USPH

The following discussion and analysis of U.S. Physical Therapy, Inc. and its subsidiaries (herein referred to as “we,” “us,” “our” or the “Company”) should be read in conjunction with (i) our historical consolidated financial statements and accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q; and (ii) our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2026 (“2025 Annual Report”). This discussion includes forward-looking statements that are subject to risk and uncertainties. Actual results may differ substantially from the statements we make in this section due to a number of factors that are discussed below. FORWARD-LOOKING STATEMENTS We make statements in this report that are considered forward-looking statements within the meaning given such term under Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements contain forward-looking information relating to the financial condition, results of operations, plans, objectives, future performance and business of our Company. These statements (often using words such as “believes”, “expects”, “intends”, “plans”, “appear”, “should” and similar words) involve risks and uncertainties that could cause actual results to differ materially from those we project. Included among such statements, but not limited to, are those relating to opening clinics, availability of personnel and the insurance reimbursement environment. The forward-looking statements are based on our current views and assumptions, and actual results could differ materially from those anticipated in such forward-looking statements 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; • 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; • private third-party payors for our services may adopt payment policies that could limit our future revenue and profitability; • 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; • compliance with state laws and regulations relating to the corporate practice of medicine and fee splitting, 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; • the impact of a termination of one or more of the Company’s hospital affiliated arrangements, which could have an adverse impact on revenue and the results of operations; • the impact of future public health crises and epidemics/pandemics • certain of our acquisition agreements contain put-rights related to a future purchase of significant equity interests in our subsidiaries or 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; • the ability to control variable interest entities for which we do not have a direct ownership; • 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; • contingent consideration provisions in certain of our acquisition agreements, the value of which may impact future financial results; 39 Table of Contents • 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, defaults or other adverse developments that affect the U.S or the 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; • use of generative artificial intelligence; • maintaining necessary insurance coverage; • availability, terms, and use of capital; and • weather and other seasonal factors. Many factors are beyond our control. Given these uncertainties, you should not place undue reliance on our forward-looking statements. Please see the other sections of this report and our other periodic reports filed with the Securities and Exchange Commission (the “SEC”) for more information on these factors. Our forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as required by law, we are under no obligation to update any forward-looking statement, regardless of the reason the statement may no longer be accurate. EXECUTIVE SUMMARY We operate our business through two reportable business segments. Our physical therapy operations segment consists of physical therapy, speech therapy and occupational therapy clinics and home-care physical and speech therapy practices that provide pre- and post-operative care and treatment for a variety of orthopedic-related disorders, sports-related injuries, and rehabilitation of injured workers. Services provided by the industrial injury prevention services (“IIP”) segment include onsite injury prevention and rehabilitation, performance optimization, post offer employment testing, functional capacity evaluations, ergonomic assessments, occupational medicine testing services, and drug & alcohol testing. IIP is performed through Industrial Sports Medicine Professionals with specialized training related to the musculoskeletal system. 40 Table of Contents Acquisitions During the six months ended June 30, 2026, and for the year ended December 31, 2025, we completed the acquisitions of clinic practices and an IIP business detailed below: Acquisition Date % Interest Acquired Number of Clinics January 2026 Acquisition 2 January 31, 2026 70% * January 2026 Acquisition 1 January 2, 2026 50% 8 July 2025 Acquisition July 31, 2025 60% 3 April 2025 Acquisition April 30, 2025 40%** *** February 2025 Acquisition February 28, 2025 65% 3 * IIP business ** On April 30, 2025, we acquired an outpatient home care practice that provides speech and occupational therapy through its 50% owned subsidiary Metro. After the transaction, ours ownership interest is 40%, the local partners have an ownership interest of 40% and the practice’s preacquisition owners have a 20% ownership interest. *** Home-care business On January 2, 2026, we acquired a 50% equity interest in an eight-clinic practice, with the original owners retaining the remaining 50% interest. On January 31, 2026, we acquired a 70% equity interest in an IIP business with the original owners retaining a 30% ownership interest. On July 1, 2026, we acquired a 67% equity interest in a twelve-clinic practice with the practice owners retaining a 33% equity interest. Our strategy is to continue acquiring multi-clinic outpatient physical therapy practices and home-care physical and speech therapy practices, to develop outpatient physical therapy clinics as satellites in existing partnerships, and to continue acquiring companies that provide IIP. Physical Therapy Locations Roll Forward (1) 2026 2025 Number of clinics, beginning of period 778 759 Q1 additions 15 14 Q1 closed or sold (12 ) (9 ) Number of clinics, end of period 781 764 Q2 additions 4 6 Q2 closed or sold (4 ) (4 ) Number of clinics, end of period 781 766 Q3 additions 18 Q3 closed or sold (7 ) Number of clinics, end of period 777 Q4 additions 11 Q4 closed or sold (10 ) Number of clinics, end of period - 778 Year-to-date total additions 19 20 Year-to-date total closed or sold (16 ) (13 ) (1) See “Glossary of Terms” 41 Table of Contents Our Board of Directors declared a quarterly dividend of $0.46 per share payable on September 11, 2026, to shareholders of record on August 21, 2026. Hospital Affiliations On February 2, 2026, we announced a 10-year strategic alliance between our subsidiary partner, Metro, and a prominent New York hospital system, whereby 60 of Metro’s existing outpatient physical therapy clinics in New York will become part of the hospital system’s clinical services network. The integration of the 60 clinics began in the three months ended June 30, 2026 and is expected to continue through September 30, 2026. On February 25, 2026, we announced a 10-year strategic alliance between another of our subsidiary partners and a local hospital system whereby our subsidiary partner’s existing 10 outpatient physical therapy clinics will become part of the hospital system’s clinical services network. The integration of the 10 clinics is expected to occur in the three months ended September 30, 2026. Regulatory Changes The following is a discussion of some of the significant healthcare regulatory changes that have affected our financial performance in the periods covered by this report or are likely to affect our financial performance and financial condition in the future. The information below should be read in conjunction with the more detailed discussion of regulations contained in our 2025 Annual Report. Medicare Reimbursement The Medicare program reimburses outpatient rehabilitation providers based on the Medicare Physician Fee Schedule (“MPFS”). Outpatient rehabilitation providers may enroll in Medicare as institutional outpatient rehabilitation facilities (i.e., rehab agencies) or individual physical or occupational therapists in private practice. The majority of our clinicians are enrolled as individual physical or occupational therapists in private practice while the remaining balance of providers are reimbursed through enrolled rehab agencies. For calendar years 2021, 2022 and 2023, Centers for Medicare and Medicaid Services (“CMS”) expected decreases in Medicare reimbursement were partially offset by one-time increases in payments as a result of other legislation passed by Congress, resulting in decreases of approximately 3.5%, 0.75% and 2.0% in each of these years, respectively. For January 1 through March 8 of 2024, CMS’s final rule resulted in an approximate 3.5% decrease in Medicare payments for the therapy specialty. However, effective as of March 9, 2024, pursuant to the Consolidated Appropriations Act, 2024, Congress minimized the reduction in Medicare payments for therapy services for the balance of 2024, resulting in an approximate 1.8% reduction in Medicare payments for therapy services (rather than the 3.5% decrease). The MPFS for 2025 decreased Medicare reimbursement for therapy services by approximately 2.9% as compared to the reimbursement rates in effect for most of 2024. For 2026, the MPFS increased Medicare reimbursement for therapy services by approximately 1.75% as compared to the reimbursement rates for 2025. 