<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: September 30, 1999

                                       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: 333-49743
                        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
<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                        Universal Hospital Services, Inc.

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                              Three Months Ended               Nine Months Ended
                                                                September 30,                    September 30,
                                                          ---------------------------     -----------------------------
                                                             1999           1998              1999            1998
                                                          ------------   ------------     --------------  -------------
<S>                                                        <C>            <C>                <C>            <C>
Revenues:

     Equipment rentals                                     $18,574,159    $15,334,184        $57,931,109    $44,494,058
     Sales of supplies and equipment, and other              2,833,329      2,228,127          8,883,274      4,594,563
                                                          ------------   ------------     --------------  -------------
        Total revenues                                      21,407,488     17,562,311         66,814,383     49,088,621

Costs of rentals and sales:

     Cost of equipment rentals                               5,439,827      4,010,706         16,036,294     11,287,095
     Rental equipment depreciation                           4,655,000      2,805,000         12,960,000     10,650,000
     Loss on disposition of Bazooka Beds                                    2,866,119                         2,866,119
     Cost of supplies and equipment sales                    2,044,637      1,441,592          6,103,662      2,999,452
                                                          ------------   ------------     --------------  -------------
        Total cost of rentals and sales                     12,139,464     11,123,417         35,099,956     27,802,666
                                                          ------------   ------------     --------------  -------------

Gross profit                                                 9,268,024      6,438,894         31,714,427     21,285,955

Selling, general and administrative                          6,788,526      5,572,732         21,719,305     14,991,969
Recapitalization and transaction costs                                                                        5,027,905
                                                          ------------   ------------     --------------  -------------
Operating income                                             2,479,498        866,162          9,995,122      1,266,081

Interest expense                                             4,569,094      3,258,101         13,147,841      7,650,415
                                                          ------------   ------------     --------------  -------------

Loss before benefit for income taxes and extraordinary      (2,089,596)    (2,391,939)        (3,152,719)    (6,384,334)
charge

Provision (benefit) for income taxes                         1,017,000       (391,000)          (280,000)    (1,069,000)
                                                          ------------   ------------     --------------  -------------
Net loss before extraordinary charge                        (3,106,596)    (2,000,939)        (2,872,719)    (5,315,334)

Extraordinary charge, net of deferred tax benefit
of $1,300,000                                                                                                 1,863,020
                                                          ------------   ------------     --------------  -------------
Net loss                                                   ($3,106,596)   ($2,000,939)       ($2,872,719)   ($7,178,354)
                                                          ============   ============     ==============  =============

</TABLE>

                   The accompanying notes are an integral
                  part of the unaudited financial statements.

                                                                               2
<PAGE>

                        Universal Hospital Services, Inc.

                                 BALANCE SHEETS
                                     ASSETS

<TABLE>
<CAPTION>
                                                                               September 30,   December 31,
                                                                                   1999            1998
                                                                               -------------   ------------
                                                                                (Unaudited)
<S>                                                                             <C>             <C>
Current assets:
       Cash                                                                 $     1,733,807
       Accounts receivable, less allowance for doubtful accounts of
          $1,100,000 and $964,000 at September 30, 1999 and December 31,
          1998, respectively                                                     21,535,448   $  17,900,816
       Inventories                                                                3,924,429       2,617,019
       Deferred income taxes                                                      1,163,000         499,000
       Other current assets                                                       1,060,103       1,669,790
                                                                            ---------------   -------------
           Total current assets                                                  29,416,787      22,686,625

Property and equipment:
       Rental equipment, at cost less accumulated depreciation                   87,078,759      73,057,730
       Property and office equipment, at cost less accumulated depreciation       4,523,840       3,496,370
                                                                            ---------------   -------------
           Total property and equipment, net                                     91,602,599      76,554,100

Intangible and other assets:
       Goodwill, less accumulated amortization                                   36,482,682      37,924,246
       Other primarily deferred financing costs, less accumulated
          amortization                                                            7,504,711       7,055,695
                                                                            ---------------   -------------
           Total assets                                                     $   165,006,779   $ 144,220,666
                                                                            ===============   =============

                                      LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities:
       Current portion of long-term debt                                           $298,420        $306,093
       Accounts payable                                                           8,633,784      10,127,962
       Accrued compensation and pension                                           3,091,392       3,139,062
       Accrued interest                                                           1,362,454       3,675,921
       Accrued expenses                                                             668,604         648,500
       Bank overdraft                                                                             2,129,795
                                                                            ---------------   -------------
           Total current liabilities                                             14,054,654      20,027,333

Long-term debt, less current portion                                            178,656,288     149,809,706
Deferred compensation and pension                                                 2,140,193       1,842,948
Deferred income taxes                                                             3,331,000       2,966,000

Series B, 13% Cumulative Preferred Stock, $0.01 par value; 25,0000 shares
   authorized, 6,246 shares issued and outstanding at September 30, 1999
   and December 31, 1998, net of unamortized discount, including accrued
   stock dividends                                                                5,972,809       5,277,000

Commitments and contingencies

Shareholders' deficiency:

       Common Stock, $.01 par value; 50,000,000 authorized at September 30,
          1999, and December 31, 1998, 16,023,240 shares issued and
          outstanding at September 30, 1999 and 16,028,450 shares issued
          and outstanding at December 31, 1998                                      160,232         160,285
       Additional paid-in capital                                                 2,043,003       2,051,026
       Accumulated deficit                                                      (41,351,400)    (37,864,701)
       Stock subscription receivable                                                                (48,931)
                                                                            ---------------   -------------
           Total shareholders' deficiency                                       (39,148,165)    (35,702,321)
                                                                            ---------------   -------------
           Total liabilities and shareholders' deficiency                   $   165,006,779   $ 144,220,666
                                                                            ===============   =============

</TABLE>

                     The accompanying notes are an integral
                  part of the unaudited financial statements.

                                                                               3
<PAGE>

                        Universal Hospital Services, Inc.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                        Nine Months Ended September 30,
                                                                        -------------------------------
                                                                             1999            1998
                                                                          -----------    ------------
<S>                                                                       <C>            <C>
Cash flows from operating activities:
              Net loss                                                    ($2,872,719)   ($7,178,354)
              Adjustments to reconcile net loss to net
                   cash provided by operating activities:
                     Depreciation                                          13,656,840     11,202,345
                     Amortization                                           2,844,996      1,481,291
                     Provision for doubtful accounts                          597,945        164,767
                     Loss on sale of equipment                                769,657      3,189,674
                     Extraordinary charge less cash paid                                     303,314
                     Deferred income taxes                                   (299,000)    (2,023,000)
              Changes in operating assets and liabilities, net
                 of impact of acquisitions:
                     Accounts receivable                                   (3,853,426)    (1,167,595)
                      Inventories and other operating assets               (1,086,723)    (2,415,937)
                     Accounts payable and accrued expenses                  4,413,388       (951,052)
                                                                        -------------   ------------
                     Net cash provided by operating activities             14,170,958      2,605,453
                                                                        -------------   ------------

Cash flows from investing activities:
              Rental equipment purchases                                  (35,890,626)   (16,704,942)
              Property and office equipment purchases                      (1,743,989)      (685,981)
              Proceeds from disposition of rental equipment                 1,505,478        754,599
              Acquisitions                                                   (845,000)   (33,869,383)
              Other                                                          (616,750)         6,709
                                                                        -------------   ------------
                     Net cash used in investing activities                (37,590,887)   (50,498,998)
                                                                        -------------   ------------

Cash flows from financing activities:
              Proceeds under loan agreements                               70,375,000    162,287,399
              Payments under loan agreements                              (41,898,486)   (51,091,978)
              Proceeds from issuance of common stock, net of
                 offering costs                                                           21,518,162
              Proceeds from issuance of preferred stock                                    6,000,000
              Repurchase of common stock                                       (8,076)   (84,734,914)
              Prepayment of deferred loan costs                            (1,184,907)    (6,780,927)
              Tax benefit of nonqualified stock options                                    1,042,000
              Change in book overdraft                                     (2,129,795)      (346,197)
                                                                        -------------   ------------
                     Net cash provided by financing activities             25,153,736     47,893,545
                                                                        -------------   ------------

Net change in cash and cash equivalents                                     1,733,807            ---
Cash and cash equivalents at beginning of period                                  ---            ---
                                                                        -------------   ------------
Cash and cash equivalents at end of period                              $   1,733,807   $        ---
                                                                        =============   ============

Supplemental cash flow information:
               Interest paid                                            $  15,017,000   $  6,708,000
                                                                        =============   ============
               Income taxes (received) paid                                 ($213,000)  $    425,000
                                                                        =============   ============
               Rental equipment purchases included in accounts payable  $   1,323,000   $  1,806,000
                                                                        =============   ============

</TABLE>

                     The accompanying notes are an integral
                  part of the unaudited financial statements.

                                                                               4
<PAGE>

                        Universal Hospital Services, Inc.

            NOTES TO UNAUDITED QUARTERLY REPORT FINANCIAL STATEMENTS

1.   Basis of Presentation:

     The condensed 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 financial statements prepared
     in accordance with generally accepted accounting principles have been
     condensed, or omitted, pursuant to such rules and regulations. These
     condensed financial statements should be read in conjunction with the
     financial statements and related notes included in the Company's Form 10-K
     filing and Form S-4 filing filed with the Securities and Exchange
     Commission on March 31, 1999 and April 26, 1999, respectively.

     The interim financial statements presented herein as of September 30, 1999
     and 1998, and for the three and nine months ended September 30, 1999 and
     1998, 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 Notes 3 and 6 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, 1998 Balance Sheet data was derived from audited financial
     statements, but does not include all disclosures required by generally
     accepted accounting principles.

2.   Acquisitions

     Home Care Instruments, Inc.

     On July 30, 1998, the Company acquired all of the outstanding capital stock
     of HCI Acquisition Corp. (HCI), the parent company of Home Care
     Instruments, Inc. for approximately $19.3 million, including the repayment
     of approximately $3.6 million of outstanding indebtedness of HCI.

     HCI rents medical equipment to the home care and hospital markets in the
     Midwestern United States, renting approximately 100 types of equipment,
     supplies disposable medical products used in connection with the rental
     equipment, and provides a variety of biomedical services.

     Patient's Choice Healthcare, Inc.

     On August 17, 1998, the Company acquired all of the outstanding capital
     stock of Patient's Choice Healthcare, Inc. (PCH), for approximately $14.6
     million, including the repayment of approximately $2.7 million of
     outstanding indebtedness of PCH.

     PCH is a medical distribution company that rents, sells and leases IV pumps
     to home infusion companies, long-term consulting pharmacies, oncology
     clinics and hospitals. PCH sells over 4,000 disposable products and rents
     over 60 different types of equipment. PCH also provides a variety of
     biomedical services.

     Medical Rentals Stat, Inc.

     On November 5, 1998, the Company acquired Medical Rentals Stat, Inc. (MRS),
     for approximately $1.8 million, including the repayment of approximately
     $0.4 million of outstanding indebtedness of MRS.

