Consolidated Results of Operations:
KING OF PRUSSIA, Pa., April 24 /PRNewswire-FirstCall/ -- Universal Health
Services, Inc. (NYSE: UHS) announced today that its reported net income was
$61.7 million, or $1.20 per diluted share, during the first quarter of 2008 as
compared to $49.5 million, or $.92 per diluted share, during the comparable
prior year quarter. After adjusting our first quarter of 2007 results for
hurricane related expenses and the gain realized on the sale of vacant land
(as indicated on the attached Schedule of Non-GAAP Supplemental Consolidated
Statements of Income Information), our net income for the three months ended
March 31, 2007 was $47.9 million, or $.89 per diluted share. There were no
such adjustments applicable to our results during the first quarter of 2008.
Net revenues increased 8% to $1.30 billion during the first quarter of
2008 as compared to $1.20 billion during the first quarter of 2007. Our
consolidated operating margin, as calculated on the attached Supplemental
Schedule (without adjusting the 2007 first quarter results for the items
mentioned above), was 14.8% and 13.9% during the three-month periods ended
March 31, 2008 and 2007, respectively.
Acute Care Services:
At our acute care hospitals owned during both periods ("same facility
basis"), inpatient admissions increased 0.8% and patient days increased 2.0%
during the first quarter of 2008 as compared to the first quarter of 2007. On
a same facility basis, net revenues at our acute care facilities increased
6.9% during the first quarter of 2008 as compared to the comparable prior year
quarter. Net revenue per adjusted admission at these facilities increased 5.3%
during the first quarter of 2008 over the comparable prior year quarter. The
operating margin at our acute care hospitals owned during both quarters
increased to 17.1% during the first quarter of 2008 as compared to 15.1%
during the first quarter of 2007.
We provide care to patients who meet certain financial or economic
criteria without charge or at amounts substantially less than our established
rates. Because we do not pursue collection of amounts determined to qualify as
charity care, they are not reported in net revenues or in accounts receivable,
net. Our acute care hospitals provided charity care and uninsured discounts,
based on charges at established rates, amounting to $151 million and $127
million during the three-month periods ended March 31, 2008 and 2007,
respectively.
Behavioral Health Care Services:
At our behavioral health facilities, on a same facility basis, inpatient
admissions increased 8.0% and patient days increased 6.3% during the first
quarter of 2008 as compared to the first quarter of 2007. On a same facility
basis, net revenues at our behavioral health facilities increased 9.2% during
the first quarter of 2008 as compared to the comparable prior year quarter.
Net revenue per adjusted admission at these facilities increased 2.6% during
the first quarter of 2008 over the comparable prior year quarter. The
operating margin at our behavioral health facilities owned during both periods
increased to 23.7% during the first quarter of 2008 as compared to 22.7%
during the first quarter of 2007.
2008 Revised Guidance:
Based upon the operating trends and financial results experienced during
the first quarter of 2008, and subject to certain provisions and adjustments,
including those as set forth below in General Information, Forward-Looking
Statements and Risk Factors and Non-GAAP Financial Measures, we estimate that
we will achieve earnings per diluted share from continuing operations of
approximately $3.70 to $3.80 during the year ended December 31, 2008.
Conference Call Information:
We will hold a conference call for investors and analysts at 9:00 a.m.
eastern time on April 25, 2008. The dial-in number is 1-877-648-7971. A
digital recording of the conference call will be available two hours after the
completion of the conference call on April 25, 2008 and will continue through
midnight on May 9, 2008. The recording can be accessed by calling
1-800-642-1687 and entering the conference ID number 41016419. This call will
also be available live over the internet at our web site at www.uhsinc.com. It
will also be distributed over CCBN's Investor Distribution Network to both
institutional and individual investors. Individual investors can listen to the
call through CCBN's individual investor center at
http://www.companyboardroom.com or by visiting any of the investor sites in
CCBN's Individual Investor Network. Institutional investors can access the
call via CCBN's password-protected event management site, StreetEvents
(www.streetevents.com).
General Information, Forward-Looking Statements and Risk Factors and
Non-GAAP Financial Measures:
Universal Health Services, Inc. is one of the nation's largest hospital
companies, operating acute care and behavioral health hospitals and ambulatory
centers nationwide and in Puerto Rico. It acts as the advisor to Universal
Health Realty Income Trust, a real estate investment trust (NYSE: UHT). For
additional information on the Company, visit our web site:
http://www.uhsinc.com.
