NHC Reports Third Quarter 2019 Earnings

Nov 05, 2019 04:32 pm

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 September 30, 2019 totaled $247,067,000 compared to $246,326,000 for the quarter ended September 30, 2018, an increase of 0.3%.

For the quarter ended September 30, 2019, reported GAAP net income attributable to NHC was $19,461,000 compared to $21,142,000 for the third quarter of 2018. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended September 30, 2019 was $12,934,000 compared to $16,024,000 for the third quarter of 2018⁽¹⁾. For the quarter ended September 30, 2019, the reported GAAP diluted earnings per share was $1.27 and the adjusted diluted earnings per share was $0.84⁽¹⁾.

^{(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 9,510 beds. NHC affiliates also operate 26 assisted living communities, five independent living communities, one behavioral health hospital, and 36 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 in reports filed by NHC with the S.E.C., including Forms 8-K, 10-Q and 10-K. 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

Nine Months Ended

September 30

2019

2018

2019

2018

(unaudited)

Revenues:

Net patient revenues

$ 235,090

$ 234,827

$ 706,465

$ 697,173

Other revenues

11,977

11,499

36,038

34,256

Net operating revenues

247,067

246,326

742,503

731,429

Costs and expenses:

Salaries, wages and benefits

152,175

149,188

441,441

434,749

Other operating

66,730

64,507

203,760

192,268

Facility rent

10,167

10,190

30,602

30,691

Depreciation and amortization

10,663

10,437

31,515

31,176

Interest

764

1,170

2,644

3,663

Total costs and expenses

240,499

235,492

709,962

692,547

Income from operations

6,568

10,834

32,541

38,882

Non-operating income

6,663

8,467

20,936

11,056

Unrealized gains on marketable equity securities

9,312

3,486

16,096

417

Income before income taxes

22,543

22,787

69,573

50,355

Income tax provision

(3,167

)

(1,700

)

(15,284

)

(9,792

)

Net income

19,376

21,087

54,289

40,563

Net loss attributable to noncontrolling interest

152

249

Net income attributable to National HealthCare Corporation

$ 19,461

$ 21,142

$ 54,441

$ 40,812

Net income per common share

Basic

$ 1.27

$ 1.39

$ 3.57

$ 2.68

Diluted

$ 1.27

$ 1.39

$ 3.55

$ 2.68

Weighted average common shares outstanding

Basic

15,275,709

15,225,654

15,267,250

15,221,217

Diluted

15,373,617

15,242,086

15,350,308

15,230,692

Dividends declared per common share

$ 0.52

$ 0.50

$ 1.54

$ 1.48

Balance Sheet Data

(in thousands)

Sept. 30

Dec. 31

2019

2018

(unaudited)

Cash, cash equivalents and marketable equity securities

$ 215,580

$ 183,470

Restricted cash, cash equivalents and marketable debt securities

158,378

184,266

Current assets

351,190

322,009

Property and equipment, net

539,604

534,650

Total assets

1,307,231

1,080,948

Current liabilities

181,088

157,924

Long-term debt

30,000

55,000

NHC stockholders' equity

771,570

733,278





Selected Operating Statistics
	Three Months Ended				Nine Months Ended
	September 30				September 30
	2019		2018⁽¹⁾		2019		2018⁽¹⁾
	(unaudited)				(unaudited)
Skilled Nursing Per Diems:
Medicare	$ 466.90		$ 463.38		$ 461.72		$ 462.50
Managed Care	394.49		400.52		393.27		400.32
Medicaid	199.02		192.11		197.18		190.31
Private Pay and Other	244.77		240.48		245.35		238.82

Average Skilled Nursing Per Diem	$ 270.24		$ 269.51		$ 270.69		$ 270.49

Skilled Nursing Patient Days:
Medicare	103,838		114,462		325,832		359,246
Managed Care	63,693		62,811		188,986		182,109
Medicaid	333,362		325,326		977,882		945,089
Private Pay and Other	180,258		180,460		534,067		532,071

Total Skilled Nursing Patient Days	681,151		683,059		2,026,767		2,018,515

⁽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				Nine Months Ended
	September 30				September 30
	2019		2018		2019		2018

Net income attributable to National Healthcare Corporation	$ 19,461		$ 21,142		$ 54,441		$ 40,812
Non-GAAP adjustments
Unrealized gains on marketable equity securities	(9,312	)	(3,486	)	(16,096	)	(417	)
Gain on acquisitions of equity method investments	-		(2,050	)	(1,975	)	(2,050	)
Operating results for newly opened facilities not at full capacity⁽²⁾	152		917		884		1,972
Stock-based compensation expense	340		361		1,448		1,538
Legal costs and charges related to Caris' legal investigation	-		-		-		8,364
Tax Cuts and Jobs Act of 2017 adjustment	-		(1,434	)	-		(1,434	)
Provision of income taxes on non-GAAP adjustments	2,293		574		4,092		(2,150	)
Non-GAAP Net income	$ 12,934		$ 16,024		$ 42,794		$ 46,635

GAAP diluted earnings per share	$ 1.27		$ 1.39		$ 3.55		$ 2.68
Non-GAAP adjustments
Unrealized gains on marketable equity securities	(0.45	)	(0.17	)	(0.78	)	(0.02	)
Gain on acquisitions of equity method investments	-		(0.13	)	(0.09	)	(0.13	)
Operating results for newly opened facilities not at full capacity ⁽²⁾	-		0.04		0.04		0.10
Stock-based compensation expense	0.02		0.02		0.07		0.07
Legal costs and charges related to Caris' legal investigation	-		-		-		0.46
Tax Cuts and Jobs Act of 2017 adjustment	-		(0.10	)	-		(0.10	)
Non-GAAP diluted earnings per share	$ 0.84		$ 1.05		$ 2.79		$ 3.06

⁽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).

View source version on businesswire.com: https://www.businesswire.com/news/home/20191105006166/en/

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

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NHC Reports Third Quarter 2019 Earnings