NATIONAL HEALTHCARE CORP
For the period ended Mar 31, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
NHC$208.85+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001437749-24-033970
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001437749-25-015499
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 87 current paragraphs.
52 unchanged; 30 reworded; 5 added; 30 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 21 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
On August 1, 2024, the Company purchased White Oak Management, Inc. ("White Oak"). The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, four independent living facilities, and a long-term care pharmacy. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.
Current report
Congress is currently considering major cuts to federal spending on Medicaid. One of the options under consideration is to limit the amount of federal Medicaid funding they receive by levying taxes on providers and thereby increasing their reimbursement rates. Restricting these “provider taxes” would create financing gaps for states which could result in higher state taxes, reductions in Medicaid eligibility, lower provider payment rates, and fewer covered benefits.
Current report
Results for the quarter ended March 31, 2025 compared to the first quarter of 2024 include a 25.7% increase in net operating revenues. The net operating revenues increase was due to an 8.5% increase in same-facility net operating revenues, as well as the August 1, 2024 acquisition of White Oak.
Current report
Net patient revenues increased $75,784,000, or 26.5%, compared to the same period last year.
Current report
Non–operating income decreased by $1,606,000 compared to the same period last year, as further detailed in Note 5 to our interim condensed consolidated financial statements. In January 2024, the Company sold its ownership interest in a homecare agency located in Nashville, Tennessee. The total consideration paid to the company was $2,100,000, which resulted in a gain of $1,024,000.
Removed paragraphs (30)
Previous report
On August 1, 2024, the Company purchased the White Oak portfolio, including its long-term care pharmacy. The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, and four independent living facilities. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.
Previous report
Effective July 1, 2024 and for the fiscal year 2025, the state of Missouri has proposed specific individual nursing facility increases, subject to approval from Centers for Medicare and Medicaid Services ("CMS"). Upon CMS' approval, we estimate the resulting increase in revenue for the 2025 fiscal year will be approximately $6,600,000 annually, or $1,650,000 per quarter.
Previous report
We have also received from many of the states in which we operate a supplemental Medicaid payment to help mitigate the inflationary labor and medical supplies costs resulting from the pandemic. We have recorded $5,267,000 and $4,232,000 in net patient revenues for these supplemental Medicaid payments for the three months ended September 30, 2024 and 2023, respectively. We have recorded $11,314,000 and $15,3620,000 in net patient revenues for these supplemental Medicaid payments for the nine months ended September 30, 2024 and 2023, respectively.
Previous report
In November 2023, CMS released its final rule outlining fiscal year 2024 Medicare payment rates. CMS projects payments to home health agencies in fiscal year 2024 will increase in aggregate by 0.8%, or $140 million. The increase is the result of a 3.3% market basket update, reduced by a 0.3% productivity adjustment. The increase is offset by a behavioral adjustment that will cut payments by a net 2.6%. The behavioral adjustment was designed to achieve budget-neutral implementation of the PDPM. Finally, CMS also adjusted the fixed-dollar loss ratio for outlier payments, which will increase payments by 0.4%.
Previous report
The operating results for newly opened facilities or agencies not at full capacity include newly constructed healthcare facilities or agencies that are still considered in the start-up phase, which are two hospice agencies for the three and nine months ended September 30, 3024. For the three and nine months ended September 30, 2023, included are two behavioral health hospitals, two homecare agencies, and two hospice agencies. The acquisition-related expenses represent expenses incurred to acquire the White Oak portfolio.
Previous report
On August 1, 2024, the Company purchased the White Oak portfolio, including its long-term care pharmacy. The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, and four independent living facilities. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.
Previous report
Net patient revenues increased $51,669,000, or 18.7%, compared to the same period last year.
Previous report
White Oak, which was acquired on August 1, 2024, as noted above, attributed to an increase of $37,299,000 in net patient revenues for the quarter ended September 30, 2024 compared to the same quarter in the prior year.
Previous report
White Oak, which was acquired on August 1, 2024, as noted above, attributed to an increase of $24,511,000 in salaries, wages, and benefits for the quarter ended September 30, 2024 compared to the same quarter in the prior year.
