Community Health Systems, Inc. (NYSE: CYH) (the “Company”) today
announced financial and operating results for the three months
ended March 31, 2024.
Commenting on the results, Tim L. Hingtgen, chief executive
officer of Community Health Systems, Inc., said, “We were pleased
with our first quarter performance compared to both prior year and
prior quarter. Progress was demonstrated on key operational and
strategic priorities, and we remain focused on building further
momentum as we pursue the opportunities available to us this
year.”
The following highlights the financial and operating results for
the three months ended March 31, 2024.
- Net operating revenues totaled $3.140 billion.
- Net loss attributable to Community Health Systems, Inc.
stockholders was $(41) million, or $(0.32) per share (diluted),
compared to $(51) million, or $(0.40) per share (diluted), for the
same period in 2023. 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 $(0.14) per share
(diluted), compared to $(0.43) per share (diluted) for the same
period in 2023.
- Adjusted EBITDA was $378 million.
- Net cash provided by operating activities was $96 million
for the three months ended March 31, 2024, compared to $5 million
for the same period in 2023.
- On a same-store basis, admissions increased 3.8 percent and
adjusted admissions increased 1.9 percent, compared to the same
period in 2023.
Three Months Ended March 31, 2024
Net operating revenues for the three months ended March 31,
2024, totaled $3.140 billion, a 1.0 percent increase compared to
$3.108 billion for the same period in 2023. On a same-store basis,
net operating revenues increased 5.7 percent for the three months
ended March 31, 2024, compared to the same period in 2023. Net
operating revenues for the three months ended March 31, 2024,
reflect a 2.3 percent decrease in admissions and a 4.0 percent
decrease in adjusted admissions, compared to the same period in
2023. On a same-store basis, admissions increased 3.8 percent and
adjusted admissions increased 1.9 percent for the three months
ended March 31, 2024, compared to the same period in 2023.
Net loss attributable to Community Health Systems, Inc.
stockholders was $(41) million, or $(0.32) per share (diluted), for
the three months ended March 31, 2024, compared to $(51) million,
or $(0.40) per share (diluted), for the same period in 2023.
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 $(0.14) per share (diluted) for the three
months ended March 31, 2024, compared to $(0.43) per share
(diluted) for the same period in 2023.
Adjusted EBITDA for the three months ended March 31, 2024, was
$378 million compared to $335 million for the same period in
2023.
The decrease in net loss attributable to Community Health
Systems, Inc. stockholders and the increase in Adjusted EBITDA for
the three months ended March 31, 2024, compared to the same period
in 2023, are primarily due to increased reimbursement rates, a
higher net benefit from supplemental reimbursement programs,
reduced expense for contract labor and reductions in supplies
expense.
Other
During 2024, through the date of this press release, the Company
has not completed any hospital divestitures.
Financial and statistical data 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 and statistical
information include operating results of businesses operated in the
comparable current year and prior year periods and exclude
businesses divested or closed in 2023.
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, expense related to the Business Transformation
Costs (as defined in footnote (c) to the Financial Highlights,
Financial Statements and Selected Operating Data below), expense
related to government and other legal matters and related costs,
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.
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 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.
The Company’s annual earnings guidance for 2024, as provided in
our press release issued on February 20, 2024, is reaffirmed. The
2024 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 as provided in our press release issued on February 20,
2024 are unchanged.
About Community Health Systems, Inc.
