Quorum Health Corporation Announces Second Quarter 2019 Results
Second quarter net loss attributable to Quorum Health Corporation was ($16.9) million, or ($0.56) per share
Second quarter Adjusted EBITDA was $33.4 million and Same-facility Adjusted EBITDA was $36.9 million
Announces agreement with MEDHOST Inc. to deploy its Electronic Health Record platform
BRENTWOOD, Tenn.–(BUSINESS WIRE)–Quorum Health Corporation (NYSE: QHC) (the “Company”) today announced financial and operating results for the second quarter ended June 30, 2019.
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QUORUM HEALTH CORPORATION |
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Three Months Ended June 30, |
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2019 |
|
2018 |
|
|
Net operating revenues |
$442.2 |
|
$472.6 |
|
|
Net loss attributable to Quorum Health Corporation |
($16.9 ) |
|
($26.6 |
) |
|
Same-facility net operating revenues |
$442.4 |
|
$458.5 |
|
|
Cash flows from operating activities |
($10.4 ) |
|
$17.2 |
|
|
Adjusted EBITDA(1) |
$33.4 |
|
$36.3 |
|
|
Same-facility Adjusted EBITDA(1 & 2) |
$36.9 |
|
$40.2 |
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(1) A table providing supplemental information on Adjusted EBITDA, Same-facility Adjusted EBITDA and reconciling net loss to Adjusted EBITDA and Same-facility Adjusted EBITDA is included in this release, see footnote (a).
(2) Same-facility Adjusted EBITDA was previously reported by the Company as Adjusted EBITDA, Adjusted for Divestitures. There has been no change in how the financial measure is being calculated.
Financial results for the second quarter ended June 30, 2019 reflect the following:
- Compared to the second quarter of 2018, same-facility net patient revenues decreased 2.6%, while same-facility net patient revenues per adjusted admission increased 0.9%. The decrease in same-facility net patient revenues compared to the second quarter of 2018 reflects a 3.4% decline in same-facility adjusted admissions and a 2.2% decline in same-facility surgeries. The decline in volumes compared to the second quarter of 2018 represents approximately $14.9 million of same-facility net patient revenues.
- Same-facility net operating revenues for the second quarter of 2019 reflect a $5.6 million decrease related to Watsonville Community Hospital and MetroSouth Medical Center (the “Pending Divestitures”). The Pending Divestitures incurred negative Adjusted EBITDA of $2.4 million during the second quarter of 2019. The Company previously announced that it had entered into a definitive agreement to sell Watsonville Community Hospital and discontinue operations at MetroSouth Medical Center by the end of 2019. The Company will continue to reflect the results of the Pending Divestitures in its same-facility results until the facilities have been sold or closed (see “Divestiture Update” below).
- Second quarter 2019 Adjusted EBITDA was 7.6% of net operating revenues and Same-facility Adjusted EBITDA was 8.3% of same-facility net operating revenues. Excluding the impact of the Pending Divestitures, Same-facility Adjusted EBITDA as a percent of same-facility net operating revenues would have been 10.3% in the second quarter of 2019 compared to 10.0% in the second quarter of 2018.
- Same-facility operating expenses in the second quarter of 2019 reflect a $28.5 million reduction in professional and general liability reserves due to a change in actuarial estimates, including a $23.5 million reduction that relates to prior years and is excluded from Same-facility Adjusted EBITDA. Factors contributing to the change in estimate include the use of valuation techniques that place more emphasis on the Company’s claims subsequent to the Spin-off compared to historical trends, as well as more reliance on industry trend factors. The reduction in the frequency and severity of the Company’s claims is the result of internal initiatives in the areas of patient safety, risk management, and claims management, as well as external factors such as tort reform in certain key states.
- Same-facility surgeries during the second quarter of 2019 improved 8.9% compared to the first quarter of 2019, as the Company focused on improving volumes at two facilities impacted by independent physician turnover and re-syndicating two outpatient surgery centers in Illinois. Excluding these four facilities and the Pending Divestitures, same-facility surgeries increased 4.9% during the second quarter of 2019 compared to the second quarter of 2018 as a result of the Company’s efforts to increase volumes in higher acuity service lines.
