Discontinued Operations

9 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3. – Discontinued Operations

All of the businesses discussed in the note below are reported as discontinued operations and the condensed consolidated financial statements for all prior periods have been adjusted to reflect this presentation.

Results for all of the businesses included in discontinued operations are presented in the following table:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2015			2014			2015			2014
Net Revenues:
Fulton Hospital	$	(9	)	$	3,255		$	6,721		$	9,985
Dexter Hospital		186			47			764			560
Memorial of Adel		10			(62	)		63			(66	)
	$	187		$	3,240		$	7,548		$	10,479
Earnings (loss) before income taxes:
Fulton Hospital	$	(299	)	$	(601	)	$	(1,196	)	$	(1,748	)
Dexter Hospital		184			34			754			516
Memorial of Adel		2			(82	)		34			(94	)
Life sciences and engineering		(31	)		(40	)		(95	)		(119	)
Lon sale of Fulton Hospital		(6	)		—			(197	)		—
Earnings (Loss) before income taxes		(150	)		(689	)		(700	)		(1,445	)
Income tax expense (benefit)		(55	)		(301	)		(291	)		(556	)
Loss from discontinued operations	$	(95	)	$	(388	)	$	(409	)	$	(889	)

Fulton Hospital – On December 31. 2014, the Company’s subsidiary, HealthMont of Missouri, LLC (“HOM”) sold substantially all the assets of its Callaway Community Hospital (“Fulton”) and related clinics in Fulton, Missouri for approximately $6,090. Fulton’s results have been reclassified as discontinued operations in our condensed consolidated financial statements as of March 31, 2015 and June 30, 2014 and for the three and nine month periods ended March 31, 2015 and 2014. Fulton retained accounts receivable and certain other assets, including the right to Medicare and Medicaid incentive payments (“EHR Funds”) for meaningful use of electronic health record technology, and substantially all liabilities of the hospital as of the sale closing date. At closing, Fulton repaid the outstanding balance of its RDA Loan of $4,745. A loss of $197 resulted from the sale of the Fulton assets, which includes $237 early repayment penalty resulting from the repayment of the Fulton RDA Loan described below.

Fulton RDA Loan - SunLink, Fulton and HealthMont LLC (“HLLC”), the direct parent of HOM closed on a $5,000 Loan Agreement dated as of March 16, 2012 (the “Fulton RDA Loan”) with a bank. The Fulton RDA Loan was repaid in full on December 31, 2014 concurrent with the sale of Fulton.

Dexter Hospital - On December 31, 2012, the Company completed the sale of substantially all the assets and the leasehold interest of its subsidiary, Dexter Hospital, LLC (“Dexter”), to Southeast Health Center of Stoddard County, LLC, an indirect subsidiary of Southeast Missouri Hospital Association (“SoutheastHEALTH”). Dexter’s operations have been classified as discontinued operations in our condensed consolidated financial statements for the three and nine month periods ended March 31, 2015 and 2014.

Memorial Hospital of Adel – On July 2, 2012, the Company and its HealthMont of Georgia, Inc. subsidiary completed the sale of substantially all the assets of the Company’s Memorial Hospital of Adel and Memorial Convalescent Center (collectively “Memorial”) to the Hospital Authority of Tift County, Georgia (“Tift”) for approximately $8,350. Memorial’s operations have been classified as discontinued operations in our condensed consolidated financial statements for the three and nine month periods ended March 31, 2015 and 2014.

Life Sciences and Engineering Segment – SunLink retained a defined benefit retirement plan which covered substantially all of the employees of this segment when the segment was sold in fiscal 1998. Effective February 28, 1997, the plan was amended to freeze participant benefits and close the plan to new participants. Pension expense and related tax benefit or expense is reflected in the results of operations for this segment for the three and nine months ended March 31, 2015 and 2014. The components of pension expense for the three and nine months ended March 31, 2015 and 2014, respectively, were as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2015			2014			2015			2014
Interest Cost	$	16		$	15		$	49		$	45
Expected return on assets		(7	)		(7	)		(22	)		(21	)
Amortization of prior service cost		22			32			70			95
Net pension expense	$	31		$	40		$	97		$	119

SunLink contributed $84 to the plan in the three and nine months ended March 31, 2015.