Delaware | 1-12040 | 13-4230695 |
(State of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
18831 Von Karman, Suite 400 Irvine, CA | 92,612 |
(Address of principal executive offices) | (Zip Code) |
99.1 | Press Release dated October 29, 2012. |
SUN HEALTHCARE GROUP, INC. |
/s/ Michael T. Berg |
Name: Michael T. Berg |
Title: Interim General Counsel and Secretary |
• | 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. |
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 | ||||||
September 30, 2012 | September 30, 2011 | ||||||
Revenue | $ | 460,470 | $ | 468,676 | |||
Center rent expense | 36,647 | 35,952 | |||||
Depreciation and amortization | 8,654 | 8,163 | |||||
Interest expense, net | 4,458 | 4,834 | |||||
Pre-tax income | 6,921 | (305,172 | ) | ||||
Income tax expense | 2,932 | 2,203 | |||||
Income (loss) from continuing operations | 3,989 | (307,375 | ) | ||||
Loss from discontinued operations | (2,702 | ) | (2,031 | ) | |||
Net income (loss) | $ | 1,287 | $ | (309,406 | ) | ||
Diluted (loss) income per share | $ | 0.05 | $ | (11.81 | ) | ||
Adjusted EBITDAR | $ | 56,869 | $ | 64,103 | |||
Margin - Adjusted EBITDAR | 12.4 | % | 13.7 | % | |||
Adjusted EBITDAR normalized | $ | 57,902 | $ | 64,103 | |||
Margin - Adjusted EBITDAR normalized | 12.6 | % | 13.7 | % | |||
Adjusted EBITDA | $ | 20,222 | $ | 28,151 | |||
Margin - Adjusted EBITDA | 4.4 | % | 6.0 | % | |||
Adjusted EBITDA normalized | $ | 21,255 | $ | 28,151 | |||
Margin - Adjusted EBITDA normalized | 4.6 | % | 6.0 | % | |||
Pre-tax income continuing operations - normalized | $ | 7,954 | $ | 14,345 | |||
Income tax expense - normalized | $ | 3,335 | $ | 4,951 | |||
Income from continuing operations - normalized | $ | 4,619 | $ | 9,394 | |||
Diluted earnings per share from continuing operations - normalized | $ | 0.17 | $ | 0.36 | |||
See definitions of Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDAR." | |||||||
See normalizing adjustments in the table "Normalizing Adjustments - Quarter Comparison." |
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | |||||||
KEY INCOME STATEMENT FIGURES | |||||||
CONSOLIDATED | |||||||
(in thousands, except per share data) | |||||||
For the | For the | ||||||
Nine Months Ended | Nine Months Ended | ||||||
September 30, 2012 | September 30, 2011 | ||||||
Revenue | $ | 1,376,105 | $ | 1,405,558 | |||
Center rent expense | 109,546 | 107,394 | |||||
Depreciation and amortization | 25,588 | 23,241 | |||||
Interest expense, net | 13,297 | 14,688 | |||||
Pre-tax income | 14,842 | (269,596 | ) | ||||
Income tax expense | 6,021 | 16,715 | |||||
Income (loss) from continuing operations | 8,821 | (286,311 | ) | ||||
Loss from discontinued operations | (8,301 | ) | (5,036 | ) | |||
Net income (loss) | $ | 520 | $ | (291,347 | ) | ||
Diluted (loss) income per share | $ | 0.02 | $ | (11.19 | ) | ||
Adjusted EBITDAR | $ | 163,462 | $ | 196,355 | |||
Margin - Adjusted EBITDAR | 11.9 | % | 14.0 | % | |||
Adjusted EBITDAR normalized | $ | 166,333 | $ | 196,355 | |||
Margin - Adjusted EBITDAR normalized | 12.1 | % | 14.0 | % | |||
Adjusted EBITDA | $ | 53,916 | $ | 88,961 | |||
Margin - Adjusted EBITDA | 3.9 | % | 6.3 | % | |||
Adjusted EBITDA normalized | $ | 56,787 | $ | 88,961 | |||
Margin - Adjusted EBITDA normalized | 4.1 | % | 6.3 | % | |||
Pre-tax income continuing operations - normalized | $ | 17,713 | $ | 49,921 | |||
Income tax expense - normalized | $ | 7,141 | $ | 19,463 | |||
Income from continuing operations - normalized | $ | 10,572 | $ | 30,458 | |||
Diluted earnings per share from continuing operations - normalized | $ | 0.40 | $ | 1.17 | |||
See definitions of Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Loss to | |||||||
Adjusted EBITDA and Adjusted EBITDAR." | |||||||
See normalizing adjustments in the table "Normalizing Adjustments - Quarter Comparison." |
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except per share data) | |||||||
September 30, 2012 | December 31, 2011 | ||||||
(unaudited) | (unaudited) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 63,801 | $ | 57,908 | |||
Restricted cash | 14,252 | 15,706 | |||||
Accounts receivable, net | 199,787 | 202,229 | |||||
Prepaid expenses and other assets | 27,323 | 29,075 | |||||
Assets held for sale | 4,946 | — | |||||
Deferred tax assets | 61,629 | 63,170 | |||||
Total current assets | 371,738 | 368,088 | |||||
Property and equipment, net | 143,288 | 148,298 | |||||
Intangible assets, net | 33,358 | 35,294 | |||||
Goodwill | 34,905 | 34,496 | |||||
