HomeMy WebLinkAboutMaterials received after packet distributionMaterial(s) received after the Planning
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CITY OF NEWPORT BEACH
PLANNING DEPARTMENT
Patricia L. Temple, Director
August 25, 2006
Bill Swiney
Sober Living by the Sea
2811 Villa Way
Newport Beach, California 92663
RE: Sober Living by the Sea — 2809, 2811, 2813 Villa Way, Newport Beach
I am in receipt of your correspondence dated July 21, 2006. In your correspondence, you
discuss a proposal whereby Sober Living by the Sea ("Sober Living') would modify its use
of the property located at 2809 -2813 Villa Way ( "Sober Living Facility) so that it is no
longer designated as a social club, as defined by Newport Beach Municipal Code Section
20.05.040. i have carefully reviewed your proposal and have determined that Sober
Living would not be designated as a social club if it was operated in the following manner:
1. The "large conference room," designated on the floor plans submitted on
August 4, 2006 ( "Plans "), must be reduced so that the maximum occupancy for this room
is approximately 20 persons. Two cubicle type offices, the design of which will need to be
approved by the Planning Director in writing, will need to be constructed in the large
conference room.
2. The "small conference room," designated on the Plans, must be reduced so
that the maximum occupancy for this room is approximately 20 persons. A wall will need
to be constructed across the back of the small conference room, as indicated on the
marked up Plans which are attached hereto. The construction of the wall must comply
with all laws and regulations including, but not limited to, the Building Code.
3. A revised set of plans showing the wall in the small conference room and
the uses for each area of the property will need to be submitted to and approved in writing
by the Planning Director. After approval of the Plans, Sober Living must use each of the
areas for the designated use and obtain the Planning Director's approval in writing prior to
any change in use.
4. The area designated as the "covered patio," and other outdoor areas,
designated on the Plans may not be used by Sober Living clients except as provided
hereafter. Clients attending meetings scheduled at the Sober Living Facility may
assemble in the covered patio area, or other outdoor areas, 10 minutes prior to a meeting
and 10 minutes after a meeting. Between the hours of 7:00 a.m. and 8:30 a.m., clients
that attend meetings scheduled at the Sober Living Facility, may be transported by van to
any other location provided that they do not assemble in the covered patio area, or other
3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658 -8915
Telephone: (949) 644 -3200 • Fax: (949) 644 -3229 • www.city.newport- beach.ca.us
outdoor area, for more than 10 minutes after a meeting ( "Clients Transported by Van ").
Between the hours of 1:00 p.m. and 3:00 p.m., clients that Clients Transported by Van
may be dropped back off at the Sober Living Facility provided that they: (a) do not arrive
at the Sober Living Facility more than 10 minutes before their next scheduled meeting; or
(b) that they disperse within 10 minutes after being dropped off at the Sober Living
Facility.
5. An average of 10 meetings per week may be held at the Sober Living
Facility. However, no more than 12 meetings may be held in any one week and no more
than 20 people may attend any meeting. Up to two meetings may be held concurrently.
The basis for determining the average number of meetings will be based on a 4 week
period. On an ongoing basis, Sober Living will maintain records for the past 12 month
period that document the number of meetings held per week and the number of persons
in attendance. These records will be verified by a representative of Sober Living and will
be made available to the Planning Director upon request.
6. No client enrolled in any of the Sober Living programs that meet at the
Sober Living Facility will be allowed to operate a motor vehicle.
7. All large meetings, in excess of 20 persons, will be held at some other
location (any other locations used in the City shall be approved for large assembly use).
a. The hours of operation for conducting meetings and picking up
prescriptions at the Sober Living Facility will be from 6:30 a.m. to 8:30 p.m. Clients
picking up or consuming prescription medicine at the Sober Living Facility will be required
to leave the Sober Living Facility within 10 minutes after they have picked up or
consumed their medication.
9. Any nurse at the Sober Living Facility shall only be on site Monday through
Friday from 7:00 am to 5:00 pm and on Saturday from 8:00 am to noon. There shall be
no nurse at the Sober Living Facility on Sundays.
10. Two staff employees shall be allowed to remain at the Sober Living Facility
until 11:00 pm, 7 days a week to receive calls.
11. Except as provided herein, clients will not be allowed to assemble at the
Sober Living Facility for the purpose of being transported to any other location.
12. Sober Living will provide and maintain 13 off -site parking spaces at the lot
directly across the street from the Sober Living Facility and will park vehicles associated
with the Sober Living Facility at the lot rather than on City streets or public parking lots.
For instance, Sober Living currently uses six vans. These vans would be parked on the
lot rather than on City streets in the surrounding neighborhood or the City parking lot.
13. Sober Living will direct clients and ensure that clients riding bikes to the
Sober Living Facility access the facility by a route approved by the Planning Director in
writing.
14. Sober living will provide trash and cigarette disposal containers and inform
their clients that they are not to dispose of litter on City streets or adjoining properties.
In summary, if Sober Living operated in conformance with the foregoing conditions, it
would be my determination that Sober Living would not be defined as "social club ".
However, please be advised that it is my opinion that any deviation from the foregoing
conditions or any additional assembly at the Sober Living Facility would change the
.....,.......-category of use:
Please contact me at your earliest convenience so we can discuss a timeline for Sober
Living to implement the foregoing changes. Simply put, I cannot make a determination
that Sober Living is operating in conformance with the Municipal Code until the above -
referenced changes have been made. Further, as a condition to making my
determination that a use permit is no longer required, Sober Living will need to withdraw
its appeal without prejudice.
I appreciate your continuing assistance in this matter.
Very truly yours,
I
UGt,
Patricia L. Temple,
Planning Director for the
City of Newport Beach
cc: Aaron C. Harp, Assistant City Attorney
Dennis O'Neil, Esq.
Enclosure: Modified Plans
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Title 14. California Code of Regahadons
Chapter 3. Guidelines for Implementation of the
California Environmental Quality Act
Article 19. Categorical Exemptions
Sections 15300 to 15333
15300. Categorical Exemptions
Section 21084 of the Public Resources Code requires these Guidelines to include a list of classes of
projects which have been determined not to have a significant effect on the environment and which shall,
therefore, be exempt from the provisions of CEQA.
