SunLink Health Systems, Inc. Announces Fiscal 2014 Fourth Quarter and Full-Year Results
SunLink Health Systems, Inc. (NYSE MKT: SSY) today announced earnings from continuing operations for its fourth fiscal quarter ended June 30, 2014 of $707,000 or $0.07 per fully diluted share, compared to earnings from continuing operations of $1,629,000 or $0.17 per fully diluted share, for the quarter ended June 30, 2013. The results for the quarter ended June 30, 2014 include $2,570,000 of pre-tax Medicare and Medicaid electronic health incentive payments, compared to $4,016,000 for the comparable quarter last year. Net earnings for the quarter ended June 30, 2014 were $1,350,000, or $0.14 per fully diluted share, compared to net earnings of $2,163,000, or $0.23 per fully diluted share, for the quarter ended June 30, 2013.
Consolidated net revenues from continuing operations for the quarters ended June 30, 2014 and 2013 were $25,070,000 and $25,445,000, respectively, a decrease of 1.5% in the current year’s quarter. The Healthcare Facilities Segment net revenues in the current quarter of $17,990,000 decreased $546,000, or 2.9%, compared to $18,536,000 for the comparable quarter of the prior year due to lower patient volume. The Specialty Pharmacy Segment revenues of $6,937,000 in the quarter ended June 30, 2014 increased $28,000, or 0.4%, from the comparable quarter of the prior year due primarily to an increase in institutional pharmacy sales.
The company had an operating profit from continuing operations for the quarter ended June 30, 2014 of $2,010,000, compared to an operating profit from continuing operations for the quarter ended June 30, 2013 of $2,638,000. The operating profit decreased in the current year’s quarter primarily due to the decrease of $1,446,000 of Medicare and Medicaid electronic health incentive payments.
For the fiscal year ended June 30, 2014, SunLink reported a loss from continuing operations of $1,391,000, or a loss of $0.15 per fully diluted share, compared to a loss of $1,585,000, or a loss of $0.17 per fully diluted share, for the comparable period last year. For the fiscal year ended June 30, 2014, SunLink reported a net loss of $545,000, or a loss of $0.06 per fully diluted share, compared to net earnings of $4,488,000 or $0.48 per share, for the fiscal year ended June 30, 2013.
Consolidated net revenues from continuing operations for the fiscal year ended June 30, 2014 decreased by 2.6% to $105,430,000 compared to $108,308,000 in the comparable period a year ago. The Healthcare Facilities Segment had net revenues in the fiscal year ended June 30, 2014 of $71,647,000 compared to $74,909,000 for the comparable period a year ago. The Specialty Pharmacy Segment had $33,322,000 of net revenues for the fiscal year ended June 30, 2014 compared to $33,314,000 in the prior fiscal year.
SunLink had an operating loss from continuing operations for the fiscal year ended June 30, 2014 of $40,000 compared to an operating loss of $1,095,000 last year. Adjusted EBITDA (a non-GAAP measure of the liquidity of the company) for SunLink’s Healthcare Facilities Segment decreased to $6,308,000 (which included $3,911,000 of electronic health records incentive payments) in the fiscal year ended June 30, 2014, from $6,728,000 last fiscal year (which included $4,947,000 of electronic health record payments). Adjusted EBITDA for the year ended June 30, 2014 for the Specialty Pharmacy Segment was $1,212,000 compared to $892,000 in the prior fiscal year.
Earnings from discontinued operations were $643,000 ($0.07 per fully diluted share) for the quarter ended June 30, 2014 and $846,000 ($0.09 per fully diluted share) for the fiscal year ended June 30, 2013, respectively. In the quarter ended June 30, 2014, discontinued operations included $1,076,000 pre-tax Medicare electronic health incentive payments recognized for a facility sold last fiscal year.
Earnings from discontinued operations were $6,073,000 ($0.64 per fully diluted share) for the fiscal year ended June 30, 2013. Earnings from discontinued operations for the fiscal year ended June 30, 2013 included pre-tax gains on the sale of substantially all of the assets of two hospitals.
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 .
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.
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 and twelve months ended June 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.