2015 Q2 Form 10-K Financial Statement

#000119312516726649 Filed on September 30, 2016

View on sec.gov

Income Statement

Concept 2015 Q2 2015 Q1 2014 Q4
Revenue $18.47M $19.29M $25.11M
YoY Change -14.47% -36.21% -3.84%
Cost Of Revenue $4.790M $1.382M $1.162M
YoY Change 12.18% 7.21% -13.93%
Gross Profit $100.0K $17.91M $23.95M
YoY Change -111.36% -38.15% -3.29%
Gross Profit Margin 0.54% 92.83% 95.37%
Selling, General & Admin $220.0K $14.22M $14.10M
YoY Change -115.71% 0.64% -2.96%
% of Gross Profit 220.0% 79.41% 58.88%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $2.680M $602.0K $580.0K
YoY Change -26.78% -22.12% -23.98%
% of Gross Profit 2680.0% 3.36% 2.42%
Operating Expenses -$70.00K $17.46M $16.64M
YoY Change -97.12% -2.18% -2.69%
Operating Profit $170.0K -$285.0K $2.022M
YoY Change -89.03% -38.71% 594.85%
Interest Expense -$180.0K $213.0K $234.0K
YoY Change -21.74% -8.97% -1.68%
% of Operating Profit -105.88% 11.57%
Other Income/Expense, Net -$310.0K $0.00 $1.970M
YoY Change -70.19% -100.0% 51.77%
Pretax Income $0.00 -$485.0K $1.788M
YoY Change -100.0% -28.78% 3273.58%
Income Tax $80.00K -$169.0K $799.0K
% Of Pretax Income 44.69%
Net Earnings $92.00K -$411.0K $977.0K
YoY Change -93.19% -57.37% 330.4%
Net Earnings / Revenue 0.5% -2.13% 3.89%
Basic Earnings Per Share $0.01 -$0.04 $0.10
Diluted Earnings Per Share $0.01 -$0.04 $0.10
COMMON SHARES
Basic Shares Outstanding 9.443M shares 9.443M shares 9.443M shares
Diluted Shares Outstanding 9.490M shares 9.443M shares 9.497M shares

Balance Sheet

Concept 2015 Q2 2015 Q1 2014 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $6.000M $4.900M $4.000M
YoY Change 66.67% 28.95% -13.04%
Cash & Equivalents $5.974M $4.885M $3.971M
Short-Term Investments
Other Short-Term Assets $8.300M $6.100M $8.500M
YoY Change -2.35% -29.89% -16.67%
Inventory $3.148M $3.936M $4.047M
Prepaid Expenses
Receivables $7.700M $1.525M $2.672M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $25.09M $24.93M $27.66M
YoY Change -2.65% -11.12% -7.5%
LONG-TERM ASSETS
Property, Plant & Equipment $14.24M $22.54M $22.82M
YoY Change -38.94% -23.0% -23.33%
Goodwill $461.0K $461.0K $461.0K
YoY Change 0.0% 0.0% 0.0%
Intangibles $2.837M $2.873M $2.908M
YoY Change -4.77% -6.33% -6.28%
Long-Term Investments
YoY Change
Other Assets $1.520M $1.522M $1.550M
YoY Change 48.29% 2.98% 3.68%
Total Long-Term Assets $32.04M $32.49M $32.18M
YoY Change -15.85% -15.77% -16.68%
TOTAL ASSETS
Total Short-Term Assets $25.09M $24.93M $27.66M
Total Long-Term Assets $32.04M $32.49M $32.18M
Total Assets $57.13M $57.42M $59.84M
YoY Change -10.52% -13.81% -12.68%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $2.688M $4.429M $5.433M
YoY Change -40.66% -14.4% -6.6%
Accrued Expenses $0.00 $5.400M $6.200M
YoY Change -100.0% -8.47% 6.9%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $816.0K $840.0K $866.0K
YoY Change 45.45% -90.87% 0.12%
Total Short-Term Liabilities $10.76M $10.70M $12.61M
YoY Change -34.79% -55.31% -21.81%
LONG-TERM LIABILITIES
Long-Term Debt $11.23M $11.47M $11.58M
YoY Change -6.02% 35.74% -31.63%
Other Long-Term Liabilities $681.0K $755.0K $786.0K
YoY Change -15.61% -10.86% -1.63%
Total Long-Term Liabilities $12.80M $13.22M $13.33M
YoY Change -8.69% 22.39% -31.85%
TOTAL LIABILITIES
Total Short-Term Liabilities $10.76M $10.70M $12.61M
Total Long-Term Liabilities $12.80M $13.22M $13.33M
Total Liabilities $23.57M $23.92M $25.94M
YoY Change -22.8% -31.15% -27.31%
SHAREHOLDERS EQUITY
Retained Earnings $15.73M $15.64M $16.05M
YoY Change 1.58% 10.63% 6.29%
Common Stock $18.20M $18.20M $18.19M
YoY Change 0.2% 285.43% 285.13%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $33.60M $33.50M $33.90M
YoY Change
Total Liabilities & Shareholders Equity $57.13M $57.42M $59.84M
YoY Change -10.52% -13.81% -12.68%

