Sun Healthcare Group, Inc. Reports 2012 Third-Quarter Operating Results; Normalized EPS from Continuing Operations of $0.17
(firmenpresse) - IRVINE, CA -- (Marketwire) -- 10/29/12 -- Sun Healthcare Group, Inc. (NASDAQ: SUNH) today announced its operating results for the third quarter ended Sept. 30, 2012.
consolidated revenues were $460.5 million for the quarter;
consolidated normalized adjusted EBITDAR was $57.9 million for the quarter representing a normalized adjusted EBITDAR margin of 12.6 percent; and
normalized earnings per share was $0.17 for the quarter.
The closing date for the Company's pending transaction with Genesis HealthCare LLC has not yet been finalized but is expected to occur in December 2012, subject to receipt of a few remaining regulatory approvals and the satisfaction of customary closing conditions. In connection with the pending transaction, the Company incurred $2.9 million of transaction costs through the nine months ended Sept. 30, 2012, which were primarily comprised of legal fees and financial advisory fees. The Company will not hold a quarterly conference call to discuss its third-quarter results.
Commenting on the expected completion of the transaction, William A. Mathies, Sun's chairman and chief executive officer, stated, "I am extremely proud of our thousands of caregivers and employees, who have maintained their focus on providing high-quality care for our patients and residents throughout the transaction process while continuing to execute toward our operational goals for this year. As we enter into our merger with Genesis HealthCare, I'm confident that we bring skills, dedication, and capabilities that will contribute to the success of the combined company."
Sun's inpatient services business produced revenue in the third quarter totaling $409.8 million, down $8.3 million, or 2.0 percent, from the third quarter of 2011. The decrease in year-over-year revenues resulted principally from the reduction in Medicare rates as mandated by the CMS Final Rule and implemented in the prior year on Oct. 1, 2011. Inpatient services adjusted EBITDAR for the quarter was $66.3 million, down $8.4 million, or 11.2 percent, from the prior year third quarter, and adjusted EBITDAR margin for the quarter was 16.2 percent, down 170 basis points from the prior year third quarter.
Sun's hospice division, SolAmor, is included in Sun's inpatient services business segment and produced revenue in the third quarter of $15.7 million, up $0.8 million, or 5.6 percent, from the third quarter of 2011. SolAmor's adjusted EBITDAR was $3.9 million in the third quarter and adjusted EBITDAR margin was 24.6 percent.
Sun's rehabilitation therapy services business, SunDance, reported third-quarter revenues of $60.9 million, adjusted EBITDAR of $4.5 million and an adjusted EBITDAR margin of 7.4 percent, up 310 basis points year over year.
Sun's medical staffing services business, CareerStaff, reported third-quarter revenues of $22.1 million, up 1.7 percent year over year, adjusted EBITDAR of $1.6 million and an adjusted EBITDAR margin of 7.2 percent.
At Sept. 30, 2012, Sun had $63.8 million in cash and cash equivalents and $88.9 million of long-term debt. During the third quarter, Sun generated cash flow from operations of $26.4 million and used net cash of $5.9 million for capital investments.
Sun Healthcare Group, Inc. (NASDAQ: SUNH) is a healthcare services company, serving principally the senior population, with consolidated annual revenues in excess of $1.9 billion and approximately 28,000 employees in 46 states. Sun's services are provided through its subsidiaries: as of Sept. 30, 2012, SunBridge Healthcare and its subsidiaries' continuing operations include 158 skilled nursing centers, 13 combined skilled nursing, assisted and independent living centers, 10 assisted living centers, two independent living centers and seven mental health centers with an aggregate of 21,324 licensed beds in 23 states; SunDance Rehabilitation provides rehabilitation therapy services to affiliated and non-affiliated centers in 36 states; CareerStaff Unlimited provides medical staffing services in 40 states; and SolAmor Hospice provides hospice services in 11 states. For more information, go to .
