Sunrise Restates Ten Years Of Results
Profit Reduced By $173 Million
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Tuesday, March 25, 2008
Sunrise Senior Living, which operates nursing homes and other facilities, said yesterday that it completed a restatement of results from 1996 through 2005 that reduced earnings by $173 million. The restatement comes after a review that found accounting errors but no evidence of stock-option backdating or insider trading.
The McLean company also said it filed its annual report for 2006, which had been delayed by the accounting review. The filing averts a delisting by the New York Stock Exchange. Sunrise had missed a March 17 deadline to file its 2006 report with the exchange but received a one-week extension.
"It's a relief that the company's finally filed its financial statements," said Derrick Dagnan, an analyst at Avondale Partners in Nashville. "There don't appear to be any major negative surprises."
With the restatement completed, Sunrise filed for an extension to report 2007 earnings. It has until Sept. 17 to report its full-year 2007 earnings.
Shares of Sunrise rose $2.43, or 11.9 percent, to close at $22.88. The company's stock has fallen 48 percent in the 12 months ended March 20.
Sunrise runs more than 450 retirement communities in North America and Europe. Last week, it announced several changes to its financial reporting procedures and said its founder and chief executive, Paul J. Klaassen, would step down as chairman.
Among the earnings changes, Sunrise raised its 2005 profit to $87.1 million ($1.82 a share), compared with previous results of $79.7 million ($1.67). Sunrise reduced 2004 profit to $1.1 million, (3 cents), compared with the $50.7 million ($1.12) that was previously reported.
For 2006, Sunrise earned $20.4 million (40 cents).
The company plans to hold a conference call April 2 to discuss yesterday's report and preliminary operating and financial results for the fourth quarter of 2007.
