SunLink Health Systems, Inc. (NYSE American: SSY) today
announced earnings from continuing operations of $799,000, or $0.09
per fully diluted share, for its second fiscal quarter ended
December 31, 2017 compared to earnings of $2,949,000, or $0.31 per
fully diluted share, for the quarter ended December 31, 2016.
Included in the earnings for the second quarter ended December 31,
2017 were:
- A $944,000 pre-tax gain by the Pharmacy
segment from the settlement of an economic damages claims resulting
from the Deepwater Horizon Settlement Program,
- A pre-tax loss of $238,000 on the
extinguishment debt resulting from a $3,548,000 partial prepayment
of debt, and
- An income tax benefit of $296,000
resulting from the change in usage of Federal Alternative Minimum
Tax carryforwards as a result of the Tax Cut and Jobs Act enacted
on December 22, 2017.
Included in the earnings for the second quarter ended December
31, 2016 was a $2,819,000 pre-tax gain on the sale of a medical
office building in December 2016.
Net earnings for the quarter ended December 31, 2017 were
$726,000, or $0.08 per fully diluted share, compared to net
earnings of $3,098,000, or $0.33 per fully diluted share, for the
quarter ended December 31, 2016.
Consolidated net revenues from continuing operations for the
quarters ended December 31, 2017 and 2016 were $13,878,000 and
$14,255,000, respectively, a decrease of 3% in the current year’s
second fiscal quarter compared to the comparable quarter of the
prior fiscal year. Healthcare Services segment net revenues of
$5,722,000 for the quarter ended December 31, 2017 decreased
$126,000 (2%) for last year’s second quarter primarily due to
decreased nursing home revenues. Pharmacy segment revenues of
$8,156,000 in the quarter ended December 31, 2017 decreased
$251,000 (3%) for the comparable quarter of the prior fiscal year
due to decreased durable medical equipment revenues this year.
SunLink had an Operating Loss for the quarter ended December 31,
2017 of $80,000, compared to an Operating Profit for the quarter
ended December 31, 2016 of $28,000.
The loss from Discontinued Operations was $73,000, a loss of
$0.01 per fully diluted share, for the quarter ended December 31,
2017 compared to earnings from discontinued operations of $149,000,
$0.02 per fully diluted share, for the quarter ended December 31,
2016.
For the six months ended December 31, 2017, SunLink reported
earnings from continuing operations of $575,000, $0.06 per fully
diluted share, compared to earnings of $1,699,000, $0.18 per fully
diluted share, for the comparable six month period of the prior
year. For the six months ended December 31, 2017, SunLink reported
net earnings of $449,000, $0.05 per fully diluted share, compared
to net earnings of $6,121,000, $0.65 per fully diluted share, for
the six months ended December 31, 2016. Loss from discontinued
operations was $126,000, or a loss of $0.01 per fully diluted
share, for the six months ended December 31, 2017 compared to
earnings from discontinued operations of $4,422,000, $0.47 per
fully diluted share, for the six months ended December 31, 2016.
The earnings from discontinued operations for the six months of the
prior 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 six
months ended December 31, 2017 and 2016 were $27,241,000 and
$27,301,000, respectively, a decrease of 1% in the current six
months. Healthcare Services Segment net revenues in the six months
ended December 31, 2017 of $11,376,000 represented a decrease of
$177,000 (2%) resulting from lower nursing home revenues. The
Pharmacy Segment revenues of $15,865,000 in the six months ended
December 31, 2017 represented an increase of $117,000, (1%) over
the comparable six months of the prior year due primarily to higher
durable medical equipment revenues this year which were realized
from Medicare reimbursement under the provisions of the 21st
Century Cures Act.
SunLink had an operating loss for the six months ended December
31, 2017 of $179,000, compared to an operating loss for the six
months ended December 31, 2016 of $925,000.
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 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
30,2017 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 six months ended December 31, 2017 and 2016,
respectively, is shown below. Healthcare Services Adjusted EBITDA
and Pharmacy Adjusted EBITDA is the EBITDA for those facilities
without any allocation of corporate overhead, impairment charges,
the Deepwater Horizon Settlement Program gain, and gains on sale of
businesses.
