Regional Health Properties, Inc.: Regional Health Properties Reports Second Quarter & Six Month 2025 Financial Results

ATLANTA, GA, Aug. 21, 2025 (GLOBE NEWSWIRE) -- Regional Health Properties, Inc. (the "Company", "Regional", "we", "us" or "our") (OTCQB: RHEP) (OTCQB: RHEPB) (OTCQB: RHEPA) (OTCQB:RHEPZ, 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 second quarter ended June 30, 2025.

SECOND QUARTER 2025 FINANCIAL RESULTS

• Reported revenue of $10.1 million.
• Generated $456k of Adjusted EBITDA¹
• June's average occupancy rate of 66.8% was the highest in over a year.
  

SECOND QUARTER 2025 BUSINESS HIGHLIGHTS

• Entered into a management contract with CJM Advisors to manage our South Carolina facilities and our Southland facility in Georgia.
• The Meadowood facility's memory care unit sustained stabilization at 93% occupancy.

SIX MONTHS ENDED JUNE 30, 2025 FINANCIAL RESULTS

• Reported revenue of $17.2 million
• Generated Adjusted EBITDA of $964k

MANAGEMENT COMMENTS
Brent Morrison, Regional's President, Chief Executive Officer, and Chairman, commented, "The second quarter reflects continued progress as we transition our business for long-term success. We now directly operate 50% of our facilities, enhancing control and alignment with our strategic objectives. Our partnership with CJM Advisors is enabling us to maximize the performance of our assets."

Mr. Morrison continued, "Subsequent to quarter-end, we completed our transformative merger with SunLink. By combining SunLink's pharmacy and healthcare services with our real estate platform, Regional is now a vertically integrated healthcare services company poised for growth, improved efficiency, and long-term value creation."

FINANCIAL RESULTS FOR QUARTER ENDED JUNE 30, 2025

For the second quarter of 2025, the Company reported total revenue of $10.1 million, a GAAP net loss of $1.4 million, EBITDA² loss of $406k and Adjusted EBITDA¹ of $456k.

BALANCE SHEET AND LIQUIDITY

As of June 30, 2025, the Company had $49.9 million, net of outstanding indebtedness with a weighted-average annual interest rate of 5.0% and a weighted-average maturity of approximately 16 years. For the six months ended June 30, 2025, net cash provided by operating activities was $805k.

SUCCESSFUL MERGER COMPLETION

On August 14, 2025, Regional announced the completion of the merger of SunLink Health Systems, Inc. ("SunLink") with and into Regional, with Regional surviving the merger as the surviving corporation, effective August 14, 2025.

At the closing of the merger, each five shares of SunLink common stock were converted into the right to receive (i) 1.1330 shares of Regional common stock and (ii) one share of Regional Series D 8% Cumulative Convertible Redeemable Participating Preferred Shares ("Regional Series D preferred stock"). The total aggregate consideration payable in the merger was approximately 1,595,400 shares of Regional common stock and approximately 1,408,120 shares of Regional Series D preferred stock.

The combined company will operate under the name Regional Health Properties, Inc. and trade under Regional's ticker symbols on the OTCQB.

The combined company will be led by Brent S. Morrison, as President and Chief Executive Officer of Regional. In addition to Mr. Morrison, the Regional leadership team includes Mark J. Stockslager, as Chief Financial Officer of Regional (and formerly the Chief Financial Officer of SunLink), and Robert M. Thornton, Jr., as Executive Vice President - Corporate Strategy of Regional (and formerly the Chief Executive Officer of SunLink).

The Board of Directors of Regional will be composed of Brent S. Morrison, Kenneth W. Taylor and Steven L. Martin, who continue from Regional's Board of Directors, Dr. Steven J. Baileys and Gene E. Burleson, who continue from SunLink's Board of Directors, and Scott Kellman and C. Christian Winkle, who joined the Board at the closing of the merger.

About Regional Health Properties, Inc.

Regional Health Properties, Inc., headquartered in Atlanta, Georgia, 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 https://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 [phone]

[e-mail]