42 Table of Contents In the final 2020 MPFS rule, CMS clarified that when the physical therapist is involved for the entire duration of the service and the physical therapist assistant (“PTA”) provides skilled therapy alongside the physical therapist, an identification of the PTA’s participation (as denoted by a “CQ modifier”) is not required. Also, when the same service (code) is furnished separately by the physical therapist and PTA, CMS applies the de minimis standard to each 15-minute unit of codes, not on the total physical therapist and PTA time of the service. For dates of service since January 1, 2022, CMS pays for physical therapy and occupational therapy services provided by PTAs and occupational therapist assistants (“OTAs”) at 85% of the otherwise applicable Part B payment amount. CMS allows a timed service to be billed without a CQ (for PTA’s) or CO (for OTA’s) modifier when a PTA or OTA participates in providing care, but the physical therapist or occupational therapist meets the Medicare billing requirements without including the PTA’s or OTA’s minutes. This occurs when the physical therapist or occupational therapist provides more minutes than the 15-minute midpoint. 43 Table of Contents RESULTS OF OPERATIONS Other Developments Effective January 1, 2026, we implemented a planned regional realignment of reporting units in connection with planned leadership transitions. This change resulted in a revised composition of the Company’s reporting units. The reorganization was administrative in nature and designed to enhance coordination, improve operational efficiency, and support long-term sustainability. The updated reporting unit structure continues to reflect substantially similar economic characteristics to those under the prior organization. On April 14, 2026, we closed a $450.0 million, five-year credit facility that includes a $175.0 million term loan and a $275.0 million revolver with a maturity date of April 14, 2031, replacing our then existing credit facility. See Liquidity and Capital Resources section for additional information. Under our $25.0 million share repurchase authorization, during the three months ended June 30, 2026, we repurchased 306,256 of our own shares on the open market for a total consideration of $19.2 million, equating to an average share price of $62.80. Including repurchases made in 2025, the Company has repurchased 387,578 shares on the open market for a total consideration of $24.8 million, equating to an average share price of $63.99. Glossary of terms The defined terms, with their respective descriptions, used in the following discussions are listed below. • Mature revenue includes revenues from owned and hospital affiliated clinics as well as homecare which were operational prior to January 1, 2025, and are still operating as of the balance sheet date. This metric excludes other management contracts. • Physical therapy revenue per patient visit is net patient revenue from owned and hospital affiliated clinics as well as homecare divided by total number of patient visits (defined below) during the periods presented. This metric excludes other management contracts. • Patient visits is the number of unique patient visits at the Company’s owned and hospital affiliated clinics as well as homecare for the periods presented. This metric excludes other management contracts. • Average daily visits per clinic is patient visits at the Company’s owned and hospital affiliated clinics, divided by the number of days in which normal business operations were conducted during the periods presented and further divided by the average number of owned and hospital affiliated clinics in operation during the periods presented. This metric excludes homecare and other management contracts. • Clinic count includes owned and hospital affiliated clinics as well as other management contracts. This metric excludes homecare. • 2026 Second Quarter refers to the three months ended June 30, 2026. • 2025 Second Quarter refers to the three months ended June 30, 2025. • 2026 Six Months refers to the six months ended June 30, 2026. • 2025 Six Months refers to the six months ended June 30, 2025. 44 Table of Contents Net income attributable to our shareholders was $9.9 million for the 2026 Second Quarter, compared to $12.4 million for the 2025 Second Quarter with earnings per share of $0.25 for the 2026 Second Quarter compared to earnings per share of $0.58 for the 2025 Second Quarter. Under GAAP, changes in the value of redeemable noncontrolling interests, representing our partners’ ownership stakes in subsidiaries not fully owned by us, are excluded from net income but are included in the calculation of earnings per share. Improving performance increases the value of these ownership interests which has a dilutive effect on earnings per share. Also, included in pretax income for the 2026 Second Quarter was a loss on change in fair value of contingent earn out consideration of $1.0 million versus a gain of $0.8 million in the 2025 Second Quarter. Total net revenue for the 2026 Second Quarter increased $16.7 million, or 8.5%, to $214.1 million from $197.3 million for the 2025 Second Quarter while operating costs increased $16.4 million, or 10.5%, to $172.1 million from $155.7 million over the same periods, respectively. Gross profit increased $0.3 million, or 0.8%, to $41.9 million in the 2026 Second Quarter, compared to $41.6 million for the 2025 Second Quarter. Net income attributable to our shareholders was $14.9 million for the 2026 Six Months, compared to $22.3 million for the 2025 Six Months. Included in pretax income for the 2026 Six Months was a loss on change in fair value of contingent earn out consideration of $3.0 million versus a gain of $5.6 million in the 2025 Six Months. Earnings per share was $0.13 for the 2026 Six Months, compared to earnings per share of $1.38 in the prior year period. Total net revenue for the 2026 Six Months increased $31.2 million, or 8.2%, to $412.3 million from $381.1 million for the 2025 Six Months while operating costs increased $29.2 million, or 8.6%, to $337.6 million from $308.4 million over the same periods, respectively. Gross profit increased $2.0 million, or 2.7%, to $74.7 million in the 2026 Six Months, compared to $72.7 million for the 2025 Six Months. The following table provides a calculation of earnings per share. Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Earnings per Share (In thousands, except per share data) (In thousands, except per share data) Computation of earnings per share - USPH shareholders: Net income attributable to USPH shareholders $ 9,898 $ 12,393 $ 14,936 $ 22,292 Charges to retained earnings: Revaluation of redeemable non-controlling interest (8,294 ) (4,806 ) (17,663 ) (1,903 ) Tax effect at statutory rate (federal and state) 2,202 1,228 4,690 486 $ 3,806 $ 8,815 $ 1,963 $ 20,875 Earnings per share (basic and diluted) $ 0.25 $ 0.58 $ 0.13 $ 1.38 Shares used in computation: Basic and diluted earnings per share - weighted-average shares 15,070 15,197 15,118 15,165 Non-GAAP Measures The following tables provide details of the basic and diluted earnings per share computation and reconcile net income attributable to our shareholders calculated in accordance with GAAP to Adjusted EBITDA, Operating Results and other non-GAAP measures. We believe providing Adjusted EBITDA, Operating Results and other non-GAAP measures to investors is useful information for comparing our period-to-period results as well as for comparing them with other similar businesses since most do not have redeemable instruments and therefore have different equity structures. Additionally, we believe that these non-GAAP measures provide useful supplemental information to investors, analysts, and other stakeholders in assessing the Company’s operational performance and financial trends. We use Adjusted EBITDA, Operating Results and other non-GAAP measures, which eliminate certain items described above that can be subject to volatility and unusual costs, as the principal measures to evaluate and monitor financial performance period over period. 