8-K
NATIONAL HEALTHCARE CORP (NHC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 21 , 20 20 ( February 20 , 2020 )
____________________________
NATIONAL HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
__________________________
| Delaware<br><br> <br>(State or other jurisdiction of incorporation) | 001-13489<br><br> <br>(Commission File Number) | 52-2057472<br><br> <br>(I.R.S. Employer Identification No.) |
|---|---|---|
| 100 Vine Street<br><br> <br>Murfreesboro , Tennessee<br><br> <br>(Address of Principal Executive Offices) | ****<br><br> <br>37130<br><br> <br>(Zip Code) |
Registrant’s telephone number, including area code: (615) 890-2020
Not Applicable
(Former name or former address, if changed since last report)
__________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $.01 par value | NHC | NYSE American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1988 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 . RESULTS OF OPERATIONS AND FINANCIAL CONDITION
National HealthCare Corporation (“NHC”) issued a press release on February 20, 2020 announcing its December 31, 2019 earnings. The entire press release is attached as Exhibit 99.1 and is incorporated by reference herein.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
| Exhibit No. | Description of Exhibit |
|---|---|
| 99.1 | Copy of press release issued on February 20, 2020 by National HealthCare Corporation announcing December 31, 2019 earnings. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 21, 2020
NATIONAL HEALTHCARE CORPORATION
By: /s/ Brian F. Kidd
Name: Brian F. Kidd
Title: Senior VP/Controller
Principal Accounting Officer
ex_173615.htm
Exhibit 99.1
For release: February 20, 2020
Contact: Brian F. Kidd, SVP/PAO
Phone: (615) 890-2020
NHC Reports 201 9 Year End **** Earnings
MURFREESBORO, Tenn. -- National HealthCare Corporation (NYSE American: NHC), the nation's oldest publicly traded senior health care company, announced today net operating revenues for the year ended December 31, 2019 totaled $996,383,000 compared to $980,349,000 for the year ended December 31, 2018, an increase of 1.6%. For the year ended December 31, 2019, reported GAAP net income attributable to NHC was $68,211,000 compared to $58,964,000 for the 2018 year, an increase of 15.7%. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the year ended December 31, 2019 was $59,616,000 compared to $64,373,000 for the 2018 year^(1)^.
GAAP diluted earnings per share were $4.44 and $3.87 for the years ended December 31, 2019 and 2018, respectively, an increase of 14.7%. Adjusted diluted earnings per share were $3.88 and $4.22 for the years ended December 31, 2019 and 2018, respectively^(1)^.
Net operating revenues for the quarter ended December 31, 2019 totaled $253,880,000 compared to $248,920,000 for the same three months in 2018, an increase of 2.0%. For the quarter ended December 31, 2019, reported GAAP net income attributable to NHC was $13,770,000 compared to $18,152,000 for the fourth quarter of 2018. Excluding the unrealized gains/losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the fourth quarter of 2019 was $16,822,000 compared to $17,749,000 for the fourth quarter of 2018.
| (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 75 skilled nursing facilities with 9,513 beds. NHC affiliates also operate 25 assisted living communities, five independent living communities, one behavioral health 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.
