Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-12996 | |
Entity Registrant Name | Diversicare Healthcare Services, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 62-1559667 | |
Entity Address, Address Line One | 1621 Galleria Boulevard | |
Entity Address, City or Town | Brentwood | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37027 | |
City Area Code | 615 | |
Local Phone Number | 771-7575 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | DVCR | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,842,738 | |
Entity Central Index Key | 0000919956 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 |
INTERIM CONSOLIDATED BALANCE SH
INTERIM CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash | $ 29,081 | $ 2,710 |
Receivables | 51,910 | 60,521 |
Self-insurance receivables, current portion | 1,573 | 1,011 |
Other receivables | 2,205 | 2,534 |
Prepaid expenses and other current assets | 4,548 | 5,056 |
Income tax refundable | 591 | 484 |
Total current assets | 89,908 | 72,316 |
PROPERTY AND EQUIPMENT, at cost | 134,838 | 132,775 |
Less accumulated depreciation and amortization | (89,318) | (85,020) |
Property and equipment, net | 45,520 | 47,755 |
OTHER ASSETS: | ||
Operating lease right-of-use assets | 297,296 | 310,238 |
Acquired leasehold interest, net | 5,469 | 5,736 |
Other noncurrent assets | 3,140 | 4,323 |
Total other assets | 305,905 | 320,297 |
Total assets | 441,333 | 440,368 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt and finance lease obligations | 2,410 | 3,498 |
Current portion of operating lease liabilities | 25,390 | 23,736 |
Trade accounts payable | 10,878 | 14,641 |
Accrued expenses: | ||
Payroll and employee benefits | 16,891 | 16,780 |
Self-insurance reserves, current portion | 15,150 | 13,829 |
Deferred income, current portion | 20,400 | 0 |
Other current liabilities | 13,555 | 11,545 |
Total current liabilities | 104,674 | 84,029 |
NONCURRENT LIABILITIES: | ||
Long-term debt and finance lease obligations, less current portion and deferred financing costs, net | 57,546 | 70,637 |
Operating lease liabilities, less current portion | 282,696 | 295,636 |
Payroll and employee benefits, less current portion | 3,185 | 0 |
Self-insurance reserves, less current portion | 14,683 | 16,291 |
Government settlement accrual | 8,000 | 9,000 |
Deferred income, less current portion | 4,920 | 0 |
Other noncurrent liabilities | 1,647 | 1,691 |
Total noncurrent liabilities | 372,677 | 393,255 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ DEFICIT: | ||
Common stock, authorized 20,000 shares, $.01 par value, 7,075 and 6,908 shares issued, and 6,843 and 6,676 shares outstanding, respectively | 70 | 69 |
Treasury stock at cost, 232 shares of common stock | (2,500) | (2,500) |
Paid-in capital | 24,444 | 24,026 |
Accumulated deficit | (58,380) | (59,079) |
Accumulated other comprehensive income | 348 | 568 |
Total shareholders’ deficit | (36,018) | (36,916) |
Total liabilities and shareholder's equity | $ 441,333 | $ 440,368 |
INTERIM CONSOLIDATED BALANCE _2
INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized (shares) | 20,000,000 | 20,000,000 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (shares) | 7,075,000 | 6,908,000 |
Common stock, shares outstanding (shares) | 6,843,000 | 6,676,000 |
Treasury stock, shares (shares) | 232,000 | 232,000 |
INTERIM CONSOLIDATED STATEMENTS
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
PATIENT REVENUES, NET | $ 118,243 | $ 117,967 | $ 238,230 | $ 235,517 |
OTHER OPERATING INCOME | 5,148 | 0 | 5,148 | 0 |
EXPENSES: | ||||
Operating | 95,775 | 94,658 | 190,634 | 189,080 |
Lease and rent expense | 13,523 | 13,114 | 27,036 | 26,229 |
Professional liability | 2,114 | 1,594 | 3,953 | 3,445 |
Government settlement expense | 0 | 3,100 | 0 | 3,100 |
General and administrative | 6,880 | 7,152 | 13,638 | 14,365 |
Depreciation and amortization | 2,278 | 2,217 | 4,565 | 4,533 |
Total expenses | 120,570 | 121,835 | 239,826 | 240,752 |
OPERATING INCOME (LOSS) | 2,821 | (3,868) | 3,552 | (5,235) |
OTHER INCOME (EXPENSE): | ||||
Other income | 409 | 40 | 524 | 200 |
Interest expense, net | (1,209) | (1,476) | (2,669) | (2,870) |
Total other expense | (800) | (1,436) | (2,145) | (2,670) |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 2,021 | (5,304) | 1,407 | (7,905) |
PROVISION FOR INCOME TAXES | (182) | (17,312) | (78) | (16,285) |
INCOME (LOSS) FROM CONTINUING OPERATIONS | 1,839 | (22,616) | 1,329 | (24,190) |
LOSS FROM DISCONTINUED OPERATIONS: | ||||
Operating loss, net of tax benefit of $167 and $111, respectively | (387) | (1,980) | (630) | (3,752) |
NET INCOME (LOSS) | $ 1,452 | $ (24,596) | $ 699 | $ (27,942) |
Per common share – basic | ||||
Continuing operations (in dollars per share) | $ 0.28 | $ (3.49) | $ 0.21 | $ (3.75) |
Discontinued operations (in dollars per share) | (0.06) | (0.31) | (0.10) | (0.58) |
Net loss per common share – basic (dollars per share) | 0.22 | (3.80) | 0.11 | (4.33) |
Per common share – diluted | ||||
Continuing operations (in dollars per share) | 0.28 | (3.49) | 0.21 | (3.75) |
Discontinued operations (in dollars per share) | (0.06) | (0.31) | (0.10) | (0.58) |
Net income (loss) per common share – diluted (dollars per share) | $ 0.22 | $ (3.80) | $ 0.11 | $ (4.33) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (shares) | 6,649 | 6,472 | 6,506 | 6,448 |
Diluted (shares) | 6,704 | 6,472 | 6,586 | 6,448 |
INTERIM CONSOLIDATED STATEMEN_2
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Tax benefit, effect on operating loss | $ 102 | $ 38 | $ 167 | $ 111 |
INTERIM CONSOLIDATED STATEMEN_3
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME (LOSS) | $ 1,452 | $ (24,596) | $ 699 | $ (27,942) |
OTHER COMPREHENSIVE INCOME: | ||||
Change in fair value of cash flow hedge, net of tax | 59 | (185) | (220) | (248) |
Total other comprehensive income (loss) | 59 | (185) | (220) | (248) |
COMPREHENSIVE INCOME (LOSS) | $ 1,511 | $ (24,781) | $ 479 | $ (28,190) |
INTERIM CONSOLIDATED STATEMEN_4
INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Balance (in shares) at Dec. 31, 2018 | 6,751 | 232 | ||||
Balance at Dec. 31, 2018 | $ (1,198) | $ 68 | $ (2,500) | $ 23,413 | $ (23,016) | $ 837 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (3,346) | (3,346) | ||||
Issuance/redemption of equity grants, net (in shares) | 163 | |||||
Issuance of equity grants, net | 42 | $ 1 | 41 | |||
Interest rate cash flow hedge | (63) | (63) | ||||
Stock-based compensation | 140 | 140 | ||||
Balance (in shares) at Mar. 31, 2019 | 6,914 | 232 | ||||
Balance at Mar. 31, 2019 | (4,425) | $ 69 | $ (2,500) | 23,594 | (26,362) | 774 |
Balance (in shares) at Dec. 31, 2018 | 6,751 | 232 | ||||
Balance at Dec. 31, 2018 | (1,198) | $ 68 | $ (2,500) | 23,413 | (23,016) | 837 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (27,942) | |||||
Balance (in shares) at Jun. 30, 2019 | 6,911 | 232 | ||||
Balance at Jun. 30, 2019 | (29,062) | $ 69 | $ (2,500) | 23,738 | (50,958) | 589 |
Balance (in shares) at Mar. 31, 2019 | 6,914 | 232 | ||||
Balance at Mar. 31, 2019 | (4,425) | $ 69 | $ (2,500) | 23,594 | (26,362) | 774 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (24,596) | (24,596) | ||||
Redemption of equity grants, net (in shares) | (3) | |||||
Interest rate cash flow hedge | (185) | (185) | ||||
Stock-based compensation | 144 | 144 | ||||
Balance (in shares) at Jun. 30, 2019 | 6,911 | 232 | ||||
Balance at Jun. 30, 2019 | (29,062) | $ 69 | $ (2,500) | 23,738 | (50,958) | 589 |
Balance (in shares) at Dec. 31, 2019 | 6,908 | 232 | ||||
Balance at Dec. 31, 2019 | (36,916) | $ 69 | $ (2,500) | 24,026 | (59,079) | 568 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (753) | (753) | ||||
Issuance/redemption of equity grants, net (in shares) | 190 | |||||
Issuance of equity grants, net | 4 | $ 1 | 3 | |||
Interest rate cash flow hedge | (279) | (279) | ||||
Stock-based compensation | 338 | 338 | ||||
Balance (in shares) at Mar. 31, 2020 | 7,098 | 232 | ||||
Balance at Mar. 31, 2020 | (37,606) | $ 70 | $ (2,500) | 24,367 | (59,832) | 289 |
Balance (in shares) at Dec. 31, 2019 | 6,908 | 232 | ||||
Balance at Dec. 31, 2019 | (36,916) | $ 69 | $ (2,500) | 24,026 | (59,079) | 568 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 699 | |||||
Balance (in shares) at Jun. 30, 2020 | 7,075 | 232 | ||||
Balance at Jun. 30, 2020 | (36,018) | $ 70 | $ (2,500) | 24,444 | (58,380) | 348 |
Balance (in shares) at Mar. 31, 2020 | 7,098 | 232 | ||||
Balance at Mar. 31, 2020 | (37,606) | $ 70 | $ (2,500) | 24,367 | (59,832) | 289 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 1,452 | 1,452 | ||||
Redemption of equity grants, net (in shares) | (23) | |||||
Interest rate cash flow hedge | 59 | 59 | ||||
Stock-based compensation | 77 | 77 | ||||
Balance (in shares) at Jun. 30, 2020 | 7,075 | 232 | ||||
Balance at Jun. 30, 2020 | $ (36,018) | $ 70 | $ (2,500) | $ 24,444 | $ (58,380) | $ 348 |
INTERIM CONSOLIDATED STATEMEN_5
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
NET INCOME (LOSS) | $ 699 | $ (27,942) |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | (630) | (3,752) |
Income (loss) from continuing operations | 1,329 | (24,190) |
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 4,565 | 4,533 |
Deferred income tax benefit | 0 | 16,008 |
Provision for self-insured professional liability, net of cash payments | 494 | 2,559 |
Amortization of right-of-use assets | 11,286 | 10,334 |
Government settlement expense | 0 | 3,100 |
Stock-based compensation | 415 | 284 |
Provision for leases in excess of cash payments | 1,656 | 2,564 |
Other | 602 | 487 |
Changes in assets and liabilities affecting operating activities: | ||
Receivables | 8,049 | (41) |
Prepaid expenses and other assets | (189) | (1,027) |
Trade accounts payable and accrued expenses | 1,461 | (2,283) |
Deferred income | 25,320 | 0 |
Operating lease liabilities | (11,286) | (10,330) |
Net cash provided by continuing operations | 43,702 | 1,998 |
Discontinued operations | (630) | (2,789) |
Net cash provided by (used in) operating activities | 43,072 | (791) |
NET CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (2,063) | (2,270) |
Purchases of property and equipment with stimulus funds | (712) | 0 |
Net cash used in continuing operations | (2,775) | (2,270) |
Discontinued operations | 0 | (226) |
Net cash used in investing activities | (2,775) | (2,496) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of debt and finance lease obligations | (18,763) | (2,741) |
Proceeds from issuance of debt | 4,551 | 6,500 |
Proceeds from stimulus funds used to purchase property and equipment | 712 | 0 |
Financing costs | (430) | (213) |
Issuance and redemption of employee equity awards, net | 4 | 42 |
Net cash provided by (used in) continuing operations | (13,926) | 3,588 |
Discontinued operations | 0 | 0 |
Net cash provided by (used in) financing activities | (13,926) | 3,588 |
NET INCREASE IN CASH | 26,371 | 301 |
CASH, beginning of period | 2,710 | 2,685 |
CASH, end of period | 29,081 | 2,986 |
SUPPLEMENTAL INFORMATION: | ||
Cash payments of interest | 2,635 | 2,701 |
Cash payments of income taxes | 187 | 254 |
SUPPLEMENTAL INFORMATION ON NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||
Acquisition of equipment through finance leases | 0 | 239 |
Acquisition of operating leases though adoption of ASC 842 | $ 0 | $ 389,403 |
BUSINESS
