NHC Reports Second Quarter 2023 Earnings

Rhea-AI Summary

National HealthCare Corporation reports Q2 2023 net operating revenues of $282.6 million, a 4.1% increase compared to Q2 2022.

Positive

• Same-facility net operating revenues increased 11.5% in Q2 2023 compared to the same period last year.
• Adjusted net income for Q2 2023 was $13.7 million, a significant increase from $7.2 million in Q2 2022.
• Occupancy increase in skilled nursing and assisted living facilities contributed to the earnings growth.

Negative

• The company ceased operations in seven skilled nursing facilities in Massachusetts and New Hampshire in September 2022.

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 grant income for the quarter ended June 30, 2023 totaled $282,582,000 compared to $271,359,000 for the quarter ended June 30, 2022, an increase of 4.1%. Excluding the government stimulus income and the seven skilled nursing facilities in Massachusetts and New Hampshire in which we ceased operations in September 2022, same-facility net operating revenues increased 11.5% during the second quarter of 2023 compared to the same period a year ago.

For the quarter ended June 30, 2023, the reported GAAP net income attributable to NHC was $16,281,000 compared to $3,203,000 for the same period in 2022. Excluding the unrealized gains or losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended June 30, 2023 was $13,658,000 compared to $7,172,000 for the same period in 2022 ^(*). The increase in non-GAAP earnings for the quarter ended June 30, 2023 compared to the second quarter of 2022 was primarily due to the continued occupancy increase in our skilled nursing and assisted living facilities, skilled nursing per diem increases from some of our government payors, and the continued reduction of nurse agency staffing expense within our operations. The GAAP diluted earnings per share was $1.06 for the quarter ended June 30, 2023 compared to $0.21 for the quarter ended June 30, 2022. Adjusted diluted earnings per share were $0.89 and $0.46 for the quarters ended June 30, 2023 and 2022, 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 68 skilled nursing facilities with 8,732 beds. NHC affiliates also operate 23 assisted living communities with 1,181 units, five independent living communities with 475 units, three behavioral health hospitals, 35 homecare agencies, and 30 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. 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
			2023				2022				2023				2022
		(unaudited)								(unaudited)
Revenues and grant income:
Net patient revenues		$	269,605			$	260,077			$	527,612			$	516,414
Other revenues			12,977				10,962				24,533				22,988
Government stimulus income			-				320				-				10,940
Net operating revenues and grant income			282,582				271,359				552,145				550,342
Costs and expenses:
Salaries, wages and benefits			175,294				174,936				343,118				345,630
Other operating			73,234				71,311				144,723				145,396
Facility rent			9,901				10,411				19,993				20,476
Depreciation and amortization			10,083				10,001				20,131				19,758
Interest			93				149				191				314
Total costs and expenses			268,605				266,808				528,156				531,574
Income from operations			13,977				4,551				23,989				18,768
Non-operating income			3,696				2,521				8,019				5,720
Unrealized gains/(losses) on marketable equity securities			4,650				(3,549	)			6,036				(423	)
Income before income taxes			22,323				3,523				38,044				24,065
Income tax provision			(6,406	)			(1,362	)			(10,842	)			(6,555	)
Net income			15,917				2,161				27,202				17,510
Net loss attributable to noncontrolling interest			364				1,042				802				1,011
Net income attributable to National HealthCare Corporation		$	16,281			$	3,203			$	28,004			$	18,521
Net income per common share
Basic		$	1.06			$	0.21			$	1.83			$	1.20
Diluted		$	1.06			$	0.21			$	1.83			$	1.20
Weighted average common shares outstanding
Basic			15,297,435				15,452,402				15,317,319				15,434,718
Diluted			15,322,344				15,487,123				15,339,240				15,475,553
Dividends declared per common share		$	0.59			$	0.57			$	1.16			$	1.12
Balance Sheet Data		June 30				December 31
(in thousands)			2023				2022
		(unaudited)
Cash, cash equivalents and marketable securities		$	193,444			$	182,589
Restricted cash, cash equivalents and marketable securities			167,683				158,067
Current assets			368,734				353,932
Property and equipment, net			501,890				506,532
Total assets			1,280,684				1,275,450
Current liabilities			197,798				197,887
Stockholders' equity			886,358				877,514

