10-Q 1 nhc20220930_10q.htm FORM 10-Q nhc20220930_10q.htm
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Table of Contents



 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

  

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to                  

  

Commission file number    001-13489

 

nhc20220930_10qimg001.jpg

 

(Exact name of registrant as specified in its Charter)

  

Delaware

52-2057472

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization

Identification No.)

  

100 E. Vine Street

Murfreesboro, TN

37130

(Address of principal executive offices)

(Zip Code)

  

(615) 8902020

Registrant's telephone number, including area code

  

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class

Trading

Symbols(s)

Name of each exchange on which

registered

Common, $0.01 par value

NHC

NYSE American

 

Indicate by check mark whether the registrant: (1) Has filed all reports required to be filed by Section 13 or 15(d), of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S–T (§ 232.405 of this chapter) during the preceding 12 months (or for such period that the registrant was required to submit such files).    Yes ☒      No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer

Accelerated filer ☐

  

Non–accelerated filer ☐

Smaller reporting company

  
 

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 accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Indicate by check mark whether the registrant is a shell company (as is defined in Rule 12b–2 of the Exchange Act). Yes    No ☒

 

15,344,103 shares of common stock of the registrant were outstanding as of November 1, 2022.

 



 

 

TABLE OF CONTENTS

 

 

 

PART I. FINANCIAL INFORMATION

 

Page

Item 1.

Financial Statements

3
     

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

25
     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

37
     

Item 4.

Controls and Procedures

37
 

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

38

     

Item 1A

Risk Factors

38
     

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

38
     

Item 3.

Defaults Upon Senior Securities

38
     

Item 4.

Mine Safety Disclosures

38
     

Item 5.

Other Information

38
     

Item 6.

Exhibits

39

 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

NATIONAL HEALTHCARE CORPORATION

Interim Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

 

  

Three Months Ended

September 30

  

Nine Months Ended

September 30

 
  

2022

  

2021

  

2022

  

2021

 
                 

Revenues and grant income:

                

Net patient revenues

 $260,247  $254,817  $776,661  $708,648 

Other revenues

  10,596   11,491   33,584   33,916 

Government stimulus income

  -   10,429   10,940   48,304 

Net operating revenues and grant income

  270,843   276,737   821,185   790,868 
                 

Cost and expenses:

                

Salaries, wages, and benefits

  173,198   170,235   518,828   483,263 

Other operating

  72,883   73,109   218,279   204,211 

Facility rent

  10,294   10,204   30,770   30,437 

Depreciation and amortization

  10,253   10,229   30,011   30,521 

Interest

  137   198   451   657 

Total costs and expenses

  266,765   263,975   798,339   749,089 
                 

Income from operations

  4,078   12,762   22,846   41,779 
                 

Other income:

                

Non–operating income

  2,731   3,399   8,451   15,245 

Gain on acquisition of equity method investment

  -   -   -   95,202 

Unrealized losses on marketable equity securities

  (11,056

)

  (23,797

)

  (11,479

)

  (23,227

)

                 

Income/(loss) before income taxes

  (4,247

)

  (7,636

)

  19,818   128,999 

Income tax (provision)/benefit

  1,140   4,090   (5,415

)

  (5,907

)

Net income/(loss)

  (3,107

)

  (3,546

)

  14,403   123,092 

Net (income)/loss attributable to noncontrolling interest

  678   198   1,689   (290

)

                 

Net income/(loss) attributable to National HealthCare Corporation

 $(2,429

)

 $(3,348

)

 $16,092  $122,802 
                 

Earnings/(loss) per share attributable to National HealthCare Corporation stockholders:

                

Basic

 $(0.16

)

 $(0.22

)

 $1.04  $8.00 

Diluted

 $(0.16

)

 $(0.22

)

 $1.04  $7.97 
                 

Weighted average common shares outstanding:

             

Basic

  15,445,569   15,364,043   15,438,375   15,347,042 

Diluted

  15,445,569   15,364,043   15,477,103   15,414,683 
                 

Dividends declared per common share

 $0.57  $0.52  $1.69  $1.56 

 

The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

 

 

 

NATIONAL HEALTHCARE CORPORATION

Interim Condensed Consolidated Statements of Comprehensive Income/(Loss)

(unaudited in thousands)

 

  

Three Months Ended

September 30

  

Nine Months Ended

September 30

 
  

2022

  

2021

  

2022

  

2021

 
                 

Net income/(loss)

 $(3,107

)

 $(3,546

)

 $14,403  $123,092 
                 

Other comprehensive loss:

                

Unrealized losses on investments in marketable debt securities

  (3,979

)

  (658

)

  (13,985

)

  (2,691

)

Reclassification adjustment for realized gains on sales of marketable debt securities

  -   (2

)

  (122

)

  (214

)

Income tax benefit related to items of other comprehensive income

  539   138   2,079   614 

Other comprehensive loss, net of tax

  (3,440

)

  (522

)

  (12,028

)

  (2,291

)

                 

Net (income)/loss attributable to noncontrolling interest

  678   198   1,689   (290

)

                 

Comprehensive income/(loss) attributable to National HealthCare Corporation

 $(5,869

)

 $(3,870

)

 $4,064  $120,511 

 

The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

 

 

 

NATIONAL HEALTHCARE CORPORATION

Interim Condensed Consolidated Balance Sheets

(in thousands)

 

  

September 30,

2022

  

December 31,

2021

 
  

unaudited

     

Assets

        

Current Assets:

        

Cash and cash equivalents

 $44,515  $107,607 

Restricted cash and cash equivalents, current portion

  25,838   10,407 

Marketable equity securities

  107,655   113,108 

Marketable debt securities

  24,559   35,310 

Restricted marketable equity securities

  20,341   26,958 

Restricted marketable debt securities, current portion

  5,014   20,727 

Accounts receivable

  99,003   96,124 

Inventories

  7,298   8,582 

Prepaid expenses and other assets

  10,306   7,815 

Total current assets

  344,529   426,638 
         

Property and Equipment:

