NHC Reports Third Quarter 2020 Earnings

MURFREESBORO, Tenn.–()–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).

 

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Author: Administrator