SUN HEALTHCARE GROUP INC - FORM 8-K - EX-99.1 - May 7, 2012

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EXHIBIT 99.1

Sun Healthcare Group, Inc.
Reports 2012 First-quarter Operating Results;
EPS from Continuing Operations of $0.07

Contact: Investor Inquiries (505) 468-2341
Media Inquiries (505) 468-4582

Irvine, Calif. (May 7, 2012)-Sun Healthcare Group, Inc. (NASDAQ GS: SUNH) today announced its operating results for the first quarter ended March 31, 2012.

Highlights of continuing operations:

•
consolidated revenues were $458.5 million for the quarter, down 1.7 percent as compared to the same period in 2011 primarily as a result of the CMS Final Rule for Medicare reimbursement that became effective on Oct. 1, 2011 (the “CMS Final Rule”);
•
consolidated adjusted EBITDAR was $52.3 million for the quarter representing an adjusted EBITDAR margin of 11.4 percent; and
•
earnings per share was $0.07 for the quarter.

Regarding the Company's first-quarter results, William A. Mathies, Sun's chairman and chief executive officer, stated, “I am pleased with the Company's overall EBITDAR and EPS results for the quarter. The reimbursement changes effected by the CMS Final Rule continue to have a significant year-over-year impact on our operations. We also experienced less of the normal seasonal admissions and occupancy strength we expected to see during the winter and, as a result, our overall occupancy and skilled mix was softer than expected. Nevertheless, our ability to progress further through our cost-mitigation and therapy-delivery plans enabled us to achieve results in line with our expectations despite the dual challenges of the CMS Final Rule's impact and external demand drivers. Our results demonstrate our ability to manage through such significant challenges and are a direct function of the dedication of our thousands of caregivers and employees who continue to demonstrate Sun's focus on providing high-quality care for our patients and residents.”
Segment Updates        
Revenue in Sun's inpatient services business declined by $8.1 million, or 2.0 percent, from the prior year period to $405.8 million, primarily related to the impact of the CMS Final Rule offset by continued growth in revenues at SolAmor, Sun's hospice business. On a year-over-year basis, inpatient occupancy declined by 50 basis points. Compared to the fourth quarter of 2011, however, occupancy rose by 10 basis points to 87.2 percent and skilled mix rose by 90 basis points to 19.3 percent. Inpatient services adjusted EBITDAR declined by $12.6 million or 16.8 percent from the prior-year quarter to $62.4 million, and adjusted EBITDAR margin declined by 270 basis points to 15.4 percent. The Company's ongoing implementation of its mitigation activities in response to the CMS Final Rule continues to have its expected cost-savings impact.
As previously disclosed, the Company determined to exit certain inpatient operations at the end of 2011 and has, as a result, reclassified the results of nine centers as discontinued operations for the first quarter of 2012 and recast its results for prior periods to reflect this reclassification.






Included in the inpatient services business segment are revenues from SolAmor, which increased $1.0 million or 7.6 percent from $13.9 million in the first quarter of 2011 to $14.9 million in the first quarter of 2012. Virtually all of SolAmor's growth compared to the prior year was same-store, as the Company's Countryside acquisition celebrated its one-year anniversary on Jan. 1, 2012. SolAmor's adjusted EBITDAR was $3.3 million in the quarter, and adjusted EBITDAR margin was 22.5 percent.
SunDance, Sun's rehabilitation therapy services business, reported first-quarter revenues of $64.1 million, adjusted EBITDAR of $4.1 million and an adjusted EBITDAR margin of 6.5 percent, up 150 basis points year over year. Ongoing changes to SunDance's therapy-delivery processes in response to the CMS final rule continue to mitigate the rule's impact.
CareerStaff, Sun's medical staffing services business, reported for the quarter revenues of $22.9 million, adjusted EBITDAR of $1.8 million and adjusted EBITDAR margin of 7.8 percent, up 10 basis points year over year. On a sequential quarter basis, CareerStaff experienced 4.1 percent revenue growth while billable hours increased on both a sequential quarter and year-over-year basis.
Capital Structure and Cash Flow
At March 31, 2012, Sun had $44.8 million in cash and cash equivalents and $89.5 million of long-term debt. During the first quarter, Sun experienced an operating cash outflow of $2.6 million, largely related to timing differences of working capital items between the fourth quarter of 2011 and the first quarter of 2012, and used $10.0 million of cash for capital investments.

