CHS (CYH) Q1 2026 Earnings Call Transcript

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Wednesday, April 22, 2026 astatine 11 a.m. ET

• Chief Executive Officer — Kevin Hammons

• Chief Financial Officer — Jason Johnson

Kevin Hammons: Thank you, Anton. Good morning, everyone, and convey you for joining our archetypal 4th 2026 league telephone and for your continued involvement successful CHS. Before we begin, I privation to admit our employees, physicians and each of our teammates who person embraced our imaginativeness to marque the wellness attraction acquisition exceptional for our patients, our communities and each other. As radical crossed our enactment stock successful this commitment, I americium assured we volition spot the benefits of making that wellness attraction acquisition exceptional. And arsenic we do, much patients volition take our wellness systems and volition make an adjacent stronger company.

Earlier this week, we announced immoderate important investments successful ambulatory country centers successful our halfway markets including the pending acquisition of a bulk ownership involvement successful the Surgical Institute of Alabama, our largest acquisition since 2016. This country halfway performs much than 8,000 cases annually, and is the largest multi-specialty country halfway successful Alabama. We expect to adjacent this transaction during the 2nd quarter. During the archetypal quarter, we besides purchased a bulk involvement successful South Anchorage Surgery Center successful Alaska and opened 2 de novo ASCs successful Birmingham and Foley, Alabama.

These targeted investments widen CHS' quality to supply outpatient surgical attraction successful the astir advantageous mode for our patients portion delivering fantabulous outcomes, optimizing the surgical acquisition for our doc partners and driving aboriginal maturation for our wellness systems. Turning to our operating show for the archetypal 4th of 2026, adjusted EBITDA was connected the debased extremity of our interior expectations, declining 17.8% from the anterior twelvemonth period, reflecting our strategical transactions to trim our debt, macroeconomic disruptions crossed the country, arsenic good arsenic the concern CHS is making successful our future.

The quarter's results see an approximate $50 cardinal year-over-year EBITDA resistance from precocious completed divestitures that went from being affirmative contributors successful the anterior twelvemonth play to antagonistic successful the archetypal 4th of 2026. Closing these divestitures volition region the antagonistic EBITDA resistance from aboriginal quarters. Additionally, portion we benefited from immoderate out-of-period gross related to the Georgia State Directed Payment Program, this tailwind was partially offset by out-of-period supplier taxation increases related to the Indiana program. Same-store nett gross accrued 3.1% year-over-year, driven by 3.7% maturation successful nett gross per adjusted admission, partially offset by a 0.5% diminution successful same-store adjusted admissions.