The troubled Franklin-based Community Health Systems — briefly the country's largest for-profit hospital chain — is still selling off facilities to pay down debt. And investors are pressing to know when the company will stop playing defense.
"This divestiture program has been a major effort. It's required a lot of time and talent and has been a distraction." CEO Wayne Smith spoke to analysts on a conference call to go over results from the third quarter — another rough one.
The attempted turnaround was dealt yet another setback by Hurricane Irma that swept through Florida where CHS has 19 facilities, including one in Key West. The estimated losses from the storm is $40 million.
But the much bigger focus remains on selling off assets.
"Hopefully we'll be through this in a relatively short period of time," Smith said. "But I think what we're going to end up with is a very stable group of hospitals that are good performers."
It's unclear just how many of the remaining 127 hospitals the company will sell. It has completed 30 transactions that were already publicly discussed this year, helping CHS pay down $3 billion of its outsized debt load. Now the company is looking to unload another batch of facilities to come up with $2 billion more.
Kevin Fischbeck, an analyst with Bank of America, points out that even the hospitals CHS isn't selling aren't performing well.
"You guys keep selling assets and paying down debt, but it seems like the organic [adjusted] growth seems to be negative," he said on Thursday's earnings call when asking when to expect the company's profits to turn around.
President and Chief Operating Officer Tim Hingtgen said CHS is focused on "playing better offense."
So far, Community Health's troubles have not resulted in big cutbacks at the company's headquarters, which just opened a new facility in Antioch. The company remains one of the bigger private employers in the Nashville area.