EX-99.1 2 l86858aex99-1.txt EXHIBIT 99.1 1 Exhibit 99.1 [RESCARE LOGO] NEWS RELEASE ResCare o 10140 Linn Station Road o Louisville, Kentucky 40223-3813 Phone: 502.394.2100 o www.rescare.com --------------- Contacts: Nel Taylor Burton W. Rice, CFA Chief Communication Officer Executive Vice President ResCare Corporate Communications Inc. 502/394-2357 615/254-3376 RESCARE REPORTS 2000 EARNINGS OF $0.68 PER SHARE BEFORE SPECIAL CHARGES LOUISVILLE, KY. (MAR. 5, 2001) -- ResCare (Nasdaq/NM: RSCR), the nation's leading provider of services to persons with mental retardation and developmental disabilities and youth with special needs, today announced earnings before special charges for the year ended December 31, 2000 of $16.5 million, or $0.68 per diluted share. Revenues for 2000 increased to a record $865.8 million compared with $827.0 million in 1999. The special charges during the year included charges related to the Company's restructuring plan, write-off of costs associated with the terminated management-led buyout, a legal settlement and a loss on the sale-leaseback of certain assets. Net income for 2000 was $14.2 million, or $0.58 per diluted share, compared with income from continuing operations of $9.7 million, or $0.39 per diluted share, for the prior year. Revenues for the three months ended December 31, 2000 rose to new fourth-quarter record of $223.3 million compared with $211.9 million in the year-earlier period. Excluding special charges, which include a legal settlement and loss on the sale-leaseback of certain assets, the Company reported earnings of $2.6 million, or $0.11 per diluted share, for the fourth quarter. Net income for the fourth quarter was $2.3 million, or $0.10 per diluted share, compared with $1.6 million, or $0.06 per diluted share, for the prior year. "We are making progress in addressing the issues that are affecting our earnings performance; but as we expected, the benefits of our efforts are not going to be apparent immediately," remarked Ronald G. Geary, chairman, president and chief executive officer. "We were aided in the fourth quarter from the restructuring actions that we implemented in the third quarter to reduce expenses, but we still faced significant pressure on margins from other expenses that we have not been able to offset by lowering costs further or obtaining increased rates. Our EBITDA for the fourth quarter of $15.8 million was down 6% from the $16.8 million in the third quarter of 2000, a much smaller percentage decline than we experienced in net income. For the fourth quarter, we recorded sharply increased insurance costs, which became effective in December 2000. The full-year impact of these higher costs, which are being experienced by most healthcare providers, will be a significant factor affecting our results for 2001. "As a result of initiatives undertaken during the year and as a benefit of our continuing positive operating cash flow, we were able to reduce our bank borrowings during the fourth quarter alone by $28.0 million. During the fourth quarter, our receivables, in terms of average days outstanding, dropped from 69 to 59 days. We also generated approximately $26.5 million from the sale/leaseback of certain properties and are continuing to pursue similar transactions. On February 28, 2001, we completed a $160 million amended credit facility with our banks." - MORE - 2 Geary added, "ResCare is a vital participant in our nation's system for supporting persons with disabilities and young people with special needs. The demand for these services continues to increase, largely unaffected by economic conditions. We are as dedicated as ever to our fundamental mission of delivering needed services through committed, well-trained staff supported by well-maintained homes and facilities, modern systems and effective controls. Although it is apparent that the financial burden for providing higher levels of services has been increasingly shifting toward providers nationwide, we are working hard with all parties to ensure rates that provide a reasonable return on the required resources. States and other regulatory agencies will not be able to attract providers willing to invest additional funds to support these vulnerable populations if reimbursement levels are inadequate." ResCare's services reach approximately 17,000 individuals in 28 states, Washington, D.C. and Canada in its Division for Persons with Disabilities and 10,000 young people with special needs in 17 states and Puerto Rico in its Division for Youth Services. More information about ResCare is available on the Company's web site at www.rescare.com. The Company from time to time makes forward-looking statements in its public disclosures, including statements relating to the Company's expected financial results, revenues that might be expected from new or acquired programs and facilities, other statements regarding development and acquisition activities, statements regarding reimbursement under federal and state programs and statements regarding various trends favoring downsizing, de-institutionalization and privatization of government programs. In the Company's filings under the federal securities laws, including its annual, periodic and current reports, the Company identifies important factors that could cause the Company's results to differ materially from those contained in such forward-looking statements. We refer you to the discussion of those factors in our filed reports. - MORE - 3 RESCARE, INC. Financial Highlights (Unaudited) (In thousands, except per share data)
