Attached files
| file | filename |
|---|---|
| 8-K - SUN HEALTHCARE GROUP INC | form8k.htm |
| EX-99.2 - SUN HEALTHCARE GROUP INC | ex992.htm |
EXHIBIT
99.1
Sun
Healthcare Group, Inc. Announces 2010 Guidance
Contact:
Investor Inquiries (505) 468-2341
Media
Inquiries (505) 468-4582
Irvine,
Calif. (Jan. 6, 2010) - Sun Healthcare Group, Inc. (NASDAQ GS: SUNH) today
announced its 2010 full-year guidance.
2010 Full-Year
Guidance
The table
below sets forth Sun’s 2010 full-year guidance.
|
(Dollars
in millions, except EPS)
|
2010
Full-Year Guidance
|
|||||||
|
Low
|
High
|
|||||||
|
Revenue
|
$ | 1,930.0 | $ | 1,954.0 | ||||
|
EBITDAR
|
$ | 244.0 | $ | 250.0 | ||||
|
EBITDA
|
$ | 168.2 | $ | 174.0 | ||||
|
Pre-tax
earnings
|
$ | 69.2 | $ | 73.8 | ||||
|
Income
from continuing operations
|
$ | 40.8 | $ | 43.5 | ||||
|
Diluted
earnings per share
|
$ | 0.92 | $ | 0.98 | ||||
|
Diluted
weighted average shares
|
44.5 | 44.5 | ||||||
|
EBITDAR
margin
|
12.6 | % | 12.8 | % | ||||
|
EBITDA
margin
|
8.7 | % | 8.9 | % | ||||
“Our
2010 guidance is based on our current assessment of the reimbursement
environment,” said Richard K. Matros, Sun’s chairman and chief executive
officer. “In formulating our 2010 guidance, we have assumed no increase in
Medicaid rates, net of provider taxes. We are offsetting the Medicare market
basket rate increase that we expect to receive in the fourth quarter of 2010
with the start-up impact of RUG IV that same quarter. We believe that these rate
assumptions, when compared to increases we received in 2009, will result in a
year-over-year annual EBITDA reduction of approximately $22 million. We
anticipate that the majority of that reduction will be offset by continued
improvement in Medicare acuity and the impact of $10 million of reduced costs
resulting from our third quarter 2009 organizational restructuring. I am pleased
with our operational execution, which translates into our ability to continue
delivering strong stable margins in a challenging economic
environment.”
Sun’s
2010 guidance is based on the continuing operations of the company and the
following additional assumptions:
|
·
|
compensation
and benefits are expected to increase approximately 3
percent;
|
|
·
|
center
lease costs are expected to increase approximately 3.8
percent:
|
|
o
|
1.5
percent for built-in increases
|
|
o
|
2.3
percent related to facility modernization in cooperation with certain
landlords;
|
|
·
|
an
effective income tax rate of 41 percent and 2010 cash income taxes paid of
between $8 million and
|
|
|
$10
million;
|
|
·
|
no
additional acquisitions or
dispositions;
|
|
·
|
an
average outstanding debt balance of $685 million with an average all-in
interest rate of 7.4 percent;
|
|
·
|
annual
increase in depreciation and amortization of $5.0
million;
|
|
·
|
non-recurring
costs in 2010 of $2.5 million associated with completing the installation
of the first phase of our new clinical/billing platform, which will be
fully implemented and operational in third quarter 2010;
and
|
|
·
|
capital
expenditures of between $50 million and $55 million, principally
for:
|
|
o
|
routine
maintenance and renovations for facilities and IT
systems;
|
|
o
|
the
build-out of 570 suite beds for our Rehab Recovery Suites® in 2010,
bringing our total suite bed count up to 2,100 by the end of 2010, an
increase of almost 38 percent; and
|
|
o
|
the
completion of our new clinical/billing
platform.
|
About
Sun Healthcare Group, Inc.
Sun Healthcare Group, Inc.’s (NASDAQ
GS: SUNH) subsidiaries provide nursing, rehabilitative and related specialty
healthcare services principally to the senior population in the United States.
Our core business is providing inpatient services, primarily through 183 skilled
nursing centers, 14 assisted and independent living centers and eight mental
health centers. On a consolidated basis, Sun has annual revenues of over $1.8
billion and approximately 30,000 employees in 46 states. At Nov. 30, 2009,
SunBridge centers had 23,205 licensed beds located in 25 states, of which 22,423
were available for occupancy. We also provide rehabilitation therapy services to
affiliated and non-affiliated centers through our SunDance subsidiary, medical
staffing services through our CareerStaff Unlimited subsidiary and hospice
services through our SolAmor subsidiary.
Forward-Looking
Statement
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. Factors that could cause actual
results to differ are identified in the public filings made by the company with
the Securities and Exchange Commission and include changes in Medicare and
Medicaid reimbursements; our ability to maintain the occupancy rates and payor
mix at our healthcare centers; potential liability for losses not covered by, or
in excess of, our insurance; the effects of government regulations and
investigations; the significant amount of our indebtedness, covenants in our
debt agreements that may restrict our activities and our ability to make
acquisitions, incur more indebtedness and refinance indebtedness on favorable
terms; the impact of the current economic downturn on our business and our
ability to collect our receivables; increasing labor costs and the shortage of
qualified healthcare personnel; and our ability to receive increases in
reimbursement rates from government payors to cover increased costs. More
information on factors that could affect our business and financial results are
included in our public filings made with the Securities and Exchange Commission,
including our Annual Report on Forms 10-K and 10-K/A and Quarterly Reports on
Form 10-Q and 10-Q/A, copies of which are available on Sun’s web site,
www.sunh.com.
The forward-looking statements involve known and unknown risks, uncertainties
and other factors that are, in some cases, beyond our control. We caution
investors that any forward-looking statements made by Sun are not guarantees of
future performance. We disclaim 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
and EBITDAR as used in this press release are non-GAAP financial measures.
EBITDA is defined as earnings before income (loss) on discontinued operations,
income taxes, loss (gain) on sale of assets, net, interest, net, depreciation
and amortization. EBITDAR is defined as EBITDA before facility rent expense.
EBITDA and EBITDAR are used by management to evaluate financial performance and
resource allocation for each entity within the operating units and for Sun as a
whole. EBITDA and EBITDAR are commonly used as analytical indicators within the
healthcare industry and also serve as measures of leverage capacity and debt
service ability. EBITDA and EBITDAR should not be considered as measures of
financial performance under generally accepted accounting principles. As the
items excluded from EBITDA and EBITDAR are significant components in
understanding and assessing financial performance, EBITDA and EBITDAR should not
be considered in isolation or as alternatives to net income (loss),
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 EBITDA and EBITDAR are
not measurements determined in accordance with generally accepted accounting
principles in the United States and are thus susceptible to varying
calculations, EBITDA and EBITDAR as presented may not be comparable to other
similarly titled measures of other companies.
Any documents filed by Sun with the SEC may be obtained free of charge at the
SEC’s web site at www.sec.gov. In addition, investors and stockholders of Sun
may obtain free copies of the documents filed with the SEC by contacting Sun’s
investor relations department at (505) 468-2341 (TDD users, please call (505)
468-4458) or by sending a written request to Investor Relations, Sun Healthcare
Group, Inc. 101 Sun Avenue N.E., Albuquerque, N.M. 87109. You may also read and
copy any reports, statements and other information filed by Sun with the SEC at
the SEC public reference room at Room 1580, 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at (800) SEC-0330 or visit the SEC’s web site for
further information.