Community Health Systems, Inc. Stock Price: Quote, Forecast, Splits & News (CYH)

Company Profile

Community Health Systems, Inc. Price & Performance (CYH)

Market Summary

Updated May 14, 8:00 PM UTC

Community Health Systems, Inc.

$3.92USD

+$0.12 (+3.16%)

After Hours

+$0.03 (+0.77%)

Prev Close

$3.80

Market Cap

$550.00M

Day Range

$3.72 - $3.96

Open

$3.77

P/E Ratio

-1.1

52W Range

$2.24 - $6.29

24H Volume

$13.46M

Dividend Yield

0.00%

EPS

-3.68

Latest News

Divestiture of Cedar Park Regional Medical Center Moves Forward
Apr 15, 2025
Community Health Systems has finalized a deal to sell its 80% stake in Cedar Park Regional Medical Center to Ascension Health for $460 million. The transaction, slated for closure by early Q3 2025, is part of the company’s broader strategy to streamline operations and reduce debt through targeted divestitures.123
Earnings Beat and Debt Reduction Bolster Community Health Systems
today
Community Health Systems surpassed expectations in its Q1 2025 earnings, posting $3.16 billion in revenue and a net loss of just $13 million, better than anticipated. The company’s ongoing divestitures and debt management initiatives have contributed to improved investor sentiment, despite ongoing cost pressures and operational challenges.456
Upcoming Healthcare Conference to Feature Community Health Systems Leadership
May 10, 2025
Community Health Systems will participate in the RBC Capital Markets Global Healthcare Conference on May 21, 2025. Management is set to discuss operational strategies and financial performance, offering investors insight into the company’s progress as it navigates industry headwinds and pursues long-term stability.789

What's Happening

Peers

Earnings

Report Date

Apr 23, 2025

Reported Revenue

3.2B

Beat +3.52%

Avg 1d Change

14.91%

Report Period

Q1 2025

Reported EPS

-0.03

Beat +70%

Implied Move 1d

27.95%

Transcript

9m 6s

Good day.

9m 7s

And welcome to the Community Health Systems First Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Should you need assistance, After today's presentation, there will be an opportunity to ask questions. To withdraw your question, please press star then 2. Please note today's event is being recorded. I would now like to turn the conference over to Anton Hai. Vice President, Investor Relations. Please go ahead.

9m 42s

Thank you, Rocco. Good morning, everyone, and welcome to Community Health Systems' First quarter twenty twenty five conference call. Joining me on today's call are Tim Henschen, Executive Officer and Kevin Hammonds, President and Chief Financial Officer. Before we begin, I must remind everyone this conference call may contain certain forward looking statements, including all statements that do not relate solely to historical or current facts. These forward looking statements are subject to a number of known and unknown risks.

10m 7s

Which are described in headings such as Risk Factors in our our Annual Report on Form 10 and other reports filed with or furnished to the SEC. Actual results may differ significantly from those expressed in any forward looking statements in today's discussion. We do not intend to update any of these forward looking statements. Afternoon, we issued a press release with our financial statements and definitions and calculations of adjusted EBITDA and adjusted EPS. We've also posted a supplemental slide presentation on our website. All calculations we will discuss today exclude impairment, gains or losses on the sale of businesses, and expense from business transformation costs. That said, I will turn the call over to Tim Hinchin, Chief Executive Officer. Thanks, Anton. Good morning, everyone, and thank you for joining our first quarter twenty twenty five conference call. We ended last year with very strong volume growth and we were pleased to carry that momentum forward into 2025. For the first quarter, same store admissions increased 4% same store adjusted admissions increased 2.6% and on a same store basis, net operating revenues increased 3.1% We have been pleased with the demand for health care services across our core portfolio markets, The first quarter growth was driven by an outsized impact from a heavier flu season than the prior year quarter.

11m 31s

Additionally, we continue to realize returns on targeted capital investments and expansions and the benefits of our strategic and operational initiatives. Including capacity management, transfer center operations, service line development and growth in our physician practices and other outpatient sites of care. We are especially pleased with our progress towards our target of $1,000,000,000 plus in divestiture proceeds which we plan to use to reduce debt and improve the company's leverage. Since our last quarterly earnings call in February, CHF completed the previously announced divestiture of ShorePoint Health System in Florida and Lake Norman Regional Medical Center in North Carolina, as well as the unannounced sale of our 50% ownership interest in Merit Health Biloxi. Last week, we announced plans to sell our 80% interest in Cedar Park Regional Medical Center in Texas to the current joint venture partner which we expect to close in late second quarter or early third quarter. While divestitures are not yet complete, we expect that activity to slow down substantially as the year goes on enabling us to fully focus on further growth opportunities across our core markets. Yesterday, we announced debt refinancing and buyback transactions that will further reduce leverage and improve our maturity profile.