BUSINESS | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Diversicare Healthcare Services, Inc. (together with its subsidiaries, “Diversicare” or the “Company”) provides long-term care services to nursing center patients in nine states, primarily in the Southeast, Midwest, and Southwest. The Company’s centers provide a range of health care services to their patients and residents that include nursing, personal care, and social services. Additionally, the Company’s nursing centers also offer a variety of comprehensive rehabilitation services, as well as nutritional support services. The Company's continuing operations include centers in Alabama, Florida, Indiana, Kansas, Mississippi, Missouri, Ohio, Tennessee, and Texas. As of June 30, 2020, the Company’s continuing operations consist of 62 nursing centers with 7,329 licensed nursing beds. The Company owns 15 and leases 47 of its nursing centers. Our nursing centers range in size from 50 to 320 licensed nursing beds. The licensed nursing bed count does not include 397 licensed assisted and residential living beds. COVID-19 Pandemic In January 2020, the Secretary of U.S. Department of Health and Human Services (“HHS”) declared a national public health emergency due to a novel coronavirus. In March 2020, the World Health Organization categorized COVID-19, a disease caused by this coronavirus (“COVID-19”), as a pandemic. According to the Centers for Disease Control and Prevention (“CDC”), older adults and people with certain underlying medical conditions are at higher risk for serious illness from COVID-19. CDC has identified nursing home populations as being at high risk of being affected by pathogens like COVID-19 as a result of the congregate nature of nursing homes and the resident population served. The Centers for Medicare & Medicaid Services (“CMS”) and the CDC have issued guidance to state and local governments and long-term care facilities to help mitigate the spread of COVID-19. For example, on March 13, 2020, CMS issued a memorandum directing long-term care facilities to significantly restrict visitors and nonessential workers and to restrict communal activities, among other measures. On May 18, 2020, CMS provided “reopening” recommendations for state and local officials to determine the level of mitigation needed to prevent the transmission of COVID-19 in nursing homes, including criteria for relaxing various restrictions. CMS has also announced COVID-19 reporting requirements and focused infection control surveys intended to assess long-term care facility compliance with infection control requirements in connection with the COVID-19 pandemic. CDC guidance includes infection prevention and control practices intended to protect both nursing home residents and healthcare personnel. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which includes, among other things, modifications to the limitation on business interest expense and net operating loss provisions relative to the payment of Federal income taxes, allows an optional payment deferral of the employer's portion of Social Security taxes that are otherwise due through December 31, 2020. These provisions of the CARES Act were effective after the date of enactment and also include the appropriation of stimulus funds to Medicare and Medicaid providers. On April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act ("PPPHCE Act") was enacted, which provides for additional emergency appropriations for COVID-19 response. Together, the CARES Act and PPPHCE Act authorize $175 billion in funding to healthcare entities to be distributed through the Public Health and Social Services Emergency Fund ("PHSSEF"), also known as the Provider Relief Fund. Payments from PHSSEF are intended to compensate providers for lost revenues and healthcare-related expenses attributable to the COVID-19 pandemic only. These payments are not required to be repaid, provided the recipients attest to and comply with certain terms and conditions, including limitations on balance billing and not using PHSSEF funds to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. The Company is utilizing these funds to compensate for lost revenues and pay for permissible costs under this legislation that include but are not limited to increased wages and increased costs for personal protective equipment and other supplies. |
CONSOLIDATION AND BASIS OF PRES
CONSOLIDATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONSOLIDATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS | CONSOLIDATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTSThe interim consolidated financial statements for the three and six month periods ended June 30, 2020 and 2019, included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. In the opinion of management of the Company, the accompanying interim consolidated financial statements reflect all normal, recurring adjustments necessary to present fairly the Company’s financial position at June 30, 2020, the results of operations, and changes in shareholders' deficit for the three and six month periods ended June 30, 2020 and 2019 and cash flows for the six months periods ended June 30, 2020 and 2019. The Company’s balance sheet information at December 31, 2019, was derived from its audited consolidated financial statements as of December 31, 2019. The results of operations for the periods ended June 30, 2020 and 2019 are not necessarily indicative of the operating results that may be expected for a full year. These interim consolidated financial statements should be read in connection with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. CARES Act and PPPHCE Act Funds The Company implemented certain changes to our accounting policies related to the recognition of stimulus funds through the CARES Act and the PPPHCE Act. There is no U.S. GAAP that covers accounting for government "grants" to for-profit entities with the exception of certain agricultural subsidies. In the absence of authoritative U.S. GAAP guidance, the Company considered the application of other authoritative accounting guidance by analogy and concluded that the guidance outlined in International Accounting Standard 20 - Accounting for Government Grants and Disclosures of Government Assistance ("IAS 20") was the most appropriate analogy for the purpose of recording and classifying the federal stimulus funds received by the Company. Under IAS 20, once it is reasonably assured that the entity will comply with the conditions of the grant, the grant money should be recognized on a systematic basis over the periods in which the entity recognizes the related expenses or losses for which the grant money is intended to compensate. The Company recognizes grants once both of the following conditions are met: (1) the Company is able to comply with the relevant conditions of the grant and (2) the grant will be received. Federal stimulus funds that are recognized to offset healthcare related expenses and lost revenue attributable to COVID-19 are reflected as "other operating income" on the accompanying interim consolidated statement of operations. Federal stimulus funds received and used toward capital improvements that assist with the response to and prevention and spread of COVID-19 is accounted for as a capital grant. For such an asset acquired with the use of a stimulus funds, the Company will recognize the asset as a net zero asset. Refer to Note 4 to the interim consolidated financial statements included in this report for additional information. Additionally, the Company has received Medicaid stimulus funds, which are recognized in accordance with ASC 606. Refer to Note 5 to the interim consolidated financial statements included in this report for additional information. Discontinued Operations On December 1, 2018, the Company sold three Kentucky properties for $18,700, which are collectively referred to as the "Kentucky Properties." On August 30, 2019, the Company terminated operations of ten centers in Kentucky and concurrently transferred operations to a new operator. These ten centers are collectively referred to as the "Kentucky Centers." The sale of the Kentucky Properties and the termination of operations at the Kentucky Centers are referred to collectively as the "Kentucky Exit." As a result of the Kentucky Exit, the Company no longer operates any skilled nursing centers in the State of Kentucky. The Company's exit from the state represented a strategic shift that has (or will have) a major effect on the Company's financial position, results of operations and cash flows. In accordance with ASC 205, the Company's discontinued operating results have been reclassified on the face of the financial statements and footnotes for all periods presented to reflect the discontinued status of these operations. Refer to Note 13, "Discontinued Operations" for more information. |
RECENT ACCOUNTING GUIDANCE
RECENT ACCOUNTING GUIDANCE | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING GUIDANCE | RECENT ACCOUNTING GUIDANCE Accounting Standards Recently Issued But Not Yet Adopted by the Company In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance intends to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. This update requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. This standard is effective for smaller reporting companies for the fiscal year beginning after December 15, 2022 with early adoption permitted. The Company is in the initial stages of evaluating the impact from the adoption of this new standard on the consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848). The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of |
COVID-19 PANDEMIC
COVID-19 PANDEMIC | 6 Months Ended |
Jun. 30, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
COVID-19 PANDEMIC | COVID-19 PANDEMIC As of June 30, 2020, the Company has received $31,180 of Medicare stimulus funds, and recognized $5,148 as income, which is reflected in "other operating income" in the Company's results of operations for the three and six month periods ended June 30, 2020. For the six months ended June 30, 2020, the Company utilized $712 of stimulus dollars to fund capital improvements to prevent the spread of COVID-19. The remaining stimulus funds of $25,320 as of June 30, 2020 are classified as "deferred income" on the interim consolidated balance sheet. Additionally, the Families First Coronavirus Response Act provided states with a temporary increase in the regular federal matching rate, or federal medical assistance percentage, used to determine the federal government's share of the cost of covered services in state Medicaid programs, provided the states agreed to certain conditions such as not imposing cost-sharing requirements for COVID-19-related testing and treatment. The Company received $4,203 and $5,064 for the three and six month periods ended June 30, 2020, respectively, of Medicaid and Hospice dollars related to this temporary increase in the federal matching rate, which related to patient services rendered between March and June 2020 and is reflected in "patient revenues, net" in the Company's results of operations for the three and six month periods ended June 30, 2020. The Company expects that it will fully utilize the stimulus funds received through June 30, 2020 in accordance with the terms and conditions of the stimulus programs. Also, the Company has elected to participate in the payment deferral of the employer's portion of Social Security taxes that are otherwise due from March 27, 2020 through December 31, 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022. To date, the Company has deferred $3,185 of Social Security taxes which is presented as "payroll and employee benefits, less current portion" on the Company's balance sheet as of June 30, 2020. The CARES Act also includes other provisions offering financial relief, for example lifting the Medicare sequestration from May 1, 2020 through December 31, 2020, which would have otherwise reduced payments to Medicare providers by 2%. For the three and six month periods ended June 30, 2020, the suspension of the Medicare sequestration positively impacted net patient revenues by $307. The Company incurred an additional $2,200 of salaries expense, $1,100 of supplies expense and $100 of travel expense related to the COVID-19 pandemic for the three month period ended June 30, 2020. The Company incurred an additional $2,600 of salaries expense, $1,200 of supplies expense and $100 of travel expense related to the COVID-19 pandemic for the six month period ended June 30, 2020. These expenses are reflected in "operating expense" in the Company's results of operations for the three and six month periods ended June 30, 2020. |
REVENUE RECOGNITION AND ACCOUNT
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE | REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE The Company's revenue is derived from providing quality healthcare services to its patients. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. The promise to provide quality care is accounted for as a single performance obligation satisfied at a point in time, when those services are rendered. The Company performed analyses using the application of the portfolio approach as a practical expedient to group patient contracts with similar characteristics, such that revenue for a given portfolio would not be materially different than if it were evaluated on a contract-by-contract basis. These analyses incorporated consideration of reimbursements at varying rates from Medicaid, Medicare, Managed Care, Private Pay, Assisted Living, Hospice, and Veterans for services provided in each corresponding state. It was determined that the contracts are not materially different for the following groups: Medicaid, Medicare, Managed Care and Private Pay and other (Assisted Living, Hospice and Veterans). Disaggregation of Revenue and Accounts Receivable In accordance with ASC 606, the Company recognized $4,203 and $5,064 of Medicaid and Hospice stimulus dollars for the three and six month periods ended June 30, 2020, respectively, that are reflected as patient revenues in the Company's results of operations. Refer to Note 4, "COVID-19 Pandemic" for more information. The following table summarizes revenue from contracts with customers by payor source from continuing operations for the periods presented (dollar amounts in thousands): Three Months Ended June 30, 2020 2019 Medicaid $ 54,161 45.8 % $ 53,812 45.6 % Medicare 22,424 19.0 % 19,545 16.6 % Managed Care 12,355 10.4 % 13,120 11.1 % Private Pay and other 29,303 24.8 % 31,490 26.7 % Total $ 118,243 100.0 % $ 117,967 100.0 % Six Months Ended June 30, 2020 2019 Medicaid $ 108,491 45.5 % $ 107,623 45.7 % Medicare 43,096 18.1 % 39,936 17.0 % Managed Care 24,951 10.5 % 26,118 11.1 % Private Pay and other 61,692 25.9 % 61,840 26.2 % Total $ 238,230 100.0 % $ 235,517 100.0 % Accounts receivable from continuing operations as of June 30, 2020 and December 31, 2019 are summarized in the following table: June 30, December 31, 2020 2019 Medicaid $ 18,722 $ 21,998 Medicare 9,659 11,811 Managed Care 7,057 9,103 Private Pay and other 16,472 17,609 Total accounts receivable $ 51,910 $ 60,521 |
LONG-TERM DEBT AND INTEREST RAT