Previous report
On March 1, 2024, the Company exited the lease and transferred the operations of two skilled nursing facilities (included assisted living units) and one memory care facility located in Missouri. The exiting of these operations resulted in other operating expenses decreasing $2,316,000 for the quarter ended September 30, 2024 compared to the same quarter in the prior year.
Previous report
Non–operating income increased by $127,000 compared to the same period last year, as further detailed in Note 6 to our interim condensed consolidated financial statements.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Results for the nine months ended September 30, 2024 compared to the same period of 2023 include an 11.6% increase in net operating revenues and grant income. For the nine months ended September 30, 2024, GAAP net income attributable to NHC was $95,846,000 compared to $38,392,000 for the same period in 2023. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, 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. The increase in adjusted net income for the nine months ended September 30, 2024 compared to the same period of 2023 was primarily due to the per diem increases in our skilled nursing facilities and the continued reduction of nurse agency staffing expense within our operations.
Previous report
On August 1, 2024, the Company purchased the White Oak portfolio, including its long-term care pharmacy. The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, and four independent living facilities. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.
Previous report
Net operating revenues and grant income
Previous report
Net patient revenues increased $89,798,000, or 11.2%, compared to the same period last year.
Previous report
White Oak, which was acquired on August 1, 2024, as noted above, attributed to an increase of $37,299,000 in net patient revenues for the nine months ended September 30, 2024 compared to the same period in the prior year.
Previous report
On March 1, 2024, the Company exited a lease and transferred the operations of two skilled nursing facilities (included assisted living units) and one memory care facility located in Missouri. The exiting of these operations resulted in net patient revenues decreasing $18,799,000 for the nine months ended September 30, 2024 compared to the same period in the prior year.
Previous report
Other revenues decreased $1,841,000, or 5.1%, compared to the same period last year, as further detailed in Note 5 to our interim condensed consolidated financial statements.
Previous report
During the nine months ended September 30, 2024, the Company recognized $9,445,000 related to the Employee Retention Credit (“ERC”) that was established by the CARES Act and intended to help businesses retain their workforce and avoid layoffs during the pandemic. The ERC provided a per employee credit to eligible businesses based on a percentage of qualified wages and health insurance benefits paid to employees. During the second quarter of 2024, all conditions related to the assistance were met and the credit was recognized as government stimulus income.
Previous report
Total costs and expenses
Previous report
Total costs and expenses for the nine months ended September 30, 2024 compared to the same period of 2023 increased $75,220,000, or 9.4%, to $878,836,000 from $803,616,000.
Previous report
Salaries, wages, and benefits as a percentage of net operating revenues was 61.5% compared to 62.5% for the nine months ended September 30, 2024 and 2023, respectively. We continue to work diligently to find solutions to reduce and eliminate the agency nurse staffing within our healthcare operations. Our agency staffing expense decreased approximately 55% for the nine months ended September 30, 2024 compared to the same period of 2023.
Previous report
White Oak, which was acquired on August 1, 2024, as noted above, attributed to an increase of $24,511,000 in salaries, wages, and benefits for the nine months ended September 30, 2024 compared to the same period in the prior year.
Previous report
On March 1, 2024, the Company exited the lease and transferred the operations of two skilled nursing facilities (included assisted living units) and one memory care facility located in Missouri. The exiting of these operations resulted in salaries, wages, and benefits decreasing $14,097,000 for the nine months ended September 30, 2024 compared to the same period in the prior year.
Previous report
Other operating expenses as a percentage of net operating revenues was 25.4% and 25.8% for the nine months ended September 30, 2024 and 2023, respectively. White Oak, which was acquired on August 1, 2024, as noted above, attributed to an increase of $8,238,000 in other operating expenses for the nine months ended September 30, 2024 compared to the same period in the prior year.
Previous report
On March 1, 2024, the Company exited the lease and transferred the operations of two skilled nursing facilities (included assisted living units) and one memory care facility located in Missouri. The exiting of these operations resulted in other operating expenses decreasing $4,452,000 for the nine months ended September 30, 2024 compared to the same quarter in the prior year.