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 40 distinct markets across 15
states. As of April 24, 2024, the Company’s subsidiaries own or
lease 71 affiliated hospitals with approximately 12,000 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, April 25, 2024 at 10:00 a.m. Central, 11:00 a.m. Eastern,
to review financial and operating results for the first quarter
ended March 31, 2024. 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.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Financial Highlights
(a)(b)
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Net operating revenues
$
3,140
$
3,108
Net loss (f)
(6
)
(20
)
Net loss attributable to Community Health
Systems, Inc. stockholders
(41
)
(51
)
Adjusted EBITDA (c)
378
335
Net cash provided by operating
activities
96
5
Loss per share attributable to Community
Health Systems, Inc. stockholders:
Basic (f)
$
(0.32
)
$
(0.40
)
Diluted (e), (f)
(0.32
)
(0.40
)
Weighted-average number of shares
outstanding (d):
Basic
131
130
Diluted
131
130
_____________
For footnotes, see pages 10, 11 and
12.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Condensed Consolidated
Statements of Loss (a)(b)
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended March
31,
2024
2023
% of Net
% of Net
Operating
Operating
Amount
Revenues
Amount
Revenues
Net operating revenues
$
3,140
100.0
%
$
3,108
100.0
%
Operating costs and expenses:
Salaries and benefits
1,368
43.5
%
1,365
43.9
%
Supplies
487
15.5
%
507
16.3
%
Other operating expenses
845
26.9
%
835
26.9
%
Lease cost and rent
77
2.5
%
81
2.6
%
Depreciation and amortization
115
3.7
%
132
4.2
%
Impairment and (gain) loss on sale of
businesses, net (f)
17
0.5
%
(22
)
(0.7
)%
Total operating costs and expenses
2,909
92.6
%
2,898
93.2
%
Income from operations (f)
231
7.4
%
210
6.8
%
Interest expense, net
211
6.8
%
207
6.7
%
Equity in earnings of unconsolidated
affiliates
(2
)
(0.1
)%
(3
)
(0.1
)%
Income before income taxes
22
0.7
%
6
0.2
%
Provision for income taxes
28
0.9
%
26
0.8
%
Net loss (f)
(6
)
(0.2
)%
(20
)
(0.6
)%
Less: Net income attributable to
noncontrolling interests
35
1.1
%
31
1.0
%
Net loss attributable to Community Health
Systems, Inc. stockholders
$
(41
)
(1.3
)%
$
(51
)
(1.6
)%
Loss per share attributable to Community
Health Systems, Inc. stockholders:
Basic (f)
$
(0.32
)
$
(0.40
)
Diluted (e), (f)
$
(0.32
)
$
(0.40
)
Weighted-average number of shares
outstanding (d):
Basic
131
130
Diluted
131
130
___________
For footnotes, see pages 10, 11 and
12.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Condensed Consolidated
Statements of Comprehensive Loss
(In millions)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Net loss
$
(6
)
$
(20
)
Other comprehensive (loss) income, net of
income taxes:
Net change in fair value of
available-for-sale debt securities, net of tax
(2
)
3
Other comprehensive (loss) income
(2
)
3
Comprehensive loss
(8
)
(17
)
Less: Comprehensive income attributable to
noncontrolling interests
35
31
Comprehensive loss attributable to
Community Health Systems, Inc. stockholders
$
(43
)
$
(48
)
___________
For footnotes, see pages 10, 11 and
12.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Selected Operating Data
(a)
(Dollars in millions)
(Unaudited)
Three Months Ended March
31,
Consolidated
Same-Store
2024
2023
% Change
2024
2023
% Change
Number of hospitals (at end of period)
71
79
71
71
Licensed beds (at end of period)
11,866
12,750
11,866
11,924
Beds in service (at end of period)
10,066
10,858
10,066
10,125
Admissions
107,055
109,624
-2.3
%
107,055
103,172
3.8
%
Adjusted admissions
236,109
245,883
-4.0
%
236,113
231,625
1.9
%
Patient days
493,824
507,925
493,824
479,168
Average length of stay (days)
4.6
4.6
4.6
4.6
Occupancy rate (average beds in
service)
53.9
%
51.9
%
53.9
%
52.6
%
Net operating revenues
$
3,140
$
3,108
1.0
%
$
3,140
$
2,970
5.7
%
Net inpatient revenues as a % of net
operating revenues
48.4
%
47.1
%
48.4
%
47.0
%
Net outpatient revenues as a % of net
operating revenues
51.6
%
52.9
%
51.6
%
53.0
%
Income from operations (f)
$
231
$
210
10.0
%
Income from operations as a % of net
operating revenues
7.4
%
6.8
%
Depreciation and amortization
$
115
$
132
Equity in earnings of unconsolidated
affiliates
$
(2
)
$
(3
)
