What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 167 added, 114 removed, 1099 unchanged (20% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Revenues and grant income:

31 unchanged sentences

30,087  

30,770  

Depreciation and amortization

14 unchanged sentences

Non–operating income

Unrealized gains/(losses) on marketable equity securities

Income before income taxes

12,116  

Unrealized gains/(losses) on marketable equity securities

Income/(loss) before income taxes

14,029  

52,073  

Income tax provision

19,818  

Income tax (provision)/benefit

Net income/(loss)

10,121  

2 unchanged sentences

Net loss attributable to noncontrolling interest

Net income attributable to National HealthCare Corporation

$ 16,281  

$ 3,203  

$ 28,004  

Net income/(loss) attributable to National HealthCare Corporation

$ 10,388  

Earnings per share attributable to National HealthCare Corporation stockholders:

$ 38,392  

$ 16,092  

Earnings/(loss) per share attributable to National HealthCare Corporation stockholders:

$ 0.68  

24 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income/(loss):

Unrealized gains/(losses) on investments in marketable debt securities

Nine Months Ended

Net income/(loss)

$ 10,121  

$ 37,323  

$ 14,403  

Other comprehensive loss:

Unrealized losses on investments in marketable debt securities

Reclassification adjustment for realized (gains)/losses on sales of marketable debt securities

Income tax (expense)/benefit related to items of other comprehensive income

Other comprehensive income/(loss), net of tax

Income tax benefit related to items of other comprehensive income

Other comprehensive loss, net of tax

Net loss attributable to noncontrolling interest

Comprehensive income/(loss) attributable to National HealthCare Corporation

$ 9,327  

$ 37,810  

$ 4,064  

The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

2 unchanged sentences

(in thousands)

September 30,

Current Assets:

10 unchanged sentences

23,136  

Restricted marketable equity securities

3 unchanged sentences

12,005  

16,244  

Accounts receivable

3 unchanged sentences

10,546  

Total current assets

33 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

Liabilities and Stockholders ’

33 unchanged sentences

10,909  

Other noncurrent liabilities

28 unchanged sentences

in thousands)

Six Months Ended

Nine Months Ended

Cash Flows From Operating Activities:

$ 37,323  

$ 14,403  

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

30,266  

30,011  

Equity in earnings of unconsolidated investments

1 unchanged sentence

Unrealized (gains)/losses on marketable equity securities

11,479  

Realized losses on sale of marketable securities

Recovery of notes receivable

Deferred income taxes

11 unchanged sentences

Other current liabilities

14,035  

Other noncurrent liabilities

Net cash provided by/(used in) operating activities

85,483  

Cash Flows From Investing Activities:

2 unchanged sentences

Proceeds from the sale of property and equipment

(Investments in)/collections of notes receivable

Investments in notes receivable

( 400 )  

Collections of notes receivable

Purchases of marketable securities

Proceeds from sale of marketable securities

36,578  

38,114  

Net cash used in investing activities

8 unchanged sentences

Net Increase/(Decrease) in Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

45,390  

Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Beginning of Period

74,865  

119,743  

Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, End of Period

$ 120,255  

$ 72,200  

Balance Sheet Classifications:

Cash and cash equivalents

$ 100,308  

$ 44,515  

Restricted cash and cash equivalents

19,947  

27,685  

Total Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

$ 120,255  

$ 72,200  

The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

2 unchanged sentences

(in thousands, except share and per share amounts)

For the six months ended June 30, 2023 :

For the nine months ended September 30, 2023 :

Comprehensive

6 unchanged sentences

$ 877,514  

Net income/(loss)

11,723  

25 unchanged sentences

886,358  

For the six months ended June 30, 2022:

Net income/(loss)

10,388  

10,121  

Other comprehensive loss

Stock–based compensation

Shares sold –

options exercised

Dividends declared to common stockholders ($ 0.59 per share)

Balance at September 30, 2023

15,324,560  

226,888  

668,244  

887,340  

For the nine months ended September 30, 2022:

Comprehensive

36 unchanged sentences

$ 902,610  

Net income loss

Other comprehensive loss

Stock–based compensation

Shares sold –

options exercised

Repurchase of common shares

Dividends declared to common stockholders ($ 0.57 per share)

Balance at September 30, 2022

15,393,103  

228,522  

659,059  

881,328  

T he accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated statements.

