Full Press Release Details
COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES FIRST QUARTER
ENDED MARCH 31, 2023 RESULTS
FRANKLIN, Tenn. (May 1, 2023) Community Health
Systems, Inc. (NYSE: CYH) (the Company ) today announced financial and operating results for the three months ended March 31, 2023.
The following highlights the financial and operating results for the three months ended March 31, 2023.
Commenting on the results, Tim L. Hingtgen,
chief executive officer of Community Health Systems, Inc., said, As the pandemic continues to subside and more patients return to healthcare settings, our healthcare teams delivered high quality services and our markets continued their
progress, producing strong same-store inpatient and outpatient volume growth in the first quarter compared to the same period last year. Our emphasis on growth initiatives also helped generate sequential gains in same-store admissions, adjusted
admissions, and surgeries compared to the fourth quarter of last year.
Three Months Ended March 31, 2023
Net operating revenues for the three months ended March 31, 2023, totaled $3.108 billion, a 0.1 percent decrease compared
to $3.111 billion for the same period in 2022. On a same-store basis, net operating revenues increased 1.7 percent for the three months ended March 31, 2023, compared to the same period in 2022. Net operating revenues for the three
months ended March 31, 2023, reflect a 1.2 percent increase in admissions and a 5.8 percent increase in adjusted admissions, compared to the same period in 2022. On a same-store basis, admissions increased 4.8 percent and
adjusted admissions increased 9.4 percent for the three months ended March 31, 2023, compared to the same period in 2022.
CYH Announces First Quarter 2023 Results
Net loss attributable to Community Health Systems, Inc. stockholders was $(51) million, or
$(0.40) per share (diluted), for the three months ended March 31, 2023, compared to $(1) million, or $(0.01) per share (diluted), for the same period in 2022. Excluding the adjusting items as presented in the table in footnote (e) on page
12, net loss attributable to Community Health Systems, Inc. stockholders was $(0.43) per share (diluted) for the three months ended March 31, 2023, compared to net income of $0.14 per share (diluted) for the same period in 2022. During the
three months ended March 31, 2023, pandemic relief funds did not materially impact net loss attributable to Community Health Systems, Inc. stockholders. During the three months ended March 31, 2022, pandemic relief funds had a positive
impact on net loss attributable to Community Health Systems, Inc. stockholders (both on a consolidated and adjusted basis) of approximately $35 million, or $0.27 on a per share (diluted) basis.
Adjusted EBITDA for the three months ended March 31, 2023, was $335 million compared to $409 million for the same period in
2022. During the three months ended March 31, 2023, pandemic relief funds did not materially impact Adjusted EBITDA. During the three months ended March 31, 2022, pandemic relief funds had a positive impact on Adjusted EBITDA of
approximately $47 million.
The increase in net loss attributable to Community Health Systems, Inc. stockholders and decrease in
Adjusted EBITDA for the three months ended March 31, 2023, compared to the same period in 2022, is primarily due to lower acuity and unfavorable changes in payor mix, increased salaries and benefits expense, increased rates for outsourced
medical specialists and a reduction in pandemic relief funds recognized, partially offset by stronger volumes, higher reimbursement rates and reduced expense for contract labor.
During 2023, through the date of
this press release, the Company has completed the divestiture of two hospitals as more specifically described below. On January 1, 2023, the Company completed the divestiture of one hospital (in respect of which the Company received proceeds at
a preliminary closing on December 31, 2022). On April 1, 2023, the Company completed the divestiture of one hospital (in respect of which the Company received proceeds at a preliminary closing on March 31, 2023). Financial and
statistical data for 2023 and 2022 presented in this press release includes the operating results of divested or closed businesses for the periods prior to the consummation of the respective divestiture or closure. Same-store operating results
exclude businesses divested in 2022 and the first quarter of 2023, businesses closed in 2022 and one de novo hospital that opened in 2022.