                                                                               5
<PAGE>

     MRS rents movable medical equipment to hospitals and home care providers in
     Oklahoma. MRS also supplies disposable medical products used in connection
     with the rental equipment, and provides a variety of biomedical services.

     Express Medical Supply, Inc.

     On March 31, 1999, the Company acquired certain assets of Express Medical
     Supply, Inc. (EMS) for approximately $0.8 million. The source of funds was
     from the Revolving Credit Facility.

     EMS rents respiratory equipment to hospitals and home care providers in
     Nashville. EMS also supplies disposable respiratory products used in
     connection with the respiratory equipment.

     Proforma Information

     The following summarizes unaudited proforma results of operations for the
     three months and nine months ended September 30, 1998 assuming the
     acquisitions of HCI, PCH and MRS occurred as of January 1, 1998. The impact
     of the acquisition of EMS is not material.

                                        Three Months Ended    Nine Months Ended
                                        September 30, 1998    September 30, 1998
                                        ------------------    ------------------
     Total Revenues                        $19,549,000            $60,015,000
     Net loss before
       extraordinary charge                 $2,283,000             $5,261,000

     Vital Choice Medical Systems, Inc.

     On October 26, 1999, the Company acquired Vital Choice Medical Systems,
     Inc. pursuant to a Stock Purchase Agreement among the Company and the
     shareholders of Vital Choice. Under the agreement, the Company acquired all
     of the outstanding capital stock of Vital Choice for approximately $5.5
     million, including the repayment of approximately $2.1 million of
     outstanding indebtedness of Vital Choice. The source of funds was from the
     new Credit Facility (see note 5 below).

     Vital Choice rents medical equipment to hospitals and alternate care
     facilities from three locations in central and northern
     California--Oakland, Fresno, and Sacramento. Vital Choice also supplies
     disposable medical products used in connection with rental equipment and
     provides a variety of biomedical services.

3.   Recapitalization of the Company

     The Recapitalization was effected through the merger (the "Merger") of UHS
     Acquisition Corp., a newly formed Minnesota corporation controlled by J.W.
     Childs Equity Partners, L.P. ("Childs") with and into the Company. The
     Recapitalization and Merger was effective on February 25, 1998.

     In connection with the Recapitalization, (i) the Company's previous
     shareholders (other than the new senior management team and certain other
     continuing members of management) received, in consideration for the
     cancellation of approximately 5.3 million shares of the Company's Common
     Stock and options to purchase approximately 344,000 shares of Common Stock,
     cash in the aggregate amount of approximately $84.7 million (net of
     aggregate option exercise price), or $15.50 per share; (ii) the Company
     repaid outstanding borrowings of approximately $35.5 million under existing
     loan agreements; (iii) the Company paid fees and expenses of approximately
     $11.5 million related to the Recapitalization of which approximately $5.9
     million was capitalized as deferred financing costs and $0.6 million which
     was recorded in equity, and (iv) the Company paid approximately $3.3
     million in severance payments to certain non-continuing members of
     management, of which $0.5 million had already been accrued.

                                                                               6
<PAGE>

     In order to finance the Recapitalization, the Company: (i) received an
     equity contribution of approximately $21.3 million in cash from Childs and
     affiliates and the management investors; (ii) issued $100.0 million in
     aggregate principal amount of 10.25% Senior Notes due 2008, and (iii)
     borrowed approximately $14.3 million under a new Revolving Credit Facility.
     In addition, the Management Investors retained their existing shares of
     Common Stock and options to purchase shares of Common Stock which had a
     total value of $3.7 million based upon the Merger Consideration and
     represent, together with new investments by such persons, approximately 20%
     of the capital stock of the Company on a fully diluted basis.

     The transaction was structured as a leveraged recapitalization for
     accounting purposes with all assets and liabilities carried over at
     historical costs.

     During the first three months of 1998, the Company incurred $5.0 million of
     non-recurring expenses, consisting of legal, auditing, and other advisory
     related fees, associated with the Recapitalization.

4.   New Senior Notes

     On January 26, 1999, the Company issued an additional $35 million of its
     10.25% Senior Notes and received proceeds of $29.8 million, net of original
     issue discount, which mature on March 1, 2008. These proceeds were used to
     reduce borrowings under the Revolving Credit Facility. Interest is payable
     semiannually in arrears on March 1 and September 1 of each year, commencing
     March 1, 1999.

5.   New Revolving Credit Facility

     On October 25, 1999, the Company entered into a new Revolving Credit
     Facility with six banks, which consists of a $77.5 million senior secured
     revolving credit facility which will terminate on October 31, 2004. On
     October 25, 1999, $48.9 million was drawn down on the facility. Borrowings
     were used to pay off the existing Revolving Credit Facility, pay financing
     expenses and for our other general working capital needs. The facility is
     collateralized by substantially all the assets of the Company.

     Interest on loans outstanding are payable at a rate per annum, selected at
     the Company's option, equal to the Base Rate Margin (the Banks Base Rate
     plus 1.75%) or the adjusted Eurodollar Rate Margin (3.00% over the adjusted
     Eurodollar Rate). Commencing April 30, 2000, the Banks Base Rate and the
     Eurodollar Rate used to calculate such interest rates may be adjusted if
     the Company satisfies certain leverage ratios. Interest on borrowings at
     the Base Rate shall be paid quarterly. Interest on borrowings at the
     Eurodollar Rate shall be paid at the end of the corresponding Eurodollar
     loan.

     The Credit Agreement also provides that a commitment fee of 0.50% per annum
     is payable on the unutilized amount of the Revolving Credit Facility.

     The Credit Agreement contains certain covenants including restrictions and
     limitations on dividends, capital expenditures, liens, leases, incurrence
     of debt, transactions with affiliates, investments and certain payments,
     and on mergers, acquisitions, consolidations and asset sales. Furthermore,
     the Company is required to maintain compliance with certain financial
     covenants such as a maximum leverage ratio, a maximum fixed charge test and
     an interest coverage test. The Credit Agreement also prohibits the Company
     from prepaying the Senior Notes.

6.   Change in Rental Equipment Depreciation Life

     Effective July 1, 1998, the Company changed the estimated remaining useful
     lives of all of its rental equipment from a range of five to seven years to
     seven years. These revised useful lives more closely reflect the expected
     remaining lives of the Company's rental equipment.

                                                                               7
<PAGE>

     This change is estimated to have resulted in a reduction of depreciation
     expense for the three months ended September 30, 1999 and 1998 of
     approximately $1.0 million and $1.5 million, respectively. For the first
     nine months of 1999 and 1998, the reduction of depreciation expense was
     approximately $2.6 million and $1.5 million, respectively.

7.   Loss on Disposition of Bazooka Beds

     During the third quarter of 1998, the Company recorded a loss of $2.9
     million on dispositions of approximately 1,700 excess Bazooka Beds. The
     Company retained approximately 750 Bazooka Beds in its rental equipment
     pool. The Company had acquired its rental equipment pool of Bazooka Beds
     under an exclusive agreement which was terminated by the Company in March
     1996. Utilization of Bazooka Beds in the Company's pool had been below the
     desired level and has declined steadily during 1997 and the first nine
     months of 1998.

                                                                               8
<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 of 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 Revenues              Percentage Increase (Decrease)
                                          --------------------------------------------  ------------------------------
                                           Three Months Ended     Nine Months Ended       Qtr 3 1999     Nine Months
                                              September 30,         September 30,                           1999
                                            1999        1998      1999         1998       Over Qtr 3      Over Nine
                                                                                             1998        Months 1998
                                          -------------------- -----------------------    -----------    ------------
                                             (Unaudited)            (Unaudited)           (Unaudited)    (Unaudited)
<S>                                       <C>          <C>       <C>         <C>          <C>            <C>
Revenues:

    Equipment rentals                       86.8%       87.3%     86.7%       90.6%          21.1%          30.2%
    Sales of supplies and equipment,
       and other                            13.2%       12.7%     13.3%        9.4%          27.2%          93.3%
                                          --------------------  -------------------
           Total revenues                  100.0%      100.0%    100.0%      100.0%          21.9%          36.1%

Costs of rentals and sales:

    Cost of equipment rentals               25.4%       22.8%     24.0%       23.0%          35.6%          42.1%
    Rental equipment depreciation           21.7%       16.0%     19.4%       21.7%          66.0%          21.7%
    Loss on disposition of Bazooka Beds                 16.3%                  5.8%            NM             NM
    Cost of supplies and equipment sales     9.6%        8.2%      9.1%        6.1%          41.8%         103.5%
                                          --------------------  -------------------
           Total cost of rentals and sales  56.7%       63.3%     52.5%       56.6%           9.1%          26.2%
                                          --------------------  -------------------

Gross profit                                43.3%       36.7%     47.5%       43.4%          43.9%          49.0%

Selling, general and administrative         31.7%       31.7%     32.5%       30.6%          21.8%          44.9%
Recapitalization and transaction costs                                        10.2%            NM             NM
                                          --------------------  -------------------
Operating income                            11.6%        5.0%     15.0%        2.6%         186.3%         689.5%

Interest expense                            21.3%       18.6%     19.7%       15.6%          40.2%          71.9%
                                          --------------------  -------------------

Loss before income taxes and
   extraordinary charge                     (9.7%)     (13.6%)    (4.7%)     (13.0%)           NM             NM
                                          --------------------  -------------------

Provision (benefit) for income taxes:        4.8%      (2.2%)     (0.4%)      (2.2%)           NM             NM

Net loss before extraordinary charge       (14.5%)     (11.4%)    (4.3%)     (10.8%)           NM             NM

Extraordinary charge, net of tax benefit                                       3.8%            NM             NM
                                          --------------------  -------------------

Net loss                                   (14.5%)     (11.4%)    (4.3%)     (14.6%)           NM             NM
                                          ====================  ===================

</TABLE>

                                                                               9
<PAGE>

General

We are a leading nationwide provider of moveable medical equipment to more than
4,400 hospitals and alternate care providers through our equipment rental and
outsourcing programs.

The following discussion addresses our financial condition as of September 30,
1999 and the results of operations and cash flows for the three months and nine
months ended September 30, 1999 and 1998. 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 our Form 10-K and
Form S-4 filings filed with the Securities and Exchange Commission on March 31,
1999 and April 26, 1999, respectively.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: Statements in this filing looking forward in time involve risk and
uncertainties. The words "believes," "does not believe," "no reason to believe,"
"expects," "plans," "intends," "estimates," "anticipated" or "anticipates," and
similar expressions, as they relate to the Company or our management, are
intended to identify forward-looking statements. The following factors, among
others, could cause our actual results to differ materially from those expressed
in any forward-looking statements: our substantial outstanding debt and high
degree of leverage and the continued availability, terms and deployment of
capital, including our ability to service or refinance debt; restrictions
imposed by the terms of our debt; adverse regulatory developments affecting,
among other things, the ability of our customers to obtain reimbursement of
payments made to us; changes and trends in customer preferences, including
increased purchasing of movable medical equipment; difficulties or delays in our
continued expansion into certain markets and development of new markets;
unanticipated costs or difficulties or delays in implementing the components of
our strategy and plan and possible adverse consequences, including inflation and
monetary conditions; actions by competitors; availability of and ability to
retain qualified personnel; and unanticipated costs or difficulties or delays in
implementing our Year 2000 compliance modifications. For a more complete
discussion see the caption "Industry Assessment" and in the Company's Form 10-K
filing filed with the Securities and Exchange Commission on March 31, 1999 under
the caption "Business--Risk Factors".

