SunLink Health Systems, Inc. (NYSE American: SSY) today
announced a loss from continuing operations of $1,070,000 (or a
loss of $0.15 per fully diluted share) for its second fiscal
quarter ended December 31, 2024 compared to a loss from continuing
operations of $407,000 (or a loss of $0.06 per fully diluted share)
for the second fiscal quarter ended December 31, 2023. During the
quarter ended December 31, 2024, the Company recorded an impairment
loss of $100,000 to write down the value of the net assets of its
information technology business which sold in January 2025.
Net loss for the quarter ended December 31, 2024 was $1,343,000
(or a loss of $0.19 per fully diluted share) compared to a net loss
of $3,075,000 (or a loss of $0.44 per fully diluted share) for the
quarter ended December 31, 2023. The net loss for the second fiscal
quarter of 2025 included a loss from discontinued operations of
$273,000 (or a loss of $0.04 fully diluted share), which includes a
loss of $110 on the sale of real estate in Houston, Mississippi.
The net loss for the second fiscal quarter of 2024 included a loss
from discontinued operations of $2,668,000 (or a loss of $0.38 per
fully diluted share), which includes for the quarter an impairment
loss of $2,032,000 on the sale of the Trace Regional Hospital, a
vacant medical office building and three (3) patient clinics and a
loss from operations of $636,000, primarily from operations of
Trace Regional Hospital (prior to its sale) and a nursing home in
Houston, Mississippi.
Consolidated net revenues for the fiscal quarters ended December
31, 2024 and 2023 were $7,935,000 and $8,510,000, respectively,
which consisted primarily of pharmacy net revenues. Pharmacy net
revenues for the quarter ended December 31, 2024 decreased
$575,000, or 7%, from the same period last year. The pharmacy
business had lower retail pharmacy scripts and durable medical
equipment orders filled this year.
SunLink reported an operating loss for the quarter ended
December 31, 2024 of $1,012,000 compared to an operating loss for
the quarter ended December 31, 2023 of $433,000.
SunLink reported a loss from continuing operations of $1,512,000
(or a loss of $0.21 per fully diluted share) for its six months
ended December 31, 2024 compared to a loss from continuing
operations of $835,000 (or $0.12 per fully diluted share) for the
six months ended December 31, 2023. Net loss for the six months
ended December 31, 2024 was $1,892,000 (or a loss of $0.27 per
fully diluted share) compared to a net loss of $4,419,000 (or $0.63
per fully diluted share) for the six months ended December 31,
2023. The net loss for the six months ended December 31, 2024
included a loss from discontinued operations of $380,000 (or a loss
of $0.05 per fully diluted share), compared to a loss from
discontinued operations of $3,584,000 (or a loss of $0.51 per fully
diluted share) for the six months ended December 31, 2023. The
discontinued operations loss for the six months ended December 31,
2024 includes a loss of $110,000 on the October 2024 property sale
in Houston, Mississippi. The discontinued operations loss for the
six months ended December 31, 2023 included an impairment loss of
$2,032,000 on the sale of the Trace Regional Hospital, a vacant
medical office building and three (3) patient clinics and loss from
operations of $1,552,000, primarily from Trace Regional Hospital
(prior to its sale) and a nursing home in Houston, Mississippi.
Consolidated net revenues for each of the six months ended December
31, 2024 and 2023 were $15,858,000 and $17,065,000, respectively.
Pharmacy net revenues for the six months ended December 31, 2023
included $380,000 from the reversal of reserves for certain sales
taxes previously accrued. Excluding the effect of the reversal of
sales tax accruals, net revenues decreased 5% in the six months
ended December 31, 2024 compared to the prior year due primarily to
decreased volume of Retail pharmacy scripts filled.
SunLink reported an operating loss for the six months ended
December 31, 2024 of $2,206,000 compared to an operating loss for
the six months ended December 31, 2023 of $883,000. The operating
loss during the comparable six month period last year resulted
primarily from the lower net revenues partially offset by the
reversal of $380,000 in accrued sales tax reserves.
Merger
On January 6, 2025, the Company and Regional Health Properties,
Inc. (“Regional”) jointly announced that they have entered into a
definitive agreement and plan of merger (the “merger agreement”),
dated January 3, 2025 pursuant to which the Company will merge with
and into Regional (the “merger”) in exchange for the issuance of an
aggregate of 1,410,000 shares of Regional common stock and
1,410,000 shares of Regional’s newly-authorized Series D 8%
Cumulative Convertible Redeemable Preferred Stock with a
liquidation preference of $10 per share. The merger has been
approved unanimously by each company’s board of directors and
completion of the transaction is subject to the receipt of the
approvals of the shareholders of both Regional and the Company,
regulatory approvals, and satisfaction of customary closing
conditions.
