Note 6 - Business Segments

3 Months Ended

Mar. 31, 2020

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 March 31, 2020
	Inpatient Services		Homecare		All Other			Total
Revenues:
Net patient revenues	$	230,987	$	13,108	$	-		$	244,095
Other revenues		435		-		11,594			12,029
Net operating revenues		231,422		13,108		11,594			256,124
Costs and expenses:
Salaries, wages and benefits		135,215		8,316		3,938			147,469
Other operating		65,105		3,819		2,744			71,668
Rent		8,378		457		1,497			10,332
Depreciation and amortization		9,571		54		813			10,438
Interest		382		-		30			412
Total costs and expenses		218,651		12,646		9,022			240,319
Income from operations		12,771		462		2,572			15,805
Non-operating income		-		-		8,146			8,146
Unrealized losses on marketable equity securities		-		-		(60,392	)		(60,392	)
Income/(loss) before income taxes	$	12,771	$	462	$	(49,674	)	$	(36,441	)

	Three Months Ended March 31, 2019
(As adjusted)	Inpatient Services		Homecare		All Other		Total
Revenues:
Net patient revenues	$	221,635	$	14,476	$	-	$	236,111
Other revenues		231		-		11,943		12,174
Net operating revenues		221,866		14,476		11,943		248,285
Costs and expenses:
Salaries, wages and benefits		129,059		8,399		3,930		141,388
Other operating		62,629		4,252		2,551		69,432
Rent		8,291		462		1,485		10,238
Depreciation and amortization		9,653		61		803		10,517
Interest		348		-		578		926
Total costs and expenses		209,980		13,174		9,347		232,501
Income from operations		11,886		1,302		2,596		15,784
Non-operating income		-		-		6,001		6,001
Unrealized gains on marketable equity securities		-		-		6,838		6,838
Income before income taxes	$	11,886	$	1,302	$	15,435	$	28,623