UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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): April 27, 2010 (April 26, 2010)

 

 

UNIVERSAL HEALTH SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE		1-10765		23-2077891
(State or other jurisdiction of Incorporation or Organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

UNIVERSAL CORPORATE CENTER

367 SOUTH GULPH ROAD

KING OF PRUSSIA, PENNSYLVANIA 19406

(Address of principal executive office) (Zip Code)

Registrant’s telephone number, including area code (610) 768-3300

Not Applicable

(Former name or former address, if changed since last report)

 

 

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):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02 Results of Operations and Financial Condition

On April 26, 2010, Universal Health Services, Inc. issued the press release attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits. 99.1 Universal Health Services, Inc., press release, dated April 26, 2010.

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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 hereunto duly authorized.

 

Date: April 27, 2010

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Exhibit Index

 

Exhibit No.		Exhibit
99.1		Universal Health Services, Inc., press release, dated April 26, 2010.

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

CONTACT:		Steve Filton
		Chief Financial Officer		April 26, 2010
		610-768-3300

UNIVERSAL HEALTH SERVICES, INC. REPORTS

2010 FIRST QUARTER FINANCIAL RESULTS

Consolidated Results of Operations:

KING OF PRUSSIA, PA – 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

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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

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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.

(more)

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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

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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

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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						Three months ended March 31, 2009
Calculation of “EBITDA”
Net revenues		$	1,347,153		100.0	%		$	1,312,419		100.0	%
Operating charges:
Salaries, wages and benefits			578,926		43.0	%			541,297		41.2	%
Other operating expenses			247,028		18.3	%			273,221		20.8	%
Supplies expense			183,816		13.6	%			173,967		13.3	%
Provision for doubtful accounts			125,390		9.3	%			118,978		9.1	%
			1,135,160		84.3	%			1,107,463		84.4	%
Operating income/margin (“EBITDAR”)			211,993		15.7	%			204,956		15.6	%
Lease and rental expense			17,934						17,072
Net income attributable to noncontrolling interests			10,943						14,493
Earnings before, depreciation and amortization, interest expense, and income taxes (“EBITDA”)		$	183,116					$	173,391

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Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands, unaudited)

 

		March 31, 2010				December 31, 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

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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

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Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)

Same Facility:

 

						% Change Quarter Ended 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

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UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

MARCH 31, 2010

AS REPORTED:

 

		For the three months ended
		Acute											Behavioral Health
		03/31/10				03/31/09				%			03/31/10				03/31/09				%
Hospitals owned and leased			21				21			0.0	%			82				81			1.2	%
Average licensed beds			5,689				5,465			4.1	%			7,971				7,794			2.3	%
Patient days			305,676				307,278			-0.5	%			538,750				512,934			5.0	%
Average daily census			3,396.4				3,414.2			-0.5	%			5,986.1				5,699.3			5.0	%
Occupancy-licensed beds			59.7	%			62.5	%		-4.4	%			75.1	%			73.1	%		2.7	%
Admissions			68,638				68,198			0.6	%			36,357				33,961			7.1	%
Length of stay			4.5				4.5			-1.2	%			14.8				15.1			-1.9	%
Inpatient revenue		$	2,783,431			$	2,580,139			7.9	%		$	544,781			$	503,681			8.2	%
Outpatient revenue			1,116,925				995,699			12.2	%			77,977				68,128			14.5	%
Total patient revenue			3,900,356				3,575,838			9.1	%			622,758				571,809			8.9	%
Other revenue			15,803				17,810			-11.3	%			8,408				7,909			6.3	%
Gross hospital revenue			3,916,159				3,593,648			9.0	%			631,166				579,718			8.9	%
Total deductions			2,926,848				2,633,799			11.1	%			281,984				257,565			9.5	%
Net hospital revenue		$	989,311			$	959,849			3.1	%		$	349,182			$	322,153			8.4	%
SAME FACILITY:
		Acute											Behavioral Health (1)
		03/31/10				03/31/09				%			03/31/10				03/31/09				%
Hospitals owned and leased			21				21			0.0	%			79				79			0.0	%
Average licensed beds			5,689				5,465			4.1	%			7,735				7,642			1.2	%
Patient days			305,676				307,278			-0.5	%			530,766				509,661			4.1	%
Average daily census			3,396.4				3,414.2			-0.5	%			5,897.4				5,662.9			4.1	%
Occupancy-licensed beds			59.7	%			62.5	%		-4.4	%			76.2	%			74.1	%		2.9	%
Admissions			68,638				68,198			0.6	%			35,295				33,937			4.0	%
Length of stay			4.5				4.5			-1.2	%			15.0				15.0			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.