12m 56s

Kevin will cover that in more detail in a few minutes. Now I'd like to touch on some of our strategic objectives moving forward into 2025. This year, we are highly focused on three foundational areas essential for every healthcare provider. First, delivering high quality care and exceptional patient outcome. Next, ensuring operational expertise and rigor in every market And finally, demonstrating financial discipline and performance. We are making progress in each area and have very specific activities underway to advance in these critically important functions. Next, we have been strategically developing both acute care and ambulatory services including our acquisition of 10 urgent care centers in Tucson late last year. As well as incremental investments in AFCs and we have added new freestanding EVs to the portfolio, too. In each CHS affiliated health system, our ability to balance acute care hospital services with ambulatory sites of care leverages the unique benefits of each care setting to create comprehensive service options for our patients. We believe this approach we have been pursuing for nearly a decade now, further positions us well for the future of health care delivery. And we continue to invest in innovation, including AI, emerging technologies, and partnerships that advance patient care support our workforce, and relieve administrative burden.

14m 27s

As the year goes on, will highlight some of these areas more specifically share the progress we are seeing.

14m 34s

Before turning the call over to Kevin, I want to acknowledge the fact that healthcare providers are currently facing a number of uncertainties. Navigating any potential changes that may come out of Washington in the weeks and months ahead makes planning more challenging. But our team is closely following these developments and advocating for policies that maintain and strengthen our health systems. And all healthcare delivery systems to ensure Americans will have needed access to essential health services As we complete the first quarter, want to express my appreciation to our team. Leaders across our organization are physicians, nurses, clinicians and caregivers and all of our support teams sharing the commitment to help people get better and live healthier for that, I am grateful. Now let me turn the call over to Kevin Hammonds, who will offer more information about the first quarter and the year ahead. Kevin? Thank you, Tim, and good morning, everyone. As Tim mentioned, we've made progress across many fronts. So before walking you through operating results for the quarter, that were generally in line with expectations, I would like to provide a brief update on the progress we made in continuing to position the company for future success.

15m 49s

Particularly through opportunistic divestitures and management of our debt.

15m 55s

In early March, we completed the divestiture of ShorePoint Health System in Florida. And on April 1, closed on the sale of Lake Norman Regional Health System in North Carolina.

16m 6s

Total gross proceeds for these two transactions of $544,000,000 was received and recorded in the first quarter.

16m 17s

Last week, we announced an agreement to divest 80% ownership in Cedar Park Regional Medical Center to the minority partner Ascension Health for $460,000,000. Which we expect to close late in the second quarter or early in the third quarter of twenty twenty five.

16m 36s

Completion of the Cedar Park transaction will bring the total in year proceeds to just over $1,000,000,000 consistent with our commentary last quarter. And along with an additional potential divestiture, now in advanced discussions, we could exceed this target materially. Each of these transactions reflects attractive double digit multiples on trailing EBITDA. Leading to meaningful deleveraging and increased shareholder value. Last night, concurrently with earnings results, we announced the issuance of $700,000,000 in new 10.75% senior secured notes due 02/1933. With the proceeds to be used to redeem all $700,000,000 of our outstanding 8% senior secured notes due 2027 at par.

17m 26s

Additionally, we've commenced a cash tender offer for all of the $626,000,000 outstanding 6.875% senior unsecured notes due 2028 at a price of 75 utilizing cash on hand and availability under our revolver to retire these notes.

17m 47s

These transactions will further reduce the company's net leverage improve our maturity profile and enhance shareholder value while not meaningfully affecting free cash flow.

17m 58s

Furthermore, we're getting all of this done despite the recent dislocation in the capital markets. At quarter end, net debt to trailing adjusted EBITDA was 7.1 times, improved from 7.4 times at year end 2024 and seven point nine times at year end 2023.

18m 19s

Now turning back to operating results, In the first quarter of twenty twenty five, we saw continued momentum with strong overall volume trends and cost controls across most categories. Leading to financial results that were generally in line with our expectations and representing a solid start to the year. The continued strong demand in our markets led to same store admissions growth of 4% year over year adjusted admissions up 2.6%, and ED visits up 2.4%. While same store surgeries were down 3%. Same store net revenue per adjusted admission was up 0.5% year over year as rate growth from commercial plans and the Medicare fee for service annual update were partly offset by unfavorable shifts in payer and acuity mix, as well as declining Medicaid rates.

19m 11s

Adjusted EBITDA for the first quarter was $376,000,000 compared with $378,000,000 in the prior year period.

