SunLink Health Systems, Inc. Announces Fiscal 2016 First Quarter Results
ATLANTA--(BUSINESS WIRE)-- SunLink Health Systems, Inc. (NYSE MKT: SSY) today announced a loss from continuing operations for its first fiscal quarter ended September 30, 2015 of $1,521,000 or a loss of $0.16 per fully diluted share, compared to a loss from continuing operations of $111,000 or a loss of $0.01 per fully diluted share, for the quarter ended September 30, 2014. Net loss for the quarter ended September 30, 2015 was $1,668,000, or a loss of $0.18 per fully diluted share, compared to a net loss of $413,000, or a loss of $0.04 per fully diluted share, for the quarter ended September 30, 2014. The losses resulted primarily from lower inpatient volume and surgeries in the Healthcare Facilities Segment and the inability to reduce costs commensurate with the lower revenue.
Consolidated net revenues from continuing operations for the quarters ended September 30, 2015 and 2014 were $20,472,000 and $22,376,000, respectively, a decrease of 8.5% in the current year’s first quarter. Healthcare Facilities Segment net revenues in the first quarter of 2016 of $12,683,000 decreased $2,097,000, or 14.2%, compared to $14,780,000 for the comparable quarter of the prior year due to lower inpatient volume and surgeries. The Specialty Pharmacy Segment revenues of $7,567,000 in the quarter ended September 30, 2015 increased $113,000, or 1.5%, over the comparable quarter of the prior year due primarily to increases in retail pharmacy and durable medical equipment sales.
The company had an operating loss from continuing operations for the quarter ended September 30, 2015 of $1,759,000, compared to an operating profit from continuing operations for the quarter ended September 30, 2014 of $305,000. The operating profit decreased in the current year’s quarter primarily due to the lower Healthcare Facilities Segment net revenues.
Loss from discontinued operations was $147,000 (a loss of $0.02 per fully diluted share) for the quarter ended September 30, 2015 compared to a loss from discontinued operations of $302,000 (a loss of $0.03 per fully diluted share) for the quarter ended September 30, 2014, respectively. The operations of Callaway Community Hospital, which was sold on December 31, 2014, are included in discontinued operations in both quarters.
SunLink Health Systems, Inc. is the parent company of subsidiaries that operate three hospitals, two nursing homes and related healthcare services and facilities in the Southeast, and a specialty pharmacy company in Louisiana. Each of the company’s healthcare services is operated locally with a strategy of linking patients’ needs with dedicated physicians and healthcare professionals to deliver quality efficient medical care. For additional information on SunLink Health Systems, Inc., please visit the company’s website at www.sunlinkhealth.com.
This press release may contain certain statements of a forward-looking nature. The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws. Such forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to them. The company has no obligation to update such forward-looking statements. Actual results may vary significantly from these forward-looking statements.
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 meet 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 provided by operations for the three months ended September 30, 2015 and 2014, 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.
Three Months Ended | ||||||||||
September 30, | ||||||||||
2015 | 2014 | |||||||||
Healthcare Facilities Adjusted EBITDA (loss) |
$ | (729,000 | ) | $ | 1,247,000 | |||||
Specialty Pharmacy Adjusted EBITDA | 120,000 | 302,000 | ||||||||
Corporate overhead costs | (583,000 | ) | (609,000 | ) | ||||||
Taxes and interest (expense) benefit | 237,000 | (416,000 | ) | |||||||
Other non-cash expenses and net change in operating assets and liabilities |
140,000 | (1,465,000 | ) | |||||||
Net cash provided by operations | $ | (815,000 | ) | $ | (941,000 | ) |
SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES | |||||||||||||||||||
FISCAL 2016 FIRST QUARTER RESULTS | |||||||||||||||||||
Amounts in 000's, except per share and volume amounts | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||
Three Months Ended September 30, 2015 |
|||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
% of Net | % of Net | ||||||||||||||||||
Amount | Revenues | Amount | Revenues | ||||||||||||||||
Operating revenues (net of contractual allowances) | $ | 22,270 | 108.8 | % | $ | 24,609 | 110.0 | % | |||||||||||
Less provision for bad debts of Healthcare Facilities Segment |
1,798 | 8.8 | % | 2,233 | 10.0 | % | |||||||||||||
Net Revenues | 20,472 | 100.0 | % | 22,376 | 100.0 | % | |||||||||||||
Costs and Expenses: | |||||||||||||||||||
Cost of goods sold | 4,597 | 22.5 | % | 4,616 | 20.6 | % | |||||||||||||
Salaries, wages and benefits | 10,644 | 52.0 | % | 10,817 | 48.3 | % | |||||||||||||
Provision for bad debts of Specialty Pharmacy Segment | 222 | 1.1 | % | 0 | 0.0 | % | |||||||||||||
Supplies | 1,658 | 8.1 | % | 1,947 | 8.7 | % | |||||||||||||
Purchased services | 1,293 | 6.3 | % | 1,336 | 6.0 | % | |||||||||||||
Other operating expenses | 2,824 | 13.8 | % | 2,372 | 10.6 | % | |||||||||||||
Rents and leases | 333 | 1.6 | % | 348 | 1.6 | % | |||||||||||||
Depreciation and amortization | 567 | 2.8 | % | 635 | 2.8 | % | |||||||||||||
Electronic Health Records incentive programs | 93 | 0.5 | % | - | 0.0 | % | |||||||||||||
Operating Profit (Loss) |
(1,759 | ) | -8.6 | % | 305 | 1.4 | % | ||||||||||||
Interest Expense - net | (217 | ) | -1.1 | % | (230 | ) | -1.0 | % | |||||||||||
Gain (loss) on sale of assets | 1 | 0.0 | % | - | 0.0 | % | |||||||||||||
|
|||||||||||||||||||
Earnings (Loss) from Continuing Operations before Income Taxes |
(1,975 | ) | -9.6 | % | 75 | 0.3 | % | ||||||||||||
Income Tax Expense (Benefit) | (454 | ) | -2.2 | % | 186 | 0.8 | % | ||||||||||||
Loss from Continuing Operations | (1,521 | ) | -7.4 | % | (111 | ) | -0.5 | % | |||||||||||
Loss from Discontinued Operations, net of tax | (147 | ) | -0.7 | % | (302 | ) | -1.3 | % | |||||||||||
Net Loss | $ | (1,668 | ) | -8.1 | % | $ | (413 | ) | -1.8 | % | |||||||||
Loss Per Share from Continuing Operations: | |||||||||||||||||||
Basic | $ | (0.16 | ) | $ | (0.01 | ) | |||||||||||||
Diluted | $ | (0.16 | ) | $ | (0.01 | ) | |||||||||||||
Loss Per Share from Discontinued Operations: | |||||||||||||||||||
Basic | $ | (0.02 | ) | $ | (0.03 | ) | |||||||||||||
Diluted | $ | (0.02 | ) | $ | (0.03 | ) | |||||||||||||
Net Loss Per Share: | |||||||||||||||||||
Basic | $ | (0.18 | ) | $ | (0.04 | ) | |||||||||||||
Diluted | $ | (0.18 | ) | $ | (0.04 | ) | |||||||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||||
Basic | 9,443 | 9,443 | |||||||||||||||||
Diluted | 9,443 | 9,460 | |||||||||||||||||
HEALTHCARE FACILITIES VOLUME STATISTICS | |||||||||||||||||||
Admissions | 445 | 632 | |||||||||||||||||
Equivalent Admissions | 1,625 | 1,949 | |||||||||||||||||
Surgeries | 380 | 418 | |||||||||||||||||
Net revenue per equivalent admission | $ | 7,805 | $ | 7,583 | |||||||||||||||
SUMMARY BALANCE SHEETS | Sept. 30, | June 30, | |||||||
2015 | 2015 | ||||||||
ASSETS | |||||||||
Cash and Cash Equivalents | $ | 4,506 | $ | 5,974 | |||||
Accounts Receivable - net | 9,483 | 9,625 | |||||||
Other Current Assets | 8,835 | 9,493 | |||||||
Property Plant and Equipment, net | 22,279 | 22,333 | |||||||
Long-term Assets | 10,191 | 9,703 | |||||||
$ | 55,294 | $ | 57,128 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current Liabilities | $ | 18,260 | $ | 10,764 | |||||
Long-term Debt and Other Noncurrent Liabilities | 5,112 | 12,804 | |||||||
Shareholders' Equity | 31,922 | 33,560 | |||||||
$ | 55,294 | $ | 57,128 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20151116005785/en/
SunLink Health Systems, Inc.
Robert M. Thornton, Jr., 770-933-7004
Chief
Executive Officer
Source: SunLink Health Systems, Inc.
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