Quorum sees annual loss swell to $200M, plans to divest more hospitals

Quorum Health's revenue declined year over year in the fourth quarter of 2018, and the Brentwood, Tenn.-based company ended last year with a net loss.

The 27-hospital system, a spinoff of Franklin, Tenn.-based Community Health Systems, said operating revenues declined 12 percent year over year to $458.6 million in the fourth quarter of 2018. Quorum said same-hospital admissions dropped 1 percent year over year in the fourth quarter of 2018 due to a decline in flu cases.

The company's annual revenue was down 9 percent in 2018. The decline was largely attributable to Quorum operating fewer hospitals in 2018 than in the year prior. The company sold three hospitals and closed one other last year.

After factoring in expenses and one-time charges, Quorum ended the fourth quarter of 2018 with a net loss of $20.7 million, compared to a loss of $26.8 million in the same period of the year prior. Looking at full-year results, Quorum's net loss widened from $114.2 million in 2017 to $200.2 million in 2018.

Quorum is focused on refining its hospital portfolio to improve financial performance. Since the company began selling off hospitals in 2016, it has received $86.5 million in net proceeds from divestitures. Quorum used the bulk of those funds — $84.8 million — to pay down its debt.

"We perform an ongoing strategic review of our hospitals based upon an analysis of financial performance, current competitive conditions, market demographic and economic trends and capital allocation requirements," Quorum said in its filing with the Securities and Exchange Commission. "As part of this strategy, we intend to divest or close underperforming hospitals and outpatient service facilities which, in turn, will allow us to reduce our corporate indebtedness and refine our hospital portfolio to become a sustainable group of hospitals and outpatient service facilities with higher operating margins."

Quorum said it intends to divest additional hospitals by the end of this year. In January, the company entered into a definitive agreement to sell Scenic Mountain Medical Center in Big Spring, Texas. Quorum expects that deal to close by the end of April.

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