Community Health Systems, Inc. Announces Third Quarter 2004 Results.BRENTWOOD Brentwood, city and district, England Brentwood, city (1991 pop. 51,212) and district, Essex, SE England. Brentwood is mainly residential but produces some agricultural equipment, film, and prefabricated concrete. , Tenn. -- With Net Operating Revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. up 18.4%, Income from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the Per Share (Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) up 19.4% and Net Income Per Share (Diluted) up 3.2% Community Health Systems, Inc. (NYSE NYSE See: New York Stock Exchange :CYH CYH Check Your Head (youth driven organization in Canada) CYH Consider Yourself Hugged ) today announced financial and operating results for the third quarter ended September September: see month. 30, 2004. Net operating revenues for the third quarter ended September 30, 2004, totaled $844.0 million, an 18.4% increase compared with $712.7 million for the same period last year. Income from continuing operations increased 19.1% to $37.6 million, or $0.37 per share (diluted), on 107.9 million weighted average shares outstanding for the quarter ended September 30, 2004, compared with $31.6 million, or $0.31 per share (diluted), on 108.1 million weighted average shares outstanding for the same period last year. Income from continuing operations for the third quarter ended September 30, 2004, was reduced by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.8 million after taxes, or $0.01 per share (diluted), as a result of approximately $400,000 in expenses incurred in connection with the registration and offering of common stock of certain of the Company's selling stockholders, and an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $788,000 loss from early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt related to the refinancing Refinancing An extension and/or increase in amount of existing debt. of the Company's credit agreement. Third quarter results also included an estimated after tax loss of approximately $1.5 million, or $0.01 per share (diluted), as a result of a series of hurricanes which negatively impacted the volumes and operating results of selected hospitals located in Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and and the Gulf Shores Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). region. Net income increased 1.1% to $32.0 million, or $0.32 per share (diluted), compared with $31.7 million, or $0.31 per share (diluted), for the same period last year. Discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. consists of an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. loss of approximately $5.6 million, or $0.05 per share (diluted), related to the sale of two hospitals and an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. related to the designation DESIGNATION, wills. The expression used by a testator, instead of the name of the person or the thing he is desirous to name; for example, a legacy to. the eldest son of such a person, would be a designation of the legatee. Vide 1 Rop. Leg. ch. 2. 2. of a third hospital as being held for sale. Refer to pages 3 and 4 for "Financial Highlights." Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the third quarter of 2004 was $121.0 million, compared with $107.3 million for the same period last year, representing a 12.8% increase. Adjusted EBITDA is EBITDA adjusted to exclude loss from early extinguishment of debt and minority interest in earnings but includes expenses incurred in connection with the registration and offering of common stock. The Company uses adjusted EBITDA as a measure of liquidity. Net cash provided by operating activities for the third quarter of 2004 was $57.2 million, compared with $47.1 million for the same period last year, an increase of 21.5%. The consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial results for the third quarter ended September 30, 2004, reflect a 9.3% increase in total admissions compared with the third quarter of 2003. This increase is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to hospitals that have been acquired by the Company. On a same-store basis, admissions decreased 1.7%, adjusted admissions increased 1.0% and net operating revenues increased 6.1% compared with the same period last year. Net operating revenues for the nine months ended September 30, 2004, totaled $2.5 billion, compared with $2.0 billion for the same period last year, a 22.4% increase, again demonstrating the Company's successful integration of acquisitions over the last several years. Income from continuing operations increased 22.3% to $117.6 million or $1.14 per share (diluted), on 108.7 million weighted averages shares outstanding for the nine months ended September 30, 2004, compared with $96.1 million, or $0.95 per share (diluted) on 108.0 million weighted average shares outstanding, for the same period last year. Net income increased 16.0% to $111.2 million, or $1.08 per share (diluted), for the nine months ended September 30, 2004, compared with $95.8 million, or $0.95 per share (diluted), for the same period last year. Adjusted EBITDA for the nine months ended September 30, 2004, was $367.1 million, compared with $315.4 million for the same period last year, a 16.4% increase. Net cash provided by operating activities for the nine months ended September 30, 2004, was $263.2 million, compared with $198.4 million for