Discontinued Operations

3 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3. – Discontinued Operations

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

Sale of Trace Regional Health Systems. Inc –On November 10, 2023, the Company's subsidiary, Crown Healthcare Investments, LLC, signed an agreement with Progressive Health Group, LLC, for the sale of the subsidiary that owns and operates Trace Regional Medical Center, which includes a hospital, a skilled nursing facility and three (3) patient clinics in Houston, MS, for approximately $8,000. The sale is expected to close by December 15, 2023 but is subject to, among other things, the Buyer's satisfactory completion of its due diligence investigation and a number of customary closing conditions.

Sold Hospitals and Nursing Home– Subsidiaries of the Company have sold substantially all the assets of five hospitals (“Sold Facilities”) during the period July 2, 2012 to March 17, 2019. The loss before income taxes of the Sold Facilities results primarily from the effects of retained professional liability insurance and claims expenses and settlement of a lawsuit.

Life Sciences and Engineering Segment —SunLink retained a defined benefit retirement plan which covered substantially all the employees of this segment when the segment was sold in fiscal year 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 months ended September 30, 2023 and 2022, respectively.

The components of pension expense for the three months ended September 30, 2023 and 2022, respectively, were as follows:

	Three Months Ended
	September 30,
	2023			2022
Interest cost	$	11		$	13
Expected return on assets		(9	)		(11	)
Amortization of prior service cost		0			0
Net pension expense	$	2		$	2

SunLink contributed $5 to the plan in the three months ended September 30, 2023 and expects to contribute an additional $15 during the last nine months of the fiscal year ending June 30, 2024.

Details of statements of operations from discontinued operations for the three months ended September 30, 2023 and 2022, primarily reflecting the reporting of Trace as discontinued operations as a result of the Company's agreement to sell Trace, which was signed on November 10, 2023, are as follows:

	Three Months Ended
	September 30,
	2023			2022
Net Revenues	$	2,672		$	3,600
Costs and Expenses:
Salaries, wages and benefits		1,898			2,807
Supplies		289			306
Purchased services		706			799
Other operating expenses		528			573
Rent and lease expense		34			26
Depreciation and amortization		133			99
Operating Loss		(916	)		(1,010	)
Other Income (Expense):
Federal stimulus - Provider relief funds		0			61
Interest income (expense), net		0			(4	)
Loss from Discontinued Operations before income taxes		(916	)		(953	)
Income Tax Expense		0			0
Loss from Discontinued Operations, net of tax	$	(916	)	$	(953	)

Details of assets and liabilities held for sale at September 30, 2023 and June 30, 2023, which primarily reflects the reporting of Trace's assets to be sold and liabilities to be assumed in a sale as a result of the Company's November 10, 2023 agreement to sell Trace are as follows:

	September 30,		June 30,
	2023		2023
Receivables - net	$	1,287	$	1,659
Inventory		142		125
Prepaid expense and other assets		136		136
Property, plant and equipment, net		5,484		5,564
Right of use assets		232		246
Noncurrent assets		3		2
Total assets held for sale	$	7,284	$	7,732
Accounts payable	$	854	$	783
Accrued payroll and related taxes		251		361
Current operating lease liabilities		61		61
Other accrued expenses		136		107
Long-term operating lease liabilities		150		192
Total liabilities held for sale	$	1,452	$	1,504