UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 17,
2022
U.S.
PHYSICAL THERAPY, INC.
(Exact name of registrant as specified in its charter)
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Nevada
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1-11151
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76-0364866
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(State or other jurisdiction
of incorporation or organization)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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1300 West Sam Houston Parkway South,
Suite 300, Houston, Texas
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77042
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(Address of Principal Executive Offices)
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(Zip
Code)
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Registrant’s telephone number, including area code: (713)
297-7000
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of
each class
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Trading
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Name of
each exchange on which registered
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Symbol(s)
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Common Stock,
$.01 par value
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USPH
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New York
Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
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Item 1.01 |
Entry into a
Material Definitive Agreement.
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On June 17, 2022, U.S. Physical Therapy, Inc. (NYSE: USPH) (the
“Company”), a national operator of outpatient physical therapy
clinics and provider of industrial injury prevention services,
entered into the Third 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. Regions Capital Markets, a division of Regions Bank,
served as Syndication Agent, and as a Joint Lead Arranger with BofA
Securities, Inc. In addition to its role as Joint Lead Arranger,
BofA Securities, Inc. also served as Sole Bookrunner.
The Credit Agreement, which matures on June 17, 2027, provides for
loans in an aggregate principal amount of $325 million. Such loans
will be available through the following facilities (collectively,
the “Senior Credit Facilities”):
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1) |
Revolving Facility: $175 million, five-year, revolving credit
facility (“Revolving Facility”), which includes a $12 million
sublimit for the issuance of standby letters of credit and a $15
million sublimit for swingline loans (each, a “Swingline
Loan”).
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2) |
Term Facility: $150 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.
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The proceeds of the Revolving Facility shall be used by the Company
for working capital and other general corporate purposes of the
Company and its subsidiaries, including to fund future acquisitions
and invest in growth opportunities. The proceeds of the Term
Facility shall be used by the Company to refinance the indebtedness
outstanding under the Second Amended and Restated Credit Agreement,
to pay fees and expenses incurred in connection with the
transactions contemplated hereby, for working capital and other
general corporate purposes of the Company and its
subsidiaries.
The Company will be 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) $100 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 2.0:1.0, and the aggregate amount of
all incremental increases under the Revolving Facility does not
exceed $50,000,000.
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 Credit Agreement) plus an applicable margin
or, at the option of the Company, an alternate base rate plus an
applicable margin. Each Swingline Loan shall bear interest at the
base rate plus the applicable margin. The
applicable margin for Term SOFR borrowings ranges from 1.50% to
2.25%, and the applicable margin for alternate base rate borrowings
ranges from 0.50% to 1.25%, in each case, based on the Consolidated
Leverage Ratio of the Company and its subsidiaries.
The Company may select interest periods of one, three or six months
for Term SOFR borrowings. Interest is payable at the end of the
selected interest period but no less frequently than quarterly and
on the date of maturity.
The Company 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”). Such unused fee will range between 0.25% and 0.35%
per annum and is also based on the Consolidated Leverage Ratio of
the Company and its subsidiaries. The Company may prepay and/or
repay the revolving loans and the term loans, and/or terminate the
revolving loan commitments, 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 a consolidated fixed charge coverage ratio
and a consolidated leverage ratio, as defined in the Credit
Agreement. The
Credit Agreement also contains customary events of
default.
The Company’s obligations under the Credit Agreement are guaranteed
by its wholly-owned material domestic subsidiaries (each, a
“Guarantor”), and the obligations of the Company and any Guarantors
are secured by a perfected first priority security interest in
substantially all of the existing and future personal property of
the Company and each Guarantor, subject to certain
exceptions.
In
association with the Company’s entry into the Credit Agreement, the
Company also entered into an interest rate swap agreement on May
10, 2022, with Bank of America, N.A., Co-Syndication Agent and
lender under the Credit Agreement, at a 5-year swap rate of 2.815%
on 1-month term SOFR on $150 million of borrowings under the Credit
Agreement to manage exposure to interest rate changes. The swap has
an effective date of June 30, 2022.
The total interest rate in any particular period will also include
an applicable margin based on the Company’s consolidated leverage
ratio.
The Administrative Agent and other parties to the Credit Agreement
have provided in the past, and may provide in the future, certain
commercial banking, financial advisory, investment banking and
other services for the Company and its affiliates in the ordinary
course of their business, for which they have received and may
continue to receive customary compensation and expense
reimbursement.
On June 21, 2022, the Company issued a press release announcing its
entry into the Credit Agreement. A copy of that press release is
attached as Exhibit 99.1 hereto.
The description of the Credit Agreement set forth above is
qualified in its entirety by reference to the Credit Agreement
filed as exhibit 10.1 hereto and incorporated herein by
reference.
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Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
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See Item 1.01 above.
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Item 9.01 |
FINANCIAL
STATEMENTS AND EXHIBITS
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Exhibits
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Description
of Exhibit
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Third
Amended and Restated Credit Agreement dated as of June 17, 2022
among the Company, as the borrower, and Bank of America, N.A., as
Administrative Agent, Regions Capital Markets as Syndication Agent,
BofA Securities Inc. and Regions Capital Markets as Joint Load
Arrangers, BofA Securities Inc., as Sole Bookrunner and the lenders
named therein. (Schedules pursuant to the Credit Agreement have not
been filed by the Registrant, who hereby undertakes to file such
schedules upon the request of the Commission.) *
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Press release dated June 21, 2022, announcing a new
credit facility. |
* Furnished herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
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U.S. Physical
Therapy, Inc.
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Date: June 21,
2022
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BY:
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/s/ Carey
Hendrickson
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Chief Financial
Officer
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