the same period last year, an increase of 32.7%. The consolidated financial results for the nine months ended September 30, 2004, reflect a 15.5% increase in total admissions compared with the same period last year. On a same-store basis, admissions increased 1.1%, adjusted admissions increased 2.2%, and net operating revenues increased 7.1%, compared with the same period last year. "We are pleased with Community Health Systems' continued strong performance for the third quarter of 2004," commented Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. T. Smith, chairman, president and chief executive officer of Community Health Systems, Inc. "While our volumes were affected by disruptions from the severe hurricane hurricane, tropical cyclone in which winds attain speeds greater than 74 mi (119 km) per hr. Wind speeds reach over 190 mi (289 km) per hr in some hurricanes. activity in Florida and the Gulf Coast of Alabama in August and September, we still delivered another quarter of solid top line growth. Our ability to consistently meet our financial and operating objectives reflects the strength of our business model and solid execution by our management team." During the third quarter of 2004, Community Health Systems, Inc. completed two acquisitions of community hospitals. On July July: see month. 1, 2004, the Company acquired Galesburg Galesburg, city (1990 pop. 33,530), seat of Knox co., W Ill., in a farm, livestock, and coal area; chartered 1841. A trade, rail, and industrial center, it has railroad shops and plants that manufacture paint, rubber hoses, apparel, and plastics. Cottage Hospital The original concept of a cottage hospital was a small rural hospital having up to 25 beds. One advantage of such a hospital in villages was the familiarity the local physician might have with their patient that may affect their treatment. (170 beds) in Galesburg, Illinois Galesburg is a city in Knox County, Illinois, in the United States. As of the 2000 census, the city population was 33,706. It is the county seat of Knox County.GR6 , and completed the acquisition of Phoenixville Phoenixville (fē`nĭksvĭl), borough (1990 pop. 15,066), Chester co., SE Pa., on the Schuylkill River; settled 1720, inc. 1849. Iron deposits in the region led to the early development of an iron industry and later (1886) to the manufacture Hospital (143 beds) in Phoenixville, Pennsylvania Phoenixville is a borough in Chester County, Pennsylvania, 28 miles (45 km) northwest of Philadelphia at the junction of French Creek with the Schuylkill River. The population was 14,788 at the 2000 census. , on August 1, 2004. "Our operating strategy and commitment to enhancing the quality of health care in more communities have produced very favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results for all of our stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. ," added Smith. "As we expand our coverage into new markets, recruit RECRUIT. A newly made soldier. top physicians and add new services, we improve the financial and operating performance of the local hospitals and benefit the residents of the communities they serve. We are proud of our growing reputation as the acquirer of choice and we will continue to identify community hospitals that meet our acquisition criteria criteria (krītēr´ē  ),n. . We remain confident that 2004 will be another successful year for Community Health Systems." As previously announced, on September 21, 2004, partnerships affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: with Forstmann Forstmann may refer to the one of the Forstmann brothers:
U.S. holding company formed in 1998 from the merger of Citicorp (itself a holding company incorporated in 1967) and Travelers Group, Inc. The $70 billion merger included one of the largest U.S. investment banks, Salomon Smith Barney Inc. Global Markets, Inc. Subsequently, 12 million of these shares were purchased and retired by the Company. As a result of this offering, these Forstmann Little & Co. partnerships no longer own any common stock of the Company. "We are pleased to have completed an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. transition of ownership of the stock held by the Forstmann Little & Co. partnerships. We believe that this transaction eliminates the overhang Overhang Calculated as stock options granted, plus the remaining options to still be granted, and then divided by the total shares outstanding. Notes: A high percentage for the overhang is usually a bad thing. that had existed as a result of having a large percentage of the Company's shares held by one owner," added Smith. Included in the Company's Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed on October October: see month. 26, 2004, is a table setting forth selected information concerning the updated projected consolidated operating results of the Company for the years ending December December: see month. 