What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 291 added, 90 removed, 700 unchanged (35% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Net patient revenues

$ 363,349 $ 279,918 $ 724,956 $ 565,741

Other revenues

Net operating revenues

11,561 11,295 23,651 22,648

Government stimulus income

- 9,445 - 9,445

Net operating revenues and grant income

374,910 300,658 748,607 597,834

Cost and expenses:

Salaries, wages, and benefits

226,534 180,076 454,664 363,214

Other operating

91,943 78,154 184,400 155,583

Facility rent

11,328 10,570 22,693 20,918

Depreciation and amortization

11,015 9,338 21,993 19,924

Total costs and expenses

340,820 278,138 683,750 559,639

Income from operations

34,090 22,520 64,857 38,195

Other income (expense):

Non–operating income

5,132 4,956 9,211 10,641

Interest expense

Unrealized gains on marketable equity securities

( 1,993 ) - ( 4,099 ) ( 46 )

Unrealized gains/(losses) on marketable equity securities

( 5,061 ) 9,124 5,921 23,523

Income before income taxes

32,168 36,600 75,890 72,313

Income tax provision

( 8,055 ) ( 9,494 ) ( 19,487 ) ( 18,956 )

24,113 27,106 56,403 53,357

Net income attributable to noncontrolling interest

( 391 ) ( 262 ) ( 476 ) ( 300 )

Net income attributable to National HealthCare Corporation

$ 23,722 $ 26,844 $ 55,927 $ 53,057

Earnings per share attributable to National HealthCare Corporation stockholders:

$ 1.53 $ 1.74 $ 3.62 $ 3.45

$ 1.52 $ 1.73 $ 3.59 $ 3.42

Weighted average common shares outstanding:

15,462,135 15,391,535 15,450,286 15,371,150

15,599,638 15,555,612 15,587,783 15,530,624

Dividends declared per common share

$ 0.64 $ 0.61 $ 1.25 $ 1.20

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

3 unchanged sentences

Three Months Ended

Other comprehensive income/(loss):

Six Months Ended

$ 24,113 $ 27,106 $ 56,403 $ 53,357

Other comprehensive income:

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

Reclassification adjustment for realized gains on sales of marketable debt securities

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

Other comprehensive income/(loss), net of tax

1,081 30 2,675 ( 442 )

Reclassification adjustment for realized losses on sales of marketable debt securities

652 1,398 652 1,388

Income tax expense related to items of other comprehensive income

( 291 ) ( 296 ) ( 495 ) ( 251 )

Other comprehensive income, net of tax

1,442 1,132 2,832 695

Net income attributable to noncontrolling interest

( 391 ) ( 262 ) ( 476 ) ( 300 )

Comprehensive income attributable to National HealthCare Corporation

$ 25,164 $ 27,976 $ 58,759 $ 53,752

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

12 unchanged sentences

Restricted marketable debt securities, current portion

13,854 11,529

Accounts receivable

1 unchanged sentence

Prepaid expenses and other assets

Notes receivable

Total current assets

41 unchanged sentences

Dividends payable

Long-term debt due within one year

Long-term debt, current portion

Total current liabilities

32 unchanged sentences

(unaudited – in thousands)

Three Months Ended

Six Months Ended

Cash Flows From Operating Activities:

$ 56,403 $ 53,357

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

Depreciation and amortization

21,993 19,924

Equity in earnings of unconsolidated investments

( 616 ) ( 651 )

Distributions from unconsolidated investments

Unrealized gains on marketable equity securities

Gains on sale of marketable securities

( 5,921 ) ( 23,523 )

Realized gains on sale of marketable securities

( 480 ) ( 350 )

Gain on sale of unconsolidated company

Gain on sale of property and equipment

Deferred income taxes

( 1,406 ) 6,041

Stock–based compensation

1 unchanged sentence

Accounts receivable

( 6,736 ) ( 842 )

Prepaid expenses and other assets

1 unchanged sentence

Trade accounts payable

( 4,214 ) 2,588

Accrued payroll

18,925 ( 1,873 )

Amounts due to third party payors

( 191 ) ( 151 )

