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NHC Reports Third Quarter 2022 Earnings

By: via Business Wire

National HealthCare Corporation (NYSE American: NHC), the nation's oldest publicly traded senior health care company, announced today net operating revenues and government stimulus income for the quarter ended September 30, 2022 totaled $270,843,000 compared to $276,737,000 for the quarter ended September 30, 2021, a decrease of 2.1%. The net operating revenues decrease during the third quarter of 2022 was primarily driven by the reduction in government stimulus income of $10.4 million during the third quarter of 2022 compared to the same period a year ago, as well as us exiting the seven skilled nursing facilities in Massachusetts and New Hampshire during the third quarter of 2022. Excluding the government stimulus income, same-facility net operating revenues increased 3.8% during the third quarter of 2022 compared to the same period a year ago.

For the quarter ended September 30, 2022, the reported GAAP net loss attributable to NHC was $2,429,000 compared to a net loss of $3,348,000 for the same period in 2021. Excluding the unrealized losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended September 30, 2022 was $7,783,000 compared to $14,884,000 for the same period in 2021 (*). The decrease in non-GAAP earnings for the third quarter of 2022 compared to the same period in 2021 was primarily due to the $10.4 million less of government stimulus income recorded, as well as incurring inflationary wage pressures on our labor costs. GAAP diluted loss per share was $0.16 for the quarter ended September 30, 2022 compared to a diluted loss per share of $0.22 for the same period in 2021. Adjusted diluted earnings per share were $0.50 and $0.96 for the quarters ended September 30, 2022 and 2021, respectively (*).

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

About NHC

NHC affiliates operate for themselves and third parties 68 skilled nursing facilities with 8,726 beds. NHC affiliates also operate 23 assisted living communities with 1,181 units, five independent living communities with 475 units, three behavioral health hospitals, 35 homecare agencies, and 29 hospice agencies. NHC’s other services include Alzheimer’s and memory care units, 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 Operations
(in thousands, except share and per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30

 

2022

 

2021

 

2022

 

2021

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

$

260,247

 

$

254,817

 

$

776,661

 

$

708,648

 

Other revenues

 

10,596

 

 

11,491

 

 

33,584

 

 

33,916

 

Government stimulus income

 

-

 

 

10,429

 

 

10,940

 

 

48,304

 

Net operating revenues and grant income

 

270,843

 

 

276,737

 

 

821,185

 

 

790,868

 

 
Costs and expenses:
Salaries, wages and benefits

 

173,198

 

 

170,235

 

 

518,828

 

 

483,263

 

Other operating

 

72,883

 

 

73,109

 

 

218,279

 

 

204,211

 

Facility rent

 

10,294

 

 

10,204

 

 

30,770

 

 

30,437

 

Depreciation and amortization

 

10,253

 

 

10,229

 

 

30,011

 

 

30,521

 

Interest

 

137

 

 

198

 

 

451

 

 

657

 

Total costs and expenses

 

266,765

 

 

263,975

 

 

798,339

 

 

749,089

 

 
Income from operations

 

4,078

 

 

12,762

 

 

22,846

 

 

41,779

 

 
Non-operating income

 

2,731

 

 

3,399

 

 

8,451

 

 

15,245

 

Gain on acquisition of equity method investment

 

-

 

 

-

 

 

-

 

 

95,202

 

Unrealized losses on marketable equity securities

 

(11,056

)

 

(23,797

)

 

(11,479

)

 

(23,227

)

 
Income/(loss) before income taxes

 

(4,247

)

 

(7,636

)

 

19,818

 

 

128,999

 

Income tax (provision)/benefit

 

1,140

 

 

4,090

 

 

(5,415

)

 

(5,907

)

Net income/(loss)

 

(3,107

)

 

(3,546

)

 

14,403

 

 

123,092

 

 
Net (income)/loss attributable to noncontrolling interest

 

678

 

 

198

 

 

1,689

 

 

(290

)

 
Net income/(loss) attributable to National HealthCare Corporation

$

(2,429

)

$

(3,348

)

$

16,092

 

$

122,802

 

 
Net income/(loss) per common share
Basic

$

(0.16

)

$

(0.22

)

$

1.04

 

$

8.00

 

Diluted

$

(0.16

)

$

(0.22

)

$

1.04

 

$

7.97

 

 
Weighted average common shares outstanding
Basic

 

