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Universal Health Services, Inc. Reports 30% Increase in 2008 First Quarter Earnings Per Diluted Share

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

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