-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dSu6kHKsEbeV7nQoaO0NQW7pSJXG/kJmeBCsCyfewwhvf0YNR8WwXHf0qp3Vcbwu aX52JGvwA+hfkP0XIFJLJQ== 0000950144-94-001964.txt : 19941117 0000950144-94-001964.hdr.sgml : 19941117 ACCESSION NUMBER: 0000950144-94-001964 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL HEALTHCORP L P CENTRAL INDEX KEY: 0000805274 STANDARD INDUSTRIAL CLASSIFICATION: 8051 IRS NUMBER: 621293855 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09382 FILM NUMBER: 94558861 BUSINESS ADDRESS: STREET 1: 100 E VINE ST CITY: MURFREESBORO STATE: TN ZIP: 37130 BUSINESS PHONE: 6158902020 MAIL ADDRESS: STREET 1: P.O. BOX 1398 CITY: MURFREESBORO STATE: TN ZIP: 37130 10-Q 1 NHC NATIONAL HEALTHCORP - SEPTEMBER 30, 1994 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 of 15(d) of the Securities Exchange Act of 1934 For quarter ended September 30, 1994 Commission file number 33-9881 ------------------ ------- NATIONAL HEALTHCORP L.P. - - - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its Charter) Delaware 62-1292855 - - - --------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 100 Vine Street Murfreesboro, TN 37130 - - - --------------------------------- ------------------- (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code (615) 890-2020 ----------------- 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. Yes x No --- --- (2) Has been subject to such filing requirements for the past 90 days. Yes x No --- --- 7,796,583 units were outstanding as of September 30, 1994. 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. NATIONAL HEALTHCORP L.P. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 -------------------- --------------------- 1994 1993 1994 1993 ---- ---- ---- ---- (IN THOUSANDS) (IN THOUSANDS) REVENUES: Net patient revenues . . . . . . . . . . . . . $ 69,051 $ 55,801 $195,535 $ 161,562 Gain on sale of investment . . . . . . . . . . -- 24,768 -- 24,768 Other revenues . . . . . . . . . . . . . . . . 6,513 6,442 19,755 17,009 -------- -------- -------- --------- Net revenues . . . . . . . . . . . . . . 75,564 87,011 215,290 203,339 -------- -------- -------- --------- COSTS AND EXPENSES: Salaries, wages and benefits . . . . . . . . . 40,465 32,461 117,157 93,597 Other operating . . . . . . . . . . . . . . . . 24,432 20,493 68,447 59,011 Depreciation and amortization . . . . . . . . . 3,549 2,996 10,262 8,675 Interest . . . . . . . . . . . . . . . . . . . 3,054 3,041 8,687 8,785 -------- -------- -------- --------- Total costs and expenses . . . . . . . . 71,500 58,991 204,553 170,068 -------- -------- -------- --------- NET INCOME . . . . . . . . . . . . . . . . . . . $ 4,064 $ 28,020 $ 10,737 $ 33,271 ======== ======== ======== ========= EARNINGS PER UNIT: Primary . . . . . . . . . . . . . . . . . . . . $ .52 $ 3.61 $ 1.37 $ 4.29 ======== ======== ======== ========= Fully diluted . . . . . . . . . . . . . . . . . $ .46 $ 2.93 $ 1.23 $ 3.56 ======== ======== ======== ========= WEIGHTED AVERAGE UNITS OUTSTANDING: Primary . . . . . . . . . . . . . . . . . . . . 7,822,962 7,755,299 7,834,197 7,753,402 Fully diluted . . . . . . . . . . . . . . . . . 9,813,174 9,728,453 9,813,110 9,726,916 CASH DISTRIBUTIONS PAID PER UNIT: Regular . . . . . . . . . . . . . . . . . . . . $ .31 $ .20 $ .86 $ .56 ======== ======== ======== ========= Special . . . . . . . . . . . . . . . . . . . . $ -- $ -- $ 1.10 $ -- ======== ======== ======== ========= NET INCOME ALLOCABLE TO PARTNERS: General partners . . . . . . . . . . . . . . . $ 41 $ 280 $ 107 $ 333 Limited partners . . . . . . . . . . . . . . . 4,023 27,740 10,630 32,938 -------- -------- -------- --------- $ 4,064 $ 28,020 $ 10,737 $ 33,271 ======== ======== ======== =========
The accompanying notes to interim condensed consolidated financial statements are an integral part of these statements. 2 3 NATIONAL HEALTHCORP L.P. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
