Community Health Systems, Inc. Announces First Quarter 2013 Results with Net Operating Revenues of $

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Community Health Systems, Inc. Announces First Quarter 2013 Results with Net Operating Revenues of $3.3 Billion

FRANKLIN, Tenn.--(BUSINESS WIRE)-- Community Health Systems, Inc. (NYS: CYH) (the "Company") today announced financial and operating results for the three months ended March 31, 2013.

Net operating revenues for the three months ended March 31, 2013, totaled $3.312 billion, a 0.4 percent increase compared with $3.297 billion for the same period in 2012. Income from continuing operations decreased to $96.3 million, or $0.86 per share (diluted), for the three months ended March 31, 2013, compared with $99.7 million, or $0.85 per share (diluted), for the same period in 2012. Net income attributable to Community Health Systems, Inc. common stockholders was $0.86 per share (diluted) for the three months ended March 31, 2013, compared with $0.85 per share (diluted) for the same period in 2012. The results for the three months ended March 31, 2013, include a $0.01 per share (diluted) loss from the early extinguishment of debt. Excluding this loss, both income from continuing operations and net income attributable to Community Health Systems, Inc. common stockholders were $0.87 per share (diluted) for the three months ended March 31, 2013. Excluding a $0.48 per share (diluted) net benefit from the resolution of an industry-wide governmental settlement and a payment update relating to prior periods, a $0.10 per share (diluted) charge to establish reserves for certain legal matters, and a $0.44 per share (diluted) loss from the early extinguishment of debt, both income from continuing operations and net income attributable to Community Health Systems, Inc. common stockholders were $0.91 per share (diluted) for the three months ended March 31, 2012. Weighted-average shares outstanding (diluted) were 92.0 million for the three months ended March 31, 2013, and 88.9 million for the three months ended March 31, 2012.


Adjusted EBITDA for the three months ended March 31, 2013, was $493.8 million compared with $535.5 million for the same period in 2012, representing a 7.8 percent decrease. Excluding the items referenced above for the prior year period, adjusted EBITDA was $477.6 million for the three months ended March 31, 2012. Adjusted EBITDA is EBITDA adjusted to exclude discontinued operations, loss from early extinguishment of debt, and net income attributable to non-controlling interests. The Company uses adjusted EBITDA as a measure of liquidity. Net cash provided by operating activities for the three months ended March 31, 2013, was $57.2 million compared with $187.3 million for the same period in 2012.

The consolidated operating results for the three months ended March 31, 2013, reflect a 4.4 percent decrease in total admissions and a 3.5 percent decrease in total adjusted admissions compared with the same period in 2012. On a same-store basis, admissions decreased 5.9 percent while adjusted admissions decreased 5.2 percent compared with the same period in 2012. Seasonality effects caused by the loss of one day from the 2012 leap year and the movement of holidays on the calendar during the three months ended March 31, 2013, resulted in approximately half of the decrease in adjusted admissions. On a same-store basis, net operating revenues increased 1.4 percent compared with the same period in 2012.

Commenting on the results, Wayne T. Smith, chairman, president and chief executive officer of Community Health Systems, Inc. said, "Our results for the first quarter reflect the current dynamic market conditions and a more challenging operating environment for healthcare providers. Our ability to adjust to these volatile conditions and realize improvement in revenues on a same store basis reflects the strength of our operating model across all of our markets. We have also focused on managing our cost structure in line with current and expected volume trends.

"As we navigate through this transformative period for our industry, we look forward to the growth opportunities ahead for Community Health Systems in 2013 as the fundamental aspects of healthcare reform begin to take shape. We believe hospitals will ultimately benefit from the insurance coverage expansion and the potential volume improvement. Further, we are well positioned for success in this new environment with a strong and diverse geographic footprint, a solid infrastructure and a proven ability to deliver sustainable results."

Smith added, "We have continued to identify unique opportunities for collaboration in order to develop solutions that meet the demands of the changing healthcare landscape. We recently announced a strategic alliance with Cleveland Clinic, a nationally recognized multi-specialty academic center, to enhance the quality of patient care, improve access to healthcare services, reduce costs and drive operational excellence. This alliance offers favorable synergies at both the clinical and operational level that will ultimately create greater value for the services provided to our patients. We look forward to working with Cleveland Clinic to enhance our market share and further differentiate ourselves in the communities we serve."

Included on pages 12, 13 and 14 of this press release are tables setting forth the Company's updated 2013 annual earnings guidance. The 2013 guidance is based on the Company's historical operating performance, current trends and other assumptions that the Company believes are reasonable at this time.

Located in the Nashville, Tennessee, suburb of Franklin, 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 non-urban and mid-size markets throughout the country. Through its subsidiaries, the Company currently owns, leases or operates 135 hospitals in 29 states with an aggregate of approximately 20,000 licensed beds. Its hospitals offer a broad range of inpatient and surgical services, outpatient treatment and skilled nursing care. In addition, through its subsidiary, Quorum Health Resources, LLC, the Company provides management and consulting services to non-affiliated general acute-care hospitals located throughout the United States. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol "CYH."