Conference Call
As previously announced, investors and the general public are invited to listen to a conference call with Sun's senior management on Tuesday, May 8, 2012, at 9 a.m. Pacific / 12 p.m. Eastern, to discuss the Company's first-quarter operating results for the period ended March 31, 2012.

To listen to the conference, dial (888) 280-4443 and refer to Sun Healthcare Group. A recording of the call will be available from 4 p.m. Eastern on May 8, 2012, through June 7, 2012, by calling (888) 203-1112 and using access code 4645807.

About Sun Healthcare Group, Inc.

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 March 31, 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 21,414 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 www.sunh.com.

Forward-looking Statements

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 all statements regarding the expected continuing effect of the Company's cost-mitigation and therapy-delivery plans to mitigate the impact on the Company's business of the CMS Final Rule. Factors that could cause actual results to differ are identified in filings made by the Company with the Securities and Exchange Commission and encompass 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; and the Company's ability to receive increases in reimbursement rates from government payors to cover increased costs. 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, www.sunh.com. There may be additional risks of which the Company is presently unaware or that it currently deems immaterial.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Sun's control. The Company 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. The Company 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.  

# # #



SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES
 
 
 
 
KEY INCOME STATEMENT FIGURES
CONSOLIDATED
(in thousands, except per share data)
 
 
 
 
 
For the
 
For the
 
Three Months Ended
 
Three Months Ended
 
March 31, 2012
 
March 31, 2011
 
 
 
 
Revenue
$
458,493

 
$
466,307

 
 
 
 
Center rent expense
36,377

 
35,692

 
 
 
 
Depreciation and amortization
8,430

 
7,449

 
 
 
 
Interest expense, net
4,411

 
4,999

 
 
 
 
Pre-tax income
3,047

 
16,237

 
 
 
 
Income tax expense
1,188

 
6,619

 
 
 
 
Income from continuing operations
1,859

 
9,618

 
 
 
 
Loss from discontinued operations
(1,646
)
 
(1,506
)
 
 
 
 
Net income
$
213

 
$
8,112

 
 
 
 
 
 
 
 
Diluted earnings per share
$
0.01

 
$
0.31

 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDAR
$
52,265

 
$
64,513

Margin - Adjusted EBITDAR
11.4
%
 
13.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
$
15,888

 
$
28,821

Margin - Adjusted EBITDA
3.5
%
 
6.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax income from continuing operations
$
3,047

 
$
16,237

 
 
 
 
Income tax expense
$
1,188

 
$
6,619

 
 
 
 
Income from continuing operations
$
1,859

 
$
9,618

 
 
 
 
Diluted earnings per share from continuing operations
$
0.07

 
$
0.37

 
 
 
 
 
 
 
 
See definitions of Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Income to
     Adjusted EBITDA and Adjusted EBITDAR."


1 of 8


SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES
 
 
 
 
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 
 
 
 
 
March 31, 2012
 
December 31, 2011
 
 (unaudited)
 
 (unaudited)
ASSETS
 
 
 
 
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
44,771

 
$
57,908

Restricted cash
14,325

 
15,706

Accounts receivable, net
206,813

 
202,229

Prepaid expenses and other assets
28,022

 
29,075

Assets held for sale
4,537

 
—

Deferred tax assets
63,993

 
63,170

 
 
 
 
 Total current assets
362,461

 
368,088

 
 
 
 
