-----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, RB/0ZLiKPL7fTpkgFKA5Rs18tsQm1VLvKt3V65jiHc9sRL5qLlzJxGwtXwXjFzuT E7MDQqw+N0W0kztAkBm7mA== 0001157523-06-004915.txt : 20060509 0001157523-06-004915.hdr.sgml : 20060509 20060509171536 ACCESSION NUMBER: 0001157523-06-004915 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060509 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060509 DATE AS OF CHANGE: 20060509 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: 06822249 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 a5144821.txt RES-CARE, INC. 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): May 9, 2006 RES-CARE, INC. (Exact Name of Registrant as specified in Charter) Kentucky 0-20372 61-0875371 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 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.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) INFORMATION TO BE INCLUDED IN THE REPORT Item 2.02 Results of Operations and Financial Condition. On May 9, 2006, Res-Care, Inc. issued a press release to announce its results for the first quarter ended March 31, 2006. A copy of the press release is included as Exhibit 99.1 to this report. Item 9.01 Financial Statements & Exhibits. Exhibit Number Description of Exhibit -------------- ---------------------- 99.1 Press release dated May 9, 2006. 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: May 9, 2006 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 May 9, 2006. EX-99.1 2 a5144821ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 ResCare Reports First Quarter Results; Company Issues 2006 Guidance on Earnings from Continuing Operations of $1.20 to $1.24 LOUISVILLE, Ky.--(BUSINESS WIRE)--May 9, 2006--ResCare, Inc. (NASDAQ/NM:RSCR), the nation's leading provider of residential, training, therapeutic, educational and support services for people with disabilities and special needs, today announced results for the first quarter ended March 31, 2006. Ronald G. Geary, ResCare chairman, president and chief executive officer, said, "We are very pleased with our strong performance in the first quarter of 2006, which gives us momentum toward our goals for the year. The integration of our recently acquired Workforce Services Group continues to go well. We will continue to exercise strict fiscal and operational discipline as we selectively take advantage of acquisition opportunities that meet our criteria." First Quarter 2006 Financial Highlights Revenues for the first quarter of 2006 increased 25% over the prior year period to a record $318.9 million. Income from continuing operations was $9.4 million, up 41% from $6.7 million in the first quarter of 2005. Diluted earnings per common share from continuing operations were $0.29, an increase of 38% over the prior year's $0.21. EBITDA for the first quarter of 2006 was $23.8 million versus $18.1 million in the prior year, a 32% increase. Effective March 31, 2006, the Company ceased providing community services in the District of Columbia. The withdrawal has been accounted for as discontinued operations. Accordingly, the results of our community services in the District of Columbia and the related exit costs, net of income taxes, have been classified as discontinued operations for all periods presented. Net loss from discontinued operations for the first quarter of 2006 was $2.2 million, or $0.07 per diluted common share. The loss is comprised of a pretax operational loss of $1.4 million and pretax exit costs of $2.2 million, offset by a tax benefit of $1.4 million. For the first quarter of 2005, net loss from discontinued operations was $1.0 million, or $0.03 per diluted common share. This loss was comprised of pretax operational losses of $1.5 million, offset by a tax benefit of $0.5 million. Net income for the first quarter of 2006 was $7.2 million, or $0.22 per diluted common share, as compared with $5.7 million, or $0.18 per share, in the prior year quarter. Subsequent to the end of the first quarter, ResCare announced the acquisitions of Hometown Opportunities and Armstrong Uniserve, together generating annual revenues of approximately $31 million. The Company also subsequently completed four tuck-in acquisitions, with annual revenues of approximately $6 million. 2006 Guidance from Continuing Operations The Company also updated its guidance for 2006 to reflect the following items: -- Earnings per diluted common share from continuing operations of $1.20 to $1.24. -- Revenues in the range of $1.33 billion to $1.35 billion. -- Diluted equivalent share count of 28.2 million common shares, plus 4.8 million common share equivalents for the preferred shares. -- Annual tax rate of 36%. The first quarter of 2006 was 39.5% due to the expiration on December 31, 2005, of the Work Opportunity Tax Credit. The Company assumes this credit will be reinstated as it has been for over 25 years, at which time the Company will adjust its annual tax rate to approximately 36%. -- Although many states' budgets are yet to be finalized, an approximate 0.5% to 1.0% increase in reimbursement rates for calendar year 2006. -- An assumed impact on operating costs from rising fuel and utility prices. -- The classification of Washington D.C. community services operations as discontinued operations. In conclusion, Mr. Geary said, "As always, I am honored to acknowledge the sacrifice and dedication of our employees. Their efforts, on behalf of the people we support, drive our success. With the help of these exceptional individuals and the strong momentum generated by our first quarter, we look forward with confidence to 2006." A listen-only simulcast and replay of ResCare's first quarter conference call will be available on-line at www.rescare.com and www.earnings.com on May 10, 2006, beginning at 9:00 a.m. Eastern