        

Property and equipment, at cost

  1,076,116   1,064,337 

Accumulated depreciation and amortization

  (564,743

)

  (543,341

)

Net property and equipment

  511,373   520,996 
         

Other Assets:

        

Restricted cash and cash equivalents, less current portion

  1,847   1,729 

Restricted marketable debt securities, less current portion

  118,858   116,063 

Deposits and other assets

  13,039   4,499 

Operating lease right-of-use assets

  126,499   156,116 

Goodwill

  168,295   168,295 

Intangible assets

  7,038   7,038 

Notes receivable

  2,000   - 

Investments in unconsolidated companies

  2,081   2,022 

Total other assets

  439,657   455,762 

Total assets

 $1,295,559  $1,403,396 

 

The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

 

 

NATIONAL HEALTHCARE CORPORATION

Interim Condensed Consolidated Balance Sheets (continued)

(in thousands, except share and per share amounts)

 

  

September 30,

2022

  

December 31,

2021

 
  

unaudited

     

Liabilities and Stockholders Equity

        

Current Liabilities:

        

Trade accounts payable

 $19,443  $22,488 

Finance lease obligations, current portion

  4,911   4,695 

Operating lease liabilities, current portion

  28,611   27,574 

Accrued payroll

  77,342   106,698 

Amounts due to third party payors

  15,496   17,595 

Accrued risk reserves, current portion

  30,852   31,134 

Other current liabilities

  24,073   20,059 

Provider relief funds

  516   9,443 

Contract liabilities

  138   15,022 

Dividends payable

  8,774   8,493 

Total current liabilities

  210,156   263,201 
         

Finance lease obligations, less current portion

  2,134   5,845 

Operating lease liabilities, less current portion

  97,888   128,542 

Accrued risk reserves, less current portion

  72,858   66,914 

Refundable entrance fees

  6,171   7,011 

Deferred income taxes

  9,750   6,852 

Other noncurrent liabilities

  15,274   16,571 

Total liabilities

  414,231   494,936 
         

Equity:

        

Common stock, $.01 par value; 45,000,000 shares authorized; 15,393,103 and 15,452,033 shares, respectively, issued and outstanding

  153   154 

Capital in excess of par value

  228,522   232,167 

Retained earnings

  659,059   669,078 

Accumulated other comprehensive income/(loss)

  (10,423

)

  1,605 

Total National HealthCare Corporation stockholders’ equity

  877,311   903,004 

Noncontrolling interest

  4,017   5,456 

Total equity

  881,328   908,460 

Total liabilities and equity

 $1,295,559  $1,403,396 

 

The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

 

 

 

NATIONAL HEALTHCARE CORPORATION

Interim Condensed Consolidated Statements of Cash Flows

(unaudited in thousands)  

 

  

Nine Months Ended

September 30

 
  

2022

  

2021

 

Cash Flows From Operating Activities:

        

Net income

 $14,403  $123,092 

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation and amortization

  30,011   30,521 

Equity in earnings of unconsolidated investments

  (498

)

  (5,320

)

Distributions from unconsolidated investments

  439   6,314 

Unrealized losses on marketable equity securities

  11,479   23,227 

(Gains)/losses on sale of marketable securities

  756   (941

)

Gain on acquisition of equity method investment

  -   (95,202

)

Recovery of notes receivable  (3,728)  - 

Deferred income taxes

  4,977   (5,428

)

Stock–based compensation

  1,980   1,905 

Changes in operating assets and liabilities:

        

Accounts receivable

  (2,879

)

  1,195 

Inventories

  1,284   85 

Prepaid expenses and other assets

  (11,484

)

  (1,685

)

Trade accounts payable

  (3,045

)

  8,329 

Accrued payroll

  (29,356

)

  (3,480

)

Amounts due to third party payors

  (2,099

)

  100 

Accrued risk reserves

  5,662   4,287 

Provider relief funds

  (8,927

)

  (16,068

)

Contract liabilities

  (14,884

)

  (24,240

)

Other current liabilities

  4,014   2,110 

Other noncurrent liabilities

  (1,297

)

  (1,930

)

Net cash provided by/(used in) operating activities

  (3,192)  46,871 

Cash Flows From Investing Activities:

        

Purchases of property and equipment

  (24,563

)

  (25,774

)

Acquisition of equity method investment, net of cash acquired

  -   (28,713

)

Investments in unconsolidated companies and notes receivable

  (2,000)  (350

)

Proceeds from the sale of property and equipment

  4,175   - 

Collections of notes receivable

  4,181   8,620 

Purchases of marketable securities

  (28,717

)

  (95,749

)

Proceeds from sale of marketable securities

  38,114   89,129 

Net cash used in investing activities

  (8,810

)

  (52,837

)

Cash Flows From Financing Activities:

        

Principal payments under finance lease obligations

  (3,495

)

  (3,292

)

Dividends paid to common stockholders

  (25,830

)

  (24,010

)

Noncontrolling interest contributions

  250   - 

Issuance of common shares

  1,281   2,405 

Repurchase of common shares

  (6,907

)

  (278

)

Entrance fee refunds

  (840

)

  (594

)

Net cash used in financing activities

  (35,541

)

  (25,769

)

Net Decrease in Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

  (47,543

)

  (31,735

)

Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Beginning of Period

  119,743   158,502 

Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, End of Period

 $72,200  $126,767 
         

Balance Sheet Classifications:

        

Cash and cash equivalents

 $44,515  $112,462 

Restricted cash and cash equivalents

  27,685   14,305 

Total Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

 $72,200  $126,767 

 

The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

 

 

  

NATIONAL HEALTHCARE CORPORATION

Interim Condensed Consolidated Statements of Stockholders Equity

(in thousands, except share and per share amounts)

