SOURCE: University General Health System, Inc.

University General Health System, Inc.

June 16, 2011 08:28 ET

University General Health System, Inc. Reports 19% Increase in Audited 2010 Net Revenues

Operating Income Improves to $3.8 Million as Net Revenues Reach Record $56.1 Million

HOUSTON, TX--(Marketwire - Jun 16, 2011) - University General Health System, Inc. (OTCQB: UGHS) (PINKSHEETS: UGHS), a diversified, integrated, multi-specialty health care provider, today reported its audited financial results for the years ended December 31, 2010 and December 31, 2009, which were filed on Form 8-K/A with the Securities and Exchange Commission on June 14, 2011.

For the twelve months ended December 31, 2010, the Company generated net revenues (gross revenues less contractual adjustments and discounts) of $56.1 million, which represented an increase of approximately 19% when compared with net revenues of $47.3 million in the year ended December 31, 2009. Operating income improved to $3,863,201 in 2010, versus an operating loss of ($894,383) in the previous year. After deducting interest expense of $4,782,168, the Company recorded a pretax loss of ($918,967) in 2010, which represented an 86% reduction in pretax loss when compared with a loss before income taxes of ($6,444,883) in the year ended December 31, 2009. Following the payment of $300,000 in state margin taxes, the net loss for 2010 totaled ($1,218,967), which was approximately 82% smaller than the net loss of ($6,715,239) that was recorded in 2009 (after payment of $270,256 in state margin taxes).

"We are pleased to report record net revenues of $56.1 million for the year ended December 31, 2010 and an 82% reduction in net loss when compared with the previous year," stated Hassan Chahadeh, M.D., Chairman and Chief Executive Officer of University General Health System, Inc. "The Company also generated $3,050,806 in net cash from operating activities in 2010, which allowed us to end the year with $2,291,754 of cash on our balance sheet, compared with cash and equivalents of only $1,640 at the end of 2009."

"We attribute the significant improvement in operating income primarily to more effective accounts receivable management and an increase in average daily patient census at our general acute care hospital, University General Hospital ("UGH"), which is located near the Texas Medical Center in Houston, Texas."

"During the first half of 2011, we began to implement a growth strategy in support of our goal of developing an integrated and diversified delivery system in the Houston area, with the expectation to enter new markets in coming years," continued Dr. Chahadeh. "We opened the emergency room ("ER") operations of Kingwood Neighborhood Emergency Center in Kingwood, Texas (northeast Houston area) as a hospital outpatient department ("HOPD") of UGH in April 2011. This was followed by our acquisition in May 2011 of a 15% non-controlling interest in Mainland Surgery Center, a free-standing ambulatory surgery center in Dickinson, Texas, located approximately 20 miles south of UGH. We also entered into a Purchase Option Agreement that entitles us to acquire all or part of the remaining 85% of Mainland ASC prior to April 22, 2014. By acquiring or opening free-standing Emergency Rooms, Diagnostic Imaging Centers, Ambulatory Surgical Centers, Wound Care Centers, and/or similar facilities within a 30-mile radius of a 'host' hospital, the remote facilities should benefit from operating under the acute care hospital's license, while the hospital's occupancy levels should benefit from patient referrals by the HOPDs. We expect to expand our remote care facilities network further during the balance of the year."

For additional information, including the Company's audited financial statements, please refer to the Form 8-K/A filed with the Securities and Exchange Commission on June 14, 2011.

University General Health System, Inc.

University General Health System, Inc. ("University General") is a diversified, integrated, multi-specialty health care provider that delivers concierge physician and patient oriented services by providing timely, innovative health solutions that are uniquely competitive, efficient and adaptive in today's health care environment. University General currently operates a 72-bed general acute care hospital near the Texas Medical Center in Houston, two free-standing emergency rooms, and one ambulatory surgery center, with plans for additional acquisitions and/or facility openings in 2011 and future years.

The Company is headquartered in Houston, Texas, and its common stock trades on the OTCQB Exchange 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.

Contact Information

  • For Additional Information, Please Contact:

    RJ Falkner & Company, Inc.
    Investor Relations Counsel
    (830) 693-4400
    info@rjfalkner.com