ASSETS ------ SEPTEMBER 30 DECEMBER 31 1994 1993 ------------ ----------- (unaudited) CURRENT ASSETS: Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . $ 538 $ 145 Cash held by trustees . . . . . . . . . . . . . . . . . . . . . . . . . . 1,413 1,289 Debt and equity securities . . . . . . . . . . . . . . . . . . . . . . . 14,513 5,670 Accounts receivable, less allowance for doubtful accounts of $3,328 and $2,612 . . . . . . . . . . . . . . . . 36,599 30,395 Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,532 4,219 Note receivable from NHI . . . . . . . . . . . . . . . . . . . . . . . . -- 26,700 Loan participation agreements . . . . . . . . . . . . . . . . . . . . . . 25,222 37,379 Inventory at lower of cost (first-in, first-out method) or market . . . . . . . . . . . . . . . . . . . . . . 2,871 2,933 Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . 1,365 561 -------- -------- Total current assets . . . . . . . . . . . . . . . . . . . . . . . 89,053 109,291 -------- -------- PROPERTY AND EQUIPMENT AND ASSETS UNDER ARRANGEMENT WITH OTHER PARTIES: Property and equipment at cost . . . . . . . . . . . . . . . . . . . . . 128,606 108,663 Less accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,518) (24,216) Assets under arrangement with other parties . . . . . . . . . . . . . . . 101,936 106,488 -------- -------- Net property, equipment and assets under arrangement with other parties . . . . . . . . . . . . . . . . . 201,024 190,935 -------- -------- OTHER ASSETS: Bond reserve funds, mortgage replacement reserves and other deposits . . . . . . . . . . . . . . . . . . . . . . 1,703 1,663 Unamortized financing costs . . . . . . . . . . . . . . . . . . . . . . . 2,883 3,085 Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,543 25,000 Notes receivable from National . . . . . . . . . . . . . . . . . . . . . 12,336 11,861 Minority equity investments and other . . . . . . . . . . . . . . . . . . 7,410 2,845 -------- -------- Total other assets . . . . . . . . . . . . . . . . . . . . . . . . 56,875 44,454 -------- -------- $346,952 $344,680 ======== ========
The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets. 3 4 NATIONAL HEALTHCORP L.P. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
LIABILITIES AND CAPITAL ----------------------- SEPTEMBER 30 DECEMBER 31 1994 1993 ------------ ----------- (Unaudited) CURRENT LIABILITIES: Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . $ 3,512 $ 3,569 Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . 5,228 5,357 Accrued payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,270 13,981 Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,753 988 Distributions payable . . . . . . . . . . . . . . . . . . . . . . . . . . -- 8,576 Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 9,017 7,327 -------- -------- Total current liabilities . . . . . . . . . . . . . . . . . . . . 36,780 39,798 -------- -------- LONG-TERM DEBT, less current portion . . . . . . . . . . . . . . . . . . . 56,808 54,625 DEBT SERVICED BY OTHER PARTIES, less current portion . . . . . . . . . . . 110,314 112,116 MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES . . . . . . . . . . . . . . 786 767 COMMITMENTS, CONTINGENCIES AND GUARANTEES SUBORDINATED CONVERTIBLE NOTES . . . . . . . . . . . . . . . . . . . . . . 30,000 30,000 DEFERRED INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,657 14,848 PARTNERS' CAPITAL: General partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,069 1,027 Limited partners and unrealized gains on Securities, less notes receivable . . . . . . . . . . . . . . . . 96,538 91,499 -------- -------- Total partners' capital . . . . . . . . . . . . . . . . . . . . . 97,607 92,526 -------- -------- $346,952 $344,680 ======== ========
The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets. 4 5 NATIONAL HEALTHCORP L.P. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
NINE MONTHS ENDED SEPTEMBER 30 ----------------- 1994 1993 ---- ---- (in thousands) CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,737 $ 33,271 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,947 8,521 Provision for doubtful accounts and notes . . . . . . . . . . . . . . . . . . . 1,655 1,282 Amortization of intangibles and deferred charges . . . . . . . . . . . . . . . 634 440 Amortization of deferred income . . . . . . . . . . . . . . . . . . . . . . . . (271) (168) Equity in earnings of unconsolidated investments . . . . . . . . . . . . . . . (222) (2,443) Distributions from unconsolidated investments . . . . . . . . . . . . . . . . . 180 2,303 Gain on sale of investments . . . . . . . . . . . . . . . . . . . . . . . . . . -- (24,773) Changes in assets and liabilities: Increase in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . (7,859) (2,993) Decrease in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 102 (Increase) Decrease in prepaid expenses and other assets . . . . . . . . . . . (804) 1,452 Increase (Decrease) in trade accounts payable . . . . . . . . . . . . . . . . . (684) 128 Increase in accrued payroll . . . . . . . . . . . . . . . . . . . . . . . . . . 