NHC Reports Second Quarter 2024 Earnings

Rhea-AI Summary

National HealthCare (NYSE American: NHC) reported strong financial results for Q2 2024. Net operating revenues and grant income increased by 6.4% to $300,658,000 compared to Q2 2023. Excluding governmental stimulus income, supplemental Medicaid payments, and three exited Missouri facilities, same-facility net operating revenues grew by 8.0%. GAAP net income attributable to NHC rose significantly to $26,844,000, up from $16,281,000 in Q2 2023. Adjusted net income also improved to $15,612,000 from $13,658,000 year-over-year. GAAP diluted EPS increased to $1.73 from $1.06, while adjusted diluted EPS rose to $1.00 from $0.89 in the same period last year.

Positive

• Net operating revenues and grant income increased by 6.4% year-over-year
• Same-facility net operating revenues grew by 8.0% excluding one-time factors
• GAAP net income rose by 64.9% compared to Q2 2023
• Adjusted net income improved by 14.3% year-over-year
• GAAP diluted EPS increased by 63.2% to $1.73
• Adjusted diluted EPS grew by 12.4% to $1.00

Negative

• Exited operations in three skilled nursing facilities in Missouri in February 2024

Insights

Financial Analyst

NHC's Q2 2024 results show robust growth and improved profitability. Net operating revenues increased by 6.4% year-over-year to $300,658,000. More impressively, same-facility revenues grew by 8.0% when excluding non-recurring items. This indicates strong organic growth in NHC's core operations.

The company's GAAP net income saw a significant jump to $26,844,000, up from $16,281,000 in Q2 2023. Adjusted net income, which provides a clearer picture of operational performance, increased to $15,612,000 from $13,658,000. This 14.3% growth in adjusted earnings outpaces revenue growth, suggesting improved operational efficiency.

The adjusted diluted EPS of $1.00 represents a 12.4% increase from the previous year, indicating value creation for shareholders. Overall, these results reflect NHC's ability to grow its business and improve profitability in the competitive senior health care market.

Healthcare Industry Expert

NHC's Q2 2024 performance underscores the resilience and growth potential of the senior health care sector. The 8.0% same-facility revenue growth is particularly noteworthy, as it indicates strong demand for NHC's services and effective operational management.

The company's decision to exit operations in three Missouri skilled nursing facilities demonstrates a strategic focus on optimizing its portfolio. This move, coupled with the strong same-facility growth, suggests NHC is successfully balancing expansion with operational efficiency.

The senior health care market is expected to grow significantly due to demographic trends. NHC's position as the nation's oldest publicly traded senior health care company gives it a competitive advantage in terms of experience and brand recognition. The company's ability to grow revenues and improve profitability in this environment bodes well for its future prospects in a sector with increasing demand.

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, 2024 totaled $300,658,000 compared to $282,582,000 for the quarter ended June 30, 2023, an increase of 6.4%. Excluding the governmental stimulus income and supplemental Medicaid payments from various states, as well as the three skilled nursing facilities in Missouri in which we exited operations in February 2024, same-facility net operating revenues increased 8.0% during the second quarter of 2024 compared to the same period a year ago.

For the quarter ended June 30, 2024, the reported GAAP net income attributable to NHC was $26,844,000 compared to $16,281,000 for the same period in 2023. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended June 30, 2024 was $15,612,000 compared to $13,658,000 for the same period in 2023 ^(*). The GAAP diluted earnings per share were $1.73 for the quarter ended June 30, 2024 compared to $1.06 for the quarter ended June 30, 2023. Adjusted diluted earnings per share were $1.00 and $0.89 for the quarters ended June 30, 2024 and 2023, respectively ^(*).

(*) - See the tables below that provide a reconciliation of GAAP to non-GAAP items.

About NHC

As of August 1, 2024, NHC affiliates operate for themselves and third parties 80 skilled nursing facilities with 10,349 beds. NHC affiliates also operate 26 assisted living communities with 1,413 units, nine independent living communities with 778 units, three behavioral health hospitals, 34 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
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Revenues and grant income:
Net patient revenues	$	279,918			$	269,605			$	565,741			$	527,612
Other revenues		11,295				12,977				22,648				24,533
Government stimulus income		9,445				-				9,445				-
Net operating revenues		300,658				282,582				597,834				552,145
Costs and expenses:
Salaries, wages and benefits		180,076				175,294				363,214				343,118
Other operating		78,154				73,234				155,583				144,723
Facility rent		10,570				9,901				20,918				19,993
Depreciation and amortization		9,338				10,083				19,924				20,131
Interest		-				93				46				191
Total costs and expenses		278,138				268,605				559,685				528,156
Income from operations		22,520				13,977				38,149				23,989
Non-operating income		4,956				3,696				10,641				8,019
Unrealized gains on marketable equity securities		9,124				4,650				23,523				6,036
Income before income taxes		36,600				22,323				72,313				38,044
Income tax provision		(9,494	)			(6,406	)			(18,956	)			(10,842	)
Net income		27,106				15,917				53,357				27,202
Net (income)/loss attributable to noncontrolling interest		(262	)			364				(300	)			802
Net income attributable to National HealthCare Corporation	$	26,844			$	16,281			$	53,057			$	28,004
Net income per common share
Basic	$	1.74			$	1.06			$	3.45			$	1.83
Diluted	$	1.73			$	1.06			$	3.42			$	1.83
Weighted average common shares outstanding
Basic		15,391,535				15,297,435				15,371,150				15,317,319
Diluted		15,555,612				15,322,344				15,530,624				15,339,240
Dividends declared per common share	$	0.61			$	0.59			$	1.20			$	1.16
Balance Sheet Data	June 30				December 31
(in thousands)		2024				2023
	(unaudited)
Cash, cash equivalents and marketable securities	$	270,019			$	223,620
Restricted cash, cash equivalents and marketable securities		170,264				167,971
Current assets		447,871				406,235
Property and equipment, net		487,193				493,329
Total assets		1,339,699				1,310,796
Current liabilities		216,935				214,476
Stockholders' equity		945,817				908,752

