SRZ - Sector: Healthcare --- Industry: Long-Term Care Facilities

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Profile: 

Sunrise Senior Living Inc.
7900 Westpark Drive
McLean, VA 22102
United States - Map
Phone: 703-273-7500
Fax: 703-744-1601
Website: http://www.sunriseseniorliving.com

Details   
Index Membership: N/A
Sector: Healthcare
Industry: Long-Term Care Facilities
Full Time Employees: 37,600


Business Summary   
Sunrise Senior Living, Inc. provides senior living services in the United States, Canada, the United Kingdom, and Germany. It offers independent living services, which include housing, meals, transportation, activities, and housekeeping, as well as licensed skilled nursing services for residents who require 24-hour skilled nursing care; and determination of the appropriate level of care and service for such resident. The company’s assisted living communities also offer a reminiscence neighborhood that provides specially designed accommodations, service, and care to support cognitively impaired residents, including residents with Alzheimer’s disease and other forms of memory loss. In addition, it provides medication management program, which includes the storage of medications, the distribution of medications as directed by the resident’s physician, and compliance monitoring. As of December 31, 2009, the company operated 384 communities, including 335 communities in the United States, 15 communities in Canada, 27 communities in the United Kingdom, and 7 communities in Germany, with a total unit capacity of 40,400 units. Sunrise Senior Living, Inc. was founded in 1981 and is headquartered in McLean, Virginia.

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Sunrise Senior Living to Receive $50 Million from HCP for 27 Management Contracts...

MCLEAN, Va., Aug. 31 /PRNewswire-FirstCall/ -- Sunrise Senior Living, Inc. (NYSE:SRZ) announced today that it has entered into a settlement and restructuring agreement with HCP, Inc. and certain of its affiliates to, among other things, transition Sunrise from management of 27 HCP-owned senior living communities for an aggregate cash payment of $50 million to Sunrise, and to settle the lawsuits between the Company and HCP pending in Virginia and Delaware. In connection with the settlement and restructuring agreement, Sunrise made a $15 million principal repayment of its bank credit facility and entered into a 14th amendment to its credit agreement extending the maturity date to December 2, 2011. Outstanding consolidated debt under the Company's bank credit facility after the $15 million payment is $8.4 million, down from $95 million at December 31, 2008.

In addition, Sunrise announced today that it had completed the previously announced sale of eight of the Company's nine German assisted living facilities to GHS Pflegeresidenzen Grundstucks GmbH and Prudential Real Estate Investors (operating on behalf of investors in a fund managed by its Munich-based business, TMW Pramerica Property Investment GmbH).

"We are very pleased with the agreement with HCP as it brings Sunrise additional capital that will be used to fulfill many of our financial obligations - and it puts to rest the HCP litigation while paving a path toward a new, positive relationship. These are two very important steps that strengthen Sunrise," said Mark Ordan, Sunrise's chief executive officer. "We have stated our need to refinance the company, and this deal goes a long way toward that goal. While we continue to pursue balance sheet-enhancing transactions, including asset sales, we do not foresee a need to sell additional community management portfolios. We are, of course, also pleased to complete the previously announced sale of eight German communities to Pramerica."

Under the settlement agreement, Sunrise received $40 million on August 31, 2010, the effective date of the agreement, and expects to receive $10 million in subsequent installments payable on the earlier of the completion of transitioning, on a portfolio-by-portfolio basis, the 27 senior living communities to a new manager or, subject to Sunrise's compliance with certain transition obligations, 12 months after the effective date.  It is Sunrise's understanding that Emeritus Corporation will assume management of many of the transitioning communities.

In addition to the pay down of the credit facility, Sunrise has agreed to use portions of the proceeds from this transaction to pay down various other debt obligations. Sunrise will also pay down its Chevy Chase loan by $5 million for a one-year extension, its Wells Fargo land loan by $5 million for a one-year extension and its Wells Fargo construction loan by $15 million to make the loan non-recourse and extend the loan to June 2013. Sunrise will use the $10 million in subsequent installments, if and as received, to repay any outstanding amounts under the Company's bank credit facility on or prior to the one-year anniversary of the HCP transaction. 

