NHC Reports 2019 Year End Earnings

MURFREESBORO, Tenn.--()--National HealthCare Corporation (NYSE American: NHC), the nation's oldest publicly traded senior health care company, announced today net operating revenues for the year ended December 31, 2019 totaled $996,383,000 compared to $980,349,000 for the year ended December 31, 2018, an increase of 1.6%. For the year ended December 31, 2019, reported GAAP net income attributable to NHC was $68,211,000 compared to $58,964,000 for the 2018 year, an increase of 15.7%. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the year ended December 31, 2019 was $59,616,000 compared to $64,373,000 for the 2018 year(1).

GAAP diluted earnings per share were $4.44 and $3.87 for the years ended December 31, 2019 and 2018, respectively, an increase of 14.7%. Adjusted diluted earnings per share were $3.88 and $4.22 for the years ended December 31, 2019 and 2018, respectively(1).

Net operating revenues for the quarter ended December 31, 2019 totaled $253,880,000 compared to $248,920,000 for the same three months in 2018, an increase of 2.0%. For the quarter ended December 31, 2019, reported GAAP net income attributable to NHC was $13,770,000 compared to $18,152,000 for the fourth quarter of 2018. Excluding the unrealized gains/losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the fourth quarter of 2019 was $16,822,000 compared to $17,749,000 for the fourth quarter of 2018.

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

About NHC
NHC affiliates operate for themselves and third parties 75 skilled nursing facilities with 9,513 beds. NHC affiliates also operate 25 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

 

Year Ended

 

December 31

 

December 31

 

2019

 

2018

 

2019

 

2018

 

(unaudited)

 

 

Revenues:  
Net patient revenues  

$

241,407

 

$

235,601

 

$

947,872

 

$

932,774

 

Other revenues  

 

12,473

 

 

13,319

 

 

48,511

 

 

47,575

 

Net operating revenues  

 

253,880

 

 

248,920

 

 

996,383

 

 

980,349

 

   
Costs and expenses:  
Salaries, wages and benefits  

 

151,390

 

 

147,972

 

 

592,831

 

 

582,721

 

Other operating  

 

64,682

 

 

61,770

 

 

268,442

 

 

254,038

 

Facility rent  

 

9,916

 

 

10,232

 

 

40,518

 

 

40,923

 

Depreciation and amortization  

 

10,904

 

 

10,718

 

 

42,419

 

 

41,894

 

Interest  

 

491

 

 

1,034

 

 

3,135

 

 

4,697

 

Total costs and expenses  

 

237,383

 

 

231,726

 

 

947,345

 

 

924,273

 

   
Income from operations  

 

16,497

 

 

17,194

 

 

49,038

 

 

56,076

 

   
Non-operating income  

 

5,811

 

 

6,614

 

 

26,747

 

 

17,670

 

Unrealized gains (losses) on marketable equity securities  

 

(3,866

)

 

721

 

 

12,230

 

 

1,138

 

   
Income before income taxes  

 

18,442

 

 

24,529

 

 

88,015

 

 

74,884

 

Income tax provision  

 

(4,755

)

 

(6,393

)

 

(20,039

)

 

(16,185

)

Net income  

 

13,687

 

 

18,136

 

 

67,976

 

 

58,699

 

   
Net loss attributable to noncontrolling interest  

 

83

 

 

16

 

 

235

 

 

265

 

   
Net income attributable to National HealthCare Corporation  

$

13,770

 

$

18,152

 

$

68,211

 

$

58,964

 

   
Net income per common share  
Basic  

$

0.90

 

$

1.19

 

$

4.47

 

$

3.87

 

Diluted  

$

0.89

 

$

1.19

 

$

4.44

 

$

3.87

 

   
Weighted average common shares outstanding  
Basic  

 

15,278,771

 

 

15,235,772

 

 

15,270,154

 

 

15,224,886

 

Diluted  

 

15,389,104

 

 

15,255,107

 

 

15,360,046

 

 

15,236,826

 

   
Dividends declared per common share  

$

0.52

 

$

0.50

 

$

2.06

 

$

1.98

 

   
Balance Sheet Data  
(in thousands)  

Dec. 31

 

Dec. 31

 

2019

 

2018

   
Cash, cash equivalents and marketable equity securities  

$

202,787

 

$

183,470

 

Restricted cash and restricted marketable debt securities  

 

158,082

 

 

184,266

 

Current assets  

 

341,053

 

 

322,009

 

Property and equipment, net  

 

535,430

 

 

534,650

 

Total assets  

 

1,286,648

 

 

1,080,948

 

Current liabilities  

 

194,763

 

 

157,924

 

Long-term debt  

 

