Note 6 - Business Segments

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 6 – Business Segments

The Company has two reportable operating segments: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and our behavioral health hospital; and (2) homecare services. These reportable operating segments are consistent with information used by the Company’s Chief Executive Officer, as chief operating decision maker (“CODM”), to assess performance and allocate resources.

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. For additional information on these reportable segments see Note 2 – Summary of Significant Accounting Policies.

The Company’s CODM evaluates performance and allocates capital resources to each segment based on an operating model that is designed to improve the quality of patient care and profitability of the Company while enhancing long-term shareholder value. The CODM does not review assets by segment in his resource allocation and therefore, assets by segment are not disclosed below.

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, 2019
	Inpatient Services		Homecare		All Other			Total
Revenues:
Net patient revenues	$	220,887	$	14,377	$	-		$	235,264
Other revenues		242		-		11,645			11,887
Net operating revenues		221,129		14,377		11,645			247,151
Costs and expenses:
Salaries, wages and benefits		130,720		8,480		8,678			147,878
Other operating		60,172		4,674		2,752			67,598
Rent		8,229		489		1,479			10,197
Depreciation and amortization		9,471		61		803			10,335
Interest		319		-		635			954
Total costs and expenses		208,911		13,704		14,347			236,962
Income (loss) from operations		12,218		673		(2,702	)		10,189
Non-operating income		-		-		8,272			8,272
Unrealized losses on marketable equity securities		-		-		(54	)		(54	)
Income before income taxes	$	12,218	$	673	$	5,516		$	18,407

	Three Months Ended June 30, 2018
	Inpatient Services		Homecare		All Other			Total
Revenues:
Net patient revenues	$	215,617	$	15,037	$	-		$	230,654
Other revenues		181		-		11,307			11,488
Net operating revenues		215,798		15,037		11,307			242,142
Costs and expenses:
Salaries, wages and benefits		128,115		8,611		8,740			145,466
Other operating		56,069		4,740		1,780			62,589
Rent		8,267		485		1,520			10,272
Depreciation and amortization		9,571		44		782			10,397
Interest		383		-		870			1,253
Total costs and expenses		202,405		13,880		13,692			229,977
Income (loss) from operations		13,393		1,157		(2,385	)		12,165
Non-operating income		-		-		5,654			5,654
Unrealized gains on marketable equity securities		-		-		12,448			12,448
Income before income taxes	$	13,393	$	1,157	$	15,717		$	30,267

	Six Months Ended June 30, 2019
	Inpatient Services		Homecare		All Other			Total
Revenues:
Net patient revenues	$	442,521	$	28,854	$	-		$	471,375
Other revenues		473		-		23,588			24,061
Net operating revenues		442,994		28,854		23,588			495,436
Costs and expenses:
Salaries, wages and benefits		256,821		16,506		15,939			289,266
Other operating		122,801		8,926		5,303			137,030
Rent		16,520		951		2,964			20,435
Depreciation and amortization		19,124		122		1,606			20,852
Interest		668		-		1,212			1,880
Total costs and expenses		415,934		26,505		27,024			469,463
Income (loss) from operations		27,060		2,349		(3,436	)		25,973
Non-operating income		-		-		14,273			14,273
Unrealized gains on marketable equity securities		-		-		6,784			6,784
Income before income taxes	$	27,060	$	2,349	$	17,621		$	47,030

	Six Months Ended June 30, 2018
	Inpatient Services		Homecare		All Other			Total
Revenues:
Net patient revenues	$	431,968	$	30,378	$	-		$	462,346
Other revenues		451		-		22,306			22,757
Net operating revenues		432,419		30,378		22,306			485,103
Costs and expenses:
Salaries, wages and benefits		251,495		16,642		17,424			285,561
Other operating		113,904		10,019		3,838			127,761
Rent		16,524		973		3,004			20,501
Depreciation and amortization		19,032		82		1,625			20,739
Interest		780		-		1,713			2,493
Total costs and expenses		401,735		27,716		27,604			457,055
Income (loss) from operations		30,684		2,662		(5,298	)		28,048
Non-operating income		-		-		2,589			2,589
Unrealized losses on marketable equity securities		-		-		(3,069	)		(3,069	)
Income (loss) before income taxes	$	30,684	$	2,662	$	(5,778	)	$	27,568