TSA Transition and R1 RCM Partnership Update
- The Company announced today that it had signed an agreement with MEDHOST Inc. (“MEDHOST”) to deploy their Electronic Health Record platform in connection with the Company’s planned transition from its Computer and Data Processing Transition Services Agreement (or “IT TSA”) with Community Health Systems, Inc. (“CHS”). The Company currently utilizes MEDHOST’s software through its IT TSA with CHS. The Company will incur additional costs to establish the remainder of its information technology systems. The Company expects the transition to be completed by the end of the first quarter of 2021.
- As previously announced, the Company has partnered with R1 RCM to provide end-to-end revenue cycle management services. The Company is on-track with the implementation of R1 RCM’s services and believes that the agreement with R1 RCM will result in approximately $5 million in cost savings and $5 million of improved net patient revenues during the second half of 2019. Beyond 2019, the Company expects the annual impact of the R1 RCM partnership to grow to approximately $45 million by 2021, which is revised from its previous estimate of $50 million to account for the Pending Divestitures.
Divestiture Update
- During the second quarter of 2019, the Company announced that it had entered into a definitive agreement to divest 106-bed Watsonville Community Hospital in Watsonville, California. Cash proceeds from the transaction are expected to be approximately $35 million to $40 million, subject to final net working capital balances.
- On July 18, 2019 the Company received notice from the Pajaro Valley Community Health Trust (“Trust”) that it had exercised its Right of First Refusal to purchase the stock interests of Watsonville Community Hospital. If the terms of the Right of First Refusal are not met, the definitive agreement entered into on May 31, 2019 will remain in effect. The Company currently anticipates completing the sale of Watsonville by the end of 2019.
- The Company previously announced that it would either sell or discontinue operations at MetroSouth Medical Center in Blue Island, Illinois by the end of 2019. The Company later announced that operations will be discontinued by the end of the third quarter of 2019. The Company expects to complete its assessment of the closure of MetroSouth by the end of the third quarter, including any potential impacts on the Company’s results of operations, financial position and cash flows.
Financial Outlook
The Company is revising its 2019 Same-facility net operating revenues guidance as a result of the Pending Divestitures. The Company is reiterating its previously established guidance for Same-facility Adjusted EBITDA.
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(In Millions) |
2018 Actual |
|
2019 Guidance Range |
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Same-facility net operating revenues |
$1,804.4 |
|
$1,550 – $1,600 |
|
Same-facility Adjusted EBITDA |
$150.7 |
|
$160 – $180 |
These projections are based on the Company’s historical operating performance, current economic, demographic and regulatory trends and other assumptions that the Company believes are reasonable at this time. See “Forward-Looking Statements” below for a list of factors that could affect the future financial and operating results of the Company or the healthcare industry generally.
A reconciliation of the Company’s projected 2019 Same-facility Adjusted EBITDA, a forward-looking non-GAAP financial measure, to net income (loss), the most directly comparable U.S. GAAP financial measure, is omitted from this press release because the Company is unable to provide such reconciliation without unreasonable effort. This inability results from the inherent difficulty in forecasting generally and in quantifying certain projected amounts that are necessary for such reconciliation. In particular, sufficient information is not available to calculate certain items required for such reconciliation without unreasonable effort, including interest expense, provision for (benefit from) income taxes and other adjustments that would be necessary to prepare a forward-looking statement of net income (loss) in accordance with U.S. GAAP. For the same reasons, the Company is unable to address the probable significance of the unavailable information.
About Quorum Health Corporation
The principal business of Quorum Health Corporation is to provide hospital and outpatient healthcare services in its markets across the United States. As of June 30, 2019, the Company owned or leased 26 hospitals in rural and mid-sized markets located across 14 states and licensed for 2,458 beds. Through Quorum Health Resources LLC, a wholly-owned subsidiary, the Company provides hospital management advisory and healthcare consulting services to non-affiliated hospitals across the country. Over 95% of the Company’s net operating revenues are attributable to its hospital operations business.
The Company’s headquarters are located in Brentwood, Tennessee, a suburb south of Nashville. Shares in Quorum Health Corporation are traded on the NYSE under the symbol “QHC.” More information about the Company can be found on its website at www.quorumhealth.com.