Restricted cash, non-current | 354 | 353 | |||||
Deferred tax assets | 125,409 | 123,974 | |||||
Other assets | 40,792 | 45,163 | |||||
Total assets | $ | 749,844 | $ | 755,666 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 47,427 | $ | 55,888 | |||
Accrued compensation and benefits | 58,212 | 61,101 | |||||
Accrued self-insurance obligations, current portion | 58,273 | 57,810 | |||||
Other accrued liabilities | 47,602 | 43,139 | |||||
Current portion of long-term debt and capital lease obligations | 944 | 1,017 | |||||
Total current liabilities | 212,458 | 218,955 | |||||
Accrued self-insurance obligations, net of current portion | 158,224 | 157,267 | |||||
Long-term debt and capital lease obligations, net of current portion | 87,989 | 88,768 | |||||
Unfavorable lease obligations, net | 5,268 | 7,110 | |||||
Other long-term liabilities | 55,500 | 58,110 | |||||
Total liabilities | 519,439 | 530,210 | |||||
Stockholders' equity: | |||||||
Preferred stock of $.01 par value, authorized 3,333 shares, zero shares were issued and outstanding as of September 30, 2012 and December 31, 2011 | — | — | |||||
Common stock of $.01 par value, authorized 41,667 shares, 25,538 and 25,146 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively | 255 | 251 | |||||
Additional paid-in capital | 731,473 | 726,861 | |||||
Accumulated deficit | (499,907 | ) | (500,427 | ) | |||
Accumulated other comprehensive loss, net | (1,416 | ) | (1,229 | ) | |||
230,405 | 225,456 | ||||||
Total liabilities and stockholders' equity | $ | 749,844 | $ | 755,666 |
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 | ||||||
September 30, 2012 | September 30, 2011 | ||||||
(unaudited) | (unaudited) | ||||||
Total net revenues | $ | 460,470 | $ | 468,676 | |||
Costs and expenses: | |||||||
Operating salaries and benefits | 259,379 | 263,932 | |||||
Self-insurance for workers' compensation and general and professional liability insurance | 15,237 | 14,545 | |||||
Operating administrative costs | 10,635 | 12,962 | |||||
Other operating costs | 97,619 | 93,705 | |||||
Center rent expense | 36,647 | 35,952 | |||||
General and administrative expenses | 14,447 | 14,825 | |||||
Depreciation and amortization | 8,654 | 8,163 | |||||
Provision for losses on accounts receivable | 5,250 | 4,604 | |||||
Interest, net of interest income of $94 and $103, respectively | 4,458 | 4,834 | |||||
Transaction costs | 1,034 | — | |||||
Loss on sale of assets, net | 189 | 809 | |||||
Restructuring costs | — | 2,426 | |||||
Loss on asset impairment | — | 317,091 | |||||
Total costs and expenses | 453,549 | 773,848 | |||||
Income (loss) before income taxes and discontinued operations | 6,921 | (305,172 | ) | ||||
Income tax expense | 2,932 | 2,203 | |||||
Income (loss) from continuing operations | 3,989 | (307,375 | ) | ||||
Loss from discontinued operations, net | (2,702 | ) | (2,031 | ) | |||
Net income (loss) | $ | 1,287 | $ | (309,406 | ) | ||
Basic loss per common and common equivalent share: | |||||||
Income (loss) from continuing operations | $ | 0.15 | $ | (11.73 | ) | ||
Loss from discontinued operations, net | (0.10 | ) | (0.08 | ) | |||
Net income (loss) | $ | 0.05 | $ | (11.81 | ) | ||
Diluted loss per common and common equivalent share: | |||||||
Income (loss) from continuing operations | $ | 0.15 | $ | (11.73 | ) | ||
Loss from discontinued operations, net | (0.10 | ) | (0.08 | ) | |||
Net income (loss) | $ | 0.05 | $ | (11.81 | ) | ||
Weighted average number of common and common equivalent shares outstanding: | |||||||
Basic | 27,082 | 26,203 | |||||
Diluted | 27,082 | 26,203 |
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED INCOME STATEMENTS | |||||||
(in thousands, except per share data) | |||||||
For the | For the | ||||||
Nine Months Ended | Nine Months Ended | ||||||
September 30, 2012 | September 30, 2011 | ||||||
(unaudited) | (unaudited) | ||||||
Total net revenues | $ | 1,376,105 | $ | 1,405,558 | |||
Costs and expenses: | |||||||
Operating salaries and benefits | 779,976 | 789,874 | |||||
Self-insurance for workers' compensation and general and professional liability insurance | 43,744 | 43,643 | |||||
Operating administrative costs | 34,744 | 39,333 | |||||
Other operating costs | 289,614 | 276,999 | |||||
Center rent expense | 109,546 | 107,394 | |||||
General and administrative expenses | 46,537 | 45,156 | |||||
Depreciation and amortization | 25,588 | 23,241 | |||||
Provision for losses on accounts receivable | 15,157 | 14,198 | |||||
Interest, net of interest income of $229 and $243, respectively | 13,297 | 14,688 | |||||
