-----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, Szw+46BWGpgaMG5puRx0BmV3Nipg02Ce5FfZxKFQEWySRDoCaOeYAtmbf38xYdnJ sfmazMbf3kZ6wX+Un8eamg== 0001157523-07-004902.txt : 20070510 0001157523-07-004902.hdr.sgml : 20070510 20070509184929 ACCESSION NUMBER: 0001157523-07-004902 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070509 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070510 DATE AS OF CHANGE: 20070509 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: 07834125 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 a5399236.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, 2007 RES-CARE, INC. (Exact Name of Registrant as specified in Charter) Kentucky 0-20372 61-0875371 (State or other (Commission (IRS Employer jurisdiction File Number) Identification No.) of 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.) 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, 2007, Res-Care, Inc. issued a press release to announce its results for the first quarter ended March 31, 2007. 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, 2007. 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, 2007 By /s/ David W. Miles ------------------------------------ David W. Miles Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description of Exhibits - ------ ----------------------- 99.1 Copy of press release issued by the Company on May 9, 2007. EX-99.1 2 a5399236ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 ResCare Reports First Quarter 2007 Results LOUISVILLE, Ky.--(BUSINESS WIRE)--May 9, 2007--ResCare, Inc. (NASDAQ: 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, 2007. First Quarter 2007 Financial Highlights Revenues for the first quarter of 2007 increased 8.4% over the prior year period to a record $338.5 million. Income from continuing operations was $10.3 million, or $0.31 per diluted common share, compared with $9.4 million, or $0.29 per diluted common share, in the same period of 2006. Share-based compensation was approximately $1.6 million ($0.03 per diluted common share) in the first quarter of 2007, compared with $0.2 million in the prior year period. The Company's effective income tax rates were 36.7% and 39.5% in the first quarters of 2007 and 2006, respectively. The higher rate in 2006 was due to the delay in the extension of work opportunity tax credits. EBITDA for the first quarter of 2007 was $25.3 million versus $23.7 million in the prior year. The Company ceased providing community services in the District of Columbia and New Mexico in the first quarter and fourth quarter of 2006, respectively. These withdrawals have been accounted for as discontinued operations. Accordingly, the results of these operations 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 2007 was $0.1 million, which is comprised of a pretax operational loss of $0.4 million, offset by a favorable adjustment of $0.2 million to the Company's exit cost accrual and a tax benefit of $0.1 million. For the first quarter of 2006, net loss from discontinued operations was $2.2 million, or $0.07 per diluted common share. This loss was comprised of pretax operational loss of $1.4 million and pretax exit costs of $2.2 million, offset by a tax benefit of $1.4 million. Ralph Gronefeld, ResCare president and chief executive officer, said, "As expected, the first quarter has benefited from the strong results achieved last year. I am pleased to report that we are on course to achieve our 2007 guidance by delivering exceptional services to an increasing number of deserving individuals. We are also taking advantage of a number of opportunities to increase both our organic growth and our growth through acquisitions. "I am pleased to report the integration of Kelly Home Care Services is progressing well. This recent acquisition not only adds to our home care operations in 18 states, but it also substantially increases our revenue from private pay reimbursement sources. We expect that home care will continue to be a rapidly growing sector as demand increases with the aging of the American population." In closing, Mr. Gronefeld added, "We are looking forward to the year ahead. We will diversify our service offerings as needs are identified, focusing both on organic growth, as well as selected acquisitions as these fit into our operational objectives." 2007 Guidance The Company confirmed its 2007 guidance for diluted earnings per common share in the range of $1.24 to $1.28 on projected revenues of approximately $1.43 billion. A listen-only simulcast and replay of ResCare's first quarter 2007 conference call will be available on-line at www.rescare.com and www.earnings.com on May 10, 2007, beginning at 9:00 a.m. Eastern Time. ResCare, founded in 1974 and based in Louisville, Kentucky, provides services in 37 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 ResCare's filings under the federal securities laws, including its annual, periodic and current reports, the Company identifies important factors that could cause its actual results to differ materially from those anticipated in forward-looking statements. Please refer to the discussion of those factors in the Company's filed reports. Statements related to expected financial results are as of this date only, and ResCare does not assume any responsibility to update these statements. RESCARE, INC. Unaudited Financial Highlights (In thousands, except per share data) Three Months Ended March 31, ------------------- 2007 2006 --------- --------- Income Statement Data: Revenues $338,495 $312,311 Facility and program expenses (1) 302,834 278,695 --------- --------- Facility and program contribution 35,661 33,616 Corporate general and administrative (1) 14,990 13,752 --------- --------- Operating income 20,671 19,864 Interest expense, net 4,426 4,300 --------- --------- Income from continuing operations before income taxes 16,245 15,564 Income tax expense 5,954 6,148 --------- --------- Income from continuing operations 10,291 9,416 Loss from discontinued operations, net of taxes (139) (2,202) --------- --------- Net income 10,152 7,214 Net income attributable to preferred shareholders 1,457 1,069 --------- --------- Net income attributable to common shareholders $8,695 $6,145 ========= ========= Basic earnings per common share: From continuing operations $0.31 $0.30 From discontinued operations (0.00) (0.07) --------- --------- Basic earnings per common share $0.31 $0.23 ========= ========= Diluted earnings per common share: From continuing operations $0.31 $0.29 From discontinued operations (0.00) (0.07) --------- --------- Diluted earnings per common share $0.31 $0.22 ========= ========= Weighted average number of common shares: Basic 28,027 27,129 Diluted 28,365 27,638 EBITDA (2) $25,338 $23,713 (1) We recorded share-based compensation expense of $1.6 million and $0.2 million for the three months ended March 31, 2007 and 2006, respectively. Of the $1.6 million for the three months ended March 31, 2007, we included $0.8 million in facility and program expenses and $0.8 million in corporate general and administrative expenses. All of the $0.2 million recorded for the three months ended March 31, 2006 was included in corporate general and administrative expenses. (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 the 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 the Company's credit agreement. A reconciliation of income from continuing operations to EBITDA is included herein. RESCARE, INC. Unaudited Financial Highlights (continued) (In thousands) Three Months Ended March 31, ------------------- 2007 2006 --------- --------- Reconciliation of Income from Continuing Operations to EBITDA: Income from continuing operations $10,291 $9,416 Add: Interest, net 4,426 4,300 Depreciation and amortization (from continuing operations) 4,667 3,849 Income tax expense 5,954 6,148 --------- --------- EBITDA $25,338 $23,713 ========= ========= March 31, Dec. 31, 2007 2006 --------- --------- Balance Sheet Data: ASSETS Cash and cash equivalents $7,108 $5,541 Accounts receivable, net 199,741 197,711 Other current assets 34,288 33,039 --------- --------- Total current assets 241,137 236,291 Property and equipment, net 77,570 75,606 Goodwill 391,383 375,494 Other assets 43,444 38,665 --------- --------- $753,534 $726,056 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $133,079 $126,371 Other long-term liabilities 45,445 42,319 Long-term debt 211,275 205,889 Shareholders' equity 363,735 351,477 --------- --------- $753,534 $726,056 ========= ========= RESCARE, INC. Unaudited Financial Highlights (continued) (In thousands) Three Months Ended March 31, ------------------- 2007 2006 --------- --------- Cash Flow Data: Net income $10,152 $7,214 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 4,676 3,939 Amortization of discount and deferred charges 269 218 Impairment charges 332 661 Deferred income taxes, net 1,224 - Provision for losses on accounts receivable 1,348 1,437 Share-based compensation 1,560 245 Changes in operating assets and liabilities 3,058 (17,031) --------- --------- Cash provided by (used in) operating activities 22,619 (3,317) --------- --------- Cash flows from investing activities: Net redemptions of short-term investments - 27,650 Purchases of property and equipment (5,096) (3,833) Proceeds from sale of assets 55 1,748 Acquisitions of businesses (20,958) (69,793) --------- --------- Cash used in investing activities (25,999) (44,228) --------- --------- Cash flows from financing activities: Long-term debt repayments (55,525) (699) Borrowings of long-term debt 40,000 40,000 Short-term borrowings - three months or less, net 20,000 5,000 Proceeds received from exercise of stock options 568 5,015 Payments on obligations under capital leases (96) (263) --------- --------- Cash provided by financing activities 4,947 49,053 --------- --------- Increase in cash and cash equivalents $1,567 $1,508 ========= ========= RESCARE, INC. Unaudited Financial Highlights (continued) (Dollars in thousands) Three Months Ended March 31, ------------------- 2007 2006 --------- --------- Segment Data: Revenues: Community Services $244,609 $211,967 Job Corps Training Services 41,679 39,837 Employment Training Services 46,661 55,218 Other 5,546 5,289 --------- --------- Consolidated $338,495 $312,311 ========= ========= Operating Income: Community Services $28,396 $24,268 Job Corps Training Services 4,078 4,262 Employment Training Services 3,070 4,437 Other 117 649 Corporate general and administrative (14,990) (13,752) --------- --------- Consolidated $20,671 $19,864 ========= ========= Operating Margin: Community Services 11.6% 11.4% Job Corps Training Services 9.8% 10.7% Employment Training Services 6.6% 8.0% Other 2.1% 12.3% Corporate general and administrative (4.4%) (4.4%) Consolidated 6.1% 6.4% CONTACT: ResCare, Inc. David W. Miles, Chief Financial Officer, 502-394-2137 -----END PRIVACY-ENHANCED MESSAGE-----