LONG-TERM DEBT AND INTEREST RATE SWAP | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND INTEREST RATE SWAP | LONG-TERM DEBT AND INTEREST RATE SWAPOn February 26, 2016, the Company executed an Amended and Restated Credit Agreement (the "Credit Agreement") with a syndicate of banks, which consists of a $80,000 mortgage loan subsequently amended ("Amended Mortgage Loan") and a $52,250 revolver subsequently amended ("Amended Revolver"). The Amended Mortgage Loan and Amended Revolver both have a five Company’s Amended Revolver has an interest rate of LIBOR plus 4.0% and is secured by accounts receivable and is subject to limits on the maximum amount of loans that can be outstanding under the revolver based on borrowing base restrictions. In connection with the sale of the Kentucky Properties, the Company entered into the Sixth Amendment ("Sixth Revolver Amendment") to amend the Amended Revolver effective December 1, 2018. The Sixth Amendment decreased the Amended Revolver capacity from $52,250 to $42,250 and also placed a $2,100 reserve against the acquisition loan facility, thereby reducing the maximum borrowing capacity of that facility to $10,400. The Company also applied $4,947 of net proceeds from the sale of the Kentucky Properties to the outstanding borrowings under the Amended Revolver. Effective April 3, 2020, the Company entered into a Seventh Amendment ("Seventh Amendment") to amend the Amended Mortgage Loan, a Ninth Amendment ("Ninth Amendment") to amend the Amended Revolver and a Second Amendment ("Second Amendment") to the affiliated revolver. The Seventh Amendment removed the reserve of $2,100 on the acquisition loan availability, thereby increasing the borrowing capacity of that facility from $10,400 to $12,500 as of June 30, 2020. The Ninth Amendment and Second Amendment increased the eligible days of qualifying accounts receivable from 120 days to 150 days for the purpose of calculating our borrowing capacity on the revolvers. The new LIBOR base rate was set at 0.5%. The Company is participating in the Texas Quality Incentive Payment Program ("QIPP"). Effective May 13, 2019, the Company entered into a Fifth Amendment (the “Fifth Term Amendment”) to amend the Amended Mortgage Loan to release the operators of three of the QIPP centers in Texas from the Amended Mortgage Loan and a Seventh Amendment (the “Seventh Revolver Amendment”) to amend the Amended Revolver to remove the operators of four of the QIPP centers in Texas from the Amended Revolver and to permanently reduce the amount available under the Amended Revolver by $2,000. At the same time, the operators of these four facilities entered into a separate revolving loan (the "affiliated revolver") with the same syndicate of banks to provide for the temporary working capital requirements of the four QIPP centers. The affiliated revolver, which is guaranteed by the Company, had an initial capacity of $5,000, which amount was reduced by $1,000 on each of January 1, 2020, April 1, 2020 and July 1, 2020. The affiliated revolver has the same maturity date as the Amended Revolver and the Amended Mortgage Loan of September 30, 2021. The affiliated revolver is cross-defaulted with the Amended Revolver and the Amended Mortgage Loan. For further discussion of the QIPP centers in Texas, refer to Note 12, "Business Development and Other Significant Transactions." As of June 30, 2020, the Company had no outstanding borrowings under the affiliated revolver. The interest rate related to the affiliated revolver was 5.75% as of June 30, 2020. The balance available for borrowing under the affiliated revolver was $1,027 at June 30, 2020. As of June 30, 2020, the Company had no outstanding borrowings under the Amended Revolver compared to $15,000 outstanding borrowings as of December 31, 2019. The interest rate related to the Amended Revolver was 5.75% as of June 30, 2020. The outstanding borrowings on the revolver were used primarily for temporary working capital requirements. Annual fees for letters of credit issued under the Amended Revolver are 3.0% of the amount outstanding. The Company has four letters of credit with a total value of $12,143 outstanding as of June 30, 2020. Considering the balance of eligible accounts receivable, the letters of credit, the amounts outstanding under the revolving credit facility and the maximum loan amount of $27,727, the balance available for borrowing under the Amended Revolver and affiliated revolver was $15,584 at June 30, 2020. The Company’s debt agreements contain various financial covenants, the most restrictive of which relates to debt service coverage ratios. The Company is in compliance with all such covenants at June 30, 2020. Interest Rate Swap Transaction As part of the debt agreements entered into in April 2013, the Company entered into an interest rate swap agreement with a member of the bank syndicate as the counterparty. The Company entered into the interest rate swap agreement to mitigate the variable interest rate risk on its outstanding mortgage borrowings. The Company designated its interest rate swap as a cash flow hedge and the effective portion of the hedge, net of taxes, is reflected as a component of other comprehensive income (loss). In conjunction with the aforementioned amendment to the Credit Agreement that occurred in February 2016, the Company retained the previously agreed upon interest rate swap modifying the terms of the swap to reflect the amended Credit Agreement. The Company redesignated the interest rate swap as a cash flow hedge. The interest rate swap agreement has a maturity date of February 26, 2021, and has an amortizing notional amount of $26,314 as of June 30, 2020. The interest rate swap agreement requires the Company to make fixed rate payments to the bank calculated on the applicable notional amount at an annual fixed rate of 5.79% while the bank is obligated to make payments to the Company based on LIBOR on the same notional amount. The applicable guidance requires companies to recognize all derivative instruments as either assets or liabilities at fair value in a company's balance sheets. The Company assesses the effectiveness of its interest rate swap on a quarterly basis, and at June 30, 2020, the Company determined that the interest rate swap was highly effective. The interest rate swap valuation model indicated a net liability of $276 at June 30, 2020. The fair value of the interest rate swap is included in “other current liabilities” on the Company’s interim consolidated balance sheet. The change in fair value of the interest rate swap liability of $59 is included in accumulated other comprehensive income for the three months ended June 30, 2020. As the Company’s interest rate swap is not traded on a market exchange, the fair value is determined using a discounted cash flow analysis. This analysis reflects the contractual terms of the interest rate swap agreement and uses observable market-based inputs, including estimated future LIBOR interest rates. The interest rate swap valuation is classified in Level 2 of the fair value hierarchy, in accordance with the FASB guidance set forth in ASC 820, Fair Value Measurement . |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASESThe Company has operating and finance leases for facilities, corporate offices, and certain equipment. The Company recognizes lease expense for these operating leases on a straight-line basis over the lease term. Leases with an initial term of one year or less are not recorded on the balance sheet. The Company's other leases have original lease terms of one twelve twenty one Leases Classification June 30, 2020 December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 297,296 $ 310,238 Finance lease assets Property and equipment, net (a) 618 906 Total leased assets $ 297,914 $ 311,144 Liabilities Current Operating Current portion of operating lease liabilities $ 25,390 $ 23,736 Finance Current portion of long-term debt and finance lease obligations 238 231 Noncurrent Operating Operating lease liabilities, less current portion 282,696 295,636 Finance Long-term debt and finance lease obligations, less current portion and deferred financing costs, net 376 445 Total lease liabilities $ 308,700 $ 320,048 (a) Finance lease assets are recorded net of accumulated amortization of $422 and $1,522 as of June 30, 2020 and December 31, 2019, respectively. Lease Cost of Continuing Operations Three Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 13,523 $ 13,114 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 55 76 Interest on finance lease liabilities Interest expense, net 10 15 Short term lease cost Operating expense 155 162 Net lease cost $ 13,743 $ 13,367 (a) Includes variable lease costs, which are immaterial Six Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 27,036 $ 26,229 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 116 143 Interest on finance lease liabilities Interest expense, net 19 26 Short term lease cost Operating expense 334 303 Net lease cost $ 27,505 $ 26,701 (a) Includes variable lease costs, which are immaterial Maturity of Lease Liabilities As of June 30, 2020 Operating Leases (a) Finance Leases (a) Total 2020 $ 51,388 $ 273 $ 51,661 2021 52,387 235 52,622 2022 53,395 114 53,509 2023 53,956 46 54,002 2024 54,169 — 54,169 After 2024 173,361 — 173,361 Total lease payments $ 438,656 $ 668 $ 439,324 Less: Interest (130,570) (54) (130,624) Present value of lease liabilities $ 308,086 $ 614 $ 308,700 (a) Operating and Finance lease payments exclude option to extend lease terms that are not reasonably certain of being exercised. The measurement of right-of-use assets and lease liabilities requires the Company to estimate appropriate discount rates. To the extent the rate implicit in the lease is readily determinable, such rate is utilized. However, based on information available at lease commencement for the majority of our leases, the rate implicit in the lease is not known. In these instances, the Company utilizes an incremental borrowing rate, which represents the rate of interest that it would pay to borrow on a collateralized basis over a similar term. Lease Term and Discount Rate June 30, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 8.34 8.81 Finance leases 2.65 3.00 Weighted-average discount rate Operating leases 8.9% 8.9% Finance leases 6.1% 6.1% Other Information Six Months Ended June 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 25,347 $ 29,033 Operating cash flows for finance leases $ 19 $ 26 Financing cash flows for finance leases $ 113 $ 250 Acquisition of operating leases through adoption of ASC 842 $ — $ 389,403 |
LEASES | LEASESThe Company has operating and finance leases for facilities, corporate offices, and certain equipment. The Company recognizes lease expense for these operating leases on a straight-line basis over the lease term. Leases with an initial term of one year or less are not recorded on the balance sheet. The Company's other leases have original lease terms of one twelve twenty one Leases Classification June 30, 2020 December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 297,296 $ 310,238 Finance lease assets Property and equipment, net (a) 618 906 Total leased assets $ 297,914 $ 311,144 Liabilities Current Operating Current portion of operating lease liabilities $ 25,390 $ 23,736 Finance Current portion of long-term debt and finance lease obligations 238 231 Noncurrent Operating Operating lease liabilities, less current portion 282,696 295,636 Finance Long-term debt and finance lease obligations, less current portion and deferred financing costs, net 376 445 Total lease liabilities $ 308,700 $ 320,048 (a) Finance lease assets are recorded net of accumulated amortization of $422 and $1,522 as of June 30, 2020 and December 31, 2019, respectively. Lease Cost of Continuing Operations Three Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 13,523 $ 13,114 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 55 76 Interest on finance lease liabilities Interest expense, net 10 15 Short term lease cost Operating expense 155 162 Net lease cost $ 13,743 $ 13,367 (a) Includes variable lease costs, which are immaterial Six Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 27,036 $ 26,229 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 116 143 Interest on finance lease liabilities Interest expense, net 19 26 Short term lease cost Operating expense 334 303 Net lease cost $ 27,505 $ 26,701 (a) Includes variable lease costs, which are immaterial Maturity of Lease Liabilities As of June 30, 2020 Operating Leases (a) Finance Leases (a) Total 2020 $ 51,388 $ 273 $ 51,661 2021 52,387 235 52,622 2022 53,395 114 53,509 2023 53,956 46 54,002 2024 54,169 — 54,169 After 2024 173,361 — 173,361 Total lease payments $ 438,656 $ 668 $ 439,324 Less: Interest (130,570) (54) (130,624) Present value of lease liabilities $ 308,086 $ 614 $ 308,700 (a) Operating and Finance lease payments exclude option to extend lease terms that are not reasonably certain of being exercised. The measurement of right-of-use assets and lease liabilities requires the Company to estimate appropriate discount rates. To the extent the rate implicit in the lease is readily determinable, such rate is utilized. However, based on information available at lease commencement for the majority of our leases, the rate implicit in the lease is not known. In these instances, the Company utilizes an incremental borrowing rate, which represents the rate of interest that it would pay to borrow on a collateralized basis over a similar term. Lease Term and Discount Rate June 30, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 8.34 8.81 Finance leases 2.65 3.00 Weighted-average discount rate Operating leases 8.9% 8.9% Finance leases 6.1% 6.1% Other Information Six Months Ended June 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 25,347 $ 29,033 Operating cash flows for finance leases $ 19 $ 26 Financing cash flows for finance leases $ 113 $ 250 Acquisition of operating leases through adoption of ASC 842 $ — $ 389,403 |