Transaction costs | 2,871 | — | |||||
Loss on sale of assets, net | 189 | 809 | |||||
Restructuring costs | — | 2,728 | |||||
Loss on asset impairment | — | 317,091 | |||||
Total costs and expenses | 1,361,263 | 1,675,154 | |||||
Income (loss) before income taxes and discontinued operations | 14,842 | (269,596 | ) | ||||
Income tax expense | 6,021 | 16,715 | |||||
Income (loss) from continuing operations | 8,821 | (286,311 | ) | ||||
Loss from discontinued operations, net | (8,301 | ) | (5,036 | ) | |||
Net income (loss) | $ | 520 | $ | (291,347 | ) | ||
Basic loss per common and common equivalent share: | |||||||
Income (loss) from continuing operations | $ | 0.33 | $ | (11.00 | ) | ||
Loss from discontinued operations, net | (0.31 | ) | (0.19 | ) | |||
Net income (loss) | $ | 0.02 | $ | (11.19 | ) | ||
Diluted loss per common and common equivalent share: | |||||||
Income (loss) from continuing operations | $ | 0.33 | $ | (11.00 | ) | ||
Loss from discontinued operations, net | (0.31 | ) | (0.19 | ) | |||
Net income (loss) | $ | 0.02 | $ | (11.19 | ) | ||
Weighted average number of common and common equivalent shares outstanding: | |||||||
Basic | 26,732 | 26,038 | |||||
Diluted | 26,732 | 26,038 |
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(in thousands) | |||||||||
For the | For the | ||||||||
Three Months Ended | Three Months Ended | ||||||||
September 30, 2012 | September 30, 2011 | ||||||||
(unaudited) | (unaudited) | ||||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | $ | 1,287 | $ | (309,406 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by | |||||||||
operating activities, including discontinued operations: | |||||||||
Depreciation and amortization | 8,654 | 8,335 | |||||||
Amortization of favorable and unfavorable lease intangibles | (507 | ) | (492 | ) | |||||
Provision for losses on accounts receivable | 5,403 | 4,975 | |||||||
Loss on sale of assets, including discontinued operations, net | 188 | 1,925 | |||||||
Loss on asset impairment | — | 317,091 | |||||||
Stock-based compensation expense | 1,233 | 2,359 | |||||||
Deferred taxes | 386 | (105 | ) | ||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||
Accounts receivable | 7,641 | 23 | |||||||
Restricted cash | 78 | 52 | |||||||
Prepaid expenses and other assets | 1,800 | (1,600 | ) | ||||||
Accounts payable | 2,756 | 1,595 | |||||||
Accrued compensation and benefits | (5,666 | ) | (11,717 | ) | |||||
Accrued self-insurance obligations | 3,821 | 3,618 | |||||||
Other accrued liabilities | (36 | ) | 2,104 | ||||||
Other long-term liabilities | (667 | ) | (880 | ) | |||||
Net cash provided by operating activities | 26,371 | 17,877 | |||||||
Cash flows from investing activities: | |||||||||
Capital expenditures | (6,722 | ) | (14,190 | ) | |||||
Proceeds from sale of assets | 781 | 1,809 | |||||||
Net cash used for investing activities | (5,941 | ) | (12,381 | ) | |||||
Cash flows from financing activities: | |||||||||
Principal repayments of long-term debt and capital lease obligations | (277 | ) | (2,806 | ) | |||||
Net cash used for financing activities | (277 | ) | (2,806 | ) | |||||
Net increase in cash and cash equivalents | 20,153 | 2,690 | |||||||
Cash and cash equivalents at beginning of period | 43,648 | 88,489 | |||||||
Cash and cash equivalents at end of period | $ | 63,801 | $ | 91,179 | |||||
Reconciliation of net cash provided by operating activities to free cash flow: | |||||||||
Net cash provided by operating activities | $ | 26,371 | $ | 17,877 | |||||
Capital expenditures | (6,722 | ) | (14,190 | ) | |||||
Free cash flow | $ | 19,649 | $ | 3,687 | |||||
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(in thousands) | |||||||||
For the | For the | ||||||||
Nine Months Ended | Nine Months Ended | ||||||||
September 30, 2012 | September 30, 2011 | ||||||||
(unaudited) | (unaudited) | ||||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | $ | 520 | $ | (291,347 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by | |||||||||
operating activities, including discontinued operations: | |||||||||
Depreciation and amortization | 25,740 | 23,879 | |||||||
Amortization of favorable and unfavorable lease intangibles | (1,527 | ) | (1,466 | ) | |||||
Provision for losses on accounts receivable | 15,866 | 15,479 | |||||||
Loss on sale of assets, including discontinued operations, net | 257 | 1,925 | |||||||
Loss on asset impairment | — | 317,091 | |||||||
Stock-based compensation expense | 5,041 | 5,160 | |||||||