3,289 1,852 Increase in accrued interest payable . . . . . . . . . . . . . . . . . . . . . 765 89 Increase in other current liabilities . . . . . . . . . . . . . . . . . . . . . 1,690 5,138 -------- -------- 19,119 24,201 -------- -------- CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Additions to and acquisitions of property and equipment, net . . . . . . . . . . (20,018) (22,991) Decrease in long-term notes receivable . . . . . . . . . . . . . . . . . . . . . 28,526 17,735 Increase in minority equity investments and other . . . . . . . . . . . . . . . . (4,757) (143) Increase in debt and equity securities . . . . . . . . . . . . . . . . . . . . . (8,843) (55,930) Unrealized gain on debt and equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 -- Sale of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 32,991 -------- -------- (4,528) (28,338) -------- -------- CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Proceeds from debt issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,535 8,519 Increase in cash held by trustee . . . . . . . . . . . . . . . . . . . . . . . . (124) (156) Increase in minority interest in subsidiaries . . . . . . . . . . . . . . . . . . 19 26 Increase in bond reserve funds, mortgage replacement reserves and other deposits . . . . . . . . . . . . . . . . . . . . (40) (129) Collection of receivables from exercise of options . . . . . . . . . . . . . . . 422 938 Payments on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,788) (2,863) Cash distributions to partners . . . . . . . . . . . . . . . . . . . . . . . . . (15,222) (4,333) Increase in financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (77) -------- -------- (14,198) 1,925 -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . 393 (2,212) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . 145 13,012 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . . . . . . . . . . . . . $ 538 $ 10,800 ======== ======== SUPPLEMENTAL INFORMATION: CASH PAYMENTS FOR INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . . . $ 7,922 $ 8,651 ======== ========
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. 5 6 NATIONAL HEALTHCORP L.P. CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (DOLLARS IN THOUSANDS)
RECEIVABLES FROM SALE OF UNREALIZED PARTNERSHIP PARTNERSHIP GAINS ON GENERAL LIMITED PARTNERS' UNITS UNITS SECURITIES PARTNERS PARTNERS TOTAL ----- ----- ---------- -------- -------- ----- BALANCE AT DECEMBER 31, 1993 7,796,433 $(15,134) $ -- $1,027 $106,633 $92,526 Net income -- -- -- 107 10,630 10,737 Collection of receivables -- 422 -- -- 422 Other 150 -- -- 1 3 4 Unrealized gains on securities -- -- 564 -- -- 564 Cash distributions ($.86 per unit) -- (66) (6,580) (6,646) --------- -------- ----- ------ -------- ------- BALANCE AT SEPT. 30, 1994 7,796,583 (14,712) 564 1,069 110,686 97,607 ========= ======== ===== ====== ======== ======= BALANCE AT DECEMBER 31, 1992 7,748,592 $(16,174) $ -- $ 791 $ 83,305 $67,922 Net income -- -- -- 333 32,938 33,271 Collection of receivables -- 938 -- -- -- 938 Other 4,610 -- -- 1 81 82 Cash distributions ($.56 per unit) -- -- -- (43) (4,290) (4,333) --------- -------- ----- ------ -------- ------- BALANCE AT SEPT. 30, 1993 7,753,202 $(15,236) $ -- $1,082 $112,034 $97,880 ========= ======== ===== ====== ======== =======
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. 6 7 NATIONAL HEALTHCORP L.P. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (Unaudited) Note 1 - CONSOLIDATED FINANCIAL STATEMENTS: The financial statements for the nine months ended September 30, 1994 and 1993, which have not been examined by independent public accountants, reflect, in the opinion of management, all adjustments necessary to present fairly the data for such periods. The results of the operations for the nine months ended September 30, 1994 are not necessarily indicative of the results that may be expected for the entire fiscal year ended December 31, 1994. The interim condensed balance sheet at December 31, 1993 is taken from the audited financial statements at that date. The interim condensed financial statements should be read in conjunction with the consolidated financial statements, including the notes thereto, for the periods ended December 31, 1993, December 31, 1992, and December 31, 1991. Note 2 - OTHER REVENUES:
