Full Press Release Details
COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES SECOND QUARTER
ENDED JUNE 30, 2022 RESULTS
FRANKLIN, Tenn. (July 27, 2022) Community
Health Systems, Inc. (NYSE: CYH) (the Company ) today announced financial and operating results for the three and six months ended June 30, 2022.
The following highlights the financial and operating results for the three months ended June 30, 2022.
Net operating revenues for the three months
ended June 30, 2022, totaled $2.934 billion, a 2.4 percent decrease compared with $3.007 billion for the same period in 2021.
Net loss attributable to Community Health Systems, Inc. stockholders was $(326) million, or $(2.52) per share (diluted), for the three months
ended June 30, 2022, compared to net income of $6 million, or $0.04 per share (diluted), for the same period in 2021. Excluding the adjusting items as presented in the table in footnote (e) on page 14, net loss attributable to
Community Health Systems, Inc. stockholders was $(2.52) per share (diluted) for the three months ended June 30, 2022, compared to net income of $0.23 per share (diluted) for the same period in 2021. Pandemic relief funds, as more specifically
described below, had a positive impact on net (loss) income attributable to Community Health Systems, Inc. stockholders (both on a consolidated and adjusted basis) of approximately $6 million, or $0.05 on a per share (diluted) basis, for the
three months ended June 30, 2022, and less than $1 million, or $0.00 on a per share (diluted) basis, for the same period in 2021. Weighted-average shares outstanding (diluted) were 129 million and 131 million for the three months
ended June 30, 2022 and 2021, respectively.
Adjusted EBITDA for the three months ended June 30, 2022, was $253 million
compared with $453 million for the same period in 2021. Pandemic relief funds had a positive impact on Adjusted EBITDA of approximately $8 million and $1 million for the three months ended June 30, 2022 and 2021, respectively.
The consolidated operating results for the three months ended June 30, 2022, reflect a 3.4 percent decrease in admissions and a
0.4 percent decrease in adjusted admissions, compared with the same period in 2021. On a same-store basis, admissions decreased 3.5 percent and adjusted admissions decreased 0.5 percent for the three months ended June 30, 2022,
compared with the same period in 2021. On a same-store basis, net operating revenues decreased 2.6 percent for the three months ended June 30, 2022, compared with the same period in 2021.
CYH Announces Second Quarter 2022 Results
Net operating revenues for the six months ended June 30, 2022, totaled
$6.044 billion, a 0.4 percent increase compared with $6.020 billion for the same period in 2021.
attributable to Community Health Systems, Inc. stockholders was $(327) million, or $(2.54) per share (diluted), for the six months ended June 30, 2022, compared to $(58) million, or $(0.46) per share (diluted), for the same period in 2021.
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 $(2.40) per share (diluted) for the six months ended June 30, 2022, compared to
net income of $0.60 per share (diluted) for the same period in 2021. Pandemic relief funds, as more specifically described below, had a positive impact on net loss attributable to Community Health Systems, Inc. stockholders (both on a consolidated
and adjusted basis) of approximately $41 million, or $0.32 on a per share (diluted) basis, for the six months ended June 30, 2022, and approximately $63 million, or $0.50 on a per share (diluted) basis, for the same period in 2021.
Weighted-average shares outstanding (diluted) were 128 million and 126 million for the six months ended June 30, 2022 and 2021, respectively.
Adjusted EBITDA for the six months ended June 30, 2022, was $662 million compared with $948 million for the same period in
2021. Pandemic relief funds had a positive impact on Adjusted EBITDA of approximately $55 million and $83 million for the six months ended June 30, 2022 and 2021, respectively.
The consolidated operating results for the six months ended June 30, 2022, reflect a 2.5 percent decrease in admissions and a
0.8 percent increase in adjusted admissions, compared with the same period in 2021. On a same-store basis, admissions decreased 1.9 percent and adjusted admissions increased 1.3 percent for the six months ended June 30, 2022,
compared with the same period in 2021. On a same-store basis, net operating revenues increased 0.6 percent for the six months ended June 30, 2022, compared with the same period in 2021.
The Company received pandemic relief fund payments through various federal, state and local programs of approximately $10 million and
$4 million during the three months ended June 30, 2022 and 2021, respectively, and approximately $52 million and $7 million for the six months ended June 30, 2022 and 2021, respectively. The Company recognized pandemic
relief funds eligible to be claimed as a reduction in operating costs and expenses of approximately $8 million and $1 million during the three months ended June 30, 2022 and 2021, respectively, and approximately $55 million and
$83 million for the six months ended June 30, 2022 and 2021, respectively. Amounts recognized are denoted by the caption pandemic relief funds in the condensed consolidated statements of loss. Pandemic relief funds that have
not yet been recognized as a reduction in operating costs and expenses or otherwise refunded to the U.S. Department of Health and Human Services or the various state and local agencies as of June 30, 2022, totaled approximately $11 million
and are reflected within accrued liabilities-other in the condensed consolidated balance sheet.
