SunLink Health Systems, Inc. (NYSE American: SSY) today
announced a loss from continuing operations of $2,768,000 or a loss
of $0.30 per fully diluted share for its fourth fiscal quarter
ended June 30, 2017 compared to a loss of $823,000, or a loss of
$0.09 per fully diluted share, for the quarter ended June 30, 2016.
Included in the loss for the fourth fiscal quarter ended June 30,
2017 is a $1,427,000 pre-tax impairment charge to write down the
goodwill and unamortized intangible assets of SunLink’s Pharmacy
Segment. Net loss for the quarter ended June 30, 2017 was a loss of
$2,408,000 or a loss of $0.26 per fully diluted share compared to a
net loss of $1,234,000 or a loss of $0.13 per fully diluted share
for the quarter ended June 30, 2016. Income tax benefit from
continuing operations was $276,000 for the quarter ended June 30,
2017 compared to income tax benefit of $2,293,000 for the quarter
ended June 30, 2016. The results for the fourth fiscal quarter of
2016 include non-cash income tax benefits of $2,322,000 which
correspondingly reduced the valuation allowance of the company’s
deferred income tax assets available to offset future taxable
income.
Consolidated net revenues from continuing operations for the
quarters ended June 30, 2017 and 2016 were $12,288,000 and
$14,060,000, respectively, a decrease of 13% in the current fiscal
year’s fourth quarter compared to the comparable quarter of the
prior fiscal year. Healthcare Services Segment net revenues of
$5,328,000 for the quarter ended June 30, 2017 decreased $1,160,000
(18%) in the current fiscal year’s quarter primarily as a result of
the closure of one hospital in June 2016. The Pharmacy Segment
revenues of $6,960,000 in the quarter ended June 30, 2017 decreased
$612,000, (8%), below revenues for the comparable quarter of the
prior fiscal year due to lower revenues in all product
categories.
SunLink had an operating loss for the quarter ended June 30,
2017 of $2,814,000, compared to an operating loss for the quarter
ended June 30, 2016 of $2,908,000.
Earnings from discontinued operations were $360,000 ($0.04 per
fully diluted share) for the quarter ended June 30, 2017 compared
to a loss from discontinued operations of $411,000 (a loss of $0.04
per fully diluted share) for the quarter ended June 30, 2016. The
earnings from discontinued operations for the current fiscal year
resulted primarily from positive settlements of prior years’
Medicare cost reports at a previously sold hospital.
For the fiscal year ended June 30, 2017, SunLink reported a loss
from continuing operations of $1,959,000 (a loss of $0.21 per fully
diluted share) compared to a loss of $11,914,000 (a loss of $1.26
per fully diluted share) for the comparable period of the prior
fiscal year. For the fiscal year ended June 30, 2017, SunLink
reported net earnings of $2,688,000 ($0.29 per fully diluted share)
compared to a net loss of $14,083,000(a loss of $1.49 per fully
diluted share) for the fiscal year ended June 30, 2016. The loss
from continuing operations for the fiscal year ended June 30, 2016
included a non-cash charge in income tax expense of $7,350,000 to
fully reserve the company’s deferred income tax assets. Earnings
from discontinued operations were $4,647,000 ($0.50 per fully
diluted share) for the fiscal year ended June 30, 2017 compared to
a loss from discontinued operations of $2,169,000 (a loss of $0.23
per fully diluted share) for the fiscal year ended June 30, 2016.
The earnings from discontinued operations for the current fiscal
year resulted from a pre-tax gain of $7,265,000 on the August 2016
sale of a hospital.
Consolidated net revenues from continuing operations for the
fiscal year ended June 30, 2017 and 2016 were $53,288,000 and
$63,433,000, respectively, a decrease of 16% in the current fiscal
year. Healthcare Services Segment net revenues in the fiscal year
ended June 30, 2017 of $22,381,000 represented a decrease of
$8,836,000 (28%) in the current fiscal year resulting primarily
from the closure of one hospital in June 2016. The Pharmacy Segment
revenues of $30,907,000 in the fiscal year ended June 30, 2017
represented a decrease of $1,309,000, (4%) over the comparable
fiscal year of the prior fiscal year due primarily to lower durable
medical equipment and retail pharmacy revenues.
SunLink had an operating loss for the fiscal year ended June 30,
2017 of $4,510,000, compared to an operating loss for the fiscal
year ended June 30, 2016 of $6,523,000.
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 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,
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 fiscal year ended June 30, 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
and gains on sale of businesses.
