Quorum Health Corporation (NYSE:QHC) today announced its operating and financial results for the three and nine months ended September 30, 2016.

Net operating revenues for the three months ended September 30, 2016 totaled $543.9 million, compared to $543.1 million for the same period in 2015, a 0.1% increase.  Income from operations for the three months ended September 30, 2016 was $17.5 million, compared to $19.8 million for the same period in 2015.  Net cash used in operating activities for the three months ended September 30, 2016 was $(0.4) million, compared to $(17.3) million for the same period in 2015.

Adjusted EBITDA for the three months ended September 30, 2016 was $46.7 million, compared to $60.3 million for the same period in 2015.  The operating results for the three months ended September 30, 2016 reflect a 3.2% decrease in total admissions and a 3.0% decrease in total adjusted admissions compared with the same period in 2015.  Net loss attributable to Quorum Health Corporation for the three months ended September 30, 2016 was $(7.0) million, or $(0.24) per share, compared to $(5.7) million, or $(0.20) per share, for the same period in 2015.

Commenting on these results, Thomas D. Miller, president and chief executive officer of Quorum Health Corporation, said, “Our results for this quarter demonstrate that we are committed to improving our operating and financial performance. Additionally, we are focused on restructuring our portfolio and positioning Quorum Health for long-term success. We have agreements for the sale of two facilities and expect to close on these transactions by year end. The Adjusted EBITDA of these two facilities represents approximately 50% of the negative Adjusted EBITDA of the entire group of assets we intend to divest. We will use the proceeds from these two sales to reduce our debt. We remain dedicated to reducing our leverage, improving profitability and increasing shareholder value.” Evidencing improved results, Mr. Miller pointed out that net operating revenues for the three months ended September 30, 2016 increased 2.7%, from $529.7 million for the three months ended June 30, 2016. Net cash used in operating activities for the three months ended September 30, 2016 was $(0.4) million, compared to net cash provided by operating activities of $36.8 million for the three months ended June 30, 2016. Adjusted EBITDA for the three months ended September 30, 2016 increased 59.9%, from $29.2 million for the three months ended June 30, 2016.

Net operating revenues for the nine months ended September 30, 2016 totaled $1,623.2 million, compared to $1,629.1 million for the same period in 2015, a 0.4% decrease.  Loss from operations for the nine months ended September 30, 2016 was $(220.7) million, compared with income from operations of $81.6 million for the same period in 2015. The results for the nine months ended September 30, 2016 include $250.4 million of non-cash charges related to the impairment of long-lived assets and goodwill recorded in the second quarter, $5.4 million of transaction costs related to the spin-off and $6.2 million of legal and settlement costs.  The results for the nine months ended September 30, 2015 include $9.1 million of transaction costs related to the spin-off. Net cash provided by operating activities for the nine months ended September 30, 2016 was $60.8 million, compared to $5.4 million for the same period in 2015.

Adjusted EBITDA for the nine months ended September 30, 2016 was $132.2 million, compared to $185.9 million for the same period in 2015.  The operating results for the nine months ended September 30, 2016 reflect a 2.9% decrease in total admissions and a 1.6% decrease in total adjusted admissions compared with the same period in 2015.  Net loss attributable to Quorum Health Corporation for the nine months ended September 30, 2016 was $(257.0) million, or $(9.05) per share, compared to net income attributable to Quorum Health Corporation of $1.9 million, or $0.07 per share, for the same period in 2015.   The net loss attributed to the non-cash impairment charge for the nine months ended September 30, 2016 was $(216.1) million, or $(7.61) per share.

Adjusted EBITDA, a non-GAAP financial measure, is EBITDA adjusted to exclude the impact of net income (loss) attributable to noncontrolling interests, expenses related to certain legal and settlement costs, impairment of long-lived assets and goodwill, and transaction costs related to the spin-off. For information regarding why the Company believes Adjusted EBITDA presents useful information to investors and for a reconciliation of Adjusted EBITDA to net cash provided by (used in) operating activities, the most directly comparable U.S. GAAP financial measure, see footnote (b) to the Financial Highlights, Financial Statements and Selected Operating Data below.

Financial Outlook

Set forth below is selected information concerning the Company’s financial outlook for the year ending December 31, 2016.  These projections update selected guidance issued most recently on August 10, 2016 and are based on the Company’s historical operating performance, current trends and other assumptions that the Company believes are reasonable at this time. The 2016 guidance should be considered in conjunction with the assumptions included herein. See “Forward-Looking Statements” below for a list of factors that could affect the future results of the Company or the healthcare industry generally.

The Company expects net operating revenues for the year ending December 31, 2016 to range from $2.170 billion to $2.180 billion and expects Adjusted EBITDA for the year ending December 31, 2016 to range from $175 million to $185 million. The guidance does not give effect to future acquisitions or divestitures, including the anticipated divestitures of two hospitals expected to close by December 31, 2016. The Company anticipates that going forward reported Adjusted EBITDA will include an adjustment for any divested hospital operations. Adjusted EBITDA includes an estimate of approximately $10 million for non-cash stock-based compensation expense, a portion of which was allocated from CHS prior to the spin-off on April 29, 2016, and includes the impact of estimated incremental expenses associated with being an independent, public company following the completion of the spin-off.

A reconciliation of the Company’s projected 2016 Adjusted EBITDA, a forward-looking non-GAAP financial measure, to the most directly comparable GAAP financial measure is omitted from this release because the Company is unable to provide such reconciliation without unreasonable effort. This inability results from the inherent difficulty in forecasting generally and in quantifying certain projected amounts that are necessary for such reconciliation. In particular, sufficient information is not available to calculate certain adjustments required for such reconciliation without unreasonable effort, including interest expense, net; provision for (benefit from) income taxes; other non-cash expenses (income), net; other changes in operating assets and liabilities and other adjustments that would be necessary to prepare a forward-looking statement of cash flows prepared in accordance with U.S. GAAP. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

About Quorum Health Corporation

The principal business of Quorum Health Corporation is to provide general hospital healthcare and other outpatient services in its markets across the United States. As of September 30, 2016, the Company owned or leased 38 hospitals, licensed for 3,578 beds in 16 states. The Company also provides outpatient services at urgent care centers, diagnostic and imaging centers, physician clinics and surgery centers. Over 95% of the Company’s net operating revenues are attributable to its hospital operations business.

Furthermore, through Quorum Health Resources, LLC, the Company provides management advisory and consulting services to non-affiliated acute care hospitals located throughout the United States.

The Company’s headquarters are located in Brentwood, Tennessee, a suburb south of Nashville. Shares in Quorum Health Corporation are traded on the NYSE under the symbol “QHC.”  More information about the Company can be found on its website at www.quorumhealth.com.

Quorum Health Corporation will hold a conference call on Thursday, November 10, 2016, at 10:00 a.m. Central, 11:00 a.m. Eastern, to review operating and financial results for the three and nine months ended September 30, 2016.  Investors will have the opportunity to listen to a live internet broadcast of the conference call by clicking on the Investor Relations link of the Company’s website at www.quorumhealth.com. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will continue to be available for approximately 30 days. Copies of this press release and conference call slide show, as well as the Company’s Current Report on Form 8-K (including this press release), will be available on the Company’s website at www.quorumhealth.com.