In response to that mandate, the Secretary for Resources has found that the following classes of projects
listed in this article do not have a significant effect on the environment, and they are declared to be
categorically exempt from the requirement for the preparation of environmental documents.
Note: Authority cited: Section 21083, Public Resources Code; Reference: Section 21084, Public
Resources Code.
15300.1. Relation to Ministerial Projects
Section 21080 of the Public Resources Code exempts from the application of CEQA those projects over
which public agencies exercise only ministerial authority. Since ministerial projects are already exempt,
categorical exemptions should be applied only where a project is not ministerial under a public agency's
statutes and ordinances. The inclusion of activities which may be ministerial within the classes and
examples contained in this article shall not be construed as a finding by the Secretary for Resources that
such an activity is discretionary.
Note: Authority cited: Section 21083, Public Resources Code; Reference: Section 21084, Public
Resources Code.
15300.2. Exceptions
(a) Location. Classes 3, 4, 5, 6, slid 11 are qualified by consideration of where the project is to be located
-- a project that is ordinarily insignificant in its impact on the environment may in a particularly sensitive
environment be significant. Therefore, these classes are considered to apply all instances, except where
the project may impact on an environmental resource of hazardous or critical concern where designated,
precisely mapped, and officially adopted pursuant to law by federal, state, or local agencies.
(b) Cumulative Impact. All exemptions for these classes are inapplicable when the cumulative impact of
successive projects of the same type in the same place, over time is significant.
(c) Significant Effect. A categorical exemption shall not be used for an activity where there is a reasonable
possibility that the activity will have a significant effect on the environment due to unusual circumstances.
(d) Scenic Highways. A categorical exemption shall not be used for a project which may result in damage
to scenic resources, including but not limited to, trees, historic buildings, rock outcroppings, or similar
resources, within a highway officially designated as a state scenic highway. This does not apply to
improvements which are required as mitigation by an adopted negative declaration or certified EIR.
(e) Hazardous Waste Sites. A categorical exemption shall not be used for a project located on a site which
is included on any list compiled pursuant to Section 65962.5 of the Government Code.
(f) Historical Resources. A categorical exemption shall not be used for a project which may cause a
substantial adverse change in the significance of a historical resource.
Note: Authority cited: Section 21083, Public Resources Code; References: Sections 21084 and 21084. 1,
Public Resources Code; Wildlife Alive v. Chickering (1971) 18 Cal.3d 190; League far Protection of
Oakland's Architectural and Historic Resources v. City of Oakland (1997) 52 Cal.AppAth 896; Citizens
for Responsible Development in West Hollywood v. City of West Hollywood (1995) 39 Ca1.App.4th 925;
City of Pasadena v. State ofCalifarnia (1993) 14 Ca1.App.4th 810; Association for the Protection etc.
Values v. City of Ukiah (1991) 2 Ca1.App.4th 720; and Baird v. County ofCon" Costa (1995) 32
Cal.App.4th 1464
15300.3. Revisions to List of Categorical Exemptions
A public agency may, at any time, request that a new class of categorical exemptions be added, or an
existing one amended or deleted. This request must be made in writing to the Office of Planning and
Research and shall contain detailed information to support the request. The granting of such request shall
be by amendment to these Guidelines.
Note: Authority cited: Section 21083, Public Resources Code; Reference: Section 21084, Public
Resources Code.
15300.4. Application By Public Agencies
Each public agency shall, in the course of establishing its own procedures, list those specific activities
which fall within each of the exempt classes, subject to the qualification that these lists must be consistent
with both the letter and the intent expressed in the classes. Public agencies may omit from their
implementing procedures classes and examples that do not apply to their activities, but they may not
require EIRs for projects described in the classes and examples in this article except under the provisions
of Section 15300.2.
Note: Authority cited: Section 21083, Public Resources Code; Reference: Section 21084, Public
Resources Code.
15301. Existing Facilities
Class 1 consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of
existing public or private structures, facilities, mechanical equipment, or topographical features, involving
negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The
types of "existing facilities" itemized below are not intended to be all- inclusive of the types of projects
which might fall within Class 1. The key consideration is whether the project involves negligible or no
expansion of an existing use.
Examples include but are not limited to
(a) Interior or exterior alterations involving such things as interior partitions, plumbing, and electrical
conveyances;
(b) Existing facilities of both investor and publicly -owned utilities used to provide electric power, natural
gas, sewerage, or other public utility services;
(c) Existing highways and streets, sidewalks, gutters, bicycle and pedestrian trails, and similar facilities
(this includes road grading for the purpose of public safety).
(d) Restoration or rehabilitation of deteriorated or damaged structures, facilities, or mechanical equipment
to meet current standards of public health and safety, unless it is determined that the damage was
substantial and resulted from an environmental hazard such as earthquake, landslide, or flood;
(e) Additions to existing structures provided that the addition will not result in an increase of more than:
(1) 50 percent of the floor area of the structures before the addition, or 2,500 square feet, whichever is
less; or
(2) 10,000 square feet if
(A) The project is in an area where all public services and facilities are available to allow for maximum
development permissible in the General Plan and
(B) The area in which the project is located is not environmentally sensitive.
(f) Addition of safety or health protection devices for use during construction of or in conjunction with
existing structures, facilities, or mechanical equipment, or topographical features including navigational
devices;
(g) New copy on existing on and off - premise signs;
(h) Maintenance of existing landscaping, native growth, and water supply reservoirs (excluding the use of
pesticides , as defined in Section 12753, Division 7, Chapter 2, Food and Agricultural Code);
(i) Maintenance of fish screens, fish ladders, wildlife habitat areas, artificial wildlife waterway devices,
streamflows, springs and waterholes, and stream channels (cleating of debris) to protect fish and wildlife
resources;
0) Fish stocking by the California Department of Fish and Game;
(k) Division of existing multiple family or single -family residences into common- interest ownership and
subdivision of existing commercial or industrial buildings, where no physical changes occur which are not
otherwise exempt;
(1) Demolition and removal of individual small structures listed in this subdivision;
(1) One single - family residence. In urbanized areas, up to three single - family residences may be
demolished under this exemption.
