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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

 

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CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 1, 2005

 

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UNIVERSAL HEALTH SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

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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)

 

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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 August 1, 2005, Universal Health Services, Inc. (the “Company”) issued a press release revising upward the gain on sale of French assets. The revised gain has no effect on income from continuing operations. A copy of the Company’s press release is furnished as exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits

 

(c) Exhibits. 99.1 Universal Health Services, Inc. Press Release dated August 1, 2005

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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: August 1, 2005

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Exhibit Index

 

Exhibit No.		Exhibit
99.1		Press release, dated August 1, 2005

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

CONTACT:		Steve Filton
		Chief Financial Officer		August 1, 2005
		610-768-3300

 

UNIVERSAL HEALTH SERVICES, INC. REVISES UPWARD

THE GAIN ON SALE OF FRENCH ASSETS, NO EFFECT ON

INCOME FROM CONTINUING OPERATIONS

 

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its previously released Consolidated Statements of Income for the three and six months ended June 30, 2005 included an after-tax gain on the sale of our 81.5% ownership interest in Medi-Partenaires which was understated by $12.4 million or $.19 per diluted share. The actual after-tax gain on the sale amounts to $120.7 million or $1.89 per diluted share which is included in income from discontinued operations, net of income tax expense. This revision has no effect on the previously released balance sheet. It reflects the cumulative translation adjustment, previously included in stockholders’ equity on the balance sheet, reclassified through the income statement upon the sale of the French assets.

 

As a result of this revision, reported net income increases to $158.8 million or $2.53 per diluted share for the three months ended June 30, 2005 and $220.3 million or $3.51 per diluted share for the six months ended June 30, 2005. This revision had no impact in either period on our income from continuing operations and income from continuing operations per diluted share or our adjusted net income and adjusted net income per diluted share (as calculated on the attached Schedules of Non-GAAP Supplemental Consolidated Statements of Income Information).

 

Income from continuing operations and income from continuing operations per diluted share remain unchanged as previously reported at $36.6 million or $.61 per diluted share during the three months ended June 30, 2005 and $91.3 million or $1.50 per diluted share during the six months ended June 30, 2005. Adjusted net income and adjusted net income per diluted share also remain unchanged as previously reported at $38.2 million or $.64 per diluted share during the three months ended June 30, 2005 and $95.8 million or $1.57 per diluted share during the six months ended June 30, 2005.

 

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.

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This press release contains forward-looking statements based on current management expectations. Numerous factors, including 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 17 and 18 of our Form 10-Q for the quarterly period ended March 31, 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 property write-downs, gains on sales of assets and businesses or 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. Below are Schedules of Non-GAAP Supplemental Consolidated Income Statement Information which reconcile these measures to net income for the periods presented.

 

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Universal Health Services, Inc.

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

 

		Three months ended June 30,						Six months ended June 30,
		2005			2004			2005			2004
Net revenues		$	990,888		$	905,494		$	1,997,533		$	1,812,620
Operating charges:
Salaries, wages and benefits			407,897			369,335			814,237			740,793
Other operating expenses			234,707			213,274			465,872			421,229
Supplies expense			126,124			113,521			252,660			229,105
Provision for doubtful accounts			95,478			74,244			177,886			157,801
Depreciation and amortization			37,988			35,033			77,684			68,342
Lease and rental expense			15,288			15,255			30,755			30,148
			917,482			820,662			1,819,094			1,647,418
Income before interest expense, minority interests and income taxes			73,406			84,832			178,439			165,202
Interest expense, net			7,450			9,359			18,126			18,926
Minority interests in earnings of consolidated entities			7,926			5,183			15,845			8,710
Income before income taxes			58,030			70,290			144,468			137,566
Provision for income taxes			21,398			25,908			53,146			50,671
Income from continuing operations			36,632			44,382			91,322			86,895
Income from discontinued operations, net of income tax expense (a)			122,211			3,907			128,930			7,578
Net income		$	158,843		$	48,289		$	220,252		$	94,473
Basic earnings per share: (b)
From continuing operations		$	0.65		$	0.77		$	1.60		$	1.51
From discontinued operations			2.16			0.07			2.26			0.13
Total basic earnings per share		$	2.81		$	0.84		$	3.86		$	1.64
Diluted earnings per share: (b)
From continuing operations		$	0.61		$	0.72		$	1.50		$	1.40
From discontinued operations			1.92			0.06			2.01			0.12
Total diluted earnings per share		$	2.53		$	0.78		$	3.51		$	1.52

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Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

 