Industry Assessment

UHS' business may be significantly affected by, and the success of our growth
strategies depends on, the availability and nature of reimbursements to
hospitals and other health care providers for their medical equipment costs
under federal programs such as Medicare, and by other third party payors. Our
customers, primarily hospitals and alternate care providers, have been and
continue to be faced with cost containment pressures and uncertainties with
respect to health care reform and reimbursement. There has been, and we believe
there will continue to be, a transition toward fixed, per-capita payment systems
and other risk-sharing mechanisms. Under its prospective payment system, the
Health Care Financing Administration, which determines Medicare reimbursement
levels, reimburses hospitals for medical treatment at fixed rates according to
diagnostic related groups without regard to the individual hospital's actual
cost. In July 1998, the HCFA changed the way it reimburses nursing homes to a
similar prospective payment system. The Balanced Budget Act of 1997
significantly reduced the growth in federal spending on Medicare and Medicaid
over the next five years.

We believe our Pay-Per-Use and other rental programs respond favorably to the
current industry environment 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 our strategic focus appears consistent with health care
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 us.

Because the capital equipment procurement decisions of health care providers are
significantly influenced by the regulatory and political environment for health
care, our operating results historically have been adversely affected 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 on health care spending and reimbursement reform, or
uncertainty as to possible reform, causes hospitals and alternate care providers
to defer the procurement of medical

                                                                              10
<PAGE>

equipment, reduce their capital expenditures or change significantly their
utilization of medical equipment, there could be a material adverse effect on
our business's financial condition and results of operations.

Recapitalization, Financing and Related Transactions

On November 25, 1997, our Board of Directors entered into the Merger Agreement
with UHS Acquisition Corp. and J.W. Childs Equity Partners, L.P. and the
Recapitalization was completed on February 25, 1998. (See footnote 3 to the
financial statements).

Completed Acquisitions (See footnote 2 to the financial statements).

On July 30, 1998, we completed the purchase of Home Care Instruments, Inc.
(HCI), a privately held company headquartered in St. Louis, Missouri.

On August 17, 1998, we completed the purchase of Patient's Choice Healthcare,
Inc, (PCH), a privately held company headquartered in Columbus, Ohio.

On November 5, 1998, we completed the purchase of Medical Rentals Stat, Inc.
(MRS), a privately held company headquartered in Oklahoma City, Oklahoma.

On March 31, 1999, we completed the purchase of Express Medical Supply, Inc.
(EMS), a privately held company headquartered in Nashville, Tennessee.

On October 26, 1999, we completed the purchase of Vital Choice Medical Systems,
Inc., a privately held company headquartered in Visalia, California.

Equipment Rental Revenues

Equipment rental revenues were $18.6 million for the third quarter of 1999,
representing a $3.3 million or 21.1% increase from equipment rental revenues of
$15.3 million for the same period of 1998. For the first nine months of 1999,
equipment rental revenues were $57.9 million, representing a $13.4 million or
30.2% increase from rental revenues of $44.5 million for the same period of
1998. After giving affect to the acquisitions of HCI, PCH, MRS and EMS,
equipment rental revenue would have increased 12.3% for the third quarter and
13.7% for the first nine months of 1999, compared to the same periods in the
prior year. The rental revenue increase resulted from the acquisitions of HCI,
PCH, MRS and EMS, combined with the continued growth at our acute care hospital
customers and at both established and new district offices. The strong growth in
rental revenues was partially offset by price concessions to certain Group
Purchasing Organizations (GPO) to achieve preferred vendor relationships.

Sales of Supplies and Equipment, and Other

Sales of supplies and equipment and other were $2.8 million for the third
quarter of 1999, representing a $0.6 million, or 27.2%, increase from sales of
supplies and equipment, and other of $2.2 million for the same period of 1998.
For the first nine months of 1999, sales of supplies and equipment, and other
were $8.9 million, representing a $4.3 million, or 93.3% increase from sales of
supplies and equipment, and other of $4.6 million for the same period of 1998.
These increases are the result of the acquisitions of HCI, PCH, MRS and EMS. PCH
placed a greater emphasis on and generated approximately two thirds of its
revenue from sales of disposables to health care providers.

Cost of Equipment Rentals

Cost of equipment rentals were $5.4 million for the third quarter of 1999,
representing a $1.4 million, or 35.6%, increase from cost of equipment rentals
of $4.0 million for the same period of 1998. For the first nine months of 1999,
cost of equipment rentals was $16.0 million, representing a $4.7 million or
42.1% increase from cost of equipment rentals of $11.3 million for the same
period of 1998. Cost of equipment rentals, as a percentage of equipment rental
revenues,

                                                                              11
<PAGE>

increased to 29.3% for the third quarter of 1999 from 26.2% for the same period
of 1998. For the first nine months of 1999, cost of equipment rentals, as a
percentage of equipment rental revenues, increased to 27.7% from 25.4% for the
same period of 1998 as a result of GPO pricing concessions, increased amount of
freight expense, and additional replacement parts cost as a result of used
equipment purchases. Furthermore, the percentage was also impaired as the
support staff salaries in the first quarter of 1998 were at a reduced level due
to the high turnover during the 1997 period of ownership uncertainty.

Rental Equipment Depreciation

Rental equipment depreciation was $4.7 million for the third quarter of 1999,
representing a $1.9 million or 66.0% increase from rental equipment depreciation
of $2.8 million for the same period of 1998. For the first nine months of 1999,
rental equipment depreciation was $13.0 million, representing a $2.3 million or
21.7% increase from rental equipment depreciation of $10.7 million for the same
period of 1998. Rental equipment depreciation as a percentage of equipment
rental revenues increased to 25.1% in the third quarter of 1999 from 18.3% for
the same period of 1998. For the first nine months of 1999, rental equipment
depreciation, as a percentage of equipment rental revenues, decreased to 22.4%
from 23.9% for the same period of 1998. These deviations were the result of the
change in rental equipment depreciation lives from a range of five to seven
years to seven years for all rental equipment (See footnote 6 to the financial
statements). This change went into effect July 1, 1998. The change in rental
equipment depreciation lives decreased rental equipment depreciation by
approximately $1.0 million in the third quarter of 1999 and $2.6 million in the
first nine months of 1999. The reduction of depreciation expense was
approximately $1.5 million in the third quarter and first nine months of 1998.

Loss on Disposal of Bazooka Beds

Our utilization of Bazooka Beds in its rental pool had been below the desired
level and had declined steadily during 1997 and 1998. We acquired the equipment
pool of Bazooka portable specialty beds under an exclusive agreement, which we
terminated in March 1996. Because of the continued decline in utilization, we
decided to dispose of approximately 1,700 excess Bazooka Beds and associated
products. The disposition of the units resulted in a loss of $2.9 million in the
third quarter of 1998. Approximately 750 units of Bazooka Beds were retained for
rental purposes.

                                                                              12
<PAGE>

Gross Profit

Total gross profit was $9.3 million for the third quarter of 1999 and 1998,
representing no change in total gross profits, exclusive of the loss on
disposition of Bazooka Beds. For the first nine months of 1999, total gross
profit was $31.7 million, representing a $7.5 million, or 31.3% increase from
total gross profit, of $24.2 million for the same period of 1998, exclusive of
the loss on disposition of Bazooka Beds. Total gross profit decreased to 43.3%
of the total revenues for the third quarter of 1999 from 53.0% of total revenues
for the same period of 1998. For the first nine months of 1999, total gross
profit, as a percentage of total revenues, decreased to 47.5% from 49.2% for the
same period of 1998, exclusive of the loss on disposition of Bazooka Beds. These
decreases are mainly due to the increased cost of equipment rentals discussed
above and changes in the rental/sales mix as a result of acquisitions partially
offset by the decrease in rental equipment depreciation expense.

Gross profit on rentals represents equipment rental revenues reduced by the cost
of equipment rentals and rental equipment depreciation. Gross profit on rentals
decreased to 45.7% for the third quarter of 1999 from 55.6% for the same period
in 1998. For the first nine months of 1999, gross profit on rental revenue
decreased to 49.9% from 50.7% for the same period of 1998. These decreases were
predominately due to the previously discussed GPO price concessions, cost of
equipment rentals as well as the increased depreciation from capital equipment
purchases that were partially offset by increased rental revenues.

Gross margin on sales of supplies and equipment and other decreased to 27.8% in
the third quarter of 1999 from 35.3% for the same period of 1998. For the first
nine months of 1999, gross profit on sales of supplies and equipment and other
decreased to 31.3% from 34.7%.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $6.8 million in the third
quarter of 1999, representing a $1.2 million, or 21.8% increase from selling,
general and administrative expenses of $5.6 million for the same period of 1998.
For the first nine months of 1999, selling, general and administrative expenses
were $21.7 million, representing a $6.7 million, or 44.9% increase from $15.0
million for the same period of 1998. The increase in the third quarter of 1999,
over the comparable quarter in 1998, and the increase for the nine month period,
is a result of the acquisitions of HCI, PCH, MRS and EMS, an increase in
employee count in 1999 over 1998, the impact of the promotional employee
incentive plan, the amortization of goodwill from acquisitions and debt
financing costs, additional costs related to our Year 2000 compliance program
and the impact of GPO administration fees. Selling, general and administrative
expenses as a percentage of total revenue were 31.7% for the third quarter of
1999 and for the same period in 1998. For the first nine months of 1999,
selling, general and administrative expenses as a percentage of total revenue
increased to 32.5% from 30.6% for the same period of 1998. These increases are
due to the previously mentioned items.

Recapitalization and Transaction Costs

During the first three months of 1998, we incurred $5.0 million of non-recurring
expenses, consisting primarily of legal, accounting, and other advisory related
fees, associated with our recapitalization.


Interest Expense

Interest expense was $4.6 million for the third quarter of 1999, representing a
$1.3 million, or 40.2% increase from interest expense of $3.3 million in the
same period of 1998. For the first nine months of 1999, interest expense was
$13.1 million, representing a $5.4 million, or 71.9% increase from $7.7 million
for the same period of 1998. These increases primarily reflect our
recapitalization, incremental borrowings associated with capital equipment
additions and the acquisitions of HCI, PCH, MRS and EMS. Average borrowings
increased to $177.9 million during the third quarter of 1999 from $131.9 million
for the same period in 1998 and from $104.9 million during the first nine months
of 1998, to $170.8 million for the first nine months of 1999.

                                                                              13
<PAGE>

Income Taxes

Our effective income tax rate for the first nine months of 1999 was 8.9%
compared to a statutory income tax rate of 34.0%, primarily due to amortization
of goodwill that is not deductible for income tax purposes. The effective income
tax rate for the first nine months of 1999 is management's estimate of the full
year 1999 effective rate.

