognized as a reduction to revenue. The bad debt expense historically reported will not materially change. For ASC 606, there is an implied contract between us and the patient upon each patient visit. Separate contractual arrangements exist between us and third party payors (e.g. insurers, managed care programs, government programs, workers' compensation) which establish the amounts the third parties pay on behalf of the patients for covered services rendered. While these agreements are not considered contracts with the customer, they are used for determining the transaction price for services provided to the patients covered by the third party payors. The payor contracts do not indicate performance obligations for us, but indicate reimbursement rates for patients who are covered by those payors when the services are provided. At that time, the Company is obligated to provide services for the reimbursement rates stipulated in the payor contracts. The execution of the contract alone does not indicate a performance obligation. For self-paying customers, the performance obligation exists when we provide the services at established rates. The difference between the Company’s established rate and the anticipated reimbursement rate is accounted for as an offset to revenue – contractual allowance. The following table details the revenue related to the various categories. Year Ended December 31, December 31, 2019 December 31, 2018 December 31, 2017 Net patient revenues $ 433,345 $ 417,703 $ 389,226 Management contract revenues 8,676 8,339 6,275 Industrial injury prevention services revenues 37,462 25,466 14,908 Other revenues 2,486 2,403 3,642 $ 481,969 $ 453,911 $ 414,051 Patient revenues Revenues are recognized in the period in which services are rendered. Net patient revenues consists of revenues for physical therapy and occupational therapy clinics that provide pre-and post-operative care and treatment for orthopedic related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and neurological-related injuries. Net patient revenues (patient revenues less estimated contractual adjustments) are recognized at the estimated net realizable amounts from third-party payors, patients and others in exchange for services rendered when obligations under the terms of the contract are satisfied. There is an implied contract between us and the patient upon each patient visit. Generally, this occurs as the Company provides physical and occupational therapy services, as each service provided is distinct and future services rendered are not dependent on previously rendered services. The Company has agreements with third-party payors that provide for payments to the Company at amounts different from its established rates. Medicare Reimbursement The Medicare program reimburses outpatient rehabilitation providers based on the Medicare Physician Fee Schedule (‘‘MPFS’’). For services provided in 2019, a 0.25% increase has been applied to the fee schedule payment rates before applying the mandatory budget neutrality adjustment. For services provided in 2020 through 2025, a 0.0% percent update will be applied each year to the fee schedule payment rates, before applying the mandatory budget neutrality adjustment. Beginning in 2021, payments to individual therapists (Physical/Occupational Therapist in Private Practice) paid under the fee schedule may be subject to adjustment based on performance in the Merit Based Incentive Payment System (“MIPS”), which measures performance based on certain quality metrics, resource use, and meaningful use of electronic health records. Under the MIPS requirements, a provider's performance is assessed according to established performance standards each year and then is used to determine an adjustment factor that is applied to the professional's payment for the corresponding payment year. The provider’s MIPS performance in 2019 will determine the payment adjustment in 2021. Each year from 2019 through 2024, professionals who receive a significant share of their revenues through an alternate payment model (“APM”), (such as accountable care organizations or bundled payment arrangements) that involves risk of financial losses and a quality measurement component will receive a 5% bonus in the corresponding payment year. The bonus payment for APM participation is intended to encourage participation and testing of new APMs and to promote the alignment of incentives across payors. The specifics of the MIPS and APM adjustments will be subject to future notice and comment rule-making. The Budget Control Act of 2011 increased the federal debt ceiling in connection with deficit reductions over the next ten years, and requires automatic reductions in federal spending by approximately $1.2 trillion. Payments to Medicare providers are subject to these automatic spending reductions, subject to a 2% cap. On April 1, 2013, a 2% reduction to Medicare payments was implemented. The Bipartisan Budget Act of 2015, enacted on November 2, 2015, extended the 2% reductions to Medicare payments through fiscal year 2025. The Bipartisan Budget Act of 2018, enacted on February 9, 2018, extends the 2% reductions to Medicare payments through fiscal year 2027. Historically, the total amount paid by Medicare in any one year for outpatient physical therapy, occupational therapy, and/or speech-language pathology services provided to any Medicare beneficiary was subject to an annual dollar limit (i.e., the ‘‘Therapy Cap’’ or ‘‘Limit’’). For 2017, the annual Limit on outpatient therapy services was $1,980 for combined Physical Therapy and Speech Language Pathology services and $1,980 for Occupational Therapy services. As a result of Bipartisan Budget Act of 2018, the Therapy Caps have been eliminated, effective as of January 1, 2018. Under the Middle Class Tax Relief and Job Creation Act of 2012 (‘‘MCTRA’’), since October 1, 2012, patients who met or exceeded $3,700 in therapy expenditures during a calendar year have been subject to a manual medical review to determine whether applicable payment criteria are satisfied. The $3,700 threshold is applied to Physical Therapy and Speech Language Pathology Services; a separate $3,700 threshold is applied to the Occupational Therapy. The MACRA directed Centers for Medicare and Medicaid Services (“CMS”) to modify the manual medical review process such that those reviews will no longer apply to all claims exceeding the $3,700 threshold and instead will be determined on a targeted basis based on a variety of factors that CMS considers appropriate. The Bipartisan Budget Act of 2018 extended the targeted medical review indefinitely, but reduced the threshold to $3,000 through December 31, 2027. For 2028, the threshold amount will be increased by the percentage increase in the Medicare Economic Index (“MEI”) for 2028. In subsequent years the threshold amount will increase based on the corresponding percentage increase in the MEI for such subsequent year. CMS adopted a multiple procedure payment reduction (‘‘MPPR’’) for therapy services in the final update to the MPFS for calendar year 2011. The MPPR applied to all outpatient therapy services paid under Medicare Part B — occupational therapy, physical therapy and speech-language pathology. Under the policy, the Medicare program pays 100% of the practice expense component of the Relative Value Unit (‘‘RVU’’) for the therapy procedure with the highest practice expense RVU, then reduces the payment for the practice expense component for the second and subsequent therapy procedures or units of service furnished during the same day for the same patient, regardless of whether those therapy services are furnished in separate sessions. Since 2013, the practice expense component for the second and subsequent therapy service furnished during the same day for the same patient was reduced by 50%. Medicare claims for outpatient therapy services furnished by therapy assistants on or after January 1, 2020 must include a modifier indicating the service was furnished by a therapy assistant. Outpatient therapy services furnished on or after January 1, 2022 in whole or part by a therapy assistant will be paid at an amount equal to 85% of the payment amount otherwise applicable for the service. Statutes, regulations, and payment rules governing the delivery of therapy services to Medicare beneficiaries are complex and subject to interpretation. The Company believes that it is in compliance, in all material respects, with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing that would have a material effect on the Company’s financial statements as of December 31, 2019. Compliance with such laws and regulations can be subject to future government review and interpretation, as well as significant regulatory action including fines, penalties, and exclusion from the Medicare program. Net patient revenue from Medicare were approximately $119.4 million, $103.6 million and $92.6 million, respectively, for 2019, 2018 and 2017. Management Contract Revenues Management contract revenues, which are included in other revenues, are derived from contractual arrangements whereby the Company manages a clinic for third party owners. The Company does not have any ownership interest in these clinics. Typically, revenues are determined based on the number of visits conducted at the clinic and recognized at a point in time when services are performed. Costs, typically salaries for the Company’s employees, are recorded when incurred. Industrial Injury Prevention Services Revenues Revenue from the industrial injury prevention business, which are also included in other revenues in the consolidated statements of net income, are derived from onsite services we provide to clients’ employees including injury prevention, rehabilitation, ergonomic assessments and performance optimization. Revenue from the Company’s industrial injury prevention business is recognized when obligations under the terms of the contract are satisfied. Revenues are recognized at an amount equal to the consideration the company expects to receive in exchange for providing injury prevention services to its clients. The revenue is determined and recognized based on the number of hours and respective rate for services provided in a given period. Other Revenues Additionally, other revenues include services the Company provides on-site, such as schools and industrial worksites, for physical or occupational therapy services, and athletic trainers and gym membership fees. Contract terms and rates are agreed to in advance between the Company and the third parties. Services are typically performed over the contract period and revenue is recorded at the point of service. If the services are paid in advance, revenue is recorded as a contract liability over the period of the agreement and recognized at the point in time, when the services are performed. Contractual Allowances The allowance for estimated contractual adjustments is based on terms of payor contracts and historical collection and write-off experience. Contractual allowances result from the differences between the rates charged for services performed and expected reimbursements by both insurance companies and government sponsored healthcare programs for such services. Medicare regulations and the various third party payors and managed care contracts are often complex and may include multiple reimbursement mechanisms payable for the services provided in Company clinics. The Company estimates contractual allowances based on its interpretation of the applicable regulations, payor contracts and historical calculations. Each month the Company estimates its contractual allowance for each clinic based on payor contracts and the historical collection experience of the clinic and applies an appropriate contractual allowance reserve percentage to the gross accounts receivable balances for each payor of the clinic. Based on the Company’s historical experience, calculating the contractual allowance reserve percentage at the payor level is sufficient to allow the Company to provide the necessary detail and accuracy with its collectability estimates. However, the services authorized and provided and related reimbursement are subject to interpretation that could result in payments that differ from the Company’s estimates. Payor terms are periodically revised necessitating continual review and assessment of the estimates made by management. The Company’s billing system does not capture the exact change in its contractual allowance reserve estimate from period to period in order to assess the accuracy of its revenues and hence its contractual allowance reserves. Management regularly compares its cash collections to corresponding net revenues measured both in the aggregate and on a clinic-by-clinic basis. In the aggregate, historically the difference between net revenues and corresponding cash collections has generally reflected a difference within approximately 1% of net revenues. Additionally, analysis of subsequent periods’ contractual write-offs on a payor basis reflects a difference within approximately 1% between the actual aggregate contractual reserve percentage as compared to the estimated contractual allowance reserve percentage associated with the same period end balance. As a result, the Company believes that a change in the contractual allowance reserve estimate would not likely be more than 1% at December 31, 2019. Allowance for Doubtful Accounts The Company determines allowances for doubtful accounts based on the specific agings and payor classifications at each clinic. The provision for doubtful accounts is included in operating costs in the statements of net income. Patient accounts receivable, which are stated at the historical carrying amount net of contractual allowances, write-offs and allowance for doubtful accounts, includes only those amounts the Company estimates to be collectible. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount to be recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Tax Cuts and Jobs Act of 2017 (the “TCJA”) was passed by Congress on December 20, 2017 and signed into law by President Trump on December 22, 2017. The TCJA made significant changes to U.S. corporate income tax laws including a decrease in the corporate income tax rate to 21% effective January 1, 2018. As a result, the Company revalued its deferred tax assets and liabilities. Based on a review and analysis as of December 31, 2017, the Company estimated a reduction of its net deferred tax liabilities by $4.3 million thereby reducing its provision for income taxes by such amount for the 2017 year. The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the twelve months ended December 31, 2019, 2018 and 2017. The Company will book any interest or penalties, if required, in interest and other expense, as appropriate. Fair Values of Financial Instruments The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, accounts payable and notes payable approximate their fair values due to the short-term maturity of these financial instruments. The carrying amount under the Amended Credit Agreement and the redemption value of Redeemable non-controlling interests approximate the respective fair values. The fair value of the Company’s redeemable non-controlling interests is determined based on “Level 3” inputs. The interest rate on the Amended Credit Agreement, which is tied to LIBOR, is set at various short-term intervals, as detailed in the Amended Credit Agreement. Segment Reporting Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by chief operating decision makers in determining the allocation of resources and in assessing performance. The Company identifies operating segments based on management responsibility and believes it meets the criteria for aggregating its operating segments into a single reportable segment. Use of Estimates In preparing the Company’s consolidated financial statements, management makes certain estimates and assumptions, especially in relation to, but not limited to, goodwill impairment, tradenames, allocations of purchase price, allowance for receivables, tax provision and contractual allowances, that affect the amounts reported in the consolidated financial statements and related disclosures. Actual results may differ from these estimates. Self-Insurance Program The Company utilizes a self-insurance plan for its employee group health and dental insurance coverage administered by a third party. Predetermined loss limits have been arranged with the insurance company to minimize the Company’s maximum liability and cash outlay. Accrued expenses include the estimated incurred but unreported costs to settle unpaid claims and estimated future claims. Management believes that the current accrued amounts are sufficient to pay claims arising from self-insurance claims incurred through December 31, 2019. Restricted Stock Restricted stock issued to employees and directors is subject to continued employment or continued service on the board, respectively. Generally, restrictions on the stock granted to employees lapse in equal annual installments on the following four anniversaries of the date of grant. For those shares granted to directors, the restrictions will lapse in equal quarterly installments during the first year after the date of grant. For those granted to officers, the restriction will lapse in equal quarterly installments during the four years following the date of grant. Compensation expense for grants of restricted stock is recognized based on the fair value per share on the date of grant amortized over the vesting period. The Company recognizes any forfeitures as they occur. The restricted stock issued is included in basic and diluted shares for the earnings per share computation. Recently Adopted Accounting Guidance In May 2014, March 2016, April 2016, and December 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations, ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer (collectively “the standards”), respectively, which supersede most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The original standards were effective for fiscal years beginning after December 15, 2016; However, in July 2015, the FASB approved a one-year deferral of these standards, with a new effective date for fiscal years beginning after December 15, 2017. The standards require the selection of a retrospective or cumulative effect transition method. The Company implemented the new standards beginning January 1, 2018 using a modified retrospective transition method. Adoption of the new standard did not result in material changes to the presentation of net revenues and bad debt expense in the consolidated statements of income, and the presentation of the amount of income from operations and net income will be unchanged upon adoption of the new standards. The principal change relates to how the new standard requires healthcare providers to estimate the amount |
Acquisitions of Businesses
Acquisitions of Businesses | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions of Businesses [Abstract] | |
