CHS extends divestiture plan as losses mount

Franklin, Tenn.-based Community Health Systems has added more hospitals to its divestiture plan, officials said on a second quarter earnings call Wednesday.

To improve its finances and reduce its nearly $15 billion debt load, CHS put a turnaround plan into place last year. As part of the plan, the company announced earlier this year that it intended to sell off 30 hospitals.

CHS completed the sale of nine hospitals on June 30 and July 1, closing on 20 of 30 intended divestitures. The company expects to complete divestiture of the remaining 10 hospitals by Sept. 30.

In its preliminary earnings release, CHS announced plans to continue unloading more hospitals, and chairman of the board and CEO Wayne T. Smith discussed the company's divestiture plan on the second quarter earnings call.

Mr. Smith said CHS is planning to sell hospitals with a combined total of at least $1.5 billion in annual net revenue. He said the company anticipates most of those transactions will close next year.

CHS' financial results for the second quarter were in line with the preview issued July 26. The company ended the quarter with a net loss of $137 million on revenues of $4.14 billion. That's compared to the same period of 2016 when CHS reported a net loss of $1.43 billion on revenues of $4.59 billion.

"Overall, we were obviously not satisfied with our performance during the second quarter, as the quarter came in below our internal forecast," Mr. Smith said on the earnings call.

In addition to restructuring its portfolio, CHS is focusing on improving operations. Mr. Smith said the company is trying to "go back into growth mode" sometime in 2018.

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