About Non-GAAP Financial Measures
This press release presents Adjusted EBITDA, a non-GAAP financial measure, which is EBITDA adjusted to add back net income attributable to noncontrolling interests and to exclude loss (gain) from early extinguishment of debt, impairment and (gain) loss on sale
of businesses, gain on sale of equity interests in Macon Healthcare, LLC, expense related to government and other legal matters and related costs, income during the fourth quarter of 2021 associated with the settlement of litigation for the recovery
of amounts of certain professional liability claims settled in 2020 covered by third-party insurance policies, expense related to employee termination benefits and other restructuring charges, the impact of a change in estimate to increase the
professional liability claims accrual recorded during the fourth quarter of 2022 with respect to claims incurred in prior years related to divested locations and the gain on sale by HealthTrust Purchasing Group, L.P. ( HealthTrust ) of a
majority interest in CoreTrust Holdings, LLC ( CoreTrust ) completed during the fourth quarter of 2022. For information regarding why the Company believes Adjusted EBITDA provides useful information to investors, and for a reconciliation
of Adjusted EBITDA to net loss attributable to Community Health Systems, Inc. stockholders, see footnote (c) to the Financial Highlights, Financial Statements and Selected Operating Data below.
CYH Announces First Quarter 2023 Results
Additionally, this press release presents adjusted net loss attributable to Community Health
Systems, Inc. stockholders per share (diluted), a non-GAAP financial measure, to reflect the impact on net loss attributable to Community Health Systems, Inc. stockholders per share (diluted) from the selected
items used in the calculation of Adjusted EBITDA. For information regarding why the Company believes this non-GAAP financial measure provides useful information to investors, and for a reconciliation of this non-GAAP financial measure to net loss attributable to Community Health Systems, Inc. stockholders per share (diluted), see footnote (e) to the Financial Highlights, Financial Statements and Selected Operating
The non-GAAP financial measures set forth above are not measurements of financial
performance under U.S. GAAP, and should not be considered in isolation or as a substitute for any financial measure calculated in accordance with U.S. GAAP. Additionally, the calculation of these non-GAAP
financial measures may not be comparable to similarly titled measures disclosed by other companies.
The Company s annual earnings
guidance for 2023, as provided in our press release issued on February 15, 2023, is reaffirmed. The 2023 guidance is based on the Company s historical operating performance, current trends and other assumptions the Company believes are
reasonable. Assumptions underlying the annual earnings guidance provided on February 15, 2023 are unchanged.
Systems, Inc. is one of the nation s largest healthcare companies. The Company s affiliates are leading providers of healthcare services, developing and operating healthcare delivery systems in 44 distinct markets across 15 states. As of
May 1, 2023, the Company s subsidiaries own or lease 78 affiliated hospitals with approximately 13,000 beds and operate more than 1,000 sites of care, including physician practices, urgent care centers, freestanding emergency departments,
occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers.
The Company s headquarters are
located in Franklin, Tennessee, a suburb south of Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol CYH. More information about the Company can be found on its website at
Community Health Systems, Inc. will hold a conference call on Tuesday, May 2, 2023, at 10:00 a.m. Central, 11:00
a.m. Eastern, to review financial and operating results for the first quarter ended March 31, 2023. Investors will have the opportunity to listen to a live internet broadcast of the conference call by clicking on the Investor Relations link of
the Company s website at www.chs.net. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will continue to be available for approximately 30 days. Copies of this press release and
conference call slide show, as well as the Company s Current Report on Form 8-K (including this press release), will be available on the Company s website at www.chs.net.