LEASES | LEASESThe Company has operating and finance leases for facilities, corporate offices, and certain equipment. The Company recognizes lease expense for these operating leases on a straight-line basis over the lease term. Leases with an initial term of one year or less are not recorded on the balance sheet. The Company's other leases have original lease terms of one twelve twenty one Leases Classification June 30, 2020 December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 297,296 $ 310,238 Finance lease assets Property and equipment, net (a) 618 906 Total leased assets $ 297,914 $ 311,144 Liabilities Current Operating Current portion of operating lease liabilities $ 25,390 $ 23,736 Finance Current portion of long-term debt and finance lease obligations 238 231 Noncurrent Operating Operating lease liabilities, less current portion 282,696 295,636 Finance Long-term debt and finance lease obligations, less current portion and deferred financing costs, net 376 445 Total lease liabilities $ 308,700 $ 320,048 (a) Finance lease assets are recorded net of accumulated amortization of $422 and $1,522 as of June 30, 2020 and December 31, 2019, respectively. Lease Cost of Continuing Operations Three Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 13,523 $ 13,114 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 55 76 Interest on finance lease liabilities Interest expense, net 10 15 Short term lease cost Operating expense 155 162 Net lease cost $ 13,743 $ 13,367 (a) Includes variable lease costs, which are immaterial Six Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 27,036 $ 26,229 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 116 143 Interest on finance lease liabilities Interest expense, net 19 26 Short term lease cost Operating expense 334 303 Net lease cost $ 27,505 $ 26,701 (a) Includes variable lease costs, which are immaterial Maturity of Lease Liabilities As of June 30, 2020 Operating Leases (a) Finance Leases (a) Total 2020 $ 51,388 $ 273 $ 51,661 2021 52,387 235 52,622 2022 53,395 114 53,509 2023 53,956 46 54,002 2024 54,169 — 54,169 After 2024 173,361 — 173,361 Total lease payments $ 438,656 $ 668 $ 439,324 Less: Interest (130,570) (54) (130,624) Present value of lease liabilities $ 308,086 $ 614 $ 308,700 (a) Operating and Finance lease payments exclude option to extend lease terms that are not reasonably certain of being exercised. The measurement of right-of-use assets and lease liabilities requires the Company to estimate appropriate discount rates. To the extent the rate implicit in the lease is readily determinable, such rate is utilized. However, based on information available at lease commencement for the majority of our leases, the rate implicit in the lease is not known. In these instances, the Company utilizes an incremental borrowing rate, which represents the rate of interest that it would pay to borrow on a collateralized basis over a similar term. Lease Term and Discount Rate June 30, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 8.34 8.81 Finance leases 2.65 3.00 Weighted-average discount rate Operating leases 8.9% 8.9% Finance leases 6.1% 6.1% Other Information Six Months Ended June 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 25,347 $ 29,033 Operating cash flows for finance leases $ 19 $ 26 Financing cash flows for finance leases $ 113 $ 250 Acquisition of operating leases through adoption of ASC 842 $ — $ 389,403 |
LEASES | LEASESThe Company has operating and finance leases for facilities, corporate offices, and certain equipment. The Company recognizes lease expense for these operating leases on a straight-line basis over the lease term. Leases with an initial term of one year or less are not recorded on the balance sheet. The Company's other leases have original lease terms of one twelve twenty one Leases Classification June 30, 2020 December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 297,296 $ 310,238 Finance lease assets Property and equipment, net (a) 618 906 Total leased assets $ 297,914 $ 311,144 Liabilities Current Operating Current portion of operating lease liabilities $ 25,390 $ 23,736 Finance Current portion of long-term debt and finance lease obligations 238 231 Noncurrent Operating Operating lease liabilities, less current portion 282,696 295,636 Finance Long-term debt and finance lease obligations, less current portion and deferred financing costs, net 376 445 Total lease liabilities $ 308,700 $ 320,048 (a) Finance lease assets are recorded net of accumulated amortization of $422 and $1,522 as of June 30, 2020 and December 31, 2019, respectively. Lease Cost of Continuing Operations Three Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 13,523 $ 13,114 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 55 76 Interest on finance lease liabilities Interest expense, net 10 15 Short term lease cost Operating expense 155 162 Net lease cost $ 13,743 $ 13,367 (a) Includes variable lease costs, which are immaterial Six Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 27,036 $ 26,229 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 116 143 Interest on finance lease liabilities Interest expense, net 19 26 Short term lease cost Operating expense 334 303 Net lease cost $ 27,505 $ 26,701 (a) Includes variable lease costs, which are immaterial Maturity of Lease Liabilities As of June 30, 2020 Operating Leases (a) Finance Leases (a) Total 2020 $ 51,388 $ 273 $ 51,661 2021 52,387 235 52,622 2022 53,395 114 53,509 2023 53,956 46 54,002 2024 54,169 — 54,169 After 2024 173,361 — 173,361 Total lease payments $ 438,656 $ 668 $ 439,324 Less: Interest (130,570) (54) (130,624) Present value of lease liabilities $ 308,086 $ 614 $ 308,700 (a) Operating and Finance lease payments exclude option to extend lease terms that are not reasonably certain of being exercised. The measurement of right-of-use assets and lease liabilities requires the Company to estimate appropriate discount rates. To the extent the rate implicit in the lease is readily determinable, such rate is utilized. However, based on information available at lease commencement for the majority of our leases, the rate implicit in the lease is not known. In these instances, the Company utilizes an incremental borrowing rate, which represents the rate of interest that it would pay to borrow on a collateralized basis over a similar term. Lease Term and Discount Rate June 30, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 8.34 8.81 Finance leases 2.65 3.00 Weighted-average discount rate Operating leases 8.9% 8.9% Finance leases 6.1% 6.1% Other Information Six Months Ended June 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 25,347 $ 29,033 Operating cash flows for finance leases $ 19 $ 26 Financing cash flows for finance leases $ 113 $ 250 Acquisition of operating leases through adoption of ASC 842 $ — $ 389,403 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Health Care Organizations [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Professional Liability and Other Liability Insurance The Company has professional liability insurance coverage for its nursing centers that, based on historical claims experience, is likely to be substantially less than the claims that are expected to be incurred. Effective July 1, 2013, the Company established a wholly-owned, offshore limited purpose insurance subsidiary, SHC Risk Carriers, Inc. (“SHC”), to replace some of the expiring commercial policies. SHC covers losses up to specified limits per occurrence. All of the Company's nursing centers in Florida, and Tennessee are now covered under the captive insurance policies along with many of the nursing centers in Alabama, Ohio and Texas, as well as those previously operated by the Company in Kentucky. The insurance coverage provided for these centers under the SHC policy provides coverage limits of at least $1,000 per medical incident with a sublimit per center of $3,000 and total annual aggregate policy limits of $5,000. All other centers within the Company's portfolio are covered through various commercial insurance policies which provide similar coverage limits per medical incident, per location, and on an aggregate basis for covered centers. The deductibles for these policies are covered through the insurance subsidiary. Reserve for Estimated Self-Insured Professional Liability Claims Because the Company’s actual liability for existing and anticipated professional liability and general liability claims will likely exceed the Company’s limited insurance coverage, the Company has recorded total liabilities for reported and estimated future claims of $26,136 and $27,390 as of June 30, 2020 and December 31, 2019, respectively. This accrual includes estimates of liability for incurred but not reported claims, estimates of liability for reported but unresolved claims, actual liabilities related to settlements, including settlements to be paid over time, and estimates of legal costs related to these claims. All losses are projected on an undiscounted basis and are presented without regard to any potential insurance recoveries. Amounts are added to the accrual for estimates of anticipated liability for claims incurred during each period, and amounts are deducted from the accrual for settlements paid on existing claims during each period. The Company evaluates the adequacy of this liability on a quarterly basis. Semi-annually, the Company retains a third-party actuarial firm to assist in the evaluation of this reserve. Since May 2012, the actuary has assisted management in the preparation of the appropriate accrual for incurred but not reported general and professional liability claims based on data furnished as of May 31 and November 30 of each year. The actuary primarily utilizes historical data regarding the frequency and cost of the Company’s past claims over a multi-year period, industry data and information regarding the number of occupied beds to develop its estimates of the Company’s ultimate professional liability cost for current periods. On a quarterly basis, the Company obtains reports of asserted claims and lawsuits incurred. These reports, which are provided by the Company’s insurers and a third-party claims administrator, contain information relevant to the actual expense already incurred with each claim as well as the third-party administrator’s estimate of the anticipated total cost of the claim. This information is reviewed by the Company quarterly and provided to the actuary semi-annually. Based on the Company’s evaluation of the actual claims information obtained, the semi-annual estimates received from the third-party actuary, the amounts paid and committed for settlements of claims and on estimates regarding the number and cost of additional claims anticipated in the future, the reserve estimate for a particular period may be revised upward or downward on a quarterly basis. Any increase in the accrual decreases results of operations in the period and any reduction in the accrual increases results of operations during the period. As of June 30, 2020, the Company is engaged in 94 professional liability lawsuits. Twenty-six lawsuits are currently scheduled for trial or arbitration during the next twelve months, and it is expected that additional cases will be set for trial or hearing. The Company’s cash expenditures for self-insured professional liability costs were $3,590 and $3,606 for the six months ended June 30, 2020 and 2019, respectively. The Company follows the accounting guidance in ASC Topic 954 that clarifies that a health care entity should not net insurance recoveries against a related professional liability claim and that the amount of the claim liability should be determined without consideration of insurance recoveries. Accordingly, the estimated insurance recovery receivables are included within "Self-insurance receivables, current portion" and "other noncurrent assets" on the Consolidated Balance Sheet. As of June 30, 2020 and December 31, 2019 there are estimated insurance recovery receivables of $1,573 and $1,011 in "Self-insurance receivables, current portion" and $155 and $1,555 in "other noncurrent assets," respectively. Although the Company adjusts its accrual for professional and general liability claims on a quarterly basis and retains a third-party actuarial firm semi-annually to assist management in estimating the appropriate accrual, professional and general liability claims are inherently uncertain, and the liability associated with anticipated claims is very difficult to estimate. Any potential claims or settlements related to COVID-19 