U S Physical Therapy : USPH IR Presentation FY 2023-FINAL

Disclaimer

Forward-Looking Statements

This presentation contains forward-looking statements, which involve numerous risks and uncertainties. Included are statements relating to opening of new clinics, availability of personnel and reimbursement environment. The forward-looking statements are based on the Company's current views and assumptions and the Company's actual results could differ materially from those anticipated as a result of certain risks, uncertainties, and factors, which include, but are not limited to: changes in Medicare rules and guidelines and reimbursement or failure of our clinics to maintain their Medicare certification and/or enrollment status; the impact of future public health crises and epidemics/pandemics, such as was the case with the novel strain of COVID-19 and its variants; revenue we receive from Medicare and Medicaid being subject to potential retroactive reduction; changes in reimbursement rates or payment methods from third party payors including government agencies, and changes in the deductibles and co-pays owed by patients; compliance with federal and state laws and regulations relating to the privacy of individually identifiable patient information, and associated fines and penalties for failure to comply; competitive, economic or reimbursement conditions in our markets which may require us to reorganize or close certain clinics and thereby incur losses and/or closure costs including the possible write- down or write-off of goodwill and other intangible assets; one of our acquisition agreements contains a put right related to a future purchase of a majority interest in a separate company; the impact of future vaccinations and/or testing mandates at the federal, state and/or local level, which could have an adverse impact on staffing, revenue, costs and the results of operations; our debt and financial obligations could adversely affect our financial condition, our ability to obtain future financing and our ability to operate our business; changes as the result of government enacted national healthcare reform; business and regulatory conditions including federal and state regulations; governmental and other third party payor inspections, reviews, investigations and audits, which may result in sanctions or reputational harm and increased costs; revenue and earnings expectations; some of our acquisition agreements contain contingent consideration, the value of which may impact future financial results; legal actions, which could subject us to increased operating costs and uninsured liabilities; general economic conditions, including but not limited to inflationary and recessionary periods; actual or perceived events involving banking volatility or limited liability, defaults or other adverse developments that affect the U.S. or international financial systems, may result in market wide liquidity problems which could have a material and adverse impact on our available cash and results of operations; our business depends on hiring, training, and retaining qualified employees availability and cost of qualified physical therapists; competitive environment in the industrial injury prevention services business, which could result in the termination or non- renewal of contractual service arrangements and other adverse financial consequences for that service line; our ability to identify and complete acquisitions, and the successful integration of the operations of the acquired businesses; impact on the business and cash reserves resulting from retirement or resignation of key partners and resulting purchase of their non-controlling interest (minority interests); maintaining our information technology systems with adequate safeguards to protect against cyber-attacks; a security breach of our or our third-party vendors' information technology systems may subject us to potential legal action and reputational harm and may result in a violation of the Health Insurance Portability and Accountability Act of 1996 of the Health Information Technology for Economic and Clinical Health Act; maintaining clients for which we perform management, industrial injury prevention related services, and other services, as a breach or termination of those contractual arrangements by such clients could cause operating results to be less than expected; maintaining adequate internal controls; maintaining necessary insurance coverage; availability, terms, and use of capital; and weather and other seasonal factors. See Risk Factors in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023 and any subsequent filings we make with the SEC.

Non-GAAP Financial Measures

This Presentation includes certain measures ("non-GAAP financial measures") which are not presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), such as Operating Results, basic and diluted operating results per share and Adjusted EBITDA. These non- GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing our financial results. Therefore, these measures should not be considered in isolation or as an alternative to GAAP measures. Our presentation of these measures may not be comparable to similarly titled measures used by other companies. Management believes that such measures are commonly reported by issuers and widely used by investors as indicators of a company's operating performance. All non-GAAP financial measures contained herein should be considered only as a supplement to, and not as a superior measure to, financial measures prepared in accordance with GAAP.

