Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 04, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
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, $0.01 par value per share | |
Trading Symbol | DVCR | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,949,104 | |
Entity Central Index Key | 0000919956 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 |
INTERIM CONSOLIDATED BALANCE SH
INTERIM CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash | $ 19,257 | $ 30,821 |
Accounts receivable | 51,231 | 53,691 |
Self-insurance receivables | 328 | 1,025 |
Other receivables | 3,890 | 4,622 |
Prepaid expenses and other current assets | 3,596 | 5,356 |
Income tax refundable | 612 | 1,746 |
Total current assets | 78,914 | 97,261 |
PROPERTY AND EQUIPMENT, at cost | 138,374 | 135,234 |
Less accumulated depreciation and amortization | (97,692) | (91,914) |
Property and equipment, net | 40,682 | 43,320 |
OTHER ASSETS: | ||
Operating lease right-of-use assets | 267,766 | 290,296 |
Acquired leasehold interest, net | 4,802 | 5,202 |
Other noncurrent assets | 4,027 | 3,773 |
Total other assets | 276,595 | 299,271 |
Total assets | 396,191 | 439,852 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt and finance lease obligations | 1,690 | 1,660 |
Current portion of operating lease liabilities | 31,174 | 28,583 |
Trade accounts payable | 15,431 | 13,901 |
Accrued expenses: | ||
Payroll and employee benefits | 12,941 | 15,393 |
Self-insurance reserves, current portion | 12,536 | 12,665 |
Deferred income | 8,174 | 25,900 |
Other current liabilities | 13,705 | 14,743 |
Total current liabilities | 95,651 | 112,845 |
NONCURRENT LIABILITIES: | ||
Long-term debt and finance lease obligations, less current portion and deferred financing costs, net | 57,622 | 58,526 |
Operating lease liabilities, less current portion | 250,505 | 274,155 |
Self-insurance reserves, less current portion | 14,021 | 15,476 |
Government settlement accrual | 7,000 | 8,000 |
Other noncurrent liabilities | 1,562 | 2,155 |
Total noncurrent liabilities | 330,710 | 358,312 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ DEFICIT: | ||
Common stock, authorized 20,000 shares, $.01 par value, 7,181 and 7,079 shares issued, and 6,949 and 6,847 shares outstanding, respectively | 71 | 71 |
Treasury stock at cost, 232 shares of common stock | (2,500) | (2,500) |
Paid-in capital | 24,947 | 24,596 |
Accumulated deficit | (52,693) | (53,510) |
Accumulated other comprehensive income | 5 | 38 |
Total shareholders’ deficit | (30,170) | (31,305) |
Total liabilities and shareholder's equity | $ 396,191 | $ 439,852 |
INTERIM CONSOLIDATED BALANCE _2
INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 7,181,000 | 7,079,000 |
Common stock, shares outstanding (in shares) | 6,949,000 | 6,847,000 |
Treasury stock, shares (in shares) | 232,000 | 232,000 |
INTERIM CONSOLIDATED STATEMENTS
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
PATIENT REVENUES, NET | $ 115,736 | $ 117,965 | $ 340,366 | $ 356,195 |
OTHER OPERATING INCOME | 2,344 | 9,563 | 22,212 | 14,711 |
EXPENSES: | ||||
Operating | 95,192 | 98,706 | 283,619 | 289,340 |
Lease and rent expense | 13,263 | 13,524 | 39,776 | 40,560 |
Professional liability | 1,814 | 2,249 | 5,381 | 6,202 |
General and administrative | 7,515 | 6,487 | 21,256 | 20,125 |
Depreciation and amortization | 2,365 | 2,098 | 7,034 | 6,663 |
Total expenses | 120,149 | 123,064 | 357,066 | 362,890 |
OPERATING (LOSS) INCOME | (2,069) | 4,464 | 5,512 | 8,016 |
OTHER INCOME (EXPENSE): | ||||
Other income | 35 | 90 | 248 | 614 |
Interest expense, net | (1,104) | (1,172) | (3,213) | (3,841) |
Total other expense | (1,069) | (1,082) | (2,965) | (3,227) |
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (3,138) | 3,382 | 2,547 | 4,789 |
BENEFIT (PROVISION) FOR INCOME TAXES | 279 | (209) | (418) | (287) |
(LOSS) INCOME FROM CONTINUING OPERATIONS | (2,859) | 3,173 | 2,129 | 4,502 |
LOSS FROM DISCONTINUED OPERATIONS: | ||||
Operating loss, net of tax benefit | (744) | (374) | (1,350) | (1,004) |
NET (LOSS) INCOME | $ (3,603) | $ 2,799 | $ 779 | $ 3,498 |
Per common share – basic | ||||
Continuing operations (in dollars per share) | $ (0.43) | $ 0.48 | $ 0.32 | $ 0.68 |
Discontinued operations (in dollars per share) | (0.11) | (0.06) | (0.20) | (0.15) |
Net income (loss) per common share – basic (in dollars per share) | (0.54) | 0.42 | 0.12 | 0.53 |
Per common share – diluted | ||||
Continuing operations (in dollars per share) | (0.43) | 0.48 | 0.31 | 0.67 |
Discontinued operations (in dollars per share) | (0.11) | (0.06) | (0.20) | (0.15) |
Net income (loss) per common share – diluted (in dollars per share) | $ (0.54) | $ 0.42 | $ 0.11 | $ 0.52 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in shares) | 6,643 | 6,577 | 6,619 | 6,606 |
Diluted (in shares) | 6,643 | 6,626 | 6,775 | 6,676 |
INTERIM CONSOLIDATED STATEMEN_2
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Patient Revenues, Net [Member] | Patient Revenues, Net [Member] | Patient Revenues, Net [Member] | Patient Revenues, Net [Member] |
Income tax benefit | $ 13 | $ 100 | $ 162 | $ 267 |
INTERIM CONSOLIDATED STATEMEN_3
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
NET (LOSS) INCOME | $ (3,603) | $ 2,799 | $ 779 | $ 3,498 |
OTHER COMPREHENSIVE (LOSS) INCOME: | ||||
Change in fair value of cash flow hedges, net of tax | (13) | 105 | (33) | (115) |
Total other comprehensive (loss) income | (13) | 105 | (33) | (115) |
COMPREHENSIVE (LOSS) INCOME | $ (3,616) | $ 2,904 | $ 746 | $ 3,383 |
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, 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 | (753) | (753) | ||||
Issuance 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 | 3,498 | |||||
Interest rate cash flow hedge | (115) | |||||
Balance (in shares) at Sep. 30, 2020 | 7,081 | 232 | ||||
Balance at Sep. 30, 2020 | (33,038) | $ 70 | $ (2,500) | 24,520 | (55,581) | 453 |
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 | 1,452 | 1,452 | ||||
Interest rate cash flow hedge | 59 | 59 | ||||
Cancellation of equity grants, net (in shares) | (23) | |||||
Cancellation of equity grants, net | 0 | |||||
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 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 2,799 | 2,799 | ||||
Issuance of equity grants, net (in shares) | 6 | |||||
Issuance of equity grants, net | 0 | |||||
Interest rate cash flow hedge | 105 | 105 | ||||
Stock-based compensation | 76 | 76 | ||||
Balance (in shares) at Sep. 30, 2020 | 7,081 | 232 | ||||
Balance at Sep. 30, 2020 | (33,038) | $ 70 | $ (2,500) | 24,520 | (55,581) | 453 |
Balance (in shares) at Dec. 31, 2020 | 7,079 | 232 | ||||
Balance at Dec. 31, 2020 | (31,305) | $ 71 | $ (2,500) | 24,596 | (53,510) | 38 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,888 | 1,888 | ||||
Issuance of equity grants, net (in shares) | 106 | |||||
Issuance of equity grants, net | 64 | $ 1 | 63 | |||
Interest rate cash flow hedge | 29 | 38 | (9) | |||
Stock-based compensation | 95 | 95 | ||||
Balance (in shares) at Mar. 31, 2021 | 7,185 | 232 | ||||
Balance at Mar. 31, 2021 | (29,229) | $ 72 | $ (2,500) | 24,754 | (51,584) | 29 |
Balance (in shares) at Dec. 31, 2020 | 7,079 | 232 | ||||
Balance at Dec. 31, 2020 | (31,305) | $ 71 | $ (2,500) | 24,596 | (53,510) | 38 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 779 | |||||
Interest rate cash flow hedge | (33) | |||||
Balance (in shares) at Sep. 30, 2021 | 7,181 | 232 | ||||
Balance at Sep. 30, 2021 | (30,170) | $ 71 | $ (2,500) | 24,947 | (52,693) | 5 |
Balance (in shares) at Mar. 31, 2021 | 7,185 | 232 | ||||
Balance at Mar. 31, 2021 | (29,229) | $ 72 | $ (2,500) | 24,754 | (51,584) | 29 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 2,494 | 2,494 | ||||
Interest rate cash flow hedge | (11) | (11) | ||||
Cancellation of equity grants, net (in shares) | (4) | |||||
Cancellation of equity grants, net | (1) | $ (1) | ||||
Stock-based compensation | 97 | 97 | ||||
Balance (in shares) at Jun. 30, 2021 | 7,181 | 232 | ||||
Balance at Jun. 30, 2021 | (26,650) | $ 71 | $ (2,500) | 24,851 | (49,090) | 18 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | (3,603) | (3,603) | ||||
Interest rate cash flow hedge | (13) | (13) | ||||
Stock-based compensation | 96 | 96 | ||||
Balance (in shares) at Sep. 30, 2021 | 7,181 | 232 | ||||
Balance at Sep. 30, 2021 | $ (30,170) | $ 71 | $ (2,500) | $ 24,947 | $ (52,693) | $ 5 |
INTERIM CONSOLIDATED STATEMEN_5
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
NET (LOSS) INCOME | $ 779 | $ 3,498 |
Loss from discontinued operations | (1,350) | (1,004) |
Income from continuing operations | 2,129 | 4,502 |
Adjustments to reconcile income from continuing operations to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 7,034 | 6,663 |
Provision for self-insured professional liability, net of cash payments | 96 | 1,066 |
Amortization of right-of-use assets | 21,074 | 17,253 |
Stock-based compensation | 288 | 491 |
Provision for leases in excess of cash payments | 1,456 | 2,477 |
Other | (80) | 959 |
Changes in assets and liabilities affecting operating activities: | ||
Receivables | 3,157 | 10,254 |
Prepaid expenses and other assets | 1,821 | (6,029) |
Trade accounts payable and accrued expenses | (3,279) | (518) |
Deferred income | (17,726) | 27,157 |
Operating lease liabilities | (21,059) | (17,246) |
Net cash (used in) provided by continuing operations | (5,089) | 47,029 |
Discontinued operations | (1,350) | (1,004) |
Net cash (used in) provided by operating activities | (6,439) | 46,025 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (3,347) | (3,096) |
Purchases of property and equipment with stimulus funds | (954) | (898) |
