SunLink Health Systems, Inc. Announces Fiscal 2019 Third Quarter Results

ATLANTA--()--SunLink Health Systems, Inc. (NYSE American: SSY) today announced net earnings of $1,042,000 ($0.15 per fully diluted share) for its third fiscal quarter ended March 31, 2019 compared to a net loss of $588,000 (a loss of $0.08 per fully diluted share) for the quarter ended March 31, 2018. The net earnings in the current year’s quarter are due to the $2,136,000 pre-tax gain on the previously announced sale of a subsidiary’s nursing home and related property. The Company had a loss from continuing operations for its fiscal quarter ended March 31, 2019 of $325,000 (a loss of $0.05 per fully diluted share) compared to a loss from continuing operations of $593,000 (a loss of $0.08 per fully diluted share) for the quarter ended March 31, 2018.

Consolidated net revenues from continuing operations for the quarters ended March 31, 2019 and 2018 were $12,361,000 and $11,333,000, respectively, an increase of 9% in the current fiscal year’s third quarter compared to the comparable quarter of the prior fiscal year. Net revenues increased in the current fiscal year primarily due to increased hospital and nursing home net revenues and increased retail and institutional pharmacy revenues.

SunLink incurred an operating loss for the quarter ended March 31, 2019 of $488,000, compared to an operating loss for the quarter ended March 31, 2018 of $720,000.

Earnings from discontinued operations was $1,367,000 ($0.20 per fully diluted share) for the quarter ended March 31, 2019 compared to earnings from discontinued operations of $5,000 ($0.00 per fully diluted share) for the quarter ended March 31, 2018. The current year results include the $2,136,000 pre-tax gain on the sale of the Parkside Ellijay Nursing Home, a $336,000 loss from operations of the discontinued businesses, and $433,000 income tax expense.

For the nine months ended March 31, 2019, SunLink reported a loss from continuing operations of $853,000 (a loss of $0.12 per fully diluted share) compared to earnings of $383,000 ($0.04 per fully diluted share) for the comparable nine month period of the prior year. For the nine months ended March 31, 2019, SunLink reported net earnings of $467,000 ($0.06 per fully diluted share) compared to a net loss of $139,000 (or a loss of $0.02 per fully diluted share) for the nine months ended March 31, 2018. Earnings from discontinued operations were $1,320,000 ($0.18 per fully diluted share) for the nine months ended March 31, 2019 compared to a loss from discontinued operations of $522,000 (or a loss of $0.06 per fully diluted share) for the nine months ended March 31, 2018.

SunLink had approximately 6% and 16% fewer fully diluted weighted average common shares outstanding for the three and nine months ended March 31, 2019 due to share repurchases in December 2017 and December 2018.

Consolidated net revenues from continuing operations for the nine months ended March 31, 2019 and 2018 were $34,719,000 and $34,990,000, respectively, a decrease of 1% in the current nine months. Net revenues in the nine months ended March 31, 2019 declined compared to the prior year primarily due to the sale of a retail pharmacy operation in January 2018.

SunLink had an operating loss for the nine months ended March 31, 2019 of $1,348,000, compared to an operating loss for the nine months ended March 31, 2018 of $498,000.

SunLink Health Systems, Inc. is the parent company of subsidiaries that own and operate healthcare properties and businesses in the Southeast. Each of the Company’s businesses is operated locally with a strategy of linking patients’ needs with 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, 2018 and other filings with the Securities and Exchange Commission which can be located at www.sec.gov.