Previous report
Other income
Previous report
Non–operating income increased by $2,749,000 compared to the same period last year, as further detailed in Note 6 to our interim condensed consolidated financial statements.
Reworded paragraphs (30)
Previous wording
National HealthCare Corporation (“NHC” or the “Company”) is a leading provider of senior health care services. As of September 30, 2024, we operate or manage, through certain affiliates, 80 skilled nursing facilities with a total of 10,349 licensed beds, 26 assisted living facilities with 1,413 units, nine independent living facilities, three behavioral health hospitals, 34 homecare agencies, and 32 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 9 states and are located primarily in the southeastern United States.
Current wording
National HealthCare Corporation (“NHC” or the “Company”) is a leading provider of senior health care services. As of March 31, 2025, we operate or manage, through certain affiliates, 80 skilled nursing facilities with a total of 10,329 licensed beds, 26 assisted living facilities with 1,413 units, nine independent living facilities, three behavioral health hospitals, 34 homecare agencies, and 33 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 9 states and are located primarily in the southeastern United States.
Previous wording
A primary area of management focus continues to be the rates of occupancy within our skilled nursing facilities. The overall census in owned and leased skilled nursing facilities for the three months ending September 30, 2024 was 88.3% compared to 88.1% for the same period a year ago. For the nine months ended September 30, 2024, overall census in our owned and leased skilled nursing facilities was 88.6% compared to 87.8% for the same period a year ago.
Current wording
A primary area of management focus continues to be the rates of occupancy within our skilled nursing facilities. The overall census in owned and leased skilled nursing facilities for the three months ending March 31, 2025 was 89.3% compared to 88.5% for the same period a year ago.
Previous wording
Our accrued professional liability and workers’ compensation reserves totaled $110,204,000 at September 30, 2024 and are a primary area of management focus. We have set aside restricted cash and cash equivalents and marketable securities to fund our estimated professional liability and workers’ compensation liabilities.
Current wording
Our accrued professional liability and workers’ compensation reserves totaled $108,197,000 at March 31, 2025 and are a primary area of management focus. We have set aside restricted cash and cash equivalents and marketable securities to fund our estimated professional liability and workers’ compensation liabilities.
Previous wording
In July 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2024. The fiscal year 2025 rule equates to a net 4.2% increase in Medicare Part A payments to SNFs in fiscal year 2025 compared to 2024 levels. The rule includes a market basket increase of 3.0%, an increase of 1.7% to the market basket forecast error adjustment, and a negative 0.5% productivity adjustment. This final rule also changes CMS’ enforcement policies to impose more equitable and consistent civil monetary penalties ("CMPs") for health and safety violations as part of the agency’s ongoing work to increase the safety and care provided in America’s nursing homes. CMS revised the regulation to expand the type of CMPs that can be imposed to allow for more per instance and per day CMPs to be imposed, as appropriate. In the final rule it also finalized updates to the SNF Quality Reporting Program ("QRP") to better account for adverse social conditions that negatively impact individuals’ health or healthcare. CMS also finalized its proposal to adopt a data validation process for the SNF QRP beginning the same year.
Current wording
In July 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2024. The fiscal year 2025 rule equates to a net 4.2% increase in Medicare Part A payments to SNFs in fiscal year 2025 compared to 2024 levels. The rule includes a market basket increase of 3.0%, an increase of 1.7% to the market basket forecast error adjustment, and a negative 0.5% productivity adjustment. This final rule also changes CMS’ enforcement policies to impose more equitable and consistent civil monetary penalties ("CMPs") for health and safety violations as part of the agency’s ongoing work to increase the safety and care provided in America’s nursing homes. CMS revised the regulation to expand the type of CMPs that can be imposed to allow for more per instance and per day CMPs to be imposed, as appropriate. The 2025 final rule also updated the SNF Quality Reporting Program ("QRP") to better account for adverse social conditions that negatively impact individuals’ health or healthcare. CMS also finalized its proposal to adopt a data validation process for the SNF QRP beginning the same year.
