Completes Financial Restatement and Accounting Review
Meets NYSE Deadline for Continued Trading
MCLEAN, Va., March 24 /PRNewswire-FirstCall/ -- Sunrise Senior Living, Inc. (NYSE: SRZ) today announced that this morning it has filed its Form 10-K for the year ended December 31, 2006 with the Securities and Exchange Commission (the "SEC") and has now completed its financial restatement and accounting review. In addition, the Company announced that by filing the 2006 Form 10-K it has met the New York Stock Exchange ("NYSE") extended deadline of filing prior to the opening today for the Company's common stock to continue to trade on the NYSE. As a result, trading in the Company's stock on the NYSE will not be suspended.
Filing of 2006 Form 10-K and Completion of Restatement and Accounting Review
The 2006 Form 10-K filed today includes restated audited financial statements for 2004 and 2005, audited financial statements for 2006 and unaudited quarterly financial information for 2005 (restated) and 2006.
The cumulative impact of the restatement reduced the Company's net income for all periods affected, including 1996 through 2005, by approximately $173 million, after-tax. This includes $138 million related to the previously disclosed restatement real estate and other adjustments, $27 million related to the impact of the stock option adjustments, and $8 million related to revenue recognition of the Company's Greystone subsidiary. The Company reported restated 2005 and 2004 revenues of $1,509 million and $1,268 million, respectively, as compared to the $1,819 million and $1,446 million, respectively, which the Company had previously reported. Substantially all of the reduction in 2005 and 2004 restated revenue amounts is due to the reduction in reimbursable contract services revenue as part of the restatement, for which there is an offsetting reduction in expense. Restated net income for 2005 totaled $87.1 million, or $1.82 per fully diluted share, as compared to the $79.7 million, or $1.67 per fully diluted share, that the Company previously reported. Restated net income for 2004 totaled $1.1 million, or $0.03 per fully diluted share, as compared to the $50.7 million, or $1.12 per fully diluted share, that the Company previously reported.
For 2006, the Company reported revenues of $1,648 million and net income of $20.4 million, or $0.40 per fully diluted share.
"The Board is pleased that the restatement is now complete," said Lynn Krominga, Chairman of the Board. "We appreciate the collaborative efforts of the NYSE staff, particularly over the past several days, which have enabled our stock to continue uninterrupted trading. Today's filing, and our recently announced corporate governance changes, significantly advance our efforts to create value for our shareholders."
"The restatement has been a complex and demanding task, and I want to thank all our team members who have tirelessly dedicated their time and efforts," said Paul Klaassen, founder and chief executive officer of Sunrise. "I also want to thank our shareholders, capital partners and lenders for their consistent support, which has allowed us to maintain and expand our business during this time. Now that our restatement is complete, we have a solid foundation on which to move forward with our business. With our recently- announced enhanced corporate governance, continued growth and reputation for championing quality of life for seniors and their families, we believe Sunrise is well positioned for the future."
"Today's filing of the 2006 Form 10-K and completion of the accounting restatement are significant steps towards becoming a current filer," said Rick Nadeau, chief financial officer of Sunrise. "We are committed to achieving and maintaining a strong control environment, high ethical standards, and timely and accurate financial reporting."
Next Steps to Become Current in Financial Reporting
The Company filed a Form 12b-25 on March 3, 2008, regarding its inability to timely file its 2007 Form 10-K. Under the NYSE rules, the Company has until September 17, 2008, to file its 2007 Form 10-K. If the Company has not filed its 2007 Form 10-K by September 17, 2008, the NYSE may allow the Company's common stock to continue to be listed on the NYSE for up to an additional six-month trading period or, if the NYSE determines that such additional trading period is not appropriate, it may commence suspension and delisting procedures. No assurance can be given that the Company will file its 2007 Form 10-K by any deadline imposed by the NYSE.
Following the filing of its 2007 Form 10-K, the Company plans to file its 2008 Form 10-Qs. The Company then plans to file its 2007 Form 10-Qs in order to become current in its financial reporting.
Announcement of Conference Call and Webcast
Sunrise will host a conference call discussing today's announcement, including its 2006 Form 10-K filing and the preliminary selected financial and operating data for the fourth quarter of 2007, at 4:30 p.m. Eastern Time on Wednesday, April 2, 2008. The call-in number for the conference call is (888) 737-3708 or (913) 312-0699 (no password required). Those interested may also go to the Investor Relations section of the Company's website, at http://www.sunriseseniorliving.com, to listen to a live broadcast of the call. A telephone replay of the call will be available until April 9, 2008, by dialing (888) 203-1112 or (719) 457-0820 (passcode: 1531974). The online replay will follow shortly after the call and continue through May 2, 2008.
About Sunrise Senior Living
Sunrise Senior Living, a McLean, Va.-based company, employs approximately 40,000 people. As of December 31, 2007, Sunrise operated 457 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for approximately 54,000 residents. At quarter end, Sunrise also had 45 communities under construction in these countries with a combined capacity for 5,800 additional residents. 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, rehabilitative and hospice care. 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 .
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 its 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 time required for the Company to prepare and file its 2007 Form 10-K, Form 10- Qs for the first three quarters of 2007 and subsequently delayed Form 10-Qs for quarters in 2008, and for Ernst & Young L.L.P. to audit the Company's 2007 financial statements and to review of the Form 10-Qs; the Company's ability to remediate material weaknesses in internal controls over financial reporting; the outcome of the SEC's investigation; the outcomes of the putative class action and derivative litigation; the outcome of the lawsuit filed by the Company's former CFO; the outcome of the Trinity OIG investigation and qui tam proceeding; the outcome of the IRS audit of the Company's tax returns for the tax years ended December 31, 2005 and 2006 and employment tax returns for 2004, 2005 and 2006; the outcome of the exploration of strategic alternatives; the Company's ability to comply with the terms of the recent amendments of its bank credit facility or to obtain a further extension of the period for providing the lenders with required financial information; development and construction risks; acquisition risks; licensing risks; business conditions; competition; changes in interest rates; the Company's ability to manage its expenses; market factors that could affect the value of the Company's properties; the risks of downturns in general economic conditions; availability of financing for development; and other risks detailed in the Company's 2006 Form 10-K filed with the SEC, as may be updated or supplemented in the Company's Form 10-Q filings. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
|SOURCE Sunrise Senior Living, Inc.|
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