19m 20s

And margin was 11.9% versus 12% in the prior year period. The impact of payer downgrades and denials remained stable in the first quarter of twenty twenty five relative to the prior quarter. Reflecting our ongoing utilization management efforts and physician advisor program. Our advocacy efforts regarding this troubling trend that is affecting all healthcare providers will continue. But we expect the year over year headwind that we called out in the third quarter twenty twenty four to persist until we anniversary it in the second half of this year. Turning to expense management, Our performance on labor costs remained solid. With average hourly wage rate up approximately 3.5% year over year. Including an increase in the number of employed physicians which was consistent with our expectations. Contract labor spend was $40,000,000 in the first quarter down $8,000,000 year over year on a consolidated basis. Reflecting our ongoing success with recruitment and retention. We held the line on supplies expense was flat year over year and flat sequentially at 15.5% of consolidated net revenues in the first quarter.

20m 39s

This demonstrates some of the benefit we are achieving as we have effectively offset the impact of inflation over these periods.

20m 48s

Medical specialist fees were $163,000,000 in the first quarter increasing approximately 9% year over year on a consolidated basis. Representing 5.1% of net revenues versus 4.8% in the prior year period.

21m 4s

This increase was in line with what we anticipated. While we remain encouraged with the progress through our in sourcing initiatives, we continue to anticipate further pressure in med spec fees. With these costs growing in excess of typical inflationary trends in 2025, but still well below the spikes that we saw from 2022 to 2023. Cash flows from operations were $120,000,000 for the first quarter up from $96,000,000 in the first quarter of twenty twenty four. And free cash flow was still slightly negative, yet improved over the prior year quarter. This improvement relative to our typical first quarter when we often experience a more significant outflow due to the timing of interest, and incentive comp payments and patient co pays and deductible resets partly reflects the long awaited receipt of $80,000,000 in income tax refund. However, that benefit was erased by the delays in payments under certain state supplemental programs. Money is now flowing from these programs, so we believe we are on track to meet our annual cash flow guidance. With our enterprise modernization initiative, Project Empower, we continue to implement new workflows generate savings opportunities, and gain new insights into our business as the Oracle environment further hardens.

22m 33s

I believe our stabilization is on track and I'm confident in the value this project will produce for the company.

22m 40s

As it relates to the 2025 financial guidance, we are maintaining the outlook that we provided in February. Consistent with prior practice, we have not considered in our guidance any additional divestitures beyond those that have already been announced. And we've also not included directed payment program reimbursement for New Mexico or Tennessee as those programs have not yet been approved by CMS for 2025. We do not have any update relative to either of those programs, but still expect their eventual approval. Recall, we believe that those programs are approved, they would add an incremental 100 to 125,000,000 to our annual guided run rate of EBITDA. This concludes our prepared remarks. So at this time, we'll turn the call back over to our operator, Rocco, for Q and A. Thank you. Also ask that you please limit yourself to one question and a single follow-up. And today's first question comes from Tanquilay with Jefferies. Please go ahead.

24m 8s

Congrats on the quarter.

24m 10s

Maybe Tim, as I think about just the volume performance here, and balancing it obviously with the revenue per adjusted admission, think that's mostly flu and the margins. I mean just curious how you're thinking about where the business can go forward, both from a volume perspective and your ability to manage or flex through the cost structure? And also any thoughts you can share with us on how you're thinking about tariffs potentially impacting your supplies and other input costs that you have to deal with?

24m 42s

Sure, Brian. I will kick that off and I'll turn it over to Kevin to touch on the tariff question. In terms of the quarter and the flu impact, did see an outsized impact in the flu, as I commented on earlier. It did have, I think, some squeeze effect on some of our lower acuity surgery volumes in the quarter, largely on the outpatient side. Due to either provider illness, staff illness or perhaps patient illness. We also are tracking to see if there's any consumer changes in terms of the reset of co pays and deductibles, and their willingness to take or receive care, with the reset of those deductibles. We're tracking that very closely. But in general, in terms of how the core book of business performed, excluding the flu impact, we're really pleased to see so many strong signs of success across the portfolio. Have really strong EMS volumes. With gains in trauma. So it wasn't all related just to to basic influenza related illness volumes. Also saw strong physician practice visits, in both primary care but also in our surgical and procedural specialists. Good growth in our cardiac service line as it relates to procedures in our cath labs, particularly higher acuity cardiac service lines as we continue to invest And then we also saw an outsized growth in our robotic surgery caseloads.

26m

Again, reflecting our investments into some new advanced platforms across various robotics platforms out there. Again, in terms of the durability and the investability in our markets to attract and grow new lines in higher levels of of business, we still see that line of sight straight and narrow through the portfolio. The other thing I would point out is Transfer Center continues to perform really, really well and provide basically daily insights as to where we can go next to continue to invest. Whether that be in service lines or technology or new capacity, we still see growing opportunities throughout the portfolio. Which lets us build into future quarters and future years. And then the last thing I would point out is just in the AFD space, despite the drop in some of our lower acuity cases, primarily [indiscernible] did have another strong growth quarter in our ASC environment as we continue to incrementally add one to two ASCs on per quarter. So we still see durability for the long run as we diversify the mix of surgeries happening in various sites of care across our markets. Brian, I'll touch on just a couple other points of your question.