Property and equipment, net
146,033

 
148,298

Intangible assets, net
34,630

 
35,294

Goodwill
34,905

 
34,496

Restricted cash, non-current
353

 
353

Deferred tax assets
123,458

 
123,974

Other assets
42,825

 
45,163

 
 
 
 
Total assets
$
744,665

 
$
755,666

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
48,836

 
$
55,888

Accrued compensation and benefits
56,494

 
61,101

Accrued self-insurance obligations, current portion
59,687

 
57,810

Other accrued liabilities
44,746

 
43,139

Current portion of long-term debt and capital lease obligations
995

 
1,017

 
 
 
 
Total current liabilities
210,758

 
218,955

 
 
 
 
Accrued self-insurance obligations, net of current portion
152,921

 
157,267

Long-term debt and capital lease obligations, net of current portion
88,500

 
88,768

Unfavorable lease obligations, net
6,492

 
7,110

Other long-term liabilities
58,454

 
58,110

 
 
 
 
Total liabilities
517,125

 
530,210

 
 
 
 
Stockholders' equity:
 
 
 
Preferred stock of $.01 par value, authorized 3,333 shares,
     zero shares were issued and outstanding as of March 31, 2012
     and December 31, 2011
—

 
—

Common stock of $.01 par value, authorized 41,667 shares,
      25,272 and 25,146 shares issued and outstanding as of
     March 31, 2012 and December 31, 2011, respectively
253

 
251

Additional paid-in capital
728,801

 
726,861

Accumulated deficit
(500,214
)
 
(500,427
)
Accumulated other comprehensive loss, net
(1,300
)
 
(1,229
)
 
227,540

 
225,456

Total liabilities and stockholders' equity
$
744,665

 
$
755,666


2 of 8


SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES
 
 
 
 
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
 
 
 
 
 
For the
 
For the
 
Three Months Ended
 
Three Months Ended
 
March 31, 2012
 
March 31, 2011
 
 (unaudited)
 
 (unaudited)
 
 
 
 
Total net revenues
$
458,493

 
$
466,307

Costs and expenses:
 
 
 
Operating salaries and benefits
261,090

 
262,480

Self-insurance for workers' compensation and
      general and professional liability insurance
15,317

 
14,557

Operating administrative costs
12,406

 
13,067

Other operating costs
96,566

 
91,135

Center rent expense
36,377

 
35,692

General and administrative expenses
16,041

 
15,379

Depreciation and amortization
8,430

 
7,449

Provision for losses on accounts receivable
4,808

 
5,176

Interest, net of interest income of $68 and $58, respectively
4,411

 
4,999

Restructuring costs
—

 
136

Total costs and expenses
455,446

 
450,070

 
 
 
 
Income before income taxes and discontinued operations
3,047

 
16,237

Income tax expense
1,188

 
6,619

Income from continuing operations
1,859

 
9,618

 
 
 
 
Discontinued operations:
 
 
 
Loss from discontinued operations, net of related taxes
(1,646
)
 
(1,506
)
Loss from discontinued operations, net
(1,646
)
 
(1,506
)
 
 
 
 
Net income
$
213

 
$
8,112

 
 
 
 
 
 
 
 
Basic income / (loss) per common and common equivalent share:
 
 
 
Income from continuing operations
$
0.07

 
$
0.37

Loss from discontinued operations, net
(0.06
)
 
(0.05
)
Net income
$
0.01

 
$
0.32

 
 
 
 
Diluted income / (loss) per common and common equivalent share:
 
 
 
Income from continuing operations
$
0.07

 
$
0.37

Loss from discontinued operations, net
(0.06
)
 
(0.06
)
Net income
$
0.01

 
$
0.31

 
 
 
 
Weighted average number of common and
     common equivalent shares outstanding:
 
 
 
Basic
26,207

 
25,740

Diluted
26,207

 
25,838





3 of 8


SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
 
 
 
 
 
 
 
 
For the
 
For the
 
 
 
Three Months Ended
 
Three Months Ended
 
 
 
