SunLink Health Systems, Inc. (NYSE American: SSY) today
announced a loss from continuing operations of $652,000 (or a loss
of $0.09 per fully diluted share) for its fourth fiscal quarter
ended June 30, 2024 compared to a loss from continuing operations
of $1,021,000 (or a loss of $0.15 per fully diluted share) for the
fourth fiscal quarter ended June 30, 2023.
Earnings from discontinued operations were $4,940,000 (or
earnings of $0.70 per fully diluted share) for the fourth fiscal
quarter ended June 30, 2024 compared to a loss from discontinued
operations of $405,000 (or a loss of $0.06 per fully diluted share)
for the fourth fiscal quarter ended June 30, 2023. During the
quarter ended June 30, 2024, the Company’s indirect subsidiary,
Southern Health Corporation of Houston, Inc. (“Southern”) sold its
Trace Extended Care & Rehab senior care facility and related
real estate in Houston, Mississippi for net proceeds of $6,522,000
and recorded a gain on the sale of $5,584,000. Southern’s results
are included in discontinued operations for the year ended June 30,
2024.
Primarily as a result of the sale of Trace Extended Care &
Rehab, net income for the quarter ended June 30, 2024 was
$4,288,000 (or $0.61 per fully diluted share) compared to a net
loss of $1,426,000 (or a loss of $0.20 per fully diluted share) for
the quarter ended June 30, 2023.
On January 22, 2024, Southern reached revised agreements for the
sale of Trace Regional Hospital, a vacant medical office building
and three (3) patient clinics in Chickasaw County Mississippi,
(collectively “Trace Hospital Assets”) to Progressive Health of
Houston, LLC (“Progressive”) pursuant to which (i) Southern sold
certain personal and intangible property to Progressive for
$500,000 under to an asset purchase agreement (“Trace Hospital
Assets Sale"), (ii) entered into a six-month net lease of the real
property of the hospital, medical office building and the clinics
property (the "Trace Real Estate Lease") for $20,000 per month,
(iii) entered into a contract to sell the Trace Hospital real
estate (the "Trace Hospital Real Estate") to Progressive for
$2,000,000 and (iv) engaged Progressive under a management
agreement to manage the operations of Trace Hospital pending
receipt of certain regulatory approvals, which was received
February 29, 2024. The Company recorded a loss of $962,000 on the
Trace Hospital Assets sale during the year ended June 30, 2024,
which included sale expenses of $174,000. The completion of the
Trace Hospital Real Estate sale has been extended by mutual
agreement to October 4, 2024. As a result of the transactions
("Revised Agreement"), SunLink reported an impairment loss of
$1,974,000 at December 31, 2023 to reduce the net value of the
Trace Hospital Assets and Trace Hospital Real Estate to the
estimated sale proceeds under the Revised Agreement. An impairment
reserve of $1,695,000 remains at June 30, 2024 for the Trace
Hospital Real Estate. There can be no assurance the completion of
the sale of the Trace Hospital Assets Real Estate will be
achieved.
Consolidated net revenues for each of the fiscal quarters ended
June 30, 2024 and 2023 were $7,913,000 and $8,010,000,
respectively, which consists primarily of pharmacy net revenues.
Pharmacy net revenues for the quarter ended June 30, 2024 decreased
$97,000, or 1%, from the same period last year as a result of lower
pharmacy scripts dispensed. The quarter ended June 30, 2024
includes $34,000 of prior period sales tax credits relating to such
sales tax refund claims.
SunLink reported an operating loss for the quarter ended June
30, 2024 of $675,000 compared to an operating loss for the quarter
ended June 30, 2023 of $1,112,000. The decreased operating loss
this year compared to last year resulted primarily from increased
gross profit margin on pharmacy revenue.
SunLink reported a loss from continuing operations of $2,311,000
(or a loss of $0.33 per fully diluted share) for its twelve months
ended June 30, 2024 compared to earnings from continuing operations
of $198,000 (or $0.03 per fully diluted share) for the twelve
months ended June 30, 2023.
Earnings from discontinued operations were $784,000 (or $0.11
per fully diluted share) for the twelve months ended June 30, 2024
compared to a loss of $1,993,000 (or a loss of $0.28 per fully
diluted share) for the twelve months ended June 30, 2023, primarily
due to the Trace Hospital Assets and Trace Extended Care &
Rehab transactions and Trace Hospital Real Estate impairment charge
described above.
SunLink reported a net loss of $1,527,000 (or a loss of $0.22
per fully diluted share) for its twelve months ended June 30, 2024
compared to a net loss of $1,795,000 (or $0.26 per fully diluted
share) for the twelve months ended June 30, 2023.