-

 

 

55,000

 

NHC stockholders' equity  

 

778,593

 

 

733,278

 

 
Selected Operating Statistics  
 

Three Months Ended

 

Year Ended

 

December 31

 

December 31

 

2019

 

2018(1)

 

2019

 

2018(1)

  (unaudited)
Skilled Nursing Per Diems:  
Medicare  

$

498.10

 

$

463.14

 

$

470.74

 

$

462.66

 

Managed Care  

 

403.30

 

 

389.49

 

 

396.17

 

 

397.70

 

Medicaid  

 

200.71

 

 

197.87

 

 

197.95

 

 

192.25

 

Private Pay and Other  

 

243.68

 

 

237.86

 

 

242.99

 

 

238.57

 

   
Average Skilled Nursing Per Diem  

$

275.03

 

$

269.42

 

$

271.07

 

$

270.22

 

   
Skilled Nursing Patient Days:  
Medicare  

 

102,798

 

 

114,396

 

 

428,367

 

 

473,642

 

Managed Care  

 

62,956

 

 

57,981

 

 

251,691

 

 

240,090

 

Medicaid  

 

343,348

 

 

326,422

 

 

1,332,025

 

 

1,271,511

 

Private Pay and Other  

 

174,979

 

 

182,758

 

 

698,554

 

 

714,829

 

   
Total Skilled Nursing Patient Days  

 

684,081

 

 

681,557

 

 

2,710,637

 

 

2,700,072

 

   
(1) A skilled nursing facility in Madisonville, Kentucky was sold in the fourth quarter of 2018. The per diems and patient days for this facility have been excluded in the 2018 column for comparative purposes.
 
The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts; unaudited):
 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31

 

December 31

 

2019

 

2018

 

2019

 

2018

   
Net income attributable to National Healthcare Corporation  

$

13,770

 

$

18,152

 

$

68,211

 

$

58,964

 

Non-GAAP adjustments  
Unrealized losses (gains) on marketable equity securities  

 

3,866

 

 

(721

)

 

(12,230

)

 

(1,138

)

Operating results for newly opened facilities not at full capacity (2)  

 

(172

)

 

1,604

 

 

712

 

 

3,562

 

Stock-based compensation expense  

 

430

 

 

240

 

 

1,878

 

 

1,778

 

Gain on acquisitions of equity method investments  

 

-

 

 

-

 

 

(1,975

)

 

(2,050

)

Gain on sale of real estate/healthcare facilities  

 

-

 

 

(1,668

)

 

-

 

 

(1,668

)

Legal costs and charges related to Caris' legal investigation  

 

-

 

 

-

 

 

-

 

 

8,364

 

U.S. Tax Cuts and Jobs Act of 2017 adjustment  

 

-

 

 

-

 

 

-

 

 

(1,434

)

Provision (benefit) of income taxes on non-GAAP adjustments  

 

(1,072

)

 

142

 

 

3,020

 

 

(2,005

)

Non-GAAP Net income  

$

16,822

 

$

17,749

 

$

59,616

 

$

64,373

 

   
GAAP diluted earnings per share  

$

0.89

 

$

1.19

 

$

4.44

 

$

3.87

 

Non-GAAP adjustments  
Unrealized losses (gains) on marketable equity securities  

 

0.19

 

 

(0.03

)

 

(0.59

)

 

(0.06

)

Operating results for newly opened facilities not at full capacity (2)  

 

(0.01

)

 

0.08

 

 

0.03

 

 

0.17

 

Stock-based compensation expense  

 

0.02

 

 

0.01

 

 

0.09

 

 

0.08

 

Gain on acquisitions of equity method investments  

 

-

 

 

-

 

 

(0.09

)

 

(0.13

)

Gain on sale of real estate/healthcare facilities  

 

-

 

 

(0.09

)

 

-

 

 

(0.08

)

Legal costs and charges related to Caris' legal investigation  

 

-

 

 

-

 

 

-

 

 

0.46

 

U.S. Tax Cuts and Jobs Act of 2017 adjustment  

 

-

 

 

-

 

 

-

 

 

(0.09

)

Non-GAAP diluted earnings per share  

$

1.09

 

$

1.16

 

$

3.88

 

$

4.22

 

   
(2) 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). The newly opened facilities for the 2018 period presented consist of facilities opened from 2016 through 2018 (two skilled nursing facilities and three assisted living facilities).

 

Contacts

Brian F. Kidd, SVP/PAO
Phone: (615) 890-2020

Release Summary

NHC announces 2019 earnings.

$Cashtags

Contacts

Brian F. Kidd, SVP/PAO
Phone: (615) 890-2020