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8-K - FORM 8-K - SUNLINK HEALTH SYSTEMS INC | d305852d8k.htm |
EX-99.2 - ADJUSTED EARNINGS - SUNLINK HEALTH SYSTEMS INC | d305852dex992.htm |
Exhibit 99.1
NEWS RELEASE | ||||||
Contact: | ||||||
Robert M. Thornton, Jr. | ||||||
Chief Executive Officer | ||||||
(770) 933-7004 |
SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES FISCAL 2012
SECOND QUARTER AND SIX MONTH RESULTS
ATLANTA, Georgia (February 16, 2012)SunLink Health Systems, Inc. (NYSE Amex Equities: SSY) today announced a loss from continuing operations for its second fiscal quarter ended December 31, 2011 of $1,586,000, or a loss of $0.17 per fully diluted share, compared to a loss from continuing operations of $2,100,000, or a loss of $0.26 per fully diluted share for the quarter ended December 31, 2010. For the six month period ended December 31, 2011 the company reported a loss from continuing operations of $1,891,000, or a loss of $0.20 per fully diluted share, compared to a loss from continuing operations of $4,364,000, or $0.54 loss per fully diluted share, for the six months ended December 31, 2010.
SunLink reported a net loss of $1,600,000, or a loss of $0.17 per fully diluted share for the quarter ended December 31, 2011, compared to a net loss of $1,765,000, or a loss of $0.22 per fully diluted share, for the comparable quarter a year ago. For the six month period ended December 31, 2011 the company reported a net loss of $1,918,000, or a loss of $0.21 per fully diluted share, compared to a net loss of $4,534,000, or a loss of $0.56 per fully diluted share in the comparable period last year.
Consolidated net revenues from continuing operations for the quarters ended December 31, 2011 and 2010 were $41,231,000 and $45,053,000, respectively, a decrease of 8.5% in the current years quarter. The Healthcare Facilities Segment net revenues in the current quarter of $30,559,000 decreased $3,010,000, or 9.0%, compared to $33,569,000 from the prior year. The Specialty Pharmacy Segment revenues of $10,672,000 in the quarter ended December 31, 2011 decreased 7.1% from the prior year. Consolidated net revenues from continuing operations for the six months ended December 31, 2011 decreased by 1.9% to $84,284,000 compared to $85,919,000 in the comparable period a year ago. The Healthcare Facilities Segment had net revenues in the six months ended December 31, 2011 of $65,857,000 compared to $65,534,000 last year. The Specialty Pharmacy Segment had $18,427,000 of net revenue for the six months ended December 31, 2011 compared to $20,385,000 in the comparable period a year ago.
The company had an operating loss for the quarter ended December 31, 2011 of $1,347,000, compared to operating profit for the quarter ended December 31, 2010 of $169,000. For the six months ended December 31, 2011, the company had an operating loss of $536,000 compared to an operating loss of $1,941,000 for the comparable prior year period. Adjusted EBITDA (a non-GAAP measure of liquidity of the company) for SunLinks Healthcare Facilities Segment in the fiscal quarter ended December 31, 2011 decreased to $822,000 from $2,860,000 in the comparable quarter a year ago. Adjusted EBITDA for SunLinks Specialty Pharmacy Segment was $285,000 in the second fiscal quarter compared to Adjusted EBITDA of $386,000 in the comparable quarter a year ago. Consolidated EBITDA for the second fiscal quarter was an
EBITDA loss of $23,000 compared to EBIDTA of $1,716,000 for the comparable quarter a year ago. For the six months ended December 31, 2011, EBITDA was $2,092,000 compared to $1,199,000 for the six months ended December 31, 2010. Adjusted EBITDA for SunLinks Healthcare Facilities Segment in the six months ended December 31, 2011 increased to $4,081, 000 from $3,318,000 in the comparable prior year period. Adjusted EBITDA for SunLinks Specialty Pharmacy Segment was $239,000 in the six month period ended December 31, 2011 compared to Adjusted EBITDA of $569,000 in the comparable prior year period.
Salaries, wages and benefits increased as a percentage of net revenue for the three months ended December 31, 2011 due to increased employee medical claims and the overall decrease in net patient revenues for the three and six months ended December 31, 2011. For the three and six months ended December 31, 2011, employee medical claims expense increased $529,000 and $786,000, respectively, as compared to the three and six months ended December 31, 2010.
