CYH - Earnings call transcript Q1 2019 | Community Health Systems, Inc.

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Operator

Good morning. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the Community Health Systems 2019 Q1 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. now call will to I Instructions] turn over the Mr. [Operator Relations. Vice President Comeaux, of Ross Investor

You conference. begin may your

Ross Comeaux

Thank you, Mike. Health Systems Good morning and quarter conference welcome XXXX call. first to Community

in the such may contain statements facts. our forward-looking the like unknown call, not and Before that Report all subject These to and as are which described certain statement. historically and relate we Risk call to forward-looking in solely statements, of begin Exchange Factors with to read to XX-K a conference Form This risks, headings filed following statements or Annual I'd do including disclosure are current on known Commission. reports the number other furnished Securities or

expressed not forward-looking We our definitions Yesterday release a of today's discussion. financial to in intend afternoon, in press and any EPS. these As results we from actual consequence, forward-looking do statements with statements any may adjusted adjusted update of differ a statements. EBITDA and calculations issued those and significantly

those posted live a has you presentation of slide supplemental this conference been call, For to our broadcast listening website. to the of

over Mr. legal and Wayne and that Mr. fair charges, related Chairman HMA gain will employee of loss agreement on I'd Chief those refer this government to expenses. exclude during other call. and from liability costs, to and and CVR calculations of related businesses, the Smith, gains Executive expenses to sale restructuring value proceedings, We the to turn we as said, to also expenses discuss termination early related slides related All extinguishment the well settlement expense, settlements divestitures, With and debt, will Officer. call losses like impairment legal earnings expense as to to Smith? to related or and legal or adjustments other incurred expenses benefits from related

Wayne Smith

to Chief call during today Very then first and to operations, Chief Tom of Dr. Financial a then conference With and President well the I'll call, our is and quarter. the who provide Executive the President on Then, to will update the Tom and I'll the Officer; an who provide Vice turn Chief Simon, Simon Tim, who you. on practices call and our an Dr. our physician of will us first performance Tim first morning Lynn our summary on more Overall, update over Operating and we Operations financial Good the expect well drive call. will as thank quarter XXXX. additional growth and the made during quarter company XXXX quarter's on brief President provide continue Hingtgen, as Medical Ross, results. during done. we progress Officer; and first of Officer. to welcome the provide Aaron, details Today's good Clinical remainder

we the to investments, In initiatives other portfolio addition hospital and a in core inpatient invested points, our and growth organizations, volume. number access XXXX, during including strategic transfer improved accountable to care of across programs, connectivity drive operating revenue divestitures patient access initiatives our

these of the worth admissions delivered of initiatives. to we saw we that improved these compared XXXX, noting our trends sequentially volumes We initiatives, Due continuation surgeries. same-store our favorable adjusted trend all It's XXXX which quarter XXXX. better very success seeing to across this in a the during and in of are results of in first admissions

X.X%. surgeries were our year-to-year adjusted year-over-year up – basis admissions quarter, our basis XX basis nearly points same-store and of the on flat our were a up For admissions were

Finally, was our up X.X%. same-store revenue net

net revenue performance we're to with volume our So same-store continue forward. and volumes deliver improve we pleased expect to going and

our non-recurring items a we EBITDA. quarter, had number the of that During lowered

growth revenue opportunities during as the XXXX, including during earnings these the to strategic of the in XXXX. roll drive As will items areas of a first minute. future we well and quarter out balance quarter some to expected quarter we fourth mentioned detail across in expense investments call, as XXXX lines, we invested a on provide strategic Along continue to throughout our management these of more number growth on during initiatives. Tim, first

like I'd about divestitures. our Now, talk to

During XXXX, number quarter during of first a balance additional we divestitures of we'll divestitures the close the completed and of incremental XXXX.

