On August 13, 2018, UHS announced that its holding company has entered into a definitive merger agreement with Federal Street Acquisition Corp. (FSAC) pursuant to which, FSAC and UHS will form a new, publicly traded company with a new name — Agiliti.

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Universal Hospital Services, Inc. Announces Third Quarter Earnings; 21st Consecutive Quarter of Increasing Revenues; Completes Recapitalization

Posted: November 3, 2003

Dateline City:
BLOOMINGTON, Minn.

BLOOMINGTON, Minn.–(BUSINESS WIRE)–Nov. 3, 2003–Universal Hospital Services, Inc., (“UHS”) today announced financial results for the third quarter ended September 30, 2003, and the completion of its previously announced recapitalization.

Total revenues were $41.8 million for the third quarter of 2003 representing a $4.1 million or 11.0% increase from total revenues of $37.7 million for the same period of 2002. This represents the 21st consecutive quarter that we have had increased revenues over the same quarter in the prior year. For the first nine months of 2003, total revenues increased 10.5% over the same period in 2002. Penetration of existing customers and the increased focus on technical and professional services and medical equipment remarketing contributed to the overall growth in revenues.

Medical equipment outsourcing revenues were $33.9 million for the third quarter of 2003, representing a $2.1 million or 6.5% increase from medical equipment outsourcing revenues of $31.8 million for the same period of 2002. For the first nine months of 2003, medical equipment outsourcing revenues were $103.9 million, representing a $6.8 million, or 7.0% increase from medical equipment outsourcing revenues of $97.1 million for the same period of 2002. Supplies, equipment and other sales grew to $4.1 million in the third quarter of 2003, representing a 36.8% increase from the prior year. For the first nine months of 2003, sales of supplies, equipment and other were $11.7 million, representing a 29.2% increase over the same period of 2002. Service revenues were $3.9 million for the third quarter of 2003, an increase of 34.3% from the same period in 2002. For the first nine months of 2003, service revenues increased 31.8% over the same period in 2002 (from $8.2 million to $10.7 million).

President and CEO, Gary D. Blackford, commenting on the quarter said, “It was a challenging quarter financially for our hospital clients, and our results reflect the value and efficiencies we bring to these clients even in difficult times. We are especially pleased with our continuing progress in growing our less capital intensive Technical and Professional Services and Equipment Sales and Remarketing businesses.”

Net income for the third quarter was $1.0 million, representing a 9.8% or $0.1 million decrease from the net income of $1.1 million for the same period of 2002. Net income was $5.0 million for the first nine months of 2003, representing an 8.9% or $0.4 million increase from the net income of $4.6 million for the same period of 2002. The increase resulted from revenue growth combined with a reduction in interest expense and a higher gross margin on the sales of supplies and equipment.

Net cash provided by operating activities grew by 13.6% to $29.2 million due to increased net income, depreciation and lower growth in working capital.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first nine months was $47.9 million versus $45.3 million for the prior year, a $2.6 million or 5.8% increase.

EBITDA is not intended to represent an alternative to operating income or cash flows from operating, financing or investing activities (as determined in accordance with generally accepted accounting principles (GAAP)) as a measure of performance, and is not representative of funds available for discretionary use due to the Company’s financing obligations. EBITDA, as defined by the Company, may not be calculated consistently among other companies applying similar reporting measures. EBITDA is included herein because it is a widely accepted financial indicator used by certain investors and financial analysts to assess and compare companies and is an integral part of the Company’s debt covenant calculations. Management believes that EBITDA provides an important perspective on the Company’s ability to service its long-term obligations, the Company’s ability to fund continuing growth, and the Company’s ability to continue as a going concern.

On October 17, 2003, we completed our previously announced recapitalization. The Company issued $260,000,000 10-1/8% senior notes due 2011 and entered into a new five-year revolving credit facility with a bank group led by General Electric Capital Corporation. The new credit facility replaced the company’s previous bank facility and provides us with up to $100 million in available revolving borrowings. On October 17, 2003 and October 28, 2003, J.W. Childs Equity Partners III, L.P., JWC Fund III Co-invest LLC, Halifax Capital Partners, L.P., and certain members of management purchased an aggregate of approximately $56 million of newly issued stock of UHS at a purchase price of $12.00 per share. In connection with the recapitalization, UHS purchased or will redeem all of its outstanding 10-1/4% senior notes due 2008 and repurchased an aggregate of 5,830,487 shares of common stock and options to purchase an aggregate of 3,147,556 shares of common stock from stockholders and optionholders on October 28, 2003. In connection with these transactions, we estimate we will record a charge in the fourth quarter of 2003 totally approximately $28.8 million, including $13.5 million of cash stock compensation and $15.3 million on the early retirement of debt and related fees and expenses.

