National HealthCare (NHC) Q4 2024 earnings summary

Executive summary

• Net operating revenues and grant income rose 14.5% year-over-year to $1.31 billion in 2024, driven by the White Oak acquisition and higher skilled nursing per diem rates.

• GAAP net income attributable to shareholders increased 52.6% to $101.9 million; adjusted net income (non-GAAP) was $76.9 million, up from $54.9 million in 2023.

• The White Oak portfolio acquisition expanded operations into North Carolina and added 15 skilled nursing, 2 assisted living, and 4 independent living facilities.

• Skilled nursing facility occupancy improved to 88.6% from 87.9% in 2023.

Financial highlights

• Net patient revenues grew 15.1% to $1.25 billion; other revenues declined 14.4% to $46.2 million.

• Salaries, wages, and benefits rose 13.8% to $810.9 million, but as a percentage of revenues, decreased slightly to 62.0%.

• Agency nurse staffing expenses dropped 66.2% year-over-year, reflecting successful cost control.

• Operating income increased 50.1% to $85.8 million.

• Diluted EPS was $6.53 (GAAP) and $4.93 (non-GAAP).

• Cash flow from operations was $107.3 million; cash used in investing activities was $236.7 million, mainly for the White Oak acquisition.

• Long-term debt at year-end was $137 million, up from zero, due to acquisition financing.

Outlook and guidance

• Management expects continued growth from the White Oak integration and ongoing government reimbursement increases.

• Short-term liquidity is supported by $76.1 million in cash and $140.1 million in marketable equity securities.

• Long-term liquidity is expected to be met through operating cash flows, real estate assets, and a $50 million credit line.