and has ones of more this to more with before better markets better economic mentioned, shift which I company us population sustainable growth. provides an sustainable resources opportunity to growth, As allowed lower our unemployment growth, for the

will better additional debt ratios. we divestitures, earnings not additional flow lead our our but complete Since As and expect only we This performance leverage last also call further cash reduction, to improve. to Carolina we divestitures Florence metrics same-store University Medical have Center. in South Lancaster, Tennessee sell we And the announced in definitive Lebanon and including agreement Vanderbilt in Hospital of four lower late to Chester, hospitals a hospitals to our March Mullins. closed

of XXXX. We expect to quarter occur third during this divestiture the

calls of consisted be have plan and million EBITDA mid-single-digit $X.X estimated margin proceeds divestitures of billion least divestitures gross divestitures These approximately for XXXX divestiture low annual $X.X generating expected approximately working a Total current proceeds. net of with of excluding billion. divestitures of includes of accounting is approximately $XXX hospitals. are Since we closed for revenue capital billion revenue the beginning to single-digit both XXXX margin. net which XXXX Our $X gross EBITDA at

As in divestitures and it interest. our inbound discussions remain buyers active potential with a number to continue we to receive relates will of

guidance billion to which Tom for timing expected provide complete during of full to is remain anticipated net expect billion divestiture $XX.X $XX.X in divestiture our $X.XXX call. later to our $X.XXX plan net XXXX guidance to be details will unchanged adjusted and our includes revenues year EBITDA billion adjusted XXXX. billion. on But the operating more We revenue EBITDA

to for turn Now I'd to like the call over additional comments. Tim

Tim Hingtgen

you, Thank Wayne.

seeing pleased the are metrics. same-store with our are we mentioned improvements continued Wayne volume As we across

acceleration upon since And as some good the number initiatives XXXX of the we're adjusted Our net investments. a during drive incremental the line some will and strategic and of talking and to our with spend and of reflect improved we expect performance across will volume quarter. growth investments XXXX first is, drove EBITDA expense XXXX. these initiatives volume trends executing the I admissions seeing some news continue of during and these time and indicators of have drive admissions review Today strategic performance we surgeries all been revenue margin our markets in We've sequentially then about result our the a strongest which volume improving I in will improved XXXX. remainder throughout

down post the First flu a on the volume selected line improvement sequential XX points in the closures and year-over-year of side, admissions continue service quarter, to despite season. lighter basis same-store impact our first

Our demonstrate hospitals improved to core continue admissions performance.

other X.X% individual growth to experienced investments targeted making increased lines, of service admission improve. and strength terms categories. across to GI specialties. company, we and our favorable orthopedics Due volumes continue we Surgeries cardiovascular, neurology, do the orthopedics, our to across In driven are spine we expect and by across other

visits While in to care. posting focused model sequential remain outpatient access were ER We first of on settings patients the lower point alternative our down quarter. X.X% acuity to adapting the migration for ER improvement of adjust

centers. of have offerings walk-in our urgent strategically and like our We care expansion continued placed care on-demand own care

Central the the count our locations our first XXX access points quarter, total an to four Florida. ED bringing including of XXth During additional we in opening on-demand opened freestanding

and focused of marketing result primary expansion we and flu in the point care increase care of our net despite experienced ongoing this a other this year. on-demand patient the As convenient access visits lighter locations, a season

clinics our are walk-in across while Looking care lower EDs additional we have our This acuity is programs. focused of see and emergency or and we primary clinical on important the growth set to of absolute is development service fewer centers by number that affiliated It seeing through hospitals result opportunities our the a of forward urgent rooms. ED inpatient freestanding to we enhanced overall, patients outreach targeted of continue and pipeline business admitted line care visits offices. transfer supported strong of to note our

was were per adjusted net admissions X.X%. and our revenue adjusted Our basis XX up up admission points

this overall, forward. our focused and So pleased driving performance with on going we're volume momentum remain

enhancements expected areas. we expense initiatives the some and to in focused to our incur organization networks, other As additional of our chain last development we practice to related key mentioned including physician our quarter, growth supply

In addition particularly related losses incurred we investments hospital to closures. recent higher-than-expected two also to these

these quarter first cost our XXXX, the of $XX the to increased operating closures expense related During by million. approximately

do physician investments. substantially chain a we the quarter during We practice the on lower Simon before talk of I I and XXXX second will expenses redevelopment strategic be to on half But meaningful opportunity ask will plan. about complete would we repositioning and expect to the front. the supply minute, the see continue I like that to back our in Dr. these as comment network In

purchase strategy to defined our focused For purchasing our chain, across and leverage we supply spend. power, supply both on a are better our service