REGIONAL HEALTH PROPERTIES, INC.
STATEMENT OF OPERATIONS
(in thousands)
		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Revenues:
Patient care revenues		$	8,774			$	2,525			$	14,416			$	4,834
Rental revenues			1,283				1,800				2,831				3,617
Total revenues			10,057				4,325				17,247				8,451
Expenses:
Patient care expense			7,184				2,183				11,585				4,283
Facility rent expense			149				149				356				297
Depreciation and amortization			403				514				805				1,025
General and administrative expense			2,429				1,229				4,659				2,860
Loss on lease termination			-				-				303				-
Credit loss expense			400				36				470				65
Gain on operations transfer			-				-				(106	)			-
Total expenses			10,565				4,111				18,072				8,530
Income (loss) from operations			(508	)			214				(825	)			(79	)
Other expense:
Interest expense, net			615				669				1,268				1,344
Other expense, net			326				251				618				245
Total other expense, net			941				920				1,886				1,589
Net loss		$	(1,449	)		$	(706	)		$	(2,711	)		$	(1,668	)
Preferred stock dividends-gain on extinguishment			-				-				(603	)			-
Net income (loss) attributable to Regional Health Properties, Inc. common stockholders		$	(1,449	)		$	(706	)		$	(3,314	)		$	(1,668	)
Net income (loss) per share of common stock attributable to Regional Health Properties, Inc.
Basic:		$	(0.68	)		$	(0.38	)		$	(1.60	)		$	(0.91	)
Diluted:		$	(0.68	)		$	(0.38	)		$	(1.60	)		$	(0.91	)
Weighted average shares of common stock outstanding:
Basic and Diluted			2,143				1,847				2,068				1,843

REGIONAL HEALTH PROPERTIES, INC.
DEBT SUMMARY
(in thousands)
June 30, 2025
			Maturity				Interest Rate				Principal				% of Principal				Deferred financing costs				Unamortized discount on bonds				Net Carrying Value
The Pavilion Care Center			12/1/2039				3.97	%		$	746				1.5	%		$	(27	)		$	-			$	719
Hearth and Care of Greenfield			8/1/2050				3.97	%			1,847				3.7	%			(59	)			-				1,788
Woodland Manor			11/1/2052				3.97	%			4,751				9.5	%			(57	)			-				4,694
Glenvue			10/1/2044				3.75	%			6,731				13.5	%			(147	)			-				6,584
Autumn Breeze			1/1/2045				3.65	%			5,855				11.7	%			(137	)			-				5,718
Georgetown			10/1/2046				2.98	%			2,974				6.0	%			(87	)			-				2,887
Sumter Valley			1/1/2047				3.70	%			4,813				9.7	%			(126	)			-				4,687
Eaglewood Bonds Series A			5/1/2042				7.65	%			5,811				11.7	%			(11	)			(104	)			5,695
Meadowood (2)			10/1/2026				4.50	%			3,067				6.1	%			(2	)			-				3,065
Coosa (3)			10/10/2026				3.95	%			4,476				9.0	%			(24	)			-				4,452
Corporate			12/31/2023				3.19	%			443				0.9	%			-				-				443
Corporate			8/25/2025				0.00	%			495				1.0	%			-				-				495
Coosa (3)			11/10/2025				7.75	%			494				1.0	%			-				-				494
Corporate			6/1/2027				5.00	%			3				0.0	%			-				-				3
Meadowood (2)			3/1/2025				6.00	%			34				0.1	%			-				-				34
Total Fixed Rate Debt			11/23/2041				4.32	%			42,539				85.3	%			(676	)			(104	)			41,759
Mountain Trace			12/24/2036				9.25	%			3,334				6.7	%			(74	)			-				3,260
Southland			7/27/2036				9.00	%			3,476				7.0	%			(101	)			-				3,375
Southland			7/27/2036				9.75	%			526				1.1	%			-								526
Total Floating Rate Debt			10/3/2036				9.17	%			7,336				14.7	%			(176	)			-				7,160
Total										$	49,875				100.0	%		$	(851	)		$	(104	)		$	48,920

Calculation of Non-GAAP Financial Measures

This press release presents information about EBITDA adjusted EBITDA and EBITDAR, 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) INCOME TO NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)
			Three Months Ended June 30,								Six Months Ended June 30,
			2025				2024				2025				2024
Net loss		$	(1,449	)		$	(706	)		$	(2,711	)		$	(1,668	)
Depreciation and amortization			403				514				805				1,025
Interest expense, net			615				669				1,268				1,344
Other expense, net			-				-				-				(18	)
Amortization of employee stock compensation			25				24				47				66
EBITDA			(406	)			501				(591	)			749
Credit loss expense			400				36				470				65
Merger costs			357				-				618				-
Loss on lease termination			-				-				303				-
Gain on operations transfer			-				-				(106	)			-
Gain (loss) from write-off of liabilities and other credit balances from discontinued operations			-				165				-				177
Project costs			-				25				-				65
Tail insurance on legacy facilities			19				79				74				152
Other one-time costs			86				80				196				140
One-time income adjustment - quality incentive program (1)			-				(147	)			-				(98	)
Adjusted EBITDA from operations		$	456			$	739			$	964			$	1,250
(1) Amounts represent adjustments needed for historical and estimated future amounts along with reconciling for timing differences.

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.
³ EBITDAR is a non-GAAP financial measure.