“We had a stated goal at the beginning of the year to complete a capital event to ensure we would have the resources to aggressively grow our business for the long term. This recapitalization achieves that goal and positions us to focus on the long term growth of products and services that our customers need and demand. The positive reception we received in the marketplace is a testament to the leadership position we have built in this industry, and the attractive opportunities we have to expand on this position,” said Blackford.

UHS issued the new equity and new senior notes in transactions that were not registered under the Securities Act of 1933, as amended, or any state securities laws and those securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security.

We will conduct a conference call regarding the Third Quarter 2003 results on Tuesday, November 4th at 10:00 AM CST. To participate, you may call (877) 284-1151 and indicate you would like to join in the UHS Third Quarter Results call with Gary Blackford as the leader. A taped replay of this call will be available from 2:00 PM CST on November 4th until 11:00 PM CST on November 10th. The “Encore Dial-in” number is: (800) 642-1687 or (706) 645-9291, confirmation #2976627.

This call is being webcast by CCBN and can be accessed at the Universal Hospital Services, Inc. web site at www.uhs.com. Click on “Press Releases” and then on “Third Quarter 2003 Results” to participate.

The webcast is also being 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 www.fulldisclosure.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).

About Universal Hospital Services, Inc.

Based in Bloomington, Minnesota, Universal Hospital Services is a leading nationwide provider of medical technology outsourcing and services to more than 5,900 acute care hospitals and alternate site providers and major medical equipment manufacturers. Our services fall into three general categories: Medical Equipment Outsourcing, Technical and Professional Services, and Medical Equipment Sales and Remarketing. We provide a comprehensive range of support services, including equipment delivery, training, technical and educational support, inspection, maintenance and complete documentation. Universal Hospital Services currently operates through 68 district offices and 13 regional service centers, serving customers in all 50 states and the District of Columbia.

     Universal Hospital Services, Inc.    3800 W. 80th Street, Suite 1250    Bloomington, MN 55431-4442    952-893-3200    www.uhs.com 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: We believe statements in this release looking forward in time involve risks and uncertainties. The following factors, among others, could adversely effect our business, operations and financial condition causing our actual results to differ materially from those expressed in any forward-looking statements: the Company’s history of net losses and substantial interest expense since its 1998 recapitalization; the Company’s need for substantial cash to operate and expand its business as planned; the Company’s substantial outstanding debt and debt service obligations; restrictions imposed by the terms of the Company’s debt; the Company’s ability to effect change in the manner in which healthcare providers traditionally procure medical equipment; the Company’s relationships with certain key suppliers and any adverse developments concerning these suppliers; the absence of long-term commitments with customers; the Company’s ability to renew contracts with group purchasing organizations; the write-off or acceleration of the amortization of goodwill; the Company’s ability to acquire adequate insurance to cover claims; the fluctuation in our quarterly operating results; adverse regulatory developments affecting, among other things, the ability of our customers to obtain reimbursement of payments made to the Company; changes and trends in customer preferences, including increased purchasing of movable medical equipment; difficulties or delays in our continued expansion into certain markets and developments of new markets; additional credit risks in increasing business with home care providers and nursing homes; consolidations in the healthcare industry; unanticipated costs or difficulties or delays in implementing the components of our strategy and plan and possible adverse consequences relating to our ability to successfully integrate recent acquisitions; effect of and changes in economic conditions, including inflation and monetary conditions; actions by competitors; and the availability of and ability to retain qualified personnel. These and other risk factors are detailed in the Company’s Securities and Exchange Commission filings.

