RHE - Regional Health Properties Reports Third Quarter 2020 Financial Results
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 |
|
|
| 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 |
|
|
| Three Months Ended |
|
|
| Nine Months Ended |
|
|
| 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 |
|
|
| Twelve Months |
|
|
| Twelve Months |
|
|
| Twelve Months |
|
|
| Twelve Months |
|
|
| Twelve Months |
| Portfolio Operating Metrics (1) |
| September 30, |
|
|
| December 31, |
|
|
| March 31, |
|
|
| June 30, |
|
|
| September 30, |
| 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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| (1) Excludes three managed facilities in Ohio. |
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|
|
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|
|
|
|
|
|
| (2) Quality Mix refers to all payor types less Medicaid. |
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| (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. |
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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