Extraordinary Charge

As a result of our recapitalization and Senior Note issuance in the first
quarter of 1998, we prepaid existing notes and a credit facility totaling $35.5
million, incurred a prepayment penalty of $2.9 million, and wrote off deferred
finance costs of $0.3 million. This amount was reduced by the tax affect of
these expenses of approximately $1.3 million.

Net Loss

We incurred a net loss of $3.1 million during the third quarter of 1999, as a
result of interest expenses due primarily to our recapitalization in 1998 and
subsequent acquisitions. The first nine months of 1999 resulted in a net loss of
$2.9 million.

EBITDA

We believe earnings before interest, taxes, depreciation, and amortization
("EBITDA") to be a measurement of operating performance. EBITDA for the third
quarter of 1999 was $8.3 million versus $4.6 million for the same period of
1998. For the first nine months of 1999, EBITDA was $26.5 million versus $13.9
million for the same period of 1998. Adjusted EBITDA, which adjusts for the loss
on disposal of Bazooka Beds and non-recurring recapitalization and transaction
costs, for the first three months of 1999, was $8.3 million and $7.5 million for
the corresponding period of 1998. Adjusted EBITDA for the first nine months of
1999 was $26.5 and $21.8 for the corresponding period in 1998.

Quarterly Financial Information: Seasonality

Quarterly operating results are typically affected by seasonal factors.
Historically, our first and fourth quarters are the strongest, reflecting
increased hospital utilization during the fall and winter months.

Liquidity and Capital Resources

Historically, we have financed our equipment purchases through internally
generated funds and borrowings under our existing revolving credit facility. As
an asset intensive business, we have required continued access to capital to
support the acquisition of equipment for rental to our customers. Exclusive of
acquisitions, we expect to purchase approximately $37.0 million of rental
equipment in 1999, of which approximately $10.5 million is estimated to be
maintenance capital expenditures.

During the first nine months of 1999 and 1998, net cash flows provided by
operating activities were $14.2 million and $2.6 million, respectively. Net cash
flows used in investing activities were $37.6 million and $50.5 million in each
of these periods. Net cash flows provided by financing activities were $25.2
million and $47.9 million, respectively.

Our principal sources of liquidity are expected to be cash flows from operating
activities and borrowings under our revolving credit facility. It is anticipated
that our principal uses of liquidity will be to fund capital expenditures
related to purchases of movable medical equipment, provide working capital, meet
debt service requirements and finance our strategic plans.

As of September 30, 1999, we were capitalized with $135.0 million of outstanding
notes and with $47.5 million outstanding loans under our $50.0 million senior
revolving credit facility. Interest on loans outstanding under our revolving
credit facility were payable at a rate per annum, selected at the option of the
Company, equal to the Base Rate

                                                                              14
<PAGE>

plus a margin of 1.00% (the "Base Rate Margin"), or the adjusted Eurodollar Rate
plus a margin of 2.25% (the "Eurodollar Rate Margin"). The Eurodollar Rate
Margin and the Base Rate Margin used to calculate such interest rates may have
been adjusted if we had satisfied certain leverage ratios. Our revolving credit
facility contained restrictive covenants which, among other things, limited us
from entering into additional indebtedness, dividends, transactions with
affiliates, assets sales, acquisitions, mergers, and consolidations, liens and
encumbrances and prepayments of other indebtedness.

On October 25, 1999, we secured a new $77.5 million Revolving Credit Facility
and simultaneously paid off the old Revolving Credit Facility. (See footnote 5
to the financial statements).

On January 26, 1999, we issued an additional $35.0 million of our 10.25% Senior
Notes and received proceeds of approximately $29.8 million, net of the original
issue discount. The proceeds were used to reduce borrowing under our Revolving
Credit Facility.

Our expansion and acquisition strategy may require substantial capital, and no
assurance can be given that we will be able to raise any necessary additional
funds through bank financing or the issuance of equity or debt securities on
terms acceptable to us, if at all.

In the first quarter of 1998, we incurred non-recurring costs related to our
recapitalization of approximately $8.9 million, including $3.2 million in
severance expense to certain non-continuing members of management, $2.8 million
($1.4 million net of tax) for prepayment penalties on existing loans and
write-off of corresponding loan origination fees, $1.2 million in investment
banker fees, and approximately $1.7 million in additional recapitalization
expenses (of which $0.6 million was recorded directly to equity).

The Year 2000 Issue

Many currently installed computer systems and software are coded to accept only
two-digit entries in the data code fields. These data code fields will need to
accept four-digit entries to distinguish 21st century dates from 20th century
dates. This problem could result in system failures or miscalculations causing
disruptions of business operations (including, among other things, a temporary
inability to process transactions, send invoices or engage in other similar
business activities). As a result, many companies' computer systems and software
will need to be upgraded or replaced in order to comply with Year 2000
requirements. The potential global impact of the Year 2000 problem is not known,
and, if not corrected in a timely manner, could affect the Company, the United
States and the world economy generally.

Our Quality Assurance Department procedures currently contain steps to include
Year 2000 compliance verification for all current and future rental products. We
have been contacting the rental equipment manufacturers regarding Year 2000
compliance. The equipment generally falls into five categories:

o    Equipment that is currently Year 2000 compatible,

o    Equipment that does not need date processing and therefore is compatible,

o    Equipment that will require the date to be manually reset (The equipment
     will continue to function but may record or print out the incorrect year),

o    Equipment that will require software or hardware upgrades (The upgrades
     will be completed by our technicians. It is estimated that the costs of the
     upgrades, will be approximately $260,000, of which approximately $100,000
     of labor and approximately $65,000 in parts and software has been incurred
     through September 30, 1999.), and

o    Equipment that will need to be disposed (We anticipate the net book value
     of this equipment will be immaterial and will be disposed of by year end.).

                                                                              15
<PAGE>

We believe approximately 99.3% of our equipment is currently Year 2000 compliant
or requires a manual reset on January 1st and February 29th. We believe that
compliance for all of our products will be achieved prior to January 1, 2000.

We are currently using line management to address internal and external Year
2000 issues. Our internal financial and other computer systems are being
reviewed to assess and remediate Year 2000 problems. Our assessment of internal
systems includes our informational technology ("IT") as well as non-IT systems.
Our Year 2000 IT compliance program includes the following phases: identifying
systems that need to be modified or replaced; carrying out remediation work to
modify existing systems or convert to new systems; and conducting validation
testing of systems and applications to ensure compliance. We are currently
carrying out all phases of the compliance program. We formed a project team in
the first quarter of 1999 consisting of representatives from our Information
Technology, Finance, Quality Assurance, Sales, and Legal Departments to address
other internal and external Year 2000 issues.

The amount of remediation work required to address Year 2000 problems is not
expected to be extensive. We have or are currently replacing certain financial
and operational systems, and we believe that the new equipment and software
substantially addresses Year 2000 issues. However, we will be required to modify
some of our existing software in order for the computer systems to function
properly in the year 2000 and thereafter. We estimate that we will complete our
Year 2000 compliance program for all of our significant internal systems no
later than November 30, 1999.

In addition, we are requesting and will continue to gain assurances from our
major suppliers that the suppliers are addressing the Year 2000 issue and that
products purchased by us from such suppliers will function properly in the year
2000. Also, contacts are being made with our customers. These actions are
intended to help mitigate the possible external impact of the Year 2000 problem.
However, it is impossible to fully assess the potential consequences in the
event service interruptions from suppliers occur or in the event that there are
disruptions in such infrastructure areas such as utilities, communications,
transportation, banking and government.

The total estimated cost for resolving our Year 2000 IT issues is approximately
$500,000, of which approximately $75,000 was charged to earnings in 1998 and
$320,000 has been charged during the first nine months of 1999. The total cost
estimate includes the cost of replacing non-compliant systems as a remediation
cost in cases where the Company has accelerated plans to replace such systems.
Estimates of Year 2000 costs are based on numerous assumptions, and there can be
no assurance that the estimates are correct or that the actual cost will not be
materially greater than anticipated.

Based on its assessments to date, we believe we will not experience any material
disruption as a result of Year 2000 problems in information processing or
interface with customers, or with processing orders and billing. However, if
certain critical third-party providers, such as those providers supplying
electricity, water or telephone service, experience difficulties resulting in
disruption of service to us, a shutdown of our operations at individual
facilities could occur for the duration of the disruption. We have not yet
developed a contingency plan to provide for continuity of processing in such
event of various problem scenarios, but we will assess the need to develop such
a plan based on the outcome of our validation phase of our Year 2000 compliance
program and the results of surveying our major suppliers and customers. Assuming
no major disruptions in service from utility companies, or other critical
third-party providers, we believe that we will be able to manage our total Year
2000 transition without any material effect on our results of operations or
financial condition.

                                                                              16
<PAGE>

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company does not have any liquid investments. The Company's exposure to
interest rate risk is mainly through its borrowing under its secured Senior
Revolving Credit Facility. The Company was primarily exposed to the London
Interbank Offered Rate (LIBOR) interest rate on its borrowings under the
Revolving Credit Facility. The Company does not use derivative financial
instruments.

Part II - Other Information

Item 1. Legal Proceedings

Not applicable.

Item 2. Changes in Securities and Use of Proceeds

Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:

     (10.19) Amendment No. 9 to the Credit Agreement dated as of October 1, 1999
             between the Company and Bankers Trust Company

     (10.20) Credit Agreement between Universal Hospital Services, Inc. and Key
             Corporate Capital, Inc. as Collateral Agent, Heller Financial, Inc.
             as Syndication Agent and Canadian Imperial Bank of Commerce as
             Administrative agent, dated October 25, 1999.

     (12)    Ratio of Earnings to Fixed Charges

(b)  Reports on Form 8-K:

     None

                                                                              17
<PAGE>

SIGNATURES




     Pursuant to the requirements of the Securities and Exchange Act of 1934,
     the registrant has duly caused this report to be signed on its behalf by
     the undersigned thereunto duly authorized.

     Date: November 12, 1999


                                    Universal Hospital Services, Inc.

                                    By /s/ David E. Dovenberg
                                       -------------------------------------
                                       David E. Dovenberg,
                                       President and Chief Executive Officer




                                    By /s/ Gerald L. Brandt
                                       -------------------------------------
                                       Gerald L. Brandt,
                                       Vice President of Finance and
                                       Chief Financial Officer

                                                                              18
<PAGE>

Universal Hospital Services, Inc.