Interest expense for the quarter ended December 31, 2011 was $1,035,000, a decrease of $2,194,000 from $3,229,000 for the quarter ended December 31, 2010. For the six months ended December 31, 2011, interest expense was $2,346,000, a decrease of $1,731,000 from $4,077,000 in the comparable prior year period. This decrease for both periods is due to a July 2011 $8,000,000 prepayment on the term loan of SunLinks existing credit agreement resulting in reduced interest expense which was partially offset by an increase in interest rates.
SUNLINK HEALTH SYSTEMS, INC. FISCAL 2012 SECOND QUARTER CONFERENCE CALL scheduled for February 22, 2012 at 11:00 AM (EST).
The dial in number for the conference call is 1-800-894-5910
A replay of the taped conference call will be available approximately one hour after the conclusion of the conference call. To listen to the replay, dial 800-723-0520.
SunLink Health Systems, Inc. currently operates six community hospitals, three nursing homes and one home care business in the Southeast and Midwest and its specialty pharmacy business, SunLink ScriptsRx, in Louisiana. Each SunLink hospital is the only hospital in its community. SunLinks operating strategy is to link patients needs with dedicated physicians and health professionals to deliver quality, efficient medical care and healthcare products and services in each area it serves. For additional information on SunLink Health Systems, Inc., please visit the companys website at www.sunlinkhealth.com.
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 companys 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 companys Annual Report on Form 10-K for the year ended June 30, 2011 and other filings with the Securities and Exchange Commission which can be located at www.sec.gov.
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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 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 (used in) operations for the three and six months ended December 31, 2011 and 2010, 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.
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Healthcare Facilties Adjusted EBITDA |
$ | 822 | $ | 2,860 | $ | 4,081 | $ | 3,318 | ||||||||
Specialty Pharmacy Adjusted EBITDA |
285 | 386 | 239 | 569 | ||||||||||||
Corporate overhead costs |
(1,130 | ) | (1,533 | ) | (2,228 | ) | (2,689 | ) | ||||||||
Taxes and interest expense |
(230 | ) | (2,440 | ) | (1,338 | ) | (2,402 | ) | ||||||||
Other non-cash expenses and net change in operating assets and liabilities |
567 | (1,614 | ) | (1,789 | ) | (156 | ) | |||||||||
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Net cash provided by operations |
$ | 314 | $ | (2,341 | ) | $ | (1,035 | ) | $ | (1,360 | ) | |||||
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SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES
FISCAL 2012 SECOND QUARTER AND SIX
MONTH RESULTS
Amounts in 000s, except per share and volume amounts
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||||||
% of Net | % of Net | % of Net | % of Net | |||||||||||||||||||||||||||||
Amount | Revenues | Amount | Revenues | Amount | Revenues | Amount | Revenues | |||||||||||||||||||||||||
Net Revenues |
$ | 41,231 | 100.0 | % | $ | 45,053 | 100.0 | % | $ | 84,284 | 100.0 | % | $ | 85,919 | 100.0 | % | ||||||||||||||||
Costs and Expenses: |
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Cost of goods sold |
7,807 | 18.9 | % | 8,443 | 18.7 | % | 12,741 | 15.1 | % | 14,251 | 16.6 | % | ||||||||||||||||||||
Salaries, wages and benefits |
18,157 | 44.0 | % | 18,116 | 40.2 | % | 36,392 | 43.2 | % | 35,906 | 41.8 | % | ||||||||||||||||||||
Provision for bad debts |
3,645 | 8.8 | % | 4,398 | 9.8 | % | 9,121 | 10.8 | % | 9,539 | 11.1 | % | ||||||||||||||||||||
Supplies |
2,860 | 6.9 | % | 3,316 | 7.4 | % | 5,922 | 7.0 | % | 6,649 | 7.7 | % | ||||||||||||||||||||
Purchased services |
2,547 | 6.2 | % | 2,835 | 6.3 | % | 5,344 | 6.3 | % | 5,689 | 6.6 | % | ||||||||||||||||||||
Other operating expenses |
5,466 | 13.3 | % | 5,453 | 12.1 | % | 11,106 | 13.2 | % | 11,143 | 13.0 | % | ||||||||||||||||||||
Rents and leases |
772 | 1.9 | % | 776 | 1.7 | % | 1,566 | 1.9 | % | 1,543 | 1.8 | % | ||||||||||||||||||||
Depreciation and amortization |
1,324 | 3.2 | % | 1,547 | 3.4 | % | 2,628 | 3.1 | % | 3,140 | 3.7 | % | ||||||||||||||||||||