Selected Operating Statistics
	Three Months Ended								Six Months Ended
	June 30								June 30
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Skilled Nursing Per Diems:
Medicare	$	577.71			$	548.74			$	579.81			$	552.38
Managed Care		447.96				445.00				459.48				444.97
Medicaid		264.49				253.22				264.88				245.12
Private Pay and Other		312.91				275.11				310.31				276.79
Average Skilled Nursing Per Diem	$	338.86			$	318.92		(1)	$	341.21		(1)	$	317.38		(1)
Skilled Nursing Patient Days:
Medicare		74,602				79,981				155,758				164,013
Managed Care		62,957				59,567				128,388				118,013
Medicaid		279,504				284,681				561,325				561,187
Private Pay and Other		150,234				164,000				307,677				321,422
Total Skilled Nursing Patient Days		567,297				588,229		(1)		1,153,148		(1)		1,164,635		(1)
(1) NHC exited three skilled nursing facilities in Missouri on March 1, 2024. For the first quarter of 2024, the exited Missouri skilled nursing facilities had an average skilled nursing per diem of $259.56 and 20,267 patient days. For the three months ended June 30, 2023, the exited Missouri skilled nursing facilities had an average skilled nursing per diem of $259.43 and 31,945 patient days. For the six months ended June 30, 2023, the exited Missouri skilled nursing facilities had an average skilled nursing per diem of $250.72 and 62,889 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
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Net income attributable to National Healthcare Corporation	$	26,844			$	16,281			$	53,057			$	28,004
Non-GAAP adjustments
Unrealized gains on marketable equity securities		(9,124	)			(4,650	)			(23,523	)			(6,036	)
Operating results for newly opened operations not at full capacity (2)		20				333				20				1,550
Stock-based compensation expense		1,176				772				1,969				1,411
Gain on sale of unconsolidated company		-				-				(1,024	)			-
Acquisition-related expenses (3)		2,194				-				2,194				-
Employee retention credit		(9,445	)			-				(9,445	)			-
Income tax provision on non-GAAP adjustments		3,947				922				7,750				800
Non-GAAP Net income	$	15,612			$	13,658			$	30,998			$	25,729
GAAP diluted earnings per share	$	1.73			$	1.06			$	3.42			$	1.83
Non-GAAP adjustments
Unrealized gains on marketable equity securities		(0.43	)			(0.23	)			(1.12	)			(0.29	)
Operating results for newly opened operations not at full capacity (2)		-				0.02				-				0.07
Stock-based compensation expense		0.05				0.04				0.10				0.07
Gain on sale of unconsolidated company		-				-				(0.05	)			-
Acquisition-related expenses (3)		0.10				-				0.10				-
Employee retention credit		(0.45	)			-				(0.45	)			-
Non-GAAP diluted earnings per share	$	1.00			$	0.89			$	2.00			$	1.68
(2) The operating results for newly opened facilities or agencies not at full capacity include newly constructed healthcare facilities or agencies that are still considered in the start-up phase, which are two hospice agencies for the three and six months ended June 30, 3024. For the three and six months ended June 30, 2023, included are two behavioral health hospitals, two homecare agencies, and two hospice agencies.
(3) Represents expenses incurred to acquire the White Oak operations that are not capitalizable.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240809892339/en/

Brian F. Kidd, SVP/CFO

Phone: (615) 890-2020

Source: National HealthCare Corporation

FAQ

What was NHC's net operating revenue for Q2 2024?

NHC's net operating revenues and grant income for Q2 2024 totaled $300,658,000, a 6.4% increase from $282,582,000 in Q2 2023.

How did NHC's same-facility net operating revenues perform in Q2 2024?

NHC's same-facility net operating revenues increased by 8.0% in Q2 2024 compared to the same period in 2023, excluding governmental stimulus income, supplemental Medicaid payments, and three exited Missouri facilities.

What was NHC's GAAP net income for Q2 2024?

NHC's GAAP net income attributable to the company for Q2 2024 was $26,844,000, compared to $16,281,000 for the same period in 2023.

How did NHC's adjusted diluted earnings per share (EPS) change in Q2 2024?

NHC's adjusted diluted EPS increased to $1.00 in Q2 2024 from $0.89 in Q2 2023, representing a 12.4% growth.