45 Table of Contents Adjusted EBITDA, a non-GAAP measure, is defined as net income attributable to our shareholders before interest income, interest expense, taxes, depreciation, amortization, change in fair value of contingent earn-out consideration, changes in revaluation of put-right liability, equity-based awards compensation expense, clinic closure costs, business acquisition related costs, costs related to a one-time financial systems and human resources upgrade, loss on sale of a partnership, other income and related portions for non-controlling interests, and other non-recurring items as applicable. Operating Results, a non-GAAP measure, equals net income attributable to our shareholders less, changes in revaluation of a put-right liability, clinic closure costs, loss on sale of a partnership, changes in fair value of contingent earn-out consideration, business acquisition related costs, costs related to a one-time financial systems and human resources upgrade, any allocations to non-controlling interests, all net of taxes and other non-recurring items as applicable. Operating Results per share also excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact. Adjusted EBITDA, Operating Results and the other non-GAAP measures presented below are not measures of financial performance under GAAP. Adjusted EBITDA, Operating Results and the other non-GAAP measures presented below should not be considered in isolation or as an alternative to, or substitute for, net income attributable to our shareholders presented in the consolidated financial statements. The tables that follow define and reconcile non-GAAP Adjusted EBITDA and non-GAAP Operating Results to the most directly comparable GAAP measure. 46 Table of Contents Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 (In thousands, except per share data) Adjusted EBITDA (a non-GAAP measure) Net income attributable to USPH shareholders $ 9,898 $ 12,393 $ 14,936 $ 22,292 Adjustments: Provision for income taxes 4,155 4,933 6,562 8,793 Depreciation and amortization 5,935 6,057 11,935 11,924 Interest expense, debt and other, net 3,213 2,422 6,004 4,701 Interest income from investments (29 ) (28 ) (45 ) (52 ) Equity-based awards compensation expense 3,168 2,117 5,479 3,888 Change in revaluation of put-right liability 168 339 (195 ) 743 Loss (gain) on change in fair value of contingent earn-out consideration 992 (790 ) 2,989 (5,612 ) Clinic closure costs (1) 6 69 (62 ) 311 Business acquisition related costs (2) 219 320 756 800 ERP implementation costs (3) 419 159 727 221 Loss on sale of a partnership - - - 123 Loan amendment costs (4) 288 - 288 - Loss on extinguishment of debt (4) 124 - 124 - Other income (175 ) (47 ) (305 ) (122 ) Allocation to non-controlling interests (1,429 ) (1,081 ) (1,997 ) (1,608 ) $ 26,952 $ 26,863 $ 47,196 $ 46,402 Operating Results (a non-GAAP measure) Net income attributable to USPH shareholders $ 9,898 $ 12,393 $ 14,936 $ 22,292 Adjustments: Loss (gain) on change in fair value of contingent earn-out consideration 992 (790 ) 2,989 (5,612 ) Change in revaluation of put-right liability 168 339 (195 ) 743 Clinic closure costs (1) 6 69 150 311 Business acquisition related costs (2) 219 320 756 800 ERP implementation costs (3) 419 159 727 221 Loss on sale of a partnership - - - 123 Loan amendment costs (4) 288 - 288 - Loss on extinguishment of debt (4) 124 - 124 - Allocation to non-controlling interest (355 ) (156 ) (356 ) (118 ) Tax effect at statutory rate (federal and state) (494 ) 16 (1,190 ) 903 $ 11,265 $ 12,350 $ 18,229 $ 19,663 Operating Results per share (a non-GAAP measure) $ 0.75 $ 0.81 $ 1.21 $ 1.30 (1) Costs associated with clinic closures during the periods presented and, for purposes of Operating Results, includes accelerated depreciation related to closed clinics. (2) Primarily consists of retention bonuses, as well as legal and consulting expenses related to the acquisition of equity interests in certain partnerships and costs associated with entering into hospital affiliation contracts. (3) Consists of costs related to a one-time financial and human resources systems upgrade. (4) Consists of costs related to the amendment of the Company’s credit facility. 47 Table of Contents A reconciliation of additional non-GAAP measures to the most comparable GAAP measures are presented in the tables below. Three Months Ended June 30, 2026 Adjustments Reported (GAAP) Clinic Closure Costs (1) Metro Incentive Costs (2) Business Acquisition Related Costs (3) ERP Implementation Costs (4) Amended Credit Facility Costs (5) Adjusted (Non-GAAP) (in thousands, except percentages) Segment information - Physical Therapy Operations Salaries and related costs, clinics (6) $ 104,563 $ - $ (816 ) $ - $ - $ - $ 103,747 Salaries and related costs as a percentage of revenue (6) 57.9 % (0.5 %) 57.5 % Gross profit $ 35,471 $ 6 $ 816 $ - $ - $ - $ 36,293 Gross profit margin 19.5 % * 0.4 % 19.9 % Corporate office costs $ 19,005 $ - $ - $ (219 ) $ (419 ) $ (288 ) $ 18,079 Corporate office costs as a percentage of revenue 8.9 % (0.1 %) (0.2 %) (0.1 %) 8.4 % Three Months Ended June 30, 2025 Adjustments Reported (GAAP) Clinic Closure Costs (1) Metro Incentive Costs (2) Business Acquisition Related Costs (3) ERP Implementation Costs (4) Amended Credit Facility Costs (5) Adjusted (Non-GAAP) (in thousands, except percentages) Segment information - Physical Therapy Operations Salaries and related costs, clinics (6) $ 93,877 $ - $ (229 ) $ - $ - $ - $ 93,648 Salaries and related costs as a percentage of revenue (6) 56.6 % (0.1 %) 56.4 % Gross profit $ 35,724 $ 69 $ 229 $ - $ - $ - $ 36,022 Gross profit margin 21.2 % * 0.1 % 21.4 % Corporate office costs $ 17,476 $ - $ - $ (178 ) $ (159 ) $ - $ 17,139 Corporate office costs as a percentage of revenue 8.9 % (0.1 %) (0.1 %) 8.7 % (1) These are costs incurred during the period that are associated with closed clinics (owned). (2) Certain earnout bonuses and incentive costs related to Metro. (3) Includes expenses related to the acquisitions of equity interests in certain partnerships and includes costs associated with entering into hospital affiliated contracts. (4) Includes costs related to a one-time financial and human resources systems upgrade. (5) Certain fees expensed when entering into the Fourth Amended Credit Facility. (6) Excludes revenues and costs related to management contracts. * Not meaningful 48 Table of Contents Six Months Ended June 30, 2026 Adjustments Reported (GAAP) Clinic Closure Costs (1) Metro Incentive Costs (2) Business Acquisition Related Costs (3) ERP Implementation Costs (4) Amended Credit Facility Costs (5) Adjusted (Non-GAAP) (in thousands, except percentages) Segment information - Physical Therapy Operations Salaries and related costs, clinics (6) $ 203,888 $ - $ (1,076 ) $ - $ - $ - $ 202,812 Salaries and related costs as a percentage of revenue (6) 58.9 % (0.3 %) 58.6 % Gross profit $ 61,968 $ 150 $ 1,076 $ 107 $ - $ - $ 63,301 Gross profit margin 17.7 % * 0.3 % * 18.1 % Corporate office costs $ 37,279 $ - $ - $ (756 ) $ (727 ) $ (288 ) $ 35,508 Corporate office costs as a percentage of revenue 9.0 % (0.2 %) (0.2 %) (0.1 %) 8.6 % Six Months Ended June 30, 2025 Adjustments Reported (GAAP) Clinic Closure Costs (1) Metro Incentive Costs (2) Business Acquisition Related Costs (3) ERP Implementation Costs (4) Amended Credit Facility Costs (5) Adjusted (Non-GAAP) (in thousands, except percentages) Segment information - Physical Therapy Operations Salaries and related costs, clinics (6) $ 185,676 $ - $ (294 ) $ - $ - $ - $ 185,382 Salaries and related costs as a percentage of revenue (6) 58.0 % (0.1 %) 58.0 % Gross profit $ 61,683 $ 311 $ 294 $ - $ - $ - $ 62,288 Gross profit margin 19.0 % 0.1 % 0.1 % 19.2 % Corporate office costs $ 33,721 $ - $ - $ (433 ) $ (221 ) $ - $ 33,067 Corporate office costs as a percentage of revenue 8.8 % (0.1 %) (0.1 %) 8.7 % (1) These are costs incurred during the period that are associated with closed clinics (owned). (2) Certain earnout bonuses and incentive costs related to Metro. (3) Includes expenses related to the acquisitions of equity interests in certain partnerships and includes costs associated with entering into hospital affiliated contracts. (4) Includes costs related to a one-time financial and human resources systems upgrade. (5) Certain fees expensed when entering into the Fourth Amended Credit Facility (6) Excludes revenues and costs related to management contracts. * Not meaningful 49 Table of Contents Supplemental Financial and Performance Metrics Revenue Metrics Physical Therapy Revenue Per Patient Visit (1) Visits (1) Average Visits Per Day (2) 2026 2025 2026 2025 2026 2025 First quarter $ 106.49 $ 105.66 1,543,144 1,443,805 31.8 31.2 Second quarter $ 107.59 $ 105.33 1,661,694 1,558,756 33.5 32.7 Third quarter $ - $ 105.54 - 1,554,207 - 32.2 Fourth Quarter $ - $ 106.49 - 1,593,336 - 32.7 Year $ 107.06 $ 105.76 3,204,838 6,150,104 32.7 32.2 (1) See definition of the metrics in the Glossary of Terms - Revenue Metrics (2) Excludes home care business. 