Previous wording
In July 2023, CMS released its final rule outlining fiscal year 2024 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2023. The fiscal year 2024 rule equates to a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to SNFs in fiscal year 2024 compared to 2023 levels. The rule includes a 3.0% market basket rate increase, a 3.6% market basket forecast error adjustment, less a 0.2% productivity adjustment, as well as a negative 2.3%, or approximately $789 million, decrease in 2024 SNF Payment Prospective Systems rates as a result of the second phase of the Patient Driven Payment Model parity adjustment recalibration.
Current wording
In April 2025, CMS released its proposed rule outlining fiscal year 2026 Medicare payment rates and policy changes for skilled nursing facilities, which will begin on October 1, 2025. The fiscal year 2026 proposal equates to a net 2.8% increase in Medicare Part A payments to SNFs in fiscal year 2026 compared to 2025 levels. The rule includes a market basket increase of 3.0%, an increase of 0.6% to the market basket forecast error adjustment, and a negative 0.8% productivity adjustment. These figures do not incorporate the SNF Value Based Purchasing (“VBP”) reduction for certain SNFs subject to the net reduction in payments under the SNF VBP; those adjustments are estimated to total $196.5 million in fiscal year 2025.
Previous wording
For the first nine months of 2024, our average Medicare per diem rate for skilled nursing facilities increased 4.9% as compared to the same period in 2023.
Current wording
For the first three months of 2025, our average Medicare per diem rate for skilled nursing facilities increased 5.2% as compared to the same period in 2024.
Previous wording
Effective July 1, 2024 and for the fiscal year 2025, the state of Tennessee implemented specific individual nursing facility increases. We estimate the resulting increase in revenue for the 2025 fiscal year will be approximately $11,000,000 annually, or $2,750,000 per quarter. Additionally, the state of Tennessee implemented non-recurring rate increases for fiscal year 2025 for continued stabilization payments and Medicaid rate rebasing. These non-recurring rate increases will result in an additional increase in revenue for the 2025 fiscal year of approximately $8,200,000 annually, or $2,050,000 per quarter.
Current wording
Effective July 1, 2024 and for the fiscal year 2025, the state of Tennessee implemented specific individual nursing facility increases. We estimate the resulting increase in revenue for the 2025 fiscal year will be approximately $11,000,000 annually, or $2,750,000 per quarter. Additionally, the state of Tennessee implemented supplemental Medicaid payments for fiscal year 2025 for continued stabilization payments and Medicaid rate rebasing. These supplemental payments will result in an increase in revenue for the 2025 fiscal year of approximately $7,500,000 annually, or $1,875,000 per quarter.
Previous wording
Effective October 1, 2024 and for the fiscal year 2025, the state of South Carolina implemented specific individual nursing facility increases. We estimate the resulting increase in revenue for the 2025 fiscal year will be approximately $500,000 annually, or $125,000 per quarter.
Current wording
Effective July 1, 2024 and for the fiscal year 2025, the state of Missouri has approved specific individual nursing facility increases. We estimate the resulting increase in revenue for the 2025 fiscal year will be approximately $6,600,000 annually, or $1,650,000 per quarter.
Previous wording
For the first nine months of 2024, our average Medicaid per diem increased 10.2% compared to the same period in 2023.
Current wording
For the first three months of 2025, our average Medicaid per diem increased 6.2% compared to the same period in 2024.
Previous wording
In June 2024, CMS released its proposed rule outlining fiscal year 2025 Medicare payment rates. CMS projects payments to home health agencies in fiscal year 2025 will decrease by 1.7% or $280 million, relative to the prior year. This decrease reflects a 2.5% home health payment update, reduced by a 3.6% decrease related to the Patient-Driven Groupings Model (“PDGM”) rebalancing and an estimated 0.6% decrease that reflects a proposed fixed dollar loss for outlier payments. As required by the Bipartisan Budget Act of 2018, this rule proposes a permanent prospective adjustment to the CY2025 home health payment rate to account for the impact of implementing the PDGM. This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY2020 implementation of PDGM and the change to a 30-day unit of payment.