31, 2004 and 2005. The revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. to the Company's previous guidance provided on July 21, 2004, relates primarily to the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of three hospitals to discontinued operations for the full year of 2004. These three hospitals account for 173 of the Company's licensed beds and approximately 1.0% of net revenue with an estimated low-single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. EBITDA margin. Located in the Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. suburb suburb, a community in an outlying section of a city or, more commonly, a nearby, politically separate municipality with social and economic ties to the central city. In the 20th cent. of Brentwood, Community Health Systems, Inc. is a leading operator of general acute care hospitals in non-urban communities throughout the country. Through its subsidiaries, the Company currently owns, leases or operates 71 hospitals in 22 states. Its hospitals offer a broad range of inpatient inpatient /in·pa·tient/ (in´pa-shent) a patient who comes to a hospital or other health care facility for diagnosis or treatment that requires an overnight stay. in·pa·tient n. medical and surgical services, outpatient outpatient /out·pa·tient/ (-pa-shent) a patient who comes to the hospital, clinic, or dispensary for diagnosis and/or treatment but does not occupy a bed. out·pa·tient n. treatment and skilled nursing care. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "CYH". Community Health Systems, Inc. will hold a conference call to discuss this press release on Wednesday Wednesday: see week. , October 27, 2004, at 11:00 a.m. Central, 12:00 p.m. Eastern. Investors will have the opportunity to listen to a live Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the broadcast of the conference call by clicking on the Investor Relations Investor relations The process by which the corporation communicates with its investors. link of the Company's website at www.chs.net, or at www.fulldisclosures.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , 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 continue through November November: see month. 27, 2004. A copy of the Company's Form 8-K (including this press release) and conference call slide show will also be available on the Company's website at www.chs.net. Statements contained in this news release regarding expected operating results, acquisition transactions and other events are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risk and uncertainties. Actual future events or results may differ materially from these statements. Readers are referred to the documents filed by Community Health Systems, Inc. with the Securities and Exchange Commission, including the Company's Registration Statement on Form S-3 (Registration Statement No. 333-117697), Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2003 and Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, 2004 and June June: see month. 30, 2004. These filings identify important risk factors and other uncertainties that could cause actual results to differ from those contained in the forward-looking statements.
COMMUNITY HEALTH SYSTEMS, INC.
Financial Highlights
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- -----------------------
2004 2003 (a) 2004 (a) 2003 (a)
-------- --------- ----------- -----------
Net operating
revenues $844,034 $712,697 $2,460,968 $2,010,922
Adjusted EBITDA(b) $121,017(c) $107,298 $367,148(c) $315,385
Income from
continuing
operations $37,649(d) $31,601 $117,579(d) $96,126
Net income $32,039 $31,683 $111,204 $95,838
Income from
continuing
operations
per share-basic $0.39 $0.32 $1.20 $0.98
Income from
continuing
operations
per share-diluted $0.37(d) $0.31 $1.14(d) $0.95
Net income per share
- basic $0.33 $0.32 $1.13 $0.97
Net income per share
- diluted $0.32 $0.31 $1.08 $0.95
Weighted average
number of shares
outstanding -
basic 97,795 98,410 98,430 98,438
Weighted average
number of shares
outstanding -
diluted 107,870(e) 108,123(e) 108,666(e) 107,980(e)
Net cash provided by
operating
activities $57,189 $47,065 $263,174 $198,356
(a) Pursuant to FASB No. 144, the Company has restated its prior
period financial statements and statistical results to reflect the
reclassification as discontinued operations the sale of two
hospitals and the designation of a third hospital as being held
for sale.
(b) EBITDA consists of income before interest, income taxes, and
depreciation and amortization. Adjusted EBITDA is EBITDA adjusted
to exclude loss from early extinguishment of debt and minority
interest in earnings. We have from time to time sold minority
interests in certain of our subsidiaries or acquired subsidiaries
with existing minority interest ownership positions. We believe
that it is useful to present adjusted EBITDA because it excludes
the portion of EBITDA attributable to these third party interests
and clarifies for investors our Company's portion of EBITDA
generated by our operations. We use adjusted EBITDA as a measure
of liquidity. We have included this measure because we believe it
provides investors with additional information about our ability
to incur and service debt and make capital expenditures. Adjusted
EBITDA is the key component in the determination of our compliance
with some of the covenants under our senior secured credit
facility, as well as to determine the interest rate and commitment
fee payable under the senior secured credit facility.
Adjusted EBITDA is not a measurement of financial performance or
liquidity under generally accepted accounting principles. It
should not be considered in isolation or as a substitute for net
income, operating income, cash flows from operating, investing or
financing activities, or any other measure calculated in
accordance with generally accepted accounting principles. The
items excluded from adjusted EBITDA are significant components in
understanding and evaluating financial performance and liquidity.