Three Months Ended Nine Months Ended September 30 September 30 ----------------------- -------------------- 1994 1993 1994 1993 ---- ---- ---- ---- (in thousands) (in thousands) Revenue from managed centers $ 4,494 $ 4,317 $12,579 $10,113 Guarantee fees 218 250 710 573 Advisory fee from NHI 458 406 1,370 1,219 Earnings on securities (208) 724 191 1,378 Equity in earnings of unconsolidated investments 95 (342) 212 575 Interest income 1,152 780 3,791 2,248 Other 304 307 902 903 ------- ------- ------- ------- $ 6,513 $ 6,442 $19,755 $17,009 ======= ======= ======= =======
Revenues from managed centers include management fees and interest income on notes receivable from the managed centers. "Other" revenues include non-health care related earnings. Note 3 - SALE OF INVESTMENT: In August 1993, the Company sold its interest in VHA Long Term Care ("VHA LTC") for approximately $32,987,000 of cash. The transaction resulted in a gain of approximately $24,768,000 ($3.19 per unit, primary; $2.55 per unit, fully diluted). Prior to the sale, income from the VHA LTC investment was recognized under the equity method of accounting. Management believes that the disposition of the investment has not materially affected the earnings of the Company. 7 8 NATIONAL HEALTHCORP L.P. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (Unaudited) Note 4 - DEBT AND EQUITY SECURITIES: Statement of Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain Investments in Debt and Equity Securities" was issued by the Financial Accounting Standards Board effective for fiscal years beginning after December 15, 1993. As required by the Statement, securities are classified as trading, held-to-maturity or available for sale. Trading securities are bought and held principally for the purpose of selling them in the near term. Securities are classified as held-to-maturity when the Company has both the positive intent and ability to hold them to maturity. All other securities are classified as available for sale. The Company considers its investments in debt and equity securities as available for sale securities and unrealized gains and losses are recorded in partner's capital in accordance with the Statement. Application of SFAS No. 115 to prior periods is not permitted and, accordingly, prior financial statements have not been restated to reflect the change in accounting principle. The ending balance of partner's capital for September 30, 1994 was increased by approximately $564,000 to reflect the net unrealized investment gain on securities classified as available for sale which were previously carried at amortized cost or lower of cost or market. The amortized cost and estimated fair value of securities classified as available for sale were as follows at September 30, 1994 (in thousands):
Amortized Unrealized Unrealized Fair Cost Gain Loss Value --------- ---------- ---------- ------ Equity securities $ 7,706 $1,039 $407 $ 8,338 U.S. Government agency securities 468 -- 68 400 Municipal debt securities 5,775 -- -- 5,775 ------- ------ ---- ------- $13,949 $1,039 $475 $14,513 ======= ====== ==== =======
The amortized cost and estimated fair value of securities classified as available for sale at September 30, 1994, by contractual maturity are shown below (in thousands):
Maturities: Amortized Fair Cost Value --------- ------- Within One Year $ 100 $ 100 One to Five Years 950 950 Six to Ten Years 1,600 1,600 Over Ten Years 3,593 3,525 Other securities without stated maturity 7,706 8,338 ------- ------- Total securities available for sale $13,949 $14,513 ======= =======
8 9 NATIONAL HEALTHCORP L.P. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (Unaudited) Proceeds from the sale of investments in debt and equity securities during the period ended September 30, 1994 were $3,481,000. Gross investment gains of $253,000 and gross investment losses of $451,000 were realized on these sales. Realized gains and losses from securities sales are determined on the specific identification of the securities. The adoption of the Statement did not have a material effect on the Company's financial position or results of operations. Note 5 - GUARANTEES: In order to obtain management agreements and to facilitate the construction or acquisition of certain health care centers which the Partnership manages for others, the Partnership has guaranteed some or all of the debt (principal and interest) on those centers. For this service the Partnership charges an annual guarantee fee of 