Community Health Systems reports an increase of 12.1% in net revenues for third quarter

Oct 29 2009

Community Health Systems, Inc. (NYSE: CYH) today announced financial and operating results for the third quarter and nine months ended September 30, 2009.

Net operating revenues for the three months ended September 30, 2009, totaled $3.087 billion, a 12.1 percent increase compared with $2.755 billion for the same period in 2008. Income from continuing operations increased to $75.4 million, or $0.65 per share (diluted), on 92.0 million weighted average shares outstanding for the three months ended September 30, 2009, compared with $59.1 million, or $0.52 per share (diluted), on 95.2 million weighted average shares outstanding for the same period in 2008. Net income increased 18.5 percent to $59.7 million, or $0.65 per share (diluted), for the three months ended September 30, 2009, compared with $50.4 million, or $0.53 per share (diluted), for the same period in 2008.

Adjusted EBITDA for the three months ended September 30, 2009, was $417.8 million, compared with $385.8 million for the same period in 2008, representing an 8.3 percent increase. Adjusted EBITDA is EBITDA adjusted to exclude discontinued operations, gain/loss from early extinguishment of debt and net income attributable to noncontrolling interests. The Company uses adjusted EBITDA as a measure of liquidity. Net cash provided by operating activities for the three months ended September 30, 2009, was $356.4 million, compared with $268.3 million for the same period in 2008.

The consolidated financial results for the three months ended September 30, 2009, reflect a 7.2 percent increase in total admissions compared with the three months ended September 30, 2008. This increase was due primarily to acquisitions during the past twelve months. On a same-store basis, admissions decreased 0.2 percent and adjusted admissions increased 1.9 percent, compared with the same period in 2008. On a same-store basis, net operating revenues increased 5.2 percent, compared with the same period in 2008.

Net operating revenues for the nine months ended September 30, 2009, totaled $9.016 billion, a 10.8 percent increase compared with $8.138 billion for the same period in 2008. Income from continuing operations increased to $220.7 million, or $1.94 per share (diluted), on 91.1 million weighted average shares outstanding for the nine months ended September 30, 2009, compared with $171.8 million, or $1.54 per share (diluted), on 95.1 million weighted average shares outstanding for the same period in 2008. Net income was $178.1 million, or $1.95 per share (diluted), for the nine months ended September 30, 2009, compared with $158.4 million, or $1.67 per share (diluted), for the same period in 2008.

Adjusted EBITDA for the nine months ended September 30, 2009, was $1.237 billion, compared with $1.124 billion for the same period in 2008, representing a 10.1 percent increase. Net cash provided by operating activities for the nine months ended September 30, 2009, was $900.8 million, compared with $685.1 million for the same period in 2008.

The consolidated financial results for the nine months ended September 30, 2009, reflect a 3.5 percent increase in total admissions compared with the nine months ended September 30, 2008. This increase was due primarily to acquisitions during the past twelve months. On a same-store basis, admissions decreased 1.9 percent and adjusted admissions increased 0.4 percent, compared with the same period in 2008. On a same-store basis, net operating revenues increased 5.4 percent, compared with the same period in 2008.

Commenting on the results, Wayne T. Smith, chairman, president and chief executive officer of Community Health Systems, Inc., stated, “We are pleased with our solid financial and operating performance in the third quarter of 2009, as we again exceeded expectations. We continued to benefit from a consistent performance at the hospital level, as evidenced by favorable revenue trends and same-store margin expansion. These results confirm that the fundamentals of our business are strong and our centralized operating strategy is working across all of our markets.

“We believe our proven ability to enhance essential healthcare services and recruit and retain qualified physicians in our markets will help support our continued growth. Our conservative operating strategy has served us well, and we are mindful of the critical need to manage our costs and drive margins. We see considerable opportunities to leverage our assets and realize additional operating improvements at our more recently acquired hospitals. We are pleased with the trends in our business and we look forward to continued progress for the remainder of 2009 and into 2010,” added Smith.

Included on pages 12, 13 and 14 of this press release are tables setting forth the Company’s updated 2009 guidance. This guidance reaffirms the Company’s previous annual earnings guidance provided on July 30, 2009, as modified to reflect certain changes as detailed in the guidance assumptions on pages 12, 13 and 14. Also reflected is the Company’s initial 2010 guidance.

Located in the Nashville, Tennessee, suburb of Franklin, Community Health Systems, Inc. is the largest publicly-traded hospital company 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 122 hospitals in 29 states with an aggregate of approximately 18,000 licensed beds. Its hospitals offer a broad range of inpatient and surgical services, outpatient treatment and skilled nursing care. In addition, through its QHR subsidiary, the Company provides management and consulting services to over 150 independent 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 to discuss this press release on Thursday, October 29, 2009, at 10:30 a.m. Central, 11:30 a.m. Eastern. 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 through November 29, 2009. Copies of the Company’s Form 8-K (including this press release) and conference call slide show are available on the Company’s website at www.chs.net.

Source: Community Health Systems