NHC(US:NHC)2023-11-02 20:19Operations and Facilities - As of September 30, 2023, the company operates or manages 68 skilled nursing facilities with a total of 8,732 licensed beds, 26 assisted living facilities with 1,501 units, and 35 homecare agencies[135]. - The overall census in owned and leased skilled nursing facilities for the three months ending September 30, 2023, was 88.1%, up from 83.7% for the same period a year ago[143]. - The company has 39 skilled nursing facilities rated 4 and 5 stars, representing 57% of its total skilled nursing facilities, compared to 36% in the industry[147]. - The company has undertaken various development activities, including the acquisition of a 66-bed skilled nursing facility in Nashville, TN, in May 2023[149]. Financial Performance - The company reported a total net operating revenue of $288.485 million for the three months ended September 30, 2023, compared to $270.843 million for the same period in 2022, reflecting a year-over-year increase of approximately 6.5%[169]. - For the three months ended September 30, 2023, net operating revenues increased by 6.5% compared to the same period in 2022, primarily driven by occupancy increases in skilled nursing facilities and higher per diem rates from government payors[178]. - For the nine months ended September 30, 2023, net patient revenues reached $804.617 million, up from $776.661 million in the same period of 2022, indicating a growth of approximately 3.7%[170]. - The company’s non-GAAP net income for the three months ended September 30, 2023, was $13.250 million, compared to $7.783 million for the same period in 2022, representing an increase of approximately 70.3%[174]. - GAAP net income attributable to NHC for the quarter was $10,388,000, a significant improvement from a net loss of $2,429,000 in the same quarter of 2022[179]. - GAAP net income attributable to NHC for the nine months was $38,392,000, compared to $16,092,000 for the same period in 2022[193]. Revenue Sources - Inpatient services generated net patient revenues of $243.865 million, while homecare and hospice services contributed $33.140 million for the three months ended September 30, 2023, totaling $277.005 million in net patient revenues[169]. - The company recorded $0 of government stimulus income from the Provider Relief Funds for the three months ended September 30, 2023, compared to $10,940,000 for the same period in 2022[141]. - The company has recorded $4,232,000 in net patient revenues for supplemental Medicaid payments for the three months ended September 30, 2023, compared to $4,773,000 for the same period in 2022[142]. Costs and Expenses - Total costs and expenses for the three months ended September 30, 2023, were $275.460 million, resulting in an income from operations of $13.025 million[169]. - Total costs and expenses for the nine months ended September 30, 2023, increased by $5,277,000, or 0.7%, to $803,616,000[198]. - Salaries, wages, and benefits increased by $9,466,000, or 5.5%, to $182,664,000, but as a percentage of net operating revenues, it decreased to 63.3% from 63.9%[186]. Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2023, was $85,483,000, a significant increase from cash used in operating activities of $3,192,000 in the same period last year, representing a change of 2,778.0%[207]. - Cash used in investing activities totaled $7,382,000 for the nine months ended September 30, 2023, compared to $8,810,000 for the same period in 2022, reflecting a decrease of 16.2%[209]. - Cash used in financing activities was $32,711,000 for the nine months ended September 30, 2023, down from $35,541,000 in the same period last year, a reduction of 8.0%[210]. - Cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of the period increased to $120,255,000, up 66.6% from $72,200,000 at the end of the same period last year[206]. - The company expects to meet its short-term liquidity requirements primarily from cash flows from operating activities, with current cash on hand of $100,308,000 and marketable securities of $110,186,000[211]. Regulatory and Payment Updates - The fiscal year 2024 rule equates to a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to skilled nursing facilities compared to 2023 levels[153]. - Effective July 1, 2023, the state of Tennessee implemented specific individual nursing facility increases, estimated to result in approximately $15,000,000 annually, or $3,750,000 per quarter[156]. - The average Medicaid per diem increased by 7.9% for the first nine months of 2023 compared to the same period in 2022[160]. - The company anticipates a decrease in Medicare payments to home health agencies by 2.2% or $375 million for fiscal year 2024, relative to the prior year[163]. - The hospice payment update for fiscal year 2024 includes a rate increase of 3.1%, or $780 million, effective October 1, 2023[165]. - The statutory aggregate cap amount for hospice payments for FY2024 is set at $33,494, up from $32,487 in FY2023[165]. Investments and Marketable Securities - The fair value of marketable equity securities was approximately $125,820,000 as of September 30, 2023, with an investment in NHI comprising about $83,700,000, or 66.5% of the total fair value[220]. - At September 30, 2023, the company had available-for-sale marketable debt securities amounting to $126,911,000, allowing flexibility in responding to interest rate fluctuations[216]. - The company reported net unrealized gains of $71,600,000 in its equity securities, with $59,000,000 related to its investment in NHI[220]. - The company does not currently use derivative instruments to hedge interest rate exposure, and any future use would require approval from the Investment Committee of the Board of Directors[218].