SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 12b-25
Commission File Number: 1-12040
NOTIFICATION OF LATE FILING
(Check One): [] Form 10-K [] Form 11-K [] Form 20-F [X] Form 10-Q
[] Form N-SAR
For Period Ended: _______________________________________
[] Transition Report on Form 10-K [] Transition Report on Form 10-Q
[] Transition Report on Form 20-F [] Transition Report on Form N-SAR
[] Transition Report on Form 11-K
For the Transition Period Ended: _________________________
Nothing in this form shall be construed to imply that the
Commission has verified any information contained herein.
If the notification relates to a portion of the filing checked
above, identify the item(s) to which the notification relates: Items 1 and 2
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PART I
REGISTRANT INFORMATION
Sun Healthcare Group, Inc.
Full name of registrant ----------------------------------------------
Former name if applicable
___________________________________________________________________________
Address of principal executive office (STREET AND NUMBER)
101 Sun Avenue, N.E.
- ---------------------------------------------------------------------------
Albuquerque, NM 87109
City, state and zip code --------------------------------------------------
<PAGE>
PART II
RULE 12b-25 (b) AND (c)
If the subject report could not be filed without unreasonable
effort or expense and the registrant seeks relief pursuant to Rule
12b-25(b), the following should be completed. (Check box if
applicable).
| (a) The reasons described in reasonable detail in
| Part III of this form could not be
| eliminated without unreasonable effort or
| expense;
|
| (b) The subject annual report, semi-annual report,
| transition report on Form 10-K,
| 20-F, 11-K or Form N-SAR, or portion thereof will
| be filed on or before the 15th calendar day
[X] | following the prescribed due date; or the subject
| quarterly report to transition report on Form 1-
| Q, or portion thereof will be filed on or before
| the fifth calendar day following the prescribed
| due date; and
|
| (c) The accountant's statement or other exhibit
| required by Rule 12b-25(c) has been attached is
| applicable.
PART III
NARRATIVE
State below in reasonable detail the reasons why Form 10-K, 11-K,
20-F, 10-Q, N-SAR or the transition report portion thereof could
not be filed within the prescribed time period. (Attach extra sheets
if needed.):
On June 30, 1998, Sun Healthcare Group, Inc. ("Sun") completed a
merger with Retirement Care Associates, Inc. ("Retirement Care"),
which was accounted for as a pooling of interests. Accordingly,
Sun s financial results for all periods, including the quarter ended
June 30, 1998, are required to be restated to include the financial
results of Retirement Care. Due to the timing of the completion of
the merger with Retirement Care, Sun requires additional time to
complete the accounting integration of Retirement Care into Sun's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
PART IV
OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to
this notification
William Warrick (505) 821-3355
___________________________________________________________________
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13
or 15(d) of the Securities Exchange Act of 1934 or Section 30 of the
Investment Company Act of 1940 during the preceding 12 months or for
such shorter period that the registrant was required to file such
report(s) been filed? If the answer is no, identify report(s).
[ X ] Yes [ ] No
2
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(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year
will be reflected by the earnings statements to be included in the
subject report or portion thereof?
[ X ] Yes [ ] No
If so: Attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the
reasons why a reasonable estimate of the results cannot be made:
Attached hereto as Exhibit 99.1 is an explanation of changes in
results of operations from the corresponding period for the last fiscal
year.
Sun Healthcare Group, Inc. has caused this notification to
be signed on its behalf by the undersigned thereunto duly authorized.
August 17, 1998 /s/ William Warrick
Date: __________________ By: _________________________
Name: William Warrick
Title: Vice President and Corporate
Controller
3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Document
- ----------- -----------------------------------
<S> <C>
99.1 Explanation furnished pursuant to Part IV Other
Information.
</TABLE>
<PAGE>
EXHIBIT 99.1
EXPLANATION FURNISHED PURSUANT TO
PART IV OTHER INFORMATION
On August 11, 1998 Sun Healthcare Group, Inc. (Sun) announced
earnings before accounting for its pooling of interests with Retirement
Care Associates, Inc. (RCA), certain charges and an extraordinary loss,
described below, of $0.38 per diluted share for the second quarter of 1998.
Accounting for RCA, the charges and the extraordinary loss, resulted in
a net loss for the quarter of $61.0 million or ($1.12) per diluted share.
Excluding the pooling with RCA, Sun reported net revenues for the
quarter ended June 30, 1998 of $753 million, a 68 percent increase over
total net revenues of $448 million reported for the second quarter of 1997.
Net earnings, before pooling, charges and an extraordinary loss, increased by
20 percent, from $17.8 million, or $0.36 per diluted share, in the
second quarter of 1997 to $21.3 million, or $0.38 per diluted share,
in the second quarter of 1998. For the six months ended June 30,
1998, Sun reported net revenues, before pooling, of $1.495 billion, a
77 percent increase over net revenues of $846 million for the six
months ended June 30, 1997.
Sun completed the RCA acquisition on June 30, 1998. The acquisition
has been accounted for as a pooling of interests and has resulted in
a restatement of Sun's financial results for all periods prior to the
merger date to include RCA.
For the three and six months ended June 30, 1998 RCA had a net
loss of $14.2 million and $27.3 million, respectively. In accounting
for the results of RCA, the periods prior to the quarter ended June
30, 1998 have been restated to reflect certain revenue adjustments
and operating expenses which had not been recorded as of the merger
date. The charges related to the merger, for the second quarter of 1998,
include $25.6 million for transaction and advisor fees, and transitional
costs related to consolidating operations.
To provide for the settlement of several legal and regulatory
matters, Sun recorded a charge of approximately $30.3 million
during the quarter for professional fees and settlement costs. The
charge includes known costs, negotiated settlement amounts and
anticipated settlement amounts. The charge provides for the
settlement of shareholder class action litigation outstanding against
RCA, final settlement of shareholder suits related to Sun's
acquisition of Golden Care, Inc., and other legal and regulatory
matters.
Sun recorded a $7.8 million charge for losses resulting
from the sale or anticipated sale of eight nursing homes and Sun's
Canadian outpatient clinics. A portion of the charge relates to a
decline in the exchange rates for Canadian currency relative to the to
the U.S. dollar.
Sun also recorded an extraordinary loss on early extinguishment
of debt of $10.1 million, net of income tax benefit. The loss resulted
from Sun's permanent reduction in the term loan portion of its bank credit
facility by $300 million, following the Sun's private placements of its
securities and the retirement of convertible debentures issued by a
subsidiary of RCA.
