Universal Health Services, Inc. Reports 2010 First Quarter Financial Results
04/26/2010
KING OF PRUSSIA, Pa., April 26, 2010 /PRNewswire via COMTEX/ --Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $71.8 million, or an increase of 7% to $.73 per diluted share, during the first quarter of 2010 as compared to $67.5 million, or $.68 per diluted share, during the comparable prior year quarter.
Net revenues increased 3% to $1.35 billion during the first quarter of 2010 as compared to $1.31 billion during the first quarter of 2009. The operating margin (net revenues less salaries, wages and benefits, other operating expenses, supplies expense and provision for doubtful accounts) increased to 15.7% during the first quarter of 2010 as compared to 15.6% during the first quarter of 2009.
Acute Care Services:
At our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 1.8% while adjusted patient days increased 0.6% during the first quarter of 2010, as compared to the first quarter of 2009. Net revenues at these facilities increased 3.1% during the first quarter of 2010 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 1.3% while net revenue per adjusted patient day increased 2.5% during the first quarter of 2010 as compared to the comparable quarter of the prior year. On a same facility basis, the operating margin at our acute care hospitals decreased to 16.1% during the first quarter of 2010 as compared to 17.6% during the first quarter of 2009.
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 $176 million and $158 million during the three-month periods ended March 31, 2010 and 2009, respectively.
Behavioral Health Care Services:
At our behavioral health care facilities, on a same facility basis, adjusted admissions increased 3.8% and adjusted patient days increased 3.9% during the first quarter of 2010 as compared to the first quarter of 2009. Net revenues at these facilities increased 6.7% during the first quarter of 2010 as compared to the comparable quarter in the prior year. At these facilities, net revenue per adjusted admission increased 2.8% while net revenue per adjusted patient day increased 2.7% during the first quarter of 2010 over the comparable prior year quarter. The operating margin at our behavioral health care facilities owned during both periods increased to 26.1% during the first quarter of 2010 as compared to 24.6% during the first quarter of 2009.
Conference Call Information:
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 27, 2010. 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 27, 2010 and will continue through midnight on May 11, 2010. The recording can be accessed by calling 1-800-642-1687 and entering the conference ID number 68231632. This call will also be available live over the internet at our web site at www.uhsinc.com. The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents at www.streetevents.com.
General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
Universal Health Services, Inc. ("UHS") is one of the nation's largest hospital companies operating, through its subsidiaries, acute care hospitals, behavioral healthcare facilities and ambulatory centers located throughout the United States and Puerto Rico. UHS 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, 2009), may cause the 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 net income attributable to UHS, adjusted net income attributable to UHS 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, when applicable, 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, reserves for settlements, legal judgments and lawsuits 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, 2009. 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,
---------------
2010 2009
---- ----
Net revenues $1,347,153 $1,312,419
Operating charges:
Salaries, wages and benefits 578,926 541,297
Other operating expenses 247,028 273,221
Supplies expense 183,816 173,967
Provision for doubtful accounts 125,390 118,978
Depreciation and amortization 53,511 51,134
Lease and rental expense 17,934 17,072
1,206,605 1,175,669
--------- ---------
Income from operations 140,548 136,750
Interest expense, net 12,377 12,638
------ ------
Income before income taxes 128,171 124,112
Provision for income taxes 45,409 42,078
------ ------
Net income 82,762 82,034
Less: Net income attributable to
noncontrolling interests 10,943 14,493
Net income attributable to UHS $71,819 $67,541
======= =======
Basic earnings per share attributable to UHS (a) $0.74 $0.68
===== =====
Diluted earnings per share attributable to UHS
(a) $0.73 $0.68
===== =====
Universal Health Services, Inc.
-------------------------------
Footnotes to Consolidated Statements of Income
----------------------------------------------
(in thousands, except per share amounts)
(unaudited)
Three months
ended March 31,
---------------
2010 2009
---- ----
(a) Earnings per share calculation:
-----------------------------------
Basic and diluted:
------------------
Net income attributable to UHS $71,819 $67,541
Less: Net income attributable to unvested
restricted share grants (315) (314)
---- ----
Net income attributable to UHS -basic and
diluted $71,504 $67,227
======= =======
Weighted average number of common shares - basic 96,539 98,412
------ ------
Basic earnings per share attributable to UHS: $0.74 $0.68
===== =====
Weighted average number of common shares 96,539 98,412
Add: Other share equivalents 911 -
Weighted average number of common shares and
equiv. -diluted 97,450 98,412
------ ------
Diluted earnings per share attributable to UHS: $0.73 $0.68
===== =====
Universal Health Services, Inc.