Our calculation of adjusted EBITDA may not be comparable to
similarly titled measures reported by other companies.
The following table reconciles adjusted EBITDA, as defined, to our net
cash provided by operating activities as derived directly from our
consolidated financial statements for the three months and nine months
ended September 30, 2004 and 2003 (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Adjusted EBITDA $121,017 $107,298 $367,148 $315,385
Interest expense, net (19,159) (18,393) (56,269) (51,926)
Provision for income taxes (24,029) (21,073) (76,344) (64,090)
(Loss) Income from operations
of hospitals sold or held
for sale (1,965) 82 (2,730) (288)
Depreciation and amortization
of discontinued operations 307 797 1,696 2,434
Other non-cash expenses, net 1,023 16 934 142
Net changes in operating
assets and liabilities,
net of effects
of acquisitions (20,005) (21,662) 28,739 (3,301)
--------- --------- --------- ---------
Net cash provided by operating
activities $57,189 $47,065 $263,174 $198,356
========= ========= ========= =========
(c) Includes approximately $400,000 of expenses incurred in connection
with the registration and offering of common stock and the
repurchase of common stock by us.
(d) Income from continuing operations for the quarter ended September
30, 2004, was reduced by approximately $0.8 million or $0.01 per
share (diluted) after taxes as a result of approximately $400,000
in expenses incurred in connection with the registration and
offering of common stock and the repurchase of common stock by us,
and an approximate $788,000 loss from early extinguishment of debt
related to the refinancing of our credit agreement. Third quarter
income from continuing operations also included an after tax loss
of approximately $1.5 million or $0.01 per share (diluted) as a
result of the series of hurricanes.
(e) Adjusted to include assumed exercise of employee stock options and
assumed conversion of convertible notes. Since the income per
share impact of the conversion of the convertible notes is less
than the basic income per share for both periods presented, the
convertible notes are dilutive and accordingly must be included in
the fully diluted calculation (after tax interest savings of $2.2
million per quarter and 8.6 million shares added to the
calculation of fully diluted earnings per share).
COMMUNITY HEALTH SYSTEMS, INC.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------------
2004 2003 2004 2003
--------- --------- ----------- -----------
Net operating revenues $844,034 $712,697 $2,460,968 $2,010,922
--------- --------- ----------- -----------
Operating expenses:
Salaries and benefits 338,442 284,061 987,552 807,687
Provision for bad debts 88,401 69,563 253,817 192,096
Supplies 103,839 83,174 297,771 234,270
Other operating
expenses 192,335 168,601 554,680 461,484
Depreciation and
amortization 39,312 35,580 115,080 101,540
Minority interests in
earnings 80 651 1,088 1,703
--------- --------- ----------- -----------
Total expenses 762,409 641,630 2,209,988 1,798,780
--------- --------- ----------- -----------
Income from operations 81,625 71,067 250,980 212,142
Interest expense, net 19,159 18,393 56,269 51,926
Loss from early
extinguishment of debt 788 - 788 -
--------- --------- ----------- -----------
Income from continuing
operations before income
taxes 61,678 52,674 193,923 160,216
Provision for income taxes 24,029 21,073 76,344 64,090
--------- --------- ----------- -----------
Income from continuing
operations 37,649 31,601 117,579 96,126
--------- --------- ----------- -----------
Discontinued operations,
net of taxes:
(Loss) Income from
operations of hospitals
sold or held for sale (1,965) 82 (2,730) (288)
Net loss on sale of
hospitals (2,020) - (2,020) -
Impairment of long-lived
assets of hospital
held for sale (1,625) - (1,625) -
--------- --------- ----------- -----------
(Loss) Income on
discontinued operations (5,610) 82 (6,375) (288)
--------- --------- ----------- -----------
Net income $32,039 $31,683 $111,204 $95,838
========= ========= =========== ===========
Income from continuing
operations per share -
basic $0.39 $0.32 $1.20 $0.98
========= ========= =========== ===========
Income from continuing
operations per share -
diluted $0.37 $0.31 $1.14 $0.95
========= ========= =========== ===========
Net income per share -
basic $0.33 $0.32 $1.13 $0.97
========= ========= =========== ===========
Net income per share -
diluted $0.32 $0.31 $1.08 $0.95
========= ========= =========== ===========
Weighted average number of
shares outstanding:
Basic 97,795 98,410 98,430 98,438
--------- --------- ----------- -----------
Diluted 107,870 108,123 108,666 107,980
--------- --------- ----------- -----------
Net income per share
calculation:
Net income $32,039 $31,683 $111,204 $95,838
Add - Convertible notes
interest, net of taxes 2,189 2,189 6,567 6,567
--------- --------- ----------- -----------
Adjusted net income $34,228 $33,872 $117,771 $102,405
========= ========= =========== ===========
Weighted average number of
shares outstanding -
basic 97,795 98,410 98,430 98,438
Add effect of dilutive
securities:
Unvested common shares 23 93 23 98
Employee stock options 1,470 1,038 1,631 862
Convertible notes 8,582 8,582 8,582 8,582
--------- --------- ----------- -----------
Weighted average number of
shares outstanding -
diluted 107,870 108,123 108,666 107,980
========= ========= =========== ===========
COMMUNITY HEALTH SYSTEMS, INC.