Accrued risk reserves

Contract liabilities

Other current liabilities

Other noncurrent liabilities

1,077 ( 8,328 )

Net cash provided by operating activities

102,074 60,307

Cash Flows From Investing Activities:

Purchases of property and equipment

Proceeds from sale of unconsolidated company

( 16,341 ) ( 13,788 )

Proceeds from the sale of unconsolidated company

Collections of (investments in) notes receivable

Investments in unconsolidated companies

Collections of notes receivable

( 3,205 ) ( 4,856 )

Purchases of marketable securities

( 47,276 ) ( 18,898 )

Proceeds from sale of marketable securities

43,455 34,662

Net cash used in investing activities

( 22,902 ) ( 990 )

Cash Flows From Financing Activities:

2 unchanged sentences

Dividends paid to common stockholders

Issuance of common stock

( 18,854 ) ( 18,137 )

Issuance of common shares

Repurchase of common shares

( 6,384 ) ( 11,402 )

Entrance fee deposits (refunds)

Net cash used in financing activities

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

( 45,732 ) ( 19,680 )

Net Increase in Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

33,440 39,637

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

96,922 125,968

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

$ 130,362 $ 165,605

Balance Sheet Classifications:

Cash and cash equivalents

$ 110,992 $ 136,214

Restricted cash and cash equivalents

19,370 29,391

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

$ 130,362 $ 165,605

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 three months ended March 31, 2025 :

For the six months ended June 30, 2025 :

Comprehensive

15 unchanged sentences

15,464,856 $ 154 $ 233,113 $ 774,954 $ ( 3,326 ) $ 3,087 $ 1,007,982

For the three months ended March 31, 2024:

– – – 23,722 – 391 24,113

Other comprehensive income

– – – – 1,442 – 1,442

Stock–based compensation

– – 1,233 – – – 1,233

Shares sold – options exercised

77,689 – 5,184 – – – 5,184

Repurchase of common shares

( 43,372 ) – ( 4,662 ) – – – ( 4,662 )

Dividends declared to common stockholders ($ 0.64 per share)

– – – ( 9,909 ) – – ( 9,909 )

Balance at June 30, 2025

15,499,173 $ 154 $ 234,868 $ 788,767 $ ( 1,884 ) $ 3,478 $ 1,025,383

For the six months ended June 30, 2024 :

Comprehensive

15 unchanged sentences

15,399,724 $ 154 $ 226,909 $ 704,726 $ ( 7,041 ) $ 1,766 $ 926,514

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

– – – 26,844 – 262 27,106

Other comprehensive income

– – – – 1,132 – 1,132

Stock–based compensation

– – 1,176 – – – 1,176

Shares sold – options exercised

38,849 – 2,827 – – – 2,827

Repurchase of common shares

( 15,636 ) – ( 1,502 ) – – – ( 1,502 )

Dividends declared to common stockholders ($ 0.61 per share)

– – – ( 9,408 ) – – ( 9,408 )

Balance at June 30, 2024

15,422,937 $ 154 $ 229,410 $ 722,162 $ ( 5,909 ) $ 2,028 $ 947,845

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

NATIONAL HEALTHCARE CORPORATION

Notes to Interim Condensed Consolidated Financial Statements

March 31, 2025

June 30, 2025

Note 1 – Description of Business

National HealthCare Corporation (“NHC” or the “Company”) is a leading provider of senior health care services.

As of March 31, 2025, we operate or manage, through certain affiliates, 80 skilled nursing facilities with a total of 10,329 licensed beds, 26 assisted living facilities with 1,413 units, nine independent living facilities, three behavioral health hospitals, 34 homecare agencies, and 33 hospice agencies.

As of June 30, 2025, we operate or manage, through certain affiliates, 80 skilled nursing facilities with a total of 10,329 licensed beds, 26 assisted living facilities with 1,413 units, nine independent living facilities, three behavioral health hospitals, 34 homecare agencies, and 33 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.

35 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 $ 2,661,000 and $ 2,471,000 for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, and December 31, 2024, the Company has recorded allowance for doubtful accounts of $ 10,926,000 and $ 9,702,000 , respectively, as our best estimate of expected losses inherent in the accounts receivable balance.

