Quorum Health Corporation (NYSE:QHC) Q2 2019 Earnings Conference Call - Final Transcript

Aug 08, 2019 • 11:00 am ET


Quorum Health Corporation (NYSE:QHC) Q2 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Quorum Health Corporation's Second Quarter 2019 Earnings Conference Call. [Operator Instructions] Before we begin the call, I'd like to read the following disclosure statement.

This conference call may contain certain forward-looking statements, including all statements that do not relate solely to historical or current facts. These forward-looking statements are subject to a number of known and unknown risks, which are described in headings, such as Risk Factors in the Company's Form 10-K filing and other reports filed with or furnished to the Securities and Exchange Commission. As a consequence, actual results may differ significantly from those expressed in any forward-looking statements in today's discussion. The Company does not intend to update any of these forward-looking statements.

Quorum Health issued a press release last evening with their financial statements and definitions and calculations of adjusted EBITDA and same-facility adjusted EBITDA, including reconciliations to US GAAP measures. A slide presentation is available on the Company's website to supplement today's call. Results discussed today consolidate the results of Quorum's 26 owned or leased hospitals and the results of Quorum Health Resources. Same-facility information excludes the results of the 12 facilities that have been divested or closed since the spin-off through June 30th, 2019.

In addition, the Company filed their quarterly report on Form 10-Q last evening. All discussions today are supplemented by the press release, the earnings presentation on the Company's website and the Form 10-Q.

All non-GAAP calculations discussed will exclude certain legal, professional and settlement costs, charges related to the impairment of long-lived assets and goodwill, the net gain or loss on sale of hospitals, the net loss of the closure of hospitals, costs associated with the transition of the Transition Service Agreement or TSAs, change in actuarial estimates, severance cost for head count reductions and executive changes.

Please refer to the earnings presentation located in the Investor Relations section of the Company's website at www.quorumhealth.com for a further description and calculation of adjusted EBITDA and same-facility adjusted EBITDA and a reconciliation of these non-GAAP measures to net income, the most direct comparable GAAP measure.

With that, I'd like to turn the call over to Mr. Bob Fish, Quorum's President.

Robert Fish

Welcome, and thank you for joining us to discuss Quorum's second quarter 2019 financial and operating results. Joining me this morning are Alfred Lumsdaine, our Chief Financial Officer; and Marty Smith, our Chief Operating Officer. On the call today, I'll discuss highlights from the second quarter and provide an update on our strategic plan before turning the call over to Marty to cover our second quarter operating results.

Our same-facility net operating revenue in the second quarter was $442.4 million, a decrease of 3.5% compared to the second quarter of 2018. I'd note that 34% of this decline comes from the two hospitals which will be sold or closed by the end of this year. Same-facility adjusted EBITDA was $37 million in the second quarter, a year-over-year decline of $3 million. This entire decline relates to the