<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________
Commission file Number: 0-20086
UNIVERSAL HOSPITAL SERVICES, INC.
---------------------------------
(Exact Name of Registrant as
specified in its charter)
Minnesota 41-0760940
------------------------------ --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1250 Northland Plaza
3800 West 80th Street
Bloomington, Minnesota 55431-4442
-----------------------------------
(Address of principal executive offices)
(Zip Code)
612-893-3200
------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------------ -----------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of April 30, 1997
----- --------------------------------
Common Stock 5,396,537 shares
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Universal Hospital Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months ended March 31,
----------------------------
1997 1996
----------------------------
<S> <C> <C>
Revenues:
Equipment rentals $14,522,649 $12,665,648
Sales of supplies and equipment 1,273,951 1,562,204
Other 165,183 164,229
----------- -----------
Total revenues 15,961,783 14,392,081
Costs and expenses:
Cost of equipment rentals 3,253,696 3,299,285
Rental equipment depreciation 3,400,000 2,825,000
Cost of supplies and equipment sales 1,004,905 1,248,253
Selling, general and administrative 5,242,970 4,934,214
Shareholder value expenses 642,481
Interest 772,095 504,693
----------- -----------
Total costs and expenses 14,316,147 12,811,445
----------- -----------
Income before income taxes 1,645,636 1,580,636
Provision for income taxes:
Current 555,000 391,000
Deferred 202,000 267,000
----------- -----------
757,000 658,000
----------- -----------
Net income $ 888,636 $ 922,636
=========== ===========
Net income per share of common stock $ 0.16 $ 0.17
=========== ===========
Weighted average common and common equivalent shares outstanding 5,612,399 5,555,250
=========== ===========
</TABLE>
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
2
<PAGE>
Universal Hospital Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
------
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 197,422
Accounts receivable, net $13,293,861 12,123,972
Inventories 1,408,828 1,256,388
Other 843,175 1,562,303
Deferred income taxes 677,000 708,000
----------- -----------
Total current assets 16,222,864 15,848,085
Property and equipment:
Rental equipment, at cost less accumulated depreciation 46,064,216 44,546,290
Property and office equipment, at cost less accumulated depreciation 3,394,240 3,497,589
----------- -----------
Total property and equipment, net 49,458,456 48,043,879
Intangible assets:
Goodwill, less accumulated amortization 14,870,313 15,057,516
Other 663,098 757,396
----------- -----------
Total Assets $81,214,731 $79,706,876
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt $ 2,196,620 $ 1,957,743
Accounts payable 3,474,774 3,902,756
Accrued compensation and pension 1,757,925 1,990,640
Accrued expenses 1,610,002 1,184,573
----------- -----------
Total current liabilities 9,039,321 9,035,712
Deferred compensation and pension 1,826,123 1,772,692
Deferred income taxes 4,749,000 4,578,000
Long-term debt 35,392,580 35,192,589
Commitments and contingencies
Shareholders' equity:
Preferred Stock, $.01 par value; 5,000,000 shares authorized,
no shares issued and outstanding
Common Stock, $.01 par value; 10,000,000 shares authorized,
5,396,537 and 5,371,921 issued and outstanding at
March 31, 1997 and December 31, 1996, respectively 53,965 53,719
Additional paid-in capital 15,061,095 14,870,153
Retained earnings 15,092,647 14,204,011
----------- -----------
Total shareholders' equity 30,207,707 29,127,883
----------- -----------
Total Liabilities and Shareholders' Equity $81,214,731 $79,706,876
=========== ===========
</TABLE>
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
3
<PAGE>
Universal Hospital Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months ended March 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 888,636 $ 922,636
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 3,811,139 3,088,660
Provision for doubtful accounts 111,575 21,752
Gain on sales of equipment (180,182) (81,717)
Deferred income taxes 202,000 267,000
Changes in operating assets and liabilities:
Accounts receivable (1,281,464) (363,739)
Inventories and other current assets 566,688 (873,158)
Accounts payable and accrued expenses 448,012 (323,983)
------------ ------------
Net cash provided by operating activities 4,566,404 2,657,451
------------ ------------
Cash flows from investing activities:
Rental equipment purchases (4,513,505) (6,059,075)
Property and office equipment purchases (86,656) (250,520)
Proceeds from sale of equipment 249,183 225,879
Other 59,859 (257,700)
------------ ------------
Net cash used in investing activities (4,291,119) (6,341,416)
------------ ------------
Cash flows from financing activities:
Proceeds from exercise of stock options 191,188
Proceeds under loan agreements 6,285,000 9,180,000
Payments under loan agreements (5,846,132) (5,787,000)
Increase (decrease)in book overdraft (1,102,763) 290,965
------------ ------------
Net cash (used) provided by financing activities (472,707) 3,683,965
Net change in cash and cash equivalents (197,422) ----
Cash and cash equivalents at beginning of period 197,422 ----
------------ ------------
Cash and cash equivalents at end of period $ ---- $ ----
============ ============
Supplemental cash flow information:
Interest paid $ 792,000 $ 513,000
============ ============
Income taxes paid $ 18,000 $ 127,000
============ ============
Rental equipment purchases included in accounts payable $ 1,912,000 $ 906,000
============ ============
</TABLE>
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
4
<PAGE>
Universal Hospital Services, Inc. and Subsidiary
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation:
The condensed consolidated financial statements included in this Form 10-Q
have been prepared by the Company without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in consolidated financial
statements prepared in accordance with generally accepted accounting
principles have been condensed, or omitted, pursuant to such rules and
regulations. These condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and related
notes included in the Company's Form 10-K filing for the year ended
December 31, 1996.
