Full Press Release Details
| Investor Contact: | Kevin Hammons | |
| President and | ||
| Chief Financial Officer | ||
| (615) 465-7000 |
COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES FIRST QUARTER
ENDED MARCH 31, 2022 RESULTS
FRANKLIN, Tenn. (April 27, 2022) Community
Health Systems, Inc. (NYSE: CYH) (the Company ) today announced financial and operating results for the three months ended March 31, 2022.
The following highlights the financial and operating results for the three months ended March 31, 2022.
Net operating revenues for the three months ended
March 31, 2022, totaled $3.111 billion, a 3.3 percent increase compared with $3.013 billion for the same period in 2021.
Net loss attributable to Community Health Systems, Inc. stockholders was $(1) million, or $(0.01) per share (diluted), for the three months
ended March 31, 2022, compared to $(64) million, or $(0.51) 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 income attributable to Community Health
Systems, Inc. stockholders was $0.14 per share (diluted) for the three months ended March 31, 2022, compared to $0.36 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 $35 million, or $0.27 on a per share (diluted) basis, and approximately $62 million, or $0.54 on a
per share (diluted) basis, for the three months ended March 31, 2022 and 2021, respectively. Weighted-average shares outstanding (diluted) were 128 million and 126 million for the three months ended March 31, 2022 and 2021,
Adjusted EBITDA for the three months ended March 31, 2022, was $409 million compared with $495 million for
the same period in 2021. Pandemic relief funds had a positive impact on Adjusted EBITDA of approximately $47 million and $82 million for the three months ended March 31, 2022 and 2021, respectively.
CYH Announces First Quarter 2022 Results
The consolidated operating results for the three months ended March 31, 2022, reflect a
1.7 percent decrease in admissions and a 2.2 percent increase in adjusted admissions, compared with the same period in 2021. On a same-store basis, admissions decreased 0.3 percent and adjusted admissions increased 3.2 percent
for the three months ended March 31, 2022, compared with the same period in 2021. On a same-store basis, net operating revenues increased 3.8 percent for the three months ended March 31, 2022, compared with the same period in 2021.
As a provider of healthcare services, the Company continues to be affected by the public health and economic effects of the COVID-19 pandemic. During the three months ended March 31, 2022 and 2021, the Company received approximately $42 million and $3 million, respectively, in pandemic relief fund payments through various
federal, state and local programs. During the three months ended March 31, 2022 and 2021, the Company recognized approximately $47 million and $82 million, respectively, of the pandemic relief funds eligible to be claimed as a
reduction in operating costs and expenses. 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 March 31, 2022, totaled approximately $9 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, We experienced the largest COVID surge to date during the first quarter, which negatively impacted net operating revenues, labor expense, and length of stay during the quarter. The Company s
leadership teams and healthcare providers continued their remarkable efforts providing safe, quality care while at the same time managing through a challenging environment. As COVID case counts subsided, our operational and financial
performance significantly improved during the month of March, as patient volumes returned and COVID-related expenses moderated. Moving through the second quarter and the remainder of the year, we anticipate contract labor rates to remain elevated,
however, we expect our operational momentum to continue, as we anticipate capturing deferred healthcare demand, benefitting from recent strategic investments, and continuing the execution of the Company s margin improvement program.
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.
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 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 2022 Results
Additionally, this press release presents adjusted net income 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 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 13, 14, 15, 16 and 17 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 largest publicly traded providers of healthcare services in the United States and a leading
operator of general acute care hospitals and outpatient facilities in communities across the country. The Company, through its subsidiaries, owns or leases 83 affiliated hospitals in 16 states with an aggregate of approximately 13,000 licensed beds.