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Operating Profit (Loss) |
(1,347 | ) | -3.3 | % | 169 | 0.4 | % | (536 | ) | -0.6 | % | (1,941 | ) | -2.3 | % | |||||||||||||||||
Interest Expense |
(1,035 | ) | -2.5 | % | (3,229 | ) | -7.2 | % | (2,346 | ) | -2.8 | % | (4,077 | ) | -4.7 | % | ||||||||||||||||
Interest Income |
| 0.0 | % | 1 | 0.0 | % | 2 | 0.0 | % | 2 | 0.0 | % | ||||||||||||||||||||
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Loss from Continuing Operations before |
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Income Taxes |
(2,382 | ) | -5.8 | % | (3,059 | ) | -6.8 | % | (2,880 | ) | -3.4 | % | (6,016 | ) | -7.0 | % | ||||||||||||||||
Income Tax Expense |
(796 | ) | -1.9 | % | (959 | ) | -2.1 | % | (989 | ) | -1.2 | % | (1,652 | ) | -1.9 | % | ||||||||||||||||
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Loss from Continuing Operations |
(1,586 | ) | -3.8 | % | (2,100 | ) | -4.7 | % | (1,891 | ) | -2.2 | % | (4,364 | ) | -5.1 | % | ||||||||||||||||
Earnings (Loss) from Discontinued Operations, net of income taxes |
(14 | ) | 0.0 | % | 335 | 0.7 | % | (27 | ) | 0.0 | % | (170 | ) | -0.2 | % | |||||||||||||||||
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Net Loss |
$ | (1,600 | ) | -3.9 | % | $ | (1,765 | ) | -3.9 | % | $ | (1,918 | ) | -2.3 | % | $ | (4,534 | ) | -10.1 | % | ||||||||||||
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Loss Per Share from Continuing Operations: |
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Basic |
$ | (0.17 | ) | $ | (0.26 | ) | $ | (0.20 | ) | $ | (0.54 | ) | ||||||||||||||||||||
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Diluted |
$ | (0.17 | ) | $ | (0.26 | ) | $ | (0.20 | ) | $ | (0.54 | ) | ||||||||||||||||||||
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Earnings (Loss) Per Share from Discontinued Operations: |
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Basic |
$ | (0.00 | ) | $ | 0.04 | $ | (0.00 | ) | $ | (0.02 | ) | |||||||||||||||||||||
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Diluted |
$ | (0.00 | ) | $ | 0.04 | $ | (0.00 | ) | $ | (0.02 | ) | |||||||||||||||||||||
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Net Loss Per Share: |
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Basic |
$ | (0.17 | ) | $ | (0.22 | ) | $ | (0.21 | ) | $ | (0.56 | ) | ||||||||||||||||||||
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Diluted |
$ | (0.17 | ) | $ | (0.22 | ) | $ | (0.21 | ) | $ | (0.56 | ) | ||||||||||||||||||||
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Weighted Average Common Shares Outstanding: |
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Basic |
9,448 | 8,082 | 9,253 | 8,081 | ||||||||||||||||||||||||||||
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Diluted |
9,448 | 8,082 | 9,253 | 8,081 | ||||||||||||||||||||||||||||
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HEALTHCARE FACILITIES VOLUME STATISTICS |
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Admissions |
1,383 | 1,493 | 2,824 | 2,993 | ||||||||||||||||||||||||||||
Equivalent Admissions |
4,794 | 4,540 | 9,659 | 9,385 | ||||||||||||||||||||||||||||
Surgeries |
595 | 682 | 1,210 | 1,389 | ||||||||||||||||||||||||||||
Net revenue per equivalent admission |
$ | 6,350 | $ | 7,394 | $ | 6,484 | $ | 6,983 |
SUMMARY BALANCE SHEETS | December 31, 2011 |
June 30, 2011 |
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ASSETS |
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Cash and Cash Equivalents |
$ | 519 | $ | 7,250 | ||||
Accounts Receivablenet |
16,113 | 16,302 | ||||||
Other Current Assets |
17,285 | 17,519 | ||||||
Property Plant and Equipment, net |
36,901 | 38,519 | ||||||
Long-term Assets |
11,019 | 9,946 | ||||||
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$ | 81,837 | $ | 89,536 | |||||
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LIABILITIES AND SHAREHOLDERS EQUITY |
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Current Liabilities |
$ | 24,131 | $ | 23,650 | ||||
Long-term Debt and Other Noncurrent Liabilities |
25,793 | 34,430 | ||||||
Shareholders Equity |
31,913 | 31,456 | ||||||
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$ | 81,837 | $ | 89,536 | |||||
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