SunLink Health Systems, an Atlanta-based chain that has been struggling to turn around its financial performance, has decided to remain a public company.
The chain first disclosed its intention to delist its shares in 2013 and began reducing the number of shareholders it has from 502 to under 300. However, on Feb. 9, its board of directors decided not to pursue taking the company private.
SunLink revealed the board's decision in an earnings release for its second fiscal quarter, which ended Dec. 31. Its shares gained more than 7% in mid-day trading to reach $1.50.
The chain has been divesting underperforming hospitals and now owns just three facilities and a specialty pharmacy. It sold two hospitals in 2012 and completed the sale of a third, Callaway Community Hospital in Fulton, Mo., in December for $6.1 million.
For the second quarter, SunLink reported a 2.2% increase in admissions. Admissions adjusted for outpatient activity decreased 8.7%, but revenue per equivalent admission was up 10.1%.
Net income for the period was $977,000 on $23.1 million in revenue compared with net income of $227,000 on $23.9 million in revenue in the second quarter of its fiscal 2014. Its operating margin improved to 8.7% compared with the prior-year period's 1.2%.
SunLink's board didn't come to any other decisions regarding its future, the company said. However, the board last year made a defensive move to prevent a hostile takeover, extending its existing shareholder rights plan until February 2021. The plan goes into effect if any entity tries to acquire more than 20% of SunLink's shares.
The company has a market capitalization of $13.7 million.
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