Quorum Health Corporation will hold a conference call on Thursday, August 8, 2019, at 11:00 a.m. Eastern time, to review its financial and operating results for the second quarter ended June 30, 2019. To participate, please dial 1-844-761-3024 approximately 10 minutes prior to the scheduled start of the call. If calling from outside of the United States, please dial 1-661-378-9914. Please reference Conference ID number 9964019 when prompted by the conference call operator. The conference call will also be webcast live from the Investor Relations portion of the Company’s website. A presentation will be made available during the call and will be found in the Investor Relations portion of the Company’s website at www.quorumhealth.com. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will continue to be available for approximately 30 days. Copies of this press release and the Company’s Current Report on Form 8-K (including this press release) will be available on the Company’s website at www.quorumhealth.com.
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QUORUM HEALTH CORPORATION |
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Three Months Ended June 30, |
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2019 |
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2018 |
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% of |
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% of |
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|
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|
$ Amount |
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Revenues |
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|
$ Amount |
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|
Revenues |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenues |
|
$ |
442,170 |
|
|
|
100.0 |
% |
|
$ |
472,632 |
|
|
|
100.0 |
% |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
213,411 |
|
|
|
48.3 |
% |
|
|
232,631 |
|
|
|
49.2 |
% |
|
Supplies |
|
|
50,202 |
|
|
|
11.4 |
% |
|
|
52,897 |
|
|
|
11.2 |
% |
|
Other operating expenses |
|
|
106,954 |
|
|
|
24.1 |
% |
|
|
144,456 |
|
|
|
30.6 |
% |
|
Depreciation and amortization |
|
|
14,500 |
|
|
|
3.3 |
% |
|
|
17,142 |
|
|
|
3.6 |
% |
|
Lease costs and rent |
|
|
11,627 |
|
|
|
2.6 |
% |
|
|
11,358 |
|
|
|
2.4 |
% |
|
Electronic health records incentives |
|
|
583 |
|
|
|
0.1 |
% |
|
|
(445 |
) |
|
|
(0.1 |
)% |
|
Legal, professional and settlement costs |
|
|
604 |
|
|
|
0.1 |
% |
|
|
5,417 |
|
|
|
1.1 |
% |
|
Impairment of long-lived assets and goodwill |
|
|
25,950 |
|
|
|
5.9 |
% |
|
|
— |
|
|
|
— |
% |
|
Loss (gain) on sale of hospitals, net |
|
|
1,140 |
|
|
|
0.3 |
% |
|
|
307 |
|
|
|
0.1 |
% |
|
Loss on closure of hospitals, net |
|
|
— |
|
|
|
— |
% |
|
|
3,338 |
|
|
|
0.7 |
% |
|
Total operating costs and expenses |
|
|
424,971 |
|
|
|
96.1 |
% |
|
|
467,101 |
|
|
|
98.8 |
% |
|
Income (loss) from operations |
|
|
17,199 |
|
|
|
3.9 |
% |
|
|
5,531 |
|
|
|
1.2 |
% |
|
Interest expense, net |
|
|
33,582 |
|
|
|
7.6 |
% |
|
|
31,926 |
|
|
|
6.8 |
% |
|
Income (loss) before income taxes |
|
|
(16,383 |
) |
|
|
(3.7 |
)% |
|
|
