Quorum Health Corporation (NYSE:QHC) Q1 2017 Earnings Conference Call - Final Transcript
May 15, 2017 • 11:00 am ET
My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the Quorum Health First Quarter 2017 Earnings 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. (Operator Instructions) Thank you.
I will turn the call over to Mr. Michael Culotta, Executive Vice President and Chief Financial Officer. You may begin your conference.
Welcome to Quorum Health's first quarter conference call. Before we begin the call, I would like to read the following disclosure statement. (Forward-looking Cautionary Statements)
With that, I would like to turn the call over to Mr. Tom Miller, President and Chief Executive Officer. Tom?
And let me also welcome you to Quorum Health's first quarter 2017 conference call. With me today is Marty Smith, Executive Vice President of Operations; Matt Hayes, Senior Vice President of Operations; Dr. Shaheed Koury, our Senior Vice President and Chief Medical Officer; and Mike Culotta, our Executive Vice President and Chief Financial Officer. Mike and I have some comments covering the first quarter results and our continued focus on improvement. We'll then open the call up for questions.
Let me start with a brief review of the quarter. Our focus during the quarter was the continued restructuring of our hospitals' portfolio, further strengthening our core hospitals and improving our financial positions. Mike will review the numbers in detail but here are few highlights.
We reported total consolidated net operating revenues of $528 million compared to $550 million in the first quarter of 2016. However, as Mike will detail later, I encourage that adjusting the comparison for leap year and the California Hospital Quality Assurance Fee, our same-facility net patient revenues would have grown 2%.
Our adjusted EBITDA adjusted for divestitures was $26.8 million for the quarter. The California Hospital Quality Assurance Fee negatively impacted our results and the amount approximately $8.3 million. We will discuss this later on the call.
As Mike mentioned, we divested the Cherokee Hospital during the first quarter which followed the divestiture of two non-strategic facilities: Barrow and Sandhills in late 2016. The adjusted EBITDA for the Cherokee facility represented a negative $696,000 in the quarter. The negative adjusted EBITDA of the additional facilities which we are working to divest represent approximately $7.1 million in the first quarter. Our net proceeds and all of these sales to date have approximated $18 million and all proceeds have gone to reduce our debt. Presently, we have asset purchase agreements on three hospitals that are signed, one transaction for one hospital expected to be included at the end of the second quarter and one transaction for the other two expected to be completed by August first.
We are actually seeking to sell additional six facilities at this time. Please see the additional details on Slides two through four. We continually evaluate additional facilities for potential divestitures as part of our broader strategy to create a stronger