1 unchanged sentence

Notes to Interim Condensed Consolidated Financial Statements

June 30, 2023

September 30, 2023

(unaudited)  

3 unchanged sentences

or the “Company”) is a leading provider of senior health care services.

As of June 30, 2023, we operate or manage, through certain affiliates, 68 skilled nursing facilities with a total of 8,732 licensed beds, 23 assisted living facilities with 1,181 units, five independent living facilities, three behavioral health hospitals, 35 homecare agencies, and 30 hospice agencies.

As of September 30, 2023, we operate or manage, through certain affiliates, 68 skilled nursing facilities with a total of 8,732 licensed beds, 26 assisted living facilities with 1,501 units, five independent living facilities, three behavioral health hospitals, 35 homecare agencies, and 30 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.

37 unchanged sentences

Credit losses are recorded as bad debt expense, which is included as a component of other operating expenses in the interim condensed consolidated statements of operations.

Bad debt expense was $ 1,852,000  and $ 3,663,000 for the three and six months ended June 30, 2023.

For the three and six months ended June 30, 2022, bad debt expense was $ 1,805,000 and $ 4,341,000 , respectively. As of June 30, 2023 

Bad debt expense was $ 1,668,000  and $ 5,331,000 for the three and nine months ended September 30, 2023, respectively.

For the three and nine months ended September 30, 2022, bad debt expense was $ 1,685,000 and $ 6,026,000 , respectively. As of September 30, 2023 

and December 31, 2022, the Company has recorded allowance for doubtful accounts of $ 8,598,000 and $ 6,246,000 , respectively, as our best estimate of expected losses inherent in the accounts receivable balance.

9 unchanged sentences

Government Grants

We account for government grants in accordance with International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance , and as such, we recognize grant income on a systematic basis in line with the recognition of specific expenses and lost revenues for which the grants are intended to compensate.

Segment Reporting

11 unchanged sentences

With the Company being a healthcare provider, the majority of our expenses are "cost of revenue" items.

Costs that could be classified as "general and administrative" by the Company would include its corporate office costs, excluding stock-based compensation, which were $ 4,995,000 and $ 10,648,000 for the three and six months ended June 30, 2023.

General and administrative costs were $ 4,799,000 and $ 10,586,000 for the three and six months ended June 30, 2022, respectively.

Costs that could be classified as "general and administrative" by the Company would include its corporate office costs, excluding stock-based compensation and incentive compensation, which were $ 5,661,000 and $ 16,309,000 for the three and nine months ended September 30, 2023, respectively.

General and administrative costs were $ 6,050,000 and $ 16,636,000 for the three and nine months ended September 30, 2022, respectively.

Long-Term Leases

56 unchanged sentences

If the present value of the cost of future services exceeds the related anticipated revenues, a liability is recorded with a corresponding charge to income.

As of June 30, 2023, and December 31, 2022, we have recorded a future service obligation liability in the amount of $ 2,218,000 .

This obligation is reflected within other noncurrent liabilities in the interim condensed consolidated balance sheets.

As of September 30, 2023, and December 31, 2022, we have recorded a future service obligation liability in the amount of $ 2,218,000 .

This obligation is reflected within other noncurrent liabilities in the interim condensed consolidated balance sheets. 

Other Noncurrent Liabilities

13 unchanged sentences

The investments in unconsolidated VIEs are classified as “investments in unconsolidated companies”

in the interim condensed consolidated balance sheets.

Note 3 –

6 unchanged sentences

The Provider Relief Fund grants come with terms and condition certifications in which all providers are required to submit documents to ensure the funds are used for healthcare-related expenses or lost revenue attributable to COVID- 19.

The Company recorded $ 0 and $ 320,000 of government stimulus income from the Provider Relief Funds for the three months ended June 30, 2023 and 2022, respectively.