(2) A duplex or similar multifamily residential structure. In urbanized areas, this exemption applies to
duplexes and similar structures where not more than six dwelling units will be demolished.
(3) A store, motel, office, restaurant, or similar small commercial structure if designed for an occupant
load of 30 persons or less. In urbanized areas, the exemption also applies to the demolition of up to three
such commercial buildings on sites zoned for such use.
(4) Accessory (appurtenant) structures including garages, carports, patios, swimming pools, and fences.
(m) Minor repairs and alterations to existing dams and appurtenant structures under the supervision of the
Department of Water Resources.
(n) Conversion of a single family residence to office use.
(o) Installation, in an existing facility occupied by a medical waste generator, of a steam sterilization twit
for the treatment of medical waste generated by that facility provided that the unit is installed and
operated in accordance with the Medical Waste Management Act (Section 117600, et seq., of the Health
and Safety Code) and accepts no offsite waste.
(p) Use of a single - family residence as a small family day care home, as defined in Section 1596.78 of the
Health and Safety Code.
Note: Authority cited: Section 21083, Public Resources Code; References: Sections 21084, Public
Resources Code; Blown v. McCwk(1994) 26 Cal.App.4th 1307.
15302. Replacement or Reconstruction
Class 2 consists of replacement or reconstruction of existing structures and facilities where the new
structure will be located on the same site as the structure replaced and will have substantially the same
purpose and capacity as the structure replaced, including but not limited to:
(a) Replacement or reconstruction of existing schools and hospitals to provide earthquake resistant
structures which do not increase capacity more than 50 percent.
(b) Replacement of a commercial structure with a new structure of substantially the same size, purpose,
and capacity.
(c) Replacement or reconstruction of existing utility systems and/or facilities involving negligible or no
expansion of capacity.
(d) Conversion of overhead electric utility distribution system facilities to underground including
connection to existing overhead electric utility distribution lines where the surface is restored to the
condition existing prior to the undergrounding.
Note: Authority cited: Section 21083, Public Resources Code; Reference: Section 21084, Public
Resources Code.
15303. New Construction or Conversion of Small Structures
Class 3 consists of construction and location of limited numbers of new, small facilities or structures;
installation of small new equipment and facilities in small structures; and the conversion of existing small
structures from one use to another where only minor modifications are made in the exterior of the
structure. The numbers of structures described in this section are the maximum allowable on any legal
parcel. Examples of this exemption include, but are not limited to:
(a) One single-family residence, or a second dwelling unit in a residential zone. In urbanized areas, up to
November 19, 2008
Mr. Barry Eaton
Secretary
Planning Commission
City of Newport Beach, 92658
Dear Mr. Eaton;
I will not be able to attend the public meeting regarding project PA2009 -199, activity
DA2008 -005 on November 20, 2008. Therefore I am writing this letter to weigh in on
the subject.
I own rental property at 128 45`h street. One unit is rented year around the other is a
summer / winter rental. In the winter we rent to students. hi the summer we rent the unit
as to vacationers by the week. Newport Beach is a destination resort area. We also
reserve the unit for our family each year.
I am opposed to any Sober Living by the Sea residences in Newport Beach. The density
of people in each unit including the racks of bicycles on the patios is unsightly and not
conducive to vacation rentals.
I have been following the progression of events on this matter. It seems that the City
abandoned its law suite for fear of it being unconstitutional.
I would encourage you to explore avenues to completely eliminate or limit very severely
the Sober Living residences in Newport Beach.
Very Truly Yours;
�S
Bradford S. Bowman
01P THE BOWMAN GROUP
20555 DEVONSHIRE STREET PMB 248 CHATSWORTH, CA 91311 818/3462111 FAX 818/3462333
www.thebowmangroup.com
Varin, Ginger
From:
Laura Curran [lauracurran@mac.com]
Sent:
Wednesday, November 19, 2008 8:53 PM
To:
Robert Hawkins; Kiff, Dave; Michael Toerge
Cc:
Varin, Ginger
Subject:
Comment on proposed Zoning Agreement with Sober Living by the Sea
Dear Planning Commission:
I am writing to express my concern regarding the proposed Zoning Agreement with Sober Living by the Sea. I
cannot attend the 11/20/2008 Planning Commission meeting, and ask that this letter be provided to all
Commissioners (I could not fmd their email addresses on line.)
This agreement circumvents the ordinance which the residents and CCNB spent many hours of research
& meeting time, as well as personal $, to help City staff & electeds create. Residents and businesses will
be denied the Hearing process which is a major part of the Ordinance.
This agreement and implied zoning for SLBTS, a large, 156 -bed Commercial Business is not appropriate
and circumvents the spirit of the General Plan, as SLBTS will be zoned in for the long term (25- years),
and considered consistent with the General Plan. This Plan was just updated, and new codes created,
reflecting 1000s of hours of work by residents. It is disheartening to see this work go unrecognized and
the residents' voice ignored.
Other Group Home operators will expect a similar agreement, and ask why (with reason) SLBTS
gets priority for bed allocation over other Operators. This essentially rewards SLBTS for operating
so many beds and impacting the community so severely for so many years.
The REST of Newport Beach: The report calls for a bed cap of 48 in the Rest of Newport Beach. How was
this # determined, what #s would this apply to?
Thankyou
Laura Curran
Varin, Ginger
From: Darleen Kuhlmann (darleenkuhl@yahoo.00m]
Sent: Tuesday, November 18, 2008 7:59 AM
To: Varin, Ginger
Subject: Public Notice
Planning Commission:
While I was in Coloma visiting with my brother and sister -in -law, Bob
& Marian Brockman who own property as I also do here in Newport Beach they
showed me a Public Notice re: the Development Agreement with Sober
Living By the Sea that they had received. We did not receive this Notice as did not our
neighbors. As this Agreement effects all of Newport Beach I believe that all the
Property Owners here should have received it. The Planning Commission should
postpone this item this Thurs. until all the property owners in Newport have been notified by mail regarding this
very important notice.
Darleen & Ken Kuhlmann
213 39th St.