Acquisitions of Businesses | 3. Acquisitions of Businesses During 2019, 2018 and 2017, the Company acquired a majority interest in the following multi-clinic physical therapy practices: Acquisition Date % Interest Acquired Number of Clinics 2019 September 2019 Acquisition September 30, 2019 67 % 11 2018 August 2018 Acquisition August 31 70 % 4 2017 January 2017 Acquisition January 1 70 % 17 May 2017 Acquisition May 31 70 % 4 June 2017 Acquisition June 30 60 % 9 October 2017 Acquisition October 31 70 % 9 On September 30, 2019, the Company acquired a 67% interest in an eleven-clinic physical therapy practice. The purchase price for the 67% interest was $12.4 million, of which $12.1 million was paid in cash and $0.3 million in a seller note that is payable in two principal installments totaling $150,000 each, plus accrued interest in September 2020 and September 2021. The note accrues interest at 5.0% per annum. On April 11, 2019, the Company acquired a company that is a provider of industrial injury prevention services. The acquired company specializes in delivering injury prevention and care, post offer employment testing, functional capacity evaluations and return-to-work services. It performs these services across a network of 45 states including onsite at eleven client locations. The business was then combined with Briotix Health, the Company’s industrial injury prevention operation, increasing the Company’s ownership position in the Briotix Health partnership to approximately 76.0%. The purchase price for the acquired company was $22.9 million ($23.6 million less cash acquired of $0.7 million), which consisted of $18.9 million in cash, (of which $0.5 million will be paid to certain shareholders), and a $4.0 million seller note. The note accrues interest at 5.5% and the principal and accrued interest is payable, on April 9, 2021. The results of operations of the acquired clinics have been included in the Company’s consolidated financial statements since the date of their respective acquisition. The Company intends to continue to pursue additional acquisition opportunities, develop new clinics and open satellite clinics. The purchase price for the 2019 acquisitions has been preliminarily allocated as follows (in thousands): IIPS* Clinic Practice Total Cash paid, net of cash acquired ($900) $ 18,427 $ 12,170 $ 30,597 Payable to shareholders of seller 486 - 486 Seller note 4,000 300 4,300 Total consideration $ 22,913 $ 12,470 $ 35,383 Estimated fair value of net tangible assets acquired: Total current assets $ 1,907 $ 697 $ 2,604 Total non-current assets 611 3,028 3,639 Total liabilities (1,504 ) (2,846 ) (4,350 ) Net tangible assets acquired $ 1,014 $ 879 $ 1,893 Referral relationships 1,500 1,500 3,000 Non-compete 590 700 1,290 Tradename 2,500 1,600 4,100 Goodwill 17,309 14,021 31,330 Fair value of non-controlling interest (classified as redeemable non-controlling interests) - (6,230 ) (6,230 ) $ 22,913 $ 12,470 $ 35,383 * Industrial injury prevention services On August 31, 2018, the Company acquired a 70% interest in a four-clinic physical therapy practice. The purchase price for the 70% interest was $7.3 million in cash and $0.4 million in a seller note that is payable in two principal installments totaling $200,000 each, plus accrued interest. The first installment was paid in cash in August 2019 and the second installment remains payable in August 2020. On April 30, 2018, the Company acquired a 65% interest in another business in the industrial injury prevention sector. The aggregate purchase price for the 65% interest was $8.6 million in cash and $400,000 in a seller note that was paid on April 30, 2019. On April 30, 2018, the Company combined its two businesses. After the combination, the Company owned a 59.45% interest in the combined business, Briotix Health. See discussion above regarding an additional acquisition on April 30, 2019 in the industrial injury prevention business. In addition, during 2018, the Company, through several of its majority owned Clinic Partnerships, acquired five separate clinic practices. These practices operate as satellites of the existing Clinic Partnership. The aggregate purchase price was $1.0 million inclusive of cash of $850,000 and a note payable of $150,000. The note accrued interest at 4.5% and the principal and accrued interest, was paid in cash on August 31, 2019. The purchase price for the 2018 acquisitions were allocated as follows (in thousands): Cash paid, net of cash acquired ($372) $ 16,367 Seller notes 950 Total consideration $ 17,317 Estimated fair value of net tangible assets acquired: Total current assets $ 1,633 Total non-current assets 305 Total liabilities (525 ) Net tangible assets acquired $ 1,413 Referral relationships 2,926 Non-compete 298 Tradename 990 Goodwill 19,835 Fair value of non-controlling interest (classified as redeemable non-controlling interests) (8,145 ) $ 17,317 On January 1, 2017, the Company acquired a 70% interest in a seventeen-clinic physical therapy practice. The purchase price for the 70% interest was $10.7 million in cash and $0.5 million in a seller note that was payable in two principal installments totaling $250,000 each, plus accrued interest. The first installment was paid in January 2018 and the second installment in January 2019. On May 31, 2017, the Company acquired a 70% interest in a four-clinic physical therapy practice. The purchase price for the 70% interest was $2.3 million in cash and $250,000 in a seller note that was payable in two principal installments totaling $125,000 each, plus accrued interest. The first installment was paid in May 2018 and the second installment in May 2019. On June 30, 2017, the Company acquired a 60% interest in a nine-clinic physical therapy practice. The purchase price for the 60% interest was $15.8 million in cash and $0.5 million in a seller note that was payable in two principal installments totaling $250,000 each, plus accrued interest. The first installment was paid in June 2018 and the second installment in June 2019. On October 31, 2017, the Company acquired a 70% interest in a nine-clinic physical therapy practice and two management contracts with third party providers. The purchase price for the 70% interest was $4.0 million in cash and $0.5 million in a seller note that was payable in two principal installments totaling $250,000 each, plus accrued interest. The first installment was paid in October 2018 and the second installment in October 2019. Also, in 2017, the Company purchased the assets and business of two physical therapy clinics in separate transactions. One clinic was consolidated with an existing clinic and the other operates as a satellite clinic of one of the existing partnerships. The purchase price for the 2017 acquisitions were allocated as follows (in thousands): Cash paid, net of cash acquired ($2,297) $ 36,682 Seller notes 2,150 Total consideration $ 38,832 Estimated fair value of net tangible assets acquired: Total current assets $ 5,853 Total non-current assets 1,527 Total liabilities (2,865 ) Net tangible assets acquired $ 4,515 Referral relationships 4,250 Non-compete 660 Tradename 6,850 Goodwill 46,722 Fair value of non-controlling interest (classified as redeemable non-controlling interests) (13,883 ) Fair value of non-controlling interest (originally classified as mandatorily redeemable non-controlling interests) (10,282 ) $ 38,832 The finalized purchase prices plus the fair value of the non-controlling interests for the acquisition in 2018 and 2017 were allocated to the fair value of the assets acquired, inclusive of identifiable intangible assets, i.e. trade names, referral relationships and non-compete agreements, and liabilities assumed based on the fair values at the acquisition date, with the amount exceeding the fair values being recorded as goodwill. For the acquisitions in 2019, the Company is in the process of completing its formal valuation analysis to identify and determine the fair value of tangible and identifiable intangible assets acquired and the liabilities assumed. Thus, the final allocation of the purchase price may differ from the preliminary estimates used at December 31, 2019 based on additional information obtained and completion of the valuation of the identifiable intangible assets. Changes in the estimated valuation of the tangible assets acquired, the completion of the valuation of identifiable intangible assets and the completion by the Company of the identification of any unrecorded pre-acquisition contingencies, where the liability is probable and the amount can be reasonably estimated, will likely result in adjustments to goodwill. The Company does not expect the adjustments to be material. For the acquisitions in 2019, the values assigned to the referral relationships and non-compete agreements are being amortized to expense equally over the respective estimated lives. For referral relationships, the amortization period is 11.0 years. For non-compete agreements, the amortization period is 6.0 years. The values assigned to tradenames are tested annually for impairment. For the acquisitions in 2018 and 2017, the values assigned to the referral relationships and non-compete agreements are being amortized to expense equally over the respective estimated lives. For referral relationships, the weighted average amortization period was 10.54 and 10.10 years at December 31, 2018 and December 31, 2017, respectively. For non-compete agreements, the weighted average amortization period was 6.00 and 5.16 years at December 31, 2018 and December 31, 2017, respectively. Generally, the values assigned to tradenames are tested annually for impairment. For the 2019, 2018 and 2017 acquisitions, total current assets primarily represent patient accounts receivable. Total non-current assets are fixed assets, primarily equipment, used in the practices. The consideration paid for each of the acquisitions was derived through arm’s length negotiations. Funding for the cash portions was derived from proceeds from the Company’s revolving credit facility. The results of operations of the acquisitions have been included in the Company’s consolidated financial statements since their respective date of acquisition. Unaudited proforma consolidated financial information for the acquisitions in 2019, 2018 and 2017 acquisitions have not been included as the results, individually and in the aggregate. |
Acquisitions and Sale of Non-Co
Acquisitions and Sale of Non-Controlling Interests | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions and Sale of Non-Controlling Interests [Abstract] | |
Acquisitions and Sale of Non-Controlling Interests | 4. Acquisitions and Sale of Non-Controlling Interests During 2019, the Company acquired additional interests in four partnerships which are included in non-controlling interest. The additional interests purchased in each of the partnerships ranged from 1% and 55%. Also in 2019, the Company sold a 1% interest in a partnership. The net after-tax difference between the payments and the portion of undistributed earnings of $196,000 was credited to additional paid-in capital. During 2018, the Company acquired additional interests in three partnerships included in non-controlling interest. The additional interests purchased in each of the partnerships ranged from 5.5% and 35%. The net after-tax difference of $224,000 was credited to additional paid-in capital. During 2017, the Company acquired additional interests in two partnerships included in non-controlling interest. The additional interests purchased in each of the partnerships was 35%. The net after-tax difference of $56,000 was credited to additional paid-in capital. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interest | 12 Months Ended |
Dec. 31, 2019 | |
REDEEMABLE NON-CONTROLLING INTEREST [Abstract] | |
Redeemable Non-Controlling Interest | 5. Redeemable Non-Controlling Interest Since October 2017, when the Company acquires a majority interest (the “Acquisition”) in a physical therapy clinic business (referred to as “Therapy Practice”), these Acquisitions occur in a series of steps which are described below. 1. Prior to the Acquisition, the Therapy Practice exists as a separate legal entity (the “Seller Entity”). The Seller Entity is owned by one or more individuals (the “Selling Shareholders”) most of whom are physical therapists that work in the Therapy Practice and provide physical therapy services to patients. 2. In conjunction with the Acquisition, the Seller Entity contributes the Therapy Practice into a newly-formed limited partnership (“NewCo”), in exchange for one hundred percent (100%) of the limited and general partnership interests in NewCo. Therefore, in this step, NewCo becomes a wholly-owned subsidiary of the Seller Entity. 3. The Company enters into an agreement (the “Purchase Agreement”) to acquire from the Seller Entity a majority (ranges from 50% to 90%) of the limited partnership interest and in all 4. The Company and the Seller Entity also execute a partnership agreement (the “Partnership Agreement”) for NewCo that sets forth the rights and obligations of the limited and general partners of NewCo. After the Acquisition, the Company is the general partner of NewCo. 5. As noted above, the Company does not purchase 100% of the limited partnership interests in NewCo and the Seller Entity retains a portion of the limited partnership interest in NewCo (“Seller Entity Interest”). 6. In most cases, some or all of the Selling Shareholders enter into an employment agreement (the “Employment Agreement”) with NewCo with an initial term that ranges from three to five years (the “Employment Term”), with automatic one-year renewals, unless employment is terminated prior to the end of the Employment Term. As a result, a Selling Shareholder becomes an employee (“Employed Selling Shareholder”) of NewCo. The employment of an Employed Selling Shareholder can be terminated by the Employed Selling Shareholder or NewCo, with or without cause, at any time. In a few situations, a Selling Shareholder does not become employed by NewCo and is not involved with NewCo following the closing; in those situations, such Selling Shareholders sell their entire ownership interest in the Seller Entity as of the closing of the Acquisition. 7. The compensation of each Employed Selling Shareholder is specified in the Employment Agreement and is customary and commensurate with his or her responsibilities based on other employees in similar capacities within NewCo, the Company and the industry. 8. The Company and the Selling Shareholder (including both Employed Selling Shareholders and Selling Shareholders not employed by NewCo) execute a non-compete agreement (the “Non-Compete Agreement”) which restricts the Selling Shareholder from engaging in competing business activities for a specified period of time (the “Non-Compete Term”). A Non-Compete Agreement is executed with the Selling Shareholders in all cases. That is, even if the Selling Shareholder does not become an Employed Selling Shareholder, the Selling Shareholder is restricted from engaging in a competing business during the Non-Compete Term. 9. The Non-Compete Term commences as of the date of the Acquisition and expires on the later a. Two years after the date an Employed Selling Shareholders’ employment is terminated (if the Selling Shareholder becomes an Employed Selling Shareholder) or b. Five to six years from the date of the Acquisition, as defined in the Non-Compete Agreement, regardless of whether the Selling Shareholder is employed by NewCo. 10. The Non-Compete Agreement applies to a restricted region which is defined as a 15-mile radius from the Therapy Practice. That is, an Employed Selling Shareholder is permitted to engage in competing businesses or activities outside the 15-mile radius (after such Employed Selling Shareholder no longer is employed by NewCo) and a Selling Shareholder who is not employed by NewCo immediately is permitted to engage in the competing business or activities outside the 15-mile radius. The Partnership Agreement contains provisions for the redemption of the Seller Entity Interest, either at the option of the Company (the “Call Right”) or at the option of the Seller Entity (the “Put Right”) as follows: 1. Put Right a. In the event that any Selling Shareholder’s employment is terminated under certain circumstances prior to the fifth anniversary of the Closing Date, the Seller Entity thereafter may have an irrevocable right to cause the Company to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below. b. In the event that any Selling Shareholder is not employed by NewCo as of the fifth anniversary of the Closing Date and the Company has not exercised its Call Right with respect to the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, Seller Entity thereafter shall have the Put Right to cause the Company to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest at the purchase price described in “3” below. c. In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the Closing Date, the Seller Entity shall have the Put Right, and upon the exercise of the Put Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in “3” below. 2. Call Right a. If any Selling Shareholder’s employment by NewCo is terminated prior to the fifth anniversary of the Closing Date, the Company thereafter shall have an irrevocable right to purchase from Seller Entity the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest, in each case at the purchase price described in “3” below. b. In the event that any Selling Shareholder’s employment with NewCo is terminated for any reason on or after the fifth anniversary of the Closing Date, the Company shall have the Call Right, and upon the exercise of the Call Right, the Terminated Selling Shareholder’s Allocable Percentage of Seller Entity’s Interest shall be redeemed by the Company at the purchase price described in “3” below. 3. For the Put Right and the Call Right, the purchase price is derived from a formula based on a specified multiple of NewCo’s trailing twelve months of earnings before interest, taxes, depreciation, amortization, and the Company’s internal management fee, plus an Allocable Percentage of any undistributed earnings of NewCo (the “Redemption Amount”). NewCo’s earnings are distributed monthly based on available cash within NewCo; therefore, the undistributed earnings amount is small, if any. 4. The Purchase Price for the initial equity interest purchased by the Company is also based on the same specified multiple of the trailing twelve-month earnings that is used in the Put Right and the Call Right noted above. 5. The Put Right and the Call Right do not have an expiration date, but the Seller Entity Interest is not required to be purchased by the Company or sold by the Seller Entity. 6. The Put Right and the Call Right never apply to Selling Shareholders who do not become employed by NewCo, since the Company requires that such Selling Shareholders sell their entire ownership interest in the Seller Entity at the closing of the Acquisition. An Employed Selling Shareholder’s ownership of his or her equity interest in the Seller Entity predates the Acquisition and the Company’s purchase of its partnership interest in NewCo. The Employment Agreement and the Non-Compete Agreement do not contain any provision to escrow or “claw back” the equity interest in the Seller Entity held by such Employed Selling Shareholder, nor the Seller Entity Interest in NewCo, in the event of a breach of the employment or non-compete terms. More specifically, even if the Employed Selling Shareholder is terminated for “cause” by NewCo, such Employed Selling Shareholder does not forfeit his or her right to his or her full equity interest in the Seller Entity and the Seller Entity does not forfeit its right to any portion of the Seller Entity Interest. The Company’s only recourse against the Employed Selling Shareholder for breach of either the Employment Agreement or the Non-Compete Agreement is to seek damages and other legal remedies under such agreements. There are no conditions in any of the arrangements with an Employed Selling Shareholder that would result in a forfeiture of the equity interest held in the Seller Entity or of the Seller Entity Interest. For the year ended December 31, 2019 and 2018, the following table details the changes in the carrying amount (fair value) of the redeemable non-controlling interests (in thousands): Year Ended December 31, 2019 December 31, 2018 Beginning balance $ 133,943 $ 102,572 Operating results allocated to redeemable non-controlling interest partners 10,659 8,433 Distributions to redeemable non-controlling interest partners (10,221 ) (9,835 ) Changes in the fair value of redeemable non-controlling interest 11,893 24,770 Purchases of redeemable non-controlling interest (8,934 ) 8,145 Acquired interest 6,230 - Sales of redeemable non-controlling interest - temporary equity 3,120 - Reduction of non-controlling interest due to sale of USPh partnership interest (6,132 ) - Notes receivable related to sales of redeemable non-controlling interest - temporary equity (2,870 ) (142 ) Other 62 - Ending balance $ 137,750 $ 133,943 The following table categorizes the carrying amount (fair value) of the redeemable non-controlling interests (in thousands): December 31, 2019 December 31, 2018 Contractual time period has lapsed but holder's employment has not been terminated $ 51,921 $ 42,624 Contractual time period has not lapsed and holder's employment has not been terminated 85,829 91,319 Holder's employment has terminated and contractual time period has expired - - Holder's employment has terminated and contractual time period has not expired - - $ 137,750 $ 133,943 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill [Abstract] | |