CYH Announces First Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Financial Highlights (a)(b)
(In millions, except per share amounts)
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Net operating revenues | $ | 3,108 | $ | 3,111 | ||||
| Net (loss) income (f) | (20 | ) | 30 | |||||
| Net loss attributable to Community Health Systems, Inc. stockholders | (51 | ) | (1 | ) | ||||
| Adjusted EBITDA (c) | 335 | 409 | ||||||
| Net cash provided by operating activities | 5 | 101 | ||||||
| Loss per share attributable to Community Health Systems, Inc. stockholders: | ||||||||
| Basic (f) | $ | (0.40 | ) | $ | (0.01 | ) | ||
| Diluted (e), (f) | (0.40 | ) | (0.01 | ) | ||||
| Weighted-average number of shares outstanding (d): | ||||||||
| Basic | 130 | 128 | ||||||
| Diluted | 130 | 128 |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Loss (a)(b)
(In millions, except per share amounts)
| Three Months Ended March 31, | ||||||||||||||||
| 2023 | 2022 | |||||||||||||||
| Amount | % of Net Operating Revenues | Amount | % of Net Operating Revenues | |||||||||||||
| Net operating revenues | $ | 3,108 | 100.0 | % | $ | 3,111 | 100.0 | % | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Salaries and benefits | 1,365 | 43.9 | % | 1,325 | 42.6 | % | ||||||||||
| Supplies | 507 | 16.3 | % | 499 | 16.0 | % | ||||||||||
| Other operating expenses | 835 | 26.9 | % | 853 | 27.4 | % | ||||||||||
| Lease cost and rent | 81 | 2.6 | % | 77 | 2.5 | % | ||||||||||
| Pandemic relief funds | % | (47 | ) | (1.5 | )% | |||||||||||
| Depreciation and amortization | 132 | 4.2 | % | 128 | 4.1 | % | ||||||||||
| Impairment and (gain) loss on sale of businesses, net (f) | (22 | ) | (0.7 | )% | 6 | 0.2 | % | |||||||||
| Total operating costs and expenses | 2,898 | 93.2 | % | 2,841 | 91.3 | % | ||||||||||
| Income from operations (f) | 210 | 6.8 | % | 270 | 8.7 | % | ||||||||||
| Interest expense, net | 207 | 6.7 | % | 217 | 7.0 | % | ||||||||||
| Loss from early extinguishment of debt | % | 5 | 0.2 | % | ||||||||||||
| Equity in earnings of unconsolidated affiliates | (3 | ) | (0.1 | )% | (5 | ) | (0.2 | )% | ||||||||
| Income before income taxes | 6 | 0.2 | % | 53 | 1.7 | % | ||||||||||
| Provision for income taxes | 26 | 0.8 | % | 23 | 0.7 | % | ||||||||||
| Net (loss) income (f) | (20 | ) | (0.6 | )% | 30 | 1.0 | % | |||||||||
| Less: Net income attributable to noncontrolling interests | 31 | 1.0 | % | 31 | 1.0 | % | ||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders | $ | (51 | ) | (1.6 | )% | $ | (1 | ) | 0.0 | % | ||||||
| Loss per share attributable to Community Health Systems, Inc. stockholders: | ||||||||||||||||
| Basic (f) | $ | (0.40 | ) | $ | (0.01 | ) | ||||||||||
| Diluted (e), (f) | $ | (0.40 | ) | $ | (0.01 | ) | ||||||||||
| Weighted-average number of shares outstanding (d): | ||||||||||||||||
| Basic | 130 | 128 | ||||||||||||||
| Diluted | 130 | 128 |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Net (loss) income | $ | (20 | ) | $ | 30 | |||
| Other comprehensive income (loss), net of income taxes: | ||||||||
| Net change in fair value of available-for-sale debt securities, net of tax | 3 | (8 | ) | |||||
| Other comprehensive income (loss) | 3 | (8 | ) | |||||
| Comprehensive (loss) income | (17 | ) | 22 | |||||
| Less: Comprehensive income attributable to noncontrolling interests | 31 | 31 | ||||||
| Comprehensive loss attributable to Community Health Systems, Inc. stockholders | $ | (48 | ) | $ | (9 | ) |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (a)
(Dollars in millions)
| Three Months Ended March 31, | ||||||||||||||||||||||||
| Consolidated | Same-Store | |||||||||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||||||||
| Number of hospitals (at end of period) | 79 | 83 | 78 | 78 | ||||||||||||||||||||
| Licensed beds (at end of period) | 12,750 | 13,289 | 12,718 | 12,618 | ||||||||||||||||||||
| Beds in service (at end of period) | 10,858 | 11,557 | 10,826 | 10,886 | ||||||||||||||||||||
