Discontinued Operations

6 Months Ended

Dec. 31, 2014

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						Six Months Ended
	December 31,						December 31,
	2014			2013			2014			2013
Net Revenues:
Fulton Hospital	$	3,321		$	3,184		$	6,730		$	6,733
Dexter Hospital		90			418			131			513
Memorial of Adel		69			2			53			(4	)
	$	3,480		$	3,604		$	6,914		$	7,242
Earnings (loss) before income taxes:
Fulton Hospital	$	(449	)	$	(549	)	$	(897	)	$	(1,147	)
Dexter Hospital		532			410			570			482
Memorial of Adel		56			(1	)		32			(12	)
Life sciences and engineering		(30	)		(40	)		(64	)		(79	)
Earnings (Loss) before income taxes		109			(180	)		(359	)		(756	)
Loss on Sale
Fulton Hospital		(191	)		—			(191	)		—
Loss on Sale		(191	)		—			(191	)		—
Income tax expense (benefit)		(70	)		(57	)		(236	)		(255	)
Loss from discontinued operations	$	(12	)	$	(123	)	$	(314	)	$	(501	)

Fulton Hospital – On December 31. 2014, the Company’s subsidiary, HealthMont of Missouri 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 December 31, 2014 and June 30, 2014 and for the three and six month periods ended December 31, 2014 and 2013. 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 $191 resulted from the sale of the Fulton assets, which includes $237 early repayment penalty resulting from the repayment of the RDA loan.

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”). 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 managed the hospital and related businesses for Southeast Health Center of Stoddard County, LLC through a transition period 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. Dexter’s operations have been classified as discontinued operations in our condensed consolidated financial statements for the three and six month periods ended December 31, 2014 and 2013.

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 six month periods ended December 31, 2014 and 2013.

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 six months ended December 31, 2014 and 2013. The components of pension expense for the three and six months ended December 31, 2014 and 2013, respectively, were as follows:

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2014			2013						2013
Interest Cost	$	16		$	15		$	33		$	30
Expected return on assets		(7	)		(7	)		(15	)		(14	)
Amortization of prior service cost		23			32			48			63
Net pension expense	$	32		$	40		$	66		$	79

SunLink contributed $56 to the plan in the three and six months ended December 31, 2014.