		Three months ended June 30,								Six months ended June 30,
		2005				2004				2005				2004
(a) Calculation of income from discontinued operations, net of income tax:
Income from operations		$	2,602			$	4,039			$	4,433			$	10,114
Gains on divestitures			177,125				2,338				186,220				2,338
Income from discontinued operations, pre-tax			179,727				6,377				190,653				12,452
Income tax provision			(57,516	)			(2,470	)			(61,723	)			(4,874	)
Income from discontinued operations, net of income tax expense		$	122,211			$	3,907			$	128,930			$	7,578
(b) Earnings per share calculation:
Basic:
Income from continuing operations		$	36,632			$	44,382			$	91,322			$	86,895
Less: Dividends on unvested restricted stock, net of taxes			(28	)			(28	)			(55	)			(56	)
Income from continuing operations - basic		$	36,604			$	44,354			$	91,267			$	86,839
Income from discontinued operations			122,211				3,907				128,930				7,578
Net income - basic		$	158,815			$	48,261			$	220,197			$	94,417
Weighted average number of common shares - basic			56,425				57,622				56,974				57,593
Basic earnings per share:
From continuing operations		$	0.65			$	0.77			$	1.60			$	1.51
From discontinued operations			2.16				0.07				2.26				0.13
Total basic earnings per share		$	2.81			$	0.84			$	3.86			$	1.64
Diluted:
Income from continuing operations		$	36,632			$	44,382			$	91,322			$	86,895
Less: Dividends on unvested restricted stock, net of taxes			(28	)			(28	)			(55	)			(56	)
Add: Debenture interest, net of taxes			2,382				2,305				4,764				4,573
Income from continuing operations - diluted		$	38,986			$	46,659			$	96,031			$	91,412
Income from discontinued operations			122,211				3,907				128,930				7,578
Net income - diluted		$	161,197			$	50,566			$	224,961			$	98,990
Weighted average number of common shares			56,425				57,622				56,974				57,593
Add: Shares for conversion of convertible debentures			6,577				6,577				6,577				6,577
Other share equivalents			646				774				481				860
Weighted average number of common shares and equiv. - diluted			63,648				64,973				64,032				65,030
Diluted earnings per share:
From continuing operations		$	0.61			$	0.72			$	1.50			$	1.40
From discontinued operations			1.92				0.06				2.01				0.12
Total diluted earnings per share		$	2.53			$	0.78			$	3.51			$	1.52

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Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information

For the Three Months Ended June 30, 2005 and 2004

(in thousands)

(unaudited)

 

		Three months ended June 30, 2005								Three months ended June 30, 2004
Net revenues		$	990,888				100.0	%		$	905,494				100.0	%
Operating charges:
Salaries, wages and benefits			407,897				41.2	%			369,335				40.8	%
Other operating expenses			234,707				23.7	%			213,274				23.6	%
Supplies expense			126,124				12.7	%			113,521				12.5	%
Provision for doubtful accounts			95,478				9.6	%			74,244				8.2	%
			864,206				87.2	%			770,374				85.1	%
Operating income/margin			126,682				12.8	%			135,120				14.9	%
Lease and rental expense			15,288								15,255
Minority interests in earnings of consolidated entities			7,926								5,183
Earnings before depreciation and amortization, interest expense, and income taxes (“EBITDA”)			103,468								114,682
Depreciation and amortization			37,988								35,033
Interest expense, net			7,450								9,359
Income before income taxes			58,030								70,290
Provision for income taxes			21,398								25,908
Income from continuing operations			36,632								44,382
Income from discontinued operations, net of income taxes			122,211								3,907
Net income		$	158,843							$	48,289
		Three months ended June 30, 2005								Three months ended June 30, 2004
		Amount				Per Diluted Share				Amount				Per Diluted Share
Calculation of Adjusted Net Income
Net income		$	158,843			$	2.53			$	48,289			$	0.78
Less: After-tax gain on sale of facilities			(120,680	)			(1.89	)			(1,486	)			(0.02	)
Adjusted net income		$	38,163			$	0.64			$	46,803			$	0.76

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Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information

For the Six Months Ended June 30, 2005 and 2004

(in thousands)

(unaudited)

 

		Six months ended June 30, 2005								Six months ended June 30, 2004
Net revenues		$	1,997,533				100.0	%		$	1,812,620				100.0	%
Operating charges:
Salaries, wages and benefits			814,237				40.8	%			740,793				40.9	%
Other operating expenses			465,872				23.3	%			421,229				23.2	%
Supplies expense			252,660				12.6	%			229,105				12.6	%
Provision for doubtful accounts			177,886				8.9	%			157,801				8.7	%
			1,710,655				85.6	%			1,548,928				85.5	%
Operating income/margin			286,878				14.4	%			263,692				14.5	%
Lease and rental expense			30,755								30,148
Minority interests in earnings of consolidated entities			15,845								8,710
Earnings before depreciation and amortization, interest expense, and income taxes (“EBITDA”)			240,278								224,834
Depreciation and amortization			77,684								68,342
Interest expense, net			18,126								18,926
Income before income taxes			144,468								137,566
Provision for income taxes			53,146								50,671
Income from continuing operations			91,322								86,895
Income from discontinued operations, net of income taxes			128,930								7,578
Net income		$	220,252							$	94,473
		Six months ended June 30, 2005								Six months ended June 30, 2004
		Amount				Per Diluted Share				Amount				Per Diluted Share
Calculation of Adjusted Income from Continuing Operations
Income from continuing operations		$	91,322			$	1.50			$	86,895			$	1.40
Less: After-tax DSH revenue attributable to prior year			—				—				(1,748	)			(0.02	)
Adjusted income from continuing operations		$	91,322			$	1.50			$	85,147			$	1.38
Calculation of Adjusted Net Income
Net income		$	220,252			$	3.51			$	94,473			$	1.52
Add: After-tax asset impairment charge			1,974				0.03				—				—
Less: After-tax gain on sale of facilities			(126,462	)			(1.97	)			(1,486	)			(0.02	)
Less: After-tax DSH revenue attributable to prior year			—				—				(1,748	)			(0.02	)
Adjusted net income		$	95,764			$	1.57			$	91,239			$	1.48
		Amount				Margin				Amount				Margin
Calculation of Adjusted Operating Income/Margin
Operating income/margin		$	286,878				14.4	%		$	263,692				14.5	%
Less: After-tax DSH revenue attributable to prior year			—				—				(1,748	)			—
Adjusted operating income/margin		$	286,878				14.4	%		$	261,944				14.5	%