Collected 93% of Contractual Rent
Strong Operator Rent Coverage
ATLANTA, GA, Nov. 17, 2023 (GLOBE NEWSWIRE) — Regional Health Properties, Inc. (the “Company,” “Regional Health,” “we”, “us” or “our”) (NYSE American: RHE) (NYSE American: RHE-PA), 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, 2023.
THIRD QUARTER 2023 FINANCIAL HIGHLIGHTS
Reduced loss from operations from $2.0 million in the prior year quarter to $0.4 million in the current quarterReduced net loss per share of common stock to $0.52 in the current third quarter as compared to $1.48 for the third quarter of 2022Generated $0.7 million of Adjusted EBITDA1 in the quarter, compared to $0.1 million in the third quarter of 2022Collected 93% of contractual rent as of September 30, 2023
THIRD QUARTER BUSINESS HIGHLIGHTS
On August 7, 2023, Regional Health announced the receipt of the acceptance letter from the NYSE American LLC (the “Exchange”) on August 1, 2023, that the Company’s plan to regain compliance with the Exchange’s continued listing standards had been accepted.On August 3, 2023, Regional Health announced that its 12.5% Series B Cumulative Redeemable Preferred Shares (the “Series B Preferred Stock”) commenced trading on the OTCQB Venture Market, operated by the OTC Markets Group, Inc., under the symbol “RHEPB”.
Brent Morrison, Regional Health’s President and Chief Executive Officer, commented, “Our operating partners continue to make progress mitigating lower than average occupancy and tight labor markets. As a result, our EBITDAR 3 coverage remains strong at 1.5x. We remain hopeful this momentum will continue into the fourth quarter as well as 2024”
Mr. Morrison continued, “With the transformative transaction behind us, we continue to look for opportunities to further simplify our capital structure and further reduce corporate expenses. As our stock price continues to trade well below net asset value, management remains committed to improve transparency for investors.”
FINANCIAL RESULTS FOR QUARTER ENDED SEPTEMBER 30, 2023
For the third quarter 2023, the Company reported total revenue of $4.1 million, a net loss of $1.0 million, EBITDA2 of $0.3 million and Adjusted EBITDA of $0.7 million.
BALANCE SHEET AND LIQUIDITY
As of September 30, 2023, the Company had $51.4 million of outstanding indebtedness with a weighted-average annual interest rate of 5.1% and a weighted-average maturity of approximately 19 years.
For the nine months ended September 30, 2023, net cash provided by operating activities was $3.4 million as compared to net cash used in operating activities of $2.2 million for the nine months ended September 30, 2022.
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.
REGIONAL HEALTH PROPERTIES, INC.
STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenues: Patient care revenues $2,136 $7,769 $6,577 $14,650 Rental revenues 1,739 3,000 5,170 10,326 Management fees 263 255 788 774 Other revenues — 6 107 20 Total revenues 4,138 11,030 12,642 25,770 Expenses: Patient care expense 2,313 7,476 7,010 14,040 Facility rent expense 149 1,451 446 4,725 Cost of management fees 156 140 442 459 Depreciation and amortization 526 600 1,738 1,819 General and administrative expense 972 1,378 3,190 3,432 Doubtful accounts expense 229 1,515 269 3,742 Other operating expenses 197 441 511 1,409 Total expenses 4,542 13,001 13,606 29,626 Income/(loss) from operations (404) (1,971) (964) (3,856)Other expense: Interest expense, net 708 564 2,066 1,855 Other expense, net (139) (2,164) 620 (1,088)Total other (income) expense, net 569 (1,600) 2,686 767 Net loss $(973) $(371) $(3,650) $(4,623)Preferred stock dividends – undeclared — (2,249) — (6,748)Preferred stock dividends – gain on extinguishment — — 43,395 — Net profit (loss) attributable to Regional Health Properties, Inc. common stockholders $(973) $(2,620) $39,745 $(11,371)Net profit (loss) per share of common stock attributable to Regional Health Properties, Inc. Basic: $(0.52) $(1.48) $21.18 $(6.40)Diluted: $(0.52) $(1.48) $21.18 $(6.40)Weighted average shares of common stock outstanding: Basic: 1,883,028 1,768,720 1,876,138 1,775,637 Diluted: 1,883,028 1,768,720 1,876,138 1,775,637
REGIONAL HEALTH PROPERTIES, INC.
(Amounts in thousands)
September 30, 2023 December 31, 2022 ASSETS Property and equipment, net $45,806 $46,611 Cash 1,427 843 Restricted cash 3,208 3,066 Accounts receivable, net of allowances of $1,579 and $1,298 2,035 6,289 Prepaid expenses and other 903 746 Notes receivable 1,060 1,099 Intangible assets – bed licenses 2,471 2,471 Intangible assets – lease rights, net 92 110 Right-of-use operating lease assets 2,588 2,848 Goodwill 1,585 1,585 Lease deposits and other deposits 4 — Straight-line rent receivable 2,830 2,912 Total assets $64,009 $68,580 LIABILITIES AND EQUITY Senior debt, net $44,208 $45,163 Bonds, net 5,989 6,120 Other debt, net 1,181 895 Accounts payable 2,783 3,293 Accrued expenses 4,806 5,036 Operating lease obligation 2,948 3,226 Other liabilities 1,707 1,131 Total liabilities 63,622 64,864 Stockholders’ equity: Common stock and additional paid-in capital 63,023 62,702 Preferred stock, Series A 426 62,423 Preferred stock, Series B 18,602 — Accumulated deficit (81,664) (121,409)Total stockholders’ equity 387 3,716 Total liabilities and stockholders’ equity $64,009 $68,580
REGIONAL HEALTH PROPERTIES, INC.
(Amounts in thousands)
September 30, 2023 Maturity Interest Rate Principal % of Principal Deferred financing costs Unamortized discount on bonds Net Carrying Value Total Fixed Rate Debt 2042 4.28% 44,569 85.0% (767) (115) 43,687 Total Floating Rate Debt 2036 9.92% 7,895 15.0% (204) – 7,691 Total $52,464 100.0% $(971) $(115) $51,378
Calculation of Non-GAAP Financial Measures
This press release presents information about EBITDA adjusted EBITDA and EBITDAR, 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:
Ended September 30, Nine Months
Ended September 30, 2023 2022 2023 2022 Net income (loss) (973) (371) (3,650) (4,623)Depreciation and amortization 526 600 1,738 1,819 Interest expense, net 708 564 2,066 1,855 Amortization of employee stock compensation 86 58 321 173 EBITDA 347 851 475 (776)Bad debt – straight line write off 229 1,383 – 3,760 Bad debt – Increase in provision – 150 278 150 Discontinuted operations (200) (2,321) (231) (2,321)Gain on Foster leases modification – (140) – (140)Expenses related to preferred stock recapitalization 95 158 768 1,232 Other one-time costs 6 63 270 92 Project costs 70 – 237 – Tail insurance on legacy facilities 127 – 512 – One-time income adjustment – quality incentive program – – – – Adjusted EBITDA from operations $674 $144 $2,309 $1,997
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.
3 EBITDAR is a non-GAAP financial measure.