Natl Healthcare has a market cap of $638 million; its shares were traded at around $44.8 with a P/E ratio of 13.2 and P/S ratio of 0.8. The dividend yield of Natl Healthcare stocks is 2.6%. Natl Healthcare had an annual average earning growth of 6% over the past 10 years. GuruFocus rated Natl Healthcare the business predictability rank of 5-star.
Highlight of Business Operations:Approximately 70% of our net patient revenues are derived from Medicare, Medicaid, and other government programs. Amounts earned under these programs are subject to review by the Medicare and Medicaid intermediaries or their agents. In our opinion, adequate provision has been made for any adjustments that may result from these reviews. Any differences between our original estimates of reimbursements and subsequent revisions are reflected in operations in the period in which the revisions are made often due to final determination or the period of payment no longer being subject to audit or review. We have made provisions of approximately $16,991,000 and $16,807,000 as of March 31, 2012 and December 31, 2011, respectively, for various Medicare and Medicaid current and prior year cost reports and claims reviews.
Proceeds from the sale of investments in marketable securities during the three months ended March 31, 2012 and 2011 were $23,394,000 and $13,570,000, respectively. Investment gains of $687,000 and $98,000 were realized on these sales during the three months ended March 31, 2012 and 2011, respectively.
Results for the three month period ended March 31, 2012 include a 1.5% decrease in net operating revenues and a 32.3% decrease in income before taxes compared to the same period in 2011. For comparative purposes, other operating expenses for the 2011 three month period included favorable results within our accrued risk reserves of $10,500,000. Excluding this adjustment, the quarter ended March 31, 2012 would have reflected an increase of 3.3% in income before taxes compared to the same period in 2011.
Net patient revenues decreased $1,440,000 or 0.8% compared to the same period last year. The decrease in net patient revenues is primarily due from the assignment of our Solaris Hospice business to Caris effective January 1, 2012. There were $0 and $3,869,000 of net patient revenues recorded for the eight Solaris Hospice entities for the three months ended March 31, 2012 and 2011, respectively. The earnings in equity recorded from Caris is presented in “non-operating income” in our interim condensed consolidated statements of income. The two newly constructed assisted living communities helped increase net patient revenues approximately $1,102,000.
Cash used in investing activities totaled $3,514,000 and $6,501,000 for the three months ended March 31, 2012 and 2011, respectively. Cash used for property and equipment additions was $2,972,000 for the three months ended March 31, 2012 and $6,160,000 in the comparable period in 2011. Cash provided by net collections of notes receivable was $170,000 in 2012 compared to $352,000 in 2011. Purchases and sales of restricted marketable securities resulted in a net use of cash of $712,000 for the 2012 period compared to $693,000 for the 2011 period.
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