Selected Operating Statistics
	Three Months Ended									Six Months Ended
	June 30									June 30
		2023				2022					2023				2022
	(unaudited)									(unaudited)
Skilled Nursing Per Diems:
Medicare	$	548.74			$	540.15				$	552.38			$	542.48
Managed Care		445.00				413.58					444.97				423.56
Medicaid		253.22				226.40					245.12				227.45
Private Pay and Other		275.11				268.70					276.79				269.42
Average Skilled Nursing Per Diem	$	318.92			$	297.63		(1)		$	317.38			$	301.66		(1)
Skilled Nursing Patient Days:
Medicare		79,981				85,438					164,013				177,021
Managed Care		59,567				55,230					118,013				110,867
Medicaid		284,681				313,171					561,187				617,431
Private Pay and Other		164,000				166,454					321,422				320,409
Total Skilled Nursing Patient Days		588,229				620,293		(1)			1,164,635				1,225,728		(1)
(1) For the three and six months ended June 30, 2022, the skilled nursing per diems and patient days listed above include the seven skilled nursing facilities that were located in Massachusetts and New Hampshire. NHC exited these seven skilled nursing facilities on September 1, 2022. For the three months ended June 30, 2022, the exited Massachusetts and New Hampshire skilled nursing facilities had an average skilled nursing per diem of $297.02 and 52,320 total patient days. For the six months ended June 30, 2022, the exited Massachusetts and New Hampshire skilled nursing facilities had an average skilled nursing per diem of $294.20 and 104,486 total patient days.
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
		2023				2022					2023				2022
	(unaudited)									(unaudited)
Net income attributable to National Healthcare Corporation	$	16,281			$	3,203				$	28,004			$	18,521
Non-GAAP adjustments
Unrealized (gains)/losses on marketable equity securities		(4,650	)			3,549					(6,036	)			423
Operating results for newly opened operations not at full capacity (2)		333				1,185					1,550				1,928
Stock-based compensation expense		772				629					1,411				1,341
Income tax (benefit)/provision on non-GAAP adjustments		922				(1,394	)				800				(960	)
Non-GAAP Net income	$	13,658			$	7,172				$	25,729			$	21,253
GAAP diluted earnings per share	$	1.06			$	0.21				$	1.83			$	1.20
Non-GAAP adjustments
Unrealized (gains)/losses on marketable equity securities		(0.23	)			0.16					(0.29	)			0.02
Operating results for newly opened operations not at full capacity (2)		0.02				0.06					0.07				0.09
Stock-based compensation expense		0.04				0.03					0.07				0.06
Non-GAAP diluted earnings per share	$	0.89			$	0.46				$	1.68			$	1.37
(2) The newly opened operations not at full capacity for the 2023 periods presented consisted of operations opened from 2021 through 2023. This consisted of two behavioral health hospitals, two homecare agencies, and two hospice agencies. The newly opened operations for the 2022 periods presented consisted of operations opened from 2020 through 2022. This consisted of two behavioral health hospitals, one homecare agency, and one hospice agency.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230804761218/en/

Brian F. Kidd, SVP/Chief Financial Officer

Phone: (615) 890-2020

Source: National HealthCare Corporation

FAQ

What are the net operating revenues for National HealthCare Corporation in Q2 2023?

The net operating revenues for Q2 2023 were $282.6 million.

What is the percentage increase in same-facility net operating revenues in Q2 2023 compared to the same period last year?

Same-facility net operating revenues increased by 11.5% in Q2 2023 compared to the same period last year.

What is the adjusted net income for Q2 2023?

The adjusted net income for Q2 2023 was $13.7 million.

What contributed to the earnings growth in Q2 2023?

The earnings growth in Q2 2023 was primarily due to the occupancy increase in skilled nursing and assisted living facilities.

When did the company cease operations in seven skilled nursing facilities?

The company ceased operations in seven skilled nursing facilities in Massachusetts and New Hampshire in September 2022.