(unaudited)

 

For the nine months ended September 30, 2022:

 

  

Common Stock

  

Capital in

Excess of

  

Retained

  

Accumulated

Other

Comprehensive

  

Non-

controlling

  

Total

Stockholders’

 
  

Shares

  

Amount

  

Par Value

  

Earnings

  

Income (Loss)

  

Interest

  

Equity

 

Balance at January 1, 2022

  15,452,033  $154  $232,167  $669,078  $1,605  $5,456  $908,460 

Net income

           15,318      31   15,349 

Contributions attributable to noncontrolling interest

                 250   250 

Other comprehensive loss

              (5,060

)

     (5,060

)

Stock–based compensation

        712            712 

Shares sold – options exercised

  21,463                   

Repurchase of common shares

  (2,165

)

     (146

)

           (146

)

Dividends declared to common stockholders ($0.55 per share)

           (8,509

)

        (8,509

)

Balance at March 31, 2022

  15,471,331  $154  $232,733  $675,887  $(3,455

)

 $5,737   911,056 

Net income/(loss)

           3,203      (1,042

)

  2,161 

Other comprehensive loss

              (3,528

)

     (3,528

)

Stock–based compensation

        629            629 

Shares sold – options exercised

  16,554      1,120            1,120 

Dividends declared to common stockholders ($0.57 per share)

           (8,828

)

        (8,828

)

Balance at June 30, 2022

  15,487,885   154   234,482   670,262   (6,983

)

  4,695   902,610 

Net loss

            (2,429

)

     (678

)

  (3,107

)

Other comprehensive loss

               (3,440

)

     (3,440

)

Stock–based compensation

         639            639 

Shares sold – options exercised

  2,600      161            161 

Repurchase of common shares

  (97,382

)

  (1

)

  (6,760

)

           (6,761

)

Dividends declared to common stockholders ($0.57 per share)

            (8,774

)

        (8,774

)

Balance at September 30, 2022

  15,393,103   153   228,522   659,059   (10,423

)

  4,017   881,328 

 

For the nine months ended September 30, 2021: 

 

  

Common Stock

  

Capital in

Excess of

  

Retained

  

Accumulated

Other

Comprehensive

  

Non-

controlling

  

Total

Stockholders’

 
  

Shares

  

Amount

  

Par Value

  

Earnings

  

Income

  

Interest

  

Equity

 

Balance at January 1, 2021

  15,369,745  $153  $226,943  $563,024  $5,057  $3,083  $798,260 

Net income

           21,267      41   21,308 

Other comprehensive loss

              (1,922

)

     (1,922

)

Stock–based compensation

        496            496 

Shares sold – options exercised

  24,331   1   326            327 

Repurchase of common shares

  (3,936

)

     (278

)

           (278

)

Dividends declared to common stockholders ($0.52 per share)

           (8,003

)

        (8,003

)

Balance at March 31, 2021

  15,390,140  $154  $227,487  $576,288  $3,135  $3,124  $810,188 
                             

Net income

           104,883      447   105,330 

Contributions attributable to noncontrolling interest

                 2,840   2,840 

Other comprehensive income

              153      153 

Stock–based compensation

        683            683 

Shares sold – options exercised

  33,100      2,078            2,078 

Dividends declared to common stockholders ($0.52 per share)

           (8,020

)

        (8,020

)

Balance at June 30, 2021

  15,423,240  $154  $230,248  $673,151  $3,288  $6,411  $913,252 
                             

Net loss

           (3,348

)

     (198

)

  (3,546

)

Other comprehensive loss

              (522

)

     (522

)

Stock–based compensation

        726            726 

Dividends declared to common stockholders ($0.52 per share)

           (8,020

)

        (8,020

)

Balance at September 30, 2021

  15,423,240  $154  $230,974  $661,783  $2,766  $6,213  $901,890 

 

The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

 

 

NATIONAL HEALTHCARE CORPORATION

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2022

(unaudited) 

 

 

 

Note 1 Description of Business

 

National HealthCare Corporation (“NHC” or the “Company”) is a leading provider of senior health care services. As of September 30, 2022, we operate or manage, through certain affiliates, 68 skilled nursing facilities with a total of 8,726 licensed beds, 23 assisted living facilities, five independent living facilities, three behavioral health hospitals, 35 homecare agencies, and 29 hospice agencies. We operate specialized care units within certain of our healthcare centers such as Alzheimer's disease care units and sub-acute nursing units. In addition, we provide insurance services, management and accounting services, and we lease properties to operators of skilled nursing and assisted living facilities. We operate in 8 states and are located primarily in the southeastern United States.

 

 

 

Note 2 Summary of Significant Accounting Policies

 

The listing below is not intended to be a comprehensive list of all our significant accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. generally accepted accounting principles (“GAAP”), with limited need for management’s judgment in their application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. See our audited December 31, 2021 consolidated financial statements and notes thereto which contain accounting policies and other disclosures required by U.S. GAAP. Our audited December 31, 2021 consolidated financial statements are available at our web site: www.nhccare.com.

 

Basis of Presentation

 

The unaudited interim condensed consolidated financial statements to which these notes are attached include all normal, recurring adjustments which are necessary to fairly present the financial position, results of operations and cash flows of NHC. All significant intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of all entities controlled by NHC. The Company presents noncontrolling interest within the equity section of its consolidated balance sheets. The Company presents the amount of consolidated net income that is attributable to NHC and the noncontrolling interest in its consolidated statements of operations.

 

We assume that users of these interim financial statements have read or have access to the audited December 31, 2021 consolidated financial statements and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies, may be determined in that context. Accordingly, footnotes and other disclosures which would substantially duplicate the disclosure contained in our most recent annual report to stockholders have been omitted. This interim financial information is not necessarily indicative of the results that may be expected for a full year for a variety of reasons.

