munity Health Systems(US:CYH)2021-04-28 16:00Financial Performance - Net operating revenues for Q1 2021 decreased by $12 million to approximately $3.013 billion compared to $3.025 billion in Q1 2020, primarily due to hospital divestitures and COVID-19 impacts [136]. - The company reported a net loss of $35 million in Q1 2021, compared to a net income of $34 million in Q1 2020, influenced by a $93 million after-tax charge for early debt extinguishment and a $64 million benefit from pandemic relief funds [137]. - Same-store net operating revenues for Q1 2021 increased by $269 million compared to the prior year period [136]. - Net operating revenues for the three months ended March 31, 2021, decreased by 0.4% to approximately $3.013 billion from approximately $3.025 billion for the same period in 2020 [173]. - Same-store net operating revenues increased by $269 million, or 9.8%, during the three months ended March 31, 2021, compared to the same period in 2020 [173]. Admissions and Services - Consolidated inpatient admissions decreased by 14.0% in Q1 2021 compared to Q1 2020, while same-store inpatient admissions decreased by 4.9% [140]. - Inpatient admissions decreased by 14.0% during the three months ended March 31, 2021, compared to the same period in 2020 [173]. - Average length of stay increased by 11.1% during the three months ended March 31, 2021, compared to the same period in 2020 [171]. Expenses and Costs - The company incurred increased expenses due to COVID-19, including additional labor and supply chain costs [126]. - Operating expenses as a percentage of net operating revenues decreased from 96.4% in Q1 2020 to 89.2% in Q1 2021 [174]. - Salaries and benefits as a percentage of net operating revenues decreased from 46.4% in Q1 2020 to 43.2% in Q1 2021 [174]. - The company has implemented cost control measures to curb increases in operating costs, but future cost increases remain unpredictable [214]. Cash Flow and Investments - Net cash provided by operating activities increased by $44 million, from approximately $57 million for the three months ended March 31, 2020, to $101 million for the three months ended March 31, 2021 [183]. - Net cash used in investing activities was approximately $120 million for the three months ended March 31, 2021, compared to approximately $109 million for the same period in 2020, an increase of approximately $11 million [184]. - Net cash used in financing activities was $406 million for the three months ended March 31, 2021, compared to net cash provided by financing activities of $82 million for the same period in 2020, an increase in cash used of approximately $488 million [186]. - The company anticipates being able to invest necessary capital in the business over the next twelve months due to current cash levels and potential future funding [160]. Debt and Liabilities - As of March 31, 2021, approximately $20 million of the outstanding debt of $11.9 billion is due within the next 12 months [203]. - Approximately $1.2 billion of accelerated payments were received under the Medicare Accelerated and Advance Payment Program, with approximately $1.1 billion remaining outstanding as of March 31, 2021 [204]. - The effective tax rate for the three months ended March 31, 2021 was 202.9%, compared to 122.8% for the same period in 2020, primarily due to an increase in the valuation allowance recognized [181]. Divestitures and Acquisitions - The company completed the divestiture of four hospitals in Q1 2021, which represented annual net operating revenues of approximately $179 million in 2020, receiving total net proceeds of approximately $23 million [130]. - During 2020, the company divested 13 hospitals, generating total net proceeds of approximately $845 million, with these hospitals representing annual net operating revenues of approximately $1.2 billion [131]. - The company continues to receive interest from potential acquirers for certain hospitals and may consider additional divestitures if deemed beneficial [134]. - The company paid approximately $4 million to acquire operating assets and related businesses of certain physician practices and clinics during Q1 2021 [135]. Government Assistance and Legislation - The company received approximately $708 million in payments through the Provider Relief Fund and various state and local programs as of March 31, 2021, with $62 million positively impacting net income for the three months ended March 31, 2021 [154]. - The CARES Act and related legislation authorized over $178 billion in funding for healthcare providers, aimed at compensating for lost revenues due to the COVID-19 pandemic [149]. - Legislative changes and court challenges to the Affordable Care Act may continue to affect the company's operations and reimbursement rates [146]. - The company is assessing the ongoing impact of the COVID-19 pandemic and related legislation on its business and financial condition [157]. Accounts Receivable - Patient accounts receivable from hospitals represent approximately 98% of total consolidated accounts receivable, with days revenue outstanding at 53 days as of March 31, 2021 [229]. - The company had approximately $3.2 billion in accounts receivable being pursued by outside collection agencies as of March 31, 2021 [227]. - Total gross accounts receivable was approximately $15.3 billion as of March 31, 2021, up from approximately $14.8 billion as of December 31, 2020 [231]. - The percentage of combined allowances to total self-pay receivables was approximately 94% as of March 31, 2021, if including receivables written-off but still being pursued [231]. Risks and Uncertainties - The company is facing uncertainties related to COVID-19, including patient volumes and increased expenses due to labor and supply chain issues [253]. - There are risks associated with substantial indebtedness and compliance with debt covenants [254]. - The company is experiencing increased competition and challenges in attracting and retaining qualified personnel [254]. - There are potential impacts from government investigations and legal proceedings on the company's operations [254].