University General Health System 2013 Revenue Increases 45% to $164 Million

Submitted by Anonymous (not verified) on Wed, 07/02/2014 - 09:28

HOUSTON, TX--(Marketwired - Jul 2, 2014) - University General Health System, Inc. (OTCQB: UGHS), a diversified, integrated multi-specialty health care delivery system, today announced its 2013 operating results, including a 44.8% improvement in total revenue, an improvement in average daily census of 52.9%, an increase in assets of $8.5 million, and a series of operational restructuring initiatives that have been designed to restore the Company's profitability in 2014. The Company will file its Form 10-K annual report with the SEC later today, in advance of an investor conference call that has been scheduled for Thursday, July 3, 2014 at 11:15 EDT to allow ample time for shareholders to review the SEC filing. Details on the conference call are provided later in this release.

FY2013 HIGHLIGHTS

MANAGEMENT COMMENTS

"Our 45% increase in total revenue during 2013 was primarily attributable to an increase in the number of adjusted patient days and an increase in the number of surgeries performed," commented Dr. Hassan Chahadeh, M.D., Chairman and Chief Executive Officer of University General Health System, Inc. "We are very pleased to have recently achieved in-network status with United and Humana, two large third-party payors, and believe the value of these relationships will be reflected in our 2014 performance. The Company is confident that the effects of MNRP (Maximum Non-Network Reimbursement Plans) will continue to put downward pressure on out-of-network providers, and thus negotiations with major third-party payors will remain a high priority and necessary to the Company's future success. Nonetheless, we acknowledge that our greatest challenges in 2013 involved the amount of human and financial capital expended on our acquisition of the UGH-Dallas hospital and the slower-than-expected turnaround we have experienced at that facility. This has taken a significant toll on our financial performance, which we expect to improve in 2014."

"We have embarked upon a restructuring of our management team and refocused our priorities on organic growth within the system versus additional acquisitions, which have historically resulted in hospital outpatient department integration challenges," continued Chahadeh. "We have also focused on consolidation of our debt, to prepare for a more global refinancing in the future. The performance of our flagship Houston hospital remains stable, and the facility has recorded revenue increases while implementing a $1,000,000 reduction in monthly expenses from January to June 2014. As a Company, we have learned much from our rapid expansion and are determined to address the issues that resulted in a deterioration in our financial position during 2013."

OPERATIONAL RESTRUCTURING PLAN

"Our financial performance during 2013 reflected many challenges that we have addressed during the first half of 2014 and will continue to focus on throughout the balance of the year," added Chahadeh. "We have outlined below some of management's strategic restructuring accomplishments, most of which were implemented in the second quarter."

"These measures are significant and reflect our commitment to shareholders as we focus on improving University General's operating and financial performance in 2014," concluded Chahadeh.

Investor Conference Call

Management of University General Health System will host a conference call on Thursday, July 3, 2014 at 11:15 a.m. EDT. Shareholders and other interested parties may participate in tomorrow's conference call by dialing 877-374-8416 (international participants dial 412-317-6716) and requesting participation in the "University General Health System Conference Call" at least five minutes before 11:15 am EDT.

A replay of the conference call will be available one hour after the call through Thursday, July 10, 2014 at 9:00 a.m. EDT by dialing 877-344-7529 (international participants dial 412-317-0088) and entering the conference ID # 10048817.

NON-GAAP FINANCIAL MEASURES (ADJUSTED EBITDA)

Adjusted EBITDA is a measure of operating performance that is not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), income from operations or cash flows provided by or used in operations, as determined in accordance with GAAP. Adjusted EBITDA is a key measure of the Company's operating performance used by management to focus on operating performance and management without mixing in items of income and expense that relate to the financing and capitalization of the business. The Company defines Adjusted EBITDA as net income (loss) before provision (benefit) for income taxes, non-operating (income) expense items, (gain) loss on sale of assets, depreciation and amortization (including non-cash impairment charges), amortization of deferred gains, and non-cash stock-based compensation expense.

The Company believes Adjusted EBITDA is useful to investors in evaluating its performance, results of operations and financial position for the following reasons:

ABOUT UNIVERSITY GENERAL HEALTH SYSTEM, INC.

University General Health System, Inc. ("University General") is a diversified, integrated multi-specialty health care provider that delivers physician-centric, high quality patient-oriented services by providing timely, innovative health solutions that are uniquely competitive, efficient, and adaptive in today's health care delivery environment. The Company currently operates two hospitals, multiple ambulatory surgical centers, a number of diagnostic imaging, physical therapy and sleep clinics, and a hyperbaric wound care center in the Houston and Dallas metropolitan areas. Also, University General owns three senior living facilities, manages six senior living facilities, and owns a Support Services company that provides revenue cycle and luxury facilities management services.

The Company is headquartered in Houston, Texas, and its common stock trades on the OTCQB under the symbol "UGHS".

FORWARD-LOOKING STATEMENTS

The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements related to the future financial performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful execution of growth strategies, product development and acceptance, the impact of competitive services and pricing, general economic conditions, and other risks and uncertainties described in the Company's periodic filings with the Securities and Exchange Commission.

(Financial Highlights Follow)