SunLink Health Systems, Inc. Announces Fiscal 2017 Second Quarter Results

By a News Reporter-Staff News Editor at Managed Care Weekly Digest -- SunLink Health Systems, Inc. (NYSE MKT: SSY) announced earnings from continuing operations of $2,949,000 or $0.31 per fully diluted share for its second fiscal quarter ended December 31, 2016 compared to a net loss of $8,566,000, or a loss of $0.91 per fully diluted share, for the quarter ended December 31, 2015. The earnings from continuing operations in the current fiscal year's quarter are primarily due to the $2,819,000 gain on the previously announced sale of a medical office building complex in December 2016. The loss from continuing operations for the fiscal quarter ended December 31, 2015 included a non-cash charge of $7,101,000 to fully reserve the company's deferred income tax assets. Net earnings for the quarter ended December 31, 2016 were $3,098,000 or $0.33 per fully diluted share compared to a net loss of $9,346,000 or a loss of $0.99 per fully diluted share, for the quarter ended December 31, 2015 (see also SunLink Health Systems, Inc.).

Consolidated net revenues from continuing operations for the quarters ended December 31, 2016 and 2015 were $14,255,000 and $16,584,000, respectively, a decrease of 14% in the current fiscal year's second quarter compared to the comparable quarter of the prior fiscal year. Healthcare Facilities Segment net revenues in the quarter ended December 31, 2016 of $5,606,000 decreased $2,203,000 in the current fiscal year's quarter primarily as a result of the closure of one hospital in June 2016. The Specialty Pharmacy Segment revenues of $8,407,000 in the quarter ended December 31, 2016 decreased $161,000, or 1.9%, over the comparable quarter of the prior fiscal year due primarily to lower durable medical equipment and retail pharmacy revenues, partially offset by increased institutional pharmacy revenues.

The company had an operating profit from continuing operations for the quarter ended December 31, 2016 of $28,000, compared to an operating loss from continuing operations for the quarter ended December 31, 2015 of $1,262,000. The operating profit in the quarter ended December 31, 2016 was due primarily to the closure of an unprofitable hospital in the prior fiscal year and $347,000 of favorable prior year Medicare cost report adjustments in the current quarter.

Earnings from discontinued operations were $149,000 ($0.02 per fully diluted share) for the quarter ended December 31, 2016 compared to a loss from discontinued operations of $780,000 (a loss of $0.08 per fully diluted share) for the quarter ended December 31, 2015, respectively. The earnings from discontinued operations for the current year result from positive settlements of prior year's Medicare cost report settlements at a previously sold hospital.

For the six months ended December 31, 2016, SunLink reported earnings from continuing operations of $1,699,000 or $0.18 per fully diluted share, compared to a loss of $9,699,000 or a loss of $1.03 per fully diluted share, for the comparable period of the prior fiscal year. For the six months ended December 31, 2016, SunLink reported net earnings of $6,121,000, or $0.65 per fully diluted share compared to a net loss of $11,014,000, or a loss of $1.17 per fully diluted share for the six months ended December 31, 2015. Earnings from discontinued operations were $4,422,000 ($0.47 per fully diluted share) for the six months ended December 31, 2016 compared to a loss from discontinued operations of $1,315,000 (a loss of $0.14 per fully diluted share) for the six months ended December 31, 2015. The earnings from discontinued operations for the first six months of the current fiscal year result from a pre-tax gain of $7,270,000 on the August 2016 sale of a subsidiary's Chestatee Regional Hospital in Dahlonega, GA.

Consolidated net revenues from continuing operations for the six months ended December 31, 2016 and 2015 were $27,301,000 and $33,168,000, respectively, a decrease of 18% in the current fiscal year's second quarter. Healthcare Facilities Segment net revenues in the six months ended December 31, 2016 of $11,060,000 decreased $5,544,000 in the current fiscal year's quarter primarily from the closure of one hospital in June 2016. The Specialty Pharmacy Segment revenues of $15,748,000 in the six months ended December 31, 2016 decreased $387,000, or 2.4%, over the comparable quarter of the prior fiscal year due primarily to lower durable medical equipment and retail pharmacy revenues.

The company had an operating loss from continuing operations for the six months ended December 31, 2016 of $925,000, compared to an operating loss from continuing operations for the six months ended December 31, 2015 of $2,428,000.

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 dedicated physicians and healthcare professionals. For additional information on SunLink Health Systems, Inc., please visit the Company's website.

Keywords for this news article include: Hospital, Medicare, Health Policy, Finance and Investment, SunLink Health Systems Inc.

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