SunLink Health Systems, Inc. (NYSE MKT: SSY) today announced a
loss from continuing operations of $890,000 or a loss of $0.10 per
fully diluted share for its third fiscal quarter ended March 31,
2017 compared to a loss from continuing operations of $1,392,000,
or a loss of $0.15 per fully diluted share, for the quarter ended
March 31, 2016. Net earnings for the quarter ended March 31, 2017
were a net loss of $1,025,000 or a loss of $0.11 per fully diluted
share compared to a net loss of $1,835,000 or a loss of $0.19 per
fully diluted share for the quarter ended March 31, 2016.
Consolidated net revenues from continuing operations for the
quarters ended March 31, 2017 and 2016 were $13,699,000 and
$16,205,000, respectively, a decrease of 15% in the current fiscal
year’s third quarter compared to the comparable quarter of the
prior fiscal year. Healthcare Facilities Segment net revenues of
$5,229,000 for the quarter ended March 31, 2017 decreased
$2,315,000 in the current fiscal year’s quarter primarily as a
result of the closure of one hospital in June 2016. The Specialty
Pharmacy Segment revenues of $8,198,000 in the quarter ended March
31, 2017 decreased $311,000, or 4%, over the comparable quarter of
the prior fiscal year due primarily to lower durable medical
equipment and retail pharmacy revenues, partially offset by
increased institutional pharmacy revenues.
SunLink had an operating loss for the quarter ended March 31,
2017 of $771,000, compared to an operating loss for the quarter
ended March 31, 2016 of $1,187,000. The decreased operating loss in
the quarter ended March 31, 2017 compared to the same quarter last
year was due primarily to the closure of an unprofitable hospital
in the prior fiscal year.
The loss from discontinued operations was $135,000 ($0.01 per
fully diluted share) for the quarter ended March 31, 2017 compared
to a loss from discontinued operations of $443,000 (a loss of $0.05
per fully diluted share) for the quarter ended March 31, 2016. The
loss from discontinued operations for the current year results
primarily from a negative settlement of a prior year’s Medicare
cost report at a previously sold hospital and insurance expense for
retained liabilities at sold hospitals.
For the nine months ended March 31, 2017, SunLink reported
earnings from continuing operations of $809,000 or $0.09 per fully
diluted share, compared to a loss from continuing operations of
$11,091,000 or a loss of $1.17 per fully diluted share, for the
comparable period of the prior fiscal year. For the nine months
ended March 31, 2017, SunLink reported net earnings of $5,096,000,
or $0.54 per fully diluted share compared to a net loss of
$12,849,000, or a loss of $1.36 per fully diluted share for the
nine months ended March 31, 2016. Earnings from discontinued
operations were $4,287,000 ($0.45 per fully diluted share) for the
nine months ended March 31, 2017 compared to a loss from
discontinued operations of $1,758,000 (a loss of $0.19 per fully
diluted share) for the nine months ended March 31, 2016. The loss
from continuing operations for the nine months ended March 31, 2016
included a non-cash charge of $7,101,000 to fully reserve the
company’s deferred income tax assets. The earnings from
discontinued operations for the first nine months of the current
fiscal year resulted from a pre-tax gain of $7,270,000 on the
August 2016 sale of a hospital.
Consolidated net revenues from continuing operations for the
nine months ended March 31, 2017 and 2016 were $41,000,000 and
$49,373,000, respectively, a decrease of 17% in the current fiscal
year. Healthcare Facilities Segment net revenues in the nine months
ended March 31, 2017 of $16,289,000 decreased $7,860,000 in the
current fiscal year’s nine months primarily from the closure of one
hospital in June 2016. The Specialty Pharmacy Segment revenues of
$23,946,000 in the nine months ended March 31, 2017 decreased
$698,000, or 3%, over the comparable nine months of the prior
fiscal year due primarily to lower durable medical equipment and
retail pharmacy revenues.