EXHIBIT INDEX TO REPORT ON FORM 10-Q


Exhibit
Number     Description                                                   Page
------     -----------                                                   ----

10.19      Amendment No. 9 to the Credit Agreement dated as of             20
           October 1, 1999 between the Company and Bankers Trust
           Company

10.20      Credit Agreement between Universal Hospital Services, Inc.      23
           and Key Corporate Capital, Inc. as Collateral Agent, Heller
           Financial, Inc. as Syndication Agent and Canadian Imperial
           Bank of Commerce as Administrative agent, dated October 25,
           1999

12         Ratio of Earnings to Fixed Charges                             137


                                                                              19
[{"type": "10-Q", "sequence": "1", "description": "FORM 10-Q", "secsgml_size_bytes": 64914}]
{"company-data": {"conformed-name": "UNIVERSAL HOSPITAL SERVICES INC", "cik": "0000886171", "assigned-sic": "7350", "irs-number": "410760940", "state-of-incorporation": "MN", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "033-47220", "film-number": "99751132"}, "business-address": {"street1": "1250 NORTHLAND PLZ", "street2": "3800 W 80TH ST", "city": "BLOOMINGTON", "state": "MN", "zip": "55431-4442", "phone": "6128933200"}, "mail-address": {"street1": "1250 NORTHLAND PLAZA", "street2": "3800 W 80TH STREET", "city": "BLOOMINGTON", "state": "MN", "zip": "55431-4442"}}
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: September 30, 1999

                                       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: 333-49743
                        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
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                        Universal Hospital Services, Inc.

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
Three Months Ended               Nine Months Ended
                                                                September 30,                    September 30,
                                                          ---------------------------     -----------------------------
                                                             1999           1998              1999            1998
                                                          ------------   ------------     --------------  -------------
Revenues:

     Equipment rentals                                     $18,574,159    $15,334,184        $57,931,109    $44,494,058
     Sales of supplies and equipment, and other              2,833,329      2,228,127          8,883,274      4,594,563
                                                          ------------   ------------     --------------  -------------
        Total revenues                                      21,407,488     17,562,311         66,814,383     49,088,621

Costs of rentals and sales:

     Cost of equipment rentals                               5,439,827      4,010,706         16,036,294     11,287,095
     Rental equipment depreciation                           4,655,000      2,805,000         12,960,000     10,650,000
     Loss on disposition of Bazooka Beds                                    2,866,119                         2,866,119
     Cost of supplies and equipment sales                    2,044,637      1,441,592          6,103,662      2,999,452
                                                          ------------   ------------     --------------  -------------
        Total cost of rentals and sales                     12,139,464     11,123,417         35,099,956     27,802,666
                                                          ------------   ------------     --------------  -------------

Gross profit                                                 9,268,024      6,438,894         31,714,427     21,285,955

Selling, general and administrative                          6,788,526      5,572,732         21,719,305     14,991,969
Recapitalization and transaction costs                                                                        5,027,905
                                                          ------------   ------------     --------------  -------------
Operating income                                             2,479,498        866,162          9,995,122      1,266,081

Interest expense                                             4,569,094      3,258,101         13,147,841      7,650,415
                                                          ------------   ------------     --------------  -------------

Loss before benefit for income taxes and extraordinary      (2,089,596)    (2,391,939)        (3,152,719)    (6,384,334)
charge

Provision (benefit) for income taxes                         1,017,000       (391,000)          (280,000)    (1,069,000)
                                                          ------------   ------------     --------------  -------------
Net loss before extraordinary charge                        (3,106,596)    (2,000,939)        (2,872,719)    (5,315,334)

Extraordinary charge, net of deferred tax benefit
of $1,300,000                                                                                                 1,863,020
                                                          ------------   ------------     --------------  -------------
Net loss                                                   ($3,106,596)   ($2,000,939)       ($2,872,719)   ($7,178,354)
                                                          ============   ============     ==============  =============
The accompanying notes are an integral
                  part of the unaudited financial statements.

                                                                               2
Universal Hospital Services, Inc.

                                 BALANCE SHEETS
                                     ASSETS
September 30,   December 31,
                                                                                   1999            1998
                                                                               -------------   ------------
                                                                                (Unaudited)
Current assets:
       Cash                                                                 $     1,733,807
       Accounts receivable, less allowance for doubtful accounts of
          $1,100,000 and $964,000 at September 30, 1999 and December 31,
          1998, respectively                                                     21,535,448   $  17,900,816
       Inventories                                                                3,924,429       2,617,019
       Deferred income taxes                                                      1,163,000         499,000
       Other current assets                                                       1,060,103       1,669,790
                                                                            ---------------   -------------
           Total current assets                                                  29,416,787      22,686,625

Property and equipment:
       Rental equipment, at cost less accumulated depreciation                   87,078,759      73,057,730
       Property and office equipment, at cost less accumulated depreciation       4,523,840       3,496,370
                                                                            ---------------   -------------
           Total property and equipment, net                                     91,602,599      76,554,100

Intangible and other assets:
       Goodwill, less accumulated amortization                                   36,482,682      37,924,246
       Other primarily deferred financing costs, less accumulated
          amortization                                                            7,504,711       7,055,695
                                                                            ---------------   -------------
           Total assets                                                     $   165,006,779   $ 144,220,666
                                                                            ===============   =============

                                      LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities:
       Current portion of long-term debt                                           $298,420        $306,093
       Accounts payable                                                           8,633,784      10,127,962
       Accrued compensation and pension                                           3,091,392       3,139,062
       Accrued interest                                                           1,362,454       3,675,921
       Accrued expenses                                                             668,604         648,500
       Bank overdraft                                                                             2,129,795
                                                                            ---------------   -------------
           Total current liabilities                                             14,054,654      20,027,333

Long-term debt, less current portion                                            178,656,288     149,809,706
Deferred compensation and pension                                                 2,140,193       1,842,948
Deferred income taxes                                                             3,331,000       2,966,000

Series B, 13% Cumulative Preferred Stock, $0.01 par value; 25,0000 shares
   authorized, 6,246 shares issued and outstanding at September 30, 1999
   and December 31, 1998, net of unamortized discount, including accrued
   stock dividends                                                                5,972,809       5,277,000

Commitments and contingencies

Shareholders' deficiency:

       Common Stock, $.01 par value; 50,000,000 authorized at September 30,
          1999, and December 31, 1998, 16,023,240 shares issued and
          outstanding at September 30, 1999 and 16,028,450 shares issued
          and outstanding at December 31, 1998                                      160,232         160,285
       Additional paid-in capital                                                 2,043,003       2,051,026
       Accumulated deficit                                                      (41,351,400)    (37,864,701)
       Stock subscription receivable                                                                (48,931)
                                                                            ---------------   -------------
           Total shareholders' deficiency                                       (39,148,165)    (35,702,321)
                                                                            ---------------   -------------
           Total liabilities and shareholders' deficiency                   $   165,006,779   $ 144,220,666
                                                                            ===============   =============
The accompanying notes are an integral
                  part of the unaudited financial statements.

                                                                               3
Universal Hospital Services, Inc.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
Nine Months Ended September 30,
                                                                        -------------------------------
                                                                             1999            1998
                                                                          -----------    ------------
Cash flows from operating activities:
              Net loss                                                    ($2,872,719)   ($7,178,354)
              Adjustments to reconcile net loss to net
                   cash provided by operating activities:
                     Depreciation                                          13,656,840     11,202,345
                     Amortization                                           2,844,996      1,481,291
                     Provision for doubtful accounts                          597,945        164,767
                     Loss on sale of equipment                                769,657      3,189,674
                     Extraordinary charge less cash paid                                     303,314
                     Deferred income taxes                                   (299,000)    (2,023,000)
              Changes in operating assets and liabilities, net
                 of impact of acquisitions:
                     Accounts receivable                                   (3,853,426)    (1,167,595)
                      Inventories and other operating assets               (1,086,723)    (2,415,937)
                     Accounts payable and accrued expenses                  4,413,388       (951,052)
                                                                        -------------   ------------
                     Net cash provided by operating activities             14,170,958      2,605,453
                                                                        -------------   ------------

Cash flows from investing activities:
              Rental equipment purchases                                  (35,890,626)   (16,704,942)
              Property and office equipment purchases                      (1,743,989)      (685,981)
              Proceeds from disposition of rental equipment                 1,505,478        754,599
              Acquisitions                                                   (845,000)   (33,869,383)
              Other                                                          (616,750)         6,709
                                                                        -------------   ------------
                     Net cash used in investing activities                (37,590,887)   (50,498,998)
                                                                        -------------   ------------

Cash flows from financing activities:
              Proceeds under loan agreements                               70,375,000    162,287,399
              Payments under loan agreements                              (41,898,486)   (51,091,978)
              Proceeds from issuance of common stock, net of
                 offering costs                                                           21,518,162
              Proceeds from issuance of preferred stock                                    6,000,000
              Repurchase of common stock                                       (8,076)   (84,734,914)
              Prepayment of deferred loan costs                            (1,184,907)    (6,780,927)
              Tax benefit of nonqualified stock options                                    1,042,000
              Change in book overdraft                                     (2,129,795)      (346,197)
                                                                        -------------   ------------
                     Net cash provided by financing activities             25,153,736     47,893,545
                                                                        -------------   ------------

Net change in cash and cash equivalents                                     1,733,807            ---
Cash and cash equivalents at beginning of period                                  ---            ---
                                                                        -------------   ------------
Cash and cash equivalents at end of period                              $   1,733,807   $        ---
                                                                        =============   ============

Supplemental cash flow information:
               Interest paid                                            $  15,017,000   $  6,708,000
                                                                        =============   ============
               Income taxes (received) paid                                 ($213,000)  $    425,000
                                                                        =============   ============
               Rental equipment purchases included in accounts payable  $   1,323,000   $  1,806,000
                                                                        =============   ============
The accompanying notes are an integral
                  part of the unaudited financial statements.

                                                                               4
Universal Hospital Services, Inc.

            NOTES TO UNAUDITED QUARTERLY REPORT FINANCIAL STATEMENTS

1.   Basis of Presentation:

     The condensed 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 financial statements prepared
     in accordance with generally accepted accounting principles have been
     condensed, or omitted, pursuant to such rules and regulations. These
     condensed financial statements should be read in conjunction with the
     financial statements and related notes included in the Company's Form 10-K
     filing and Form S-4 filing filed with the Securities and Exchange
     Commission on March 31, 1999 and April 26, 1999, respectively.

     The interim financial statements presented herein as of September 30, 1999
     and 1998, and for the three and nine months ended September 30, 1999 and
     1998, 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 Notes 3 and 6 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, 1998 Balance Sheet data was derived from audited financial
     statements, but does not include all disclosures required by generally
     accepted accounting principles.

2.   Acquisitions

     Home Care Instruments, Inc.

     On July 30, 1998, the Company acquired all of the outstanding capital stock
     of HCI Acquisition Corp. (HCI), the parent company of Home Care
     Instruments, Inc. for approximately $19.3 million, including the repayment
     of approximately $3.6 million of outstanding indebtedness of HCI.

     HCI rents medical equipment to the home care and hospital markets in the
     Midwestern United States, renting approximately 100 types of equipment,
     supplies disposable medical products used in connection with the rental
     equipment, and provides a variety of biomedical services.

     Patient's Choice Healthcare, Inc.

     On August 17, 1998, the Company acquired all of the outstanding capital
     stock of Patient's Choice Healthcare, Inc. (PCH), for approximately $14.6
     million, including the repayment of approximately $2.7 million of
     outstanding indebtedness of PCH.

     PCH is a medical distribution company that rents, sells and leases IV pumps
     to home infusion companies, long-term consulting pharmacies, oncology
     clinics and hospitals. PCH sells over 4,000 disposable products and rents
     over 60 different types of equipment. PCH also provides a variety of
     biomedical services.