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, April 28, 2022, at 10:00 a.m. Central, 11:00 a.m. Eastern, to
review financial and operating results for the first quarter ended March 31, 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 First Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Financial Highlights (a)(b)
(In millions, except per share amounts)
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net operating revenues | $ | 3,111 | $ | 3,013 | ||||
| Net income (loss) (f) | 30 | (35 | ) | |||||
| Net loss attributable to Community Health Systems, Inc. stockholders | (1 | ) | (64 | ) | ||||
| Adjusted EBITDA (c) | 409 | 495 | ||||||
| Net cash provided by operating activities | 101 | 101 | ||||||
| Loss per share attributable to Community Health Systems, Inc. stockholders: | ||||||||
| Basic (f) | $ | (0.01 | ) | $ | (0.51 | ) | ||
| Diluted (e), (f) | (0.01 | ) | (0.51 | ) | ||||
| Weighted-average number of shares outstanding (d): | ||||||||
| Basic | 128 | 126 | ||||||
| Diluted | 128 | 126 |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2022 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, | ||||||||||||||||
| 2022 | 2021 | |||||||||||||||
| % of Net | % of Net | |||||||||||||||
| Operating | Operating | |||||||||||||||
| Amount | Revenues | Amount | Revenues | |||||||||||||
| Net operating revenues | $ | 3,111 | 100.0 | % | $ | 3,013 | 100.0 | % | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Salaries and benefits | 1,325 | 42.6 | % | 1,303 | 43.2 | % | ||||||||||
| Supplies | 499 | 16.0 | % | 491 | 16.3 | % | ||||||||||
| Other operating expenses | 853 | 27.4 | % | 738 | 24.5 | % | ||||||||||
| Lease cost and rent | 77 | 2.5 | % | 78 | 2.6 | % | ||||||||||
| Pandemic relief funds | (47 | ) | (1.5 | )% | (82 | ) | (2.7 | )% | ||||||||
| Depreciation and amortization | 128 | 4.1 | % | 138 | 4.6 | % | ||||||||||
| Impairment and (gain) loss on sale of businesses, net (f) | 6 | 0.2 | % | 21 | 0.7 | % | ||||||||||
| Total operating costs and expenses | 2,841 | 91.3 | % | 2,687 | 89.2 | % | ||||||||||
| Income from operations (f) | 270 | 8.7 | % | 326 | 10.8 | % | ||||||||||
| Interest expense, net | 217 | 7.0 | % | 231 | 7.7 | % | ||||||||||
| Loss from early extinguishment of debt | 5 | 0.2 | % | 71 | 2.3 | % | ||||||||||
| Equity in earnings of unconsolidated affiliates | (5 | ) | (0.2 | )% | (10 | ) | (0.3 | )% | ||||||||
| Income before income taxes | 53 | 1.7 | % | 34 | 1.1 | % | ||||||||||
| Provision for income taxes | 23 | 0.7 | % | 69 | 2.3 | % | ||||||||||
| Net income (loss) (f) | 30 | 1.0 | % | (35 | ) | (1.2 | )% | |||||||||
| Less: Net income attributable to noncontrolling interests | 31 | 1.0 | % | 29 | 0.9 | % | ||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders | $ | (1 | ) | 0.0 | % | $ | (64 | ) | (2.1 | )% | ||||||
| Loss per share attributable to Community Health Systems, Inc. stockholders: | ||||||||||||||||
| Basic (f) | $ | (0.01 | ) | $ | (0.51 | ) | ||||||||||
| Diluted (e), (f) | $ | (0.01 | ) | $ | (0.51 | ) | ||||||||||
| Weighted-average number of shares outstanding (d): | ||||||||||||||||
| Basic | 128 | 126 | ||||||||||||||
| Diluted | 128 | 126 |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net income (loss) | $ | 30 | $ | (35 | ) | |||
| Other comprehensive loss, net of income taxes: | ||||||||
| Net change in fair value of available-for-sale debt securities, net of tax | (8 | ) | (3 | ) | ||||
| Other comprehensive loss | (8 | ) | (3 | ) | ||||
| Comprehensive income (loss) | 22 | (38 | ) | |||||
| Less: Comprehensive income attributable to noncontrolling interests | 31 | 29 | ||||||
| Comprehensive loss attributable to Community Health Systems, Inc. stockholders | $ | (9 | ) | $ | (67 | ) |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (a)