This press release contains forward-looking statements based on current
management expectations. Numerous factors, including those disclosed herein,
those related to healthcare industry trends and those detailed in our filings
with the Securities and Exchange Commission (as set forth in Item 1A-Risk
Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form
10-K for the year ended December 31, 2007), may cause results to differ
materially from those anticipated in the forward-looking statements. Many of
the factors that will determine our future results are beyond our capability
to control or predict. These statements are subject to risks and uncertainties
and therefore actual results may differ materially. Readers should not place
undue reliance on such forward-looking statements which reflect management's
view only as of the date hereof. We undertake no obligation to revise or
update any forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events or
otherwise.
We believe that operating income, operating margin, adjusted income from
continuing operations, adjusted income from continuing operations per diluted
share, adjusted net income, adjusted net income per diluted share and earnings
before interest, taxes, depreciation and amortization ("EBITDA"), which are
non-GAAP financial measures ("GAAP" is Generally Accepted Accounting
Principles in the United States of America), are helpful to our investors as
measures of our operating performance. In addition, we believe that comparing
and discussing our financial results based on these measures, as calculated,
is helpful to our investors since it neutralizes the effect in each year of
items that are nonrecurring or non-operational in nature including items such
as, but not limited to, gains on sales of assets and businesses,
hurricane-related expenses and insurance recoveries, reserves for legal
judgments, lawsuits and other settlements and other amounts that may be
reflected in the current or prior year financial statements that relate to
prior periods. To obtain a complete understanding of our financial performance
these measures should be examined in connection with net income, determined in
accordance with GAAP, as presented in the condensed consolidated financial
statements and notes thereto in this report or in our other filings with the
Securities and Exchange Commission including our Report on Form 10-K for the
year ended December 31, 2007. Since the items included or excluded from these
measures are significant components in understanding and assessing financial
performance under GAAP, these measures should not be considered to be
alternatives to net income as a measure of our operating performance or
profitability. Since these measures, as presented, are not determined in
accordance with GAAP and are thus susceptible to varying calculations, they
may not be comparable to other similarly titled measures of other companies.
Investors are encouraged to use GAAP measures when evaluating our financial
performance.
Universal Health Services, Inc.
Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
Three months
ended March 31,
2008 2007
Net revenues $1,297,715 $1,197,601
Operating charges:
Salaries, wages and benefits 550,460 510,993
Other operating expenses 252,495 245,352
Supplies expense 181,817 175,358
Provision for doubtful accounts 120,875 99,093
Depreciation and amortization 47,370 43,463
Lease and rental expense 17,667 16,176
Hurricane related expenses, net - (433)
1,170,684 1,090,002
Income before interest expense, hurricane
insurance recoveries in excess of
expenses, minority interests and income
taxes 127,031 107,599
Interest expense, net 13,479 12,722
Minority interests in earnings of
consolidated entities 13,279 14,192
Income before income taxes 100,273 80,685
Provision for income taxes 38,610 31,113
Income from continuing operations 61,663 49,572
Loss from discontinued operations,
net of income taxes - (64)
Net income $61,663 $49,508
Basic earnings per share:
From continuing operations $1.20 $0.93
From discontinued operations - -
Total basic earnings per share $1.20 $0.93
Diluted earnings per share:
From continuing operations $1.20 $0.92
From discontinued operations - -
Total diluted earnings per share $1.20 $0.92
Weighted average number of common shares 51,263 53,493
Other share equivalents 73 193
Weighted average number of common shares
and equiv. - diluted 51,336 53,686
Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Consolidated Statements of Income
Information ("Supplemental Schedule")
