SunLink Health Systems, Inc. (NYSE MKT: SSY) today announced a loss from continuing operations for its first fiscal quarter ended September 30, 2014 of $403,000 or a loss of $0.04 per fully diluted share, compared to a loss from continuing operations of $1,174,000 or a loss of $0.12 per fully diluted share, for the quarter ended September 30, 2013. SunLink reported a net loss for the quarter ended September 30, 2014 of $413,000, or a loss of $0.04 per fully diluted share, compared to a net loss of $1,158,000, or a loss of $0.12 per fully diluted share, for the quarter ended September 30, 2013.
Consolidated net revenues from continuing operations for the quarters ended September 30, 2014 and 2013 were $25,784,000 and $25,578,000, respectively, an increase of 0.8% in the current year’s quarter. The Healthcare Facilities Segment net revenues in the current quarter of $18,188,000 decreased $452,000, or 2.4%, compared to $18,640,000 for the comparable quarter of the prior year due to lower patient volume. The Specialty Pharmacy Segment revenues of $7,454,000 in the quarter ended September 30, 2014 increased $612,000, or 8.9%, from the comparable quarter of the prior year due primarily to an increase in institutional pharmacy sales.
The company had an operating loss from continuing operations for the quarter ended September 30, 2014 of $75,000, compared to an operating loss from continuing operations for the quarter ended September 30, 2013 of $864,000. The reduced operating loss in the current year’s quarter resulted primarily from increased Specialty Pharmacy Segment gross profit margin as a result of its increased net revenues and from lower consolidated costs and expenses this year. Adjusted EBITDA (a non-GAAP measure of the liquidity of the company) for SunLink’s Healthcare Facilities Segment increased to $858,000 in the three months ended September 30, 2014, from $833,000 for the comparable quarter of the last fiscal year. Adjusted EBITDA for the three months ended September 30, 2014 for the Specialty Pharmacy Segment was $307,000 compared to $72,000 for the comparable quarter in the prior fiscal year.
SunLink Health Systems, Inc. is the parent company of subsidiaries that operate hospitals and related businesses in the Southeast and Midwest, and a specialty pharmacy company in Louisiana. Each hospital is the only hospital in its community and 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, 2014 and 2013, 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, | |||||||||
| 2014 | 2013 | ||||||||
Healthcare Facilities Adjusted EBITDA | $ | 858,000 | $ | 833,000 | |||||
| Specialty Pharmacy Adjusted EBITDA | 307,000 | 72,000 | |||||||
| Corporate overhead costs | (505,000 | ) | (862,000 | ) | |||||
| Taxes and interest expense | (328,000 | ) | (310,000 | ) | |||||
| Other non-cash expenses and net change in | |||||||||
| operating assets and liabilities | (1,273,000 | ) | 2,653,000 | ||||||
| Net cash provided by operations | $ | (941,000 | ) | $ | 2,386,000 | ||||
| SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES | ||||||||||||||||
| FISCAL 2015 FIRST QUARTER RESULTS | ||||||||||||||||
| Amounts in 000's, except per share and volume amounts | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
| Three Months Ended September 30, | ||||||||||||||||
| 2014 | 2013 | |||||||||||||||
| % of Net | % of Net | |||||||||||||||