(Dollars in millions)
| Three Months Ended March 31, | ||||||||||||||||||||||||
| Consolidated | Same-Store | |||||||||||||||||||||||
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||
| Number of hospitals (at end of period) | 83 | 85 | 83 | 83 | ||||||||||||||||||||
| Licensed beds (at end of period) | 13,289 | 13,563 | 13,289 | 13,308 | ||||||||||||||||||||
| Beds in service (at end of period) | 11,557 | 11,991 | 11,557 | 11,736 | ||||||||||||||||||||
| Admissions | 108,367 | 110,268 | -1.7 | % | 108,367 | 108,689 | -0.3 | % | ||||||||||||||||
| Adjusted admissions | 232,315 | 227,366 | 2.2 | % | 232,290 | 224,983 | 3.2 | % | ||||||||||||||||
| Patient days | 551,245 | 549,991 | 551,245 | 541,541 | ||||||||||||||||||||
| Average length of stay (days) | 5.1 | 5.0 | 5.1 | 5.0 | ||||||||||||||||||||
| Occupancy rate (average beds in service) | 53.0 | % | 50.8 | % | 53.0 | % | 51.2 | % | ||||||||||||||||
| Net operating revenues | $ | 3,111 | $ | 3,013 | 3.3 | % | $ | 3,108 | $ | 2,995 | 3.8 | % | ||||||||||||
| Net inpatient revenues as a % of net operating revenues | 49.4 | % | 49.8 | % | 49.4 | % | 49.6 | % | ||||||||||||||||
| Net outpatient revenues as a % of net operating revenues | 50.6 | % | 50.2 | % | 50.6 | % | 50.4 | % | ||||||||||||||||
| Income from operations (f) | $ | 270 | $ | 326 | -17.2 | % | ||||||||||||||||||
| Income from operations as a % of net operating revenues | 8.7 | % | 10.8 | % | ||||||||||||||||||||
| Depreciation and amortization | $ | 128 | $ | 138 | ||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | (5 | ) | $ | (10 | ) | ||||||||||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders | $ | (1 | ) | $ | (64 | ) | 98.4 | % | ||||||||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders as a % of net operating revenues | 0.0 | % | -2.1 | % | ||||||||||||||||||||
| Adjusted EBITDA (c) | $ | 409 | $ | 495 | -17.4 | % | ||||||||||||||||||
| Adjusted EBITDA as a % of net operating revenues | 13.1 | % | 16.4 | % | ||||||||||||||||||||
| Net cash provided by operating activities | $ | 101 | $ | 101 | 0.0 | % |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions, except share data)
| March 31, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 460 | $ | 507 | ||||
| Patient accounts receivable | 2,079 | 2,062 | ||||||
| Supplies | 353 | 355 | ||||||
| Prepaid income taxes | 95 | 94 | ||||||
| Prepaid expenses and taxes | 229 | 192 | ||||||
| Other current assets | 272 | 269 | ||||||
| Total current assets | 3,488 | 3,479 | ||||||
| Property and equipment | 9,779 | 9,757 | ||||||
| Less accumulated depreciation and amortization | (4,223 | ) | (4,204 | ) | ||||
| Property and equipment, net | 5,556 | 5,553 | ||||||
| Goodwill | 4,219 | 4,219 | ||||||
| Deferred income taxes | 53 | 53 | ||||||
| Other assets, net | 1,947 | 1,913 | ||||||
| Total assets | $ | 15,263 | $ | 15,217 | ||||
| LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||||
| Current liabilities | ||||||||
| Current maturities of long-term debt | $ | 43 | $ | 31 | ||||
| Current operating lease liabilities | 149 | 147 | ||||||
| Accounts payable | 825 | 830 | ||||||
| Accrued liabilities: | ||||||||
| Employee compensation | 697 | 655 | ||||||
| Accrued interest | 186 | 225 | ||||||
| Other | 447 | 476 | ||||||
| Total current liabilities | 2,347 | 2,364 | ||||||
| Long-term debt (g) | 12,154 | 12,109 | ||||||
| Deferred income taxes | 213 | 192 | ||||||
| Long-term operating lease liabilities | 578 | 535 | ||||||
| Other long-term liabilities | 790 | 827 | ||||||
| Total liabilities | 16,082 | 16,027 | ||||||
| Redeemable noncontrolling interests in equity of consolidated subsidiaries | 493 | 480 | ||||||