The Company recorded $ 0 and $ 10,940,000 of government stimulus income from the Provider Relief Funds for the six months ended June 30, 2023 and 2022, respectively.

The Company recorded $ 0 of government stimulus income from the Provider Relief Funds for the three months ended September 30, 2023 and 2022.

The Company recorded $ 0 and $ 10,940,000 of government stimulus income from the Provider Relief Funds for the nine months ended September 30, 2023 and 2022, respectively.

The grant income was determined on a systematic basis in line with the recognition of specific expenses and lost revenues for which the grants are intended to compensate.

2 unchanged sentences

We have also received supplemental Medicaid payments from many of the states in which we operate to help mitigate the incremental costs resulting from the COVID- 19 public health emergency.

We have recorded $ 6,247,000 and $ 5,001,000 in net patient revenues for these supplemental Medicaid payments for the three months ended June 30, 2023 and 2022, respectively. We have recorded $ 11,130,000 and $ 10,539,000 in net patient revenues for these supplemental Medicaid payments for the six months ended June 30, 2023 and 2022, respectively.

We have recorded $ 4,232,000 and $ 4,773,000 in net patient revenues for these supplemental Medicaid payments for the three months ended September 30, 2023 and 2022, respectively. We have recorded $ 15,362,000 and $ 15,312,000 in net patient revenues for these supplemental Medicaid payments for the nine months ended September 30, 2023 and 2022, respectively.

Note 4 –

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Net patient revenues:

25 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Private Pay and Other

29 unchanged sentences

We believe that any differences between the net revenues recorded, and final determination will not materially affect the consolidated financial statements.

We have made provisions of approximately $ 15,659,000 and $ 16,631,000 as of June 30, 2023 and December 31, 2022, respectively, for various Medicare, Medicaid, and Managed Care claims reviews and current and prior year cost reports.

We have made provisions of approximately $ 15,588,000 and $ 16,631,000 as of September 30, 2023 and December 31, 2022, respectively, for various Medicare, Medicaid, and Managed Care claims reviews and current and prior year cost reports.

Note 5 –

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Rental income

4 unchanged sentences

Management and accounting services fees

14,045  

11,993  

Insurance services

10 unchanged sentences

We manage five skilled nursing facilities owned by National Health Corporation (“National”).

We recognized management fees and interest on management fees from these facilities of $ 1,276,000 and $ 1,002,000 for the three months ended June 30, 2023 and 2022, respectively.

We recognized management fees and interest on management fees of $ 2,466,000 and $ 1,983,000 from these facilities for the six months ended June 30, 2023 and 2022, respectively.

We recognized management fees and interest on management fees from these facilities of $ 1,243,000 and $ 1,029,000 for the three months ended September 30, 2023 and 2022, respectively.

We recognized management fees and interest on management fees of $ 3,968,000 and $ 3,012,000 from these facilities for the nine months ended September 30, 2023 and 2022, respectively.

Insurance Services

For workers’

compensation insurance services, the premium revenues reflected in the interim condensed consolidated statements of operations for the three months ended June 30, 2023 and 2022 were $ 570,000 and $ 716,000 , respectively.

The premium revenues reflected in the interim condensed consolidated statements of operations for the six months ended June 30, 2023 and 2022 were $ 1,307,000 and $ 1,443,000 , respectively.

compensation insurance services, the premium revenues reflected in the interim condensed consolidated statements of operations for the three months ended September 30, 2023 and 2022 were $ 678,000 and $ 496,000 , respectively.

The premium revenues reflected in the interim condensed consolidated statements of operations for the nine months ended September 30, 2023 and 2022 were $ 1,985,000 and $ 1,939,000 , respectively.

Associated losses and expenses including those for self-insurance are included in the interim condensed consolidated statements of operations as "Salaries, wages and benefits."

For professional liability insurance services, the premium revenues reflected in the interim condensed consolidated statements of operations for the three months ended June 30, 2023 and 2022 were $ 312,000 and $ 519,000 , respectively.

The premium revenues reflected in the interim condensed consolidated statements of operations for the six months ended June 30, 2023 and 2022 were $ 623,000 and $ 1,039,000 , respectively.