| Amount | Revenues | Amount | Revenues | |||||||||||||
| Operating revenues (net of contractual allowances) | $ | 29,019 | 112.5 | % | $ | 28,296 | 110.6 | % | ||||||||
| Less provision for bad debts of Healthcare Facilities Segment | 3,235 | 12.5 | % | 2,718 | 10.6 | % | ||||||||||
| Net Revenues | 25,784 | 100.0 | % | 25,578 | 100.0 | % | ||||||||||
| Costs and Expenses: | ||||||||||||||||
| Cost of goods sold | 4,616 | 17.9 | % | 4,275 | 16.7 | % | ||||||||||
| Salaries, wages and benefits | 12,806 | 49.7 | % | 12,987 | 50.8 | % | ||||||||||
| Provision for bad debts of Specialty Pharmacy Segment | - | 0.0 | % | 53 | 0.2 | % | ||||||||||
| Supplies | 2,390 | 9.3 | % | 2,197 | 8.6 | % | ||||||||||
| Purchased services | 1,706 | 6.6 | % | 1,851 | 7.2 | % | ||||||||||
| Other operating expenses | 3,165 | 12.3 | % | 3,711 | 14.5 | % | ||||||||||
| Rents and leases | 441 | 1.7 | % | 461 | 1.8 | % | ||||||||||
| Depreciation and amortization | 735 | 2.9 | % | 907 | 3.5 | % | ||||||||||
| Operating Loss | (75 | ) | -0.3 | % | (864 | ) | -3.4 | % | ||||||||
| Interest Expense, net | (298 | ) | -1.2 | % | (312 | ) | -1.2 | % | ||||||||
| Loss from Continuing Operations before Income Taxes | (373 | ) | -1.4 | % | (1,176 | ) | -4.6 | % | ||||||||
| Income Tax Expense (Benefit) | 30 | 0.1 | % | (2 | ) | 0.0 | % | |||||||||
| Loss from Continuing Operations | (403 | ) | -1.6 | % | (1,174 | ) | -4.6 | % | ||||||||
| Earnings from Discontinued Operations, net of tax | (10 | ) | 0.0 | % | 16 | 0.1 | % | |||||||||
| Net Loss | $ | (413 | ) | -1.6 | % | $ | (1,158 | ) | -4.5 | % | ||||||
| Loss Per Share from Continuing Operations: | ||||||||||||||||
| Basic | $ | (0.04 | ) | $ | (0.12 | ) | ||||||||||
| Diluted | $ | (0.04 | ) | $ | (0.12 | ) | ||||||||||
| Earnings (Loss) Per Share from Discontinued Operations: | ||||||||||||||||
| Basic | $ | (0.00 | ) | $ | 0.00 | |||||||||||
| Diluted | $ | (0.00 | ) | $ | 0.00 | |||||||||||
| Net Loss Per Share: | ||||||||||||||||
| Basic | $ | (0.04 | ) | $ | (0.12 | ) | ||||||||||
| Diluted | $ | (0.04 | ) | $ | (0.12 | ) | ||||||||||
| Weighted Average Common Shares Outstanding: | ||||||||||||||||
| Basic | 9,443 | 9,443 | ||||||||||||||
| Diluted | 9,443 | 9,443 | ||||||||||||||
| HEALTHCARE FACILITIES VOLUME STATISTICS | ||||||||||||||||
| Admissions | 747 | 747 | ||||||||||||||
| Equivalent Admissions | 2,383 | 2,567 | ||||||||||||||
| Surgeries | 577 | 500 | ||||||||||||||
| Net revenue per equivalent admission | $ | 7,633 | $ | 7,190 | ||||||||||||
| SUMMARY BALANCE SHEETS | Sept. 30, | June 30, | ||||||||||||||
| 2014 | 2014 | |||||||||||||||
| ASSETS | ||||||||||||||||
| Cash and Cash Equivalents | $ | 2,076 | $ | 3,587 | ||||||||||||
| Accounts Receivable - net | 10,934 | 9,850 | ||||||||||||||
| Other Current Assets | 12,903 | 12,338 | ||||||||||||||
| Property Plant and Equipment, net | 28,355 | 28,719 | ||||||||||||||
| Long-term Assets | 9,354 | 9,353 | ||||||||||||||
| $ | 63,622 | $ | 63,847 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||
| Current Liabilities | $ | 16,971 | $ | 16,481 | ||||||||||||
| Long-term Debt and Other Noncurrent Liabilities | 13,739 | 14,048 | ||||||||||||||
| Shareholders' Equity | 32,912 | 33,318 | ||||||||||||||
| $ | 63,622 | $ | 63,847 | |||||||||||||
Contacts:
Robert M. Thornton, Jr.,
770-933-7004
Chief Executive Officer
