Res-Care, Inc. Form 8-K

-----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, NVIFW94/4xOfx+kg15YwW6SslKFcyoY+KFLJimSsygdBZ1rJcU8s3IYLAk935acS 3g2RnXzbiZfNGpdefz1J+A== 0000950152-02-001540.txt : 20020415 0000950152-02-001540.hdr.sgml : 20020415 ACCESSION NUMBER: 0000950152-02-001540 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020306 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020307 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: 02568850 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 l93182ae8-k.htm RES-CARE, INC. FORM 8-K Res-Care, Inc. Form 8-K

TABLE OF CONTENTS


Item 5. Other Events
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibit 99.1 Press Release

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): March 6, 2002

RES-CARE, INC.
(Exact Name of Registrant as specified in Charter)


Kentucky	0-20372	61-0875371
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


10140 Linn Station Road, Louisville, Kentucky (Address of principal executive offices)		40223 (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, 6, and 8 are not applicable and are omitted from this Report.

Item 5. Other Events

On March 6, 2002, Res-Care, Inc. announced its financial results for the fourth quarter and the year ended December 31, 2001. A copy of Res-Care’s press release is attached as Exhibit 99.1 to this report.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(a) Financial Statements of Business Acquired.

Not applicable.

(b) Pro Forma Financial Information.

Not applicable.

The following exhibits are filed with this Report on Form 8-K:


REGULATION S-K
EXHIBIT NUMBER		EXHIBIT
99.1		Press Release dated March 6, 2002

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: March 6, 2002		By /s/ L. Bryan Shaul L. Bryan Shaul, Executive Vice President for Finance and Administration, Chief Financial Officer