     Medical Rentals Stat, Inc.

     On November 5, 1998, the Company acquired Medical Rentals Stat, Inc. (MRS),
     for approximately $1.8 million, including the repayment of approximately
     $0.4 million of outstanding indebtedness of MRS.

                                                                               5
MRS rents movable medical equipment to hospitals and home care providers in
     Oklahoma. MRS also supplies disposable medical products used in connection
     with the rental equipment, and provides a variety of biomedical services.

     Express Medical Supply, Inc.

     On March 31, 1999, the Company acquired certain assets of Express Medical
     Supply, Inc. (EMS) for approximately $0.8 million. The source of funds was
     from the Revolving Credit Facility.

     EMS rents respiratory equipment to hospitals and home care providers in
     Nashville. EMS also supplies disposable respiratory products used in
     connection with the respiratory equipment.

     Proforma Information

     The following summarizes unaudited proforma results of operations for the
     three months and nine months ended September 30, 1998 assuming the
     acquisitions of HCI, PCH and MRS occurred as of January 1, 1998. The impact
     of the acquisition of EMS is not material.

                                        Three Months Ended    Nine Months Ended
                                        September 30, 1998    September 30, 1998
                                        ------------------    ------------------
     Total Revenues                        $19,549,000            $60,015,000
     Net loss before
       extraordinary charge                 $2,283,000             $5,261,000

     Vital Choice Medical Systems, Inc.

     On October 26, 1999, the Company acquired Vital Choice Medical Systems,
     Inc. pursuant to a Stock Purchase Agreement among the Company and the
     shareholders of Vital Choice. Under the agreement, the Company acquired all
     of the outstanding capital stock of Vital Choice for approximately $5.5
     million, including the repayment of approximately $2.1 million of
     outstanding indebtedness of Vital Choice. The source of funds was from the
     new Credit Facility (see note 5 below).

     Vital Choice rents medical equipment to hospitals and alternate care
     facilities from three locations in central and northern
     California--Oakland, Fresno, and Sacramento. Vital Choice also supplies
     disposable medical products used in connection with rental equipment and
     provides a variety of biomedical services.

3.   Recapitalization of the Company

     The Recapitalization was effected through the merger (the "Merger") of UHS
     Acquisition Corp., a newly formed Minnesota corporation controlled by J.W.
     Childs Equity Partners, L.P. ("Childs") with and into the Company. The
     Recapitalization and Merger was effective on February 25, 1998.

     In connection with the Recapitalization, (i) the Company's previous
     shareholders (other than the new senior management team and certain other
     continuing members of management) received, in consideration for the
     cancellation of approximately 5.3 million shares of the Company's Common
     Stock and options to purchase approximately 344,000 shares of Common Stock,
     cash in the aggregate amount of approximately $84.7 million (net of
     aggregate option exercise price), or $15.50 per share; (ii) the Company
     repaid outstanding borrowings of approximately $35.5 million under existing
     loan agreements; (iii) the Company paid fees and expenses of approximately
     $11.5 million related to the Recapitalization of which approximately $5.9
     million was capitalized as deferred financing costs and $0.6 million which
     was recorded in equity, and (iv) the Company paid approximately $3.3
     million in severance payments to certain non-continuing members of
     management, of which $0.5 million had already been accrued.

                                                                               6
In order to finance the Recapitalization, the Company: (i) received an
     equity contribution of approximately $21.3 million in cash from Childs and
     affiliates and the management investors; (ii) issued $100.0 million in
     aggregate principal amount of 10.25% Senior Notes due 2008, and (iii)
     borrowed approximately $14.3 million under a new Revolving Credit Facility.
     In addition, the Management Investors retained their existing shares of
     Common Stock and options to purchase shares of Common Stock which had a
     total value of $3.7 million based upon the Merger Consideration and
     represent, together with new investments by such persons, approximately 20%
     of the capital stock of the Company on a fully diluted basis.

     The transaction was structured as a leveraged recapitalization for
     accounting purposes with all assets and liabilities carried over at
     historical costs.

     During the first three months of 1998, the Company incurred $5.0 million of
     non-recurring expenses, consisting of legal, auditing, and other advisory
     related fees, associated with the Recapitalization.

4.   New Senior Notes

     On January 26, 1999, the Company issued an additional $35 million of its
     10.25% Senior Notes and received proceeds of $29.8 million, net of original
     issue discount, which mature on March 1, 2008. These proceeds were used to
     reduce borrowings under the Revolving Credit Facility. Interest is payable
     semiannually in arrears on March 1 and September 1 of each year, commencing
     March 1, 1999.

5.   New Revolving Credit Facility

     On October 25, 1999, the Company entered into a new Revolving Credit
     Facility with six banks, which consists of a $77.5 million senior secured
     revolving credit facility which will terminate on October 31, 2004. On
     October 25, 1999, $48.9 million was drawn down on the facility. Borrowings
     were used to pay off the existing Revolving Credit Facility, pay financing
     expenses and for our other general working capital needs. The facility is
     collateralized by substantially all the assets of the Company.

     Interest on loans outstanding are payable at a rate per annum, selected at
     the Company's option, equal to the Base Rate Margin (the Banks Base Rate
     plus 1.75%) or the adjusted Eurodollar Rate Margin (3.00% over the adjusted
     Eurodollar Rate). Commencing April 30, 2000, the Banks Base Rate and the
     Eurodollar Rate used to calculate such interest rates may be adjusted if
     the Company satisfies certain leverage ratios. Interest on borrowings at
     the Base Rate shall be paid quarterly. Interest on borrowings at the
     Eurodollar Rate shall be paid at the end of the corresponding Eurodollar
     loan.

     The Credit Agreement also provides that a commitment fee of 0.50% per annum
     is payable on the unutilized amount of the Revolving Credit Facility.

     The Credit Agreement contains certain covenants including restrictions and
     limitations on dividends, capital expenditures, liens, leases, incurrence
     of debt, transactions with affiliates, investments and certain payments,
     and on mergers, acquisitions, consolidations and asset sales. Furthermore,
     the Company is required to maintain compliance with certain financial
     covenants such as a maximum leverage ratio, a maximum fixed charge test and
     an interest coverage test. The Credit Agreement also prohibits the Company
     from prepaying the Senior Notes.

6.   Change in Rental Equipment Depreciation Life

     Effective July 1, 1998, the Company changed the estimated remaining useful
     lives of all of its rental equipment from a range of five to seven years to
     seven years. These revised useful lives more closely reflect the expected
     remaining lives of the Company's rental equipment.

                                                                               7
This change is estimated to have resulted in a reduction of depreciation
     expense for the three months ended September 30, 1999 and 1998 of
     approximately $1.0 million and $1.5 million, respectively. For the first
     nine months of 1999 and 1998, the reduction of depreciation expense was
     approximately $2.6 million and $1.5 million, respectively.

7.   Loss on Disposition of Bazooka Beds

     During the third quarter of 1998, the Company recorded a loss of $2.9
     million on dispositions of approximately 1,700 excess Bazooka Beds. The
     Company retained approximately 750 Bazooka Beds in its rental equipment
     pool. The Company had acquired its rental equipment pool of Bazooka Beds
     under an exclusive agreement which was terminated by the Company in March
     1996. Utilization of Bazooka Beds in the Company's pool had been below the
     desired level and has declined steadily during 1997 and the first nine
     months of 1998.

                                                                               8
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 of 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:
Percent of Total Revenues              Percentage Increase (Decrease)
                                          --------------------------------------------  ------------------------------
                                           Three Months Ended     Nine Months Ended       Qtr 3 1999     Nine Months
                                              September 30,         September 30,                           1999
                                            1999        1998      1999         1998       Over Qtr 3      Over Nine
                                                                                             1998        Months 1998
                                          -------------------- -----------------------    -----------    ------------
                                             (Unaudited)            (Unaudited)           (Unaudited)    (Unaudited)
Revenues:

    Equipment rentals                       86.8%       87.3%     86.7%       90.6%          21.1%          30.2%
    Sales of supplies and equipment,
       and other                            13.2%       12.7%     13.3%        9.4%          27.2%          93.3%
                                          --------------------  -------------------
           Total revenues                  100.0%      100.0%    100.0%      100.0%          21.9%          36.1%

Costs of rentals and sales:

    Cost of equipment rentals               25.4%       22.8%     24.0%       23.0%          35.6%          42.1%
    Rental equipment depreciation           21.7%       16.0%     19.4%       21.7%          66.0%          21.7%
    Loss on disposition of Bazooka Beds                 16.3%                  5.8%            NM             NM
    Cost of supplies and equipment sales     9.6%        8.2%      9.1%        6.1%          41.8%         103.5%
                                          --------------------  -------------------
           Total cost of rentals and sales  56.7%       63.3%     52.5%       56.6%           9.1%          26.2%
                                          --------------------  -------------------

Gross profit                                43.3%       36.7%     47.5%       43.4%          43.9%          49.0%

Selling, general and administrative         31.7%       31.7%     32.5%       30.6%          21.8%          44.9%
Recapitalization and transaction costs                                        10.2%            NM             NM
                                          --------------------  -------------------
Operating income                            11.6%        5.0%     15.0%        2.6%         186.3%         689.5%

Interest expense                            21.3%       18.6%     19.7%       15.6%          40.2%          71.9%
                                          --------------------  -------------------

Loss before income taxes and
   extraordinary charge                     (9.7%)     (13.6%)    (4.7%)     (13.0%)           NM             NM
                                          --------------------  -------------------

Provision (benefit) for income taxes:        4.8%      (2.2%)     (0.4%)      (2.2%)           NM             NM

Net loss before extraordinary charge       (14.5%)     (11.4%)    (4.3%)     (10.8%)           NM             NM

Extraordinary charge, net of tax benefit                                       3.8%            NM             NM
                                          --------------------  -------------------

Net loss                                   (14.5%)     (11.4%)    (4.3%)     (14.6%)           NM             NM
                                          ====================  ===================
9
General

We are a leading nationwide provider of moveable medical equipment to more than
4,400 hospitals and alternate care providers through our equipment rental and
outsourcing programs.

The following discussion addresses our financial condition as of September 30,
1999 and the results of operations and cash flows for the three months and nine
months ended September 30, 1999 and 1998. 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 our Form 10-K and
Form S-4 filings filed with the Securities and Exchange Commission on March 31,
1999 and April 26, 1999, respectively.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: Statements in this filing looking forward in time involve risk and
uncertainties. The words "believes," "does not believe," "no reason to believe,"
"expects," "plans," "intends," "estimates," "anticipated" or "anticipates," and
similar expressions, as they relate to the Company or our management, are
intended to identify forward-looking statements. The following factors, among
others, could cause our actual results to differ materially from those expressed
in any forward-looking statements: our substantial outstanding debt and high
degree of leverage and the continued availability, terms and deployment of
capital, including our ability to service or refinance debt; restrictions
imposed by the terms of our debt; adverse regulatory developments affecting,
among other things, the ability of our customers to obtain reimbursement of
payments made to us; changes and trends in customer preferences, including
increased purchasing of movable medical equipment; difficulties or delays in our
continued expansion into certain markets and development of new markets;
unanticipated costs or difficulties or delays in implementing the components of
our strategy and plan and possible adverse consequences, including inflation and
monetary conditions; actions by competitors; availability of and ability to
retain qualified personnel; and unanticipated costs or difficulties or delays in
implementing our Year 2000 compliance modifications. For a more complete
discussion see the caption "Industry Assessment" and in the Company's Form 10-K
filing filed with the Securities and Exchange Commission on March 31, 1999 under
the caption "Business--Risk Factors".