Commenting on the results, Tim L.
Hingtgen, chief executive officer of Community Health Systems, Inc., said, Our results in the second quarter were affected by challenging operating dynamics that included lower than anticipated volume, lower net revenue per adjusted admission,
and significant contract labor costs driven by labor market and inflationary pressures. We have initiatives underway intended to actively address these pressures by accelerating strategic growth opportunities in key markets, aggressively working to
recruit and retain permanent staff to replace contract labor, achieving incremental expense reductions, and leveraging our centralized resources to achieve improved results. Over the past several quarters, we have made strategic investments in our
markets, and we continue to believe we are well-positioned to meet healthcare demand and take market share as patient volumes return. We are committed to intense operational execution, and we remain confident that our strategies will deliver
long-term growth and value.
The Company completed the divestiture of one hospital on July 1, 2022 (in respect of which the
Company received proceeds at a preliminary closing on June 30, 2022). Financial and statistical data for 2022 and 2021 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 closing. Same-store operating results exclude businesses divested or closed in 2021 and one hospital opened in 2022.
CYH Announces Second Quarter 2022 Results
Information 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 incurred
in the fourth quarter of 2020 related to the settlement of certain professional liability claims for which the third-party insurers obligation to insure the Company against the underlying loss was being litigated along with income during the
fourth quarter of 2021 associated with the settlement of such litigation for the recovery of amounts covered by such third-party insurance policies, expense related to employee termination benefits and other restructuring charges, and expense from
settlement and fair value adjustments on the contingent value right agreement liability related to the Health Management Associates, Inc. ( HMA ) legal proceedings and related legal expenses. For information regarding why the Company
believes Adjusted EBITDA provides useful information to investors, and for a reconciliation of Adjusted EBITDA to net (loss) income attributable to Community Health Systems, Inc. stockholders, see footnote (c) to the Financial Highlights,
Financial Statements and Selected Operating Data below. Additionally, this press release presents adjusted net (loss) income attributable to Community Health Systems, Inc. stockholders per share (diluted), a
non-GAAP financial measure, to reflect the impact on net (loss) income 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) income attributable to Community Health Systems, Inc. stockholders per share (diluted), see footnote (e) to the Financial Highlights, Financial Statements and
Selected Operating Data below.
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.
Included on pages 15, 16, 17, 18 and 19 of this press release are tables setting forth the Company s 2022 updated annual earnings
guidance. The 2022 guidance is based on the Company s historical operating performance, current trends and other assumptions that the Company believes are reasonable at this time as more specifically discussed below.
Community Health 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 47 distinct markets across 16 states. As of July 27, 2022, the Company s subsidiaries own or lease 83 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 www.chs.net.
Community Health Systems, Inc. will hold a conference call on Thursday, July 28, 2022, at 10:00 a.m. Central, 11:00 a.m. Eastern, to
review financial and operating results for the second quarter ended June 30, 2022. 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 Second Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Financial Highlights (a)(b)
(In millions, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net operating revenues | $ | 2,934 | $ | 3,007 | $ | 6,044 | $ | 6,020 | ||||||||
| Net (loss) income (f) | (298 | ) | 37 | (268 | ) | 2 | ||||||||||
| Net (loss) income attributable to Community Health Systems, Inc. stockholders | (326 | ) | 6 | (327 | ) | (58 | ) | |||||||||
| Adjusted EBITDA (c) | 253 | 453 | 662 | 948 | ||||||||||||
| Net cash provided by operating activities | 53 | 179 | 154 | 280 | ||||||||||||
| (Loss) earnings per share attributable to Community Health Systems, Inc. stockholders: | ||||||||||||||||
| Basic (f) | $ | (2.52 | ) | $ | 0.04 | $ | (2.54 | ) | $ | (0.46 | ) | |||||
| Diluted (e), (f) | (2.52 | ) | 0.04 | (2.54 | ) | (0.46 | ) | |||||||||
| Weighted-average number of shares outstanding (d): | ||||||||||||||||
| Basic | 129 | 127 | 128 | 126 | ||||||||||||
| Diluted | 129 | 131 | 128 | 126 |
footnotes, see pages 12, 13 and 14.
