Community Health Systems, Inc. Announces Fourth Quarter and Year-End 2017 Results and 2018 Guidance

Investment Weekly News

By a News Reporter-Staff News Editor at Investment Weekly News -- Community Health Systems, Inc. (NYSE: CYH) (the "Company") announced financial and operating results for the three months and year ended December 31, 2017.

The following highlights the financial and operating results for the three months ended December 31, 2017. Certain items have been adjusted for items that management considers not reflective of ongoing operations as discussed further on pages 4 and 5 of this press release: Net operating revenues totaled $3.059 billion and were adversely impacted by a $591 million increase in contractual allowances and provision for bad debts from the change in estimate further discussed below. Net loss attributable to Community Health Systems, Inc. common stockholders was $(2.013) billion, or $(17.98) per share (diluted), compared with net loss of $(220) million, or $(1.99) per share (diluted) for the same period in 2016. Excluding the adjusting items as presented in the table in footnote (h) on page 17, net loss attributable to Community Health Systems, Inc. common stockholders was $(0.28) per share (diluted). Adjusted EBITDA was $409 million. Loss from continuing operations attributable to Community Health Systems, Inc. common stockholders was $(17.95) per share (diluted). Excluding the adjusting items as presented in the table in footnote (h) on page 17, loss from continuing operations attributable to Community Health Systems, Inc. common stockholders was $(0.25) per share (diluted). Cash flow from operations was $156 million, compared with $327 million for the same period in 2016. On a same-store basis, admissions decreased 1.7 percent and adjusted admissions decreased 0.9 percent, compared with the same period in 2016. Net operating revenues for the three months ended December 31, 2017, totaled $3.059 billion, a 31.6 percent decrease, compared with $4.469 billion for the same period in 2016. As further discussed below, the financial results include a change in estimate recorded by the Company during the three months ended December 31, 2017 to increase contractual allowances and the provision for bad debts by a total of approximately $591 million as a result of information obtained from new accounting processes and methodologies implemented in preparation for the adoption of the new revenue recognition accounting guidance.

Loss from continuing operations attributable to Community Health Systems, Inc. common stockholders was $(2.010) billion, or $(17.95) per share (diluted), for the three months ended December 31, 2017, compared with $(211) million, or $(1.91) per share (diluted), for the same period in 2016. Excluding the adjusting items as presented in the table in footnote (h) on page 17, loss from continuing operations was $(0.25) per share (diluted).

Net loss attributable to Community Health Systems, Inc. common stockholders was $(2.013) billion, or $(17.98) per share (diluted), for the three months ended December 31, 2017, compared with $(220) million, or $(1.99) per share (diluted), for the same period in 2016. Excluding the adjusting items as presented in the table in footnote (h) on page 17, net loss attributable to Community Health Systems, Inc. common stockholders was $(0.28) per share (diluted), for the three months ended December 31, 2017. For the three months ended December 31, 2017, loss from discontinued operations, net of tax, was approximately $(3) million, or $(0.03) per share (diluted). Weighted-average shares outstanding (diluted) were 112 million for the three months ended December 31, 2017, and 111 million for the three months ended December 31, 2016.

Adjusted EBITDA for the three months ended December 31, 2017, was $409 million compared with $564 million for the same period in 2016, representing a 27.5 percent decrease. Adjusted EBITDA for the three months ended December 31, 2017, includes an adjustment for the $591 million adverse impact of the change in estimate recorded during the three-month period to increase contractual allowances and the provision for bad debts as noted above.

The consolidated operating results for the three months ended December 31, 2017, reflect a 19.2 percent decrease in total admissions, and a 19.3 percent decrease in total adjusted admissions, compared with the same period in 2016. On a same-store basis, admissions decreased 1.7 percent and adjusted admissions decreased 0.9 percent during the three months ended December 31, 2017, compared with the same period in 2016. On a same-store basis (as further defined in footnote (a) on page 14), net operating revenues increased 1.8 percent during the three months ended December 31, 2017, compared with the same period in 2016.

Net operating revenues for the year ended December 31, 2017, totaled $15.353 billion, a 16.7 percent decrease, compared with $18.438 billion for the same period in 2016.

Loss from continuing operations attributable to Community Health Systems, Inc. common stockholders was $(2.447) billion, or $(21.89) per share (diluted), for the year ended December 31, 2017, compared with $(1.706) billion, or $(15.41) per share (diluted), for the same period in 2016. Excluding the adjusting items as presented in the table in footnote (h) on page 17, loss from continuing operations was $(1.20) per share (diluted).

Net loss attributable to Community Health Systems, Inc. common stockholders was $(2.459) billion, or $(22.00) per share (diluted), for the year ended December 31, 2017, compared with $(1.721) billion, or $(15.54) per share (diluted), for the same period in 2016. Excluding the adjusting items as presented in the table in footnote (h) on page 17, net loss attributable to Community Health Systems, Inc. common stockholders was $(1.26) per share (diluted), for the year ended December 31, 2017. Loss from discontinued operations, net of tax, for the year ended December 31, 2017, was approximately $(12) million, or $(0.11) per share (diluted). Weighted-average shares outstanding (diluted) were 112 million for the year ended December 31, 2017, and 111 million for the year ended December 31, 2016.

Adjusted EBITDA for the year ended December 31, 2017, was $1.703 billion compared with $2.225 billion for the same period in 2016, representing a 23.5 percent decrease. Adjusted EBITDA for the year ended December 31, 2017, includes an adjustment for the $591 million adverse impact of the change in estimate recorded during the three months ended December 31, 2017 to increase contractual allowances and the provision for bad debts as noted above.

The consolidated operating results for the year ended December 31, 2017, reflect a 13.9 percent decrease in total admissions, and a 14.5 percent decrease in total adjusted admissions, compared with the same period in 2016. On a same-store basis, admissions decreased 1.9 percent and adjusted admissions decreased 1.7 percent during the year ended December 31, 2017, compared with the same period in 2016. On a same-store basis (as further defined in footnote (a) on page 14), net operating revenues increased 0.2 percent during the year ended December 31, 2017, compared with the same period in 2016.

Commenting on the results, Wayne T. Smith, chairman and chief executive officer of Community Health Systems, Inc., said, "We are pleased with our progress in the fourth quarter and expect to carry that momentum through 2018, as we execute strategies that we believe will strengthen our core business and drive improved results. During the fourth quarter, we completed our 2017 announced divestiture plan and we intend to continue to optimize our portfolio in 2018 to help pay down debt and refine our portfolio to stronger markets. In 2018, we remain committed to growth initiatives to advance our competitive position, including expanding our transfer and access program across our networks, launching Accountable Care Organizations, and strategically expanding outpatient services. We are also committed to driving operational efficiencies, and, as always, are dedicated to patient safety and clinical advancements that improve healthcare for the patients and communities we serve."

Keywords for this news article include: Business, Health and Medicine, Investment and Finance, Community Health Systems Inc..