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, 2013 of $1,174,000, or a loss of $0.12 per fully diluted share, compared to a loss from continuing operations of $1,622,000, or a loss of $0.17 per fully diluted share, for the quarter ended September 30, 2012. SunLink reported a net loss for the quarter ended September 30, 2013 of $1,158,000, or a loss of $0.12 per fully diluted share, compared to net loss of $1,424,000, or a loss of $0.15 per fully diluted share, for the quarter ended September 30, 2012.
Consolidated net revenues from continuing operations for the quarters ended September 30, 2013 and 2012 were $25,578,000 and $25,690,000, respectively, a decrease of 0.4% in the current year's quarter. The Healthcare Facilities Segment net revenues in the current quarter of $18,640,000 decreased $268,000, or 1.4%, compared to $18,908,000 for the comparable quarter of the prior year. The Specialty Pharmacy Segment revenues of $6,842,000 in the quarter ended September 30, 2013 increased $93,000, or 1.4% above segment revenues of the comparable quarter of the prior year.
The company had an operating loss from continuing operations for the quarter ended September 30, 2013 of $864,000, compared to an operating loss from continuing operations for the quarter ended September 30, 2012 of $2,491,000. The operating margin increased in the current year's quarter primarily due to increased Adjusted EBITDA (a non-GAAP measure of the liquidity of the company) for SunLink's Healthcare Facilities Segment and the non-recurrence in the current year of a $789,000 pre-tax impairment charge recorded last year. Adjusted EBITDA at SunLink's Healthcare Facilities Segment in the first fiscal quarter was $832,000 compared to $129,000 in the comparable quarter a year ago. Adjusted EBITDA for SunLink's Specialty Pharmacy Segment was $70,000 in the first fiscal quarter compared to Adjusted EBITDA of $80,000 in the comparable quarter a year ago.
Earnings from discontinued operations were $16,000 ($0.00 per fully diluted share) for the quarter ended September 30, 2013 and $198,000 ($0.02 per fully diluted share) for the fiscal quarter ended September 30, 2012, respectively. Earnings from discontinued operations for the quarter ended September 30, 2012 included a post-tax gain on the sale of substantially all of the assets of a subsidiary which owned and operated a hospital and nursing home in Adel, Georgia.
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 (used in) operations for the three months ended September 30, 2013 and 2012, 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,
2013 2012
Healthcare Facilities Adjusted EBITDA $ 832,000 $ 129,000
Specialty Pharmacy Adjusted EBITDA 70,000 80,000
Corporate overhead costs (859,000 ) (927,000 )
Taxes and interest expense (316,000 ) (501,000 )
Other non-cash expenses and net change in
operating assets and liabilities 2,659,000 (1,373,000 )
Net cash provided by (used in) operations $ 2,386,000 $ (2,592,000 )
SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES
FISCAL 2014 FIRST QUARTER RESULTS
Amounts in 000's, except per share and volume amounts
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended September 30,
2013 2012
% of Net % of
Net
Amount Revenues Amount Revenues
Operating revenues (net of contractual allowances) $ 28,296 110.6 % $ 29,172 113.6 %
Less provision for bad debts of Healthcare Facilities Segment 2,718 10.6 % 3,482 13.6 %
Net Revenues 25,578 100.0 % 25,690 100.0 %
Costs and Expenses:
Cost of goods sold 4,275 16.7 % 4,237 16.5 %
Salaries, wages and benefits 12,987 50.8 % 13,221 51.5 %
Provision for bad debts of Specialty Pharmacy Segment 53 0.2 % 80 0.3 %
Supplies 2,197 8.6 % 2,263 8.8 %
Purchased services 1,851 7.2 % 1,956 7.6 %
Other operating expenses 3,711 14.5 % 4,105 16.0 %
Rents and leases 461 1.8 % 546 2.1 %
Impairments of property, plant and equipment - 0.0 % 789 3.1 %
Depreciation and amortization 907 3.5 % 984 3.8 %
Operating Loss (864 ) -3.4 % (2,491 ) -9.7 %
Interest Expense, net (312 ) -1.2 % (559 ) -2.2 %
Loss from Continuing Operations before Income Taxes (1,176 ) -4.6 % (3,050 ) -11.9 %
Income Tax Benefit (2 ) 0.0 % (1,428 ) -5.6 %
Loss from Continuing Operations (1,174 ) -4.6 % (1,622 ) -6.3 %
Earnings from Discontinued Operations, net of tax 16 0.1 % 198 0.8 %
Net Loss $ (1,158 ) -4.5 % $ (1,424 ) -5.5 %
Loss Per Share from Continuing Operations:
Basic $ (0.12 ) $ (0.17 )
Diluted $ (0.12 ) $ (0.17 )
Earnings Per Share from Discontinued Operations:
Basic $ 0.00 $ 0.02
Diluted $ 0.00 $ 0.02
Net Loss Per Share:
Basic $ (0.12 ) $ (0.15 )
Diluted $ (0.12 ) $ (0.15 )
Weighted Average Common Shares Outstanding:
Basic 9,443 9,446
Diluted 9,443 9,446
HEALTHCARE FACILITIES VOLUME STATISTICS
Admissions 747 878
Equivalent Admissions 2,567 3,158
Surgeries 500 518
Net revenue per equivalent admission $ 7,261 $ 5,987
SUMMARY BALANCE SHEETS Sept. 30, June 30,
2013 2013
ASSETS
Cash and Cash Equivalents $ 4,190 $ 2,657
Accounts Receivable - net 10,949 12,356
Other Current Assets 11,568 13,080
Property Plant and Equipment, net 30,123 30,574
Long-term Assets 9,227 9,336
$ 66,057 $ 68,003
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 22,011 $ 22,246
Long-term Debt and Other Noncurrent Liabilities 11,444 12,014
Shareholders' Equity 32,602 33,743
$ 66,057 $ 68,003
CONTACT: SunLink Health Systems, Inc.
Robert M. Thornton, Jr., (770) 933-7004
Chief Executive Officer
Source: SunLink Health Systems, Inc.