are uncertain at this time. Professional liability cases have a long cycle from the date of an incident to the date a case is resolved, and final determination of the Company’s actual liability for claims incurred in any given period is a process that takes years. As a result, the Company’s actual liabilities may vary significantly from the accrual, and the amount of the accrual has and may continue to fluctuate by a material amount in any given period. Each change in the amount of this accrual will directly affect the Company’s reported earnings and financial position for the period in which the change in accrual is made. Civil Investigative Demand ("CID") In February 2020, we entered into a settlement agreement with the U.S. Department of Justice and the State of Tennessee of actions alleging violations of the federal False Claims Act in connection with our provision of therapy and the completion of certain resident admission forms. This settlement resolved an investigation that had begun in 2012 and covers the time period from January 1, 2010 through December 31, 2015. This agreement requires annual payments for a period of five the Company has included $1,000 and $8,000 within "Other current liabilities" and "Government Settlement Accrual", respectively, on the Consolidated Balance Sheets as of June 30, 2020. Failure to make timely any of these payments could result in rescission of the settlement and result in the government having a very large claim against us, including penalties, and/or make us ineligible to participate in certain government funded healthcare programs, any of which could in turn significantly harm our business and financial condition. In conjunction with the settlement of the government investigation related to our therapy practices, we entered into a corporate integrity agreement ("CIA") with the Office of the Inspector General of CMS. The CIA has a term of five years and imposes material burdens on the Company, its officers and directors to take actions designed to ensure compliance with applicable healthcare laws, including requirements to maintain specific compliance positions within the Company, to report any non-compliance with the terms of the CIA, to return any overpayments received, to submit annual reports and for an annual audit of submitted claims by an independent review organization. The CIA sets forth penalties for non-compliance by the Company with the terms of the agreement, including possible exclusion from federally funded healthcare programs for material violations of the agreement. Other Insurance With respect to workers’ compensation insurance, substantially all of the Company’s employees are covered under either a prefunded deductible policy or state-sponsored programs. The Company has been and remains a non-subscriber to the Texas workers’ compensation system and, therefore, is completely self-insured for employee injuries with respect to its Texas operations. From the period from July 1, 2008 through June 30, 2020, the Company is covered by a prefunded deductible policy. Under this prefunded policy, the Company is self-insured for the first $500 per claim, subject to an aggregate maximum of $3,000. The Company funds a loss fund account with the insurer to pay for claims below the deductible. The Company accounts for premium expense under this policy based on its estimate of the level of claims subject to the policy deductibles expected to be incurred. The liability for workers’ compensation claims was $1,249 and $921 at June 30, 2020 and December 31, 2019, respectively. The Company has a non-current receivable for workers’ compensation policies covering previous years of $1,792 and $1,575 which is included in "other noncurrent assets" on the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively. The non-current receivable is a function of payments paid to the Company’s insurance carrier in excess of the estimated level of claims expected to be incurred. Any potential claims or settlements related to COVID-19 are uncertain at this time. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Overview of Plans In June 2008, the Company adopted the Advocat Inc. 2008 Stock Purchase Plan for Key Personnel (“Stock Purchase Plan”). The Stock Purchase Plan provides for the granting of rights to purchase shares of the Company's common stock to directors and officers. The Stock Purchase Plan allows participants to elect to utilize a specified portion of base salary, annual cash bonus, or director compensation to purchase restricted shares or restricted share units (“RSU's”) at 85% of the quoted market price of a share of the Company's common stock on the date of purchase. The restriction period under the Stock Purchase Plan is generally two In April 2010, the Compensation Committee of the Board of Directors adopted the 2010 Long-Term Incentive Plan (“2010 Plan”), followed by approval by the Company's shareholders in June 2010. The 2010 Plan allows the Company to issue stock appreciation rights, stock options and other share and cash based awards. In June 2017, our shareholders approved an amendment to the 2010 Plan to increase the number of shares of our common stock authorized under the 2010 Plan from 380 shares to 680 shares. No grants can be made under the 2010 Plan after May 31, 2027. Equity Grants and Valuations During the six months ended June 30, 2020 and 2019, the Compensation Committee of the Board of Directors approved grants totaling approximately 198 and 151 shares of restricted common stock respectively, to certain employees and members of the Board of Directors. The fair value of restricted shares is determined as the quoted market price of the underlying common shares at the date of the grant. The restricted shares typically vest one-third on the first, second and third anniversaries of the grant date. Unvested shares may not be sold or transferred. During the vesting period, dividends accrue on the restricted shares, but are paid in additional shares of common stock upon vesting, subject to the vesting provisions of the underlying restricted shares. The restricted shares are entitled to the same voting rights as other common shares. On March 13, 2020, the Compensation Committee of the Board of Directors approved the grant of 100 shares of common stock to the Company's Chief Executive Officer, as a one-time bonus in lieu of a 2020 salary increase and as recognition for completing the settlement with the Office of the Inspector General and the disposition of all of the Company's facilities in the State of Kentucky. The stock was fully vested on the date of the grant, and the grant date fair value of which was expensed during the quarter ended March 31, 2020. In computing the fair value estimates for options and stock-only stock appreciation rights ("SOSARs") using the Black-Scholes-Merton valuation method, the Company took into consideration the exercise price of the equity grants and the market price of the Company's stock on the date of grant. The Company used an expected volatility that equals the historical volatility over the most recent period equal to the expected life of the equity grants. The risk free interest rate is based on the U.S. treasury yield curve in effect at the time of grant. The Company used the expected dividend yield at the date of grant, reflecting the level of annual cash dividends currently being paid on its common stock. Upon vesting of equity awards, all restrictions are removed. Our policy is to account for forfeitures of share-based compensation awards as they occur. Summarized activity of the equity compensation plans is presented below: Weighted Options/ Average SOSARs Exercise Price Outstanding, December 31, 2019 76 $ 7.55 Granted — — Exercised — — Expired or cancelled (11) 5.45 Outstanding, June 30, 2020 65 $ 7.92 Exercisable, June 30, 2020 65 $ 7.92 Weighted Average Restricted Grant Date Shares Fair Value Outstanding, December 31, 2019 207 $ 5.28 Granted 198 2.00 Vested (188) 3.93 Cancelled (23) 4.68 Outstanding, June 30, 2020 194 $ 3.32 Summarized activity of the Restricted Share Units for the Stock Purchase Plan is as follows: Weighted Average Restricted Grant Date Share Units Fair Value Outstanding, December 31, 2019 48 $ 5.08 Granted 29 2.00 Vested (13) 8.11 Outstanding, June 30, 2020 64 $ 3.05 The SOSARs and Options were valued and recorded in the same manner, and, other than amounts that may be settled pursuant to employment agreements with certain members of management, will be settled with issuance of new stock for the difference between the market price on the date of exercise and the exercise price. The Company estimated the total recognized and unrecognized compensation related to SOSARs and stock options using the Black-Scholes-Merton equity grant valuation model. The following table summarizes information regarding stock options and SOSAR grants outstanding as of June 30, 2020: Weighted Average Intrinsic Intrinsic Range of Exercise Grants Value-Grants Grants Value-Grants Exercise Prices Prices Outstanding Outstanding Exercisable Exercisable $8.14 to $10.21 $ 8.83 45 $ — 45 $ — $5.86 $ 5.86 20 $ — 20 $ — 65 65 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded an income tax expense from continuing operations of $78 during the six months ended June 30, 2020 and an expense of $16,285 during the six months ended June 30, 2019. When assessing the recoverability of the Company’s recorded deferred tax assets, the accounting guidance, ASC 740, Income Taxes , requires that all available positive and negative evidence be considered in evaluating the likelihood that the Company will be able to realize the benefit of its deferred tax assets in the future, which is highly judgmental. Such evidence includes, but may not be limited to, scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax-planning strategies, and the results of recent operations. When assessing all available evidence, the Company recognized that governmental and regulatory changes have put downward revenue pressure on the long-term care industry as a piece of negative evidence in its analysis. In 2019 and 2018 combined, the Company recognized a total expense of $9.5 million related to the CID settlement in principle. Additionally, in 2017 it recorded an additional $5.5 million of income tax expense related to the revaluation of deferred tax assets in accordance with the Tax Cuts and Jobs Act. Because of these items and other financial results, the Company entered a cumulative loss for the 36 preceding months ended June 30, 2019 and performed a thorough assessment of the available positive and negative evidence in order to ascertain whether it is more likely than not that in future periods the Company will generate sufficient pre-tax income to utilize all of its federal deferred tax assets and its net operating loss and other carryforwards and credits. The Company also identified several pieces of positive evidence that were considered and weighed in the analysis performed regarding the valuation of deferred tax assets. The evidence included the termination of operations for 10 nursing facilities in Kentucky completed in the third quarter of 2019, the related corporate and regional restructuring and other cost saving initiatives already in process. The evidence also included consideration of participation in revenue incentive programs that are expected to generate additional revenue, the long-term expiration dates of a majority of the net operating losses and credits, and the Company’s history of not having carryforwards or credits expire unutilized. In performing the analysis, the Company contemplated utilization of the recorded deferred tax assets under multiple scenarios. After consideration of these factors, the Company determined that a full valuation allowance of $20.0 million was necessary as of June 30, 2019. As of June 30, 2020, the Company has a valuation allowance in the amount of $21.3 million. The Company will continue to periodically assess the realizability of its future deferred tax assets. On March 27, 2020, the CARES Act was enacted and signed into law. Certain provisions of the CARES Act impact the 2019 income tax provision computations of the Company and are reflected in the first quarter of 2020, or the period of enactment. The CARES Act contains modifications on the depreciation of qualified improvement property, as well as the limitation of business interest for tax years beginning in 2019 and 2020. The new life classification of the qualified improvement property, allowing for bonus depreciation to be taken, along with the modification to Section 163(j) to increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income significantly increased the allowable deductions of the Company and result in additional taxable losses for the year-ended 2019, resulting in greater net operating losses (“NOL”) to be carried back. The NOL carryback resulted in a tax refund of $321 and an increase to the Work Opportunity Tax Credit (“WOTC”) deferred tax asset, which is offset by a full valuation allowance. These changes pursuant to the CARES Act did not have a significant impact to the first quarter of 2020, other than the tax refund and net adjustments to the WOTC credit and NOL deferred tax assets, which are offset by a valuation allowance. As a result of the CARES Act, it is anticipated that the Company will fully utilize all interest expense expected to be incurred in 2020. The Company is not currently under examination by any major income tax jurisdiction. During 2020, the statutes of limitations will lapse on the Company's 2016 Federal tax year and certain 2015 and 2016 state tax years. The Company does not believe the Federal or state statute lapses or any other event will significantly impact the balance of unrecognized tax benefits in the next twelve months. The net balance of unrecognized tax benefits was not material to the interim consolidated financial statements for the six months ended June 30, 2020 and 2019. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE Information with respect to basic and diluted net loss per common share is presented below in thousands, except per share: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income (loss) Income (loss) from continuing operations $ 1,839 $ (22,616) $ 1,329 $ (24,190) Loss from discontinued operations, net of income taxes (387) (1,980) (630) (3,752) Net income (loss) $ 1,452 $ (24,596) $ 699 $ (27,942) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income (loss) per common share: Per common share – basic Income (loss) from continuing operations $ 0.28 $ (3.49) $ 0.21 $ (3.75) Loss from discontinued operations (0.06) (0.31) (0.10) (0.58) Net income (loss) per common share – basic $ 0.22 $ (3.80) $ 0.11 $ (4.33) Per common share – diluted Income (loss) from continuing operations $ 0.28 $ (3.49) $ 0.21 $ (3.75) Loss from discontinued operations (0.06) (0.31) (0.10) (0.58) Net income (loss) per common share – diluted $ 0.22 $ (3.80) $ 0.11 $ (4.33) Weighted Average Common Shares Outstanding: Basic 6,649 6,472 6,506 6,448 Diluted 6,704 6,472 6,586 6,448 |
