Full Press Release Details
| Investor Contact: | W. Larry Cash | |||
| President of Financial Services | ||||
| and Chief Financial Officer | ||||
| (615) 465-7000 |
COMMUNITY HEALTH SYSTEMS, INC. PREVIEWS
THIRD QUARTER 2015 OPERATING RESULTS
(October 21, 2015) - Community Health Systems, Inc. (NYSE: CYH) (the Company ) today announced preliminary financial and operating results for the three months ended September 30, 2015. These results are based on information
available to management as of the date of this press release and are subject to revision upon finalization of the Company s quarterly accounting and financial reporting procedures.
The Company anticipates net operating revenues for the three months ended September 30, 2015, will be approximately $4.846 billion,
compared with $4.780 billion for the same period in 2014. Income from continuing operations before taxes as reported for the three months ended September 30, 2015, is expected to be approximately $121 million, compared with $133 million for the
three months ended September 30, 2014. Adjusted EBITDA for the three months ended September 30, 2015, is expected to be approximately $661 million, compared with $750 million for the same period in 2014. Income from continuing operations
for the three months ended September 30, 2015, excluding expenses from the planned spin-off of Quorum Health Corporation, is expected to be $0.56 per share (diluted), compared with $1.01 per share (diluted) for the three months ended
The consolidated operating results for the three months ended September 30, 2015, reflect a 1.9 percent
decrease in total admissions and a 0.2 percent increase in adjusted admissions, compared with the same period in 2014. On a same-store basis, admissions decreased 2.1 percent while adjusted admissions increased 0.1 percent, compared with the same
period in 2014. Same-store net revenue per adjusted admission increased 1.0 percent for the three months ended September 30, 2015, compared to the same period in 2014.
Consolidated net operating revenues increased over the prior year by 1.4 percent as a weakness in volume and deterioration in revenue payor
mix compared with the first six months of 2015 resulted in lower than anticipated net operating revenues during the period. Accordingly, consolidated salaries and benefits, which included higher costs related to an increase in the number of employed
physicians, increased as a percentage of consolidated net revenue from 45.7 percent for the three months ended September 30, 2014, to 46.2 percent for the three months ended September 30, 2015. Consolidated supplies expense, which
increased primarily from higher drug costs, also increased as a percentage of consolidated net revenue from 15.3 percent for the three months ended September 30, 2014, to 15.7 percent for the three months ended September 30, 2015.
Consolidated other operating expenses, which included higher costs incurred related to the Company s implementation of ICD-10, increased as a percentage of consolidated net revenue from 23.4 percent for the three months ended September 30,
2014, to 23.7 percent for the three months ended September 30, 2015. Electronic health records incentives were also lower than the same period in the prior year by $34 million.
CYH Previews Third Quarter 2015 Results
The Company has posted on the Investor Relations section of its website a slide presentation regarding the preliminary results of
operations for the third quarter ended September 30, 2015. The Company anticipates reporting its complete financial results for the three and nine months ended September 30, 2015, on November 2, 2015, followed by a live earnings call
on November 3, 2015.
EBITDA is a non-GAAP financial measure which consists of net income attributable to Community Health Systems,
Inc. before interest, income taxes, and depreciation and amortization. Adjusted EBITDA is EBITDA adjusted to exclude discontinued operations, loss from early extinguishment of debt, impairment of long-lived assets, net income attributable to
noncontrolling interests, acquisition and integration expenses from the acquisition of Health Management Associates, Inc. ( HMA ), expenses incurred related to the Company s planned spin-off of Quorum Health Corporation, expense
related to government legal settlements and related costs, and expense from fair value adjustments related to the HMA legal proceedings, accounted for at fair value, underlying the CVR agreement, and related legal expenses. The Company believes that
it is useful to present Adjusted EBITDA because it excludes the portion of EBITDA attributable to noncontrolling interests and clarifies for investors the Company s portion of EBITDA generated by continuing operations. The Company uses Adjusted
EBITDA as a measure of liquidity. The Company has also presented Adjusted EBITDA in this release because it believes it provides investors with additional information about the Company s ability to incur and service debt and make capital
expenditures. Adjusted EBITDA is not a measurement of financial performance or liquidity under U.S. GAAP. It should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing
activities or any other measure calculated in accordance with U.S. GAAP. The items excluded from Adjusted EBITDA are significant components in understanding and evaluating financial performance and liquidity. This calculation of Adjusted EBITDA may
not be comparable to similarly titled measures reported by other companies. A reconciliation of Adjusted EBITDA to net cash provided by operating activities will be provided as part of the Company s reporting of completed financial results.
About Community Health Systems, Inc.
Community Health Systems, Inc. is one of the largest publicly-traded hospital companies in the United States and a leading operator of general
acute care hospitals in communities across the country. Through its subsidiaries, the Company currently owns, leases or operates 198 affiliated hospitals in 29 states with an aggregate of approximately 30,000 licensed beds.
The Company has announced plans for a spin-off transaction to create a new, publicly-traded company, Quorum Health Corporation, with 38
affiliated hospitals and related outpatient services in 16 states, together with Quorum Health Resources, LLC, a subsidiary providing management and consulting services to non-affiliated hospitals. The transaction is expected to close during the
first quarter of 2016.
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.
CYH Previews Third Quarter 2015 Results
Regulation FD Disclosure
The Company is also providing a preliminary update to its 2015 annual guidance to reflect selected changes to projected consolidated operating
results for the year ending December 31, 2015, as reflected in the Company s earnings release issued on August 3, 2015. These projections reflect expected year-to-date operating results and expected operating results for the remainder
of 2015. The 2015 annual guidance is based on the Company s historical and expected operating performance, current trends and other assumptions that the Company believes are reasonable at this time.
CYH Previews Third Quarter 2015 Results
Forward-Looking Statements
release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of
1995 that involve risk and uncertainties. All statements in this press release other than statements of historical fact, including statements regarding projections, expected operating results, and other events that depend upon or refer to future
events or conditions or that include words such as expects, anticipates, intends, plans, believes, estimates, thinks, and similar expressions, are forward-looking
statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, these assumptions are inherently subject to significant economic and competitive uncertainties and contingencies, which are
difficult or impossible to predict accurately and may be beyond the control of the Company. Accordingly, the Company cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those
in the forward-looking statements. A number of factors could affect the future results of the Company or the healthcare industry generally and could cause the Company s expected results to differ materially from those expressed in this press
These factors include, among other things:
CYH Previews Third Quarter 2015 Results
The Company cautions that the preliminary results for the three months ended September 30, 2015, set forth in this press release are given as of the date
hereof based on information currently available to management and are subject to revision upon finalization of the Company s quarterly accounting and financial reporting procedures. The expected consolidated operating results for the three
months ended September 30, 2015, are not necessarily indicative of the results that may be experienced for any future periods. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other
forward-looking statements, whether as a result of new information, future events or otherwise.