Deferred taxes | 229 | 9,871 | |||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||
Accounts receivable | (13,568 | ) | (12,555 | ) | |||||
Restricted cash | 1,453 | (1,876 | ) | ||||||
Prepaid expenses and other assets | 4,125 | (1,410 | ) | ||||||
Accounts payable | (7,358 | ) | (1,906 | ) | |||||
Accrued compensation and benefits | (2,889 | ) | (12,298 | ) | |||||
Accrued self-insurance obligations | 1,420 | (294 | ) | ||||||
Other accrued liabilities | 4,386 | 1,158 | |||||||
Other long-term liabilities | (2,920 | ) | (2,098 | ) | |||||
Net cash provided by operating activities | 30,775 | 49,313 | |||||||
Cash flows from investing activities: | |||||||||
Capital expenditures | (24,551 | ) | (32,346 | ) | |||||
Proceeds from sale of assets | 781 | 1,809 | |||||||
Acquisitions, net of cash acquired | (260 | ) | (356 | ) | |||||
Net cash used for investing activities | (24,030 | ) | (30,893 | ) | |||||
Cash flows from financing activities: | |||||||||
Principal repayments of long-term debt and capital lease obligations | (852 | ) | (8,404 | ) | |||||
Net cash used for financing activities | (852 | ) | (8,404 | ) | |||||
Net increase in cash and cash equivalents | 5,893 | 10,016 | |||||||
Cash and cash equivalents at beginning of period | 57,908 | 81,163 | |||||||
Cash and cash equivalents at end of period | $ | 63,801 | $ | 91,179 | |||||
Reconciliation of net cash provided by operating activities to free cash flow: | |||||||||
Net cash provided by operating activities | $ | 30,775 | $ | 49,313 | |||||
Capital expenditures | (24,551 | ) | (32,346 | ) | |||||
Free cash flow | $ | 6,224 | $ | 16,967 | |||||
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | ||||||||
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA and ADJUSTED EBITDAR | ||||||||
(in thousands) | ||||||||
For the | For the | |||||||
Three Months Ended | Three Months Ended | |||||||
September 30, 2012 | September 30, 2011 | |||||||
(unaudited) | (unaudited) | |||||||
Total net revenues | $ | 460,470 | $ | 468,676 | ||||
Net income (loss) | $ | 1,287 | $ | (309,406 | ) | |||
Income (loss) from continuing operations | 3,989 | (307,375 | ) | |||||
Income tax expense | 2,932 | 2,203 | ||||||
Interest, net | 4,458 | 4,834 | ||||||
Depreciation and amortization | 8,654 | 8,163 | ||||||
EBITDA | $ | 20,033 | $ | (292,175 | ) | |||
Loss on sale of assets, net | 189 | 809 | ||||||
Restructuring costs | — | 2,426 | ||||||
Loss on asset impairment | — | 317,091 | ||||||
Adjusted EBITDA | $ | 20,222 | $ | 28,151 | ||||
Center rent expense | 36,647 | 35,952 | ||||||
Adjusted EBITDAR | $ | 56,869 | $ | 64,103 | ||||
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | ||||||||
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA and ADJUSTED EBITDAR | ||||||||
(in thousands) | ||||||||
For the | For the | |||||||
Nine Months Ended | Nine Months Ended | |||||||
September 30, 2012 | September 30, 2011 | |||||||
(unaudited) | (unaudited) | |||||||
Total net revenues | $ | 1,376,105 | $ | 1,405,558 | ||||
Net income (loss) | $ | 520 | $ | (291,347 | ) | |||
Income (loss) from continuing operations | 8,821 | (286,311 | ) | |||||
Income tax expense | 6,021 | 16,715 | ||||||
Interest, net | 13,297 | 14,688 | ||||||
Depreciation and amortization | 25,588 | 23,241 | ||||||
EBITDA | $ | 53,727 | $ | (231,667 | ) | |||
Loss on sale of assets, net | 189 | 809 | ||||||
Restructuring costs | — | 2,728 | ||||||
Loss on asset impairment | — | 317,091 | ||||||
Adjusted EBITDA | $ | 53,916 | $ | 88,961 | ||||
Center rent expense | 109,546 | 107,394 | ||||||
Adjusted EBITDAR | $ | 163,462 | $ | 196,355 | ||||
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 September 30, 2012 | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Inpatient Services | Rehabilitation Therapy Services | Medical Staffing Services | Other & Corp Seg | Elimination of Affiliated Revenue | Consolidated | |||||||||||||||||||
Nonaffiliated revenue | $ | 409,750 | $ | 29,032 | $ | 21,686 | $ | 2 | — | $ | 460,470 | |||||||||||||
Affiliated revenue | — | 31,885 | 432 | — | (32,317 | ) | — | |||||||||||||||||
Total revenue | $ | 409,750 | $ | 60,917 | $ | 22,118 | $ | 2 | $ | (32,317 | ) | $ | 460,470 | |||||||||||
Income (loss) from continuing operations | $ | 22,780 | $ | 4,068 | $ | 1,238 | $ | (24,097 | ) | — | $ | 3,989 | ||||||||||||
Income tax expense | — | — | — | 2,932 | — | 2,932 | ||||||||||||||||||
Interest, net | (53 | ) | — | — | 4,511 | — | 4,458 | |||||||||||||||||
Depreciation and amortization | 7,276 | 267 | 191 | 920 | — | 8,654 | ||||||||||||||||||