INCOME STATEMENT DATA: Three Months Ended Year Ended December 31 December 31 ------------------------- -------------------------- 2000 1999 2000 1999 -------- -------- -------- --------- Revenues $223,312 $211,943 $865,796 $ 827,012 Facility and program expenses 199,377 192,027 763,576 719,002 -------- -------- -------- --------- Facility and program contribution 23,935 19,916 102,220 108,010 Operating expenses (income): Corporate general and administrative 7,539 5,913 28,111 27,726 Depreciation and amortization 5,673 5,288 22,308 21,107 Special charges 479 -- 4,149 20,498 Other expense 68 82 270 40 -------- -------- -------- --------- Total operating expenses 13,759 11,283 54,838 69,371 -------- -------- -------- --------- Operating income 10,176 8,633 47,382 38,639 Interest, net 5,628 5,305 22,559 18,750 -------- -------- -------- --------- Income from continuing operations before income taxes 4,548 3,328 24,823 19,889 Income tax expense 2,235 1,745 10,647 10,153 -------- -------- -------- --------- Income from continuing operations 2,313 1,583 14,176 9,736 Gain on sale of unconsolidated affiliate, net of tax -- -- -- 534 Cumulative effect of accounting change, net of tax -- -- -- (3,932) -------- -------- -------- --------- Net income $ 2,313 $ 1,583 $ 14,176 $ 6,338 ======== ======== ======== ========= Basic earnings per share from continuing operations $ 0.10 $ 0.07 $ 0.58 $ 0.40 Gain on sale of unconsolidated affiliate, net of tax -- -- -- 0.02 Cumulative effect of accounting change, net of tax -- -- -- (0.16) -------- -------- -------- --------- Basic earnings per share $ 0.10 $ 0.07 $ 0.58 $ 0.26 ======== ======== ======== ========= Diluted earnings per share from continuing operations $ 0.10 $ 0.06 $ 0.58 $ 0.39 Gain on sale of unconsolidated affiliate, net of tax -- -- -- 0.02 Cumulative effect of accounting change, net of tax -- -- -- (0.16) -------- -------- -------- --------- Diluted earnings per share $ 0.10 $ 0.06 $ 0.58 $ 0.25 ======== ======== ======== ========= Weighted average number of common shares: Basic 24,320 24,251 24,309 24,184 Diluted 24,320 24,498 24,354 24,970
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BALANCE SHEET DATA: December 31 September 30 December 31 2000 2000 1999 ----------- ------------ ----------- ASSETS Cash and cash equivalents $ 33,415 $ 16,980 $ 7,057 Accounts and notes receivable, net 142,764 163,243 141,807 Other current assets 26,440 23,094 21,692 -------- -------- -------- Total current assets 202,619 203,317 170,556 -------- -------- -------- Property and equipment, net 85,074 109,957 102,739 Excess of acquisition cost over net assets acquired, net 218,012 219,932 220,493 Other assets 30,401 28,733 29,343 -------- -------- -------- $536,106 $561,939 $523,131 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $ 80,314 $ 78,832 $ 68,415 Other long-term liabilities 8,505 6,346 6,293 Long-term debt 269,164 300,937 285,039 Shareholders' equity 178,123 175,824 163,384 -------- -------- -------- $536,106 $561,939 $523,131 ======== ======== ========
CASH FLOW DATA: Three Months Ended Year Ended December 31 December 31 -------------------------- -------------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Cash provided by operating activities $ 25,052 $ 1,924 $ 39,344 $ 5,535 Cash flows from investing activities: Purchases of property and equipment (2,456) (12,468) (20,922) (23,604) Acquisitions of businesses (24) (1,576) (1,045) (14,780) Proceeds from sales of assets 26,629 -- 28,671 -- -------- -------- -------- -------- Cash provided by (used in) investing activities 24,149 (14,044) 6,704 (38,384) -------- -------- -------- -------- Cash flows from financing activities: Net borrowings (repayments) under notes to banks (32,766) 842 (20,210) 28,407 Proceeds received from exercise of stock options -- 21 520 1,123 -------- -------- -------- -------- Cash provided by (used in) financing activities (32,766) 863 (19,690) 29,530 -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents $ 16,435 $(11,257) $ 26,358 $ (3,319) ======== ======== ======== ========
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