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Regional Health Properties Reports Third Quarter 2024 Financial Results

ATLANTA, GA, Nov. 26, 2024 (GLOBE NEWSWIRE) — Regional Health Properties, Inc. (the “Company”, “Regional”, “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, 2024.

THIRD QUARTER 2024 FINANCIAL

THIRD QUARTER 2024 BUSINESS HIGHLIGHTS

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.

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.


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