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

Managed Care Weekly Digest

By a News Reporter-Staff News Editor at Managed Care Weekly Digest -- SunLink Health Systems, Inc. (NYSE MKT: SSY) announced a loss from continuing operations of $890,000 or a loss of $0.10 per fully diluted share for its third fiscal quarter ended March 31, 2017 compared to a loss from continuing operations of $1,392,000, or a loss of $0.15 per fully diluted share, for the quarter ended March 31, 2016. Net earnings for the quarter ended March 31, 2017 were a net loss of $1,025,000 or a loss of $0.11 per fully diluted share compared to a net loss of $1,835,000 or a loss of $0.19 per fully diluted share for the quarter ended March 31, 2016 (see also SunLink Health Systems, Inc.).

Consolidated net revenues from continuing operations for the quarters ended March 31, 2017 and 2016 were $13,699,000 and $16,205,000, respectively, a decrease of 15% in the current fiscal year's third quarter compared to the comparable quarter of the prior fiscal year. Healthcare Facilities Segment net revenues of $5,229,000 for the quarter ended March 31, 2017 decreased $2,315,000 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 $8,198,000 in the quarter ended March 31, 2017 decreased $311,000, or 4%, 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.

SunLink had an operating loss for the quarter ended March 31, 2017 of $771,000, compared to an operating loss for the quarter ended March 31, 2016 of $1,187,000. The decreased operating loss in the quarter ended March 31, 2017 compared to the same quarter last year was due primarily to the closure of an unprofitable hospital in the prior fiscal year.

The loss from discontinued operations was $135,000 ($0.01 per fully diluted share) for the quarter ended March 31, 2017 compared to a loss from discontinued operations of $443,000 (a loss of $0.05 per fully diluted share) for the quarter ended March 31, 2016. The loss from discontinued operations for the current year results primarily from a negative settlement of a prior year's Medicare cost report at a previously sold hospital and insurance expense for retained liabilities at sold hospitals.

For the nine months ended March 31, 2017, SunLink reported earnings from continuing operations of $809,000 or $0.09 per fully diluted share, compared to a loss from continuing operations of $11,091,000 or a loss of $1.17 per fully diluted share, for the comparable period of the prior fiscal year. For the nine months ended March 31, 2017, SunLink reported net earnings of $5,096,000, or $0.54 per fully diluted share compared to a net loss of $12,849,000, or a loss of $1.36 per fully diluted share for the nine months ended March 31, 2016. Earnings from discontinued operations were $4,287,000 ($0.45 per fully diluted share) for the nine months ended March 31, 2017 compared to a loss from discontinued operations of $1,758,000 (a loss of $0.19 per fully diluted share) for the nine months ended March 31, 2016. The loss from continuing operations for the nine months ended March 31, 2016 included a non-cash charge of $7,101,000 to fully reserve the company's deferred income tax assets. The earnings from discontinued operations for the first nine months of the current fiscal 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 nine months ended March 31, 2017 and 2016 were $41,000,000 and $49,373,000, respectively, a decrease of 17% in the current fiscal year. Healthcare Facilities Segment net revenues in the nine months ended March 31, 2017 of $16,289,000 decreased $7,860,000 in the current fiscal year's nine months primarily from the closure of one hospital in June 2016. The Specialty Pharmacy Segment revenues of $23,946,000 in the nine months ended March 31, 2017 decreased $698,000, or 3%, over the comparable nine months of the prior fiscal year due primarily to lower durable medical equipment and retail pharmacy revenues.

SunLink had an operating loss for the nine months ended March 31, 2017 of $1,696,000, compared to an operating loss for the nine months ended March 31, 2016 of $3,615,000. Positive adjustments for Medicare cost report adjustments of $385,000 this year compared to negative adjustments of $662,000 last year contributed to the reduction of the operating loss for the current year nine months results compared to the same period last year.

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, SunLink Health Systems Inc.