SunLink Health Systems, Inc. Announces Fiscal 2024 First Quarter Results

Rhea-AI Summary

SunLink Health Systems, Inc. (NYSE American: SSY) announced a loss from continuing operations of $428,000 for the first fiscal quarter ended September 30, 2023, compared to $605,000 for the same period in 2022. The subsidiary, Crown Healthcare Investments, LLC, signed an agreement for the sale of Trace Regional Medical Center for approximately $8,000,000. The net loss for the quarter ended September 30, 2023, was $1,344,000 compared to $1,558,000 for the same period in 2022. Consolidated net revenues for each fiscal quarter ended September 30, 2023, and 2022 were $8,555,000 and $7,449,000, respectively, representing a 15% increase. SunLink reported an operating loss for the quarter ended September 30, 2023, of $450,000 compared to $617,000 for the same period in 2022. The company also highlighted the adverse effects of the COVID-19 pandemic on its assets and operations, including salaries and wages pressure, workforce shortages, supply chain disruption, and broad inflationary pressures.

Positive

• 15% increase in consolidated net revenues for the quarter ended September 30, 2023, compared to the same period in 2022.
• Operating loss decreased from the previous year's comparable quarter due to increased net revenues.

Negative

• Net loss for the quarter ended September 30, 2023, was $1,344,000, compared to $1,558,000 for the same period in 2022.
• Adverse effects of the COVID-19 pandemic on the company's assets and operations.

ATLANTA--(BUSINESS WIRE)-- SunLink Health Systems, Inc. (NYSE American: SSY) today announced a loss from continuing operations of $428,000 (or a loss of $0.06 per fully diluted share) for its first fiscal quarter ended September 30, 2023 compared to a loss from continuing operations of $605,000 (or a loss of $0.09 per fully diluted share) for the first fiscal quarter ended September 30, 2022. On November 10, 2023, the Company's subsidiary, Crown Healthcare Investments, LLC, signed an agreement with Progressive Health Group, LLC, ("Buyer") for the sale of the subsidiary that owns and operates Trace Regional Medical Center (“Trace”), which includes a hospital, a skilled nursing facility and three (3) patient clinics in Houston, MS, for approximately $8,000,000. The sale is expected to close by December 15, 2023 but is subject to, among other things, the Buyer's satisfactory completion of its due diligence investigation and a number of customary closing conditions. The results for Trace are included in discontinued operations for the current fiscal year and prior period financial information has been restated to include Trace in discontinued operations.

Net loss for the quarter ended September 30, 2023 was $1,344,000 (or a loss of $0.19 per fully diluted share) compared to a net loss of $1,558,000 (or a loss of $0.22 per fully diluted share) for the quarter ended September 30, 2022. The net loss for the quarter included a loss from discontinued operations of $916,000 (or a loss of $0.13 per fully diluted share) for the quarter ended September 30, 2023 compared to a loss from discontinued operations of $953,000 (or a loss of $0.14 per fully diluted share) for the quarter ended September 30, 2022, substantially all of which relates to Trace’s results.

Consolidated net revenues for each fiscal quarters ended September 30, 2023 and 2022 were $8,555,000 and $7,449,000, respectively, an increase of 15% in the current year’s quarter above those in the comparable quarter of the prior fiscal year. Pharmacy net revenues increased above those of the comparable fiscal quarter of the prior fiscal year due to a $321 refund of prior periods sales taxes paid, an 8% increase retail and institutional pharmacy scripts filled and increased DME revenue per order in the fiscal quarter ended September 30, 2023 compared to the fiscal quarter ended September 30, 2022.

SunLink reported an operating loss for the quarter ended September 30, 2023 of $450,000 compared to an operating loss for the quarter ended September 30, 2022 of $617,000. The decrease in operating loss from last year’s comparable quarter was due primarily to the increased net revenues this fiscal quarter.

COVID-19 Pandemic

The Company continued to experience adverse after-effects of the COVID-19 pandemic in the quarter ended September 30, 2023 and believes such effects will likely continue to affect its assets and operations in the foreseeable future particularly salaries and wages pressure, workforce shortages, supply chain disruption and broad inflationary pressures. Our ability to make estimates of any such continuing effects of evolving strains of COVID-19 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, 2023 and other filings with the Securities and Exchange Commission which can be located at www.sec.gov.

SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES
FISCAL 2024 FIRST QUARTER RESULTS
Amounts in 000's, except per share
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
	Three Months Ended September 30,
		2023								2022
						% of Net								% of Net
		Amount				Revenues				Amount				Revenues
Net revenues		$	8,555				100.0	%		$	7,449			100.0	%
Costs and Expenses:
Cost of goods sold			4,771				55.8	%			4,369			58.7	%
Salaries, wages and benefits			2,617				30.6	%			2,523			33.9	%
Supplies			34				0.4	%			30			0.4	%
Purchased services			286				3.3	%			250			3.4	%
Other operating expenses			906				10.6	%			533			7.2	%
Rent and leases			91				1.1	%			92			1.2	%
Depreciation and amortization			300				3.5	%			269			3.6	%
Operating loss			(450	)			-5.3	%			(617	)		-8.3	%
Interest Income - net			22				0.3	%			0			0.2	%
Gain on sale of assets			2				0.0	%			12			0.0	%
Loss from Continuing Operations before
Income Taxes			(426	)			-5.0	%			(605	)		-8.1	%
Income Tax expense			2				0.0	%			0			0.0	%
Loss from Continuing Operations			(428	)			-5.0	%			(605	)		-8.1	%
Loss from Discontinued Operations, net of tax			(916	)			-10.7	%			(953	)		-12.8	%
Net Loss		$	(1,344	)			-15.7	%		$	(1,558	)		-20.9	%
Loss Per Share from Continuing Operations:
Basic		$	(0.06	)						$	(0.09	)
Diluted		$	(0.06	)						$	(0.09	)
Earnings (Loss) Per Share from Discontinued Operations:
Basic		$	(0.13	)						$	(0.14	)
Diluted		$	(0.13	)						$	(0.14	)
Net Loss Per Share:
Basic		$	(0.19	)						$	(0.22	)
Diluted		$	(0.19	)						$	(0.22	)
Weighted Average Common Shares Outstanding:
Basic			7,033								6,983
Diluted			7,033								6,983
SUMMARY BALANCE SHEETS		September 30.				June 30,
		2023				2023
ASSETS
Cash and Cash Equivalents		$	2,820			$	4,486
Receivable - net			2,764				2,592
Current Assets Held for Sale			7,284				1,920
Other Current Assets			3,663				3,276
Property Plant and Equipment, net			2,891				2,717
Long-term Assets			2,301				8,277
		$	21,723			$	23,268
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities		$	4,993			$	4,869
Noncurrent Liabilities			651				982
Shareholders' Equity			16,079				17,417
		$	21,723			$	23,268

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231117895003/en/

Robert M. Thornton, Jr.

Chief Executive Officer

(770) 933-7004

Source: SunLink Health Systems, Inc.

What were SunLink Health Systems, Inc.'s net revenues for the quarter ended September 30, 2023?

Consolidated net revenues for the quarter ended September 30, 2023, were $8,555,000.

What was the operating loss for SunLink Health Systems, Inc. for the quarter ended September 30, 2023?

SunLink reported an operating loss of $450,000 for the quarter ended September 30, 2023.

What impact did the COVID-19 pandemic have on SunLink Health Systems, Inc.?

The company experienced adverse effects of the COVID-19 pandemic, including salaries and wages pressure, workforce shortages, supply chain disruption, and broad inflationary pressures.