Net cash used in continuing operations | (4,301) | (3,994) |
Discontinued operations | 0 | 0 |
Net cash used in investing activities | (4,301) | (3,994) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of debt and finance lease obligations | (1,142) | (19,414) |
Proceeds from issuance of debt | 0 | 4,551 |
Proceeds from stimulus funds used to purchase property and equipment | 305 | 898 |
Financing costs | 0 | (556) |
Issuance and redemption of employee equity awards, net | 13 | 3 |
Net cash used in continuing operations | (824) | (14,518) |
Discontinued operations | 0 | 0 |
Net cash used in financing activities | (824) | (14,518) |
NET (DECREASE) INCREASE IN CASH | (11,564) | 27,513 |
CASH, beginning of period | 30,821 | 2,710 |
CASH, end of period | 19,257 | 30,223 |
SUPPLEMENTAL INFORMATION: | ||
Cash payments of interest | 2,909 | 3,592 |
Cash (refunds) payments of income taxes | $ (1,072) | $ 289 |
BUSINESS
BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
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 eight 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, Indiana, Kansas, Mississippi, Missouri, Ohio, Tennessee, and Texas. As of September 30, 2021, the Company’s continuing operations consist of 61 nursing centers with 7,250 licensed nursing beds. The Company owns 15 and leases 46 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. The 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, CMS has issued guidance that has gradually relaxed nursing home visitation restrictions that were imposed in 2020, while emphasizing the importance of infection prevention practices. To help nursing homes and other providers respond to and contain the spread of COVID-19, CMS has also issued temporary emergency blanket waivers to various government healthcare program requirements. For example, through the end of the public health emergency declaration, CMS is waiving the requirement for a three-day hospital stay prior to Medicare Part A coverage of skilled nursing facility benefits, which allows Medicare beneficiaries that require a new or changed skilled level of care to receive that care under Medicare Part A from a skilled nursing facility without satisfying the hospital stay requirement (sometimes referred to as “skilled in place”). CMS continues to review the need for the waivers and has announced early termination of some waivers as the pandemic and nursing home practices have evolved. In addition, CMS has 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 and allows an optional payment deferral of the employer's portion of Social Security taxes that were 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. The Paycheck Protection Program and Health Care Enhancement Act ("PPPHCE Act"), enacted on April 24, 2020, the Consolidated Appropriations Act, 2021 ("CAA"), enacted December 27, 2020, and American Rescue Plan Act of 2021 ("ARPA"), enacted on March 11, 2021, provide for additional emergency appropriations for COVID-19 response. Together, the CARES Act and other enacted legislation, authorize 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, as made to providers through general and targeted distributions, are intended to compensate providers for lost revenues and healthcare-related expenses attributable to the COVID-19 pandemic only. As long as the recipient has sufficient COVID-19 attributable expenses and lost revenues, as defined by the PHSSEF and complies with certain terms and conditions, these payments are not required to be repaid. The terms and conditions include, among others, requirements to comply with certain reporting requirements, limitations on balance billing and restrictions against using PHSSEF funds to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. The CAA provides that targeted distribution payments made to an eligible entity may be allocated by the entity's parent organization among its subsidiary eligible health care providers and the entity receiving the targeted distribution payments remains responsible for reporting obligations. As of September 30, 2021, the Company has utilized the funds it received from the PHSSEF to compensate for COVID-19 attributable lost revenues and pay for permissible expenses, including but not limited to increased wages and increased costs for personal protective equipment, infection control supplies, and COVID-19 testing, and the Company has not refunded any of the funds received from the PHSSEF. The Company’s remaining deferred COVID-19 funds relate to distributions from the Nursing Home Infection Control, described below. The CARES Act and other enacted legislation authorized additional relief funding to skilled nursing facilities and nursing homes in the form of Nursing Home Infection Control distributions, with a fixed ten thousand dollars distributed for each facility and variable distributions based on number of beds. The legislation also provides for infection control quality incentive payments to skilled nursing facilities and nursing homes based on certain performance measures tied to COVID-19 infections and mortalities. These payments were calculated based on monthly performance periods running from September through December 2020, with the total available bonus payment for each performance period determined in part based on data reported via Certification and Survey Provider Enhanced Reports ("CASPER"). The terms and conditions for this distribution limit use of payments to certain infection control expenses. In June 2021, HHS clarified that the reporting requirements and time period for use of funds applicable to general PHSSEF funds also apply to these Nursing Home Infection Control distributions. Recipients of more than ten thousand dollars in PHSSEF funds, including Nursing Home Infection Control distributions, are required to submit reports to HHS that include information about their expenses and lost revenues and use of the PHSSEF funds through an online portal that opened on July 1, 2021. The timelines for reporting on the use of PHSSEF funds depend on the time periods during which the funds were received, such that a series of reports will be required. We have reported our use of the PHSSEF funds we received between April 10, 2020 and June 30, 2020 in accordance with the Post-Payment Notices of Reporting Requirements guidance. HHS continues to update guidance regarding post-payment reporting requirements that provide additional details and examples related to how recipients should calculate their COVID-19 attributable expenses, lost revenues and infection control expenses for purposes of PHSSEF reporting. Ultimately, to the extent that reports submitted by a recipient do not demonstrate sufficient healthcare related lost revenues, expenses attributable to COVID-19 or infection control expenses (as those terms are defined by HHS), the recipient may have to repay any excess funds received. On September 10, 2021, HHS announced additional funding available for health care providers affected by the COVID-19 pandemic. The Phase 4 General Distribution PHSSEF payments will be based on providers' lost revenues and expenses between July 1, 2020, and March 31, 2021. We also recently applied for funding under Phase 4 of the PHSSEF and the American Rescue Plan Rural funding program; however, we do not know whether we will ultimately receive additional payments under these distributions. The Company currently anticipates, but cannot guarantee, that it will have sufficient COVID-19 attributable expenses and lost revenues to retain the PPSSEF payments it has received to date, or sufficient infection control expenses to retain the Nursing Home Infection Control distributions it has received to date. The Company does not yet know the full extent of its COVID-19 attributable expenses and lost revenues. The Company will not be able to determine the amount of used funds until the form, process and reporting rules are finalized by the federal government. There also can be no assurance that the PHSSEF funds will ultimately be enough to reimburse the Company for the full extent of its COVID-19 attributable expenses and losses. As a result of the COVID-19 pandemic, we have experienced and may continue to experience price increases in equipment, pharmaceuticals, and medical supplies due to increased demand and limited availability for certain items. Staffing, equipment, pharmaceutical and medical supplies and vaccine shortages may impact our ability to admit and treat patients. We have incurred, and may continue to incur, increased expenses arising from the COVID-19 pandemic, particularly in the form of increased labor costs, testing and the increased costs of personal protective equipment, food and infection control supplies. Refer to Note 4, "COVID-19 Pandemic" for further information. There have been cases of COVID-19 at our centers. We have experienced and may continue to experience reduced occupancy in our centers, in part due to perceived risks by patients and family members of residential care and their perception of restrictions such as limited visitation policies (which have been relaxed pursuant to CMS guidance), a reduction in patients released to nursing homes from hospitals and other healthcare facilities, and a general reluctance to seek medical care or interface with the healthcare system during the pandemic or for an undetermined period of time. Occupancy may also be affected by the data each nursing home is required to report, including the number of confirmed and suspected cases of COVID-19 and resident deaths related to COVID-19, which is made publicly available through the CDC National Healthcare Safety Network. |