-------------------------------
Schedule of Non-GAAP Supplemental Consolidated Statements of Income
Information ("Supplemental Schedule")
-------------------------------------------------------------------
For the three months ended March 31, 2010 and 2009
--------------------------------------------------
(in thousands, except per share amounts)
(unaudited)
Calculation of "EBITDA"
-----------------------
Three months ended
March 31, 2010
--------------
Calculation of "EBITDA"
-----------------------
Net revenues $1,347,153 100.0%
Operating charges:
Salaries, wages and benefits 578,926 43.0%
Other operating expenses 247,028 18.3%
Supplies expense 183,816 13.6%
Provision for doubtful
accounts 125,390 9.3%
1,135,160 84.3%
--------- ----
Operating income/margin
("EBITDAR") 211,993 15.7%
Lease and rental expense 17,934
Net income attributable to
noncontrolling interests 10,943
------
Earnings before,
depreciation and
amortization, interest
expense, and income taxes
("EBITDA") $183,116
========
Three months ended
March 31, 2009
--------------
Calculation of "EBITDA"
-----------------------
Net revenues $1,312,419 100.0%
Operating charges:
Salaries, wages and benefits 541,297 41.2%
Other operating expenses 273,221 20.8%
Supplies expense 173,967 13.3%
Provision for doubtful
accounts 118,978 9.1%
1,107,463 84.4%
--------- ----
Operating income/margin
("EBITDAR") 204,956 15.6%
Lease and rental expense 17,072
Net income attributable to
noncontrolling interests 14,493
------
Earnings before,
depreciation and
amortization, interest
expense, and income taxes
("EBITDA") $173,391
========
Universal Health Services, Inc.
-------------------------------
Condensed Consolidated Balance Sheets
-------------------------------------
(in thousands, unaudited)
December
March 31, 31,
2010 2009
---- ----
Assets
Current assets:
Cash and cash equivalents $6,865 $9,180
Accounts receivable, net 648,831 602,559
Supplies 83,822 84,272
Other current assets 36,863 27,270
Deferred income taxes 39,895 51,336
Current assets held for sale 21,580 21,580
Total current assets 837,856 796,197
------- -------
Property and equipment 3,771,362 3,738,818
Less: accumulated depreciation (1,467,874) (1,423,580)
2,303,488 2,315,238
--------- ---------
Other assets:
Goodwill 733,626 732,685
Deferred charges 9,316 8,643
Other 115,025 111,700
$3,999,311 $3,964,463
========== ==========
Liabilities and Stockholders'
Equity
Current liabilities:
Current maturities of long-term
debt $1,526 $2,573
Accounts payable and accrued
liabilities 583,028 578,617
Federal and state taxes 25,716 1,627
Total current liabilities 610,270 582,817
------- -------
Other noncurrent liabilities 367,747 375,580
Long-term debt 891,615 956,429
Deferred income taxes 63,125 60,091
UHS common stockholders' equity 1,821,755 1,751,071
Noncontrolling interest 244,799 238,475
------- -------
Total equity 2,066,554 1,989,546
$3,999,311 $3,964,463
========== ==========
Universal Health Services, Inc.
-------------------------------
Consolidated Statements of Cash Flows
-------------------------------------
(in thousands)
(unaudited)
Three months
ended March 31,
---------------
2010 2009
---- ----
Cash Flows from Operating Activities:
Net income $82,762 $82,034
Adjustments to reconcile net income to
net
cash provided by operating activities:
Depreciation & amortization 53,511 51,134
Gain on sale of asset (1,848) -
Stock-based compensation expense 4,065 3,463
Changes in assets & liabilities, net
of effects from
acquisitions and dispositions:
Accounts receivable (46,499) (44,894)
Construction management and other
receivable - 17,477
Accrued interest 8,357 10,491
Accrued and deferred income taxes 37,380 28,062
Other working capital accounts (2,389) 6,581
Other assets and deferred charges (4,231) (1,902)
Other (4,164) (4,537)
Accrued insurance expense, net of
commercial premiums paid 18,960 20,014
Payments made in settlement of self-
insurance claims (10,187) (15,669)
Net cash provided by operating
activities 135,717 152,254
------- -------
Cash Flows from Investing Activities:
Property and equipment additions, net
of disposals (62,576) (78,219)
Proceeds received from sale of asset 2,894 -
Net cash used in investing activities (59,682) (78,219)
------- -------
Cash Flows from Financing Activities:
Reduction of long-term debt (68,363) (51,800)
Repurchase of common shares (2,157) (14,725)
Dividends paid (4,834) (3,962)
Issuance of common stock 1,627 667
Profit distributions to noncontrolling
interests (4,623) (252)
Net cash used in financing activities (78,350) (70,072)
------- -------
Increase (decrease) in cash and cash
equivalents (2,315) 3,963
Cash and cash equivalents, beginning
of period 9,180 5,460
Cash and cash equivalents, end of
period $6,865 $9,423
====== ======
Supplemental Disclosures of Cash Flow
Information:
Interest paid $5,482 $3,966
====== ======
Income taxes paid, net of refunds $6,732 $13,784
====== =======
Universal Health Services, Inc.