quarter, added first savings supply we the we and reorganized chain have organizational executives drive lead this very into experienced focus and have to have structure To-date, expense our savings. implemented XXXX and During and we part product formulary. as categories company-wide supply that are of the initiatives in value the best the expanding more and quality, safety supply offer with than commodity products identified XX overall our

of summary, In XXXX expect lead with to deploying late playbook utilizing the the same of see that team we in physician implemented initiate to of which we quarter. same improvement in the beyond. supply implant preference also with such categories external the on other physician-led particular of XXXX. will And the much We to throughout we around certain which same selection items. and significant procurement for the other to of plan areas costs. And are the assist clinical vendor advisory expense savings will be strategy specialty first and We committees category XX% savings started first

of drive the margin years. improvement We expense next couple expect and initiatives these to over leverage further

turn over On of a these improvement Dr. XXXX. And as call basis as XXX points of we targeting we are now revenue lines, the net at I'll percent expense Simon. exit to least

Lynn Simon

Thanks, Tim.

as improved growth positions tightly more noted we year over with clinics, our than affiliated a line Successful our strategic in strong two grown our physician into years of to specialists clinics which efforts providers we our for process, aligned our by quarter. is support recruitment have recruitment primary in service ensure and addition less startup includes prior planning provider well X% multiyear the retention in In base have the XXXX, care to last affiliated practicing those months over through as XXXX total. XX% past our than and markets. in the base XX employed increased As by XXXX

to hiring was of expect we further and quarters, our $XX year-over-year was clinic reduced While providers EBITDA approximately growth million enhance by up this new revenue $XX net million. our onboarding subsequent SWB during and

physician to show scheduling, continuing engagement are centralized Our and such strategies online as good recruitment technology other efforts patient and results. scheduling

in increase quarter primary increase in are traditional XX.X% first mentioned, the clinic During had as in Tim neurology of And and X.X% a growth visits we procedures. well and we seeing cardiology, XXXX, surgeries care visits. orthopedics, walk-in as a GI as

continue these now, to further deliver CHS-affiliated competitive through providers from financial high-quality We markets. into walk will and expect investments strategic physicians position volumes to results. additional And strengthening some in strong our Tom

Tom Aaron

We've our these and and focused our been strategies on drive see some morning. reiterate highlighted you, we're Thank good improvement improving results. of I'll Wayne, Lynn and metrics. to Tim efforts that deliver Lynn same-store that pleased to

first results acuity, hospitals. growth and surgery improved from Our and adjusted quarter stronger progress portfolio investor benefited admission of and volume

in Now, on same-store we'll quarter-over-quarter discuss a first basis. a quarter

call on exclude mentioned As discussed earlier. Ross calculations a this reminder, items

quarters, deferred market in investments revenue and first a is comprised XXXX fluctuations of impacted during XXXX. in higher in revenue in and The X.X% QX QX value Similar a other increases net comp stock and to decreases adjusted which XXXX, change QX first market This X.X%. was combined EBITDA X.X% the per corresponding net not the XXXX, materially. quarter impacted our admissions, quarter by plans significant in in increase revenues increase benefits in expense of of resulting increase held increased adjusted has increased and During bond those revenue admissions.

X.X% adjusted impact, revenue would changes total Excluding first and X.X%. non-patient other net been have per revenue net up market admission and up our quarter fluctuations revenue, our

up were includes, basis increased points, Medicare points. revenue Consolidated were approximately pair XXXX of first operating self-pay other the first revenue. points, quarter of revenue which basis compared the basis over XX basis and to first XXXX quarter and increased points fee-for-service XXX of XXX shows quarter, and managed for other our net Medicare our the Advantage XX decreased points, Medicaid net decreased XXX basis revenue During mix operations XX% care

at care admissions volumes by Advantage adjusted payor, Medicare Looking were and each self-pay our our up. managed

Medicaid Medicare volumes Our fee-for-service each and decreased.

net increased During quarter of first of uncollected XXXX, the revenue point self-pay to increase. care adjusted revenue XX.X% and of sum a year-over-year, discounts from basis consolidated the XX.X% charity XXX

net increase our expense XXX net operating primarily investment. benefits physician implant revenues basis for as expense same-store XX a same from growth spend. operating employee higher our and increased our items, and of lower driven benefits percent as points. increased percent of points revenues for increased Supplies a exceeded the same commodity This costs For our stores surgery salaries approximately as was basis by stores

increased other of higher expenses percentage due operating same-stores revenues points for XX expenses. related Our to as vendor net a operating basis

physician As Tim contracting focused year. supply and implementing savings leveraging mentioned, to underway with We're category in for with the we're others later preference driving strategies expense other our on and national second operating by follow technology. the