Newport Beach, Ca 92663
State of California Department ofAleohol and Drug Programs
Licensed Residential Facilities andlor
Certified Alcohol and Drug Programs
As of: 11/06/2007 Orange County
Program Name: MAINSTREAM GROUP Record ID: 3ON84EN
Legal Name: THE MAINSTREAM GROUP, INC. Service Type: RES
Address: 343 AVENIDA VAQUERO Resident Capacity: 6
City, State: SAN Cr EMEInE, CA 92672 Total Occupancy: 6
Phone #: (949)366 -9210 Fax #: (949)498 -5706 Target Population: 13
Expiration Date 12131/2008
Program Name:
THE MAINSTREAM GROUP, INC.
Record ID:
300094KN
Legal Name:
THE MAINSTREAM GROUP, INC.
Service Type:
RES
Address:
26920 CALLE DELORES, UNIT B
Resident Capacity:
6
City, State:
CAPISTRANO BEACH, :CA -92624
Total Occupancy:
6
Phone #:
(949)5669210 Fax #: (949)498 -5706
Target Population:
12
Expiration Date
01/3112008
Program Name: THE MAINSTREAM GROUP, INC. Record ID: 300084IN
Legal Name: THE MAINSTREAM GROUP, INC. Service Type: RES -DETOX
Address. 26884 AVENIDA LAS PALMAS Resident Capacity: 6
City, State: CAPISTRANO BEACH, CA 92624 Total Occupancy: 6
Phone #: (949)3669210 Fax #: (949)498 -5706 Target Population: 1.1
Expiration Date 1213112007
Program Name:
THE MAINSTREAM GROUP
Record ID:
300094IN
Legal Name:
THE MAINSTREAM GROUP, INC.
Service Type:
RES
Address:
26920 CALLE DOLORES, UNIT A
Resident Capacity:
6
City, State:
CAPISTRANO BEACH, CA 92624
Total Occupancy:
6
Phone #:
(949)366 -9210 Fax #: (949)498 -5706
Target Population:
12
Expiration Date
10/31/2007
Program Name: THE NEW BEGINNING Record ID: 300120AN
Legal Name: THE NEW BEGINNING FELLOWSHIP CENTER Service Type: RES
Address: 2024 EAST SYCAMORE AVENUE Resident Capacity: 6
City, State: ORANGE, CA 92867 Total Occupancy: 6
Phone #: (714 )839 -5305 Fax #: (714)839 -5501 Target Population: 1.2
Expiration Date 06/30/2009
Program Name: NEW BEGINNING FELLOWSHIP CENTER
Record ID:
30012OBN
Legal Name: THE NEW BEGINNING FELLOWSHIP CENTER
Service Type:
NON
Address: 16581 BR00%HURST
Resident Capacity:
0
City, State: FOUNTAIN VALLEY, CA 92706
Total Occupancy.
0
Phone #: (714)839 -2515 Fax #: (714)839 -5501
Target Population:
1.1
6
Expiration Date
03/31/2009
Program Name:
THE SHORES TREATMENT AND RECOVERY
Record ID:
300175AP
Legal Name:
THE SHORES TREATMENT AND RECOVERY
Service Type:
RES
Address:
223 LUGONIA STREET
Resident Capacity:
6
City, State:
NEWPORT BEACH, CA 92663
ecaP cy:
Total Occupancy;
6
Phone #:
(800)637 -5254 Fax #: (949)722 -8955
Target Population:
1.1
Expiration Date
11/30/2007
State of California Department of Alcohol and Drug Programs
Licensed Residential Facilities and/or
Certified Alcohol and Drug Programs
As of 11/06/2007 Orange County
Program Name: MAINSTREAM GROUP Record ID: 300084EN
Legal Name: THE MAINSTREAM GROUP, INC. Service Type: RES
Address: 343 AVENIDA VAQUERO Resident Capacity. 6
City, State: SAN CLEMENTE, CA 92672 Total Occupancy: 6
Phone #: (949)366 -9210 Fax #: (949)198 -5706 Target Population: 1.3
Expiration Date 12/3112008
Program Name:
THE MAINSTREAM. GROUP, INC.
Record ID:
300094KN
Legal Name:
THE MAINSTREAM GROUP, INC.
Service Type:
RES
Address:
26920 CALLE DELORES, UNIT B
Resident Capacity:
6
City, State:
CAPISTRANO BEACH, CA 92624
Total Occupancy:
6
Phone #:
(949)366 -9210 Fax #: (949)498 -5706
Target Population:
1.2
Expiration Date
01/31/2008
Program Name:
THE MAINSTREAM GROUP, INC.
Record ID:
300094JN
Legal Name:
THE MAINSTREAM GROUP, INC.
Service Type:
RES -DETOX
Address:
26884 AVENIDA LAS PALMAS
Resident Capacity:
6
City,.State:-
CAPISTRANOBEACILCA92624
Total Occupancy:
6
Phone #:
(949)366 -9210 Fax #: (949)198 -5706
Target Population:
Ll
Expiration Date
12/31/2007
Program Name:
THE MAINSTREAM GROUP
Record ID:
300084IN
Legal Name:
THE MAINSTREAM GROUP, INC.
Service Type:
RES
Address:
26920 CALLE DOLORES, UNIT A
Resident Capacity:
6
City, State:
CAPISTRANO BEACH, CA 92624
Total Occupancy:
6
Phone #:
(949)366 -9210 Fax #: (949)498 -5706
Target Population:
1.2
Expiration Date
10/31/2007
Program Name: THE NEW BEGINNING Record ID: 300120AN
Legal Name: THE NEW BEGINNING FELLOWSHIP CENTER Service Type: RES
Address: M24 EAST SYCAMORE AVENM Resident Capacity: 6
City, State: ORANGE, CA 92867 Total Occupancy. 6
Phone #: (714)839 -5305 Fax #: (714)839 -5501 Target Population: 1.2
Expiration Date 06 /30/2009
Program Name:
NEW BEGBNING FELLOWSHIP CENTER
Record ID:
30012OBN
Legal Name:
THE NEW BEGINNING FELLOWSHIP CENTER
Service Type:
NON
Address:
16581 BROOKHURST
Resident Capacity:.