Sunrise and HCP will also negotiate to restructure the leasing and management agreements of up to 35 other senior living communities pursuant to the REIT Investment Diversification and Empowerment Act of 2007. Any such restructuring will not have a net adverse economic impact on Sunrise.

Following the transition of the 27 senior living communities to new operators, which is expected to occur within the next 12 months, Sunrise will continue to manage up to 48 communities on behalf of HCP. Additional details on these announcements can be found in the Company's Form 8-K, which will be filed with the Securities and Exchange Commission on or about September, 6, 2010.

About Sunrise Senior Living

Sunrise Senior Living, a McLean, Va.-based company, employs approximately 35,000 people. As of June 30, 2010, Sunrise operated 356 communities in the United States, Canada, Germany and the United Kingdom, with a combined unit capacity of approximately 35,400 units. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing and rehabilitative services. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. To learn more about Sunrise, please visit http://www.sunriseseniorliving.com.

Forward-Looking Statements

Certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Sunrise believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurances that these expectations will be realized. Sunrise's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, the risk that the Sunrise is unable to settle the remaining claims with respect to its German subsidiaries; the risk that the Company is not able to sell the North American properties mortgaged pursuant to the restructure transactions; the risk that the net sale proceeds of the mortgaged North American properties are not sufficient to pay the minimum amount guaranteed by Sunrise to the lenders that are party to the restructure transactions; changes in the Company's anticipated cash flow and liquidity; the Company's ability to maintain adequate liquidity to operate its business and execute its restructuring; the Company's ability to obtain waivers, cure or reach agreements with respect to defaults under the Company's loan, joint venture and construction agreements; the risk that a group of the Company's creditors, acting together, could force the Company into an involuntary bankruptcy proceeding; the Company's ability to sell its German communities within a reasonable time period; the Company's ability to refinance extend the maturity of or otherwise repay its bank credit facility due in 2010 and other debt due in 2010 and/or raise funds from other sources; the Company's ability to achieve anticipated savings from the Company's cost reduction initiatives; the outcome of the U.S. Securities and Exchange Commission's investigation; the outcome of the IRS audit of the Company's tax returns for the tax years ended December 31, 2005, 2006, 2007 and 2008; the Company's ability to continue to recognize income from refinancings and sales of communities by ventures; risk of changes in the Company's critical accounting estimates; risk of further write-downs or impairments of the Company's assets; risk of future obligations to fund guarantees and other support arrangements to some of the Company's ventures, lenders to the ventures or third-party owners; risk of declining occupancies in existing communities or slower than expected leasing of new communities; risk resulting from any international expansion; development and construction risks; availability of financing for development, including construction loans as to which we are in default; risks associated with past or any future acquisitions; compliance with government regulations; risk of new legislation or regulatory developments; the risk that some of the Company's management agreements, subject to early termination provisions based on various performance measures, could be terminated due to failure to achieve the performance measures; business conditions and market factors that could affect occupancy rates at and revenues from the Company's communities and the value of the Company's properties generally; competition and our response to pricing and promotional activities of our competitors; changes in interest rates; unanticipated expenses; the risks of further downturns in general economic conditions including, but not limited to, financial market performance, consumer credit availability, interest rates, inflation, energy prices, unemployment and consumer sentiment about the economy in general; risks associated with the ownership and operation of assisted living and independent living communities; and other risks detailed in the Company's 2009 Annual Report on Form 10-K filed with the SEC, as may be amended or supplemented in the Company's Form 10-Q filings or otherwise. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

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Sunrise Senior Living, G-III Apparel Group: Biggest Price Gainers (SRZ)
Sunrise Senior Living topped the list of Biggest Percentage Price Gainers among common stocks on the New York Stock Exchange at midday

Bouncing north off a bottom....

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Big day !