50 Table of Contents 2026 Second Quarter versus 2025 Second Quarter Three Months Ended June 30, 2026 June 31, 2025 Variance Amount As a % of Net Revenue Amount As a % of Net Revenue Amount % (In thousands, except percentages) Net patient revenue $ 173,224 80.9 % $ 164,183 83.2 % $ 9,041 5.5 % Hospital affiliation revenue 5,564 2.6 % - 0.0 % 5,564 * Other revenue 35,271 16.5 % 33,161 16.8 % 2,110 6.4 % Net revenue 214,059 100.0 % 197,344 100.0 % 16,715 8.5 % Operating Cost: Salaries and related costs 125,404 58.6 % 113,788 57.7 % 11,616 10.2 % Rent, supplies, contract labor and other 38,965 18.2 % 34,127 17.3 % 4,838 14.2 % Depreciation and amortization 5,621 2.6 % 5,741 2.9 % (120 ) (2.1 )% Provision for credit losses 2,120 1.0 % 1,995 1.0 % 125 6.3 % Clinic closure costs - lease and other 6 0.0 % 69 0.0 % (63 ) * Total operating cost 172,116 80.4 % 155,720 78.9 % 16,396 10.5 % Gross Profit 41,943 19.6 % 41,624 21.1 % 319 0.8 % Corporate office costs 19,005 8.9 % 17,476 8.9 % 1,529 8.7 % Loss (gain) on change in fair value of contingent earn-out consideration 992 0.5 % (790 ) (0.4 )% 1,782 (225.6 )% Operating Income 21,946 10.3 % 24,938 12.6 % (2,992 ) (12.0 )% Other (expense) income: Interest expense, debt and other (3,213 ) (1.5 )% (2,422 ) (1.2 )% (791 ) 32.7 % Interest income from investments 29 0.0 % 28 0.0 % 1 3.6 % Change in revaluation of put-right liability (168 ) (0.1 )% (339 ) (0.2 )% 171 (50.4 )% Loss on extinguishment of debt (124 ) (0.1 )% - 0.0 % (124 ) * Equity in earnings of unconsolidated affiliate 408 0.2 % 401 0.2 % 7 1.7 % Other 175 0.1 % 47 0.0 % 128 272.3 % Total other (expense) (2,893 ) (1.4 )% (2,285 ) (1.2 )% (608 ) 26.6 % Income before taxes 19,053 8.9 % 22,653 11.5 % (3,600 ) (15.9 )% Provision for income taxes 4,155 1.9 % 4,933 2.5 % (778 ) (15.8 )% Net income 14,898 7.0 % 17,720 9.0 % (2,822 ) (15.9 )% Less: Net income attributable to non-controlling interest: Redeemable non-controlling interest - temporary equity (4,080 ) (1.9 )% (3,914 ) (2.0 )% (166 ) 4.2 % Non-controlling interest - permanent equity (920 ) (0.4 )% (1,413 ) (0.7 )% 493 (34.9 )% (5,000 ) (2.3 )% (5,327 ) (2.7 )% 327 (6.1 )% Net income attributable to USPH shareholders $ 9,898 4.6 % $ 12,393 6.3 % $ (2,495 ) (20.1 )% * Not meaningful 51 Table of Contents Segment Results Three Months Ended Variance June 30, 2026 June 30, 2025 $ % (In thousands, except percentages) Physical Therapy Operations Net patient revenue $ 173,224 $ 164,183 $ 9,041 5.5 % Hospital affiliation revenue 5,564 - 5,564 * Other revenue (1) 3,567 4,109 (542 ) (13.2 )% Net revenue 182,355 168,292 14,063 8.4 % Operating costs (1)(2) 146,884 132,568 14,316 10.8 % Gross profit $ 35,471 $ 35,724 $ (253 ) (0.7 )% IIP Net revenue $ 31,704 $ 29,052 $ 2,652 9.1 % Operating costs (2) 25,232 23,152 2,080 9.0 % Gross profit $ 6,472 $ 5,900 $ 572 9.7 % Financial and operating metrics (not in thousands): Patient visits (3) 1,661,694 1,558,756 102,938 6.6 % Average daily visits per clinic (3) 33.5 32.7 0.8 2.4 % Physical therapy revenue per patient visit (3) $ 107.59 $ 105.33 $ 2.26 2.1 % Mature revenue percent change (3) 3.5 % 0.2 % Salaries and related costs, as a percentage of revenue (4)(5) 57.9 % 56.6 % Adjusted salaries and related costs, as a percentage of revenue (4)(5)(6) 57.5 % 56.4 % Physical therapy operations gross profit margin (2) 19.5 % 21.2 % Adjusted physical therapy operations gross profit margin (2)(7) 19.9 % 21.4 % IIP gross profit margin 20.4 % 20.3 % (1) Includes revenues and/or costs related to other management contracts. (2) Amortization of certain intangible assets was reallocated between physical therapy operations and IIP segments for Q2 2025 amounts to conform with current presentation. (3) See Glossary of terms for definition. Reflects the average number of clinic locations (755 and 731) during the current and prior-year periods, respectively. (4) Beginning Q2 2026, the Company changed its salaries and related costs metric from cost-per-visit to percentage-of-revenue, which management believes is a more meaningful presentation. For hospital affiliated clinics, salaries and related costs reimbursements by hospital systems are recognized as revenue by USPH, supporting this presentation change. Prior period metrics have been revised to conform to the current presentation. (5) Includes cost and revenue from physical therapy operations. Excludes costs and revenue from other management contracts. (6) Excludes certain incentive costs related to Metro. Please see the section titled Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. (7) Excludes certain incentive costs related to the Metro acquisition, business acquisition costs and clinic closure costs. Please see the section titled Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. * Not meaningful Physical Therapy Operations Revenues Physical therapy net revenue was $182.4 million for the 2026 Second Quarter, an 8.4% increase versus the 2025 Second Quarter, including a 3.5% increase in mature revenue. Of the total physical therapy net revenue, $5.6 million was associated with the previously announced strategic hospital affiliations. Total patient visits were 1,661,694, which includes home-care visits, for the 2026 Second Quarter, a 6.6% increase from the 2025 Second Quarter. Average daily visits per clinic, which does not include home-care visits, was 33.5 for the 2026 Second Quarter compared to 32.7 for the 2025 Second Quarter. Other revenues decreased approximately $0.5 million, to $3.6 million for the 2026 Second Quarter from $4.1 million for the 2025 Second Quarter. 52 Table of Contents Operating costs Operating costs from physical therapy operations increased $14.3 million, or 10.8%, to $146.9 million for the 2026 Second Quarter from $132.6 million for the 2025 Second Quarter mostly due to the additional clinics added from the comparable prior year period. Salaries and related costs, clinics (excluding other management contracts) increased to $104.6 million in the 2026 Second Quarter from $93.9 million in the 2025 Second Quarter, an increase of $10.7 million, or 11.4%. Excluding certain incentive costs related to the Metro acquisition, salaries and related costs as a percentage of revenue increased to 57.5% for the 2026 Second Quarter from 56.4% for the 2025 Second Quarter. We changed our salaries and related costs metric from cost-per-visit to percentage-of-revenue, because we believe it is a more meaningful presentation. For hospital affiliated clinics, salaries and related costs reimbursements by hospital systems are recognized as revenue, by us, supporting this presentation change. Please see the section titled Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. Rent, supplies, contract labor and other costs, related to clinics (excluding other management contracts) increased to $34.2 million in the 2026 Second Quarter from $29.7 million in the 2025 Second Quarter, an increase of $4.5 million, or 15.2%. Depreciation and amortization related to physical therapy operations decreased to $4.7 million in the 2026 Second Quarter from $5.0 million in the 2025 Second Quarter. The provision for credit losses was $2.1 million for the 2026 Second Quarter and $2.0 million for the 2025 Second Quarter. As a percentage of net revenues, the provision for credit losses was 1.2% over the same periods. Gross Profit Gross profit from physical therapy operations was $35.5 million, or 19.5% as a percent of physical therapy operations net revenue, for the 2026 Second Quarter as compared to $35.7 million, or 21.2% as a percent of net revenues, for the 2025 Second Quarter. Adjusted gross profit margin (a non-GAAP measure) was 19.9% for the 2026 Second Quarter compared to 21.4% for the 2025 Second Quarter. The 2026 Second Quarter results include an unfavorable impact of company-provided health benefit costs compared to a favorable impact in the 2025 