Community Health Systems Inc. (CYH) filed Quarterly Report for the period ended 2009-09-30.
Community Health Systems Inc. is a leading provider of non-urban acute healthcare services. Their facilities together with their medical staffs provide a wide range of inpatient and outpatient acute care services and a variety of specialty services. Community Health Systems Inc. has a market cap of $3.1 billion; its shares were traded at around $33.42 with a P/E ratio of 13.7 and P/S ratio of 0.3. Community Health Systems Inc. had an annual average earning growth of 14.2% over the past 5 years.
Highlight of Business Operations:
Self-pay revenues represented approximately 11.4% and 11.1% of our net operating revenues for the three months ended September 30, 2009 and 2008, respectively, and 11.2% and 10.9% of our net operating revenues for the nine months ended September 30, 2009 and 2008, respectively. The value of charity care services relative to total net operating revenues increased to 4.0% and 3.8% for the three and nine months ended September 30, 2009, respectively, from 3.3% and 3.6% for the three and nine months ended September 30, 2008, respectively. Uninsured and underinsured patients continue to be an industry-wide issue, and we anticipate this trend will continue into the foreseeable future. Legislative reform impacting the healthcare industry remains a priority of the current presidential administration and various proposals continue to be strongly debated in Congress. Given the current level of uncertainty of what may result from these reform proposals, it is not possible, at this time, to accurately predict what impact any final legislation may have on us.
Operating expenses, excluding depreciation and amortization, as a percentage of net operating revenues, increased to 86.7% for the three months ended September 30, 2009, compared to 86.3% for the three months ended September 30, 2008. Salaries and benefits, as a percentage of net operating revenues, increased 0.5% to 40.1% for the three months ended September 30, 2009, compared to 39.6% for the three months ended September 30, 2008. This increase primarily relates to recently acquired hospitals. Provision for bad debts, as a percentage of net operating revenues, increased 0.6% to 12.3% for the three months ended September 30, 2009, compared to 11.7% for the three months ended September 30, 2008. This increase primarily represents an increase in self-pay revenues over the comparable period of 2008 due to increased charges and the impact of current economic conditions on individuals’ ability to pay. Supplies, as a percentage of net operating revenues, increased 0.1% to 13.9% for the three months ended September 30, 2009, as compared to 13.8% for the three months ended September 30, 2008. Rent and other operating expenses, as a percentage of net operating revenues, decreased 0.8% to 20.4% for the three months ended September 30, 2009, as compared to 21.2% for the three months ended September 30, 2008. This decrease is due primarily to reductions in contract labor. Equity in earnings of unconsolidated affiliates, as a percentage of net operating revenues, decreased 0.1% to 0.2% for the three months ended September 30, 2009, as compared to 0.3% for the three months ended September 30, 2008.
Income from continuing operations as a percentage of net operating revenue increased from 2.1% for the three months ended September 30, 2008 to 2.4% for the three months ended September 30, 2009. Net income as a percentage of net operating revenue increased from 2.1% for the three months ended September 30, 2008 to 2.4% for the three months ended September 30, 2009. The increase in income from continuing operations as a percentage of net operating revenue is primarily a result of the decrease in interest expense as a percentage of net operating revenues, as discussed above.
Operating expenses, excluding depreciation and amortization, as a percentage of net operating revenues, increased to 86.7% for the nine months ended September 30, 2009, compared to 86.6% for the nine months ended September 30, 2008. Salaries and benefits, as a percentage of net operating revenues, increased 0.1% to 40.1% for the nine months ended September 30, 2009, compared to 40.0% for the nine months ended September 30, 2008. Provision for bad debts, as a percentage of net operating revenues, increased 1.0% to 12.0% for the nine months ended September 30, 2009, compared to 11.0% for the nine months ended September 30, 2008. This increase primarily represents an increase in self-pay revenues over the comparable period of 2008 and the impact of current economic conditions on individuals’ ability to pay. Supplies, as a percentage of net operating revenues, decreased 0.1% to 13.9% for the nine months ended September 30, 2009, as compared to 14.0% for the nine months ended September 30, 2008. This decrease is primarily the result of improvements from greater utilization of and improved pricing under our purchasing program. Rent and other operating expenses, as a percentage of net operating revenues, decreased 0.9% to 20.7% for the nine months ended September 30, 2009, as compared to 21.6% for the nine months ended September 30, 2008. This decrease is due primarily to reductions in contract labor. Equity in earnings of unconsolidated affiliates, as a percentage of net operating revenues, remained consistent at 0.4% for each of the nine-month periods ended September 30, 2009 and 2008.
Income from continuing operations as a percentage of net operating revenue increased from 2.1% for the nine months ended September 30, 2008 to 2.5% for the nine months ended September 30, 2009. Net income as a percentage of net operating revenue increased from 2.2% for the nine months ended September 30, 2008 to 2.5% for the nine months ended September 30, 2009. The increase in income from continuing operations as a percentage of net operating revenue is primarily due to the decrease in interest expense as a percentage of net operating revenues.
The loans under the Credit Facility bear interest on the outstanding unpaid principal amount at a rate equal to an applicable percentage plus, at our option, either (a) an Alternate Base Rate (as defined) determined by reference to the greater of (1) the Prime Rate (as defined) announced by Credit Suisse or (2) the Federal Funds Effective Rate (as defined) plus 0.5%, or (b) a reserve adjusted London interbank offered rate for dollars (Eurodollar rate) (as defined). The applicable percentage for term loans is 1.25% for Alternate Base Rate loans and 2.25% for Eurodollar rate loans. The applicable percentage for revolving loans was initially 1.25% for Alternate Base Rate revolving loans and 2.25% for Eurodollar revolving loans, in each case subject to reduction based on our leverage ratio. Loans under the swingline subfacility bear interest at the rate applicable to Alternate Base Rate loans unde
CYH is in the portfolios of Richard Snow of Snow Capital Management, L.P., Ron Baron of Baron Funds, Andreas Halvorsen of Viking Global Investors LP.
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