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RH

REGIONAL HEALTH PROPERTIES, INC (RHE)·Q3 2021 Earnings Summary

Executive Summary

  • Q3 2021 total revenues were $6.702M vs $6.468M in Q2 and $4.767M in Q3 2020; operating income was $0.628M and net loss was $0.039M, reflecting sequential improvement in operating profit and a narrowed net loss .
  • Rent collections remained strong at 97.4%, with a healthy cash balance of $6.233M; management highlighted ongoing efforts to reconfigure the capital structure and confidence in solutions for both classes of equity .
  • Refinancing progress: Meadowood loan extended to 2026 and Coosa Valley refinancing reduced cash interest by 155 bps, supporting lower interest burden going forward .
  • Portfolio occupancy continued to trend down to 66.7% with skilled mix at 28.8% (12-month basis); rent coverage after management fees improved slightly to 1.23x .
  • Wall Street consensus estimates via S&P Global were unavailable for RHE; comparisons vs estimates and beat/miss assessments could not be made [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

  • Strong rent collections at 97.4% and healthy liquidity with $6.233M cash; management remains confident about capital structure solutions for both common and preferred holders .
  • CEO: “We are proud of our operators and their staff as they work tirelessly to navigate industry headwinds… Our efforts to refigure our capital structure remain on-going and I remain confident we will be able to find a solution for both classes of equity.” CFO: “We’re pleased to have completed the refinancing of two facilities this quarter and four HUD refinancings are expected to be filed in the coming months” .
  • Rent coverage after management fees held at 1.23x and before fees at 1.71x on a trailing 12-month basis, indicating resilient tenant performance despite occupancy pressure .

What Went Wrong

  • Occupancy declined to 66.7% (12-month basis) with skilled mix at 28.8%, evidencing ongoing census headwinds in the portfolio .
  • Patient care economics at the Tara Facility remained pressured: patient care revenues were $2.309M while patient care expenses were $2.454M in Q3 (negative spread) .
  • General and administrative expenses rose 30.8% to $1.0M driven by consulting ($0.111M) and stock-based comp ($0.179M); ongoing capital structure costs of ~$0.122M were expensed in other expense, net .

Financial Results

Metric ($USD)Q3 2020Q1 2021Q2 2021Q3 2021
Total Revenues ($M)$4.767 $7.081 $6.468 $6.702
Rental Revenues ($M)$4.308 $4.081 $3.763 $4.136
Patient Care Revenues ($M)$0.000 $2.690 $2.445 $2.309
Management Fees ($M)$0.244 $0.248 $0.247 $0.248
Other Revenues ($M)$0.215 $0.062 $0.013 $0.009
Income from Operations ($M)$0.630 $1.115 $0.548 $0.628
Net (Loss) Income ($M)$(0.073) $0.021 $(0.503) $(0.039)
Continuing Ops Diluted EPS ($)$(1.38) $(1.31) $(1.59) $(1.25)
Total Diluted EPS ($)$(1.38) $(1.32) $(1.62) $(1.27)
Operating Margin %13.2% (630/4,767) 15.8% (1,115/7,081) 8.5% (548/6,468) 9.4% (628/6,702)
Net Income Margin %-1.5% (-73/4,767) 0.3% (21/7,081) -7.8% (-503/6,468) -0.6% (-39/6,702)

Segment/KPI Breakdown:

KPIQ3 2020 (TTM)Q1 2021 (TTM)Q2 2021 (TTM)Q3 2021 (TTM)
Occupancy %73.0% 68.6% 67.7% 66.7%
Skilled/Quality Mix %29.3% 29.6% 29.3% 28.8%
Rent Coverage (Pre Mgmt Fees)1.58x 1.65x 1.71x 1.71x
Rent Coverage (Post Mgmt Fees)1.24x 1.17x 1.22x 1.23x
Rent Collections %n/a97.2% 97.1% 97.4%
Cash ($M)n/a$6.196 $5.633 $6.233
Total Debt Outstanding ($M)n/a$54.4 $54.2 $53.4

Notes:

  • “Net loss attributable to common stockholders” includes undeclared preferred dividends and was $(2.289)M in Q3 2021 vs $(2.323)M in Q3 2020; management also disclosed net loss excluding undeclared preferred dividends of $0.039M vs $0.073M in Q3 2020 .