Current wording
In November 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates. CMS projects payments to home health agencies in fiscal year 2025 will increase by 0.5% or $85 million, relative to the prior year. This increase reflects a 2.7% home health payment update, reduced by a 1.8% decrease that reflects the permanent behavior adjustment and an estimated 0.4% decrease that reflects the updated fixed-dollar loss ratio for outlier payments. As required by the Bipartisan Budget Act of 2018, this rule proposes a permanent prospective adjustment to the CY2025 home health payment rate to account for the impact of implementing the Patient-Driven Groupings Model (“PDGM”). This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY2020 implementation of PDGM and the change to a 30-day unit of payment.
Previous wording
In July 2023, CMS released its final rule outlining fiscal year 2024 Medicare payment rates. CMS issued a rate increase of 3.1%, or $780 million, effective October 1, 2023. This increase is the result of a 3.3% market basket increase reduced by a 0.2% productivity adjustment. The FY2024 hospice payment update also includes an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made annually. The cap amount for FY2024 is $33,494.
Current wording
In April 2025, CMS released its proposed rule outlining fiscal year 2026 Medicare payment rates. CMS issued a rate increase of 2.4%, or $695 million, effective October 1, 2025. This increase is the result of a 3.2% market basket increase reduced by a 0.8% productivity adjustment. The FY2026 hospice payment update also includes an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made annually. The proposed cap amount for FY2026 is $35,293.
Previous wording
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.
Current wording
The Company’s CODM evaluates performance including pretax earnings 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.
Previous wording
The following table and discussion set forth items from the interim condensed consolidated statements of operations as a percentage of net operating revenues and grant income for the three and nine months ended September 30, 2024 and 2023.
Current wording
The following table and discussion set forth items from the interim condensed consolidated statements of operations as a percentage of net operating revenues for the three months ended March 31, 2025 and 2024.
Previous wording
Results for the quarter ended September 30, 2024 compared to the third quarter of 2023 include a 17.9% increase in net operating revenues. For the quarter ended September 30, 2024, GAAP net income attributable to NHC was $42,789,000 compared to $10,388,000 for the same period in 2023. Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended September 30, 2024 was $19,910,000 compared to $13,250,000 for the same period in 2023. The increase in adjusted net income for the three months ended September 30, 2024 compared to the same period of 2023 was primarily due to the per diem increases in our skilled nursing facilities and the continued reduction of nurse agency staffing expense within our operations.
Current wording
For the quarter ended March 31, 2025, GAAP net income attributable to NHC was $32,205,000 compared to net income of $26,213,000 for the same period in 2024. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended March 31, 2025 was $24,838,000 compared to $15,386,000 for the same period in 2024, an increase of 61.4%. The increase in non-GAAP earnings for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to the continued increase in skilled nursing census, skilled nursing per diem increases from some of our government payors, the continued reduction of agency staffing expense, and the White Oak operations being accretive to earnings.
Previous wording
The total census at owned and leased skilled nursing facilities for the quarter averaged 88.3%, compared to an average of 88.1% for the same quarter a year ago. Overall, the composite skilled nursing facility per diem increased 7.8% compared to the same quarter a year ago. Our Medicare per diem rates increased 4.8% and managed care per diem rates decreased 6.0% compared to the same quarter a year ago. Medicaid and private pay per diem rates increased 13.1% and 14.1%, respectively, compared to the same quarter a year ago. For the three months ended September 30, 2024 and 2023, respectively, $5,267,000 and $4,232,000 have been included in our net patient revenues for supplemental Medicaid payments that are in addition to our Medicaid skilled nursing per diems.
Current wording
The total census at owned and leased skilled nursing facilities for the quarter averaged 89.3%, compared to an average of 88.5% for the same quarter a year ago. Overall, the composite skilled nursing facility per diem increased 4.9% compared to the same quarter a year ago. Our Medicare per diem rates increased 5.2% and managed care per diem rates increased 4.6% compared to the same quarter a year ago. Medicaid and private pay per diem rates increased 6.2% and 9.5%, respectively, compared to the same quarter a year ago. For the three months ended March 31, 2025 and 2024, respectively, $1,872,000 and $3,462,000 have been included in our net patient revenues for supplemental Medicaid payments.