(26,395 |
) |
|
|
(5.6 |
)% |
|
Provision for (benefit from) income taxes |
|
|
94 |
|
|
|
— |
% |
|
|
(454 |
) |
|
|
(0.1 |
)% |
|
Net income (loss) (a) |
|
|
(16,477 |
) |
|
|
(3.7 |
)% |
|
|
(25,941 |
) |
|
|
(5.5 |
)% |
|
Less: Net income (loss) attributable to noncontrolling interests |
|
|
396 |
|
|
|
0.1 |
% |
|
|
665 |
|
|
|
0.1 |
% |
|
Net income (loss) attributable to Quorum Health Corporation |
|
$ |
(16,873 |
) |
|
|
(3.8 |
)% |
|
$ |
(26,606 |
) |
|
|
(5.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Quorum Health Corporation stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (b) |
|
$ |
(0.56 |
) |
|
|
|
|
|
$ |
(0.92 |
) |
|
|
|
|
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
30,001,208 |
|
|
|
|
|
|
|
28,995,564 |
|
|
|
|
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QUORUM HEALTH CORPORATION |
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|
|
Six Months Ended June 30, |
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|||||||||||||
|
|
|
2019 |
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|
2018 |
|
||||||||||
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|
|
|
|
|
|
% of |
|
|
|
|
|
|
% of |
|
||
|
|
|
$ Amount |
|
|
Revenues |
|
|
$ Amount |
|
|
Revenues |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenues |
|
$ |
884,975 |
|
|
|
100.0 |
% |
|
$ |
959,452 |
|
|
|
100.0 |
% |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
438,486 |
|
|
|
49.5 |
% |
|
|
479,631 |
|
|
|
50.0 |
% |
|
Supplies |
|
|
101,587 |
|
|
|
11.5 |
% |
|
|
111,783 |
|
|
|
11.7 |
% |
|
Other operating expenses |
|
|
243,743 |
|
|
|
27.7 |
% |
|
|
297,194 |
|
|
|
31.0 |
% |
|
Depreciation and amortization |
|
|
29,139 |
|
|
|
3.3 |
% |
|
|
35,403 |
|
|
|
3.7 |
% |
|
Lease costs and rent |
|
|
23,158 |
|
|
|
2.6 |
% |
|
|
23,890 |
|
|
|
2.5 |
% |
|
Electronic health records incentives earned |
|
|
609 |
|
|
|
0.1 |
% |
|
|
(586 |
) |
|
|
(0.1 |
)% |
|
Legal, professional and settlement costs |
|
|
1,289 |
|
|
|
0.1 |
% |
|
|
8,830 |
|
|
|
0.9 |
% |
|
Impairment of long-lived assets and goodwill |
|
|
34,810 |
|
|
|
3.9 |
% |
|
|
39,760 |
|
|
|
4.1 |
% |
|
Loss (gain) on sale of hospitals, net |
|
|
1,140 |
|
|
|
0.1 |
% |
|
|
8,122 |
|
|
|
0.8 |
% |
|
Loss on closure of hospitals, net |
|
|
— |
|
|
|
— |
% |
|
|
17,084 |
|
|
|
1.8 |
% |
|
Total operating costs and expenses |
|
|
873,961 |
|
|
|
98.8 |
% |
|
|
1,021,111 |
|
|
|
106.4 |
% |
|
Income (loss) from operations |
|
|
11,014 |
|
|
|
1.2 |
% |
|
|
(61,659 |
) |
|
|
(6.4 |
)% |
|
Interest expense, net |
|
|
65,848 |
|
|
|
7.4 |
% |
|
|
62,857 |
|
|
|
6.6 |
% |
|
Income (loss) before income taxes |
|
|
(54,834 |
) |
|
|
(6.2 |
)% |
|
|
(124,516 |
) |
|
|
(13.0 |
)% |
|
Provision for (benefit from) income taxes |
|
|
249 |
|
|
|
— |
% |
|
|
(88 |
) |
|
|
— |
% |
|
Net income (loss) (a) |
|
|
(55,083 |
) |
|
|
(6.2 |
)% |
|
|
(124,428 |
) |
|
|
(13.0 |
)% |
|
Less: Net income (loss) attributable to noncontrolling interests |
|
|
796 |
|
|
|
0.1 |
% |
|
|
1,146 |
|
|
|
0.1 |
% |
|
Net income (loss) attributable to Quorum Health Corporation |
|
$ |
(55,879 |
) |
|
|
(6.3 |
)% |
|
$ |
(125,574 |
) |
|
|