CONSOLIDATION AND BASIS OF PRES
CONSOLIDATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2021 | |
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 nine month periods ended September 30, 2021 and 2020, 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 September 30, 2021, the results of operations and changes in shareholders' deficit for the three and nine month periods ended September 30, 2021 and 2020 and cash flows for the nine month periods ended September 30, 2021 and 2020. The Company’s balance sheet information at December 31, 2020, was derived from its audited consolidated financial statements as of December 31, 2020. The results of operations for the three and nine month periods ended September 30, 2021 and 2020 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, 2020. PHSSEF Funds During the year ended December 31, 2020, the Company implemented certain changes to its accounting policies related to the recognition of stimulus funds through the PHSSEF, which it has applied consistently throughout the period ended September 30, 2021. There is no U.S. GAAP that explicitly 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 Standards 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 and certain state 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 eligible to receive the grant, and (2) the Company is able to comply with the relevant conditions of the grant. Federal and certain state 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 are accounted for as a capital grant. For such an asset acquired with the use of stimulus funds, the Company will recognize the asset as a net zero asset. Refer to Note 4, "COVID-19 Pandemic" 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, "Revenue Recognition and Accounts Receivable" to the interim consolidated financial statements included in this report for additional information. |
RECENT ACCOUNTING GUIDANCE
RECENT ACCOUNTING GUIDANCE | 9 Months Ended |
Sep. 30, 2021 | |
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 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 derivatives consistent with past presentation. The amendments in the ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Company continues to evaluate changes in the market and may apply other elections, as applicable, in the future as allowed under ASU No. 2020-04. |
COVID-19 PANDEMIC
COVID-19 PANDEMIC | 9 Months Ended |
Sep. 30, 2021 | |
Unusual or Infrequent Items, or Both [Abstract] | |
COVID-19 PANDEMIC | COVID-19 PANDEMICAs of September 30, 2021, the Company has received $51,607 from the PHSSEF. The Company recognized $2,344 and $9,563 as income for the three month periods ended September 30, 2021 and 2020, respectively, and $21,335 and $14,711 for the nine months ended September 30, 2021 and 2020, respectively, which is reflected in "other operating income" in the Company's results of operations. For the nine months ended September 30, 2021 and 2020, the Company utilized $954 and $898, respectively, of these stimulus dollars to fund capital improvements to prevent the spread of COVID-19. The remaining stimulus funds of $8,174 and $25,900 as of September 30, 2021 and December 31, 2020, respectively, are classified as "deferred income" on the consolidated balance sheet. The Nursing Home Infection Control Distributions, which also include infection control quality incentive payments, are subject to terms and conditions that require recipients to use the funds for infection control expenses. HHS issued guidance in June 2021 that set forth deadlines for using and reporting on the use of PHSSEF funds, including Nursing Home Infection Control Distributions, which depend on the time periods in which the PHSSEF funds were received. The Company recognized $877 of grant funds from states, which is included in "other operating income" in the Company's results of operations for the nine month period ended September 30, 2021. 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 recognized $5,038 and $6,645 for the three month periods ended September 30, 2021 and 2020, respectively, of Medicaid and Hospice dollars related to this temporary increase in the federal matching rate, which related to patient services rendered and is reflected in "patient revenues, net" in the Company's results of operations. The Company recognized $14,909 and $11,709, for the nine month periods ended September 30, 2021 and 2020, respectively, of Medicaid and Hospice dollars, which related to patient services rendered and is reflected in "patient revenues, net" in the Company's results of operations. The CARES Act and other stimulus legislation also include other provisions offering financial relief, for example lifting the Medicare sequestration from May 1, 2020 through December 31, 2021, which would have otherwise reduced payments to Medicare providers by 2% as required by the Budget Control Act of 2011 (but also extending sequestration through 2030). For the three month periods ended September 30, 2021 and 2020, the suspension of the Medicare sequestration positively impacted net patient revenues by $644 and $724, respectively, and $2,004 and $1,031 for the nine month periods ended September 30, 2021 and 2020, respectively. However, in addition to providing funding for healthcare providers, the ARPA increases the federal budget deficit in a manner that triggers an additional statutorily mandated sequestration under the Pay-As-You-Go Act of 2010 ("PAYGO Act"). As a result, absent congressional action, Medicare spending will be reduced by up to 4% in FY 2022, to begin to take effect in January 2022, in addition to the existing sequestration requirements of the Budget Control Act of 2011. The Company incurred an additional $6,018 and $8,241 of labor expense for the three month periods ended September 30, 2021 and 2020, respectively, and $1,152 and $4,430 for testing and the increased costs of personal protective equipment, food and infection control supplies related to the COVID-19 pandemic for the three month period ended September 30, 2021 and 2020, respectively. The Company incurred an additional $19,847 and $11,349 of labor expense for the nine month periods ended September 30, 2021 and 2020, respectively, and $5,731 and $5,642 for testing and the increased costs of personal protective equipment, food and infection control supplies related to the COVID-19 pandemic for the nine month periods ended September 30, 2021 and 2020, respectively. These expenses are reflected in "operating expense" in the Company's results of operations for the three and nine month periods ended September 30, 2021. The Company is closely monitoring and evaluating the impact of the COVID-19 pandemic on all aspects of its business. We have identified team members and patients who have tested positive for COVID-19 at all of our centers, and we have incurred an increase in the costs of caring for the team members, patients, and residents in those centers. The Company has also experienced reduced occupancy at its centers and has incurred additional expenditures preparing its centers for potential outbreaks and maintaining the healthcare delivery capacity of its centers. While we have experienced reduced occupancy and increased expenses, we received additional PHSSEF and other stimulus funds during 2020 and 2021, which have been used, and are expected to continue to be used to mitigate the impact of COVID-19 derived lost revenues associated with the reduced occupancy as well as increased expenses, and any cash flow or liquidity impacts therefrom. The Company has an interdisciplinary team monitoring and staying up to date on the latest information about COVID-19. The Company understands that President Biden has tasked CMS with issuing guidance and/or promulgating setting forth vaccine requirements for certain employees that may be applicable to the Company, and the Company intends to fully comply with that guidance. The Company has implemented precautionary measures and response protocols to minimize the spread of COVID-19, following the current guidance from CMS, the CDC, and state and local governments. The Company also intends to fully comply with the forthcoming Occupational Safety and Health Administration ("OSHA") Emergency Temporary Standard ("ETS") as applicable. Nevertheless, the Company expects additional COVID-19 cases will occur at its centers. The Company is continuing to evaluate and consider the potential impact that COVID-19 may have on its liquidity, financial condition and results of operations due to numerous uncertainties, including the duration of the COVID-19 pandemic and the timing, availability and adoption of effective medical treatment and vaccines. These and other factors relating to the COVID-19 pandemic could have a material adverse effect on the Company's future results of operations, financial condition and liquidity. |
REVENUE RECOGNITION AND ACCOUNT
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2021 | |
