Regional Health Properties, Inc. (NYSE American: RHE)
(NYSE American: RHEpA), a self-managed healthcare real estate
investment company that invests primarily in real estate purposed
for senior living and long-term care, reported results for the
quarter ended September 30, 2020.
Brent Morrison, Regional Health Properties’ Chief Executive
Officer, stated: “Our operators continue to perform admirably,
protecting vulnerable elderly residents while facing unprecedented
challenges related to the COVID-19 pandemic which have impacted
both occupancy levels and facility cost structures. The Federal
Government has provided nursing home operators with much needed
stimulus to weather the operating headwinds brought on by the
pandemic, and we are hopeful this critically needed support will
continue. We appreciate the hard work of our operators and their
frontline staff.”
See the Company’s recently filed Form 10-Q for additional
details on the current and potential impact of COVID-19 on the
business.
Brent Morrison commented: “Accomplished finance executive Ben
Waites has joined the company, effective September 8, 2020, as our
Chief Financial Officer and Vice President. In this role, Waites
will help lead our efforts to drive value through strategic focus,
team development, and operational and financial excellence. Ben’s
experience, leadership and financial expertise, particularly within
the skilled nursing industry, are a great addition to the company
as we navigate through these extraordinary times. He has a
well-documented history of working with large organizations with
multiple locations, bringing financial teams together to maximize
resources and drive the business forward.”
Management periodically monitors a number of facility
performance metrics, including rent coverages both before and after
management fees. For the 12 months ended September 30, 2020, the
Company’s portfolio rent coverage before management fees was 1.58x
and rent coverage after management fees was 1.24x. Occupancy and
skilled mix for the Company’s portfolio were 73.2% and 29.3%
respectively, for the 12 months ended September 30, 2020. These
data exclude the impact of three managed facilities located in
Ohio.
Summary of Financial Results for the Three Months Ended
September 30, 2020
Total revenues in the third quarter of 2020 decreased 1.3% to
$4.77 million, from $4.83 million in the third quarter of 2019. The
decrease is a result of four facilities sold during the third
quarter of 2019, offset by the receipt of $0.2 million of
previously deferred interest. The Company generally recognizes all
rental revenues on a straight-line rent accrual basis.
General and administrative costs increased 1.8%, to $0.74
million for the three months ended September 30, 2020, compared to
$0.73 million for the same period in 2019. For both the current and
prior year periods, general and administrative costs include
minimal stock-based compensation expense.
Doubtful accounts expense (recovery) increased to $0.8 million
for the three months ended September 30, 2020, compared to $0.03
million in the same period in 2019. In the current period the
Company booked a provision for $0.9 million of outstanding rent
arrears from one operator offset by cash collections of previously
reserved amounts.
Interest expense decreased by $0.5 million, or 40.2%, to $0.7
million for the third quarter of 2020 compared to $1.2 million for
the same period in 2019. The decrease is mainly due to the payoff
of the Pinecone and Congressional Bank loans in the third quarter
of 2019.
Net loss attributable to Regional Health Properties, Inc.’s
common stockholders in the third quarter of 2020 was $2.3 million,
or $1.38 per basic and diluted share, compared to net income of
$3.6 million, or $2.11 per basic and diluted share in the prior
year period.
Cash at September 30, 2020, totaled $4.6 million compared to
$4.4 million at December 31, 2019. Restricted cash at September 30,
2020, totaled $3.1 million compared to $3.7 million at December 31,
2019. Total debt outstanding at September 30, 2020 amounted to
$54.8 million compared to $55.4 million at December 31, 2019 (net
of $1.3 million and $1.4 million of deferred financing costs at
September 30, 2020 and December 31, 2019, respectively).
About Regional Health Properties
Regional Health Properties, Inc. (NYSE American: RHE) (NYSE
American: RHEpA) is a self-managed healthcare real estate
investment company that invests primarily in real estate purposed
for senior living and long-term healthcare through facility lease
and sub-lease transactions.
Regional currently owns, leases or manages for third parties 24
facilities (12 of which are owned by Regional, nine of which are
leased by Regional and three of which are managed by Regional for
third parties).
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. Statements in this press
release regarding future events and developments and our future
performance, as well as management’s expectations, beliefs, plans,
estimates or projections relating to the future, are
forward-looking statements.