EBITDA | $ | 30,003 | $ | 4,335 | $ | 1,429 | $ | (15,734 | ) | — | $ | 20,033 | ||||||||||||
Loss on sale of assets, net | — | — | — | 189 | — | 189 | ||||||||||||||||||
Adjusted EBITDA | $ | 30,003 | $ | 4,335 | $ | 1,429 | $ | (15,545 | ) | — | $ | 20,222 | ||||||||||||
Center rent expense | 36,323 | 154 | 170 | — | — | 36,647 | ||||||||||||||||||
Adjusted EBITDAR | $ | 66,326 | $ | 4,489 | $ | 1,599 | $ | (15,545 | ) | — | $ | 56,869 | ||||||||||||
Normalized Adjusted EBITDA | $ | 30,003 | $ | 4,335 | $ | 1,429 | $ | (14,511 | ) | — | $ | 21,256 | ||||||||||||
Normalized Adjusted EBITDAR | $ | 66,326 | $ | 4,489 | $ | 1,599 | $ | (14,511 | ) | — | $ | 57,903 | ||||||||||||
Adjusted EBITDA margin | 7.3 | % | 7.1 | % | 6.5 | % | 4.4 | % | ||||||||||||||||
Adjusted EBITDAR margin | 16.2 | % | 7.4 | % | 7.2 | % | 12.4 | % | ||||||||||||||||
Normalized Adjusted EBITDA margin | 7.3 | % | 7.1 | % | 6.5 | % | 4.6 | % | ||||||||||||||||
Normalized Adjusted EBITDAR margin | 16.2 | % | 7.4 | % | 7.2 | % | 12.6 | % | ||||||||||||||||
See definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Loss to | ||||||||||||||||||||||||
Adjusted EBITDA and Adjusted EBITDAR." | ||||||||||||||||||||||||
See normalizing adjustments in the table "Normalizing Adjustments - Quarter Comparison." |
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA and ADJUSTED EBITDAR | ||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||
For the Nine Months Ended September 30, 2012 | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Inpatient Services | Rehabilitation Therapy Services | Medical Staffing Services | Other & Corp Seg | Elimination of Affiliated Revenue | Consolidated | |||||||||||||||||||
Nonaffiliated revenue | $ | 1,220,673 | $ | 88,858 | $ | 66,559 | $ | 15 | — | $ | 1,376,105 | |||||||||||||
Affiliated revenue | — | 98,152 | 1,982 | — | (100,134 | ) | — | |||||||||||||||||
Total revenue | $ | 1,220,673 | $ | 187,010 | $ | 68,541 | $ | 15 | $ | (100,134 | ) | $ | 1,376,105 | |||||||||||
Income (loss) from continuing operations | $ | 65,104 | $ | 11,381 | $ | 4,345 | $ | (72,009 | ) | — | $ | 8,821 | ||||||||||||
Income tax expense | — | — | — | 6,021 | — | 6,021 | ||||||||||||||||||
Interest, net | (81 | ) | — | (3 | ) | 13,381 | — | 13,297 | ||||||||||||||||
Depreciation and amortization | 21,420 | 778 | 562 | 2,828 | — | 25,588 | ||||||||||||||||||
EBITDA | $ | 86,443 | $ | 12,159 | $ | 4,904 | $ | (49,779 | ) | — | $ | 53,727 | ||||||||||||
Loss on sale of assets, net | — | — | — | 189 | — | 189 | ||||||||||||||||||
Adjusted EBITDA | $ | 86,443 | $ | 12,159 | $ | 4,904 | $ | (49,401 | ) | — | $ | 54,105 | ||||||||||||
Center rent expense | 108,606 | 432 | 508 | — | — | 109,546 | ||||||||||||||||||
Adjusted EBITDAR | $ | 195,049 | $ | 12,591 | $ | 5,412 | $ | (49,401 | ) | — | $ | 163,651 | ||||||||||||
Normalized Adjusted EBITDA | $ | 86,443 | $ | 12,159 | $ | 4,904 | $ | (46,530 | ) | — | $ | 56,976 | ||||||||||||
Normalized Adjusted EBITDAR | $ | 195,049 | $ | 12,591 | $ | 5,412 | $ | (46,530 | ) | — | $ | 166,522 | ||||||||||||
Adjusted EBITDA margin | 7.1 | % | 6.5 | % | 7.2 | % | 3.9 | % | ||||||||||||||||
Adjusted EBITDAR margin | 16.0 | % | 6.7 | % | 7.9 | % | 11.9 | % | ||||||||||||||||
Normalized Adjusted EBITDA margin | 7.1 | % | 6.5 | % | 7.2 | % | 4.1 | % | ||||||||||||||||
Normalized Adjusted EBITDAR margin | 16.0 | % | 6.7 | % | 7.9 | % | 12.1 | % | ||||||||||||||||
See definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Loss to | ||||||||||||||||||||||||
Adjusted EBITDA and Adjusted EBITDAR." | ||||||||||||||||||||||||
See normalizing adjustments in the table "Normalizing Adjustments - Year to Date Comparison." |
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 September 30, 2011 | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Inpatient Services | Rehabilitation Therapy Services | Medical Staffing Services | Other & Corp Seg | Elimination of Affiliated Revenue | Consolidated | |||||||||||||||||||
Nonaffiliated revenue | $ | 418,097 | $ | 29,568 | $ | 20,996 | $ | 15 | — | $ | 468,676 | |||||||||||||
Affiliated revenue | — | 32,791 | 757 | — | (33,548 | ) | — | |||||||||||||||||
Total revenue | $ | 418,097 | $ | 62,359 | $ | 21,753 | $ | 15 | $ | (33,548 | ) | $ | 468,676 | |||||||||||
Income (loss) from continuing operations | $ | (285,549 | ) | $ | 2,296 | $ | 1,221 | $ | (25,343 | ) | — | $ | (307,375 | ) | ||||||||||
Income tax expense | — | — | — | 2,203 | — | 2,203 | ||||||||||||||||||