For professional liability insurance services, the premium revenues reflected in the interim condensed consolidated statements of operations for the three months ended September 30, 2023 and 2022 were $ 312,000 and $ 519,000 , respectively.

The premium revenues reflected in the interim condensed consolidated statements of operations for the nine months ended September 30, 2023 and 2022 were $ 935,000 and $ 1,558,000 , respectively.

Associated losses and expenses including those for self–insurance are included in the interim condensed consolidated statements of operations as "Other operating costs and expenses".

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Dividends and net realized gains and losses on sales of securities

21 unchanged sentences

The following table sets forth the Company’s unaudited interim condensed consolidated statements of operations by business segment (in thousands ):

Three Months Ended June 30, 2023

Revenues and grant income:

Three Months Ended September 30, 2023

Net patient revenues

5 unchanged sentences

11,480  

Net operating revenues and grant income

Net operating revenues

244,162  

11 unchanged sentences

72,490  

10,094  

Depreciation and amortization

9 unchanged sentences

Non-operating income

Unrealized gains on marketable equity securities

Income before income taxes

$ 10,474  

Unrealized losses on marketable equity securities

Income/(loss) before income taxes

$ 10,556  

1 unchanged sentence

$ 14,029  

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Net patient revenues

5 unchanged sentences

10,596  

Government stimulus income

Net operating revenues and grant income

Net operating revenues

227,940  

23 unchanged sentences

$ 5,395  

$ 3,523  

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Net patient revenues

5 unchanged sentences

36,013  

Net operating revenues and grant income

Net operating revenues

707,689  

27 unchanged sentences

Non-operating income

12,116  

Unrealized gains on marketable equity securities

4 unchanged sentences

$ 52,073  

Six Months Ended June, 2022

Nine Months Ended September, 2022

Revenues and grant income:

40 unchanged sentences

Unrealized losses on marketable equity securities

Income before income taxes

$ 11,271  

Income/(loss) before income taxes

$ 11,549  

4 unchanged sentences

Operating Leases

At June 30, 2023, we lease from NHI the real property of 28 skilled nursing facilities, five assisted living centers and three independent living centers under one lease agreement.

At September 30, 2023, we lease from NHI the real property of 28 skilled nursing facilities, five assisted living centers and three independent living centers under one lease agreement.

As part of the lease agreement, we sublease four Florida skilled nursing facilities to a third -party operator.

2 unchanged sentences

The percentage rent is based on a quarterly calculation of revenue increases and is payable on a quarterly basis.

Total facility rent expense to NHI was $ 9,124,000 and $ 9,563,000 for the three months ended June 30, 2023 and 2022, respectively.

Total facility rent expense to NHI was $ 18,419,000 and $ 18,815,000 for the six months ended June 30, 2023 and 2022, respectively.

Total facility rent expense to NHI was $ 9,300,000 and $ 9,478,000 for the three months ended September 30, 2023 and 2022, respectively.

Total facility rent expense to NHI was $ 27,719,000 and $ 28,293,000 for the nine months ended September 30, 2023 and 2022, respectively.

Finance Leases

At June 30, 2023, we leased and operated three senior healthcare facilities in the state of Missouri under three separate lease agreements.

At September 30, 2023, we leased and operated three senior healthcare facilities in the state of Missouri under three separate lease agreements.

Two of the healthcare facilities are skilled nursing facilities that also include assisted living facilities and the third healthcare facility is a memory care facility.

