DISCONTINUED OPERATIONS

12 Months Ended

Jun. 30, 2014

Discontinued Operations And Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

3. DISCONTINUED OPERATIONS

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

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”). The assets of Dexter consisted of a leased 50-bed acute care hospital and related clinics, equipment, and home health services in Dexter, Missouri. Subsequent to the sale, Dexter has managed the hospital and related businesses for Southeast Health Center of Stoddard County, LLC and have done so through a transition period that ended June 30, 2013. Dexter 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 December 31, 2012. The sale of the assets, including the right to EHR Funds, and leasehold interest of Dexter for approximately $9,930, less sale expenses and taxes, resulted in net proceeds of approximately $7,400. Approximately $5,200 of the net proceeds was used to pay off the outstanding balance of the Company’s senior credit facility under the Term Loan of the Company’s then outstanding Credit Facility. Dexter’s operations have been reclassified as discontinued operations in our consolidated financial statements for the fiscal years ended June 30, 2014, 2013 and 2012.

Memorial Hospital of Adel—On July 2, 2012, the Company and its HealthMont of Georgia, Inc. subsidiary completed the sale of substantially of all the assets of Memorial Hospital of Adel and Memorial Convalescent Center (collectively “Memorial”) to the Hospital of Authority of Tift County, Georgia (“Tift”) for approximately $8,350. The net proceeds from the sale of approximately $7,500 were used to repay a portion of the Company’s senior debt under the Term Loan under the Company’s then outstanding Credit Facility. Memorial’s operations have been reclassified as discontinued operations in our consolidated financial statements as of and for the fiscal years ended June 30, 2014, 2013 and 2012.

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 fiscal years ended June 30, 2014, 2013 and 2012.

Discontinued Operations Reserves—SunLink has discontinued operations carried on by its former life sciences and engineering segment as well as certain of our healthcare operations. SunLink’s reserves related to discontinued operations of these segments represent management’s best estimate of SunLink and its subsidiaries’ possible liability for claims for which SunLink or its subsidiaries may incur liability. No reserve for discontinued operations is included in discontinued operations at June 30, 2014.

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

Discontinued Operations—Summary Statement of Earnings Information

	Years Ended June 30,
	2014			2013			2012
Net Revenues:
Dexter Hospital	$	602		$	9,634		$	20,066
Memorial of Adel		(59	)		114			14,643
	$	543		$	9,748		$	34,709
Earnings Before Income Taxes:
Dexter Hospital	$	1,548		$	542		$	3,751
Memorial of Adel		(94	)		(26	)		445
Life sciences and engineering		(158	)		(253	)		(88	)
Earnings before income taxes		1,296			263			4,108
Gain on Sale:
Dexter Hospital		0			9,289			0
Memorial of Adel		0			1,161			0
Gain on Sale		0			10,450			0
Income tax expense		450			4,640			1,351
Earnings from discontinued operations	$	846		$	6,073		$	2,757