IRVINE, CA -- 12/01/08 --
Sun Healthcare Group, Inc. (NASDAQ: SUNH) today
announced that variable interest rates on $154.4 million of its outstanding
bank term loans were reset in late Nov. 2008 at an average nominal rate of
4.13 percent. The variable interest rates are based on LIBOR plus a spread
of 200 basis points. Interest rates can generally be reset for periods of
one month to six months.
At Nov. 30, 2008, the outstanding bank term loans, which mature on April
19, 2014, aggregated $347.0 million. Sun had previously fixed interest
rates through July 2010 on $150.0 million of the term loans at an
average nominal interest rate of 6.81 percent through interest rate swap
arrangements. As a result, at Nov. 30, 2008, the average nominal rate for
the outstanding term loans, including the recent reset, is 5.47 percent.
Sun is required to make scheduled principal payments on the term loans
equal to $3.5 million annually. In addition, Sun is also
required to make a mandatory prepayment out of excess cash flow in the
first quarter of each year. Although the amount of that prepayment cannot
be calculated before year-end financial statements have been prepared,
management anticipates that these payments will be made with existing cash
on hand. After the prepayment, Sun's ratio of net indebtedness to EBITDA is
expected to be below 4 to 1. Sun has no other significant debt maturities
in 2009 or 2010.
About Sun Healthcare Group, Inc.
Sun Healthcare Group, Inc., with executive offices in Irvine, California,
owns SunBridge Healthcare Corporation and other affiliated companies that
operate long-term and postacute care facilities in many states. In
addition, the Sun Healthcare Group family of companies provides therapy
through SunDance Rehabilitation Corporation, hospice services through
SolAmor Hospice and medical staffing through CareerStaff Unlimited, Inc.
Statements made in this press release concerning future events are not
historical facts and 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. Factors that could cause actual
results to differ are identified in the public filings made by the company
with the Securities and Exchange Commission and include changes in Medicare
and Medicaid reimbursements; our ability to maintain the occupancy rates
and payor mix at our long-term care centers; potential liability for losses
not covered by, or in excess of, our insurance; the effects of government
regulations and investigations; the significant amount of our indebtedness,
covenants in our debt agreements that may restrict our activities and our
ability to incur more indebtedness; increasing labor costs and the shortage
of qualified healthcare personnel; our liquidity; and our ability to
receive increases in reimbursement rates from government payors to cover
increased costs. More information on factors that could affect our business
and financial results are included in our public filings made with the
Securities and Exchange Commission, including our Annual Report on Form
10-K and Quarterly Reports on Forms 10-Q, copies of which are available on
Sun's web site, www.sunh.com.
The forward-looking statements involve known and unknown risks,
uncertainties and other factors that are, in some cases, beyond our
control. We caution investors that any forward-looking statements made by
Sun are not guarantees of future performance. We disclaim 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 is used in this press release and is a non-GAAP financial
measure. EBITDA is defined as earnings before income (loss) on discontinued
operations, income taxes, loss (gain) on sale of assets, net, interest,
net, depreciation and amortization. EBITDA is used by management and our
lenders to evaluate financial performance for Sun as a whole. EBITDA is
commonly used as an analytical indicator within the healthcare industry and
also serves as measures of leverage capacity and debt service ability.
EBITDA should not be considered as a measure of financial performance under
generally accepted accounting principles.
Any documents filed by Sun with the SEC may be obtained free of charge
at the SEC's web site at www.sec.gov. In addition, investors and
stockholders of Sun may obtain free copies of the documents filed with the
SEC by contacting Sun's investor relations department at (505) 468-2341
(TDD users, please call (505) 468-4458) or by sending a written request to
Investor Relations, Sun Healthcare Group, Inc. 101 Sun Avenue N.E.,
Albuquerque, N.M. 87109. You may also read and copy any reports, statements
and other information filed by Sun with the SEC at the SEC public reference
room at Room 1580, 100 F Street, N.E., Washington, D.C. 20549. Please call
the SEC at (800) SEC-0330 or visit the SEC's web site for further
information.
Contact:
Investor Inquiries
(505) 468-2341
Media Inquiries
(505) 468-4582