Technicals
Close Above the 50-day MA
Close Above the 13-day MA
Gap Up
Percentage Gainer

Last Price Quote is:
38.82%above 13-day MA
25.34%above 50-day MA
RS Rating: 24 

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Huge Buy Opportunity...
Earnings were out Friday Feb 25.
CEO Ordan is an ex Goldman Sachs guy and has been making huge improvements in SRZ since taking over. The Price/Sales is a wee .34 or the most underpriced in its sector. A $20 stock which is still much less than it traded for a couple of years ago.
Fidelity is a heavy owner in SRZ shares.
More good news will take it higher and news is due.

Day's Range: 9.43 - 10.60
52wk Range: 2.18 - 10.60
Volume: 4,169,515
Avg Vol (3m): 836,433
Market Cap: 577.74M
P/E (ttm): 9.65
EPS (ttm): 1.06
Div & Yield: N/A (N/A)

Technicals
Percentage Gainer

Last Price Quote is:
13.49%above 13-day EMA
35.86%above 50-day EMA
RS Rating: 98 

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Sunrise Senior Living Brightens On Upbeat Earnings...
Shares rally to 52-week high after big jump in profit.

Sunrise Senior Living posted a fourth-quarter profit of 87 cents per share, up from 19 cents in the fourth quarter of 2009. Sunrise shares rallied 12% on the news, to hit a new 52 week high of $10.52. That's up from a 52 week low of $2.18 set back in August of last year.

MCLEAN, Va., Feb. 25, 2011 /PRNewswire via COMTEX/ -- Sunrise Senior Living, Inc. (SRZ, Trade ) today reported financial results and operating data for the fourth quarter and full year of 2010. Sunrise will host a conference call and webcast Friday, February 25, 2011, at 9:00 a.m. ET, to discuss the financial results.

"2010 was a year of strengthening Sunrise and we are now well positioned to take advantage of great opportunities in 2011 and the years to come," said Mark Ordan, Sunrise's chief executive officer. "Bottom line 2010 performance is benefitted by outsized gains realized in our restructuring. Our operating results are adversely affected by the reduction of revenue from our restructuring without an equivalent reduction of expenses, and our G&A was adversely affected by non-recurring items. While we are excited by our progress, optimistic and committed to our future, we have in our 10-K and supplemental 8-K provided investors with meaningful additional detail to enable a fuller understanding of both our progress and of the risks we still need to tackle."

2010 Overview

During 2010, Sunrise sold its nine German communities, executed debt restructuring agreements with its German lenders, sold land parcels, sold its venture interests to Ventas, modified, extended and amended certain venture and management agreements, and entered into management agreement buyouts. Sunrise used the majority of the proceeds from these transactions to reduce outstanding indebtedness. As a result of these management agreement buyouts, the Company now manages 32 fewer communities. Sunrise earned $13.0 million, $17.2 million and $17.7 million of management fees from the 32 terminated communities in 2010, 2009 and 2008, respectively. Sunrise expects to reduce its corporate overhead to partially offset its reduced management fee income.

2010 Annual Results

Sunrise reported total operating revenues of $1.4 billion for the twelve months ended December 31, 2010, as compared to $1.5 billion for the twelve months ended December 31, 2009. Net income was greatly increased by non-recurring factors and was $99.1 million, or $1.72 per fully diluted share, for the twelve months ended 2010. This included $63.3 million of buyout fees and $68.5 million of income from discontinued operations, as compared to net loss of ($133.9) million, or ($2.61) per fully diluted share, for the twelve months ended December 31, 2009. A significant portion of Sunrise's ongoing management fee income is heavily concentrated with four business partners, as outlined in the Company's 2010 Form 10-K.

Adjusted income from ongoing operations was $15.6 million for the twelve months ended December 31, 2010, as compared to an adjusted income of $15.9 million for the twelve months ended December 31, 2009. Adjusted EBITDAR for the twelve months ended December 31, 2010, was $117.9 million as compared to $131.1 million for the twelve months ended December 31, 2009. Adjusted income from ongoing operations and Adjusted EBITDAR are measures of operating performance that are not calculated in accordance with U.S. GAAP and should not be considered as a substitute for income or loss from operations or net income or loss. These are used by management to focus on income generated from the ongoing operations of the Company and to help management assess if adjustments to current spending decisions are needed. For a reconciliation of these items, please refer to the attached tables "Adjusted Income from Ongoing Operations" and "Adjusted EBITDAR Reconciliation."