                    UNIVERSAL HOSPITAL SERVICES, INC.                             BALANCE SHEETS     (dollars in thousands except share and per share information)                                  ASSETS                                           September 30,  December 31,                                               2003           2002                                           -------------  -------------                                            (unaudited) Current assets:      Accounts receivable, less allowance for     doubtful accounts of $1,700 and $1,800     at September 30, 2003 and December 31,     2002, respectively                         $31,015        $29,807    Inventories                                   3,438          2,983    Deferred income taxes                         2,763          3,062    Other current assets                          1,639          1,700                                           -------------  -------------       Total current assets                      38,855         37,552  Property and equipment, net:     Movable medical equipment, net              116,922        118,409    Property and office equipment, net            6,156          5,746                                           -------------  -------------       Total property and equipment, net        123,078        124,155  Intangible assets:     Goodwill                                     36,472         35,608    Other, primarily deferred financing     costs, net                                   3,572          3,948    Other intangibles, net                        1,218            873                                           -------------  -------------       Total assets                            $203,195       $202,136                                           =============  =============                 LIABILITIES AND SHAREHOLDERS' DEFICIENCY  Current liabilities:     Current portion of long-term debt              $308           $251    Accounts payable                              8,612         11,078    Accrued compensation and pension              7,023          7,060    Accrued interest                              1,280          4,962    Other accrued expenses                        2,359          1,697    Book overdrafts                                 928          2,712                                           -------------  -------------       Total current liabilities                 20,510         27,760  Long-term debt, less current portion           202,924        200,555 Deferred compensation and pension                2,790          4,869 Deferred income taxes                            5,904          3,062  Series B, 13% Cumulative Accruing Pay-In-  Kind Stock, $0.01 par value; 25,000  shares authorized, 6,246 shares issued  and outstanding at September 30, 2003  and December 31, 2002, net of  unamortized discount, including  accrued stock dividends                        10,751          9,672  Common stock subject to put                     12,708         11,576  Commitments and contingencies  Shareholders' deficiency:     Common stock, $0.01 par value;    35,000,000 shares authorized,    11,413,152 and 11,394,320 shares issued    and outstanding at September 30, 2003    and December 31, 2002, respectively             114            114    Additional paid-in capital                    5,785          6,876    Accumulated deficit                         (56,061)       (59,959)    Deferred compensation                          (498)          (657)    Accumulated other comprehensive loss         (1,732)        (1,732)                                           -------------  -------------       Total shareholders' deficiency           (52,392)       (55,358)                                           -------------  -------------       Total liabilities and shareholders'        deficiency                             $203,195       $202,136                                           =============  =============      This statement does not reflect the impact of the October 2003                            recapitalization                        Universal Hospital Services, Inc.                          Statements of Income                         (dollars in thousands)                                Three Months Ended    Nine Months Ended                                  September 30,        September 30,                              -------------------- --------------------                                 2003      2002       2003      2002                              ----------- -------- ----------- --------                                   (unaudited)          (unaudited) Revenues:     Medical equipment     outsourcing                 $33,899  $31,823    $103,940  $97,123    Sales of supplies and     equipment and other           4,051    2,961      11,702    9,055    Service                        3,895    2,899      10,743    8,151                              ----------- -------- ----------- --------          Total revenues          41,845   37,683     126,385  114,329  Costs of medical equipment  outsourcing, sales and  service:     Cost of medical     equipment outsourcing     and service                  13,227   11,287      37,989   33,191    Movable medical     equipment depreciation        8,121    7,349      23,921   21,585    Cost of supplies and     equipment sales               2,737    2,065       7,950    6,385                              ----------- -------- ----------- --------          Total costs of           equipment           outsourcing and           sales                  24,085   20,701      69,860   61,161                              ----------- -------- ----------- --------           Gross profit            17,760   16,982      56,525   53,168  Selling, general and  administrative                  11,671   10,555      35,178   31,935                              ----------- -------- ----------- --------           Operating income         6,089    6,427      21,347   21,233  Interest expense                  4,354    4,456      13,034   13,579                              ----------- -------- ----------- --------  Income before income taxes        1,735    1,971       8,313    7,654  Provision for income taxes          705      830       3,336    3,082                              ----------- -------- ----------- --------  Net income                       $1,030   $1,141      $4,977   $4,572                              =========== ======== =========== ========   Additional information    Movable medical equipment     (approximate number of     units at end of period)                          143,000  128,000    Offices (at end of     period)                                               68       65    Number of hospital     customers (at end of     period)                                            2,850    2,720    Number of total     customers (at end of     period)                                            5,925    5,770      This statement does not reflect the impact of the October 2003                            recapitalization                            Percent of