The condensed consolidated financial statements presented herein as of
March 31, 1997, and for the three months then ended reflect, in the opinion
of management, all adjustments necessary for a fair presentation of
financial position and the results of operations for the periods presented.
Except as discussed in Note 3 below, these adjustments are all of a normal,
recurring nature. The results of operations for any interim period are not
necessarily indicative of results for the full year.
The December 31, 1996 Condensed Consolidated Balance Sheet data was derived
from audited consolidated financial statements, but does not include all
disclosures required by generally accepted accounting principles.
2. Pending Sale of the Company
On February 10, 1997, the Company and MEDIQ Incorporated (MEDIQ) entered
into a definitive agreement for MEDIQ to acquire 100% of UHS outstanding
common stock for $17.50 per share. Including the assumption of the
Company's debt, the total purchase price is expected to be approximately
$138,000,000. The transaction is to be structured as a cash merger. The
transaction was approved by the Company's shareholders on April 4, 1997 and
is awaiting clearance under the Hart-Scott-Rodino Antitrust Improvements
Act (the "Hart-Scott-Rodino Act").
On April 10, 1997, the Company received a request for additional
information from the Federal Trade Commission ("FTC"). This "second
request" extends the waiting period under the Hart-Scott-Rodino Act, during
which the FTC is permitted to review the transaction, until the 20th
calendar day after both companies comply with the FTC's request. The
Company is currently seeking to comply with the FTC's request as
expediciously as possible.
3. Shareholder Value Expenses
During the first quarter of 1997, the Company incurred $642,481 in costs
associated with the Company's evaluation of ways to enhance shareholder
value, including the potential sale of the Company, a joint venture with
another Company and other alternatives, and with the subsequent efforts to
complete the transaction with MEDIQ. See Note 2 above.
5
<PAGE>
4. Acquisition of Biomedical Equipment Rental and Sales, Inc. (BERS)
On August 13, 1996, the Company acquired BERS pursuant to a Stock Purchase
Agreement among the Company and the shareholders of BERS. The acquisition
was accounted for using the purchase method. BERS operations have been
included in the Company's results of operations since the date of
acquisition.
The following summarized, unaudited pro forma results of operations for the
three months ended March 31, 1996 assume the acquisition occurred as of
January 1, 1996.
<TABLE>
<CAPTION>
1996
-----------
<S> <C>
Total revenues $15,819,936
Net income $ 801,716
Net earnings per share $ 0.14
</TABLE>
On April 4, 1997, BERS merged into the Company.
5. Earnings Per Share
In February, 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings Per Share." This statement establishes
standards for computing and presenting basic and diluted earnings per share
(EPS) for financial statements issued for periods ending after December 15,
1997. The dilutive effect of stock options included in primary earnings per
share was $0.01 for the first quarter of 1997. The Company's reported
earnings per share for the three months ended March 31, 1997 and 1996
approximates diluted earnings per share computed under Statement No. 128.