Second Quarter, impacting margins by approximately 100 basis points. Please see the section titled Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. Industrial Injury Prevention Services IIP revenue increased $2.7 million, or 9.1%, to $31.7 million for the 2026 Second Quarter as compared to $29.1 million for the 2025 Second Quarter. Excluding the IIP acquisition made on January 31, 2026, IIP revenue increased 3.6% over the comparable three month periods. Gross profit from IIP operations for the 2026 Second Quarter increased $0.6 million, or 9.7%, to $6.5 million from $5.9 million for the 2025 Second Quarter. Gross profit margin from IIP operations was 20.4% for the 2026 Second Quarter compared to 20.3% for the 2025 Second Quarter. Corporate Office Costs Corporate office costs increased to $19.0 million in the 2026 Second Quarter, up from $17.5 million in the 2025 Second Quarter, driven by increased clinic count, expenses related to the amendment of the credit facility, expenses related to acquisition integration, and 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 percentage of net revenue, corporate office costs was 8.9% for the 2026 Second Quarter and the 2025 Second Quarter. Excluding business acquisition costs, the costs associated with the implementation of the new financial and human resources system, and the costs related to the amendment of the credit facility, adjusted corporate office costs was 8.4% of net revenue for the 2026 Second Quarter and 8.7% for the 2025 Second Quarter, respectively. Please see the section titled Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. 53 Table of Contents Change in fair value of contingent earn-out consideration Revaluation of contingent consideration related to certain acquisitions resulted in a net loss (an increase in the related liabilities) of $1.0 million for the 2026 Second Quarter compared to a net gain (a decrease in the related liabilities) of $0.8 million for the 2025 Second Quarter. Operating Income Operating income was $21.9 million for the 2026 Second Quarter compared to $24.9 million for the 2025 Second Quarter. Included in operating income for the 2026 Second Quarter was a non-cash loss on change in fair value of contingent earn out consideration of $1.0 million versus a non-cash gain of $0.8 million in the 2025 Second Quarter. Other (Expenses) Income Interest Expense, Debt and Other Interest expense increased by $0.8 million to $3.2 million for the 2026 Second Quarter compared to $2.4 million for the 2025 Second Quarter due to a higher average outstanding balance on our revolving credit facility for the 2026 Second Quarter. The effective interest rate associated with borrowings on our credit facilities was 5.3% for the 2026 Second Quarter and 5.6% for the 2025 Second Quarter. Change in revaluation of put-right liability Revaluation of put-right liability related to the future purchase of an IIP business resulted in a net non-cash expense (an increase in the related liability) of $0.2 million for the 2026 Second Quarter compared to net non-cash expense of $0.3 million for the 2025 Second Quarter. Provision for Income Taxes The provision for income taxes was $4.2 million for the 2026 Second Quarter compared to $4.9 million during the 2025 Second Quarter while the effective tax rate was 29.6% and 28.5% over the same periods, respectively. Three Months Ended June 30, 2026 June 30, 2025 (In thousands, except percentages) Income before taxes $ 19,053 $ 22,653 Less: Net income attributable to non-controlling interest: Redeemable non-controlling interest - temporary equity (4,080 ) (3,914 ) Non-controlling interest - permanent equity (920 ) (1,413 ) $ (5,000 ) $ (5,327 ) Income before taxes less net income attributable to non-controlling interest $ 14,053 $ 17,326 Provision for income taxes $ 4,155 $ 4,933 Effective income tax rate 29.6 % 28.5 % Net Income Attributable to Non-controlling Interest Net income attributable to non-controlling interest (temporary and permanent) was $5.0 million for the 2026 Second Quarter compared to $5.3 million for the 2025 Second Quarter. 54 Table of Contents 2026 Six Months versus 2025 Six Months Six Months Ended June 30, 2026 June 30, 2025 Variance Amount As a % of Net Revenue Amount As a % of Net Revenue Amount % (In thousands, except percentages) Net patient revenue $ 337,552 81.9 % $ 316,730 83.1 % $ 20,822 6.6 % Hospital affiliation revenue 5,564 1.3 % - 0.0 % 5,564 * Other revenue 69,228 16.8 % 64,402 16.9 % 4,826 7.5 % Net revenue 412,344 100.0 % 381,132 100.0 % 31,212 8.2 % Operating Cost: Salaries and related costs 244,892 59.4 % 225,037 59.0 % 19,855 8.8 % Rent, supplies, contract labor and other 77,417 18.8 % 67,971 17.8 % 9,446 13.9 % Depreciation and amortization 11,278 2.7 % 11,281 3.0 % (3 ) 0.0 % Provision for credit losses 4,124 1.0 % 3,843 1.0 % 281 7.3 % Clinic closure costs - lease and other (62 ) 0.0 % 311 0.1 % (373 ) (119.9 )% Total operating cost 337,649 81.9 % 308,443 80.9 % 29,206 9.5 % Gross Profit 74,695 18.1 % 72,689 19.1 % 2,006 2.8 % Corporate office costs 37,279 9.0 % 33,721 8.8 % 3,558 10.6 % (Gain) loss on change in fair value of contingent earn-out consideration 2,989 0.7 % (5,612 ) (1.5 )% 8,601 (153.3 )% Operating Income 34,427 8.3 % 44,580 11.7 % (10,153 ) (22.8 )% Other (expense) income: Interest expense, debt and other (6,004 ) (1.5 )% (4,701 ) (1.2 )% (1,303 ) 27.7 % Interest income from investments 45 0.0 % 52 0.0 % (7 ) (13.5 )% Change in revaluation of put-right liability 195 0.0 % (743 ) (0.2 )% 938 (126.2 )% Equity in earnings of unconsolidated affiliate 772 0.2 % 794 0.2 % (22 ) (2.8 )% Loss on sale of a partnership - 0.0 % (123 ) 0.0 % 123 * Loss on extinguishment of debt (124 ) 0.0 % - 0.0 % (124 ) * Other 305 0.1 % 122 0.0 % 183 150.0 % Total other (expense) income (4,811 ) (1.2 )% (4,599 ) (1.2 )% (212 ) 4.6 % Income before taxes 29,616 7.2 % 39,981 10.5 % (10,365 ) (25.9 )% Provision for income taxes 6,562 1.6 % 8,793 2.3 % (2,231 ) (25.4 )% Net income 23,054 5.6 % 31,188 8.2 % (8,134 ) (26.1 )% Less: Net income attributable to non-controlling interest: Redeemable non-controlling interest - temporary equity (6,594 ) (1.6 )% (5,926 ) (1.6 )% (668 ) 11.3 % Non-controlling interest - permanent equity (1,524 ) (0.4 )% (2,970 ) (0.8 )% 1,446 (48.7 )% (8,118 ) (2.0 )% (8,896 ) (2.3 )% 778 (8.7 )% Net income attributable to USPH shareholders $ 14,936 3.6 % $ 22,292 5.8 % $ (7,356 ) (33.0 )% * Not meaningful 55 Table of Contents Segment Results Six Months Ended Variance June 30, 2026 June 30, 2025 $ % Physical Therapy Operations (In thousands, except percentages) Revenue related to: Net patient revenue $ 337,552 $ 316,730 $ 20,822 6.6 % Hospital affiliation revenue 5,564 - 5,564 * Other revenue (1) 6,914 7,970 (1,056 ) (13.2 )% Total revenue 350,030 324,700 25,330 7.8 % Operating costs (1)(2) 288,062 263,017 25,045 9.5 % Gross profit $ 61,968 $ 61,683 $ 285 0.5 % IIP Net revenue $ 62,314 $ 56,432 $ 5,882 10.4 % Operating costs (2) 49,587 45,426 4,161 9.2 % Gross profit $ 12,727 $ 11,006 $ 1,721 15.6 % Financial and operating metrics (not in thousands): Patient visits (3) 3,204,838 3,002,561 202,277 6.7 % Average daily visits per clinic (3) 32.7 31.9 0.8 2.5 % Physical therapy revenue per patient visit (3) $ 107.06 $ 105.49 $ 1.57 1.5 % Mature revenue percent change (3) 3.1 % (0.5 %) Salaries and related costs, as a percentage of revenue (4)(5) 58.9 % 58.0 % Adjusted salaries and related costs, as a percentage of revenue (4)(5)(6) 58.6 % 58.0 % Physical therapy operations gross profit margin (2) 17.7 % 19.0 % Adjusted physical therapy operations gross profit margin (2)(7) 18.1 % 19.2 % IIP gross profit margin 20.4 % 19.5 % (1) Includes revenues and/or costs related to other management contracts. (2) Amortization of certain intangible assets was reallocated between physical therapy operations and IIP segments for YTD 2025 amounts to conform with current presentation. (3) See Glossary of terms for definition. Reflects the average number of clinic locations (753 and 728) during the current and prior-year periods, respectively. (4) Beginning Q2 2026, the Company changed its salaries and related costs metric from cost-per-visit to percentage-of-revenue, which management believes is a more meaningful presentation. For hospital affiliated clinics, salaries and related costs reimbursements by hospital systems are recognized as revenue by USPH, supporting this presentation change. Prior period metrics have been revised to conform to the current presentation. (5) Includes cost and revenue from physical therapy operations. Excludes costs and revenue from other management contracts. (6) Excludes certain incentive costs related to Metro. Please see the section titled Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. (7) Excludes certain incentive costs related to the Metro acquisition, business acquisition costs and clinic closure costs. Please see the section titled Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. * Not meaningful Physical Therapy Operations Revenue Total revenue for physical therapy operations was $350.0 million for the 2026 Six Months, a 7.8% increase versus the 2025 Six Months, including a 3.1% increase in revenue at mature clinics. Of the total physical therapy net revenue, $5.6 million was associated with the previously announced strategic hospital affiliations. Total patient visits were 3,204,838, which includes home-care visits, for the 2026 Six Months, a 6.7% increase from the 2025 Six Months. Average daily visits per clinic, which does not include home-care visits, was 32.7 for the 2026 Six Months compared to 31.9 for the 2025 Six Months. 