ATLANTA, GA, Nov. 26, 2024 (GLOBE NEWSWIRE) -- Regional Health Properties, Inc. (the "Company", "Regional", "we", "us" or "our") (NYSE:RHE) (NYSE:RHE), a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term care, today announced its financial results for the third quarter ended September 30, 2024.
THIRD QUARTER 2024 FINANCIAL
- Reduced loss from operations year over year from $0.4 million in the prior year quarter to $0.3 million in the current quarter
- Generated $1.0 million of Adjusted EBITDA1 in the quarter, compared to $0.6 million in the third quarter of 2023
- Collected 80.3% of contractual rent during Q3 2024. We are working with our tenants and have a positive outlook on collectability during Q4 2024
THIRD QUARTER 2024 BUSINESS HIGHLIGHTS
- The Healthcare Services segment produced its first positive EBITDA quarter since taking back operations of two facilities in 2022
- Our Meadowood facility in Glencoe, AL has achieved its highest occupancy since taking back the facility in 2022
- Regional's portfolio CMS star rating is the highest in over two years
MANAGEMENT COMMENTS
Brent Morrison, Regional's President, Chief Executive Officer, and Chairman, commented, "The third quarter continues Regional's turnaround. While our rent collections in the quarter were less than ideal, we have taken additional steps to work with our operating partners and anticipate collecting back rent."
Mr. Morrison continued, "Subsequent to quarter end, we entered into a management contract with CJM Advisors ("CJM") to manage our Sylva, NC facility. We are excited to work with Chris Murphy, former COO of Regency Integrated Health Systems and the entire CJM team to further the financial performance of our asset."
FINANCIAL RESULTS FOR QUARTER ENDED SEPTEMBER 30, 2024
For the third quarter of 2024, the Company reported total revenue of $4.2 million, a net loss of $1.0 million, EBITDA2 of $0.2 million and Adjusted EBITDA of $1.0 million.
BALANCE SHEET AND LIQUIDITY
As of September 30, 2024, the Company had $49.7 million, net of outstanding indebtedness with a weighted-average annual interest rate of 5.1% and a weighted-average maturity of approximately 17 years. For the nine months ended September 30, 2024, net cash provided by operating activities was $1.0 million. The Company is currently negotiating various methods to collect the remaining unpaid rent and notes receivable.
Subsequent to quarter end, we obtained a $0.5 million line of credit and expect to be current on all debt payments and back in compliance with all loan documents during Q4 2024.
About Regional Health Properties
Regional Health Properties, Inc., a Georgia corporation, is a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term care. For more information, visit www.regionalhealthproperties.com.
Important Cautions Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "expects," "intends," "believes," "anticipates," "plans," "likely," "will," "seeks," "estimates" and variations of such words and similar expressions are intended to identify such forward-looking statements. This press release includes forward-looking statements that reflect the Company's current views with respect to, among other things, its business, operations, financial performance, revenue, capital structure, the impact of the exchange offer and economic developments.
Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those projected or contemplated by our forward-looking statements due to various factors, including, among others: our dependence on the operating success of our operators; the amount of, and our ability to service, our indebtedness; covenants in our debt agreements that may restrict our ability to make investments, incur additional indebtedness and refinance indebtedness on favorable terms; the availability and cost of capital; our ability to raise capital through equity and debt financings or through the sale of assets; increases in market interest rates and inflation; our ability to meet the continued listing requirements of the NYSE American LLC and to maintain the listing of our securities thereon; the effect of increasing healthcare regulation and enforcement on our operators and the dependence of our operators on reimbursement from governmental and other third-party payors; the relatively illiquid nature of real estate investments; the impact of litigation and rising insurance costs on the business of our operators; the impact on us of litigation relating to our prior operation of our healthcare properties; the effect of our operators declaring bankruptcy, becoming insolvent or failing to pay rent as due; the ability of any of our operators in bankruptcy to reject unexpired lease obligations and to impede our ability to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor's obligations; our ability to find replacement operators and the impact of unforeseen costs in acquiring new properties; epidemics or pandemics, including the COVID-19 pandemic, and the related impact on our tenants, operators and healthcare facilities; and other factors discussed from time to time in our news releases, public statements and documents filed by us with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release, and we expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by applicable law.