BUSINESS DEVELOPMENTS AND OTHER
BUSINESS DEVELOPMENTS AND OTHER SIGNIFICANT TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS DEVELOPMENTS AND OTHER SIGNIFICANT TRANSACTIONS | BUSINESS DEVELOPMENTS AND OTHER SIGNIFICANT TRANSACTIONS 2018 New Master Lease Agreement On October 1, 2018, the Company entered into a new Master Lease Agreement (the "Lease") with Omega Healthcare Investors (the "Lessor") to lease 34 centers currently owned by the Lessor and operated by Diversicare. The old Master Lease with the Lessor provided for its operation of 23 skilled nursing centers in Texas, Kentucky, Alabama, Tennessee, Florida, and Ohio. Additionally, Diversicare operated 11 centers owned by the Lessor under separate leases in Missouri, Kentucky, Indiana, and Ohio. The Lease entered into by Diversicare and the Lessor consolidated the leases for all 34 centers under one new Master Lease. The Lease has an initial term of twelve On August 30, 2019, the Company terminated operations of ten centers in Kentucky and concurrently transferred operations to a new operator. The agreement effectively amended the Lease with Omega Healthcare Investors to remove the ten Kentucky facilities, reduce the annual rent expense, and release the Company from any further obligations arising under the Lease with respect to the Kentucky facilities. The remaining Lease terms are unchanged with an initial term of twelve Quality Incentive Payment Program |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS Kentucky Disposition On October 30, 2018 the Company entered into an Asset Purchase Agreement (the "Agreement") with Fulton Nursing and Rehabilitation, LLC, Holiday Fulton Propco LLC, Birchwood Nursing and Rehabilitation LLC, Padgett Clinton Propco LLC, Westwood Nursing and Rehabilitation LLC, and Westwood Glasgow Propco (the "Buyers") to sell the assets and transfer the operations of the Kentucky Properties. On December 1, 2018, the Company completed the sale of the Kentucky Properties with the Buyers for a purchase price of $18,700. This transaction did not meet the accounting criteria to be reported as a discontinued operation. The carrying value of these centers' assets was $13,331, resulting in a gain of $4,825, with the remaining proceeds for miscellaneous closing costs. The proceeds were used to relieve debt, as required under the terms of the Company's Amended Mortgage Loan and Amended Revolver. Refer to Note 6, "Long-term Debt and Interest Rate Swap" for more information on this transaction. On May 22, 2019, the Company announced that it entered into an agreement with Omega to amend its master lease to terminate operations of ten nursing facilities, totaling approximately 885 skilled nursing beds, located in Kentucky and to concurrently transfer operations to an operator selected by Omega. On August 30, 2019, the Company completed the transaction and no longer operates any skilled nursing centers in the State of Kentucky. The Company's exit from the state represented a strategic shift that has (or will have) a major effect on the Company's operations and financial results. In accordance with ASC 205, the Company's discontinued financial position, results of operations and cash flows have been reclassified on the face of the financial statements and footnotes for all periods presented to reflect the discontinued status of these operations. The transaction resulted in a gain on the modification of the Omega lease, which was presented within Discontinued Operations on the Consolidated Statements of Operations for the third quarter of 2019. The net gain on the transaction was $733. These centers contributed revenues of $17,404 for the three months ended June 30, 2019 and a net loss of $387 and $1,980 for the three months ended June 30, 2020 and 2019, respectively. The centers contributed revenues of $34,207 for the six months ended June 30, 2019, and net loss of $630 and $3,752 for the six months ended June 30, 2020 and 2019, respectively. The Company did not transfer the accounts receivable or liabilities, inclusive of the reserves for professional liability and workers' compensation, to the new operator. The Company expects to pay the remaining liabilities in the ordinary course of business through its future operating cash flows. The Company does not have significant uncollected accounts receivable associated with these centers as of June 30, 2020. |
CONSOLIDATION AND BASIS OF PR_2
CONSOLIDATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The interim consolidated financial statements for the three and six month periods ended June 30, 2020 and 2019, included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. In the opinion of management of the Company, the accompanying interim consolidated financial statements reflect all normal, recurring adjustments necessary to present fairly the Company’s financial position at June 30, 2020, the results of operations, and changes in shareholders' deficit for the three and six month periods ended June 30, 2020 and 2019 and cash flows for the six months periods ended June 30, 2020 and 2019. The Company’s balance sheet information at December 31, 2019, was derived from its audited consolidated financial statements as of December 31, 2019. The results of operations for the periods ended June 30, 2020 and 2019 are not necessarily indicative of the operating results that may be expected for a full year. These interim consolidated financial statements should be read in connection with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. CARES Act and PPPHCE Act Funds The Company implemented certain changes to our accounting policies related to the recognition of stimulus funds through the CARES Act and the PPPHCE Act. There is no U.S. GAAP that covers accounting for government "grants" to for-profit entities with the exception of certain agricultural subsidies. In the absence of authoritative U.S. GAAP guidance, the Company considered the application of other authoritative accounting guidance by analogy and concluded that the guidance outlined in International Accounting Standard 20 - Accounting for Government Grants and Disclosures of Government Assistance ("IAS 20") was the most appropriate analogy for the purpose of recording and classifying the federal stimulus funds received by the Company. Under IAS 20, once it is reasonably assured that the entity will comply with the conditions of the grant, the grant money should be recognized on a systematic basis over the periods in which the entity recognizes the related expenses or losses for which the grant money is intended to compensate. The Company recognizes grants once both of the following conditions are met: (1) the Company is able to comply with the relevant conditions of the grant and (2) the grant will be received. Federal stimulus funds that are recognized to offset healthcare related expenses and lost revenue attributable to COVID-19 are reflected as "other operating income" on the accompanying interim consolidated statement of operations. Federal stimulus funds received and used toward capital improvements that assist with the response to and prevention and spread of COVID-19 is accounted for as a capital grant. For such an asset acquired with the use of a stimulus funds, the Company will recognize the asset as a net zero asset. Refer to Note 4 to the interim consolidated financial statements included in this report for additional information. Additionally, the Company has received Medicaid stimulus funds, which are recognized in accordance with ASC 606. Refer to Note 5 to the interim consolidated financial statements included in this report for additional information. |
Discontinued Operations | In accordance with ASC 205, the Company's discontinued operating results have been reclassified on the face of the financial statements and footnotes for all periods presented to reflect the discontinued status of these operations. |
Recent Accounting Standards Adopted and Not Adopted by the Company | Accounting Standards Recently Issued But Not Yet Adopted by the Company In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance intends to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. This update requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. This standard is effective for smaller reporting companies for the fiscal year beginning after December 15, 2022 with early adoption permitted. The Company is in the initial stages of evaluating the impact from the adoption of this new standard on the consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848). The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of |
Revenue Recognition | The Company's revenue is derived from providing quality healthcare services to its patients. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. The promise to provide quality care is accounted for as a single performance obligation satisfied at a point in time, when those services are rendered. The Company performed analyses using the application of the portfolio approach as a practical expedient to group patient contracts with similar characteristics, such that revenue for a given portfolio would not be materially different than if it were |
REVENUE RECOGNITION AND ACCOU_2
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes revenue from contracts with customers by payor source from continuing operations for the periods presented (dollar amounts in thousands): Three Months Ended June 30, 2020 2019 Medicaid $ 54,161 45.8 % $ 53,812 45.6 % Medicare 22,424 19.0 % 19,545 16.6 % Managed Care 12,355 10.4 % 13,120 11.1 % Private Pay and other 29,303 24.8 % 31,490 26.7 % Total $ 118,243 100.0 % $ 117,967 100.0 % Six Months Ended June 30, 2020 2019 Medicaid $ 108,491 45.5 % $ 107,623 45.7 % Medicare 43,096 18.1 % 39,936 17.0 % Managed Care 24,951 10.5 % 26,118 11.1 % Private Pay and other 61,692 25.9 % 61,840 26.2 % Total $ 238,230 100.0 % $ 235,517 100.0 % |
Schedule of Accounts Receivable | Accounts receivable from continuing operations as of June 30, 2020 and December 31, 2019 are summarized in the following table: June 30, December 31, 2020 2019 Medicaid $ 18,722 $ 21,998 Medicare 9,659 11,811 Managed Care 7,057 9,103 Private Pay and other 16,472 17,609 Total accounts receivable $ 51,910 $ 60,521 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Assets and Liabilities, Leases | Leases Classification June 30, 2020 December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 297,296 $ 310,238 Finance lease assets Property and equipment, net (a) 618 906 Total leased assets $ 297,914 $ 311,144 Liabilities Current Operating Current portion of operating lease liabilities $ 25,390 $ 23,736 Finance Current portion of long-term debt and finance lease obligations 238 231 Noncurrent Operating Operating lease liabilities, less current portion 282,696 295,636 Finance Long-term debt and finance lease obligations, less current portion and deferred financing costs, net 376 445 Total lease liabilities $ 308,700 $ 320,048 (a) Finance lease assets are recorded net of accumulated amortization of $422 and $1,522 as of June 30, 2020 and December 31, 2019, respectively. |
Lease, Cost | Lease Cost of Continuing Operations Three Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 13,523 $ 13,114 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 55 76 Interest on finance lease liabilities Interest expense, net 10 15 Short term lease cost Operating expense 155 162 Net lease cost $ 13,743 $ 13,367 (a) Includes variable lease costs, which are immaterial Six Months Ended June 30, Classification 2020 2019 Operating lease cost (a) Lease and rent expense $ 27,036 $ 26,229 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 116 143 Interest on finance lease liabilities Interest expense, net 19 26 Short term lease cost Operating expense 334 303 Net lease cost $ 27,505 $ 26,701 (a) Includes variable lease costs, which are immaterial |