27m 11s

In terms of expenses, we feel that even with some of the softness resulting from the flu, we still had very strong inpatient admissions and we were able to control our expenses with the added load of inpatient [indiscernible] And we believe that we'll be able to continue to maintain and control expenses throughout the year. We also think that there's some tailwinds for us as we continue to stabilize our new ERP and gain insights into the business and see [indiscernible] tailwinds on being able to take out some additional costs. Relative to tariffs, just a reminder, we are a member of HPG. Our group purchasing organization. Approximately or in excess of 70% of our supplies are purchased through the GPO. With that, we have fixed pricing Typically, are three years.

28m 23s

Through the GPO. So we have some price protection there. Approximately half of our purchasing through the GPO is domestic purchasing. In which is so would not be subject to tariffs And then beyond that, it's a mix of countries less than 5% of our purchases are from China, which would have the most risk I think, in the current environment relative to tariffs. So it's a very small part And again, the other purchasing is spread out across a number of different countries and I think it's yet to be determined what the risk is there. I appreciate that. Then maybe my follow-up, Kevin, as I think about the balance sheet and obviously you have a refi that was announced yesterday. Just curious how we should be thinking about number one, you called out the potential upcoming divestiture and then maybe about free cash flow guidance and what's embedded and what's not in the guidance? And also just proceeds from the recent divestiture announcement Lake Norman, I know was came in on April 1. So just anything you can share with us as we try to think about modeling the balance sheet and cash flows for the next one to two years?

29m 38s

Thanks. Sure. So the proceeds from Lake Norman that closed on April 1, those proceeds were actually received on threethirty one. So they were on our balance sheet. Sitting in the cash balance. As was the proceeds from ShorePoint which were received earlier in March. A portion of that was still sitting in cash and a portion of it had been used to pay down some on the ABL. Those proceeds will largely be used to do the tender of the unsecured notes that we meant released yesterday or announced yesterday.

30m 20s

In terms of the remainder of the year, I think we're on track in terms of our cash flow guidance.

30m 30s

Even with the additional divestiture of Cedar Park Regional Medical Center that we announced, and that taking place or anticipating closing kind of late in the second quarter, early third quarter I don't think it's going to have a material impact on the cash flow.

30m 50s

Equation. For the remainder of the year. So that's part of why we've not made any adjustments to that.

30m 58s

And with the refinancing, although we are paying a higher interest rate on the $700,000,000 that we are refinancing net of the impact of the tender offer for the unsecureds will have a slight benefit in reducing interest expense for the year but still within our guidance range.

31m 23s

Thank you.

31m 27s

Thank you. And our next question today comes from A. J. Rice at UBS.

31m 31s

Please go ahead. [indiscernible] I understand the comment on the Tennessee and New Mexico DPP programs. Are you hearing anything about whether the business as usual or those been put on hold for any particular reason? And I know in your case, you had three states, Alabama, Arkansas, and Indiana that had some level of discussion about potentially expanding or adding a program. Any updates on what's happening with those?

32m 4s

Thanks, AJ. So it's really been kind of quiet. We haven't heard anything specific.

32m 12s

About Tennessee or New Mexico. Nor have we expected to hear anything Best we can tell, things are moving forward. We do know that in the recent past couple weeks under this current administration, there have been a couple DPP programs approved in other states. I believe New Hampshire and Arizona were the states that programs have been approved. So it does appear that things are moving and that there's not a complete moratorium. On these plans that I would you know, tend to believe is a positive. Absent hearing anything else. But we're just still in a wait and see. But as we sit here today, we know of no reason that they will not be approved. Going forward. In terms of the other states, [indiscernible] has been discussing a program It has passed the state house I believe a bill has also passed the state Senate, maybe with some revisions. The state legislature is still in session. For another week or two, so nothing final has come out. But it is looking positive that they may pass a program in Indiana. I'm sorry, Alabama is still early on, and they're discussions and I don't expect to hear anything at this point.

33m 42s

It's just too early to know. Okay. And maybe my follow-up question, I'll just ask you a little bit about the public exchanges. Do you have an update as to how much of your volume and what kind of year to year growth you're seeing on the public exchanges this year? And any updated thoughts on or advocacy that you and then [indiscernible] I'm sorry. You broke up a little bit. But I believe our net revenue from the exchanges is less than 6%.

34m 19s

Of our total net revenue. We are seeing growth in that business. But it's still relatively small portion of our total net revenue. And then in terms of advocacy for the extension of the enhanced premium tax credits for the exchange volume, I think reading the current headlines, we're very active in the advocacy efforts there. Think it's too soon to tell as to whether those will be extended beyond their current cycle.

34m 50s

But we remain very active in our efficacy efforts. To make sure we understand how Okay. Thanks so much.

35m 5s

Thanks again. Thank you. And our next question today comes from Josh Frazking with Nephron Research. Please go ahead.