Community Health Systems, Inc. will hold a conference call on Tuesday, April 30, 2013, at 9:00 a.m. Central, 10:00 a.m. Eastern, to review financial and operating results for the first quarter ended March 31, 2013. 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, or at www.earnings.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will continue to be available through May 30, 2013. Copies of the Company's current report on Form 8-K (including this press release) and conference call slide show will be available on the Company's website at www.chs.net.

Forward-Looking Statements

Statements contained in this press release regarding expected operating results, acquisition transactions or divestitures and other events are forward-looking statements that involve risk and uncertainties. Actual future events or results may differ materially from these statements. Readers are referred to the documents filed by Community Health Systems, Inc. with the Securities and Exchange Commission, including the Company's annual report on Form 10-K, current reports on Form 8-K and quarterly reports on Form 10-Q. These filings identify important risk factors and other uncertainties that could cause actual results to differ from those contained in the forward-looking statements. 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.

    

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Financial Highlights (a)(b)

(In thousands, except per share amounts)


(Unaudited)

 
Three Months Ended
March 31,
20132012
 
Net operating revenues$3,311,750$3,297,035
Adjusted EBITDA (c)493,829535,495
Income from continuing operations (d), (e), (f), (g)96,32399,718
Net income attributable to Community Health Systems, Inc. stockholders79,17475,474
 
Basic earnings (loss) per share attributable to Community
Health Systems, Inc. common stockholders (i):
Continuing operations (d), (e), (f), (g)$0.87$0.86
Discontinued operations - (0.01)
Net income$0.87$0.85 
 
Diluted earnings (loss) per share attributable to Community
Health Systems, Inc. common stockholders (i):
Continuing operations (d), (e), (f), (g)$0.86$0.85
Discontinued operations - (0.01)
Net income$0.86$0.85 
 
Weighted-average number of shares outstanding (h):
Basic91,00388,675
Diluted91,99988,853
 
Net cash provided by operating activities$57,154$187,310
 

_____

For footnotes, see pages 10 and 11.

  

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (a)(b)

(In thousands, except per share amounts)


(Unaudited)

 
Three Months Ended March 31,
2013 2012
Amount 

% of Net
Operating
Revenues

Amount 

% of Net
Operating
Revenues

Operating revenues (net of contractual allowances and discounts)$3,799,864$3,783,491
Provision for bad debts 488,114   486,456  
Net operating revenues 3,311,750 100.0% 3,297,035 100.0%
 
Operating costs and expenses:
Salaries and benefits1,577,14847.6%1,524,97546.3%
Supplies497,84115.0%498,57915.1%
Other operating expenses707,97421.4%708,94321.5%
Electronic health records incentive reimbursement (d)(20,916)-0.6%(26,168)-0.8%
Rent71,5542.2%67,2242.0%
Depreciation and amortization 192,158 5.8% 174,354 5.3%
Total operating costs and expenses 3,025,759 91.4% 2,947,907 89.4%
 
Income from operations (d), (e), (f), (g)285,9918.6%349,12810.6%
Interest expense, net156,3504.8%152,1754.7%
Loss from early extinguishment of debt1,2950.0%63,4291.9%
Equity in earnings of unconsolidated affiliates (15,680)-0.5% (12,013)-0.4%

Income from continuing operations before income taxes

144,0264.3%145,5374.4%
Provision for income taxes 47,703 1.4% 45,819 1.4%
Income from continuing operations (d), (e), (f), (g) 96,323 2.9% 99,718 3.0%
 
Discontinued operations, net of taxes:
Loss from operations of entities sold - 0.0% (466)0.0%
Loss from discontinued operations, net of taxes - 0.0% (466)0.0%
Net income96,3232.9%99,2523.0%
Less: Net income attributable to noncontrolling interests 17,149 0.5% 23,778 0.7%
Net income attributable to Community Health Systems, Inc. stockholders$79,174 2.4%$75,474 2.3%
 

Basic earnings (loss) per share attributable to Community Health Systems, Inc. common stockholders (i):

Continuing operations (d), (e), (f), (g)$0.87$0.86
Discontinued operations -  (0.01)
Net income$0.87 $0.85 
 

Diluted earnings (loss) per share attributable to Community Health Systems, Inc. common stockholders (i):

Continuing operations (d), (e), (f), (g)$0.86$0.85
Discontinued operations -  (0.01)
Net income$0.86 $0.85 
 

Weighted-average number of shares outstanding (h):

Basic 91,003  88,675 
Diluted 91,999  88,853 
 

_____

For footnotes, see pages 10 and 11.

    

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)


(Unaudited)

 
Three Months Ended March 31,

 

2013

2012

 
Net income$96,323$99,252
Other comprehensive income, net of income taxes:
Net change in fair value of interest rate swaps15,77010,536
Net change in fair value of available-for-sale securities1,8092,667
Amortization and recognition of unrecognized pension cost components 733 1,140
Other comprehensive income 18,312 

14,343

Comprehensive income114,635

113,595

Less: Comprehensive income attributable to noncontrolling interests 17,149 23,778

Comprehensive income attributable to Community Health Systems, Inc. stockholders

$97,486$

89,817

 

____

For footnotes, see pages 10 and 11.

        

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Selected Operating Data (b)

($ In thousands)


(Unaudited)

 
For the Three Months Ended March 31,
Consolidated  Same-Store
20132012  % Change 20132012% Change
Number of hospitals (at end of period)135134 Read Full Story

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