Lessee, Operating Lease, Liability, Maturity | Maturity of Lease Liabilities As of June 30, 2020 Operating Leases (a) Finance Leases (a) Total 2020 $ 51,388 $ 273 $ 51,661 2021 52,387 235 52,622 2022 53,395 114 53,509 2023 53,956 46 54,002 2024 54,169 — 54,169 After 2024 173,361 — 173,361 Total lease payments $ 438,656 $ 668 $ 439,324 Less: Interest (130,570) (54) (130,624) Present value of lease liabilities $ 308,086 $ 614 $ 308,700 (a) Operating and Finance lease payments exclude option to extend lease terms that are not reasonably certain of being exercised. |
Finance Lease, Liability, Maturity | Maturity of Lease Liabilities As of June 30, 2020 Operating Leases (a) Finance Leases (a) Total 2020 $ 51,388 $ 273 $ 51,661 2021 52,387 235 52,622 2022 53,395 114 53,509 2023 53,956 46 54,002 2024 54,169 — 54,169 After 2024 173,361 — 173,361 Total lease payments $ 438,656 $ 668 $ 439,324 Less: Interest (130,570) (54) (130,624) Present value of lease liabilities $ 308,086 $ 614 $ 308,700 (a) Operating and Finance lease payments exclude option to extend lease terms that are not reasonably certain of being exercised. |
Summary of Other Lease Information | Lease Term and Discount Rate June 30, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 8.34 8.81 Finance leases 2.65 3.00 Weighted-average discount rate Operating leases 8.9% 8.9% Finance leases 6.1% 6.1% Other Information Six Months Ended June 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 25,347 $ 29,033 Operating cash flows for finance leases $ 19 $ 26 Financing cash flows for finance leases $ 113 $ 250 Acquisition of operating leases through adoption of ASC 842 $ — $ 389,403 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summarized activity of equity compensation plans | Summarized activity of the equity compensation plans is presented below: Weighted Options/ Average SOSARs Exercise Price Outstanding, December 31, 2019 76 $ 7.55 Granted — — Exercised — — Expired or cancelled (11) 5.45 Outstanding, June 30, 2020 65 $ 7.92 Exercisable, June 30, 2020 65 $ 7.92 |
Schedule of summarized activity of Restricted Share Units | Weighted Average Restricted Grant Date Shares Fair Value Outstanding, December 31, 2019 207 $ 5.28 Granted 198 2.00 Vested (188) 3.93 Cancelled (23) 4.68 Outstanding, June 30, 2020 194 $ 3.32 Summarized activity of the Restricted Share Units for the Stock Purchase Plan is as follows: Weighted Average Restricted Grant Date Share Units Fair Value Outstanding, December 31, 2019 48 $ 5.08 Granted 29 2.00 Vested (13) 8.11 Outstanding, June 30, 2020 64 $ 3.05 |
Schedule of summarized information regarding stock options and SOSAR grants outstanding | The following table summarizes information regarding stock options and SOSAR grants outstanding as of June 30, 2020: Weighted Average Intrinsic Intrinsic Range of Exercise Grants Value-Grants Grants Value-Grants Exercise Prices Prices Outstanding Outstanding Exercisable Exercisable $8.14 to $10.21 $ 8.83 45 $ — 45 $ — $5.86 $ 5.86 20 $ — 20 $ — 65 65 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Basic and diluted net income (loss) per common share | Information with respect to basic and diluted net loss per common share is presented below in thousands, except per share: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income (loss) Income (loss) from continuing operations $ 1,839 $ (22,616) $ 1,329 $ (24,190) Loss from discontinued operations, net of income taxes (387) (1,980) (630) (3,752) Net income (loss) $ 1,452 $ (24,596) $ 699 $ (27,942) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income (loss) per common share: Per common share – basic Income (loss) from continuing operations $ 0.28 $ (3.49) $ 0.21 $ (3.75) Loss from discontinued operations (0.06) (0.31) (0.10) (0.58) Net income (loss) per common share – basic $ 0.22 $ (3.80) $ 0.11 $ (4.33) Per common share – diluted Income (loss) from continuing operations $ 0.28 $ (3.49) $ 0.21 $ (3.75) Loss from discontinued operations (0.06) (0.31) (0.10) (0.58) Net income (loss) per common share – diluted $ 0.22 $ (3.80) $ 0.11 $ (4.33) Weighted Average Common Shares Outstanding: Basic 6,649 6,472 6,506 6,448 Diluted 6,704 6,472 6,586 6,448 |
BUSINESS (Details)
BUSINESS (Details) | Jun. 30, 2020bedcenterstate | Oct. 01, 2018center |
Accounting Policies [Line Items] | ||
Number of states in which entity operates | state | 9 | |
Number of nursing centers | center | 62 | |
Number of licensed nursing beds | 7,329 | |
Number of nursing center facilities owned | center | 15 | |
Number of nursing center facilities leased | center | 47 | 34 |
Number of licensed assisted and residential living beds | 397 | |
Minimum | ||
Accounting Policies [Line Items] | ||
Number of licensed nursing beds per center | 50 | |
Maximum | ||
Accounting Policies [Line Items] | ||
Number of licensed nursing beds per center | 320 |
CONSOLIDATION AND BASIS OF PR_3
CONSOLIDATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Details) $ in Thousands | Dec. 01, 2018USD ($)property | Jun. 30, 2020facility | Aug. 30, 2019facility |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of nursing center facilities terminated | 10 | ||
Kentucky Properties | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of properties sold | property | 3 | ||
Proceeds from sale of assets | $ | $ 18,700 | ||
Kentucky Properties | Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of nursing center facilities terminated | 10 |
COVID-19 PANDEMIC (Details)
COVID-19 PANDEMIC (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Unusual or Infrequent Items, or Both [Abstract] | |||||
COVID-19, Medicare stimulus funds received | $ 31,180 | $ 31,180 | |||
OTHER OPERATING INCOME | 5,148 | $ 0 | 5,148 | $ 0 | |
Proceeds from stimulus funds used to purchase property and equipment | 712 | $ 0 | |||
COVID-19, remaining stimulus funds | 25,320 | 25,320 | |||
COVID-19, Medicaid funds received | 4,203 | 5,064 | |||
Payroll and employee benefits, less current portion | 3,185 | 3,185 | $ 0 | ||
COVID-19, Medicaid sequestration amount | 307 | 307 | |||
COVID-19, salaries expense | 2,200 | 2,600 | |||
COVID-19, supplies expense | 1,100 | 1,200 | |||
COVID-19, travel expense | $ 100 | $ 100 |
REVENUE RECOGNITION AND ACCOU_3
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
COVID-19, Medicaid funds received | $ 4,203 | $ 5,064 | ||
Total revenues | $ 118,243 | $ 117,967 | $ 238,230 | $ 235,517 |
Total revenues, as a percent | 100.00% | 100.00% | 100.00% | 100.00% |
Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 54,161 | $ 53,812 | $ 108,491 | $ 107,623 |
Total revenues, as a percent | 45.80% | 45.60% | 45.50% | 45.70% |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 22,424 | $ 19,545 | $ 43,096 | $ 39,936 |
Total revenues, as a percent | 19.00% | 16.60% | 18.10% | 17.00% |
Managed Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 12,355 | $ 13,120 | $ 24,951 | $ 26,118 |
Total revenues, as a percent | 10.40% | 11.10% | 10.50% | 11.10% |
Private Pay and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 29,303 | $ 31,490 | $ 61,692 | $ 61,840 |
Total revenues, as a percent | 24.80% | 26.70% | 25.90% | 26.20% |
REVENUE RECOGNITION AND ACCOU_4
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 51,910 | $ 60,521 |
Medicaid | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 18,722 | 21,998 |
Medicare | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 9,659 | 11,811 |
Managed Care | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 7,057 | 9,103 |
Private Pay and other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 16,472 | $ 17,609 |
LONG-TERM DEBT AND INTEREST R_2
LONG-TERM DEBT AND INTEREST RATE SWAP (Details) | Dec. 01, 2018USD ($) | Nov. 30, 2018 | Feb. 26, 2016USD ($)center | Jun. 30, 2020USD ($)letter_of_credit | Apr. 03, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 01, 2019center | Jun. 30, 2019center | May 13, 2019USD ($)center | Apr. 30, 2019center | Sep. 30, 2017USD ($) | Oct. 03, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||
Number of QIPP centers released | center | 3 | |||||||||||
Number of skilled nursing centers participating in QIPP | center | 12 | 1 | 4 | 11 | ||||||||
Accumulated other comprehensive income (loss) | $ 348,000 | $ 568,000 | ||||||||||
Interest rate swap | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Notional amount of interest rate derivatives | $ 26,314,000 | |||||||||||
Annual fixed rate (as a percent) | 5.79% | |||||||||||
Net liability based on interest rate swap valuation model | $ 276,000 | |||||||||||
Accumulated other comprehensive income (loss) | $ (59,000) | |||||||||||
Amended and restated credit agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Number of letters of credit | letter_of_credit | 4 | |||||||||||
Mortgage loan | Amended and restated credit agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowing capacity | $ 80,000,000 | |||||||||||
Debt instrument term | 5 years | |||||||||||
Period of amortization | 25 years | |||||||||||
Amended mortgage loan balance | $ 60,112,000 | |||||||||||
Number of owned nursing centers to secure Amended Mortgage Loan | center | 15 | |||||||||||
Mortgage loan | Amended and restated credit agreement | Interest rate swap | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt interest rate at period end | 5.79% | |||||||||||
Amended revolver | Amended and restated credit agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowing capacity | $ 42,250,000 | $ 27,727,000 | $ 5,000,000 | $ 52,250,000 | $ 52,250,000 | |||||||
Debt instrument term | 5 years | |||||||||||
Repayments of lines of credit | 4,947,000 | |||||||||||
Reduction in credit facility | 2,000,000 | |||||||||||
Interest rate during period | 5.75% | |||||||||||
Borrowings outstanding | $ 0 | $ 15,000,000 | ||||||||||
Letters of credit security deposit for a lease | 12,143,000 | |||||||||||
Amended revolver | Amended and restated credit agreement | LIBOR | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate percentage | 4.00% | |||||||||||
Amended revolver | Affiliated Revolving Credit Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Periodic reduction in capacity | $ 1,000,000 | |||||||||||
Borrowings outstanding | 1,027,000 | |||||||||||
Amended revolver | Amended Revolver and Affiliated Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Balance available for borrowing under revolving credit center | $ 15,584,000 | |||||||||||
Letter of credit | Amended and restated credit agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Annual fees for letters of credit issued under Revolver (as a percentage) | 3.00% | |||||||||||
Mortgage term loan | Mortgage loan | Amended and restated credit agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowing capacity | $ 67,500,000 | |||||||||||
Debt interest rate at period end | 4.50% | |||||||||||
Amended mortgage loan balance | $ 48,712,000 | |||||||||||
Mortgage term loan | Mortgage loan | Amended and restated credit agreement | Interest rate swap | Designated as hedging instrument | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Notional amount of interest rate derivatives | $ 30,000,000 | |||||||||||
Mortgage term loan | Mortgage loan | Amended and restated credit agreement | LIBOR | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate percentage | 4.00% | |||||||||||
Acquisition loan facility | Mortgage loan | Amended and restated credit agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowing capacity | 10,400,000 | $ 12,500,000 | ||||||||||
Debt interest rate at period end | 5.25% | |||||||||||
Amended mortgage loan balance | $ 11,400,000 | |||||||||||
Line of credit, reserve | $ 2,100,000 | |||||||||||
Acquisition loan facility | Mortgage loan | Amended and restated credit agreement | LIBOR | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate percentage | 4.75% | |||||||||||
Acquisition loan facility | Mortgage loan | Amended Revolver and Affiliated Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowing capacity | $ 12,500,000 | $ 10,400,000 | ||||||||||
Amended mortgage loan balance | $ 2,100,000 | |||||||||||
Eligible days of qualifying accounts receivable (in days) | 150 days | 120 days | ||||||||||
Acquisition loan facility | Mortgage loan | Amended Revolver and Affiliated Revolver | LIBOR | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate percentage | 0.50% |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Lessee, Lease, Description [Line Items] | |
Other leases renewal term | 20 years |
Other leases termination period | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Other leases remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Other leases remaining lease term | 12 years |
LEASES - Balance Sheet Classifi
LEASES - Balance Sheet Classification (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Operating lease right-of-use assets | $ 297,296 | $ 310,238 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:AssetsAbstract | us-gaap:AssetsAbstract |
