-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B55EwxleOHy5gAGpMTw5seweS/6D/ODTCBY5B1D8rvqJzVOlaoQLS23hzI0X7Atd iyOUtsfgiXxJBHgVjMyQ3Q== 0001157523-03-006345.txt : 20031106 0001157523-03-006345.hdr.sgml : 20031106 20031106070017 ACCESSION NUMBER: 0001157523-03-006345 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031106 ITEM INFORMATION: FILED AS OF DATE: 20031106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RES CARE INC /KY/ CENTRAL INDEX KEY: 0000776325 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-NURSING & PERSONAL CARE FACILITIES [8050] IRS NUMBER: 610875371 STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20372 FILM NUMBER: 03980937 BUSINESS ADDRESS: STREET 1: 10140 LINN STATION RD CITY: LOUISVILLE STATE: KY ZIP: 40223 BUSINESS PHONE: 5023942100 MAIL ADDRESS: STREET 1: 10140 LINN STATION RD CITY: LOUISVILLE STATE: KY ZIP: 40223 8-K 1 a4510738.txt RESCARE 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 5, 2003 RES-CARE, INC. (Exact Name of Registrant as specified in Charter) Kentucky 0-20372 61-0875371 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 10140 Linn Station Road, Louisville, Kentucky 40223 (Address of principal executive offices) (Zip code) (502) 394-2100 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report.) INFORMATION TO BE INCLUDED IN THE REPORT Items 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11 are not applicable and are omitted from this report. Item 12. Results of Operations and Financial Condition On November 5, 2003, Res-Care, Inc. issued a press release to announce its 2003 third quarter and nine months results. A copy of the press release is included as Exhibit 99.1 to this report. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RES-CARE, INC. Date: November 5, 2003 By /s/ Ronald G. Geary --------------------------------- Ronald G. Geary Chairman, CEO and President EXHIBIT INDEX Exhibit Number Description of Exhibits - ------- ----------------------- 99.1 Copy of press release issued by the Company on November 5, 2003. EX-99 3 a4510738_ex991.txt RESCARE EXHIBIT 99.1 Exhibit 99.1 ResCare Reports Third Quarter Results; Announces Financing Commitment LOUISVILLE, Ky.--(BUSINESS WIRE)--Nov. 5, 2003--ResCare (NASDAQ/NM: RSCR), the nation's leading provider of services to persons with developmental and other disabilities and people with special needs, today announced results for the third quarter and nine months ended September 30, 2003. Ronald G. Geary, ResCare chairman, president and chief executive officer, said, "A difficult economic environment can test a company. At ResCare, management raised the bar to new levels to assure quality service while practicing intense fiscal discipline. Our success to date in 2003 proves that ResCare passed the test, due in large part to the sacrifices made by our employees and their commitment to the individuals they serve. The Company is reporting solid financial results and an excellent balance sheet with strong cash flow for the third quarter ended September 30, 2003. We are very pleased that, while we achieved this level of financial performance, we also delivered exceptional services to a growing number of individuals. We believe that this equation, balancing quality care and fiscal management, is clearly the right formula for success at ResCare." The Company also announced that it has received a commitment for a new $135 million senior secured credit facility, including a $100 million revolver and a $35 million term loan. The Company anticipates using existing cash, along with proceeds from the senior secured credit facility to repay existing subordinated indebtedness, including but not limited to $87 million of its convertible subordinated notes due December 2004. The Company's participation in the new credit facility and the early redemption of the convertible subordinated notes are subject to conditions that the Company expects to satisfy. In commenting on the financing, Mr. Geary said, "This anticipated senior credit facility will substantially strengthen the balance sheet of our company. Also, it better positions the Company to take full advantage of a gradually improving economy. In addition, the willingness of lenders to invest in ResCare, we believe, confirms our business plan and the strength of our franchise." For the third quarter ended September 30, 2003, net income was $3.2 million, or $0.13 per diluted share. Last year, diluted earnings per share was $0.15, which included $0.03 relating to a gain on the redemption of convertible notes. Revenues for the third quarter of 2003 were $240.5 million, up from $233.1 million in the year-earlier period. This was the 47th consecutive quarter of increased revenue over the prior year quarter. Mr. Geary continued, "Earnings per share for the third quarter of 2003 were reduced $0.01 as a result of a settlement with union employees to successfully resolve a 26-month contract dispute. We are gratified that we have resolved this dispute. We can now move forward together and concentrate on the best interests of the people we serve and the valuable employees who provide those services." For the nine months ended September 30, 2003, net income was $10.9 million, or $0.44 per diluted share, versus $9.8 million, or $0.40 per diluted share, for the nine months ended September 30, 2002. EBITDA for the nine months ended September 30, 2003, increased 4.4% to $44.4 million versus $42.5 million for the same nine-month period in 2002. Revenues for the nine months ended September 30, 2003, were $717.3 million, up from $685.9 million in the year-earlier period. Mr. Geary added, "We are pleased with the progress we are making. With 113 new homes opened to date in 2003, we are on track with our plan to add a total of 163 new homes in 2003. We are also very pleased with our outstanding cash flow this quarter. We have $95 million of cash on hand. Additionally, for the nine months, we had a $50.9 million positive cash flow from operations as compared with $15.8 million in 2002. During the past 28 years, we've learned how to navigate tough economic times. The good news is that we do sense a slowly improving economy, and we expect our company will ultimately benefit. The reimbursement environment at the state level is still challenging. However, given our longevity and the experience and dedication of our employees, we will persevere and succeed in this environment." A listen-only simulcast and replay of ResCare's third quarter conference call will be available on-line at www.rescare.com and www.fulldisclosure.com on November 6, 2003, beginning at 9:00 a.m. Eastern Time. ResCare, founded in 1974, offers services to some 32,000 people in 32 states, Washington, D.C., Puerto Rico and Canada. ResCare is a human service company that provides residential, therapeutic, job training and educational support to people with developmental or other disabilities, to youth with special needs and to adults who are experiencing barriers to employment. The Company is based in Louisville, KY. More information about ResCare is available on the Company's web site at http://www.rescare.com. From time to time, ResCare makes forward-looking statements in its public disclosures, including statements relating to expected financial results, revenues that might be expected from new or acquired programs and facilities, its development and acquisition activities, reimbursement under federal and state programs, compliance with debt covenants and other risk factors, and various trends favoring downsizing, de-institutionalization and privatization of government programs. In our filings under the federal securities laws, including our annual, periodic and current reports, we identify important factors that could cause our actual results to differ materially from those anticipated in forward-looking statements. Please refer to the discussion of those factors in our filed reports. RESCARE, INC. Unaudited Financial Highlights (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 -------- -------- -------- -------- Income Statement Data: Revenues $240,508 $233,121 $717,345 $685,902 Facility and program expenses 218,149 210,348 646,452 618,265 -------- -------- -------- -------- Facility and program contribution 22,359 22,773 70,893 67,637 Operating expenses (income): Corporate general and administrative 8,314 9,264 26,794 26,487 Depreciation and amortization 3,008 2,964 9,043 8,983 Other income (72) (1,071) (307) (1,373) -------- -------- -------- -------- Total operating expenses 11,250 11,157 35,530 34,097 -------- -------- -------- -------- Operating income 11,109 11,616 35,363 33,540 Interest, net 6,089 6,084 18,346 18,266 -------- -------- -------- -------- Income before income taxes 5,020 5,532 17,017 15,274 Income tax expense 1,807 1,846 6,126 5,499 -------- -------- -------- -------- Net income $3,213 $3,686 $10,891 $9,775 ======== ======== ======== ======== Basic earnings per share $0.13 $0.15 $0.45 $0.40 ======== ======== ======== ======== Diluted earnings per share $0.13 $0.15 $0.44 $0.40 ======== ======== ======== ======== Weighted average number of common shares: Basic 24,475 24,418 24,438 24,406 Diluted 25,006 24,464 24,629 24,614 EBITDA (1) $14,117 $14,580 $44,406 $42,523 EBITDAR (1) 22,809 22,731 70,461 66,515 (1) EBITDA is defined as income before depreciation and amortization, net interest expense and income taxes. EBITDAR is defined as EBITDA before facility rent. EBITDA and EBITDAR should not be considered as measures of financial performance under accounting principles generally accepted in the United States of America and the items excluded from EBITDA and EBITDAR are significant components in understanding and assessing financial performance. EBITDA is one of the measures used to determine the Company's compliance with certain covenants contained in its credit facility. The table below sets forth a reconciliation of net income to EBITDA and EBITDAR. Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 -------- -------- -------- -------- Net income as reported $3,213 $3,686 $10,891 $9,775 Add: Interest, net 6,089 6,084 18,346 18,266 Depreciation and amortization 3,008 2,964 9,043 8,983 Income tax expense 1,807 1,846 6,126 5,499 -------- -------- -------- -------- EBITDA 14,117 14,580 44,406 42,523 Add: Facility rent 8,692 8,151 26,055 23,992 -------- -------- -------- -------- EBITDAR $22,809 $22,731 $70,461 $66,515 ======== ======== ======== ======== RESCARE, INC. Unaudited Financial Highlights (continued) (In thousands) Sept. 30, June 30, Dec. 31, 2003 2003 2002 -------- -------- -------- Balance Sheet Data: (Audited) ASSETS Cash and cash equivalents $95,079 $73,605 $72,089 Accounts receivable, net 129,416 129,051 124,609 Other current assets 30,608 36,388 44,613 -------- -------- -------- Total current assets 255,103 239,044 241,311 Property and equipment, net 63,149 63,856 61,668 Goodwill 229,041 228,836 218,256 Other assets 23,167 23,422 25,377 -------- -------- -------- $570,460 $555,158 $546,612 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $117,907 $98,696 $96,765 Other long-term liabilities 12,756 12,510 11,545 Long-term debt 251,015 259,069 261,123 Shareholders' equity 188,782 184,883 177,179 -------- -------- -------- $570,460 $555,158 $546,612 ======== ======== ======== Nine Months Ended September 30, 2003 2002 -------- -------- Cash Flow Data: Net income $10,891 $9,775 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 9,043 8,983 Amortization of discount on notes 204 353 Deferred income taxes, net (83) 1,368 Provision for losses on accounts receivable 5,803 3,685 Loss from sale of assets 67 88 Gain on extinguishment of debt (306) (1,280) Changes in operating assets and liabilities 25,290 (7,218) -------- -------- Cash provided by operating activities 50,909 15,754 -------- -------- Cash flows from investing activities: Purchases of property and equipment (11,088) (10,314) Acquisitions of businesses (9,402) (272) Proceeds from sales of assets 395 341 -------- -------- Cash used in investing activities (20,095) (10,245) -------- -------- Cash flows from financing activities: Net repayments of long-term debt (8,536) (5,949) Proceeds received from exercise of stock options 712 219 -------- -------- Cash used in financing activities (7,824) (5,730) -------- -------- Increase (decrease) in cash and cash equivalents $22,990 $(221) ======== ======== CONTACT: ResCare Nel Taylor, 502-394-2357 -----END PRIVACY-ENHANCED MESSAGE-----