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| Consolidated Statements of Income | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except share and per share amounts) | ||||||||||||
| Three Months Ended | Year Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31 | December 31 | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| (unaudited) | ||||||||||||
| Revenues: | ||||||||||||
| Net patient revenues | $ | 241,407 | $ | 235,601 | $ | 947,872 | $ | 932,774 | ||||
| Other revenues | **** | 12,473 | 13,319 | **** | 48,511 | 47,575 | ||||||
| Net operating revenues | **** | 253,880 | 248,920 | **** | 996,383 | 980,349 | ||||||
| Costs and expenses: | ||||||||||||
| Salaries, wages and benefits | **** | 151,390 | 147,972 | **** | 592,831 | 582,721 | ||||||
| Other operating | **** | 64,682 | 61,770 | **** | 268,442 | 254,038 | ||||||
| Facility rent | **** | 9,916 | 10,232 | **** | 40,518 | 40,923 | ||||||
| Depreciation and amortization | **** | 10,904 | 10,718 | **** | 42,419 | 41,894 | ||||||
| Interest | **** | 491 | 1,034 | **** | 3,135 | 4,697 | ||||||
| Total costs and expenses | **** | 237,383 | 231,726 | **** | 947,345 | 924,273 | ||||||
| Income from operations | **** | 16,497 | 17,194 | **** | 49,038 | 56,076 | ||||||
| Non-operating income | **** | 5,811 | 6,614 | **** | 26,747 | 17,670 | ||||||
| Unrealized gains (losses) on marketable equity securities | **** | (3,866 | ) | 721 | **** | 12,230 | 1,138 | |||||
| Income before income taxes | **** | 18,442 | 24,529 | **** | 88,015 | 74,884 | ||||||
| Income tax provision | **** | (4,755 | ) | (6,393 | ) | **** | (20,039 | ) | (16,185 | ) | ||
| Net income | **** | 13,687 | 18,136 | **** | 67,976 | 58,699 | ||||||
| Net loss attributable to noncontrolling interest | **** | 83 | 16 | **** | 235 | 265 | ||||||
| Net income attributable to National HealthCare Corporation | $ | 13,770 | $ | 18,152 | $ | 68,211 | $ | 58,964 | ||||
| Net income per common share | ||||||||||||
| Basic | $ | 0.90 | $ | 1.19 | $ | 4.47 | $ | 3.87 | ||||
| Diluted | $ | 0.89 | $ | 1.19 | $ | 4.44 | $ | 3.87 | ||||
| Weighted average common shares outstanding | ||||||||||||
| Basic | **** | 15,278,771 | 15,235,772 | **** | 15,270,154 | 15,224,886 | ||||||
| Diluted | **** | 15,389,104 | 15,255,107 | **** | 15,360,046 | 15,236,826 | ||||||
| Dividends declared per common share | $ | 0.52 | $ | 0.50 | $ | 2.06 | $ | 1.98 | ||||
| Balance Sheet Data | **** | **** | **** | **** | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| (in thousands) | Dec. 31 | Dec. 31 | ||||||||||
| 2019 | 2018 | |||||||||||
| Cash, cash equivalents and marketable equity securities | $ | 202,787 | $ | 183,470 | ||||||||
| Restricted cash and restricted marketable debt securities | **** | 158,082 | 184,266 | |||||||||
| Current assets | **** | 341,053 | 322,009 | |||||||||
| Property and equipment, net | **** | 535,430 | 534,650 | |||||||||
| Total assets | **** | 1,286,648 | 1,080,948 | |||||||||
| Current liabilities | **** | 194,763 | 157,924 | |||||||||
| Long-term debt | **** | - | 55,000 | |||||||||
| NHC stockholders' equity | **** | 778,593 | 733,278 | |||||||||
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| Selected Operating Statistics | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Year Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| December 31 | December 31 | |||||||||||
| 2019 | 2018^(1)^ | **** | 2019 | 2018^(1)^ | ||||||||
| (unaudited) | ||||||||||||
| Skilled Nursing Per Diems: | **** | **** | **** | **** | **** | **** | **** | **** | ||||
| Medicare | $ | 498.10 | $ | 463.14 | $ | 470.74 | $ | 462.66 | ||||
| Managed Care | **** | 403.30 | 389.49 | **** | 396.17 | 397.70 | ||||||
| Medicaid | **** | 200.71 | 197.87 | **** | 197.95 | 192.25 | ||||||