EX-99.1 3 l93182aex99-1.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 - -------------------------------------------------------------------------------- [NEWS RELEASE LETTERHEAD] ResCare - 10140 Linn Station Road - Louisville, Kentucky 40223-3813 - Phone: 502.394.2100 - 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 FOURTH QUARTER 2001 EARNINGS OF $0.11 PER SHARE BEFORE CHARGES ---------------------- EXPECTS EARNINGS OF $0.65-$0.70 PER SHARE FOR 2002 LOUISVILLE, KY. (MAR. 6, 2002) -- ResCare (Nasdaq/NM: RSCR), the nation's leading provider of services to persons with mental retardation and developmental disabilities and young people with special needs, today announced results for the fourth quarter ended December 31, 2001 that included higher revenues and earnings of $0.11 per diluted share, before charges of $22 million related to reserves for accounts receivable and insurance claims. After these charges, the Company reported a net loss for the quarter of $10.6 million, or $0.44 per diluted share, before an extraordinary item. In the fourth quarter of 2000, ResCare reported earnings of $2.6 million, or $0.11 per diluted share, excluding special charges, which included a legal settlement and loss on the sale-leaseback of certain assets. Revenues for the fourth quarter were $229.7 million, up from $223.3 million in the year-earlier period. "We continued to make fundamental operating progress in the fourth quarter," said Ronald G. Geary, chairman, president and chief executive officer. "One of our primary goals throughout 2001 was to enhance our information systems and other components of our infrastructure that support our employees in providing a consistently high standard of care for clients. We realized meaningful gains in these initiatives and expect to make further strides in 2002. Our cost structure benefited from the increased overall availability of labor and our focus on controllable expenses at the operating level. In the fourth quarter of 2001, we began implementing our electronic time and attendance system intended to increase efficiency. Based on early results from the first region converted, we expect a further increase in the efficient use of our staff. "The component of the fourth quarter charge related to accounts receivable totaled approximately $15.5 million. We identified the need for this increased reserve, in part, as a result of our implementation of a new information system for billing and accounts receivable. The new system provides a single platform for us to track and analyze receivables and manage our operations that have grown substantially through acquisitions. We believe this new system now gives us the information necessary to timely address any billing issues and prevent a recurrence of this type of charge. - MORE - ResCare Reports 2001 Results Page 2 March 6, 2002 - -------------------------------------------------------------------------------- "Also included in the fourth quarter charges is $6.5 million related to insurance claims for workers' compensation. These claims arose because of current studies of our experience during the policy years when we were integrating several significant acquisitions. Additional workers' compensation reserves were also required because of ineffective handling of claims by the Company's previous third-party administrator." Geary emphasized that the basis for the charges of $22 million in the fourth quarter came principally from current studies and analyses of data prior to 2001. He said, "We believe that the monthly provisions are adequate for reserves established during 2001 for both accounts receivable and insurance claims. As a result of the fourth-quarter charges, we were not in compliance at year end with certain covenants of our bank lending agreement; but have begun discussions that we believe will lead to a resolution of those variances. "The budgetary pressures that most states are experiencing because of the recession will clearly challenge us in obtaining additional rate relief in 2002. We have the advantage, however, that demand for our services is not affected by economic activity. We expect to achieve growth in revenues for 2002 of 4% to 6%, principally as a result of pursuing internal growth opportunities such as opening additional homes to help reduce the waiting lists for care for people needing services as well as selected acquisitions. We have already opened 16 new homes thus far in 2002 and intend to accelerate that pace over the remainder of this year. The required adoption of Statement of Financial Accounting Standards (SFAS) No. 142 for goodwill amortization effective January 1, 2002 should add approximately $0.20 per share to our annual earnings. Including the impact of adopting SFAS 142, our goal is to achieve earnings for 2002 of $0.65 to $0.70 per diluted share and establish a base to achieve an even stronger recovery in profitability in future years." Geary concluded, "During the fourth quarter of 2001, we refinanced our debt by issuing $150 million in notes on November 15, 2001 and entering into an $80 million senior secured credit facility with a new bank group. We had $59.0 million in cash and equivalents at year end and generated $58 million in EBITDA for 2001 before charges. We expect to continue to have significant free cash flow from operations during 2002 that will further strengthen our financial flexibility to fund growth." ResCare's services to people with disabilities and to special needs youth reach approximately 27,000 people in 32 states, Washington, D.C., Puerto Rico and Canada. 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, statements regarding compliance with debt covenants and other risk factors 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- ResCare Reports 2001 Results Page 3 March 6, 2002 - -------------------------------------------------------------------------------- RESCARE, INC. Financial Highlights (In thousands, except per share data)
INCOME STATEMENT DATA: Three Months Ended Year Ended December 31 December 31 ---------------------- ---------------------- 2001 2000 2001 2000 --------- --------- --------- --------- Revenues $ 229,676 $ 223,312 $ 895,205 $ 865,796 Facility and program expenses 227,640 199,377 827,244 763,576 --------- --------- --------- --------- Facility and program contribution 2,036 23,935 67,961 102,220 Operating expenses (income): Corporate general and administrative 9,667 7,539 33,390 28,111 Depreciation and amortization 5,041 5,673 21,079 22,308 Special charges -- 479 1,729 4,149 Other (income) expense (178) 68 (1,013) 270 --------- --------- --------- --------- Total operating expenses 14,530 13,759 55,185 54,838 --------- --------- --------- --------- Operating income (loss) (12,494) 10,176 12,776 47,382 Interest, net 4,874 5,628 19,061 22,559 --------- --------- --------- --------- Income (loss) before income taxes (17,368) 4,548 (6,285) 24,823 Income tax expense (benefit) (6,737) 2,235 (1,916) 10,647 --------- --------- --------- --------- Income (loss) before extraordinary item (10,631) 2,313 (4,369) 14,176 Extraordinary loss on extinguishment of debt, net of tax (3) -- (3) -- --------- --------- --------- --------- Net income (loss) $ (10,634) $ 2,313 $ (4,372) $ 14,176 ========= ========= ========= ========= Basic earnings (loss) per share before extraordinary item $ (0.44) $ 0.10 $ (0.18) $ 0.58 Extraordinary loss on extinguishment of debt, net of tax -- -- -- -- --------- --------- --------- --------- Basic earnings (loss) per share $ (0.44) $ 0.10 $ (0.18) $ 0.58 ========= ========= ========= ========= Diluted earnings (loss) per share before extraordinary item $ (0.44) $ 0.10 $ (0.18) $ 0.58 Extraordinary loss on extinguishment of debt, net of tax -- -- -- -- --------- --------- --------- --------- Diluted earnings (loss) per share $ (0.44) $ 0.10 $ (0.18) $ 0.58 ========= ========= ========= ========= Weighted average number of common shares: Basic 24,374 24,320 24,357 24,309 Diluted 24,374 24,320 24,357 24,354
-MORE- ResCare Reports 2001 Results Page 4 March 6, 2002 - --------------------------------------------------------------------------------
BALANCE SHEET DATA: December 31 September 30 December 31 2001 2001 2000 ----------- ------------ ----------- ASSETS Cash and cash equivalents $ 58,997 $ 9,107 $ 33,415 Accounts and notes receivable, net 132,181 157,749 142,775 Other current assets 35,740 27,850 27,094 -------- -------- -------- Total current assets 226,918 194,706 203,284 -------- -------- -------- Property and equipment, net 58,779 62,109 85,074 Excess of acquisition cost over net assets acquired, net 209,413 210,864 218,012 Other assets 39,826 34,088 30,401 -------- -------- -------- $534,936 $501,767 $536,771 -------- -------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $ 84,041 $105,778 $ 80,979 Other long-term liabilities 8,752 7,084 8,505 Long-term debt 268,014 204,190 269,164 Shareholders' equity 174,129 184,715 178,123 -------- -------- -------- $534,936 $501,767 $536,771 ======== ======== ========

