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National Healthcare (NHC) Analogies

• A Marriott for senior living and post-acute care facilities.
• Like a specialized HCA Healthcare, operating nursing homes and assisted living communities instead of acute care hospitals.

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• Skilled Nursing Services: Provides post-acute and long-term care, including medical supervision, rehabilitation therapies, and assistance with daily living for patients.
• Assisted Living Services: Offers residential care for individuals who need help with daily activities but do not require complex medical care.
• Independent Living Services: Delivers housing and amenities for active seniors seeking a maintenance-free lifestyle with access to services and social engagement.
• Homecare Services: Supplies medical and non-medical care, such as skilled nursing, therapy, and personal care, directly in patients' homes.
• Hospice Services: Focuses on end-of-life care, providing comfort, pain management, and emotional and spiritual support for patients and their families.

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National Healthcare Corporation (NHC) primarily serves individuals directly rather than other companies. Its customers can be categorized as follows:

1. Residents of Skilled Nursing and Rehabilitation Facilities: These are individuals, often elderly, who require post-acute care, short-term rehabilitation following a hospital stay, or long-term care for chronic medical conditions.
2. Residents of Assisted Living and Independent Living Facilities: This category includes seniors who seek a supportive living environment with assistance for daily activities (assisted living) or those who desire a community setting with amenities and social opportunities without requiring daily medical care (independent living).
3. Patients receiving Home Healthcare and Hospice Services: These are individuals who require medical care, therapy, or end-of-life support and comfort care delivered in the convenience and familiarity of their own homes.

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Stephen F. Flatt, Chief Executive Officer & Inside Director
Stephen F. Flatt was appointed Chief Executive Officer of National HealthCare Corporation effective January 1, 2017. He joined NHC in June 2005 as Senior Vice President – Development and became NHC's President on January 1, 2009. Prior to his time at NHC, he served as President of Lipscomb University from 1997 through June 2005. Before that, he was President of Ezell Harding Christian School in Nashville and Vice President of Financial Affairs and Institutional Planning at Lipscomb University. He received his B.A. degree from David Lipscomb College and his M.S. degree and Ph.D. from George Peabody College of Vanderbilt University.

Brian F. Kidd, Senior Vice President and Chief Financial Officer
Brian F. Kidd joined National HealthCare Corporation in 2008. He was promoted to Senior Vice President and Chief Financial Officer in 2023, having previously served as Vice President of Financial Reporting and Director of Financial Reporting. Before joining NHC, Mr. Kidd accumulated 10 years of experience in public accounting. He is a Certified Public Accountant and earned his B.S. in Accounting from Middle Tennessee State University in 1998.

R. Michael Ussery, President & Chief Operating Officer
R. Michael Ussery serves as the President and Chief Operating Officer of National HealthCare Corporation.

B. Anderson "Andy" Flatt, Senior Vice President & Chief Information Officer
B. Anderson "Andy" Flatt holds the position of Senior Vice President and Chief Information Officer at National HealthCare Corporation.

Vicki L. Dodson, Senior Vice President, Patient Services
Vicki L. Dodson is the Senior Vice President of Patient Services for National HealthCare Corporation.

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The key risks to National Healthcare Corporation (NHC) are primarily centered around government regulations and reimbursement, workforce challenges, and legal and regulatory liabilities.

1. Dependence on Government Reimbursement Programs and Regulatory Changes: National Healthcare Corporation's financial stability is significantly exposed to potential changes in government healthcare policies, specifically concerning Medicare and Medicaid reimbursement rates and methodologies. The highly regulated nature of the healthcare industry means that modifications to laws and regulations, as well as the government's application of these methodologies, could directly impact NHC's revenue and profitability.
2. Workforce Recruitment and Retention Challenges: NHC faces persistent challenges in attracting and retaining qualified healthcare professionals. This issue, common within the broader healthcare industry, can affect the quality of service provided and operational efficiency. The ongoing struggle with workforce recruitment and retention also contributes to increased labor costs, which can negatively impact the company's financial performance.
3. Legal and Regulatory Liabilities and Patient Care Claims: The company operates in an environment subject to significant legal claims, patient care liabilities, and rigorous regulatory scrutiny. NHC has faced various lawsuits and deficiency reports concerning issues such as patient abuse, inadequate fall prevention, unsafe living environments, and improper Medicare billing. The potential for substantial legal costs, settlement amounts, and reputational damage from such claims and regulatory non-compliance poses a considerable risk to the business.

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National Healthcare Corporation (NHC) Addressable Markets (U.S.)

