CYH
Community Health Systems INC
NYSE
DEF 14A: Community Health Systems Announces 2024 Annual Meeting of Stockholders
Sentiment:
Proxy Statement
28 March 2024 4:31 PM
Community Health Systems will hold its 2024 Annual Meeting of Stockholders on May 7, 2024, to vote on director elections, executive compensation, and the ratification of the independent accounting firm.
Worse than expected
The company experienced a net loss attributable to stockholders of $(133) million in 2023, compared to a net income of $46 million in the prior year.
Adjusted EBITDA decreased by 0.9% to $1.454 billion in 2023.
Cash Flows from Operations decreased by 30.0% to $210 million.
The stock price decreased by 27.5% as of December 31, 2023.
Summary
- Community Health Systems (CHS) will hold its Annual Meeting of Stockholders on May 7, 2024.
- Stockholders will vote on the election of 14 directors, an advisory vote on executive compensation, and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024.
- In 2023, CHS reported net operating revenues of $12.5 billion, a 2.3% increase compared to the prior year.
- The company experienced a net loss attributable to stockholders of $(133) million, compared to a net income of $46 million in the prior year.
- Adjusted EBITDA was $1.454 billion, a 0.9% decrease compared to the prior year.
- The company refinanced a portion of its senior secured debt in December 2023, issuing $1.0 billion in new notes and redeeming $985 million of existing notes.
- CHS repurchased and retired approximately $402 million of its outstanding notes at a discount during 2023.
- The company's four organizational priorities are: Accelerate Growth, Strengthen Our Workforce, Control Expenses, and Advance Safety and Quality.
- The company achieved an 89% reduction in its Serious Safety Event Rate from the 2013 baseline.
Sentiment
Score: 6
Explanation: The document presents a mixed sentiment. While there are positive aspects such as revenue growth and progress in strategic initiatives, the net loss and decrease in Adjusted EBITDA temper the overall outlook. The company is taking steps to improve its financial position, but challenges remain.
Positives
- Net operating revenues increased by 2.3% to $12.5 billion in 2023.
- Patient volumes increased during 2023.
- The company made meaningful progress in managing its labor expense.
- The company's margin improvement program positively impacted non-labor expenses.
- The company refinanced a portion of its senior secured debt, extending the maturity of the refinanced debt.
- The company repurchased and retired approximately $402 million principal amount of its outstanding notes at a discount.
- The company achieved an 89% reduction in its Serious Safety Event Rate since 2013.
- The company had a net gain of more than 1,000 bedside nurses in 2023.
- The company is rolling out a new enterprise resource planning (ERP) system to redesign and consolidate key business functions.
Negatives
- The company experienced a net loss attributable to stockholders of $(133) million in 2023, compared to a net income of $46 million in the prior year.
- Adjusted EBITDA decreased by 0.9% to $1.454 billion in 2023.
- Cash Flows from Operations decreased by 30.0% to $210 million.
- The stock price decreased by 27.5% as of December 31, 2023.
Risks
- The company faces challenges such as higher medical specialist fees, adverse trends in professional liability claims, and the shift of Medicare-age patients to Medicare Advantage plans.
- The company faces increasing frequency of third-party payors downgrading status, denying claims, and delaying payment for services rendered.
- The company's enterprise risk management process identifies and monitors key risks facing the company.
Future Outlook
The company remains focused on its four priority areas: Accelerate Growth, Strengthen Our Workforce, Control Expenses, and Advance Safety and Quality, which it believes are essential to driving results and delivering value for all stakeholders.
Management Comments
- Wayne T. Smith, Chairman of the Board of Directors: 'Thank you for your investment in Community Health Systems, Inc. and your continued support.'
- Tim L. Hingtgen, Chief Executive Officer: 'We appreciate the dialogue we have with our stockholders throughout the year and look forward to continuing this dialogue in the future.'
Industry Context
The document notes that Community Health Systems, like many healthcare providers, experienced an improved, yet still challenging, operating environment in 2023, reflecting broader trends in the healthcare industry.
Comparison to Industry Standards
- The document compares the company's executive compensation to a peer group of 13 companies, including Aflac, Owens & Minor, Brookdale Senior Living, Quest Diagnostics, DaVita, Select Medical Holdings Corporation, Encompass Health Corporation, Tenet Healthcare Corporation, HCA Healthcare, Inc., Universal Health Services, Inc., Henry Schein, Inc., Unum Group, and Molina Healthcare, Inc.
- The document notes that the company's annual total compensation package of $310,000 for non-management directors (exclusive of stipends) remained generally consistent with the median total director compensation package paid by companies within the peer group.
Stakeholder Impact
- The company's performance and strategic initiatives impact shareholders, employees, patients, and the communities it serves.
