Note 6 - Business Segments

9 Months Ended

Sep. 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 September 30, 2019
	Inpatient Services		Homecare			All Other			Total
Revenues:
Net patient revenues	$	222,246	$	12,844		$	-		$	235,090
Other revenues		199		-			11,778			11,977
Net operating revenues		222,445		12,844			11,778			247,067
Costs and expenses:
Salaries, wages and benefits		133,949		8,630			9,596			152,175
Other operating		60,800		4,267			1,663			66,730
Rent		8,234		450			1,483			10,167
Depreciation and amortization		9,666		61			936			10,663
Interest		312		-			452			764
Total costs and expenses		212,961		13,408			14,130			240,499
Income (loss) from operations		9,484		(564	)		(2,352	)		6,568
Non-operating income		-		-			6,663			6,663
Unrealized gains on marketable equity securities		-		-			9,312			9,312
Income (loss) before income taxes	$	9,484	$	(564	)	$	13,623		$	22,543

	Three Months Ended September 30, 2018
	Inpatient Services		Homecare		All Other			Total
Revenues:
Net patient revenues	$	220,099	$	14,728	$	-		$	234,827
Other revenues		136		-		11,363			11,499
Net operating revenues		220,235		14,728		11,363			246,326
Costs and expenses:
Salaries, wages and benefits		131,418		8,367		9,403			149,188
Other operating		57,371		4,797		2,339			64,507
Rent		8,255		488		1,447			10,190
Depreciation and amortization		9,570		55		812			10,437
Interest		369		-		801			1,170
Total costs and expenses		206,983		13,707		14,802			235,492
Income (loss) from operations		13,252		1,021		(3,439	)		10,834
Non-operating income		-		-		8,467			8,467
Unrealized gains on marketable equity securities		-		-		3,486			3,486
Income before income taxes	$	13,252	$	1,021	$	8,514		$	22,787

	Nine Months Ended September 30, 2019
	Inpatient Services		Homecare		All Other			Total
Revenues:
Net patient revenues	$	664,768	$	41,697	$	-		$	706,465
Other revenues		672		-		35,366			36,038
Net operating revenues		665,440		41,697		35,366			742,503
Costs and expenses:
Salaries, wages and benefits		390,770		25,136		25,535			441,441
Other operating		183,602		13,193		6,965			203,760
Rent		24,754		1,400		4,448			30,602
Depreciation and amortization		28,790		183		2,542			31,515
Interest		979		-		1,665			2,644
Total costs and expenses		628,895		39,912		41,155			709,962
Income (loss) from operations		36,545		1,785		(5,789	)		32,541
Non-operating income		-		-		20,936			20,936
Unrealized gains on marketable equity securities		-		-		16,096			16,096
Income before income taxes	$	36,545	$	1,785	$	31,243		$	69,573

	Nine Months Ended September 30, 2018
	Inpatient Services		Homecare		All Other			Total
Revenues:
Net patient revenues	$	652,066	$	45,107	$	-		$	697,173
Other revenues		588		-		33,668			34,256
Net operating revenues		652,654		45,107		33,668			731,429
Costs and expenses:
Salaries, wages and benefits		382,913		25,009		26,827			434,749
Other operating		171,275		14,816		6,177			192,268
Rent		24,780		1,460		4,451			30,691
Depreciation and amortization		28,602		137		2,437			31,176
Interest		1,149		-		2,514			3,663
Total costs and expenses		608,719		41,422		42,406			692,547
Income (loss) from operations		43,935		3,685		(8,738	)		38,882
Non-operating income		-		-		11,056			11,056
Unrealized gains on marketable equity securities		-		-		417			417
Income before income taxes	$	43,935	$	3,685	$	2,735		$	50,355