Lawrence Solow's questions to US Physical Therapy Inc (USPH) leadership • Q1 2025
Question
Lawrence Solow asked for more color on the drivers of the strong pricing, particularly the commercial rate increase and the role of workers' comp. He also questioned if strong average visits per day were skewed by clinic closures, the reasons for the year-over-year margin decline, and for an update on cost-control initiatives.
Answer
CFO Carey Hendrickson detailed that the overall rate strength was broad-based, with commercial rates up ~2% and workers' comp rates up a significant 10% year-over-year. She confirmed same-clinic volume was down in Jan/Feb due to weather but turned positive in March and is expected to grow for the full year. Both Hendrickson and CEO Christopher Reading attributed the margin decline partly to cost increases from mid-2024 and the impact of the lower-margin Metro acquisition, which was heavily affected by weather. Reading added that he is now personally leading a cost-review initiative with the top 40 partnerships.