SunLink Health Systems, Inc. reported its financial results for the three months ended September 30, 2024, revealing a decrease in net revenues and an improvement in net loss compared to the same period in the previous year. The company generated net revenues of $7.923 million, down 7.4% from $8.555 million in the prior year, which included $321,000 from prior period sales tax refunds. The decline in revenue was attributed to challenges in the pharmacy business, particularly a 7% decrease in pharmacy net revenues, despite a 10% increase in institutional pharmacy scripts filled.

The company recorded a net loss of $549,000, or $0.08 per fully diluted share, significantly improved from a net loss of $1.344 million, or $0.19 per share, in the same quarter of 2023. This improvement was largely due to reduced losses from discontinued operations, which fell to $107,000 from $916,000 in the prior year. Operating loss for the quarter was $1.194 million, worsening from a loss of $450,000 in the previous year, primarily due to increased costs and a decrease in revenues.

Cash and cash equivalents increased to $7.529 million as of September 30, 2024, from $7.170 million at the end of June 2024. The company reported net cash used in operating activities of $915,000, an improvement from $1.137 million in the same period last year. Notably, net cash provided by investing activities was $1.274 million, compared to a net cash outflow of $524,000 in the prior year, driven by proceeds from the sale of property and investments.

Strategically, SunLink's operations were impacted by the aftermath of the COVID-19 pandemic, facing challenges in hiring qualified employees and rising labor and supply costs. The company has been actively divesting non-core assets, including the sale of Trace Regional Hospital and related assets, which generated a loss of $962,000 for the year ended June 30, 2024. The sale of Trace real estate was completed on October 9, 2024, for approximately $1.932 million, with an additional impairment reserve of $44,000 recorded for transaction expenses.

As of September 30, 2024, total assets were $19.629 million, down from $20.612 million at the end of June 2024, while total shareholders' equity decreased to $15.424 million from $15.973 million. The company continues to face challenges but is focused on enhancing shareholder value through strategic transactions and operational improvements.