Goodwill | 6. Goodwill The changes in the carrying amount of goodwill as of December 31, 2019 and 2018 consisted of the following (in thousands): Year Ended December 31, 2019 Year Ended December 31, 2018 Beginning balance $ 293,525 $ 271,338 Goodwill acquired 31,330 19,778 Goodwill related to partnership interest sold (7,325 ) - Goodwill adjustments for purchase price allocation of businesses acquired in prior year 146 2,409 Ending balance $ 317,676 $ 293,525 |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, net | 7. Intangible Assets, net Intangible assets, net as of December 31, 2019 and 2018 consisted of the following (in thousands): December 31, 2019 December 31, 2018 Tradenames $ 32,049 $ 30,256 Referral relationships, net of accumulated amortization of $11,677 and $9,370, respectively 18,367 16,895 Non-compete agreements, net of accumulated amortization of $5,424 and $4,716, respectively 2,172 1,677 $ 52,588 $ 48,828 Tradenames, referral relationships and non-compete agreements are related to the businesses acquired. The value assigned to tradenames has an indefinite life and is tested at least annually for impairment using the relief from royalty method in conjunction with the Company’s annual goodwill impairment test. The value assigned to referral relationships is being amortized over their respective estimated useful lives which range from 6 to 16 years. Non-compete agreements are amortized over the respective term of the agreements which range from 5 to 6 years. The following table details the amount of amortization expense recorded for intangible assets for the years ended December 31, 2019, 2018 and 2017 (in thousands): Year Ended Year Ended Year Ended December 31, 2019 December 31, 2018 December 31, 2017 Referral relationships $ 2,307 $ 2,161 $ 1,934 Non-compete agreements 708 616 720 $ 3,015 $ 2,777 $ 2,654 For one acquisition, the value assigned to tradename was being amortized over the term of the six year agreement in which the Company had acquired the right to use the specific tradename. The remaining balances of the referral relationships and non-compete agreements is expected to be amortized as follows (in thousands): Referral Relationships Non-Compete Agreements Years Annual Amount Years Annual Amount Ending December 31, Ending December 31, 2020 $ 2,403 2020 $ 619 2021 $ 2,403 2021 $ 541 2022 $ 2,354 2022 $ 364 2023 $ 2,247 2023 $ 294 2024 $ 2,082 2024 $ 238 Thereafter $ 6,878 Thereafter $ 116 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | 8. Accrued Expenses Accrued expenses as of December 31, 2019 and 2018 consisted of the following (in thousands): December 31, 2019 December 31, 2018 Salaries and related costs $ 19,340 $ 21,726 Credit balances due to patients and payors 4,303 7,293 Group health insurance claims 2,277 3,124 Other 4,935 6,350 Total $ 30,855 $ 38,493 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable [Abstract] | |
Notes Payable | 9. Notes Payable Notes payable as of December 31, 2019 and 2018 consisted of the following (in thousands): December 31, 2019 December 31, 2018 Credit Agreement average effective interest rate of 3.9% inclusive of unused fee $ 46,000 $ 38,000 Various notes payable with $728 plus accrued interest due in the next year, interest accrues in the range of 4.75% through 5.50% per annum 5,089 1,836 $ 51,089 $ 39,836 Less current portion (728 ) (1,434 ) Long term portion $ 50,361 $ 38,402 Effective December 5, 2013, the Company entered into an Amended and Restated Credit Agreement with a commitment for a $125.0 million revolving credit facility. This agreement was amended in August 2015, January 2016, March 2017 and November 2017 (hereafter referred to as “Amended Credit Agreement”). The Amended Credit Agreement is unsecured and has loan covenants, including requirements that the Company comply with a consolidated fixed charge coverage ratio and consolidated leverage ratio. Proceeds from the Amended Credit Agreement may be used for working capital, acquisitions, purchases of the Company’s common stock, dividend payments to the Company’s common stockholders, capital expenditures and other corporate purposes. The pricing grid which is based on the Company’s consolidated leverage ratio with the applicable spread over LIBOR ranging from 1.25% to 2.0% or the applicable spread over the Base Rate ranging from 0.1% to 1%. Fees under the Amended Credit Agreement include an unused commitment fee ranging from 0.25% to 0.3% depending on the Company’s consolidated leverage ratio and the amount of funds outstanding under the Amended Credit Agreement. The January 2016 amendment to the Amended Credit Agreement increased the cash and noncash consideration that the Company could pay with respect to acquisitions permitted under the Amended Credit Agreement to $50,000,000 for any fiscal year, and increased the amount the Company may pay in cash dividends to its shareholders in an aggregate amount not to exceed $10,000,000 in any fiscal year. The March 2017 amendment, among other items, increased the amount the Company may pay in cash dividends to its shareholders in an aggregate amount not to exceed $15,000,000 in any fiscal year. The November 2017 amendment, among other items, adjusted the pricing grid as described above, increased the aggregate amount the Company may pay in cash dividends to its shareholders to an amount not to exceed $20,000,000 and extended the maturity date to November 30, 2021. On December 31, 2019, $46.0 million was outstanding on the Credit Agreement resulting in $79.0 million of availability. As of December 31, 2019, the Company was in compliance with all of the covenants thereunder. The Company generally enters into various notes payable as a means of financing a portion of its acquisitions and purchasing of non-controlling interests. In conjunction with the transactions related to these in 2019, the Company entered into notes payable in the aggregate amount of $4.7 million of which an aggregate principal payment of $0.3 million is due in 2020 and $4.4 million is due in 2021. Interest accrues in the range of 4.75% to 5.50% per annum and is payable with each principal installment. Aggregate annual payments of principal required pursuant to the Credit Agreement and the various notes payable subsequent to December 31, 2019 are as follows (in thousands): During the twelve months ended December 31, 2020 $ 728 During the twelve months ended December 31, 2021 50,361 $ 51,089 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 10. Leases The Company has operating leases for its corporate offices and operating facilities. The Company determines if an arrangement is a lease at the inception of a contract. Effective January 1, 2019, right-of-use assets and operating lease liabilities are included in the consolidated balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent net present value of the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and operating lease liabilities are recognized at commencement date based on the net present value of the fixed lease payments over the lease term. The Company’s operating lease terms are generally five years or less. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Operating fixed lease expense is recognized on a straight-line basis over the lease term. In accordance with ASC 842, the Company records on its consolidated balance sheet leases with a term greater than 12 months. The Company has elected, in compliance with current accounting standards, not to record leases with an initial terms of 12 months or less in the consolidated balance sheet. ASC 842 requires the separation of the fixed lease components from the variable lease components. The Company has elected the practical expedient to account for separate lease components of a contract as a single lease cost thus causing all fixed payments to be capitalized. Non-lease and variable cost components are not included in the measurement of the right-of-use assets or operating lease liabilities. The Company also elected the package of practical expedients permitted within ASC 842, which among other things, allows the Company to carry forward historical lease classification. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage are not included in the right-of-use assets or operating lease liabilities. These are expensed as incurred and recorded as variable lease expense. For the year ended December 31, 2019, the components of lease expense were as follows (in thousands): Year Ended December 31, 2019 Operating lease cost $ 30,225 Short-term lease cost 1,212 Variable lease cost 6,074 Total lease cost * $ 37,511 * Sublease income was immaterial Lease cost is reflected in the consolidated statement of net income in the line item – rent, supplies, contract labor and other. For the year ended December 31, 2019, supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities (in thousands) $ 30,077 Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands) * $ 113,222 * Includes the right-of-use assets obtained in exchange for lease liabilities of $82.6 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. The aggregate future lease payments for operating leases as of December 31, 2019 were as follows (in thousands): Year Amount 2020 $ 29,279 2021 23,369 2022 17,039 2023 11,528 2024 6,453 Therafter 6,129 Total lease payments $ 93,797 Less: imputed interest 7,053 Total operating lease liabilities $ 86,744 Average lease terms and discount rates were as follows: Year Ended December 31, 2019 Weighted-average remaining lease term - Operating leases 4.05 Years Weighted-average discount rate - Operating leases 3.9% |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 11. Income Taxes Significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31, 2019 and 2018 were as follows (in thousands): December 31, 2019 December 31, 2018 Deferred tax assets: Compensation $ 1,964 $ 1,842 Allowance for doubtful accounts 514 600 Acquired net operating losses 840 - Lease obligations - including closed clinics 21,445 34 Deferred tax assets $ 24,763 $ 2,476 Deferred tax liabilities: Depreciation and amortization $ (13,195 ) $ (11,309 ) Operating lease right-of-use assets (21,416 ) - Other (223 ) (179 ) Deferred tax liabilities (34,834 ) (11,488 ) Net deferred tax liability $ (10,071 ) $ (9,012 ) The deferred tax assets and liabilities related to purchased interests not yet finalized may result in an immaterial adjustment. During 2019, the Company recorded deferred tax assets of $3.0 million related to the revaluation of redeemable non-controlling interests and acquisitions of non-controlling interests. In addition, during 2019, the Company recorded an adjustment to the deferred tax assets of $0.3 million as a result of a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts with its federal and state tax returns for 2018. The offset of this adjustment was a decrease to the previously reported federal income tax receivable. As of December 31, 2019, the Company has a federal income tax receivable of $1.5 million and state tax receivables of $1.3 million. The tax receivables are included in other current assets The differences between the federal tax rate and the Company’s effective tax rate for the years ended December 31, 2019, 2018 and 2017 were as follows (in thousands): December 31, 2019 December 31, 2018 December 31, 2017 U. S. tax at statutory rate $ 11,274 21.0 % $ 9,710 21.0 % $ 9,900 35.0 % Tax legislation adjustment - 0.0 % - 0.0 % (4,325 ) -15.3 % State income taxes, net of federal benefit and tax reform 2,059 3.8 % 1,722 3.7 % 1,060 3.7 % Excess equity compensation deduction (871 ) -1.6 % (806 ) -1.7 % (1,139 ) -4.0 % Non-deductible expenses 1,185 2.2 % 743 1.6 % 560 2.0 % Other - 0.0 % - 0.0 % (24 ) -0.1 % $ 13,647 25.4 % $ 11,369 24.6 % $ 6,032 21.3 % As a result of TCJA, the Company revalued its deferred tax assets and liabilities as of December 31, 2017. Based on a review and analysis as of December 31, 2017, the Company estimated a reduction of its net deferred tax liabilities by $4.3 million thereby reducing its provision for income taxes by such amount for the 2017 year. Significant components of the provision for income taxes for the years ended December 31, 2019, 2018 and 2017 were as follows (in thousands): December 31, 2019 December 31, 2018 December 31, 2017 Current: Federal $ 6,523 $ 5,357 $ 9,332 State 2,473 1,199 1,564 Total current 8,996 6,556 10,896 Deferred: Federal 3,730 3,771 (5,233 ) State 921 1,042 369 Total deferred 4,651 4,813 (4,864 ) Total income tax provision $ 13,647 $ 11,369 $ 6,032 For 2019, 2018 and 2017, the Company performed a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts. The adjustments were immaterial. The Company considers this reconciliation process to be an annual control. The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income in the periods which the deferred tax assets are deductible, management believes that a valuation allowance is not required, as it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. The Company’s U.S. federal returns remain open to examination for 2016 through 2018 and U.S. state jurisdictions are open for periods ranging from 2015 through 2018. The Company does not believe that it has any significant uncertain tax positions at December 31, 2019 and December 31, 2018, nor is this expected to change within the next twelve months due to the settlement and expiration of statutes of limitation. The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the years ended December 31, 2019, 2018 and 2017. |
Equity Based Plans
Equity Based Plans | 12 Months Ended |
Dec. 31, 2019 | |
Equity Based Plans [Abstract] | |
Equity Based Plans | 12. Equity Based Plans The Company has the following equity based plans with outstanding equity grants: The Amended and Restated 1999 Employee Stock Option Plan (the “Amended 1999 Plan”) permits the Company to grant to non-employee directors and employees of the Company up to 600,000 non-qualified options to purchase shares of common stock and restricted stock (subject to proportionate adjustments in the event of stock dividends, splits, and similar corporate transactions). The exercise prices of options granted under the Amended 1999 Plan are determined by the Compensation Committee. The period within which each option will be exercisable is determined by the Compensation Committee. The Amended 1999 Plan was approved by the shareholders of the Company at the 2008 Shareholders Meeting on May 20, 2008. The Amended and Restated 2003 Stock Option Plan (the “Amended 2003 Plan”) permits the Company to grant to key employees and outside directors of the Company incentive and non-qualified options and shares of restricted stock covering up to 2,100,000 shares of common stock (subject to proportionate adjustments in the event of stock dividends, splits, and similar corporate transactions). The material terms of the Amended 2003 Plan was reapproved by the shareholders of the Company at the 2015 Shareholders Meeting on May 19, 2015 and an increase in the number of shares authorized for issuance from 1,750,000 to 2,100,000 was approved at the 2016 Shareholders Meeting on March 17, 2016. A cumulative summary of equity plans as of December 31, 2019 follows: Authorized Restricted Stock Issued Outstanding Stock Options Stock Options Exercised Stock Options Exercisable Shares Available for Grant Equity Plans Amended 1999 Plan 600,000 416,402 - 139,791 - 7,775 Amended 2003 Plan 2,100,000 1,019,995 - 778,300 - 301,705 2,700,000 1,436,397 - 918,091 - 309,480 During 2019, 2018 and 2017, the Company granted the following shares of restricted stock to directors, officers and employees pursuant to its equity plans as follows: Year Granted Number of Shares Weighted Average Fair Value Per Share 2019 91,682 $ 104.85 2018 93,801 $ 78.63 2017 79,475 $ 62.19 During 2019, 2018 and 2017, the following shares were cancelled due to employee terminations prior to restrictions lapsing: Year Cancelled Number of Shares Weighted Average Fair Value Per Share 2019 1,578 $ 87.88 2018 3,867 $ 59.51 2017 2,875 $ 63.12 Generally, restrictions on the stock granted to employees lapse in equal annual installments on the following four anniversaries of the date of grant. For those shares granted to directors, the restrictions will lapse in equal quarterly installments during the first year after the date of grant. For those granted to officers, the restriction will lapse in equal quarterly installments during the four years following the date of grant. There were 150,771 and 152,926 shares outstanding as of December 31, 2019 and December 31, 2018 respectively, for which restrictions had not lapsed. The restrictions will lapse in 2020 through 2023. Compensation expense for grants of restricted stock is recognized based on the fair value on the date of grant. Compensation expense for restricted stock grants was $7.0 million, $5.9 million, and $5.0 million, respectively, for 2019, 2018 and 2017. As of December 31, 2019, the remaining $9.2 million of compensation expense will be recognized from 2019 through 2022. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Preferred Stock [Abstract] | |
Preferred Stock | 13. Preferred Stock The Board is empowered, without approval of the shareholders, to cause shares of preferred stock to be issued in one or more series and to establish the number of shares to be included in each such series and the rights, powers, preferences and limitations of each series. There are no provisions in the Company’s Articles of Incorporation specifying the vote required by the holders of preferred stock to take action. All such provisions would be set out in the designation of any series of preferred stock established by the Board. The bylaws of the Company specify that, when a quorum is present at any meeting, the vote of the holders of at least a majority of the outstanding shares entitled to vote who are present, in person or by proxy, shall decide any question brought before the meeting, unless a different vote is required by law or the Company’s Articles of Incorporation. Because the Board has the power to establish the preferences and rights of each series, it may afford the holders of any series of preferred stock, preferences, powers, and rights, voting or otherwise, senior to the right of holders of common stock. The issuance of the preferred stock could have the effect of delaying or preventing a change in control of the Company. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2019 | |
Common Stock [Abstract] | |
