NHC Reports Second Quarter 2022 Earnings

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 June 30, 2022 totaled $271,359,000 compared to $263,158,000 for the quarter ended June 30, 2021, an increase of 3.1%. The net operating revenues increase during the second quarter of 2022 was primarily driven by the continued occupancy increase in our skilled nursing facilities, as well as the June 2021 acquisition of Caris HealthCare, a hospice provider. The net patient revenue increases were offset by the reduction in government stimulus income of $14.8 million during the second quarter of 2022 compared to the same period a year ago.

For the quarter ended June 30, 2022, the reported GAAP net income attributable to NHC was $3,203,000 compared to $104,883,000 for the same period in 2021. The large increase in our reported GAAP net income for the second quarter of 2021 was primarily due to the gain recorded from the acquisition of Caris HealthCare, L.P. Excluding the gain on the Caris HealthCare, L.P. acquisition, as well as the unrealized losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended June 30, 2022 was $7,172,000 compared to $15,077,000 for the same period in 2021 (*). The decrease in non-GAAP earnings for the second quarter of 2022 compared to the same period in 2021 was primarily due to the $14.8 million less of government stimulus income recorded, as well as incurring inflationary wage pressures on our labor costs. GAAP diluted earnings per share was $0.21 for the quarter ended June 30, 2022 compared to $6.80 for the same period in 2021. Adjusted diluted earnings per share were $0.46 and $0.98 for the quarters ended June 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 75 skilled nursing facilities with 9,447 beds. NHC affiliates also operate 24 assisted living communities with 1,210 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 Six Months Ended
June 30 June 30

2022

 

2021

 

2022

 

2021

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

$

260,077

 

$

236,976

 

$

516,414

 

$

453,831

 

Other revenues

 

10,962

 

 

11,056

 

 

22,988

 

 

22,425

 

Government stimulus income

 

320

 

 

15,126

 

 

10,940

 

 

37,875

 

Net operating revenues and grant income

 

271,359

 

 

263,158

 

 

550,342

 

 

514,131

 

 
Costs and expenses:
Salaries, wages and benefits

 

174,936

 

 

163,868

 

 

345,630

 

 

313,025

 

Other operating

 

71,311

 

 

64,979

 

 

145,396

 

 

131,105

 

Facility rent

 

10,411

 

 

10,170

 

 

20,476

 

 

20,233

 

Depreciation and amortization

 

10,001

 

 

10,131

 

 

19,758

 

 

20,292

 

Interest

 

149

 

 

215

 

 

314

 

 

459

 

Total costs and expenses

 

266,808

 

 

249,363

 

 

531,574

 

 

485,114

 

 
Income from operations

 

4,551

 

 

13,795

 

 

18,768

 

 

29,017

 

 
Non-operating income

 

2,521

 

 

5,586

 

 

5,720

 

 

11,846

 

Gain on acquisition of equity method investment

 

-

 

 

95,202

 

 

-

 

 

95,202

 

Unrealized gains/(losses) on marketable equity securities

 

(3,549

)

 

(6,489

)

 

(423

)

 

570

 

 
Income before income taxes

 

3,523

 

 

108,094

 

 

24,065

 

 

136,635

 

Income tax provision

 

(1,362

)

 

(2,764

)

 

(6,555

)

 

(9,997

)

Net income

 

2,161

 

 

105,330

 

 

17,510

 

 

126,638

 

 
Net (income)/loss attributable to noncontrolling interest

 

1,042

 

 

(447

)

 

1,011

 

 

(488

)

 
Net income attributable to National HealthCare Corporation

$

3,203

 

$

104,883

 

$

18,521

 

$

126,150

 

 
Net income per common share
Basic

$

0.21

 

$

6.83

 

$

1.20

 

$

8.22

 

Diluted

$

0.21

 

$

6.80

 

$

1.20

 

$

8.19

 

 
Weighted average common shares outstanding
Basic

 

15,452,402

 

 

15,349,162

 

 

15,434,718

 

 

15,338,400

 

Diluted

 

15,487,123

 

 

15,419,012

 

 

15,475,553

 

 

15,404,634

 

 
Dividends declared per common share

$

0.57

 

$

0.52

 

$

1.12

 

$

1.04

 

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

2022

2021

(unaudited)
 
Cash, cash equivalents and marketable securities

$

219,831

 

$

256,025

 

Restricted cash, cash equivalents and marketable securities

 

167,071

 

 

175,884

 

Current assets

 

394,781

 

 

426,638

 

Property and equipment, net

 

515,771

 

 

520,996

 

Total assets

 

1,350,469

 

 

1,403,396

 

Current liabilities

 

224,365

 

 

263,201

 

NHC stockholders' equity

 

897,915

 

 

903,004

 

Selected Operating Statistics
Three Months Ended Six Months Ended
June 30 June 30

2022

 

2021

 

2022

 

2021

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

$

540.15

 

$

523.70

 

$

542.48

 

$

530.80

 

Managed Care

 

413.58

 

 

408.81

 

 

423.56

 

 

407.18

 

Medicaid

 

226.40

 

 

226.75

 

 

227.45

 

 

222.57

 

Private Pay and Other

 

268.70

 

 

256.58

 

 

269.42

 

 

252.28

 

 
Average Skilled Nursing Per Diem

$

297.63

 

$

298.55

 

$

301.66

 

$

297.90

 

 
Skilled Nursing Patient Days:
Medicare

 

85,438

 

 

92,163

 

 

177,021

 

 

183,490

 

Managed Care

 

55,230

 

 

64,196

 

 

110,867

 

 

126,107

 

Medicaid

 

313,171

 

 

300,875

 

 

617,431

 

 

579,976

 

Private Pay and Other

 

166,454

 

 

148,247

 

 

320,409

 

 

281,214

 

 
Total Skilled Nursing Patient Days

 

620,293

 

 

605,481

 

 

1,225,728

 

 

1,170,787

 

 
 
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

2022

 

2021

 

2022

 

2021

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

$

3,203

 

$

104,883

 

$

18,521

 

$

126,150

 

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

 

3,549

 

 

6,489

 

 

423

 

 

(570

)

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

 

1,185

 

 

120

 

 

1,928

 

 

365

 

Gain on acquisition of equity method investment

 

-

 

 

(95,202

)

 

-

 

 

(95,202

)

Stock-based compensation expense

 

629

 

 

683

 

 

1,341

 

 

1,179

 

Income tax benefit on non-GAAP adjustments

 

(1,394

)

 

(1,896

)

 

(960

)

 

(253

)

Non-GAAP Net income

$

7,172

 

$

15,077

 

$

21,253

 

$

31,669

 

 
GAAP diluted earnings per share

$

0.21

 

$

6.80

 

$

1.20

 

$

8.19

 

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

 

0.16

 

 

0.31

 

 

0.02

 

 

(0.03

)

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

 

0.06

 

 

0.01

 

 

0.09

 

 

0.02

 

Gain on acquisition of equity method investment

 

-

 

 

(6.17

)

 

-

 

 

(6.18

)

Stock-based compensation expense

 

0.03

 

 

0.03

 

 

0.06

 

 

0.06

 

Non-GAAP diluted earnings per share

$

0.46

 

$

0.98

 

$

1.37

 

$

2.06

 

(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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