SOURCE: Sun Healthcare Group, Inc.

Sun Healthcare Group, Inc.

May 03, 2011 16:30 ET

Sun Healthcare Group, Inc. Reports 2011 First-Quarter Results and EPS of $0.33

IRVINE, CA--(Marketwire - May 3, 2011) - Sun Healthcare Group, Inc. (NASDAQ: SUNH) today announced its operating results for the first quarter ended March 31, 2011.

Results for the first-quarter period ended March 31, 2011:

--  consolidated revenues rose 2.9 percent to $483.9 million, compared to
    the same period in 2010, driven primarily by rate growth and skilled
    mix in the inpatient services segment;
--  consolidated adjusted EBITDAR increased 5.0 percent to $63.9 million
    and adjusted EBITDAR margin grew 30 basis points to 13.2 percent
    compared to the same period in 2010;
--  diluted earnings per share from continuing operations was $0.33 on
    25.8 million weighted-average diluted shares; and
--  free cash flow was $7.2 million, in line with expectations for the
    quarter.

Commenting on the Company's first-quarter results, William A. Mathies, Sun's chairman and chief executive officer, remarked, "I am pleased with the overall results of the quarter. Our admission volumes have directly impacted our year-over-year growth in our skilled mix days and have contributed to our improving occupancy levels. These positive trends directly correlate with our initiatives associated with attracting and caring for high-acuity, short-stay patients. I was pleased with our teams' ability to convert these positive revenue trends into enhanced profit contribution, with both adjusted EBITDAR and EPS in line with our expectations."

Mathies added, "Our first quarter results reflect our continued success in navigating the transition to RUGs IV and other Medicare related changes implemented on October 1, 2010. In the quarter we also successfully integrated our Countryside Hospice acquisition, which was accretive to both top line as well as margin. In the balance of 2011, we look forward to continuing the execution of our value-creation initiatives, which include the growth of our clinical capabilities and clinical outcomes, the expansion of our Rehab Recovery Suites® (RRS) footprint and the targeted acquisition of nursing center and hospice businesses that are complementary to our portfolio and vision."

Segment Updates

On a year-over-year basis, revenue growth for the quarter in SunBridge, Sun's inpatient services business, totaled $13.8 million, or 3.3 percent. SunBridge reported adjusted EBITDAR of $74.5 million for the quarter, with an adjusted EBITDAR margin of 17.3 percent, up 50 basis points from the same period in 2010. In both the year-over-year and sequential quarters, patient admissions increased by 9.0 percent and 6.5 percent, respectively, reversing the adverse occupancy trend of the prior year. The majority of the new admissions were high-acuity patients, which drove skilled mix up by 20 basis points over prior year to 20.0 percent for the quarter. In addition, skilled mix revenue, as a percent of total revenue, rose 230 basis points to 41.1 percent for the quarter.

Included in the inpatient segment, SolAmor, the company's hospice business, experienced same-store revenue growth in the quarter of 5.4 percent or $0.6 million and an additional $2.3 million of revenue growth associated with the acquisition of Countryside. In total, SolAmor revenues increased from $11.0 million in the first quarter of 2010 to $13.9 million in the first quarter of 2011.

For the quarter, SunDance, Sun's rehabilitation therapy services business, reported adjusted EBITDAR of $3.1 million, down from the prior-year quarter due to changes in concurrent therapy reimbursement which was effective on Oct. 1, 2010, and the implementation of the multiple procedure payment reduction (MPPR), which was effective on Jan. 1, 2011. For the quarter, SunDance's adjusted EBITDAR margin was 5.0 percent, which was consistent with adjusted EBITDAR margin for the prior sequential quarter.

Although revenues from CareerStaff, the Company's medical staffing services segment, were down 2.4 percent to $22.9 million compared to revenues in the same quarter of 2010, its business lines appear to be stabilizing, as revenues grew for the third consecutive quarter. CareerStaff achieved adjusted EBITDAR of $1.8 million and an adjusted EBITDAR margin of 7.7 percent for the quarter.