Common Stock | 14. Common Stock From September 2001 through December 31, 2008, the Board authorized the Company to purchase, in the open market or in privately negotiated transactions, up to 2,250,000 shares of the Company’s common stock. In March 2009, the Board authorized the repurchase of up to 10% or approximately 1,200,000 shares of its common stock (“March 2009 Authorization”). The Amended Credit Agreement permits share repurchases of up to $15,000,000, subject to compliance with covenants. The Company is required to retire shares purchased under the March 2009 Authorization. Under the March 2009 Authorization, the Company has purchased a total of 859,499 shares. There is no expiration date for the share repurchase program. There are currently an additional estimated 131,176 shares (based on the closing price of $114.35 on December 31, 2019, the last business day in 2019) that may be purchased from time to time in the open market or private transactions depending on price, availability and the Company’s cash position. The Company did not purchase any shares of its common stock during 2019 or 2018. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2019 | |
Defined Contribution Plan [Abstract] | |
Defined Contribution Plan | 15. Defined Contribution Plan The Company has several 401(k) profit sharing plans covering all employees with three months of service. For certain plans, the Company makes matching contributions. The Company may also make discretionary contributions of up to 50% of employee contributions. The Company did not make any discretionary contributions for the years ended December 31, 2019, 2018 and 2017. The Company matching contributions totaled $2.0 million, $1.8 million and $1.5 million, respectively, for the years ended December 31, 2019, 2018 and 2017. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Operating Leases The Company has entered into operating leases for its executive offices and clinic facilities. In connection with these agreements, the Company incurred rent expense of $37.5 million, $37.1 million and $34.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. Several of the leases provide for an annual increase in the rental payment based upon the Consumer Price Index. The majority of the leases provide for renewal periods ranging from one to five years. The agreements to extend the leases typically specify that rental rates would be adjusted to market rates as of each renewal date. The future minimum operating lease commitments for each of the next five years and thereafter and in the aggregate as of December 31, 2019 are as follows (in thousands): 2020 $ 35,784 2021 28,022 2022 20,618 2023 14,332 2024 8,302 Thereafter 8,432 Total $ 115,490 Employment Agreements At December 31, 2019, the Company had outstanding employment agreements with four of its executive officers one of which has provided notice of a planned retirement in October 2020. These remaining three agreements, which presently expire on December 31, 2020, provide for automatic two year renewals at the conclusion of each expiring term or renewal term. All of the agreements contain a provision for annual adjustment of salaries. In addition, the Company has outstanding employment agreements with most of the managing physical therapist partners of the Company’s physical therapy clinics and with certain other clinic employees which obligate subsidiaries of the Company to pay compensation of $39.3 million in 2020 and $8.6 million in the aggregate from 2021 through 2023. In addition, many of the employment agreements with the managing physical therapists provide for monthly bonus payments calculated as a percentage of each clinic’s net revenues (not in excess of operating profits) or operating profits. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 17. Earnings Per Share The computations of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017 are as follows (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2019 December 31, 2018 December 31, 2017 Computation of earnings per share - USPH shareholders: Net income attributable to USPH shareholders $ 40,039 $ 34,873 $ 22,256 Charges to retained earnings: Revaluation of redeemable non-controlling interest (11,893 ) (24,770 ) (201 ) Tax effect at statutory rate (federal and state) of 26.25% 3,121 6,502 75 $ 31,267 $ 16,605 $ 22,130 Earnings per share (basic and diluted) $ 2.45 $ 1.31 $ 1.76 Shares used in computation: Basic and diluted earnings per share - weighted-average shares 12,756 12,666 12,570 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Data (Unaudited) [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 18. Selected Quarterly Financial Data (Unaudited) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net patient revenues $ 106,650 $ 113,363 $ 104,392 $ 108,940 Net revenues $ 116,231 $ 126,373 $ 117,251 $ 122,114 Gross profit $ 26,718 $ 31,425 $ 27,372 $ 26,959 Operating income $ 15,425 $ 19,898 $ 16,816 $ 15,286 Net income $ 12,375 $ 19,800 $ 13,069 $ 12,015 Net income attributable to USPH shareholders $ 8,443 $ 14,620 $ 9,047 $ 7,929 Basic and diluted earnings per share attributable to common shareholders: $ 0.39 $ 0.85 $ 0.66 $ 0.55 Shares used in computation - basic and diluted 12,707 12,767 12,774 12,774 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net patient revenues $ 100,552 $ 105,989 $ 103,354 $ 107,808 Net revenues $ 108,342 $ 115,098 $ 113,122 $ 117,349 Gross profit $ 23,214 $ 27,154 $ 26,076 $ 25,219 Operating income $ 13,051 $ 17,026 $ 15,433 $ 14,804 Net income $ 10,054 $ 13,236 $ 11,879 $ 13,673 Net income attributable to USPH shareholders $ 7,117 $ 9,246 $ 8,102 $ 10,408 Basic and diluted earnings per share attributable to common shareholders: $ 0.27 $ 0.48 $ 0.13 $ 0.43 Shares used in computation - basic and diluted 12,616 12,677 12,685 12,685 |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES Balance at Beginning of Period Additions Charged to Costs and Expenses Additions Charged to Other Accounts Deductions Balance at End of Period YEAR ENDED DECEMBER 31, 2019: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts(1) $ 2,672 $ 4,858 - $ 4,832 (2 ) $ 2,698 YEAR ENDED DECEMBER 31, 2018: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts $ 2,273 $ 4,603 - $ 4,204 (2 ) $ 2,672 YEAR ENDED DECEMBER 31, 2017: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts $ 1,792 $ 3,672 - $ 3,191 (2 ) $ 2,273 (1) Related to patient accounts receivable and accounts receivable—other. (2) Uncollectible accounts written off, net of recoveries. * All other schedules are omitted because of the absence of conditions under which they are required or because the required information is shown in the financial statements or notes thereto. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Cash Equivalents | Cash Equivalents The Company maintains its cash and cash equivalents at financial institutions. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The combined account balances at several institutions typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Management believes that this risk is not significant. |
Long-Lived Assets | Long-Lived Assets Fixed assets are stated at cost. Depreciation is computed on the straight-line method over the estimated useful lives of the related assets. Estimated useful lives for furniture and equipment range from three to eight years and for software purchased from three to seven years. Leasehold improvements are amortized over the shorter of the related lease term or estimated useful lives of the assets, which is generally three to five years. |
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of | Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of The Company reviews property and equipment and intangible assets with finite lives for impairment upon the occurrence of certain events or circumstances that indicate the related amounts may be impaired. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Goodwill | Goodwill Goodwill represents the excess of the amount paid and fair value of the non-controlling interests over the fair value of the acquired business assets, which include certain identifiable intangible assets. Historically, goodwill has been derived from acquisitions and, prior to 2009, from the purchase of some or all of a particular local management’s equity interest in an existing clinic. Effective January 1, 2009, if the purchase price of a non-controlling interest by the Company exceeds or is less than the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. The fair value of goodwill and other identifiable intangible assets with indefinite lives are tested for impairment annually and upon the occurrence of certain events, and are written down to fair value if considered impaired. The Company evaluates goodwill for impairment on at least an annual basis (in its third quarter) by comparing the fair value of its reporting units to the carrying value of each reporting unit including related goodwill. The Company evaluates indefinite lived tradenames using the relief from royalty method in conjunction with its annual goodwill impairment test. The Company operates a one segment business which is made up of various clinics within partnerships. The partnerships are components of regions and are aggregated to the operating segment level for the purpose of determining the Company’s reporting units when performing its annual goodwill impairment test. In 2019, 2018 and 2017, there were six regions. In addition to the six regions, in 2018 and 2019, the impairment test included a separate analysis for the industrial injury prevention business, a separate reporting unit. An impairment loss generally would be recognized when the carrying amount of the net assets of a reporting unit, inclusive of goodwill and other identifiable intangible assets, exceeds the estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using two factors: (i) earnings prior to taxes, depreciation and amortization for the reporting unit multiplied by a price/earnings ratio used in the industry and (ii) a discounted cash flow analysis. A weight is assigned to each factor and the sum of each weight times the factor is considered the estimated fair value. For 2019, the factors (i.e., price/earnings ratio, discount rate and residual capitalization rate) were updated to reflect current market conditions. The evaluation of goodwill in 2019, 2018 and 2017 did not result in any goodwill amounts that were deemed impaired. The Company has not identified any triggering events occurring after the testing date that would impact the impairment testing results obtained. The Company will continue to monitor for any triggering events or other indicators of impairment. |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The non-controlling interests that are reflected as redeemable non-controlling interests in the consolidated financial statements consist of those that the owners and the Company have certain redemption rights, whether currently exercisable or not, and which currently, or in the future, require that the Company purchase or the owner sell the non-controlling interest held by the owner, if certain conditions are met. The purchase price is derived at a predetermined formula based on a multiple of trailing twelve months earnings performance as defined in the respective limited partnership agreements. The redemption rights can be triggered by the owner or the Company at such time as both of the following events have occurred: 1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the transaction, typically three to five years, as defined in the limited partnership agreement. The redemption rights are not automatic or mandatory (even upon death) and require either the owner or the Company to exercise its rights when the conditions triggering the redemption rights have been satisfied. On the date the Company acquires a controlling interest in a partnership, and the limited partnership agreement for such partnership contains redemption rights not under the control of the Company, the fair value of the non-controlling interest is recorded in the consolidated balance sheet under the caption – Redeemable non-controlling interests. Then, in each reporting period thereafter until it is purchased by the Company, the redeemable non-controlling interest is adjusted to the greater of its then current redemption value or initial carrying value, based on the predetermined formula defined in the respective limited partnership agreement. As a result, the value of the non-controlling interest is not adjusted below its initial carrying value. The Company records any adjustment in the redemption value, net of tax, directly to retained earnings and are not reflected in the consolidated statements of income. Although the adjustments are not reflected in the consolidated statements of income, current accounting rules require that the Company reflects the adjustments, net of tax, in the earnings per share calculation. The amount of net income attributable to redeemable non-controlling interest owners is included in consolidated net income on the face of the consolidated statements of net income. Management believes the redemption value (i.e. the carrying amount) and fair value are the same. |
Mandatorily Redeemable Non-Controlling Interests | Mandatorily Redeemable Non-Controlling Interests The non-controlling interests that are reflected as mandatorily redeemable non-controlling interests in the consolidated statements of income consist of those owners who have certain redemption rights, whether currently exercisable or not, and which currently, or in the future, require that the Company purchase the non-controlling interest of those owners at a predetermined formula based on a multiple of trailing twelve months earnings performance as defined in the respective limited partnership agreements. The redemption rights are triggered at such time as both of the following events have occurred: 1) termination of the owner’s employment, regardless of the reason for such termination, and 2) the passage of specified number of years after the closing of the transaction, typically three to five years, as defined in the limited partnership agreement. Prior to September 30 th Mandatorily redeemable non-controlling interests Interest expense – mandatorily redeemable non-controlling interests – change in redemption value and Interest expense – mandatorily redeemable non-controlling interests – earnings allocable As previously mentioned due to amendments of the limited partnership agreements entered into by the Company, the redemption values of the mandatorily redeemable non-controlling interest (previously classified as liabilities) have been amended and are now classified as redeemable non-controlling interest (temporary equity) at fair value on the December 31, 2019 consolidated balance sheet. |
Non-Controlling Interests | Non-Controlling Interests The Company recognizes non-controlling interests, in which the Company has no obligation but the right to purchase the non-controlling interests, as permanent equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income attributable to non-controlling interests is included in consolidated net income on the face of the statements of net income. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the non-controlling equity investment on the deconsolidation date. When the purchase price of a non-controlling interest by the Company exceeds the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. Additionally, operating losses are allocated to non-controlling interests even when such allocation creates a deficit balance for the non-controlling interest partner. |
Revenue Recognition | Revenue Recognition In May 2014, March 2016, April 2016, and December 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations, ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer (collectively the “standards”), respectively, which supersede most of the current revenue recognition requirements (“ASC 606”). The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company implemented the new standards beginning January 1, 2018 using a modified retrospective transition method. The principal change relates to how the new standard requires healthcare providers to estimate the amount of variable consideration to be included in the transaction price up to an amount which is probable that a significant reversal will not occur. The most common forms of variable consideration the Company experiences are amounts for services provided that are ultimately not realizable from a customer. There were no changes to revenues or other revenues upon implementation. Under the new standards, the Company’s estimate for unrealizable amounts will continue to be recognized as a reduction to revenue. The bad debt expense historically reported will not materially change. For ASC 606, there is an implied contract between us and the patient upon each patient visit. Separate contractual arrangements exist between us and third party payors (e.g. insurers, managed care programs, government programs, workers' compensation) which establish the amounts the third parties pay on behalf of the patients for covered services rendered. While these agreements are not considered contracts with the customer, they are used for determining the transaction price for services provided to the patients covered by the third party payors. The payor contracts do not indicate performance obligations for us, but indicate reimbursement rates for patients who are covered by those payors when the services are provided. At that time, the Company is obligated to provide services for the reimbursement rates stipulated in the payor contracts. The execution of the contract alone does not indicate a performance obligation. For self-paying customers, the performance obligation exists when we provide the services at established rates. The difference between the Company’s established rate and the anticipated reimbursement rate is accounted for as an offset to revenue – contractual allowance. The following table details the revenue related to the various categories. Year Ended December 31, December 31, 2019 December 31, 2018 December 31, 2017 Net patient revenues $ 433,345 $ 417,703 $ 389,226 Management contract revenues 8,676 8,339 6,275 Industrial injury prevention services revenues 37,462 25,466 14,908 Other revenues 2,486 2,403 3,642 $ 481,969 $ 453,911 $ 414,051 Patient revenues Revenues are recognized in the period in which services are rendered. Net patient revenues consists of revenues for physical therapy and occupational therapy clinics that provide pre-and post-operative care and treatment for orthopedic related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and neurological-related injuries. Net patient revenues (patient revenues less estimated contractual adjustments) are recognized at the estimated net realizable amounts from third-party payors, patients and others in exchange for services rendered when obligations under the terms of the contract are satisfied. There is an implied contract between us and the patient upon each patient visit. Generally, this occurs as the Company provides physical and occupational therapy services, as each service provided is distinct and future services rendered are not dependent on previously rendered services. The Company has agreements with third-party payors that provide for payments to the Company at amounts different from its established rates. Medicare Reimbursement The Medicare program reimburses outpatient rehabilitation providers based on the Medicare Physician Fee Schedule (‘‘MPFS’’). For services provided in 2019, a 0.25% increase has been applied to the fee schedule payment rates before applying the mandatory budget neutrality adjustment. For services provided in 2020 through 2025, a 0.0% percent update will be applied each year to the fee schedule payment rates, before applying the mandatory budget neutrality adjustment. Beginning