| Admissions | 109,624 | 108,367 | 1.2 | % | 108,923 | 103,918 | 4.8 | % | ||||||||||||||||
| Adjusted admissions | 245,883 | 232,315 | 5.8 | % | 244,040 | 222,984 | 9.4 | % | ||||||||||||||||
| Patient days | 507,925 | 551,245 | 505,699 | 532,724 | ||||||||||||||||||||
| Average length of stay (days) | 4.6 | 5.1 | 4.6 | 5.1 | ||||||||||||||||||||
| Occupancy rate (average beds in service) | 51.9 | % | 53.0 | % | 51.9 | % | 54.4 | % | ||||||||||||||||
| Net operating revenues | $ | 3,108 | $ | 3,111 | -0.1 | % | $ | 3,083 | $ | 3,032 | 1.7 | % | ||||||||||||
| Net inpatient revenues as a % of net operating revenues | 47.1 | % | 49.4 | % | 47.0 | % | 49.6 | % | ||||||||||||||||
| Net outpatient revenues as a % of net operating revenues | 52.9 | % | 50.6 | % | 53.0 | % | 50.4 | % | ||||||||||||||||
| Income from operations (f) | $ | 210 | $ | 270 | -22.2 | % | ||||||||||||||||||
| Income from operations as a % of net operating revenues | 6.8 | % | 8.7 | % | ||||||||||||||||||||
| Depreciation and amortization | $ | 132 | $ | 128 | ||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | (3 | ) | $ | (5 | ) | ||||||||||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders | $ | (51 | ) | $ | (1 | ) | -5,000 | % | ||||||||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders as a % of net operating revenues | -1.6 | % | 0.0 | % | ||||||||||||||||||||
| Adjusted EBITDA (c) | $ | 335 | $ | 409 | -18.1 | % | ||||||||||||||||||
| Adjusted EBITDA as a % of net operating revenues | 10.8 | % | 13.1 | % | ||||||||||||||||||||
| Net cash provided by operating activities | $ | 5 | $ | 101 | -95.0 | % |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions, except share data)
| March 31, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 144 | $ | 118 | ||||
| Patient accounts receivable | 2,043 | 2,040 | ||||||
| Supplies | 345 | 353 | ||||||
| Prepaid income taxes | 79 | 99 | ||||||
| Prepaid expenses and taxes | 276 | 237 | ||||||
| Other current assets | 227 | 235 | ||||||
| Total current assets | 3,114 | 3,082 | ||||||
| Property and equipment | 9,560 | 9,639 | ||||||
| Less accumulated depreciation and amortization | (4,305 | ) | (4,274 | ) | ||||
| Property and equipment, net | 5,255 | 5,365 | ||||||
| Goodwill | 4,051 | 4,166 | ||||||
| Deferred income taxes | 49 | 49 | ||||||
| Other asset, net | 2,154 | 2,007 | ||||||
| Total assets | $ | 14,623 | $ | 14,669 | ||||
| LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||||
| Current liabilities | ||||||||
| Current maturities of long-term debt | $ | 39 | $ | 21 | ||||
| Current operating lease liabilities | 138 | 148 | ||||||
| Accounts payable | 712 | 773 | ||||||
| Accrued liabilities: | ||||||||
| Employee compensation | 596 | 637 | ||||||
| Accrued interest | 184 | 189 | ||||||
| Other | 463 | 418 | ||||||
| Total current liabilities | 2,132 | 2,186 | ||||||
| Long-term debt (g) | 11,696 | 11,614 | ||||||
| Deferred income taxes | 351 | 354 | ||||||
| Long-term operating lease liabilities | 588 | 605 | ||||||
| Other long-term liabilities | 647 | 644 | ||||||
| Total liabilities | 15,414 | 15,403 | ||||||
| Redeemable noncontrolling interests in equity of consolidated subsidiaries | 561 | 541 | ||||||
| STOCKHOLDERS DEFICIT | ||||||||
| Community Health Systems, Inc. stockholders deficit: | ||||||||
| Preferred stock, $.01 par value per share, 100,000,000 shares authorized; none issued | ||||||||
| Common stock, $.01 par value per share, 300,000,000 shares authorized; 136,749,427 shares issued and outstanding at March 31, 2023, and 134,703,717 shares issued and outstanding at December 31, 2022 | 1 | 1 | ||||||
| Additional paid-in capital | 2,054 | 2,084 | ||||||
| Accumulated other comprehensive loss | (18 | ) | (21 | ) | ||||
| Accumulated deficit | (3,482 | ) | (3,431 | ) | ||||
| Total Community Health Systems, Inc. stockholders deficit | (1,445 | ) | (1,367 | ) | ||||
| Noncontrolling interests in equity of consolidated subsidiaries | 93 | 92 | ||||||