0
City, State:
FOUNTAIN VALLEY, CA 92706
Total Occupancy:
0
Phone #:
(714)839 -2515 Fax #: (714)839 -5501
Target Population:
1.1
Expiration Date
03/31/2009
Program Name: THE SHORES TREATMENT AND RECOVERY Record ID: 300175AP
Legal Name: THE SHORES TREATMENT AND RECOVERY Service Type:. RES
Address: 223 LUGONIA STREET Resident Capacity: 6
City, State: NEWPORT BEACH, CA 92663 Total Occupancy: 6
Phone #: (800)637 -5254 Fax #: (949)722 -8955 Target Population: 1.1
Expiration Date 11/30/2007
robert rush
Subject: September 20, 2006 Sober Living by the Sea purchased by CRC
The Orange County Register
OC addiction center bought out
Sober Living by the Sea purchased by CRC, nation's biggest chain of treatment centers.
Wednesday, September 20, 2006
Sober Living by the Sea, a 200 -bed addiction treatment center, is being purchased by CRC Health
Group, a Cupertino -based company that owns more than 90 addiction and health centers nationally.
Terms of the deal were not disclosed. Sober Living was founded in 1984 as a six -bed, in -home
treatment center. The company now offers a variety of programs that help people with dr1f, ((lid
1Y! yr '.) iau ryc a,,tr y,aS ' /7iPlovk ,Ii'lw0 Via(,
The founders of Sober Living, Carl and Barbara Mosen, are retiring. Day -to -day management is not
expected to change.
i
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3
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5
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9
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19
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21
22
23
24
25
26
State
Licensed
................
Per Kiff
3-07
# of Licensed (or ALL Beds) Recovery Beds 21,007
# of Licensed (or ALL Beds) Recovery Beds POST SLBTS Deal
OC
Licensed
.................
Per Kiff
3 -07
1,495
Newport
Licensed
................
Per Kiff
3 -07
219
Newport Beach
ALL Lic \ Unlic
..................
"Kill Method"
7 -08
371
419
WNB \Lido \Penn
ALL Lic \ Unlic
..............
"Kill Method"
7 -08
297
297
Population
2,988,072
83,000
83,000
16,000
% of Persons Who Abuse Alcohol \Drugs
10.10%
10.10%
10.10%
10.10%
# of Persons Who Abuse Acohol\Drugs
301,795
8,383
8,383
1,616
% of Persons Seeking Treatment **
6.00%
6.00%
6.00%
6.00%
# of Persons Seeking Treatment
18,108
503
356
97
Bed Days Needed assuming 70 -day stay
1,267,540
35,209
24,920
6,787
# of Licensed (or ALL Beds) Recovery Beds
1,495
219
371
297
Bed Days /Year Available assuming 365 days per bed
545,675
79,935
135,415
108,405
%of WNB \Lido \Penn Population vs All Newport Beach (16000/83000)
19.3%
• of Recovery Beds in WNB \Lido \Penn vs All Newport Beach (297/371)
80.1%
" 11 1. After SLBTS Deal(297/419)
70.9%
Bed Days Under or (Over) - Concentration
721,865
(44,726)
(110,495)
(101,618)
Under or (Over) - Concentration "Muliplier"
Before SLBTS Deal
0.6
(1.3)
(4.4)
(15.0)
After SLBTS Deal
(5.1)
(15.0)
** 2002 National Survey On Drug Use & Health -- US DHHS
CRC Health Corporation Reports Operating Results for the Third Quart ... ne Months Ended September 30, 2008: Financial News - Yahoo! Finance 11120/08 8:24 AM
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Press Release Source: CRC Health Corporation
CRC Health Corporation Reports Operating Results for the
Third Quarter and Nine Months Ended September 30, 2008
Friday November 14, 5:43 pm ET
CUPERTINO, Calif.—(BUSINESS WIRE) —CRC Health Corporation (`CRC" or the `Company "), a leading
provider of substance abuse treatment and youth services through its wholly -owned consolidated
subsidiaries, announced its results for the third quark and nine months ended September 30, 2008,
reflecting contributions from acquisitions and continued organic growth.
ADVERTISEMENT The Company has three operating divisions: recovery
division, youth division, and healthy living division.
The recovery division provides substance abuse and
behavioral disorder treatment services through
residential treatment facilities and outpatient treatment
clinics. The youth division provides educational
programs for underachieving young people through
residential schools and wilderness programs. The
healthy living division provides adolescent and adult
weight management programs and treatment services
for eating disorders. For segment reporting purposes,
the Company reports in two segments: recovery and
youth. The healthy living division is combined with
corporate/other as it does not meet the quantitative
threshold for separate segment reporting.
Comparative financial results and selected statistics
for the third quarter and nine months ended
September 30, 2008 have been presented to conform to the Company's new organizational structure
which became effective on October 1, 2007.
At September 30, 2008, the Company concluded that a portion of its youth division was impaired. The
Company believes that there will be a decrease in expected future cash flows in the youth division based
upon current economic conditions including the lack of availability of student loans, credit for our clients,
and other factors. As a result, for the quarter and nine months ended September 30, 2008, the Company
recognized a $142.2 million non -cash impairment charge for goodwill and a $23.9 million non -cash
impairment charge related to asset impairments.
For the quarter ended September 30, 2008, consolidated adjusted pro forma net revenue increased $0.7
million, or 0.6%, to $127.0 million from $126.3 million during the same period in 2007. Third quarter 2008
adjusted pro forma EBITDA increases of $3.5 million, or 2.8 %, and $3.4 million, or 13.3 %, compared to
the quarter ended June 30, 2008.
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CRC Health Corporation Reports Operating Results for the Third Quart ... ne Months Ended September 30, 2008: Finandal News - Yahool Finance 11/20/08 8:24 AM
months ended September 30. 2008 adjusted pro forma EBITDA of $75.1 million reflects a decrease of
$10.9 million. or 12.7 %. from the same period of 2007.
