Note 7 - Business Segments

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 7 – 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 behavioral health hospitals; and (2) homecare and hospice 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, 2022
	Inpatient Services			Homecare and Hospice		All Other			Total
Revenues and grant income:
Net patient revenues	$	228,138		$	32,109	$	-		$	260,247
Other revenues		(198	)		-		10,794			10,596
Net operating revenues and grant income		227,940			32,109		10,794			270,843
Costs and expenses:
Salaries, wages, and benefits		144,047			19,581		9,570			173,198
Other operating		66,522			6,310		51			72,883
Rent		8,088			575		1,631			10,294
Depreciation and amortization		9,198			248		807			10,253
Interest		137			-		-			137
Total costs and expenses		227,992			26,714		12,059			266,765
Income/(loss) from operations		(52	)		5,395		(1,265	)		4,078
Non-operating income		-			-		2,731			2,731
Unrealized losses on marketable equity securities		-			-		(11,056	)		(11,056	)
Income/(loss) before income taxes	$	(52	)	$	5,395	$	(9,590	)	$	(4,247	)

	Three Months Ended September 30, 2021
	Inpatient Services		Homecare and Hospice		All Other			Total
Revenues:
Net patient revenues	$	222,884	$	31,933	$	-		$	254,817
Other revenues		128		-		11,363			11,491
Government stimulus income		10,429		-		-			10,429
Net operating revenues and grant income		233,441		31,933		11,363			276,737
Costs and expenses:
Salaries, wages, and benefits		141,318		18,771		10,146			170,235
Other operating		64,755		5,618		2,736			73,109
Rent		7,998		594		1,612			10,204
Depreciation and amortization		9,300		118		811			10,229
Interest		198		-		-			198
Total costs and expenses		223,569		25,101		15,305			263,975
Income/(loss) from operations		9,872		6,832		(3,942	)		12,762
Non-operating income		-		-		3,399			3,399
Unrealized losses on marketable equity securities		-		-		(23,797	)		(23,797	)
Income/(loss) before income taxes	$	9,872	$	6,832	$	(24,340	)	$	(7,636	)

	Nine Months Ended September 30, 2022
	Inpatient Services		Homecare and Hospice		All Other			Total
Revenues:
Net patient revenues	$	680,776	$	95,885	$	-		$	776,661
Other revenues		15		-		33,569			33,584
Government stimulus income		10,940		-		-			10,940
Net operating revenues and grant income		691,731		95,885		33,569			821,185
Costs and expenses:
Salaries, wages, and benefits		435,322		58,007		25,499			518,828
Other operating		192,791		19,848		5,640			218,279
Rent		24,498		1,759		4,513			30,770
Depreciation and amortization		27,120		472		2,419			30,011
Interest		451		-		-			451
Total costs and expenses		680,182		80,086		38,071			798,339
Income/(loss) from operations		11,549		15,799		(4,502	)		22,846
Non-operating income		-		-		8,451			8,451
Unrealized losses on marketable equity securities		-		-		(11,479	)		(11,479	)
Income/(loss) before income taxes	$	11,549	$	15,799	$	(7,530	)	$	19,818

	Nine Months Ended September 30, 2021
	Inpatient Services		Homecare and Hospice		All Other			Total
Revenues and grant income:
Net patient revenues	$	644,986	$	63,662	$	-		$	708,648
Other revenues		324		-		33,592			33,916
Government stimulus income		48,304		-		-			48,304
Net operating revenues and grant income		693,614		63,662		33,592			790,868
Costs and expenses:
Salaries, wages, and benefits		407,534		39,922		35,807			483,263
Other operating		185,860		10,291		8,060			204,211
Rent		24,129		1,478		4,830			30,437
Depreciation and amortization		27,790		299		2,432			30,521
Interest		657		-		-			657
Total costs and expenses		645,970		51,990		51,129			749,089
Income/(loss) from operations		47,644		11,672		(17,537	)		41,779
Non-operating income		-		-		15,245			15,245
Gain on acquisition of equity method investment		-		-		95,202			95,202
Unrealized losses on marketable equity securities		-		-		(23,227	)		(23,227	)
Income before income taxes	$	47,644	$	11,672	$	69,683		$	128,999