SunLink Health Systems, Inc. Announces Fiscal 2006 Third Quarter Results.ATLANTA Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. -- SunLink Health Systems, Inc. (AMEX AMEX See: American Stock Exchange : SSY SSY Simpson Spence Young (Hong Kong shipbrokers) SSY Siddha Samadhi Yoga SSY Scottish Socialist Youth ) today announced net earnings for its third fiscal quarter ended March 31, 2006 of $632,000, or $0.08 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net earnings of $2,439,000, or $0.32 per fully diluted share, for the quarter ended March 31, 2005. For the nine months ended March 31, 2006, SunLink reported net earnings of $2,637,000 or $0.34 per fully diluted share, compared to net earnings of $3,437,000, or $0.45 per fully diluted share for the nine months ended March 31, 2005. Net earnings for the three and nine months ended March 31, 2006 were impacted by losses from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $377,000 ($0.05 per fully diluted share) and $373,000 ($0.05 per fully diluted share), respectively, which resulted primarily from unfavorable settlements of prior year Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. cost reports of a hospital sold in 2004. SunLink reported earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $1,009,000, or $0.13 per fully diluted share, for the quarter ended March 31, 2006, compared to earnings from continuing operations of $2,453,000, or $0.32 per fully diluted share, for the comparable quarter a year ago. SunLink reported earnings from continuing operations of $3,010,000, or $0.38 per fully diluted share, for the nine months ended March 31, 2006, compared to earnings from continuing operations of $3,428,000, or $0.45 per fully diluted share, for the comparable period a year ago. The effective income tax rate of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 40% for the quarter and nine months ended March 31, 2006 increased substantially from the less than 8% effective tax rate for the quarter and nine months ended March 31, 2005 due to lower net operating tax loss carry-forwards available in the current year. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net revenues from continuing operations for the quarters ended March 31, 2006 and 2005 were $34,630,000 and $33,893,000, respectively, an increase of 2.2% in the current year. The increase in net revenues for the quarter ended March 31, 2006 was due to a 10.8% increase in commercial insurance net revenues, price increases for most services at our hospitals and an 8.1% increase in net revenue per equivalent admission. Equivalent admissions declined 5.5% in the quarter ended March 31, 2006 compared to the prior year's third quarter. Consolidated net revenues from continuing operations for the nine months ended March 31, 2006 and 2005 were $100,771,000 and $95,641,000, respectively, an increase of 5.4% in the current year. The 5.4% increase in net revenues for the nine months ended March 31, 2006 was due to an 11.9% increase in commercial insurance net revenues, price increases for most services at our hospitals and a 5.5% increase in net revenue per equivalent admission. The company's operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. from continuing operations for the quarter ended March 31, 2006 was $1,945,000 compared to an operating profit for the quarter ended March 31, 2005 of $2,874,000. The company's operating profit from continuing operations for the nine months ended March 31, 2006 was $5,844,000 compared to an operating profit for the nine months ended March 31, 2005 of $4,920,000. The decrease in operating profit for the quarter ended March 31, 2006 resulted from higher costs of patient service revenues, primarily increased salaries, wages and benefits and bad debts. Salaries, wages and benefits increased due to higher salary costs and more staff as well as $199,000 of expense pursuant to Statement of Financial Accounting Standards No. 123 (R) relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc stock options. The provision for bad debts was higher in the quarter ended March 31, 2006 compared to the prior year's comparable quarter due partly to rate increases which could not be collected and also due to higher self-pay revenue. SunLink Health Systems, Inc. currently operates seven community hospitals and related businesses in the Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: The company will conduct a conference call on May 11, 2006 at 11:00 a.m. Eastern Time to discuss its quarterly results. To participate in the conference call, please dial 1-866-793-1307. A replay of the call will be available shortly after the call and will continue to be available for 90 days by dialing 1-888-266-2081 and entering passcode 904708 when prompted. This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in more detail in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended June June: see month. 30, 2005 and other filings with the Securities and Exchange Commission which can be located at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. .
SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES
FISCAL 2006 THIRD QUARTER RESULTS
Amounts in 000's, except per share amounts
CONSOLIDATED STATEMENTS OF EARNINGS Three Nine
Months Ended Months Ended
March 31, March 31,
2006 2005 2006 2005
-------- -------- --------- --------
Net Revenues $34,630 $33,893 $100,771 $95,641
Cost of Patient Service Revenues:
Salaries, wages and benefits 17,150 16,179 49,496 45,903
Provision for bad debts 3,307 2,528 10,694 8,799
Supplies 3,583 3,782 10,734 10,707
Purchased services 2,159 1,979 6,391 5,569
Other operating expenses 5,023 5,253 13,375 15,638
Rents and leases 597 644 1,819 2,228
Depreciation and amortization 866 654 2,418 1,877
-------- -------- --------- --------
Operating Profit 1,945 2,874 5,844 4,920
Loss on early repayment of debt - - - (384)
Interest Income (Expense) - net (277) (245) (799) (816)
-------- -------- --------- --------
Earnings from Continuing
Operations
before Income Taxes 1,668 2,629 5,045 3,720
Income Tax Expense (659) (176) (2,035) (292)
-------- -------- --------- --------
Earnings from Continuing
Operations 1,009 2,453 3,010 3,428
Earnings (Loss) from Discontinued
Operations,
net of income taxes (377) (14) (373) 9
-------- -------- --------- --------
Net Earnings $632 $2,439 $2,637 $3,437
======== ======== ========= ========
Earnings Per Share from
Continuing Operations:
Basic $0.14 $0.34 $0.42 $0.48
======== ======== ========= ========
Diluted $0.13 $0.32 $0.38 $0.45
======== ======== ========= ========
Earnings (Loss) Per Share from
Discontinued Operations:
Basic $(0.05) $(0.00) $(0.05) $0.00
======== ======== ========= ========
Diluted $(0.05) $(0.00) $(0.05) $0.00
======== ======== ========= ========
Net Earnings Per Share:
Basic $0.09 $0.34 $0.36 $0.48
======== ======== ========= ========
Diluted $0.08 $0.32 $0.34 $0.45
======== ======== ========= ========
Weighted Average Common Shares
Outstanding:
Basic 7,269 7,158 7,238 7,165
======== ======== ========= ========
Diluted 7,890 7,707 7,847 7,693
======== ======== ========= ========
SUMMARY BALANCE SHEETS March 31, June 30,
2006 2005
-------- --------
ASSETS
Cash and Cash Equivalents $1,824 $5,281
Other Current Assets 21,395 19,573
Property Plant and Equipment, net 38,343 35,875
Long-term Assets 4,535 4,711
-------- --------
$66,097 $65,440
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities $19,624 $21,701
Long-term Debt and Other
Noncurrent Liabilities 13,852 14,438
Shareholders' Equity 32,621 29,301
-------- --------
$66,097 $65,440
======== ========
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