- The company is committed to supporting the communities where it operates.
Next Steps
- Stockholders are requested to vote on the proposals outlined in the proxy statement.
- The Board of Directors will consider the outcome of the advisory vote on executive compensation when making future executive compensation decisions.
- The Audit and Compliance Committee will reconsider the selection of the independent registered public accounting firm if stockholders do not ratify the appointment of Deloitte & Touche LLP.
Related Party Transactions
- A subsidiary of the Company employs Elizabeth Medley, the spouse of Mark B. Medley, Regional President Region 3 Operations.
- During 2023, a subsidiary of the Company employed Rebecca Pitt, the spouse of Justin D. Pitt, Executive Vice President, General Counsel and Assistant Secretary of the Company.
Key Dates
- 2023-01-01: Start of the 2023-2025 performance period for long-term incentive awards.
- 2023-12-31: End of the 2023-2025 performance period for long-term incentive awards.
- 2024-03-11: Record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting.
- 2024-03-28: Mailing date of the Proxy Statement and form of proxy card.
- 2024-05-07: Date of the Annual Meeting of Stockholders.
- 2024-10-29: Earliest date for receipt of notice of proxy access director nomination for the 2025 Annual Meeting.
- 2024-11-28: Latest date for receipt of notice of proxy access director nomination for the 2025 Annual Meeting and deadline for stockholder proposals for inclusion in the 2025 proxy statement.
- 2025-01-12: Earliest date for receipt of notice of director nomination or other business for the 2025 Annual Meeting.
- 2025-02-11: Latest date for receipt of notice of director nomination or other business for the 2025 Annual Meeting.
- 2025-03-08: Deadline for stockholders intending to solicit proxies in support of director nominees other than the company's nominees to provide notice required by Rule 14a-19.
Keywords
stockholders, executive compensation, directors, annual meeting, financial performance, healthcare, CHS, Community Health Systems
CYH
Community Health Systems INC
NYSE
Sector: TBD
Filings with Classifications
Better than expected
1 July 2025 4:30 PM
Asset Divestiture Announcement
- The transaction generated $436 million in cash proceeds for Community Health Systems.
- An estimated pre-tax gain of $143 million ($93 million after tax) was realized from the sale.
- The final cash consideration of $436 million was higher than the amended base purchase price of $430 million, indicating positive adjustments.
Better than expected
24 April 2025 4:30 PM
Quarterly Report
- The company's net income improved significantly from a net loss in the same period last year.
Capital raise
24 April 2025 4:30 PM
Quarterly Report
- CHS entered into a privately negotiated agreement with a multi-asset investment manager to issue and sell $700 million aggregate principal amount of 10% Senior Secured Notes due 2033.
- The company expects to use the net proceeds from issuance of the 10% Senior Secured Notes due 2033, together with cash on hand, to redeem the 8% Senior Secured Notes due 2027 and to pay related fees and expenses.
Better than expected
23 April 2025 4:30 PM
Earnings Release
- The net loss attributable to Community Health Systems, Inc. stockholders improved from $(41) million to $(13) million year-over-year.
Worse than expected
3 April 2025 8:30 PM
Proxy Statement
- The net loss attributable to Community Health Systems, Inc. stockholders increased from $(133) million in 2023 to $(516) million in 2024.
Worse than expected
3 March 2025 6:06 PM
SEC Form 4 Filing
- The forfeiture of a significant portion (83.2%) of the performance-based restricted shares indicates that the company's performance during the 2022-2024 period was worse than expected, failing to meet the pre-determined performance objectives.
Worse than expected
3 March 2025 6:04 PM
SEC Form 4
- The forfeiture of a significant portion of performance-based restricted shares suggests that the company underperformed relative to its targets during the 2022-2024 performance period.
Worse than expected
3 March 2025 6:02 PM
SEC Form 4 Filing
- The forfeiture of 11,850 performance-based restricted shares suggests that the company's performance did not fully meet the established objectives for the 2022-2024 performance period.
Worse than expected
19 February 2025 4:31 PM
Annual Results
- The company reported a net loss attributable to Community Health Systems, Inc. stockholders of $516 million in 2024, compared to a net loss of $133 million in 2023.
Worse than expected
18 February 2025 4:30 PM
Quarterly Earnings Release
- The company reported a net loss attributable to Community Health Systems, Inc. stockholders for Q4 2024, compared to net income in the same period of 2023.
- The company reported a larger net loss attributable to Community Health Systems, Inc. stockholders for the year ended December 31, 2024, compared to the same period in 2023.
Worse than expected
26 November 2024 4:30 PM
Material Definitive Agreement Termination
- The termination of the sale agreement is worse than expected as it removes a planned divestiture and introduces uncertainty about the future of the assets.