Bad debt expense was $ 3,377,000 and $ 6,038,000 for the three and six months ended June 30, 2025, respectively.

For the three and six months ended June 30, 2024, bad debt expense was $ 2,053,000 and $ 4,524,000 , respectively.

As of June 30, 2025 and December 31, 2024, the Company has recorded allowance for doubtful accounts of $ 12,452,000 and $ 9,702,000 , respectively, as our best estimate of expected losses inherent in the accounts receivable balance.

Other Revenues

7 unchanged sentences

We recognize variable rent annually or monthly, as applicable, when, based on the actual revenue of the lessee is earned.

Government Grants

We account for government grants in accordance with International Accounting Standards ("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.

For the six months ended June 30, 2024, all conditions related to the Employee Retention Credit ("ERC") were met and the credit was recognized as government stimulus income.

The ERC was established by the CARES Act and intended to help businesses retain their workforce and avoid layoffs during the pandemic.

The ERC provided a per employee credit to eligible businesses based on a percentage of qualified wages and health insurance benefits paid to employees.

The qualified wages and health insurance benefits paid by the Company were related to the second, third and fourth quarters of 2020.

Segment Reporting

2 unchanged sentences

( 1 ) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals, and ( 2 ) homecare and hospice services.

The Company also reports an "all other" category that includes revenues from rental income, management and accounting services fees, insurance services, and cost of the corporate office.

The Company also reports an “all other” category that includes revenues from rental income, management and accounting services fees, insurance services, and costs of the corporate office.

See Note 6 for further disclosure of the Company’s operating segments.

3 unchanged sentences

The primary facility costs include utilities and property insurance.

In 2025, we contributed land to a newly-formed limited liability company resulting in an equity interest in the new entity.

The fair value of the land contributed to the new entity was $ 5,625,000 .

The related cost basis of the contributed land was $ 2,019,000 , which resulted in a gain of $ 3,606,000 .

The gain has been included in the interim condensed consolidated statements of operations as "other operating expenses."

General and Administrative Costs

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 $ 6,632,000 and $ 6,164,000 for the three months ended March 31, 2025 and 2024, 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 $ 7,027,000 and $ 13,659,000 for the three and six months ended June 30, 2025, respectively.

General and administrative costs were $ 7,226,000 and $ 13,390,000 for the three and six months ended June 30, 2024, respectively.

Long-Term Leases

The Company’s lease portfolio primarily consists of operating real estate leases for certain skilled nursing facilities, assisted and independent living facilities, homecare and hospice offices, and pharmacy warehouses.

The original terms of the leases typically range from two to fifteen years.

10 unchanged sentences

Property and Equipment

Property and equipment are recorded at cost.

Property and equipment are recorded at cost or fair value, if acquired.

Depreciation is provided by the straight-line method over the expected useful lives of the assets estimated as follows:

1 unchanged sentence

Leasehold improvements are amortized over periods that do not exceed the non-cancelable respective lease terms using the straight-line method.

Investments in Unconsolidated Companies

We use the equity method to account for our investments in joint ventures in which we have the ability to exercise significant influence.

Original investments in these entities are recorded at cost and subsequently adjusted by our share of equity in income or losses.

As of June 30, 2025, the majority of our investments in unconsolidated companies relates to a multi-family development that is under construction in Franklin, Tennessee, in which we own a 55 % non-controlling interest.

Business Combinations

24 unchanged sentences

We are principally self-insured for incidents occurring in all centers owned or leased by us.

The coverages include both primary policies and excess policies.

The coverage includes both primary policies and excess policies.

In all years, settlements, if any, in excess of available insurance policy limits and our own reserves would be expensed by us.

1 unchanged sentence

We have continuing care retirement centers (“CCRC”) within our operations.

Residents may enter into continuing care contracts with us.

Residents at these retirement centers may enter into continuing care contracts with us.

Non-refundable fees are included as a component of the transaction price and are amortized into revenue over the actuarily determined remaining life of the resident, which is the expected period of occupancy by the resident.

3 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 March 31, 2025, and December 31, 2024, we have recorded a future service obligation liability in the amount of $ 1,474,000 .