Cash Flow and Rent Expense

At March 31, 2011, Sun had $85.6 million in cash and cash equivalents and $153.4 million of long-term debt. Sun's free cash flow for the first quarter of 2011 was $7.2 million, after taking into account $8.8 million of cash used for capital expenditures in the quarter. Rent expense in the quarter, reflecting the first full quarter in which the increased rents resulting from Sun's 2010 restructuring were paid, increased $18.4 million over rent expense in the first quarter of 2010, to $36.9 million.

Conference Call

As previously announced, investors and the general public are invited to listen to a conference call with Sun's senior management on Wednesday, May 4, 2011, at 10 a.m. Pacific / 1 p.m. Eastern, to discuss the Company's first-quarter results for the period ended March 31, 2011.

To listen to the conference call, dial (888) 389-5997 and refer to Sun Healthcare Group. A recording of the call will be available from 4 p.m. Eastern on May 4, 2011, until midnight Eastern on June 4, 2011, by calling (888) 203-1112 and using access code 5967956.

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 March 31, 2011, SunBridge Healthcare and its subsidiaries operate 163 skilled nursing centers, 16 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 22,916 licensed beds in 25 states; SunDance Rehabilitation provides rehabilitation therapy services to affiliated and non-affiliated centers in 36 states; CareerStaff Unlimited provides medical staffing services in 39 states; and SolAmor Hospice provides hospice services in 10 states. For more information, go to www.sunh.com.

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 expected results of operations, growth opportunities and plans and objectives of management for future operations, including expectations concerning the expansion of the Company's Rehab Recovery Suites® portfolio, acquisitions and the impact of changes in the Medicare payment system. 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; 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 significant amount of the Company's indebtedness; covenants in debt agreements 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 current 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. 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 Report on Form 10-Q, copies of which are available on Sun's web site, www.sunh.com. 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.

EBITDA, adjusted EBITDA, adjusted EBITDAR and free cash flow, as used in this press release and in the accompanying tables, which are non-GAAP financial measures, are each reconciled to their respective GAAP-recognized financial measures in the accompanying tables.

                SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                       KEY INCOME STATEMENT FIGURES
                               CONSOLIDATED
                  (in thousands, except per share data)


                                                    For the      For the
                                                     Three        Three
                                                    Months       Months
                                                     Ended        Ended
                                                   March 31,    March 31,
                                                      2011         2010
                                                  -----------  -----------


Revenue                                           $   483,897  $   470,415

Depreciation and amortization                           7,579       12,348

Interest expense, net                                   5,000       11,890

Pre-tax income                                         14,322       18,099

Income tax expense                                      5,872        7,296

Income from continuing operations                       8,450       10,803

Loss from discontinued operations                        (338)        (605)
                                                  -----------  -----------

Net income                                        $     8,112  $    10,198
                                                  ===========  ===========


Diluted earnings per share                        $      0.31  $      0.69
                                                  ===========  ===========


Adjusted EBITDAR                                  $    63,949  $    60,884
Margin - Adjusted EBITDAR                                13.2%        12.9%
                                                  -----------  -----------


Adjusted EBITDA                                   $    27,037  $    42,337
Margin - Adjusted EBITDA                                  5.6%         9.0%
                                                  -----------  -----------

Pre-tax income continuing operations              $    14,322  $    18,099

Income tax expense                                $     5,872  $     7,296

Income from continuing operations                 $     8,450  $    10,803

Diluted earnings per share from continuing
 operations                                       $      0.33  $      0.73
                                                  -----------  -----------

See definitions of Adjusted EBITDA and Adjusted EBITDAR in the table
"Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDAR".





                SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                        CONSOLIDATED BALANCE SHEETS
                    (in thousands, except share data)



                                                   March 31,   December 31,
                                                      2011        2010
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)
                       ASSETS

Current assets:
  Cash and cash equivalents                       $    85,571  $    81,163
  Restricted cash                                      17,274       15,329
  Accounts receivable, net                            218,827      218,040
  Prepaid expenses and other assets                    20,510       16,859
  Deferred tax assets                                  68,423       69,800
                                                  -----------  -----------

    Total current assets                              410,605      401,191

Property and equipment, net                           141,211      139,860
Intangible assets, net                                 41,255       41,967
Goodwill                                              347,520      348,047
Restricted cash, non-current                              351          350
Deferred tax assets                                   125,864      126,540
Other assets                                           50,027       23,803
                                                  -----------  -----------

      Total assets                                $ 1,116,833  $ 1,081,758
                                                  ===========  ===========

       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                $    47,795  $    49,993
  Accrued compensation and benefits                    65,092       61,518
  Accrued self-insurance obligations, current
   portion                                             55,314       52,093
  Income taxes payable                                    478            -
  Other accrued liabilities                            53,451       53,945
  Current portion of long-term debt and capital
   lease obligations                                   11,112       11,050
                                                  -----------  -----------
  Total current liabilities                           233,242      228,599

Accrued self-insurance obligations, net of
 current portion                                      159,146      133,405
Long-term debt and capital lease obligations,
 net of current portion                               142,238      144,930
Unfavorable lease obligations, net                      9,133        9,815
Other long-term liabilities                            51,840       52,566
                                                  -----------  -----------
  Total liabilities                                   595,599      569,315

Stockholders' equity:
  Preferred stock of $.01 par value, authorized
   3,333,333 shares, zero shares were issued and
   outstanding as of March 31, 2011 and
   December 31, 2010                                        -            -
  Common stock of $.01 par value, authorized
   41,666,667 shares, 25,088,409 and 24,973,693
   shares issued and outstanding as of
   March 31, 2011 and December 31, 2010,
   respectively                                           251          250
  Additional paid-in capital                          721,500      720,854
  Accumulated deficit                                (200,549)    (208,661)
  Accumulated other comprehensive income, net              32            -
                                                  -----------  -----------
                                                      521,234      512,443
                                                  -----------  -----------
     Total liabilities and stockholders' equity   $ 1,116,833  $ 1,081,758
                                                  ===========  ===========





                SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED INCOME STATEMENTS
                  (in thousands, except per share data)


                                                    For the      For the
                                                     Three        Three
                                                    Months       Months
                                                     Ended        Ended
                                                   March 31,    March 31,
                                                      2011         2010
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)

Total net revenues                                $   483,897  $   470,415
                                                  -----------  -----------
Costs and expenses:
  Operating salaries and benefits                     272,101      265,087
  Self-insurance for workers' compensation and
   general and professional liability insurance        15,262       14,441
  Operating administrative costs                       13,280       12,289
  Other operating costs                                98,591       96,652
  Center rent expense                                  36,912       18,547
  General and administrative expenses                  15,379       15,266
  Depreciation and amortization                         7,579       12,348
  Provision for losses on accounts receivable           5,335        5,796
  Interest, net of interest income of $59 and
   $90, respectively                                    5,000       11,890
  Restructuring costs                                     136            -
                                                  -----------  -----------
Total costs and expenses                              469,575      452,316
                                                  -----------  -----------

Income before income taxes and discontinued
 operations                                            14,322       18,099
Income tax expense                                      5,872        7,296
                                                  -----------  -----------
Income from continuing operations                       8,450       10,803
                                                  -----------  -----------

Discontinued operations:
Loss from discontinued operations, net of related
 taxes                                                   (338)        (605)
                                                  -----------  -----------

Net income                                        $     8,112  $    10,198
                                                  ===========  ===========


Basic income per common and common equivalent
 share:
  Income from continuing operations               $      0.33  $      0.74
  Loss from discontinued operations, net                (0.01)       (0.05)
                                                  -----------  -----------
Net income                                        $      0.32  $      0.69
                                                  ===========  ===========

Diluted income per common and common equivalent
 share:
  Income from continuing operations               $      0.33  $      0.73
  Loss from discontinued operations, net                (0.02)       (0.04)
                                                  -----------  -----------
Net income                                        $      0.31  $      0.69
                                                  ===========  ===========

Weighted average number of common and common
 equivalent shares outstanding:
  Basic                                                25,740       14,678
  Diluted                                              25,838       14,828





                SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (in thousands)


                                                    For the      For the
                                                     Three        Three
                                                    Months       Months
                                                     Ended        Ended
                                                   March 31,    March 31,
                                                      2011         2010
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)

Cash flows from operating activities:
  Net income                                      $     8,112  $    10,198
  Adjustments to reconcile net income to net cash
   provided by operating activities, including
   discontinued operations:
      Depreciation and amortization                     7,681       12,446
      Amortization of favorable and unfavorable
       lease intangibles                                 (484)        (474)
      Provision for losses on accounts receivable       5,644        6,014
      Stock-based compensation expense                  1,449        1,393
      Deferred taxes                                    2,032        4,936
  Changes in operating assets and liabilities,
   net of acquisitions:
      Accounts receivable                              (5,393)      (6,322)
      Restricted cash                                  (1,946)      (1,156)
      Prepaid expenses and other assets                  (249)       4,283
      Accounts payable                                 (1,919)      (5,859)
      Accrued compensation and benefits                 3,438        8,424
      Accrued self-insurance obligations               (1,342)       2,037
      Income taxes payable                                478          628
      Other accrued liabilities                          (731)       2,470
      Other long-term liabilities                        (727)        (955)
                                                  -----------  -----------
        Net cash provided by operating activities      16,043       38,063
                                                  -----------  -----------

Cash flows from investing activities:
  Capital expenditures                                 (8,837)     (17,058)
                                                  -----------  -----------
      Net cash used for investing activities           (8,837)     (17,058)
                                                  -----------  -----------

Cash flows from financing activities:
  Principal repayments of long-term debt and
   capital lease obligations                           (2,798)     (20,941)
  Payment to non-controlling interest                       -       (2,025)
  Distribution to non-controlling interest                  -          (69)
                                                  -----------  -----------
      Net cash used for financing activities           (2,798)     (23,035)
                                                  -----------  -----------

Net increase (decrease) in cash and cash
 equivalents                                            4,408       (2,030)
Cash and cash equivalents at beginning of period       81,163      104,483
                                                  -----------  -----------
Cash and cash equivalents at end of period        $    85,571  $   102,453
                                                  ===========  ===========

Reconciliation of net cash provided by operating
 activities to free cash flow:

   Net cash provided by operating activities      $    16,043  $    38,063
   Capital expenditures                                (8,837)     (17,058)
                                                  -----------  -----------
    Free cash flow                                $     7,206  $    21,005
                                                  ===========  ===========

Free cash flow is defined as net cash flow provided by operating activities
less cash used for capital expenditures.

Free cash flow is used by management to evaluate discretionary cash flow
potentially available for debt service and other financing activities.






                SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

   RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA and ADJUSTED EBITDAR
                              (in thousands)


                                                    For the      For the
                                                  Three Months Three Months
                                                     Ended        Ended
                                                   March 31,    March 31,
                                                      2011         2010
                                                  ------------ ------------
                                                  (unaudited)  (unaudited)

 Total net revenues                               $    483,897 $    470,415
                                                  ------------ ------------

 Net income                                       $      8,112 $     10,198
                                                  ------------ ------------


   Income from continuing operations                     8,450       10,803

   Income tax expense                                    5,872        7,296

   Interest, net                                         5,000       11,890

   Depreciation and amortization                         7,579       12,348
                                                  ------------ ------------

 EBITDA                                           $     26,901 $     42,337

   Restructuring costs                                     136            -
                                                  ------------ ------------

 Adjusted EBITDA                                  $     27,037 $     42,337


   Center rent expense                                  36,912       18,547
                                                  ------------ ------------

 Adjusted EBITDAR                                 $     63,949 $     60,884
                                                  ============ ============