Supplemental Statistical Information
(unaudited)
% Change
Quarter
Ended
Same Facility: 3/31/2010
-------------- ---------
Acute Care Hospitals
--------------------
Revenues 3.1%
Adjusted Admissions 1.8%
Adjusted Patient Days 0.6%
Revenue Per Adjusted Admission 1.3%
Revenue Per Adjusted Patient Day 2.5%
Behavioral Health Hospitals
---------------------------
Revenues 6.7%
Adjusted Admissions 3.8%
Adjusted Patient Days 3.9%
Revenue Per Adjusted Admission 2.8%
Revenue Per Adjusted Patient Day 2.7%
UHS Consolidated First Quarter Ended
---------------- -------------------
3/31/2010 3/31/2009
--------- ---------
Revenues $1,347,153 $1,312,419
EBITDA (1) $183,116 $173,391
EBITDA Margin (1) 13.6% 13.2%
Cash Flow From Operations $135,717 $152,254
Days Sales Outstanding 43 45
Capital Expenditures $62,576 $78,219
Debt 893,141 947,569
UHS common stockholders' equity 1,821,755 1,596,544
Debt / Total Capitalization 32.9% 37.2%
Debt / EBITDA (2) 1.29 1.64
Debt / Cash From Operations (2) 1.73 1.84
Acute Care EBITDAR Margin (3) 16.1% 17.6%
Behavioral Health EBITDAR Margin (3) 25.5% 24.3%
(1) Net of noncontrolling interest
(2) Latest 4 quarters
(3) Before Corporate overhead allocation and noncontrolling interest
UNIVERSAL HEALTH SERVICES, INC.
SELECTED HOSPITAL STATISTICS
MARCH 31, 2010
AS REPORTED:
For the three months ended
Acute
03/31/10 03/31/09
-------- --------
Hospitals owned and
leased 21 21
Average licensed beds 5,689 5,465
Patient days 305,676 307,278
Average daily census 3,396.4 3,414.2
Occupancy-licensed beds 59.7% 62.5%
Admissions 68,638 68,198
Length of stay 4.5 4.5
Inpatient revenue $2,783,431 $2,580,139
Outpatient revenue 1,116,925 995,699
Total patient revenue 3,900,356 3,575,838
Other revenue 15,803 17,810
Gross hospital revenue 3,916,159 3,593,648
Total deductions 2,926,848 2,633,799
Net hospital revenue $989,311 $959,849
AS REPORTED:
For the three months ended
%
---
Hospitals owned and
leased 0.0%
Average licensed beds 4.1%
Patient days -0.5%
Average daily census -0.5%
Occupancy-licensed beds -4.4%
Admissions 0.6%
Length of stay -1.2%
Inpatient revenue 7.9%
Outpatient revenue 12.2%
Total patient revenue 9.1%
Other revenue -11.3%
Gross hospital revenue 9.0%
Total deductions 11.1%
Net hospital revenue 3.1%
AS REPORTED:
For the three months ended
Behavioral Health
03/31/10 03/31/09
-------- --------
Hospitals owned and
leased 82 81
Average licensed beds 7,971 7,794
Patient days 538,750 512,934
Average daily census 5,986.1 5,699.3
Occupancy-licensed beds 75.1% 73.1%
Admissions 36,357 33,961
Length of stay 14.8 15.1
Inpatient revenue $544,781 $503,681
Outpatient revenue 77,977 68,128
Total patient revenue 622,758 571,809
Other revenue 8,408 7,909
Gross hospital revenue 631,166 579,718
Total deductions 281,984 257,565
Net hospital revenue $349,182 $322,153
AS REPORTED:
For the three months ended
%
---
Hospitals owned and
leased 1.2%
Average licensed beds 2.3%
Patient days 5.0%
Average daily census 5.0%
Occupancy-licensed beds 2.7%
Admissions 7.1%
Length of stay -1.9%
Inpatient revenue 8.2%
Outpatient revenue 14.5%
Total patient revenue 8.9%
Other revenue 6.3%
Gross hospital revenue 8.9%
Total deductions 9.5%
Net hospital revenue 8.4%
SAME FACILITY:
Acute
03/31/10 03/31/09
-------- --------
Hospitals owned and
leased 21 21
Average licensed beds 5,689 5,465
Patient days 305,676 307,278
Average daily census 3,396.4 3,414.2
Occupancy-licensed beds 59.7% 62.5%
Admissions 68,638 68,198
Length of stay 4.5 4.5
SAME FACILITY:
%
---
Hospitals owned and
leased 0.0%
Average licensed beds 4.1%
Patient days -0.5%
Average daily census -0.5%
Occupancy-licensed beds -4.4%
Admissions 0.6%
Length of stay -1.2%
SAME FACILITY:
Behavioral Health
(1)
03/31/10 03/31/09
-------- --------
Hospitals owned and
leased 79 79
Average licensed beds 7,735 7,642
Patient days 530,766 509,661
Average daily census 5,897.4 5,662.9
Occupancy-licensed beds 76.2% 74.1%
Admissions 35,295 33,937
Length of stay 15.0 15.0
SAME FACILITY:
%
---
Hospitals owned and
leased 0.0%
Average licensed beds 1.2%
Patient days 4.1%
Average daily census 4.1%
Occupancy-licensed beds 2.9%
Admissions 4.0%
Length of stay 0.1%
(1) Ascent, Centennial Peaks, Crescent Pines, The Hope Program and
Springwoods Behavioral are excluded in both current and prior years.
Coastal Behavioral is included in March 1st thru year to date.
SOURCE Universal Health Services, Inc.