Sunrise Senior Living loss narrows, occupancy down

Shares fall 32 percent as McLean firm reports revenue decline of 7%

Sunrise Senior Living, the luxury senior citizen housing operator that has been trying to dig out from under heavy debt, reduced its net losses in the third quarter from a year earlier but still faces challenges in a weak economy.

The McLean company reported a net loss of $44.4 million (88 cents per share), compared with a loss of $68.7 million ($1.36) a year ago. Sunrise, which earlier this year said it was considering seeking bankruptcy protection, reported third-quarter revenue of $382.6 million, down 7 percent from the $412.6 million the company reported a year ago.

Sunrise has been trying to restructure debt and deals with big lenders.

It has nearly $412 million of long-term debt in default, including $200 million on its communities in Germany.

The company last month said it was selling 21 assisted-living facilities in 11 states as part of its restructuring effort. Sunrise recorded an impairment charge of $6.8 million in the third quarter to write down the value of five of the 21 facilities.

"The changes we need to make to create a lean and profitable Sunrise will take some time, but they are changes we will make and this process is already begun," Sunrise chief executive Mark Ordan said in a conference call with analysts on Monday.

The company said in May that it was eliminating 150 jobs from its workforce of approximately 40,000 people. Sunrise said it is in discussions with "various venture partners and third parties regarding the sale of certain assets" to raise cash and reduce debt.

In addition to getting overextended, Sunrise had to correct years of accounting errors, erasing $173 million of past profits.

The properties being sold are in California, Colorado, Connecticut, Georgia, Indiana, Michigan, New Mexico, North Carolina, Ohio, Pennsylvania and Virginia.

Sunrise operates 403 communities in the United States, Canada, Britain and Germany, with a total of approximately 41,500 units.

The troubled firm said average unit occupancy in comparable communities in the third quarter was 86.7 percent, down from 90.5 percent a year ago. On a sunnier note, the company's average daily revenue per occupied unit increased 2.3 percent from a year ago, to $186.37 million for the quarter.

Sunrise shares, which traded above $40 per share two years ago, closed Monday at $2.93, down 32 percent on the day.