 

Estimates and Assumptions

 

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and could cause our reported net income to vary significantly from period to period, including but not limited to, the potential future effects of the novel coronavirus (“COVID-19”).

 

Net Patient Revenues and Accounts Receivable

 

Net patient revenues are derived from services rendered to patients for skilled and intermediate nursing, rehabilitation therapy, assisted living and independent living, home health care services, and hospice services. Net patient revenue is reported at the amount that reflects the consideration to which the Company expects to be entitled in exchange for providing patient services. These amounts are due from patients, governmental programs, and other third-party payors, and include variable consideration for retroactive revenue adjustments due to settlement of audits, reviews, and investigations.

 

The Company recognizes revenue as its performance obligations are completed. Routine services are treated as a single performance obligation satisfied over time as services are rendered. These routine services represent a bundle of services that are not capable of being distinct. The performance obligations are satisfied over time as the patient simultaneously receives and consumes the benefits of the healthcare services provided. Additionally, there may be ancillary services which are not included in the daily rates for routine services, but instead are treated as separate performance obligations satisfied at a point in time when those services are rendered.  Contract liabilities are recorded for payments the Company receives in which performance obligations have not been completed.

 

9

 

The Company determines the transaction price based on established billing rates reduced by explicit price concessions provided to third party payors. Explicit price concessions are based on contractual agreements and historical experience. The Company considers the patient's ability and intent to pay the amount of consideration upon admission. Credit losses are recorded as bad debt expense, which is included as a component of other operating expenses in the interim condensed consolidated statements of operations. Bad debt expense was $1,685,000 and $6,026,000 for the three and nine months ended September 30, 2022. For the three and nine months ended September 30, 2021, bad debt expense was $1,452,000 and $3,473,000, respectively. As of September 30, 2022, and December 31, 2021, the Company has recorded allowance for doubtful accounts of $7,841,000 and $6,411,000, respectively, as our best estimate of expected losses inherent in the accounts receivable balance.

 

Other Revenues

 

Other revenues include revenues from the provision of insurance services, management and accounting services to other long–term care providers, and rental income. Our insurance revenues consist of premiums that are generally paid in advance and then amortized into income over the policy period. We charge for management services based on a percentage of net revenues. We charge for accounting services based on a monthly fee or a fixed fee per bed of the healthcare center under contract. We record other revenues as the performance obligations are satisfied based on the terms of our contractual arrangements.

 

We recognize rental income based on the terms of our operating leases. Under certain of our leases, we receive variable rent, which is based on the increase in revenues of a lessee over a base year. We recognize variable rent annually or monthly, as applicable, when, based on the actual revenue of the lessee is earned.

 

Government Grants

 

We account for government grants in accordance with International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance, and as such, we recognize grant income on a systematic basis in line with the recognition of specific expenses and lost revenues for which the grants are intended to compensate.   

 

Segment Reporting

 

In accordance with the provisions of Accounting Standards Codification ("ASC") 280, Segment Reporting, the Company is required to report financial and descriptive information about its reportable operating segments. The Company has two reportable operating segments: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals, and (2) homecare and hospice services. The Company also reports an “all other” category that includes revenues from rental income, management and accounting services fees, insurance services, and costs of the corporate office. See Note 7 for further disclosure of the Company’s operating segments.

 

Other Operating Expenses

 

Other operating expenses include the costs of care and services that we provide to the residents of our facilities and the costs of maintaining our facilities. Our primary patient care costs include drugs, medical supplies, purchased professional services, food, and professional liability insurance and licensing fees. The primary facility costs include utilities and property insurance.

 

General and Administrative Costs

 

With the Company being a healthcare provider, the majority of our expenses are "cost of revenue" items. Costs that could be classified as "general and administrative" by the Company would include its corporate office costs, excluding stock-based compensation, which were $6,050,000 and $16,636,000 for the three and nine months ended September 30, 2022. General and administrative costs were $5,361,000 and $15,615,000 for the three and nine months ended September 30, 2021, respectively.

 

Long-Term Leases

 

The Company’s lease portfolio primarily consists of finance and operating real estate leases for certain skilled nursing facilities, assisted and independent living facilities, homecare and hospice offices, and pharmacy warehouses. The original terms of the leases typically range from two to fifteen years. Several of the real estate leases include renewal options which vary in length and may not include specific rent renewal amounts. We determine if an arrangement is a lease at inception of a contract. We determine the lease term by assuming exercise of renewal options that are reasonably certain.

 

The Company records right-of-use assets and liabilities for non-cancelable real estate operating leases with original or remaining lease terms in excess of one year. Leases with a lease term of 12 months or less at inception are not recorded and are expensed on a straight-line basis over the lease term. We recognize lease components and non-lease components together and not as separate parts of a lease for real estate leases.

 

10

 

Operating lease right-of-use assets and liabilities are recorded at the present value of the lease payments over the lease term. The present value of the lease payments are discounted using the incremental borrowing rate associated with each lease. The variable components of the lease payment that fluctuate with the operations of a health facility are not included in determining the right-of-use assets and lease liabilities. Rather, these variable components are expensed as incurred.

 

Property and Equipment

 

Property and equipment are recorded at cost. Depreciation is provided by the straight-line method over the expected useful lives of the assets estimated as follows: buildings and improvements, 20-40 years and equipment and furniture, 3-15 years. Leasehold improvements are amortized over periods that do not exceed the non-cancelable respective lease terms using the straight-line method.

 

Finance leases are recorded at cost. Finance leases are amortized in accordance with the provision codified within ASC 842, Leases. Amortization of finance lease assets is included in depreciation and amortization expense.

 

Business Combinations

 

We account for acquisitions using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Acquisitions are accounted for as purchases and are included in our consolidated financial statements from their respective acquisition dates. Assets acquired and liabilities assumed, if any, are measured at fair value on the acquisition date using the appropriate valuation method. Goodwill generated from acquisitions is recognized for the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed. In determining the fair value of identifiable assets, we use various valuation techniques. These valuation methods require us to make estimates and assumptions surrounding projected revenues and costs, future growth, and discount rates.

