ATLANTA--(BUSINESS WIRE)--SunLink Health Systems, Inc. (NYSE MKT: SSY) today announced a loss from continuing operations for its fourth fiscal quarter ended June 30, 2016 of $823,000 or a loss of $0.09 per fully diluted share, compared to a loss from continuing operations of $7,000 or a loss of $0.00 per fully diluted share, for the quarter ended June 30, 2015. Net loss for the quarter ended June 30, 2016 was $1,234,000, or a loss of $0.13 per fully diluted share, compared to net earnings of $92,000, or $0.01 per fully diluted share, for the quarter ended June 30, 2015. The results for the fourth fiscal quarter of 2016 include non-cash income tax benefits of $2,322,000 which reduce the valuation allowance of the company’s deferred income tax assets to recognize the estimated future use of a portion of the company’s net operating loss carryforwards to offset future taxable income.

Consolidated net revenues from continuing operations for the quarters ended June 30, 2016 and 2015 were $14,060,000 and $18,474,000, respectively, a decrease of 23.9% in the current year’s fourth quarter. Healthcare Facilities Segment net revenues in the quarter ended June 30, 2016 of $6,314,000 decreased $4,031,000, or 39.0%, in the current year’s quarter. During the current year’s quarter, one subsidiary’s hospital experienced sharply reduced revenues relating to changes in physician staffing and the decision to discontinue inpatient services at that facility. The Specialty Pharmacy Segment revenues of $7,572,000 in the quarter ended June 30, 2016 decreased $412,000, or 5.2%, over the comparable quarter of the prior year due primarily to decreased institutional pharmacy sales.

The company had an operating loss from continuing operations for the quarter ended June 30, 2016 of $2,908,000, compared to an operating profit from continuing operations for the quarter ended June 30, 2015 of $268,000. In the quarter ended June 30, 2016, an impairment charge of $858,000 was recognized for a closed hospital facility which was formerly leased to an unaffiliated third party operator and is currently substantially vacant.

For the fiscal year ended June 30, 2016, SunLink reported a loss from continuing operations of $11,914,000, or a loss of $1.26 per fully diluted share, compared to earnings of $487,000, or $0.05 per fully diluted share, for the comparable period last year. The results for the fiscal year ended June 30, 2016 include the non-cash charges of $4,558,000 to provide an additional valuation allowance for the company’s deferred income tax assets, as well as the impairment charge described above. For the fiscal year ended June 30, 2016, SunLink reported a net loss of $14,083,000, or a loss of $1.49 per fully diluted share, compared to net earnings of $245,000 or $0.03 per fully diluted share, for the fiscal year ended June 30, 2015.

Consolidated net revenues from continuing operations for the fiscal year ended June 30, 2016 decreased by 14.0% to $63,433,000 compared to $73,746,000 in the comparable period a year ago. The Healthcare Facilities Segment had net revenues in the fiscal year ended June 30, 2016 of $30,462,000 compared to $39,933,000 for the comparable period a year ago. The Specialty Pharmacy Segment had $32,216,000 of net revenues for the fiscal year ended June 30, 2016 compared to $33,175,000 in the prior fiscal year.

SunLink had an operating loss from continuing operations for the fiscal year ended June 30, 2016 of $6,523,000 compared to an operating profit of $2,220,000 in the preceding year.

Loss from discontinued operations was $411,000 (a loss of $0.04 per fully diluted share) for the quarter ended June 30, 2016 compared to earnings from discontinued operations of $99,000 ($0.01 per fully diluted share) for the quarter ended June 30, 2015, respectively.

Loss from discontinued operations was $2,169,000 (a loss of $0.23 per fully diluted share) for the fiscal year ended June 30, 2016 compared to a loss of $242,000 (a loss of $0.02 per fully diluted share) for the fiscal year ended June 30, 2015.

On August 19, 2016, the company announced that a subsidiary sold its Chestatee Regional Hospital in Dahlonega, GA to an unaffiliated third party for approximately $15,000,000. A portion of the proceeds was allotted for the payment of debt and the balance will be retained for working capital and general corporate purposes. Chestatee’s results for the three and twelve months ending June 30, 2016 and 2015 have been reclassified as discontinued operations for these periods.

SunLink Health Systems, Inc. is the parent company of subsidiaries that currently operate one hospital, two nursing homes and related businesses in the Southeast and a specialty pharmacy company in Louisiana. For additional information on SunLink Health Systems, Inc., please visit the company’s website at www.sunlinkhealth.com.

This press release may contain certain statements of a forward-looking nature. The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws. Such forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to them. The company has no obligation to update such forward-looking statements. Actual results may vary significantly from these forward-looking statements.

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 operations for the twelve months ended June 30, 2016 and 2015, 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.