1% to 2% of the outstanding principal balance guaranteed, which fee is in addition to the Partnership's management fee. The principal amount outstanding under the guarantees is approximately $76,947,000 at September 30, 1994 with interest rates ranging from approximately 3.2% to 10.0%. Note 6 - ACQUISITIONS: In February, 1994, the Partnership acquired the stock of Spectrum Enterprises, Inc. and Spectrum Private Nursing Services, Inc. for a total consideration of approximately $4,253,000. Spectrum Enterprises, Inc. owns and operates eleven homecare programs located in Panama City, Port St. Joe, Carrabelle, Crawfordville, Tallahassee, Madison, Perry, Blountstown, Marianna, Quincy and Chipley, Florida. Spectrum Private Nursing Services, Inc. owns and operates two homecare programs located in Panama City and Tallahassee, Florida which provides services to private payors exclusively. Former shareholders have signed a covenant not to compete. The Partnership is amortizing the cost of the covenant not to compete over its term (96 months). In February, 1994, the Partnership purchased for approximately $6,000,000 a 120-bed long-term health care center located in Naples, Florida. Note 7 - UNIT OPTIONS: NHC has Incentive Option Plans which provide for the granting of options to key employees and directors to purchase units at no less than market value on the date of grant. On April 22, 1994, options to purchase 495,500 units were granted at $25.12 per unit. At September 30, 1994, options to purchase 5,000 units and 495,500 units at $11.25 and $25.12, respectively, remain outstanding. 9 10 NATIONAL HEALTHCORP L.P. FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (Unaudited) Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations Overview At September 30, 1994, National HealthCorp L.P. operates and manages 96 long-term health care centers with 12,303 beds in nine states. The Company provides nursing care as well as ancillary therapy services to patients in a variety of settings including long-term nursing centers, managed care specialty units, subacute care units, Alzheimer's care units, homecare programs, and facilities for assisted living. The Company also operates retirement centers. Results of Operations Last year's third quarter and nine month period through September 30 included a one-time gain from the sale of NHC's interest in VHA Long-Term Care. The gain increased both revenues and net income $24.8 million ($3.19 per unit, primary; $2.55 per unit, fully diluted) and, for purposes of comparison, is excluded from the discussion of results of operations below. Three Months Ended September 30, 1994 Compared to Three Months Ended September 30, 1993. Net revenues for the three months ended September 30, 1994 increased $13.3 million or 21.4% to $75.6 million from $62.2 million for the three months ended September 30, 1993. Net patient revenues increased $13.3 million or 23.7% in the 1994 period as compared to the 1993 period. Other revenues increased 1.1% to $6.5 million. The increased revenues for the quarter reflect the continued growth of operations. Compared to the quarter a year ago, NHC has increased the number of owned or leased long-term care beds from 5,913 beds to 6,290 beds. The number of long-term care beds managed for others has increased from 5,174 beds to 6,013 beds. The number of homecare locations has increased from 17 locations to 28 locations. The Company has also put increased emphasis upon and expanded its more profitable managed care, acute care and rehabilitative services. Also contributing to increased revenues are improvements in both private pay and third party payor rates. Total costs and expenses for the 1994 third quarter increased $12.5 million or 21.2% to $71.5 million from $59.0 million. Salaries, wages and benefits, the largest operating costs of this service company, increased $8.0 million or 24.7% to $40.5 million from $32.5 million. Other operating expenses increased $3.9 million or 19.2% to $24.4 million for the 1994 third quarter compared to $20.5 million in the 1993 period. Depreciation and amortization increased 18.5% to $3.5 million. Interest costs remained flat at approximately $3.1 million. Increases in salaries, wages, benefits and other operating expenses are due to increased numbers of employees because of growth as well as inflationary wage increases. Depreciation increased as a result of the Company's placing of newly 10 11 NATIONAL HEALTHCORP