Industry Assessment

UHS' business may be significantly affected by, and the success of our growth
strategies depends on, the availability and nature of reimbursements to
hospitals and other health care providers for their medical equipment costs
under federal programs such as Medicare, and by other third party payors. Our
customers, primarily hospitals and alternate care providers, have been and
continue to be faced with cost containment pressures and uncertainties with
respect to health care reform and reimbursement. There has been, and we believe
there will continue to be, a transition toward fixed, per-capita payment systems
and other risk-sharing mechanisms. Under its prospective payment system, the
Health Care Financing Administration, which determines Medicare reimbursement
levels, reimburses hospitals for medical treatment at fixed rates according to
diagnostic related groups without regard to the individual hospital's actual
cost. In July 1998, the HCFA changed the way it reimburses nursing homes to a
similar prospective payment system. The Balanced Budget Act of 1997
significantly reduced the growth in federal spending on Medicare and Medicaid
over the next five years.

We believe our Pay-Per-Use and other rental programs respond favorably to the
current industry environment 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 our strategic focus appears consistent with health care
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 us.

Because the capital equipment procurement decisions of health care providers are
significantly influenced by the regulatory and political environment for health
care, our operating results historically have been adversely affected 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 on health care spending and reimbursement reform, or
uncertainty as to possible reform, causes hospitals and alternate care providers
to defer the procurement of medical

                                                                              10
equipment, reduce their capital expenditures or change significantly their
utilization of medical equipment, there could be a material adverse effect on
our business's financial condition and results of operations.

Recapitalization, Financing and Related Transactions

On November 25, 1997, our Board of Directors entered into the Merger Agreement
with UHS Acquisition Corp. and J.W. Childs Equity Partners, L.P. and the
Recapitalization was completed on February 25, 1998. (See footnote 3 to the
financial statements).

Completed Acquisitions (See footnote 2 to the financial statements).

On July 30, 1998, we completed the purchase of Home Care Instruments, Inc.
(HCI), a privately held company headquartered in St. Louis, Missouri.

On August 17, 1998, we completed the purchase of Patient's Choice Healthcare,
Inc, (PCH), a privately held company headquartered in Columbus, Ohio.

On November 5, 1998, we completed the purchase of Medical Rentals Stat, Inc.
(MRS), a privately held company headquartered in Oklahoma City, Oklahoma.

On March 31, 1999, we completed the purchase of Express Medical Supply, Inc.
(EMS), a privately held company headquartered in Nashville, Tennessee.

On October 26, 1999, we completed the purchase of Vital Choice Medical Systems,
Inc., a privately held company headquartered in Visalia, California.

Equipment Rental Revenues

Equipment rental revenues were $18.6 million for the third quarter of 1999,
representing a $3.3 million or 21.1% increase from equipment rental revenues of
$15.3 million for the same period of 1998. For the first nine months of 1999,
equipment rental revenues were $57.9 million, representing a $13.4 million or
30.2% increase from rental revenues of $44.5 million for the same period of
1998. After giving affect to the acquisitions of HCI, PCH, MRS and EMS,
equipment rental revenue would have increased 12.3% for the third quarter and
13.7% for the first nine months of 1999, compared to the same periods in the
prior year. The rental revenue increase resulted from the acquisitions of HCI,
PCH, MRS and EMS, combined with the continued growth at our acute care hospital
customers and at both established and new district offices. The strong growth in
rental revenues was partially offset by price concessions to certain Group
Purchasing Organizations (GPO) to achieve preferred vendor relationships.

Sales of Supplies and Equipment, and Other

Sales of supplies and equipment and other were $2.8 million for the third
quarter of 1999, representing a $0.6 million, or 27.2%, increase from sales of
supplies and equipment, and other of $2.2 million for the same period of 1998.
For the first nine months of 1999, sales of supplies and equipment, and other
were $8.9 million, representing a $4.3 million, or 93.3% increase from sales of
supplies and equipment, and other of $4.6 million for the same period of 1998.
These increases are the result of the acquisitions of HCI, PCH, MRS and EMS. PCH
placed a greater emphasis on and generated approximately two thirds of its
revenue from sales of disposables to health care providers.

Cost of Equipment Rentals

Cost of equipment rentals were $5.4 million for the third quarter of 1999,
representing a $1.4 million, or 35.6%, increase from cost of equipment rentals
of $4.0 million for the same period of 1998. For the first nine months of 1999,
cost of equipment rentals was $16.0 million, representing a $4.7 million or
42.1% increase from cost of equipment rentals of $11.3 million for the same
period of 1998. Cost of equipment rentals, as a percentage of equipment rental
revenues,

                                                                              11
increased to 29.3% for the third quarter of 1999 from 26.2% for the same period
of 1998. For the first nine months of 1999, cost of equipment rentals, as a
percentage of equipment rental revenues, increased to 27.7% from 25.4% for the
same period of 1998 as a result of GPO pricing concessions, increased amount of
freight expense, and additional replacement parts cost as a result of used
equipment purchases. Furthermore, the percentage was also impaired as the
support staff salaries in the first quarter of 1998 were at a reduced level due
to the high turnover during the 1997 period of ownership uncertainty.

Rental Equipment Depreciation

Rental equipment depreciation was $4.7 million for the third quarter of 1999,
representing a $1.9 million or 66.0% increase from rental equipment depreciation
of $2.8 million for the same period of 1998. For the first nine months of 1999,
rental equipment depreciation was $13.0 million, representing a $2.3 million or
21.7% increase from rental equipment depreciation of $10.7 million for the same
period of 1998. Rental equipment depreciation as a percentage of equipment
rental revenues increased to 25.1% in the third quarter of 1999 from 18.3% for
the same period of 1998. For the first nine months of 1999, rental equipment
depreciation, as a percentage of equipment rental revenues, decreased to 22.4%
from 23.9% for the same period of 1998. These deviations were the result of the
change in rental equipment depreciation lives from a range of five to seven
years to seven years for all rental equipment (See footnote 6 to the financial
statements). This change went into effect July 1, 1998. The change in rental
equipment depreciation lives decreased rental equipment depreciation by
approximately $1.0 million in the third quarter of 1999 and $2.6 million in the
first nine months of 1999. The reduction of depreciation expense was
approximately $1.5 million in the third quarter and first nine months of 1998.

Loss on Disposal of Bazooka Beds

Our utilization of Bazooka Beds in its rental pool had been below the desired
level and had declined steadily during 1997 and 1998. We acquired the equipment
pool of Bazooka portable specialty beds under an exclusive agreement, which we
terminated in March 1996. Because of the continued decline in utilization, we
decided to dispose of approximately 1,700 excess Bazooka Beds and associated
products. The disposition of the units resulted in a loss of $2.9 million in the
third quarter of 1998. Approximately 750 units of Bazooka Beds were retained for
rental purposes.

                                                                              12
Gross Profit

Total gross profit was $9.3 million for the third quarter of 1999 and 1998,
representing no change in total gross profits, exclusive of the loss on
disposition of Bazooka Beds. For the first nine months of 1999, total gross
profit was $31.7 million, representing a $7.5 million, or 31.3% increase from
total gross profit, of $24.2 million for the same period of 1998, exclusive of
the loss on disposition of Bazooka Beds. Total gross profit decreased to 43.3%
of the total revenues for the third quarter of 1999 from 53.0% of total revenues
for the same period of 1998. For the first nine months of 1999, total gross
profit, as a percentage of total revenues, decreased to 47.5% from 49.2% for the
same period of 1998, exclusive of the loss on disposition of Bazooka Beds. These
decreases are mainly due to the increased cost of equipment rentals discussed
above and changes in the rental/sales mix as a result of acquisitions partially
offset by the decrease in rental equipment depreciation expense.

Gross profit on rentals represents equipment rental revenues reduced by the cost
of equipment rentals and rental equipment depreciation. Gross profit on rentals
decreased to 45.7% for the third quarter of 1999 from 55.6% for the same period
in 1998. For the first nine months of 1999, gross profit on rental revenue
decreased to 49.9% from 50.7% for the same period of 1998. These decreases were
predominately due to the previously discussed GPO price concessions, cost of
equipment rentals as well as the increased depreciation from capital equipment
purchases that were partially offset by increased rental revenues.

Gross margin on sales of supplies and equipment and other decreased to 27.8% in
the third quarter of 1999 from 35.3% for the same period of 1998. For the first
nine months of 1999, gross profit on sales of supplies and equipment and other
decreased to 31.3% from 34.7%.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $6.8 million in the third
quarter of 1999, representing a $1.2 million, or 21.8% increase from selling,
general and administrative expenses of $5.6 million for the same period of 1998.
For the first nine months of 1999, selling, general and administrative expenses
were $21.7 million, representing a $6.7 million, or 44.9% increase from $15.0
million for the same period of 1998. The increase in the third quarter of 1999,
over the comparable quarter in 1998, and the increase for the nine month period,
is a result of the acquisitions of HCI, PCH, MRS and EMS, an increase in
employee count in 1999 over 1998, the impact of the promotional employee
incentive plan, the amortization of goodwill from acquisitions and debt
financing costs, additional costs related to our Year 2000 compliance program
and the impact of GPO administration fees. Selling, general and administrative
expenses as a percentage of total revenue were 31.7% for the third quarter of
1999 and for the same period in 1998. For the first nine months of 1999,
selling, general and administrative expenses as a percentage of total revenue
increased to 32.5% from 30.6% for the same period of 1998. These increases are
due to the previously mentioned items.

Recapitalization and Transaction Costs

During the first three months of 1998, we incurred $5.0 million of non-recurring
expenses, consisting primarily of legal, accounting, and other advisory related
fees, associated with our recapitalization.

Interest Expense

Interest expense was $4.6 million for the third quarter of 1999, representing a
$1.3 million, or 40.2% increase from interest expense of $3.3 million in the
same period of 1998. For the first nine months of 1999, interest expense was
$13.1 million, representing a $5.4 million, or 71.9% increase from $7.7 million
for the same period of 1998. These increases primarily reflect our
recapitalization, incremental borrowings associated with capital equipment
additions and the acquisitions of HCI, PCH, MRS and EMS. Average borrowings
increased to $177.9 million during the third quarter of 1999 from $131.9 million
for the same period in 1998 and from $104.9 million during the first nine months
of 1998, to $170.8 million for the first nine months of 1999.

                                                                              13
Income Taxes

Our effective income tax rate for the first nine months of 1999 was 8.9%
compared to a statutory income tax rate of 34.0%, primarily due to amortization
of goodwill that is not deductible for income tax purposes. The effective income
tax rate for the first nine months of 1999 is management's estimate of the full
year 1999 effective rate.