For the three months ended March 31, 2008 and 2007
(in thousands, except per share amounts)
(unaudited)
Three months ended Three months ended
March 31, 2008 March 31, 2007
Net revenues $1,297,715 100.0% $1,197,601 100.0%
Operating charges:
Salaries, wages and benefits 550,460 42.4% 510,993 42.7%
Other operating expenses 252,495 19.5% 245,352 20.5%
Supplies expense 181,817 14.0% 175,358 14.6%
Provision for doubtful accounts 120,875 9.3% 99,093 8.3%
1,105,647 85.2% 1,030,796 86.1%
Operating income/margin 192,068 14.8% 166,805 13.9%
Lease and rental expense 17,667 16,176
Minority interests in earnings
of consolidated entities 13,279 14,192
Earnings before hurricane related
expenses, hurricane insurance
recoveries, depreciation and
amortization, interest expense,
and income taxes ("EBITDA") 161,122 136,437
Hurricane related expenses, net
of recoveries - (433)
Depreciation and amortization 47,370 43,463
Interest expense, net 13,479 12,722
Income before income taxes 100,273 80,685
Provision for income taxes 38,610 31,113
Income from continuing operations 61,663 49,572
Loss from discontinued operations,
net of income taxes - (64)
Net income $61,663 $49,508
Three months ended Three months ended
March 31, 2008 March 31, 2007
Per Per
Diluted Diluted
Amount Share Amount Share
Calculation of Adjusted Income from
Continuing Operations
Income from continuing operations $61,663 $1.20 $49,572 $0.92
Plus/minus adjustments:
Hurricane related recoveries, net
of expenses and income taxes - - (269) -
Gain on sale of real property, net
of income taxes - - (1,369) (0.03)
Subtotal after-tax adjustments to
income from continuing operations - - (1,638) (0.03)
Adjusted income from continuing
operations $61,663 $1.20 $47,934 $0.89
Calculation of Adjusted Net Income
Net income $61,663 $1.20 $49,508 $0.92
After-tax adjustments to income from
continuing operations, as indicated
above - - (1,638) (0.03)
Adjusted net income $61,663 $1.20 $47,870 $0.89
Universal Health Services, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31, December 31,
2008 2007
Assets:
Cash and cash equivalents $8,916 $16,354
Accounts receivable, net 689,878 627,186
Other current assets 127,576 131,307
Property, plant and equipment, net 1,959,265 1,933,916
Other assets 900,647 899,894
Total Assets $3,686,282 $3,608,657
Liabilities and Stockholders' Equity:
Current portion of long-term debt $3,774 $3,116
Other current liabilities 543,555 484,595
Other noncurrent liabilities 349,369 344,755
Long-term debt 1,041,308 1,008,786
Deferred income taxes 37,974 40,022
Minority interests 223,090 210,184
Stockholders' equity 1,487,212 1,517,199
Total Liabilities and Stockholders' Equity $3,686,282 $3,608,657
Universal Health Services, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three months
ended March 31,
2008 2007
Cash Flows from Operating Activities:
Net income $61,663 $49,508
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation & amortization 47,370 43,482
Gain on sale of assets - (2,200)
Changes in assets & liabilities, net of
effects from acquisitions and dispositions:
Accounts receivable (62,692) (57,307)
Accrued interest 8,999 9,534
Accrued and deferred income taxes 31,301 27,373
Other working capital accounts 27,777 13,565
Other assets and deferred charges 456 (2,811)
Other (1,714) (4,041)
Minority interest in earnings of consolidated
entities, net of distributions 12,906 10,972
Accrued insurance expense, net of commercial
premiums paid 19,376 23,071
Payments made in settlement of self-insurance
claims (13,766) (12,170)
Net cash provided by operating activities 131,676 98,976
Cash Flows from Investing Activities:
Property and equipment additions, net of
disposals (81,751) (99,349)
Proceeds received from sale of assets 2,235 5,268
Acquisition of assets and businesses - (73,378)
Purchase of minority ownership interest
in majority owned business - (14,762)
Net cash used in investing activities (79,516) (182,221)
Cash Flows from Financing Activities:
Additional borrowings 33,180 84,664
Repurchase of common shares (89,799) (3,288)
Dividends paid (4,072) (4,310)
Issuance of common stock 1,093 115
Capital contributions from minority member - 2,340
Net cash (used in) provided by financing
activities (59,598) 79,521
Decrease in cash and cash equivalents (7,438) (3,724)
Cash and cash equivalents, beginning of period 16,354 14,939
Cash and cash equivalents, end of period $8,916 $11,215
Supplemental Disclosures of Cash Flow Information:
Interest paid $6,407 $5,182
Income taxes paid, net of refunds $7,642 $3,700
Universal Health Services, Inc.
