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NHC Reports Third Quarter 2020 Earnings

·7 min read

National HealthCare Corporation (NYSE American: NHC), the nation's oldest publicly traded senior health care company, announced today net operating revenues and CARES Act funding for the quarter ended September 30, 2020 totaled $250,626,000 compared to $247,067,000 for the quarter ended September 30, 2019, an increase of 1.4%. The CARES Act funding is intended to partially offset COVID-19 expenses and lost revenues. Excluding the CARES Act funding recorded during the third quarter of 2020, net operating revenues would have decreased 3.5% compared to the third quarter of 2019.

For the quarter ended September 30, 2020, the reported GAAP net income attributable to NHC was $12,849,000 compared to $19,461,000 for the third quarter of 2019. Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended September 30, 2020 was $13,475,000 compared to $12,934,000 for the third quarter of 2019, an increase of 4.2% (*). For the quarter ended September 30, 2020, the reported GAAP diluted earnings per share was $0.84 and the adjusted diluted earnings per share was $0.88 (*).

(*) - See the tables below that provide a reconciliation of GAAP to non-GAAP items.

About NHC
NHC affiliates operate for themselves and third parties 76 skilled nursing facilities with 9,633 beds. NHC affiliates also operate 24 assisted living communities, five independent living communities, one behavioral health hospital and 35 homecare programs. NHC’s other services include Alzheimer’s and memory care units, hospice services, pharmacy services, a rehabilitation services company, and providing management and accounting services to third party post-acute operators. Other information about the company can be found on our web site at www.nhccare.com.

Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company’s operations and measure the Company’s performance more consistently across periods. Therefore, the Company believes this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Forward-Looking Statements
Statements in this press release that are not historical facts are forward-looking statements. NHC cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. The risks and uncertainties are detailed from time to time in reports filed by NHC with the S.E.C., including Forms 8-K, 10-Q and 10-K, and include, among others, the following: liabilities and other claims asserted against us and patient care liabilities, as well as the resolution of current litigation; availability of insurance and assets for indemnification; national and local economic conditions; including their effect on the availability and cost of labor, utilities and materials; the effect of government regulations and changes in regulations governing the healthcare industry, including our compliance with such regulations; changes in Medicare and Medicaid payment levels and methodologies and the application of such methodologies by the government and its fiscal intermediaries; and other factors referenced or incorporated by reference in the S.E.C. filings. The risks included here are not exhaustive. All forward-looking statements represent NHC’s best judgment as of the date of this release.

Consolidated Statements of Income

(in thousands, except share and per share amounts)

Three Months Ended

Nine Months Ended

September 30

September 30

2020

2019

2020

2019

(unaudited)

(unaudited)

Revenues and grant income:

Net patient revenues

$

227,383

$

235,090

$

697,149

$

706,465

Other revenues

11,111

11,977

34,463

36,038

Government stimulus income

12,132

-

36,780

-

Net operating revenues and grant income

250,626

247,067

768,392

742,503

Costs and expenses:

Salaries, wages and benefits

151,564

152,175

455,947

441,441

Other operating

70,887

66,730

213,416

203,760

Facility rent

10,320

10,167

30,972

30,602

Depreciation and amortization

10,548

10,663

31,531

31,515

Interest

285

764

1,150

2,644

Total costs and expenses

243,604

240,499

733,016

709,962

Income from operations

7,022

6,568

35,376

32,541

Non-operating income

6,478

6,663

20,578

20,936

Unrealized gains/(losses) on marketable equity securities

(241

)

9,312

(40,580

)

16,096

Income before income taxes

13,259

22,543

15,374

69,573

Income tax provision

(391

)

(3,167

)

(800

)

(15,284

)

Net income

12,868

19,376

14,574

54,289

Net (income)/loss attributable to noncontrolling interest

(19

)

85

(253

)

152

Net income attributable to National HealthCare Corporation

$

12,849

$

19,461

$

14,321

$

54,441

Net income per common share

Basic

$

0.84

$

1.27

$

0.94

$

3.57

Diluted

$

0.84

$

1.27

$

0.93

$

3.55

Weighted average common shares outstanding

Basic

15,310,754

15,275,709

15,304,235

15,267,250

Diluted

15,371,311

15,373,617

15,368,775

15,350,308

Dividends declared per common share

$

0.52

$

0.52

$

1.56

$

1.54

Balance Sheet Data

(in thousands)

Sept. 30

Dec. 31

2020

2019

(unaudited)

Cash, cash equivalents and marketable equity securities

$

296,638

$

202,787

Restricted cash, cash equivalents and marketable debt securities

154,393

158,082

Current assets

422,228

341,053

Property and equipment, net

530,616

535,430

Total assets

1,338,779

1,286,648

Current liabilities

259,673

194,763

NHC stockholders' equity

773,960

778,593

Selected Operating Statistics

Three Months Ended

Nine Months Ended

September 30

September 30

2020

2019

2020

2019

(unaudited)

(unaudited)

Skilled Nursing Per Diems:

Medicare

$

521.50

$

468.09

$

513.29

$

462.10

Managed Care

413.11

396.05

405.68

393.79

Medicaid

215.13

198.41

208.44

196.99

Private Pay and Other

248.76

236.75

249.34

242.76

Average Skilled Nursing Per Diem

$

286.91

$

267.40

$

281.17

$

269.73

Skilled Nursing Patient Days:

Medicare

94,158

103,575

290,597

325,569

Managed Care

53,319

63,442

165,544

188,735

Medicaid

320,734

344,157

998,456

988,677

Private Pay and Other

151,841

169,766

485,025

523,575

Total Skilled Nursing Patient Days

620,052

680,940

1,939,622

2,026,556

The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts; unaudited):

Three Months Ended

Nine Months Ended

September 30

September 30

2020

2019

2020

2019

Net income attributable to National Healthcare Corporation

$

12,849

$

19,461

$

14,321

$

54,441

Non-GAAP adjustments

Unrealized (gains)/losses on marketable equity securities

241

(9,312

)

40,580

(16,096

)

Operating results for newly opened facilities not at full capacity (1)

87

152

401

884

Gain on acquisitions of equity method investments

-

-

(1,707

)

(1,975

)

Stock-based compensation expense

518

340

1,807

1,448

Provision of income taxes on non-GAAP adjustments

(220

)

2,293

(10,681

)

4,092

Non-GAAP Net income

$

13,475

$

12,934

$

44,721

$

42,794

GAAP diluted earnings per share

$

0.84

$

1.27

$

0.93

$

3.55

Non-GAAP adjustments

Unrealized gains on marketable equity securities

0.01

(0.45

)

1.95

(0.78

)

Operating results for newly opened facilities not at full capacity (1)

0.01

-

0.02

0.04

Gain on acquisitions of equity method investments

-

-

(0.08

)

(0.09

)

Stock-based compensation expense

0.02

0.02

0.09

0.07

Non-GAAP diluted earnings per share

$

0.88

$

0.84

$

2.91

$

2.79

(1) The newly opened facilities not at full capacity for the 2020 period presented consist of facilities opened from 2018 through 2020 (one memory care facility). The newly opened facilities for the 2019 period presented consist of facilities opened from 2017 through 2019 (one skilled nursing facility, two assisted living facilities, and one memory care facility).

View source version on businesswire.com: https://www.businesswire.com/news/home/20201105006209/en/

Contacts

Brian F. Kidd, SVP/Controller
(615) 890-2020