SunLink Health Systems, Inc. Announces Fiscal 2025 Third Quarter Results

SunLink Health Systems, Inc. (NYSE American: SSY) today announced a loss from continuing operations of $630,000 (or a loss of $0.09 per fully diluted share) for its third fiscal quarter ended March 31, 2025 compared to a loss from continuing operations of $824,000 (or a loss of $0.12 per fully diluted share) for the third fiscal quarter ended March 31, 2025. Net loss for the quarter ended March 31, 2025 was $671,000 (or a loss of $0.10 per fully diluted share) compared to a net loss of $1,396,000 (or a loss of $0.20 per fully diluted share) for the quarter ended March 31, 2024.

Loss from discontinued operations was $41,000 (or a loss of $01 per fully diluted share)for the quarter ended March 31, 2025 compared to a loss of $572,000 (or a loss of $0.08 per fully diluted share) for the quarter ended March 31, 2024. The loss for the quarter ended March 31, 2024 included a $613,000 loss on the sale of the operations of Trace Regional Hospital, a vacant medical office building and three (3) patient clinics (“Trace Regional”) in January 2024.

Consolidated net revenues for the fiscal quarters ended March 31, 2025 and 2024 were $7,323,000 and $7,462,000, respectively, which consisted primarily of pharmacy net revenues. Pharmacy net revenues for the quarter ended March 31, 2025 increased $51,000, or 1%, over those for the same period last year, primarily due to higher institutional pharmacy net revenues this year.

SunLink reported an operating loss for the quarter ended March 31, 2025 of $683,000 compared to an operating loss for the quarter ended March 31, 2024 of $853,000.

SunLink reported a loss from continuing operations of $2,142,000 (or a loss of $0.30 per fully diluted share) for its nine months ended March 31, 2025 compared to a loss from continuing operations of $1,659,000 (or $0.24 per fully diluted share) for the nine months ended March 31, 2024. Net loss for the nine months ended March 31, 2025 was $2,563,000 (or a loss of $0.36 per fully diluted share) compared to a net loss of $5,815,000 (or $0.59 per fully diluted share) for the nine months ended March 31, 2024. The net loss for the nine months ended March 31, 2025 included a loss from discontinued operations of $421,000 (or a loss of $0.06 per fully diluted share), compared to a loss from discontinued operations of $4,156,000 (or a loss of $0.59 per fully diluted share) for the nine months ended March 31, 2024. The loss from discontinued operations for the nine months ended March 31, 2025 included a loss of $110,000 on the October 2024 property sale in Houston, Mississippi. The discontinued operations loss for the nine months ended March 31, 2024 included an impairment charge of $2,032,000 on the book value of the Company’s former Trace Regional Hospital, a vacant medical office building and three (3) patient clinics and a $613,000 loss on the sale of Trace Regional operations in January 2024.

Consolidated net revenues for each of the nine month periods ended March 31, 2025 and 2024 were $23,181,000,000 and $24,527,000, respectively. Pharmacy net revenues for the nine months ended March 31, 2024 included $437,000 from the reversal of reserves for certain sales taxes previously accrued. Excluding the effect of the reversal of sales tax accruals, net revenues decreased 3% in the nine months ended March 31, 2025 compared to the prior year due primarily to decreased volume of Retail pharmacy scripts filled and durable medical equipment orders.

SunLink reported an operating loss for the nine months ended March 31, 2025 of $2,889,000 compared to an operating loss for the nine months ended March 31,2024 of $1,736,000. The operating loss during the comparable nine month period of the prior year resulted primarily from the lower net Pharmacy revenues offset by the reversal of $437,000 in accrued sales tax reserves.

Merger

On April 15, 2025, the Company and Regional Health Properties, Inc. (“Regional”) jointly announced that they have entered into an amended and restated agreement and plan of merger (the “merger agreement”), pursuant to which SunLink is to merge with and into Regional (the “merger”) in exchange for the issuance to the SunLink shareholders of an aggregate of approximately 1,595,401 shares of Regional common stock and 1,408,121 shares of Regional’s newly-authorized Series D 8% Cumulative Convertible Redeemable Participating Preferred Shares (the “Regional Series D Preferred Stock”) with an initial liquidation preference of $12.50 per share. The merger agreement has been approved by each company’s board of directors and completion of the transaction remains subject to the receipt of the approvals of the shareholders of both Regional and SunLink, regulatory approvals and satisfaction of customary closing conditions.