6. Income Tax Expense
The Company's effective tax rate was 46.0% and 41.6% for the three months
ended March 31, 1997 and 1996 respectively. The effective tax rate for the
three months ended March 31, 1997 was higher than state and federal
statutory rates primarily due to approximately $217,000 of non-deductible
expenses incurred with the pending sale of the Company. See Notes 2 and 3
above.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following should be read in conjunction with the accompanying financial
statements and notes.
Results of Operations
The following table provides information on the percentages certain items of
selected financial data bear to total revenues and also indicates the percentage
increase or decrease of this information over the prior comparable period:
<TABLE>
<CAPTION>
Percent of Total Revenue Percentage Increase (Decrease)
------------------------ ------------------------------
Three Months ended March 31, Qtr 1 1997
----------------------------
1997 1996 Over Qtr 1 1996
------ ------ ---------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Revenues
Equipment rentals 90.98% 88.00% 14.66%
Sales of supplies and equipment 7.98% 10.86% -18.45%
Other 1.04% 1.14% 0.58%
------ ------
Total revenues 100.00% 100.00% 10.91%
Rentals and Sales Costs
Cost of equipment rentals 20.38% 22.93% -1.38%
Rental equipment depreciation 21.30% 19.63% 20.35%
Cost of supplies and equipment sales 6.30% 8.67% -19.50%
------ ------
Gross Margin 52.02% 48.77% 18.29%
Selling, General and Administrative 32.85% 34.28% 6.26%
Shareholder Value Expense 4.02% N/A
Interest 4.84% 3.51% 52.98%
------ ------
Income Before Income Taxes 10.31% 10.98% 4.11%
------ ------
Income Taxes 4.74% 4.57% 15.05%
------ ------
Net Income 5.57% 6.41% -3.69%
====== ======
</TABLE>
7
<PAGE>
General
The following discussion addresses the financial condition of Universal Hospital
Services, Inc. (UHS) as of March 31, 1997 and the results of operations and cash
flows for the three months ended March 31, 1997 and 1996. This discussion should
be read in conjunction with the financial statements included elsewhere herein
and the Management's Discussion and Analysis and Financial sections of the
Company's previously filed December 31, 1996 Annual Report on Form 10-K.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: Statements in this filing looking forward in time involve risks and
uncertainties, including, but not limited to, the effect of changing economic or
business conditions, increased utilization of the Bazooka bed, the impact of
competition, the pending sale of the Company to MEDIQ, and other risk factors
described more fully below under the captions "Industry Assessment" and "Rental
Equipment Build Up" and in the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 under the caption "Business" and in the Company's Proxy
Statement dated March 19, 1997.
Revenues
Equipment rental revenues increased during the first quarter of 1997 over the
first quarter of 1996 by $1,857,000 or 14.7%. The acquisition of Biomedical
Equipment Rental and Sales (BERS), completed August 13, 1996, contributed
$1,184,000 to the 1997 increase in rental revenues. Although the remaining
$673,000 growth in rental revenues (5.3%) was less than anticipated, this rental
revenue increase resulted from continued growth at acute care hospitals and at
established offices with substantially higher growth rates associated with
rental revenues from alternate care customers and at newer offices. This growth
was accomplished even though the acute care market is experiencing a continuing
gradual decline in census rates, a very cost sensitive market and consolidations
in the industry. The Company expects rental revenue generated from alternate
care to continue to increase reflecting the continuing trend in health care
toward treating the patient in the most cost effective environment. Future
rental revenue may be adversely affected by customer uncertainties and employee
departures resulting from the pending sale of the Company to MEDIQ.
Effective February 1, 1997, the Company entered into a two year agreement with
Premier, Inc. (Premier), the nation's largest health care alliance enterprise,
for medical equipment rentals and services. The Premier agreement and some
longer term commitments the Company has entered into with some if its larger
customers have required some price concessions. However, these agreements
contributed to first quarter rental revenue growth and are expected to
contribute to future rental revenue growth.
Sales of supplies and equipment, together with the related costs of these items,
represent primarily disposable medical supplies used in connection with the
Company's rental equipment. The Company believes that supplying these products
is important to its full service business even though the commodity-like nature
of these products results in substantially lower gross margins than its rental
equipment business. Sales of supplies and equipment declined by $288,000 for the
first three months of 1996 compared to the first three months of 1997. The
acquisition of BERS contributed $141,000 to total sales revenue for the first
quarter of 1997. Sales of the Demand Positive Airway Pressure Devices (DPAP)
were $279,000 in the first quarter of 1996. During the remaining periods of
1996, sales of the Demand Positive Airway Pressure Device (DPAP) declined and,
as a result of not meeting Company expectations, the Company made the decision
to abandon the sleep apnea market. Of the remaining $150,000 decrease, $96,000
reflected a continuing trend by a major vendor of disposables to market its
products directly to some of the Company's larger customers.
