Business Operations

3 Months Ended

Sep. 30, 2012

Business Operations

Note 2. – Business Operations

Business Operations

SunLink Health Systems, Inc. subsidiaries provide healthcare services in certain rural and exurban markets in the United States. SunLink’s business is composed of the ownership of subsidiaries which operate in two business segments:

• Healthcare Facilities, which consist of

• Our four community hospitals which have a total of 232 licensed beds;

• Our three nursing homes, which have a total of 166 licensed beds, each of which is located adjacent to a corresponding SunLink community hospital; and

• Our one home health agency, which operates in connection with a corresponding SunLink community hospital; and

• One hospital facility and related equipment which is leased to a third party hospital operator. The third party hospital operator has the option to buy the hospital facility and equipment.

• Specialty Pharmacy, which consists of

• Specialty pharmacy services;

• Durable medical equipment;

• Institutional pharmacy services; and

• Retail pharmacy products and services, all of which are conducted in rural markets.

SunLink subsidiaries have conducted the healthcare facilities business since 2001 and the specialty pharmacy business since April 2008. The Specialty Pharmacy Segment currently is operated through Carmichael’s Cashway Pharmacy, Inc. (“Carmichael”), a subsidiary of SunLink ScriptsRx, LLC subsidiary, and is composed of a specialty pharmacy business acquired in April 2008 with four service lines.

SunLink’s Board and management have determined to focus the Company’s strategic investments on enhancing the existing hospital portfolio, including the selective disposal of underperforming and non-strategic subsidiary facilities.