KING OF PRUSSIA, Pa., Jan. 30 /PRNewswire-FirstCall/ -- Universal Health
Services, Inc. (NYSE: UHS) announced today its unaudited preliminary results
for the fourth quarter and full year ended December 31, 2005 and guidance for
2006.
Preliminary results for the fourth quarter ended December 31, 2005:
For the fourth quarter ended December 31, 2005, we expect to report
earnings per diluted share from continuing operations of approximately $.16 -
$.18 on revenues of approximately $967 million. These preliminary results are
subject to numerous factors, as indicated below, which may cause the actual
results to differ materially. Included in our expected earnings per diluted
share from continuing operations for the fourth quarter of 2005 are the
following:
-- combined charges of approximately $.38 per diluted share resulting
from expenses incurred in connection with damage sustained in
Louisiana from Hurricane Katrina that resulted in the closure of our
Methodist Hospital, Lakeland Medical Pavilion, Chalmette Medical
Center and Virtue Street Pavilion during the third quarter;
-- a gain of $.07 per diluted share resulting from the sale of land;
-- other combined net favorable adjustments of approximately $.04 per
diluted share consisting primarily of certain income tax benefits
recognized in connection with the employee retention tax credit as
provided in the "Gulf Opportunity Zone Act of 2005."
Excluding the above-mentioned items included in our preliminary results,
we expect to report adjusted earnings per diluted share from continuing
operations of approximately $.43 - $.45 for the three-month period ended
December 31, 2005. Impacting the fourth quarter results are the loss of
revenues from our above-mentioned acute care facilities in Louisiana,
increased pressure on salaries in certain markets, the dilutive effect of
integrating the Keystone and Brown Schools acquisitions and the continued high
levels of uninsured patients.
At our acute care hospitals owned during both periods, inpatient
admissions increased 3.4% and patient days increased 1.4% during the fourth
quarter of 2005 as compared to the comparable 2004 quarter. Since our above-
mentioned facilities located in Louisiana have been closed since the
Hurricane, the inpatient statistics for those facilities have been excluded
from the fourth quarter of each year. At our behavioral health care
facilities owned during both quarters, inpatient admissions increased 7.4% and
patient days increased 2.8% during the fourth quarter of 2005 as compared to
the comparable 2004 quarter.
Preliminary results for the year ended December 31, 2005:
For the year ended December 31, 2005, we expect to report earnings per
diluted share from continuing operations of approximately $1.90 - $1.92 on
revenues of approximately $3.93 billion. Included in our expected earnings
per diluted share from continuing operations for the 2005 year are the
following:
-- combined charges of approximately $1.58 per diluted share resulting
from expenses incurred in connection with damage sustained from
Hurricane Katrina at our above-mentioned facilities located in
Louisiana;
-- Hurricane-related insurance recoveries of approximately $.78 per
diluted share reflecting the minimum level of commercial insurance
proceeds due to us, substantially all of which have been received;
-- the combined favorable prior year effect of $.08 per diluted share
resulting from supplemental reimbursements received from certain
states and contractual settlements (as previously disclosed in our
earnings release for the nine-month period ended September 30, 2005);
-- a gain of $.06 per diluted share resulting from the sale of land;
-- other combined net favorable adjustments of approximately $.01 per
diluted share.
Excluding the above-mentioned items included in our preliminary results,
we expect to report adjusted earnings per diluted share from continuing
operations of approximately $2.55 - $2.57 for the year ended December 31,
2005.
At our acute care hospitals owned during both years (excluding the
inpatient statistics for our above-mentioned Louisiana hospitals for the
period of September 1st through December 31st of each year), inpatient
admissions increased 2.7% and patient days increased 1.4% during 2005 as
compared to 2004. At our behavioral health care facilities owned during both
years, inpatient admissions increased 5.9% and patient days increased 4.5%
during 2005 as compared to 2004.
The expected results for the 2005 periods presented above are subject to
numerous factors which may cause the actual results to differ materially.
Such factors include, but are not limited to, the completion of our ongoing
review of the financial statements and the completion of the annual audit of
our consolidated financial statements by the independent public accountants.
In addition, many of the Hurricane Katrina-related expenses and insurance
recoveries included in our expected results were based on our damage
assessments of the real property and equipment at each of the above-mentioned
facilities affected by the Hurricane. However, given the widespread damage to
each facility and surrounding communities, at this time, we are unable to
predict with certainty the ultimate amount of damage sustained by each
facility, the ultimate replacement cost of the damaged assets or the net
realizable value of the damaged assets. Since our damage assessment efforts
are ongoing, it is possible we may adjust the Hurricane-related expenses and
recoveries recorded during 2005 which may cause the above-mentioned expected
results for the three- and twelve-month periods ended December 31, 2005 to
change by material amounts. It is also likely that we will record additional
charges in future periods related to Hurricane Katrina and our estimates of
the charges may change by amounts which could be material. Although we
believe our insurance claims for Hurricane-related losses will exceed the
recoveries we have recorded as of December 31, 2005, which we believe entitles
us to Hurricane-related insurance proceeds in excess of those recorded as of
December 31, 2005, the timing and amount of such proceeds can not be
determined at this time since it will be based on factors such as loss
causation, ultimate replacement costs of damaged assets and ultimate economic
value of business interruption claims.
We expect to announce final fourth quarter and full-year 2005 results on
February 27, 2006 with a conference call for investors at 9:00 a.m. Eastern
Time on February 28, 2006.
2006 Guidance:
For 2006, we expect to achieve earnings per diluted share from continuing
operations of approximately $2.60 - $2.65. The guidance includes
approximately $.10 per diluted share of stock compensation expense recorded in
connection with Statement of Financial Accounting Standards 123R, which we
adopted on January 1, 2006. This guidance assumes no revenue from our
Louisiana facilities that were closed as a result of damage sustained from
Hurricane Katrina and it does not take into consideration additional
Hurricane-related expenses and/or commercial insurance recoveries. The 2006
guidance does not include the potential favorable impact of Texas Medicaid
supplemental reimbursements that we may be entitled to during 2006 should the
appropriate federal and state approvals be obtained. The Centers for Medicare
and Medicaid Services' ("CMS") disposition of the Texas Medicaid state plan
amendment containing the provisions for these supplemental Medicaid payments
is required by mid-March 2006. There can be no assurance these additional
reimbursements will be approved, however, if approved, we may be entitled to
additional reimbursements ranging from $5 million to $21 million covering the
period of June 1, 2005 through August 31, 2006. If approved, the continuation
of these reimbursements beyond August 31, 2006 and the level of such
reimbursements are largely contingent on the nature of CMS's disposition of
the state plan amendment in March 2006.
We will hold a conference call for investors and analysts at 9:00 a.m.
Eastern Time on January 31, 2006. 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 January 31, 2006 and will continue
through midnight on February 7, 2006. The recording can be accessed by
calling 1-800-642-1687 and entering the conference ID number of 4757702. This
call will also be available live over the Internet at our web site at
http://www.uhsinc.com.
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 website:
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 "Forward-Looking
Statements and Risk Factors" on pages 18 and 19 of our Form 10-Q for the
quarterly period ended September 30, 2005), 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, adjusted
operating income and adjusted operating margin, 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 such as gains on sales of assets and
businesses, Hurricane-related expenses and insurance recoveries, and other
amounts 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, 2004. 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.
SOURCE: Universal Health Services, Inc.
CONTACT: Steve Filton, Chief Financial Officer, Universal Health
Services, +1-610-768-3300
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