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NHC Reports First Quarter 2022 Earnings

NHC

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 March 31, 2022 totaled $278,983,000 compared to $250,973,000 for the quarter ended March 31, 2021, an increase of 11.2%. The net operating revenues increase during the first quarter of 2022 was primarily driven by the occupancy increase in our skilled nursing facilities, as well as the June 2021 acquisition of Caris Healthcare, a hospice provider.

For the quarter ended March 31, 2022, the reported GAAP net income attributable to NHC was $15,318,000 compared to $21,267,000 for the same period in 2021. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended March 31, 2022 was $14,081,000 compared to $16,592,000 for the same period in 2021 (*). The decrease in adjusted net income for the first quarter of 2022 compared to the first quarter of 2021 was primarily due to less government stimulus income recorded during the current quarter, as well as higher inflationary pressures on labor costs. The GAAP diluted earnings per share were $0.99 compared to $1.38 for the quarters ended March 31, 2022 and 2021, respectively. Adjusted diluted earnings per share were $0.91 and $1.08 for the quarters ended March 31, 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 9,456 beds. NHC affiliates also operate 24 assisted living communities, five independent living communities, one behavioral health hospital, 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
March 31

2022

2021

(unaudited)
Revenues and grant income:
Net patient revenues

$

256,337

$

216,855

Other revenues

12,026

11,369

Government stimulus income

10,620

22,749

Net operating revenues and grant income

278,983

250,973

Costs and expenses:
Salaries, wages and benefits

170,694

149,159

Other operating

74,085

66,124

Facility rent

10,065

10,063

Depreciation and amortization

9,757

10,161

Interest

165

244

Total costs and expenses

264,766

235,751

Income from operations

14,217

15,222

Non-operating income

3,199

6,260

Unrealized gains on marketable equity securities

3,126

7,059

Income before income taxes

20,542

28,541

Income tax provision

(5,193

)

(7,233

)

Net income

15,349

21,308

Net income attributable to noncontrolling interest

(31

)

(41

)

Net income attributable to National HealthCare Corporation

$

15,318

$

21,267

Net income per common share
Basic

$

0.99

$

1.39

Diluted

$

0.99

$

1.38

Weighted average common shares outstanding
Basic

15,416,836

15,327,520

Diluted

15,463,855

15,390,076

Dividends declared per common share

$

0.55

$

0.52

Balance Sheet Data March 31 Dec. 31
(in thousands)

2022

2021

(unaudited)
Cash, cash equivalents and marketable securities

$

206,028

$

256,025

Restricted cash, cash equivalents and marketable securities

175,973

175,884

Current assets

384,020

426,638

Property and equipment, net

520,201

520,996

Total assets

1,357,011

1,403,396

Current liabilities

216,487

263,201

NHC stockholders' equity

905,319

903,004

Selected Operating Statistics
Three Months Ended
March 31

2022

2021

(unaudited)
Skilled Nursing Per Diems:
Medicare

$

544.66

$

537.97

Managed Care

433.48

405.49

Medicaid

228.53

218.08

Private Pay and Other

270.19

247.49

Average Skilled Nursing Per Diem

$

305.78

$

297.20

Skilled Nursing Patient Days:
Medicare

91,583

91,327

Managed Care

55,637

61,911

Medicaid

304,260

279,101

Private Pay and Other

153,955

132,967

Total Skilled Nursing Patient Days

605,435

565,306

The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts):
Three Months Ended
March 31

2022

2021

(unaudited)
Net income attributable to National Healthcare Corporation

$

15,318

$

21,267

Non-GAAP adjustments
Unrealized gains on marketable equity securities

(3,126

)

(7,059

)

Operating results for newly opened facilities not at full capacity (1)

743

245

Stock-based compensation expense

712

496

Income tax provision on non-GAAP adjustments

434

1,643

Non-GAAP Net income

$

14,081

$

16,592

GAAP diluted earnings per share

$

0.99

$

1.38

Non-GAAP adjustments
Unrealized gains on marketable equity securities

(0.15

)

(0.33

)

Operating results for newly opened facilities not at full capacity (1)

0.04

0.01

Stock-based compensation expense

0.03

0.02

Non-GAAP diluted earnings per share

$

0.91

$

1.08

(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 that will open during the second quarter of 2022. 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.

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