Sun Healthcare Group, Inc. (NASDAQ: SUNH) announced its operating results for the second quarter ended June 30, 2010 that showed an increase in revenues of 1.3% compared to the same period in 2009. The company posted second quarter net income of $9.97 million or $0.22 per share, compared to $10.1 million or $0.23 per share in the prior year period. Sun’s results showed an improvement in reimbursement rates and revenue growth in hospice and rehabilitation. The company’s medial staffing services business saw a decline in revenues for reflecting the economic slowdown and its impact to the temporary medical staffing industry. During the quarter, Sun expensed the implementation of a new billing system for $900,000 and took a $2.2 million charge for transaction costs associated with the separation of its operating and real estate assets.
"We have navigated through a particularly tough time in our sector with only a slight reduction in normalized adjusted EBITDAR and EBITDA. As we get closer to the Oct. 1 effective date for changes in Medicare reimbursement, which include the implementation of RUGs IV, restrictions on concurrent therapy and elimination of the lookback period, we are bullish on the growth opportunities that these changes provide. We still anticipate top line softness and no growth in Medicaid rates in 2011, given the continued budget pressures that exist in many states in which we operate. However, we expect Medicare growth in both pricing and acuity, a decided improvement over what we have experienced in 2010 coming off the Medicare rate reduction in October 2009. The previously announced separation of our operating assets and our real estate assets and the creation of the REIT are proceeding as planned," said Richard K. Matros, Sun’s chairman and chief executive officer.
See the full 8-K for Q2 2010