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SunLink reported net earnings of $891,000, or $0.11 per fully diluted share, for the quarter ended June 30, 2009, compared to net earnings of $427,000, or $0.05 per fully diluted share, for the comparable quarter a year ago. For the fiscal year ended June 30, 2009, SunLink reported net earnings of $912,000, or $0.11 per fully diluted share compared to net earnings of $1,616,000, or $0.21 per share, for the fiscal year ended June 30, 2008.
Consolidated net revenues for the quarters ended June 30, 2009 and 2008 were $49,255,000 and $43,819,000, respectively, an increase of 12.4% for the fourth fiscal quarter. SunLink's Specialty Pharmacy segment, which began business when it acquired Carmichael's Cashway Pharmacy, Inc. on April 22, 2008, added $10,599,000 of net revenue for the quarter ended June 30, 2009 compared to $7,059,000 last year. The Healthcare Facilities segment net revenues for the quarter ended June 30, 2009 was $38,656,000 compared to $36,760,000 for the comparable quarter a year ago. The most recent fourth quarter's results included an aggregate of $775,000 from state indigent care programs and positive prior year third-party payor settlements compared to $1,612,000 in the quarter ended June 30, 2008. Consolidated net revenues for the fiscal year ended June 30, 2009 increased by 25.8% to $199,254,000 compared to $158,431,000 in the comparable period a year ago. The Specialty Pharmacy segment had $47,329,000 of net revenue for the year ended June 30, 2009 compared to $7,059,000 for the prior fiscal year. The Healthcare Facilities segment net revenues for the fiscal year ended June 30, 2009 were $151,925,000 compared to $151,372,000 for the fiscal year ended June 30, 2008.
The company's operating profit for the quarter ended June 30, 2009 was $2,354,000, or 4.8% of net revenues, compared to an operating profit for the quarter ended June 30, 2008 of $1,679,000, or 3.8% of net revenues. Operating profit as a percentage of net revenues increased in the fiscal year ended June 30, 2009 due to operating profit added by the Specialty Pharmacy segment. Operating profit for the fiscal year ended June 30, 2009 was $5,679,000, or 2.9% of net revenues, compared to $5,405,000, or 3.4% of net revenues, for the fiscal year ended June 30, 2008. Adjusted EBITDA (a non-GAAP measure of the liquidity of the company) at SunLink's Healthcare Facilities segment for the fourth fiscal quarter increased to $4,005,000 from $3,867,000 in the comparable quarter a year ago. Adjusted EBITDA for SunLink's Specialty Pharmacy segment was $1,205,000 in the fourth fiscal quarter compared to $821,000 in the comparable quarter a year ago which included Specialty Pharmacy results for 71 days.
SunLink Health Systems, Inc. currently operates seven 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. SunLink's 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 company's 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 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, 2009 and other filings with the Securities and Exchange Commission which can be located at www.sec.gov.
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 months and fiscal year ended June 30, 2009 and 2008, 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.
Three Months ended Fiscal Year ended
June 30, June 30,
2009 2008 2009 2008
Healthcare Facilities Adjusted EBITDA $ 4,005,000 $ 3,867,000 $ 14,631,000 $ 14,921,000
Specialty Pharmacy Adjusted EBITDA 1,205,000 821,000 3,394,000 821,000