Interest, net | (33 | ) | — | — | 4,867 | — | 4,834 | |||||||||||||||||
Depreciation and amortization | 6,770 | 236 | 187 | 970 | — | 8,163 | ||||||||||||||||||
EBITDA | $ | (278,812 | ) | $ | 2,532 | $ | 1,408 | $ | (17,303 | ) | — | $ | (292,175 | ) | ||||||||||
Loss on sale of assets, net | 809 | — | — | — | — | 809 | ||||||||||||||||||
Restructuring costs | — | — | — | 2,426 | — | 2,426 | ||||||||||||||||||
Loss on asset impairment | 317,091 | — | — | — | — | 317,091 | ||||||||||||||||||
Adjusted EBITDA | $ | 39,088 | $ | 2,532 | $ | 1,408 | $ | (14,877 | ) | — | $ | 28,151 | ||||||||||||
Center rent expense | 35,642 | 140 | 170 | — | — | 35,952 | ||||||||||||||||||
Adjusted EBITDAR | $ | 74,730 | $ | 2,672 | $ | 1,578 | $ | (14,877 | ) | — | $ | 64,103 | ||||||||||||
Adjusted EBITDA margin | 9.3 | % | 4.1 | % | 6.5 | % | 6.0 | % | ||||||||||||||||
Adjusted EBITDAR margin | 17.9 | % | 4.3 | % | 7.3 | % | 13.7 | % | ||||||||||||||||
See definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Loss to | ||||||||||||||||||||||||
Adjusted EBITDA and Adjusted EBITDAR." |
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA and ADJUSTED EBITDAR | ||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||
For the Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Inpatient Services | Rehabilitation Therapy Services | Medical Staffing Services | Other & Corp Seg | Elimination of Affiliated Revenue | Consolidated | |||||||||||||||||||
Nonaffiliated revenue | $ | 1,250,568 | $ | 89,645 | $ | 65,309 | $ | 36 | — | $ | 1,405,558 | |||||||||||||
Affiliated revenue | — | 98,710 | 2,079 | — | (100,789 | ) | — | |||||||||||||||||
Total revenue | $ | 1,250,568 | $ | 188,355 | $ | 67,388 | $ | 36 | $ | (100,789 | ) | $ | 1,405,558 | |||||||||||
Income (loss) from continuing operations | $ | (217,007 | ) | $ | 8,495 | $ | 4,082 | $ | (81,881 | ) | — | $ | (286,311 | ) | ||||||||||
Income tax expense | — | — | — | 16,715 | — | 16,715 | ||||||||||||||||||
Interest, net | (69 | ) | — | 1 | 14,756 | — | 14,688 | |||||||||||||||||
Depreciation and amortization | 19,331 | 689 | 561 | 2,660 | — | 23,241 | ||||||||||||||||||
EBITDA | $ | (197,745 | ) | $ | 9,184 | $ | 4,644 | $ | (47,750 | ) | — | $ | (231,667 | ) | ||||||||||
Loss on sale of assets, net | 809 | — | — | — | — | 809 | ||||||||||||||||||
Restructuring costs | 302 | — | — | 2,426 | — | 2,728 | ||||||||||||||||||
Loss on asset impairment | 317,091 | — | — | — | — | 317,091 | ||||||||||||||||||
Adjusted EBITDA | $ | 120,457 | $ | 9,184 | $ | 4,644 | $ | (45,324 | ) | — | $ | 88,961 | ||||||||||||
Center rent expense | 106,487 | 394 | 513 | — | — | 107,394 | ||||||||||||||||||
Adjusted EBITDAR | $ | 226,944 | $ | 9,578 | $ | 5,157 | $ | (45,324 | ) | — | $ | 196,355 | ||||||||||||
Adjusted EBITDA margin | 9.6 | % | 4.9 | % | 6.9 | % | 6.3 | % | ||||||||||||||||
Adjusted EBITDAR margin | 18.1 | % | 5.1 | % | 7.7 | % | 14.0 | % | ||||||||||||||||
See definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Loss to | ||||||||||||||||||||||||
Adjusted EBITDA and Adjusted EBITDAR." |
Sun Healthcare Group, Inc. and Subsidiaries | |||||||||||||||||||||||||
Selected Operating Statistics | |||||||||||||||||||||||||
Continuing Operations | |||||||||||||||||||||||||
For the | For the | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||
Consolidated Company | |||||||||||||||||||||||||
Revenues - Non-affiliated (in thousands) | |||||||||||||||||||||||||
Skilled Nursing and similar | |||||||||||||||||||||||||
facilities | $ | 393,560 | $ | 402,703 | $ | 1,172,804 | $ | 1,205,479 | |||||||||||||||||
Hospice | 15,719 | 14,885 | 46,491 | 43,647 | |||||||||||||||||||||
Other - Inpatient Services | 471 | 509 | 1,378 | 1,442 | |||||||||||||||||||||
Inpatient Services | 409,750 | 418,097 | 1,220,673 | 1,250,568 | |||||||||||||||||||||
Rehabilitation Therapy Services | 29,032 | 29,568 | 88,858 | 89,645 | |||||||||||||||||||||
Medical Staffing Services | 21,686 | 20,996 | 66,559 | 65,309 | |||||||||||||||||||||
Other - non-core businesses | 2 | 15 | 15 | 36 | |||||||||||||||||||||
Total | $ | 460,470 | $ | 468,676 | $ | 1,376,105 | $ | 1,405,558 | |||||||||||||||||
Revenue Mix - Non-affiliated (in thousands) | |||||||||||||||||||||||||
Medicare | $ | 128,180 | 28 | % | $ | 149,147 | 32 | % | $ | 397,867 | 29 | % | $ | 454,591 | 32 | % | |||||||||
Medicaid | 195,441 | 42 | % | 184,754 | 39 | % | 570,734 | 41 | % | 541,977 | 39 | % | |||||||||||||
Private and Other | 106,648 | 24 | % | 106,541 | 23 | % | 320,285 | 24 | % | 324,169 | 23 | % | |||||||||||||
