National Healthcare Corp Reports Operating Results (10-Q)
National Healthcare Corp has a market cap of $654.1 million; its shares were traded at around $46.78 with a P/E ratio of 13.3 and P/S ratio of 0.9. The dividend yield of National Healthcare Corp stocks is 2.6%. National Healthcare Corp had an annual average earning growth of 6% over the past 10 years. GuruFocus rated National Healthcare Corp the business predictability rank of 5-star.
Highlight of Business Operations:Beginning January 1, 2012, the state of Tennessee implemented a 4.25% rate reduction for their Medicaid program. On May 14, 2012 and effective retroactively to January 1, 2012, Tennessee's legislation voted to restore 1.75% of the 4.25% rate reduction; thus leaving a net 2.5% rate reduction for the first six months of 2012. Effective July 1, 2012 and for the fiscal year 2013, the state of Tennessee implemented specific individual nursing facility rate increases. We estimate the resulting increase in revenue for the fiscal year 2013 will be approximately $3,500,000 annually, or $875,000 per quarter.
Other revenues decreased $923,000 or 6.2% in the three month 2012 period to $14,007,000 from $14,930,000 in the 2011 three–month period. The decrease in other revenues is primarily due to the decreased collections of management and accounting services fees of $788,000, as further detailed in Note 3 of our interim condensed consolidated financial statements.
Results for the nine month period ended September 30, 2012 include a 2.3% decrease in net operating revenues and a 12.2% decrease in income before income taxes compared to the same period in 2011. For comparative purposes, other operating expenses for the 2011 nine month period included favorable results within our accrued risk reserves of $10,500,000. Excluding this adjustment, the nine months ended September 30, 2012 would have reflected an increase in income before income taxes of $1,225,000, or 1.9%, over the same period in 2011.
Other revenues decreased $2,256,000 or 5.1% in the 2012 nine month period to $42,008,000 from $44,264,000 in the 2011 nine month period. The decrease in other revenues is primarily due to the decreased collections of management and accounting services fees of $1,432,000, as further detailed in Note 3 of our interim condensed consolidated financial statements.
Cash used in investing activities totaled $24,286,000 and $17,782,000 for the nine months ended September 30, 2012 and 2011, respectively. Cash used for property and equipment additions was $14,888,000 for the nine months ended September 30, 2012 and $17,881,000 in the comparable period in 2011. In June 2012, we acquired an additional 7.5% non-controlling ownership interest in Caris for $7,500,000. Cash provided by net collections of notes receivable was $336,000 in 2012 compared to $1,573,000 in 2011. Purchases and sales of restricted marketable securities resulted in a net use of cash of $2,234,000 for the 2012 period compared to $1,474,000 for the 2011 period.
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