As of June 30, 2025 and December 31, 2024, we have recorded a future service obligation liability in the amount of $ 1,474,000 .

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

9 unchanged sentences

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023 - 09 " Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures," which requires companies to disclosed disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts.

Improvements to Income Tax Disclosures," which requires companies to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts.

ASU 2023 - 09 is effective for annual periods beginning with the Company's fiscal year 2025.

8 unchanged sentences

We are currently evaluating the impact this ASU will have on the company's financial statements and related disclosures.

Reclassifications

Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform to the presentation in the current-year financial statements.

Note 3 – Net Patient Revenues

4 unchanged sentences

Three Months Ended

Six Months Ended

Net patient revenues:

1 unchanged sentence

$ 325,012 $ 245,385 $ 650,490 $ 497,638

Homecare and hospice services

Homecare and hospice

38,337 34,533 74,466 68,103

11 unchanged sentences

Three Months Ended

Six Months Ended

31 % 33 % 31 % 33 %

12 % 10 % 12 % 10 %

30 % 29 % 30 % 29 %

Private Pay and Other

27 % 28 % 27 % 28 %

100 % 100 % 100 % 100 %

Medicare covers skilled nursing services for beneficiaries who require nursing care and/or rehabilitation services following a hospitalization of at least three consecutive days.

22 unchanged sentences

The funding generally incorporates specific use requirements primarily for direct patient care including labor related expenses or various patient care related expenses.

We have recorded $ 1,872,000 and $ 3,462,000 in net patient revenues for these supplemental Medicaid payments for the three months ended March 31, 2025 and 2024, respectively.

We have recorded $ 1,812,000 and $ 2,585,000 in net patient revenues for these supplemental Medicaid payments for the three months ended June 30, 2025 and 2024, respectively.

We have recorded $ 3,684,000 and $ 6,047,000 in net patient revenues for these supplemental Medicaid payments for the six months ended June 30, 2025 and 2024, respectively.

Third Party Payors

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation.

Laws and regulations governing Medicare and Medicaid programs are complex and subject to interpretation.

Noncompliance with such laws and regulations can be subject to regulatory actions including fines, penalties, and exclusion from the Medicare and Medicaid programs.

5 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 $ 13,897,000 and $ 15,351,000 as of March 31, 2025 and December 31, 2024, respectively, for various Medicare, Medicaid, and Managed Care claims reviews and current and prior year cost reports.

We have made provisions of approximately $ 15,160,000 and $ 15,351,000 as of June 30, 2025 and December 31, 2024, respectively, for various Medicare, Medicaid, and Managed Care claims reviews and current and prior year cost reports.

Note 4 – Other Revenues

5 unchanged sentences

Three Months Ended

Six Months Ended

Rental income

1 unchanged sentence

Management and accounting services fees

4,085 4,081 8,508 8,518

Insurance services

831 816 1,645 1,688

473 370 875 455

Total other revenues

2 unchanged sentences

The Company leases real estate assets consisting of skilled nursing facilities and assisted living facilities to third party operators.

Additionally, we sublease four Florida skilled nursing facilities included in our lease from National Health Investors (“NHI”), who is a related party, as noted in Note 7 – Long Term Leases.

Additionally, we sublease four Florida skilled nursing facilities included in our lease from National Health Investors (“NHI”) as noted in Note 7 – Long Term Leases.

NHI is a publicly-traded real estate investment trust.

2 unchanged sentences

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

For the three months ended March 31, 2025 and 2024, we recognized management fees and interest on management fees of $ 1,408,000 and $ 1,320,000 , respectively, for these centers.

We recognized management fees and interest on management fees from these facilities of $ 1,376,000 and $ 1,346,000 for the three months ended June 30, 2025 and 2024, respectively.

We recognized management fees and interest on management fees of $ 2,784,000 and $ 2,666,000 from these facilities for the six months ended June 30, 2025 and 2024, 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 March 31, 2025 and 2024 were $ 525,000 and $ 582,000 , respectively.

For workers’ compensation insurance services, the premium revenues reflected in the interim condensed consolidated statements of operations for the three months ended June 30, 2025 and 2024 were $ 541,000 and $ 527,000 , respectively.