(13.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Quorum Health Corporation stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (b) |
|
$ |
(1.88 |
) |
|
|
|
|
|
$ |
(4.37 |
) |
|
|
|
|
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
29,721,167 |
|
|
|
|
|
|
|
28,726,445 |
|
|
|
|
|
|
QUORUM HEALTH CORPORATION |
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|
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Three Months Ended June 30, |
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|
|
|
2019 |
|
|
2018 |
|
|
Variance |
|
|
% Variance |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (c) |
|
|
2,458 |
|
|
|
2,649 |
|
|
|
(191 |
) |
|
|
(7.2 |
)% |
|
Admissions (d) |
|
|
16,354 |
|
|
|
18,200 |
|
|
|
(1,846 |
) |
|
|
(10.1 |
)% |
|
Adjusted admissions (e) |
|
|
41,700 |
|
|
|
45,551 |
|
|
|
(3,851 |
) |
|
|
(8.5 |
)% |
|
Surgeries (f) |
|
|
17,909 |
|
|
|
19,114 |
|
|
|
(1,205 |
) |
|
|
(6.3 |
)% |
|
Emergency room visits (g) |
|
|
128,431 |
|
|
|
135,389 |
|
|
|
(6,958 |
) |
|
|
(5.1 |
)% |
|
Medicare case mix index (h) |
|
|
1.46 |
|
|
|
1.44 |
|
|
|
0.02 |
|
|
|
1.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-facility: (i) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (c) |
|
|
2,458 |
|
|
|
2,458 |
|
|
|
— |
|
|
|
— |
% |
|
Admissions (d) |
|
|
16,286 |
|
|
|
17,267 |
|
|
|
(981 |
) |
|
|
(5.7 |
)% |
|
Adjusted admissions (e) |
|
|
41,477 |
|
|
|
42,949 |
|
|
|
(1,472 |
) |
|
|
(3.4 |
)% |
|
Surgeries (f) |
|
|
17,843 |
|
|
|
18,241 |
|
|
|
(398 |
) |
|
|
(2.2 |
)% |
|
Emergency room visits (g) |
|
|
127,828 |
|
|
|
129,167 |
|
|
|
(1,339 |
) |
|
|
(1.0 |
)% |
|
Medicare case mix index (h) |
|
|
1.46 |
|
|
|
1.45 |
|
|
|
0.01 |
|
|
|
0.7 |
% |
|
|
||||||||||||||||
|
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
Variance |
|
|
% Variance |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (c) |
|
|
2,458 |
|
|
|
2,649 |
|
|
|
(191 |
) |
|
|
(7.2 |
)% |
|
Admissions (d) |
|
|
34,109 |
|
|
|
38,749 |
|
|
|
(4,640 |
) |
|
|
(12.0 |
)% |
|
Adjusted admissions (e) |
|
|
85,016 |
|
|
|
94,779 |
|
|
|
(9,763 |
) |
|
|
(10.3 |
)% |
|
Surgeries (f) |
|
|
34,632 |
|
|
|
39,701 |
|
|
|
(5,069 |
) |
|
|
(12.8 |
)% |
|
Emergency room visits (g) |
|
|
260,556 |
|
|
|
289,186 |
|
|
|
(28,630 |
) |
|
|
(9.9 |
)% |
|
Medicare case mix index (h) |
|
|
1.47 |
|
|
|
1.44 |
|
|
|
0.03 |
|
|
|
2.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-facility: (i) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (c) |
|
|
2,458 |
|
|
|
2,458 |
|
|
|
— |
|
|
|
— |
% |
|
Admissions (d) |
|
|
33,485 |
|
|
|
35,778 |
|
|
|
(2,293 |
) |
|
|
(6.4 |
)% |
|
Adjusted admissions (e) |
|
|
83,254 |
|
|
|
86,821 |
|
|
|
(3,567 |
) |
|
|
(4.1 |
)% |
|
Surgeries (f) |
|
|
34,234 |
|
|
|
36,133 |
|
|
|
(1,899 |
) |
|
|
(5.3 |
)% |
|
Emergency room visits (g) |
|
|
255,262 |
|
|
|
263,638 |
|
|
|
(8,376 |
) |
|
|
(3.2 |
)% |
|
Medicare case mix index (h) |
|
|
1.47 |
|
|
|
1.44 |
|
|
|
0.03 |
|
|
|
2.1 |
% |
|
QUORUM HEALTH CORPORATION |
||||||||||||||||
|
|
||||||||||||||||
|
|
|
Three Months Ended June 30, |
|
|||||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
$ Variance |