COVID-19 Pandemic
The Company continues to experience post-COVID-19 pandemic
after-effects in its quarter and believes it will likely to
continue experience these effects on its assets and operations in
the foreseeable future particularly from salaries and wages
pressure, workforce shortages, supply chain disruption and broad
inflationary pressures. Our ability to make estimates of any such
continuing effects on future revenues, expenses or changes in
accounting judgments that have had or are reasonably likely to have
a material effect on our financial statements is very limited,
depending as they do on the severity and length thereof; as well as
any further government actions and/or regulatory changes intended
to address such effects.
SunLink Health Systems, Inc. is the parent company of
subsidiaries that own and operate a pharmacy business and an
information technology business in the Southeast (the latter of
which sold on January 6, 2025). 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,
2024 and other filings with the Securities and Exchange Commission
which can be located at www.sec.gov.
SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES FISCAL 2025 SECOND
QUARTER RESULTS Amounts in 000's, except per share
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) Three
Months Ended December 31, Six Months Ended December 31,
2024
2023
2024
2023
% of Net % of Net % of Net % of Net
Amount Revenues Amount Revenues Amount Revenues
Amount Revenues Net
revenues
$
7,935
100.0
%
$
8,510
100.0
%
$
15,858
100.0
%
$
17,065
100.0
%
Costs and Expenses: Cost of goods sold
4,618
58.2
%
4,761
55.9
%
9,093
57.3
%
9,532
55.9
%
Salaries, wages and benefits
2,713
34.2
%
2,668
31.4
%
5,791
36.5
%
5,285
31.0
%
Supplies
40
0.5
%
39
0.5
%
74
0.5
%
73
0.4
%
Purchased services
326
4.1
%
281
3.3
%
645
4.1
%
567
3.3
%
Other operating expenses
833
10.5
%
784
9.2
%
1,637
10.3
%
1,690
9.9
%
Rent and leases
93
1.2
%
92
1.1
%
187
1.2
%
183
1.1
%
Depreciation and amortization
324
4.1
%
318
3.7
%
637
4.0
%
618
3.6
%
Operating loss
(1,012
)
-12.8
%
(433
)
-5.1
%
(2,206
)
-13.9
%
(883
)
-5.2
%
Interest Income - net
42
0.5
%
29
0.3
%
100
0.6
%
51
0.3
%
Impairment loss
(100
)
-1.3
%
0
0.0
%
(100
)
-0.6
%
0
0.0
%
Gain on sale of assets
0
0.0
%
0
0.0
%
694
4.4
%
2
0.0
%
Loss from Continuing Operations before Income Taxes
(1,070
)
-13.5
%
(404
)
-4.7
%
(1,512
)
-9.5
%
(830
)
-4.9
%
Income Tax expense
0
0.0
%
3
0.0
%
0
0.0
%
5
0.0
%
Loss from Continuing Operations
(1,070
)
-13.5
%
(407
)
-4.8
%
(1,512
)
-9.5
%
(835
)
-4.9
%
Loss from Discontinued Operations, net of tax
(273
)
-3.4
%
(2,668
)
-31.4
%
(380
)
-2.4
%
(3,584
)
-21.0
%
Net Loss
$
(1,343
)
-16.9
%
$
(3,075
)
-36.1
%
$
(1,892
)
-11.9
%
$
(4,419
)
-25.9
%
Loss Per Share from Continuing Operations: Basic
$
(0.15
)
$
(0.06
)
$
(0.21
)
$
(0.12
)
Diluted
$
(0.15
)
$
(0.06
)
$
(0.21
)
$
(0.12
)
Loss Per Share from Discontinued Operations: Basic
$
(0.04
)
$
(0.38
)
$
(0.05
)
$
(0.51
)
Diluted
$
(0.04
)
$
(0.38
)
$
(0.05
)
$
(0.51
)
Net Loss Per Share: Basic
$
(0.19
)
$
(0.44
)
$
(0.27
)
$
(0.63
)
Diluted
$
(0.19
)
$
(0.44
)
$
(0.27
)
$
(0.63
)
Weighted Average Common Shares Outstanding: Basic
7,041
7,040
7,041
7,039
Diluted
7,041
7,040
7,041
7,039
SUMMARY BALANCE SHEETS December 31,
June 30,
2024
2024
ASSETS Cash and Cash Equivalents
$
8,020
$
7,170
Receivable - net
2,831
3,371
Current Assets Held for Sale
256
1,959
Other Current Assets
3,099
3,164
Property Plant and Equipment, net
2,053
2,809
Long-term Assets
1,613
2,139
$
17,872
$
20,612
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities
$
3,495
$
4,213
Noncurrent Liabilities
296
426
Shareholders' Equity
14,081
15,973
$
17,872
$
20,612
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250212287098/en/
Robert M. Thornton, Jr. Chief Executive Officer
(770) 933-7004
Sunlink Health Systems (AMEX:SSY)
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