Historical Financial Results
Third Quarter and Nine Months Ended September 30, 2008 Consolidated Financial Results:
Recovery Division:
Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007
• Net revenue increased $6.3 million, or 8.5 %, to $80 million for the quarter from $73.7 million from
the comparable prior -year quarter. Same- faplity net revenue increased $4.7 ntiilion, or 6.5 %, to
$76.8 million for the quarter from $72.1 million from the comparable prior -year quarter. The
increase in same - facility net revenue was driven by a 2.6% increase in census and a 3.7%
increase in rates.
• Adjusted pro forma revenue increased $4.7 million, or 6.1 %, to $80.6 million for the quarter from
$75.9 million from the comparable prior -year quarter. Adjusted pro fora EBITDA increased $2.3
million, or 9.4 %, to $26.6 million for the quarter from $24.3 million from the comparable prior -year
quarter.
• Our recovery division incurred an increase of $3.5 million In operating expenses. Recovery
division, same - facility increase In operating expenses was $1.7 million, or 3.8 %, acquisition-
related increase was $1.1 million, and startup related increases were $0.7 million.
Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007
• Net revenue increased $19.8 million, or 9.2 %, to $236.0 million for the nine months ended
September 30, 2008 from $2162 rnillion from the comparable period. Same- faaGty net revenue
increased $14.2 million, or 6.7 %, to $227.5 million for the nine months from $213.3 million from
the comparable prior -year period. The increase in same - facility, net revenue was driven by a 3.1%
increase in census and a 3.4% increase in rates.
• Adjusted pro forma revenue increased $13.9 million, or 6.2 %, to $239.1 million for the nine
months ended September 30, 2008 from $225.2 million from the comparable period in the prior
year. Adjusted pro forma EBITDA increased $3.3 million, or 4.5 %, to $75.7 million for the nine
months from $72.4 million from the comparable prior-year period.
• Our recovery division incurred an increase of $14.5 million, or 9.3 %, in operating expenses.
Recovery division, same - facility increase in operating expenses was $9.9 million, or 7.4 %, and
acquisition and startup- related increase was $4.5 million.
Youth Division
Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007
• Net revenue decreased $3.5 million, or 8.7 %, to $36.7 million for the quarter from $40.2 million
from the comparable prior -year quarter. Same- facilty net revenue decreased $4.4 million, or
11.5%, to $33.8 million for the quarter from $382 million from the comparable prior-year quarter.
The decrease in same- facility net revenue was driven by a 13.5% decrease in census partially
offset by a 3.9% increase in rates. The decrease in census was significantly impacted by a single
therapeutic boarding school that experienced a significant increase in student graduations and
other departures during the second half of 2007.
• Our youth division incurred an increase of $165.1 million in operating expense, or 469.4 %, mostly
related to a $142.2 million non -cash impairment charge for goodwill as well as for a $23.9 million
non -cash impairment charge related to asset Impairments partially offset by reductions in general
and administrative expenses. Excluding the impairment charges, youth division operating
expenses decreased by $1.0 million compared to the sane period in 2007.
• Adjusted pro forma revenue decreased $3.5 million, or 8.8 %, to $36.7 million for the quarter from
$40.2 million from the comparable prior -year quarter. Adjusted pro fora EBITDA decreased $3.6
million, or 41.9%, to $5.1 million for the quarter from $8.7 million from the comparable prior -year
quarter.
Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007
h"p: // biz. yahoo. com/ bw/ 081114/200811140060ll.htmi ?.v ®I Page 2 of 8
CRC Heath Corporation Reports Operating Results for the Third quart ... ne Months Ended September 30, 2008: Financial News - Yahoo! Finance
ip Net revenue decreased $6.9 million, or 6.1 %, to $105.8 million for the nine months ended
September 30, 2008 from $112.7 million from the comparable prior -year period. Same4a
in
significant Increase in student graduations during the second half of 2007 and has yet to recover
the lost census.
• Our youth division incurred an operating expense increase of $164.8 million, or 160.6% due to
Impairment charges of $142.2 million for goodwill and $23.9 million for long -11ved assets.
Excluding the impairment charges, youth division operating expenses decreased by $1.2 million,
or 1.2 %, compared to the same period in 2007.
Corporate/Other.
Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007
• Net revenue increased $1.3 million, or 15.4 %, to $9.7 million for the quarter from $8.4 million from
the comparable prior -year quarter. Operating expenses increased $4.1 million or 35.6% in
corp/other.
• Adjusted pro forma revenue decreased $0.4 million, or 4.0 %, to $9.7 million for the quarter from
$10.1 million from the comparable prior -year quarter. Adjusted pro forma EBITDA decreased $1.6
million, or 131.1 %, to a loss of $2.8 million for the quarter from a loss of $1.2 million from the
comparable prior -year quarter. The increase in the loss is attributable to increases in start-up
losses in both eating disorder and weight management programs, increased operating expenses
associated with the growth in our adolescent weight management summer camps, and increases
in corporate administrative expenses.
Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007
. Net revenue increased $5.8 million, or 33.4 %, to $23.0 million for the nine months ended
September 30, 2008 from $17.2 million from the comparable prior-year period. Operating
expenses increased $11.5 million or 36.1% in corp/other.
Adjusted pro forma revenue increased $0.6 million, or 2.7 %, to $23.0 million for the nine months
from $22.4 million from the comparable period in the prior year. Adjusted pro forma EBITDA
decreased $4.1 million, or 50.4 %, to a loss of $12.1 million for the nine months from a loss of $8.0
million from the comparable period in the prior year. The increase in the loss is attributable to
increases in start-up losses in both eating disorder and weight management programs, increased
operating expenses associated with the growth in our adolescent weight management summer
camps, and increases in corporate administrative expenses.
The unaudited adjusted pro forma revenue and EBITDA for the periods presented give effect to all
acquisitions as 0 they had occurred on January 1, 2007. The pro forma adjustments are based upon
available information and certain assumptions that CRC believes are reasonable. The pro forma
adjusted EBITDA is for informational purposes only and does not purport to represent what CRC's result
of operations or financial position would have been if the acquisitions in 2007 occurred at any date, nor
does such information purport to project the results of operations for any future period.
