SOURCE: Sun Healthcare Group, Inc.

Sun Healthcare Group, Inc.

December 05, 2011 08:00 ET

Sun Healthcare Group, Inc. Pursues Amendment to Its Senior Secured Credit Facility

IRVINE, CA--(Marketwire - Dec 5, 2011) - Sun Healthcare Group, Inc. (NASDAQ: SUNH) today announced that it is seeking an amendment to its senior secured credit facility to provide additional financial flexibility. Pursuant to the proposed amendment, the Company will make a voluntary debt pay-down and increase its interest expense in return for greater flexibility to certain financial covenants. Although these covenant changes would enable the Company to operate with improved flexibility in addressing the Medicare reimbursement changes that became effective on Oct. 1, 2011, there is no assurance that the Company will be successful in achieving an agreement with its lenders.

As discussed on its third-quarter earnings call, even without an amendment, the Company expects to remain in compliance with its covenants under its senior secured credit facility at least through 2012 from a combination of debt pay-down using a portion of its existing cash and projected operating cash flows.

About Sun Healthcare Group, Inc.

Sun Healthcare Group, Inc. (NASDAQ: SUNH) is a healthcare services company, serving principally the senior population, with consolidated annual revenues in excess of $1.9 billion and approximately 30,000 employees in 46 states. Sun's services are provided through its subsidiaries: as of Oct. 1, 2011, SunBridge Healthcare and its subsidiaries operate 165 skilled nursing centers, 14 combined skilled nursing, assisted and independent living centers, 10 assisted living centers, two independent living centers and eight mental health centers with an aggregate of 22,997 licensed beds in 25 states; SunDance Rehabilitation provides rehabilitation therapy services to affiliated and non-affiliated centers in 38 states; CareerStaff Unlimited provides medical staffing services in 43 states; and SolAmor Hospice provides hospice services in 11 states. For more information, go to

Forward-looking Statements

Statements made in this release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "anticipate," "believe," "plan," "estimate," "expect," "hope," "intend," "may" and similar expressions. Forward-looking statements in this release include all statements regarding the Company's expectations regarding compliance under its senior secured credit facility. Factors that could cause actual results to differ are identified in filings made by the Company with the Securities and Exchange Commission and include changes in Medicare and Medicaid reimbursements, including with respect to the CMS final rule, and the Company's ability to mitigate the impact of such changes; the impact that healthcare reform legislation will have on the Company's business; the ability to maintain the occupancy rates and payor mix at the Company's healthcare centers; potential liability for losses not covered by, or in excess of, insurance; the effects of government regulations and investigations; the ability of the Company to collect its accounts receivable on a timely basis; the amount of the Company's indebtedness; covenants in debt agreements and leases that may restrict the Company's activities, including the Company's ability to make acquisitions and incur more indebtedness on favorable terms; the impact of the economic downturn on the business; increasing labor costs and the shortage of qualified healthcare personnel; and the Company's ability to receive increases in reimbursement rates from government payors to cover increased costs. Other factors include the Company's ability to enter into an agreement with its lenders for an amendment on terms satisfactory to the Company, if at all. More information on factors that could affect the Company's business and financial results are included in Sun's filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available on Sun's web site, There may be additional risks of which the Company is presently unaware or that it currently deems immaterial.

The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control. Sun cautions investors that any forward-looking statements made by Sun are not guarantees of future performance and are only made as of the date of this release. Sun disclaims 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.

Contact Information

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