|
|
% Variance |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net patient revenues |
|
$ |
423,871 |
|
|
$ |
449,261 |
|
|
$ |
(25,390 |
) |
|
|
(5.7 |
)% |
|
Non-patient revenues |
|
|
18,299 |
|
|
|
23,371 |
|
|
|
(5,072 |
) |
|
|
(21.7 |
)% |
|
Total net operating revenues |
|
$ |
442,170 |
|
|
$ |
472,632 |
|
|
$ |
(30,462 |
) |
|
|
(6.4 |
)% |
|
Net patient revenues per adjusted admission |
|
$ |
10,165 |
|
|
$ |
9,863 |
|
|
$ |
302 |
|
|
|
3.1 |
% |
|
Net operating revenues per adjusted admission |
|
$ |
10,604 |
|
|
$ |
10,376 |
|
|
$ |
228 |
|
|
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-facility: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net patient revenues |
|
$ |
424,150 |
|
|
$ |
435,307 |
|
|
$ |
(11,157 |
) |
|
|
(2.6 |
)% |
|
Non-patient revenues |
|
|
18,255 |
|
|
|
23,206 |
|
|
|
(4,951 |
) |
|
|
(21.3 |
)% |
|
Total net operating revenues |
|
$ |
442,405 |
|
|
$ |
458,513 |
|
|
$ |
(16,108 |
) |
|
|
(3.5 |
)% |
|
Net patient revenues per adjusted admission |
|
$ |
10,226 |
|
|
$ |
10,135 |
|
|
$ |
91 |
|
|
|
0.9 |
% |
|
Net operating revenues per adjusted admission |
|
$ |
10,666 |
|
|
$ |
10,676 |
|
|
$ |
(10 |
) |
|
|
(0.1 |
)% |
|
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
$ Variance |
|
|
% Variance |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net patient revenues |
|
$ |
846,053 |
|
|
$ |
913,857 |
|
|
$ |
(67,804 |
) |
|
|
(7.4 |
)% |
|
Non-patient revenues |
|
|
38,922 |
|
|
|
45,595 |
|
|
|
(6,673 |
) |
|
|
(14.6 |
)% |
|
Total net operating revenues |
|
$ |
884,975 |
|
|
$ |
959,452 |
|
|
$ |
(74,477 |
) |
|
|
(7.8 |
)% |
|
Net patient revenues per adjusted admission |
|
$ |
9,952 |
|
|
$ |
9,642 |
|
|
$ |
310 |
|
|
|
3.2 |
% |
|
Net operating revenues per adjusted admission |
|
$ |
10,410 |
|
|
$ |
10,123 |
|
|
$ |
287 |
|
|
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-facility: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net patient revenues |
|
$ |
835,915 |
|
|
$ |
860,994 |
|
|
$ |
(25,079 |
) |
|
|
(2.9 |
)% |
|
Non-patient revenues |
|
|
38,783 |
|
|
|
44,927 |
|
|
|
(6,144 |
) |
|
|
(13.7 |
)% |
|
Total net operating revenues |
|
$ |
874,698 |
|
|
$ |
905,921 |
|
|
$ |
(31,223 |
) |
|
|
(3.4 |
)% |
|
Net patient revenues per adjusted admission |
|
$ |
10,041 |
|
|
$ |
9,917 |
|
|
$ |
124 |
|
|
|
1.3 |
% |
|
Net operating revenues per adjusted admission |
|
$ |
10,506 |
|
|
$ |
10,434 |
|
|
$ |
72 |
|
|
|
0.7 |
% |
|
QUORUM HEALTH CORPORATION |
||||||||
|
|
||||||||
|
|
|
June 30, |
|
|
December 31, |
|
||
|
|
|
2019 |
|
|
2018 |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,265 |
|
|
$ |
3,203 |
|
|
Patient accounts receivable |
|
|
270,923 |
|
|
|
322,608 |
|
|
Inventories |
|
|
41,447 |
|
|
|
45,646 |
|
|
Prepaid expenses |
|
|
21,653 |
|
|
|
19,683 |
|
|
Due from third-party payors |
|
|
57,071 |
|
|
|
63,443 |
|
|
Current assets of hospitals held for sale |
|
|
35,380 |
|
|
|
— |
|
|
Other current assets |
|
|
33,604 |
|
|
|
36,405 |
|
|
Total current assets |
|
|
462,343 |
|
|
|
490,988 |
|
|
Property and equipment, net |
|
|
496,555 |
|
|
|
559,438 |
|
|
Goodwill |
|
|
391,658 |
|
|
|
