EX-99.1 2 exh_991.htm EXHIBIT 99.1 exh_991.htm
EXHIBIT 99.1
 
RESCARE FIRST QUARTER 2013 RESULTS

First Quarter 2013 Financial Results

Revenues for the first quarter of 2013 were $389.5 million, which was a 2.0% decrease from prior year period revenues of $397.3 million.  Contract losses and modifications in Workforce Services and Youth Services segments were partially offset by increased revenues from acquisitions in our Residential and HomeCare segments since the first quarter of 2012.

Net income was $11.3 million for the first quarter of 2013, compared with $5.7 million in the same period of 2012.  The increase is due to lower interest expense and income tax expenses.  Adjusted EBITDA for the first quarter of 2013 was $30.1 million versus $30.0 million in the prior year quarter.

RES-CARE, INC.
Unaudited Financial Highlights
(In thousands)

   
Three Months Ended
March 31,
 
   
2013
   
2012
 
Income Statement Data:
           
Revenues
  $ 389,454     $ 397,342  
Cost of services
    294,376       299,280  
Gross profit
    95,078       98,062  
Operating expenses:
               
Operational general and administrative
    58,770       60,349  
Corporate general and administrative
    15,110       17,667  
Total operating expenses
    73,880       78,016  
                 
Operating income
    21,198       20,046  
                 
Interest expense, net
    8,537       10,443  
Income before income taxes
    12,661       9,603  
Income tax expense
    1,365       3,868  
Net income
    11,296       5,735  
Net loss – noncontrolling interest
    (36 )     (30 )
Net income – Res-Care, Inc.
  $ 11,332     $ 5,765  
                 
Other comprehensive income:
               
Foreign currency translation adjustments
    (191 )     161  
Comprehensive income attributable to Res-Care, Inc.
  $ 11,141     $ 5,926  
Total comprehensive income
  $ 11,105     $ 5,896  
 
 
 
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RES-CARE, INC.
Unaudited Financial Highlights (continued)
(In thousands)

   
Three Months Ended
March 31,
 
   
2013
   
2012
 
Net income to EBITDA and Adjusted EBITDA:
           
Net income
  $ 11,296     $ 5,735  
Add:  Interest, net
    8,537       10,443  
Depreciation and amortization
    8,195       8,807  
Income tax expense
    1,365       3,868  
EBITDA (1)
    29,393       28,853  
Add:  Share-based compensation
    704       1,174  
Acquisition costs
           
Adjusted EBITDA (1)
  $ 30,097     $ 30,027  

   
March 31,
2013
   
December 31,
2012
 
Balance Sheet Data:
           
ASSETS
 
             
Cash and cash equivalents
  $ 46,703     $ 50,134  
Accounts receivable, net
    228,506       228,377  
Other current assets
    39,436       39,705  
Total current assets
    314,645       318,216  
Property and equipment, net
    94,959       97,030  
Goodwill
    288,140       288,265  
Other intangible assets, net
    319,564       321,293  
Other assets
    23,904       27,154  
    $ 1,041,212     $ 1,051,958  
                 
LIABILITIES AND SHAREHOLDER’S EQUITY
 
                 
Current liabilities
  $ 154,337     $ 175,174  
Other long-term liabilities
    164,121       162,722  
Long-term debt
    366,935       370,052  
Shareholder’s equity
    355,819       344,010  
    $ 1,041,212     $ 1,051,958  

(1)
EBITDA is defined as income from continuing operations before depreciation and amortization, net interest expense, loss on extinguishment of debt and income taxes.  Adjusted EBITDA is defined as EBITDA before share-based compensation and acquisition costs.  EBITDA and Adjusted EBITDA should not be considered as measures of financial performance under accounting principles generally accepted in the United States of America.  The items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing financial performance.  Management routinely calculates and presents EBITDA and Adjusted EBITDA because it believes that EBITDA and Adjusted EBITDA are useful to investors and are used as analytical indicators 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.
 
 
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RES-CARE, INC.
Unaudited Financial Highlights (continued)
(In thousands)

   
Three Months Ended
March 31,
 
   
2013
   
2012
 
Cash Flow Data:
           
Net income
  $ 11,296     $ 5,735  
Adjustments to reconcile net income to cash provided by (used in) operating activities:
               
Depreciation and amortization
    8,195       8,807  
Amortization of discount and deferred debt issuance costs
    870       675  
Share-based compensation
    704       1,174  
Deferred income taxes, net
    1,964       1,100  
Provision for losses on accounts receivable
    1,818       1,549  
Loss on sale of assets
    102       35  
Changes in operating assets and liabilities
    (15,779 )     (20,122 )
Cash provided by (used in) operating activities
    9,170       (1,047 )
                 
Cash flows from investing activities:
               
Proceeds from sale of assets
    81       10  
Purchases of property and equipment
    (4,103 )     (4,261 )
Acquisitions of businesses, net of cash acquired
    (7 )     (4,550 )
Cash used in investing activities
    (4,029 )     (8,801 )
                 
Cash flows from financing activities:
               
Debt repayments, net
    (8,498 )     (2,614 )
Debt issuance costs
    (8 )      
Cash used in financing activities
    (8,506 )     (2,614 )
Effect of exchange rate on cash and cash equivalents
    (66 )     64  
Decrease in cash and cash equivalents
  $ (3,431 )   $ (12,398 )
 
 
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Page 4
 
RES-CARE, INC.
Unaudited Financial Highlights (continued)
(Dollars in thousands)

   
Three Months Ended
March 31,
 
   
2013
   
2012
 
Segment Data:
           
Revenues:
           
Residential Services
  $ 204,501     $ 200,798  
ResCare HomeCare
    88,068       84,019  
Youth Services
    41,880       46,557  
Workforce Services
    39,818       48,829  
Pharmacy Services
    15,187       17,139  
Consolidated
  $ 389,454     $ 397,342  
                 
Operating Income(1):
               
Residential Services
  $ 24,398     $ 26,569  
ResCare HomeCare
    4,532       4,798  
Youth Services
    3,061       3,261  
Workforce Services
    3,612       1,948  
Pharmacy Services
    1,027       1,145  
Corporate
    (15,432 )     (17,675 )
Consolidated
  $ 21,198     $ 20,046  
                 
Operating Margin(1):
               
Residential Services
    11.9 %     13.2 %
ResCare HomeCare
    5.1 %     5.7 %
Youth Services
    7.3 %     7.0 %
Workforce Services
    9.1 %     4.0 %
Pharmacy Services
    6.8 %     6.7 %
Corporate
    (4.0 %)     (4.4 %)
Consolidated
    5.4 %     5.0 %

(1)
Other (expense) income, which is included with corporate general and administrative expenses per the Income Statement Data on page 1, has been allocated for purposes of segment reporting.

 
 
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