 

Goodwill and Other Intangible Assets

 

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill is not amortized but is subject to an annual impairment test. We perform our annual goodwill impairment assessment on the first day of the fourth quarter.  Tests are performed more frequently if events occur, or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.

 

The Company’s indefinite-lived intangible assets consist of trade names and certificates of need and licenses. The Company reviews indefinite-lived intangible assets for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable.

 

Accrued Risk Reserves  

 

We are self–insured for risks related to health insurance and have wholly–owned limited purpose insurance companies that insure risks related to workers’ compensation and general and professional liability insurance claims. The accrued risk reserves include a liability for reported claims and estimates for incurred but unreported claims. Our policy is to engage an external, independent actuary to assist in estimating our exposure for claims obligations (for both asserted and unasserted claims). We reassess our accrued risk reserves on a quarterly basis.

 

Professional liability remains an area of particular concern to us. The long-term care industry has seen an increase in personal injury/wrongful death claims based on alleged negligence by skilled nursing facilities and their employees in providing care to residents. The Company has been, and continues to be, subject to claims and legal actions that arise in the ordinary course of business, including potential claims related to patient care and treatment. A significant increase in the number of these claims, or an increase in the amounts due as a result of these claims could have a material adverse effect on our consolidated financial position, results of operations and cash flows. It is also possible that future events could cause us to make significant adjustments or revisions to these reserve estimates and cause our reported net income to vary significantly from period to period.

 

We are principally self-insured for incidents occurring in all centers owned or leased by us. The coverages include both primary policies and excess policies. In all years, settlements, if any, in excess of available insurance policy limits and our own reserves would be expensed by us.

 

11

 

Continuing Care Contracts

 

We have one continuing care retirement center (“CCRC”) within our operations. Residents at this retirement center may enter into continuing care contracts with us. The contracts provide that 10% of the resident entry fee becomes non-refundable upon occupancy, and the remaining refundable portion of the entry fee is calculated using the lessor of the price at which the apartment is re-assigned or 90% of the original entry fee, plus 40% of any appreciation if the apartment value exceeds the original resident’s entry fee.

 

Non-refundable fees are included as a component of the transaction price and are amortized into revenue over the actuarily determined remaining life of the resident, which is the expected period of occupancy by the resident. We pay the refundable portion of our entry fees to residents when they relocate from our community and the apartment is re-occupied. Refundable entrance fees are not included as part of the transaction price and are classified as noncurrent liabilities in our consolidated balance sheets. 

 

We also annually estimate the present value of the cost of future services and the use of facilities to be provided to the current CCRC residents and compare that amount with the balance of non-refundable deferred revenue from entrance fees received. If the present value of the cost of future services exceeds the related anticipated revenues, a liability is recorded with a corresponding charge to income. As of September 30, 2022, and December 31, 2021, we have recorded a future service obligation liability in the amount of $2,338,000. This obligation is reflected within other noncurrent liabilities in the interim condensed consolidated balance sheets. 

 

Other Noncurrent Liabilities

 

Other noncurrent liabilities include reserves primarily related to various uncertain income tax positions, deferred revenue, and obligations to provide future services to our CCRC residents. Deferred revenue includes the deferred gain on the sale of assets to National Health Corporation (“National”) and the non-refundable portion (10%) of CCRC entrance fees being amortized over the remaining life expectancies of the residents.

 

Noncontrolling Interest

 

The noncontrolling interest in a subsidiary is presented within total equity in the Company's interim condensed consolidated balance sheets. The Company presents the noncontrolling interest and the amount of consolidated net income attributable to NHC in its interim condensed consolidated statements of operations. The Company’s earnings per share is calculated based on net income attributable to NHC’s stockholders. The carrying amount of the noncontrolling interest is adjusted based on an allocation of the subsidiary earnings, contributions, and distributions.

 

Variable Interest Entities

 

We have equity interests in unconsolidated limited liability companies that operate various post-acute and senior healthcare businesses. We analyze our investments in these limited liability companies to determine if the company is considered a variable interest entity (“VIE”) and would require consolidation. To the extent that we own interests in a VIE and we (i) have the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent we own interests in a VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary.

 

The Company's maximum exposure to losses in its investments in unconsolidated VIEs cannot be quantified and may or may not be limited to its investment in the unconsolidated VIE. The investments in unconsolidated VIEs are classified as “investments in unconsolidated companies” in the interim condensed consolidated balance sheets.

 

Reclassifications

 

Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform to the presentation in the current-year financial statements. 

 

 

 

Note 3 Coronavirus Pandemic

 

In early March 2020, COVID-19, a disease caused by the novel strain of the coronavirus, was characterized as a pandemic by the World Health Organization. The U.S. government enacted several laws beginning in March 2020 designed to help the nation respond to the COVID-19 pandemic. The laws impacted healthcare providers in a variety of ways, but the largest legislation from a monetary relief perspective is the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). Through the CARES Act, as well as the Paycheck Protection Program and Health Care Enhancement Act ("PPPCHE"), the federal government allocated $178 billion to the Public Health and Social Services Emergency Fund, which is referred to as the Provider Relief Fund. The Provider Relief Fund is administered through grants and other mechanisms to skilled nursing providers, home health providers, hospitals, and other Medicare and Medicaid enrolled providers to cover unreimbursed health care related expenses or lost revenue attributable to the public health emergency resulting from COVID-19.    