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 on a daily basis. 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 $4,516 and $522 of Medicaid and Hospice stimulus dollars, respectively, for the three month period ended September 30, 2021, compared to $6,327 and $318 of Medicaid and Hospice stimulus dollars, respectively, for the three month period ended September 30, 2020. The Company recognized $13,775 and $1,134 of Medicaid and Hospice stimulus dollars, respectively, for the nine month period ended September 30, 2021, compared to $11,709 and $1,089 of Medicaid and Hospice stimulus dollars, respectively, for the nine month period ended September 30, 2020. The Medicaid and Hospice stimulus dollars are reflected as patient revenues in the Company's results of operations and in the table below. 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 September 30, 2021 2020 Medicaid $ 55,554 48.0 % $ 55,844 47.3 % Medicare 19,682 17.0 % 24,374 20.7 % Managed Care 13,033 11.3 % 11,967 10.1 % Private Pay and other 27,467 23.7 % 25,780 21.9 % Total $ 115,736 100.0 % $ 117,965 100.0 % Nine Months Ended September 30, 2021 2020 Medicaid $ 157,274 46.2 % $ 164,335 46.1 % Medicare 62,870 18.5 % 67,470 18.9 % Managed Care 38,804 11.4 % 36,918 10.4 % Private Pay and other 81,418 23.9 % 87,472 24.6 % Total $ 340,366 100.0 % $ 356,195 100.0 % Accounts receivable from continuing operations as of September 30, 2021 and December 31, 2020 are summarized in the following table: September 30, December 31, 2021 2020 Medicaid $ 19,697 $ 17,354 Medicare 8,192 14,273 Managed Care 9,028 8,021 Private Pay and other 14,314 14,043 Total accounts receivable $ 51,231 $ 53,691 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On October 14, 2020, the Company executed an Amended and Restated Credit Agreement (the "Credit Agreement") with a syndicate of banks, which consists of a $62,000 mortgage loan subsequently amended ("Amended Mortgage Loan"), a $36,000 revolver subsequently amended ("Amended Revolver") and a $2,000 affiliated revolver amended ("Amended Affiliated Revolver"). The Amended Mortgage Loan, Amended Revolver and Amended Affiliated Revolver have a 3-year maturity through September 30, 2023. The Amended Mortgage Loan has a term of 3 years, with principal and interest payable monthly based on a 25-year amortization. Interest on the term loan facility is based on LIBOR plus 4.0% with a 1.0% floor. The Amended Mortgage Loan balance was $60,127 as of September 30, 2021 with an interest rate of 5.0%. The Amended Mortgage Loan is secured by 15 owned nursing centers, related equipment and a lien on the accounts receivable of these centers. The Amended Mortgage Loan, the Amended Revolver and the Amended Affiliated Revolver are cross-collateralized and cross-defaulted. The Company’s Amended Revolver and Amended Affiliated Revolver have an interest rate of LIBOR plus 4.0% and are secured by accounts receivable and are subject to limits on the maximum amount of loans that can be outstanding under the revolver based on borrowing base restrictions. Effective June 10, 2021, the Company entered into amendments to the Amended Revolver and the Amended Affiliated Revolver. The amendments decreased the borrowing capacity of the Amended Revolver from $36,000 to $35,000 and increased the borrowing capacity of the Amended Affiliated Revolver from $2,000 to $3,000. The maturity date of the loan agreements remains September 30, 2023. As of September 30, 2021 and December 31, 2020, the Company had no outstanding borrowings under its revolvers. The interest rate related to the revolvers was 5.0% as of September 30, 2021. 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 $12,451 outstanding as of September 30, 2021. Considering the balance of eligible accounts receivable, the letters of credit, the amounts outstanding under the Amended Revolver and the Amended Affiliated Revolver, and the maximum loan amount of $25,294 for these revolvers, the balance available for borrowing under the revolvers was $12,843 at September 30, 2021. |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES In February 2021, the Company entered into an interest rate cap agreement with a member of the bank syndicate as the counterparty. The Company entered into the interest rate cap agreement to mitigate the variable interest rate risk associated with its outstanding mortgage borrowings. The Company designated the interest rate cap as a cash flow hedge, and the effective portion of the hedge is reflected as a component of other comprehensive income. The interest rate cap has the same maturity date as the Amended Mortgage Loan and has an amortizing notional amount that was $60,127 as of September 30, 2021. The interest rate cap agreement requires the counterparty to pay the Company an amount equal to the applicable notional amount multiplied by the rate by which the LIBOR index exceeds a 1% strike rate during the period. The Company assesses the effectiveness of the interest rate cap on a quarterly basis and at September 30, 2021, the Company has determined that the interest rate cap was effective. Accordingly, the gain or loss related to the change in fair value of the interest rate cap is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period during which the hedged forecasted transaction affects earnings. The fair value of the interest rate cap of $54 at September 30, 2021 was included in other noncurrent assets on the Company's Consolidated Balance Sheets. In conjunction with the refinancing of its outstanding borrowings during October 2020, the Company terminated its interest rate swap. Following the termination, $90 was recorded in other comprehensive income and was reclassified as an adjustment to earnings over the remaining term of the original hedge. Of this amount, $38 was recorded as a decrease to retained earnings for the nine months ended September 30, 2021. As of September 30, 2021, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: Interest Rate Derivative Number of Instruments Notional Interest Rate Cap 1 $ 60,127 The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheets as of September 30, 2021 and December 31, 2020. Asset Derivatives Liability Derivatives Fair Value at: Fair Value at: Balance Sheet Classification September 30, 2021 December 31, 2020 Balance Sheet Classification September 30, 2021 December 31, 2020 Interest Rate Cap Other noncurrent assets $ 54 $ — Other noncurrent liabilities $ — $ — The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income for the three months ended September 30, 2021 and September 30, 2020. Effect of Derivative Instruments on the Consolidated Statements of Income Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Three Months Ended September 30, Three Months Ended September 30, 2021 2020 2021 2020 Interest Rate Swap $ — $ 105 Interest Expense (a) $ — $ 49 Interest Rate Cap $ (13) $ — Interest Expense (a) $ — $ — Total $ (13) $ 105 $ — $ 49 (a) Total interest expense presented in the consolidated income statements for the three months ended September 30, 2021 and 2020 was $1,104 and $1,172, respectively. The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income for the nine months ended September 30, 2021 and September 30, 2020. Effect of Derivative Instruments on the Consolidated Statements of Income Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Nine Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest Rate Swap $ — $ (115) Interest Expense (a) $ (38) $ 148 Interest Rate Cap $ (33) $ — Interest Expense (a) $ — $ — Total $ (33) $ (115) $ (38) $ 148 (a) Total interest expense presented in the consolidated income statements for the nine months ended September 30, 2021 and 2020 was $3,213 and $3,841, respectively. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
LEASES | LEASES The 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 Classification September 30, 2021 December 31, 2020 Assets Operating lease assets Operating lease right-of-use assets $ 267,766 $ 290,296 Finance lease assets Property and equipment, net (a) 326 508 Total leased assets $ 268,092 $ 290,804 Liabilities Current Operating Current portion of operating lease liabilities $ 31,174 $ 28,583 Finance Current portion of long-term debt and finance lease obligations 234 251 Noncurrent Operating Operating lease liabilities, less current portion 250,505 274,155 Finance Long-term debt and finance lease obligations, less current portion and deferred financing costs, net 119 280 Total lease liabilities $ 282,032 $ 303,269 (a) Finance lease assets are recorded net of accumulated amortization of $653 and $471 as of September 30, 2021 and December 31, 2020, respectively. Lease Cost of Continuing Operations Three Months Ended September 30, Classification 2021 2020 Operating lease cost (a) Lease and rent expense $ 13,263 $ 13,524 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 61 50 Interest on finance lease liabilities Interest expense, net 7 7 Short term lease cost Operating expense 160 111 Net lease cost $ 13,491 $ 13,692 (a) Includes variable lease costs, which are immaterial. Nine Months Ended September 30, Classification 2021 2020 Operating lease cost (a) Lease and rent expense $ 39,776 $ 40,560 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 183 165 Interest on finance lease liabilities Interest expense, net 23 26 Short term lease cost Operating expense 442 445 Net lease cost $ 40,424 $ 41,196 (a) Includes variable lease costs, which are immaterial. Maturity of Lease Liabilities As of September 30, 2021 Operating Leases (a) Finance Leases (a) Total 2021 $ 51,893 $ 254 $ 52,147 2022 52,879 89 52,968 2023 53,123 33 53,156 2024 53,649 — 53,649 2025 54,247 — 54,247 After 2025 101,276 — 101,276 Total lease payments $ 367,067 $ 376 $ 367,443 Less: Interest (85,388) (23) (85,411) Present value of lease liabilities $ 281,679 $ 353 $ 282,032 (a) Operating and finance lease payments exclude options 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 September 30, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 7.22 7.91 Finance leases 1.64 2.26 Weighted-average discount rate Operating leases 7.9% 7.9% Finance leases 6.0% 6.2% Other Information Nine Months Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 38,219 $ 38,018 Operating cash flows for finance leases 23 26 Financing cash flows for finance leases 182 175 |
