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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 June 30, 2002

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
                                                            For the transition period from _________________________

Commission file Number: 333-49743

UNIVERSAL HOSPITAL SERVICES, INC.
(Exact name of registrant as specified in its charter)

                                          Delaware                                                                                   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)
952-893-3200
(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 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

 

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

Universal Hospital Services, Inc.
                     
STATEMENTS OF OPERATIONS
(dollars in thousands)
(unaudited)
                     
        Three Months Ended   Six Months Ended
        June 30,   June 30,
        2002   2001   2002   2001
Revenues:              
  Equipment outsourcing $32,499   $26,905   $65,300   $54,731
  Sales of supplies and equipment, and other 5,759   3,087   11,345   6,130
      Total revenues 38,258   29,992   76,645   60,861
Costs of equipment outsourcing and sales:              
  Cost of equipment outsourcing 9,647   7,840   19,201   15,577
  Movable medical equipment depreciation 7,030   6,445   14,236   12,652
  Cost of supplies and equipment sales 3,457   1,860   7,021   3,718
      Total costs of equipment outsourcing and sales 20,134   16,145   40,458   31,947
Gross profit 18,124   13,847   36,187   28,914
Selling, general and administrative:              
  Selling, general and administrative, excluding              
    additional retirement benefits 10,966   9,351   21,382   18,919
  Additional retirement benefits including              
    $1.2 million of non-cash stock compensation -   1,553   -   1,553
      Total selling, general and administrative 10,966   10,904   21,382   20,472
Operating income 7,158   2,943   14,805   8,442
Interest expense 4,565   4,949   9,123   10,104
Income (loss) before income taxes 2,593   (2,006)   5,682   (1,662)
Provision for income taxes 1,136   14   2,252   28
Net income (loss) $ 1,457   $(2,020)   $ 3,430   $(1,690)
                     
The accompanying notes are an integral part of the unaudited financial statements.
                     
Universal Hospital Services, Inc.
             
BALANCE SHEETS
(dollars in thousands except share and per share information)
             
ASSETS      
        June 30,   December 31,
        2002   2001
        (unaudited)    
Current assets:      
  Accounts receivable, less allowance for doubtful accounts of $1,800      
    at June 30, 2002 and $2,000 at December 31, 2001 $ 30,201   $ 30,574
  Inventories 2,922   2,762
  Other current assets 1,222   2,370
  Deferred income taxes 2,370   1,120
      Total current assets 36,715   36,826
Property and equipment, net:      
  Movable medical equipment, net 113,083   111,965
  Property and office equipment, net 6,006   5,933
      Total property and equipment, net 119,089   117,898
Intangible assets:      
  Goodwill, net 35,458   35,324
  Other, primarily deferred financing costs, net 5,669   6,166
      Total assets $ 196,931   $ 196,214
LIABILITIES AND SHAREHOLDERS' DEFICIENCY      
Current liabilities:      
  Current portion of long-term debt $ 332   $ 313
  Accounts payable 10,375   14,390
  Accrued compensation and pension 4,979   6,930
  Accrued interest 5,043   4,795
  Other accrued expenses 2,087   1,803
  Bank overdrafts 1,841   491
      Total current liabilities 24,657   28,722
Long-term debt, less current portion 202,125   204,128
Deferred compensation and pension 3,546   3,141
Deferred income taxes 4,584   2,370
Series B, 13% Cumulative Accruing Pay-In-Kind Stock, $0.01 par value; 25,000 shares authorized,      
  6,246 shares issued and outstanding at June 30, 2002 and December 31, 2001, net of      
  unamortized discount, including accrued stock dividends 9,029   8,387
Common stock subject to put 7,988   3,763
Commitments and contingencies      
Shareholders' deficiency:      
  Common Stock, $0.01 par value; 35,000,000 authorized, 11,392,596 and 11,275,050 shares      
    issued and outstanding at June 30, 2002 and December 31, 2001, respectively 114   113
  Additional paid-in capital -   1,091
  Accumulated deficit (54,295)   (54,524)
  Deferred compensation (817)   (977)
      Total shareholders' deficiency (54,998)   (54,297)
      Total liabilties and shareholders' deficiency $ 196,931   $ 196,214
             
The accompanying notes are an integral part of the unaudited financial statements.
Universal Hospital Services, Inc.
               
STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
               
          Six Months Ended June 30,
          2002   2001
Cash flows from operating activities:        
  Net income (loss)   $ 3,430   $ (1,690)
  Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
    Depreciation   15,276   13,509
    Amortization of intangibles   629   1,895
    Accretion of bond discount   265   265
    Provision for doubtful accounts   415   989
    Non-cash stock-based compensation expense        
      upon issuance of stock options   160   1,247
    Loss on sales/disposal of equipment   418   345
    Deferred income taxes   1,097    
  Changes in operating assets and liabilities:        
    Accounts receivable   (47)   (2,143)
    Inventories and other operating assets   (284)   49
    Accounts payable and accrued expenses   (2,661)   (1,328)
      Net cash provided by operating activities   18,698   13,138
Cash flows from investing activities:        
  Movable medical equipment purchases   (17,516)   (13,537)
  Property and office equipment purchases   (1,098)   (1,004)
  Proceeds from disposition of movable medical equipment   499   417
  Other   (355)   43
      Net cash used in investing activities   (18,470)   (14,081)
Cash flows from financing activities:        
  Proceeds under loan agreements   28,600   28,550
  Payments under loan agreements   (30,848)   (28,635)
  Repurchase of common stock   (11)   (7)
  Payment of deferred offering costs   94    
  Proceeds from issuance of common stock, net of offering costs   587   94
  Change in book overdraft   1,350   941
      Net cash provided by financing activities   (228)   943
Net change in cash and cash equivalents   $ -   $ -
Supplemental cash flow information:        
  Interest paid   $ 8,610   $ 10,151
  Movable medical equipment purchases included in accounts payable   $ 4,690   $ 3,886
  Income taxes received   $ 53