Initiating Coverage On Major ObamaCare Beneficiary University General Health Care System (UGHS) with Strong Buy $2.50 Target on @$600 Million Revenues by year end 2015
Initiating Coverage On Major ObamaCare Beneficiary University General Health Care System (UGHS) with Strong Buy $2.50 Target
University General Health System (UGHS) has announced its highly profitable 2012 operating results which includes a 59% improvement in total revenue, an increase in shareholders' equity of $11.3 million, and an increase in assets of $60.3 million. UGHS plans on filing its annual report on Form 10-K with the SEC on Monday, October 21, 2013.
Management of University General Health System also plans to host a conference call Tuesday, October 22, 2013 at 11:15 a.m. EDT. Shareholders and other interested parties may participate in the 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 October 30, 2013 at 9:00 am EDT by dialing 877-344-7529 (international participants dial 412-317-0088) and entering the conference ID# 10035630.
In the conference call, we expect to hear a lot about the 2012 highlights listed below.
FY2012 HIGHLIGHTS
Net patient revenue increased 52% to approximately $101.8 million, compared with approximately $67 million in the year ended December 31, 2011. The improvement in revenue was driven by increases in admissions, surgeries and adjusted patient days of 6.0%, 7.9% and 9.5%, respectively, relative to prior-year levels.
Resident revenue for the senior living business segment approximated $7.7 million, and support services revenue totaled $2.5 million. The Company's senior living properties achieved an overall occupancy rate of 93.1% in the year ended December 31, 2012. This was higher than the senior living industry's national average occupancy of approximately 89% for combined properties, as reported by the National Investment Center for the Senior Housing and Care Center for the fourth quarter 2012.
Total revenue rose 59% to approximately $113.2 million, compared with approximately $71.2 million in 2011. Total revenue in 2012 included partial-year revenue contributions from the Company's UGH-Dallas hospital, which was acquired on December 14, 2012, and other hospital outpatient departments ("HOPDs") that were acquired during the course of the year.
Patient revenue from Medicare and Medicaid, after contractual adjustments, accounted for approximately 33.0% and 37.4% of total patient revenue, and patient revenue from managed care contracts and other third-party payors accounted for approximately 75.0% and 58.9% of patient revenue, before provision for doubtful accounts, in 2012 and 2011, respectively.
Total assets increased 53% to approximately $174.8 million as of December 31, 2012, compared with approximately $114.5 million at December 31, 2011.
Shareholders' equity improved by $11.3 million, from a negative ($0.6 million) at December 31, 2011 to approximately $10.7 million as of December 31, 2012.
Adjusted EBITDA improved 188% to approximately $28.3 million in 2012, versus approximately $9.8 million in 2011. (Adjusted EBITDA is a non-GAAP measure that is reconciled with GAAP results in a table at the end of this press release.).
Operating income increased 664% to approximately $19.1 million in 2012, versus approximately $2.5 million in the previous year, primarily due to the implementation of an aggressive internal and external growth strategies that had a significant positive impact upon revenues, along with successful cost-control initiatives.
The Company recorded a net loss attributable to common shareholders of ($3.9 million), or ($0.01) per share, in the most recent year, compared with a net loss attributable to common shareholders of ($2.6 million), or ($0.01) per share, in 2011.
The management team has also made comments about 2012.
"Our 59% increase in total revenue during 2012 was primarily attributable to a 9.5% increase in adjusted patient days and an increase in the number of surgeries performed at University General Hospital in Houston, combined with acquisitions that furthered the development and expansion of our health delivery system," commented Dr. Hassan Chahadeh, M.D., Chairman and Chief Executive Officer of University General Health System, Inc. "Our Adjusted EBITDA of $28.3 million was equivalent to approximately 25% of revenue, which substantially exceeded the EBITDA margins for our publicly traded competitors. We believe this is a direct reflection of our business model, which seeks to provide the highest quality of care within the most cost-effective and least restrictive environment."
"University General Health System entered 2013 as a much stronger company, well-positioned to execute its strategic growth strategy. Supported by a stronger balance sheet, our objectives for 2013 include the pursuit of additional acquisitions to build out our regional health care system in the Houston and Dallas markets. We are actively seeking to expand into additional new markets, as well. Longer-term, we plan to capitalize on opportunities created by the current regulatory and reimbursement environment, through acquisitions and facilities expansion and development. Our goal is to build diversified, integrated, multi-specialty health care delivery networks comprised of flagship acute care hospitals supported by complementary free-standing HOPDs and senior living facilities in an expanding number of markets. Utilizing our Support Services segment for revenue cycle management and concierge hospitality services, we believe the Company can capitalize on accretive acquisition opportunities. Based upon currently available information, we expect the Company's financial performance to improve substantially in 2013," concluded Dr. Chahadeh.
Want to know more about University General Health System? Check out our detailed report.
Source: MarketWired
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Founder and Editor-in-Chief for NBTEquitiesResearch.com. Contributor and Anchor for the Fox News Channel and Fox Business Network 2000-2013. Chairman & CEO of NBT Group, Inc., a boutique private capital investment bank and investor relations organization.
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