XXXX half and and improvements Switching the We of savings in flow. in beyond. see back cash expect meaningful to to XXXX more

during cash for operations million improved first $XX quarter million. cash quarter flow to million the provided of XXXX, cash compares XXXX. flow Our has $XXX were approximately flows by which $XXX first from of the of by Free operations

terms of and year a increase malpractice, payments quarter-over-quarter from increased million. included prior Improved divested items claims the year-over-year each hospitals supplemental programs. capital approximately working and changes accounts cash including contribute worth Other versus during – few decreases included In offset in $XX are increases more the approximately year-over-year other flows quarter. this state the million collections there $XX Decrease quarter. receivable, noting of

to Turning CapEx.

quarter CapEx X.X% revenue. Our first XXXX of the $XXX for million or net of was

our high other such quarter as build or We're areas. as outs During opportunities invest in our access the CapEx towards line of capital was of to million first and acuity net well for points markets growth additional as revenue. $XXX our X.X% orthopedics cardiology service continuing XXXX, high

had million. approximately first on the had of long-term the cash $XX.XX of of the current Moving At $XXX we to we end sheet. at approximately the the $XXX balance And the of quarter, sheet. debt, billion of long-term of maturities first balance quarter, end million debt

structure. continued secured note March a to through the Loan as a be balance We And in proactive as our Term our senior off of we capital paid through facility billion reminder manage H we offering $X.X XXXX.

first X.XX X. Our is currently net the under financial ratio covenant to facility leverage lien credit

first approximately X. XX net to ratio debt of lien As March XXXX leverage X.XX is our

plan additional and Tim mentioned a as operations. debt to Wayne total lien As we expect our and earlier, first ratio moving improve and forward divestiture of we our our pay initiatives. net decrease reduce our expect leverage ongoing number down debt we covered debt strategic Wayne, to Lynn

and over goal is couple primary quarters on which to the growth, cash will flow. Our EBITDA execute to allowing next the initiatives, of better these deleverage drive improved same-store drive company

divestitures reminder, a the refinancing activities. impact guidance H QX updated anticipate guidance the to As reflect refinancing. full reflect contemplates our of XXXX year Loan We've XXXX not future and does Term

$X.XX to XXX.X $XXX to anticipated flow divestitures. anticipated XXX $X.XXX $X.XXX Our average, be million. forecasted billion. to weighted to outstanding to be income after million of is to expected be back CapEx to return guidance to be is includes $XXX $XXX at call Cash million negative $X.XX Wayne, you. based Net the anticipated to billion for X%. growth updated And negative to to is for share million. diluted million revenues to on is Adjusted net to $XX.X operations following; from are be XXXX flat anticipated $XXX shares I’ll to million. $XX.X is the operating billion EBITDA per expected adjusted adjusting up admission Same-store billion

Wayne Smith

ready At Thanks, it Tom. up questions. we're to for this point Mike open

But at available one and you you XXX-XXX-XXXX. area limit the as get you talk will code to can always have reach chance can We on so several us to everyone question, we're a to of phone. to

Operator

RBC Capital Markets. comes [Operator Instructions] question from Frank Morgan first from Your

Frank Morgan

in hoping -- a was bit guidance, I more the these a I balance you of morning. for year. the XXXX what the bit thoughts could going with physician of but walking around cadence maybe you mean, the through things a updates just talk and are closures Obviously, little on And your and the over specifically the about little about reaffirmed guess have cadence off that. Good quarter lot of on in any I burning built year. the rates that the for there But curious you just Thanks. kind fourth proposed on-boarding.