EBITDA is defined as earnings before loss on discontinued operations,
income taxes, interest, net, depreciation and amortization.  Adjusted
EBITDA is defined as EBITDA before restructuring costs.  Adjusted EBITDAR
is defined as Adjusted EBITDA before center rent expense.  Adjusted EBITDA
and Adjusted EBITDAR are used by management to evaluate financial
performance and resource allocation for each entity within the operating
units and for the Company as a whole.  Adjusted EBITDA and Adjusted EBITDAR
are commonly used as analytical indicators within the healthcare industry
and also serve as measures of leverage capacity and debt service ability.
Adjusted EBITDA and Adjusted EBITDAR should not be considered as measures
of financial performance under generally accepted accounting principles. As
the items excluded from Adjusted EBITDA and Adjusted EBITDAR are
significant components in understanding and assessing finance performance,
Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation
or as alternatives to net income, cash flows generated by or used in
operating, investing or financing activities or other financial statement
data presented in the consolidated financial statements as indicators of
financial performance or liquidity.  Because Adjusted EBITDA and Adjusted
EBITDAR are not measurements determined in accordance with U.S. generally
accepted accounting principles and are thus susceptible to varying
calculations.  Adjusted EBITDA and Adjusted EBITDAR as presented may not be
comparable to other similarly titled measures of other companies.





                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 March 31, 2011
                                (unaudited)


                                                      Elimination
                    Rehabilitation  Medical               of
             Inpatient  Therapy    Staffing  Other &   Affiliated Consoli-
             Services   Services   Services  Corp Seg  Revenue    dated
             ---------  ---------  --------  --------  ---------  --------
Nonaffiliated
 revenue     $ 431,477  $  30,097  $ 22,316  $      7  $       -  $483,897
Affiliated
 revenue             -     32,694       623         -    (33,317)        -
             ---------  ---------  --------  --------  ---------  --------
  Total
   revenue   $ 431,477  $  62,791  $ 22,939  $      7  $ (33,317) $483,897
             ---------  ---------  --------  --------  ---------  --------

Income
 (loss) from
 continuing
 operations  $  31,425  $   2,772  $  1,399  $(27,146) $       -  $  8,450
Income tax
 expense             -          -         -     5,872          -     5,872
Interest, net       (5)         -         1     5,004          -     5,000
Depreciation
 and
 amortization    6,336        226       187       830          -     7,579
             ---------  ---------  --------  --------  ---------  --------

  EBITDA     $  37,756  $   2,998  $  1,587  $(15,440) $       -  $ 26,901

Restructuring
 costs             136          -         -         -          -       136
             ---------  ---------  --------  --------  ---------  --------

  Adjusted
   EBITDA    $  37,892  $   2,998  $  1,587  $(15,440) $       -  $ 27,037

Center rent
 expense        36,612        127       173         -          -    36,912
             ---------  ---------  --------  --------  ---------  --------

  Adjusted
   EBITDAR   $  74,504  $   3,125  $  1,760  $(15,440) $       -  $ 63,949
             =========  =========  ========  ========  =========  ========


    Adjusted
      EBITDA
      margin       8.8%       4.8%      6.9%                           5.6%

    Adjusted
     EBITDAR
      margin      17.3%       5.0%      7.7%                          13.2%


See definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the
table "Reconciliation of Net Income 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 Three Months Ended March 31, 2010
                                (unaudited)


                                                      Elimination
                     Rehabilitation Medical               of
              Inpatient  Therapy   Staffing  Other &   Affiliated Consoli-
              Services   Services  Services  Corp Seg   Revenue    dated
              ---------  --------  --------  --------  ---------  --------
Nonaffiliated
 revenue      $ 417,687  $ 29,363  $ 23,357  $      8  $       -  $470,415
Affiliated
 revenue              -    21,154       143         -    (21,297)        -
              ---------  --------  --------  --------  ---------  --------
  Total
   revenue    $ 417,687  $ 50,517  $ 23,500  $      8  $ (21,297) $470,415
              ---------  --------  --------  --------  ---------  --------

Income (loss)
 from
 continuing
 operations   $  38,061  $  3,876  $  1,482  $(32,616) $       -  $ 10,803
Income tax
 expense              -         -         -     7,296          -     7,296
Interest, net     2,725         -        (1)    9,166          -    11,890
Depreciation
 and
 amortization    11,181       153       180       834          -    12,348
              ---------  --------  --------  --------  ---------  --------