2010 Fourth Quarter Results

In the fourth quarter of 2010, Sunrise reported revenues of $319.0 million as compared to $363.0 million for the fourth quarter of 2009. Net income for the fourth quarter of 2010 was $50.0 million or $0.87 per fully diluted share, as compared to net income of $10.4 million, or $0.19 per fully diluted share, for the fourth quarter of 2009. The change between periods was primarily driven by a $10 million buy-out fee paid by HCP and a $25 million gain resulting from the sale of our venture interest to Ventas.

Adjusted income from ongoing operations was $1.6 million in the fourth quarter of 2010 as compared to an adjusted income of $6.3 million in the fourth quarter of 2009. Adjusted EBITDAR for the fourth quarter of 2010 was $25.7 million as compared to $42.1 million for the fourth quarter of 2009.

Cash and Liquidity Update

Sunrise had $66.7 million of unrestricted cash at December 31, 2010. As of December 31, 2010, Sunrise had significantly reduced its consolidated debt to $163.0 million, as compared to $440.2 million at December 31, 2009, a reduction of $277.2 million.

New Venture Transaction

As previously announced, on January 10, 2011, Sunrise closed on the purchase and sale agreement with a wholly owned subsidiary of CNL Lifestyle Properties and an affiliate of Arcapita, which was Sunrise's joint venture partner in 29 Sunrise-managed communities. As part of the agreement, Sunrise contributed its 10-percent ownership interest in the existing venture for a 40-percent ownership interest in a new venture. The portfolio was valued at approximately $630 million (excluding transaction costs). As part of the Company's new venture agreement with a wholly owned subsidiary of CNL Lifestyle Properties, Sunrise will have the option to purchase CNL's interest in the venture beginning from the start of year three to the end of year six. Sunrise's share of the transaction costs is approximately $5.7 million (excluding the funding of escrows), which was expensed as incurred ($1.5 million in the fourth quarter of 2010 and $4.2 million in January 2011).

Ventas

Effective December 1, 2010, Sunrise closed on the previously disclosed purchase and sale agreements with Ventas, Inc. and certain of its affiliates to sell to Ventas all of Sunrise's joint venture interests in nine limited liability companies in the U.S. and two limited partnerships in Canada, which collectively own 58 communities managed by Sunrise. The aggregate purchase price for the venture interests was approximately $41.5 million. Sunrise used the proceeds from the transaction, after expenses, to pay down its debt obligations and for working capital. In connection with this transaction, Sunrise recorded a $25.0 million gain on the sale of its venture interests.

Sunrise continues to manage the 58 senior living communities, together with the other 21 senior living communities in the Ventas portfolio that are already wholly owned by Ventas, pursuant to amended and restated master and management agreements entered into in connection with the purchase and sale transaction.

Operating Data for Fourth-Quarter 2010

Comparable community revenues for the fourth quarter of 2010 increased by 4.8 percent, from $442.8 million for the fourth quarter of 2009 to $464.0 million for the fourth quarter of 2010. Excluding the impact of foreign exchange rates in 2010, comparable community revenues for the fourth quarter of 2010 increased 4.8 percent to $463.9 million year-over-year.

Average unit occupancy in comparable communities for the fourth quarter of 2010 was 88.3 percent, which was up 80 basis points from 87.5 percent for the fourth quarter of 2009, and up 60 basis points as compared to 87.7 percent in the third quarter of 2010.

Average daily revenue per occupied unit in comparable communities increased 3.7 percent from $198.92 for the fourth quarter of 2009 to $206.32 for the fourth quarter of 2010. Excluding the impact of foreign exchange rates in 2010, average daily revenue per occupied unit for the comparable community portfolio increased 3.7 percent to $206.27 for the fourth quarter of 2010 as compared to the fourth quarter of 2009.

Comparable community operating expenses for the fourth quarter of 2010 increased 0.3 percent from $326.0 million to $327.1 million. Foreign exchange rates in 2010 did not significantly impact these operating expense results in the fourth quarter of 2010.

