Universal Health Services, Inc. · NYSE:UHS
Universal Health Services — Universal Hospital Services — Q3 2006 Earnings Presentation
21 slides from Universal Health Services's earnings presentation, Nov 8, 2006
Slide 1: Q3 2006 Earnings Teleconference
Q3 2006 Earnings Teleconference November 8, 2006
Slide 2: Forward Looking Statements
Forward Looking Statements Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Universal Hospital Services, Inc. believes statements in this presentation looking forward in time involve risks and uncertainties. The following factors, among others, could adversely affect
Slide 3: Financial Results ($ millions)
Financial Results ($ millions) 3rd Qtr YTD 2005 2006 % Chg 2005 2006 % Chg Revenues 53.4 54.6 2% 162.0 167.7 4% Adjusted EBITDA 18.2 18.9 4% 55.1 61.3 11% Our 2006 performance is very solid, particularly in light of continued headwinds in the hospital industry. Refer to appendix for reconciliation o
Slide 4: 2006 Market Headwinds
2006 Market Headwinds Weak Census Equipment Recalls Gasoline Costs Hospital Equipment Purchases Weak Flu Season General Uncertainty 4
Slide 5: Positive Trends
Positive Trends: Operational Efficiencies Resident Program Traction Lifecycle Adoption Sole-source GPO Agreement Dual Source GPO Agreement 5
Slide 6: Results of our Strategic Review Completed in Q3
Results of our Strategic Review Completed in Q3 General confirmation of management’s view of strategic opportunities, provided clearer market / consumer perspectives: Significant additional opportunities to grow traditional rental business; particularly as demographics return census to 3-5% historic
Slide 7: Focus for 2007
Focus for 2007 Implementation / Penetration of New Accounts Broadlane HPG Other national account opportunities Continued Drive for More Resident-Based Programs Continued Focus on Improving UHS’ Operating Leverage and Efficiencies Further development of our Sales Force Continue Disciplined Approach t
Slide 8: Financial Review
Financial Review 8
Slide 9: Weak Market Fundamentals Continued into Q3-2006
Weak Market Fundamentals Continued into 2005 had an above-average and late season lasting through April. Q3-2006 Year-over-Year % Change 2006 has been below average and 14.0% particularly weak in 3rd Qtr. 12.0% Source: www.cdc.gov/flu/weekly/fluactivity.htm Comparing to strong 10.0% Flu Quarters in
Slide 10: Market Headwinds - continued
Market Headwinds - continued: Hospital’s Moveable Medical Equipment Needs Weak Census likely has a multiplier impact on Supplemental Rental Supplemental Rental We’ve adapted to the weak Census, and are poised for upside when Census returns Owned Equipment Winter Spring Summer Fall 10
Slide 11: Medical Equipment Outsourcing
Medical Equipment Outsourcing Rental of UHS-owned equipment Supplemental (short-term) Long Term Bariatrics: suite of specialty equipment for treatment of obesity AMPP Resident Programs (Asset Management Partnership Program) On-site management to drive better equipment utilization (UHS people, techno
Slide 12: Technical & Professional Services
Technical & Professional Services Technical Services: Professional Services: Maintain & Repair Customer-owned Equipment: Technology baseline assessments Non-resident, response-based / scheduled Biomedical Services Vendor neutral Capital Planning Services Resident-Based Programs: Product comparison r
Slide 13: Medical Equipment Sales and Remarketing
Medical Equipment Sales and Remarketing Asset recovery and equipment brokerage New equipment sales Logistics Management Disposable Sales $ millions 3rd Quarter YTD September 2005 2006 % Chg 2005 2006 % Chg Revenues $5.1 $4.7 -6% $14.0 $13.5 -4% Gross Margin $1.1 $1.0 -3% $2.9 $3.3 16% Gross Margin %
Slide 14: Selected Income Statement Data
Selected Income Statement Data ($ millions) 3rd Quarter YTD September 2005 2006 % Chg 2005 2006 % Chg Consolidated Revenues $ 53.4 $ 54.6 2% 162.0 167.7 4% Operating efficiencies have produced positive operating leverage in 2006 Gross Margin 20.6 21.3 3% 66.2 71.2 8% % of Revenues 39% 39% 41% 43% SG
Slide 15: Liquidity Overview – 9 Months Ended Sept 2006
Liquidity Overview – 9 Months Ended Sept 2006 ($ millions) Leverage Calculation – 9/30/06 Borrowing Base at 9/30/2006 $111 (net of L/Cs outstanding) Total Debt at 9/30/06 $291.4 LTM Adj. EBITDA $ 81.1 (c) Total Debt / Adj. EBITDA 3.6x Available Liquidity $83 $ Cash Flow from Operations $ 44 10.125%
Slide 16: 2006 Estimated Guidance
2006 Estimated Guidance ($ millions) 2006 E Key Drivers EBITDA (a) Increased by $0.6 in 2006 for the + Mgmt & Board Fees 1.5 (a) strategic review + Stock-based Comp (FAS 123R) 1.6 = Adjusted EBITDA $79 - $81 Hospital census and equipment purchasing activity, resident program signings, penetration of
Slide 17: Appendix
Appendix 17
Slide 18: EBITDA Reconciliation ($ millions)
EBITDA Reconciliation ($ millions) 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 represe
Slide 19: EBITDA Reconciliation 2000 – 2006 ($ millions)
EBITDA Reconciliation 2000 – 2006 ($ millions) EBITDA 2000 2001 2002 2003 2004 2005 LTM 9/30/06 Net cash provided by operating activities $ 28.2 $ 31.7 $ 40.2 $ 16.0 $ 38.0 $ 44.0 $ 52.9 (a) Changes in operating assets and liabilities (3.5) 0.4 4.1 7.9 2.2 2.3 (1.5) Other non-cash expenses (2.3) (3.
Slide 20: Depreciation and Amortization Reconciliation ($ millions)
Depreciation and Amortization Reconciliation ($ millions) LTM 3rd Quarter YTD September September 2005 2006 2005 2006 2006 Movable Medical Equipment Depreciation $ 9.6 $ 9.5 $28.1 $27.7 $37.6 Other Gross Margin Depreciation 0.5 0.6 1.0 1.7 2.7 Total Gross Margin Depreciation 10.1 10.1 29.1 29.4 40.3
Slide 21: Accrual Capex Reconciliation ($ millions)
Accrual Capex Reconciliation ($ millions) YTD LTM SEPT SEPT 2000 2001 2002 2003 2004 2005 2006 2006 Cash used in Investing Activities 31.5 41.5 39.0 36.8 65.2 40.6 32.0 44.8 Less: Acquisitions - (7.8) - (1.9) (15.1) (1.1) - (1.1) Less: Other 0.1 (0.3) (0.2) (0.2) - - - - Less: MME in A/P prior year
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