Selected Operating Data
(Unaudited)
($ in thousands)
For the Three Months Ended
September 30,
--------------------------------
Consolidated
--------------------------------
2004 2003 % Change
------------ --------- ---------
Number of hospitals 71 69
Licensed beds 7,971 7,408
Beds in service 6,440 5,748
Admissions 69,208 63,297 9.3%
Adjusted admissions 131,301 117,895 11.4%
Patient days 277,216 245,937 12.7%
Average length of stay (days) 4.0 3.9
Occupancy rate (average beds in
service) 47.2% 47.4%
Net operating revenues $844,034 $712,697 18.4%
Net inpatient revenue as a % of total
net operating revenues 49.6% 50.2%
Net outpatient revenue as a % of
total net operating revenues 49.1% 48.6%
Income from operations $81,625 $71,067 14.9%
Income from operations as a % of net
operating revenues 9.7% 10.0%
Depreciation and amortization $39,312 $35,580
Minority interest in earnings $80 $651
Liquidity Data:
Adjusted EBITDA $121,017 $107,298 12.8%
Adjusted EBITDA as a % of net
operating revenues 14.3% 15.1%
Net cash provided by operating
activities $57,189 $47,065
Net cash provided by operating
activities as a % of net operating
revenue 6.8% 6.6%
For the Three Months Ended
September 30,
--------------------------------
Same-Store
--------------------------------
2004 2003 % Change
------------ --------- ---------
Number of hospitals 68 68
Licensed beds 7,332 7,345
Beds in service 5,822 5,709
Admissions 61,643 62,732 -1.7%
Adjusted admissions 118,051 116,873 1.0%
Patient days 242,306 244,388 -0.9%
Average length of stay (days) 3.9 3.9
Occupancy rate (average beds in
service) 46.0% 47.4%
Net operating revenues $752,096 $709,053 6.1%
Net inpatient revenue as a % of total
net operating revenues 49.0% 50.1%
Net outpatient revenue as a % of
total net operating revenues 49.9% 48.6%
Income from operations $77,412 $71,132 8.8%
Income from operations as a % of net
operating revenues 10.3% 10.0%
Depreciation and amortization $36,165 $35,373
Minority interest in earnings $80 $651
Continuing operating results and statistical data exclude discontinued
operations for all periods presented.
Certain 2003 operating data has been adjusted for minor
reclassification/corrections.
COMMUNITY HEALTH SYSTEMS, INC.
