NHC Reports Second 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 grant income for the quarter ended June 30, 2020 totaled $261,642,000 compared to $247,151,000 for the quarter ended June 30, 2019, an increase of 5.9%. Excluding the grant income recorded during the second quarter of 2020, net operating revenues would have decreased 4.1% compared to the second quarter of 2019.

For the quarter ended June 30, 2020, the reported GAAP net income attributable to NHC was $28,324,000 compared to $13,711,000 for the second 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 June 30, 2020 was $14,177,000 compared to $12,895,000 for the second quarter of 2019 (*). For the quarter ended June 30, 2020, the reported GAAP diluted earnings per share was $1.84 and the adjusted diluted earnings per share was $0.92 (*).

(*) - 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

 

Six Months Ended

June 30

 

June 30

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

(unaudited) (unaudited)
Revenues and grant income:
Net patient revenues

$

225,671

 

$

235,264

 

$

469,766

 

$

471,375

 

Other revenues

 

11,323

 

 

11,887

 

 

23,352

 

 

24,061

 

Government stimulus income

 

24,648

 

 

-

 

 

24,648

 

 

-

 

Net operating revenues and grant income

 

261,642

 

 

247,151

 

 

517,766

 

 

495,436

 

 
Costs and expenses:
Salaries, wages and benefits

 

156,914

 

 

147,878

 

 

304,383

 

 

289,266

 

Other operating

 

70,861

 

 

67,598

 

 

142,529

 

 

137,030

 

Facility rent

 

10,320

 

 

10,197

 

 

20,652

 

 

20,435

 

Depreciation and amortization

 

10,545

 

 

10,335

 

 

20,983

 

 

20,852

 

Interest

 

453

 

 

954

 

 

865

 

 

1,880

 

Total costs and expenses

 

249,093

 

 

236,962

 

 

489,412

 

 

469,463

 

 
Income from operations

 

12,549

 

 

10,189

 

 

28,354

 

 

25,973

 

 
Non-operating income

 

5,954

 

 

8,272

 

 

14,100

 

 

14,273

 

Unrealized gains/(losses) on marketable equity securities

 

20,053

 

 

(54

)

 

(40,339

)

 

6,784

 

 
Income before income taxes

 

38,556

 

 

18,407

 

 

2,115

 

 

47,030

 

Income tax provision

 

(10,034

)

 

(4,725

)

 

(409

)

 

(12,117

)

Net income

 

28,522

 

 

13,682

 

 

1,706

 

 

34,913

 

 
Net (income)/loss attributable to noncontrolling interest

 

(198

)

 

29

 

 

(234

)

 

67

 

 
Net income attributable to National HealthCare Corporation

$

28,324

 

$

13,711

 

$

1,472

 

$

34,980

 

 
Net income per common share
Basic

$

1.85

 

$

0.90

 

$

0.10

 

$

2.29

 

Diluted

$

1.84

 

$

0.89

 

$

0.10

 

$

2.28

 

 
Weighted average common shares outstanding
Basic

 

15,307,105

 

 

15,269,637

 

 

15,300,941

 

 

15,262,950

 

Diluted

 

15,372,430

 

 

15,352,702

 

 

15,367,464

 

 

15,338,520

 

 
Dividends declared per common share

$

0.52

 

$

0.52

 

$

1.04

 

$

1.02

 

 
 
Balance Sheet Data

June 30

 

Dec. 31

(in thousands)

 

2020

 

 

 

2019

 

(unaudited)

 
Cash, cash equivalents and marketable equity securities

$

261,585

 

$

202,787

 

Restricted cash, cash equivalents and marketable debt securities

 

170,896

 

 

158,082

 

Current assets

 

390,204

 

 

341,053

 

Property and equipment, net

 

535,964

 

 

535,430

 

Total assets

 

1,335,238

 

 

1,286,648

 

Current liabilities

 

262,142

 

 

194,763

 

NHC stockholders' equity

 

768,052

 

 

778,593

 

 
Selected Operating Statistics

Three Months Ended

 

Six Months Ended

June 30

 

June 30

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

(unaudited)

Skilled Nursing Per Diems:
Medicare

$

513.22

 

$

457.03

 

$

509.35

 

$

459.30

 

Managed Care

 

401.39

 

 

389.81

 

 

402.15

 

 

392.65

 

Medicaid

 

209.60

 

 

196.57

 

 

205.28

 

 

196.23

 

Private Pay and Other

 

247.48

 

 

245.53

 

 

249.60

 

 

245.65

 

 
Average Skilled Nursing Per Diem

$

277.85

 

$

269.44

 

$

278.48

 

$

270.91

 

 
Skilled Nursing Patient Days:
Medicare

 

90,896

 

 

109,140

 

 

196,439

 

 

221,994

 

Managed Care

 

50,669

 

 

62,866

 

 

112,225

 

 

125,293

 

Medicaid

 

333,196

 

 

326,234

 

 

677,722

 

 

644,520

 

Private Pay and Other

 

161,877

 

 

178,453

 

 

333,184

 

 

353,809

 

 
Total Skilled Nursing Patient Days

 

636,638

 

 

676,693

 

 

1,319,570

 

 

1,345,616

 

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

Three Months Ended

 

Six Months Ended

June 30

 

June 30

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

(unaudited)

 
Net income attributable to National Healthcare Corporation

$

28,324

 

$

13,711

 

$

1,472

 

$

34,980

 

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

 

(20,053

)

 

54

 

 

40,339

 

 

(6,784

)

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

 

112

 

 

137

 

 

314

 

 

731

 

Gain on acquisition of equity method investment

 

-

 

 

(1,975

)

 

(1,708

)

 

(1,975

)

Stock-based compensation expense

 

823

 

 

684

 

 

1,289

 

 

1,108

 

Income tax (benefit)/provision on non-GAAP adjustments

 

4,971

 

 

284

 

 

(10,461

)

 

1,785

 

Non-GAAP Net income

$

14,177

 

$

12,895

 

$

31,245

 

$

29,845

 

 
GAAP diluted earnings per share

$

1.84

 

$

0.89

 

$

0.10

 

$

2.28

 

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

 

(0.97

)

 

-

 

 

1.94

 

 

(0.34

)

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

 

0.01

 

 

0.01

 

 

0.02

 

 

0.04

 

Gain on acquisition of equity method investment

 

-

 

 

(0.09

)

 

(0.08

)

 

(0.09

)

Stock-based compensation expense

 

0.04

 

 

0.03

 

 

0.05

 

 

0.05

 

Non-GAAP diluted earnings per share

$

0.92

 

$

0.84

 

$

2.03

 

$

1.94

 

 
 
(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).

 

Contacts

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

Release Summary

NHC Announces Second Quarter 2020 Earnings

$Cashtags

Contacts

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