L.P. FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (Unaudited) Management's Discussion and Analysis of Financial Conditions and Results of Operations (continued) constructed assets in service and due to improvements and remodeling at existing facilities in 1993 and 1994. The total census at owned and leased centers for the quarter averaged 92.3% compared to an average of 94.1% for the same quarter a year ago. Nine Months Ended September 30, 1994 Compared to Nine Months Ended September 30, 1993 Net revenues for the nine months ended September 30, 1994 increased $36.7 million or 20.6% to $215.3 million from $178.6 million for the nine months ended September 30, 1993. Net patient revenues increased $34.0 million or 21.0% in the 1994 period as compared to the 1993 period. Other revenues increased 16.1% to $19.8 million. The increased revenues for the quarter reflect the continued growth of operations. Compared to the nine months a year ago, NHC has increased the number of owned or leased long-term care beds from 5,913 beds to 6,290 beds. The number of long-term care beds managed for others has increased from 5,174 beds to 6,013 beds. The number of homecare locations has increased from 17 locations to 28 locations. The Company has also put increased emphasis upon and expanded its more profitable managed care, acute care and rehabilitative services. Also contributing to increased revenues are improvements in both private pay and third party payor rates. Total costs and expenses for the 1994 nine months increased $34.5 million or 20.3% to $204.6 million from $170.1 million. Salaries, wages and benefits, the largest operating costs of this service company, increased $23.6 million or 25.2% to $117.2 million from $93.6 million. Other operating expenses increased $9.4 million or 16.0% to $68.4 million for the 1994 nine months compared to $59.0 million in the 1993 period. Depreciation and amortization increased 18.3% to $10.3 million. Interest costs remained flat at approximately $8.7 million. Increases in salaries, wages, benefits and other operating expenses are due to increased numbers of employees because of growth as well as inflationary wage increases. Depreciation increased as a result of the Company's placing of newly constructed assets in service and due to improvements and remodeling of existing facilities in 1993 and 1994. The total census of owned and leased centers for the nine months averaged 92.7% compared to an average of 93.8% for the nine months a year ago. Liquidity and Capital Resources The Company has generated net cash from operating activities during the first nine months of 1994 in the amount of $19.1 million. The funds were used, along with 11 12 NATIONAL HEALTHCORP L.P. FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (Unaudited) Management's Discussion and Analysis of Financial Conditions and Results of Operations (continued) $28.5 million collected on long-term notes receivable and $3.5 million from an increase in long-term obligations to make additions to and acquisitions of property and equipment in the amount of $20.0 million, to make additional investments in debt and equity securities of $13.6 million, to make payments of cash distributions to partners of $15.2 million and to make payments on debt of $2.8 million. At September 30, 1994, the Company's ratio of long-term obligations to convertible debt and capital is 1.3 to 1. The ratio of current assets to current liabilities is 2.4 to 1. Working capital is $52.3 million. These financial resources with anticipated funds from future operations are expected to be adequate to enable the Partnership to meet its working capital requirements and expansion goals. Development During the first nine months of 1994, the Company added a net total of 436 licensed long-term care beds, 80 assisted living beds, additional rehabilitation space and purchased a Florida-based homecare company. Currently, NHC has 728 beds under development at 14 health care centers in Florida, South Carolina, Tennessee, Alabama and Missouri. 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND THE CONSOLIDATED BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 1,951,000 14,513,000 71,681,000 (3,328,000) 2,871,000 89,053,000 275,036,000 (74,012,000) 346,952,000 36,780,000 197,122,000 0 0 0 97,607,000 346,952,000 0 215,290,000 0 183,949,000 0 1,655,000 8,687,000 10,737,000 0 0 0 0 0 10,737,000 1.37 1.23
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