Other revenues, primarily representing net gains on sales of used rental
equipment, remain insignificant. The Company expects that such revenues will
continue to be a small portion of total revenues.
8
<PAGE>
Rental Costs
Cost of equipment rentals represents the direct costs of operating the Company's
district offices including occupancy, fleet operations, equipment repairs and
technical service costs. These costs as a percentage of rental revenues
decreased for the first three months from 26.0% in 1996 to 22.4% in 1997. This
decrease resulted from the Company purchasing the newer generation of a line of
equipment, the older generation of which had been rented from the manufacturer
in 1996 on a short term basis due to perceived obsolescence risk.
Rental equipment depreciation as a percentage of rental revenues increased from
22.3% in the first quarter of 1996 to 23.4% in the comparable quarter of 1997.
This increase was the result of the impact of a full year's depreciation on 1996
equipment acquisitions not being matched by growth in UHS' rental revenues and
the Company's purchase of equipment that was previously rented as discussed
above.
Gross Profit
Gross margin on rentals represents equipment rental revenues reduced by the cost
of equipment rentals and rental equipment depreciation. Gross margin on rentals
increased from 51.6% during the first quarter of 1996 to 54.2% in 1997. This
increase was predominately due to the previously discussed decline in cost of
equipment rentals.
Sales gross margin as a percentage of sales of supplies and equipment improved
from 20.1% in the first quarter of 1996 to 21.1% in 1997. This increased sales
gross margin was due to a vendor selling lower margined products directly to
hospitals, which resulted in a higher margin percentage on a lower volume of
total sales, and the addition of higher margined sales from BERS.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of total revenue
decreased to 32.8% for the first three months of 1997 from 34.3% in the
comparable period in 1996. The decrease primarily reflected approximately
$235,000 of cost savings associated with the Company's expense control
initiatives implemented in late 1996. See "Expense Control Initiatives" below.
Expense Control Initiatives
In 1996, as a result of slower than anticipated rental revenue growth and lower
margins, the Company implemented several expense control initiatives to reduce
or defer costs. In August, the Company announced executive salary cuts and a
moratorium on new hires. In October, the Company announced the elimination of 10
corporate positions by functional consolidation and cutting nonessential
activities and changed the Company's employee medical benefit program from a
total company-paid plan to a shared-cost program, effective January 1, 1997. The
estimated savings from these activities was approximately $235,000 for the first
quarter of 1997. No material costs relating to these expense control initiatives
were incurred in the first quarter of 1997. However, there can be no assurance
that these initiatives will result in decreased total expense or that their
implementation will materially improve margins.
Shareholder Value Expenses
The Company also incurred approximately $642,000 of costs associated with
evaluating ways to increase shareholder value and costs in conjunction with the
pending sale of the Company to MEDIQ. See "Pending Sale of the Company" below.
9
<PAGE>
Interest Expense
Interest expense increased by $267,000 for the first quarter of 1997 over the
first quarter of 1996, primarily reflecting interest on the BERS acquisition
debt and incremental borrowings associated with capital equipment additions.
Average borrowings increased from $25,513,000 for the first three months of 1996
to $37,388,000 for the first three months of 1997.
Income Taxes
The Company's effective tax rate increased from 41.6% during the first quarter
of 1996 to 46.0% for the first quarter of 1997. This was mainly due to the
addition of approximately $217,000 of non-deductible expenses incurred in
connection with the announced sale of the Company to MEDIQ. See "Pending Sale
of the Company" below.
Net Income
Net income decreased $34,000 from the first quarter of 1996 to the first quarter
of 1997. Without the expense of $642,000 associated with evaluating ways to
increase shareholder value and in conjunction with the pending sale of the
Company to MEDIQ, net income would have been approximately $1,335,000 versus the
reported earnings of $889,000.
Quarterly Financial Information: Seasonality
Quarterly operating results are typically affected by seasonal factors.
Historically, the Company's first and fourth quarter are the most profitable,
reflecting increased hospital utilization during the fall and winter months.