Finance lease assets | $ 618 | $ 906 |
Total leased assets | 297,914 | 311,144 |
Liabilities, Current [Abstract] | ||
Current portion of operating lease liabilities | $ 25,390 | $ 23,736 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:LiabilitiesCurrentAbstract | us-gaap:LiabilitiesCurrentAbstract |
Finance lease, current | $ 238 | $ 231 |
Liabilities, Noncurrent [Abstract] | ||
Operating lease liabilities, less current portion | $ 282,696 | $ 295,636 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligations | us-gaap:LongTermDebtAndCapitalLeaseObligations |
Finance lease, noncurrent | $ 376 | $ 445 |
Total lease liabilities | 308,700 | 320,048 |
Accumulated amortization of finance leases | $ 422 | $ 1,522 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 13,523 | $ 13,114 | $ 27,036 | $ 26,229 |
Amortization of finance lease assets | 55 | 76 | 116 | 143 |
Interest on finance lease liabilities | 10 | 15 | 19 | 26 |
Short term lease cost | 155 | 162 | 334 | 303 |
Net lease cost | $ 13,743 | $ 13,367 | $ 27,505 | $ 26,701 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating and Financing Lease Liabilities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Operating Leases | |
2020 | $ 51,388 |
2021 | 52,387 |
2022 | 53,395 |
2023 | 53,956 |
2024 | 54,169 |
After 2024 | 173,361 |
Total lease payments | 438,656 |
Less: Interest | (130,570) |
Present value of lease liabilities | 308,086 |
Finance Leases | |
2020 | 273 |
2021 | 235 |
2022 | 114 |
2023 | 46 |
2024 | 0 |
After 2024 | 0 |
Total lease payments | 668 |
Less: Interest | (54) |
Present value of lease liabilities | 614 |
Operating and Finance Lease Liabilities Payments Due [Abstract] | |
2020 | 51,661 |
2021 | 52,622 |
2022 | 53,509 |
2023 | 54,002 |
2024 | 54,169 |
After 2024 | 173,361 |
Total lease payments | 439,324 |
Less: Interest | (130,624) |
Present value of lease liabilities | $ 308,700 |
LEASES - Other Lease Informatio
LEASES - Other Lease Information (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Weighted-average remaining lease term (years) | |||
Operating leases | 8 years 4 months 2 days | 8 years 9 months 21 days | |
Finance leases | 2 years 7 months 24 days | 3 years | |
Weighted-average discount rate | |||
Operating leases | 8.90% | 8.90% | |
Finance leases | 6.10% | 6.10% | |
Operating cash flows for operating leases | $ 25,347 | $ 29,033 | |
Operating cash flows for finance leases | 19 | 26 | |
Financing cash flows for finance leases | 113 | 250 | |
Acquisition of operating leases though adoption of ASC 842 | $ 0 | $ 389,403 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($)lawsuit | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Malpractice Insurance [Line Items] | ||||
Number of professional liability lawsuits | lawsuit | 94 | |||
Cash expenditures for self-insured professional liability costs | $ 3,590,000 | $ 3,606,000 | ||
Other Insurance | ||||
Liability for workers compensation claims | 1,249,000 | $ 921,000 | ||
Workers compensation insurance, non current receivable for excess premiums paid | 1,792,000 | 1,575,000 | ||
Professional malpractice liability insurance | ||||
Malpractice Insurance [Line Items] | ||||
Liability for reported and estimated future claims | 26,136,000 | 27,390,000 | ||
Prefunded deductible policy | ||||
Malpractice Insurance [Line Items] | ||||
Insurance policy coverage limits per claim | 500,000 | |||
Other Insurance | ||||
Insurance policy coverage limits per claim | 500,000 | |||
Professional liability insurance, annual coverage limit per facility | 3,000,000 | |||
Health insurance, maximum self-insured annual amount per individual | 200,000 | |||
Liability for reported claims and estimates for incurred but unreported claims | 2,448,000 | 1,810,000 | ||
SHC Risk Carriers, Inc | Professional malpractice liability insurance | ||||
Malpractice Insurance [Line Items] | ||||
Insurance policy coverage limits per claim | 1,000,000 | |||
Malpractice insurance annual sublimit per center | 3,000,000 | |||
Aggregate policy limit | 5,000,000 | |||
Other Insurance | ||||
Insurance policy coverage limits per claim | $ 1,000,000 | |||
Scheduled for trial or arbitration over next 12 months | ||||
Malpractice Insurance [Line Items] | ||||
Number of professional liability lawsuits | lawsuit | 26 | |||
Civil Investigative Demand | ||||
Malpractice Insurance [Line Items] | ||||
Settlement payment period | 5 years | |||
Payments made during period | $ 500,000 | |||
Current loss accrual | $ 1,000,000 | |||
Noncurrent loss accrual | 8,000,000 | |||
Self Insurance Receivable, Current | ||||
Malpractice Insurance [Line Items] | ||||
Estimated insurance recovery receivables | 1,573,000 | 1,011,000 | ||
Other Noncurrent Assets | ||||
Malpractice Insurance [Line Items] | ||||
Estimated insurance recovery receivables | $ 155,000 | $ 1,555,000 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | Mar. 13, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2017 | May 31, 2017 | Sep. 30, 2016 | May 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 416 | $ 284 | |||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grant of restricted common stock (shares) | 198,000 | 151,000 | |||||
Restricted Stock | First anniversary of grant date | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage of awards | 33.33% | ||||||
Restricted Stock | Second anniversary of grant date | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage of awards | 33.33% | ||||||
Restricted Stock | Third anniversary of grant date | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage of awards | 33.33% | ||||||
2008 Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of quoted market price offering rate | 85.00% | ||||||
Restriction period | 2 years | ||||||
Shares authorized under the plan (shares) | 350,000 | 150,000 | |||||
2010 Long Term Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares reserved for future issuance (shares) | 680,000 | 380,000 | |||||
Chief Executive Officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock granted to CEO (in shares) | 100,000 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Activity of Equity Compensation Plans (Details) - Stock Options and Stock Appreciation Rights (SARs) shares in Thousands | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Number of Shares | |
Outstanding, beginning (shares) | shares | 76 |
Granted (shares) | shares | 0 |
Exercised (shares) | shares | 0 |
Expired or cancelled (shares) | shares | (11) |
Outstanding, ending (shares) | shares | 65 |
Exercisable (shares) | shares | 65 |
Weighted Average Exercise Price | |
Outstanding, beginning (dollars per share) | $ / shares | $ 7.55 |
Granted (dollars per share) | $ / shares | 0 |
Exercised (dollars per share) | $ / shares | 0 |
Expired or cancelled (dollars per share) | $ / shares | 5.45 |
Outstanding, ending (dollars per share) | $ / shares | 7.92 |
Exercisable, weighted average exercise price (dollars per share) | $ / shares | $ 7.92 |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Restricted Stock and Restricted Stock Units Activity (Details) - $ / shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Restricted Shares | ||
Number of Shares | ||
Outstanding, beginning (shares) | 207 | |
Granted (shares) | 198 | 151 |
Vested (shares) | (188) | |
Cancelled (shares) | (23) | |
Outstanding, ending (shares) | 194 | |
Weighted Average Granted Date Fair Value | ||
Outstanding, beginning (dollars per share) | $ 5.28 | |
Granted (dollars per share) | 2 | |
Vested (dollars per share) | 3.93 | |
Cancelled (dollars per share) | 4.68 | |
Outstanding, ending (dollars per share) | $ 3.32 | |
Restricted Stock Units (RSUs) | ||
Number of Shares | ||
Outstanding, beginning (shares) | 48 | |
Granted (shares) | 29 | |
Vested (shares) | (13) | |
Outstanding, ending (shares) | 64 | |
Weighted Average Granted Date Fair Value | ||
Outstanding, beginning (dollars per share) | $ 5.08 | |
Granted (dollars per share) | 2 | |
Vested (dollars per share) | 8.11 | |
Outstanding, ending (dollars per share) | $ 3.05 |
STOCK-BASED COMPENSATION - Sc_3
STOCK-BASED COMPENSATION - Schedule of Awards Outstanding and Exercisable (Details) - Stock Options and Stock Appreciation Rights (SARs) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise prices (dollars per share) | $ 7.92 | $ 7.55 |
Grants outstanding (shares) | 65 | |
Grants exercisable (shares) | 65 | |
$8.14 to $10.21 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Range of exercise prices, minimum (dollars per share) | $ 8.14 | |
Range of exercise prices, maximum (dollars per share) | 10.21 | |
Weighted average exercise prices (dollars per share) | $ 8.83 | |
Grants outstanding (shares) | 45 | |
Intrinsic value - grants outstanding | $ 0 | |
Grants exercisable (shares) | 45 | |
Intrinsic value - grants exercisable | $ 0 | |
$5.86 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Range of exercise prices, minimum (dollars per share) | $ 5.86 | |
Weighted average exercise prices (dollars per share) | $ 5.86 | |
Grants outstanding (shares) | 20 | |
Intrinsic value - grants outstanding | $ 0 | |
Grants exercisable (shares) | 20 | |
Intrinsic value - grants exercisable | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands | Mar. 27, 2020USD ($) | Jun. 30, 2020USD ($)facility | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)facility | Jun. 30, 2019USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019USD ($) |
Income Tax Disclosure [Abstract] | |||||||
Income tax expense | $ 182 | $ 17,312 | $ 78 | $ 16,285 | |||
Contingent liability expense | $ 9,500 | ||||||
Tax Act, income tax expense related to revaluation of deferred tax assets | $ 5,500 | ||||||
Number of nursing center facilities terminated | facility | 10 | 10 | |||||
Deferred tax asset, valuation allowance | $ 21,300 | $ 20,000 | $ 21,300 | $ 20,000 | |||
CARES Act, tax refund received | $ 321 |
EARNINGS PER COMMON SHARE - Bas
EARNINGS PER COMMON SHARE - Basic and Diluted Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Net income (loss) | ||||
Income (loss) from continuing operations | $ 1,839 | $ (22,616) | $ 1,329 | $ (24,190) |
Loss from discontinued operations, net of income taxes | (387) | (1,980) | (630) | (3,752) |
Net income (loss) | $ 1,452 | $ (24,596) | $ 699 | $ (27,942) |
Per common share – basic | ||||
Loss from continuing operations (in dollars per share) | $ 0.28 | $ (3.49) | $ 0.21 | $ (3.75) |
Loss from discontinued operations (dollars per share) | (0.06) | (0.31) | (0.10) | (0.58) |
Net loss per common share – basic (dollars per share) | 0.22 | (3.80) | 0.11 | (4.33) |
Per common share – diluted | ||||
Loss from continuing operations (dollars per share) | 0.28 | (3.49) | 0.21 | (3.75) |
Loss from discontinued operations (dollars per share) | (0.06) | (0.31) | (0.10) | (0.58) |
Net income (loss) per common share – diluted (dollars per share) | $ 0.22 | $ (3.80) | $ 0.11 | $ (4.33) |
Weighted Average Common Shares Outstanding: | ||||
Basic (shares) | 6,649 | 6,472 | 6,506 | 6,448 |
Diluted (shares) | 6,704 | 6,472 | 6,586 | 6,448 |
EARNINGS PER COMMON SHARE - Nar
EARNINGS PER COMMON SHARE - Narrative (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from computation of diluted earnings per share (shares) | 65 | 99 |
BUSINESS DEVELOPMENTS AND OTH_2
BUSINESS DEVELOPMENTS AND OTHER SIGNIFICANT TRANSACTIONS - Narrative (Details) | Oct. 01, 2018centerextension | Jun. 30, 2020facilitycenter | Sep. 01, 2019center | Aug. 30, 2019facility | Jun. 30, 2019center | May 13, 2019center | Apr. 30, 2019center |
Business Acquisition [Line Items] | |||||||
Number of nursing center facilities leased | 34 | 47 | |||||
Number of skilled nursing centers under lease | 23 | ||||||
Operating lease, initial term | 12 years | ||||||
Number of lease extensions allowed | extension | 2 | ||||||
Lease extension period | 10 years | ||||||
Number of nursing center facilities terminated | facility | 10 | ||||||
Annual lease fixed escalators, percent | 2.15% | ||||||
Number of skilled nursing centers participating in QIPP | 12 | 1 | 4 | 11 | |||
Omega Healthcare Investors Inc | |||||||
Business Acquisition [Line Items] | |||||||
Number of nursing center facilities leased | 11 | ||||||
Discontinued Operations | Kentucky Properties | |||||||
Business Acquisition [Line Items] | |||||||
Number of nursing center facilities terminated | facility | 10 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) $ in Thousands | Aug. 30, 2019USD ($)facilitybed | Dec. 01, 2018USD ($) | Jun. 30, 2020USD ($)facility | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($)facility | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of nursing center facilities terminated | facility | 10 | 10 | ||||||
Revenues contributed from centers | $ 17,404 | $ 34,207 | ||||||
Net loss contributed by discontinued operations | $ 387 | $ 1,980 | $ 630 | $ 3,752 | ||||
Kentucky Properties | Discontinued Operations | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of nursing center facilities terminated | facility | 10 | |||||||
Number of skilled nursing beds terminated | bed | 885 | |||||||
Pretax gain on transaction | $ 733 | |||||||
Kentucky Properties | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from sale of assets | $ 18,700 | |||||||
Carrying value of centers | $ 13,331 | |||||||
Gain on disposition of assets | $ 4,825 |