56 Table of Contents Other revenues decreased approximately $1.1 million, or 13.2%, to $6.9 million for the 2026 Six Months from $8.0 million for the 2025 Six Months. Operating costs Operating costs from physical therapy operations increased $25.1 million, or 9.5%, to $288.1 million for the 2026 Six Months from $263.0 million for the 2025 Six Months mostly due to the additional clinics added from the comparable prior year period. Salaries and related costs, clinics (excluding other management contracts) increased to $203.9 million in the 2026 Six Months from $185.7 million in the 2025 Six Months, an increase of $18.2 million, or 9.8%. Excluding certain incentive costs related to the Metro acquisition, salaries and related costs as a percentage of revenue increased to 58.6% for the 2026 Six Months from 58.0% for the 2025 Six Months. We changed our salaries and related costs metric from cost-per-visit to percentage-of-revenue, because we believe it is a more meaningful presentation. For hospital affiliated clinics, salaries and related costs reimbursements by hospital systems are recognized as revenue by us, supporting this presentation change. Refer to the section Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. Rent, supplies, contract labor and other costs, related to clinics (excluding other management contracts) increased to $68.0 million in the 2026 Six Months from $59.6 million in the 2025 Six Months, an increase of $8.5 million, or 14.3%. Depreciation and amortization related to physical therapy operations decreased to $9.4 million in the 2026 Six Months from $9.7 million in the 2025 Six Months, a decrease of $0.3 million. The provision for credit losses was $4.1 million for the 2026 Six Months and $3.8 million for the 2025 Six Months. As a percentage of net patient revenues, the provision for credit losses was 1.2% over the same periods. Gross Profit Gross profit from physical therapy operations was $62.0 million, or 17.7% as a percent of net revenues, for the 2026 Six Months as compared to $61.7 million, or 19.0% as a percent of net revenues, for the 2025 Six Months. Adjusted gross profit margin (a non-GAAP measure) was 18.1% for the 2026 Six Months compared to 19.2% for the 2025 Six Months. Refer to the section Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. Industrial Injury Prevention Services IIP revenue increased $5.9 million, or 10.4%, to $62.3 million for the 2026 Six Months as compared to $56.4 million for the 2025 Six Months. Excluding the IIP acquisition in January 2026, revenue increased 5.8% over the comparable periods. Gross profit from IIP operations for the 2026 Six Months increased $1.7 million, or 15.6%, to $12.7 million from $11.0 million for the 2025 Six Months. Gross profit margin from IIP operations was 20.4% for the 2026 Six Months compared to 19.5% for the 2025 Six Months. Corporate Office Costs Corporate office costs increased to $37.3 million in the 2026 Six Months, up from $33.7 million in the 2025 Six Months, driven by increased location count, expenses related to acquisition integration, and 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 percentage of net revenue, corporate office costs was 9.0% for the 2026 Six Months compared to 8.8% for the 2025 Six Months. Excluding acquisition integration costs, the costs associated with the implementation of the new financial and human resources system, and the costs related to the amendment of the credit facility, adjusted corporate office costs was 8.6% of net revenue for the 2026 Six Months and 8.7% for the 2025 Six Months. Please see the section titled Non-GAAP Measures for a reconciliation of non-GAAP measures to the most directly comparable GAAP measure. 57 Table of Contents Change in fair value of contingent earn-out consideration Revaluation of contingent consideration related to certain acquisitions resulted in a net loss (an increase in the related liabilities) of $3.0 million for the 2026 Six Months compared to a net gain (a decrease in the related liabilities) of $5.6 million for the 2026 Six Months. Operating Income Operating income was $34.4 million for the 2026 Six Months compared to $44.6 million for the 2025 Six Months. Included in operating income for the 2026 Six Months was a non-cash loss of change in fair value of contingent earn out consideration of $3.0 million versus a non-cash gain of $5.6 million in the 2025 Six Months Other (Expenses) Income Interest Expense, Debt and Other Interest expense increased by $1.3 million to $6.0 million for the 2026 Six Months compared to $4.7 million for the 2025 Six Months due to a higher average outstanding balance on our revolving credit facility for the 2026 Six Months. The effective interest rate was 5.4% and 5.5% over the comparable six-month periods, respectively. Change in revaluation of put-right liability Revaluation of put-right liability related to the future purchase of an IIP business resulted in a net non-cash gain (a decrease in the related liability) of $0.2 million for the 2026 Six Months compared to net non-cash loss (an increase in the related liability) of $0.7 million for the 2025 Six Months. Provision for Income Taxes The provision for income taxes was $6.6 million for the 2026 Six Months compared to $8.8 million during the 2025 Six Months while the effective tax rate was 30.5% and 28.3% over the same periods, respectively. Six Months Ended June 30, 2026 June 30, 2025 (In thousands, except percentages) Income before taxes $ 29,616 $ 39,981 Less: Net income attributable to non-controlling interest: Redeemable non-controlling interest - temporary equity (6,594 ) (5,926 ) Non-controlling interest - permanent equity (1,524 ) (2,970 ) $ (8,118 ) $ (8,896 ) Income before taxes less net income attributable to non-controlling interest $ 21,498 $ 31,085 Provision for income taxes $ 6,562 $ 8,793 Effective income tax rate 30.5 % 28.3 % Net Income Attributable to Non-controlling Interest Net income attributable to non-controlling interest (temporary and permanent) was $8.1 million for the 2026 Six Months compared to $8.9 million for the 2025 Six Months. 58 Table of Contents LIQUIDITY AND CAPITAL RESOURCES We believe that our business has sufficient cash to allow us to meet our short-term cash requirements. Total cash and cash equivalents were $24.9 million as of June 30, 2026, compared to $35.6 million as of December 31, 2025. We had outstanding borrowings of $221.0 million and available credit of $229.0 million as of June 30, 2026 under our Senior Credit Facilities compared to $161.8 million of outstanding borrowings and available credit of $144.5 million as of December 31, 2025 under the prior credit facility. We believe that our cash and cash equivalents and availability under our Senior Credit Facilities are sufficient to fund the working capital needs of our operating subsidiaries through at least June 30, 2027. Historically, we have generated sufficient cash from operations to fund our development activities and to cover operational needs. We plan to continue developing new clinics and making acquisitions. We have, from time to time, purchased the non-controlling interests of limited partners in our existing partnerships. We may purchase additional non-controlling interests in the future. Generally, any acquisition or purchase of non-controlling interests is expected to be accomplished using our cash, financing, or a combination of the two. We make reasonable and appropriate efforts to collect accounts receivable, including applicable deductible and co-payment amounts. Claims are submitted to payors daily, weekly or monthly in accordance with our policy or payor’s requirements. When possible, we submit our claims electronically. The