CHS Net Revenues Drop 18% in Q1

Despite the losses, CEO Wayne T. Smith says the company 'continued progress across a number of our strategic and operating initiatives.'

Community Health Systems Inc.'s long-running financial problems continue, with the Franklin, Tennessee–based hospital chain reporting a nearly 18% drop in net revenues and a 21% drop in total admissions in the first quarter of 2018.

Highlights include:

• Net operating revenues totaled $3.7 billion, a 17.8% decrease, compared with $4.49 billion for the first quarter of 2017.
   
• Net loss to CHS stockholders was $25 million, or $0.22 per share, compared with a net loss of $199 million, or $1.79 per share in the first quarter of 2017;
    
• Adjusted EBITDA was $440 million, compared with $527 million in the first quarter of 2017, a 16.5% decrease;
   
• Cash flow from operations was $106 million, compared with $242 million for the same period in 2017;
   
• Consolidated operating results for Q1 reflect a 19.6% decrease in total admissions and a 20.8% decrease in total adjusted admissions;
   
• On a same-store basis, admissions decreased 2.4% and adjusted admissions decreased 1.9%, compared with Q1 of 2017;
   
• On a same-store basis, net operating revenues increased 1.6%, compared with Q1 of 2017.

Despite the losses, CHS CEO and Chairman Wayne T. Smith said the company "continued progress across a number of our strategic and operating initiatives."

"During the first few months of the year, we expanded our transfer and access program, launched Accountable Care Organizations, and invested in both outpatient capabilities and service line enhancements across our markets," Smith said. "These efforts helped drive a good financial performance during the first quarter and position the Company for further anticipated improvements during the balance of 2018."

CHS sold six hospitals in the first quarter, although the divestitures have yet to be completed. Those divested hospitals represent about $2 billion in annual operating revenues, CHS said in its report.

In March, S&P Global Ratings lowered its corporate credit rating for CHS, citing concerns over the company's liquidity.

Relatively speaking, CHS is doing better now after a brutal Q4 of 2017, when the hospital operator reported a $2 billion loss, or nearly $18 per share.

Although those revenue results were within expectations, CHS's cash flow was "much weaker" than S&P had anticipated.