Sunrise Senior Living (NYSE: SRZ) reported a loss of $31.8 million in the second quarter, compared to a profit of $8 million for the same quarter last year. Adding that to the first quarter loss of $33.1 million, the Mclean, Va.-based retirement community operator lost $64.9 million in the first six months of this year, approaching its $70.3 million loss for all of last year.
Sunrise attributed its first half losses to a $27.7 million write-off of abandoned project costs (approximately $26 million related to the discontinuance of three condominium projects and $10 million related to other development projects), a decrease in gains on the sale and development of real estate, and a drop in earnings and return on investment in unconsolidated communities. On it’s conference call, the company discussed how it is scaling back its development pipeline due to current market conditions.
Revenue in the second quarter rose to $434.1 million compared to year-ago second-quarter revenue of $408 million. First-half revenue increased 8 percent to $867.2 million.
Sunrise also reported that its voluntary separation program and other staffing reductions will eliminate approximately 100 positions by the end of the year. Severance costs for the reductions are currently estimated at $8.1 million. The cuts were undertaken at the end of July to save between $15 million and $20 million a year.
On the conference call, Richard J. Nadeau stated that they expect to receive a cash distribution in the fourth quarter of between $50 million and $60 million and expect to record a gain upon closing of this transaction of between $41 million and $51 million. He also said that they are in compliance with the requirements under their bank credit facility and have sufficient capital to fund operations and our scaled back development pipeline.