Reliance on SEC Relief from Filing Requirements

U.S. Physical Therapy, Inc. (the “Company, “us”, “our” and “we”) is filing this Current Report on Form 8-K to the Order of the Securities and Exchange Commission (the “SEC”), issued on March 4, 2020 and as revised on March 25, 2020 to Section 36 of the Exchange Act, granting exemptions from specified provisions of the Exchange Act and certain rules thereunder (Release No. 34-88465) (the “SEC Order”). The SEC Order provides that a registrant subject to the reporting requirements of Exchange Act Section 13(a) or 15(d), and any person required to make any filings with respect to such registrant, is exempt from any requirement to file or furnish materials with the Commission under Exchange Act Sections 13(a), 13(f), 13(g), 14(a), 14(c), 14(f), 15(d) and Regulations 13A, Regulation 13D-G (except for those provisions mandating the filing of Schedule 13D or amendments to Schedule 13D), 14A, 14C and 15D, and Exchange Act Rules 13f-1, and 14f-1, as applicable, if certain conditions are satisfied.

The Company, relying on the SEC Order, will delay the filing of its Quarterly Report on Form 10-Q for the three months ended March 31, 2020 (the “Report”) due to the circumstances related to COVID-19. In particular, due to the government imposed restrictions in many of the areas we operate including our corporate offices, COVID-19 has caused disruptions to the Company and limited access to its facilities resulting in limited support from its staff. The Company’s operations are located throughout the United States with its corporate office in Houston, Texas. These restrictions have, in turn, slowed the completion of the Company’s internal quarterly review, including evaluating the various impacts of COVID-19 on its financial statements, and to prepare and complete in a timely manner the Report. Notwithstanding the foregoing, the Company expects to file the Report on May 21, 2020, approximately two weeks later than normal.

Business Update

The effects of the COVID-19 pandemic continue to adversely impact us. Our patient volumes last week overall were approximately 55% of normal but vary significantly by region. At this point, we have 51 clinics at least temporarily closed and we anticipate additional closures. Clinics that remain open continue to experience a significant decline in patient volume as new patient referrals continue to slow and existing patients continue to cancel scheduled appointments and fail to schedule additional appointments. Likewise the Company’s industrial injury prevention business is experiencing a significant downturn as a number of our clients’ locations are on reduced work schedules or closed. As a result, the Company expects a significant drop in revenue and, in the near term, expects to incur losses. Management has taken a number of steps to mitigate these losses. To date we have furloughed or terminated approximately 2,000 employees, comprising more than 40% of our employees across the Company. In our corporate office, we have made across the board employee salary reductions of from 20% to 25%, as well as a 35% to 40% salary reduction for executives, and a 50% reduction of our Board of Directors related fees. In addition, many of our clinic partnerships have made similar salary reductions. We continue to deploy a telehealth and e-visit solution to perform services remotely, renegotiate leases, slow development of new clinics, delay potential acquisitions and cut other expenses.

Dividend Payment and Suspension of Further Dividends in 2020

The Company will pay the first quarter dividend as scheduled on Friday, April 17, 2020. As previously disclosed, the Board of Directors declared a cash dividend of $0.32 per share payable on April 17, 2020 to shareholders of record as of March 13, 2020. Although a final decision has not yet been made by the Company’s Board of Directors, management does not anticipate that the Company will pay subsequent dividends for the remainder of 2020.

Additional Risk Factor

We are subject to risks associated with public health crises and epidemics/pandemics, such as the novel strain of coronavirus (COVID-19).

Our operations expose us to risks associated with public health crises and epidemics/pandemics, such as the novel strain of coronavirus (COVID-19) that has spread globally. In recent weeks, the continued spread has led to disruption and volatility in the global capital markets, which increases the cost of, and adversely impacts access to, capital and increases economic uncertainty. The pandemic has caused an economic slowdown of potentially extended duration, and it is possible that it could cause a global recession.

COVID-19 is having, and will continue to have, an adverse impact on our operations and supply chains, including an increase in cancellations of physical therapy patient appointments and a decline in the scheduling of new or additional patient appointments. Due to these impacts and measures, we have experienced, and will continue to experience, significant and unpredictable reductions and cancellations of our patient visits.

As a result, given the rapid and evolving nature of the virus, COVID-19 will negatively affect our revenue, and it is uncertain how materially COVID-19 will affect operations generally if these impacts persist or worsen over an extended period of time. Any of these impacts would have a significant adverse effect on our business, financial condition and results of operations, and at this point, the extent of the impact of COVID-19 remains uncertain.

Summary of Risk Factors

Our business can be affected by certain risks, uncertainties and factors which include, but are not limited to:

Refer to Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 28, 2020 for a listing and explanation of risk factors and the above noted additional risk factor.

About U.S. PHYSICAL THERAPY, INC. (NYSE:USPH)

U.S. Physical Therapy, Inc., through its subsidiaries, operates outpatient physical 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. The Company’s segment is made up of various clinics within partnerships. The Company primarily operates through subsidiary clinic partnerships, in which it owns a general partnership interest and a limited partnership interest, and the managing therapists of the clinics owns the remaining limited partnership interest in the clinics. The Company operates approximately 510 clinics in over 40 states. There are approximately 380 clinics operated under Clinic Partnerships and over 100 operated as Company-owned Facilities. In addition to its owned clinics, it also manages physical therapy facilities for third parties, primarily physicians, with over 20 third-party facilities under management.