in 2021, payments to individual therapists (Physical/Occupational Therapist in Private Practice) paid under the fee schedule may be subject to adjustment based on performance in the Merit Based Incentive Payment System (“MIPS”), which measures performance based on certain quality metrics, resource use, and meaningful use of electronic health records. Under the MIPS requirements, a provider's performance is assessed according to established performance standards each year and then is used to determine an adjustment factor that is applied to the professional's payment for the corresponding payment year. The provider’s MIPS performance in 2019 will determine the payment adjustment in 2021. Each year from 2019 through 2024, professionals who receive a significant share of their revenues through an alternate payment model (“APM”), (such as accountable care organizations or bundled payment arrangements) that involves risk of financial losses and a quality measurement component will receive a 5% bonus in the corresponding payment year. The bonus payment for APM participation is intended to encourage participation and testing of new APMs and to promote the alignment of incentives across payors. The specifics of the MIPS and APM adjustments will be subject to future notice and comment rule-making. The Budget Control Act of 2011 increased the federal debt ceiling in connection with deficit reductions over the next ten years, and requires automatic reductions in federal spending by approximately $1.2 trillion. Payments to Medicare providers are subject to these automatic spending reductions, subject to a 2% cap. On April 1, 2013, a 2% reduction to Medicare payments was implemented. The Bipartisan Budget Act of 2015, enacted on November 2, 2015, extended the 2% reductions to Medicare payments through fiscal year 2025. The Bipartisan Budget Act of 2018, enacted on February 9, 2018, extends the 2% reductions to Medicare payments through fiscal year 2027. Historically, the total amount paid by Medicare in any one year for outpatient physical therapy, occupational therapy, and/or speech-language pathology services provided to any Medicare beneficiary was subject to an annual dollar limit (i.e., the ‘‘Therapy Cap’’ or ‘‘Limit’’). For 2017, the annual Limit on outpatient therapy services was $1,980 for combined Physical Therapy and Speech Language Pathology services and $1,980 for Occupational Therapy services. As a result of Bipartisan Budget Act of 2018, the Therapy Caps have been eliminated, effective as of January 1, 2018. Under the Middle Class Tax Relief and Job Creation Act of 2012 (‘‘MCTRA’’), since October 1, 2012, patients who met or exceeded $3,700 in therapy expenditures during a calendar year have been subject to a manual medical review to determine whether applicable payment criteria are satisfied. The $3,700 threshold is applied to Physical Therapy and Speech Language Pathology Services; a separate $3,700 threshold is applied to the Occupational Therapy. The MACRA directed Centers for Medicare and Medicaid Services (“CMS”) to modify the manual medical review process such that those reviews will no longer apply to all claims exceeding the $3,700 threshold and instead will be determined on a targeted basis based on a variety of factors that CMS considers appropriate. The Bipartisan Budget Act of 2018 extended the targeted medical review indefinitely, but reduced the threshold to $3,000 through December 31, 2027. For 2028, the threshold amount will be increased by the percentage increase in the Medicare Economic Index (“MEI”) for 2028. In subsequent years the threshold amount will increase based on the corresponding percentage increase in the MEI for such subsequent year. CMS adopted a multiple procedure payment reduction (‘‘MPPR’’) for therapy services in the final update to the MPFS for calendar year 2011. The MPPR applied to all outpatient therapy services paid under Medicare Part B — occupational therapy, physical therapy and speech-language pathology. Under the policy, the Medicare program pays 100% of the practice expense component of the Relative Value Unit (‘‘RVU’’) for the therapy procedure with the highest practice expense RVU, then reduces the payment for the practice expense component for the second and subsequent therapy procedures or units of service furnished during the same day for the same patient, regardless of whether those therapy services are furnished in separate sessions. Since 2013, the practice expense component for the second and subsequent therapy service furnished during the same day for the same patient was reduced by 50%. Medicare claims for outpatient therapy services furnished by therapy assistants on or after January 1, 2020 must include a modifier indicating the service was furnished by a therapy assistant. Outpatient therapy services furnished on or after January 1, 2022 in whole or part by a therapy assistant will be paid at an amount equal to 85% of the payment amount otherwise applicable for the service. Statutes, regulations, and payment rules governing the delivery of therapy services to Medicare beneficiaries are complex and subject to interpretation. The Company believes that it is in compliance, in all material respects, with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing that would have a material effect on the Company’s financial statements as of December 31, 2019. Compliance with such laws and regulations can be subject to future government review and interpretation, as well as significant regulatory action including fines, penalties, and exclusion from the Medicare program. Net patient revenue from Medicare were approximately $119.4 million, $103.6 million and $92.6 million, respectively, for 2019, 2018 and 2017. Management Contract Revenues Management contract revenues, which are included in other revenues, are derived from contractual arrangements whereby the Company manages a clinic for third party owners. The Company does not have any ownership interest in these clinics. Typically, revenues are determined based on the number of visits conducted at the clinic and recognized at a point in time when services are performed. Costs, typically salaries for the Company’s employees, are recorded when incurred. Industrial Injury Prevention Services Revenues Revenue from the industrial injury prevention business, which are also included in other revenues in the consolidated statements of net income, are derived from onsite services we provide to clients’ employees including injury prevention, rehabilitation, ergonomic assessments and performance optimization. Revenue from the Company’s industrial injury prevention business is recognized when obligations under the terms of the contract are satisfied. Revenues are recognized at an amount equal to the consideration the company expects to receive in exchange for providing injury prevention services to its clients. The revenue is determined and recognized based on the number of hours and respective rate for services provided in a given period. Other Revenues Additionally, other revenues include services the Company provides on-site, such as schools and industrial worksites, for physical or occupational therapy services, and athletic trainers and gym membership fees. Contract terms and rates are agreed to in advance between the Company and the third parties. Services are typically performed over the contract period and revenue is recorded at the point of service. If the services are paid in advance, revenue is recorded as a contract liability over the period of the agreement and recognized at the point in time, when the services are performed. |
Contractual Allowances | Contractual Allowances The allowance for estimated contractual adjustments is based on terms of payor contracts and historical collection and write-off experience. Contractual allowances result from the differences between the rates charged for services performed and expected reimbursements by both insurance companies and government sponsored healthcare programs for such services. Medicare regulations and the various third party payors and managed care contracts are often complex and may include multiple reimbursement mechanisms payable for the services provided in Company clinics. The Company estimates contractual allowances based on its interpretation of the applicable regulations, payor contracts and historical calculations. Each month the Company estimates its contractual allowance for each clinic based on payor contracts and the historical collection experience of the clinic and applies an appropriate contractual allowance reserve percentage to the gross accounts receivable balances for each payor of the clinic. Based on the Company’s historical experience, calculating the contractual allowance reserve percentage at the payor level is sufficient to allow the Company to provide the necessary detail and accuracy with its collectability estimates. However, the services authorized and provided and related reimbursement are subject to interpretation that could result in payments that differ from the Company’s estimates. Payor terms are periodically revised necessitating continual review and assessment of the estimates made by management. The Company’s billing system does not capture the exact change in its contractual allowance reserve estimate from period to period in order to assess the accuracy of its revenues and hence its contractual allowance reserves. Management regularly compares its cash collections to corresponding net revenues measured both in the aggregate and on a clinic-by-clinic basis. In the aggregate, historically the difference between net revenues and corresponding cash collections has generally reflected a difference within approximately 1% of net revenues. Additionally, analysis of subsequent periods’ contractual write-offs on a payor basis reflects a difference within approximately 1% between the actual aggregate contractual reserve percentage as compared to the estimated contractual allowance reserve percentage associated with the same period end balance. As a result, the Company believes that a change in the contractual allowance reserve estimate would not likely be more than 1% at December 31, 2019. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company determines allowances for doubtful accounts based on the specific agings and payor classifications at each clinic. The provision for doubtful accounts is included in operating costs in the statements of net income. Patient accounts receivable, which are stated at the historical carrying amount net of contractual allowances, write-offs and allowance for doubtful accounts, includes only those amounts the Company estimates to be collectible. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount to be recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Tax Cuts and Jobs Act of 2017 (the “TCJA”) was passed by Congress on December 20, 2017 and signed into law by President Trump on December 22, 2017. The TCJA made significant changes to U.S. corporate income tax laws including a decrease in the corporate income tax rate to 21% effective January 1, 2018. As a result, the Company revalued its deferred tax assets and liabilities. Based on a review and analysis as of December 31, 2017, the Company estimated a reduction of its net deferred tax liabilities by $4.3 million thereby reducing its provision for income taxes by such amount for the 2017 year. The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the twelve months ended December 31, 2019, 2018 and 2017. The Company will book any interest or penalties, if required, in interest and other expense, as appropriate. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, accounts payable and notes payable approximate their fair values due to the short-term maturity of these financial instruments. The carrying amount under the Amended Credit Agreement and the redemption value of Redeemable non-controlling interests approximate the respective fair values. The fair value of the Company’s redeemable non-controlling interests is determined based on “Level 3” inputs. The interest rate on the Amended Credit Agreement, which is tied to LIBOR, is set at various short-term intervals, as detailed in the Amended Credit Agreement. |
Segment Reporting | Segment Reporting Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by chief operating decision makers in determining the allocation of resources and in assessing performance. The Company identifies operating segments based on management responsibility and believes it meets the criteria for aggregating its operating segments into a single reportable segment. |
Use of Estimates | Use of Estimates In preparing the Company’s consolidated financial statements, management makes certain estimates and assumptions, especially in relation to, but not limited to, goodwill impairment, tradenames, allocations of purchase price, allowance for receivables, tax provision and contractual allowances, that affect the amounts reported in the consolidated financial statements and related disclosures. Actual results may differ from these estimates. |
Self-Insurance Program | Self-Insurance Program The Company utilizes a self-insurance plan for its employee group health and dental insurance coverage administered by a third party. Predetermined loss limits have been arranged with the insurance company to minimize the Company’s maximum liability and cash outlay. Accrued expenses include the estimated incurred but unreported costs to settle unpaid claims and estimated future claims. Management believes that the current accrued amounts are sufficient to pay claims arising from self-insurance claims incurred through December 31, 2019. |
Restricted Stock | Restricted Stock Restricted stock issued to employees and directors is subject to continued employment or continued service on the board, respectively. Generally, restrictions on the stock granted to employees lapse in equal annual installments on the following four anniversaries of the date of grant. For those shares granted to directors, the restrictions will lapse in equal quarterly installments during the first year after the date of grant. For those granted to officers, the restriction will lapse in equal quarterly installments during the four years following the date of grant. Compensation expense for grants of restricted stock is recognized based on the fair value per share on the date of grant amortized over the vesting period. The Company recognizes any forfeitures as they occur. The restricted stock issued is included in basic and diluted shares for the earnings per share computation. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance In May 2014, March 2016, April 2016, and December 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations, ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer (collectively “the standards”), respectively, which supersede most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The original standards were effective for fiscal years beginning after December 15, 2016; However, in July 2015, the FASB approved a one-year deferral of these standards, with a new effective date for fiscal years beginning after December 15, 2017. The standards require the selection of a retrospective or cumulative effect transition method. The Company implemented the new standards beginning January 1, 2018 using a modified retrospective transition method. Adoption of the new standard did not result in material changes to the presentation of net revenues and bad debt expense in the consolidated statements of income, and the presentation of the amount of income from operations and net income will be unchanged upon adoption of the new standards. The principal change relates to how the new standard requires healthcare providers to estimate the amount of variable consideration to be included in the transaction price up to an amount which is probable that a significant reversal will not occur. The most common forms of variable consideration the Company experiences are amounts for services provided that are ultimately not realizable from a customer. Under the new standards, the Company’s estimate for unrealizable amounts will continue to be recognized as a reduction to revenue. The bad debt expense historically reported will not materially change. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASC 842”), which amended prior accounting standards for leases. The Company implemented the new lease standard, ASC Topic 842 – Leases as of January 1, 2019 using the transition method in ASU 2018-11 issued in July 2018 which allows the Company to initially apply the new leases standard at adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. There was no adjustment required to retained earnings upon adoption. Accordingly, no retrospective adjustments were made to the comparative periods presented. The Company elected certain of the practical expedients permitted, including the expedient that allows the Company to retain its existing lease assessment and classification. Adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of operating lease right-of-use assets (“ROU”) and operating lease liabilities of approximately $78.0 million and $82.6 million respectively, as of January 1, 2019 for operating leases as a lessee. The adoption did not materially impact the Company’s consolidated statement of income or cash flows. See Footnote 10 - Leases for further discussion of leases. In August 2018, the Securities Exchange Commission (“SEC”) issued Final Rule 33-10532, Disclosure Update and Simplification, which amends certain disclosure requirements that were redundant, duplicative, overlapping or superseded by other SEC disclosure requirements. The amendments generally eliminated or otherwise reduced certain disclosure requirements of various SEC rules and regulations. However, in some cases, the amendments require additional information to be disclosed, including changes in stockholders’ equity in interim periods. The rule is effective 30 days after its publication in the Federal Register. The rule was posted on October 4, 2018. On September 25, 2018, the SEC released guidance advising it will not object to a registrant adopting the requirement to include changes in stockholders’ equity in the Form 10-Q for the first quarter beginning after the effective date of the rule. The Company adopted this guidance in its Form 10-Q for the period ended March 31, 2019. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350), which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment change. ASU 2017-04 is effective prospectively for fiscal years, and the interim periods within those years, beginning after December 15, 2019. There was no impact to goodwill from this change. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses, which added a new impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, including trade receivables. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. The standard is required to be applied using the modified retrospective approach with a cumulative-effect adjustment to retained earnings, if any, upon adoption. The Company has completed the adoption of the standard on January 1, 2020. The financial instruments subject to ASU 2016-13 are the Company’s accounts receivable derived from contracts with customers. A significant portion of the Company’s accounts receivable is from highly-solvent, creditworthy payors including governmental programs such as Medicare and Medicaid, and highly regulated commercial insurers. The Company’s estimate of expected credit losses as of January 1, 2020, using its expected credit loss evaluation process, resulted in no adjustments to the allowance for credit losses and no cumulative-effect adjustment to retained earnings on the adoption date of the standard. |