collection process is time-consuming and typically involves the submission of claims to multiple payors whose payment of claims may be dependent upon the payment of another payor. Claims under litigation and vehicular incidents can take a year or longer to collect. Medicare and other payor claims relating to new clinics awaiting CMS approval initially may not be submitted for six months or more. When all reasonable internal collection efforts have been exhausted, accounts are written off prior to sending them to outside collection firms. With managed care, commercial health plans and self-pay payor type receivables, the write-off generally occurs after the account receivable has been outstanding for 120 days or longer. As of June 30, 2026, we have reserved $6.7 million related to credit balances, a portion of which is due to patients and payors. We continue to return cash to stockholders through dividends and share repurchases. In May 2026, the Board of Directors authorized a dividend payment of $0.46 per share. The Board of Directors approved a share repurchase program effective August 5, 2025. The program authorizes the repurchase by the Company of up to $25.0 million of its outstanding shares of common stock over the period ending on December 31, 2026. Under the share repurchase program, shares may be repurchased from time to time in the open market or negotiated transactions at prevailing market rates, or by other means in accordance with federal securities laws. The timing and amount of share repurchases under the share repurchase program, if any, will depend on several factors, including the Company’s stock price performance, ongoing capital allocation priorities and general market conditions. During the three months ended June 30, 2026, we repurchased 306,256 shares on the open market for a total consideration of $19.2 million. Including repurchases made in 2025, we have repurchased 387,578 shares on the open market for a total consideration of $24.8 million and have nearly completed our current share repurchase authorization. Cash Flow A summary of our operating, investing and financing activities is discussed below. Six Months Ended June 30, 2026 June 30, 2025 Net cash provided by operating activities $ 38,178 $ 30,186 Net cash (used in) investing activities (46,207 ) (19,334 ) Net cash (used in) financing activities (2,654 ) (18,128 ) 59 Table of Contents Operating Activities Cash provided by operating activities was $38.2 million for the 2026 Six Months, compared to $30.2 million of net cash provided in the 2025 Six Months. Investing Activities Cash used in investing activities for the 2026 Six Months totaled $46.2 million and primarily consisted of $36.6 million used in the purchase of interests in businesses and non-controlling interests (temporary and permanent), and $10.7 million of fixed assets purchases. Cash used in investing activities in the 2025 Six Months was $19.3 million. Financing Activities Cash used in financing activities for the 2026 Six Months totaled $2.7 million and primarily comprised of $15.5 million in net proceeds from our Revolving Facility (as defined below), and $43.8 million from our Term Facility (as defined below). Uses included payments of $19.2 million made to repurchase our common stock, $13.6 million of contingent consideration payments, $12.3 million in distributions to non-controlling interests (temporary and permanent), cash dividends of $13.9 million paid to our shareholders, and payments of $2.5 million related to notes payable and the Company’s term loan. Cash used in financing activities in the 2025 Six Months was $18.1 million. Credit Facilities Third Amended and Restated Credit Facility On December 5, 2013, we entered into an Amended and Restated Credit Agreement with a commitment for a $125.0 million revolving credit facility. This agreement was amended and/or restated in August 2015, January 2016, March 2017, November 2017, January 2021 and June 2022, which was set to expire on June 22, 2027 (“Prior Credit Facility”). The Prior Credit Facility provided for total borrowings of $325.0 million, consisting of a $175.0 million revolving credit facility and a $150.0 million term loan. Fourth Amended and Restated Credit Facility On April 14, 2026, we entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) among Bank of America, N.A., as administrative agent (“Administrative Agent”) and the lenders from time-to-time party thereto. The Credit Agreement, which matures on April 14, 2031, provides for loans in an aggregate principal amount of $450.0 million. Such loans will be available through the following facilities (collectively, the “Senior Credit Facilities”): 1) Revolving Facility: $275.0 million, five-year, revolving credit facility (“Revolving Facility”), which includes a $25.0 million sublimit for the issuance of standby letters of credit and a $25.0 million sublimit for swingline loans (each, a “Swingline Loan”). 2) Term Facility: $175.0 million term loan facility (the “Term Facility”). The Term Facility amortizes in quarterly installments of: (a) 0.625% in each of the first two years, (b) 1.250% in the third and fourth year, and (c) 1.875% in the fifth year of the Credit Agreement. The remaining outstanding principal balance of all term loans is due on the maturity date. The proceeds of the Revolving Facility have been and shall continue to be used by us for working capital and other general corporate purposes of our Company and its subsidiaries, including funding future acquisitions and investing in growth opportunities. The proceeds of the Term Facility were used by us to refinance the indebtedness outstanding under the Prior Credit Facility. We are permitted to increase the Revolving Facility and/or add one or more tranches of term loans in an aggregate amount not to exceed the sum of (i) $125.0 million plus (ii) an unlimited additional amount, provided that (in the case of clause (ii)), after giving effect to such increases, the pro forma Consolidated Leverage Ratio (as defined in the Credit Agreement) would not exceed 2.5:1.0. 60 Table of Contents The interest rates per annum applicable to the Senior Credit Facilities (other than in respect of Swingline Loans) will be Term SOFR as defined in the agreement plus an applicable margin or, at our option, an alternate base rate plus an applicable margin. Interest is payable at the end of the selected interest period but no less frequently than quarterly and on the date of maturity. We will also pay to the Administrative Agent, for the account of each lender under the Revolving Facility, a commitment fee equal to the actual daily excess of each lender’s commitment over its outstanding credit exposure under the Revolving Facility (“unused fee”). We may prepay and/or repay the revolving loans and the term loans, in whole or in part, at any time without premium or penalty, subject to certain conditions. The Credit Agreement contains customary covenants limiting, among other things, the incurrence of additional indebtedness, the creation of liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends, and other payments in respect of equity interests, acquisitions, investments, loans and guarantees, subject, in each case, to customary exceptions, thresholds and baskets. The Credit Agreement includes certain financial covenants which include the Consolidated Fixed Charge Coverage Ratio and the Consolidated Leverage Ratio, as defined in the Credit Agreement. The Credit Agreement also contains customary events of default. Our obligations under the Credit Agreement are guaranteed by our wholly owned material domestic subsidiaries (each, a “Guarantor”), and our obligations and any Guarantors are secured by a perfected first priority security interest in substantially all of our existing and future personal property and each Guarantor, subject to certain exceptions. As of June 30, 2026, $172.5 million (net of unamortized debt issuance costs of $2.5 million) was outstanding on the Term Facility while $46.0 million was outstanding under the Revolving Facility resulting in $229.0 million of credit availability on the Revolving Facility. The effective interest rate on our Senior Credit Facilities was 5.3% for the three months ended June 30, 2026 and 5.1% for the three months ended, June 30 2025. The effective interest rate on our Senior Credit Facilities was 5.4% and 5.5% for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we were in compliance with all of the covenants contained in the Senior Credit Facilities. Interest Rate Swap In May 2022, we entered into an interest rate swap agreement, effective on June 30, 2022, with Bank of America, N.A. It has a $150 