Cashflow Statement

Concept 2015 Q2 2015 Q1 2014 Q4
OPERATING ACTIVITIES
Net Income $92.00K -$411.0K $977.0K
YoY Change -93.19% -57.37% 330.4%
Depreciation, Depletion And Amortization $2.680M $602.0K $580.0K
YoY Change -26.78% -22.12% -23.98%
Cash From Operating Activities $1.650M $1.340M $890.0K
YoY Change 189.47% -682.61% -23.28%
INVESTING ACTIVITIES
Capital Expenditures -$300.0K $258.0K $319.0K
YoY Change -41.18% -23.21% -21.43%
Acquisitions
YoY Change
Other Investing Activities $30.00K $0.00 $6.090M
YoY Change -100.0% -7712.5%
Cash From Investing Activities -$270.0K -$260.0K $5.770M
YoY Change -47.06% -27.78% -1302.08%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -280.0K -170.0K -4.770M
YoY Change -6.67% 13.33% 1438.71%
NET CHANGE
Cash From Operating Activities 1.650M 1.340M 890.0K
Cash From Investing Activities -270.0K -260.0K 5.770M
Cash From Financing Activities -280.0K -170.0K -4.770M
Net Change In Cash 1.100M 910.0K 1.890M
YoY Change -558.33% -222.97% 410.81%
FREE CASH FLOW
Cash From Operating Activities $1.650M $1.340M $890.0K
Capital Expenditures -$300.0K $258.0K $319.0K
Free Cash Flow $1.950M $1.082M $571.0K
YoY Change 80.56% -291.17% -24.27%