LEASES | LEASES The 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 Classification September 30, 2021 December 31, 2020 Assets Operating lease assets Operating lease right-of-use assets $ 267,766 $ 290,296 Finance lease assets Property and equipment, net (a) 326 508 Total leased assets $ 268,092 $ 290,804 Liabilities Current Operating Current portion of operating lease liabilities $ 31,174 $ 28,583 Finance Current portion of long-term debt and finance lease obligations 234 251 Noncurrent Operating Operating lease liabilities, less current portion 250,505 274,155 Finance Long-term debt and finance lease obligations, less current portion and deferred financing costs, net 119 280 Total lease liabilities $ 282,032 $ 303,269 (a) Finance lease assets are recorded net of accumulated amortization of $653 and $471 as of September 30, 2021 and December 31, 2020, respectively. Lease Cost of Continuing Operations Three Months Ended September 30, Classification 2021 2020 Operating lease cost (a) Lease and rent expense $ 13,263 $ 13,524 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 61 50 Interest on finance lease liabilities Interest expense, net 7 7 Short term lease cost Operating expense 160 111 Net lease cost $ 13,491 $ 13,692 (a) Includes variable lease costs, which are immaterial. Nine Months Ended September 30, Classification 2021 2020 Operating lease cost (a) Lease and rent expense $ 39,776 $ 40,560 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 183 165 Interest on finance lease liabilities Interest expense, net 23 26 Short term lease cost Operating expense 442 445 Net lease cost $ 40,424 $ 41,196 (a) Includes variable lease costs, which are immaterial. Maturity of Lease Liabilities As of September 30, 2021 Operating Leases (a) Finance Leases (a) Total 2021 $ 51,893 $ 254 $ 52,147 2022 52,879 89 52,968 2023 53,123 33 53,156 2024 53,649 — 53,649 2025 54,247 — 54,247 After 2025 101,276 — 101,276 Total lease payments $ 367,067 $ 376 $ 367,443 Less: Interest (85,388) (23) (85,411) Present value of lease liabilities $ 281,679 $ 353 $ 282,032 (a) Operating and finance lease payments exclude options 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 September 30, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 7.22 7.91 Finance leases 1.64 2.26 Weighted-average discount rate Operating leases 7.9% 7.9% Finance leases 6.0% 6.2% Other Information Nine Months Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 38,219 $ 38,018 Operating cash flows for finance leases 23 26 Financing cash flows for finance leases 182 175 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
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 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 and Florida. 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 $23,928 and $24,744 as of September 30, 2021 and December 31, 2020, 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. The actuary assists 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 September 30, 2021, the Company is engaged in 77 professional liability lawsuits. Fifteen 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 $4,991 and $5,136 for the nine months ended September 30, 2021 and 2020, 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" on the Consolidated Balance Sheet. As of September 30, 2021 and December 31, 2020 there are estimated insurance recovery receivables of $328 and $1,025 in "Self-insurance receivables", 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 the first quarter of this year, the Company was served with a Civil Investigatory Demand (“CID”) by the United States Department of Justice. The CID requested information and documents related to time keeping records for two certified occupational therapy assistants who worked at one of the Company’s Alabama facilities and documents evidencing any complaints that the facility had failed to provide therapy. The Company responded to the CID and has recently agreed to produce voluntarily additional information and documents related to the investigation. 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 years ending in February 2025 and also requires a contingent payment in the event the Company sells any of its owned facilities during the five-year payment period. Relative to the settlement agreement, the Company paid $1,000 and $500 during the first quarter of 2021 and 2020, respectively. As of September 30, 2021 and December 31, 2020, the Company has $8,000 and $9,000 outstanding related to the settlement agreement, respectively. Of the outstanding balance related to the settlement agreement, $1,000 is reflected as "Other current liabilities" and the remaining $7,000 and $8,000 is reflected as "Government settlement accrual" on the Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020, respectively. Failure to timely make 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 September 30, 2021, 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 $1,185 and $1,039 at September 30, 2021 and December 31, 2020, respectively. The Company has a non-current receivable for workers’ compensation policies covering previous years of $2,637 and $2,050 which is included in "other noncurrent assets" on the Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020, 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 | 9 Months Ended |
Sep. 30, 2021 | |
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 years from the date of purchase and during which the shares will have the rights to receive dividends, however, the restricted share certificates will not be delivered to the shareholder and the shares cannot be sold, assigned or disposed of during the restriction period. In June 2016, our shareholders approved an amendment to the Stock Purchase Plan to increase the number of shares of our common stock authorized under the Plan from 150 shares to 350 shares. No grants can be made under the Stock Purchase Plan after April 25, 2028. 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. In June 2021, 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 680 shares to 980 shares. No grants can be made under the 2010 Plan after May 31, 2027. Equity Grants and Valuations During the nine months ended September 30, 2021 and 2020, the Compensation Committee of the Board of Directors approved grants totaling approximately 106 and 198 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, 2020 65 $ 7.92 Granted — — Exercised — — Expired or cancelled — — Outstanding, September 30, 2021 65 $ 7.92 Exercisable, September 30, 2021 65 $ 7.92 Weighted Average Restricted Grant Date Shares Fair Value Outstanding, December 31, 2020 193 $ 3.32 Granted 106 4.25 Vested (88) 3.99 Cancelled (4) 2.80 Outstanding, September 30, 2021 207 $ 3.51 Summarized activity of the RSU's for the Stock Purchase Plan is as follows: Weighted Average Grant Date RSU's Fair Value Outstanding, December 31, 2020 55 $ 2.92 Granted 37 4.25 Vested (26) 3.93 Outstanding, September 30, 2021 66 $ 3.27 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 September 30, 2021: Weighted Average Range of Exercise Grants Grants Exercise Prices Prices Outstanding Exercisable $8.14 to $10.21 $ 8.83 45 45 $5.86 $ 5.86 20 20 65 65 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded an income tax expense from continuing operations of $418 during the nine months ended September 30, 2021 and an income tax expense of $287 during the nine months ended September 30, 2020. 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 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. As of September 30, 2021, the Company has a valuation allowance in the amount of $18,860. 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 were 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 an impact during the three-month or nine-month period ended September 30, 2021. The Company is not currently under examination by any major income tax jurisdiction. During 2021, the statutes of limitations will lapse on the Company's 2017 federal tax year and certain 2016 and 2017 state tax years. The Company does not believe the |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | EARNINGS (LOSS) PER COMMON SHARE Information with respect to basic and diluted net income (loss) per common share is presented below in thousands, except per share amounts: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Income (loss): Income (loss) from continuing operations $ (2,859) $ 3,173 $ 2,129 $ 4,502 Loss from discontinued operations, net of income taxes (744) (374) (1,350) (1,004) Net income (loss) $ (3,603) $ 2,799 $ 779 $ 3,498 Denominator: Basic Weighted Average Common Shares Outstanding: 6,643 6,577 6,619 6,606 Dilutive effect of stock options, SOSARs, Restricted Shares and Restricted Share Units — 49 156 70 Adjusted weighted average common shares outstanding 6,643 6,626 6,775 6,676 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income (loss) per common share: Per common share – basic Income (loss) from continuing operations $ (0.43) $ 0.48 $ 0.32 $ 0.68 Loss from discontinued operations (0.11) (0.06) (0.20) (0.15) Net income (loss) per common share – basic $ (0.54) $ 0.42 $ 0.12 $ 0.53 Per common share – diluted Income (loss) from continuing operations $ (0.43) $ 0.48 $ 0.31 $ 0.67 Loss from discontinued operations (0.11) (0.06) (0.20) (0.15) Net income (loss) per common share – diluted $ (0.54) $ 0.42 $ 0.11 $ 0.52 |
BUSINESS DEVELOPMENTS AND OTHER