35m 12s

Hi, thanks. Good morning. You guys hear us okay? [indiscernible] Oh, sounds like you guys are breaking up. Hopefully you hear this. So just in response first question in response to an answer you gave before, can you speak more to the strong primary care and surgical specialist visits? Do you have a good sense of how much that is sort of overall market versus your specific initiatives? And are you seeing follow through care after and procedures after those visits?

35m 39s

Sure, Tasha. Can you hear me okay? I just want to do a mic check here.

35m 44s

Yeah. A little a little in and out, I think you're okay now.

35m 46s

Okay, sorry about that. In terms of our clinic visits, and again, I'll speak to our employee provider base.

35m 54s

Although we have some anecdotal information from independent providers across our health systems as well. In terms of our employed affiliated provider base, we saw strong growth in both primary care which you could argue is related to the spike in influenza. So again, not using that as our canary in the coal mine, we We focused more intently in terms of how our specialist volumes were pulling through the quarter. We did see good gains in same store and in non same store throughout the first quarter. Again, we've sequentially been adding on to those volumes for the last several quarters. So we see it as a good read through for long term prospects in our markets. In terms of the procedural pull through, in some specialties like cardiology, the growth in new patient visits we do believe did improve our cath lab pull through within the quarter. I also mentioned some strengthening of higher acuity cardiac service So we believe there's some attribution to the growth of those, employed cardiology practices, for instance, We did see some slowdown in GI even though we had good practice visits, saw a slowdown in GI procedures throughout quarter. Again, that's the one that we somewhat attribute to perhaps timing with co pays and deductibles resetting and some apprehension by patients to take that elective care so early in the year until they're their co pays and deductibles have been met.

37m 21s

We'll track that one throughout the year. That was the one area of softness that we did not expect in the quarter. All right. Perfect. And then my big question is just in terms of payer behavior, I heard you talk about sort of stability there. But just specifically around denials and pre authorizations. Are there variations on a geographic basis, on a line of business basis, on a specific plan basis that you're seeing?

37m 56s

Basis, pretty broad Confirm me. This is the operator.

38m 8s

Your line is Bricky.

38m 14s

Here. Please stand by.

38m 50s

And we have reconnected the speaker location. Please proceed.

38m 54s

All right. Can you hear us better now?

38m 56s

I I do hear you. We we didn't hear much of the answer, though. So I don't know if if you don't mind starting over.

39m 3s

Which one, Josh, was it for both the clinic visits and the denials and downgrades?

39m 11s

Now we heard all the all the procedural pull through commentary. It was it you sort of cut out after the plan behavior and, you know, segments plan specific geography.

39m 19s

Sure.

39m 20s

So so to your question for denials and downgrades, we're really seeing it across all regions.

39m 28s

And across all service lines. So it's it's nothing that I would call out as being very specific to a payer or a service line or a region. But more general in nature.

39m 44s

All right. Perfect. Thank you.

39m 49s

Thank you. And our next question today comes from Andrew Mock at Barclays. Please go ahead.

39m 55s

Hi, good morning. You reiterated the guidance despite absorbing additional headwinds around divestitures, the claims denials and medical specialist fees. I guess based on that, should we be thinking about the lower half of guidance? Or is there anything coming in stronger to offset those incremental headwinds? So the headwinds related to downgrades and denials were baked into our original guidance. We had indicated we started to see those an increase in the third quarter of last year. They really stabilized in the fourth quarter and remained consistent We will anniversary that or anticipate anniversarying that in the back half of this year.

40m 38s

And so we did build that in to our original guidance. So I don't think that that would would be an incremental headwind as we think about where we're at relative to our full year guidance, We are absorbing the additional divestiture, as you indicated. For the back half of the year.

41m 1s

But it's still early. It's only after one quarter. And I think that we're within the guidance range. And we do obviously reserve the right as we think about any future divestitures, if we get anything else across the finish line, and with potentially DPPs being approved those could all further change how we think about guidance and we would think about updating at that point. But as we sit here right now, I don't think the one divestiture was material enough to make a change to our guidance. Got it. And maybe just a follow-up. So it sounds like you guided for elevated medical specialist fees, but it still sounds like it's maybe outpacing those early expectations. Can you comment on the categories where you're seeing incremental specialist fee pressure? Thanks.

41m 52s

Yes. So, we guided to an 8% to 12% increase in medical specialist fees or that's when we baked in to our guidance for the full year. We were at 9% So call that within the range.

42m 6s

Of where we were expecting It is a pain point and continues to be a pain point The majority of that is in anesthesiology, probably over 50% of the increase is in anesthesiology or 50% of our our medical specialist fees. We are seeing a little bit in radiology starting to pick up.

42m 32s

But the primary pain point at this point is still anesthesiology.

