NHC Reports 2021 Year End Earnings

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 year ended December 31, 2021 totaled $1,074,302,000 compared to $1,028,217,000 for the year ended December 31, 2020, an increase of 4.5%. The net operating revenues increase in 2021 was primarily driven by the June 2021 controlling equity interest acquisition of Caris Healthcare, a hospice provider with 28 agencies.

For the year ended December 31, 2021, the reported GAAP net income attributable to NHC was $138,590,000 compared to $41,871,000 for the 2020 year. Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the year ended December 31, 2021 was $62,645,000 compared to $58,543,000 for the 2020 year, which is a 7.0% increase ^(*). GAAP diluted earnings per share were $8.99 compared to $2.72 for the years ended December 31, 2021 and 2020, respectively. Adjusted diluted earnings per share were $4.06 compared to $3.81 for the years ended December 31, 2021 and 2020, respectively ^(*).

For the quarter ended December 31, 2021, the reported GAAP net income attributable to NHC was $15,788,000 compared to $27,550,000 for the same period in 2020. Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended December 31, 2021 was $15,801,000 compared to $13,822,000 for the same period in 2020, an increase of 14.3% ^(*). The GAAP diluted earnings per share were $1.02 compared to $1.79 for the quarters ended December 31, 2021 and 2020, respectively. Adjusted diluted earnings per share were $1.02 and $0.90 for the quarters ended December 31, 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								Year Ended
				December 31								December 31
					2021				2020				2021				2020
Revenues and grant income:
	Net patient revenues			$	256,894			$	234,646			$	965,542			$	931,795
	Other revenues				11,484				14,454				45,400				48,917
	Government stimulus income				15,056				10,725				63,360				47,505
		Net operating revenues and grant income			283,434				259,825				1,074,302				1,028,217
Costs and expenses:
	Salaries, wages and benefits				168,433				153,359				629,672				609,306
	Other operating				76,910				73,429				303,145				286,845
	Facility rent				10,381				9,522				40,818				40,494
	Depreciation and amortization				10,151				10,487				40,672				42,018
	Interest				188				249				845				1,399
	Impairment of assets				8,225				-				8,225				-
		Total costs and expenses			274,288				247,046				1,023,377				980,062
Income from operations					9,146				12,779				50,925				48,155
Non-operating income					2,529				7,656				17,774				26,527
Gain on acquisitions of equity method investments					-				-				95,202				1,707
Unrealized gains/(losses) on marketable equity securities					9,364				16,614				(13,863	)			(23,966	)
Income before income taxes					21,039				37,049				150,038				52,423
Income tax provision					(5,044	)			(9,633	)			(10,951	)			(10,433	)
Net income					15,995				27,416				139,087				41,990
Net (income)/loss attributable to noncontrolling interest					(207	)			134				(497	)			(119	)
Net income attributable to National HealthCare Corporation				$	15,788			$	27,550			$	138,590			$	41,871
Net income per common share
	Basic			$	1.03			$	1.80			$	9.03			$	2.74
	Diluted			$	1.02			$	1.79			$	8.99			$	2.72
Weighted average common shares outstanding
	Basic				15,364,302				15,311,947				15,347,129				15,306,174
	Diluted				15,440,633				15,371,718				15,416,716				15,369,523
Dividends declared per common share				$	0.55			$	0.52			$	2.11			$	2.08
	Balance Sheet Data			Dec. 31				Dec. 31
	(in thousands)				2021				2020
	Cash, cash equivalents and marketable securities			$	256,025			$	323,445
	Restricted cash, cash equivalents and marketable securities				175,884				158,162
	Current assets				426,638				456,755
	Property and equipment, net				520,996				520,318
	Total assets				1,403,396				1,362,132
	Current liabilities				263,201				281,228
	NHC stockholders' equity				903,004				795,177

Selected Operating Statistics
	Three Months Ended								Year Ended
	December 31								December 31
		2021				2020				2021				2020
Skilled Nursing Per Diems:
Medicare	$	530.32			$	533.95			$	529.03			$	518.46
Managed Care		439.61				418.14				414.11				408.92
Medicaid		224.61				258.47				225.40				220.50
Private Pay and Other		259.96				250.54				255.60				249.61
Average Skilled Nursing Per Diem	$	297.62			$	317.94			$	297.19			$	290.10
Skilled Nursing Patient Days:
Medicare		91,056				96,943				362,080				387,540
Managed Care		56,133				58,085				239,726				223,629
Medicaid		317,610				290,979				1,213,565				1,289,435
Private Pay and Other		158,577				140,288				597,802				625,313
Total Skilled Nursing Patient Days		623,376				586,295				2,413,173				2,525,917
The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts):
	Three Months Ended								Year Ended
	December 31								December 31
		2021				2020				2021				2020
Net income attributable to National Healthcare Corporation	$	15,788			$	27,550			$	138,590			$	41,871
Non-GAAP adjustments
Unrealized loss (gains) on marketable equity securities		(9,364	)			(16,614	)			13,863				23,966
Impairment of assets		8,225				-				8,225				-
Gains on acquisitions of equity method investments		-				-				(95,202	)			(1,707	)
Gain on sale of real estate/healthcare facilities		-				(2,784	)			-				(2,784	)
Operating results for newly opened facilities not at full capacity (1)		442				200				922				602
Stock-based compensation expense		715				646				2,620				2,453
Income tax (benefit)/provision on non-GAAP adjustments		(5	)			4,824				(6,373	)			(5,858	)
Non-GAAP Net income	$	15,801			$	13,822			$	62,645			$	58,543
GAAP diluted earnings per share	$	1.02			$	1.79			$	8.99			$	2.72
Non-GAAP adjustments
Unrealized loss (gains) on marketable equity securities		(0.45	)			(0.80	)			0.67				1.15
Impairment of assets		0.40				-				0.39				-
Gains on acquisitions of equity method investments		-				-				(6.16	)			(0.08	)
Gain on sale of real estate/healthcare facilities		-				(0.13	)			-				(0.13	)
Operating results for newly opened facilities not at full capacity (1)		0.02				0.01				0.04				0.03
Stock-based compensation expense		0.03				0.03				0.13				0.12
Non-GAAP diluted earnings per share	$	1.02			$	0.90			$	4.06			$	3.81
(1) The newly opened facilities not at full capacity for the 2021 periods presented consist of operations opened from 2019 through 2021. The newly opened facilities for the 2020 periods presented consist of operations opened from 2018 through 2020. For the 2021 periods, there is one memory care facility included and two behavioral health hospitals that are opening in the first quarter of 2022. For the 2020 periods, there was one memory care facility included in the results.

 

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