Selected Operating Data
(Unaudited)
($ in thousands)
For the Nine Months Ended
September 30,
---------------------------------
Consolidated
---------------------------------
2004 2003 % Change
----------- ----------- ---------
Number of hospitals 71 69
Licensed beds 7,971 7,408
Beds in service 6,440 5,748
Admissions 208,972 180,866 15.5%
Adjusted admissions 387,042 332,149 16.5%
Patient days 849,732 704,927 20.5%
Average length of stay (days) 4.1 3.9
Occupancy rate (average beds in
service) 50.3% 48.0%
Net operating revenues $2,460,968 $2,010,922 22.4%
Net inpatient revenue as a % of
total net operating revenues 50.4% 51.1%
Net outpatient revenue as a % of
total net operating revenues 48.2% 47.6%
Income from operations $250,980 $212,142 18.3%
Income from operations as a % of net
operating revenues 10.2% 10.5%
Depreciation and amortization $115,080 $101,540
Minority interest in earnings $1,088 $1,703
Liquidity Data:
Adjusted EBITDA $367,148 $315,385 16.4%
Adjusted EBITDA as a % of net
operating revenues 14.9% 15.7%
Net cash provided by operating
activities $263,174 $198,356
Net cash provided by operating
activities as a % of net operating
revenue 10.7% 9.9%
For the Nine Months Ended
September 30,
---------------------------------
Same-Store
---------------------------------
2004 2003 % Change
----------- ----------- ---------
Number of hospitals 68 68
Licensed beds 7,332 7,345
Beds in service 5,822 5,709
Admissions 181,865 179,847 1.1%
Adjusted admissions 337,717 330,331 2.2%
Patient days 721,868 701,683 2.9%
Average length of stay (days) 4.0 3.9
Occupancy rate (average beds in
service) 48.6% 48.1%
Net operating revenues $2,141,891 $2,000,080 7.1%
Net inpatient revenue as a % of
total net operating revenues 50.2% 51.1%
Net outpatient revenue as a % of
total net operating revenues 48.7% 47.7%
Income from operations $233,722 $212,095 10.2%
Income from operations as a % of net
operating revenues 10.9% 10.6%
Depreciation and amortization $102,570 $100,927
Minority interest in earnings $1,088 $1,703
Continuing operating results and statistical data exclude discontinued
operations for all periods presented.
Certain 2003 operating data has been adjusted for minor
reclassification/corrections.
COMMUNITY HEALTH SYSTEMS, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
September 30, December 31,
2004 2003
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $19,952 $16,331
Patient accounts receivable, net 577,910 559,097
Other current assets 140,324 120,652
------------- ------------
Total current assets 738,186 696,080
------------- ------------
Property and equipment 1,890,735 1,772,461
Less accumulated depreciation and
amortization (411,988) (377,116)
------------- ------------
Property and equipment, net 1,478,747 1,395,345
------------- ------------
Goodwill, net 1,213,479 1,155,797
------------- ------------
Other assets, net 104,283 102,989
------------- ------------
Total assets $3,534,695 $3,350,211
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $20,687 $29,677
Accounts payable and accrued
liabilities 398,919 368,387
------------- ------------
Total current liabilities 419,606 398,064
------------- ------------
Long-term debt 1,760,518 1,444,981
------------- ------------
Other long-term liabilities 168,809 156,577
------------- ------------
Stockholders' equity 1,185,762 1,350,589
------------- ------------
Total liabilities and
stockholders' equity $3,534,695 $3,350,211
============= ============
COMMUNITY HEALTH SYSTEMS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
----------------------
2004 2003
----------- ----------
Cash flows from operating activities
Net Income $111,204 $95,838
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 116,776 103,974
Minority interest in earnings 1,088 1,703
Other non-cash expenses, net 5,367 142
Net changes in operating assets and
liabilities, net of effects of
acquisitions 28,739 (3,301)
----------- ----------
Net cash provided by operating
activities 263,174 198,356
----------- ----------
Cash flows from investing activities
Acquisitions of facilities and
other related equipment (131,815) (320,233)
Proceeds from sale of facilities 7,850 -
Purchases of property and equipment, net (124,138) (100,909)
Increase in other assets (23,576) (20,174)
----------- ----------
Net cash used in investing
activities (271,679) (441,316)
----------- ----------
Cash flows from financing activities
Proceeds from exercise of stock options 3,951 1,479
Stock repurchase (290,361) (14,060)
Deferred financing costs (4,669) -
Redemption of minority investments
in joint ventures (2,218) (336)
Distribution to minority investors
in joint ventures (998) (1,836)
Borrowing under credit agreement 1,632,911 280,000
Repayments of long-term indebtedness (1,326,490) (92,489)
----------- ----------
Net cash provided by financing
activities 12,126 172,758
----------- ----------
Net change in cash and cash equivalents 3,621 (70,202)
Cash and cash equivalents at beginning of
period 16,331 132,844
----------- ----------
Cash and cash equivalents at end of period $19,952 $62,642
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