BUSINESS DEVELOPMENTS AND OTHER SIGNIFICANT TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS DEVELOPMENTS AND OTHER SIGNIFICANT TRANSACTIONS | BUSINESS DEVELOPMENTS AND OTHER SIGNIFICANT TRANSACTIONS Merger Agreement As previously announced, on August 26, 2021, the Company, DAC Acquisition LLC, a Delaware limited liability company (“Parent”), and DVCR Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), entered into an agreement and plan of merger, pursuant to which Merger Sub will be merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Subject to the terms and conditions set forth in the merger agreement, at the effective time of the Merger, each share of Company common stock issued and outstanding immediately prior to the effective time of the Merger (other than (i) shares of Company common stock held by the Company as treasury stock or owned by Parent or Merger Sub and (ii) shares of Company common stock held by stockholders who have properly and validly exercised their statutory rights of appraisal in respect of such shares) will be automatically converted into the right to receive cash in an amount equal to $10.10 per share, net of applicable withholding taxes and without interest thereon. The Company's board of directors approved the Merger and directed the Merger be submitted to the stockholders of the Company for adoption. A special meeting of the stockholders will be held on November 18, 2021 to vote on the proposal to adopt the Merger. The Merger requires the approval of a majority of the Company's stockholders and is expected to be completed in the fourth quarter of 2021, subject to such approval by the Company's stockholders. |
CONSOLIDATION AND BASIS OF PR_2
CONSOLIDATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The interim consolidated financial statements for the three and nine month periods ended September 30, 2021 and 2020, 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 September 30, 2021, the results of operations and changes in shareholders' deficit for the three and nine month periods ended September 30, 2021 and 2020 and cash flows for the nine month periods ended September 30, 2021 and 2020. The Company’s balance sheet information at December 31, 2020, was derived from its audited consolidated financial statements as of December 31, 2020. The results of operations for the three and nine month periods ended September 30, 2021 and 2020 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, 2020. PHSSEF Funds During the year ended December 31, 2020, the Company implemented certain changes to its accounting policies related to the recognition of stimulus funds through the PHSSEF, which it has applied consistently throughout the period ended September 30, 2021. There is no U.S. GAAP that explicitly 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 Standards 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 and certain state 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 eligible to receive the grant, and (2) the Company is able to comply with the relevant conditions of the grant. Federal and certain state 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 are accounted for as a capital grant. For such an asset acquired with the use of stimulus funds, the Company will recognize the asset as a net zero asset. Refer to Note 4, "COVID-19 Pandemic" 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, "Revenue Recognition and Accounts Receivable" to the interim consolidated financial statements included in this report for additional information. |
Accounting Standards Recently Issued But Not Yet 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 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 derivatives consistent with past presentation. The amendments in the ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Company continues to evaluate changes in the market and may apply other elections, as applicable, in the future as allowed under ASU No. 2020-04. |
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 on a daily basis. 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). |
REVENUE RECOGNITION AND ACCOU_2
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of 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 September 30, 2021 2020 Medicaid $ 55,554 48.0 % $ 55,844 47.3 % Medicare 19,682 17.0 % 24,374 20.7 % Managed Care 13,033 11.3 % 11,967 10.1 % Private Pay and other 27,467 23.7 % 25,780 21.9 % Total $ 115,736 100.0 % $ 117,965 100.0 % Nine Months Ended September 30, 2021 2020 Medicaid $ 157,274 46.2 % $ 164,335 46.1 % Medicare 62,870 18.5 % 67,470 18.9 % Managed Care 38,804 11.4 % 36,918 10.4 % Private Pay and other 81,418 23.9 % 87,472 24.6 % Total $ 340,366 100.0 % $ 356,195 100.0 % |
Schedule of Accounts Receivable | Accounts receivable from continuing operations as of September 30, 2021 and December 31, 2020 are summarized in the following table: September 30, December 31, 2021 2020 Medicaid $ 19,697 $ 17,354 Medicare 8,192 14,273 Managed Care 9,028 8,021 Private Pay and other 14,314 14,043 Total accounts receivable $ 51,231 $ 53,691 |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives | As of September 30, 2021, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: Interest Rate Derivative Number of Instruments Notional Interest Rate Cap 1 $ 60,127 |
Schedule of Fair Value of Derivative Instruments | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheets as of September 30, 2021 and December 31, 2020. Asset Derivatives Liability Derivatives Fair Value at: Fair Value at: Balance Sheet Classification September 30, 2021 December 31, 2020 Balance Sheet Classification September 30, 2021 December 31, 2020 Interest Rate Cap Other noncurrent assets $ 54 $ — Other noncurrent liabilities $ — $ — |
Schedule of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income | The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income for the three months ended September 30, 2021 and September 30, 2020. Effect of Derivative Instruments on the Consolidated Statements of Income Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Three Months Ended September 30, Three Months Ended September 30, 2021 2020 2021 2020 Interest Rate Swap $ — $ 105 Interest Expense (a) $ — $ 49 Interest Rate Cap $ (13) $ — Interest Expense (a) $ — $ — Total $ (13) $ 105 $ — $ 49 (a) Total interest expense presented in the consolidated income statements for the three months ended September 30, 2021 and 2020 was $1,104 and $1,172, respectively. The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income for the nine months ended September 30, 2021 and September 30, 2020. Effect of Derivative Instruments on the Consolidated Statements of Income Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Nine Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest Rate Swap $ — $ (115) Interest Expense (a) $ (38) $ 148 Interest Rate Cap $ (33) $ — Interest Expense (a) $ — $ — Total $ (33) $ (115) $ (38) $ 148 (a) Total interest expense presented in the consolidated income statements for the nine months ended September 30, 2021 and 2020 was $3,213 and $3,841, respectively. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities | Classification September 30, 2021 December 31, 2020 Assets Operating lease assets Operating lease right-of-use assets $ 267,766 $ 290,296 Finance lease assets Property and equipment, net (a) 326 508 Total leased assets $ 268,092 $ 290,804 Liabilities Current Operating Current portion of operating lease liabilities $ 31,174 $ 28,583 Finance Current portion of long-term debt and finance lease obligations 234 251 Noncurrent Operating Operating lease liabilities, less current portion 250,505 274,155 Finance Long-term debt and finance lease obligations, less current portion and deferred financing costs, net 119 280 Total lease liabilities $ 282,032 $ 303,269 (a) Finance lease assets are recorded net of accumulated amortization of $653 and $471 as of September 30, 2021 and December 31, 2020, respectively. |
Schedule of Lease Cost of Continuing Operations | Lease Cost of Continuing Operations Three Months Ended September 30, Classification 2021 2020 Operating lease cost (a) Lease and rent expense $ 13,263 $ 13,524 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 61 50 Interest on finance lease liabilities Interest expense, net 7 7 Short term lease cost Operating expense 160 111 Net lease cost $ 13,491 $ 13,692 (a) Includes variable lease costs, which are immaterial. Nine Months Ended September 30, Classification 2021 2020 Operating lease cost (a) Lease and rent expense $ 39,776 $ 40,560 Finance lease cost: Amortization of finance lease assets Depreciation and amortization 183 165 Interest on finance lease liabilities Interest expense, net 23 26 Short term lease cost Operating expense 442 445 Net lease cost $ 40,424 $ 41,196 (a) Includes variable lease costs, which are immaterial. |
Schedule of Maturity of Operating Lease Liabilities | Maturity of Lease Liabilities As of September 30, 2021 Operating Leases (a) Finance Leases (a) Total 2021 $ 51,893 $ 254 $ 52,147 2022 52,879 89 52,968 2023 53,123 33 53,156 2024 53,649 — 53,649 2025 54,247 — 54,247 After 2025 101,276 — 101,276 Total lease payments $ 367,067 $ 376 $ 367,443 Less: Interest (85,388) (23) (85,411) Present value of lease liabilities $ 281,679 $ 353 $ 282,032 (a) Operating and finance lease payments exclude options to extend lease terms that are not reasonably certain of being exercised. |
Schedule of Maturity of Finance Lease Liabilities | Maturity of Lease Liabilities As of September 30, 2021 Operating Leases (a) Finance Leases (a) Total 2021 $ 51,893 $ 254 $ 52,147 2022 52,879 89 52,968 2023 53,123 33 53,156 2024 53,649 — 53,649 2025 54,247 — 54,247 After 2025 101,276 — 101,276 Total lease payments $ 367,067 $ 376 $ 367,443 Less: Interest (85,388) (23) (85,411) Present value of lease liabilities $ 281,679 $ 353 $ 282,032 (a) Operating and finance lease payments exclude options to extend lease terms that are not reasonably certain of being exercised. |