• Skilled Nursing Facilities: The U.S. skilled nursing facility market was estimated at USD 199.72 billion in 2024 and is projected to reach USD 290.02 billion by 2033, growing at a compound annual growth rate (CAGR) of 4.39% from 2025 to 2033. Other estimates place the market at USD 202.4 billion in 2025, anticipated to reach USD 279.9 billion by 2035 with a CAGR of 3.3% between 2025 and 2035. Another source reported the market size at USD 180.95 billion in 2023, projected to reach approximately USD 253.77 billion by 2033, with a CAGR of 3.44% from 2024 to 2033.
• Assisted Living Facilities: The U.S. assisted living facility market size was estimated at USD 44.38 billion in 2024 and is expected to reach USD 93.54 billion by 2033, growing at a CAGR of 8.69% from 2025 to 2033. Another report valued the market at USD 103.5 billion in 2024, predicted to reach USD 182.3 billion by 2034 with a 5.9% CAGR during 2025-2034. One source indicated the market was valued at USD 89.4 billion in 2024 and is projected to expand at a CAGR of 5.4% from 2024 to 2031, reaching USD 129.2 billion by 2031.
• Home Healthcare Services: The U.S. home healthcare services market size was valued at USD 100.95 billion in 2024 and is projected to grow from USD 107.07 billion in 2025 to USD 176.30 billion by 2032, exhibiting a CAGR of 7.4% during the forecast period. Other estimates for the U.S. home healthcare market size include USD 162.35 billion in 2024, expected to reach USD 381.40 billion by 2033, growing at a CAGR of 10.00% from 2025 to 2033. Another report estimated the market at USD 111.2 billion in 2024, growing at a CAGR of 10.2% from 2025 to 2035, reaching USD 317.9 billion by 2035.
• Hospice Services: The U.S. hospice market was valued at USD 29.92 billion in 2024 and is projected to reach USD 39.09 billion by 2030, rising at a CAGR of 4.61%. The estimated market size for the hospice industry in the United States reached USD 34.5 billion in 2022 and is projected to experience an 8.02% CAGR from 2023 to 2030. The market size of Hospices & Palliative Care Centers in the U.S. is USD 39.0 billion in 2025. Other data shows the U.S. Hospice Care Market size was valued at USD 36.89 billion in 2024 and is projected to reach USD 67.44 billion by 2031, growing at a CAGR of 8.64% from 2024 to 2031.

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National Healthcare Corporation (NHC) is expected to drive future revenue growth over the next two to three years through several key strategies and market dynamics:

1. Strategic Acquisitions: NHC has demonstrated a clear strategy of expanding its operations through acquisitions. The August 2024 acquisition of White Oak Management, Inc. notably contributed to a significant increase in net operating revenues for the third quarter of 2025. This indicates that inorganic growth through the addition of new facilities and managed operations remains a key driver.
2. Growth in Same-Facility Net Operating Revenues and Demand for Services: The company has consistently reported an increase in same-facility net operating revenues, with an 8.7% rise in the third quarter of 2025 compared to the prior year. This growth is bolstered by the ongoing high demand for NHC's diverse range of healthcare services, including skilled nursing, therapy, assisted living, independent living, homecare, and hospice care. The increase in average Medicare Advantage per diem also supports this trend.
3. Favorable Regulatory Changes and Reimbursement Rates: Positive regulatory developments, such as the projected net increase in Medicare Part A payments for skilled nursing facilities for fiscal year 2026, are expected to enhance NHC's financial performance. Improvements in reimbursement rates, including the increase in average Medicare Advantage per diem, contribute to revenue uplift.
4. Expansion into Behavioral Health Services: NHC has identified expansion into the behavioral health sector as a potential area for future growth. This diversification into a high-demand healthcare segment could unlock new revenue streams for the company.

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Share Repurchases

• NHC repurchased common stock totaling approximately $2.75 million in 2021, $24.96 million in 2022, and $2.05 million in 2023.
• Year-to-date as of September 30, 2025, the company repurchased 88,738 shares for $9.6 million.
• In August 2022, NHC authorized a new stock repurchase program of up to $25 million, which commenced on August 11, 2022, and expired on August 10, 2023.

Share Issuance

• NHC received proceeds from the issuance of common stock totaling approximately $1.76 million in 2021, $2.10 million in 2022, and $1.48 million in 2023.
• In 2020, proceeds from shares sold due to options exercised amounted to approximately $1.76 million.

Inbound Investments

• NHC received significant government stimulus income from the Provider Relief Fund (PRF), with $63.36 million in 2021 and $11.46 million in 2022.
• As of December 31, 2020, $16.07 million of Provider Relief Fund amounts were received but not yet recognized as income, reflected as a current liability on the balance sheet.

Outbound Investments

• On August 1, 2024, NHC completed the acquisition of the White Oak Senior Living portfolio, a 15-property operation in North and South Carolina, for $220 million. This acquisition expanded NHC's operations into North Carolina and increased its presence in South Carolina, adding 1,928 skilled nursing beds, 48 assisted living units, and 302 independent living units.
• In June 2021, NHC acquired the remaining 24.9% equity interest in Caris, a hospice care business, resulting in a recorded gain of $95.20 million.

Capital Expenditures

• Capital expenditures (purchases of property and equipment) were approximately $34.56 million in 2021, $26.02 million in 2022, and $27.88 million in 2023.
• For the next fiscal year, capital expenditures are forecasted to be $29.67 million.
• The primary focus of these expenditures is on the company's core operations, including skilled nursing facilities, assisted living facilities, independent living facilities, homecare and hospice agencies, and behavioral health hospitals.