Managed Care / Insurance | 24,568 | 5 | % | 22,777 | 5 | % | 71,311 | 5 | % | 69,133 | 5 | % | |||||||||||||
Veterans | 5,633 | 1 | % | 5,457 | 1 | % | 15,908 | 1 | % | 15,688 | 1 | % | |||||||||||||
Total | $ | 460,470 | 100 | % | $ | 468,676 | 100 | % | $ | 1,376,105 | 100 | % | $ | 1,405,558 | 100 | % | |||||||||
Inpatient Services Stats | |||||||||||||||||||||||||
Number of centers: | 190 | 190 | 190 | 190 | |||||||||||||||||||||
Number of available beds: | 20,774 | 20,803 | 20,774 | 20,803 | |||||||||||||||||||||
Occupancy %: | 87.0 | % | 87.2 | % | 87.1 | % | 87.4 | % | |||||||||||||||||
Payor Mix % based on patient days: | |||||||||||||||||||||||||
Medicare - SNF Beds | 13.9 | % | 15 | % | 14.6 | % | 15.6 | % | |||||||||||||||||
Managed care / Ins. - SNF Beds | 4.1 | % | 3.8 | % | 4.1 | % | 4 | % | |||||||||||||||||
Total SNF skilled mix | 18.0 | % | 18.8 | % | 18.7 | % | 19.6 | % | |||||||||||||||||
Medicare | 12.7 | % | 13.7 | % | 13.4 | % | 14.3 | % | |||||||||||||||||
Medicaid | 64.2 | % | 62.8 | % | 63.7 | % | 62.3 | % | |||||||||||||||||
Private and Other | 17.9 | % | 18.7 | % | 17.9 | % | 18.5 | % | |||||||||||||||||
Managed Care / Insurance | 3.8 | % | 3.5 | % | 3.7 | % | 3.6 | % | |||||||||||||||||
Veterans | 1.4 | % | 1.3 | % | 1.3 | % | 1.3 | % | |||||||||||||||||
Revenue Mix % of revenues: | |||||||||||||||||||||||||
Medicare - SNF Beds | 29.1 | % | 33.7 | % | 30.5 | % | 34.6 | % | |||||||||||||||||
Managed care / Ins. - SNF Beds | 6.3 | % | 5.8 | % | 6.2 | % | 5.9 | % | |||||||||||||||||
Total SNF skilled mix | 35.4 | % | 39.5 | % | 36.7 | % | 40.5 | % | |||||||||||||||||
Medicare | 30.2 | % | 34.5 | % | 31.5 | % | 35.2 | % | |||||||||||||||||
Medicaid | 47.7 | % | 44.2 | % | 46.8 | % | 43.3 | % | |||||||||||||||||
Private and Other | 14.8 | % | 14.6 | % | 14.6 | % | 14.7 | % | |||||||||||||||||
Managed Care / Insurance | 5.9 | % | 5.4 | % | 5.8 | % | 5.5 | % | |||||||||||||||||
Veterans | 1.4 | % | 1.3 | % | 1.3 | % | 1.3 | % | |||||||||||||||||
Revenues PPD: | |||||||||||||||||||||||||
Medicare (Part A) | $ | 465.80 | $ | 520.11 | $ | 463.52 | $ | 520.92 | |||||||||||||||||
Medicare Blended Rate | |||||||||||||||||||||||||
(Part A & B) | $ | 513.99 | $ | 563.52 | $ | 509.23 | $ | 559.86 | |||||||||||||||||
Medicaid | $ | 183.16 | $ | 176.42 | $ | 180.65 | $ | 175.21 | |||||||||||||||||
Medicaid, net of provider taxes | $ | 165.95 | $ | 160.69 | $ | 163.50 | $ | 159.84 | |||||||||||||||||
Private and Other | $ | 189.42 | $ | 186.05 | $ | 189.87 | $ | 190.06 | |||||||||||||||||
Managed Care / Insurance | $ | 387.04 | $ | 384.33 | $ | 380.05 | $ | 377.69 | |||||||||||||||||
Veterans | $ | 242.67 | $ | 257.15 | $ | 246.28 | $ | 249.90 | |||||||||||||||||
Rehab contracts | |||||||||||||||||||||||||
Affiliated | 178 | 178 | 178 | 178 | |||||||||||||||||||||
Non-affiliated | 338 | 343 | 338 | 343 | |||||||||||||||||||||
Average Qtrly Revenue per | |||||||||||||||||||||||||
Contract (in thousands) | $ | 118 | $ | 120 | $ | 121 | $ | 121 | |||||||||||||||||
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
NORMALIZING ADJUSTMENTS - QUARTER COMPARISON | ||||||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||
AS REPORTED - 3rd QUARTER 2012 | ||||||||||||||||||||||||||||
Revenue | Adjusted EBITDAR | Adjusted EBITDA | Pre-tax | Income from Continuing Operations | Disc Ops | Net (Loss) Income | ||||||||||||||||||||||
As Reported 3rd QUARTER 2012 | $ | 460,470 | $ | 56,869 | $ | 20,222 | $ | 6,921 | $ | 3,989 | $ | (2,702 | ) | $ | 1,287 | |||||||||||||
Percent of Revenue | 12.4 | % | 4.4 | % | 1.5 | % | 0.9 | % | (0.6 | )% | 0.3 | % | ||||||||||||||||
Normalizing Adjustments: | ||||||||||||||||||||||||||||
Transaction costs | — | 1,033 | 1,033 | 1,033 | 630 | — | 630 | |||||||||||||||||||||
Normalized As Reported - 3rd | ||||||||||||||||||||||||||||
QUARTER 2012 | $ | 460,470 | $ | 57,902 | $ | 21,255 | $ | 7,954 | $ | 4,619 | $ | (2,702 | ) | $ | 1,917 | |||||||||||||
Percent of Revenue | 12.6 | % | 4.6 | % | 1.7 | % | 1.0 | % | (0.6 | )% | 0.4 | % | ||||||||||||||||
As Reported | $ | 0.15 | $ | (0.10 | ) | $ | 0.05 | |||||||||||||||||||||
Diluted EPS: As Normalized | $ | 0.17 | $ | (0.10 | ) | $ | 0.07 | |||||||||||||||||||||
AS REPORTED - 3rd QUARTER 2011 | ||||||||||||||||||||||||||||
Revenue | Adjusted EBITDAR | Adjusted EBITDA | Pre-tax | Income from Continuing Operations | Disc Ops | Net Income | ||||||||||||||||||||||
As Reported - 3rd QUARTER 2011 | $ | 468,676 | $ | 64,103 | $ | 28,151 | $ | (305,172 | ) | $ | (307,375 | ) | $ | (2,031 | ) | $ | (309,406 | ) | ||||||||||