CASH FLOW DATA: Three Months Ended Year Ended December 31 December 31 ------------------------ ------------------------ 2001 2000 2001 2000 -------- -------- -------- -------- Cash provided by operating activities $ 7,510 $ 25,052 $ 15,149 $ 39,344 Cash flows from investing activities: Purchases of property and equipment (2,279) (2,456) (9,323) (20,914) Acquisitions of businesses -- (24) -- (1,045) Proceeds from sales of assets 632 26,629 26,261 28,671 -------- -------- -------- -------- Cash provided by (used in) investing activities (1,647) 24,149 16,938 6,712 -------- -------- -------- -------- Cash flows from financing activities: Net borrowings (repayments) of long-term debt 44,010 (32,766) (6,852) (20,210) Proceeds received from exercise of stock options 17 -- 347 512 -------- -------- -------- -------- Cash provided by (used in) financing activities 44,027 (32,766) (6,505) (19,698) -------- -------- -------- -------- Increase in cash and cash equivalents $ 49,890 $ 16,435 $ 25,582 $ 26,358 ======== ======== ======== ========
-MORE- ResCare Reports 2001 Results Page 5 March 6, 2002 - -------------------------------------------------------------------------------- IMPACT OF FOURTH QUARTER ACCOUNTS RECEIVABLE AND INSURANCE CLAIMS CHARGES AND FIRST QUARTER SPECIAL CHARGES:
Three Months Ended Year Ended December 31, 2001 December 31, 2001 ----------------------------- ---------------------------- Without Without As Reported Charges(1) As Reported Charges(2) ----------- ---------- ----------- ---------- Revenues $ 229,676 $ 229,676 $ 895,205 $ 895,205 EBITDA (3) (7,453) 14,547 33,855 57,584 EBITDAR (3) 234 22,234 63,647 87,376 Net income (loss) (10,634) 2,594 (4,372) 9,833 Diluted earnings (loss) per share $ (0.44) $ 0.11 $ (0.18) $ 0.40
(1) Pretax charges for the three months ended December 31, 2001 include an additional provision for doubtful accounts of $15.5 million and an additional provision for workers' compensation claims of $6.5 million. (2) Pretax charges for the year ended December 31, 2001 include an additional provision for doubtful accounts of $15.5 million and an additional provision for workers' compensation claims of $6.5 million. Also included in these charges is $1.6 million related to the cessation of certain operations in Tennessee and the write-off of $0.1 million in deferred debt issuance costs recorded in the first quarter of 2001. (3) EBITDA is defined as income before extraordinary item, 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 and the items excluded from EBITDA and EBITDAR are significant components in understanding and assessing financial performance. -END- -----END PRIVACY-ENHANCED MESSAGE-----

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	(c) Exhibits.