Net income as a percentage of consolidated net revenue for the three months ended September 30,
2008 was - 110.7% compared to 3.8% for the same period in 2007. For the nine months
ended September 30, 2008, net income as a percentage of consolidated net revenue was -37.7%
compared to 2.2% for the comparable period in 2007. The decrease in net income percentage was due
to increased operating expenses related to impairment charges for the youth division. Excluding youth
division impairment charges, net income as a percentage of consolidated net revenue
increased by 20.7% and 7.8 %, for the three and nine months ended September 30, 2008 compared to
the same period in 2007. The increases are due to acquisitions as well as by some decreases in interest
expenses and lower expenses related to our interest rate swaps.
11/20/08 8:24 AM
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CRC Health Corporation Reports Operating Results For the Third Quart ... ne Months Ended September 30, 2008: Financial News - Yahoo! Finance
Excluding the impairment charges for the youth division and related tax effects, consolidated net income
increased by $21.6 million and $20.9 million respectively for the three months and nine months ended
September 30, 2008 compared to the same periods in 2007. In order to supplement its condensed
consolidated financial statements presented in accordance with GAAP, CRC is providing a summary to
show the computation of EBITDA, as well as adjusted pro forma EBITDA. Adjusted pro forma EBITDA
takes into account certain adjustments which are excluded from EBITDA for purposes of various
covenants in the indenture governing CRC's 10IY4% senior subordinated notes due 2016 and its senior
secured credit facility, as amended to date. CRC believes that the adjusted pro forma EBITDA
information presented provides useful information to both management and investors concerning its
ability to meet its future debt obligations and to comply with certain covenants in its borrowing
arrangements that are tied to these measures. CRC also believes that including the effect of these items
allows management and investors to better compare CRC's financial performance from period -to- period,
and to better compare CRC's financial performance with that of its competitors. The presentation of this
additional information is not meant to be considered in isolation of, or as a substitute for, results
prepared in accordance with GAAP.
CRC HEALTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
(In thousands, except share amounts)
September 30, December 31,
2008 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $
Accounts receivable, net of allowance for doubtful accounts of $5,935
in 2008 and $6,901 in 2007
Prepaid expenses
Other current assets
Income taxes receivable
Deferred income taxes
Total current assets
PROPERTY AND EQUIPMENT -Net
GOODWILL
INTANGIBLE ASSETS -Net
OTHER ASSETS
TOTAL ASSETS
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable
Accrued liabilities
Current portion of long -term debt
Other current liabilities
Income taxes payable
Total current liabilities
LONG -TERM DEBT -Less current portion
OTHER LIABILITIES
DEFERRED INCOME TAXES
Total liabilities
COMMITMENTS AND CONTINGENCIES (Note 12)
MINORITY INTEREST
STOCKHOLDER'S EQUITY:
Common stock, $0.001 par value - -1,000 shares authorized; 1,000
shares issued and outstanding at September 30, 2008 and December
31, 2007
Additional paid -in capital
(Accumulated deficit) retained earnings
3,014 $
5,118
31,689
31;910
6,404
7,544
1,531
2,120
6,599
49,237
129,369
602,854
361,750
21,831
$ 1,165,041
193
6,599
53,484
122,937
730,684
390,388
24,798
$ 1,322,291
$ 7,909 $
7,014
29,186
37,582
9,014
35,603
24,582
29,824
6,908
-
77,599
110,023
648,910
612,764
6,039
7,514
121,585
145,867
854,133" 876,168
317 374
442,150 438,605
(130,559) 7,141
11120/08 8:24 AM
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CRC Health Corporation Reports Operating Results for the Third Quart ... ne Months Ended September 30, 2008: Financial News - Yahoo! Finance
Accumulated other comprehensive (loss) income (1,000) -
Total stockholder's equity 310,591 445,749
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,165,041 $ 1,322,291
CRC HEALTH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(In thousands)
NET REVENUE:
Net client service revenue
Other revenue
Total net revenue
OPERATING EXPENSES:
Salaries and benefits
Supplies, facilities and other operating costs
Provision for doubtful accounts
Depreciation and amortization
Asset impairments
Impairment
ng expenses
(LOSS) INCOME FROM OPERATIONS
INTEREST EXPENSE, NET
OTHER (EXPENSE) INCOME
(LOSS) INCOME BEFORE INCOME TAXES
INCOME TAX (BENEFIT) EXPENSE
MINORITY INTEREST IN INCOME (LOSS) OF
SUBSIDIARIES
NET (LOSS) INCOME
Three
Three
Nine
Nine
Months
Months
Months
Months
Ended
Ended
Ended
Ended
September
September
September
September
30,
30,
30,
30,
2008
2007
2008
2007
$ 124,278 $ 120,623 $ 358,646 $ 341,489
2,146
1,746
6,126
4,603
126,424
122,369
364,772
346,092
61,429
55,443
183,959
167,131
36,926
36,557
107,582
100,677
1,715
2,036
5,010
5,064
5,929
5,397
17,343
16,310
23,880
-
23,880
-
142,238
-
142,238
-
272,117
99,433
480,012
289,182
(145,693)
22,936
(115,240)
56,910
(13,125)
(15,169)
(40,148)
(44,971)
(37) (1,217)
(69) 800
(158,855)
6,550
(155,457)
11,139
(19,222)
1,502
(17,699)
3,375
301
427
(57)
275
$ (139,934) $
4,621
1 137,701 ) $
7,489
Reconciliation of GAAP "Cash Flows Provided By Operating Activities" to non -GAAP "EBITOA
from
continuing operations" and Reconciliation of non -GAAP "EBITOA from continuing operations to
GAAP Net (Loss) Income"
(In thousands) (unaudited)
11/20/08 8:24 AM
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Three Months
Three Months
Nine Months
Nine Months
Ended
Ended
Ended
Ended
September 30,
September 30,
September 30,
September 30,
2008
2007
2008
2007
Cash flows provided by (used in)
operating activiBes
$ 259
$ (2,857)
$ 21,090
$ 18,119
on of debt discount an
other financing costs
(1,132)
(1,108)
(3,357)
(3,356)
Stock -based compensation
(1,544)
(1,060)
(3,847)
(3,203)
Deferred income taxes
25,645
(4,617)
26,674
(3,747)
Net effect of changes in non-
current net assets
(207)
(422)
(129)
(832)
Goodwill impairment
(142,238)