401,073 |
|
|
Intangible assets, net |
|
|
41,066 |
|
|
|
48,289 |
|
|
Operating lease right-of-use assets |
|
|
84,854 |
|
|
|
— |
|
|
Long-term assets of hospitals held for sale |
|
|
25,796 |
|
|
|
— |
|
|
Other long-term assets |
|
|
65,954 |
|
|
|
74,306 |
|
|
Total assets |
|
$ |
1,568,226 |
|
|
$ |
1,574,094 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
1,646 |
|
|
$ |
1,697 |
|
|
Current portion of operating lease liabilities |
|
|
23,797 |
|
|
|
— |
|
|
Accounts payable |
|
|
140,768 |
|
|
|
143,917 |
|
|
Accrued liabilities: |
|
|
|
|
|
|
|
|
|
Accrued salaries and benefits |
|
|
61,006 |
|
|
|
76,908 |
|
|
Accrued interest |
|
|
10,517 |
|
|
|
10,024 |
|
|
Due to third-party payors |
|
|
37,218 |
|
|
|
45,852 |
|
|
Current liabilities of hospitals held for sale |
|
|
10,675 |
|
|
|
— |
|
|
Other current liabilities |
|
|
38,573 |
|
|
|
43,336 |
|
|
Total current liabilities |
|
|
324,200 |
|
|
|
321,734 |
|
|
Long-term debt |
|
|
1,210,523 |
|
|
|
1,191,777 |
|
|
Long-term operating lease liabilities |
|
|
61,554 |
|
|
|
— |
|
|
Deferred income tax liabilities, net |
|
|
6,978 |
|
|
|
6,736 |
|
|
Long-term liabilities of hospitals held for sale |
|
|
3,248 |
|
|
|
— |
|
|
Other long-term liabilities |
|
|
89,245 |
|
|
|
126,499 |
|
|
Total liabilities |
|
|
1,695,748 |
|
|
|
1,646,746 |
|
|
Redeemable noncontrolling interests |
|
|
2,278 |
|
|
|
2,278 |
|
|
Equity: |
|
|
|
|
|
|
|
|
|
Quorum Health Corporation stockholders’ equity (deficit): |
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value per share, 100,000,000 shares authorized, none issued |
|
|
— |
|
|
|
— |
|
|
Common stock, $0.0001 par value per share, 300,000,000 shares authorized; 32,926,689 shares issued and outstanding at June 30, 2019, and 31,521,398 shares issued and outstanding at December 31, 2018 |
|
|
3 |
|
|
|
3 |
|
|
Additional paid-in capital |
|
|
559,487 |
|
|
|
557,309 |
|
|
Accumulated other comprehensive income (loss) |
|
|
856 |
|
|
|
759 |
|
|
Accumulated deficit |
|
|
(705,071 |
) |
|
|
(648,464 |
) |
|
Total Quorum Health Corporation stockholders’ equity (deficit) |
|
|
(144,725 |
) |
|
|
(90,393 |
) |
|
Nonredeemable noncontrolling interests |
|
|
14,925 |
|
|
|
15,463 |
|
|
Total equity (deficit) |
|
|
(129,800 |
) |
|
|
(74,930 |
) |
|
Total liabilities and equity |
|
$ |
1,568,226 |
|
|
$ |
1,574,094 |
|
|
QUORUM HEALTH CORPORATION |
||||||||||||||||
|
|
||||||||||||||||
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(16,477 |
) |
|
$ |
(25,941 |
) |
|
$ |
(55,083 |
) |
|
$ |
(124,428 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
14,500 |
|
|
|
17,142 |
|
|
|
29,139 |
|
|
|
35,403 |
|
|
Non-cash interest expense, net |
|
|
2,380 |
|
|
|
2,723 |
|
|
|
4,319 |
|
|
|
4,534 |
|
|
Provision for (benefit from) deferred income taxes |
|
|
31 |
|
|
|
(511 |
) |
|
|
121 |
|
|
|
25 |
|
|
Stock-based compensation expense |
|
|
1,194 |
|
|
|
2,756 |
|
|
|
2,964 |
|
|
|
5,220 |
|
|
Impairment of long-lived assets and goodwill |
|
|
25,950 |
|
|
|
— |
|
|
|
34,810 |
|
|
|
39,760 |
|
|
Loss (gain) on sale of hospitals, net |
|
|
1,140 |
|
|
|
307 |
|
|
|
1,140 |
|
|
|
8,122 |
|
|
