NHC Reports First Quarter 2021 Earnings

Rhea-AI Summary

National HealthCare Corporation (NHC) reported net operating revenues of $250.97 million for Q1 2021, a 2% decline from Q1 2020. The company received CARES Act funding to mitigate COVID-19 impacts. Skilled nursing facility census rose by 3.5% in Q1 2021. GAAP net income was $21.27 million, a recovery from a loss of $26.85 million in Q1 2020. GAAP diluted EPS reached $1.38, up from a loss of $1.76 per share the previous year. Adjusted EPS decreased slightly to $1.08 compared to $1.11 in 2020.

Positive

• GAAP net income of $21.27 million for Q1 2021, a turnaround from a $26.85 million loss in Q1 2020.
• Census in skilled nursing facilities increased by 3.5% from January to March 2021.
• GAAP diluted earnings per share improved to $1.38 from a loss of $1.76 in the previous year.

Negative

• Net operating revenues decreased by 2% compared to the same quarter in 2020.
• Adjusted diluted earnings per share declined to $1.08 from $1.11 in Q1 2020.

National HealthCare Corporation (NYSE American: NHC), the nation's oldest publicly traded senior health care company, announced today net operating revenues and CARES Act income for the quarter ended March 31, 2021 totaled $250,973,000 compared to $256,124,000 for the quarter ended March 31, 2020, a decrease of 2.0%. The CARES Act funding is intended to partially offset COVID-19 expenses and lost revenues. For the first time since the beginning of the COVID-19 pandemic, the census in our skilled nursing facilities increased approximately 3.5% from the beginning of January 2021 through the end of March 2021.

For the quarter ended March 31, 2021, the reported GAAP net income attributable to NHC was $21,267,000 compared to a GAAP net loss attributable to NHC in the amount of $26,852,000 for the same period in 2020. 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, 2021 was $16,592,000 compared to $17,070,000 for the same period in 2020 ^(*). GAAP diluted earnings per share was $1.38 for the quarter ended March 31, 2021 compared to a GAAP diluted loss per share of $1.76 for the same period in 2020. Adjusted diluted earnings per share were $1.08 and $1.11 for the quarters ended March 31, 2021 and 2020, 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 9,463 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 Operations
(in thousands, except share and per share amounts)
		Three Months Ended
		March 31
		2021				2020
		(unaudited)
Revenues and grant income:
Net patient revenues		$	216,855			$	244,095
Other revenues			11,369				12,029
Government stimulus income			22,749				-
Net operating revenues and grant income			250,973				256,124
Costs and expenses:
Salaries, wages and benefits			145,130				147,469
Other operating			70,153				71,668
Facility rent			10,063				10,332
Depreciation and amortization			10,161				10,438
Interest			244				412
Total costs and expenses			235,751				240,319
Income from operations			15,222				15,805
Non-operating income			6,260				8,146
Unrealized gains/(losses) on marketable equity securities			7,059				(60,392	)
Income/(loss) before income taxes			28,541				(36,441	)
Income tax (provision)/benefit			(7,233	)			9,625
Net income/(loss)			21,308				(26,816	)
Net income attributable to noncontrolling interest			(41	)			(36	)
Net income/(loss) attributable to National HealthCare Corporation		$	21,267			$	(26,852	)
Net income/(loss) per common share
Basic		$	1.39			$	(1.76	)
Diluted		$	1.38			$	(1.76	)
Weighted average common shares outstanding
Basic			15,327,520				15,294,777
Diluted			15,390,076				15,294,777
Dividends declared per common share		$	0.52			$	0.52
Balance Sheet Data		March 31				Dec. 31
(in thousands)		2021				2020
		(unaudited)
Cash, cash equivalents and marketable securities		$	318,845			$	323,445
Restricted cash, cash equivalents and marketable securities			166,750				158,162
Current assets			464,618				456,755
Property and equipment, net			514,484				520,318
Total assets			1,355,312				1,362,132
Current liabilities			265,846				281,228
NHC stockholders' equity			807,064				795,177

Selected Operating Statistics
		Three Months Ended
		March 31
		2021				2020
		(unaudited)
Skilled Nursing Per Diems:
Medicare		$	537.97			$	506.02
Managed Care			415.44				402.78
Medicaid			218.08				201.09
Private Pay and Other			247.49				251.61
Average Skilled Nursing Per Diem		$	298.29			$	279.07
Skilled Nursing Patient Days:
Medicare			91,327				105,543
Managed Care			61,911				61,556
Medicaid			279,101				344,526
Private Pay and Other			132,967				171,307
Total Skilled Nursing Patient Days			565,306				682,932
The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts):
		Three Months Ended
		March 31
		2021				2020
		(unaudited)
Net income/(loss) attributable to National Healthcare Corporation		$	21,267			$	(26,852	)
Non-GAAP adjustments
Unrealized (gains)/losses on marketable equity securities			(7,059	)			60,392
Operating results for newly opened facilities not at full capacity (1)			245				203
Gain on acquisition of equity method investment			-				(1,707	)
Stock-based compensation expense			496				466
Income tax (benefit)/provision on non-GAAP adjustments			1,643				(15,432	)
Non-GAAP Net income		$	16,592			$	17,070
GAAP diluted earnings/(loss) per share		$	1.38			$	(1.76	)
Non-GAAP adjustments
Unrealized (gains)/losses on marketable equity securities			(0.33	)			2.92
Operating results for newly opened facilities not at full capacity (1)			0.01				0.01
Gain on acquisition of equity method investment			-				(0.08	)
Stock-based compensation expense			0.02				0.02
Non-GAAP diluted earnings per share		$	1.08			$	1.11

(1) The newly opened facilities not at full capacity for the 2021 period presented consist of operations opened from 2019 through 2021. The newly opened facilities for the 2020 period presented consist of operations opened from 2018 through 2020. For both of the periods presented, one memory care facility was opened during these years.

 

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FAQ

What were the net operating revenues for NHC in Q1 2021?

NHC's net operating revenues for Q1 2021 were $250.97 million.

How did NHC's GAAP net income change from Q1 2020 to Q1 2021?

NHC's GAAP net income improved to $21.27 million in Q1 2021, recovering from a loss of $26.85 million in Q1 2020.

What was the diluted EPS for NHC in Q1 2021?

The GAAP diluted earnings per share for NHC in Q1 2021 was $1.38.

Did NHC experience an increase or decrease in skilled nursing facility census?

NHC experienced a 3.5% increase in skilled nursing facility census from January to March 2021.

What impact did the CARES Act have on NHC's revenues?

The CARES Act funding was intended to offset COVID-19-related expenses and lost revenues for NHC.