15,445,569

 

 

15,364,043

 

 

15,438,375

 

 

15,347,042

 

Diluted

 

15,445,569

 

 

15,364,043

 

 

14,577,103

 

 

15,414,683

 

 
Dividends declared per common share

$

0.57

 

$

0.52

 

$

1.69

 

$

1.56

 

 
 
Balance Sheet Data Sept. 30 Dec. 31
(in thousands)

2022

2021

(unaudited)
 
Cash, cash equivalents and marketable securities

$

176,729

 

$

256,025

 

Restricted cash, cash equivalents and marketable securities

 

171,898

 

 

175,884

 

Current assets

 

344,529

 

 

426,638

 

Property and equipment, net

 

511,373

 

 

520,996

 

Total assets

 

1,295,559

 

 

1,403,396

 

Current liabilities

 

210,156

 

 

263,201

 

NHC stockholders' equity

 

877,311

 

 

903,004

 

 
Selected Operating Statistics
Three Months Ended Nine Months Ended
September 30 September 30

 

2022

 

2021

 

2022

 

2021

(unaudited) (unaudited)
Skilled Nursing Per Diems:
Medicare

$

535.60

 

$

523.98

 

$

540.30

 

$

528.60

 

Managed Care

 

429.22

 

 

404.43

 

 

425.39

 

 

406.32

 

Medicaid

 

237.61

 

 

231.39

 

 

230.79

 

 

225.68

 

Private Pay and Other

 

265.68

 

 

257.13

 

 

268.13

 

 

254.03

 

 
Average Skilled Nursing Per Diem

$

302.43

 

$

295.40

 

$

301.91

 

$

297.04

 

 
Skilled Nursing Patient Days:
Medicare

 

81,940

 

 

87,534

 

 

258,961

 

 

271,024

 

Managed Care

 

52,956

 

 

57,486

 

 

163,823

 

 

183,593

 

Medicaid

 

302,500

 

 

315,979

 

 

919,931

 

 

895,955

 

Private Pay and Other

 

169,068

 

 

158,011

 

 

489,477

 

 

439,225

 

 
Total Skilled Nursing Patient Days

 

606,464

 

 

619,010

 

 

1,832,192

 

 

1,789,797

 

 
 
The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts):
Three Months Ended Nine Months Ended
September 30 September 30

 

2022

 

2021

 

2022

 

2021

(unaudited) (unaudited)
 
Net income/(loss) attributable to National Healthcare Corporation

$

(2,429

)

$

(3,348

)

$

16,092

 

$

122,802

 

Non-GAAP adjustments
Unrealized losses on marketable equity securities

 

11,056

 

 

23,797

 

 

11,479

 

 

23,227

 

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

 

2,105

 

 

115

 

 

4,033

 

 

480

 

Gain on acquisition of equity method investment

 

-

 

 

-

 

 

-

 

 

(95,202

)

Stock-based compensation expense

 

639

 

 

726

 

 

1,980

 

 

1,905

 

Income tax benefit on non-GAAP adjustments

 

(3,588

)

 

(6,406

)

 

(4,548

)

 

(6,369

)

Non-GAAP Net income

$

7,783

 

$

14,884

 

$

29,036

 

$

46,843

 

 
GAAP diluted earnings/(loss) per share

$

(0.16

)

$

(0.22

)

$

1.04

 

$

7.97

 

Non-GAAP adjustments
Unrealized losses on marketable equity securities

 

0.53

 

 

1.14

 

 

0.56

 

 

1.12

 

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

 

0.10

 

 

0.01

 

 

0.19

 

 

0.02

 

Gain on acquisition of equity method investment

 

-

 

 

-

 

 

-

 

 

(6.16

)

Stock-based compensation expense

 

0.03

 

 

0.03

 

 

0.09

 

 

0.09

 

Non-GAAP diluted earnings per share

$

0.50

 

$

0.96

 

$

1.88

 

$

3.04

 

 
(1) The newly opened facilities not at full capacity for the 2022 period presented consisted of operations opened from 2020 through 2022. This consisted of two behavioral health hospitals, one homecare agency, and one hospice agency. The newly opened facilities for the 2021 period presented consisted of operations opened from 2019 through 2021. The 2021 period consisted of one memory care facility.

 

Contacts

Brian F. Kidd, SVP/Controller

Phone: (615) 890-2020

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