  EBITDA      $  51,967  $  4,029  $  1,661  $(15,320) $       -  $ 42,337

Restructuring
 costs                -         -         -         -          -         -
              ---------  --------  --------  --------  ---------  --------

  Adjusted
   EBITDA     $  51,967  $  4,029  $  1,661  $(15,320) $       -  $ 42,337
Center rent
 expense         18,214       123       210         -          -    18,547
              ---------  --------  --------  --------  ---------  --------

  Adjusted
   EBITDAR    $  70,181  $  4,152  $  1,871  $(15,320) $       -  $ 60,884
              =========  ========  ========  ========  =========  ========


     Adjusted
       EBITDA
       margin      12.4%      8.0%      7.1%                           9.0%

     Adjusted
      EBITDAR
       margin      16.8%      8.2%      8.0%                          12.9%

See definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the
table "Reconciliation of Net Income to Adjusted EBITDA and Adjusted
EBITDAR".





                Sun Healthcare Group, Inc. and Subsidiaries
                      Selected Operating Statistics
                          Continuing Operations


                                                      For the
                                                Three Months Ended
                                                     March 31,
                                              -----------------------
                                                2011           2010
                                              --------       --------
Consolidated Company

Revenues - Non-affiliated (in thousands)
  Skilled Nursing and similar facilities      $417,143       $406,176
  Hospice                                       13,855         10,987
  Other - Inpatient Services                       479            524
                                              --------       --------
   Inpatient Services                          431,477        417,687

  Rehabilitation Therapy Services               30,097         29,363
  Medical Staffing Services                     22,316         23,357
  Other - non-core businesses                        7              8
                                              --------       --------
    Total                                     $483,897       $470,415
                                              ========       ========


Revenue Mix - Non-affiliated (in thousands)
  Medicare                                    $157,621   33% $141,523   30%
  Medicaid                                     184,678   38%  187,306   40%
  Private and Other                            112,012   23%  112,288   24%
  Managed Care / Insurance                      24,468    5%   24,393    5%
  Veterans                                       5,118    1%    4,905    1%
                                              --------  ---  --------  ---
    Total                                     $483,897  100% $470,415  100%
                                              ========  ===  ========  ===


Inpatient Services Stats

 Number of centers:                                199            199
 Number of available beds:                      22,060         22,029
 Occupancy %:                                     87.0%          87.8%

 Payor Mix % based on patient days:
   Medicare - SNF Beds                            15.8%          15.7%
   Managed care / Ins. - SNF Beds                  4.2%           4.1%
                                              --------       --------
       Total SNF skilled mix                      20.0%          19.8%
                                              --------       --------

  Medicare                                        14.5%          14.3%
  Medicaid                                        62.1%          61.8%
  Private and Other                               18.4%          19.0%
  Managed Care / Insurance                         3.8%           3.8%
  Veterans                                         1.2%           1.1%

 Revenue Mix % of revenues:
   Medicare - SNF Beds                            35.1%          32.6%
   Managed care / Ins. - SNF Beds                  6.0%           6.2%
                                              --------       --------
       Total SNF skilled mix                      41.1%          38.8%
                                              --------       --------

  Medicare                                        35.5%          32.8%
  Medicaid                                        42.8%          44.8%
  Private and Other                               14.9%          15.4%
  Managed Care / Insurance                         5.6%           5.8%
  Veterans                                         1.2%           1.2%


 Revenues PPD:
  Medicare (Part A)                           $ 520.92       $ 465.98
  Medicare Blended Rate (Part A & B)          $ 556.98       $ 502.21
  Medicaid                                    $ 172.25       $ 172.59
  Private and Other                           $ 193.39       $ 186.31
  Managed Care / Insurance                    $ 367.47       $ 363.84
  Veterans                                    $ 245.52       $ 243.97


Rehab contracts

 Affiliated                                        179            131
 Non-affiliated                                    343            337

 Average Qtrly Revenue per Contract
  (in thousands)                              $    120       $    108

Contact Information

  • Contact:
    Investor Inquiries
    (505) 468-2341

    Media Inquiries
    (505) 468-4582