Regional Health Properties Reports Fourth Quarter 2021 and Full-Year Financial Results
Regional Health Properties, Inc. (NYSE American: RHE, RHE-PA) reported financial results for the year ending December 31, 2021. The company collected 94.1% of fourth-quarter cash rent and experienced total patient care revenues of $2.0 million for Q4, totaling $9.5 million for the year. Occupancy rates stood at 65.1% amid pandemic challenges. The exchange offer for Series A Preferred Shares aims to streamline capital structure. Net loss attributable to common stockholders was $661,000 for Q4, less than $1.0 million a year prior, with cash increasing to $6.8 million.
- Collected 94.1% of Q4 2021 rent.
- Increased cash position to $6.8 million compared to $4.2 million in 2020.
- Fourth-quarter patient care revenues up to $2.0 million.
- Net loss of $1.2 million for 2021, up from $0.7 million in 2020.
- Total rental revenues decreased by 1.4% for the year.
- Occupancy rates were 65.1%, impacted by the Omicron variant and staffing shortages.
Business Update
- Commenced Exchange Offer for Series A Preferred Shares to streamline capital structure
-
Collected
94.1% of fourth-quarter 2021 contractual cash rent
Management periodically monitors several facility performance metrics, including rent coverages both before and after management fees. In the fourth quarter of 2021, the Company’s portfolio rent coverage before management fees was 1.69 x and rent coverage after management fees was 1.20 x. Occupancy and skilled mix for the Company’s portfolio was
Rent Collections and Operational Changes
As of the quarter ended
The operators of the Company’s facilities provide a range of healthcare services to their patients and residents, including skilled nursing and assisted living services, social services, various therapy services, and other rehabilitative and healthcare services for both long-term and short-stay patients and residents. Effective
Accordingly, as of
Summary of Financial Results for the Three and 12 Months Ended
Total Patient care revenues for our new Healthcare Services segment in the fourth quarter of 2021 was
Patient care expense of
Total rental revenues on our Real Estate segment, in the fourth quarter of 2021 increased
Depreciation and amortization slightly decreased in the fourth quarter of 2021 compared to the fourth quarter of 2020. Depreciation and amortization decreased by approximately
General and administrative costs decreased
Provision for doubtful accounts expense decreased by
Interest expense decreased slightly by
Gain on extinguishment of debt of
In early 2020, the Company began to investigate alternatives to retire or refinance our outstanding Series A Preferred Stock through privately negotiated transactions, open market repurchases, redemptions, exchange offers, tender offers, or otherwise. Costs associated with these efforts have been expensed as incurred in Other expense, net. Other expense, net which also includes other miscellaneous items, was approximately
Gain from discontinued operations, net of tax, for the fourth quarter of 2021, was
Net loss attributable to
Cash at
About
The Company currently owns, leases, manages for third parties, and operates, 24 facilities. The Company: (i) leased 10 skilled nursing facilities (“SNF’s”) (which the Company owns); (ii) subleased eight SNFs (which the Company leases) to third-party tenants; (iii) operated one SNF, as of
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 the terms and timing of the Exchange Offer 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
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the
Additional Information about the Exchange Offer and Where to Find It
In connection with the proposed transaction, RHE filed with the
Participants in the Solicitation
RHE and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of RHE, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in RHE’s proxy statement for its 2021 Annual Meeting of Shareholders, which was filed with the
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||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(Amounts in 000’s) |
||||||||
2021 |
2020 |
|||||||
ASSETS | ||||||||
Property and equipment, net | $ |
50,127 |
|
$ |
52,533 |
|
||
Cash |
|
6,792 |
|
|
4,186 |
|
||
Restricted cash |
|
3,056 |
|
|
3,306 |
|
||
Accounts receivable, net of allowance of |
|
2,145 |
|
|
2,100 |
|
||
Prepaid expenses and other |
|
460 |
|
|
328 |
|
||
Notes receivable |
|
362 |
|
|
444 |
|
||
Intangible assets - bed licenses |
|
2,471 |
|
|
2,471 |
|
||
Intangible assets - lease rights, net |
|
134 |
|
|
158 |
|
||
Right-of-use operating lease assets |
|
29,909 |
|
|
33,740 |
|
||
|
1,585 |
|
|
1,585 |
|
|||
Lease deposits and other deposits |
|
398 |
|
|
514 |
|
||
Straight-line rent receivable |
|
8,257 |
|
|
6,660 |
|
||
Total assets | $ |
105,696 |
|