Previous wording
On March 1, 2024, the Company exited a lease and transferred the operations of two skilled nursing facilities (included assisted living units) and one memory care facility located in Missouri. The exiting of these operations resulted in net patient revenues decreasing $7,861,000 for the quarter ended September 30, 2024 compared to the same quarter in the prior year.
Current wording
The White Oak operations attributed to an increase of $56,726,000 in net patient revenues for the quarter ended March 31, 2025 compared to the same period in 2024. On March 1, 2024, the Company exited a lease and transferred the operations of two skilled nursing facilities and one memory care facility located in Missouri. The exiting of these operations resulted in net patient revenues decreasing $5,579,000 for the quarter ended March 31, 2025 compared to the first quarter of 2024.
Previous wording
Other revenues decreased $44,000, or 0.4%, compared to the same quarter last year, as further detailed in Note 5 to our interim condensed consolidated financial statements.
Current wording
Other revenues increased $737,000, or 6.5%, compared to the same quarter last year, as further detailed in Note 4 to our interim condensed consolidated financial statements.
Previous wording
Total costs and expenses for the three months ended September 30, 2024 compared to the same period of 2023 increased $43,691,000, or 15.9%, to $319,151,000 from $275,460,000.
Current wording
Total costs and expenses for the three months ended March 31, 2025 compared to the same period of 2024 increased $61,429,000, or 21.8% to $342,930,000 from $281,501,000.
Previous wording
Salaries, wages, and benefits as a percentage of net operating revenues was 62.7% compared to 63.3% for the three months ended September 30, 2024 and 2023, respectively. We continue to work diligently to find solutions to reduce and eliminate the agency nurse staffing within our healthcare operations. Our agency staffing expense decreased approximately 60% for the three months ended September 30, 2024 compared to the same period of 2023.
Current wording
Salaries, wages, and benefits increased $44,992,000, or 24.6%, to $228,130,000 from $183,138,000. Salaries, wages, and benefits as a percentage of net operating revenues was 61.0% compared to 61.6% for the three months ended March 31, 2025 and 2024, respectively. Although we continue to face workforce and labor shortages within all of our operations, we are working diligently to find solutions to reduce and eliminate agency nurse staffing expense within our healthcare operations. For the first quarter of 2025, our agency nurse staffing expense was $1,487,000 compared to $5,286,000 for the first quarter of 2024.
Previous wording
On March 1, 2024, the Company exited the lease and transferred the operations of two skilled nursing facilities (included assisted living units) and one memory care facility located in Missouri. The exiting of these operations resulted in salaries, wages, and benefits decreasing $6,148,000 for the quarter ended September 30, 2024 compared to the same quarter in the prior year.
Current wording
The White Oak operations attributed to an increase of $37,018,000 in salaries, wages, and benefits for the three months ended March 31, 2025 compared to the same period in the prior year. On March 1, 2024, the Company exited a lease and transferred the operations of two skilled nursing facilities and one memory care facility located in Missouri. The exiting of these operations resulted in salaries, wages and benefits decreasing $4,009,000 for the quarter ended March 31, 2025 compared to the first quarter of 2024.
Previous wording
Other operating expenses as a percentage of net operating revenues was 24.3% and 25.1% for the three months ended September 30, 2024 and 2023, respectively. White Oak, which was acquired on August 1, 2024, as noted above, attributed to an increase of $8,238,000 in other operating expenses for the quarter ended September 30, 2024 compared to the same quarter in the prior year.
Current wording
Other operating expenses increased $15,028,000, or 19.4%, to $92,457,000 for the 2025 period compared to $77,429,000 for the 2024 period. Other operating expenses as a percentage of net operating revenues was 24.7% and 26.1% for the three months ended March 31, 2025 and 2024, respectively. The White Oak operations attributed to an increase of $12,769,000 in other operating expenses for the three months ended March 31, 2025 as compared to the same period in the prior year. The three exited Missouri operations during the first quarter of 2024 resulted in other operating expenses decreasing $2,281,000 for the quarter ended March 31, 2025 compared to the same period last year.