 

12

 

The Provider Relief Fund grants come with terms and condition certifications in which all providers are required to submit documents to ensure the funds are used for healthcare-related expenses or lost revenue attributable to COVID-19. The Company recorded $0 and $10,429,000 of government stimulus income from the Provider Relief Funds for the three months ended September 30, 2022 and 2021, respectively. The Company recorded $10,940,000 and $48,304,000 of government stimulus income from the Provider Relief Funds for the nine months ended September 30, 2022 and 2021, respectively. The grant income was determined on a systemic basis in line with the recognition of specific expenses and lost revenues for which the grants are intended to compensate. The Company’s assessment of whether the terms and conditions for amounts received have been met for income recognition and the Company’s related income calculation considered all frequently asked questions and other interpretive guidance issued to date by the U.S. Department of Health and Human Services (“HHS”).

 

Additionally, as part of the CARES Act, the legislation included an expansion of the Medicare Accelerated and Advance Payment Program. The expanded Medicare Accelerated and Advance Payment Program is a streamlined version of existing policy that allows the Medicare Administrative Contractors (“MAC’s”) to issue up to three months of advance Medicare payments to help increase cash flow and liquidity to Medicare Part A and Part B providers in certain circumstances that include national emergencies. In the second quarter of 2020, we received approximately $51,253,000 as part of this program. These funds are applied against claims for services provided to Medicare patients after approximately one year from the date we received the funds. During the first eleven months after repayment began, repayment occurs through an automatic recoupment of twenty-five percent of Medicare payments. During the succeeding nine months, repayment occurs through an automatic recoupment of fifty percent of Medicare payments. Any remaining balance that was not paid through the recoupment process within twenty-nine months of receipt of the funds will be required to be paid on-demand, subject to an interest rate of four percent. As of September 30, 2022 and December 31, 2021, $138,000 and $15,022,000, respectively, of the accelerated payments remain and are reflected within contract liabilities in the interim condensed consolidated balance sheet.

 

The CARES Act and subsequent related legislation temporarily suspended Medicare sequestration beginning May 1, 2020 through March 31, 2022. The Medicare sequestration policy reduced fee-for-service Medicare payments by 2 percent. Beginning April 1, 2022, the sequestration reductions were 1% from April 1, 2022 through June 30, 2022. The full 2% reduction went back into effect July 1, 2022. The CARES Act extends the sequestration policy through 2030 in exchange for this temporary suspension, which the sequestration reduction for 2030 has been increased up to 3%.

 

The CARES Act also temporarily permitted employers to defer the deposit and payment of the employer’s portion of the social security taxes (6.2% of employee wages) that otherwise would have been due between March 27, 2020 and December 31, 2020. The provision requires that the deferred taxes be paid over a two-year period with half the amount required to be paid by December 31, 2021, and the other half by December 31, 2022. At September 30, 2022 and December 31, 2021, we have deferred $10,545,000 of the Company’s share of the social security taxes included in the current liabilities section of the consolidated balance sheet. 

 

We have also received supplemental Medicaid payments from many of the states in which we operate to help mitigate the incremental costs resulting from the COVID-19 public health emergency. We have recorded $4,773,000 and $5,053,000 in net patient revenues for these supplemental Medicaid payments for the three months ended September 30, 2022 and 2021, respectively. We have recorded $15,312,000 and $16,102,000 in net patient revenues for these supplemental Medicaid payments for the nine months ended September 30, 2022 and 2021, respectively.

 

 

 

Note 4 Net Patient Revenues

 

The Company disaggregates revenue from contracts with customers by service type and by payor.

 

Revenue by Service Type

 

The Company’s net patient services can generally be classified into the following two categories: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals, and (2) homecare and hospice services (in thousands).

 

  

Three Months Ended

September 30

  

Nine Months Ended

September 30

 
  

2022

  

2021

  

2022

  

2021

 

Net patient revenues:

                

Inpatient services

 $228,138  $222,884  $680,776  $644,986 

Homecare and hospice

  32,109   31,933   95,885   63,662 

Total net patient revenue

 $260,247  $254,817  $776,661  $708,648 

 

13

 

For inpatient and hospice services, revenue is recognized on a daily basis as each day represents a separate contract and performance obligation. For homecare, revenue is recognized when services are provided based on the number of days of service rendered in the period of care or on a per-visit basis. Typically, patients and third-party payors are billed monthly after services are performed or the patient is discharged, and payments are due based on contract terms.

 

As our performance obligations relate to contracts with a duration of one year or less, the Company is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients are typically under no obligation to remain admitted in our facilities or under our care.  As the period between the time of service and time of payment is typically one year or less, the Company did not adjust for the effects of a significant financing component.

 

Revenue by Payor

 

Certain groups of patients receive funds to pay the cost of their care from a common source. The following table sets forth sources of net patient revenues for the periods indicated:

 

  

Three Months Ended

September 30

  

Nine Months Ended

September 30

 

Source

 

2022

  

2021

  

2022

  

2021

 

Medicare

  37%

 

  36%

 

  37%

 

  35%

 

Managed Care

  9%

 

  10%

 

  10%

 

  12%

 

Medicaid

  29%

 

  30%

 

  28%

 

  29%

 

Private Pay and Other

  25%

 

  24%

 

  25%

 

  24%

 

Total

  100%

 

  100%

 

  100%

 

  100%

 

 

Medicare covers skilled nursing services for beneficiaries who require nursing care and/or rehabilitation services following a hospitalization of at least three consecutive days (there is temporary relief from the three-day hospital stay during the COVID-19 emergency). For each eligible day a Medicare beneficiary is in a skilled nursing facility, Medicare pays the facility a daily payment, subject to adjustment for certain factors such as a wage index in the geographic area. The payment covers all services provided by the skilled nursing facility for the beneficiary that day, including room and board, nursing, therapy and drugs, as well as an estimate of capital–related costs to deliver those services.

 

For homecare services, Medicare pays based on the acuity level of the patient and based on periods of care. A period of care is defined as a length of care up to 30 days with multiple continuous periods allowed. The services covered by the payment include all disciplines of care, in addition to medical supplies, within the scope of the home health benefit.