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CY2016 dei Entity Registrant Name
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SUNLINK HEALTH SYSTEMS INC
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<div> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> <b><i>Concentrations of Credit Risk</i></b>&#x2014;SunLink&#x2019;s Healthcare Facilities segment subsidiaries grant unsecured credit to their patients, most of who reside in the service area of the subsidiaries&#x2019; facilities and are insured under third-party agreements. Medicare and Medicaid patient accounts represent SunLink&#x2019;s only significant concentrations of credit risk. For SunLink&#x2019;s Healthcare Facilities Segment, Medicare net revenues were approximately 37%, 39%, and 40% of net revenues for the years ended June 30, 2016, 2015 and 2014, respectively. For SunLink&#x2019;s Healthcare Facilities Segment, Medicaid was approximately 37%, 30%, and 29% of net revenues for the years ended June 30, 2016, 2015 and 2014, respectively. For SunLink&#x2019;s Healthcare Facilities Segment, Medicare receivables were approximately 51% and 45% of receivables&#x2014;net at June 30, 2016 and 2015, respectively, while Medicaid receivables were approximately 22% and 15% of receivables&#x2014;net at June 30, 2016 and 2015, respectively.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> SunLink&#x2019;s Specialty Pharmacy segment subsidiary grants unsecured credit to individual customers and institutional customers.&#xA0;Individual customers primarily are insured under third-party agreements, including Medicare and Medicaid, while the institutional customers are grant credit according to their determined credit risk.&#xA0;Medicare receivables were approximately 13% and 18% of the Specialty Pharmacy&#x2019;s receivables at June 30, 2016 and 2015, respectively, while Medicaid receivables were approximately 10% and 12% of the segments receivable at June 30, 2016 and 2015, respectively. Approximately 77% and 70% of the Specialty Pharmacy&#x2019;s net receivables at June 30, 2016 and 2015, respectively, were private insurance and institutional customers&#x2019; receivables. Net revenues for the Specialty Pharmacy segment for the fiscal year ended June 30, 2016 and 2015 were approximately 16% and 8% Medicare, respectively, and approximately 10% and 14% Medicaid, respectively.</p> </div>
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<div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%" align="left"><b>1.</b></td> <td valign="top" align="left"><b>BUSINESS OPERATIONS</b></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> SunLink Health Systems, Inc., through subsidiaries (&#x201C;SunLink&#x201D;, &#x201C;we&#x201D;, &#x201C;our&#x201D;, &#x201C;ours&#x201D;, &#x201C;us&#x201D; or the &#x201C;Company&#x201D;), owns businesses which are providers of healthcare services in certain markets in the United States. 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FONT-SIZE: 6pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="5%">&#xA0;</td> <td valign="top" width="2%" align="left">&#x2022;</td> <td valign="top" width="1%">&#xA0;</td> <td valign="top" align="left">A subsidiary which owns a closed hospital building and a medical office building which it currently rents an office to an unaffiliated healthcare provider.</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="3%" align="left">&#x2022;</td> <td valign="top" width="1%">&#xA0;</td> <td valign="top" align="left">The Specialty Pharmacy Segment, which is composed of four operational areas:</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="5%">&#xA0;</td> <td valign="top" width="2%" align="left">&#x2022;</td> <td valign="top" width="1%">&#xA0;</td> <td valign="top" align="left">Retail pharmacy products and services, all of which are conducted in rural markets;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="5%">&#xA0;</td> <td valign="top" width="2%" align="left">&#x2022;</td> <td valign="top" width="1%">&#xA0;</td> <td valign="top" align="left">Institutional pharmacy services;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="5%">&#xA0;</td> <td valign="top" width="2%" align="left">&#x2022;</td> <td valign="top" width="1%">&#xA0;</td> <td valign="top" align="left">Specialty pharmacy services; and</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="5%">&#xA0;</td> <td valign="top" width="2%" align="left">&#x2022;</td> <td valign="top" width="1%">&#xA0;</td> <td valign="top" align="left">Durable medical equipment.</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> SunLink subsidiaries have conducted the healthcare facilities business since 2001 and the specialty pharmacy operations since 2008. Our Specialty Pharmacy Segment currently is operated through Carmichael&#x2019;s Cashway Pharmacy, Inc. (&#x201C;Carmichael&#x201D;), a subsidiary of our SunLink ScriptsRx, LLC subsidiary, and is composed of a specialty pharmacy business acquired in April 2008 with four service lines.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> On August 19, 2016, a subsidiary of the Company sold substantially all assets and certain liabilities of its Chestatee Regional Hospital in Dahlonega, GA, for approximately $15,000 subject to adjustment for the book value of certain assets and liabilities at the sale date. In addition, the Company has entered into an agreement to lease the emergency department and certain ancillary space&#xA0;located in its former hospital, North Georgia Medical Center, which is now closed, to a regional healthcare system. The lease transaction is subject to a number of conditions precedent including regulatory approval and negotiation of definitive leases. The Company continues to operate its 100-bed skilled nursing facility which is located adjacent to the closed hospital. The Company believes its specialty pharmacy business continues to under-perform, and the Company has engaged advisors to assist it in evaluating the sale of its specialty pharmacy business and one medical office building. The Company&#x2019;s possible use of net proceeds from the Dahlonega sale and possible future transactions may include, among other things, a prepayment of long-term debt, a return of capital to shareholders via a repurchase of shares or a dividend, and other general corporate purposes. However, there can be no assurance any further sale or lease transaction will be authorized by the Board of Directors or completed or, if completed, that there will be sufficient proceeds to return capital to shareholders or for future development or other general corporate purposes.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Throughout these notes to the consolidated financial statements, SunLink Health Systems, Inc., and its consolidated subsidiaries are referred to on a collective basis as &#x201C;SunLink&#x201D;, &#x201C;we&#x201D;, &#x201C;our&#x201D;, &#x201C;ours&#x201D;, &#x201C;us&#x201D; or the &#x201C;Company.&#x201D; This drafting style is not meant to indicate that the publicly traded Company or any particular subsidiary of the Company owns or operates any asset, business or property.&#xA0;The Trace Hospital, pharmacy operations and businesses described in this filing are owned and operated by distinct and indirect subsidiaries of SunLink Health System, Inc.</p> </div>
