Episode 54: Optimism in Money Matters

Jolene Francis, Vice President and Chief Development Officer, joins Kevin Woodward, Enloe Health Vice President and Chief Financial Officer, for an informative discussion about Enloe’s financial condition.

Kevin talks about the balance sheet overview now that fiscal year 2026 has ended. He also highlights opportunities, focus areas and disciplined strategies to keep the organization’s momentum going in the next 12 months. He also discusses the situation at Oroville Hospital and offers an update on Enloe’s new Workforce Sustainability Committee and its improvements to hiring practices.

Finally, Kevin and Jolene talk about the soon-to-open Gonzales Comprehensive Cancer Center and the just-started imaging and heart services facility. Kevin also gives a boost to all Enloe Health departments for their continued hard work.

Transcript

Joleen Francis: [00:00:00] The Enloe Senior Team message is presented in this caregiver-centric podcast, providing an update on what's new and exciting across the campuses of Enloe Health Hello, everyone. I'm Jolene Francis, Chief Development Officer. Welcome to the August twenty twenty-six episode of Enloe's Message. Today, we welcome our CFO, Kevin Woodward, to give us an update on results from our fiscal year-end.

Hi, Kevin. Thanks for being here today. 

Kevin Woodward: Hey, Jolene. Glad to be here. 

Joleen Francis: Lots to discuss today, Kevin, but let's start with financial results from fiscal year twenty twenty-six. How did things look for Enloe Health at the end of this fiscal year? 

Kevin Woodward: Twenty twenty-six seems to be consistent with our original projection that we established back in the previous fiscal year.

We had targeted a level of financial performance around fifty-two million as [00:01:00] an operating EBITDA measure. And, and as a reminder, that measure is a measure of cash flows generated from operations. And that goes first to support our debt service requirement of about twenty-eight million a year or our mortgage, and the rest is for reinvestment in the organization for equipment, IT infrastructure, and some, some building work.

So we were able to meet our targets for twenty twenty-six with debt service right around twenty-eight million and, uh, about, uh, twenty million in, in total capital spend. 

Joleen Francis: That's great news. And I, I have to say, you guys are so fast at getting those results. It's actually really, really impressive to have that complex of a financial statement done this soon after the end of the fiscal year.

So congratulations to your team. As we progress through fiscal year twenty twenty-seven, and we're striving to attain sustainable outcomes for the long term, what do you think is most important for all of us to focus on? 

Kevin Woodward: Hmm. Most importantly, everyone that's listening should have worked with their [00:02:00] individual financial analyst to develop the underlying budget, which really rolls into a projection for twenty twenty-seven.

Joleen Francis: Mm-hmm. 

Kevin Woodward: And so that projection, uh, is the basis of a lot of our decision work that we have going into the next fiscal year. So the thing to focus on is really meeting that promise to the organization that was developed through your work with your analysts and the budget. And so that's it. What drives this organization is labor.

So again, about ninety percent of our spend at a department level is labor. So again, realizing and achieving your financial target is the most important work that you could do from a financial perspective. So similar level of financial performance projected for twenty twenty-seven. Uh, we're looking at a performance measure of, again, around fifty-two million.

That's extremely important. That's about the, the third year that we've had that level, uh, of financial performance. And again, over the last couple years, we have been striving for predictability and repeatability in earnings such that we can continue to basically to invest in these [00:03:00] major projects, and that being, first, the cancer center, which we have completed at the end of this fiscal twenty-six.

But again, we're embarking on another project of a similar size and scope of about a hundred and twenty million. And again, the last thing we need to do or have is our organization start to fall apart from a financial perspective. Because everybody gets nervous and projects can stop. So key for the next 12 to 24 months is, again, consistency in our financial results, minding and having the rigor to meet those targets so that we don't get distracted by a bad financial outlook.

Joleen Francis: Yeah, things that could get in our way. So in other words, just we all have to keep our eye on the ball. 

Kevin Woodward: For sure. 

Joleen Francis: Okay. 

Kevin Woodward: Yeah. 

Joleen Francis: Well, thanks for that update. That's good news, and it's also a challenge for us going forward. Right. We have to make sure we're meeting those goals. I have a couple other items that I wanted to ask you about today, Kevin.

The first is something that remains in the back of everyone's mind, and that's the situation at Oroville Hospital. Are there any new updates or insights- Hmm ... that you can share? [00:04:00] 

Kevin Woodward: There's a lot that I can't just because we signed a non-disclosure agreement- Sure ... as it relates to, to this process. Obviously, they're going through bankruptcy, and they have been positioned to be for sale.

We have and continue consider the acquisition of Oroville, and our due diligence in that continues. I'm not sure- 

Joleen Francis: But not a heck of a lot else, but we're still following it 

Kevin Woodward: along. We're still following it very closely. We have, uh, hired a number of advisors to help us through this process, and we have done, uh, the right level of due diligence thus far.