| Company Contact |
| Brent Morrison, CFA |
| Chief Executive Officer & President |
| Regional Health Properties, Inc. |
| Tel (678) 368-4402 |
| [email protected] |
| REGIONAL HEALTH PROPERTIES, INC. | ||||||||||||||||
| STATEMENT OF OPERATIONS | ||||||||||||||||
| (in thousands, except for per share and shares outstanding information) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues: | ||||||||||||||||
| Patient care revenues | $ | 2,585 | $ | 2,136 | $ | 7,418 | $ | 6,577 | ||||||||
| Rental revenues | 1,640 | 1,739 | 5,257 | 5,170 | ||||||||||||
| Management fees | — | 263 | — | 788 | ||||||||||||
| Other revenues | — | — | — | 107 | ||||||||||||
| Total revenues | 4,225 | 4,138 | 12,675 | 12,642 | ||||||||||||
| Expenses: | ||||||||||||||||
| Patient care expense | 2,179 | 2,153 | 6,462 | 6,444 | ||||||||||||
| Facility rent expense | 149 | 149 | 446 | 446 | ||||||||||||
| Cost of management fees | — | 156 | — | 442 | ||||||||||||
| Depreciation and amortization | 474 | 526 | 1,499 | 1,738 | ||||||||||||
| General and administrative expense | 1,224 | 1,329 | 4,085 | 4,284 | ||||||||||||
| Credit loss expense | 499 | 229 | 563 | 269 | ||||||||||||
| Total expenses | 4,525 | 4,542 | 13,055 | 13,623 | ||||||||||||
| Income (loss) from operations | (300 | ) | (404 | ) | (380 | ) | (981 | ) | ||||||||
| Other expense: | ||||||||||||||||
| Interest expense, net | 677 | 708 | 2,021 | 2,066 | ||||||||||||
| Other expense, net | 5 | (139 | ) | 249 | 603 | |||||||||||
| Total other expense, net | 682 | 569 | 2,270 | 2,669 | ||||||||||||
| Net loss | $ | (982 | ) | $ | (973 | ) | $ | (2,650 | ) | $ | (3,650 | ) | ||||
| Preferred stock dividends-gain on extinguishment | — | 43,395 | — | 43,395 | ||||||||||||
| Net income (loss) attributable to Regional Health Properties, Inc. common stockholders | $ | (982 | ) | $ | 42,422 | $ | (2,650 | ) | $ | 39,745 | ||||||
| Net income (loss) per share of common stock attributable to Regional Health Properties, Inc. | ||||||||||||||||
| Basic: | $ | (0.52 | ) | $ | (0.52 | ) | $ | (1.42 | ) | $ | 21.18 | |||||
| Diluted: | $ | (0.52 | ) | $ | (0.52 | ) | $ | (1.42 | ) | $ | 21.18 | |||||
| Weighted average shares of common stock outstanding: | ||||||||||||||||
| Basic: | 1,904,028 | 1,883,028 | 1,863,314 | 1,876,138 | ||||||||||||
| Diluted: | 1,904,028 | 1,883,028 | 1,863,314 | 1,876,138 | ||||||||||||
| REGIONAL HEALTH PROPERTIES, INC. | ||||||||
| BALANCE SHEET | ||||||||
| (in thousands) | ||||||||
| September 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Property and equipment, net | $ | 39,429 | $ | 40,398 | ||||
| Asset held for sale, net | 4,851 | 4,939 | ||||||
| Cash | 497 | 953 | ||||||
| Restricted cash | 3,005 | 3,231 | ||||||
| Accounts receivable, net of allowances of $2,082 and $2,040 | 2,034 | 1,403 | ||||||
| Prepaid expenses and other | 663 | 613 | ||||||
| Notes receivable | 594 | 1,044 | ||||||
| Intangible assets - bed licenses | 2,471 | 2,471 | ||||||
| Intangible assets - lease rights, net | 74 | 87 | ||||||
| Right-of-use operating lease assets | 2,263 | 2,556 | ||||||
| Goodwill | 1,585 | 1,585 | ||||||
| Straight-line rent receivable | 2,594 | 2,901 | ||||||
| Total assets | $ | 60,060 | $ | 62,181 | ||||
| LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||
| Senior debt, net | $ | 39,509 | $ | 40,401 | ||||
| Debt related to asset held for sale, net | 3,354 | 3,454 | ||||||
| Bonds, net | 5,849 | 5,991 | ||||||
| Other debt, net | 945 | 889 | ||||||
| Accounts payable | 3,707 | 2,493 | ||||||
| Accrued expenses | 4,703 | 4,060 | ||||||
| Operating lease obligation | 2,592 | 2,917 | ||||||
| Other liabilities | 1,781 | 1,791 | ||||||