Net loss attributable to Community Health
Systems, Inc. stockholders
$
(41
)
$
(51
)
19.6
%
Net loss attributable to Community Health
Systems, Inc. stockholders as a % of net operating revenues
-1.3
%
-1.6
%
Adjusted EBITDA (c)
$
378
$
335
12.8
%
Adjusted EBITDA as a % of net operating
revenues
12.0
%
10.8
%
Net cash provided by operating
activities
$
96
$
5
1820.0
%
___________
For footnotes, see pages 10, 11 and
12.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(In millions, except share
data)
(Unaudited)
March 31, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
$
48
$
38
Patient accounts receivable
2,194
2,231
Supplies
329
328
Prepaid income taxes
34
76
Prepaid expenses and taxes
263
260
Other current assets
307
275
Total current assets
3,175
3,208
Property and equipment
9,607
9,511
Less accumulated depreciation and
amortization
(4,388
)
(4,304
)
Property and equipment, net
5,219
5,207
Goodwill
3,957
3,958
Deferred income taxes
29
29
Other assets, net
2,037
2,053
Total assets
$
14,417
$
14,455
LIABILITIES AND STOCKHOLDERS’
DEFICIT
Current liabilities
Current maturities of long-term debt
$
34
$
21
Current operating lease liabilities
115
124
Accounts payable
941
912
Accrued liabilities:
Employee compensation
504
571
Accrued interest
207
160
Other
335
354
Total current liabilities
2,136
2,142
Long-term debt (g)
11,533
11,466
Deferred income taxes
354
369
Long-term operating lease liabilities
546
563
Other long-term liabilities
726
739
Total liabilities
15,295
15,279
Redeemable noncontrolling interests in
equity of consolidated subsidiaries
329
323
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; 138,966,388 shares issued and
outstanding at March 31, 2024, and 136,774,911 shares issued and
outstanding at December 31, 2023
1
1
Additional paid-in capital
2,192
2,185
Accumulated other comprehensive loss
(16
)
(14
)
Accumulated deficit
(3,605
)
(3,564
)
Total Community Health Systems, Inc.
stockholders’ deficit
(1,428
)
(1,392
)
Noncontrolling interests in equity of
consolidated subsidiaries
221
245
Total stockholders’ deficit
(1,207
)
(1,147
)
Total liabilities and stockholders’
deficit
$
14,417
$
14,455
___________
For footnotes, see pages 10, 11 and
12.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Condensed Consolidated
Statements of Cash Flows
(In millions)
(Unaudited)
Three Months Ended March
31,
2024
2023
Cash flows from operating activities
Net loss
$
(6
)
$
(20
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
115
132
Deferred income taxes
(14
)
7
Stock-based compensation expense
6
6
Impairment and (gain) loss on sale of
businesses, net (f)
17
(22
)
Other non-cash expenses, net
33
42
Changes in operating assets and
liabilities, net of effects of acquisitions and divestitures:
Patient accounts receivable
39
(2
)
Supplies, prepaid expenses and other
current assets
(40
)
(50
)
Accounts payable, accrued liabilities and
income taxes
(13
)
(32
)
Other
(41
)
(56
)
Net cash provided by operating
activities
96
5
Cash flows from investing activities
Acquisitions of facilities and other
related businesses
(1
)
(8
)
Purchases of property and equipment
(93
)
(122
)
Proceeds from disposition of hospitals and
other ancillary operations
-
92
Proceeds from sale of property and
equipment
1
5
Purchases of available-for-sale debt
securities and equity securities
(4
)
(26
)
Proceeds from sales of available-for-sale
debt securities and equity securities
12
61
Purchases of investments in unconsolidated
affiliates
(4
)
(5
)
Increase in other investments
(10
)
(16
)
Net cash used in investing activities
(99
)
(19
)
Cash flows from financing activities
Repurchase of restricted stock shares for
payroll tax withholding requirements
(2
)
(4
)
Proceeds from noncontrolling investors in
joint ventures
-
2
Redemption of noncontrolling investments
in joint ventures
-
(1
)
Distributions to noncontrolling investors
in joint ventures
(50
)
(44
)
Other borrowings
17
29
Proceeds from ABL Facility
933
815
Repayments of long-term indebtedness
(885
)
(757
)
Net cash provided by financing
activities
13
40
Net change in cash and cash
equivalents
10
26
Cash and cash equivalents at beginning of
period
38
118
Cash and cash equivalents at end of
period
$
48
$
144
___________
For footnotes, see pages 10, 11 and
12.