Wayne Smith

Wayne. Frank. Hey, It's

it's of proposed, through. goes We think And in it's August. CMS, you terms it be theoretically, of of can see. to all meaningful in approved it this Just but all proposed us number will there's a fairly which categories if

been is think it on happens this has as historically this good not it's but year, I slide year. XX. as But every

Tom Aaron

of Knoxville rest that I down. initiatives, you think We the mentioned mentioned the got on closing Lynn Frank, -- that market the right.

in taxes that to insurance, the Knoxville are property year. that will later IT. that of we're utilities, We selling close relocating City campus with the associated There's

So will wind down quarter approach will the sale. as was be highest that we QX the that

we're We're QX. On and the those investments the think volume points initiatives, investments really access in the adjusted with with about that other we've talked I forth. growth admission continuing so happy

And major good very this we I ACO two think We're got as that to throughout against new on those as ramp we the so, was in, initiatives. with start progress thought which and no side, initiatives know, especially successful the tough up comp quarter. pretty what's and Really seeing we've of a year was we're so happening launch. what volume happy you

physician first other on preference biggest talking going that that one well second got A initiatives, up teed one. effect the the than one to supply one on just one. we're about bigger that we in QX the is that. successful a initiatives, a be very It's the chain. On is another after underway. We've had The launch

already physicians that on huddling one. Our are

very are natural contracting those executable the So, strategy.

impact six serve We last commodity just The I'll XXXX. and labor ramp improvement -- the quarters on pretty that we And we later at of the we're of the held in again most those. highly that much physician health analytics. see benefits other confident the mentioned the respect then our up to the lastly, did the were progress mostly out came going hospitals. -- two items should Tim mentioned, that what mention have we're we in the with into on we get in with And benefits salary the most our side start-ups. a quarter year items all look this And of to hiring of So box to that benefits. then made in Lynn

that expect down We years. to the wind over

had like of point and on manageable. rules, very asked you are inpatient Wayne's we've the in us So the what past and for that top if the to could Medicare we quarter. fourth both that so -- we during on bigger wanted Medicare But the those And those what feel those. a than they preliminary. Fee-for-Service to we then good and Those are the and are about Medicare opportunity share follow-through Advantage, be

Operator

question next from comes Credit Rice Your Suisse. from A.J.

A.J. Rice

showing improving I the you're doctors. to trends success on ask I side recruiting your mentioning Obviously, Hi, about and plans. capital about everybody. in some guess, volume going you're was

seasonality a see look enough down with you're capital growth. the the that Is percent in with pickup Are of sheet that down quarter of and see would have you'd some was over think I specifically balance a the spending capital And a opportunities I specifically the Or to an little at to the start anomaly little guess bit. trended a year? volume to it's of constrained the -- and added do you'll your -- physicians actually just you at the looking down the course new pickup feeling you revenues for potentially all has allocating on capital, I As needs? trended at little bit.

Wayne Smith

with for out that XXXX. on we so we're late like might that in quarter We not to. bigger we quarter, for called A.J., some those and last year, year have did XXXX last it's have first paid the comparable in to a comparing the purchases comp

those are projects initiatives the strategies the to markets. same We on the strategic are funding add path as whatever can in all that

continuing we're that path. on so, And

And spend. also we've period earlier, not QX got a going way. That's being divested hospital in we'll making been than out Then knowing getting in going those. start in called making we're spend The We've having we under replacement be replacement it's Porte, $X La but with towards in start the spend and to got -- the a million, ramp having a we're replacement we've hospital to remaining change. of was Indiana. strategic XXXX. divestitures the strategic will I think benefit of of to As spend not hospital of less end where lot the -- that up portfolio hospital for

do the increase ratio I So to that program. hospital over with replacement divestiture the end time as we expect

Operator

next Nephron Josh from comes Research. from question Your Raskin

Josh Raskin

out Do ones those morning. cash now? if Good remember the Could after you us you gets working are there's just commitments don't guys any that any flow implications I remain Thanks. sold that worked working on capital facilities. on the remind for any you the typically have just on sale. or of

Wayne Smith

have from so We been have capital. the -- Josh observation after working is that our generally one keeping we of kind we close,

will receivables the collection XX liabilities. And XX in most XX so the that part, to maybe for payable first pay out our days accounts on the to come the days all starts on we Then essentially that that. accrued of

the month on gets we are road In So we have down that close, facilities, say receivables. flow at it let's standpoint. -- don't on sometimes this -- bit when a did fact a Generally, we out. quarter, before collection divested levels good from have backwards little we our a quarter the But cash a in obligations.

large It's an one campus. So called out we've need a we of to that to three sale it very move our lot for campus. a and closed do some ready There's the to also assets we a is have out. old and

material. have obligations. other they're revenue able do and nothing them TSA those would So and the But expect put IT theirs. divestitures have obligations that I to on ongoing We for until cycle services that unique think one's with closures up I wouldn't on than to we buyers

Operator

Your next question comes from Giacobbe Ralph from Citigroup.