Subsequent Event | Subsequent Event On February 26, 2020, the Company completed an acquisition of a four clinic physical therapy practice. The clinics are held in four separate partnerships. On the date of purchase, the Company acquired approximately 65% of the equity interests, with the practice’s clinical founders and associates retaining approximately 35%. The aggregate purchase price for the acquisition was approximately $12.2 million. |
Organization, Nature of Opera_2
Organization, Nature of Operations and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Nature of Operations and Basis of Presentation [Abstract] | |
Clinic Acquisition | Acquisition Date % Interest Acquired Number of Clinics 2019 September 2019 Acquisition September 30, 2019 67 % 11 2018 August 2018 Acquisition August 31 70 % 4 2017 January 2017 Acquisition January 1 70 % 17 May 2017 Acquisition May 31 70 % 4 June 2017 Acquisition June 30 60 % 9 October 2017 Acquisition October 31 70 % 9 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Disaggregation of Revenue, Categories | The following table details the revenue related to the various categories. Year Ended December 31, December 31, 2019 December 31, 2018 December 31, 2017 Net patient revenues $ 433,345 $ 417,703 $ 389,226 Management contract revenues 8,676 8,339 6,275 Industrial injury prevention services revenues 37,462 25,466 14,908 Other revenues 2,486 2,403 3,642 $ 481,969 $ 453,911 $ 414,051 |
Acquisitions of Businesses (Tab
Acquisitions of Businesses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions of Businesses [Abstract] | |
Clinic Acquisition | Acquisition Date % Interest Acquired Number of Clinics 2019 September 2019 Acquisition September 30, 2019 67 % 11 2018 August 2018 Acquisition August 31 70 % 4 2017 January 2017 Acquisition January 1 70 % 17 May 2017 Acquisition May 31 70 % 4 June 2017 Acquisition June 30 60 % 9 October 2017 Acquisition October 31 70 % 9 |
Preliminary Purchase Prices Allocation | The purchase price for the 2019 acquisitions has been preliminarily allocated as follows (in thousands): IIPS* Clinic Practice Total Cash paid, net of cash acquired ($900) $ 18,427 $ 12,170 $ 30,597 Payable to shareholders of seller 486 - 486 Seller note 4,000 300 4,300 Total consideration $ 22,913 $ 12,470 $ 35,383 Estimated fair value of net tangible assets acquired: Total current assets $ 1,907 $ 697 $ 2,604 Total non-current assets 611 3,028 3,639 Total liabilities (1,504 ) (2,846 ) (4,350 ) Net tangible assets acquired $ 1,014 $ 879 $ 1,893 Referral relationships 1,500 1,500 3,000 Non-compete 590 700 1,290 Tradename 2,500 1,600 4,100 Goodwill 17,309 14,021 31,330 Fair value of non-controlling interest (classified as redeemable non-controlling interests) - (6,230 ) (6,230 ) $ 22,913 $ 12,470 $ 35,383 * Industrial injury prevention services The purchase price for the 2018 acquisitions were allocated as follows (in thousands): Cash paid, net of cash acquired ($372) $ 16,367 Seller notes 950 Total consideration $ 17,317 Estimated fair value of net tangible assets acquired: Total current assets $ 1,633 Total non-current assets 305 Total liabilities (525 ) Net tangible assets acquired $ 1,413 Referral relationships 2,926 Non-compete 298 Tradename 990 Goodwill 19,835 Fair value of non-controlling interest (classified as redeemable non-controlling interests) (8,145 ) $ 17,317 The purchase price for the 2017 acquisitions were allocated as follows (in thousands): Cash paid, net of cash acquired ($2,297) $ 36,682 Seller notes 2,150 Total consideration $ 38,832 Estimated fair value of net tangible assets acquired: Total current assets $ 5,853 Total non-current assets 1,527 Total liabilities (2,865 ) Net tangible assets acquired $ 4,515 Referral relationships 4,250 Non-compete 660 Tradename 6,850 Goodwill 46,722 Fair value of non-controlling interest (classified as redeemable non-controlling interests) (13,883 ) Fair value of non-controlling interest (originally classified as mandatorily redeemable non-controlling interests) (10,282 ) $ 38,832 |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
REDEEMABLE NON-CONTROLLING INTEREST [Abstract] | |
Changes in Carrying Amount (Fair Value) of Redeemable Non-Controlling Interest | For the year ended December 31, 2019 and 2018, the following table details the changes in the carrying amount (fair value) of the redeemable non-controlling interests (in thousands): Year Ended December 31, 2019 December 31, 2018 Beginning balance $ 133,943 $ 102,572 Operating results allocated to redeemable non-controlling interest partners 10,659 8,433 Distributions to redeemable non-controlling interest partners (10,221 ) (9,835 ) Changes in the fair value of redeemable non-controlling interest 11,893 24,770 Purchases of redeemable non-controlling interest (8,934 ) 8,145 Acquired interest 6,230 - Sales of redeemable non-controlling interest - temporary equity 3,120 - Reduction of non-controlling interest due to sale of USPh partnership interest (6,132 ) - Notes receivable related to sales of redeemable non-controlling interest - temporary equity (2,870 ) (142 ) Other 62 - Ending balance $ 137,750 $ 133,943 |
Carrying Amount of (Fair Value) Redeemable Non-Controlling Interest | The following table categorizes the carrying amount (fair value) of the redeemable non-controlling interests (in thousands): December 31, 2019 December 31, 2018 Contractual time period has lapsed but holder's employment has not been terminated $ 51,921 $ 42,624 Contractual time period has not lapsed and holder's employment has not been terminated 85,829 91,319 Holder's employment has terminated and contractual time period has expired - - Holder's employment has terminated and contractual time period has not expired - - $ 137,750 $ 133,943 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill as of December 31, 2019 and 2018 consisted of the following (in thousands): Year Ended December 31, 2019 Year Ended December 31, 2018 Beginning balance $ 293,525 $ 271,338 Goodwill acquired 31,330 19,778 Goodwill related to partnership interest sold (7,325 ) - Goodwill adjustments for purchase price allocation of businesses acquired in prior year 146 2,409 Ending balance $ 317,676 $ 293,525 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, Net | Intangible assets, net as of December 31, 2019 and 2018 consisted of the following (in thousands): December 31, 2019 December 31, 2018 Tradenames $ 32,049 $ 30,256 Referral relationships, net of accumulated amortization of $11,677 and $9,370, respectively 18,367 16,895 Non-compete agreements, net of accumulated amortization of $5,424 and $4,716, respectively 2,172 1,677 $ 52,588 $ 48,828 |
Amortization Expenses | The following table details the amount of amortization expense recorded for intangible assets for the years ended December 31, 2019, 2018 and 2017 (in thousands): Year Ended Year Ended Year Ended December 31, 2019 December 31, 2018 December 31, 2017 Referral relationships $ 2,307 $ 2,161 $ 1,934 Non-compete agreements 708 616 720 $ 3,015 $ 2,777 $ 2,654 |
Amortization of Referral Relationships and Non Competition Agreements | The remaining balances of the referral relationships and non-compete agreements is expected to be amortized as follows (in thousands): Referral Relationships Non-Compete Agreements Years Annual Amount Years Annual Amount Ending December 31, Ending December 31, 2020 $ 2,403 2020 $ 619 2021 $ 2,403 2021 $ 541 2022 $ 2,354 2022 $ 364 2023 $ 2,247 2023 $ 294 2024 $ 2,082 2024 $ 238 Thereafter $ 6,878 Thereafter $ 116 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Accrued expenses as of December 31, 2019 and 2018 consisted of the following (in thousands): December 31, 2019 December 31, 2018 Salaries and related costs $ 19,340 $ 21,726 Credit balances due to patients and payors 4,303 7,293 Group health insurance claims 2,277 3,124 Other 4,935 6,350 Total $ 30,855 $ 38,493 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable [Abstract] | |
Credit Agreement and Notes Payable | Notes payable as of December 31, 2019 and 2018 consisted of the following (in thousands): December 31, 2019 December 31, 2018 Credit Agreement average effective interest rate of 3.9% inclusive of unused fee $ 46,000 $ 38,000 Various notes payable with $728 plus accrued interest due in the next year, interest accrues in the range of 4.75% through 5.50% per annum 5,089 1,836 $ 51,089 $ 39,836 Less current portion (728 ) (1,434 ) Long term portion $ 50,361 $ 38,402 |
Aggregate Annual Payments of Principal Required to Revolving Credit Facility | Aggregate annual payments of principal required pursuant to the Credit Agreement and the various notes payable subsequent to December 31, 2019 are as follows (in thousands): During the twelve months ended December 31, 2020 $ 728 During the twelve months ended December 31, 2021 50,361 $ 51,089 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Expense | For the year ended December 31, 2019, the components of lease expense were as follows (in thousands): Year Ended December 31, 2019 Operating lease cost $ 30,225 Short-term lease cost 1,212 Variable lease cost 6,074 Total lease cost * $ 37,511 * Sublease income was immaterial |
Supplemental Information Related to Leases | For the year ended December 31, 2019, supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities (in thousands) $ 30,077 Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands) * $ 113,222 * Includes the right-of-use assets obtained in exchange for lease liabilities of $82.6 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. |
Future Lease Payments for Operating Leases | The aggregate future lease payments for operating leases as of December 31, 2019 were as follows (in thousands): Year Amount 2020 $ 29,279 2021 23,369 2022 17,039 2023 11,528 2024 6,453 Therafter 6,129 Total lease payments $ 93,797 Less: imputed interest 7,053 Total operating lease liabilities $ 86,744 |
Average Lease Terms and Discount Rates | Average lease terms and discount rates were as follows: Year Ended December 31, 2019 Weighted-average remaining lease term - Operating leases 4.05 Years Weighted-average discount rate - Operating leases 3.9% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Components of Deferred Tax Assets and Liabilities Included in Consolidated Balance Sheets | Significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31, 2019 and 2018 were as follows (in thousands): December 31, 2019 December 31, 2018 Deferred tax assets: Compensation $ 1,964 $ 1,842 Allowance for doubtful accounts 514 600 Acquired net operating losses 840 - Lease obligations - including closed clinics 21,445 34 Deferred tax assets $ 24,763 $ 2,476 Deferred tax liabilities: Depreciation and amortization $ (13,195 ) $ (11,309 ) Operating lease right-of-use assets (21,416 ) - Other (223 ) (179 ) Deferred tax liabilities (34,834 ) (11,488 ) Net deferred tax liability $ (10,071 ) $ (9,012 ) |
Differences Between Federal Tax Rate and Company's Effective Tax Rate for Results of Continuing Operations | The differences between the federal tax rate and the Company’s effective tax rate for the years ended December 31, 2019, 2018 and 2017 were as follows (in thousands): December 31, 2019 December 31, 2018 December 31, 2017 U. S. tax at statutory rate $ 11,274 21.0 % $ 9,710 21.0 % $ 9,900 35.0 % Tax legislation adjustment - 0.0 % - 0.0 % (4,325 ) -15.3 % State income taxes, net of federal benefit and tax reform 2,059 3.8 % 1,722 3.7 % 1,060 3.7 % Excess equity compensation deduction (871 ) -1.6 % (806 ) -1.7 % (1,139 ) -4.0 % Non-deductible expenses 1,185 2.2 % 743 1.6 % 560 2.0 % Other - 0.0 % - 0.0 % (24 ) -0.1 % $ 13,647 25.4 % $ 11,369 24.6 % $ 6,032 21.3 % |
Significant Components of Provision for Income Taxes for Continuing Operations | Significant components of the provision for income taxes for the years ended December 31, 2019, 2018 and 2017 were as follows (in thousands): December 31, 2019 December 31, 2018 December 31, 2017 Current: Federal $ 6,523 $ 5,357 $ 9,332 State 2,473 1,199 1,564 Total current 8,996 6,556 10,896 Deferred: Federal 3,730 3,771 (5,233 ) State 921 1,042 369 Total deferred 4,651 4,813 (4,864 ) Total income tax provision $ 13,647 $ 11,369 $ 6,032 |
Equity Based Plans (Tables)
Equity Based Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Based Plans [Abstract] | |
Cumulative Summary of Equity Plans | A cumulative summary of equity plans as of December 31, 2019 follows: Authorized Restricted Stock Issued Outstanding Stock Options Stock Options Exercised Stock Options Exercisable Shares Available for Grant Equity Plans Amended 1999 Plan 600,000 416,402 - 139,791 - 7,775 Amended 2003 Plan 2,100,000 1,019,995 - 778,300 - 301,705 2,700,000 1,436,397 - 918,091 - 309,480 |
Restricted Stock Granted and Cancelled | During 2019, 2018 and 2017, the Company granted the following shares of restricted stock to directors, officers and employees pursuant to its equity plans as follows: Year Granted Number of Shares Weighted Average Fair Value Per Share 2019 91,682 $ 104.85 2018 93,801 $ 78.63 2017 79,475 $ 62.19 During 2019, 2018 and 2017, the following shares were cancelled due to employee terminations prior to restrictions lapsing: Year Cancelled Number of Shares Weighted Average Fair Value Per Share 2019 1,578 $ 87.88 2018 3,867 $ 59.51 2017 2,875 $ 63.12 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Future Minimum Operating Lease Commitments | The future minimum operating lease commitments for each of the next five years and thereafter and in the aggregate as of December 31, 2019 are as follows (in thousands): 2020 $ 35,784 2021 28,022 2022 20,618 2023 14,332 2024 8,302 Thereafter 8,432 Total $ 115,490 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computations of Basic and Diluted Earnings Per Share | The computations of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017 are as follows (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2019 December 31, 2018 December 31, 2017 Computation of earnings per share - USPH shareholders: Net income attributable to USPH shareholders $ 40,039 $ 34,873 $ 22,256 Charges to retained earnings: Revaluation of redeemable non-controlling interest (11,893 ) (24,770 ) (201 ) Tax effect at statutory rate (federal and state) of 26.25% 3,121 6,502 75 $ 31,267 $ 16,605 $ 22,130 Earnings per share (basic and diluted) $ 2.45 $ 1.31 $ 1.76 Shares used in computation: Basic and diluted earnings per share - weighted-average shares 12,756 12,666 12,570 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Data (Unaudited) [Abstract] | |
Selected Quarterly Financial Data | Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net patient revenues $ 106,650 $ 113,363 $ 104,392 $ 108,940 Net revenues $ 116,231 $ 126,373 $ 117,251 $ 122,114 Gross profit $ 26,718 $ 31,425 $ 27,372 $ 26,959 Operating income $ 15,425 $ 19,898 $ 16,816 $ 15,286 Net income $ 12,375 $ 19,800 $ 13,069 $ 12,015 Net income attributable to USPH shareholders $ 8,443 $ 14,620 $ 9,047 $ 7,929 Basic and diluted earnings per share attributable to common shareholders: $ 0.39 $ 0.85 $ 0.66 $ 0.55 Shares used in computation - basic and diluted 12,707 12,767 12,774 12,774 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net patient revenues $ 100,552 $ 105,989 $ 103,354 $ 107,808 Net revenues $ 108,342 $ 115,098 $ 113,122 $ 117,349 Gross profit $ 23,214 $ 27,154 $ 26,076 $ 25,219 Operating income $ 13,051 $ 17,026 $ 15,433 $ 14,804 Net income $ 10,054 $ 13,236 $ 11,879 $ 13,673 Net income attributable to USPH shareholders $ 7,117 $ 9,246 $ 8,102 $ 10,408 Basic and diluted earnings per share attributable to common shareholders: $ 0.27 $ 0.48 $ 0.13 $ 0.43 Shares used in computation - basic and diluted 12,616 12,677 12,685 12,685 |
Organization, Nature of Opera_3
Organization, Nature of Operations and Basis of Presentation (Details) | Apr. 11, 2019StateLocation | Apr. 30, 2018Business | Dec. 31, 2019ClinicStateFacility | Dec. 31, 2018Clinic | Dec. 31, 2017Clinic | Mar. 31, 2017 |
Organization, Nature of Operations and Basis of Presentation [Abstract] | ||||||
Number of clinics operated | 583 | |||||
Number of states where clinics are operated | State | 40 | |||||
Number of third party facilities | Facility | 26 | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | ||||||
Percentage of interest acquired | 35.00% | |||||
Percentage of general partnership interest owned | 1.00% | |||||
Number of clinic practices acquired | 1 | 5 | 2 | |||
Number of clinics consolidated with an existing clinic | 1 | 1 | ||||
Number of clinics that operate as a satellite clinic with existing partnerships | 1 | 1 | 1 | |||
Minimum [Member] | ||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | ||||||
Percentage of interest acquired | 1.00% | 5.50% | ||||
Percentage of limited partnership interest owned | 24.00% | |||||
Maximum [Member] | ||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | ||||||
Percentage of interest acquired | 55.00% | 35.00% | ||||
Percentage of limited partnership interest owned | 99.00% | |||||
April 2019 Acquisition [Member] | ||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | ||||||
Percentage of interest acquired | 76.00% | |||||
Acquisition date | Apr. 11, 2019 | |||||
Number of states of network services | State | 45 | |||||
Number of onsite client locations | Location | 11 | |||||
Industrial Injury Prevention [Member] | ||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | ||||||
Percentage of interest acquired | 65.00% | 55.00% | ||||
Number of businesses merged | Business | 2 | |||||
Percentage of combined business interest owned | 59.45% |
Organization, Nature of Opera_4
Organization, Nature of Operations and Basis of Presentation - Schedule of Multi, Clinic Acquisition (Details) - Clinic | Sep. 30, 2019 | Aug. 31, 2018 | Oct. 31, 2017 | Jun. 30, 2017 | May 31, 2017 | Jan. 01, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 02, 2017 | Dec. 31, 2016 |
Business Combination, Description [Abstract] | |||||||||||
Percentage of interest acquired | 35.00% | ||||||||||
Number of clinics | 1 | 5 | 2 | ||||||||
September 2019 Acquisition [Member] | |||||||||||
Business Combination, Description [Abstract] | |||||||||||
Acquisition date | Sep. 30, 2019 | ||||||||||
Percentage of interest acquired | 67.00% | ||||||||||
Number of clinics | 11 | ||||||||||
August 2018 Acquisition [Member] | |||||||||||
Business Combination, Description [Abstract] | |||||||||||
Acquisition date | Aug. 31, 2018 | ||||||||||
Percentage of interest acquired | 70.00% | ||||||||||
Number of clinics | 4 | ||||||||||
January 2017 Acquisition [Member] | |||||||||||
Business Combination, Description [Abstract] | |||||||||||
Acquisition date | Jan. 1, 2017 | ||||||||||
Percentage of interest acquired | 70.00% | 70.00% | |||||||||
Number of clinics | 17 | ||||||||||
May 2017 Acquisition [Member] | |||||||||||
Business Combination, Description [Abstract] | |||||||||||
Acquisition date | May 31, 2017 | ||||||||||
Percentage of interest acquired | 70.00% | ||||||||||
Number of clinics | 4 | ||||||||||
June 2017 Acquisition [Member] | |||||||||||
Business Combination, Description [Abstract] | |||||||||||
Acquisition date | Jun. 30, 2017 | ||||||||||
Percentage of interest acquired | 60.00% | ||||||||||
Number of clinics | 9 | ||||||||||
October 2017 Acquisition [Member] | |||||||||||
Business Combination, Description [Abstract] | |||||||||||
Acquisition date | Oct. 31, 2017 | ||||||||||
Percentage of interest acquired | 70.00% | ||||||||||
Number of clinics | 9 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | Feb. 26, 2020USD ($)ClinicPartnership | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)ClinicSegmentRegionPartnership | Dec. 31, 2018USD ($)ClinicRegionPartnership | Dec. 31, 2017USD ($)ClinicRegionPartnership | Feb. 09, 2018 | Nov. 02, 2015 | Apr. 01, 2013 |
Revenue Recognition [Abstract] | |||||||||||||||