Footnotes to Financial Highlights, Financial
Statements and Selected Operating Data
(a)
Both financial and statistical results include 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 and statistical information include
operating results of businesses operated in the comparable current
year and prior year periods and exclude businesses divested or
closed in 2023. There were no discontinued operations reported for
the periods presented.
(b)
The following table provides information needed to calculate
loss per share, which is adjusted for income attributable to
noncontrolling interests (in millions):
Three Months Ended
March 31,
2024
2023
Net loss attributable to Community Health
Systems, Inc. stockholders:
Net loss
$
(6
)
$
(20
)
Less: Income attributable to
noncontrolling interests, net of taxes
35
31
Net loss attributable to Community Health
Systems, Inc. stockholders — basic and diluted
$
(41
)
$
(51
)
(c)
EBITDA is a non-GAAP financial measure which consists of net
loss attributable to Community Health Systems, Inc. before
interest, income taxes, and depreciation and amortization. Adjusted
EBITDA, also a non-GAAP financial measure, 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, expense from third-party
consulting costs associated with significant process and systems
redesign across multiple functions (the “Business Transformation
Costs”) as part of the Company’s previously disclosed multi-year
initiative to modernize and consolidate technology platforms and
associated processes, expense related to government and other legal
matters and related costs, 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 of a majority interest in CoreTrust
completed during the fourth quarter of 2022. The Company has from
time to time sold noncontrolling interests in certain of its
subsidiaries or acquired subsidiaries with existing noncontrolling
interest ownership positions. The Company believes that it is
useful to present Adjusted EBITDA because it adds back the portion
of EBITDA attributable to these third-party interests. The Company
reports Adjusted EBITDA as a measure of financial performance.
Adjusted EBITDA is a key measure used by management to assess the
operating performance of the Company’s hospital operations and to
make decisions on the allocation of resources. Adjusted EBITDA is
also used to evaluate the performance of the Company’s executive
management team and is one of the primary metrics used in
connection with determining short-term cash incentive compensation
and the achievement of vesting criteria with respect to
performance-based equity awards. In addition, management utilizes
Adjusted EBITDA in assessing the Company’s consolidated results of
operations and operational performance and in comparing the
Company’s results of operations between periods.
Footnotes to Financial Highlights, Financial
Statements and Selected Operating Data (Continued)
The Company believes it is useful to provide investors and other
users of the Company’s financial statements this performance
measure to align with how management assesses the Company’s results
of operations. Adjusted EBITDA also is comparable to a similar
metric called Consolidated EBITDA, as defined in the Company’s
asset-based loan facility (the “ABL Facility”) and the Company’s
existing note indentures, which is a key component in the
determination of the Company’s compliance with certain covenants
under the ABL Facility and such note indentures (including the
Company’s ability to service debt and incur capital expenditures),
and is used to determine the interest rate and commitment fee
payable under the ABL Facility (although Adjusted EBITDA does not
include all of the adjustments described in the ABL Facility).
Adjusted EBITDA includes the Adjusted EBITDA attributable to
hospitals that were divested during the course of such year, but in
each case solely to the extent relating to the period prior to the
consummation of the applicable divestiture.
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.
The following table reflects the reconciliation of Adjusted
EBITDA, as defined, to net loss attributable to Community Health
Systems, Inc. stockholders as derived directly from the condensed
consolidated financial statements (in millions):
Three Months Ended
March 31,
2024
2023
Net loss attributable to Community
Health
Systems, Inc. stockholders
$
(41
)
$
(51
)
Adjustments:
Provision for income taxes
28
26
Depreciation and amortization
115
132
Net income attributable to noncontrolling
interests
35
31
Interest expense, net
211
207
Impairment and (gain) loss on sale of
businesses, net
17
(22
)
Expense from government and other legal
matters and related costs
-
10
Expense from business transformation
costs
13
-
Expense related to employee termination
benefits and other restructuring charges
-
2
Adjusted EBITDA
$
378
$
335
(d)
The following table sets forth components reconciling the basic
weighted-average number of shares to the diluted weighted-average
number of shares (in millions):
Three Months Ended
March 31,
2024
2023
Weighted-average number of shares
outstanding - basic
131
130
Add effect of dilutive securities:
Stock awards and options
-
-
Weighted-average number of shares
outstanding - diluted
131
130
Footnotes to Financial Highlights, Financial
Statements and Selected Operating Data (Continued)
The Company generated a net loss attributable to Community
Health Systems, Inc. stockholders for the three months ended March
31, 2024 and 2023, so the effect of dilutive securities is not
considered because their effect would be antidilutive. If the
Company had generated net income, the effect of stock awards and
options on the diluted shares calculation would have been an
increase of 443,799 shares and 468,193 shares during the three
months ended March 31, 2024 and 2023, respectively.
