NHC Reports a 25.7% Increase in Net Income Available to Common Shareholders

Revenues for the three months ended June 30, 2009 totaled $172,036,000 compared to $160,562,000 for the same three months of 2008, an increase of 7.1%. Net income was $.67 per basic common share for the quarter ended June 30, 2009 compared to $.57 per basic common share for the quarter ended June 30, 2008.

NHC operates, through various subsidiaries, for itself and third parties, 76 long-term health care centers with 9,772 beds. NHC also operates, through subsidiaries, 33 homecare programs, seven independent living centers and 23 assisted living centers. NHC's other services include Alzheimer's units, long-term care pharmacies, hospice, a rehabilitation services company, and providing management and accounting services to third parties. Other information about the company can be found on our web site at www.NHCcare.com.

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

Condensed Statements of Income
(in thousands, except share and per share amounts)
                                                                       Three Months Ended                  Six Months Ended
                                                                       June 30                             June 30
Revenues:                                                              2009              2008              2009              2008
             Net patient revenues                                      $  155,849        $  143,163        $  308,916        $  287,128
             Other revenues                                               16,187            17,399            31,789            33,575
                          Net revenues                                    172,036           160,562           340,705           320,703
Costs and Expenses:
             Salaries, wages and benefits                                 91,875            86,312            182,601           173,853
             Other operating                                              47,421            44,639            95,389            89,953
             Rent                                                         8,064             7,876             16,032            15,794
             Depreciation and amortization                                6,287             6,024             12,530            12,021
             Interest                                                     188               170               395               389
                          Total costs and expenses                        153,835           145,021           306,947           292,010
Income Before Income Taxes                                                18,201            15,541            33,758            28,693
             Income Tax Provision                                         (6,834     )      (6,055     )      (13,207    )      (11,035    )
Net Income                                                                11,367            9,486             20,551            17,658
Dividends to Preferred Shareholders                                       (2,168     )      (2,168     )      (4,336     )      (4,336     )
Net income available to common shareholders                            $  9,199          $  7,318          $  16,215         $  13,322
Earnings Per Common Share:
             Basic                                                     $  0.67           $  0.57           $  1.21           $  1.04
             Diluted                                                   $  0.67           $  0.56           $  1.20           $  1.02
Weighted average common shares outstanding
             Basic                                                        13,658,141        12,779,582        13,444,679        12,773,639
             Diluted                                                      13,675,285        13,125,402        13,466,047        13,121,810
                                       Balance Sheet Data
                                       (in thousands)                  June 30           Dec. 31
                                                                       2009              2008
                                       Cash and marketable securities  $  242,042        $  232,463
                                       Current assets                     325,305           312,752
                                       Total assets                       793,272           777,296
                                       Current liabilities                242,382           251,919
                                       Long-term obligations              25,959            25,807
                                       Deferred lease credit              3,029             3,635
                                       Deferred revenue                   17,157            15,118
                                       Stockholders' equity               504,745           480,817

Selected Operating Statistics
                       Three Months Ended            Six Months Ended
                       June 30                       June 30
                       2009             2008         2009           2008
Per Diems:
Medicare               $       381.21   $   362.45   $   381.23     $   362.95
Medicaid                       151.87       145.64       151.01         146.09
Private Pay and Other          226.10       216.44       225.22         214.72
Patient Days:
Medicare                       105,130      102,748      210,982        206,354
Medicaid                       276,145      284,123      544,916        549,163
Private Pay and Other          169,258      165,727      337,193        330,048
                               550,533      552,598      1,093,091      1,085,565
Average Per Diem       $       218.49   $   208.03   $   218.34     $   208.18

SOURCE: National HealthCare Corporation

National HealthCare Corporation 
Gerald Coggin, 615-890-2020 
Sr. VP of Corporate Relations