Previous wording
The income tax provision for the three months ended September 30, 2024 is $15,338,000 (an effective income tax rate of 26.4%).
Current wording
The income tax provision for the three months ended March 31, 2025 is $11,432,000 (an effective income tax rate of 26.1%).
Previous wording
Specifically, the Company believes the presentation of non-GAAP financial information that excludes the unrealized gains or losses on our marketable equity securities, operating results for newly opened facilities or agencies not at full capacity, gains on sale of unconsolidated companies, share-based compensation expense, acquisition-related expenses, and the recognition of the employee retention credit is helpful in allowing investors to assess the Company’s operations more accurately.
Current wording
Specifically, the Company believes the presentation of non-GAAP financial information that excludes the unrealized gains or losses on our marketable equity securities, gains on sale of unconsolidated companies, and share-based compensation expense is helpful in allowing investors to assess the Company’s operations more accurately.
Previous wording
Net cash provided by operating activities for the nine months ended September 30, 2024 was $94,514,000 as compared to $85,483,000 in the same period last year. Cash provided by operating activities consisted of net income of $96,057,000 and adjustments for non–cash items of $9,070,000. There was cash provided by working capital in the amount of $7,015,000 for the nine months ended September 30, 2024 compared to $20,645,000 for the same period a year ago.
Current wording
Net cash provided by operating activities for the three months ended March 31, 2025 was $39,255,000 as compared to $9,646,000 in the same period last year. Cash provided by operating activities consisted of net income of $32,290,000 and adjustments for non–cash items of $2,379,000. There was cash provided by working capital in the amount of $4,827,000 for the three months ended March 31, 2025 compared to cash used for working capital needs in the amount of $14,634,000 for the same period a year ago.
Previous wording
Included in the adjustments for non-cash items are depreciation and amortization expense, equity in earnings of unconsolidated investments, unrealized gains on our marketable equity securities, gains on sales of investments, deferred taxes, and stock compensation.
Current wording
Included in the adjustments for non-cash items are depreciation expense, equity in earnings of unconsolidated investments, unrealized gains on our marketable equity securities, gain on sale of an unconsolidated company, deferred taxes, and stock compensation.
Previous wording
Net cash used in investing activities totaled $225,048,000 for the nine months ended September 30, 2024, compared to $7,382,000 for the nine months ended September 30, 2023. Cash used for property and equipment additions was $19,944,000 and $19,300,000 for the nine months ended September 30, 2024, and 2023, respectively. On August 1, 2024, the acquisition of White Oak Senior Living resulted in cash used of $215,896,000. Proceeds from the sale of marketable securities, net of purchases, resulted in cash provided by investing activity of $15,040,000 and $14,815,000 for the nine months ended September 30, 2024 and 2023, respectively. In January 2024, the Company sold its 50% joint venture ownership interest in a homecare agency resulting in proceeds from the sale of $2,100,000. For the nine months ended September 30, 2024, we contributed capital of $8,370,000 to a joint venture, multi-family development that is under construction in Franklin, Tennessee.
Current wording
Net cash used in investing activities totaled $7,323,000 for the three months ended March 31, 2025, compared to $2,415,000 for the three months ended March 31, 2024. Cash used for property and equipment additions was $6,137,000 and $5,955,000 for the three months ended March 31, 2025, and 2024, respectively. Proceeds from the sale of marketable securities, net of purchases, resulted in cash provided by investing activities of $1,226,000 and $2,912,000 for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, we contributed capital of $2,419,000 to a joint venture, multi-family development that is under construction in Franklin, Tennessee. In January 2024, the Company sold its ownership interest in a homecare agency resulting in proceeds from the sale of $2,100,000.