$ |
108,025 |
|
||
LIABILITIES AND EQUITY | ||||||||
Senior debt, net | $ |
46,043 |
|
$ |
47,275 |
|
||
Bonds, net |
|
6,239 |
|
|
6,342 |
|
||
Other debt, net |
|
594 |
|
|
822 |
|
||
Accounts payable |
|
3,749 |
|
|
3,008 |
|
||
Accrued expenses |
|
4,987 |
|
|
2,225 |
|
||
Operating lease obligation |
|
32,059 |
|
|
35,884 |
|
||
Other liabilities |
|
1,629 |
|
|
1,365 |
|
||
Total liabilities |
|
95,300 |
|
|
96,921 |
|
||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock and additional paid-in capital, no par value; 55,000 shares authorized; 1,775 and 1,688 shares issued and outstanding at |
|
62,515 |
|
|
62,041 |
|
||
Preferred stock, no par value; 5,000 shares authorized; 2,812 shares issued and outstanding, redemption amount |
|
62,423 |
|
|
62,423 |
|
||
Accumulated deficit |
|
(114,542 |
) |
|
(113,360 |
) |
||
Total stockholders’ equity |
|
10,396 |
|
|
11,104 |
|
||
Total liabilities and stockholders’ equity | $ |
105,696 |
|
$ |
108,025 |
|
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(Amounts in 000’s, except per share data) |
||||||||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||
Revenues: | ||||||||||||||||
Patient care revenues | $ |
2,041 |
|
$ |
— |
|
$ |
9,485 |
|
$ |
— |
|
||||
Rental revenues |
|
4,113 |
|
|
3,427 |
|
|
16,093 |
|
|
16,325 |
|
||||
Management fees |
|
278 |
|
|
269 |
|
|
1,021 |
|
|
1,001 |
|
||||
Other revenues |
|
7 |
|
|
29 |
|
|
91 |
|
|
253 |
|
||||
Total revenues |
|
6,439 |
|
|
3,725 |
|
|
26,690 |
|
|
17,579 |
|
||||
Expenses: | ||||||||||||||||
Patient care expense |
|
2,332 |
|
|
— |
|
|
9,243 |
|
|
— |
|
||||
Facility rent expense |
|
1,545 |
|
|
1,639 |
|
|
6,464 |
|
|
6,558 |
|
||||
Cost of management fees |
|
204 |
|
|
189 |
|
|
672 |
|
|
675 |
|
||||
Depreciation and amortization |
|
638 |
|
|
655 |
|
|
2,591 |
|
|
2,894 |
|
||||
General and administrative expense |
|
951 |
|
|
1,039 |
|
|
3,904 |
|
|
3,373 |
|
||||
Provision for doubtful accounts |
|
179 |
|
|
272 |
|
|
256 |
|
|
925 |
|
||||
Other operating expenses |
|
303 |
|
|
230 |
|
|
982 |
|
|
860 |
|
||||
Total expenses |
|
6,152 |
|
|
4,024 |
|
|
24,112 |
|
|
15,285 |
|
||||
Income from operations |
|
287 |
|
|
(299 |
) |
|
2,578 |
|
|
2,294 |
|
||||
Other expense (income) : | ||||||||||||||||
Interest expense, net |
|
647 |
|
|
686 |
|
|
2,669 |
|
|
2,777 |
|
||||
Gain on extinguishment of debt |
|
— |
|
|
— |
|
|
(146 |
) |
|
— |
|
||||
Other expense |
|
353 |
|
|
(23 |
) |
|
1,192 |
|
|
121 |
|
||||
Total other expense, net |
|
1,000 |
|
|
663 |
|
|
3,715 |
|
|
2,898 |
|
||||
Loss from continuing operations before income taxes |
|
(713 |
) |
|
(962 |
) |
|
(1,137 |
) |
|
(604 |
) |
||||
Loss from continuing operations |
|
(713 |
) |
|
(962 |
) |
|
(1,137 |
) |
|
(604 |
) |
||||
Gain (loss) from discontinued operations, net of tax |
|
52 |
|
|
(51 |
) |
|
(45 |
) |
|
(84 |
) |
||||
Net Loss |
|
(661 |
) |
|
(1,013 |
) |
|
(1,182 |
) |
|
(688 |
) |
||||
Net loss attributable to |
|
(661 |
) |
|
(1,013 |
) |
|
(1,182 |
) |
|
(688 |
) |
||||
Preferred stock dividends - undeclared |
|
(2,249 |
) |
|
(2,249 |
) |
|
(8,997 |
) |
|
(8,997 |
) |
||||
Net Loss attributable to |
$ |
(2,910 |
) |
$ |
(3,262 |
) |
$ |
(10,179 |
) |
$ |
(9,685 |
) |
||||
Net loss per share of common stock attributable to |
||||||||||||||||
Basic and diluted: | ||||||||||||||||
Continuing operations | $ |
(1.69 |
) |
$ |
(1.90 |
) |
$ |
(5.84 |
) |
$ |
(5.69 |
) |
||||
Discontinued operations |
|
0.03 |
|
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.05 |
) |
||||
$ |
(1.66 |
) |
$ |
(1.93 |
) |
$ |
(5.87 |
) |
$ |
(5.74 |
) |
|||||
Weighted average shares of common stock outstanding: | ||||||||||||||||
Basic and diluted |
|
1,775 |
|
|
1,688 |
|
|
1,734 |
|
|
1,688 |
|
|
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SUPPLEMENTAL OPERATING METRICS (1) |
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Twelve Months Ended | |||||
Portfolio Operating Metrics (1) | |||||
Occupancy % |
|
|
|
|
|
Quality Mix (2) |
|
|
|
|
|
Rent Coverage Before Management Fees (3) | 1.77 |
1.65 |
1.71 |
1.71 |
1.69 |
Rent Coverage After Management Fees (3) | 1.28 |
1.17 |
1.22 |
1.23 |
1.20 |
(1) Excludes three managed facilities in |
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(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/20220228005782/en/
Company Contacts
Chief Financial Officer and Vice President
Tel (678) 368-4393
ben.waites@regionalhealthproperties.com
Investor Relations
Managing Partner
Hayden IR
Tel (646) 536-7331
brett@haydenir.com
Source:
FAQ
What were the financial results of Regional Health Properties for Q4 2021?
What is the net loss for Regional Health Properties for the year ended December 31, 2021?
How many facilities are operated by Regional Health Properties?
What does the exchange offer for Series A Preferred Shares mean for shareholders?