Total Revenues       Percent Increase                                                        (Decrease)                                                                 Nine                                                               Months                     Three Months    Nine Months      Qtr 3     2003                         Ended          Ended         2003    Over Nine                     September 30,   September 30,   Over Qtr  Months                       2003   2002    2003   2002     3 2002    2002                    --------------- --------------  --------- ---------  Revenues:    Medical equipment    outsourcing        81.0%  84.4%   82.2%  85.0%       6.5%      7.0%   Sales of supplies    and equipment    and other           9.7%   7.9%    9.3%   7.9%      36.8%     29.2%   Services             9.3%   7.7%    8.5%   7.1%      34.3%     31.8%                    -------- ------ ------- ------     Total revenues   100.0% 100.0%  100.0% 100.0%      11.0%     10.5%  Costs of medical  equipment  outsourcing,  sales and service:    Cost of medical    equipment    outsourcing and    service            31.6%  30.0%   30.1%  29.0%      17.2%     14.5%   Movable medical    equipment    depreciation       19.4%  19.5%   18.9%  18.9%      10.5%     10.8%   Cost of supplies    and equipment    sales               6.6%   5.4%    6.3%   5.6%      32.5%     24.5%                    -------- ------ ------- ------     Total costs of      medical      equipment      outsourcing,      sales and      service          57.6%  54.9%   55.3%  53.5%      16.3%     14.2%                    -------- ------ ------- ------      Gross profit      42.4%  45.1%   44.7%  46.5%       4.6%      6.3%  Selling, general  and administrative   27.8%  28.0%   27.8%  27.9%      10.6%     10.2%                    -------- ------ ------- ------      Operating      income           14.6%  17.1%   16.9%  18.6%     (5.3%)      0.5%  Interest expense      10.4%  11.9%   10.3%  11.9%     (2.3%)    (4.0%)                    -------- ------ ------- ------  Income before  income taxes          4.2%   5.2%    6.6%   6.7%    (12.0%)      8.6%  Provision for  income taxes          1.7%   2.2%    2.6%   2.7%    (15.1%)      8.2%                    -------- ------ ------- ------  Net income             2.5%   3.0%    4.0%   4.0%     (9.8%)      8.9%                    ======== ====== ======= ======      This statement does not reflect the impact of the October 2003                            recapitalization                         Universal Hospital Services, Inc.                        Statements of Cash Flows                         (dollars in thousands)                                                       Nine Months Ended                                                       September 30,                                                   --------------------                                                      2003      2002 Cash flows from operating activities:             (unaudited)    Net income                                         $4,977   $4,572    Adjustments to reconcile net income to net    cash provided by operating activities:         Depreciation                                  25,558   23,132         Amortization of intangibles                    1,038      942         Accretion of bond discount                       397      397         Provision for doubtful accounts                  528      551         Non-cash stock-based compensation expense        160      240         Loss on sales/disposal of equipment              412      472         Deferred income taxes                          3,141    3,072         Changes in operating assets and          liabilities, net of impact of          acquisition:              Accounts receivable                      (1,697)    (305)              Inventories and other operating               assets                                    (425)  (1,400)              Accounts payable and accrued expenses    (4,873)  (5,946)                                                   ----------- --------         Net cash provided by operating activities     29,216   25,727                                                   ----------- --------  Cash flows from investing activities:    Movable medical equipment purchases               (26,710) (25,489)    Property and office equipment purchases            (2,025)  (1,634)    Proceeds from disposition of movable medical     equipment                                          1,465      744    Other                                              (1,905)    (375)                                                   ----------- --------         Net cash used in investing activities        (29,175) (26,754)                                                   ----------- --------  Cash flows from financing activities:    Proceeds under loan agreements                     50,950   47,225    Payments under loan agreements                    (49,244) (46,623)    Repurchase of common stock                              -      (11)    Payment of deferred financing cost                     (5)       -    Proceeds from issuance of common stock, net of     offering costs                                        42      587    Change in book overdraft                           (1,784)    (151)                                                   ----------- --------         Net cash provided by financing activities        (41)   1,027                                                   ----------- --------  Net change in cash and cash equivalents                 $---     $---                                                   =========== ========  Supplemental cash flow information:         Interest paid                                $16,319  $16,608                                                   =========== ========         Income taxes paid                               $192      $75                                                   =========== ========         Movable medical equipment purchases in          accounts payable                             $3,270   $5,751                                                   =========== ========         Movable medical equipment additions          $24,303  $25,298                                                   =========== ========  Additional information          Net cash provided by operating activities    $29,216  $25,727         Changes in operating assets and          liabilities                                   6,995    7,651         Other non-cash expenses                       (1,497)  (1,660)         Current income taxes                             195       10         Interest expense                              13,034   13,579                                                   ----------- --------          EBITDA                                       $47,943  $45,307                                                   =========== ========    This statement does not reflect the impact of the October                     2003 Recapitalization 
Language:
English
Contact:
Universal Hospital Services, Inc., Bloomington
Bethany A. Oliver, 952-893-3288