Schedule of Lease Term and Discount Rate and Other Lease Information | Lease Term and Discount Rate September 30, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 7.22 7.91 Finance leases 1.64 2.26 Weighted-average discount rate Operating leases 7.9% 7.9% Finance leases 6.0% 6.2% Other Information Nine Months Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 38,219 $ 38,018 Operating cash flows for finance leases 23 26 Financing cash flows for finance leases 182 175 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020 65 $ 7.92 Granted — — Exercised — — Expired or cancelled — — Outstanding, September 30, 2021 65 $ 7.92 Exercisable, September 30, 2021 65 $ 7.92 |
Schedule of Summarized Activity of Restricted Share Units | Weighted Average Restricted Grant Date Shares Fair Value Outstanding, December 31, 2020 193 $ 3.32 Granted 106 4.25 Vested (88) 3.99 Cancelled (4) 2.80 Outstanding, September 30, 2021 207 $ 3.51 Summarized activity of the RSU's for the Stock Purchase Plan is as follows: Weighted Average Grant Date RSU's Fair Value Outstanding, December 31, 2020 55 $ 2.92 Granted 37 4.25 Vested (26) 3.93 Outstanding, September 30, 2021 66 $ 3.27 |
Schedule of Stock Options and SOSAR Grants Outstanding | The following table summarizes information regarding stock options and SOSAR grants outstanding as of September 30, 2021: Weighted Average Range of Exercise Grants Grants Exercise Prices Prices Outstanding Exercisable $8.14 to $10.21 $ 8.83 45 45 $5.86 $ 5.86 20 20 65 65 |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Common Share | Information with respect to basic and diluted net income (loss) per common share is presented below in thousands, except per share amounts: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Income (loss): Income (loss) from continuing operations $ (2,859) $ 3,173 $ 2,129 $ 4,502 Loss from discontinued operations, net of income taxes (744) (374) (1,350) (1,004) Net income (loss) $ (3,603) $ 2,799 $ 779 $ 3,498 Denominator: Basic Weighted Average Common Shares Outstanding: 6,643 6,577 6,619 6,606 Dilutive effect of stock options, SOSARs, Restricted Shares and Restricted Share Units — 49 156 70 Adjusted weighted average common shares outstanding 6,643 6,626 6,775 6,676 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income (loss) per common share: Per common share – basic Income (loss) from continuing operations $ (0.43) $ 0.48 $ 0.32 $ 0.68 Loss from discontinued operations (0.11) (0.06) (0.20) (0.15) Net income (loss) per common share – basic $ (0.54) $ 0.42 $ 0.12 $ 0.53 Per common share – diluted Income (loss) from continuing operations $ (0.43) $ 0.48 $ 0.31 $ 0.67 Loss from discontinued operations (0.11) (0.06) (0.20) (0.15) Net income (loss) per common share – diluted $ (0.54) $ 0.42 $ 0.11 $ 0.52 |
BUSINESS (Details)
BUSINESS (Details) | Sep. 30, 2021nursing_centernursing_bedstate |
Accounting Policies [Line Items] | |
Number of states in which entity operates | state | 8 |
Number of nursing centers | nursing_center | 61 |
Number of licensed nursing beds | 7,250 |
Number of nursing center facilities owned | nursing_center | 15 |
Number of nursing center facilities leased | nursing_center | 46 |
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 |
COVID-19 PANDEMIC (Details)
COVID-19 PANDEMIC (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | |||||
COVID-19, PHSSEF funds received | $ 51,607 | $ 51,607 | |||
COVID-19, PHSSEF revenue | 2,344 | $ 9,563 | 21,335 | $ 14,711 | |
Proceeds from stimulus funds used to purchase property and equipment | 954 | 898 | |||
COVID-19, remaining stimulus funds | 8,174 | 8,174 | $ 25,900 | ||
COVID-19, Medicaid revenue from states | 4,516 | 6,327 | 13,775 | 11,709 | |
Medicaid and Hospice revenue | 5,038 | 6,645 | 14,909 | 11,709 | |
COVID-19, Medicaid sequestration amount | 644 | 724 | 2,004 | 1,031 | |
COVID-19, salaries expense | 6,018 | 8,241 | 19,847 | 11,349 | |
COVID-19, supplies expense | $ 1,152 | $ 4,430 | 5,731 | $ 5,642 | |
Other operating income | |||||
Unusual or Infrequent Item, or Both [Line Items] | |||||
COVID-19, Medicaid revenue from states | $ 877 |
REVENUE RECOGNITION AND ACCOU_3
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
COVID-19, Medicaid revenue from states | $ 4,516 | $ 6,327 | $ 13,775 | $ 11,709 |
COVID-19, Hospice funds received | 522 | 318 | 1,134 | 1,089 |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 115,736 | $ 117,965 | $ 340,366 | $ 356,195 |
Total revenues, as a percent | 100.00% | 100.00% | 100.00% | 100.00% |
Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 55,554 | $ 55,844 | $ 157,274 | $ 164,335 |
Total revenues, as a percent | 48.00% | 47.30% | 46.20% | 46.10% |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 19,682 | $ 24,374 | $ 62,870 | $ 67,470 |
Total revenues, as a percent | 17.00% | 20.70% | 18.50% | 18.90% |
Managed Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 13,033 | $ 11,967 | $ 38,804 | $ 36,918 |
Total revenues, as a percent | 11.30% | 10.10% | 11.40% | 10.40% |
Private Pay and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 27,467 | $ 25,780 | $ 81,418 | $ 87,472 |
Total revenues, as a percent | 23.70% | 21.90% | 23.90% | 24.60% |
REVENUE RECOGNITION AND ACCOU_4
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 51,231 | $ 53,691 |
Medicaid | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 19,697 | 17,354 |
Medicare | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 8,192 | 14,273 |
Managed Care | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 9,028 | 8,021 |
Private Pay and other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 14,314 | $ 14,043 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | Oct. 14, 2020USD ($)nursing_center | Sep. 30, 2021USD ($)letter_of_credit | Jun. 10, 2021USD ($) | Jun. 09, 2021USD ($) | Dec. 31, 2020USD ($) |
Amended And Restated Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument term | 3 years | ||||
Amended And Restated Credit Agreement | Revolvers | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 25,294,000 | ||||
Borrowings outstanding | $ 0 | $ 0 | |||
Interest rate during period | 5.00% | ||||
Balance available for borrowing under revolving credit center | $ 12,843,000 | ||||
Amended Mortgage Loan | Mortgage | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 62,000,000 | ||||
Debt instrument term | 3 years | ||||
Period of amortization | 25 years | ||||
Borrowings outstanding | $ 60,127,000 | ||||
Interest rate during period | 5.00% | ||||
Number of owned nursing centers to secure Amended Mortgage Loan | nursing_center | 15 | ||||
Amended Mortgage Loan | Mortgage | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate percentage | 4.00% | ||||
Amended Mortgage Loan | Mortgage | Floor | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate percentage | 1.00% | ||||
Amended Revolver | Revolvers | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 36,000,000 | $ 35,000,000 | $ 36,000,000 | ||
Annual fees for letters of credit issued under revolver (as a percentage) | 3.00% | ||||
Number of letters of credit | letter_of_credit | 4 | ||||
Letters of credit security deposit for a lease | $ 12,451,000 | ||||
Amended Affiliated Revolver | Revolvers | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 2,000,000 | $ 3,000,000 | $ 2,000,000 |
DERIVATIVES AND HEDGING ACTIV_3
DERIVATIVES AND HEDGING ACTIVITIES - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Interest Rate Cap | Other noncurrent assets | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Asset derivatives | $ 54 | $ 0 | |
Interest Rate Cap | Cash Flow Hedging | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Notional amount | $ 60,127 | ||
Strike rate | 1.00% | ||
Interest Rate Swap | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Reclassified to earnings | $ 90 | $ 38 |
DERIVATIVES AND HEDGING ACTIV_4
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Derivatives (Details) - Interest Rate Cap - Cash Flow Hedging $ in Thousands | Sep. 30, 2021USD ($)state |
Derivative [Line Items] | |
Number of Instruments | state | 1 |
Notional | $ | $ 60,127 |
DERIVATIVES AND HEDGING ACTIV_5
DERIVATIVES AND HEDGING ACTIVITIES - Derivative Instruments in Statement of Financial Position, Fair Value (Details) - Interest Rate Cap - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 54 | $ 0 |
Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 0 | $ 0 |
DERIVATIVES AND HEDGING ACTIV_6
DERIVATIVES AND HEDGING ACTIVITIES - Effect Of Cash Flow Hedge Accounting On Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative | $ (13) | $ 105 | $ (33) | $ (115) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 49 | (38) | 148 |
Interest expense | (1,104) | (1,172) | (3,213) | (3,841) |
Interest Rate Swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative | 0 | 105 | 0 | (115) |
Interest expense | (1,104) | (1,172) | (3,213) | (3,841) |
Interest Rate Swap | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 49 | (38) | 148 |
Interest Rate Cap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative | (13) | 0 | (33) | 0 |
Interest Rate Cap | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ 0 | $ 0 | $ 0 | $ 0 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | |
Other leases renewal term | 20 years |
Other leases termination period | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Original lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Original lease term | 12 years |
LEASES - Balance Sheet Classifi
LEASES - Balance Sheet Classification (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Operating lease right-of-use assets | $ 267,766 | $ 290,296 |
