NHC Reports Second Quarter 2021 Earnings

Rhea-AI Summary

National HealthCare Corporation (NHC) reported net operating revenues of $263.16 million for Q2 2021, slightly up from $261.64 million in Q2 2020. The company experienced a 4% increase in skilled nursing facility census from April to June 2021 and a 7.5% rise from January to June 2021. GAAP net income surged to $104.88 million compared to $28.32 million in the same quarter last year, driven largely by the acquisition of Caris HealthCare. GAAP diluted EPS for the quarter was $6.80, an increase from $1.84 in Q2 2020.

Positive

• GAAP net income increased to $104.88 million in Q2 2021 from $28.32 million in Q2 2020.
• GAAP diluted earnings per share rose to $6.80 from $1.84 year-over-year.
• Skilled nursing facility census grew 4% in Q2 2021 compared to Q1 2021.

Negative

• Adjusted net income only marginally increased to $15.08 million from $14.18 million year-over-year.

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 June 30, 2021 totaled $263,158,000 compared to $261,642,000 for the quarter ended June 30, 2020. The census in our skilled nursing facilities for the second quarter of 2021 increased approximately 4% from the beginning of April 2021 through the end of June 2021. The census in our skilled nursing facilities increased approximately 7.5% from the beginning of January 2021 through the end of June 2021.

For the quarter ended June 30, 2021, the reported GAAP net income attributable to NHC was $104,883,000 compared to $28,324,000 for the same period in 2020. The large increase in our reported GAAP net income for the second quarter of 2021 is primarily due to the gain recorded from the acquisition of Caris HealthCare, L.P., a hospice provider. Excluding the gain on the Caris HealthCare, L.P. acquisition, as well as the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended June 30, 2021 was $15,077,000 compared to $14,177,000 for the same period in 2020 ^(*). GAAP diluted earnings per share was $6.80 for the quarter ended June 30, 2021 compared to $1.84 for the same period in 2020. Adjusted diluted earnings per share were $0.98 and $0.92 for the quarters ended June 30, 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 9,473 beds. NHC affiliates also operate 24 assisted living communities, five independent living communities, one behavioral health hospital, 35 homecare agencies, and 28 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
				2021			2020			2021			2020
				(unaudited)						(unaudited)
Revenues and grant income:
	Net patient revenues			$ 236,976			$ 225,671			$ 453,831			$ 469,766
	Other revenues			11,056			11,323			22,425			23,352
	Government stimulus income			15,126			24,648			37,875			24,648
		Net operating revenues and grant income		263,158			261,642			514,131			517,766
Costs and expenses:
	Salaries, wages and benefits			156,804			156,914			301,934			304,383
	Other operating			72,043			70,861			142,196			142,529
	Facility rent			10,170			10,320			20,233			20,652
	Depreciation and amortization			10,131			10,545			20,292			20,983
	Interest			215			453			459			865
		Total costs and expenses		249,363			249,093			485,114			489,412
Income from operations				13,795			12,549			29,017			28,354
Non-operating income				5,586			5,954			11,846			12,392
Gains on acquisitions of equity method investments				95,202			-			95,202			1,708
Unrealized gains/(losses) on marketable equity securities				(6,489)			20,053			570			(40,339)
Income before income taxes				108,094			38,556			136,635			2,115
Income tax provision				(2,764)			(10,034)			(9,997)			(409)
Net income				105,330			28,522			126,638			1,706
Net income attributable to noncontrolling interest				(447)			(198)			(488)			(234)
Net income attributable to National HealthCare Corporation				$ 104,883			$ 28,324			$ 126,150			$ 1,472
Net income per common share
	Basic			$ 6.83			$ 1.85			$ 8.22			$ 0.10
	Diluted			$ 6.80			$ 1.84			$ 8.19			$ 0.10
Weighted average common shares outstanding
	Basic			15,349,162			15,307,105			15,338,400			15,300,941
	Diluted			15,419,012			15,372,430			15,404,634			15,367,464
Dividends declared per common share				$ 0.52			$ 0.52			$ 1.04			$ 1.04
	Balance Sheet Data			June 30			Dec. 31
	(in thousands)			2021			2020
				(unaudited)
	Cash, cash equivalents and marketable securities			$ 297,009			$ 323,445
	Restricted cash, cash equivalents and marketable securities			173,764			158,162
	Current assets			465,907			456,755
	Property and equipment, net			519,617			520,318
	Total assets			1,457,369			1,362,132
	Current liabilities			273,012			281,228
	NHC stockholders' equity			906,841			795,177

Selected Operating Statistics
	Three Months Ended				Six Months Ended
	June 30				June 30
	2021		2020		2021		2020
	(unaudited)				(unaudited)
Skilled Nursing Per Diems:
Medicare	$ 523.70		$ 513.22		$ 530.80		$ 509.35
Managed Care	418.21		401.39		416.85		402.15
Medicaid	226.75		209.60		222.57		205.28
Private Pay and Other	256.58		247.48		252.28		249.60
Average Skilled Nursing Per Diem	$ 299.55		$ 277.85		$ 298.94		$ 278.48
Skilled Nursing Patient Days:
Medicare	92,163		90,896		183,490		196,439
Managed Care	64,196		50,669		126,107		112,225
Medicaid	300,875		333,196		579,976		677,722
Private Pay and Other	148,247		161,877		281,214		333,184
Total Skilled Nursing Patient Days	605,481		636,638		1,170,787		1,319,570
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
	2021		2020		2021		2020
	(unaudited)				(unaudited)
Net income attributable to National Healthcare Corporation	$ 104,883		$ 28,324		$ 126,150		$ 1,472
Non-GAAP adjustments
Unrealized (gains)/losses on marketable equity securities	6,489		(20,053)		(570)		40,339
Operating results for newly opened facilities not at full capacity (1)	120		112		365		314
Gains on acquisitions of equity method investments	(95,202)		-		(95,202)		(1,708)
Stock-based compensation expense	683		823		1,179		1,289
Income tax (benefit)/provision on non-GAAP adjustments	(1,896)		4,971		(253)		(10,461)
Non-GAAP Net income	$ 15,077		$ 14,177		$ 31,669		$ 31,245
GAAP diluted earnings per share	$ 6.80		$ 1.84		$ 8.19		$ 0.10
Non-GAAP adjustments
Unrealized (gains)/losses on marketable equity securities	0.31		(0.97)		(0.03)		1.94
Operating results for newly opened facilities not at full capacity (1)	0.01		0.01		0.02		0.02
Gains on acquisitions of equity method investments	(6.17)		-		(6.18)		(0.08)
Stock-based compensation expense	0.03		0.04		0.06		0.05
Non-GAAP diluted earnings per share	$ 0.98		$ 0.92		$ 2.06		$ 2.03
(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 NHC's net revenues for Q2 2021?

NHC reported net operating revenues of $263.16 million for Q2 2021.

How did NHC's GAAP net income change in Q2 2021?

NHC's GAAP net income rose to $104.88 million in Q2 2021, compared to $28.32 million in Q2 2020.

What was the diluted EPS for NHC in Q2 2021?

The GAAP diluted earnings per share for NHC in Q2 2021 was $6.80.

What drove the increase in NHC's net income for Q2 2021?

The increase in NHC's net income was primarily due to the acquisition of Caris HealthCare.

Did NHC's skilled nursing facility census increase in 2021?

Yes, NHC's skilled nursing facility census increased approximately 4% from April to June 2021.