| Total liabilities | 62,440 | 61,996 | ||||||
| Stockholders' equity (deficit): | ||||||||
| Common stock and additional paid-in capital | 63,144 | 63,059 | ||||||
| Preferred stock, Series A | 426 | 426 | ||||||
| Preferred stock, Series B | 18,602 | 18,602 | ||||||
| Accumulated deficit | (84,552 | ) | (81,902 | ) | ||||
| Total stockholders' (deficit) equity | (2,380 | ) | 185 | |||||
| Total liabilities and stockholders' equity (deficit) | $ | 60,060 | $ | 62,181 | ||||
| REGIONAL HEALTH PROPERTIES, INC. | ||||||||||||||||||||||||||||
| DEBT SUMMARY | ||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||
| September 30, 2024 | ||||||||||||||||||||||||||||
| Maturity | Interest Rate | Principal | % of Principal | Deferred financing costs | Unamortized discount on bonds | Net Carrying Value | ||||||||||||||||||||||
| Total Fixed Rate Debt | 1/16/2042 | 4.29 | % | 43,092 | 85.0 | % | (715 | ) | (110 | ) | 42,267 | |||||||||||||||||
| Total Floating Rate Debt | 10/3/2036 | 9.67 | % | 7,578 | 15.0 | % | (188 | ) | - | 7,390 | ||||||||||||||||||
| Total | $ | 50,670 | 100.0 | % | $ | (903 | ) | $ | (110 | ) | $ | 49,657 | ||||||||||||||||
Calculation of Non-GAAP Financial Measures
This press release presents information about EBITDA and adjusted EBITDA, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain items that may not be indicative of its recurring core business operating results. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to the Company's historical performance. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making.
These non-GAAP financial measures are presented for supplemental informational purposes only. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, GAAP financial measures. These non-GAAP financial measures may differ from the non-GAAP financial measures used by other companies. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure is provided below for each of the fiscal periods indicated.
A reconciliation of EBITDA and adjusted EBITDA is as follows:
| REGIONAL HEALTH PROPERTIES, INC. | ||||||||||||||||
| RECONCILIATION OF NET LOSS TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net loss | $ | (982 | ) | $ | (973 | ) | $ | (2,650 | ) | $ | (3,650 | ) | ||||
| Depreciation and amortization | 474 | 526 | 1,499 | 1,738 | ||||||||||||
| Interest expense, net | 677 | 708 | 2,021 | 2,066 | ||||||||||||
| Amortization of employee stock compensation | 19 | 85 | 85 | 321 | ||||||||||||
| EBITDA | 188 | 346 | 955 | 475 | ||||||||||||
| Credit loss expense | 499 | 229 | 563 | 269 | ||||||||||||
| Other expense (income), net | 5 | (139 | ) | 249 | 603 | |||||||||||
| Gain (loss) from write-off of liabilities and other credit balances from discontinued operations | 3 | (200 | ) | 180 | (231 | ) | ||||||||||
| Expenses related to preferred stock recapitalization | - | 95 | - | 768 | ||||||||||||
| Other one-time costs | 179 | 6 | 319 | 270 | ||||||||||||
| Project costs | 20 | 70 | 85 | 237 | ||||||||||||
| Tail insurance on legacy facilities | 55 | 127 | 262 | 382 | ||||||||||||
| One-time income adjustment - quality incentive program (1) | 49 | 49 | (49 | ) | (354 | ) | ||||||||||
| Adjusted EBITDA from operations | $ | 998 | $ | 583 | $ | 2,564 | $ | 2,419 | ||||||||
| (1) Amounts represent adjustments for annual payments received and related amortization of payments for each respective period. | ||||||||||||||||
1 Adjusted EBITDA is a non-GAAP financial measure. See "Calculation of Non-GAAP Financial Measures" for important additional information.
2 EBITDA is a non-GAAP financial measure. See "Calculation of Non-GAAP Financial Measures" for important additional information.
