NHC Reports First Quarter 2020 Earnings

May 08, 2020 05:45 am
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 quarter ended March 31, 2020 totaled $256,124,000 compared to $248,285,000 for the quarter ended March 31, 2019, an increase of 3.2%.

For the quarter ended March 31, 2020, the reported GAAP net loss attributable to NHC was $26,852,000 compared to a GAAP net income attributable to NHC of $21,269,000 for the first 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 March 31, 2020 was $17,070,000 compared to $16,951,000 for the first quarter of 2019 (*). For the quarter ended March 31, 2020, the reported GAAP diluted loss per share was $1.76, with the adjusted diluted earnings per share being a positive $1.11 (*).

(*) - 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
March 31

2020

2019

(unaudited)
Revenues:
Net patient revenues

$

244,095

 

$

236,111

 

Other revenues

 

12,029

 

 

12,174

 

Net operating revenues

 

256,124

 

 

248,285

 

Costs and expenses:
Salaries, wages and benefits

 

147,469

 

 

141,388

 

Other operating

 

71,668

 

 

69,432

 

Facility rent

 

10,332

 

 

10,238

 

Depreciation and amortization

 

10,438

 

 

10,517

 

Interest

 

412

 

 

926

 

Total costs and expenses

 

240,319

 

 

232,501

 

Income from operations

 

15,805

 

 

15,784

 

Non-operating income

 

8,146

 

 

6,001

 

Unrealized gains/(losses) on marketable equity securities

 

(60,392

)

 

6,838

 

Income/(loss) before income taxes

 

(36,441

)

 

28,623

 

Income tax (provision)/benefit

 

9,625

 

 

(7,392

)

Net income/(loss)

 

(26,816

)

 

21,231

 

(Income)/loss attributable to noncontrolling interest

 

(36

)

 

38

 

Net income/(loss) attributable to National HealthCare Corporation

$

(26,852

)

$

21,269

 

Net income/(loss) per common share
Basic

$

(1.76

)

$

1.39

 

Diluted

$

(1.76

)

$

1.39

 

Weighted average common shares outstanding
Basic

 

15,294,777

 

 

15,256,189

 

Diluted

 

15,294,777

 

 

15,324,125

 

Dividends declared per common share

$

0.52

 

$

0.50

 

Balance Sheet Data March 31 Dec. 31
(in thousands)

2020

2019

(unaudited)
Cash, cash equivalents and marketable equity securities

$

161,553

 

$

202,787

 

Restricted cash, cash equivalents and marketable debt securities

 

162,499

 

 

158,082

 

Current assets

 

306,682

 

 

341,053

 

Property and equipment, net

 

540,620

 

 

535,430

 

Total assets

 

1,256,307

 

 

1,286,648

 

Current liabilities

 

217,982

 

 

194,763

 

NHC stockholders' equity

 

742,562

 

 

778,593

 

Selected Operating Statistics
Three Months Ended
March 31

2020

2019

(unaudited)
Skilled Nursing Per Diems:
Medicare

$

506.02

 

$

461.50

 

Managed Care

 

402.78

 

 

395.50

 

Medicaid

 

201.09

 

 

195.89

 

Private Pay and Other

 

251.61

 

 

245.76

 

Average Skilled Nursing Per Diem

$

279.07

 

$

272.40

 

Skilled Nursing Patient Days:
Medicare

 

105,543

 

 

112,854

 

Managed Care

 

61,556

 

 

62,427

 

Medicaid

 

344,526

 

 

318,286

 

Private Pay and Other

 

171,307

 

 

175,356

 

Total Skilled Nursing Patient Days

 

682,932

 

 

668,923

 

The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts):
Three Months Ended
March 31

2020

2019

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

$

(26,852

)

$

21,269

 

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

 

60,392

 

 

(6,838

)

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

 

203

 

 

595

 

Gain on acquisition of equity method investment

 

(1,707

)

 

-

 

Stock-based compensation expense

 

466

 

 

424

 

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

 

(15,432

)

 

1,501

 

Non-GAAP Net income

$

17,070

 

$

16,951

 

GAAP diluted earnings/(loss) per share

$

(1.76

)

$

1.39

 

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

 

2.92

 

 

(0.33

)

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

 

0.01

 

 

0.03

 

Gain on acquisition of equity method investment

 

(0.08

)

 

-

 

Stock-based compensation expense

 

0.02

 

 

0.02

 

Non-GAAP diluted earnings per share

$

1.11

 

$

1.11

 

(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).

 

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