Ralph Giacobbe

drivers seen relative that quarter. surgery have so just in think more you've reported and bump? and both to what that Can far specifically durability terms of the more the little recent and of stood maybe good volume lines the about you versus bit number the talk kind the service morning. that The maybe increase seeing number Thanks. out And others of importantly, a Thanks, trend increase? that sustainability in you

Tim Hingtgen

This I will Ralph. morning, question. Good Hingtgen. take is that Tim

In planning those the that to thoughtful the that the strategic physician number of of Lynn some XXXX teed due throughout put the calendar largely increased stores processes terms of into plans mentioned, today multiyear believe it's surgery our ups same I strategic volumes. start -- non-same-store the pipeline, planning up we in XXXX recruitment growth, the number year, driving good play surgical all those certainly are

both As are and care we access into center the surgeries. roll seeing drive we primary clinicians the on practices volumes recruit outpatient our good progress those transfer points inpatient

So pent that those then had top of placing markets capital seeing to acuity surgical later in we're expand XXXX And we some was targeted investments. in the that some spend lift are of certainly some terms in-flight on throughout demand. up our capacity right good where of now and

some into that we ambulatory So then we're as glad to on we we growth lastly put on put that had in see had well. And this I'll there, once capital group our play, surgery grow. good quarter volume the

driving well. partnerships good strategic as increased some acquisitions happened in that that outpatient on XXXX business Some and basis are

provider and forward. into do and believe on that I So the investment leveraging practice we're going physician it's network sustainable planning

Operator

Your question from Gupte comes SVB Leerink. Ana next from

Ana Gupte

Hey, thanks, good morning.

not clear. IPPS update now guidance the the rate So right just one I'm you did not? in the first clarify, entirely was have or to

Wayne Smith

is it any Do or that... on question other you

Ana Gupte

in you wondering just for the the rate if tell was sure… I had couldn't inpatient guidance. already Medicare I

Wayne Smith

fairly when two weeks out. not than so benefit we this of put our old. guidance original it reassessed is original that have as And the this Ana, Yes. we when quarter, we less did went out this recent guidance

so into we well. taken as this QX was And it our after evaluate consideration as

like we've as guidance. even pathway mentioned, benefit without we be the -- this very got However, got to of in manageable we've we feel our

Operator

Kevin from from Fischbeck comes Bank question next of Your America.

Kevin Fischbeck

Thanks. Great.

surprised over guys Just last compression have if on of you've on few what change I in given the wanted And margin guess, still that low seen on the I color versus was the have I kind I because you all in the But the you to things divesting given quarters. the the take follow-up been of million forward. down of in be one of would you've the the appreciate anything fact trends I same-store margin that. surprised assets, the the might the going guess, of that's $XX margin compressions quarter, improvement million by was more and you cost highlight points its wasn't time? the quarter the volume physician strength asset another wind that costs else -- about leverage and that $XX going cost. I that Or the there just basis on or maybe given better half XX revenue

Wayne Smith

out. made feel Yes, benefits changes would the major Again, we that was I us. not have surprise benefits first history even think that the to like quarter -- our over planned we time

theme. feel about don't this recurring to that's like all be along. been going We've a we So talking

definitely to we're in the third in getting We the have fourth second quarter. that anticipating the a been lift for on more supply chain be going coming but of the lot and quarter,

to made out strategies us that change build We team capabilities and say our that chain that I'd our investments. have We've in investments concern there's But there. nothing supply much made gives going significant forward. probably

have typically the benefits year. later do higher some You with levels that payroll little bit the taxes a out of upfront in

we're comfortable positioned. we're So we where feel with like very

Operator

Sarah from Jaffray. from comes question next James Piper Your

Jesse Klink

volume And quarter was the one on Thanks. EBITDA like one conversely impacted less Hi. having looks work third This extra to day I quarter out revenue will just year. trends. have is Sarah. you then last for it how hoping in break could compared Jesse day

reverse same to the trends how in those the quarter? wondering degree So Thanks. just might third