CYH Announces Second Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of (Loss) Income (a)(b)
(In millions, except per share amounts)
| Three Months Ended June 30, | ||||||||||||||||
| 2022 | 2021 | |||||||||||||||
| % of Net | % of Net | |||||||||||||||
| Operating | Operating | |||||||||||||||
| Amount | Revenues | Amount | Revenues | |||||||||||||
| Net operating revenues | $ | 2,934 | 100.0 | % | $ | 3,007 | 100.0 | % | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Salaries and benefits | 1,295 | 44.1 | % | 1,266 | 42.1 | % | ||||||||||
| Supplies | 487 | 16.6 | % | 500 | 16.6 | % | ||||||||||
| Other operating expenses | 830 | 28.3 | % | 715 | 23.8 | % | ||||||||||
| Lease cost and rent | 78 | 2.7 | % | 78 | 2.6 | % | ||||||||||
| Pandemic relief funds | (8 | ) | (0.3 | )% | (1 | ) | (0.0 | )% | ||||||||
| Depreciation and amortization | 133 | 4.5 | % | 133 | 4.4 | % | ||||||||||
| Impairment and (gain) loss on sale of businesses, net (f) | % | 2 | 0.1 | % | ||||||||||||
| Total operating costs and expenses | 2,815 | 95.9 | % | 2,693 | 89.6 | % | ||||||||||
| Income from operations (f) | 119 | 4.1 | % | 314 | 10.4 | % | ||||||||||
| Interest expense, net | 218 | 7.4 | % | 219 | 7.2 | % | ||||||||||
| Loss from early extinguishment of debt | % | 8 | 0.3 | % | ||||||||||||
| Equity in earnings of unconsolidated affiliates | (1 | ) | (0.0 | )% | (4 | ) | (0.1 | )% | ||||||||
| (Loss) income before income taxes | (98 | ) | (3.3 | )% | 91 | 3.0 | % | |||||||||
| Provision for income taxes | 200 | 6.8 | % | 54 | 1.8 | % | ||||||||||
| Net (loss) income (f) | (298 | ) | (10.1 | )% | 37 | 1.2 | % | |||||||||
| Less: Net income attributable to noncontrolling interests | 28 | 1.0 | % | 31 | 1.0 | % | ||||||||||
| Net (loss) income attributable to Community Health Systems, Inc. stockholders | $ | (326 | ) | (11.1 | )% | $ | 6 | 0.2 | % | |||||||
| (Loss) earnings per share attributable to Community Health Systems, Inc. stockholders: | ||||||||||||||||
| Basic (f) | $ | (2.52 | ) | $ | 0.04 | |||||||||||
| Diluted (e), (f) | $ | (2.52 | ) | $ | 0.04 | |||||||||||
| Weighted-average number of shares outstanding (d): | ||||||||||||||||
| Basic | 129 | 127 | ||||||||||||||
| Diluted | 129 | 131 |
footnotes, see pages 12, 13 and 14.
CYH Announces Second Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Loss (a)(b)
(In millions, except per share amounts)
| Six Months Ended June 30, | ||||||||||||||||
| 2022 | 2021 | |||||||||||||||
| % of Net | % of Net | |||||||||||||||
| Operating | Operating | |||||||||||||||
| Amount | Revenues | Amount | Revenues | |||||||||||||
| Net operating revenues | $ | 6,044 | 100.0 | % | $ | 6,020 | 100.0 | % | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Salaries and benefits | 2,620 | 43.4 | % | 2,569 | 42.7 | % | ||||||||||
| Supplies | 985 | 16.3 | % | 992 | 16.5 | % | ||||||||||
| Other operating expenses | 1,683 | 27.8 | % | 1,453 | 24.1 | % | ||||||||||
| Lease cost and rent | 155 | 2.6 | % | 156 | 2.6 | % | ||||||||||
| Pandemic relief funds | (55 | ) | (0.9 | )% | (83 | ) | (1.4 | )% | ||||||||
| Depreciation and amortization | 261 | 4.3 | % | 272 | 4.5 | % | ||||||||||
| Impairment and (gain) loss on sale of businesses, net (f) | 6 | 0.1 | % | 23 | 0.4 | % | ||||||||||
| Total operating costs and expenses | 5,655 | 93.6 | % | 5,382 | 89.4 | % | ||||||||||
| Income from operations (f) | 389 | 6.4 | % | 638 | 10.6 | % | ||||||||||
| Interest expense, net | 435 | 7.2 | % | 449 | 7.5 | % | ||||||||||
| Loss from early extinguishment of debt | 5 | % | 79 | 1.3 | % | |||||||||||
| Equity in earnings of unconsolidated affiliates | (6 | ) | (0.1 | )% | (15 | ) | (0.2 | )% | ||||||||
| (Loss) income before income taxes | (45 | ) | (0.7 | )% | 125 | 2.0 | % | |||||||||
| Provision for income taxes | 223 | 3.7 | % | 123 | 2.0 | % | ||||||||||
| Net (loss) income (f) | (268 | ) | (4.4 | )% | 2 | 0.0 | % | |||||||||
| Less: Net income attributable to noncontrolling interests | 59 | 1.0 | % | 60 | 1.0 | % | ||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders | $ | (327 | ) | (5.4 | )% | $ | (58 | ) | (1.0 | )% | ||||||
| Loss per share attributable to Community Health Systems, Inc. stockholders: | ||||||||||||||||
| Basic (f) | $ | (2.54 | ) | $ | (0.46 | ) | ||||||||||
| Diluted (e), (f) | $ | (2.54 | ) | $ | (0.46 | ) | ||||||||||
| Weighted-average number of shares outstanding (d): | ||||||||||||||||
| Basic | 128 | 126 | ||||||||||||||
| Diluted | 128 | 126 |
footnotes, see pages 12, 13 and 14.