The premium revenues reflected in the interim condensed consolidated statements of operations for the six months ended June 30, 2025 and 2024 were $ 1,066,000 and $ 1,109,000 , 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 March 31, 2025 and 2024 were $ 289,000 and $ 290,000 , respectively.

For professional liability insurance services, the premium revenues reflected in the interim condensed consolidated statements of operations for the three months ended June 30, 2025 and 2024 were $ 289,000 and $ 289,000 , respectively.

The premium revenues reflected in the interim condensed consolidated statements of operations for the six months ended June 30, 2025 and 2024 were $ 579,000 and $ 579,000 , 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".

2 unchanged sentences

Three Months Ended

Six Months Ended

Dividends and net realized gains and losses on sales of securities

1 unchanged sentence

Interest income

2,588 2,648 4,713 5,186

Equity in earnings of unconsolidated investments

616 584 616 651

Gain on sale of unconsolidated company

2 unchanged sentences

Gain on sale of unconsolidated company

In January 2024, the Company sold its ownership interest in a homecare agency located in Nashville, Tennessee.

In January 2024, the Company sold its 50 % joint venture ownership interest in a homecare agency located in Nashville, Tennessee.

The total consideration paid to the Company was $ 2,100,000 , which resulted in a gain of $ 1,024,000 .

7 unchanged sentences

The CODM does not review assets by segment in his resource allocation and therefore, assets by segment are not disclosed below.

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

Three Months Ended March 31, 2025

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, 2025

Net patient revenues

19 unchanged sentences

Interest expense

Unrealized gains on marketable equity securities

( 1,993 ) - - ( 1,993 )

Unrealized losses on marketable equity securities

- - ( 5,061 ) ( 5,061 )

Income/(loss) before income taxes

$ 30,431 $ 7,396 $ ( 5,659 ) $ 32,168

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Net patient revenues

2 unchanged sentences

324 - 10,971 11,295

Net operating revenues

Government stimulus income

- - 9,445 9,445

Net operating revenues and grant income

245,709 34,533 20,416 300,658

Costs and expenses:

8 unchanged sentences

231,517 28,443 18,178 278,138

Income from operations

14,192 6,090 2,238 22,520

Non-operating income

- - 4,956 4,956

Interest expense

Unrealized gains on marketable equity securities

- - 9,124 9,124

Income before income taxes

$ 14,192 $ 6,090 $ 16,318 $ 36,600

Six Months Ended June 30, 2025

Net patient revenues

$ 650,490 $ 74,466 $ - $ 724,956

Other revenues

803 - 22,848 23,651

Net operating revenues and grant income

651,293 74,466 22,848 748,607

Costs and expenses:

Salaries, wages, and benefits

383,078 45,587 25,999 454,664

Other operating

165,319 14,304 4,777 184,400

17,662 1,189 3,842 22,693

Depreciation and amortization

20,161 261 1,571 21,993

Total costs and expenses

586,220 61,341 36,189 683,750

Income/(loss) from operations

3 unchanged sentences

Interest expense

( 4,099 ) - - ( 4,099 )

Unrealized gains on marketable equity securities

2 unchanged sentences

$ 60,974 $ 13,125 $ 1,791 $ 75,890

Six Months Ended June 30, 2024

Net patient revenues

$ 497,638 $ 68,103 $ - $ 565,741

Other revenues

339 - 22,309 22,648

Government stimulus income

- - 9,445 9,445

Net operating revenues and grant income

497,977 68,103 31,754 597,834

Costs and expenses:

Salaries, wages, and benefits

298,949 42,305 21,960 363,214

Other operating

135,496 12,367 7,720 155,583

16,374 1,133 3,411 20,918

Depreciation and amortization

18,013 374 1,537 19,924

Total costs and expenses

468,832 56,179 34,628 559,639

Income/(loss) from operations

29,145 11,924 ( 2,874 ) 38,195

Non-operating income

- - 10,641 10,641

Interest expense

( 46 ) - - ( 46 )

Unrealized gains on marketable equity securities

- - 23,523 23,523

Income before income taxes

$ 29,099 $ 11,924 $ 31,290 $ 72,313

Note 7 – Long-Term Leases

Operating Leases

At March 31, 2025, 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 June 30, 2025, 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.

