Sun Healthcare Group, Inc. (NASDAQ GS: SUNH) released its operating results for the fourth quarter and year ended Dec. 31, 2010 that showed revenue rising 2% during the quarter to $483.4 million compared to the same period in 2009. The company showed a net loss for the quarter of $32.3 million dollars based upon $74.8 million of pre-tax restructuring costs, acquisition and disposal costs, and additions to reserves for prior-periods’ self-insurance and general liability matters.
The restructuring costs were previously announced as part of the separation of its real estate assets and its operating assets into two separate, publicly traded companies. In connection with the restructuring transaction, the Company incurred pre-tax transaction costs totaling $29.1 million, consisting of legal, accounting and investment banker fees and related costs. The Company also incurred $29.2 million in pre-tax costs associated with the extinguishment of long-term debt in conjunction with the restructuring. Other normalized adjustments also include, on a pre-tax basis, the impact of $15.3 million of additions to reserves for prior periods’ self-insurance and general liabilities, $0.4 million of costs associated with the acquisition of Countryside, and $0.8 million of costs associated with the disposition of three nursing centers in the fourth quarter.
Other segments of Sun’s business operations include revenue growth of 2.1% in the same-store sales of its SolAmor hospice business due to its census expansion. SunDance, Sun’s rehabilitation therapy services business, experienced revenue growth of $6.5 million, or 14.0 percent, in the quarter on the strength of the 3.9 percent growth in revenue per contract coupled with growth in total contracts. Sun’s medical staffing services business, CareerStaff, continued to be impacted negatively by the slow national economy and saw its revenues down 3.5% percent to $22.7 million compared to revenues in the same quarter of 2009.
William A. Mathies, Sun’s chairman and chief executive officer, remarked, “I am pleased with our reported revenue and EBITDAR growth for the quarter and the year given the environmental challenges we faced in 2010 with the weak economy, soft census trends, reimbursement pressures and various regulatory changes affecting our sector. Our caregivers and leadership teams did an outstanding job embracing these challenges while maintaining their commitment to deliver quality care and achieving $250.6 million of normalized adjusted EBITDAR for fiscal 2010. In addition, we experienced positive admissions trends and rate growth in our nursing center business in alignment with our initiatives associated with caring for high-acuity short-stay patients.”
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