NHC Reports Third Quarter 2018 Earnings

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Nov. 9, 2018 10:35 UTC

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 for the quarter ended September 30, 2018 totaled $246,326,000 compared to $241,196,000 for the quarter ended September 30, 2017, an increase of 2.1%.

For the quarter ended September 30, 2018, reported GAAP net income attributable to NHC was $21,142,000 compared to $11,352,000 for the third quarter of 2017, an increase of 86.2%. Excluding the $3.5 million unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended September 30, 2018 was $15,710,000 compared to $11,875,000 for the third quarter of 2017, an increase of 32.3%(1). For the quarter ended September 30, 2018, the reported GAAP diluted earnings per share was $1.39 and the adjusted diluted earnings per share was $1.03(1).

           
     

(1)

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

About NHC

NHC affiliates operate for themselves and third parties 76 skilled nursing facilities with 9,604 beds. NHC affiliates also operate 24 assisted living communities, five independent living communities, one geriatric psychiatric hospital, and 35 homecare programs. NHC’s other services include Alzheimer’s and memory care units, hospice services, 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 Income
(in thousands, except share and per share amounts)
            Three Months Ended     Nine Months Ended
            September 30     September 30
            2018     2017     2018     2017
            (unaudited)     (unaudited)
Revenues:                          
  Net patient revenues     $ 234,827       $ 229,259       $ 697,173       $ 683,598  
  Other revenues       11,499         11,937         34,256         34,831  
    Net operating revenues       246,326         241,196         731,429         718,429  
                               
Costs and expenses:                        
  Salaries, wages and benefits       149,188         145,900         434,749         426,639  
  Other operating       64,507         63,250         192,268         188,522  
  Facility rent       10,190         10,106         30,691         30,273  
  Depreciation and amortization       10,437         10,833         31,176         31,609  
  Interest       1,170         1,322         3,663         3,599  
    Total costs and expenses       235,492         231,411         692,547         680,642  
                               
Income from operations       10,834         9,785         38,882         37,787  
                               
Other income:                        
  Non-operating income       8,467         6,090         11,056         16,047  
  Unrealized gains on marketable equity securities       3,486         -         417         -  
                               
Income before income taxes       22,787         15,875         50,355         53,834  
Income tax provision       (1,700 )       (4,691 )       (9,792 )       (19,448 )
Net income         21,087         11,184         40,563         34,386  
                               
Net loss attributable to noncontrolling interest       55         168         249         349  
                               
Net income attributable to National HealthCare Corporation     $ 21,142       $ 11,352       $ 40,812       $ 34,735  
                               
Net income per common share                        
  Basic     $ 1.39       $ 0.75       $ 2.68       $ 2.29  
  Diluted     $ 1.39       $ 0.75       $ 2.68       $ 2.28  
                               
Weighted average common shares outstanding                        
  Basic       15,225,654         15,195,394         15,221,217         15,186,315  
  Diluted       15,242,086         15,220,567         15,230,692         15,217,797  
                               
Dividends declared per common share     $ 0.50       $ 0.48       $ 1.48       $ 1.41  
                               
  Balance Sheet Data                        
  (in thousands)     Sept. 30     Dec. 31            
            2018     2017            
            (unaudited)                  
                               
  Cash, cash equivalents and marketable securities     $ 195,101       $ 198,203              
  Restricted cash, cash equivalents and marketable securities       180,168         174,698              
  Current assets       324,473         329,311              
  Property and equipment, net       540,936         549,319              
  Total assets       1,084,668         1,096,526              
  Current liabilities       151,548         155,065              
  Long-term debt       75,000         100,000              
  NHC stockholders' equity       720,023         702,738              
                                   
                         
Selected Operating Statistics                        
                         
      Three Months Ended     Nine Months Ended
      September 30     September 30
      2018     2017     2018     2017
      (unaudited)     (unaudited)
Skilled Nursing Per Diems:                        
Medicare     $ 462.94       $ 459.63       $ 461.96       $ 461.38  
Managed Care       400.61         402.86         400.36         407.16  
Medicaid       191.61         188.48         189.84         186.35  
Private Pay and Other       240.57         230.73         238.82         231.76  
                         
Average Skilled Nursing Per Diem     $ 268.89       $ 265.79       $ 269.81       $ 266.84  
                         
Skilled Nursing Patient Days:                        
Medicare       115,420         117,634         362,153         360,285  
Managed Care       63,047         64,327         182,794         186,487  
Medicaid       330,761         325,886         961,190         959,779  
Private Pay and Other       181,570         183,339         535,249         541,827  
                         
Total Skilled Nursing Patient Days       690,798         691,186         2,041,386         2,048,378  
                         
                         
                         
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
      2018     2017     2018     2017
      (unaudited)     (unaudited)
                         
Net income attributable to National Healthcare Corporation     $ 21,142       $ 11,352       $ 40,812       $ 34,735  
Non-GAAP adjustments:                        
Unrealized gains on marketable equity securities       (3,486 )       -         (417 )       -  
Legal costs and charges related to Caris' legal investigation       -         757         8,364         1,239  
Operating results for newly opened facilities not at full capacity (*)       492         976         947         2,725  
Gain on acquisition of equity method investment       (2,050 )       -         (2,050 )       -  
Gain on sale of assets within equity method investment       -         (1,305 )       -         (1,305 )
Stock-based compensation expense       361         430         1,538         1,263  
Tax provision adjustment on 2017 filed income tax returns       (1,434 )       -         (1,434 )       -  
Provision of income taxes on non-GAAP adjustments       685         (335 )       (1,884 )       (1,530 )
Non-GAAP Net income     $ 15,710       $ 11,875       $ 45,876       $ 37,127  
                         
                         
GAAP diluted earnings per share     $ 1.39       $ 0.75       $ 2.68       $ 2.28  
Non-GAAP adjustments:                        
Unrealized gains on marketable equity securities       (0.17 )       -         (0.02 )       -  
Legal costs and charges related to Caris' legal investigation       -         0.02         0.46         0.05  
Operating results for newly opened facilities not at full capacity (*)       0.02         0.04         0.05         0.11  
Gain on acquisition of equity method investment       (0.13 )       -         (0.13 )       -  
Gain on sale of assets within equity method investment       -         (0.05 )       -         (0.05 )
Stock-based compensation expense       0.02         0.02         0.07         0.05  
Tax provision adjustment on 2017 filed income tax returns       (0.10 )       -         (0.10 )       -  
Non-GAAP diluted earnings per share     $ 1.03       $ 0.78       $ 3.01       $ 2.44  
                         
(*) The newly opened facilities consist of one skilled nursing facility and two assisted living facilities that opened during 2017.
 

 

Contacts

National HealthCare Corporation
Brian F. Kidd, 615-890-2020
SVP and Controller

 

 
 

Source: National HealthCare Corporation

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