DRI Healthcare Reports Second Quarter 2025 Results

Executive Summary

• DRI Healthcare Trust reported its Second Quarter 2025 financial results, highlighting a Total Income of $44.1 million and Adjusted EBITDA of $30.4 million for the quarter ended June 30, 2025.
• The company completed the internalization of its investment management function, terminating the agreement with DRI Capital Inc. via a $48 million termination payment and acquiring DRI Capital's assets for $1 million.
• Significant capital return activities occurred, including the repurchase of ~958K units for $9.1 million during Q2 and the redemption of $10 million in Series C Preferred Securities, alongside the declaration of a $0.10 per unit quarterly distribution for Q3 2025.

Key Details

• Financial Performance (Q2 2025):
  • Total Income: $44.1 million (vs $41.6 million in Q2 2024).
  • Total Cash Receipts: $40.2 million.
  • Adjusted EBITDA: $30.4 million.
  • Comprehensive Loss: $0.7 million.
  • Adjusted Cash Earnings per Unit: $0.51 (basic and diluted).
  • Net Earnings: $0.376 million (vs Net Loss of $2.133 million in Q2 2024).
• Six-Month Performance (Jan-Jun 2025):
  • Total Income: $88.2 million.
  • Total Cash Receipts: $102.1 million.
  • Adjusted EBITDA: $82.0 million.
  • Comprehensive Loss: $2.5 million.
  • Adjusted Cash Earnings per Unit: $0.95.
• Management Internalization:
  • Completed transaction to internalize investment management function subsequent to quarter-end.
  • Terminated management agreement with DRI Capital Inc. for a termination payment of $48 million.
  • Acquired relevant assets of DRI Capital for a purchase price of $1 million.
  • Employees of DRI Capital transitioned to a subsidiary of DRI Healthcare.
• Capital Returns & Share Repurchases:
  • Repurchased 958,279 Units under Normal Course Issuer Bid (NCIB) at an average price of $9.54, totaling $9.1 million.
  • Redeemed $10 million of Series C Preferred Securities for $9.5 million.
  • Subsequent to June 30, 2025, repurchased an additional 208,580 Units at an average price of US$10.24, totaling $2.1 million.
  • TSX approval received for NCIB to acquire up to 3,148,536 Units between May 20, 2025, and May 19, 2026.
• Dividends/Distributions:
  • Paid quarterly cash distribution of US$0.10 per Unit on July 18, 2025.
  • Declared quarterly cash distribution of US$0.10 per Unit for Q3 2025, payable October 20, 2025, to unitholders of record on September 30, 2025.
• Portfolio & Asset Updates:
  • Portfolio includes 28 royalty streams on 21 products.
  • Royalty asset portfolio book value (net of amortization): $774.4 million as of June 30, 2025.
  • Financial royalty asset book value: $54.2 million as of June 30, 2025.
  • Completed funding of Ekterly (sebetralstat) optional payment of $22 million, increasing royalty entitlement on net sales up to $500 million from 5.0% to 6.0% and potential milestone payment to KalVista from $50 million to $57 million. Total investment in Ekterly is now $127 million.
  • Received TSX approval for first pre-approval investment, validating underwriting approach.
• Liquidity:
  • Cash and cash equivalents: $82.5 million as of June 30, 2025.
  • Outstanding credit facility principal balance: $344.7 million as of June 30, 2025.
  • Units issued and outstanding: 55,500,947 as of June 30, 2025.
• Management Changes:
  • CFO Amit Kapur announced departure from DRI Healthcare at the end of September 2025.

Notable Quotes

• "Over the past few months, DRI Healthcare has undergone a truly transformational period. By successfully internalizing our external manager, we now have direct alignment between our management team and our unitholders—every decision is focused squarely on creating long-term value." — Ali Hedayat, Chief Executive Officer
• "Last summer, Amit graciously stepped in at a pivotal moment, helping to steady DRI Healthcare and lay a stronger foundation. He was instrumental in DRI Healthcare's strategic review... and ultimately facilitating the successful internalization of the manager." — Gary Collins, Executive Chair