Consolidated net revenues for each of the twelve months ended
June 30, 2024 and 2023 were $32,440,000 and $34,280,000,
respectively. Pharmacy net revenues for the twelve months ended
June 30, 2023 included $2,615,000 from the reversal of reserves for
certain sales taxes previously accrued. The Company determined
during that quarter that, based on discussions and correspondence
from taxing authorities and consultation with external legal
counsel, it was more likely than not that such accrued sales taxes
would not be payable. The twelve months ended June 30, 2024
includes $471,000 of prior period sales tax refunds. Excluding the
effect of the sales tax refunds and reversal of sales tax accruals,
net revenues decreased less than 1 % in the twelve months ended
June 30, 2024 compared to the prior year.
SunLink reported an operating loss for the twelve months ended
June 30, 2024 of $2,411,000 compared to operating profit for the
twelve months ended June 20, 2023 of $74,000. The operating profit
during the comparable twelve month period last year resulted
primarily from the reversal of accrued sales tax reserves.
COVID-19 Pandemic
The Company continues to experience adverse after-effects of the
COVID-19 pandemic in the quarter ended June 30, 2024 and believes
such effects will likely continue to affect 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. 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 2024 FOURTH
QUARTER AND ANNUAL RESULTS Amounts in 000's, except per
share CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
Three Months Ended June 30, Twelve Months Ended June
30,
2024
2023
2024
2023
% of Net % of Net % of Net % of Net
Amount Revenues Amount Revenues Amount Revenues
Amount Revenues Net
revenues
$
7,913
100.0
%
$
8,010
100.0
%
$
32,440
100.0
%
$
34,280
100.0
%
Costs and Expenses: Cost of goods sold
4,382
55.4
%
4,929
61.5
%
18,253
56.3
%
18,571
54.2
%
Salaries, wages and benefits
2,624
33.2
%
2,609
32.6
%
10,561
32.6
%
10,156
29.6
%
Supplies
44
0.6
%
36
0.4
%
153
0.5
%
140
0.4
%
Purchased services
298
3.8
%
319
4.0
%
1,130
3.5
%
1,107
3.2
%
Other operating expenses
735
9.3
%
744
9.3
%
3,014
9.3
%
2,598
7.6
%
Rent and leases
92
1.2
%
96
1.2
%
367
1.1
%
372
1.1
%
Depreciation and amortization
413
5.2
%
389
4.9
%
1,373
4.2
%
1,262
3.7
%
Operating profit (loss)
(675
)
-8.5
%
(1,112
)
-13.9
%
(2,411
)
-7.4
%
74
0.2
%
Interest Income - net
23
0.3
%
74
0.9
%
93
0.3
%
87
0.3
%
Gain on sale of assets
0
0.0
%
17
0.2
%
2
0.0
%
30
0.1
%
Earnings (Loss) from Continuing Operations before Income
Taxes
(652
)
-8.2
%
(1,021
)
-12.7
%
(2,316
)
-7.1
%
191
0.6
%
Income Tax benefit
0
0.0
%
0
0.0
%
(5
)
0.0
%
(7
)
0.0
%
Earnings (Loss) from Continuing Operations
(652
)
-8.2
%
(1,021
)
-12.7
%
(2,311
)
-7.1
%
198
0.6
%
Earnings (Loss) from Discontinued Operations, net of tax
4,940
62.4
%
(405
)
-5.1
%
784
2.4
%
(1,993
)
-5.8
%
Net Loss
$
4,288
54.2
%
$
(1,426
)
-17.8
%
$
(1,527
)
-4.7
%
$
(1,795
)
-5.2
%
Earnings (Loss) Per Share from Continuing Operations: Basic
$
(0.09
)
$
(0.15
)
$
(0.33
)
$
0.03
Diluted
$
(0.09
)
$
(0.15
)
$
(0.33
)
$
0.03
Loss Per Share from Discontinued Operations: Basic
$
0.70
$
(0.06
)
$
0.11
$
(0.28
)
Diluted
$
0.70
$
(0.06
)
$
0.11
$
(0.28
)
Net Loss Per Share: Basic
$
0.61
$
(0.20
)
$
(0.22
)
$
(0.26
)
Diluted
$
0.61
$
(0.20
)
$
(0.22
)
$
(0.26
)
Weighted Average Common Shares Outstanding: Basic
7,041
7,032
7,038
7,019
Diluted
7,041
7,032
7,038
7,022
SUMMARY BALANCE SHEETS June 30, June
30,
2024
2023
ASSETS Cash and Cash Equivalents
$
7,170
$
4,486
Receivable - net
3,371
2,592
Current Assets Held for Sale
1,959
1,920
Other Current Assets
3,164
3,276
Property Plant and Equipment, net
2,809
2,717
Long-term Assets
2,139
8,277
$
20,612
$
23,268
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities
$
4,213
$
4,869
Noncurrent Liabilities
426
982
Shareholders' Equity
15,973
17,417
$
20,612
$
23,268
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240930244290/en/
Robert M. Thornton, Jr. Chief Executive Officer
(770) 933-7004
Sunlink Health Systems (AMEX:SSY)
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