 

For hospice services, Medicare pays a daily rate to cover the hospice’s costs for providing services included in the patient care plan. Medicare makes daily payments based on 1 of 4 levels of hospice care. All hospice care and services offered to patients and their families must follow an individualized written plan of care that meets the patient’s needs.

 

Our hospice service revenue is subject to certain limitations on payments from Medicare. We are subject to an inpatient cap limit and an overall Medicare payment cap for each provider number. We monitor these caps on a provider-by-provider basis and estimate amounts due back to Medicare if we estimate a cap has been exceeded. If applicable, we record these cap adjustments as a reduction to revenue.

 

Medicaid is operated by individual states with the financial participation of the federal government. The states in which we operate currently use prospective cost–based reimbursement systems. Under cost–based reimbursement systems, the skilled nursing facility is reimbursed for the reasonable direct and indirect allowable costs it incurred in a base year in providing routine resident care services as defined by the program.

 

Private pay, managed care, and other payment sources include commercial insurance, individual patient funds, managed care plans and the Veterans Administration. Private paying patients, private insurance carriers and the Veterans Administration generally pay based on the healthcare center's charges or specifically negotiated contracts. For private pay patients in skilled nursing, assisted living and independent living facilities, the Company bills for room and board charges, with the remittance being due on receipt of the statement and generally by the 10th day of the month the services are performed.

 

Certain managed care payors for homecare services pay on a per-visit basis. This revenue is recorded on an accrual basis based upon the date of services at amounts equal to its established or estimated per-visit rates.     

 

Contract Liabilities

 

Included in the Company’s interim condensed consolidated balance sheets are contract liabilities, which represent payments the Company receives in advance of services provided. As of September 30, 2022 and December 31, 2021, the Company has recorded $138,000 and $15,022,000, respectively, in contract liabilities related to receipts from the Medicare Accelerated and Advance Payment Program.  Recoupment of the accelerated payments began in the second quarter of 2021.

 

14

 

A summary of the contract liabilities are as follows (in thousands):

 

Balance at December 31, 2021

 $15,022 

Payments received

  - 

Payments recouped

  (14,884

)

Balance at September 30, 2022

 $138 

 

Third Party Payors

 

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Noncompliance with such laws and regulations can be subject to regulatory actions including fines, penalties, and exclusion from the Medicare and Medicaid programs. We believe that we are following all applicable laws and regulations.

 

Medicare and Medicaid program revenues, as well as certain Managed Care program revenues, are subject to audit and retroactive adjustment by government representatives or their agents. Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor and the Company’s historical settlement activity, including an assessment to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known, or as years are settled or are no longer subject to such audits, reviews, and investigations. We believe that any differences between the net revenues recorded, and final determination will not materially affect the consolidated financial statements. We have made provisions of approximately $15,496,000 and $17,595,000 as of September 30, 2022 and December 31, 2021, respectively, for various Medicare, Medicaid, and Managed Care claims reviews and current and prior year cost reports.

 

 

 

Note 5 Other Revenues

 

Other revenues are outlined in the table below. Revenues from rental income include health care real estate properties owned by us and leased to third party operators. Revenues from management and accounting services include fees provided to manage and provide accounting services to other healthcare operators. Revenues from insurance services include premiums for workers’ compensation and professional liability insurance policies that our wholly owned insurance subsidiaries have written for certain healthcare operators to which we provide management or accounting services. "Other" revenues include miscellaneous health care related earnings (in thousands).

 

  

Three Months Ended

September 30

  

Nine Months Ended

September 30

 
  

2022

  

2021

  

2022

  

2021

 

Rental income

 $5,830  $5,792  $17,642  $16,954 

Management and accounting services fees

  3,922   4,244   11,993   12,703 

Insurance services

  1,015   1,291   3,497   3,832 

Other

  (171

)

  164   452   427 

Total other revenues

 $10,596  $11,491  $33,584  $33,916 

 

Rental Income

 

The Company leases real estate assets consisting of skilled nursing facilities and assisted living facilities to third party operators. Additionally, we sublease four Florida skilled nursing facilities included in our lease from National Health Investors (“NHI”) as noted in Note 8 – Long Term Leases.

 

Management Fees from National Health Corporation

 

We manage five skilled nursing facilities owned by National Health Corporation (“National”). We recognized management fees and interest on management fees from these facilities of $1,029,000 and $970,000 for the three months ended September 30, 2022 and 2021, respectively. We recognized management fees and interest on management fees of $3,012,000 and $2,806,000 from these facilities for the nine months ended September 30, 2022 and 2021, respectively.

 

15

 

Insurance Services

 

For workers’ compensation insurance services, the premium revenues reflected in the interim condensed consolidated statements of operations for the three months ended September 30, 2022 and 2021 were $496,000 and $780,000, respectively. The premium revenues reflected in the interim condensed consolidated statements of operations for the nine months ended September 30, 2022 and 2021 were $1,939,000 and $2,298,000, respectively. Associated losses and expenses including those for self-insurance are included in the interim condensed consolidated statements of operations as "Salaries, wages and benefits."

 

For professional liability insurance services, the premium revenues reflected in the interim condensed consolidated statements of operations for the three months ended September 30, 2022 and 2021 were $519,000 and $511,000, respectively. The premium revenues reflected in the interim condensed consolidated statements of operations for the nine months ended September 30, 2022 and 2021 were $1,558,000 and $1,534,000, respectively. Associated losses and expenses including those for self–insurance are included in the interim condensed consolidated statements of operations as "Other operating costs and expenses".

 

 

 

Note 6 NonOperating Income

 

Non–operating income includes equity in earnings of unconsolidated investments, dividends and other realized gains and losses on sales of marketable securities, and interest income (in thousands).