Non-cash portion of loss (gain) on hospital closures |
|
|
— |
|
|
|
1,089 |
|
|
|
(567 |
) |
|
|
6,394 |
|
|
Changes in reserves for self-insurance claims, net of payments |
|
|
(29,963 |
) |
|
|
4,355 |
|
|
|
(25,803 |
) |
|
|
10,380 |
|
|
Other non-cash expense (income), net |
|
|
116 |
|
|
|
56 |
|
|
|
(1,256 |
) |
|
|
7 |
|
|
Changes in operating assets and liabilities, net of acquisitions and divestitures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patient accounts receivable |
|
|
22,766 |
|
|
|
19,645 |
|
|
|
18,780 |
|
|
|
21,074 |
|
|
Due from and due to third-party payors, net |
|
|
2,159 |
|
|
|
19,761 |
|
|
|
(2,262 |
) |
|
|
20,978 |
|
|
Inventories, prepaid expenses and other current assets |
|
|
(5,143 |
) |
|
|
(1,519 |
) |
|
|
(232 |
) |
|
|
(229 |
) |
|
Accounts payable and accrued liabilities |
|
|
(28,930 |
) |
|
|
(19,301 |
) |
|
|
(8,784 |
) |
|
|
(9,714 |
) |
|
Long-term assets and liabilities, net |
|
|
(117 |
) |
|
|
(3,368 |
) |
|
|
398 |
|
|
|
(2,925 |
) |
|
Net cash provided by (used in) operating activities |
|
|
(10,394 |
) |
|
|
17,194 |
|
|
|
(2,316 |
) |
|
|
14,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures for property and equipment |
|
|
(9,819 |
) |
|
|
(10,791 |
) |
|
|
(18,111 |
) |
|
|
(25,319 |
) |
|
Capital expenditures for software |
|
|
(2,326 |
) |
|
|
(531 |
) |
|
|
(3,517 |
) |
|
|
(1,044 |
) |
|
Acquisitions, net of cash acquired |
|
|
— |
|
|
|
(26 |
) |
|
|
(455 |
) |
|
|
(58 |
) |
|
Proceeds from the sale of hospitals |
|
|
11,741 |
|
|
|
507 |
|
|
|
11,741 |
|
|
|
39,170 |
|
|
Other investing activities, net |
|
|
(2,112 |
) |
|
|
52 |
|
|
|
(383 |
) |
|
|
249 |
|
|
Net cash provided by (used in) investing activities |
|
|
(2,516 |
) |
|
|
(10,789 |
) |
|
|
(10,725 |
) |
|
|
12,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit facilities |
|
|
175,000 |
|
|
|
115,000 |
|
|
|
327,000 |
|
|
|
247,000 |
|
|
Repayments under revolving credit facilities |
|
|
(149,000 |
) |
|
|
(119,000 |
) |
|
|
(299,000 |
) |
|
|
(233,000 |
) |
|
Borrowings of long-term debt |
|
|
25 |
|
|
|
55 |
|
|
|
186 |
|
|
|
67 |
|
|
Repayments of long-term debt |
|
|
(12,130 |
) |
|
|
(30,820 |
) |
|
|
(13,963 |
) |
|
|
(31,447 |
) |
|
Payments of debt issuance costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,268 |
) |
|
Cancellation of restricted stock awards for payroll tax withholdings on vested shares |
|
|
(103 |
) |
|
|
(1,309 |
) |
|
|
(564 |
) |
|
|
(1,943 |
) |
|
Cash distributions to noncontrolling investors |
|
|
(333 |
) |
|
|
— |
|
|
|
(1,556 |
) |
|
|
(803 |
) |
|
Net cash provided by (used in) financing activities |
|
|
13,459 |
|
|
|
(36,074 |
) |
|
|
12,103 |
|
|
|
(22,394 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash, cash equivalents and restricted cash |
|
|
549 |
|
|
|
(29,669 |
) |
|
|
(938 |
) |
|
|
5,205 |
|
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
1,716 |
|
|
|
40,491 |
|
|
|
3,203 |
|
|
|
5,617 |
|
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
2,265 |
|
|
$ |
10,822 |
|
|
$ |
2,265 |
|
|
$ |
10,822 |
|
Contacts
Investor Contact:
Asher Dewhurst
Westwicke Partners
QuorumHealth@Westwicke.com
(443) 213-0500
