NHC(US:NHC)2024-11-07 21:59Operations and Facilities - As of September 30, 2024, the company operates or manages 80 skilled nursing facilities with a total of 10,349 licensed beds, 26 assisted living facilities with 1,413 units, and 34 homecare agencies[134]. - The overall census in owned and leased skilled nursing facilities for the three months ending September 30, 2024, was 88.3%, an increase from 88.1% for the same period a year ago[137]. - The company has 45 skilled nursing facilities rated 4 and 5 stars, representing 56% of its total facilities, compared to 36% in the industry[140]. - The average census at owned and leased skilled nursing facilities for the nine months ended September 30, 2024, was 88.6%, up from 87.8% in the same period last year[188]. Financial Performance - The Company reported net patient revenues of $328,674,000 for inpatient services and $35,648,000 for homecare and hospice services, totaling $340,198,000[161]. - Total costs and expenses for the Company amounted to $319,151,000, resulting in an income from operations of $21,047,000[161]. - For the three months ended September 30, 2023, net patient revenues were $277,005,000, with total costs and expenses of $275,460,000, leading to an income from operations of $13,025,000[162]. - The Company reported net patient revenues of $894,415,000 for inpatient services and $103,751,000 for homecare and hospice services, totaling $938,032,000[163]. - For the nine months ended September 30, 2023, net patient revenues were $804,617,000, with total costs and expenses of $803,616,000, resulting in an income from operations of $37,014,000[164]. - For the three months ended September 30, 2024, GAAP net income attributable to the company was $42,789,000, a significant increase from $10,388,000 in the same period of 2023, representing a 312.5% growth[171]. - Net operating revenues for the quarter increased by $51,669,000, or 18.7%, compared to the same period last year[173]. - The total costs and expenses for the three months ended September 30, 2024, increased by $43,691,000, or 15.9%, totaling $319,151,000 compared to $275,460,000 in 2023[178]. - Adjusted net income for the nine months ended September 30, 2024, was $50,909,000, compared to $38,978,000 for the same period in 2023, reflecting a 30.5% increase[185]. Revenue Sources and Changes - The average Medicare per diem rate for skilled nursing facilities increased by 4.9% for the first nine months of 2024 compared to the same period in 2023[148]. - The average Medicaid per diem increased by 10.2% for the first nine months of 2024 compared to the same period in 2023[152]. - The state of Tennessee's Medicaid increases are estimated to result in an additional revenue of approximately $11 million annually, or $2.75 million per quarter, starting from fiscal year 2025[148]. - The acquisition of the White Oak portfolio on August 1, 2024, contributed an increase of $37,299,000 in net patient revenues for the quarter ended September 30, 2024[175]. - Net patient revenues increased by $37,299,000 due to the acquisition of White Oak on August 1, 2024[189]. Cost Management - Salaries, wages, and benefits as a percentage of net operating revenues decreased from 63.3% in 2023 to 62.7% in 2024[179]. - The company experienced a 60% reduction in agency staffing expenses for the three months ended September 30, 2024, compared to the same period in 2023[179]. - Salaries, wages, and benefits as a percentage of net operating revenues decreased to 61.5% from 62.5% year-over-year[194]. - Total costs and expenses rose by $75,220,000, or 9.4%, to $878,836,000 for the nine months ended September 30, 2024[193]. Tax and Cash Flow - The effective income tax rate for the three months ended September 30, 2024, was 26.4%, with a provision of $15,338,000[184]. - The effective income tax rate for the nine months ended September 30, 2024, was 26.3%, with an income tax provision of $34,294,000[199]. - Net cash provided by operating activities was $94,514,000, an increase of 10.6% compared to $85,483,000 in the same period last year[202]. - Net cash used in investing activities totaled $225,048,000, a significant increase from $7,382,000 in the prior year[204]. - Net cash provided by financing activities was $119,640,000, compared to net cash used of $32,711,000 in the same period last year[205]. Market and Regulatory Changes - In fiscal year 2025, CMS projects a 1.7% decrease in payments to home health agencies, equating to a reduction of $280 million compared to the previous year[155]. - For fiscal year 2024, CMS issued a 3.1% rate increase for hospice services, amounting to $780 million, effective October 1, 2023[157]. - In fiscal year 2025, CMS announced a 2.9% rate increase for hospice services, totaling $790 million, effective October 1, 2024[158]. Non-GAAP Financial Measures - The Company provides non-GAAP financial measures to help investors assess ongoing operations and performance consistency across periods[165]. - The Company believes that excluding unrealized gains or losses on marketable equity securities and other specific items provides a clearer view of operational performance[166]. Marketable Securities - The fair value of marketable equity securities was approximately $187,755,000 as of September 30, 2024, with unrealized gains of $139.9 million[215].