(e)
The following supplemental table reconciles net loss
attributable to Community Health Systems, Inc. stockholders, as
reported, on a per share (diluted) basis, to net loss attributable
to Community Health Systems, Inc. stockholders per share (diluted)
with the adjustments described herein (total per share amounts may
not add due to rounding). The Company believes that the
presentation of non-GAAP adjusted net loss attributable to
Community Health Systems, Inc. stockholders per share (diluted)
presents useful information to investors by highlighting the impact
on net loss attributable to Community Health Systems, Inc.
stockholders per share (diluted) of selected items used in
calculating Adjusted EBITDA which may not reflect the Company’s
underlying operating performance and assisting in comparing the
Company’s results of operations between periods.
Three Months Ended
March 31,
2024
2023
Net loss per share (diluted), as
reported
$
(0.32
)
$
(0.40
)
Adjustments:
Impairment and (gain) loss on sale of
businesses, net
0.10
(0.11
)
Expense from government and other legal
matters and related costs
-
0.06
Expense from business transformation
costs
0.08
-
Expense related to employee termination
benefits and other restructuring charges
-
0.01
Net loss per share (diluted), excluding
adjustments
$
(0.14
)
$
(0.43
)
(f)
Both income from operations and net loss included a net non-cash
impairment expense of $17 million and income of $22 million for the
three months ended March 31, 2024 and 2023, respectively. The
impairment expense for 2024 was primarily to reduce the carrying
value of several assets that were idled, disposed of or
held-for-sale. The income for 2023 was primarily from gains on the
sale of certain businesses during the period and also impairment
charges to reduce the value of certain long-lived assets at
businesses the Company identified for closure, sale or sold. These
gains and impairment charges do not have an impact on the
calculation of the Company’s financial covenants under the ABL
Facility.
(g)
The maximum aggregate principal amount under the ABL Facility is
$1.0 billion, subject to borrowing base capacity. At March 31,
2024, the Company had outstanding borrowings of $302 million and
approximately $618 million of additional borrowing capacity (after
taking into consideration $67 million of outstanding letters of
credit) under the ABL Facility.
Forward-Looking Statements
This press 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 release.
These factors include, among other things:
- general economic and business conditions, both nationally and
in the regions in which we operate, including the impact of current
negative macroeconomic conditions, ongoing inflationary pressures,
the current high interest rate environment, and current
geopolitical instability, as well as the potential impact on us of
financial, credit and capital conditions;
- the impact of current or future federal and state health reform
initiatives;
- the extent to and manner in which states adopt changes to
Medicaid programs, implement health insurance exchanges or alter or
reduce the provision of, or payment for, healthcare to state
residents through legislation, regulation or otherwise;
- changes related to health insurance enrollment, including those
affecting the beneficiary enrollment process and the stability of
health insurance exchanges;
- risks associated with our substantial indebtedness, leverage
and debt service obligations, including our ability to refinance
such indebtedness on acceptable terms or to incur additional
indebtedness, and our ability to remain in compliance with debt
covenants;
- demographic changes;
- changes in, or the failure to comply with, federal, state or
local laws or governmental regulations affecting our business;
- potential adverse impact of known and unknown legal, regulatory
and governmental proceedings and other loss contingencies,
including governmental investigations and audits, and federal and
state false claims act litigation;
- our ability, where appropriate, to enter into and maintain
provider arrangements with payors and the terms of these
arrangements, which may be further affected by the increasing
consolidation of health insurers and managed care companies and
vertical integration efforts involving payors and healthcare
providers;
- changes in, or the failure to comply with, contract terms with
payors and changes in reimbursement policies, methodologies or
rates paid by federal or state healthcare programs or commercial
payors;
- security breaches, cyber-attacks, loss of data, other
cybersecurity threats or incidents, including those experienced
with respect to our information systems or the information systems
of third parties with whom we conduct business, and any actual or
perceived failures to comply with legal requirements governing the
privacy and security of health information or other regulated,
sensitive or confidential information, or legal requirements
regarding data privacy or data protection;