-
(142,238)
-
11/20/08 8:24 AM
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CRC Health Corporation Reports Operating Results for the Third Quart ... ne Months Ended September 30, 2008: Financial News - Yahoo! Finance
Asset impairment (23,880) - (23,880) -
Net effect of working capital
changes 9,092 20,082 5,329 16,818
Interest expense and other
financing costs 13,125 15,169 40,148 44,971
Income tax (benefit) expense (19,222) 1,502 (17,699) 3,375
EBITDA from continuing operations (140,102) 26,689 (97,909} 72,145
Interest expense and otter
financing casts (13,125) (15,169) (40,148) (44,971)
Income tax expense (benefit) 19,222 (1,502) 17,699 (3,375)
Depreciation and amortization (5,929) (5,397) (17,343} (16,310}
Net(loss)income $ (139,934) $ 4,621 $ (137,701) $ 7,489
Reconciliation of non -GAAP "EBITDA from continuing operations" to non -GAAP "Adjusted pro
forma EBITDA"
(in thousands) (unaudited)
Three Months
Three Mortths
Nine Months
Nine Months
Ended
Ended
Ended
Ended
September 30,
September 30,
September 30,
September 30,
2008
2007
2008
2007
EBITDA from continuing operations $ (140,102)
$ 26,689
$ (97,909)
$ 72,145
Pre - acquisition Adjusted EBITDA
from other acquisitions in 2007
Pre - acquisition Adjusted EBITDA
from other acquisitions in 2008
Expenses incurred related to the
Transactions
Unrecognized proft on deferred
revenue
Asset impairments
Impairment of goodwill
Stock -based compensation
expense
Foreign exchange translation
(Gain) loss on interest rate swap
Loss (gain) on fixed asset disposal
Management fees to Sponsor
Transaction expense
Write -off of cancelled aoquisitons
Minority interest in loss of
subsidiaries
Franchise taxes
Write-off of miscellaneous accounts
(non -cash)
Adjusted Pro forma EBITDA
CRC Health Corporation
Selected Statistics
-
749
-
3,175
236
335
1,083
1,433
3
-
3
13
108
13
2,695
23,880
-
23,880
-
142,238
-
142,238
-
1,543
1,061
3,847
3,204
35
-
35
-
1
1,206
34
744
(20)
-
(21)
(10)
630
500
1,630
1,532
-
723
-
723
116
13
240
32
301
427
(57)
275
40
(44)
128
102
- - 8 24
$ 28,811 $ 31,770 $ 75,149 $ 86,077
Recovery Division:
Number of inpatient facilities - end of period
Number of outpatient facilities - end of period
Number of comprehensive treatment clinics (CTC) - end of period
Available beds - end of period
Nine Months
Ended
September 30,
2008
30
15
64
1,909
Nine Mordhe
Ended
September 30,
2007
27
14
61
1,801
11/20/08 8:24 AM
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CRC HeaRh Corporation Reports Operating Results for the Third Quart ... ne Months Ended September 30.2008: Financial News - Yahoo! Finance
Patentdays - Inpatient
417,918
394,412
Occupancy rate
80.9%
83.5%
Net revenue per patient day - Inpatient
$ 367.93 $
353.82
Patient days - CTC
7,130,834
6,864,215
Net revenue per patient day - CTC
$ 11.53 $
11.18
Youth Division:
Number of facilities - end of period
29
29
Patient days
349,582
407,687
Net revenge per patient day
$ 302.63 $
282.83
Healthy ! Wing Division:
Number off allies - end of period 17 13
Patient days 82,216 63,819
Net revenue per patient day $ 276.60 $ 263.94
Conference Call
CRC will host a conference call, open to all interested parties, on Monday, November 17, 2008
beginning at 10:00 a.m. Pacific Daylight Time (1 :00 p.m. Eastern Daylight Time). The number to call
within the United States is (877) 502 -9276. Participants outside the United States should call (913) 905-
1086. The conference ID is 6074992. A replay of the conference call will be available starting three
hours after the completion of the call until 2:59 p.m. Pacific Daylight Time Sunday, November 23, 2008.
The replay number for callers within the United States is (888) 203 -1112 or (719) 457 -0820 from outside
the United States and the conference ID for all callers is 6074992.
Forward- Looking Statements
This press release includes or may include "forward - looking statements." Al statements included herein,
other than statements of historical fad, may constitute forward- looking statements. Although CRC
believes that the expectations reflected in such forward - looking statements are reasonable, it can give
no assurance that such expectations will prove to be correct Important factors that could cause actual
results to differ materially from those expressed or implied by such forward- looking statements include,
among others, the following factors: changes in government reimbursement for CRC's services; CRC's
substantial indebtedness; changes in applicable regulations or a government investigation or assertion
Shat CRC has violated applicable regulations; attempts by local residents to force our closure or
relocation; the potentially dificuS, unsuccessful or costly integration of recently acquired operations and
future acquisitions; the potentially difficult, unsuccessful or costly opening and operating of new
treatment facilities; the possibility that commercial payors for CRC's services may undertake future cost
containment initiatives; the limited number of national suppliers of methadone used in CRC's outpatient
treatment clinics; the failure to maintain established relationships or cultivate new relationships with
patient referral sources; shortages in qualified healthcare workers; natural disasters such as hurricanes,
earthquakes and floods; competition that limits CRC's ability to grow; the potentially costly
Implementation of new infomtation systems to comply with federal and state Initiatives relating to patent
privacy, security of medical information and electronic transactions; the potentially costly implementation
of accounting and other management systems and resources in response to financial reporting and other
requirements; the loss of key members of CRC's management; claims asserted against CRC or dick of
adequate available insurance; and cartsin restrictive covenants in CRC's debt documents.
Contact:
CRC Health Corporation
Kevin Hogge, 877- 272 -8668
Chief Financial Officer
Source: CRC Health Corporation
10001 'k
11/20/08 8:24 AM
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CRC Health Corporation Reports Operating Results for the Third Quart ... ne Months Ended September 30, 2008: Financial News - Yabool Finance 11/20/08 8:24 AM
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