Six Months Ended December 31,
2017 2016
Healthcare Services Adjusted EBITDA $ 322,000 $ 679,000 Pharmacy
Adjusted EBITDA 1,200,000 334,000 Corporate Overhead Adjusted
EBITDA (833,000 ) (1,028,000 ) Taxes and interest expense 50,000
(150,000 )
Other non-cash expenses and net change in
operating assets and liabilities
(474,000 ) (3,749,000 ) Net cash provided by (used
in) operations $ 265,000 $ (3,914,000 )
SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES
FISCAL 2018 SECOND QUARTER AND ANNUAL RESULTS
Amounts in 000's, except per share and volume amounts
CONSOLIDATED STATEMENTS OF EARNINGS Three Months Ended
December 31, 2017 Six Months Ended December 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) $ 14,038 101.2 % $ 14,359 100.7 % $ 27,471 100.8 % $
27,438 100.5 % Less provision for bad debts of Healthcare
Facilities Segment 160 1.2 % 104
0.7 % 230 0.8 % 137 0.5 % Net Revenues
13,878 100.0 % 14,255 100.0 % 27,241 100.0 % 27,301 100.0 % Costs
and Expenses: Cost of goods sold 5,092 36.7 % 5,433 38.1 % 9,550
35.1 % 10,069 36.9 % Salaries, wages and benefits 5,888 42.4 %
5,759 40.4 % 11,652 42.8 % 11,604 42.5 % Provision for bad debts of
Specialty Pharmacy Segment 88 0.6 % 125 0.9 % 208 0.8 % 216 0.8 %
Supplies 488 3.5 % 482 3.4 % 913 3.4 % 918 3.4 % Purchased services
662 4.8 % 713 5.0 % 1,349 5.0 % 1,421 5.2 % Other operating
expenses 1,145 8.3 % 1,111 7.8 % 2,587 9.5 % 2,821 10.3 % Rents and
leases 160 1.2 % 138 1.0 % 314 1.2 % 267 1.0 % Depreciation and
amortization 439 3.2 % 466 3.3 % 868 3.2 % 910 3.3 % Electronic
Health Records incentive programs (4 ) 0.0 % -
0.0 % (21 ) -0.1 % - 0.0 % Operating
Profit (Loss ) (80 ) -0.6 % 28 0.2 % (179 ) -0.7 % (925 ) -3.4 %
Interest Expense - net (119 ) -0.9 % (157 ) -1.1 % (246 )
-0.9 % (378 ) -1.4 % Gain on economic damages claim, net 944 6.8 %
- 0.0 % 944 3.5 % - 0.0 % Loss on extinguishment of debt, net (238
) -1.7 % (289 ) -2.0 % (238 ) -0.9 % (243 ) -0.9 % Gain (Loss) on
sale of assets (4 ) 0.0 % 2,995 21.0 %
(2 ) 0.0 % 3,017 11.1 % Earnings from
Continuing Operations before Income Taxes 503 3.6 % 2,577 18.1 %
279 1.0 % 1,471 5.4 % Income Tax Benefit (296 ) -2.1
% (372 ) -2.6 % (296 ) -1.1 % (228 ) -0.8 %
Earnings from Continuing Operations 799 5.8 % 2,949 20.7 % 575 2.1
% 1,699 6.2 % Earnings (Loss) from Discontinued Operations, net of
tax (73 ) -0.5 % 149 1.0 % (126
) -0.5 % 4,422 16.2 % Net Earnings $ 726
5.2 % $ 3,098 21.7 % $ 449 1.6 % $ 6,121
22.4 % Earnings Per Share from Continuing Operations: Basic
$ 0.09 $ 0.31 $ 0.06 $ 0.18 Diluted $
0.09 $ 0.31 $ 0.06 $ 0.18 Earnings
(Loss) Per Share from Discontinued Operations: Basic $ (0.01 ) $
0.02 $ (0.01 ) $ 0.47 Diluted $ (0.01 ) $ 0.02
$ (0.01 ) $ 0.47 Net Earnings Per Share: Basic $ 0.08
$ 0.33 $ 0.05 $ 0.65 Diluted $ 0.08 $
0.33 $ 0.05 $ 0.65 Weighted Average Common
Shares Outstanding: Basic 8,688 9,443
9,125 9,443 Diluted 8,758
9,450 9,196 9,449
HEALTHCARE FACILITIES VOLUME STATISTICS Hospital and
Nursing Home Admissions 156 124 322 245 Hospital and Nursing Home
Patient Days 14,128 15,273 28,873 30,707
SUMMARY BALANCE
SHEETS December 31, June 30, 2017
2017 ASSETS Cash and Cash Equivalents $
2,959 $ 10,494 Accounts Receivable - net 6,360 5,906 Other Current
Assets 6,207 6,221 Property Plant and Equipment, net 10,549 10,290
Long-term Assets 2,583 2,425 $ 28,658
$ 35,336 LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities $ 5,438 $ 12,314 Long-term Debt and Other Noncurrent
Liabilities 4,016 1,329 Shareholders' Equity 19,204
21,693 $ 28,658 $ 35,336
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version on businesswire.com: http://www.businesswire.com/news/home/20180214006338/en/
SunLink Health Systems, Inc.Robert M. Thornton, Jr.,
770-933-7004Chief Executive Officer
Sunlink Health Systems (AMEX:SSY)
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