NHC Reports Third Quarter 2021 Earnings

Rhea-AI Summary

National HealthCare Corporation (NHC) reported net operating revenues of $276.7 million for the third quarter of 2021, marking a 10.4% increase from $250.6 million in Q3 2020. The revenue rise was attributed to the acquisition of Caris Healthcare. However, NHC experienced a GAAP net loss of $3.35 million, a decline from a net income of $12.85 million year-over-year. Adjusted net income rose 10.5% to $14.88 million, with adjusted diluted earnings per share at $0.96, compared to $0.88 previously.

Positive

• Increased net operating revenues of $276.7 million, up 10.4% from last year.
• Acquisition of Caris Healthcare contributed to revenue growth.
• Adjusted net income rose to $14.88 million, a 10.5% increase.

Negative

• GAAP net loss of $3.35 million compared to a profit of $12.85 million last year.
• Diluted loss per share of $0.22, down from earnings per share of $0.84 in Q3 2020.
• Unrealized losses in marketable equity securities negatively impacted earnings.

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 CARES Act income for the quarter ended September 30, 2021 totaled $276,737,000 compared to $250,626,000 for the quarter ended September 30, 2020, an increase of 10.4%. The net operating revenues increase for the third quarter of 2021 was primarily driven by the June 2021 controlling equity interest acquisition of Caris Healthcare, a hospice provider with 28 agencies. The census in our skilled nursing facilities increased 90 basis points during the third quarter of 2021, when compared sequentially to the second quarter of 2021.

For the quarter ended September 30, 2021, the reported GAAP net loss attributable to NHC was $3,348,000 compared to net income attributable to NHC of $12,849,000 for the same period in 2020. The decrease in our reported GAAP earnings for the third quarter of 2021 is due to the unrealized losses in our marketable equity securities portfolio. Excluding the unrealized losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended September 30, 2021 was $14,884,000 compared to $13,475,000 for the same period in 2020, an increase of 10.5% ^(*). The GAAP diluted loss per share was $0.22 for the quarter ended September 30, 2021 compared to earnings per share of $0.84 for the same period in 2020. Adjusted diluted earnings per share were $0.96 and $0.88 for the quarters ended September 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, 34 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								Nine Months Ended
	September 30								September 30
	2021				2020				2021				2020
	(unaudited)								(unaudited)
Revenues and grant income:
Net patient revenues	$	254,817			$	227,383			$	708,648			$	697,149
Other revenues		11,491				11,111				33,916				34,463
Government stimulus income		10,429				12,132				48,304				36,780
Net operating revenues and grant income		276,737				250,626				790,868				768,392
Costs and expenses:
Salaries, wages and benefits		159,305				151,564				461,239				455,947
Other operating		84,039				70,887				226,235				213,416
Facility rent		10,204				10,320				30,437				30,972
Depreciation and amortization		10,229				10,548				30,521				31,531
Interest		198				285				657				1,150
Total costs and expenses		263,975				243,604				749,089				733,016
Income from operations		12,762				7,022				41,779				35,376
Non-operating income		3,399				6,478				15,245				18,870
Gains on acquisitions of equity method investments		-				-				95,202				1,708
Unrealized losses on marketable equity securities		(23,797	)			(241	)			(23,227	)			(40,580	)
Income/(loss) before income taxes		(7,636	)			13,259				128,999				15,374
Income tax (provision)/benefit		4,090				(391	)			(5,907	)			(800	)
Net income/(loss)		(3,546	)			12,868				123,092				14,574
Net (income)/loss attributable to noncontrolling interest		198				(19	)			(290	)			(253	)
Net income/(loss) attributable to National HealthCare Corporation	$	(3,348	)		$	12,849			$	122,802			$	14,321
Net income/(loss) per common share
Basic	$	(0.22	)		$	0.84			$	8.00			$	0.94
Diluted	$	(0.22	)		$	0.84			$	7.97			$	0.93
Weighted average common shares outstanding
Basic		15,364,043				15,310,754				15,347,043				15,304,235
Diluted		15,434,438				15,371,311				15,414,683				15,368,775
Dividends declared per common share	$	0.52			$	0.52			$	1.56			$	1.56
Balance Sheet Data	Sept. 30				Dec. 31
(in thousands)	2021				2020
	(unaudited)
Cash, cash equivalents and marketable securities	$	254,945			$	323,445
Restricted cash, cash equivalents and marketable securities		176,356				158,162
Current assets		424,829				456,755
Property and equipment, net		522,019				520,318
Total assets		1,415,798				1,362,132
Current liabilities		257,670				281,228
NHC stockholders' equity		895,677				795,177

Selected Operating Statistics
	Three Months Ended								Nine Months Ended
	September 30								September 30
	2021				2020				2021				2020
	(unaudited)								(unaudited)
Skilled Nursing Per Diems:
Medicare	$	523.98			$	521.50			$	528.60			$	513.29
Managed Care		404.43				413.11				406.32				405.68
Medicaid		231.39				218.21				225.68				209.43
Private Pay and Other		257.13				248.76				254.03				249.34
Average Skilled Nursing Per Diem	$	295.40			$	288.51			$	297.04			$	281.68
Skilled Nursing Patient Days:
Medicare		87,534				94,158				271,024				290,597
Managed Care		57,486				53,319				183,593				165,544
Medicaid		315,979				320,734				895,955				998,456
Private Pay and Other		158,011				151,841				439,225				485,025
Total Skilled Nursing Patient Days		619,010				620,052				1,789,797				1,939,622
The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts):
	Three Months Ended								Nine Months Ended
	September 30								September 30
	2021				2020				2021				2020
	(unaudited)								(unaudited)
Net income/(loss) attributable to National Healthcare Corporation	$	(3,348	)		$	12,849			$	122,802			$	14,321
Non-GAAP adjustments
Unrealized losses on marketable equity securities		23,797				241				23,227				40,580
Operating results for newly opened facilities not at full capacity (1)		115				87				480				401
Gains on acquisitions of equity method investments		-				-				(95,202	)			(1,707	)
Stock-based compensation expense		726				518				1,905				1,807
Income tax (benefit)/provision on non-GAAP adjustments		(6,406	)			(220	)			(6,369	)			(10,681	)
Non-GAAP Net income	$	14,884			$	13,475			$	46,843			$	44,721
GAAP diluted earnings/(loss) per share	$	(0.22	)		$	0.84			$	7.97			$	0.93
Non-GAAP adjustments
Unrealized losses on marketable equity securities		1.14				0.01				1.12				1.95
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		-				-				(6.16	)			(0.08	)
Stock-based compensation expense		0.03				0.02				0.09				0.09
Non-GAAP diluted earnings per share	$	0.96			$	0.88			$	3.04			$	2.91
(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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211105005159/en/

Brian F. Kidd, SVP/Controller

Phone: (615) 890-2020

Source: National HealthCare Corporation

FAQ

What were National HealthCare Corporation's revenues for Q3 2021?

NHC reported net operating revenues of $276.7 million for Q3 2021.

What is the net income for NHC for Q3 2021?

NHC reported a GAAP net loss of $3.35 million for Q3 2021.

How did NHC's adjusted earnings per share compare year-over-year?

Adjusted diluted earnings per share were $0.96 for Q3 2021, up from $0.88 in Q3 2020.

What drove the increase in NHC's revenues for Q3 2021?

The increase was primarily driven by the acquisition of Caris Healthcare.

What significant change occurred in NHC's skilled nursing facilities census for Q3 2021?

The census increased by 90 basis points compared sequentially to Q2 2021.