COVID-19 Pandemic

The Company continues to experience post-COVID-19 pandemic after-effects in its quarter and believes it will likely to continue experience these effects on its assets and operations in the foreseeable future particularly from salaries and wages pressure, workforce shortages, supply chain disruption and broad inflationary pressures. Our ability to estimate any such continuing effects on future revenues, expenses or changes in accounting judgments that have had or are reasonably likely to have a material effect on our financial statements is very limited, depending as they do on the severity and length thereof; as well as any further government actions and/or regulatory changes intended to address such effects.

SunLink Health Systems, Inc. is the parent company of subsidiaries that own and operate a pharmacy business in Louisiana . For additional information on SunLink Health Systems, Inc., please visit the Company’s website.

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, 2024 and other filings with the Securities and Exchange Commission which can be located at www.sec.gov.

SUNLINK HEALTH SYSTEMS, INC. ANNOUNCES
FISCAL 2025 THIRD QUARTER RESULTS
Amounts in 000's, except per share
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
	Three Months Ended March 31,																Nine Months Ended March 31,
		2025								2024							2025							2024
						% of Net								% of Net							% of Net							% of Net
		Amount				Revenues				Amount				Revenues			Amount				Revenues			Amount				Revenues
Net revenues		$	7,323				100.0	%		$	7,462			100.0	%		$	23,181			100.0	%		$	24,527			100.0	%
Costs and Expenses:
Cost of goods sold			4,234				57.8	%			4,339			58.1	%			13,327			57.5	%			13,871			56.6	%
Salaries, wages and benefits			2,275				31.1	%			2,652			35.5	%			8,066			34.8	%			7,937			32.4	%
Supplies			30				0.4	%			36			0.5	%			104			0.4	%			109			0.4	%
Purchased services			339				4.6	%			265			3.6	%			984			4.2	%			832			3.4	%
Other operating expenses			717				9.8	%			589			7.9	%			2,354			10.2	%			2,279			9.3	%
Rent and leases			92				1.3	%			92			1.2	%			279			1.2	%			275			1.1	%
Depreciation and amortization			319				4.4	%			342			4.6	%			956			4.1	%			960			3.9	%
Operating loss			(683	)			-9.3	%			(853	)		-11.4	%			(2,889	)		-12.5	%			(1,736	)		-7.1	%
Interest Income - net			67				0.9	%			19			0.3	%			167			0.7	%			70			0.3	%
Impairment loss			0				0.0	%			0			0.0	%			(100	)		-0.4	%			0			0.0	%
Gain (Loss) on sale of assets			(14	)			-0.2	%			0			0.0	%			680			2.9	%			2			0.0	%
Loss from Continuing Operations before
Income Taxes			(630	)			-8.6	%			(834	)		-11.2	%			(2,142	)		-9.2	%			(1,664	)		-6.8	%
Income Tax benefit			0				0.0	%			10			0.1	%			0			0.0	%			5			0.0	%
Loss from Continuing Operations			(630	)			-8.6	%			(824	)		-11.0	%			(2,142	)		-9.2	%			(1,659	)		-6.8	%
Loss from Discontinued Operations, net of tax			(41	)			-0.6	%			(572	)		-7.7	%			(421	)		-1.8	%			(4,156	)		-16.9	%
Net Loss		$	(671	)			-9.2	%		$	(1,396	)		-18.7	%		$	(2,563	)		-11.1	%		$	(5,815	)		-23.7	%
Loss Per Share from Continuing Operations:
Basic		$	(0.09	)						$	(0.12	)					$	(0.30	)					$	(0.24	)
Diluted		$	(0.09	)						$	(0.12	)					$	(0.30	)					$	(0.24	)
Loss Per Share from Discontinued Operations:
Basic		$	(0.01	)						$	(0.08	)					$	(0.06	)					$	(0.59	)
Diluted		$	(0.01	)						$	(0.08	)					$	(0.06	)					$	(0.59	)
Net Loss Per Share:
Basic		$	(0.10	)						$	(0.20	)					$	(0.36	)					$	(0.83	)
Diluted		$	(0.10	)						$	(0.20	)					$	(0.36	)					$	(0.83	)
Weighted Average Common Shares Outstanding:
Basic			7,041								7,041							7,041							7,038
Diluted			7,041								7,041							7,041							7,038
SUMMARY BALANCE SHEETS		March 31,				June 30,
		2025				2024
ASSETS
Cash and Cash Equivalents		$	7,466			$	7,170
Receivable - net			2,940				3,371
Current Assets Held for Sale			0				1,959
Other Current Assets			3,299				3,164
Property Plant and Equipment, net			1,896				2,809
Long-term Assets			1,873				2,139
		$	17,474			$	20,612
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities		$	3,501			$	4,213
Noncurrent Liabilities			563				426
Shareholders' Equity			13,410				15,973
		$	17,474			$	20,612

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250513300835/en/