Corporate overhead costs (1,097,000 ) (1,338,000 ) (5,017,000 ) (4,825,000 )
Taxes and interest expense (1,517,000 ) (812,000 ) (4,668,000 ) (2,950,000 )
Other non-cash expenses and net changes in operating assets and 1,559,000 (2,797,000 ) (3,910,000 ) (6,287,000 )
liabilities
Net cash provided by (used in) operations $ 4,155,000 $ (259,000 ) $ 4,430,000 $ 1,680,000
SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES
FISCAL 2009 FOURTH QUARTER AND FULL YEAR
RESULTS
Amounts in 000's, except per share and volume amounts
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended June 30, Twelve Months Ended June 30,
2009 2008 2009 2008
% of Net % of Net % of Net % of Net
Amount Revenues Amount Revenues Amount Revenues Amount Revenues
Net Revenues $ 49,255 100.0 % $ 43,819 100.0 % $ 199,254 100.0 % $ 158,431 100.0 %
Costs and Expenses:
Cost of goods sold 6,467 13.1 % 4,571 10.4 % 31,766 15.9 % 4,571 2.9 %
Salaries, wages and benefits 19,121 38.8 % 19,495 44.5 % 78,813 39.6 % 73,852 46.6 %
Provision for bad debts 6,402 13.0 % 5,142 11.7 % 24,533 12.3 % 22,013 13.9 %
Supplies 3,841 7.8 % 3,272 7.5 % 14,744 7.4 % 14,615 9.2 %
Purchased services 2,834 5.8 % 2,476 5.7 % 11,548 5.8 % 9,961 6.3 %
Other operating expenses 5,652 11.5 % 5,164 11.8 % 21,616 10.8 % 19,872 12.5 %
Rents and leases 825 1.7 % 349 0.8 % 3,226 1.6 % 2,630 1.7 %
Impairment of construction in process - 0.0 % - 0.0 % 433 0.2 % - 0.0 %
Depreciation and amortization 1,759 3.6 % 1,671 3.8 % 6,896 3.5 % 5,512 3.5 %
Operating Profit 2,354 4.8 % 1,679 3.8 % 5,679 2.9 % 5,405 3.4 %
Gain on sales of assets - 0.0 % - 0.0 % 180 0.1 % - 0.0 %
Loss on early repayment of debt - 0.0 % (267 ) -0.6 % - 0.0 % (267 ) -0.2 %
Interest Expense (947 ) -1.9 % (850 ) -1.9 % (3,765 ) -1.9 % (2,114 ) -1.3 %
Interest Income 11 0.0 % 25 0.1 % 50 0.0 % 72 0.0 %
Earnings from Continuing Operations before Income Taxes 1,418 2.9 % 587 1.3 % 2,144 1.1 % 3,096 2.0 %
Income Tax Expense 568 1.2 % 8 0.0 % 1,077 0.5 % 1,087 0.7 %
Earnings from Continuing Operations 850 1.7 % 579 1.3 % 1,067 0.5 % 2,009 1.3 %
Loss from Discontinued Operations, net of income taxes 41 0.1 % (152 ) -0.3 % (155 ) -0.1 % (393 ) -0.2 %
Net Earnings $ 891 1.8 % $ 427 1.0 % $ 912 0.5 % $ 1,616 1.0 %
Earnings Per Share from Continuing Operations:
Basic $ 0.11 $ 0.07 $ 0.13 $ 0.26
Diluted $ 0.11 $ 0.07 $ 0.13 $ 0.26
Loss Per Share from Discontinued Operations:
Basic $ 0.01 $ (0.02 ) $ (0.02 ) $ (0.05 )
Diluted $ 0.01 $ (0.02 ) $ (0.02 ) $ (0.05 )
Net Earnings Per Share:
Basic $ 0.11 $ 0.05 $ 0.11 $ 0.21
Diluted $ 0.11 $ 0.05 $ 0.11 $ 0.21
Weighted Average Common Shares Outstanding:
Basic 8,001 7,850 7,975 7,605
Diluted 8,020 8,049 8,019 7,855
HEALTHCARE FACILITIES VOLUME STATISTICS
Admissions 1,952 2,046 8,397 8,865
Equivalent Admissions 6,000 6,118 24,548 25,390
Surgeries 988 1,032 3,805 4,422
Net revenue per equivalent admission $ 6,443 $ 6,009 $ 6,189 $ 5,962
SUMMARY BALANCE SHEETS June 30, June 30,
2009 2008
ASSETS
Cash and Cash Equivalents $ 2,364 $ 1,716
Accounts Receivable - net 21,116 20,052
Other Current Assets 13,543 13,404
Property Plant and Equipment, net 46,122 51,220
Long-term Assets 24,238 25,232
$ 107,383 $ 111,624
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 25,400 $ 27,069
Long-term Debt and Other Noncurrent Liabilities 40,206 44,311
Shareholders' Equity 41,777 40,244
$ 107,383 $ 111,624
SOURCE: SunLink Health Systems, Inc.
SunLink Health Systems, Inc. Robert M. Thornton, Jr., 770-933-7000 Chief Executive Officer
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