Percent of Revenue | 13.7 | % | 6 | % | (65.1 | )% | (65.6 | )% | (0.4 | )% | (66.0 | )% | ||||||||||||||||
Normalizing Adjustments: | ||||||||||||||||||||||||||||
Restructuring costs | — | — | — | 2,426 | 1,480 | — | 1,480 | |||||||||||||||||||||
Impairment of assets | — | — | — | 317,091 | 315,289 | — | 315,289 | |||||||||||||||||||||
Normalized As Reported - 3rd | ||||||||||||||||||||||||||||
QUARTER 2011 | $ | 468,676 | $ | 64,103 | $ | 28,151 | $ | 14,345 | $ | 9,394 | $ | (2,031 | ) | $ | 7,363 | |||||||||||||
Percent of Revenue | 13.7 | % | 6.0 | % | 3.1 | % | 2.0 | % | (0.4 | )% | 1.6 | % | ||||||||||||||||
As Reported | $ | (11.73 | ) | $ | (0.08 | ) | $ | (11.81 | ) | |||||||||||||||||||
Diluted EPS: As Normalized | $ | 0.36 | $ | (0.08 | ) | $ | 0.28 | |||||||||||||||||||||
See definitions of Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDAR." | ||||||||||||||||||||||||||||
Normalizing adjustments are transactions or adjustments not related to ongoing operations and consist of transaction costs associated with the Company's sale to Genesis Healthcare. | ||||||||||||||||||||||||||||
Since normalizing adjustments are not measurements determined in accordance with U.S. generally accepted accounting principles and are thus susceptible to varying calculations and interpretations, the information presented herein may not be comparable to other similarly described information of other companies. |
SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
NORMALIZING ADJUSTMENTS - YEAR TO DATE COMPARISON | ||||||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||
AS REPORTED - NINE MONTHS 2012 | ||||||||||||||||||||||||||||
Revenue | Adjusted EBITDAR | Adjusted EBITDA | Pre-tax | Income from Continuing Operations | Disc Ops | Net (Loss) Income | ||||||||||||||||||||||
As Reported - Nine Months 2012 | $ | 1,376,105 | $ | 163,462 | $ | 53,916 | $ | 14,842 | $ | 8,821 | $ | (8,301 | ) | $ | 520 | |||||||||||||
Percent of Revenue | 11.9 | % | 3.9 | % | 1.1 | % | 0.6 | % | (0.6 | )% | — | % | ||||||||||||||||
Normalizing Adjustments: | ||||||||||||||||||||||||||||
Transaction costs | — | 2,871 | 2,871 | 2,871 | 1,751 | — | 1,751 | |||||||||||||||||||||
Normalized As Reported - Nine | ||||||||||||||||||||||||||||
Months 2012 | $ | 1,376,105 | $ | 166,333 | $ | 56,787 | $ | 17,713 | $ | 10,572 | $ | (8,301 | ) | $ | 2,271 | |||||||||||||
Percent of Revenue | 12.1 | % | 4.1 | % | 1.3 | % | 0.8 | % | (0.6 | )% | 0.2 | % | ||||||||||||||||
As Reported | $ | 0.33 | $ | (0.31 | ) | $ | 0.02 | |||||||||||||||||||||
Diluted EPS: As Normalized | $ | 0.40 | $ | (0.32 | ) | $ | 0.08 | |||||||||||||||||||||
AS REPORTED - NINE MONTHS 2011 | ||||||||||||||||||||||||||||
Revenue | Adjusted EBITDAR | Adjusted EBITDA | Pre-tax | Income from Continuing Operations | Disc Ops | Net Income | ||||||||||||||||||||||
As Reported - Nine Months 2011 | $ | 1,405,558 | $ | 196,355 | $ | 88,961 | $ | (269,596 | ) | $ | (286,311 | ) | $ | (5,036 | ) | $ | (291,347 | ) | ||||||||||
Percent of Revenue | 14.0 | % | 6.3 | % | (19.2 | )% | (20.4 | )% | (0.4 | )% | (20.7 | )% | ||||||||||||||||
Normalizing Adjustments: | ||||||||||||||||||||||||||||
Restructuring costs | — | — | — | 2,426 | 1,480 | — | 1,480 | |||||||||||||||||||||
Impairment of assets | — | — | — | 317,091 | 315,289 | — | 315,289 | |||||||||||||||||||||
Normalized As Reported - Nine | ||||||||||||||||||||||||||||
Months 2011 | $ | 1,405,558 | $ | 196,355 | $ | 88,961 | $ | 49,921 | $ | 30,458 | $ | (5,036 | ) | $ | 25,422 | |||||||||||||
Percent of Revenue | 14.0 | % | 6.3 | % | 3.6 | % | 2.2 | % | (0.4 | )% | 1.8 | % | ||||||||||||||||
As Reported | $ | (11.00 | ) | $ | (0.19 | ) | $ | (11.19 | ) | |||||||||||||||||||
Diluted EPS: As Normalized | $ | 1.17 | $ | (0.19 | ) | $ | 0.98 | |||||||||||||||||||||
See definitions of Adjusted EBITDA and Adjusted EBITDAR in the table "Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDAR." | ||||||||||||||||||||||||||||
Normalizing adjustments are transactions or adjustments not related to ongoing operations and consist of transaction costs associated with the Company's sale to Genesis Healthcare. | ||||||||||||||||||||||||||||
Since normalizing adjustments are not measurements determined in accordance with U.S. generally accepted accounting principles and are thus susceptible to varying calculations and interpretations, the information presented herein may not be comparable to other similarly described information of other companies. |