Capital Resources and Liquidity
As an asset intensive service business, the Company requires continued access to
capital to support the acquisition of equipment for rental to its customers. The
Company expects that rental equipment purchases will approximate $19,000,000 in
1997.
The Company has financed its equipment purchases primarily through internally
generated funds and unsecured borrowings. As of March 31, 1997, these unsecured
borrowings were comprised of term loans and a $20,000,000 revolving credit
facility available through June 30, 1999. As of March 31, 1997, approximately
$8,300,000 of the revolving credit facility was unused. Net cash flows from
operating activities were $4,600,000 for the first three months of 1997 compared
to $2,700,000 for the comparable period in 1996.
The Company believes that net cash flow from operating activities and use of its
existing credit facility will be sufficient to fund working capital and capital
expenditure needs for the foreseeable future. Assuming debt financing continues
to be available at reasonable rates, the Company anticipates maintaining a ratio
of long-term debt to total capitalization in the range of 40% to 60%. Such ratio
was 55.4% as of March 31, 1997.
The Company does not maintain cash balances at its bank under a Company policy
whereby the net of collected balances and cleared checks is, at the Company's
option, applied to or drawn from the credit facility on a daily basis.
10
<PAGE>
Biomedical Equipment Rental and Sales, Inc. Acquisition
On August 13, 1996, the Company completed its acquisition of Biomedical
Equipment Rental and Sales, Inc. (BERS) pursuant to a stock purchase agreement
among the Company and the shareholders of BERS for approximately $12,350,000.
BERS results are included in the financial statements of the Company from the
date of acquisition.
Rental Equipment Build Up
The Company acquired its equipment pool of Bazooka portable specialty beds under
an exclusive agreement which was terminated in March 1996. The Company does not
expect to acquire any additional Bazooka beds. Utilization of Bazooka beds in
the Company's pool is currently below the desired level. The Company has
performed an impairment analysis based upon projected income and cash flows in
accordance with current accounting literature and has determined that the
current book value of these assets is currently fully recoverable. The Company
believes this supply/demand imbalance will be reduced. However, in the event
that anticipated growth in customer demand for this product does not occur, the
Company's margin on these products could be adversely affected.
Industry Assessment
The Company's customers, primarily acute care hospitals and other health care
providers, have been and continue to be faced with cost containment pressures
and uncertainties with respect to health care reform. The Company believes that,
although specific legislation has not been enacted, reform has begun with
movement toward health care related consolidations, managed care and the
formation of integrated healthcare systems. There appears to be an effort by
providers of health care to coordinate all aspects of patient care irrespective
of delivery location. Likely changes in reimbursement methodology, and a gradual
transition toward fixed, per-capita payment systems and other risk-sharing
mechanisms will reward health care providers who improve efficiencies and
effectively manage their costs, while providing care in the most appropriate
setting. Although future reimbursement policies remain uncertain and
unpredictable, the Company believes that the current reform efforts will
continue to focus on cost containment in health care, with universal access to
care and quality of care being important, but nonetheless secondary
considerations.
The Company believes its Pay-Per-Use Equipment Management Programs respond
favorably to the current reform efforts by providing high quality equipment
through programs which help health care providers improve their efficiency while
effectively matching costs to patient needs, wherever that care is being
provided. While the Company's strategic focus appears consistent with the
providers' efforts to contain costs and improve efficiencies, there can be no
assurances as to how health care reform will ultimately evolve and the impact it
will have on the Company.
Because the capital equipment procurement decisions of health care providers are
significantly influenced by the regulatory and political environment for health
care, historically the Company has experienced certain adverse operating trends
in periods when significant health care reform initiatives were under
consideration and uncertainty remained as to their likely outcome. To the extent
general cost containment pressures or health care spending and reimbursement
reform, or uncertainty as to possible reform, causes hospitals and other health
care providers to defer the procurement of medical equipment, reduce their
capital expenditures or change significantly their utilization of medical
equipment, the Company's results of operations could be adversely affected.
11
<PAGE>
Pending Sale of the Company
On February 10, 1997, the Company and MEDIQ Incorporated (MEDIQ) entered into a
definitive agreement for MEDIQ to acquire 100% of UHS outstanding common stock
for $17.50 per share. Including the assumption of the Company's debt, the total
purchase price is expected to be approximately $138,000,000. The transaction is
to be structured as a cash merger. The transaction was approved by the Company's
shareholders on April 4, 1997 and is awaiting clearance under the Hart-Scott-
Rodino Antitrust Improvements Act (the "Hart-Scott-Rodino Act").
