NHC Reports Third Quarter Earnings

Revenues for the three months ended September 30, 2009 totaled $171,630,000 compared to $163,271,000 for the same three months of 2008, an increase of 5.1%. Net income was $.74 per basic common share for the quarter ended September 30, 2009 compared to $.91 per basic common share for the quarter ended September 30, 2008.

Recent accomplishments include the renewal of our $75,000,000 bank line of credit agreement and accreditation of our NHC Geriatric Clinical Residency Program by the American Physical Therapy Association.

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                  Nine Months Ended
                                                                   September 30                        September 30
Revenues:                                                          2009              2008              2009              2008
           Net patient revenues                                    $  154,546        $  146,521        $  463,462        $  433,649
           Other revenues                                             17,084            16,750            48,873            50,325
                      Net revenues                                    171,630           163,271           512,335           483,974
Costs and Expenses:
           Salaries, wages and benefits                               91,834            88,036            274,435           261,889
           Other operating                                            47,199            44,755            142,588           134,708
           Rent                                                       8,032             7,834             24,064            23,628
           Depreciation and amortization                              6,335             6,218             18,865            18,239
           Interest                                                   159               274               554               663
                      Total costs and expenses                        153,559           147,117           460,506           439,127
Income Before Income Taxes                                            18,071            16,154            51,829            44,847
           Income Tax Provision                                       (5,727     )      (2,381     )      (18,934    )      (13,416    )
Net Income                                                            12,344            13,773            32,895            31,431
Dividends to Preferred Shareholders                                   (2,169     )      (2,169     )      (6,505     )      (6,505     )
Net income available to common shareholders                        $  10,175         $  11,604         $  26,390         $  24,926
Earnings Per Common Share:
           Basic                                                   $  0.74           $  0.91           $  1.95           $  1.95
           Diluted                                                 $  0.74           $  0.88           $  1.95           $  1.90
Weighted average common shares outstanding
           Basic                                                      13,675,162        12,788,968        13,522,351        12,778,786
           Diluted                                                    13,685,572        15,678,702        13,540,066        13,099,488
                                   Balance Sheet Data
                                   (in thousands)                  Sept. 30          Dec. 31
                                                                   2009              2008
                                   Cash and marketable securities  $  252,335        $  232,463
                                   Current assets                     325,946           312,752
                                   Total assets                       810,071           777,296
                                   Current liabilities                243,564           251,919
                                   Long-term obligations              29,458            25,807
                                   Deferred lease credit              2,726             3,635
                                   Deferred revenue                   16,383            15,118
                                   Stockholders' equity               517,940           480,817

Selected Operating Statistics
                       Three Months Ended        Nine Months Ended
                       September 30              September 30
                       2009         2008         2009           2008
Per Diems:
Medicare               $   375.47   $   364.28   $   374.58     $   363.39
Medicaid                   151.24       147.70       151.09         146.64
Private Pay and Other      225.65       214.55       225.37         214.66
Patient Days:
Medicare                   102,365      103,213      313,347        309,567
Medicaid                   283,896      281,097      828,812        830,260
Private Pay and Other      169,191      171,478      506,384        501,526
                           555,452      555,788      1,648,543      1,641,353
Average Per Diem       $   215.23   $   208.55   $   216.38     $   208.30

SOURCE: National HealthCare Corporation

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