Guidance Changes

Metric/ItemPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPS GuidanceFY/QuarterlyNone issuedNone issuedMaintained (no formal guidance)
Capital Structure ActionsOngoingPursuing exchange of Series A Preferred to common; SEC engagement “Efforts to refigure our capital structure remain on-going… confident we will be able to find a solution for both classes of equity” Maintained/progressing
Debt Refinancing – MeadowoodFacility loann/aExtended to 2026 Raised (term extended)
Debt Refinancing – Coosa ValleyFacility loann/aReduced cash interest by 155 bps Lowered (interest rate)
HUD Refinancings4 facilitiesIn processExpected to be filed in coming months Maintained/progressing
Tara Facility ManagementFacility opsManaged by Vero Health New management agreement with Peach Health Group effective Oct 1, 2021; base fee 4% of Adjusted Net Revenues (min $35k) months 1‑6; 3% (min $30k) thereafter; EBITDAR incentive tiers Transitioned operator/terms formalized

Earnings Call Themes & Trends

Note: No Q3 2021 earnings call transcript was available; themes are derived from press releases.

TopicPrevious Mentions (Q1, Q2)Current Period (Q3)Trend
Capital Structure/Preferred ExchangeQ1: exploring refinancing opportunities; Q2: pursuing process to exchange Series A Preferred for common Ongoing reconfiguration efforts; confidence in solutions for both equity classes Progressing
Occupancy/CensusQ1: 68.6% TTM; Q2: 67.7% TTM 66.7% TTM Deteriorating
Rent Collections97.2% in Q1; 97.1% in Q2 97.4% in Q3 Stable/Slightly improving
Tenant Rent CoverageAfter fees: 1.17x (Q1) → 1.22x (Q2) 1.23x (Q3) Improving modestly
Tara Facility ManagementQ2: managed by Vero Health Transitioned to Peach Health under new management agreement with EBITDAR incentives Operational transition
COVID/Macro HeadwindsQ1/Q2: ongoing impact; hope for improvement as COVID recedes CEO acknowledges “industry headwinds,” praises operators Lingering macro pressure

Management Commentary

  • CEO Brent Morrison: “We are proud of our operators and their staff as they work tirelessly to navigate industry headwinds. We continue to collect all rent from our operators (outside of a partial rent deferral on one facility). Our efforts to refigure our capital structure remain on-going and I remain confident we will be able to find a solution for both classes of equity.”
  • CFO Ben Waites: “We’re pleased to have completed the refinancing of two facilities this quarter and four HUD refinancings are expected to be filed in the coming months.”
  • Q2 CEO: “We are pursuing a process to reconfigure the Company’s capital structure… to exchange our Series A Preferred shares for common shares.”
  • Q1 CFO: “The opportunities to refinance some of our senior debt… Other capital structure improvements are also underway that should allow the Company to move into a growth mode…”

Q&A Highlights

  • No Q3 2021 earnings call transcript was available; no Q&A insights to report [ListDocuments: none].

Estimates Context

  • Wall Street consensus estimates via S&P Global (EPS and revenue) were unavailable for RHE for Q3 2021; as a result, we cannot assess beats/misses relative to consensus or infer estimate revisions from S&P Global at this time [GetEstimates error].

Key Takeaways for Investors

  • Liquidity and collections resilient: $6.233M cash and 97.4% rent collections support near-term stability amid macro headwinds .
  • Sequential improvement in operating income ($0.628M vs $0.548M in Q2) alongside a narrowed net loss ($0.039M vs $(0.503)M in Q2) signals operational progress, though total EPS remains negative .
  • Occupancy continues to trend lower (66.7% TTM), pressuring patient care economics at Tara (expenses > revenues in Q3), reinforcing the importance of the new management agreement and incentive-based EBITDAR thresholds with Peach Health .
  • Debt actions are tangible catalysts: Meadowood extended to 2026 and Coosa Valley interest reduced by 155 bps; additional HUD filings expected, which should help reduce interest burden and extend maturities .
  • Preferred equity overhang and capital structure reconfiguration remain central to the equity narrative; management engagement with the SEC and investors continues, but timing remains uncertain .
  • Without S&P Global consensus coverage, traders should anchor on sequential trends (revenues, operating income, collections) and debt-refinancing milestones for near-term stock reaction catalysts .
  • Monitoring: watch occupancy and skilled mix stabilization, execution on HUD refinancings, and any formal guidance or capital structure transaction updates for re-rating potential .