- any potential impairments in the carrying value of goodwill,
other intangible assets, or other long-lived assets, or changes in
the useful lives of other intangible assets;
- the effects related to the sequestration spending reductions
pursuant to both the Budget Control Act of 2011 and the
Pay-As-You-Go Act of 2010 and the potential for future deficit
reduction legislation;
- increases in the amount and risk of collectability of patient
accounts receivable, including decreases in collectability which
may result from, among other things, self-pay growth and
difficulties in recovering payments for which patients are
responsible, including co-pays and deductibles;
- the efforts of insurers, healthcare providers, large employer
groups and others to contain healthcare costs, including the trend
toward value-based purchasing;
- the impact of competitive labor market conditions, including in
connection with our ability to hire and retain qualified nurses,
physicians, other medical personnel and key management, and
increased labor expenses arising from inflation and/or competition
for such positions;
- the inability of third parties with whom we contract to provide
hospital-based physicians and the effectiveness of our efforts to
mitigate such non-performance including through acquisitions of
outsourced medical specialist businesses, engagement with new or
replacement providers, employment of physicians and re-negotiation
or assumption of existing contracts;
- any failure to obtain medical supplies or pharmaceuticals at
favorable prices;
- liabilities and other claims asserted against us, including
self-insured professional liability claims;
- competition;
- trends toward treatment of patients in less acute or specialty
healthcare settings, including ambulatory surgery centers or
specialty hospitals or via telehealth;
- changes in medical or other technology;
- any failure of our ongoing process of redesigning and
consolidating key business functions, including through the
implementation of a new core enterprise resource planning system,
to proceed as expected or to be completed successfully;
- changes in U.S. GAAP;
- the availability and terms of capital to fund any additional
acquisitions or replacement facilities or other capital
expenditures;
- our ability to successfully make acquisitions or complete
divestitures, our ability to complete any such acquisitions or
divestitures on desired terms or at all, the timing of the
completion of any such acquisitions or divestitures, and our
ability to realize the intended benefits from any such acquisitions
or divestitures;
- the impact that changes in our relationships with joint venture
or syndication partners could have on effectively operating our
hospitals or ancillary services or in advancing strategic
opportunities;
- our ability to successfully integrate any acquired hospitals
and/or outpatient facilities, or to realize expected benefits from
acquisitions such as increased growth in patient service
revenues;
- the impact of severe weather conditions and climate change, as
well as the timing and amount of insurance recoveries in relation
to severe weather events;
- our ability to obtain adequate levels of insurance, including
general liability, professional liability, cyber liability and
directors and officers liability insurance;
- timeliness of reimbursement payments received under government
programs;
- effects related to pandemics, epidemics, or outbreaks of
infectious diseases on our business, results of operations,
financial condition, and/or cash flows;
- any failure to comply with our obligations under license or
technology agreements;
- challenging economic conditions in non-urban communities in
which we operate;
- the concentration of our revenue in a small number of
states;
- our ability to realize anticipated cost savings and other
benefits from our current strategic and operational cost savings
initiatives;
- any changes in or interpretations of income tax laws and
regulations; and
- the risk factors set forth in our Annual Report on Form 10-K
for the year ended December 31, 2023, filed with the Securities and
Exchange Commission (the “SEC”) on February 21, 2024 and other
filings filed with the SEC.
The consolidated operating results for the three months ended
March 31, 2024, are not necessarily indicative of the results that
may be experienced for any future periods. The Company cautions
that the reaffirmation of our guidance for calendar year 2024
(which guidance was originally included in our February 20, 2024
press release) as set forth herein is based on currently available
information. The Company undertakes no obligation to revise or
update any forward-looking statements (including such guidance), or
to make any other forward-looking statements, whether as a result
of new information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424367952/en/
Investor Contact: Kevin Hammons President and Chief Financial
Officer (615) 465-7000
Community Health Systems (NYSE:CYH)
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