Joleen Francis: Well- Yeah ... fair enough. Uh, I'm sure that when there is news that we should and can share, we certainly will- For sure ... as soon as we can. Switching topics now, we, we know that the new Gonzalez Comprehensive Cancer Center building is substantially complete and that the ambulatory operations team is working on licensing as they prepare for their first patient later this year.

As the primary executive sponsor of this critically important project, I wanted to ask [00:05:00] you to talk about the success of the project and what you're most proud of as we prepare to open. 

Kevin Woodward: The success of the project is it's, you know, just it, it's nice to see the brick and mortar of something that took about five years from conceiving it to developing the business case, performing, uh, the space study and, and programming work, understanding the adjacencies and, and just the intricacies of bringing a building like that together and seeing it and being able to walk it is, is pretty incredible.

Joleen Francis: Mm-hmm. 

Kevin Woodward: Somewhat of an emotional experience for a lot of us that have been involved from all of the leadership through the cancer center as well as senior leadership of seeing things such as the simple wall colors that we picked out about two years ago and seeing that on the wall. And they're 

Joleen Francis: still in style.

Kevin Woodward: Right. 

Joleen Francis: It's awesome. Yeah. 

Kevin Woodward: Yeah. It's- 

Joleen Francis: Well, thank you for all the work that you did on that. It was a, a huge lift for the organization, and you led the way the entire time, so it is very exciting to [00:06:00] see it completed. And I know the rest of our organization is looking forward to seeing it- Yeah ... before we open or maybe right after we open, but we will plan- Yeah

something for everyone to get out there and see that space 'cause it's, it's really phenomenal- Yeah ... and our community's excited about it. 

Kevin Woodward: And going back to what to be proud of, I think the organization did everything right, you know, from the planning phases, the market analysis, and picking our partners to make this project a reality.

You know, best in class as it relates to either legal counsel and financial advisors related to the bond and, and debt transaction to the facility and, and space study work and our partnership with ECG Consulting to the construction management firm that we had partnered with, which was Covalis And being innovative in the contracting process with the builder such that there were incentives and, and basically profits at risk for all parties involved, and that was innovative, and it really helped us bring the project principally on time and certainly under budget [00:07:00] thus far.

Joleen Francis: Mm-hmm. 

Kevin Woodward: So over three years ago, we established a project budget of 154 million, and today we're about three million under. 

Joleen Francis: Wow. Congratulations to you and the team that you assembled to get that project done. It really is-- it's a historic moment for the organization, so thanks for all that work. And even with the new addition of that building to our footprint, we're not done yet.

You alluded to it a minute ago, but let's talk about the next big construction project that's currently underway to build needed new facilities for advanced imaging and heart and vascular services. Where is it? When will it start, and- 

Kevin Woodward: Yeah ... 

Joleen Francis: when do we plan to open? 

Kevin Woodward: Sure. Well, technically, construction started on June 26th.

We have a ceremonial groundbreaking coming up in the first week of August. Mm-hmm. Uh, we have a timeline that is approximately 24 months, so the basically substantial completion is planned for June of '28. So we're pretty excited about that. That suggests we're only 23 months away from [00:08:00] another major building.

It should reflect about thir- 68,000 square feet, 120.1 million in total project cost, and about 31 million in equipment. Um- 

Joleen Francis: And it's gonna be a pretty advanced technology in that building. I understand folks that have-- that are familiar with what's been purchased are pretty excited about it. 

Kevin Woodward: Yeah. Some have suggested it'll be some of the most advanced imaging technology north of San Francisco all the way up into Oregon, so we're pretty excited about that.

Again, the design of this, just like the cancer center, was to be not a regional program but a Northern California program such that the imaging, the modalities, and the comprehensive solution that we're putting together should make it, again, a market driver for us ag- all the way up to the Oregon border.

Joleen Francis: Yeah. Well, it's very exciting. Looking forward to learning more about that and seeing the building as it starts to go up, so Final thoughts today, [00:09:00] Kevin, anything else you wanna share with the organization? 

Kevin Woodward: Just again, to be mindful of our targeted level of financial performance, which means the individual department level budget meeting their targets.

Pretty sizable organization today. We're pushing 1.2 billion, over 4,500 employees, and, um, over $700 million in wage costs, so. 

Joleen Francis: Yeah, that's a lot of money. 

Kevin Woodward: A lot of money. It is. A lot to pay attention to, and the importance of meeting our financial targets and contributing to the stability of the organization, uh, at the department level, I think can't be understated.

Joleen Francis: Yeah. That's all good news. It's about all the time we have for now, too. So thanks so much for joining us on the podcast today, Kevin. It's always a pleasure to talk with you, and we really appreciate all the hard work that your teams do, uh, to keep us informed and keep us within the, the guardrails of financial sustainability.

And as a special thanks to all our caregivers for [00:10:00] spending time with us and sharing this program with your colleagues and friends. We'll talk again in September when we're joined by another member of Enloe's senior team to discuss what's new and exciting across our campuses. Thanks for joining us.

Take care, everyone.