Supplemental Statistical Information
(unaudited)
% Change
Quarter Ended
Same Facility: 03/31/2008
Acute Care Hospitals
Revenues 6.9%
Adjusted Admissions 1.5%
Adjusted Patient Days 2.8%
Revenue Per Adjusted Admission 5.3%
Revenue Per Adjusted Patient Day 4.0%
Behavioral Health Hospitals
Revenues 9.2%
Adjusted Admissions 6.4%
Adjusted Patient Days 4.7%
Revenue Per Adjusted Admission 2.6%
Revenue Per Adjusted Patient Day 4.3%
UHS Consolidated First Quarter Ended
03/31/2008 03/31/2007
Revenues $1,297,715 $1,197,601
EBITDA (1) $161,122 $136,437
EBITDA Margin (1) 12.4% 11.4%
Cash Flow From Operations $131,676 $98,976
Days Sales Outstanding 48 50
Capital Expenditures $81,751 $99,349
Debt 1,045,082 913,275
Shareholders Equity 1,487,212 1,461,195
Debt / Total Capitalization 41.3% 38.5%
Debt / EBITDA (2) 1.95 1.97
Debt / Cash From Operations (2) 2.74 5.78
Acute Care EBITDAR Margin (3) 16.2% 15.1%
Behavioral Health EBITDAR Margin (3) 23.1% 22.4%
(1) Net of Minority Interest
(2) Latest 4 quarters
(3) Before Corporate overhead allocation and minority interest
UNIVERSAL HEALTH SERVICES, INC.
SELECTED HOSPITAL STATISTICS
MARCH 31, 2008
AS REPORTED:
For the three months ended
Acute (1) Behavioral Health
03/31/08 03/31/07 % 03/31/08 03/31/07 %
Hospitals owned and
leased 23 22 4.5% 83 81 2.5%
Average licensed beds 5,578 5,417 3.0% 7,596 7,060 7.6%
Patient days 320,595 309,174 3.7% 529,955 481,353 10.1%
Average daily census 3,523.0 3,435.3 2.6% 5,823.7 5,348.4 8.9%
Occupancy-licensed
beds 63.2% 63.4% -0.4% 76.7% 75.8% 1.2%
Admissions 70,511 68,766 2.5% 32,882 29,405 11.8%
Length of stay 4.5 4.5 1.1% 16.1 16.4 -1.5%
Inpatient revenue $2,505,320 $2,271,139 10.3% $488,733 $433,912 12.6%
Outpatient revenue 955,155 868,131 10.0% 66,588 59,645 11.6%
Total patient revenue 3,460,475 3,139,270 10.2% 555,321 493,557 12.5%
Other revenue 19,132 14,451 32.4% 8,158 7,830 4.2%
Gross hospital
revenue 3,479,607 3,153,721 10.3% 563,479 501,387 12.4%
Total deductions 2,508,600 2,260,856 11.0% 250,621 225,675 11.1%
Net hospital revenue $971,007 $892,865 8.8% $312,858 $275,712 13.5%
SAME FACILITY:
Acute (2) Behavioral Health (3)
03/31/08 03/31/07 % 03/31/08 03/31/07 %
Hospitals owned and
leased 22 22 0.0% 80 80 0.0%
Average licensed beds 5,413 5,417 -0.1% 7,307 7,054 3.6%
Patient days 315,433 309,174 2.0% 511,056 480,987 6.3%
Average daily census 3,466.3 3,435.3 0.9% 5,616.0 5,344.3 5.1%
Occupancy-licensed
beds 64.0% 63.4% 1.0% 76.9% 75.8% 1.4%
Admissions 69,330 68,766 0.8% 31,745 29,394 8.0%
Length of stay 4.5 4.5 1.2% 16.1 16.4 -1.6%
(1) Licensed beds from our Acute care hospitals located in New Orleans are
excluded.
(2) Our three acute care hospitals located in New Orleans and Centennial
Hills are excluded in current and prior years.
(3) Casa de Lago, Cottonwood Treatment Center, Dover Behavioral,
Foundations Behavioral and Shenandoah Valley are excluded in the
current and prior years. Highlands Behavioral is included in both
current and prior years from March 1 through year to date.
SOURCE Universal Health Services, Inc.
CONTACT: Steve Filton, Chief Financial Officer of Universal Health
Services, Inc., +1-610-768-3300
Print