SunLink had an operating loss for the nine months ended March
31, 2017 of $1,696,000, compared to an operating loss for the nine
months ended March 31, 2016 of $3,615,000. Positive adjustments for
Medicare cost report adjustments of $385,000 this year compared to
negative adjustments of $662,000 last year contributed to the
reduction of the operating loss for the current year nine months
results compared to the same period last year.
SunLink Health Systems, Inc. is the parent company of
subsidiaries that own and operate healthcare businesses in the
Southeast. Each of the Company’s healthcare businesses is operated
locally with a strategy of linking patients’ needs with dedicated
physicians and healthcare professionals. For additional information
on SunLink Health Systems, Inc., please visit the Company’s
website.
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 including, without limitation, statements regarding the
company’s business strategy. These forward-looking statements are
subject to certain risks, uncertainties and other factors, which
could cause actual results, performance and achievements to differ
materially from those anticipated. Certain of those risks,
uncertainties and other factors are disclosed in more detail in the
company’s Annual Report on Form 10-K for the year ended June 30,
2016 and other filings with the Securities and Exchange Commission
which can be located at www.sec.gov.
Adjusted earnings before income taxes,
interest, depreciation and amortization
Earnings before income taxes, interest, depreciation and
amortization (“EBITDA”) represent the sum of income before income
taxes, interest, depreciation and amortization. We understand that
certain industry analysts and investors generally consider EBITDA
to be one measure of the liquidity of the company, and it is
presented to assist analysts and investors in analyzing the ability
of the company to generate cash, service debt and to satisfy
capital requirements. We believe increased EBITDA is an indicator
of improved ability to service existing debt and to satisfy capital
requirements. EBITDA, however, is not a measure of financial
performance under accounting principles generally accepted in the
United States of America and should not be considered an
alternative to net income as a measure of operating performance or
to cash liquidity. Because EBITDA is not a measure determined in
accordance with accounting principles generally accepted in the
United States of America and is thus susceptible to varying
calculations, EBITDA, as presented, may not be comparable to other
similarly titled measures of other corporations. Net cash used in
operations for the nine months ended March 31, 2017 and 2016,
respectively, is shown below. Healthcare Facilities Adjusted EBITDA
and Specialty Pharmacy Adjusted EBITDA is the EBITDA for those
facilities without any allocation of corporate overhead, impairment
charges and gains on sale of businesses.
Nine Months Ended March 31,
2017 2016
Healthcare Facilities Adjusted EBITDA
$ 940,000 $ (1,589,000 ) Specialty Pharmacy Adjusted EBITDA 299,000
882,000 Corporate overhead costs (1,559,000 ) (1,552,000 ) Taxes
and interest expense (271,000 ) (7,488,000 )
Other non-cash expenses and net change in
operating assets and liabilities
(4,408,000 ) 9,456,000 Net cash used in
operations $ (4,999,000 ) $ (291,000 )
SUNLINK HEALTH SYSTEMS, INC.
