SunLink(US:SSY)2023-05-10 20:40Financial Assistance and Funding - The Company received approximately $6,182 in Provider Relief Funds (PRF) from April 1, 2020, to March 31, 2023, with $5,713 recognized as other income[68]. - The Company obtained $3,234 in Paycheck Protection Plan (PPP) loans during the quarter ended June 30, 2020, all of which have been forgiven as of March 31, 2023[69]. - The Company applied for Employee Retention Credit (ERC) of $3,586 due to a decrease in gross receipts and has received all applied amounts[70]. - The company received a total of $9,416 under the CARES Act programs, including $6,182 in PRF and $3,234 in PPP loans[102]. - The Company continues to monitor compliance with terms and conditions of PRF, PPP, and ERC funding, which are subject to federal audits[71]. Impact of COVID-19 - The Company experienced material reductions in demand and net revenues in its Healthcare business due to the COVID-19 pandemic, alongside increased costs for medical supplies and staffing[66]. - The Company faces uncertainties and risks related to the COVID-19 pandemic, which have affected its ability to resume normal business strategies[61]. - The company believes it has adequate financing and liquidity to support operations through the next twelve months, despite uncertainties related to COVID-19[103]. Financial Performance - Total net revenues for the three months ended March 31, 2023, were $11,533 million, a 9.6% increase from $10,527 million in the same period of 2022[78]. - Healthcare Services net revenues decreased by $217 million (5.8%) for the three-month period but increased by $674 million (6.4%) for the nine-month period ended March 31, 2023, compared to the prior year[78][79]. - Pharmacy segment net revenues increased by $1,223 million (18.0%) for the three months and $4,825 million (23.1%) for the nine months ended March 31, 2023, compared to the same periods in 2022[80]. - Operating loss for the three months ended March 31, 2023, was $774 million, an improvement of 27.3% compared to a loss of $1,064 million in the same period of 2022[85]. - Loss from continuing operations after income tax for the three months ended March 31, 2023, was $727 million, compared to a loss of $934 million in the same period of 2022[95]. - Net loss for the three months ended March 31, 2023 was $762, compared to a net loss of $990 for the same period in 2022, representing a 23% improvement[99]. - Net loss for the nine months ended March 31, 2023 was $369, a decline from net earnings of $356 in the same period in 2022[99]. Costs and Expenses - Costs and expenses for the three months ended March 31, 2023, were $12,307 million, a 6.2% increase from $11,591 million in the same period of 2022[83]. - The Company acknowledges the impact of inflation on operating costs and the ability to achieve cash flow and profitability, particularly due to fixed payments from government programs[55]. Operational Strategy - The Company plans to focus on improving operations and achieving profitability in its existing Healthcare Services and Pharmacy businesses while pursuing selective acquisitions[61]. - The company expects to purchase approximately $1,000 of capitalizable DME in the next twelve months, subject to demand and supply challenges[105]. - The company anticipates funding capital expenditures primarily from cash on hand, with no significant changes expected in cash obligations beyond the next twelve months[105]. Market Challenges - The company is challenged by the competitive nature of the U.S. healthcare market and the need to attract and retain qualified staff[55]. - The company has not undertaken any obligation to publicly update or revise forward-looking statements, which may differ from actual future results[60]. Legal and Financial Position - The company reported a valuation allowance of $7,906 million against deferred tax assets as of March 31, 2023[92]. - Contractual obligations related to outstanding debt and operating leases totaled $1,001 as of March 31, 2023, with $24 due within one year[104]. - Legal expenses to a related law firm amounted to $35 for the three months ended March 31, 2023, compared to $9 for the same period in 2022[107]. - The company has not entered into any transactions using derivative financial instruments, indicating minimal exposure to market risk[108]. - The company's unrestricted cash on hand was $5,382 as of March 31, 2023, serving as the primary source of liquidity[101].