| Total stockholders deficit | (1,352 | ) | (1,275 | ) | ||||
| Total liabilities and stockholders deficit | $ | 14,623 | $ | 14,669 |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities | ||||||||
| Net (loss) income | $ | (20 | ) | $ | 30 | |||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 132 | 128 | ||||||
| Deferred income taxes | 7 | 22 | ||||||
| Stock-based compensation expense | 6 | 5 | ||||||
| Impairment and (gain) loss on sale of businesses, net (f) | (22 | ) | 6 | |||||
| Loss from early extinguishment of debt | 5 | |||||||
| Other non-cash expenses, net | 42 | 45 | ||||||
| Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||||||||
| Patient accounts receivable | (2 | ) | (17 | ) | ||||
| Supplies, prepaid expenses and other current assets | (50 | ) | (40 | ) | ||||
| Accounts payable, accrued liabilities and income taxes | (32 | ) | (23 | ) | ||||
| Other | (56 | ) | (60 | ) | ||||
| Net cash provided by operating activities | 5 | 101 | ||||||
| Cash flows from investing activities | ||||||||
| Acquisitions of facilities and other related businesses | (8 | ) | (1 | ) | ||||
| Purchases of property and equipment | (122 | ) | (97 | ) | ||||
| Proceeds from disposition of hospitals and other ancillary operations | 92 | 2 | ||||||
| Proceeds from sale of property and equipment | 5 | |||||||
| Purchases of available-for-sale debt securities and equity securities | (26 | ) | (31 | ) | ||||
| Proceeds from sales of available-for-sale debt securities and equity securities | 61 | 24 | ||||||
| Purchases of investments in unconsolidated affiliates | (5 | ) | (4 | ) | ||||
| Increase in other investments | (16 | ) | (14 | ) | ||||
| Net cash used in investing activities | (19 | ) | (121 | ) | ||||
| Cash flows from financing activities | ||||||||
| Repurchase of restricted stock shares for payroll tax withholding requirements | (4 | ) | (8 | ) | ||||
| Deferred financing costs and other debt-related costs | (73 | ) | ||||||
| Proceeds from noncontrolling investors in joint ventures | 2 | 1 | ||||||
| Redemption of noncontrolling investments in joint ventures | (1 | ) | ||||||
| Distributions to noncontrolling investors in joint ventures | (44 | ) | (29 | ) | ||||
| Other borrowings | 29 | 27 | ||||||
| Issuance of long-term debt | 1,535 | |||||||
| Proceeds from ABL Facility | 815 | |||||||
| Repayments of long-term indebtedness | (757 | ) | (1,480 | ) | ||||
| Net cash provided by (used in) financing activities | 40 | (27 | ) | |||||
| Net change in cash and cash equivalents | 26 | (47 | ) | |||||
| Cash and cash equivalents at beginning of period | 118 | 507 | ||||||
| Cash and cash equivalents at end of period | $ | 144 | $ | 460 |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2023 Results
Footnotes to Financial Highlights, Financial Statements and Selected Operating Data
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net loss attributable to Community Health Systems,Inc. stockholders: | ||||||||
| Net (loss) income | $ | (20 | ) | $ | 30 | |||
| Less: Income attributable to noncontrolling interests, net of taxes | 31 | 31 | ||||||
| Net loss attributable to Community Health Systems, Inc. stockholders basic and diluted | $ | (51 | ) | $ | (1 | ) |
CYH Announces First Quarter 2023 Results
Footnotes to Financial Highlights, Financial Statements and Selected Operating Data
Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP. It should not
be considered in isolation or as a substitute for net income, operating income, or any other performance measure calculated in accordance with U.S. GAAP. The items excluded from Adjusted EBITDA are significant components in understanding and
evaluating financial performance. The Company believes such adjustments are appropriate as the magnitude and frequency of such items can vary significantly and are not related to the assessment of normal operating performance. Additionally, this
calculation of Adjusted EBITDA may not be comparable to similarly titled measures disclosed by other companies.