March 31, 2012
 
March 31, 2011
 
 
 
 (unaudited)
 
 (unaudited)
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
Net income
 
$
213

 
$
8,112

Adjustments to reconcile net loss to net cash provided by
 
 
 
 
operating activities, including discontinued operations:
 
 
 
 
 
Depreciation and amortization
 
8,582

 
7,681

 
Amortization of favorable and unfavorable lease intangibles
 
(513
)
 
(484
)
 
Provision for losses on accounts receivable
 
5,122

 
5,644

 
Stock-based compensation expense
 
2,232

 
1,449

 
Deferred taxes
 
(260
)
 
2,032

Changes in operating assets and liabilities, net of acquisitions:
 
 
 
 
 
Accounts receivable
 
(9,781
)
 
(5,393
)
 
Restricted cash
 
1,381

 
(1,946
)
 
Prepaid expenses and other assets
 
1,752

 
(249
)
 
Accounts payable
 
(6,036
)
 
(1,919
)
 
Accrued compensation and benefits
 
(4,607
)
 
3,438

 
Accrued self-insurance obligations
 
(2,469
)
 
(1,342
)
 
Income taxes payable
 
—

 
478

 
Other accrued liabilities
 
1,531

 
(731
)
 
Other long-term liabilities
 
227

 
(727
)
 
Net cash (used for) provided by operating activities
 
(2,626
)
 
16,043

 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(9,961
)
 
(8,837
)
Acquisitions, net of cash acquired
 
(260
)
 
—
 
Net cash used for investing activities
 
(10,221
)
 
(8,837
)
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Principal repayments of long-term debt and capital lease obligations
 
(290
)
 
(2,798
)
 
Net cash used for financing activities
 
(290
)
 
(2,798
)
 
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
 
(13,137
)
 
4,408

Cash and cash equivalents at beginning of period
 
57,908

 
81,163

Cash and cash equivalents at end of period
 
$
44,771

 
$
85,571

 
 
 
 
 
 
Reconciliation of net cash provided by operating activities to free cash flow:
 
 
 
 
 
 
 
 
Net cash (used for) provided by operating activities
 
$
(2,626
)
 
$
16,043

 
Capital expenditures
 
(9,961
)
 
(8,837
)
 
Free cash flow
 
$
(12,587
)
 
$
7,206

 
 
 
 
 
 
 
 
 
 
 
 
Free cash flow is defined as net cash flow provided by operating activities less cash used for capital expenditures.
Free cash flow is used by management to evaluate discretionary cash flow potentially available for principal repayment and other financing activities.

4 of 8


SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES
 
 
 
 
 
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA and ADJUSTED EBITDAR
(in thousands)
 
 
 
 
 
 
 
For the
 
For the
 
 
Three Months Ended
 
Three Months Ended
 
 
March 31, 2012
 
March 31, 2011
 
 
 (unaudited)
 
 (unaudited)
 
 
 
 
 
 Total net revenues
 
$
458,493

 
$
466,307

 
 
 
 
 
 Net income
 
$
213

 
$
8,112

 
 
 
 
 
 
 
 
 
 
 Income from continuing operations
 
1,859

 
9,618

 
 
 
 
 
 Income tax expense
 
1,188

 
6,619

 
 
 
 
 
 Interest, net
 
4,411

 
4,999

 
 
 
 
 
 Depreciation and amortization
 
8,430

 
7,449

 
 
 
 
 
 EBITDA
 
$
15,888

 
$
28,685

 
 
 
 
 
 
 
 
 
 
 Restructuring costs
 
—

 
136

 
 
 
 
 
 
 
 
 
 
 Adjusted EBITDA
 
$
15,888

 
$
28,821

 
 
 
 
 
 Center rent expense
 
36,377

 
35,692

 
 
 
 
 
 Adjusted EBITDAR
 
$
52,265

 
$
64,513

 
 
 
 
 


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.

5 of 8


SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
 
RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA and ADJUSTED EBITDAR
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 For the Three Months Ended March 31, 2012
 (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Inpatient
Services
 
 Rehabilitation
Therapy
Services
 
 Medical
Staffing
Services
 
 Other &
Corp Seg
 
 Elimination
of Affiliated
Revenue
 
 Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaffiliated revenue
 
$
405,788

 
$
30,629

 
$
22,069

 
$
7

 
—

 
$
458,493

 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliated revenue
 
—

 
33,464

 
831

 
—

 
(34,295
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
405,788

 
$
64,093

 
$
22,900

 
$
7

 
$
(34,295
)
 
$
458,493

 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
 
$
19,349

 
$
3,762

 
$
1,431

 
$
(22,683
)
 
—

 
$
1,859

 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
—

 
—

 
—

 
1,188

 
—

 
1,188

 
 
 
 
 
 
 
 
 
 
 
 
 
Interest, net
 
(19
)
 
—

 
—

 
4,430

 
—

 
4,411

 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
7,028

 
251

 
185

 
966

 
—

 
8,430

 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
$
26,358

 
$
4,013

 
$
1,616

 
$
(16,099
)
 
—

 
$
15,888

 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring costs
 
—

 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
$
26,358

 
$
4,013

 
$
1,616

 
$
(16,099
)
 
—

 
$
15,888

 
 
 
 
 
 
 
 
 
 
 
 
 
Center rent expense
 
36,075

 
134

 
168

 
—

 
—

 
36,377

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDAR
 
$
62,433

 
$
4,147

 
$
1,784

 
$
(16,099
)
 
—

 
$
52,265

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA margin
 
6.5
%
 
6.3
%
 
7.1
%
 
 
 
 
 
3.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDAR margin
 
15.4
%
 
6.5
%
 
7.8
%
 
 
 
 
 
11.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Income to
     Adjusted EBITDA and Adjusted EBITDAR."

6 of 8


SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
 
RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA and ADJUSTED EBITDAR
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 For the Three Months Ended March 31, 2011
 (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Inpatient
Services
 
 Rehabilitation
Therapy
Services
 
 Medical
Staffing
Services
 
 Other &
Corp Seg
 
 Elimination
of Affiliated
Revenue
 
 Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaffiliated revenue
 
$
413,888

 
$
30,096

 
$
22,316

 
$
7

 
—

 
$
466,307

 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliated revenue
 
—

 
32,694

 
623

 
—

 
(33,317
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
413,888

 
$
62,790

 
$
22,939

 
$
7

 
$
(33,317
)
 
$
466,307

 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
 
$
33,339

 
$
2,772

 
$
1,399

 
$
(27,892
)
 
—

 
$
9,618

 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
—

 
—

 
—

 
6,619

 
—

 
6,619

 
 
 
 
 
 
 
 
 
 
 
 
 
Interest, net
 
(6
)
 
—

 
1

 
5,004

 
—

 
4,999

 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
6,206

 
226

 
187

 
830

 
—

 
7,449

 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
$
39,539

 
$
2,998

 
$
1,587

 
$
(15,439
)
 
—

 
$
28,685

 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring costs
 
136

 
—

 
—

 
—

 
—

 
136

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
$
39,675

 
$
2,998

 
$
1,587

 
$
(15,439
)
 
—

 
$
28,821

 
 
 
 
 
 
 
 
 
 
 
 
 
Center rent expense
 
35,392

 
127

 
173

 
—

 
—

 
35,692

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDAR
 
$
75,067

 
$
3,125

 
$
1,760

 
$
(15,439
)
 
—

 
$
64,513

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA margin
 
9.6
%
 
4.8
%
 
6.9
%
 
 
 
 
 
6.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDAR margin
 
18.1
%
 
5
%
 
7.7
%
 
 
 
 
 
13.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Income to
     Adjusted EBITDA and Adjusted EBITDAR."

7 of 8


Sun Healthcare Group, Inc. and Subsidiaries
Selected Operating Statistics
Continuing Operations
 
 
 
 
 
 
 
 
 
For the
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2012
 
 
2011
 
 
Consolidated Company
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues - Non-affiliated (in thousands)
 
 
 
 
 
 
Skilled Nursing and similar facilities
$
390,435

 
 
$
399,554

 
 
Hospice
14,903

 
 
13,855

 
 
Other - Inpatient Services
450

 
 
479

 
 
Inpatient Services
405,788

 
 
413,888

 
 
 
 
 
 
 
 
 
Rehabilitation Therapy Services
30,629

 
 
30,096

 
 
Medical Staffing Services
22,069

 
 
22,316

 
 
Other - non-core businesses
7

 
 
7

 
 
Total
$
458,493

 
 
$
466,307

 
 
 
 
 
 
 
 
 
Revenue Mix - Non-affiliated (in thousands)
 
 
 
 
 
 
Medicare
$
136,288

30
%
 
$
151,251

32
%
 
Medicaid
186,443

41
%
 
177,645

38
%
 
Private and Other
107,262

23
%
 
109,284

24
%
 
Managed Care / Insurance
23,337

5
%
 
23,009

5
%
 
Veterans
5,163

1
%
 
5,118

1
%
 
Total
$
458,493

100
%
 
$
466,307

100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inpatient Services Stats
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of centers:
190

 
 
190

 
 
Number of available beds:
20,779

 
 
20,818

 
 
Occupancy percent:
87.2
%
 
 
87.7
%
 
 
 
 
 
 
 
 
 
Payor Mix percentage based on patient days:
 
 
 
 
 
 
Medicare - SNF Beds
15.3
%
 
 
15.8
%
 
 
Managed care / Ins. - SNF Beds
4
%
 
 
4.1
%
 
 
    Total SNF skilled mix
19.3
%
 
 
19.9
%
 
 
 
 
 
 
 
 
 
Medicare
14
%
 
 
14.5
%
 
 
Medicaid
63.3
%
 
 
62.2
%
 
 
Private and Other
17.8
%
 
 
18.2
%
 
 
Managed Care / Insurance
3.7
%
 
 
3.8
%
 
 
Veterans
1.2
%
 
 
1.3
%
 
 
 
 
 
 
 
 
 
Revenue Mix percent of revenues:
 
 
 
 
 
 
Medicare - SNF Beds
31.6
%
 
 
34.9
%
 
 
Managed care / Ins. - SNF Beds
6.1
%
 
 
5.9
%
 
 
    Total SNF skilled mix
37.7
%
 
 
40.8
%
 
 
 
 
 
 
 
 
 
Medicare
32.4
%
 
 
35.4
%
 
 
Medicaid
45.9
%
 
 
42.9
%
 
 
Private and Other
14.7
%
 
 
15
%
 
 
Managed Care / Insurance
5.7
%
 
 
5.5
%
 
 
Veterans
1.3
%
 
 
1.2
%
 
 
 
 
 
 
 
 
 
Revenues Per Patient Day:
 
 
 
 
 
 
Medicare (Part A)
$
463.10

 
 
$
522.11

 
 
Medicare Blended Rate (Part A & B)
$
506.02

 
 
$
558.27

 
 
Medicaid
$
178.64

 
 
$
173.69

 
 
Medicaid, net of provider taxes
$
161.61

 
 
$
158.62

 
 
Private and Other
$
190.19

 
 
$
196.17

 
 
Managed Care / Insurance
$
381.54

 
 
$
368.69

 
 
Veterans
$
251.11

 
 
$
245.52

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rehab contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliated
178

 
 
179

 
 
Non-affiliated
338

 
 
343

 
 
 
 
 
 
 
 
 
Average Qtrly Revenue per Contract
(in thousands)
$
124

 
 
$
120

 
 
 
 
 
 
 
 
 

8 of 8

SUN HEALTHCARE GROUP INC Reports