Time. ResCare, founded in 1974 and based in Louisville, Kentucky, provides services in 36 states, Washington, D.C., Puerto Rico and Canada. ResCare's services include residential, therapeutic, job training and educational supports to people with developmental or other disabilities; education and training to young people in the Job Corps program; one-stop employment and training services for people experiencing barriers to employment; and supports to older people in their homes. More information is available at 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, financing plans, 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) Three Months Ended March 31, -------------------- 2006 2005 --------- --------- Income Statement Data: Revenues $318,925 $254,491 Facility and program expenses 285,288 228,829 --------- --------- Facility and program contribution 33,637 25,662 Corporate general and administrative expense 13,752 10,930 --------- --------- Operating income 19,885 14,732 Interest expense, net 4,300 4,566 --------- --------- Income from continuing operations before income taxes 15,585 10,166 Income tax expense 6,156 3,456 --------- --------- Income from continuing operations 9,429 6,710 Loss from discontinued operations, net of taxes (2,215) (1,039) --------- --------- Net income $7,214 $5,671 ========= ========= Amounts attributable to common shareholders (1): Income from continuing operations $8,009 $5,668 Loss from discontinued operations (1,881) (878) --------- --------- Net income $6,128 $4,790 ========= ========= Basic earnings per common share: From continuing operations $0.30 $0.21 From discontinued operations (0.07) (0.03) --------- --------- Basic earnings per common share $0.23 $0.18 ========= ========= Diluted earnings per common share: From continuing operations $0.29 $0.21 From discontinued operations (0.07) (0.03) --------- --------- Diluted earnings per common share $0.22 $0.18 ========= ========= Weighted average number of common shares: Basic 27,129 26,147 Diluted 27,638 26,906 EBITDA (2) $23,824 $18,063 (1) Income from continuing operations attributable to preferred shareholders for the quarters ended March 31, 2006 and 2005, was $1.4 million and $1.0 million, respectively. Loss from discontinued operations attributable to preferred shareholders for the quarters ended March 31, 2006 and 2005, was $0.3 million and $0.2 million, respectively. Net income attributable to preferred shareholders for the quarters ended March 31, 2006 and 2005, was $1.1 million and $0.9 million, respectively. (2) EBITDA is defined as income from continuing operations before depreciation and amortization, net interest expense and income taxes. EBITDA should not be considered as a measure of financial performance under accounting principles generally accepted in the United States of America. The items excluded from EBITDA are significant components in understanding and assessing financial performance. Management routinely calculates and communicates EBITDA and believes that it is useful to investors because it is commonly used as an analytical indicator within our industry to evaluate performance, measure leverage capacity and debt service ability, and to estimate current or prospective enterprise value. EBITDA is also used in measurements under certain covenants contained in our credit agreement. The following table sets forth a reconciliation of income from continuing operations to EBITDA. RESCARE, INC. Unaudited Financial Highlights (continued) (In thousands) Three Months Ended March 31, -------------------- 2006 2005 --------- --------- Reconciliation of Income from Continuing Operations to EBITDA: Income from continuing operations $9,429 $6,710 Add: Interest, net 4,300 4,566 Depreciation and amortization 3,939 3,331 Income tax expense 6,156 3,456 --------- --------- EBITDA $23,824 $18,063 ========= ========= RESCARE, INC. Unaudited Financial Highlights (continued) (In thousands) March 31, Dec. 31, 2006 2005 --------- --------- Balance Sheet Data: ASSETS Cash and cash equivalents $11,402 $9,894 Short-term investments -- 27,650 Accounts receivable, net 188,733 160,821 Other current assets 37,065 33,435 --------- --------- Total current assets 237,200 231,800 Property and equipment, net 75,007 74,175 Goodwill 335,106 281,016 Other assets 36,779 24,111 --------- --------- $684,092 $611,102 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $151,172 $135,885 Other long-term liabilities 21,818 21,125 Long-term debt 196,649 152,094 Shareholders' equity 314,453 301,998 --------- --------- $684,092 $611,102 ========= ========= Three Months Ended March 31, -------------------- 2006 2005 --------- --------- Cash Flow Data: Net income $7,214 $5,671 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization 3,939 3,331 Amortization of deferred charges 218 322 Provision for losses on accounts receivable 1,437 1,134 Share-based compensation 245 -- Changes in operating assets and liabilities (16,370) 10,176 --------- --------- Cash (used in) provided by operating activities (3,317) 20,634 --------- --------- Cash flows from investing activities: Net redemptions (purchases) of short-term investments 27,650 (13,490) Purchases of property and equipment (3,833) (2,886) Proceeds from sale of assets 1,748 -- Acquisitions of businesses (69,793) (761) --------- --------- Cash used in investing activities (44,228) (17,137) --------- --------- Cash flows from financing activities: Net borrowings of long-term debt 44,038 34 Proceeds received from exercise of stock options 5,015 2,450 --------- --------- Cash provided by financing activities 49,053 2,484 --------- --------- Increase in cash and cash equivalents $1,508 $5,981 ========= ========= CONTACT: ResCare Inc., Louisville Ross Davison, 502-394-2123 -----END PRIVACY-ENHANCED MESSAGE-----