42m 37s

Yeah, I agree. And if I could just add on to that, in terms of our mitigation tactics for that, as you know, we've built out a platform to in source, hospital based provider services successfully managing the transition of APP to the EDN side over the last I'll say almost two years. We've since added anesthesia in sourcing to the mix. We called out last quarter one of our major markets moving that to an in source platform. When the cost increase or the ask from the outsource provider, we believe is unreasonable and we can in source at a lower cost and drive better quality and value we are doing so. Have a couple more programs that are being in sourced already on the docket for this year. But we're trying to leave some cap space, if you will, for us to be able to pivot really quickly in other markets should we get further demand that we don't believe are reasonable for outsized services. We also have just begun the in sourcing process in our first radiology program leveraging again our internal expertise and skills try to mitigate any future cost pressures or extraordinary cost pressures across that hospital base specialty as well.

43m 49s

Great, thank you.

43m 52s

Thank you. Our next question comes from Steve Baxter at Wells Fargo. Please go ahead.

44m 3s

Hi, thanks. Just wanted to follow-up on AJ's question about PPP programs.

44m 7s

I know that there's something in your guidance for the twenty twenty five components of the Tennessee or New Mexico program, but I believe there were retroactive portions of that related to 2024. If it were approved, I think towards the end of the year, just Could you remind us, do you recognize those in the first quarter or if not, when would you expect recognition to occur?

44m 28s

Steven, I'm sorry. Could you speak up just a little bit?

44m 31s

We're having a little hard time hearing you. Just a little soft.

44m 36s

Yeah. Sorry about that. Hope this is better.

44m 38s

Just asking about the the Tennessee, New Mexico supplemental payment programs. I know that the twenty twenty five components are in your guidance yet. But to the extent that, yes, believe there is retroactivity related to twenty twenty four that was approved. Just wondering if that was recognized. In the first quarter or that would be recognized later in year? Just looking for an update on that factor first.

44m 59s

Sure. So you're correct. There is a a retro piece of Tennessee back to 07/01/2024 That actually has not received full approval yet. So we have not recognized that component either. So So that is still out there.

45m 21s

And that would be in addition to the 100,000,000 to $125,000,000 run rate that we've talked about on an annual basis. [indiscernible] we're still waiting to final approval of that.

45m 40s

Okay. Okay. And then just to expand a little bit on, you know, the payer mix dynamics that you discussed. I think I understand some of the around acuity, but I guess specifically on the lower year over year commercial mix, I mean, that lapping the you know, the the denials and downgrade impact? Or is there something else that kind consider there? And I'm hoping you could expand a little bit on, you mentioned Medicaid rate decreases, was hoping you could potentially flush that out a little bit.

46m 8s

Sure. Let me start off and Tim, feel free to jump in.

46m 12s

So the flu certainly we believe had an impact on care in the first quarter, not only on acuity, but also some disruption We also have seen a reduction in elective procedures and we're seeing more of that reduction in commercial business. And I think it's a combination of potentially the flu, but also some of the disruption in the economy, some of the discussion of recession and fear of tariffs or potential impacts of tariffs and what that may have. And when you think about your patient population, those with higher deductible co pays [indiscernible] high deductible plans, are probably the most financial risk in the first quarter before their co pays and deductibles have been met. And that's where we saw the biggest declines in elective procedures, particularly outpatient and in the out, elective procedures, surgeries. Was in that commercial space.

47m 22s

Yes, I agree. And the other item that's impacting the net revenue per adjusted admission we did because of the outsized impact of I think have some of the highest levels of medical volumes. Relative to surgical volumes than we've had in some time. Roughly again, 5% of our case volumes in the quarter medical and typically we'd be running two thirds. So I think there was just some dilution impact there. We did see our case mix index increase for both medical and surgical in the quarter. But overall, it came in a little bit lower than prior year quarter because of that dilution impact of the higher medical. Which typically runs a lower acuity index.

48m 9s

Thank you.

48m 11s

And ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to Tim Henschin for any closing remarks.

48m 17s

Great. Thank you, Rocco, and thanks to all of you for joining our call today. As always, if you have additional questions, you can reach us at 615465700 Thanks again and have a great day.

48m 31s

Thank you, sir. This concludes today's conference call. Thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Key Insights

Community Health Systems reported strong Q1 2025 results, with same-store admissions up 4%, adjusted admissions up 2.6%, and net operating revenues up 3.1% year-over-year, driven in part by a heavier flu season and continued growth in core markets.
The company completed several divestitures, including ShorePoint Health System, Lake Norman Regional Medical Center, and a 50% stake in Merit Health Biloxi, with total gross proceeds of $544 million in Q1; an additional $460 million divestiture of Cedar Park Regional Medical Center is expected to close in late Q2 or early Q3, bringing total 2025 proceeds to over $1 billion.
Debt management initiatives included issuing $700 million in new senior secured notes to redeem existing debt and launching a tender offer for $626 million in unsecured notes, resulting in improved net leverage (7.1x trailing adjusted EBITDA vs. 7.4x at year-end 2024) and a better maturity profile.
Adjusted EBITDA for Q1 was $376 million (margin 11.9%), essentially flat year-over-year, with stable payer downgrades/denials and effective cost controls; labor costs rose 3.5% and contract labor spend declined by $8 million year-over-year.
The company reaffirmed its 2025 financial guidance, excluding unannounced divestitures and pending supplemental payment programs (Tennessee and New Mexico DPPs), which could add $100–$125 million to annual EBITDA if approved; management remains focused on operational rigor, financial discipline, and continued investment in ambulatory services and innovation.