2 unchanged sentences

Minimum Lease Payments

The following table summarizes the maturity of our finance and operating lease liabilities as of June 30, 2023 ( in thousands ):

$ 3,467  

The following table summarizes the maturity of our finance and operating lease liabilities as of September 30, 2023 ( in thousands ):

$ 2,166  

16 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Weighted average common shares outstanding

3 unchanged sentences

15,438,375  

Net income attributable to National HealthCare Corporation

$ 16,281  

$ 3,203  

Net income attributable to National HealthCare Corporation

$ 10,388  

$ 38,392  

Earnings per common share, basic

$ 16,092  

Earnings per common share, basic

$ 0.68  

10 unchanged sentences

38,728  

40,835  

Weighted average common shares outstanding

3 unchanged sentences

15,477,103  

Net income attributable to National HealthCare Corporation

$ 16,281  

$ 3,203  

Net income attributable to National HealthCare Corporation

$ 10,388  

$ 38,392  

Earnings per common share, diluted

$ 16,092  

Earnings per common share, diluted

$ 0.68  

1 unchanged sentence

$ 1.04  

In the above table, options to purchase 641,310  and 391,050  shares of our common stock have been excluded for the six months ended June 30, 2023 

In the above table, options to purchase 637,409  and 389,781  shares of our common stock have been excluded for the nine months ended September 30, 2023 

and 2022, respectively, due to their anti-dilutive impact.

7 unchanged sentences

Marketable securities consist of the following (in thousands) :

June 30, 2023

September 30, 2023

December 31, 2022

37 unchanged sentences

Included in the marketable equity securities are the following (in thousands, except share amounts):

June 30, 2023

September 30, 2023

December 31, 2022

7 unchanged sentences

The amortized cost and estimated fair value of debt securities classified as available for sale, by contractual maturity, are as follows (in thousands) :

June 30, 2023

September 30, 2023

December 31, 2022

18 unchanged sentences

$ 142,647  

Gross unrealized gains related to marketable equity securities are $ 76,349,000 and $ 71,869,000 as of June 30, 2023 and December 31, 2022, respectively.

Gross unrealized losses related to marketable equity securities are $ 1,671,000 and $ 3,227,000 as of June 30, 2023 and December 31, 2022, respectively.

For the three months ended June 30, 2023 and 2022, the Company recognized net unrealized gains of $ 4,650,000 and net unrealized losses of $ 3,549,000 , respectively, for the changes in fair market value of the marketable equity securities in the interim condensed consolidated statements of operations.

For the six months ended June 30, 2023 and 2022, the Company recognized net unrealized gains of $ 6,036,000 and net unrealized losses of $ 423,000 , respectively, for the changes in fair market value of the marketable equity securities in the interim condensed consolidated statements of operations.

Gross unrealized gains related to available for sale marketable debt securities are $ 24,000 and $ 9,000 as of June 30, 2023 and December 31, 2022, respectively.

Gross unrealized losses related to available for sale marketable debt securities are $ 10,486,000 and $ 11,071,000 as of June 30, 2023 and December 31, 2022, respectively.

Gross unrealized gains related to marketable equity securities are $ 73,823,000 and $ 71,869,000 as of September 30, 2023 and December 31, 2022, respectively.

Gross unrealized losses related to marketable equity securities are $ 2,238,000 and $ 3,227,000 as of September 30, 2023 and December 31, 2022, respectively.

For the three months ended September 30, 2023 and 2022, the Company recognized net unrealized losses of $ 3,093,000 and $ 11,056,000 , respectively, for the changes in fair market value of the marketable equity securities in the interim condensed consolidated statements of operations.

For the nine months ended September 30, 2023 and 2022, the Company recognized net unrealized gains of $ 2,943,000 and net unrealized losses of $ 11,479,000 , respectively, for the changes in fair market value of the marketable equity securities in the interim condensed consolidated statements of operations.

Gross unrealized gains related to available for sale marketable debt securities are $ 3,000 and $ 9,000 as of September 30, 2023 and December 31, 2022, respectively.

Gross unrealized losses related to available for sale marketable debt securities are $ 11,651,000 , comprised of securities with a fair value of $ 123,530,000 , as of September 30, 2023. 

Gross unrealized losses related to available for sale marketable debt securities are $ 11,071,000 , comprised of securities with a fair value of $ 139,629,000 , as of December 31, 2022.

The Company’s unrealized losses in our available for sale marketable debt securities were determined to be non-credit related.

The Company has not recognized any credit related impairments for the six months ended 

June 30, 2023 and 2022.

For the marketable securities in gross unrealized loss positions, (a) it is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and (b) the Company expects that the contractual principal and interest will be received on the investment securities.

