Regional Health Properties Reports 74.2% Revenue Growth but Net Loss in Latest Quarter

Regional Health Properties, Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending March 31, 2025. The company generated total revenues of $7.19 million, a 74.2% increase from $4.13 million in the same period last year. This growth was primarily driven by a substantial rise in patient care revenues, which surged 144.3% to $5.64 million, attributed to the transition of several facilities into the Healthcare Services segment. However, rental revenues decreased by 14.9% to $1.55 million, reflecting the same transition.

Despite the increase in revenues, the company reported a net loss of $1.26 million for the quarter, compared to a loss of $0.96 million in the prior year. The loss from operations was $318,000, slightly higher than the $294,000 loss reported in the previous year. Total expenses rose to $7.51 million, up 69.8% from $4.42 million, driven by increased patient care expenses, which more than doubled to $4.40 million. General and administrative expenses also increased by 36.7% to $2.23 million, reflecting the operational changes and transitions within the company.

In terms of strategic developments, Regional Health Properties is pursuing a merger with SunLink Health Systems, which was announced in early January 2025. The merger agreement has been amended to increase the number of shares of common stock to be issued and adjust the liquidation preference of the newly authorized Series D Preferred Stock. This merger is subject to shareholder and regulatory approvals, and it aims to enhance the company's operational capabilities and market presence.

Operationally, the company reported a total of 12 properties, including nine skilled nursing facilities and two multi-service facilities, as of March 31, 2025. The company is actively managing its portfolio, with a focus on improving occupancy rates, which have slightly declined to 66.5% from previous quarters. The company is also working on expediting the collection of past due rent and patient receivables, which are critical for maintaining liquidity.

Looking ahead, Regional Health Properties aims to enhance its liquidity through various measures, including refinancing debt, increasing lease revenues, and potentially selling additional securities. As of March 31, 2025, the company had $0.5 million in unrestricted cash and $3.6 million in net accounts receivable. Management believes it is probable that the company will meet its obligations over the next year, despite the ongoing challenges in the healthcare sector and the impact of recent operational transitions.