Extraordinary Charge

As a result of our recapitalization and Senior Note issuance in the first
quarter of 1998, we prepaid existing notes and a credit facility totaling $35.5
million, incurred a prepayment penalty of $2.9 million, and wrote off deferred
finance costs of $0.3 million. This amount was reduced by the tax affect of
these expenses of approximately $1.3 million.

Net Loss

We incurred a net loss of $3.1 million during the third quarter of 1999, as a
result of interest expenses due primarily to our recapitalization in 1998 and
subsequent acquisitions. The first nine months of 1999 resulted in a net loss of
$2.9 million.

EBITDA

We believe earnings before interest, taxes, depreciation, and amortization
("EBITDA") to be a measurement of operating performance. EBITDA for the third
quarter of 1999 was $8.3 million versus $4.6 million for the same period of
1998. For the first nine months of 1999, EBITDA was $26.5 million versus $13.9
million for the same period of 1998. Adjusted EBITDA, which adjusts for the loss
on disposal of Bazooka Beds and non-recurring recapitalization and transaction
costs, for the first three months of 1999, was $8.3 million and $7.5 million for
the corresponding period of 1998. Adjusted EBITDA for the first nine months of
1999 was $26.5 and $21.8 for the corresponding period in 1998.

Quarterly Financial Information: Seasonality

Quarterly operating results are typically affected by seasonal factors.
Historically, our first and fourth quarters are the strongest, reflecting
increased hospital utilization during the fall and winter months.

Liquidity and Capital Resources

Historically, we have financed our equipment purchases through internally
generated funds and borrowings under our existing revolving credit facility. As
an asset intensive business, we have required continued access to capital to
support the acquisition of equipment for rental to our customers. Exclusive of
acquisitions, we expect to purchase approximately $37.0 million of rental
equipment in 1999, of which approximately $10.5 million is estimated to be
maintenance capital expenditures.

During the first nine months of 1999 and 1998, net cash flows provided by
operating activities were $14.2 million and $2.6 million, respectively. Net cash
flows used in investing activities were $37.6 million and $50.5 million in each
of these periods. Net cash flows provided by financing activities were $25.2
million and $47.9 million, respectively.

Our principal sources of liquidity are expected to be cash flows from operating
activities and borrowings under our revolving credit facility. It is anticipated
that our principal uses of liquidity will be to fund capital expenditures
related to purchases of movable medical equipment, provide working capital, meet
debt service requirements and finance our strategic plans.

As of September 30, 1999, we were capitalized with $135.0 million of outstanding
notes and with $47.5 million outstanding loans under our $50.0 million senior
revolving credit facility. Interest on loans outstanding under our revolving
credit facility were payable at a rate per annum, selected at the option of the
Company, equal to the Base Rate

                                                                              14
plus a margin of 1.00% (the "Base Rate Margin"), or the adjusted Eurodollar Rate
plus a margin of 2.25% (the "Eurodollar Rate Margin"). The Eurodollar Rate
Margin and the Base Rate Margin used to calculate such interest rates may have
been adjusted if we had satisfied certain leverage ratios. Our revolving credit
facility contained restrictive covenants which, among other things, limited us
from entering into additional indebtedness, dividends, transactions with
affiliates, assets sales, acquisitions, mergers, and consolidations, liens and
encumbrances and prepayments of other indebtedness.

On October 25, 1999, we secured a new $77.5 million Revolving Credit Facility
and simultaneously paid off the old Revolving Credit Facility. (See footnote 5
to the financial statements).

On January 26, 1999, we issued an additional $35.0 million of our 10.25% Senior
Notes and received proceeds of approximately $29.8 million, net of the original
issue discount. The proceeds were used to reduce borrowing under our Revolving
Credit Facility.

Our expansion and acquisition strategy may require substantial capital, and no
assurance can be given that we will be able to raise any necessary additional
funds through bank financing or the issuance of equity or debt securities on
terms acceptable to us, if at all.

In the first quarter of 1998, we incurred non-recurring costs related to our
recapitalization of approximately $8.9 million, including $3.2 million in
severance expense to certain non-continuing members of management, $2.8 million
($1.4 million net of tax) for prepayment penalties on existing loans and
write-off of corresponding loan origination fees, $1.2 million in investment
banker fees, and approximately $1.7 million in additional recapitalization
expenses (of which $0.6 million was recorded directly to equity).

The Year 2000 Issue

Many currently installed computer systems and software are coded to accept only
two-digit entries in the data code fields. These data code fields will need to
accept four-digit entries to distinguish 21st century dates from 20th century
dates. This problem could result in system failures or miscalculations causing
disruptions of business operations (including, among other things, a temporary
inability to process transactions, send invoices or engage in other similar
business activities). As a result, many companies' computer systems and software
will need to be upgraded or replaced in order to comply with Year 2000
requirements. The potential global impact of the Year 2000 problem is not known,
and, if not corrected in a timely manner, could affect the Company, the United
States and the world economy generally.

Our Quality Assurance Department procedures currently contain steps to include
Year 2000 compliance verification for all current and future rental products. We
have been contacting the rental equipment manufacturers regarding Year 2000
compliance. The equipment generally falls into five categories:

o    Equipment that is currently Year 2000 compatible,

o    Equipment that does not need date processing and therefore is compatible,

o    Equipment that will require the date to be manually reset (The equipment
     will continue to function but may record or print out the incorrect year),

o    Equipment that will require software or hardware upgrades (The upgrades
     will be completed by our technicians. It is estimated that the costs of the
     upgrades, will be approximately $260,000, of which approximately $100,000
     of labor and approximately $65,000 in parts and software has been incurred
     through September 30, 1999.), and

o    Equipment that will need to be disposed (We anticipate the net book value
     of this equipment will be immaterial and will be disposed of by year end.).

                                                                              15
We believe approximately 99.3% of our equipment is currently Year 2000 compliant
or requires a manual reset on January 1st and February 29th. We believe that
compliance for all of our products will be achieved prior to January 1, 2000.

We are currently using line management to address internal and external Year
2000 issues. Our internal financial and other computer systems are being
reviewed to assess and remediate Year 2000 problems. Our assessment of internal
systems includes our informational technology ("IT") as well as non-IT systems.
Our Year 2000 IT compliance program includes the following phases: identifying
systems that need to be modified or replaced; carrying out remediation work to
modify existing systems or convert to new systems; and conducting validation
testing of systems and applications to ensure compliance. We are currently
carrying out all phases of the compliance program. We formed a project team in
the first quarter of 1999 consisting of representatives from our Information
Technology, Finance, Quality Assurance, Sales, and Legal Departments to address
other internal and external Year 2000 issues.

The amount of remediation work required to address Year 2000 problems is not
expected to be extensive. We have or are currently replacing certain financial
and operational systems, and we believe that the new equipment and software
substantially addresses Year 2000 issues. However, we will be required to modify
some of our existing software in order for the computer systems to function
properly in the year 2000 and thereafter. We estimate that we will complete our
Year 2000 compliance program for all of our significant internal systems no
later than November 30, 1999.

In addition, we are requesting and will continue to gain assurances from our
major suppliers that the suppliers are addressing the Year 2000 issue and that
products purchased by us from such suppliers will function properly in the year
2000. Also, contacts are being made with our customers. These actions are
intended to help mitigate the possible external impact of the Year 2000 problem.
However, it is impossible to fully assess the potential consequences in the
event service interruptions from suppliers occur or in the event that there are
disruptions in such infrastructure areas such as utilities, communications,
transportation, banking and government.

The total estimated cost for resolving our Year 2000 IT issues is approximately
$500,000, of which approximately $75,000 was charged to earnings in 1998 and
$320,000 has been charged during the first nine months of 1999. The total cost
estimate includes the cost of replacing non-compliant systems as a remediation
cost in cases where the Company has accelerated plans to replace such systems.
Estimates of Year 2000 costs are based on numerous assumptions, and there can be
no assurance that the estimates are correct or that the actual cost will not be
materially greater than anticipated.

Based on its assessments to date, we believe we will not experience any material
disruption as a result of Year 2000 problems in information processing or
interface with customers, or with processing orders and billing. However, if
certain critical third-party providers, such as those providers supplying
electricity, water or telephone service, experience difficulties resulting in
disruption of service to us, a shutdown of our operations at individual
facilities could occur for the duration of the disruption. We have not yet
developed a contingency plan to provide for continuity of processing in such
event of various problem scenarios, but we will assess the need to develop such
a plan based on the outcome of our validation phase of our Year 2000 compliance
program and the results of surveying our major suppliers and customers. Assuming
no major disruptions in service from utility companies, or other critical
third-party providers, we believe that we will be able to manage our total Year
2000 transition without any material effect on our results of operations or
financial condition.

                                                                              16
Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company does not have any liquid investments. The Company's exposure to
interest rate risk is mainly through its borrowing under its secured Senior
Revolving Credit Facility. The Company was primarily exposed to the London
Interbank Offered Rate (LIBOR) interest rate on its borrowings under the
Revolving Credit Facility. The Company does not use derivative financial
instruments.

Part II - Other Information

Item 1. Legal Proceedings

Not applicable.

Item 2. Changes in Securities and Use of Proceeds

Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:

     (10.19) Amendment No. 9 to the Credit Agreement dated as of October 1, 1999
             between the Company and Bankers Trust Company

     (10.20) Credit Agreement between Universal Hospital Services, Inc. and Key
             Corporate Capital, Inc. as Collateral Agent, Heller Financial, Inc.
             as Syndication Agent and Canadian Imperial Bank of Commerce as
             Administrative agent, dated October 25, 1999.

     (12)    Ratio of Earnings to Fixed Charges

(b)  Reports on Form 8-K:

     None

                                                                              17
SIGNATURES

     Pursuant to the requirements of the Securities and Exchange Act of 1934,
     the registrant has duly caused this report to be signed on its behalf by
     the undersigned thereunto duly authorized.

     Date: November 12, 1999

                                    Universal Hospital Services, Inc.

                                    By /s/ David E. Dovenberg
                                       -------------------------------------
                                       David E. Dovenberg,
                                       President and Chief Executive Officer

                                    By /s/ Gerald L. Brandt
                                       -------------------------------------
                                       Gerald L. Brandt,
                                       Vice President of Finance and
                                       Chief Financial Officer

                                                                              18
Universal Hospital Services, Inc.

EXHIBIT INDEX TO REPORT ON FORM 10-Q

Exhibit
Number     Description                                                   Page
------     -----------                                                   ----

10.19      Amendment No. 9 to the Credit Agreement dated as of             20
           October 1, 1999 between the Company and Bankers Trust
           Company

10.20      Credit Agreement between Universal Hospital Services, Inc.      23
           and Key Corporate Capital, Inc. as Collateral Agent, Heller
           Financial, Inc. as Syndication Agent and Canadian Imperial
           Bank of Commerce as Administrative agent, dated October 25,
           1999

12         Ratio of Earnings to Fixed Charges                             137

                                                                              19