| 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; 134,686,087 shares issued and outstanding at March 31, 2022, and 132,146,282 shares issued and outstanding at December 31, 2021 | 1 | 1 | ||||||
| Additional paid-in capital | 2,107 | 2,118 | ||||||
| Accumulated other comprehensive loss | (22 | ) | (14 | ) | ||||
| Accumulated deficit | (3,478 | ) | (3,477 | ) | ||||
| Total Community Health Systems, Inc. stockholders deficit | (1,392 | ) | (1,372 | ) | ||||
| Noncontrolling interests in equity of consolidated subsidiaries | 80 | 82 | ||||||
| Total stockholders deficit | (1,312 | ) | (1,290 | ) | ||||
| Total liabilities and stockholders deficit | $ | 15,263 | $ | 15,217 |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2022 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | 30 | $ | (35 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 128 | 138 | ||||||
| Deferred income taxes | 22 | 68 | ||||||
| Stock-based compensation expense | 5 | 8 | ||||||
| Impairment and (gain) loss on sale of businesses, net (f) | 6 | 21 | ||||||
| Loss from early extinguishment of debt | 5 | 71 | ||||||
| Other non-cash expenses, net | 45 | (40 | ) | |||||
| Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||||||||
| Patient accounts receivable | (17 | ) | (34 | ) | ||||
| Supplies, prepaid expenses and other current assets | (40 | ) | (2 | ) | ||||
| Repayment/derecognition of Medicare accelerated payments | (18 | ) | ||||||
| Accounts payable, accrued liabilities and income taxes | (23 | ) | (23 | ) | ||||
| Other | (60 | ) | (53 | ) | ||||
| Net cash provided by operating activities | 101 | 101 | ||||||
| Cash flows from investing activities | ||||||||
| Acquisitions of facilities and other related businesses | (1 | ) | (4 | ) | ||||
| Purchases of property and equipment | (97 | ) | (105 | ) | ||||
| Proceeds from disposition of hospitals and other ancillary operations | 2 | 6 | ||||||
| Proceeds from sale of property and equipment | 2 | |||||||
| Purchases of available-for-sale debt securities and equity securities | (31 | ) | (22 | ) | ||||
| Proceeds from sales of available-for-sale debt securities and equity securities | 24 | 26 | ||||||
| Purchases of investments in unconsolidated affiliates | (4 | ) | ||||||
| Increase in other investments | (14 | ) | (23 | ) | ||||
| Net cash used in investing activities | (121 | ) | (120 | ) | ||||
| Cash flows from financing activities | ||||||||
| Repurchase of restricted stock shares for payroll tax withholding requirements | (8 | ) | (5 | ) | ||||
| Deferred financing costs and other debt-related costs | (73 | ) | (220 | ) | ||||
| Proceeds from noncontrolling investors in joint ventures | 1 | |||||||
| Distributions to noncontrolling investors in joint ventures | (29 | ) | (21 | ) | ||||
| Other borrowings | 27 | 3 | ||||||
| Issuance of long-term debt | 1,535 | 2,870 | ||||||
| Repayments of long-term indebtedness | (1,480 | ) | (3,033 | ) | ||||
| Net cash used in financing activities | (27 | ) | (406 | ) | ||||
| Net change in cash and cash equivalents | (47 | ) | (425 | ) | ||||
| Cash and cash equivalents at beginning of period | 507 | 1,676 | ||||||
| Cash and cash equivalents at end of period | $ | 460 | $ | 1,251 |
footnotes, see pages 10, 11 and 12.
CYH Announces First Quarter 2022 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 income (loss) | $ | 30 | $ | (35 | ) | |||
| Less: Income attributable to noncontrolling interests, net of taxes | 31 | 29 | ||||||
| Net loss attributable to Community Health Systems, Inc. stockholders basic and diluted | $ | (1 | ) | $ | (64 | ) |
CYH Announces First Quarter 2022 Results
Footnotes to Financial Highlights, Financial Statements and Selected Operating Data (Continued)
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.