Recent Transcripts

Strong Q1 volume growth, $1B+ divestiture proceeds driving deleveraging and stable 2025 outlook.

CHS achieved record volumes, strong revenue growth, and margin improvement in 2024, with continued deleveraging.

Feb 19

Q4 2024

Revenue Growth

+5.5% (FY), +6.5% (Q4)

EBITDA Margin

13.1% (Q4), 12.2% (FY)

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$12B	$12B	$12B	$12B	$13B
Cost of Revenue	$7.4B	$7.3B	$7.3B	$7.4B	$1.9B
Gross Profit	$4.4B	$5.1B	$4.9B	$5.1B	$11B
Gross Profit %	37%	41%	40%	41%	85%
R&D Expenses	$0	$108M	$85M	$80M	$0

2020

2021

2022

2023

2024

Revenue

$12B

$13B

Cost of Revenue

$7.4B

$7.3B

$7.4B

$1.9B

Gross Profit

$4.4B

$5.1B

$4.9B

$5.1B

$11B

Gross Profit %

37%

41%

40%

41%

85%

R&D Expenses

$108M

$85M

$80M

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$607M	$368M	$179M	$16M	-$362M
Dep. & Amort.	$558M	$540M	$534M	$505M	$486M
Def. Tax	-$187M	$170M	$165M	$35M	-$116M
Stock Comp.	$13M	$25M	$20M	$22M	$17M
Chg. in WC	$1.4B	-$295M	-$479M	-$390M	$0

2020

2021

2022

2023

2024

Net Income

$607M

$368M

$179M

$16M

-$362M

Dep. & Amort.

$558M

$540M

$534M

$505M

$486M

Def. Tax

-$187M

$170M

$165M

$35M

-$116M

Stock Comp.

$13M

$25M

$20M

$22M

$17M

Chg. in WC

$1.4B

-$295M

-$479M

-$390M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$1.7B	$507M	$118M	$38M	$37M
ST Investments	$0	$0	$0	$0	$0
Cash & ST Inv.	$1.7B	$507M	$118M	$38M	$37M
Receivables	$2.1B	$2.2B	$2.1B	$2.4B	$2.5B
Inventory	$335M	$355M	$353M	$328M	$331M

2020

2021

2022

2023

2024

Cash

$1.7B

$507M

$118M

$38M

$37M

ST Investments

Cash & ST Inv.

$1.7B

$507M

$118M

$38M

$37M

Receivables

$2.1B

$2.2B

$2.1B

$2.4B

$2.5B

Inventory

$335M

$355M

$353M

$328M

$331M

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Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. · See all tickers.

Overview
Latest News
Earnings
Income Statement
Cash Flow
Balance Sheet
Related

Earnings

Report Date

Apr 23, 2025

Reported Revenue

3.2B

Beat +3.52%

Avg 1d Change

14.91%

Report Period

Q1 2025

Reported EPS

-0.03

Beat +70%

Implied Move 1d

27.95%

Transcript

9m 6s

Good day.

9m 7s

9m 42s

10m 7s

11m 31s

12m 56s

14m 27s

As the year goes on, will highlight some of these areas more specifically share the progress we are seeing.

14m 34s

15m 49s

Particularly through opportunistic divestitures and management of our debt.

15m 55s

In early March, we completed the divestiture of ShorePoint Health System in Florida. And on April 1, closed on the sale of Lake Norman Regional Health System in North Carolina.

16m 6s

Total gross proceeds for these two transactions of $544,000,000 was received and recorded in the first quarter.

16m 17s

16m 36s

17m 26s

17m 47s

These transactions will further reduce the company's net leverage improve our maturity profile and enhance shareholder value while not meaningfully affecting free cash flow.

17m 58s

18m 19s

19m 11s

Adjusted EBITDA for the first quarter was $376,000,000 compared with $378,000,000 in the prior year period.

19m 20s

20m 39s

This demonstrates some of the benefit we are achieving as we have effectively offset the impact of inflation over these periods.

20m 48s

21m 4s

22m 33s

I believe our stabilization is on track and I'm confident in the value this project will produce for the company.

22m 40s

24m 8s

Congrats on the quarter.

24m 10s

24m 42s

26m

27m 11s

28m 23s

29m 38s

30m 20s

In terms of the remainder of the year, I think we're on track in terms of our cash flow guidance.