Revenue related to the various categories | $ 122,114,000 | $ 117,251,000 | $ 126,373,000 | $ 116,231,000 | $ 117,349,000 | $ 113,122,000 | $ 115,098,000 | $ 108,342,000 | $ 481,969,000 | $ 453,911,000 | $ 414,051,000 | ||||
Basis of Presentation [Abstract] | |||||||||||||||
Number of business segments | Segment | 1 | ||||||||||||||
Federal debt ceiling in connection with deficit reductions | 10 years | ||||||||||||||
Reductions in federal spending | $ 1,200,000,000,000 | ||||||||||||||
Medicare spending cut percentage | 2.00% | ||||||||||||||
Expected reduction in Medicare spending percentage | 2.00% | 2.00% | 2.00% | ||||||||||||
Combined physical therapy/speech language pathology expenses | $ 3,700 | ||||||||||||||
Reduction in combined physical therapy/speech language pathology expenses | $ 3,000 | ||||||||||||||
Percentage of practice expense component | 100.00% | ||||||||||||||
Percentage reduction for service | 50.00% | ||||||||||||||
Percentage of payment for outpatient therapy services | 85.00% | ||||||||||||||
Net patient revenue from Medicare accounts | $ 119,400,000 | $ 103,600,000 | 92,600,000 | ||||||||||||
Difference between net revenues and corresponding cash collections, approximately of net revenues | 1.00% | ||||||||||||||
Difference between actual aggregate contractual reserve and estimated contractual allowance reserve percentage | 1.00% | ||||||||||||||
Maximum contractual allowance reserve estimate | 1.00% | ||||||||||||||
Estimated reduction in deferred tax liabilities | $ (4,300,000) | ||||||||||||||
Corporate income tax rate | 21.00% | 21.00% | 35.00% | ||||||||||||
Goodwill [Abstract] | |||||||||||||||
Number of regions | Region | 6 | 6 | 6 | ||||||||||||
Income Taxes [Abstract] | |||||||||||||||
Accrued interest and penalties associated with any unrecognized tax benefits | 0 | 0 | $ 0 | $ 0 | $ 0 | ||||||||||
Interest expense recognized | 0 | 0 | $ 0 | ||||||||||||
Recently Adopted Accounting Guidance [Abstract] | |||||||||||||||
Operating lease right-of-use assets | 81,586,000 | $ 0 | 81,586,000 | $ 0 | |||||||||||
Lease Liability | 86,744,000 | $ 86,744,000 | |||||||||||||
Subsequent Event [Abstract] | |||||||||||||||
Number of clinic practices acquired | Clinic | 1 | 5 | 2 | ||||||||||||
Number of partnerships | Partnership | 4 | 3 | 2 | ||||||||||||
Percentage of equity interests acquired | 35.00% | ||||||||||||||
February 2020 Acquisition [Member] | Subsequent Event [Member] | |||||||||||||||
Subsequent Event [Abstract] | |||||||||||||||
Acquisition date | Feb. 26, 2020 | ||||||||||||||
Number of clinic practices acquired | Clinic | 4 | ||||||||||||||
Number of partnerships | Partnership | 4 | ||||||||||||||
Percentage of equity interests acquired | 65.00% | ||||||||||||||
Percentage of associates equity retained | 35.00% | ||||||||||||||
Aggregate purchase price for the acquired clinic practices | $ 12,200,000 | ||||||||||||||
ASU 2016-02 [Member] | |||||||||||||||
Recently Adopted Accounting Guidance [Abstract] | |||||||||||||||
Operating lease right-of-use assets | 78,000,000 | $ 78,000,000 | |||||||||||||
Lease Liability | $ 82,600,000 | $ 82,600,000 | |||||||||||||
Year 2019 [Member] | |||||||||||||||
Basis of Presentation [Abstract] | |||||||||||||||
Percentage of increase in Medicare payment rates | 0.25% | ||||||||||||||
From 2019 through 2024 [Member] | |||||||||||||||
Basis of Presentation [Abstract] | |||||||||||||||
Percentage of bonus payment by APM | 5.00% | ||||||||||||||
From 2020 through 2025 [Member] | |||||||||||||||
Basis of Presentation [Abstract] | |||||||||||||||
Percentage of increase in Medicare payment rates | 0.00% | ||||||||||||||
Employee [Member] | |||||||||||||||
Restricted Stock [Abstract] | |||||||||||||||
Period in which restrictions lapse on stock granted | 4 years | ||||||||||||||
Director [Member] | |||||||||||||||
Restricted Stock [Abstract] | |||||||||||||||
Period in which restrictions lapse on stock granted | 1 year | ||||||||||||||
Officer [Member] | |||||||||||||||
Restricted Stock [Abstract] | |||||||||||||||
Period in which restrictions lapse on stock granted | 4 years | ||||||||||||||
Minimum [Member] | |||||||||||||||
Redeemable Non-Controlling Interests [Abstract] | |||||||||||||||
Redeemable non-controlling interest, redemption rights, commencement period | 3 years | ||||||||||||||
Mandatorily Redeemable Non-Controlling Interests [Abstract] | |||||||||||||||
Mandatorily redeemable non-controlling interest, redemption rights, commencement period | 3 years | ||||||||||||||
Subsequent Event [Abstract] | |||||||||||||||
Percentage of equity interests acquired | 1.00% | 5.50% | 1.00% | 5.50% | |||||||||||
Minimum [Member] | Furniture & Equipment [Member] | |||||||||||||||
Long-Lived Assets [Abstract] | |||||||||||||||
Estimated useful lives | 3 years | ||||||||||||||
Minimum [Member] | Software [Member] | |||||||||||||||
Long-Lived Assets [Abstract] | |||||||||||||||
Estimated useful lives | 3 years | ||||||||||||||
Minimum [Member] | Leasehold Improvements [Member] | |||||||||||||||
Long-Lived Assets [Abstract] | |||||||||||||||
Estimated useful lives | 3 years | ||||||||||||||
Maximum [Member] | |||||||||||||||
Redeemable Non-Controlling Interests [Abstract] | |||||||||||||||
Redeemable non-controlling interest, redemption rights, commencement period | 5 years | ||||||||||||||
Mandatorily Redeemable Non-Controlling Interests [Abstract] | |||||||||||||||
Mandatorily redeemable non-controlling interest, redemption rights, commencement period | 5 years | ||||||||||||||
Subsequent Event [Abstract] | |||||||||||||||
Percentage of equity interests acquired | 55.00% | 35.00% | 55.00% | 35.00% | |||||||||||
Maximum [Member] | Year 2017 [Member] | |||||||||||||||
Basis of Presentation [Abstract] | |||||||||||||||
Annual limit on physical therapy and speech language pathology services | $ 1,980 | ||||||||||||||
Annual limit occupational therapy services | $ 1,980 | ||||||||||||||
Maximum [Member] | Furniture & Equipment [Member] | |||||||||||||||
Long-Lived Assets [Abstract] | |||||||||||||||
Estimated useful lives | 8 years | ||||||||||||||
Maximum [Member] | Software [Member] | |||||||||||||||
Long-Lived Assets [Abstract] | |||||||||||||||
Estimated useful lives | 7 years | ||||||||||||||
Maximum [Member] | Leasehold Improvements [Member] | |||||||||||||||
Long-Lived Assets [Abstract] | |||||||||||||||
Estimated useful lives | 5 years | ||||||||||||||
Net Patient Revenues [Member] | |||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||
Revenue related to the various categories | $ 108,940,000 | $ 104,392,000 | $ 113,363,000 | $ 106,650,000 | $ 107,808,000 | $ 103,354,000 | $ 105,989,000 | $ 100,552,000 | $ 433,345,000 | $ 417,703,000 | $ 389,226,000 | ||||
Management Contract Revenues [Member] | |||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||
Revenue related to the various categories | 8,676,000 | 8,339,000 | 6,275,000 | ||||||||||||
Industrial Injury Prevention Services Revenues [Member] | |||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||
Revenue related to the various categories | 37,462,000 | 25,466,000 | 14,908,000 | ||||||||||||
Other Revenues [Member] | |||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||
Revenue related to the various categories | $ 2,486,000 | $ 2,403,000 | $ 3,642,000 |
Acquisitions of Businesses (Det
Acquisitions of Businesses (Details) $ in Thousands | Sep. 30, 2019USD ($)ClinicInstallment | Apr. 11, 2019USD ($)StateLocation | Aug. 31, 2018USD ($)ClinicInstallment | Apr. 30, 2018USD ($)Business | Oct. 31, 2017USD ($)ClinicInstallmentContract | Jun. 30, 2017USD ($)ClinicInstallment | May 31, 2017USD ($)ClinicInstallment | Jan. 01, 2017USD ($)ClinicInstallment | Dec. 31, 2019USD ($)Clinic | Dec. 31, 2018USD ($)Clinic | Dec. 31, 2017USD ($)Clinic | Mar. 31, 2017 | Jan. 02, 2017 | Dec. 31, 2016USD ($) | ||
Business Combination, Description [Abstract] | ||||||||||||||||
Percentage of interest acquired | 35.00% | |||||||||||||||
Number of clinics | Clinic | 1 | 5 | 2 | |||||||||||||
Number of clinics consolidated with an existing clinic | Clinic | 1 | 1 | ||||||||||||||
Number of clinics that operate as a satellite clinic with existing partnerships | Clinic | 1 | 1 | 1 | |||||||||||||
Cash paid, net of cash acquired | $ 30,597 | $ 16,367 | $ 30,597 | $ 16,367 | $ 36,682 | |||||||||||
Net of cash acquired | 372 | $ 900 | 2,297 | |||||||||||||
Payable to shareholders of seller | 486 | |||||||||||||||
Seller notes | 4,300 | 950 | 2,150 | |||||||||||||
Total consideration | 35,383 | 17,317 | 38,832 | |||||||||||||
Estimated fair value of net tangible assets acquired: [Abstract] | ||||||||||||||||
Total current assets | 2,604 | 1,633 | 5,853 | |||||||||||||
Total non-current assets | 3,639 | 305 | 1,527 | |||||||||||||
Total liabilities | (4,350) | (525) | (2,865) | |||||||||||||
Net tangible assets acquired | 1,893 | 1,413 | 4,515 | |||||||||||||
Referral relationships | 3,000 | 2,926 | 4,250 | |||||||||||||
Non-compete | 1,290 | 298 | 660 | |||||||||||||
Tradename | 4,100 | 990 | 6,850 | |||||||||||||
Goodwill | 31,330 | 19,835 | 46,722 | |||||||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interests) | (6,230) | (8,145) | (13,883) | |||||||||||||
Fair value of non-controlling interest (originally classified as mandatorily redeemable non-controlling interests) | (10,282) | |||||||||||||||
Total consideration | $ 35,383 | $ 17,317 | $ 38,832 | |||||||||||||
Referral Relationships [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Estimated useful lives of acquired intangibles | 11 years | 10 years 6 months 14 days | 10 years 1 month 6 days | |||||||||||||
Non-compete Agreements [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Estimated useful lives of acquired intangibles | 6 years | 6 years | 5 years 1 month 28 days | |||||||||||||
September 2019 Acquisition [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition date | Sep. 30, 2019 | |||||||||||||||
Percentage of interest acquired | 67.00% | |||||||||||||||
Number of clinics | Clinic | 11 | |||||||||||||||
Business acquisition number of installments for payment of purchase consideration | Installment | 2 | |||||||||||||||
Percentage of interest accrued | 5.00% | |||||||||||||||
September 2019 Acquisition [Member] | September 2020 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Cash paid for acquisition of interest in clinic | $ 150 | |||||||||||||||
September 2019 Acquisition [Member] | September 2021 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Cash paid for acquisition of interest in clinic | $ 150 | |||||||||||||||
April 2019 Acquisition [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition date | Apr. 11, 2019 | |||||||||||||||
Number of states of network services | State | 45 | |||||||||||||||
Number of onsite client locations | Location | 11 | |||||||||||||||
Percentage of interest acquired | 76.00% | |||||||||||||||
Cash paid for acquisition of interest in clinic | $ 18,900 | |||||||||||||||
Aggregate purchase price for the acquired clinic practices | $ 23,600 | |||||||||||||||
Percentage of interest accrued | 5.50% | |||||||||||||||
Cash paid, net of cash acquired | $ 22,900 | |||||||||||||||
Net of cash acquired | 700 | |||||||||||||||
Payable to shareholders of seller | 500 | |||||||||||||||
Seller notes | 4,000 | |||||||||||||||
IIPS [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Percentage of interest acquired | 65.00% | 55.00% | ||||||||||||||
Cash paid for acquisition of interest in clinic | $ 8,600 | |||||||||||||||
Number of businesses merged | Business | 2 | |||||||||||||||
Percentage of combined business interest owned | 59.45% | |||||||||||||||
Cash paid, net of cash acquired | [1] | 18,427 | ||||||||||||||
Payable to shareholders of seller | [1] | 486 | ||||||||||||||
Seller notes | 4,000 | [1] | $ 400 | |||||||||||||
Total consideration | [1] | 22,913 | ||||||||||||||
Estimated fair value of net tangible assets acquired: [Abstract] | ||||||||||||||||
Total current assets | [1] | 1,907 | ||||||||||||||
Total non-current assets | [1] | 611 | ||||||||||||||
Total liabilities | [1] | (1,504) | ||||||||||||||
Net tangible assets acquired | [1] | 1,014 | ||||||||||||||
Referral relationships | [1] | 1,500 | ||||||||||||||
Non-compete | [1] | 590 | ||||||||||||||
Tradename | [1] | 2,500 | ||||||||||||||
Goodwill | [1] | 17,309 | ||||||||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interests) | [1] | 0 | ||||||||||||||
Total consideration | [1] | 22,913 | ||||||||||||||
Clinic Practice [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Cash paid, net of cash acquired | 12,170 | |||||||||||||||
Payable to shareholders of seller | 0 | |||||||||||||||
Seller notes | 300 | |||||||||||||||
Total consideration | 12,470 | |||||||||||||||
Estimated fair value of net tangible assets acquired: [Abstract] | ||||||||||||||||
Total current assets | 697 | |||||||||||||||
Total non-current assets | 3,028 | |||||||||||||||
Total liabilities | (2,846) | |||||||||||||||
Net tangible assets acquired | 879 | |||||||||||||||
Referral relationships | 1,500 | |||||||||||||||
Non-compete | 700 | |||||||||||||||
Tradename | 1,600 | |||||||||||||||
Goodwill | 14,021 | |||||||||||||||
Fair value of non-controlling interest (classified as redeemable non-controlling interests) | (6,230) | |||||||||||||||
Total consideration | $ 12,470 | |||||||||||||||
August 2018 Acquisition [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition date | Aug. 31, 2018 | |||||||||||||||
Percentage of interest acquired | 70.00% | |||||||||||||||
Number of clinics | Clinic | 4 | |||||||||||||||
Cash paid for acquisition of interest in clinic | $ 7,300 | |||||||||||||||
Business acquisition number of installments for payment of purchase consideration | Installment | 2 | |||||||||||||||
Seller notes | $ 400 | |||||||||||||||
August 2018 Acquisition [Member] | August 2019 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 200 | |||||||||||||||
August 2018 Acquisition [Member] | August 2020 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 200 | |||||||||||||||
January 2017 Acquisition [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition date | Jan. 1, 2017 | |||||||||||||||
Percentage of interest acquired | 70.00% | 70.00% | ||||||||||||||
Number of clinics | Clinic | 17 | |||||||||||||||
Cash paid for acquisition of interest in clinic | $ 10,700 | |||||||||||||||
Business acquisition number of installments for payment of purchase consideration | Installment | 2 | |||||||||||||||
Seller notes | $ 500 | |||||||||||||||
January 2017 Acquisition [Member] | January 2018 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250 | |||||||||||||||
January 2017 Acquisition [Member] | January 2019 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250 | |||||||||||||||
May 2017 Acquisition [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition date | May 31, 2017 | |||||||||||||||
Percentage of interest acquired | 70.00% | |||||||||||||||
Number of clinics | Clinic | 4 | |||||||||||||||
Cash paid for acquisition of interest in clinic | $ 2,300 | |||||||||||||||
Business acquisition number of installments for payment of purchase consideration | Installment | 2 | |||||||||||||||
Seller notes | $ 250 | |||||||||||||||
May 2017 Acquisition [Member] | May 2018 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 125 | |||||||||||||||
May 2017 Acquisition [Member] | May 2019 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 125 | |||||||||||||||
June 2017 Acquisition [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition date | Jun. 30, 2017 | |||||||||||||||
Percentage of interest acquired | 60.00% | |||||||||||||||
Number of clinics | Clinic | 9 | |||||||||||||||
Cash paid for acquisition of interest in clinic | $ 15,800 | |||||||||||||||
Business acquisition number of installments for payment of purchase consideration | Installment | 2 | |||||||||||||||
Seller notes | $ 500 | |||||||||||||||
June 2017 Acquisition [Member] | June 2018 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 250 | |||||||||||||||
June 2017 Acquisition [Member] | June 2019 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250 | |||||||||||||||
October 2017 Acquisition [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition date | Oct. 31, 2017 | |||||||||||||||
Percentage of interest acquired | 70.00% | |||||||||||||||
Number of clinics | Clinic | 9 | |||||||||||||||
Cash paid for acquisition of interest in clinic | $ 4,000 | |||||||||||||||
Business acquisition number of installments for payment of purchase consideration | Installment | 2 | |||||||||||||||
Number of management contracts | Contract | 2 | |||||||||||||||
Seller notes | $ 500 | |||||||||||||||
October 2017 Acquisition [Member] | October 2018 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | 250 | |||||||||||||||
October 2017 Acquisition [Member] | October 2019 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Acquisition cost payable in two principal installments including accrued interest | $ 250 | |||||||||||||||
Acquisition of Five Clinic Practices [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Number of clinics | Clinic | 5 | |||||||||||||||
Cash paid for acquisition of interest in clinic | $ 1,000 | |||||||||||||||
Aggregate purchase price for the acquired clinic practices | 850 | |||||||||||||||
Seller notes | $ 150 | |||||||||||||||
Acquisition of Five Clinic Practices [Member] | August 2019 [Member] | ||||||||||||||||
Business Combination, Description [Abstract] | ||||||||||||||||
Percentage of interest accrued | 4.50% | |||||||||||||||
[1] | Industrial injury prevention services |
Acquisitions and Sale of Non-_2
Acquisitions and Sale of Non-Controlling Interests (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)Partnership | Dec. 31, 2018USD ($)Partnership | Dec. 31, 2017USD ($)Partnership | |
Business Combination, Description [Abstract] | |||
Number of partnerships in which interest acquired | Partnership | 4 | 3 | 2 |
Sale of non-controlling interest percentage in partnership one | 1.00% | ||
Tax effect on sale price | $ | $ 196 | $ 224 | $ 56 |
Percentage of interest acquired | 35.00% | ||
Minimum [Member] | |||
Business Combination, Description [Abstract] | |||
Percentage of interest acquired | 1.00% | 5.50% | |
Maximum [Member] | |||
Business Combination, Description [Abstract] | |||
Percentage of interest acquired | 55.00% | 35.00% |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in Carrying Amount (Fair Value) of Redeemable Non-Controlling Interests [Roll Forward] | ||||
Beginning balance | $ 133,943 | |||
Ending balance | 137,750 | $ 133,943 | ||
Carrying Amount (Fair Value) of Redeemable Non-Controlling Interest [Abstract] | ||||
Redeemable non-controlling interests | 133,943 | 133,943 | $ 137,750 | $ 133,943 |
Redeemable Non-Controlling Interest [Member] | ||||
Changes in Carrying Amount (Fair Value) of Redeemable Non-Controlling Interests [Roll Forward] | ||||
Beginning balance | 133,943 | 102,572 | ||
Operating results allocated to redeemable non-controlling interest partners | 10,659 | 8,433 | ||
Distributions to redeemable non-controlling interest partners | (10,221) | (9,835) | ||
Changes in the fair value of redeemable non-controlling interest | 11,893 | 24,770 | ||
Purchases of redeemable non-controlling interest | (8,934) | 8,145 | ||
Acquired interest | 6,230 | 0 | ||
Sales of redeemable non-controlling interest - temporary equity | 3,120 | 0 | ||
Reduction of non-controlling interest due to sale of USPh partnership interest | (6,132) | 0 | ||
Notes receivable related to sales of redeemable non-controlling interest - temporary equity | (2,870) | (142) | ||
Other | 62 | 0 | ||
Ending balance | 137,750 | 133,943 | ||
Carrying Amount (Fair Value) of Redeemable Non-Controlling Interest [Abstract] | ||||
Contractual time period has lapsed but holder's employment has not been terminated | 51,921 | 42,624 | ||
