Community Health Systems, Inc. Announces Third Quarter 2007 Results with Net Operating Revenues of $2.352 Billion

Business Wire,  Oct 30, 2007  

Tags: Community Health Systems Inc.

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FRANKLIN, Tenn. -- Community Health Systems, Inc. (NYSE: CYH) today announced financial and operating results for the three and nine months ended September 30, 2007.

As previously announced, on July 25, 2007, the Company completed its acquisition of Triad Hospitals, Inc. ("Triad"). Financial and statistical data reported in this earnings release includes Triad's operating results from July 25, 2007, the date of the completion of Triad acquisition. Prior period consolidated results and statistical data reflect only Community Health Systems, Inc. and its subsidiaries for the period prior to the Triad acquisition. Same-store operating results and statistical data includes comparable information for hospitals acquired from Triad for the months of August and September 2007 and 2006.

Net operating revenues for the quarter ended September 30, 2007, totaled $2.352 billion, a 110.4% increase compared with $1.118 billion for the same period last year. Income from continuing operations increased 76.1% to $16.3 million, or $0.17 per share (diluted), on 94.8 million weighted average shares outstanding for the quarter ended September 30, 2007, compared with $9.2 million, or $0.10 per share (diluted), on 95.3 million weighted average shares outstanding for the same period last year. Income from continuing operations for the third quarter ended September 30, 2007, was reduced by an after-tax charge of $17.5 million, or $0.18 per share (diluted), from the early extinguishment of debt related to the refinancing of the Company's credit agreement in connection with the Triad acquisition. Net income increased 26.9% to $10.5 million, or $0.11 per share (diluted), compared with $8.2 million, or $0.09 per share (diluted), for the same period last year. Discontinued operations consisted of an after-tax loss of approximately $5.8 million, or $0.06 per share (diluted), related to three hospitals being held for sale and the sale of a hospital partnership interest. Continuing operating results and statistical data exclude discontinued operations for all periods presented.

Adjusted EBITDA for the third quarter of 2007 was $303.6 million, compared with $92.5 million for the same period last year, representing a 228.3% increase. Adjusted EBITDA is EBITDA adjusted to exclude discontinued operations and minority interest in earnings. The Company uses adjusted EBITDA as a measure of liquidity. Net cash provided by operating activities for the third quarter of 2007 was $188.7 million, compared with $61.0 million for the same period last year.

The consolidated financial results for the quarter ended September 30, 2007, reflect a 71.3% increase in total admissions compared with the same period last year. This increase is primarily attributable to hospitals acquired during 2007 and 2006, including the Triad acquisition. On a same-store basis, admissions decreased 3.0% and adjusted admissions decreased 0.6%, compared with the same period last year. On a same-store basis, net operating revenues increased 5.7%, compared with the same period last year.

The consolidated financial results for the three and nine months ended September 30, 2006, include the change in estimate of the Company's allowance for doubtful accounts which was recorded in the third quarter ended September 30, 2006, as previously disclosed. The effect of this change resulted in a $65.0 million increase in the Company's allowance for doubtful accounts on its September 30, 2006, balance sheet and a corresponding $65.0 million pre-tax increase to the provision for bad debts, which reduced adjusted EBITDA by $65.0 million and income from continuing operations by $40.0 million, or $0.42 per share (diluted), for the quarter ended September 30, 2006, and $0.41 per share (diluted) for the nine months ended September 30, 2006.

Net operating revenues for the nine months ended September 30, 2007, totaled $4.793 billion, a 50.1% increase compared with $3.192 billion for the same period last year. Income from continuing operations increased 3.9% to $124.4 million compared with $119.7 million for the same period last year. Income from continuing operations increased to $1.32 per share (diluted) on 94.6 million weighted average shares outstanding compared to $1.24 per share (diluted) on 96.8 million weighted average shares outstanding for the same period last year, and was reduced by an after-tax charge of $0.19 per share (diluted) for the nine months ended September 30, 2007, from early extinguishment of debt related to the refinancing of the Company's credit agreement in connection with the Triad acquisition. Net income increased to $118.5 million, or $1.25 per share (diluted), for the nine months ended September 30, 2007, compared with $114.6 million, or $1.19 per share (diluted), for the same period last year.

Adjusted EBITDA for the nine months ended September 30, 2007, was $645.8 million, compared with $408.4 million for the same period last year, representing a 58.1% increase. Net cash provided by operating activities for the nine months ended September 30, 2007, was $404.7 million, compared with $268.1 million for the same period last year.