NHC(NHC) - 2025 Q2 - Quarterly Results

Executive Summary NHC reported strong Q2 2025 financial performance driven by revenue growth and strategic acquisitions, despite a GAAP net income decrease due to non-operating factors Financial Highlights (Q2 2025) NHC reported a significant increase in net operating revenues and adjusted net income for the second quarter of 2025, despite a decrease in GAAP net income compared to the prior year period | Metric | Q2 2025 (USD) | Q2 2024 (USD) | YoY Change | | :---------------------- | :-------- | :-------- | :--------- | | Net Operating Revenues | $374,910,000 | $300,658,000 | +24.7% | | GAAP Net Income | $23,722,000 | $26,844,000 | -11.6% | | Adjusted Net Income | $25,710,000 | $15,612,000 | +64.7% | | GAAP Diluted EPS | $1.52 | $1.73 | -12.1% | | Adjusted Diluted EPS | $1.65 | $1.00 | +65.0% | Operational Drivers (Q2 2025) The increase in net operating revenues for Q2 2025 was primarily driven by growth in same-facility revenues and the strategic acquisition of White Oak Management, Inc - Same-facility net operating revenues increased by 9.6% year-over-year[1] - The August 1, 2024 acquisition of White Oak Management, Inc. contributed to the revenue growth[1] Company Overview National HealthCare Corporation (NHC) is the oldest publicly traded senior health care company, offering a wide range of facilities and services Business Operations National HealthCare Corporation (NHC) is the nation's oldest publicly traded senior health care company, operating a comprehensive range of facilities and services for themselves and third parties - As of August 1, 2025, NHC affiliates operate 80 skilled nursing facilities with 10,329 beds[4] - The company also operates 26 assisted living communities (1,413 units), 9 independent living communities (777 units), 3 behavioral health hospitals, 34 homecare agencies, and 33 hospice agencies[4] - Additional services include Alzheimer's and memory care units, pharmacy services, rehabilitation services, and management/accounting services for third-party post-acute operators[4] Financial Performance Analysis NHC's Q2 2025 financial performance features strong revenue growth, improved operational income, and balance sheet enhancements Consolidated Statements of Operations NHC's Q2 2025 consolidated statements of operations show strong revenue growth and improved income from operations, but GAAP net income was impacted by unrealized losses on marketable equity securities compared to gains in the prior year Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | Metric | 2025 (USD thousands) | 2024 (USD thousands) | YoY Change | | :--------------------------------- | :----- | :----- | :--------- | | Net operating revenues and grant income | $374,910 | $300,658 | +24.7% | | Salaries, wages and benefits | $226,534 | $180,076 | +25.8% | | Income from operations | $34,090 | $22,520 | +51.4% | | Unrealized gains/(losses) on marketable equity securities | $(5,061) | $9,124 | N/A | | Net income attributable to NHC | $23,722 | $26,844 | -11.6% | | Diluted EPS | $1.52 | $1.73 | -12.1% | Consolidated Statements of Operations (Six Months Ended June 30, in thousands) | Metric | 2025 (USD thousands) | 2024 (USD thousands) | YoY Change | | :--------------------------------- | :----- | :----- | :--------- | | Net operating revenues and grant income | $748,607 | $597,834 | +25.2% | | Salaries, wages and benefits | $454,664 | $363,214 | +25.2% | | Income from operations | $64,857 | $38,195 | +69.8% | | Unrealized gains/(losses) on marketable equity securities | $5,921 | $23,523 | -74.8% | | Net income attributable to NHC | $55,927 | $53,057 | +5.4% | | Diluted EPS | $3.59 | $3.42 | +4.9% | - Dividends declared per common share increased to $0.64 in Q2 2025 from $0.61 in Q2 2024[8] Balance Sheet Highlights As of June 30, 2025, NHC demonstrated improved liquidity and increased stockholders' equity, while reducing its overall debt position compared to December 31, 2024 Balance Sheet Data (in thousands) | Metric | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | Change (USD thousands) | | :--------------------------------------- | :-------------- | :---------------- | :----- | | Cash, cash equivalents and marketable securities | $257,628 | $216,185 | +$41,443 | | Total assets | $1,562,220 | $1,524,429 | +$37,791 | | Current and long-term debt | $110,000 | $137,000 | -$27,000 | | NHC stockholders' equity | $1,021,905 | $980,161 | +$41,744 | GAAP to Non-GAAP Reconciliation NHC provides non-GAAP adjustments to its financial results to offer a clearer view of core operational performance, excluding items such as unrealized gains/losses on marketable equity securities and one-time gains/expenses Non-GAAP Net Income Reconciliation (Three Months Ended June 30, in thousands) | Item | 2025 (USD thousands) | 2024 (USD thousands) | | :------------------------------------------ | :----- | :----- | | Net income attributable to NHC (GAAP) | $23,722 | $26,844 | | Unrealized (gains)/losses on marketable equity securities | $5,061 | $(9,124) | | Gain on sale of property and equipment | $(3,606) | - | | Acquisition-related expenses | - | $2,194 | | Employee retention credit | - | $(9,445) | | Non-GAAP Net income | $25,710 | $15,612 | Non-GAAP Diluted EPS Reconciliation (Three Months Ended June 30) | Item | 2025 (USD) | 2024 (USD) | | :------------------------------------------ | :----- | :----- | | GAAP diluted earnings per share | $1.52 | $1.73 | | Unrealized (gains)/losses on marketable equity securities | $0.32 | $(0.59) | | Gain on sale of property and equipment | $(0.23) | - | | Acquisition-related expenses | - | $0.14 | | Employee retention credit | - | $(0.61) | | Non-GAAP diluted earnings per share | $1.65 | $1.00 | Operational Performance Analysis NHC's Q2 2025 operational performance reflects significant increases in skilled nursing per diem rates and patient days Skilled Nursing Per Diems NHC experienced increases in average skilled nursing per diem rates across all payer types for both the second quarter and year-to-date periods of 2025, reflecting improved reimbursement rates Skilled Nursing Per Diems (Three Months Ended June 30) | Payer Type | 2025 (USD) | 2024 (USD) | Change (USD) | | :-------------------- | :----- | :----- | :----- | | Medicare | $614.85 | $577.71 | +$37.14 | | Managed Care | $486.17 | $447.96 | +$38.21 | | Medicaid | $286.43 | $264.49 | +$21.94 | | Private Pay and Other | $341.34 | $312.91 | +$28.43 | | Average Skilled Nursing Per Diem | $361.42 | $338.86 | +$22.56 | Skilled Nursing Patient Days Total skilled nursing patient days saw a substantial increase in Q2 2025 and YTD 2025 across all payer categories, indicating higher utilization of NHC's facilities, even after exiting some facilities in the prior year Skilled Nursing Patient Days (Three Months Ended June 30) | Payer Type | 2025 (Days) | 2024 (Days) | Change (Days) | | :-------------------- | :------- | :------- | :------- | | Medicare | 83,615 | 74,602 | +9,013 | | Managed Care | 83,015 | 62,957 | +20,058 | | Medicaid | 368,687 | 279,504 | +89,183 | | Private Pay and Other | 194,202 | 150,234 | +43,968 | | Total Skilled Nursing Patient Days | 729,519 | 567,297 | +162,222 | - For the six months ended June 30, 2024, three skilled nursing facilities in Missouri that NHC exited on March 1, 2024, accounted for 20,267 patient days[9] Additional Disclosures This section clarifies non-GAAP financial measures and discusses risks associated with forward-looking statements Non-GAAP Financial Measures Explanation NHC provides non-GAAP financial measures to offer investors a more consistent and accurate assessment of the company's ongoing operations and performance across periods, supplementing GAAP information - Non-GAAP figures are presented to help investors more accurately assess the ongoing nature of operations and measure performance consistently[5] - This additional non-GAAP information is not intended to be considered in isolation or as a substitute for GAAP financial information[5] Forward-Looking Statements The press release includes forward-looking statements that are subject to various risks and uncertainties, as detailed in NHC's filings with the S.E.C - Statements in the press release that are not historical facts are forward-looking statements[6] - These statements involve risks and uncertainties and are not guarantees of future performance[6] - Risks and uncertainties are detailed in reports filed with the S.E.C., including Forms 8-K, 10-Q, and 10-K[6]