Wayne Smith

measurable a that, would not else. that probably amount of this don't call out, going is just holidays it amount. had the to that how feel we're the it out I and not spell we yes, year. impact quarter material know or not that, a would us We remainder and everything Yes. It's like but only say material call a on

Operator

from from comes question next Tanal Goldman Your Sachs. Stephen

Stephen Tanal

of items of number to thinking called guys. sort a some have think about little of us core trended of quantify could of I just sort like maybe sort the of a bit would unusual Good guess year, out. here? sort you the are there's EBITDA morning But that in underlying maybe items just you the ex tell seasonality summarize where of

Wayne Smith

we're some called I up math a something We Knoxville Again, more start got think that's out The We've out items. physician I in the Well, practices. easy. $XX think mode the substantially unusual pretty right calling is we're more on million in now. physicians. of

we feel we've talked pretty continue to side. execute As to want coming forward. the practices was position core we and call we comfortable We on helpful. that we a The I we still puts really of to if That with especially And out, said project the And EBITDA wouldn't about comfortable, we be the and point I side, like that side, the out. on out be takes labor, those know expenses. that There volume on initiatives going going out to volume we're feel not statistics our $XX supply improve million. would lot but I leverage that strong. called are us model chain the our very labor gives physician in for at. other through also the think that are Lynn pipeline look that

Operator

next Your Costa Securities. question from from Peter Fargo comes Wells

Peter Costa

particular Was doing you've tied spending. category question squeezing to where of what me was? a same-store some sort Thanks being that was said the to it on surgical more been You on like dig volumes I'd the in little a there for in here. of Ralph's up.

sort as spending comes you're the between surgical the As that growth? you lag come worry that as volume the down spend CapEx down what's well? time the and will do -- of And CapEx

Wayne Smith

Peter. Hi, previous upon expand comments. I'll my

driving In acuity well, neurosurgery, service commented earlier, acuity initiatives. drivers. growth favorable here working by supply growth, on And good of of some implant today quarter, our on year orthopedics, business higher quarter mix that in the on called as those was of book as the of categories margin the to out the terms higher we but better lines, we've higher surgical still on leveraging as prior compared

the throughout of So the that year. that's will play come work rest into

GI the if for will, in GI in general performer growth We very but markets. us not many you a and the categories. very, also surgery had always strong most good complex,

So, backfilling line, service GI there. lost growth we with good expanding had providers or our some recruitment certain

area cath quarter. all mid-single-digit cath growth our quite invest staff, had other throughout volumes lab doesn't We year-over-year strong get The on the called we a in medical the specialist. the in increase surgery labs in as that our again

a put worried firm months a we our just just of ago categories XX broad lot ways growth. that XX, standpoint, of From be in not we're across those to and into making that on general, strategic So, capital funding won't we play, sure plans future execution. tied

for fact, pipeline. As surgery market ASCs performing we large to strong Las more Mexico in the have underway a see of well. until of won't there. Again Likely benefits very matter New us you expansion project then add those XXXX. some capacity in Cruces, also the And transactions

pipeline the nor the a a slowed and ability capacity. there. and to but investing get the As physician we it to equipment lot surgeons the capitalizing the really have to their together, spending in service advance down we the But and on robust line partners, open, not to takes tools the jobs grow work the centers with our our you know for hospitals have put stop deal do that staff

Operator

turn for was I our call Mr. closing At last question. to comments. this That Smith back time, will the over

Wayne Smith

time again the Thank us this with for spending you morning.

the in pleased the call quarter. we're encouraged outlined we've And with XXXX. made with the progress we're As today, first in

specifically want XXXX. division We we're in hospital management to looking operators chief to officers, for officers, the team, chief nursing Once forward, our their always and forward on and financial officers, throughout executive Moving improvement questions, have hospital, This our strong year. you on thank performance chief staff, progress again, a look if you our our can XXX-XXX-XXXX. reach today. updating you strategic forward at continued We concludes call to initiatives. us

Operator

today's This call. concludes conference

You now disconnect. may

Community Health Systems (CYH) 1 May 192019 Q1 Earnings call transcript