               
SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES
FISCAL 2019 THIRD QUARTER RESULTS
Amounts in 000's, except per share and volume amounts
 
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
Three Months Ended March 31, Nine Months Ended March 31,
2019 2018 2019 2018
% of Net % of Net % of Net % of Net
Amount Revenues Amount Revenues Amount Revenues Amount Revenues
Net Revenues $ 12,361 100.0 % $ 11,333 100.0 % 34,719 100.0 % 34,990 100.0 %
Costs and Expenses:
Cost of goods sold 5,539 44.8 % 5,073 44.8 % 14,711 42.4 % 14,623 41.8 %
Salaries, wages and benefits 4,931 39.9 % 4,806 42.4 % 14,225 41.0 % 14,068 40.2 %
Supplies 329 2.7 % 327 2.9 % 942 2.7 % 958 2.7 %
Purchased services 663 5.4 % 532 4.7 % 1,817 5.2 % 1,599 4.6 %
Other operating expenses 865 7.0 % 778 6.9 % 2,858 8.2 % 2,702 7.7 %
Rents and leases 155 1.3 % 154 1.4 % 458 1.3 % 463 1.3 %
Depreciation and amortization 367 3.0 % 383 3.4 % 1,056 3.0 % 1,096 3.1 %
Electronic Health Records incentive programs   0     0.0 %   0   0.0 %   0   0.0 %   (21 ) -0.1 %
Operating Loss (488 ) -3.9 % (720 ) -6.4 % (1,348 ) -3.9 % (498 ) -1.4 %
 
Interest Expense - net (63 ) -0.5 % (56 ) -0.5 % (185 ) -0.5 % (302 ) -0.9 %
Gain on economic damages claim, net 0 0.0 % 0 0.0 % 0 0.0 % 944 2.7 %
Loss on extinguishment of debt, net 0 0.0 % 0 0.0 % 0 0.0 % (238 ) -0.7 %
Gains on sale of assets   0     0.0 %   183   1.6 %   454   1.3 %   181   0.5 %
 

Earnings (Loss) from Continuing Operations before Income Taxes

(551 ) -4.5 % (593 ) -5.2 % (1,079 ) -3.1 % 87 0.2 %
Income Tax benefit   (226 )   -1.8 %   0   0.0 %   (226 ) -0.7 %   (296 ) -0.8 %
Earnings (Loss) from Continuing Operations (325 ) -2.6 % (593 ) -5.2 % (853 ) -2.5 % 383 1.1 %
Earnings (Loss) from Discontinued Operations, net of tax   1,367     11.1 %   5   0.0 %   1,320   3.8 %   (522 ) -1.5 %
Net Earnings (Loss) $ 1,042     8.4 % $ (588 ) -5.2 % $ 467   1.3 % $ (139 ) -0.4 %
Earnings (Loss) Per Share from Continuing Operations:
Basic $ (0.05 ) $ (0.08 ) $ (0.12 ) $ 0.04  
Diluted $ (0.05 ) $ (0.08 ) $ (0.12 ) $ 0.04  
Earnings (Loss) Per Share from Discontinued Operations:
Basic $ 0.20   $ 0.00   $ 0.18   $ (0.06 )
Diluted $ 0.20   $ 0.00   $ 0.18   $ (0.06 )
Net Earnings (Loss) Per Share:
Basic $ 0.15   $ (0.08 ) $ 0.06   $ (0.02 )
Diluted $ 0.15   $ (0.08 ) $ 0.06   $ (0.02 )
Weighted Average Common Shares Outstanding:
Basic   6,987     7,417     7,203     8,564  
Diluted   6,987     7,417     7,203     8,632  
 
HEALTHCARE FACILITIES VOLUME STATISTICS
 
Hospital and Nursing Home Admissions 132 140 375 384
Hospital and Nursing Home Patient Days 6,367 5,933 20,189 19,030
 
SUMMARY BALANCE SHEETS March 31, June 30,
2019 2018
ASSETS
Cash and Cash Equivalents $ 9,160 $ 3,456
Accounts Receivable - net 5,251 4,823
Other Current Assets 4,667 4,831
Property Plant and Equipment, net 5,488 5,896
Long-term Assets   2,494     7,170  
$ 27,060   $ 26,176  
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 6,040 $ 4,851
Long-term Debt and Other Noncurrent Liabilities 3,749 4,139
Shareholders' Equity   17,271     17,186  
$ 27,060   $ 26,176  

Contacts

Robert M. Thornton, Jr.
Chief Executive Officer
(770) 933-7004

Contacts

Robert M. Thornton, Jr.
Chief Executive Officer
(770) 933-7004