Sunrise's comparable community portfolio consists of communities that were open and operating as of January 1, 2008, and include consolidated, unconsolidated venture, and managed communities in the United States, Canada and the United Kingdom. Sunrise's management believes that total comparable-community revenues, average daily revenue per occupied unit, average unit occupancy rates and total comparable-community expenses are useful indicators of trends in Sunrise's management business.

Supplemental Information

For additional details on Sunrise's comparable-community data, please refer to the Supplemental Information attached. Also, additional supplemental information has been furnished to the Securities and Exchange Commission in a Form 8-K, and can also be found on the Supplemental Data link on the Investor Relations section of the Company's Web site at http://suppdata.sunriseseniorliving.com/

Conference Call and Webcast

Sunrise will host a conference call and webcast at 9:00 a.m. ET on Friday, February 25, 2011, to discuss the financial results for the fourth quarter and full year of 2010 and the other matters discussed in this press release. The call-in number for the conference call is 888-554-1431 or 719-325-2196 (from outside the U.S.). Callers should reference the "Sunrise Senior Living Q4 Earnings Call" or the participant passcode: 5721106. Those interested may also go to the Investor Relations section of the Company's Web site ( http://www.sunriseseniorliving.com ) to listen to the earnings call. A telephone replay of the call will be available until March 11, 2011 at 1 p.m. ET, by dialing 888-203-1112 or 719-457-0820 (passcode:5721106); a replay will also be available on Sunrise's Web site during that period.

About Sunrise Senior Living

Sunrise Senior Living, a McLean, Va.-based company, employs approximately 31,700 people. As of December 31, 2010, Sunrise operated 319 communities located in the United States, Canada and the United Kingdom, with a unit capacity of approximately 31,200 units. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing and rehabilitative services. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. To learn more about Sunrise, please visit http://www.sunriseseniorliving.com .

Forward-Looking Statements

Certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Sunrise believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurances that these expectations will be realized. Sunrise's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, the risk that the net sale proceeds of the mortgaged North American properties are not sufficient to pay the minimum amount guaranteed by Sunrise to the lenders that are party to the German restructure transactions; the risk that we may be unable to reduce expenses and generate positive operating cash flows; the risk of future obligations to fund guarantees to some of our ventures and lenders to the ventures; the risk of further write-downs or impairments of our assets; the risk that we are unable to obtain waivers, cure or reach agreements with respect to existing or future defaults under our loan, venture and construction agreements; the risk that we will be unable to repay, extend or refinance our indebtedness as it matures, or that we will not comply with loan covenants; the risk that our ventures will be unable to repay, extend or refinance their indebtedness as it matures, or that they will not comply with loan covenants creating a foreclosure risk to our venture interest and a termination risk to our management agreement; the risk that we are unable to continue to recognize income from refinancings and sales of communities by ventures; the risk of declining occupancies in existing communities or slower than expected leasing of newer communities; the risk that we are unable to extend leases on our operating properties at expiration, in some cases, the expiration is as early as 2013; the risk that some of our management agreements, subject to early termination provisions based on various performance measures, could be terminated due to failure to achieve the performance measures; the risk that our management agreements can be terminated in certain circumstances due to our failure to comply with the terms of the management agreements or to fulfill our obligations thereunder; the risk from competition and our response to pricing and promotional activities of our competitors; the risk of not complying with government regulations; the risk of new legislation or regulatory developments; the risk of changes in interest rates; the risk of unanticipated expenses; the risks of further downturns in general economic conditions including, but not limited to, financial market performance, downturns in the housing market, consumer credit availability, interest rates, inflation, energy prices, unemployment and consumer sentiment about the economy in general;the risks associated with the ownership and operation of assisted living and independent living communities; other risk factors contained in our 2010 Form 10-K filed with the SEC on February 25, 2011. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. Unless the context suggests otherwise, references herein to "Sunrise," the "Company," "we," "us" and "our" mean Sunrise Senior Living, Inc. and our consolidated subsidiaries.

SOURCE Sunrise Senior Living, Inc.