| Private Pay and Other | **** | 243.68 | 237.86 | **** | 242.99 | 238.57 | ||||||
| Average Skilled Nursing Per Diem | $ | 275.03 | $ | 269.42 | $ | 271.07 | $ | 270.22 | ||||
| Skilled Nursing Patient Days: | **** | **** | **** | **** | **** | **** | **** | **** | ||||
| Medicare | **** | 102,798 | 114,396 | **** | 428,367 | 473,642 | ||||||
| Managed Care | **** | 62,956 | 57,981 | **** | 251,691 | 240,090 | ||||||
| Medicaid | **** | 343,348 | 326,422 | **** | 1,332,025 | 1,271,511 | ||||||
| Private Pay and Other | **** | 174,979 | 182,758 | **** | 698,554 | 714,829 | ||||||
| Total Skilled Nursing Patient Days | **** | 684,081 | 681,557 | **** | 2,710,637 | 2,700,072 | ||||||
| ^(1)^A skilled nursing facility in Madisonville, Kentucky was sold in the fourth quarter of 2018.^^The per diems and patient days for this facility have been excluded in the 2018 column for comparative purposes. | ||||||||||||
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| The tables below provide reconciliations of GAAP to non-GAAP items (in thousands, except per share amounts; unaudited): | ||||||||||||
| Three Months Ended | Year Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31 | December 31 | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Net income attributable to National Healthcare Corporation | $ | 13,770 | $ | 18,152 | $ | 68,211 | $ | 58,964 | ||||
| Non-GAAP adjustments | ||||||||||||
| Unrealized losses (gains) on marketable equity securities | **** | 3,866 | (721 | ) | **** | (12,230 | ) | (1,138 | ) | |||
| Operating results for newly opened facilities not at full capacity^(2)^ | **** | (172 | ) | 1,604 | **** | 712 | 3,562 | |||||
| Stock-based compensation expense | **** | 430 | 240 | **** | 1,878 | 1,778 | ||||||
| Gain on acquisitions of equity method investments | **** | - | - | **** | (1,975 | ) | (2,050 | ) | ||||
| Gain on sale of real estate/healthcare facilities | **** | - | (1,668 | ) | **** | - | (1,668 | ) | ||||
| Legal costs and charges related to Caris' legal investigation | **** | - | - | **** | - | 8,364 | ||||||
| U.S. Tax Cuts and Jobs Act of 2017 adjustment | **** | - | - | **** | - | (1,434 | ) | |||||
| Provision (benefit) of income taxes on non-GAAP adjustments | **** | (1,072 | ) | 142 | **** | 3,020 | (2,005 | ) | ||||
| Non-GAAP Net income | $ | 16,822 | $ | 17,749 | $ | 59,616 | $ | 64,373 | ||||
| GAAP diluted earnings per share | $ | 0.89 | $ | 1.19 | $ | 4.44 | $ | 3.87 | ||||
| Non-GAAP adjustments | ||||||||||||
| Unrealized losses (gains) on marketable equity securities | **** | 0.19 | (0.03 | ) | **** | (0.59 | ) | (0.06 | ) | |||
| Operating results for newly opened facilities not at full capacity ^(2)^ | **** | (0.01 | ) | 0.08 | **** | 0.03 | 0.17 | |||||
| Stock-based compensation expense | **** | 0.02 | 0.01 | **** | 0.09 | 0.08 | ||||||
| Gain on acquisitions of equity method investments | **** | - | - | **** | (0.09 | ) | (0.13 | ) | ||||
| Gain on sale of real estate/healthcare facilities | **** | - | (0.09 | ) | **** | - | (0.08 | ) | ||||
| Legal costs and charges related to Caris' legal investigation | **** | - | - | **** | - | 0.46 | ||||||
| U.S. Tax Cuts and Jobs Act of 2017 adjustment | **** | - | - | **** | - | (0.09 | ) | |||||
| Non-GAAP diluted earnings per share | $ | 1.09 | $ | 1.16 | $ | 3.88 | $ | 4.22 | ||||
| ^(2)^ The newly opened facilities for the 2019 period presented consist of facilities opened from 2017 through 2019 (one skilled nursing facility, two assisted living facilities, and one memory care facility). The newly opened facilities for the 2018 period presented consist of facilities opened from 2016 through 2018 (two skilled nursing facilities and three assisted living facilities). | ||||||||||||
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