ANNOUNCES FISCAL 2017 THIRD QUARTER RESULTS Amounts
in 000's, except per share and volume amounts
CONSOLIDATED STATEMENTS OF
EARNINGS
Three Months Ended March 31, 2017 Nine Months
Ended March 31, 2017 2016
2017 2016 % of Net % of
Net % of Net % of Net Amount
Revenues Amount Revenues
Amount Revenues Amount
Revenues Operating revenues (net of contractual
allowances) $ 13,883 101.3 % $ 16,418 101.3 % $ 41,321 100.8 % $
50,834 103.0 % Less provision for bad debts of Healthcare
Facilities Segment 184 1.3 % 213
1.3 % 321 0.8 % 1,461 3.0 % Net
Revenues 13,699 100.0 % 16,205 100.0 % 41,000 100.0 % 49,373 100.0
% Costs and Expenses: Cost of goods sold 5,523 40.3 % 5,614 34.6 %
15,592 38.0 % 15,582 31.6 % Salaries, wages and benefits 5,872 42.9
% 7,675 47.4 % 17,476 42.6 % 23,918 48.4 % Provision for bad debts
of Specialty Pharmacy Segment 126 0.9 % 69 0.4 % 342 0.8 % 429 0.9
% Supplies 455 3.3 % 647 4.0 % 1,373 3.3 % 2,486 5.0 % Purchased
services 692 5.1 % 761 4.7 % 2,113 5.2 % 2,510 5.1 % Other
operating expenses 1,194 8.7 % 1,958 12.1 % 4,015 9.8 % 6,125 12.4
% Rents and leases 142 1.0 % 191 1.2 % 409 1.0 % 582 1.2 %
Depreciation and amortization 466 3.4 %
477 2.9 % 1,376 3.4 % 1,356 2.7
% Operating Loss (771 ) -5.6 % (1,187 ) -7.3 % (1,696 ) -4.1 %
(3,615 ) -7.3 % Interest Expense - net (129 ) -0.9 % (211 )
-1.3 % (507 ) -1.2 % (637 ) -1.3 % Loss on extinguishment of debt,
net - 0.0 % - 0.0 % (243 ) -0.6 % - 0.0 % Gain on sale of assets
2 0.0 % 5 0.0 % 3,019
7.4 % 12 0.0 %
Earnings (Loss) from Continuing Operations
before Income Taxes
(898 ) -6.6 % (1,393 ) -8.6 % 573 1.4 % (4,240 ) -8.6 % Income Tax
Expense (Benefit) (8 ) -0.1 % (1 ) 0.0 %
(236 ) -0.6 % 6,851 13.9 % Earnings (Loss)
from Continuing Operations (890 ) -6.5 % (1,392 ) -8.6 % 809 2.0 %
(11,091 ) -22.5 % Earnings (Loss) from Discontinued Operations, net
of tax (135 ) -1.0 % (443 ) -2.7 %
4,287 10.5 % (1,758 ) -3.6 % Net Earnings (Loss) $
(1,025 ) -7.5 % $ (1,835 ) -11.3 % $ 5,096 12.4 % $
(12,849 ) -26.0 %
Earnings (Loss) Per Share from Continuing
Operations:
Basic $ (0.10 ) $ (0.15 ) $ 0.09 $ (1.17 ) Diluted $ (0.10 )
$ (0.15 ) $ 0.09 $ (1.17 ) Earnings (Loss) Per Share from
Discontinued Operations: Basic $ (0.01 ) $ (0.05 ) $ 0.46 $
(0.19 ) Diluted $ (0.01 ) $ (0.05 ) $ 0.45 $ (0.19 ) Net
Earnings (Loss) Per Share: Basic $ (0.11 ) $ (0.19 ) $ 0.54
$ (1.36 ) Diluted $ (0.11 ) $ (0.19 ) $ 0.54 $ (1.36 )
Weighted Average Common Shares Outstanding: Basic 9,334
9,443 9,408 9,443
Diluted 9,334 9,443 9,429
9,443
HEALTHCARE FACILITIES VOLUME
STATISTICS Admissions 154 156 400 679 Nursing Home
Patient Days 13,428 14,099 41,989 43,091
SUMMARY BALANCE
SHEETS March 31, June 30, 2017
2017 ASSETS Cash and Cash Equivalents $
11,237 $ 3,261 Accounts Receivable - net 6,300 6,166 Other Current
Assets 5,955 8,465 Property Plant and Equipment, net 10,683 12,994
Long-term Assets 3,958 13,219 $ 38,133
$ 44,105 LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities $ 6,640 $ 20,051 Long-term Debt and Other Noncurrent
Liabilities 7,489 4,565 Shareholders' Equity 24,004
19,489 $ 38,133 $ 44,105
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version on businesswire.com: http://www.businesswire.com/news/home/20170511006472/en/
SunLink Health Systems, Inc.Robert M. Thornton, Jr.,
770-933-7004Chief Executive Officer
Sunlink Health Systems (AMEX:SSY)
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