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USPh At a Glance

Leading Physical Therapy Company

671	42
Outpatient Physical and	State
Occupational Therapy Clinics (5)	National Footprint (5)	Diversified Payor Mix

• One of the largest PT clinic owner/operator platforms in a highly fragmented market
• Leading public physical therapy platform
• Headquarters: Houston, TX
• Founded: 1990
• Employees: 6,000+

$605mm

LTM Revenues(1)

87%	13%
Physical Therapy	Injury Prevention
Operations% of Revenue(1)	Services % of Revenue(1)

Attractive Market Dynamics

>$30bn		>10%
US Rehabilitation Market	Favorable	No Company Has Greater
	Demographic Trends	Than 10% Market Share(2)

Proven Business Model

			~1/2
Partner	with	Driven by Organic	Of Clinics Were
Experienced Physical Therapists	Growth and Acquisitions	De Novo Start-ups

Strong Financial Position

$78mm	9%	$1.76
LTM Adj EBITDA(1)	YoY Revenue Growth(3)	Annual Dividend(4)

1. As of or for the year ended December 31, 2023. Adjusted EBITDA is a non-GAAP financial measure and has not been prepared in accordance with GAAP. See Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA for further detail.

• (2) Source: "Industry Trends in M&A and Total Addressable Market Study" (Bain & Company, WebPT). Select Medical used as proxy for largest physical therapy operator in the U.S. with 1,936 outpatient rehabilitation clinics as of March 31, 2023.
• 1. Based on FY 2022 results.
  2. Annualized quarterly dividend of $0.43 per share.
  3. As of December 31, 2023

Expanding National Footprint of Physical Therapy Clinics

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Large and Growing Market Opportunity

• $30B+ U.S. rehab market projected to grow to $40B+ by 2025
• Favorable demographics - physically active, aging and obese population segments
• Significant market potential
• • ~50% of Americans over 18 years old develop a musculoskeletal injury that lasts more than 3 months
  • Within this group, only 10% use outpatient physical therapy services (1)
• Healthcare delivery shifting towards lower cost, high quality outpatient providers
• Operating environment favors market consolidators with scale

• (1) Source: "Industry Trends in M&A and Total Addressable Market Study" (Bain & Company, WebPT), Market Research.

Outpatient Clinics are the Leading Setting For Care

Orthopedic rehab is the primary driver of physical therapy services, representing approximately 60% of visits

Physical Therapy Delivery Mix

Outpatient

Clinics

Hospitals;	Home Health	Offices of	Other
State, Local,		Physicians
and Private

• Source: "Industry Trends in M&A and Total Addressable Market Study" (Bain & Company, WebPT).

Payors See Significant ROI for Physical Therapy

With PT

Hip replacement surgery

($56,000)

Inpatient care

($15,000)

Outpatient Physical

Therapy Clinic

Full Recovery

Total Treatment Cost

~$79K

Readmission

Rate of

10%

Without PT

Hip replacement surgery

($56,000)

Inpatient care

($15,000)

Home

Full Recovery

Total Treatment Cost

~$85K

Readmission

Rate of

20%

Average overall savings of ~$6k with significantly lower readmission rate

• Source: "Industry Trends in M&A and Total Addressable Market Study" (Bain & Company, WebPT).

Competitive Landscape

Highly fragmented U.S. outpatient rehab market with 37,000+ clinics (1)

No company with >10% market share(2)

USPh is one of the largest owner/operator of PT clinics

USPh is well-positioned to capitalize in a more challenged macro environment

1,850+		850+		671
Clinics(3)		Clinics(3)		Clinics(3)

• (1) Source: "Industry Trends in M&A and Total Addressable Market Study" (Bain & Company, WebPT).
• 1. Source: "Industry Trends in M&A and Total Addressable Market Study" (Bain & Company, WebPT). Select Medical used as proxy for largest physical therapy operator in the U.S. with 1,936 outpatient rehabilitation clinics as of March 31, 2023.
  2. Clinic counts as of December 31, 2023

Growth Strategy

1

Drive organic growth through de novo PT/OT clinic openings, utilize true

partnership model

2

Maximize profits of existing facilities by growing patient volume, improving

pricing, increasing efficiencies and adding programs and services

3

Augment organic growth through strategic acquisitions

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Highly Retentive, Partnership Model

• Specialize in trauma, sports, work-related and pre- and post-surgical cases
• Partner with experienced physical therapists
• • Drive volume via referrals
  • Augment sales with marketing reps
• Organic growth includes lower cost de novo start up clinics
• Strategic acquisitions structured as partnerships to create strong alignment of interests:
• • Significant ownership retained by founders (~20% to 40%)
  • Maintain established local brand
  • Monthly distributions of cash generated based on ownership percentages
  • Agree to purchase remaining interest of partners on back end at typically the same EBITDA multiple as the original purchase

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