On April 10, 1997, the Company received a request for additional information
from the Federal Trade Commission ("FTC"). This "second request" extends the
waiting period under the Hart-Scott-Rodino Act, during which the FTC is
permitted to review the transaction, until the 20th calendar day after both
companies comply with the FTC's request. The Company is currently seeking to
comply with the FTC's request as expediciously as possible.
12
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submissions of Matters to a Vote of Security Holders
On April 4, 1997 the Company held a special meeting of the Company's
shareholders. The holders of 3,889,317 shares of common stock, representing
72.4% of the 5,372,421 shares of common stock entitled to vote, were
represented at the special meeting in person or by proxy.
At the special meeting, the shareholders approved the merger
agreement, dated as of February 10, 1997, by and among MEDIQ Incorporated, PRN
Merger Corporation and the Company. The tabulation of the voting is listed in
the table below.
Summary of Matter Voted Upon by Shareholders
For Against Abstain
--- ------- -------
Approval of Merger Agreement 3,680,916 204,385 4,016
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(11) Schedule of Computation of Per Share Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K:
Form 8-K, dated February 18, 1997, reporting the announcement of the
Company entering into a definitive agreement, dated February 10, 1997,
for MEDIQ Incorporated to acquire the Company.
Form 8-K/A, dated February 27, 1997, amending the Form 8-K filed on
February 18, 1997, by including the Agreement and Plan of Merger dated
February 10, 1997 by and among MEDIQ Incorporated, PRN Merger
Corporation and the Company.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
Date: May 14, 1997
------------
Universal Hospital Services, Inc.
By /s/ Thomas A. Minner
--------------------
Thomas A. Minner, President and
Chief Executive Officer
By /s/ David E. Dovenberg
----------------------
David E. Dovenberg,
Vice President of Finance and
Chief Financial Officer
<PAGE>
Universal Hospital Services, Inc. and Subsidiary
EXHIBIT INDEX TO REPORT ON FORM 10-Q
Exhibit
Number Description Page
- ------ ----------- ----
11 Schedule of Computation of Per Share Earnings 16
27 Financial Data Schedule Electronically Filed
<PAGE>
Exhibit 11
Universal Hospital Services, Inc. and Subsidiary
SCHEDULE OF COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three Months ended March 31,
----------------------------
1997 1996
---------- ----------
<S> <C> <C>
Primary:
Net income $ 888,636 $ 922,636
========== ==========
Weighted average number of common
shares outstanding during this period 5,377,048 5,445,270
Add common equivalent shares relating
to outstanding options to purchase
common stock using the treasury
stock method 235,351 109,980
---------- ----------
Weighted average number of common and
common equivalent shares outstanding 5,612,399 5,555,250
========== ==========
Primary net earnings per common share $ 0.16 $ 0.17
========== ==========
Fully Diluted:
Net income $ 888,636 $ 922,636
========== ==========
Weighted average number of common shares
outstanding during this period 5,377,048 5,445,270
Add common equivalent shares relating to
outstanding options to purchase common
stock using the treasury stock method 273,775 109,980
---------- ----------
Weighted average number of common and
common equivalent shares outstanding 5,650,823 5,555,250
========== ==========
Fully diluted net earnings per common
share $ 0.16 $ 0.17
========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
Balance Sheets, Statements of Income and Statements of Cash Flows and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 13,802,861
<ALLOWANCES> 509,000
<INVENTORY> 1,408,828
<CURRENT-ASSETS> 16,222,864
<PP&E> 118,333,207
<DEPRECIATION> 68,874,751
<TOTAL-ASSETS> 81,214,731
<CURRENT-LIABILITIES> 9,039,321
<BONDS> 0
0
0
<COMMON> 53,965
<OTHER-SE> 30,153,742
<TOTAL-LIABILITY-AND-EQUITY> 81,214,731
<SALES> 1,273,951
<TOTAL-REVENUES> 15,961,783
<CGS> 1,004,905
<TOTAL-COSTS> 7,658,601
<OTHER-EXPENSES> 642,481
<LOSS-PROVISION> 111,575
<INTEREST-EXPENSE> 772,095
<INCOME-PRETAX> 1,645,636
<INCOME-TAX> 757,000
<INCOME-CONTINUING> 888,636
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 888,636
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
</TABLE>