Delay expected
22 November 2024 4:30 PM
Asset Sale Agreement
- The Punta Gorda hospital has indefinitely suspended inpatient operations due to hurricane damage, which may cause delays in the transaction.
Worse than expected
24 October 2024 4:34 PM
Quarterly Report
- The company's net loss of $391 million in Q3 2024 is significantly worse than the $91 million loss in Q3 2023.
- The company's impairment charges and professional liability accrual adjustments are significantly higher than expected.
- The company's consolidated inpatient admissions decreased by 4.1%, indicating a decline in overall patient volume.
Worse than expected
23 October 2024 4:30 PM
Quarterly Report
- The company's net loss attributable to stockholders was significantly worse than the same period last year, increasing from $(91) million to $(391) million.
- The adjusted EBITDA decreased from $360 million to $347 million in the third quarter of 2024 compared to the same period in 2023.
- The net loss per share increased from $(0.69) to $(2.95) in the third quarter of 2024 compared to the same period in 2023.
Better than expected
25 July 2024 4:30 PM
Quarterly Report
- The company's net income improved compared to the same periods in the prior year, moving from a loss to a profit.
- The company's same-store revenue growth indicates better performance in its core operations.
- The company's debt restructuring efforts, including the gain from early extinguishment of debt, positively impacted the financial results.
Delay expected
25 July 2024 4:30 PM
Quarterly Report
- The company's construction of a replacement facility in Knox, Indiana, is required to be completed by September 30, 2026, if a new lease with Starke County is not entered into.
Capital raise
25 July 2024 4:30 PM
Quarterly Report
- The company completed an offering of an additional $1.225 billion aggregate principal amount of its outstanding 10.875% Senior Secured Notes due 2032.
- Proceeds from the offering of the Tack-On Notes were used to redeem all $1.116 billion of the outstanding 8.000% Senior Secured Notes due 2026, to fund senior note repurchases, pay related fees and expenses and for general corporate purposes.
Better than expected
24 July 2024 4:30 PM
Quarterly Report
- The company's net loss improved significantly compared to the same period last year.
- Adjusted EBITDA increased, indicating improved operational performance.
- Same-store revenues and admissions showed positive growth.
Delay expected
21 June 2024 6:01 PM
Material Definitive Agreement Termination
- The sale of the two hospitals was delayed due to the FTC's legal challenge and subsequent injunction.
Worse than expected
21 June 2024 6:01 PM
Material Definitive Agreement Termination
- The termination of the sale is worse than expected as it disrupts CHS's strategic plans and may require a reassessment of their financial and operational strategies for the two hospitals.
Capital raise
21 May 2024 9:19 PM
Debt Offering Announcement
- The company is raising $1.225 billion through a tack-on offering of senior secured notes.
- The proceeds will be used to redeem existing debt and for general corporate purposes.
Capital raise
21 May 2024 8:28 AM
Debt Offering Announcement
- The company is raising $1.125 billion through a tack-on offering of senior secured notes.
- The proceeds will be used to redeem existing debt and for general corporate purposes.
Delay expected
25 April 2024 4:32 PM
Quarterly Report
- The sale of Lake Norman Regional Medical Center and Davis Regional Medical Center to Novant Health, Inc. is delayed due to a complaint filed by the Federal Trade Commission.
Better than expected
25 April 2024 4:32 PM
Quarterly Report
- The company's net loss improved from $20 million to $6 million year-over-year, indicating better than expected financial performance.
Better than expected
24 April 2024 4:30 PM
Quarterly Report
- The company's net loss per share improved from $(0.40) to $(0.32) year-over-year.
- Adjusted EBITDA increased from $335 million to $378 million year-over-year.
- Net cash provided by operating activities increased from $5 million to $96 million year-over-year.
Delay expected
18 April 2024 4:30 PM
Asset Sale Agreement
- The agreement can be terminated if the transaction is not completed by August 31, 2024, indicating a potential for delay.
Worse than expected
28 March 2024 4:31 PM
Proxy Statement
- The company experienced a net loss attributable to stockholders of $(133) million in 2023, compared to a net income of $46 million in the prior year.
- Adjusted EBITDA decreased by 0.9% to $1.454 billion in 2023.
- Cash Flows from Operations decreased by 30.0% to $210 million.
- The stock price decreased by 27.5% as of December 31, 2023.
Worse than expected
20 February 2024 4:30 PM
Quarterly Report
- The company's net income and adjusted EBITDA decreased compared to the same periods in the previous year.
- The company reported a net loss for the full year 2023, compared to a net income in 2022.
- The company is projecting a net loss per share for 2024.
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