PHILADELPHIA, March 23, 2004 (PRIMEZONE) -- On March 22, 2004, the law firm of Berger & Montague, P.C. filed a securities fraud class action complaint in the District Court for the Eastern District of Pennsylvania against Universal Health Services, Inc. ("Universal Health" or the "Company")(NYSE:UHS) and certain of its senior officers, on behalf of purchasers of Universal Health's securities between July 21, 2003 and February 27, 2004 inclusive (the "Class Period").
The Complaint charges defendants Universal Health, Alan B. Miller, and Steve G. Filton with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Complaint alleges that defendants materially misled the investing public, thereby inflating the price of UHS stock, by publicly issuing false and misleading statements and omitting to disclose material facts regarding the Company, its financial performance, earnings momentum, and future business prospects, including: (a) Universal Health was unable to compete effectively in key markets; (b) Universal Health's hospitals were losing better-paying patients to their competitors, and the proportion of uninsured patients who constitute a greater credit risk was increasing; (c) certain Universal Health hospitals were unable to effectively manage their caseloads, and, as a consequence, had experienced an increase in the number of patients who remained hospitalized at the Company's facilities beyond the period reimbursable by Medicaid and Medicare causing the hospitals to lose full payments for the services provided; (d) defendants failed to properly write-off uncollectible receivables, and materially overstated Universal Health's financial results by maintaining known uncollectible accounts as assets during the Class Period; (e) the Company's allowance for doubtful accounts was insufficient, and, as a result, the Company's reported operating income was artificially inflated; and (f) the Company's reported operating income was not a true measure of the Company's operating performance because defendants failed to properly deduct from operating income the appropriate allowance for doubtful accounts.
On March 1, 2004, before the markets opened, defendants shocked investors by withdrawing their guidance for 2004 and by announcing that earnings per diluted share for the three-month period ending March 31, 2004 could be as much as 25% lower than the $0.84 per diluted share recorded in the same period in the prior year. Defendants attributed the decline in substantial part to the factors listed above. With regard to bad debt, the Company, which had already increased its provision for doubtful accounts in the fourth quarter of 2003 to $74.3 million, or 7.8% of revenues, as compared to $58 million, or 6.9% of revenues, during the prior year's fourth quarter, said that bad debt in 2004 was likely to exceed the Company's previously-reported expectation of 9.5% of revenues. On this news, the price of Universal Health's shares fell $9.05, or 17%, to $44.88.
If you purchased Universal Health securities during the Class Period of July 21, 2003 through February 27, 2004 inclusive, you may, no later than May 21, 2004, move to be appointed as a Lead Plaintiff. A Lead Plaintiff is a representative party that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Universal Health securities during the Class Period, please contact Berger & Montague, P.C. at investorprotect@bm.net for a more thorough explanation of the Lead Plaintiff selection process.
The law firm of Berger & Montague, P.C. is a Philadelphia law firm, consisting of over 60 attorneys, all of whom represent plaintiffs in complex litigation. The Berger firm has extensive experience representing institutional and other investor plaintiffs in class action securities litigation and has played lead roles in major cases over the past 30 years which have resulted in recoveries of several billion dollars to investors. The firm has represented investors as lead counsel in such leading securities actions as Rite Aid, Sotheby's, Waste Management, Inc., Sunbeam, Boston Chicken, and IKON Office Solutions. The standing of Berger & Montague, P.C. in successfully conducting major securities and antitrust litigation has been recognized by numerous courts. For example:
"Class counsel did a remarkable job in representing the class interests." In Re: IKON Office Solutions Securities Litigation. Civil Action No. 98-4286 (E.D.Pa.) (partial settlement for $111 million approved May, 2000).
". . . (Y)ou have acted the way lawyers at their best ought to act. And I have had a lot of cases . . . In 15 years now as a judge and I cannot recall a significant case where I felt people were better represented than they are here . . . I would say this has been the best representation that I have seen." In Re: Waste Management, Inc. Securities Litigation, Civil Action No. 97-C7709 (N.D. Ill.) (settled in 1999 for $220 million).
If you purchased Universal Health securities during the Class Period, or have any questions concerning this notice or your rights with respect to this matter, please contact:
Sherrie R. Savett, Esquire Michael T. Fantini, Esquire Diane R. Werwinski, Investor Relations Manager Berger & Montague, P.C. 1622 Locust Street Philadelphia, PA 19103 Phone: 888-891-2289 or 215-875-3000 Fax: 215-875-5715 Website: http://www.bergermontague.com e-mail: InvestorProtect@bm.net