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SunLink Health Systems, Inc. Announces Fiscal 2018 Second Quarter ResultsSunLink Health Systems, Inc. (NYSE American: SSY) today announced earnings from continuing operations of $799,000, or $0.09 per fully diluted share, for its second fiscal quarter ended December 31, 2017 compared to earnings of $2,949,000, or $0.31 per fully diluted share, for the quarter ended December 31, 2016. Included in the earnings for the second quarter ended December 31, 2017 were:
Included in the earnings for the second quarter ended December 31, 2016 was a $2,819,000 pre-tax gain on the sale of a medical office building in December 2016. Net earnings for the quarter ended December 31, 2017 were $726,000, or $0.08 per fully diluted share, compared to net earnings of $3,098,000, or $0.33 per fully diluted share, for the quarter ended December 31, 2016. Consolidated net revenues from continuing operations for the quarters ended December 31, 2017 and 2016 were $13,878,000 and $14,255,000, respectively, a decrease of 3% in the current year's second fiscal quarter compared to the comparable quarter of the prior fiscal year. Healthcare Services segment net revenues of $5,722,000 for the quarter ended December 31, 2017 decreased $126,000 (2%) for last year's second quarter primarily due to decreased nursing home revenues. Pharmacy segment revenues of $8,156,000 in the quarter ended December 31, 2017 decreased $251,000 (3%) for the comparable quarter of the prior fiscal year due to decreased durable medical equipment revenues this year. SunLink had an Operating Loss for the quarter ended December 31, 2017 of $80,000, compared to an Operating Profit for the quarter ended December 31, 2016 of $28,000. The loss from Discontinued Operations was $73,000, a loss of $0.01 per fully diluted share, for the quarter ended December 31, 2017 compared to earnings from discontinued operations of $149,000, $0.02 per fully diluted share, for the quarter ended December 31, 2016. For the six months ended December 31, 2017, SunLink reported earnings from continuing operations of $575,000, $0.06 per fully diluted share, compared to earnings of $1,699,000, $0.18 per fully diluted share, for the comparable six month period of the prior year. For the six months ended December 31, 2017, SunLink reported net earnings of $449,000, $0.05 per fully diluted share, compared to net earnings of $6,121,000, $0.65 per fully diluted share, for the six months ended December 31, 2016. Loss from discontinued operations was $126,000, or a loss of $0.01 per fully diluted share, for the six months ended December 31, 2017 compared to earnings from discontinued operations of $4,422,000, $0.47 per fully diluted share, for the six months ended December 31, 2016. The earnings from discontinued operations for the six months of the prior year resulted from a pre-tax gain of $7,270,000 on the August 2016 sale of a hospital. Consolidated net revenues from continuing operations for the six months ended December 31, 2017 and 2016 were $27,241,000 and $27,301,000, respectively, a decrease of 1% in the current six months. Healthcare Services Segment net revenues in the six months ended December 31, 2017 of $11,376,000 represented a decrease of $177,000 (2%) resulting from lower nursing home revenues. The Pharmacy Segment revenues of $15,865,000 in the six months ended December 31, 2017 represented an increase of $117,000, (1%) over the comparable six months of the prior year due primarily to higher durable medical equipment revenues this year which were realized from Medicare reimbursement under the provisions of the 21st Century Cures Act. SunLink had an operating loss for the six months ended December 31, 2017 of $179,000, compared to an operating loss for the six months ended December 31, 2016 of $925,000. SunLink Health Systems, Inc. is the parent company of subsidiaries that own and operate healthcare businesses in the Southeast. Each of the Company's healthcare 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 30,2017 and other filings with the Securities and Exchange Commission which can be located at www.sec.gov. 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 to satisfy 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 used in operations for the six months ended December 31, 2017 and 2016, respectively, is shown below. Healthcare Services Adjusted EBITDA and Pharmacy Adjusted EBITDA is the EBITDA for those facilities without any allocation of corporate overhead, impairment charges, the Deepwater Horizon Settlement Program gain, and gains on sale of businesses.
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