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 significant 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; 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; the impact of COVID-19 on our business
and the business of our operators, including without limitation,
the extent and duration of the COVID-19 pandemic, increased costs
experienced by our operators in connection therewith, and the
extent to which government support may be available to our
operators to offset such costs and the conditions related thereto;
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. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in
000’s)
September 30,
December 31,
ASSETS
2020
2019
(Unaudited)
Property and equipment, net
$
53,097
$
54,672
Cash
4,646
4,383
Restricted cash
3,100
3,655
Accounts receivable, net of allowance of
$1,176 and $615
1,795
963
Prepaid expenses and other
405
249
Notes receivable
464
840
Intangible assets - bed licenses
2,471
2,471
Intangible assets - lease rights, net
164
462
Right-of-use operating lease assets
34,652
37,287
Goodwill
1,585
1,585
Lease deposits and other deposits
517
517
Straight-line rent receivable
7,436
6,674
Total assets
$
110,332
$
113,758
LIABILITIES AND EQUITY
Senior debt, net
$
47,550
$
48,415
Bonds, net
6,330
6,409
Other debt, net
919
539
Accounts payable
2,939
3,699
Accrued expenses
2,288
2,613
Operating lease obligation
36,771
39,262
Other liabilities
1,430
1,078
Total liabilities
98,227
102,015
Stockholders' equity:
Common stock and additional paid-in
capital, no par value; 55,000
shares authorized; 1,688 shares issued and
outstanding at
September 30, 2020 and December 31,
2019
62,029
61,992
Preferred stock, no par value; 5,000
shares authorized; 2,812
shares issued and outstanding, redemption
amount $70,288
at September 30, 2020 and December 31,
2019
62,423
62,423
Accumulated deficit
(112,347
)
(112,672
)
Total stockholders' equity
12,105
11,743
Total liabilities and stockholders'
equity
$
110,332
$
113,758
REGIONAL HEALTH PROPERTIES,
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in 000’s, except per share data) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Revenues:
Rental revenues
$
4,308
$
4,590
$
12,898
$
14,746
Management fees
244
239
732
716
Other revenues
215
1
224
93
Total revenues
4,767
4,830
13,854
15,555
Expenses:
Facility rent expense
1,640
1,640
4,919
5,006
Cost of management fees
161
148
486
467
Depreciation and amortization
694
797
2,239
2,661
General and administrative expenses
743
730
2,334
2,551
Doubtful accounts expense (recovery)
790
32
653
(214
)
Other operating expenses
109
191
630
821
Total expenses
4,137
3,538
11,261
11,292
Income from operations
630
1,292
2,593
4,263
Other expense (income):
Interest expense, net
692
1,157
2,091
4,535
Loss on extinguishment of debt
-
924
-
2,478
Gain on disposal of assets
-
(6,451
)
-
(7,141
)
Other expense (income), net
9
(48
)
144
6
Total other expense (income), net
701
(4,418
)
2,235
(122
)
(Loss) income from continuing operations
before income taxes
(71
)
5,710
358
4,385
Income tax expense
-
-
-
44
(Loss) income from continuing
operations
(71
)
5,710
358
4,341
(Loss) income from discontinued
operations, net of tax
(2
)
101
(33
)
411
Net (Loss) income
(73
)
5,811
325
4,752
Preferred stock dividends - undeclared
(2,250
)
(2,250
)
(6,748
)
(6,748
)
Net (loss) income attributable to Regional
Health Properties, Inc.
Common Stockholders
$
(2,323
)
$
3,561
$
(6,423
)
$
(1,996
)
Net (loss) income per share of common
stock attributable to
Regional Health Properties, Inc.
Basic and diluted:
Continuing operations
$
(1.38
)
$
2.05
$
(3.79
)
$
(1.42
)
Discontinued operations
$
(0.00
)
$
0.06
$
(0.02
)
$
0.24
$
(1.38
)
$
2.11
$
(3.81
)
$
(1.18
)
Weighted average shares of common stock
outstanding:
Basic and diluted
1,688
1,688
1,688
1,688
REGIONAL HEALTH PROPERTIES,
INC. AND SUBSIDIARIES SUPPLEMENTAL OPERATING METRICS (1)
Twelve Months Ended
Twelve Months Ended
Twelve Months Ended
Twelve Months Ended
Twelve Months Ended
Portfolio Operating Metrics
(1)
September 30, 2019
December 31, 2019
March 31, 2020
June 30, 2020
September 30, 2020
Occupancy %
76.4
%
76.5
%
76.3
%
75.1
%
73.2
%
Quality Mix (2)
28.0
%
27.9
%
27.7
%
28.0
%
29.3
%
Rent Coverage Before Management Fees
(3)
1.46
1.57
1.59
1.55
1.58
Rent Coverage After Management Fees
(3)
1.08
1.18
1.21
1.20
1.24
(1) Excludes three managed facilities in
Ohio.
(2) Quality Mix refers to all payor types
less Medicaid.
(3) EBITDAR coverage and EBITDARM coverage
include information provided by our tenants. The Company has not
independently verified this information, but have no reason to
believe such information to be inaccurate in any material
respect.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201116005182/en/
Company Contacts Brent Morrison Chief Executive Officer
Regional Health Properties, Inc. Tel (678) 368-4402
brent.morrison@regionalhealthproperties.com
Investor Relations Brett Maas Managing Partner Hayden IR
Tel (646) 536-7331 brett@haydenir.com
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