The lease includes base rent plus a percentage rent.

The annual base rent is $ 32,225,000 in 2025 and $ 31,975,000 in 2026 with the lease term expiring in 2026.

The annual base rent is $ 32,225,000 in 2025 and $ 31,975,000 in 2026 with the lease term expiring in December 2026.

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 $ 9,911,000 and $ 9,472,000 for the three months ended March 31, 2025 and 2024, respectively.

Total facility rent expense to NHI was $ 9,903,000 and $ 9,814,000 for the three months ended June 30, 2025 and 2024, respectively.

Total facility rent expense to NHI was $ 19,814,000 and $ 19,286,000 for the six months ended June 30, 2025 and 2024, respectively.

Minimum Lease Payments

The following table summarizes the maturity of our operating lease liabilities as of March 31, 2025 ( in thousands ):

The following table summarizes the maturity of our operating lease liabilities as of June 30, 2025 ( in thousands ):

Total minimum lease payments

8 unchanged sentences

Three Months Ended

Six Months Ended

Weighted average common shares outstanding

14 unchanged sentences

$ 1.52 $ 1.73 $ 3.59 $ 3.42

For the three months ended March 31, 2025 and 2024, 493,249 and 245,726 stock options, respectively, were excluded from the calculation of diluted weighted average shares of common stock outstanding because the inclusion of these securities would have an anti-dilutive impact.

For the three and six months ended June 30, 2025, 269,351 stock options were excluded from the calculation of diluted weighted average shares of common stock outstanding because the inclusion of these securities would have an anti-dilutive impact.

For the three and six months ended June 30 2024, 233,486 of stock options have been excluded from the calculation of diluted weighted average shares of common stock outstanding because the inclusion of these securities would have an anti-dilutive effect.

Note 9 – Investments in Marketable Securities

5 unchanged sentences

Marketable securities consist of the following (in thousands) :

March 31, 2025

June 30, 2025

December 31, 2024

15 unchanged sentences

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

March 31, 2025

June 30, 2025

December 31, 2024

2 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) :

March 31, 2025

June 30, 2025

December 31, 2024

7 unchanged sentences

$ 135,689 $ 133,701 $ 125,118 $ 119,804

Gross unrealized gains related to marketable equity securities are $ 126,575,000 and $ 115,259,000 as of March 31, 2025 and December 31, 2024, respectively.

Gross unrealized losses related to marketable equity securities are $ 1,049,000 and $ 715,000 as of March 31, 2025 and December 31, 2024, respectively.

For the three months ended March 31, 2025 and 2024, the Company recognized net unrealized gains of $ 10,982,000 and $ 14,399,000 , 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 $ 494,000 and $ 135,000 as of March 31, 2025 and December 31, 2024, respectively.

Gross unrealized losses related to available for sale marketable debt securities are $ 4,215,000 and $ 5,449,000 as of March 31, 2025 and December 31, 2024, respectively.

Gross unrealized gains related to marketable equity securities are $ 120,859,000 and $ 115,259,000 as of June 30, 2025 and December 31, 2024, respectively.

Gross unrealized losses related to marketable equity securities are $ 393,000 and $ 715,000 as of June 30, 2025 and December 31, 2024, respectively.

For the three months ended June 30, 2025 and 2024, the Company recognized net unrealized losses of $ 5,061,000 and net unrealized gains of $ 9,124,000 , 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, 2025 and 2024, the Company recognized net unrealized gains of $ 5,921,000 and $ 23,523,000 , 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 $ 1,044,000 and $ 135,000 as of June 30, 2025 and December 31, 2024, respectively.

Gross unrealized losses related to available for sale marketable debt securities are $ 3,032,000 and $ 5,449,000 as of June 30, 2025 and December 31, 2024, respectively.

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 three months ended March 31, 2025 and 2024.

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 three months ended March 31, 2025 and 2024 were $ 12,288,000 and $ 11,615,000 , respectively.

Investment gains of $ 241,000 and $ 344,000 were realized on these sales during the three months ended March 31, 2025 and 2024, respectively.