Finance lease assets | 326 | 508 |
Total leased assets | 268,092 | 290,804 |
Current | ||
Current portion of operating lease liabilities | 31,174 | 28,583 |
Finance lease, current | 234 | 251 |
Noncurrent | ||
Operating lease liabilities, less current portion | 250,505 | 274,155 |
Finance lease, noncurrent | 119 | 280 |
Total lease liabilities | 282,032 | 303,269 |
Accumulated amortization of finance leases | $ 653 | $ 471 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 13,263 | $ 13,524 | $ 39,776 | $ 40,560 |
Finance lease cost: | ||||
Amortization of finance lease assets | 61 | 50 | 183 | 165 |
Interest on finance lease liabilities | 7 | 7 | 23 | 26 |
Short term lease cost | 160 | 111 | 442 | 445 |
Net lease cost | $ 13,491 | $ 13,692 | $ 40,424 | $ 41,196 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating and Financing Lease Liabilities (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Operating Leases | |
2021 | $ 51,893 |
2022 | 52,879 |
2023 | 53,123 |
2024 | 53,649 |
2025 | 54,247 |
After 2025 | 101,276 |
Total lease payments | 367,067 |
Less: Interest | (85,388) |
Present value of lease liabilities | 281,679 |
Finance Leases | |
2021 | 254 |
2022 | 89 |
2023 | 33 |
2024 | 0 |
2025 | 0 |
After 2025 | 0 |
Total lease payments | 376 |
Less: Interest | (23) |
Present value of lease liabilities | 353 |
Operating and Finance Lease Liabilities Payments Due [Abstract] | |
2021 | 52,147 |
2022 | 52,968 |
2023 | 53,156 |
2024 | 53,649 |
2025 | 54,247 |
After 2025 | 101,276 |
Total lease payments | 367,443 |
Less: Interest | (85,411) |
Present value of lease liabilities | $ 282,032 |
LEASES - Other Lease Informatio
LEASES - Other Lease Information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Weighted-average remaining lease term (years) | |||
Operating leases | 7 years 2 months 19 days | 7 years 10 months 28 days | |
Finance leases | 1 year 7 months 20 days | 2 years 3 months 3 days | |
Weighted-average discount rate | |||
Operating leases | 7.90% | 7.90% | |
Finance leases | 6.00% | 6.20% | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash flows for operating leases | $ 38,219 | $ 38,018 | |
Operating cash flows for finance leases | 23 | 26 | |
Financing cash flows for finance leases | $ 182 | $ 175 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended | ||
Sep. 30, 2021USD ($)lawsuit | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Malpractice Insurance [Line Items] | |||
Number of professional liability lawsuits | lawsuit | 77 | ||
Cash expenditures for self-insured professional liability costs | $ 4,991,000 | $ 5,136,000 | |
Other Insurance | |||
Liability for workers compensation claims | 1,185,000 | $ 1,039,000 | |
Workers compensation insurance, non current receivable for excess premiums paid | $ 2,637,000 | 2,050,000 | |
CID | |||
Malpractice Insurance [Line Items] | |||
Settlement payment period | 5 years | ||
Payments made during period | $ 1,000,000 | $ 500,000 | |
Outstanding related to settlement agreement | 8,000,000 | 9,000,000 | |
Current loss accrual | 1,000,000 | 1,000,000 | |
Noncurrent loss accrual | $ 7,000,000 | 8,000,000 | |
CIA term | 5 years | ||
Self-insurance receivables, current portion | |||
Malpractice Insurance [Line Items] | |||
Estimated insurance recovery receivables | $ 328,000 | 1,025,000 | |
Scheduled for trial or arbitration over next 12 months | |||
Malpractice Insurance [Line Items] | |||
Number of professional liability lawsuits | lawsuit | 15 | ||
Professional malpractice liability insurance | |||
Malpractice Insurance [Line Items] | |||
Liability for reported and estimated future claims | $ 23,928,000 | 24,744,000 | |
Professional malpractice liability insurance | SHC Risk Carriers, Inc | |||
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 | ||
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 | $ 1,444,000 | $ 2,358,000 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | Mar. 13, 2020 | Jun. 30, 2008 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2017 | May 31, 2017 | Jun. 30, 2016 | May 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense | $ 288 | $ 491 | ||||||
Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock granted to CEO (in shares) | 100,000 | |||||||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Grant of restricted common stock (in shares) | 106,000 | 198,000 | ||||||
Restricted Stock | First anniversary | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 33.33% | |||||||
Restricted Stock | Second anniversary | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 33.33% | |||||||
Restricted Stock | Third anniversary | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 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 (in 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 (in shares) | 980,000 | 680,000 | 380,000 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Activity of Equity Compensation Plans (Details) - Options/SOSARs shares in Thousands | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of Shares | |
Outstanding, beginning (in shares) | shares | 65 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | 0 |
Expired or cancelled (in shares) | shares | 0 |
Outstanding, ending (in shares) | shares | 65 |
Exercisable (in shares) | shares | 65 |
Weighted Average Exercise Price | |
Outstanding, beginning (in dollars per share) | $ / shares | $ 7.92 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 0 |
Expired or cancelled (in dollars per share) | $ / shares | 0 |
Outstanding, ending (in dollars per share) | $ / shares | 7.92 |
Exercisable, weighted average exercise price (in 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 | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Restricted Shares | ||
Number of Shares | ||
Outstanding, beginning (in shares) | 193 | |
Granted (in shares) | 106 | 198 |
Vested (in shares) | (88) | |
Cancelled (in shares) | (4) | |
Outstanding, ending (in shares) | 207 | |
Weighted Average Granted Date Fair Value | ||
Outstanding, beginning (in dollars per share) | $ 3.32 | |
Granted (in dollars per share) | 4.25 | |
Vested (in dollars per share) | 3.99 | |
Cancelled (in dollars per share) | 2.80 | |
Outstanding, ending (in dollars per share) | $ 3.51 | |
RSU's | ||
Number of Shares | ||
Outstanding, beginning (in shares) | 55 | |
Granted (in shares) | 37 | |
Vested (in shares) | (26) | |
Outstanding, ending (in shares) | 66 | |
Weighted Average Granted Date Fair Value | ||
Outstanding, beginning (in dollars per share) | $ 2.92 | |
Granted (in dollars per share) | 4.25 | |
Vested (in dollars per share) | 3.93 | |
Outstanding, ending (in dollars per share) | $ 3.27 |
STOCK-BASED COMPENSATION - Sc_3
STOCK-BASED COMPENSATION - Schedule of Awards Outstanding and Exercisable (Details) - Options/SOSARs - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise prices (in dollars per share) | $ 7.92 | $ 7.92 |
Grants outstanding (in shares) | 65 | |
Grants exercisable (in shares) | 65 | |
$8.14 to $10.21 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Range of exercise prices, minimum (in dollars per share) | $ 8.14 | |
Range of exercise prices, maximum (in dollars per share) | 10.21 | |
Weighted average exercise prices (in dollars per share) | $ 8.83 | |
Grants outstanding (in shares) | 45 | |
Grants exercisable (in shares) | 45 | |
$5.86 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Range of exercise prices, minimum (in dollars per share) | $ 5.86 | |
Range of exercise prices, maximum (in dollars per share) | 5.86 | |
Weighted average exercise prices (in dollars per share) | $ 5.86 | |
Grants outstanding (in shares) | 20 | |
Grants exercisable (in shares) | 20 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 279 | $ (209) | $ (418) | $ (287) | |
Valuation allowance | $ 18,860 | $ 18,860 | |||
Tax refund | $ 321 |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE - Schedule of Basic and Diluted Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: Income (loss): | ||||
Income (loss) from continuing operations | $ (2,859) | $ 3,173 | $ 2,129 | $ 4,502 |
Loss from discontinued operations, net of income taxes | (744) | (374) | (1,350) | (1,004) |
Net income (loss) | $ (3,603) | $ 2,799 | $ 779 | $ 3,498 |
Denominator: Basic Weighted Average Common Shares Outstanding (in shares) | 6,643 | 6,577 | 6,619 | 6,606 |
Dilutive effect of stock options, SOSARs, Restricted Shares and Restricted Share Units (in shares) | 0 | 49 | 156 | 70 |
Adjusted weighted average common shares outstanding (in shares) | 6,643 | 6,626 | 6,775 | 6,676 |
Per common share – basic | ||||
Income (loss) from continuing operations (in dollars per share) | $ (0.43) | $ 0.48 | $ 0.32 | $ 0.68 |
Loss from discontinued operations (in dollars per share) | (0.11) | (0.06) | (0.20) | (0.15) |
Net income (loss) per common share – basic (in dollars per share) | (0.54) | 0.42 | 0.12 | 0.53 |
Per common share – diluted | ||||
Income (loss) from continuing operations (in dollars per share) | (0.43) | 0.48 | 0.31 | 0.67 |
Loss from discontinued operations (in dollars per share) | (0.11) | (0.06) | (0.20) | (0.15) |
Net income (loss) per common share – diluted (in dollars per share) | $ (0.54) | $ 0.42 | $ 0.11 | $ 0.52 |
EARNINGS (LOSS) PER COMMON SH_4
EARNINGS (LOSS) PER COMMON SHARE - Narrative (Details) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from computation of diluted earnings per share (in shares) | 15 | 65 |
BUSINESS DEVELOPMENTS AND OTH_2
BUSINESS DEVELOPMENTS AND OTHER SIGNIFICANT TRANSACTIONS (Details) | Aug. 26, 2021$ / shares |
Business Combination and Asset Acquisition [Abstract] | |
Conversion price (in dollars per share) | $ 10.10 |