 

  

Three Months Ended

September 30

  

Nine Months Ended

September 30

 
  

2022

  

2021

  

2022

  

2021

 

Dividends and net realized gains and losses on sales of securities

 $1,324  $2,365  $4,381  $6,242 

Interest income

  1,373   1,020   3,572   3,683 

Equity in earnings of unconsolidated investments

  34   14   498   5,320 

Total non-operating income

 $2,731  $3,399  $8,451  $15,245 

 

Caris HealthCare, L.P.

 

On June 11, 2021, the Company acquired the remaining 24.9% equity interest in Caris HealthCare, L.P. (“Caris”). Prior to the June 11, 2021 acquisition date, Caris was our most significant equity method investment with a 75.1% non-controlling ownership interest. From the respective acquisition date, Caris’ financial information is now included in the Company’s consolidated financial statements and is no longer accounted for as an equity method investment.

 

 

 

Note 7 Business Segments

 

The Company has two reportable operating segments: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals; and (2) homecare and hospice services. These reportable operating segments are consistent with information used by the Company’s Chief Executive Officer, as chief operating decision maker (“CODM”), to assess performance and allocate resources.

 

The Company also reports an “all other” category that includes revenues from rental income, management and accounting services fees, insurance services, and costs of the corporate office. For additional information on these reportable segments see Note 2Summary of Significant Accounting Policies.

 

The Company’s CODM evaluates performance and allocates capital resources to each segment based on an operating model that is designed to improve the quality of patient care and profitability of the Company while enhancing long-term shareholder value. The CODM does not review assets by segment in his resource allocation and therefore, assets by segment are not disclosed below.

 

16

 

The following table sets forth the Company’s unaudited interim condensed consolidated statements of operations by business segment (in thousands):

 

  

Three Months Ended September 30, 2022

 
  

Inpatient
Services

  

Homecare

and Hospice

  

All Other

  

Total

 

Revenues and grant income:

                

Net patient revenues

 $228,138  $32,109  $-  $260,247 

Other revenues

  (198

)

  -   10,794   10,596 

Net operating revenues and grant income

  227,940   32,109   10,794   270,843 
                 

Costs and expenses:

                

Salaries, wages, and benefits

  144,047   19,581   9,570   173,198 

Other operating

  66,522   6,310   51   72,883 

Rent

  8,088   575   1,631   10,294 

Depreciation and amortization

  9,198   248   807   10,253 

Interest

  137   -   -   137 

Total costs and expenses

  227,992   26,714   12,059   266,765 
                 

Income/(loss) from operations

  (52

)

  5,395   (1,265)  4,078 

Non-operating income

  -   -   2,731   2,731 

Unrealized losses on marketable equity securities

  -   -   (11,056

)

  (11,056

)

                 

Income/(loss) before income taxes

 $(52

)

 $5,395  $(9,590

)

 $(4,247

)

 

 

  

Three Months Ended September 30, 2021

 
  

Inpatient
Services

  

Homecare

and Hospice

  

All Other

  

Total

 

Revenues:

                

Net patient revenues

 $222,884  $31,933  $-  $254,817 

Other revenues

  128   -   11,363   11,491 

Government stimulus income

  10,429   -   -   10,429 

Net operating revenues and grant income

  233,441   31,933   11,363   276,737 
                 

Costs and expenses:

                

Salaries, wages, and benefits

  141,318   18,771   10,146   170,235 

Other operating

  64,755   5,618   2,736   73,109 

Rent

  7,998   594   1,612   10,204 

Depreciation and amortization

  9,300   118   811   10,229 

Interest

  198   -   -   198 

Total costs and expenses

  223,569   25,101   15,305   263,975 
                 

Income/(loss) from operations

  9,872   6,832   (3,942

)

  12,762 

Non-operating income

  -   -   3,399   3,399 

Unrealized losses on marketable equity securities

  -   -   (23,797

)

  (23,797

)

                 

Income/(loss) before income taxes

 $9,872  $6,832  $(24,340

)

 $(7,636

)

 

17

 
  

Nine Months Ended September 30, 2022

 
  

Inpatient
Services

  

Homecare

and Hospice

  

All Other

  

Total

 

Revenues:

                

Net patient revenues

 $680,776  $95,885  $-  $776,661 

Other revenues

  15   -   33,569   33,584 

Government stimulus income

  10,940   -   -   10,940 

Net operating revenues and grant income

  691,731   95,885   33,569   821,185 
                 

Costs and expenses:

                

Salaries, wages, and benefits

  435,322   58,007   25,499   518,828 

Other operating

  192,791   19,848   5,640   218,279 

Rent

  24,498   1,759   4,513   30,770 

Depreciation and amortization

  27,120   472   2,419   30,011 

Interest

  451   -   -   451 

Total costs and expenses

  680,182   80,086   38,071   798,339 
                 

Income/(loss) from operations

  11,549   15,799   (4,502

)

  22,846 

Non-operating income

  -   -   8,451   8,451 

Unrealized losses on marketable equity securities

  -   -   (11,479

)

  (11,479

)

                 

Income/(loss) before income taxes

 $11,549  $15,799  $(7,530

)

 $19,818 

 

 

  

Nine Months Ended September 30, 2021

 
  

Inpatient
Services

  

Homecare

and Hospice

  

All Other

  

Total

 

Revenues and grant income:

                

Net patient revenues

 $644,986  $63,662  $-  $708,648 

Other revenues

  324   -   33,592   33,916 

Government stimulus income

  48,304   -   -   48,304 

Net operating revenues and grant income

  693,614   63,662   33,592   790,868 
                 

Costs and expenses:

                

Salaries, wages, and benefits

  407,534   39,922   35,807   483,263 

Other operating

  185,860   10,291   8,060   204,211 

Rent

  24,129   1,478   4,830   30,437 

Depreciation and amortization

  27,790   299   2,432   30,521 

Interest

  657   -   -   657 

Total costs and expenses

  645,970   51,990   51,129   749,089 
                 

Income/(loss) from operations

  47,644   11,672   (17,537

)