Previous wording
Net cash provided by financing activities totaled $119,640,000 for the nine months ended September 30, 2024 compared to net cash used of $32,711,000 for the nine months ended September 30, 2023. The funding for the White Oak acquisition was provided by the Company’s cash on hand and borrowings under the credit facility of approximately $150,000,000. During the third quarter of 2024, cash of $3,000,000 was used to pay down the outstanding principal balance on our credit facility. We made principal payments under our finance lease obligations in the amount of $860,000 and $3,711,000 for the nine months ended September 30, 2024 and 2023, respectively. Cash used for dividend payments to common stockholders totaled $27,545,000 in the current year period compared to $26,520,000 for the same period a year ago. Cash provided by the issuance of common stock totaled $13,471,000 for the nine months ended September 30, 2024 compared to $260,000 for the same period a year ago. We repurchased common shares outstanding in the amount of $13,502,000 and $2,482,000 for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
Net cash used in financing activities totaled $12,693,000 for the three months ended March 31, 2025 compared to $12,067,000 for the three months ended March 31, 2024. During the first quarter of 2025, cash of $3,000,000 was used to pay down the outstanding principal balance of the long-term debt. Cash used for dividend payments to common stockholders totaled $9,420,000 in the current year period compared to $9,051,000 for the same period a year ago. Proceeds from the issuance of common stock totaled $1,278,000 and $8,412,000 for the three months ended March 31, 2025 and 2024, respectively. We repurchased common shares outstanding in the amount of $1,722,000 and $9,900,000 for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
We expect to meet our short-term liquidity requirements primarily from our cash flows from operating activities. In addition to cash flows from operations, our current cash on hand of $84,807,000, our marketable equity securities of $164,754,000, and our borrowing capacity on the $50 million available line of credit are expected to be adequate to meet our contractual obligations, operating liquidity, and our growth and development plans in the next twelve months. We also have substantial value in our unencumbered real estate assets, which could potentially be used as collateral in future borrowing opportunities.
Current wording
We expect to meet our short-term liquidity requirements primarily from our cash flows from operating activities. In addition to cash flows from operations, we have current cash on hand of $90,386,000 and unrestricted marketable equity securities of $152,785,000. We also have unencumbered real estate and the borrowing capacity on our $50 million available line of credit. We believe these various resources are adequate to meet our contractual obligations and growth and development plans in the next twelve months.
Previous wording
We expect to meet our long-term liquidity requirements primarily from our cash flows from operating activities, our current cash on hand of $84,807,000, our marketable equity securities of $164,754,000, and our borrowing capacity on the $50 million available line of credit. We also have substantial value in our unencumbered real estate assets, which could potentially be used as collateral in future borrowing opportunities.
Current wording
We expect to meet our long-term liquidity requirements primarily from our cash flows from operating activities, our current cash on hand of $90,386,000, our unrestricted marketable equity securities of $152,785,000, and our borrowing capacity on the $50 million available line of credit. We also have substantial value in our unencumbered real estate assets, which could potentially be used as collateral in future borrowing opportunities.
Previous wording
Laws and regulations governing Medicare, Medicaid and other federal healthcare programs are complex and subject to interpretation. Management believes that it is following all applicable laws and regulations in all material respects. However, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusions from the Medicare, Medicaid, and other federal healthcare programs.
Current wording
Laws and regulations governing the Medicare, Medicaid and other federal healthcare programs are complex and subject to interpretation. Management believes that it is following all applicable laws and regulations in all material respects. However, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusions from the Medicare, Medicaid, and other federal healthcare programs.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The total census at owned and leased skilled nursing facilities for the nine months ended September 30, 2024 averaged 88.6%, compared to an average of 87.8% for the same period a year ago. Overall, the composite skilled nursing facility per diem increased 7.7% compared to the same period a year ago. Our Medicare per diem rates increased 4.9% and managed care per diem rates decreased 0.1% compared to the same period a year ago. Medicaid and private pay per diem rates increased 10.2% and 12.9%, respectively, compared to the same period a year ago. For the nine months ended September 30, 2024 and 2023, respectively, $11,314,000 and $15,362,000 have been included in our net patient revenues for supplemental Medicaid payments that are in addition to our Medicaid skilled nursing per diems.
Previous report — wording carried elsewhere
The income tax provision for the nine months ended September 30, 2024 is $34,294,000 (an effective income tax rate of 26.3%).