30m 30s

30m 50s

Equation. For the remainder of the year. So that's part of why we've not made any adjustments to that.

30m 58s

31m 23s

Thank you.

31m 27s

Thank you. And our next question today comes from A. J. Rice at UBS.

31m 31s

32m 4s

Thanks, AJ. So it's really been kind of quiet. We haven't heard anything specific.

32m 12s

33m 42s

34m 19s

34m 50s

But we remain very active in our efficacy efforts. To make sure we understand how Okay. Thanks so much.

35m 5s

Thanks again. Thank you. And our next question today comes from Josh Frazking with Nephron Research. Please go ahead.

35m 12s

35m 39s

Sure, Tasha. Can you hear me okay? I just want to do a mic check here.

35m 44s

Yeah. A little a little in and out, I think you're okay now.

35m 46s

Okay, sorry about that. In terms of our clinic visits, and again, I'll speak to our employee provider base.

35m 54s

37m 21s

37m 56s

Basis, pretty broad Confirm me. This is the operator.

38m 8s

Your line is Bricky.

38m 14s

Here. Please stand by.

38m 50s

And we have reconnected the speaker location. Please proceed.

38m 54s

All right. Can you hear us better now?

38m 56s

I I do hear you. We we didn't hear much of the answer, though. So I don't know if if you don't mind starting over.

39m 3s

Which one, Josh, was it for both the clinic visits and the denials and downgrades?

39m 11s

Now we heard all the all the procedural pull through commentary. It was it you sort of cut out after the plan behavior and, you know, segments plan specific geography.

39m 19s

Sure.

39m 20s

So so to your question for denials and downgrades, we're really seeing it across all regions.

39m 28s

And across all service lines. So it's it's nothing that I would call out as being very specific to a payer or a service line or a region. But more general in nature.

39m 44s

All right. Perfect. Thank you.

39m 49s

Thank you. And our next question today comes from Andrew Mock at Barclays. Please go ahead.

39m 55s

40m 38s

41m 1s

41m 52s

Yes. So, we guided to an 8% to 12% increase in medical specialist fees or that's when we baked in to our guidance for the full year. We were at 9% So call that within the range.

42m 6s

42m 32s

But the primary pain point at this point is still anesthesiology.

42m 37s

43m 49s

Great, thank you.

43m 52s

Thank you. Our next question comes from Steve Baxter at Wells Fargo. Please go ahead.

44m 3s

Hi, thanks. Just wanted to follow-up on AJ's question about PPP programs.

44m 7s

44m 28s

Steven, I'm sorry. Could you speak up just a little bit?

44m 31s

We're having a little hard time hearing you. Just a little soft.

44m 36s

Yeah. Sorry about that. Hope this is better.

44m 38s

44m 59s

45m 21s

And that would be in addition to the 100,000,000 to $125,000,000 run rate that we've talked about on an annual basis. [indiscernible] we're still waiting to final approval of that.

45m 40s

46m 8s

Sure. Let me start off and Tim, feel free to jump in.

46m 12s

47m 22s

48m 9s

Thank you.

48m 11s

And ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to Tim Henschin for any closing remarks.

48m 17s

Great. Thank you, Rocco, and thanks to all of you for joining our call today. As always, if you have additional questions, you can reach us at 615465700 Thanks again and have a great day.

48m 31s

Thank you, sir. This concludes today's conference call. Thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Key Insights

Community Health Systems reported strong Q1 2025 results, with same-store admissions up 4%, adjusted admissions up 2.6%, and net operating revenues up 3.1% year-over-year, driven in part by a heavier flu season and continued growth in core markets.
The company completed several divestitures, including ShorePoint Health System, Lake Norman Regional Medical Center, and a 50% stake in Merit Health Biloxi, with total gross proceeds of $544 million in Q1; an additional $460 million divestiture of Cedar Park Regional Medical Center is expected to close in late Q2 or early Q3, bringing total 2025 proceeds to over $1 billion.
Debt management initiatives included issuing $700 million in new senior secured notes to redeem existing debt and launching a tender offer for $626 million in unsecured notes, resulting in improved net leverage (7.1x trailing adjusted EBITDA vs. 7.4x at year-end 2024) and a better maturity profile.
Adjusted EBITDA for Q1 was $376 million (margin 11.9%), essentially flat year-over-year, with stable payer downgrades/denials and effective cost controls; labor costs rose 3.5% and contract labor spend declined by $8 million year-over-year.
The company reaffirmed its 2025 financial guidance, excluding unannounced divestitures and pending supplemental payment programs (Tennessee and New Mexico DPPs), which could add $100–$125 million to annual EBITDA if approved; management remains focused on operational rigor, financial discipline, and continued investment in ambulatory services and innovation.

Community Health Systems, Inc. Price & Performance (CYH)

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