Proceeds from the sale of available for sale marketable securities during the six months ended June 30, 2023 and 2022 were $ 28,051,000 and $ 30,814,000 , respectively.

Investment losses of $ 561,000 and $ 364,000 were realized on these sales during the six months ended June 30, 2023 and 2022, respectively. 

The Company has not recognized any credit related impairments for the nine months ended 

September 30, 2023 and 2022.

For the marketable debt securities in gross unrealized loss positions, (a) it is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and (b) the Company expects that the contractual principal and interest will be received on the investment securities.

Proceeds from the sale of available for sale marketable securities during the nine months ended September 30, 2023 and 2022 were $ 36,578,000 and $ 38,114,000 , respectively.

Investment losses of $ 603,000 and $ 756,000 were realized on these sales during the nine months ended September 30, 2023 and 2022, respectively. 

Note 11 –

9 unchanged sentences

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The following table summarizes fair value measurements by level at June 30, 2023 and December 31, 2022 for assets and liabilities measured at fair value on a recurring basis (in thousands) :

The following table summarizes fair value measurements by level at September 30, 2023 and December 31, 2022 for assets and liabilities measured at fair value on a recurring basis (in thousands) :

Fair Value Measurements Using

June 30, 2023

September 30, 2023

For Identical

52 unchanged sentences

Goodwill and Other Intangible Assets

At June 30, 2023, the Company reviewed the carrying value of goodwill for impairment indicators.

At September 30, 2023, the Company reviewed the carrying value of goodwill for impairment indicators.

As a result of the review, there were no impairment indicators regarding the Company’s goodwill that required a quantitative test to be performed.

2 unchanged sentences

If actual results are not consistent with our assumptions and estimates, we may be exposed to future goodwill impairment losses.

At June 30, 2023, the following table represents the activity related to our goodwill by segment ( in thousands ):

At September 30, 2023, the following table represents the activity related to our goodwill by segment ( in thousands ):

January 1, 2023

2 unchanged sentences

$ 168,295  

June 30, 2023

September 30, 2023

$ 3,741  

3 unchanged sentences

Note 13 - Stock Repurchase Program

During the six months ended June 30, 2023, the Company repurchased 44,349 shares of its common stock for a total cost of $ 2,482,000 .

During the six months ended June 30, 2022, the Company repurchased 2,165 shares of its common stock for a total cost of $ 146,000 .

During the nine months ended September 30, 2023, the Company repurchased 44,349 shares of its common stock for a total cost of $ 2,482,000 .

During the nine months ended September 30, 2022, the Company repurchased 99,547 shares of its common stock for a total cost of $ 6,907,000 .

The shares were funded from cash on hand and were cancelled and returned to the status of authorized but unissued.

3 unchanged sentences

NHC recognizes stock–based compensation expense for all stock options granted over the requisite service period using the fair value at the date of grant using the Black–Scholes pricing model.

Stock–based compensation totaled $ 772,000 and $ 629,000 for the three months ended June 30, 2023 and 2022, respectively.

Stock-based compensation totaled $ 1,411,000 and $ 1,341,000 for the six months ended June 30, 2023 and 2022, respectively.

Stock–based compensation totaled $ 708,000 and $ 639,000 for the three months ended September 30, 2023 and 2022, respectively.

Stock-based compensation totaled $ 2,119,000 and $ 1,980,000 for the nine months ended September 30, 2023 and 2022, respectively.

Stock–based compensation is included in “Salaries, wages and benefits”

in the interim condensed consolidated statements of operations.

At June 30, 2023, the Company had $ 4,736,000 of unrecognized compensation cost related to unvested stock–based compensation awards.

At September 30, 2023, the Company had $ 4,068,000 of unrecognized compensation cost related to unvested stock–based compensation awards.

This unrecognized compensation cost will be amortized over an approximate two -year period.

Stock Options

The following table summarizes the significant assumptions used to value the options granted for the six months ended June 30, 2023 and for the year ended December 31, 2022.

The following table summarizes the significant assumptions used to value the options granted for the nine months ended September 30, 2023 and for the year ended December 31, 2022.