Fiscal Years Ended June 30, 2017
2016 Healthcare Services Adjusted EBITDA $ 195,000 $
(2,554,000 ) Pharmacy Adjusted EBITDA 440,000 912,000 Corporate
Overhead Adjusted EBITDA (1,804,000 ) (2,145,000 ) Taxes and
interest expense (366,000 ) (5,392,000 )
Other non-cash expenses and net change in
operating assets and liabilities
(4,075,000 ) 8,753,000 Net cash used in
operations $ (5,610,000 ) $ (426,000 )
SUNLINK HEALTH
SYSTEMS, INC. ANNOUNCES
FISCAL 2017 FOURTH QUARTER AND ANNUAL
RESULTS Amounts in 000's, except per share and volume
amounts CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended June 30,
Twelve Months Ended June 30,
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) $ 12,445 101.3 % $ 14,037 99.8 % $ 53,766 100.9 % $
64,871 102.3 % Less provision for bad debts of Healthcare
Facilities Segment 157 1.3 % (23 ) -0.2
% 478 0.9 % 1,438 2.3 % Net Revenues
12,288 100.0 % 14,060 100.0 % 53,288 100.0 % 63,433 100.0 % Costs
and Expenses: Cost of goods sold 4,325 35.2 % 4,822 34.3 % 19,917
37.4 % 20,404 32.2 % Salaries, wages and benefits 5,902 48.0 %
6,865 48.8 % 23,378 43.9 % 30,783 48.5 % Provision for bad debts of
Specialty Pharmacy Segment 96 0.8 % 201 1.4 % 438 0.8 % 630 1.0 %
Supplies 471 3.8 % 840 6.0 % 1,844 3.5 % 3,326 5.2 % Purchased
services 654 5.3 % 738 5.2 % 2,767 5.2 % 3,248 5.1 % Other
operating expenses 1,601 13.0 % 1,906 13.6 % 5,616 10.5 % 8,031
12.7 % Rents and leases 152 1.2 % 209 1.5 % 561 1.1 % 791 1.2 %
Impairments 1,427 11.6 % 858 6.1 % 1,427 2.7 % 858 1.4 %
Depreciation and amortization 538 4.4 % 522 3.7 % 1,914 3.6 % 1,878
3.0 % Electronic Health Records incentive programs (64 )
-0.5 % 7 0.0 % (64 ) -0.1 % 7
0.0 % Operating Profit (Loss ) (2,814 ) -22.9 % (2,908 )
-20.7 % (4,510 ) -8.5 % (6,523 ) -10.3 % Interest Expense -
net (128 ) -1.0 % (206 ) -1.5 % (635 ) -1.2 % (843 ) -1.3 % Loss on
extinguishment of debt - net - 0.0 % - 0.0 % (243 ) -0.5 % - 0.0 %
Gain (loss) on sale of assets (102 ) -0.8 % (2
) 0.0 % 2,917 5.5 % 10 0.0 %
Earnings (Loss) from Continuing Operations before Income Taxes
(3,044 ) -24.8 % (3,116 ) -22.2 % (2,471 ) -4.6 % (7,356 ) -11.6 %
Income Tax Expense (Benefit) (276 ) -2.2 %
(2,293 ) -16.3 % (512 ) -1.0 % 4,558 7.2 %
Earnings (Loss) from Continuing Operations (2,768 ) -22.5 % (823 )
-5.9 % (1,959 ) -3.7 % (11,914 ) -18.8 % Earnings (Loss) from
Discontinued Operations, net of tax 360 2.9 %
(411 ) -2.9 % 4,647 8.7 % (2,169 ) -3.4
% Net Earnings (Loss) $ (2,408 ) -19.6 % $ (1,234 ) -8.8 % $
2,688 5.0 % $ (14,083 ) -22.2 % Earnings (Loss) Per Share
from Continuing Operations: Basic $ (0.30 ) $ (0.09 ) $ (0.21 ) $
(1.26 ) Diluted $ (0.30 ) $ (0.09 ) $ (0.21 ) $ (1.26 ) Earnings
(Loss) Per Share from Discontinued Operations: Basic $ 0.04
$ (0.04 ) $ 0.50 $ (0.23 ) Diluted $ 0.04 $ (0.04 ) $
0.50 $ (0.23 ) Net Earnings (Loss) Per Share: Basic $ (0.26
) $ (0.13 ) $ 0.29 $ (1.49 ) Diluted $ (0.26 ) $ (0.13 ) $
0.29 $ (1.49 ) Weighted Average Common Shares Outstanding:
Basic 9,163 9,443 9,346
9,443 Diluted 9,163 9,443
9,346 9,443
HEALTHCARE
FACILITIES VOLUME STATISTICS Admissions 173 149 573 828
Hospital and Nursing Home Patient Days 14,484 15,369 59,756 61,926
SUMMARY BALANCE SHEETS June 30, June
30, 2017 2016 ASSETS Cash and Cash Equivalents $
10,494 $ 3,261 Accounts Receivable - net 5,906 6,166 Other Current
Assets 6,221 8,465 Property Plant and Equipment, net 10,290 12,994
Long-term Assets 2,425 13,219 $ 35,336
$ 44,105 LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities $ 12,314 $ 20,051 Long-term Debt and Other Noncurrent
Liabilities 1,329 4,565 Shareholders' Equity 21,693
19,489 $ 35,336 $ 44,105
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version on businesswire.com: http://www.businesswire.com/news/home/20170928006366/en/
SunLink Health Systems, Inc.Robert M. Thornton, Jr.,
770-933-7004Chief Executive Officer
Sunlink Health Systems (AMEX:SSY)
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