Sunrise Files 2007 Form 10-K
"We are pleased to have met the bank deadline to file our 2007 Form 10-K,bringing us one step closer to becoming current in our SEC filings," said PaulKlaassen, founder and chief executive officer of Sunrise. "We have beenworking through a series of difficult issues and are fortunate to have astrong management team and a good plan in place to help us set a new coursefor Sunrise."
"We have a strategic plan in place to focus on the profitability of ourcore business, scale back new development and reduce overhead and our overallcost structure while continuing to provide excellent service to seniors," saidMark Ordan, Sunrise's chief investment and administrative officer. "We willinvest judiciously in future growth and manage our existing portfolioefficiently to drive profitability."
As previously announced, Mark Ordan will become chief executive officer ofSunrise when Paul Klaassen transitions to non-executive chairman of the board,effective at the next annual meeting of Sunrise shareholders expected to takeplace in November 2008.
The Company reported revenues of $1.7 billion for 2007 and 2006. Net lossfor 2007 was $70.3 million, or ($1.41) per fully diluted share as compared torestated net income of $15.3 million, or $0.30 per fully diluted share in2006. Included in the 2007 pre-tax loss are charges of $177 million relatedto losses on guarantees, impairments and write downs related to certain of theCompany's ventures, acquisitions and investments as well as losses resultingfrom the Company's accounting restatement and related matters. In addition,during the first two quarters of 2008, the Company expects to record $22million in charges for discontinuation of its condominium projects and $23million in charges in legal and accounting fees related to the Company'saccounting review and investigations. These items are described in greaterdetail in the Company's 10-K filing under the section "Management's Discussionand Analysis of Financial Condition and Results of Operations."
The Company expects to file its first and second quarter Form 10-Qs for2008 by August 20, 2008, and September 10, 2008, respectively.
Strategic Plan and Objectives
The Company also announced its strategic plan, which consists of thefollowing key elements:
-- focus on the core business of building and operating high-qualityassisted living and memory care communities to drive profitability;
-- strengthen the Company's existing portfolios to minimize exposure tofuture losses;
-- reduce corporate expenses and operating cost structure;
-- preserve financial flexibility during difficult capital markets byreducing the Company's development pipeline as needed; and
-- build Sunrise's brand and reputation by continuing to provide thehighest levels of care and quality.
Sunrise's previously disclosed development plan for 2008 included adevelopment pipeline of 3,200 to 3,400 units. Based on current capital marketconditions, this number is expected to be decreased by up to 50 percent, whichincludes deferring some projects from 2008 until 2009. Should capitalmarkets improve, the Company will adjust its pipeline accordingly.
As part of its plan to reduce corporate expenses, the Company announced aprogram that is intended to generate savings of $15 million to $20 million onan annualized basis beginning in 2009. The Company expects to achieve thisthrough reorganization of its
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