National HealthCare (NHC) 8-K NHC Reports a 16.1% Increase in Net Income and Announces a 14.3% Increase in the Common Dividend

For release: May 1, 2008

Contact: Gerald Coggin, Sr. VP of Corporate Relations

Phone: (615) 890-2020

NHC Reports a 16.1% Increase in Net Income and Announces a 14.3% Increase in the Common Dividend

MURFREESBORO, Tenn. -- National HealthCare Corporation (AMEX: NHC; AMEX: NHC.PR.A), a publicly traded long-term health care company, today announced net income for the quarter ended March 31, 2008 of $8,172,000 compared to $7,040,000 for the quarter ended March 31, 2007.

The current period basic earnings per share were reduced by approximately 17 cents due to the dividends on the preferred stock that we issued as consideration in the merger with National Health Realty, Inc. (“NHR”).  Revenues for the three months ended March 31, 2008 totaled $160,141,000 compared to $146,504,000 for the same three months of 2007.  Net income was $.47 per share basic for the quarter ended March 31, 2008 compared to $.56 per share basic for the quarter ended March 31, 2007.

Highlights of the quarter include the purchase for $6.4 million by NHC of the 109-bed skilled nursing facility Holston Health and Rehabilitation Center located in Knoxville, Tennessee and the selection of NHC by McKendree Village to manage its continuing care retirement community located in the Nashville, Tennessee suburb of Hermitage.

The Board of Directors has also declared a quarterly cash dividend of $.24 per common share to shareholders of record on June 30, 2008 and payable on September 2, 2008.  This represents a 14.3% increase over last quarter’s dividend.

NHC operates, through various subsidiaries, for itself and third parties, 75 long-term health care centers with 9,582 beds. NHC also operates, through subsidiaries, 32 homecare programs, seven independent living centers and 23 assisted living centers. NHC’s other services include managed care specialty medical units, Alzheimer’s units, hospice, rehabilitative services and accounting and financial services. Additional information including the company's most recent press releases may be obtained on NHC's Web site atwww.NHCcare.com.

Statements in this press release that are not historical facts are forward-looking statements. NHC cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. The risks and uncertainties are detailed from time to time in reports filed by NHC with the S.E.C., including Forms 8-K, 10-Q and 10-K, and include, among others, the following:  liabilities and other claims asserted against us and patient care liabilities, as well as the resolution of current litigation; availability of insurance and assets for indemnification; national and local economic conditions; including their effect on the availability and cost of labor, utilities and materials; the effect of government regulations and changes in regulations governing the healthcare industry, including our compliance with such regulations; changes in Medicare and Medicaid payme nt levels and methodologies and the application of such methodologies by the government and its fiscal intermediaries, the ability of third parties for whom we have guaranteed debt to refinance certain short term debt obligations; and other factors referenced or incorporated by reference in the S.E.C. filings.  The risks included here are not exhaustive.  All forward-looking statements represent NHC’s best judgment as of the date of this release.

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NHC reports 16.1% Increase in Net Income

Condensed Statements of Income
(in thousands, except share and per share amounts)
				Three Months Ended
				March 31
Revenues:				2008	2007
	Net patient revenues			$   143,965	$   133,480
	Other revenues			16,176	13,024
		Net revenues		160,141	146,504
Costs and Expenses:
	Salaries, wages and benefits			87,541	79,174
	Other operating			45,314	41,828
	Rent			7,918	10,523
	Depreciation and amortization			5,997	3,756
	Interest			219	276
		Total costs and expenses		146,989	135,557
Income Before Income Taxes				13,152	10,947
	Income Tax Provision			(4,980)	(3,907)
Net Income				8,172	7,040
Dividends to Preferred Shareholders				(2,168)	-
Net income available to common shareholders				$      6,004	$      7,040
Earnings Per Share:
	Basic			$        0.47	$        0.56
	Diluted			$        0.46	$        0.54
Weighted average common shares outstanding
	Basic			12,767,696	12,526,231
	Diluted			13,118,218	12,992,219
			Balance Sheet Data
			(in thousands)	March 31	Dec. 31
				2008	2007
			Cash and marketable securities	$   186,166	$   167,779
			Current assets	257,538	246,014
			Total assets	707,065	698,408
			Current liabilities	187,385	188,825
			Long-term obligations	34,037	33,790
			Deferred lease credit	4,544	4,847
			Deferred revenue	17,982	15,238
			Shareholders' equity	463,117	455,708
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NHC Reports 16.1% Increase in Net Income

Selected Operating Statistics
	Three Months Ended
	March 31
	2008	2007
Per Diems:
Medicare	$ 363.44	$ 352.12
Medicaid	146.54	139.96
Private Pay and Other	212.98	201.10
Patient Days:
Medicare	103,606	99,491
Medicaid	275,040	274,544
Private Pay and Other	164,321	150,420
	542,967	524,455
Average Per Diem	$ 208.03	$ 197.74
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