NHC Reports Second Quarter 2022 Earnings

Rhea-AI Summary

National HealthCare Corporation (NHC) reported net operating revenues of $271.36 million for Q2 2022, a 3.1% increase from $263.16 million in Q2 2021. This growth was attributed to rising occupancy rates in skilled nursing facilities and the acquisition of Caris HealthCare. However, the company faced a $14.8 million decline in government stimulus income compared to last year. GAAP net income fell to $3.20 million from $104.88 million, while adjusted net income decreased to $7.17 million from $15.08 million. GAAP diluted EPS dropped to $0.21 from $6.80 in Q2 2021.

Positive

• 3.1% increase in net operating revenues to $271.36 million.
• Increased occupancy in skilled nursing facilities.
• Acquisition of Caris HealthCare contributing to revenue growth.

Negative

• $14.8 million reduction in government stimulus income.
• GAAP net income fell significantly from $104.88 million to $3.20 million.
• Inflationary wage pressures impacting labor costs.
• Adjusted diluted EPS decreased from $0.98 to $0.46.

MURFREESBORO, Tenn.--(BUSINESS WIRE)-- 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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220805005037/en/

Brian F. Kidd, SVP/Controller

Phone: (615) 890-2020

Source: National HealthCare Corporation

FAQ

What were NHC's revenues for Q2 2022?

NHC reported net operating revenues of $271.36 million for Q2 2022.

How much did NHC earn in Q2 2022?

NHC's GAAP net income for Q2 2022 was $3.20 million.

What is the EPS for NHC in Q2 2022?

NHC's GAAP diluted earnings per share (EPS) for Q2 2022 was $0.21.

What factors contributed to NHC's revenue increase in Q2 2022?

Revenue increase was driven by higher occupancy in skilled nursing facilities and the acquisition of Caris HealthCare.

How did government stimulus income affect NHC's financials in Q2 2022?

NHC faced a reduction of $14.8 million in government stimulus income compared to Q2 2021.