CY2016 us-gaap Insurance Recoveries
InsuranceRecoveries
0
CY2016 us-gaap Malpractice Insurance Description
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Claim made under its insurance policy covering, among other things, employee theft relating to misappropriation of funds by two now former employees over an eight year period beginning in 2006.
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NumberOfReportableSegments
2 Segment
CY2016 us-gaap Use Of Estimates
UseOfEstimates
<div> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> <b><i>Management Estimates</i></b>&#x2014;The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates made by management involve reserves for adjustments to net patient service revenues, evaluation of the recoverability of assets, including accounts receivable and intangible assets, and the assessment of litigation and contingencies, including income taxes and related tax asset valuation allowances, all as discussed in more detail in the remainder of these notes to the consolidated financial statements. Actual results could differ materially from these estimates.</p> </div>
CY2016 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
9443000 shares
CY2016 us-gaap Property Plant And Equipment Estimated Useful Lives
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Estimated useful lives of the assets, which range from 3 to 45 years, on a straight-line basis
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1.79
CY2016 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Exercisable Weighted Average Remaining Contractual Term1
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1
P6Y1M6D
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9.05
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9443000 shares
CY2016 dei Trading Symbol
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SSY
CY2016 us-gaap Proceeds From Issuance Of Long Term Debt
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0
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0.80 pure
CY2016 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Gross
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75000 shares
CY2016 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Risk Free Interest Rate
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0.0163 pure
CY2016 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Forfeitures In Period
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29500 shares
CY2016 us-gaap Share Based Compensation
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58000
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SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1
P6Y
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CY2016 ssy Age Of Participants To Take Monthly Pension Benefits One
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P65Y
CY2016 ssy Increase Decrease In Third Party Payor Settlements
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-3009000
CY2016 ssy Financial And Healthcare Services Revenue
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CY2016 ssy Payments To Acquire Property Plant And Equipment Continuing Operations
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1347000
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28000
CY2016 ssy Payments To Acquire Property Plant And Equipment Discontinued Operations
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104000
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EarningsPerShareBasic
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-0.13
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-7000
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-7000
CY2016 ssy Increase Decrease In Deferred Gain
IncreaseDecreaseInDeferredGain
0
CY2016 ssy Maximum Period Of Accounts Receivable Written Off
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P120D
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2024
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0.04 pure
CY2016 ssy Share Based Compensation Arrangement By Share Based Payments Award Options Grants In Period Range Of Exercise Price
ShareBasedCompensationArrangementByShareBasedPaymentsAwardOptionsGrantsInPeriodRangeOfExercisePrice
1.79
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IncreaseDecreaseChangesInDeferredIncomeTaxes
4530000
CY2016 ssy Unrecognized Actuarial Loss
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0
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-46000
CY2016 ssy Health Care Organization Significant Change In Estimates
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786000
CY2015Q1 us-gaap Earnings Per Share Basic
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-0.04
CY2015Q1 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
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CY2016Q2 us-gaap Sales Revenue Net
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CY2016Q2 us-gaap Net Income Loss
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CY2016Q2 us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
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CY2015Q2 us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
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9443000 shares
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9443000 shares
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9443000 shares
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18474000
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9443000 shares
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9443000 shares
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9443000 shares
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9443000 shares
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9443000 shares
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9443000 shares
CY2015Q4 us-gaap Weighted Average Number Of Shares Outstanding Basic
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9443000 shares

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