Statements made in this release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "anticipate," "believe," "plan," "estimate," "expect," "hope," "intend," "may" and similar expressions. Forward-looking statements in this release include the Company's expectations regarding the closing of the transaction with Genesis Healthcare. Factors that could cause actual results to differ are identified in filings made by the Company with the Securities and Exchange Commission and include changes in Medicare and Medicaid reimbursements, including with respect to the CMS Final Rule, and the Company's ability to mitigate the impact of such changes; the impact that healthcare reform legislation will have on the Company's business; the ability to maintain the occupancy rates and payor mix at the Company's healthcare centers; potential liability for losses not covered by, or in excess of, insurance; the effects of government regulations and investigations; the ability of the Company to collect its accounts receivable on a timely basis; the amount of the Company's indebtedness; covenants in debt agreements and leases that may restrict the Company's activities, including the Company's ability to make acquisitions and incur more indebtedness on favorable terms; the impact of the economic downturn on the business; increasing labor costs and the shortage of qualified healthcare personnel; the Company's ability to receive increases in reimbursement rates from government payors to cover increased costs; delays in or failure to satisfy required conditions to the closing of the proposed merger with Genesis Healthcare, including the receipt of required regulatory approvals with respect to the transaction; failure to consummate or delay in consummating the transaction for other reasons; and disruption from the transaction making it more difficult to maintain relationships with customers and employees. More information on factors that could affect the Company's business and financial results are included in Sun's filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available on Sun's web site, . There may be additional risks of which the Company is presently unaware or that it currently deems immaterial.
The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control. Sun cautions investors that any forward-looking statements made by Sun are not guarantees of future performance and are only made as of the date of this release. Sun disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
EBITDA, adjusted EBITDA, adjusted EBITDAR and free cash flow, as used in this press release and in the accompanying tables, which are non-GAAP financial measures, are each reconciled to their respective GAAP-recognized financial measures in the accompanying tables.
EBITDA is defined as earnings before loss on discontinued operations, income taxes, interest, net, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before restructuring costs. Adjusted EBITDAR is defined as Adjusted EBITDA before center rent expense. Adjusted EBITDA and Adjusted EBITDAR are used by management to evaluate financial performance and resource allocation for each entity within the operating units and for the Company as a whole. Adjusted EBITDA and Adjusted EBITDAR are commonly used as analytical indicators within the healthcare industry and also serve as measures of leverage capacity and debt service ability. Adjusted EBITDA and Adjusted EBITDAR should not be considered as measures of financial performance under generally accepted accounting principles. As the items excluded from Adjusted EBITDA and Adjusted EBITDAR are significant components in understanding and assessing finance performance, Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation or as alternatives to net income, cash flows generated by or used in operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA and Adjusted EBITDAR are not measurements determined in accordance with U.S. generally accepted accounting principles and are thus susceptible to varying calculations. Adjusted EBITDA and Adjusted EBITDAR as presented may not be comparable to other similarly titled measures of other companies.
EBITDA is defined as earnings before loss on discontinued operations, income taxes, interest, net, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before restructuring costs. Adjusted EBITDAR is defined as Adjusted EBITDA before center rent expense. Adjusted EBITDA and Adjusted EBITDAR are used by management to evaluate financial performance and resource allocation for each entity within the operating units and for the Company as a whole. Adjusted EBITDA and Adjusted EBITDAR are commonly used as analytical indicators within the healthcare industry and also serve as measures of leverage capacity and debt service ability. Adjusted EBITDA and Adjusted EBITDAR should not be considered as measures of financial performance under generally accepted accounting principles. As the items excluded from Adjusted EBITDA and Adjusted EBITDAR are significant components in understanding and assessing finance performance, Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation or as alternatives to net income, cash flows generated by or used in operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Adjusted EBITDA and Adjusted EBITDAR are not measurements determined in accordance with U.S. generally accepted accounting principles and are thus susceptible to varying calculations. Adjusted EBITDA and Adjusted EBITDAR as presented may not be comparable to other similarly titled measures of other companies.
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