Contractual time period has not lapsed and holder's employment has not been terminated | 85,829 | 91,319 | ||
Holder's employment has terminated and contractual time period has expired | 0 | 0 | ||
Holder's employment has terminated and contractual time period has not expired | 0 | 0 | ||
Redeemable non-controlling interests | $ 137,750 | $ 102,572 | $ 137,750 | $ 133,943 |
Therapy Practice [Member] | Minimum [Member] | ||||
Business Combination, Description [Abstract] | ||||
Business acquisition, percentage of limited partnership acquired | 50.00% | |||
Therapy Practice [Member] | Maximum [Member] | ||||
Business Combination, Description [Abstract] | ||||
Business acquisition, percentage of limited partnership acquired | 90.00% | |||
Therapy Practice [Member] | NewCo. [Member] | ||||
Business Combination, Description [Abstract] | ||||
Percentage of equity interest of subsidiary contributed for acquisition | 100.00% | |||
Business acquisition, percentage of general partnership interest acquired | 100.00% | |||
Business acquisition, consideration payable, term of note | 2 years | |||
Employment agreement renewal term | 1 year | |||
Non-Compete agreement term under condition of termination of employment of employed selling shareholder | 2 years | |||
Therapy Practice [Member] | NewCo. [Member] | Minimum [Member] | ||||
Business Combination, Description [Abstract] | ||||
Employment agreement term | 3 years | |||
Non-Compete agreement term regardless of whether the selling shareholder is employed | 5 years | |||
Therapy Practice [Member] | NewCo. [Member] | Maximum [Member] | ||||
Business Combination, Description [Abstract] | ||||
Employment agreement term | 5 years | |||
Non-Compete agreement term regardless of whether the selling shareholder is employed | 6 years |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 293,525 | $ 271,338 |
Goodwill acquired | 31,330 | 19,778 |
Goodwill related to partnership interest sold | (7,325) | 0 |
Goodwill adjustments for purchase price allocation of businesses acquired in prior year | 146 | 2,409 |
Ending balance | $ 317,676 | $ 293,525 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Total | $ 52,588 | $ 48,828 |
Tradenames [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Total | 32,049 | 30,256 |
Referral Relationships [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Total | 18,367 | 16,895 |
Accumulated amortization | $ 11,677 | 9,370 |
Referral Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated useful life | 6 years | |
Referral Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated useful life | 16 years | |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Total | $ 2,172 | 1,677 |
Accumulated amortization | $ 5,424 | $ 4,716 |
Non-compete Agreements [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated useful life | 5 years | |
Non-compete Agreements [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Estimated useful life | 6 years |
Intangible Assets, net - Amorti
Intangible Assets, net - Amortization Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization of Deferred Charges [Abstract] | |||
Total amortization expenses | $ 3,015 | $ 2,777 | $ 2,654 |
Referral Relationships [Member] | |||
Amortization of Deferred Charges [Abstract] | |||
Total amortization expenses | 2,307 | 2,161 | 1,934 |
Non-compete Agreements [Member] | |||
Amortization of Deferred Charges [Abstract] | |||
Total amortization expenses | $ 708 | $ 616 | $ 720 |
Intangible Assets, net - Amor_2
Intangible Assets, net - Amortization of Referral Relationships and Non-Competition Agreements (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Referral Relationships [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity [Abstract] | |
2020 | $ 2,403 |
2021 | 2,403 |
2022 | 2,354 |
2023 | 2,247 |
2024 | 2,082 |
Thereafter | 6,878 |
Non-compete Agreements [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity [Abstract] | |
2020 | 619 |
2021 | 541 |
2022 | 364 |
2023 | 294 |
2024 | 238 |
Thereafter | $ 116 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Salaries and related costs | $ 19,340 | $ 21,726 |
Credit balances due to patients and payors | 4,303 | 7,293 |
Group health insurance claims | 2,277 | 3,124 |
Other | 4,935 | 6,350 |
Total | $ 30,855 | $ 38,493 |
Notes Payable - Summary of Note
Notes Payable - Summary of Notes Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instruments [Abstract] | ||
Payments/Long term debt, Total | $ 51,089 | $ 39,836 |
Less current portion | (728) | (1,434) |
Long term portion | 50,361 | 38,402 |
Credit Facility [Member] | ||
Debt Instruments [Abstract] | ||
Payments/Long term debt, Total | $ 46,000 | 38,000 |
Average effective interest rate | 3.90% | |
4.75 % through 5.50 % Notes Payable due in Next Year [Member] | ||
Debt Instruments [Abstract] | ||
Payments/Long term debt, Total | $ 5,089 | $ 1,836 |
Annual installments | $ 728 | |
4.75 % through 5.50 % Notes Payable due in Next Year [Member] | Maximum [Member] | ||
Debt Instruments [Abstract] | ||
Percentage of interest accrued | 5.50% | |
4.75 % through 5.50 % Notes Payable due in Next Year [Member] | Minimum [Member] | ||
Debt Instruments [Abstract] | ||
Percentage of interest accrued | 4.75% |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2017 | Mar. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2019 | Dec. 05, 2013 | |
Debt Instruments [Abstract] | |||||
Aggregate principal payment due in 2020 | $ 728,000 | ||||
Aggregate principal payment due in 2021 | 50,361,000 | ||||
Notes Payable [Member] | |||||
Debt Instruments [Abstract] | |||||
Aggregate amount of notes payable | 4,700,000 | ||||
Aggregate principal payment due in 2020 | 300,000 | ||||
Aggregate principal payment due in 2021 | $ 4,400,000 | ||||
Minimum [Member] | |||||
Debt Instruments [Abstract] | |||||
Spread on Libor variable rate | 1.25% | ||||
Spread on variable rate | 0.10% | ||||
Percentage of unused commitment fee | 0.25% | ||||
Minimum [Member] | Notes Payable [Member] | |||||
Debt Instruments [Abstract] | |||||
Average effective interest rate | 4.75% | ||||
Maximum [Member] | |||||
Debt Instruments [Abstract] | |||||
Spread on Libor variable rate | 2.00% | ||||
Spread on variable rate | 1.00% | ||||
Percentage of unused commitment fee | 0.30% | ||||
Maximum [Member] | Notes Payable [Member] | |||||
Debt Instruments [Abstract] | |||||
Average effective interest rate | 5.00% | ||||
Credit Facility [Member] | |||||
Debt Instruments [Abstract] | |||||
Revolving credit facility commitment | $ 125,000,000 | ||||
Revolving credit facility maturity date | Nov. 30, 2021 | ||||
Remaining revolving credit outstanding | $ 79,000,000 | ||||
Average effective interest rate | 3.90% | ||||
Credit Agreement [Member] | |||||
Debt Instruments [Abstract] | |||||
Cash and noncash consideration with respect to acquisition after amendment | $ 50,000,000 | ||||
Credit Agreement [Member] | Maximum [Member] | |||||
Debt Instruments [Abstract] | |||||
Cash dividends after amendment | $ 20,000,000 | $ 15,000,000 | $ 10,000,000 |
Notes Payable - Summary of Aggr
Notes Payable - Summary of Aggregate Annual Payments of Principal Required to Revolving Credit Facility (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Long Term Debt By Maturity [Abstract] | ||
During the twelve months ended December 31, 2020 | $ 728 | |
During the twelve months ended December 31, 2021 | 50,361 | |
Payments/Long term debt, Total | $ 51,089 | $ 39,836 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($) | ||
Components of Lease Expense [Abstract] | ||
Operating lease cost | $ 30,225 | |
Short-term lease cost | 1,212 | |
Variable lease cost | 6,074 | |
Total lease cost | 37,511 | [1] |
Supplemental Information Related to Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | 30,077 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | 113,222 | [2] |
Future Lease Payments for Operating Leases [Abstract] | ||
2020 | 29,279 | |
2021 | 23,369 | |
2022 | 17,039 | |
2023 | 11,528 | |
2024 | 6,453 | |
Thereafter | 6,129 | |
Total lease payments | 93,797 | |
Less: imputed interest | 7,053 | |
Total operating lease liabilities | $ 86,744 | |
Average Lease Terms and Discount Rates [Abstract] | ||
Weighted-average remaining lease term - Operating leases | 4 years 18 days | |
Weighted-average discount rate - Operating leases | 3.90% | |
ASU 2016-02 [Member] | ||
Future Lease Payments for Operating Leases [Abstract] | ||
Total operating lease liabilities | $ 82,600 | |
Maximum [Member] | ||
Operating Lease [Abstract] | ||
Lease term | 5 years | |
[1] | Sublease income was immaterial | |
[2] | Includes the right-of-use assets obtained in exchange for lease liabilities of $82.6 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities Included in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets [Abstract] | ||
Compensation | $ 1,964 | $ 1,842 |
Allowance for doubtful accounts | 514 | 600 |
Acquired net operating losses | 840 | 0 |
Lease obligations - including closed clinics | 21,445 | 34 |
Deferred tax assets | 24,763 | 2,476 |
Deferred tax liabilities [Abstract] | ||
Depreciation and amortization | (13,195) | (11,309) |
Operating lease right-of-use assets | (21,416) | 0 |
Other | (223) | (179) |
Deferred tax liabilities | (34,834) | (11,488) |
Net deferred tax liability | $ (10,071) | $ (9,012) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Examination [Abstract] | |||
Deferred tax assets, related to revaluation and acquisition of redeemable non-controlling interests | $ 3,000 | ||
Estimated reduction in deferred tax liabilities | $ (4,300) | ||
Adjustment to deferred tax assets | 300 | ||
Accrued interest and penalties associated with any unrecognized tax benefits | 0 | $ 0 | 0 |
Interest expense recognized | 0 | $ 0 | $ 0 |
Federal [Member] | |||
Income Tax Examination [Abstract] | |||
Tax receivable included in other current assets | $ 1,500 | ||
Periods open for examination | 2016 2017 2018 | ||
State [Member] | |||
Income Tax Examination [Abstract] | |||
Tax receivable included in other current assets | $ 1,300 | ||
Periods open for examination | 2015 2016 2017 2018 |
Income Taxes - Differences Betw
Income Taxes - Differences Between Federal Tax Rate and Company's Effective Tax Rate for Results of Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Abstract] | |||
U.S. tax at statutory rate | $ 11,274 | $ 9,710 | $ 9,900 |
Tax legislation adjustment | 0 | 0 | (4,325) |
State income taxes, net of federal benefit and tax reform | 2,059 | 1,722 | 1,060 |
Excess equity compensation deduction | (871) | (806) | (1,139) |
Non-deductible expenses | 1,185 | 743 | 560 |
Other | 0 | 0 | (24) |
Total income tax provision | $ 13,647 | $ 11,369 | $ 6,032 |
U.S. tax at statutory rate | 21.00% | 21.00% | 35.00% |
Tax legislation adjustment | 0 | 0 | (0.153) |
State income taxes, net of federal benefit and tax reform | 3.80% | 3.70% | 3.70% |
Excess equity compensation deduction | (1.60%) | (1.70%) | (4.00%) |
Nondeductible expenses | 2.20% | 1.60% | 2.00% |
Other | 0.00% | 0.00% | (0.10%) |
Total | 25.40% | 24.60% | 21.30% |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Provision for Income Taxes for Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current [Abstract] | |||
Federal | $ 6,523 | $ 5,357 | $ 9,332 |
State | 2,473 | 1,199 | 1,564 |
Total current | 8,996 | 6,556 | 10,896 |
Deferred [Abstract] | |||
Federal | 3,730 | 3,771 | (5,233) |
State | 921 | 1,042 | 369 |
Total deferred | 4,651 | 4,813 | (4,864) |
Total income tax provision | $ 13,647 | $ 11,369 | $ 6,032 |
Equity Based Plans (Details)
Equity Based Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 17, 2016 | Mar. 16, 2016 | |
Share-based Compensation [Abstract] | |||||
Number of shares authorized (in shares) | 2,700,000 | ||||
Number of common shares available for grant (in shares) | 309,480 | ||||
Shares outstanding for which restrictions had not lapsed (in shares) | 150,771 | 152,926 | |||
Restricted Stock [Member] | |||||
Share-based Compensation [Abstract] | |||||
Compensation expense | $ 6,985 | $ 5,939 | $ 5,032 | ||
Compensation not yet recognized | $ 9,200 | ||||
Amended 2003 Plan [Member] | |||||
Share-based Compensation [Abstract] | |||||
Number of shares authorized (in shares) | 2,100,000 | 2,100,000 | 1,750,000 | ||
Number of common shares available for grant (in shares) | 301,705 | ||||
Employees [Member] | |||||
Share-based Compensation [Abstract] | |||||
Restricted period on the stock granted | 4 years | ||||
Executive Officer [Member] | |||||
Share-based Compensation [Abstract] | |||||
Restricted period on the stock granted | 4 years | ||||
Maximum [Member] | |||||
Share-based Compensation [Abstract] | |||||
Restrictions will lapse in | 2023 | ||||
Maximum [Member] | Non Qualified Stock Options [Member] | |||||
Share-based Compensation [Abstract] | |||||
Number of shares authorized (in shares) | 600,000 | ||||
Maximum [Member] | Amended 2003 Plan [Member] | |||||
Share-based Compensation [Abstract] | |||||
Number of common shares available for grant (in shares) | 2,100,000 | ||||
Minimum [Member] | |||||
Share-based Compensation [Abstract] | |||||
Restrictions will lapse in | 2020 |
Equity Based Plans - Cumulative
Equity Based Plans - Cumulative Summary of Equity Plans (Details) - shares | Dec. 31, 2019 | Mar. 17, 2016 | Mar. 16, 2016 |
Share-based Compensation [Abstract] | |||
Authorized (in shares) | 2,700,000 | ||
Restricted stock issued (in shares) | 1,436,397 | ||
Outstanding stock options (in shares) | 0 | ||
Stock options exercised (in shares) | 918,091 | ||
Stock options exercisable (in shares) | 0 | ||
Shares available for grant (in shares) | 309,480 | ||
Amended 1999 Plan [Member] | |||
Share-based Compensation [Abstract] | |||
Authorized (in shares) | 600,000 | ||
Restricted stock issued (in shares) | 416,402 | ||
Outstanding stock options (in shares) | 0 | ||
Stock options exercised (in shares) | 139,791 | ||
Stock options exercisable (in shares) | 0 | ||
Shares available for grant (in shares) | 7,775 | ||
Amended 2003 Plan [Member] | |||
Share-based Compensation [Abstract] | |||
Authorized (in shares) | 2,100,000 | 2,100,000 | 1,750,000 |
Restricted stock issued (in shares) | 1,019,995 | ||
Outstanding stock options (in shares) | 0 | ||
Stock options exercised (in shares) | 778,300 | ||
Stock options exercisable (in shares) | 0 | ||
Shares available for grant (in shares) | 301,705 |
Equity Based Plans - Restricted
Equity Based Plans - Restricted Stock Granted to Directors, Officers and Employees Pursuant to its Equity Plans (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |||
Number of shares (in shares) | 91,682 | 93,801 | 79,475 |
Weighted average fair value (in dollars per share) | $ 104.85 | $ 78.63 | $ 62.19 |
Equity Based Plans - Restrict_2
Equity Based Plans - Restricted Stock Cancelled Due to Employee Terminations Prior to Restrictions Lapsing (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |||
Number of shares (in shares) | 1,578 | 3,867 | 2,875 |
Weighted average fair value (in dollars per share) | $ 87.88 | $ 59.51 | $ 63.12 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2009 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2008 | |
Class of Stock Disclosures [Abstract] | ||||
Common stock authorized by the Board of Directors (in shares) | 1,200,000 | 2,250,000 | ||
Total purchased shares (in shares) | 859,499 | 0 | 0 | |
Additional estimated shares (in shares) | 131,176 | |||
Closing price (in dollars per share) | $ 114.35 | |||
Maximum [Member] | ||||
Class of Stock Disclosures [Abstract] | ||||
Percentage of repurchase of common stock | 10.00% | |||
Bank credit agreement to permit share repurchases of common stock | $ 15,000,000 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | |||
Required time period for employees for profit sharing plan | 3 months | ||
Maximum employer contribution as a percentage of employee contribution | 50.00% | ||
Contribution expense recognized | $ 0 | $ 0 | $ 0 |
Employer matching contribution amount | $ 2 | $ 1.8 | $ 1.5 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Officer | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Operating Leased Assets [Abstract] | |||
Rent expense | $ 37.5 | $ 37.1 | $ 34.8 |
Retirement date | Oct. 31, 2020 | ||
Expiration date | Dec. 31, 2020 | ||
Renewal period of employment agreements | 2 years | ||
Future compensation - 2020 | $ 39.3 | ||
Future compensation - 2021 through 2023 | $ 8.6 | ||
Executive Officer [Member] | |||
Operating Leased Assets [Abstract] | |||
Number of officers with the company had employee agreement | Officer | 4 | ||
Minimum [Member] | |||
Operating Leased Assets [Abstract] | |||
Operating leases renewal period | 1 year | ||
Maximum [Member] | |||
Operating Leased Assets [Abstract] | |||
Operating leases renewal period | 5 years |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Operating Lease Commitments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies [Abstract] | |
2020 | $ 35,784 |
2021 | 28,022 |
2022 | 20,618 |
2023 | 14,332 |
2024 | 8,302 |
Thereafter | 8,432 |
Total | $ 115,490 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Computation of earnings per share - USPH shareholders [Abstract] | |||||||||||
Net income attributable to USPH shareholders | $ 40,039 | $ 34,873 | $ 22,256 | ||||||||
Charges to retained Earnings [Abstract] | |||||||||||
Revaluation of redeemable non-controlling interest | (11,893) | (24,770) | (201) | ||||||||
Tax effect at statutory rate (federal and state) of 26.25% | 3,121 | 6,502 | 75 | ||||||||
Net income attributable to common shareholders | $ 31,267 | $ 16,605 | $ 22,130 | ||||||||
Earnings per share (basic and diluted) (in dollars per share) | $ 0.55 | $ 0.66 | $ 0.85 | $ 0.39 | $ 0.43 | $ 0.13 | $ 0.48 | $ 0.27 | $ 2.45 | $ 1.31 | $ 1.76 |
Shares used in computation [Abstract] | |||||||||||
Basic and diluted earnings per share - weighted-average shares (in shares) | 12,774 | 12,774 | 12,767 | 12,707 | 12,685 | 12,685 | 12,677 | 12,616 | 12,756 | 12,666 | 12,570 |
Federal and state statutory income tax rate | 26.25% |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net revenues | $ 122,114 | $ 117,251 | $ 126,373 | $ 116,231 | $ 117,349 | $ 113,122 | $ 115,098 | $ 108,342 | $ 481,969 | $ 453,911 | $ 414,051 |
Gross profit | 26,959 | 27,372 | 31,425 | 26,718 | 25,219 | 26,076 | 27,154 | 23,214 | 112,474 | 101,663 | 90,617 |
Operating income | 15,286 | 16,816 | 19,898 | 15,425 | 14,804 | 15,433 | 17,026 | 13,051 | $ 67,425 | $ 60,314 | $ 54,728 |
Net income | 12,015 | 13,069 | 19,800 | 12,375 | 13,673 | 11,879 | 13,236 | 10,054 | |||
Net income attributable to USPH shareholders | $ 7,929 | $ 9,047 | $ 14,620 | $ 8,443 | $ 10,408 | $ 8,102 | $ 9,246 | $ 7,117 | |||
Basic and diluted earnings per share attributable to USPH shareholders (in dollars per share) | $ 0.55 | $ 0.66 | $ 0.85 | $ 0.39 | $ 0.43 | $ 0.13 | $ 0.48 | $ 0.27 | $ 2.45 | $ 1.31 | $ 1.76 |
Shares used in computation - basic and diluted (in shares) | 12,774 | 12,774 | 12,767 | 12,707 | 12,685 | 12,685 | 12,677 | 12,616 | 12,756 | 12,666 | 12,570 |
Net Patient Revenues [Member] | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||
Net revenues | $ 108,940 | $ 104,392 | $ 113,363 | $ 106,650 | $ 107,808 | $ 103,354 | $ 105,989 | $ 100,552 | $ 433,345 | $ 417,703 | $ 389,226 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019 | [1] | Dec. 31, 2018 | Dec. 31, 2017 | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Beginning Balance | $ 2,672 | $ 2,273 | $ 1,792 | |||
Additions Charged to Cost and Expenses | 4,858 | 4,603 | 3,672 | |||
Additions Charged to Other Accounts | 0 | 0 | 0 | |||
Deductions | [2] | 4,832 | 4,204 | 3,191 | ||
Ending Balance | $ 2,698 | $ 2,672 | [1] | $ 2,273 | ||
[1] | Related to patient accounts receivable and accounts receivable-other. | |||||
[2] | Uncollectible accounts written off, net of recoveries. |