RHE Regional Health Properties Inc

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

• 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

Brent.morrison@regionalhealthproperties.com

REGIONAL HEALTH PROPERTIES, INC.
STATEMENT OF OPERATIONS
(in thousands, except for per share and shares outstanding information)
		Three Months EndedSeptember 30,								Nine Months EndedSeptember 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 EndedSeptember 30,								Nine Months EndedSeptember 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.