September 30,

Risk–free interest rate

8 unchanged sentences

3.57 %  

The following table summarizes our outstanding stock options for the six months ended June 30, 2023 and for the year ended December 31, 2022.

The following table summarizes our outstanding stock options for the nine months ended September 30, 2023 and for the year ended December 31, 2022.

Exercise Price

10 unchanged sentences

299,712  

Options exercised

Options cancelled

Options outstanding at Jun 30, 2023

Options outstanding at September 30, 2023

689,909  

$ 2,768,603  

Options exercisable at June 30, 2023

Options exercisable at September 30, 2023

175,847  

June 30, 2023

September 30, 2023

Exercise Prices

9 unchanged sentences

Note 15 –

The Company's income tax provision as a percentage of our income before income taxes was 28.7 % and 38.7 % for the three months ended June 30, 2023 and 2022, respectively.

The Company's income tax provision as a percentage of our income before income taxes was 28.5 % and 27.2 % for the six months ended June 30, 2023 and 2022, respectively. 

The Company's income tax provision as a percentage of our income before income taxes was 27.9 % for the three months ended September 30, 2023.

The Company’s income tax benefit as a percentage of our income before income taxes was 26.8 % for the three months ended September 30, 2022.

The Company's income tax provision as a percentage of our income before income taxes was 28.3 % and 27.3 % for the nine months ended September 30, 2023 and 2022, respectively. 

Typically, these percentages vary from the U.S.

federal statutory income tax rate of 21 % primarily due to state income taxes, excess tax benefits from stock-based compensation, adjustments to unrecognized tax benefits, benefits resulting from the lapsing of statute of limitations of items in our tax contingency reserve, and non-deductible expenses.

For the three months and six months ended June 30, 2023, the accrual of state income tax and adjustments to unrecognized tax benefits were the only significant reconciling items.

For the three months and six months ended June 30, 2022, the accrual of state income taxes and adjustments to unrecognized tax benefits were the only significant reconciling items.

federal statutory income tax rate of 21 % primarily due to state income taxes, excess tax benefits from stock-based compensation, benefits resulting from the lapsing of statute of limitations of items in our tax contingency reserve, and non-deductible expenses.

The tax benefit related to the statute of limitation expirations was $ 0 for the three and nine months ended September 30, 2023.

The tax benefit related to the statute of limitation expirations was $ 437,000 for the three and nine months ended September 30, 2022.

Our quarterly income tax provision, and our estimate of our annual effective income tax rate, is subject to variation due to several factors, including volatility based on the amount of pre-tax income or loss.  

8 unchanged sentences

The credit facility contains customary events of default and remedies.

As of June 30, 2023, we have no outstanding balance on the credit facility.

As of September 30, 2023, we have no outstanding balance on the credit facility.

Note 17 –

3 unchanged sentences

compensation and general and professional liability insurance claims both for our owned and leased entities and certain of the entities to which we provide management or accounting services.

The liability we have recognized for reported claims and estimates for incurred but unreported claims totals $ 106,220,000 and $ 102,469,000 at June 30, 2023 and December 31, 2022, respectively.

The liability we have recognized for reported claims and estimates for incurred but unreported claims totals $ 108,125,000 and $ 102,469,000 at September 30, 2023 and December 31, 2022, respectively.

The liability is included in accrued risk reserves in the interim condensed consolidated balance sheets and is subject to adjustment for actual claims incurred.

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The District Court granted NHC Healthcare/Moulton’s Motion to Dismiss, along with other pending Motions to Dismiss, and entered an Order of Dismissal on March 23, 2023 and an Amended Order of Dismissal on April 4, 2023, which dismissed the case in its entirety with prejudice with respect to the claims asserted by the Plaintiffs.

The Plaintiffs filed a Notice of Appeal on April 20, 2023 to appeal the dismissal to the 11th Circuit Court of Appeals.

The Plaintiffs filed a Notice of Appeal on April 20, 2023 to appeal the dismissal to the 11th Circuit Court of Appeals, which remains pending.

Governmental Regulations

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements