8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):         November 6, 2007

SUN HEALTHCARE GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-12040	85-0410612
(State of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

18831 Von Karman, Suite 400 Irvine, CA	92612
(Address of principal executive offices)	(Zip Code)

No Change

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 7.01.  Regulation FD Disclosure

     On November 6, 2007, Sun Healthcare Group, Inc. ("Sun") conducted an investor presentation.  The slide show for the presentation is attached to this report as Exhibit 99.1.  The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the slide show includes material investor information that is not otherwise publicly available.  In addition, Sun does not assume any obligation to update such information in the future.

Item 9.01  Financial Statements and Exhibits

99.1 Slide show for investor presentation to be conducted November 6, 2007.

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SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SUN HEALTHCARE GROUP, INC.

  /s/ Mike Berg                                 

Name:  Mike Berg

Title:  Secretary

Dated:  November 6, 2007

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EX-99.1

CIBC 

18th Annual Healthcare

Conference

November 6, 2007

1

Statements made in this presentation may contain “forward-looking” information, such as forecasts of future
financial performance. Such statements involve risks and uncertainties and are subject to change at any
time. Factors that could cause actual results to differ materially include, but are not limited to, the
following: potential liability for losses not covered by, or in excess of, our insurance; continued compliance
by the Company under its debt agreements; changes in Medicare and Medicaid reimbursements; the impact
of federal and state regulations and investigations; changes in payor mix and payment methodologies; our
ability to integrate the operations of Harborside Healthcare Corporation; our ability to generate sufficient
cash flow to operate our business; our ability to receive increases in reimbursement rates from government
payors to cover increased costs; and competition for qualified staff in the healthcare industry. More
information on these and other factors that could affect our business and financial results are included in our
Annual Report on Form 10-K/A for the year ended December 31, 2006 and other public filings made with the
Securities and Exchange Commission.

The forward-looking statements involve known and unknown risks, uncertainties and other factors that are,
in some cases, beyond our control. We caution that any forward-looking statements made by us 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.

Furthermore, references to non-GAAP financial information and pro forma, normalized data contained herein
are reconciled to comparable GAAP financial information in our earnings release dated August 1, 2007 which
is available on our website at www.sunh.com and has been filed with the SEC in an 8K. 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
the Investor Relations Department of Sun 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 NW,
Albuquerque, NM 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 450 Fifth Street, NW, Room 1200, Washington, D.C.
20549. Please call the SEC at (800) SEC-0330 or visit the SEC’s web site for further information on its public
reference room.

Forward-Looking Statements

2

Investment Highlights

•Attractive industry fundamentals and reimbursement
  outlook

•Nationally diversified portfolio of facilities 

•Focus on high-acuity patients

•Harborside acquisition creates one of the largest U.S.
  operators

•Demonstrated integration track record

•Strong financial performance and underlying asset
  coverage

•Proven and experienced management team

3

15.9

16.0

16.1

16.3

16.5

16.7

16.9

17.0

17.3

17.1

16.7

16.4

15.0

15.5

16.0

16.5

17.0

17.5

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2006

2006

(in thousands)

Source: CMS

The long-term healthcare industry continues to grow due to demographic demand with
limited construction of new inpatient facilities.

Source: US Census Bureau

(in millions)

7

4

6

10

15

21

1.5%

2.0%

2.2%

2.6%

3.9%

5.0%

0

5

10

15

20

2000A

2010E

2020E

2030E

2040E

2050E

0%

2%

4%

6%

8%

10%

85+ Population

% of TotalPopulation

2005

Attractive Industry Demographics

Declining Number of
Nursing Facilities

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•Acquisition creates one of the largest
     long-term care operators in the U.S.

•Strong asset base of 213 inpatient
     facilities across 25 states

•High CON concentration provides
     barriers to entry

–17 of 25 states

•Significant facility ownership

–82 Facilities (1) - 38%

•Leverages existing Sun infrastructure
     to realize significant cost savings

(1) Includes exercise of Moffie and NHP purchase options.

Total:  $1,156.3 million

2007

2007

Pro Forma Nine Months

Pro Forma Nine Months

Inpatient Payor Mix

Inpatient Payor Mix

($ in millions)

Skilled

Mix

$393.1

Medicaid

$550.4

Private Pay
and Other

$212.8

 34%

 47.6%

18.4%

Sun Pro Forma for Harborside Acquisition

5

.

.

8
.
9
            
          

8 
8
            
          

6

5

10

15

3

1

9

1

12

12

3

20

3

19

10

1

15

2

17

7

9

9

7

Existing Sun State

Harborside State

Overlapping State

#

Number of Facilities

24,426 Licensed Beds in 25 States

(1)Includes the exercise of Harborside’s purchase options on the Moffie portfolio (five facilities) and the NHP
portfolio (four facilities).

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Medicare as a % of Revenue (2)

Inpatient Revenue Quality Mix (3)

Inpatient Revenue Per Patient Day

Occupancy (1)

(3) Quality mix includes all non-Medicaid inpatient revenues.

29.4%

28.8%

Q3 2006

Q3 2007

89.7%

89.3%

Q3 2006

Q3 2007

$365

$319

$157

50.3%

52.0%

Q3 2006

Q3 2007

(1) Occupancy  excludes hospitals

(2) Medicare as a % of Revenue includes Medicare and Hospice

Medicaid

$163

$156

$308

$391

Private and Other

(Percentages represent change from prior period)

2006  YTD

2007  YTD

89.5%

89.5%

2006 YTD

2007 YTD

28.9%

29.9%

51.2%

52.4%

2006 YTD

2007  YTD

Q3 2006

Q3 2007

$167

Managed Care/Comm

Medicare Part A

3.9%

3.7%
7.1%
            
          

7.3%

Improving Inpatient Performance Metrics
Pro Forma Sun with Harborside

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.

SNFs- Lowest Cost Setting for 

Rehab and Recovery

Comparison of per Case Rates

SNF

IRF

LTAC

Tracheotomy with Vent

$10,051

$26,051

$115,463

Respiratory with Vent

7,897

26,051

74,689

Joint Replacement

6,165 

17,135

67,104

Hip Fracture

10,618

18,487

44,633

Stroke

8,905

34,196

31,496

Average

$ 8,727

$24,384

$66,677

Source: Medpac

SNFs Are Lowest Cost Providers

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32 Centers currently have RRS - 8 More Under Development

3rd Quarter 2007 Occupancy

3rd Quarter 2007 Rehab %

3rd Quarter 2007 ALOS

Centers 
w/RRS units

All other centers

RRS units

All other centers

All 

 Other 

Centers

35

RRS 
Units

29

Q3 ‘07

Q3 ‘07

Rehab Recovery Suites -Opportunity for Growth

9

89.2%

89.9%

89.0%

90.0%

Centers w/ACC 

Units

All Other 

Centers

Q3 ‘06

Q3 ‘07

Alzheimers Care Centers -
Another Opportunity

•51 Centers currently have Alzheimer’s units - over 1929
   beds

•93.0% Occupancy in the Alzheimer’s units

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Harborside Integration Plan

•Sun management has the experience and skill necessary to
    integrate large multi-facility acquisitions without
    disrupting existing operations

•Acquisition of Harborside resulted in the establishment of a
    third reporting division with its own dedicated
    management

•Identifiable cost saving opportunities of $12-15 million

•Sun expects to realize approximately two-thirds of these
    net synergies over the first twelve months

•YTD savings are $3.6 million

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Q3’07	Q3’06	Q3’07 YTD	Q3’06 YTD	Q3’07	Q3’06	Q3’07 YTD	Q3’06 YTD
33	32	33	32	33	20	33	20
$31.9	$29.9	$93.9	$89.1	$28.3	$24.3	$84.1	$72.7
$1.8	$1.5	$5.8	$1.8	$2.5	$2.0	$6.3	$5.2
5.6%	5.1%	6.2%	2.0%	8.9%	8.2%	7.5%	7.2%

Specializes in temporary therapy,
pharmacy, physician, and nurse
staffing

Sun’s ancillary businesses are complementary to its core business

Description

Geography (states)

GrossRevenue

Margin

EBITDA

One of the largest contract
rehab companies, providing
physical, occupational and
speech rehab therapy services

Ancillary Businesses

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Financial Performance

13

            
Actual Results 
            
Pro Forma 
            
            
(Dollars in thousands) 
            
Quarter Ended September 30, 
            
Prior Yr Q3 
            
            

            
2007 
            
2006 
            
2006 
            
            
Revenue 
            
$ 439,570 
            
$ 252,777 
            
$ 416,724 
            
            
Depreciation and amortization 
            
10,051 
            
4,941 
            
9,262 
            
            
Interest expense, net 
            
14,841 
            
4,697 
            
8,670 
            
            
Income (loss) from continuing operations 
            
5,145 
            
(931)
            
3,389 
            
            
EBITDAR normalized 
            
$ 54,156 
            
$ 22,171 
            
$ 45,789 
            
            
   Margin - EBITDAR normalized 
            
12.3%
            
8.8%
            
11.0%
            
            
EBITDA normalized 
            
$ 35,324 
            
$ 8,834 
            
$ 25,740 
            
            
   Margin - EBITDA normalized 
            
8.0%
            
3.5%
            
6.2%
            
            
Income from continuing operations - normalized 
            
$ 6,754 
            
$ 426 
            
$ 6,550 
            
            
Diluted earnings per share - normalized 
            
$ 0.15 
            
$ 0.01 
            
$ 0.15 
            
            

            
            
Sun Third Quarter 2007 Results
          

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	Actual Results		Pro Forma Results
(Dollars in thousands)	Nine Months Ended Sep 30,		Nine Months Ended Sep 30,
	2007	2006	2007	2006
Revenue	$1,136,758	$ 746,461	$1,299,325	$ 1,226,473
Depreciation and amortization	23,643	11,497	28,396	24,561
Interest expense, net	28,901	14,140	33,546	24,871
Income from continuing operations	19,533	3,344	18,232	15,176
EBITDAR normalized	$ 134,245	$ 65,371	$ 154,801	$ 128,270
Margin - EBITDAR normalized	11.8%	8.8%	11.9%	10.5%
EBITDA normalized	$ 80,965	$ 26,558	$ 94,568	$ 67,030
Margin - EBITDA normalized	7.1%	3.6%	7.3%	5.5%
Income from continuing operations - normalized	$ 18,331	$ (414)	$ 21,143	$ 13,404
Diluted earnings per share - normalized	$ 0.43	$ (0.01)	$ 0.49	$ 0.31

Sun Third Quarter 2007 Results

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	Restated		UPDATED
(Dollars in millions)	May 2007 Guidance		2007 Guidance
	Low	High	Low	High
Revenue	$ 1,556.0	$ 1,570.0	$ 1,578.0	$ 1,584.0
EBITDAR	179.0	185.0	189.0	191.0
EBITDA	107.0	113.0	116.0	120.0
Income from continuing operations	20.0	23.0	26.0	28.0
Diluted earnings per share	$ 0.45	$ 0.52	$ 0.59	$ 0.64
Diluted weighted average shares	44.0	44.0	44.0	44.0
EBITDAR margin	11.5%	11.8%	12.0%	12.1%
EBITDA margin	6.9%	7.2%	7.4%	7.6%

Sun 2007 Guidance

16

( $ In Millions)                  

		Sep. 30, 2007	Pro Forma Dec. 2007
Cash		$ 85.1 (1)	$ 54.1 (1)
Debt:
	Mortgage Debt	129.2	128.0
	Clipper Debt	49.6	49.6
	Senior Secured Debt	306.4	304.8
	Senior Secured Delayed Draw	35.0	25.0
	Subordinated Debt	200.0	200.0
	Other Long Term Debt	1.8	1.3
	Total Debt	722.0	708.7
	Net Debt	661.9	679.6
Normalized, Pro Forma LTM EBITDA		$ 120.8 (2)	$ 143.1 (3)
Debt/EBITDA		5.5/1	4.7/1

Pro Forma Capitalization Table

Note: (1) Assumes cash over $25 million used to pay off debt.(2) Excludes impact of Moffie and NHP. Includes $3.6 million in
synergies. (3) Includes impact of Moffie $6 million and NHP $2.2 million, full impact of first synergies of $10 million and no
additional draws on senior secured delayed draw facility should be necessary due to greater than expected cash flows from
operations.

17

2007 / 2008
Key Focus Areas

•Same store growth

•Harborside integration

•Development of hospice business

•Infrastructure effectiveness

•Debt pay down

18

19