CYH Announces Second Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive (Loss) Income
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net (loss) income | $ | (298 | ) | $ | 37 | $ | (268 | ) | $ | 2 | ||||||
| Other comprehensive (loss) income, net of income taxes: | ||||||||||||||||
| Net change in fair value of available-for-sale debt securities, net of tax | (6 | ) | 1 | (14 | ) | (3 | ) | |||||||||
| Amortization and recognition of unrecognized pension cost components, net of tax | 1 | |||||||||||||||
| Other comprehensive (loss) income | (6 | ) | 1 | (14 | ) | (2 | ) | |||||||||
| Comprehensive (loss) income | (304 | ) | 38 | (282 | ) | |||||||||||
| Less: Comprehensive income attributable to noncontrolling interests | 28 | 31 | 59 | 60 | ||||||||||||
| Comprehensive (loss) income attributable to Community Health Systems, Inc. stockholders | $ | (332 | ) | $ | 7 | $ | (341 | ) | $ | (60 | ) |
footnotes, see pages 12, 13 and 14.
CYH Announces Second Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (a)
(Dollars in millions)
| Three Months Ended June 30, | ||||||||||||||||||||||||
| Consolidated | Same-Store | |||||||||||||||||||||||
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||
| Number of hospitals (at end of period) | 84 | 84 | 83 | 83 | ||||||||||||||||||||
| Licensed beds (at end of period) | 13,341 | 13,320 | 13,289 | 13,320 | ||||||||||||||||||||
| Beds in service (at end of period) | 11,608 | 11,748 | 11,556 | 11,748 | ||||||||||||||||||||
| Admissions | 107,805 | 111,543 | -3.4 | % | 107,682 | 111,543 | -3.5 | % | ||||||||||||||||
| Adjusted admissions | 247,119 | 248,013 | -0.4 | % | 246,771 | 248,004 | -0.5 | % | ||||||||||||||||
| Patient days | 498,198 | 517,289 | 497,858 | 517,289 | ||||||||||||||||||||
| Average length of stay (days) | 4.6 | 4.6 | 4.6 | 4.6 | ||||||||||||||||||||
| Occupancy rate (average beds in service) | 47.3 | % | 48.4 | % | 47.3 | % | 48.4 | % | ||||||||||||||||
| Net operating revenues | $ | 2,934 | $ | 3,007 | -2.4 | % | $ | 2,928 | $ | 3,007 | -2.6 | % | ||||||||||||
| Net inpatient revenues as a % of net operating revenues | 44.9 | % | 46.1 | % | 44.9 | % | 46.0 | % | ||||||||||||||||
| Net outpatient revenues as a % of net operating revenues | 55.1 | % | 53.9 | % | 55.1 | % | 54.0 | % | ||||||||||||||||
| Income from operations (f) | $ | 119 | $ | 314 | -62.1 | % | ||||||||||||||||||
| Income from operations as a % of net operating revenues | 4.1 | % | 10.4 | % | ||||||||||||||||||||
| Depreciation and amortization | $ | 133 | $ | 133 | ||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | (1 | ) | $ | (4 | ) | ||||||||||||||||||
| Net (loss) income attributable to Community Health Systems, Inc. stockholders | $ | (326 | ) | $ | 6 | -5533.3 | % | |||||||||||||||||
| Net (loss) income attributable to Community Health Systems, Inc. stockholders as a % of net operating revenues | -11.1 | % | 0.2 | % | ||||||||||||||||||||
| Adjusted EBITDA (c) | $ | 253 | $ | 453 | -44.2 | % | ||||||||||||||||||
| Adjusted EBITDA as a % of net operating revenues | 8.6 | % | 15.1 | % | ||||||||||||||||||||
| Net cash provided by operating activities | $ | 53 | $ | 179 | -70.4 | % |