The Company has not recognized any credit related impairments for the six months ended June 30, 2025 and 2024.

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 six months ended June 30, 2025 and 2024 were $ 43,455,000 and $ 34,662,000 , respectively.

Investment gains of $ 480,000 and $ 350,000 were realized on these sales during the six months ended June 30, 2025 and 2024, respectively.

Note 10 – Fair Value Measurements

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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 March 31, 2025 and December 31, 2024 for assets and liabilities measured at fair value on a recurring basis (in thousands) :

The following table summarizes fair value measurements by level at June 30, 2025 and December 31, 2024 for assets and liabilities measured at fair value on a recurring basis (in thousands) :

Fair Value Measurements Using

March 31, 2025

June 30, 2025

For Identical

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Note 11 – Goodwill and Other Intangible Assets

At March 31, 2025, we evaluated potential triggering events that might be indicators that our goodwill and indefinite lived intangibles were impaired.

At June 30, 2025, we evaluated potential triggering events that might be indicators that our goodwill and indefinite lived intangibles were impaired.

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 March 31, 2025, the following table represents the activity related to our goodwill by segment ( in thousands ):

At June 30, 2025, the following table represents the activity related to our goodwill by segment ( in thousands ):

January 1, 2025

$ 5,924 $ 164,554 $ – $ 170,478

March 31, 2025

June 30, 2025

$ 5,924 $ 164,554 $ – $ 170,478

Indefinite-lived intangible assets consist of the following (in thousands) :

December 31, 2024

$ 15,896 $ 15,896

2 unchanged sentences

Note 12 - Stock Repurchase Program

During the three months ended March 31, 2025, the Company repurchased 17,409 shares of its common stock for a total cost of $ 1,722,000 .

During the three months ended March 31, 2024, the Company repurchased 101,131 shares of its common stock for a total cost of $ 9,900,000 .

During the six months ended June 30, 2025, the Company repurchased 60,781 shares of its common stock for a total cost of $ 6,384,000 .

During the six months ended June 30, 2024, the Company repurchased 116,767 shares of its common stock for a total cost of $ 11,402,000 .

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

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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 $ 1,027,000 and $ 793,000 for the three months ended March 31, 2025 and 2024, respectively.

Stock–based compensation totaled $ 1,233,000 and $ 1,175,000 for the three months ended June 30, 2025 and 2024, respectively.

Stock-based compensation totaled $ 2,260,000 and $ 1,969,000 for the six months ended June 30, 2025 and 2024, respectively.

Stock–based compensation is included in “Salaries, wages and benefits” in the interim condensed consolidated statements of operations.

At March 31, 2025, the Company had $ 9,077,000 of unrecognized compensation cost related to unvested stock–based compensation awards.

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

At June 30, 2025, the Company had $ 8,425,000 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 three months ended March 31, 2025 and for the year ended December 31, 2024.

The following table summarizes the significant assumptions used to value the options granted for the six months ended June 30, 2025 and for the year ended December 31, 2024.

Risk–free interest rate

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2.80 % 2.63 %

The following table summarizes our outstanding stock options for the three months ended March 31, 2025 and for the year ended December 31, 2024.

The following table summarizes our outstanding stock options for the six months ended June 30, 2025 and for the year ended December 31, 2024.

Exercise Price

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( 6,333 ) 78.77 –

Options outstanding at March 31, 2025

Options outstanding at June 30, 2025

833,190 $ 81.96 $ 20,875,000

Options exercisable at March 31, 2025

Options exercisable at June 30, 2025

309,544 $ 73.00 $ 10,528,000

March 31, 2025

June 30, 2025

Exercise Prices

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Note 14 – Income Taxes

The Company's income tax provision as a percentage of our income before income taxes was 26.1 % and 26.5 % for the three months ended March 31, 2025 and 2024, respectively.

The Company's income tax provision as a percentage of our income before income taxes was 25.0 % and 25.9 % for the three months ended June 30, 2025 and 2024, respectively.

The Company's income tax provision as a percentage of our income before income taxes was 25.7 % and 26.2 % for the six months ended June 30, 2025 and 2024, 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, benefits resulting from the lapsing of statute of limitations of items in our tax contingency reserve, and non-deductible expenses.

