Company: USPH
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001140361-25-029744
Chunk: 11

Company: U S PHYSICAL THERAPY INC /NV
Filing Date: 2025-08-08
Form: 10-Q
Item: Item 2
Chunk 11
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 IIP acquisition made in April 2024, IIP revenue increased by $4.0 million or 18.4% in the 2025 Second Quarter and gross profit margin increased $1.0 million or 21.8% in the 2025 Second Quarter over the
        comparable prior year period.

Corporate Office Costs

Corporate office costs increased to $17.5 million for the 2025 Second Quarter from $14.2 million for the 2024 Second Quarter, primarily to support of the larger number of clinics, as well
        as, acquisition integration costs and costs associated with the implementation of a new financial and human resources system. Implementation costs associated with the new financial and human resources system are expected to continue through the end
        of 2026. As a ratio to net revenue, corporate office costs was 8.9% for the 2025 Second Quarter compared to 8.5% for the 2024 Second Quarter. Excluding the acquisition integration costs and the costs associated with the implementation of the new
        financial and human resources system of $0.3 million, corporate office costs was 8.7% of net revenue for the 2025 Second Quarter.

        44

Change in fair value of contingent earn-out consideration

We revalued contingent consideration related to certain acquisitions and recognized a net gain (a decrease in the related liabilities) of $0.8 million for the 2025 Second Quarter compared to a net loss (an increase
        in the related liabilities) of $4.0 million for the 2024 Second Quarter.

Operating Income

Operating income was $24.9 million for the 2025 Second Quarter compared to $15.6 million for the 2024 Second Quarter. Excluding the impact of change in value of contingent consideration
        in the 2025 Second Quarter of $0.8 million, and the 2024 Second Quarter of $4.0 million, operating income increased to $24.1 million for the 2025 Second Quarter from $19.6 million in the 2024 Fourth Quarter.

Other (Expenses) Income

Interest Expense, Debt and Other

Interest expense increased by $0.4 million to $2.4 million for the 2025 Second Quarter compared to $2.0 million for the 2024 Second Quarter due to a higher average outstanding balance on
          our revolving credit facility for the 2025 Second Quarter. The interest rate associated with borrowings on our credit