million notional value adjusted concurrently with scheduled principal payments made on the term loan and has a maturity date of June 30, 2027. Beginning in July 2022, we receive 1-month SOFR, and pay a fixed rate of interest of 2.815% on 1-month SOFR or Bank of America’s prime rate on a quarterly basis. The total interest rate in any period also includes an applicable margin based on our consolidated leverage ratio. In connection with the swap, no cash was exchanged between us and the counterparty. We designated our interest rate swap as a cash flow hedge and structured it to be highly effective. Consequently, unrealized gains and losses related to the fair value of the interest rate swap are recorded to accumulated other comprehensive income (loss), net of tax. As of June 30, 2026, the fair value of the interest rate swap was $1.4 million, an increase of $0.5 million, net of income tax effect, as compared to December 31, 2025. The fair value of the interest rate swap is included in Other assets (current and long term) in our consolidated balance sheet while the changes in fair value are presented as an unrealized loss or gain in our unaudited consolidated statements of comprehensive income. The interest rate swap arrangement has generated $0.6 million in interest savings for the 2026 Six Months. 61 Table of Contents Notes Payable and Deferred Payments Related to Acquisitions We generally enter into various notes payable as a means of financing our acquisitions. Our present outstanding notes payable primarily relate to the acquisitions of a business or acquisitions of majority interests in such businesses. At June 30, 2026, our remaining outstanding balance on these notes aggregated $1.5 million, of which $0.3 million is payable in 2026, $0.7 million is payable in 2027, and $0.5 million is payable in 2028. Notes are generally payable in equal annual installments of principal over two years plus any accrued and unpaid interest. Interest accrues at various interest rates ranging from 4.5% to 8.5% per annum. On January 2, 2026, we acquired a 50% equity interest in an eight-clinic practice with the practice owners retaining 50% ownership interest. The purchase price for the 50% equity interest was approximately $6.2 million, of which $5.7 million was paid in cash and $0.5 million is in the form of a note payable. The note accrues interest at 5.0% per annum and the principle and interest is payable on January 1, 2028. On September 30, 2025, together with a local partner, we acquired a 100% equity interest in a two-clinic practice for a purchase price of $0.4 million, which was paid in cash. As part of this transaction, we agreed to additional consideration if future objectives are met. The contingent consideration was valued at less than $0.1 million as of June 30, 2026. On July 31, 2025, we acquired a 60% equity interest in a three-clinic practice with the practice owners retaining a 40% equity interest. The purchase price for the 60% equity interest was approximately $7.9 million, of which $7.6 million was paid in cash and $0.3 million in the form of a note payable. The note accrues interest at 5.0% per annum and the principal and interest is payable on July 31, 2027. As part of this transaction, we agreed to additional consideration if future operational objectives are met. The contingent consideration was valued at $1.4 million as of June 30, 2026. On April 30, 2025, we acquired an outpatient home-care physical and speech therapy practice through our 50%-owned subsidiary, Metro. After the transaction, our ownership interest is 40%, our local partners have a partnership interest of 40% and the practice’s pre-acquisition owners have a 20% ownership interest. The purchase price for the 80% equity interest was approximately $2.3 million which was paid in cash. As part of this transaction, we agreed to additional consideration if future operational objectives are met. The maximum amount of additional contingent consideration due under this agreement was $1.8 million. On June 5, 2026, we paid $1.7 million in full settlement of the contingent consideration. As of June 30, 2026, no further amounts are payable related to the acquisition. On February 28, 2025, we acquired 65% interest in a physical therapy practice with three clinic locations. The prior owners retained a 35% ownership interest. The purchase price for the 65% interest was approximately $3.8 million which was paid in cash. As part of this transaction, we agreed to additional consideration if future operational objectives are met. The maximum amount of additional contingent consideration due under this agreement is $1.3 million. In March 2026, we paid $1.0 million in full settlement of the contingent consideration, of which $0.8 million was paid in cash and $0.2 million in the form of a note payable. The note accrues interest at 5% per annum and the principal and interest is payable on March 31, 2027. On November 30, 2024, we acquired a 75% equity interest in an eight-clinic physical therapy practice. The owner of the practice retained 25% of the equity interests. The purchase price for the 75% equity interest was approximately $15.9 million, of which $15.7 million was paid in cash, and $0.2 million was in the form of a note payable. The note accrues interest at 5.0% per annum and the principal and interest is payable in one installment which is due on December 1, 2026. On October 31, 2024, we acquired a 50% interest in Metro pursuant to an Equity Interest Purchase Agreement (the “Purchase Agreement”) dated October 7, 2024 among U.S. Physical Therapy, Ltd. (a subsidiary of the Company), Metro, the members of Metro, and Michael G. Mayrsohn, as Sellers’ Representative. We also became the managing member of Metro. We paid a purchase price of approximately $76.5 million, $75.0 million of which was funded by our cash on hand and the remaining $1.5 million through the issuance of 18,358 shares of the Company’s common stock based on a trailing five-day average as of the day immediately prior to closing. The shares of the Company’s common stock were issued in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act. The Purchase Agreement also included an earnout where the sellers can earn up to $20.0 million of additional consideration if certain performance criteria relating to the Metro business are achieved. We paid $7.4 million in full settlement of the earnout in March 2026. As of June 30, 2026, no further amounts are payable related to the Metro acquisition. 62 Table of Contents On August 31, 2024, we acquired a 70% equity interest in an eight-clinic practice physical therapy and the original practice owners retained a 30% equity interest. The purchase price for the 70% equity interest was approximately $2.0 million. As part of the transaction, we agreed to additional contingent consideration if future operational and financial objectives are met. $3.6 million in contingent consideration was paid as full settlement of contingent consideration in April 2026. On March 29, 2024, we acquired a 50% equity interest in a nine-clinic physical therapy and hand therapy practice. The original owners of the practice retained the remaining 50%. The purchase price for the 50% equity interest was approximately $16.4 million, of which $0.5 million was in the form of a note payable. The note accrued interest at 4.5% per annum and the principal and interest was paid during the 2026 First Quarter. As part of the transaction, we agreed to additional contingent consideration if future operational and financial objectives are met. There is no maximum payout. In November 2025, we paid $2.5 million in full settlement of the contingent consideration. As of June 30, 2026, no further amounts are payable related to this acquisition. Redeemable Non-Controlling Interest Certain limited partnership agreements and limited liability company agreements, as amended, provide that, upon the triggering events, we have a call right, and the selling entity or individual has a 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 and classified as redeemable non-controlling interest (temporary equity) in our consolidated balance sheets. The fair value of the redeemable non-controlling interests on June 30, 2026 was $317.5 million. In the event that a limited non-controlling partner’s employment ceases at any time after a specified date that is typically between three and six years from the acquisition date, we have agreed to certain contractual provisions which enable such minority partners to exercise their right to trigger our repurchase of that partner’s non-controlling interest at a predetermined multiple of earnings before interest and taxes.