For the three months ended March 31, 2025 and 2024, the accrual of state income tax was the most significant reconciling item.

For the three months and six months ended June 30, 2025, the accrual of state income tax was the most significant reconciling item.

For the three and six months ended June 30, 2024, the accrual of state income tax was the only significant reconciling items.

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.

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Long–term debt consists of the following ( dollars in thousands ):

Interest rate

Maturity March 31,

Interest rate at

Credit facility, interest payable monthly

2 unchanged sentences

( 7,500 ) ( 7,500 )

Total long-term debt, less current portion

Total long-term debt

$ 102,500 $ 129,500

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The revolving line of credit contains a commitment fee equal to 0.25 % of the unused borrowing capacity.

There are no amounts outstanding on the revolving line of credit at March 31, 2025.

There are no amounts outstanding on the revolving line of credit at June 30, 2025.

NHC’s obligations under the Credit Facility are unsecured.

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The Credit Facility also contains customary events of default.

As of March 31, 2025, the Company is compliant with all financial covenants.

As of June 30, 2025, the Company is compliant with all financial covenants.

Based on level 2 inputs, the carrying value of the Company's long-term debt is considered to approximate the fair value of such debt based upon the interest rates that the Company believes it can currently obtain for similar debt.

The aggregate maturities of long–term debt for the five years subsequent to March 31, 2025 are as follows (in thousands) :

The aggregate maturities of long–term debt for the five years subsequent to June 30, 2025 are as follows (in thousands) :

Long–Term Debt

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Accrued Risk Reserves

We have wholly-owned limited purpose insurance companies that insure risks related to workers’ compensation 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 $ 108,197,000 and $ 103,616,000 at March 31, 2025 and December 31, 2024, respectively.

We have wholly–owned limited purpose insurance companies that insure risks related to workers’ 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 $ 108,982,000 and $ 103,616,000 at June 30, 2025 and December 31, 2024, 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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In addition, the long–term care industry is continuously subject to scrutiny by governmental regulators, which could result in litigation or claims related to regulatory compliance matters.

Civil Investigative Demand

Civil Investigative Demand / Qui Tam Complaint

On or about May 21, 2024, Caris Healthcare, L.P.

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Attorney’s Office for the Eastern District of Tennessee.

The CID requests the production of certain medical records for patients at Caris’ Nashville office and other documents related to the billing for hospice services for the period of January 1, 2019, through the date of the CID.

The Company is cooperating with respect to the requests and remains in the process of responding to the CID.

The CID requested the production of certain medical records for patients at Caris’ Nashville office and other documents related to the billing for hospice services for the period of January 1, 2019, through the date of the CID.

The Company cooperated with respect to the requests.

On June 23, 2025, a Notice of Election to Decline Intervention (the “Notice of Declination”) was filed by the United States of America, the State of Tennessee, the Commonwealth of Virginia, and the State of Georgia, in a case styled U.S.

Caris HealthCare, L.P., Case No.

3:23 -CV- 00330, in the U.S.

District Court for the Eastern District of Tennessee (the “Qui Tam Case”).

Subsequent to the Notice of Declination filing, an underlying qui tam complaint, originally filed on September 12, 2023, was unsealed.

Given that the government has declined to intervene in the Qui Tam Case, the relators have 90 days to effectuate service should they choose to proceed.

Caris denies all allegations and liability in the Qui Tam Case and intends to vigorously defend the matter.

Governmental Regulations

6 unchanged sentences

Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted.

Consequently, because no specific indemnity claims have been asserted, no liabilities have been recorded for these obligations on the consolidated balance sheets for any of the periods presented.

Note 17 – Subsequent Events

On July 4, 2025, President Donald Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

ASC 740, Income Taxes , requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.

Consequently, as of the date of enactment, and during the year ended December 31, 2025, the Company will evaluate all deferred tax balances under the newly enacted tax law and identify any other changes required to its financial statements as a result of the OBBBA.

The Company is still evaluating the impact of the OBBBA, and the results of such evaluations will be reflected on the Company’s Form 10 -K for the year ended December 31, 2025.

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