0001171843-14-005404.txt : 20141110 0001171843-14-005404.hdr.sgml : 20141110 20141110160953 ACCESSION NUMBER: 0001171843-14-005404 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20141110 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20141110 DATE AS OF CHANGE: 20141110 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: 141208746 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 gff8k_111014.htm FORM 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 10, 2014

 

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.)

 

9901 Linn Station Road, Louisville, Kentucky 40223
(Address of principal executive offices) (Zip code)

 

(502) 394-2100

(Registrant's telephone number, including area code)

 

(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.

 

Res-Care, Inc. is furnishing unaudited financial information related to the results of its third quarter and nine months ended September 30, 2014, that was posted to its website on November 10, 2014. The information, which is attached as Exhibit 99.1 to this report, includes certain non-GAAP financial measures and related reconciliations to GAAP measures that were not included in the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2014.

 

Item 9.01 Financial Statements & Exhibits.

 

Exhibit Number Description of Exhibit

99.1

 Unaudited financial information for the third quarter and nine months ended September 30, 2014.

 

 

 

 
 

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 10, 2014 By: /s/ Ross Davison
  Ross Davison
  Chief Financial Officer

 

 

 

 

 
 

EXHIBIT INDEX

 

 

 

 

Exhibit

Number

Description of Exhibits
   
99.1Unaudited financial information for the third quarter and nine months ended September 30, 2014.

 

 EX-99.1 2 exh_991.htm EXHIBIT 99.1

Exhibit 99.1

 

 

RESCARE THIRD QUARTER 2014 RESULTS

 

Third Quarter 2014 Financial Results

 

Revenues for the third quarter of 2014 were $437.8 million, which was a 6.8% increase over prior year period revenues of $409.9 million. The increase in revenue is primarily due to acquisitions in our Residential and HomeCare segments since the third quarter of 2013 and organic growth in all segments.

 

Net income was $6.5 million for the third quarter of 2014, compared with $11.3 million in the same period of 2013. The decrease is primarily attributable to lower operating results in our ResCare HomeCare operating segment and higher legal costs. Adjusted EBITDA for the third quarter of 2014 was $29.6 million versus $34.6 million in the prior year quarter.

 

RES-CARE, INC.

Unaudited Financial Highlights

(In thousands)

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2014   2013   2014   2013 
Income Statement Data:                    
Revenues  $437,807   $409,934   $1,290,724   $1,195,621 
Cost of services   333,809    305,508    978,241    894,958 
Gross profit   103,998    104,426    312,483    300,663 
Operating expenses:                    
Operational general and administrative   60,498    55,222    175,704    167,601 
Corporate general and administrative   23,898    24,280    81,135    63,168 
Total operating expenses   84,396    79,502    256,839    230,769 
                     
Operating income   19,602    24,924    55,644    69,894 
                     
Interest expense, net   8,571    8,140    25,145    24,342 
Loss on extinguishment of debt   -    -    659    - 
Income before income taxes   11,031    16,784    29,840    45,552 
Income tax expense   4,521    5,450    12,367    12,683 
Net income   6,510    11,334    17,473    32,869 
Net loss – noncontrolling interest   -    (34)   -    (110)
Net income – Res-Care, Inc.  $6,510   $11,368   $17,473   $32,979 
                     
Other comprehensive income:                    
Foreign currency translation adjustments   (263)   56    (292)   (358)
Comprehensive income attributable to Res-Care, Inc.  $6,247   $11,424   $17,181   $32,621 
Total comprehensive income  $6,247   $11,390   $17,181   $32,511 

 

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RES-CARE, INC.

Unaudited Financial Highlights (continued)

(In thousands)

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2014   2013   2014   2013 
Net income to EBITDA and Adjusted EBITDA:                    
Net income  $6,510   $11,334   $17,473   $32,869 
Add: Interest, net   8,571    8,140    25,145    24,342 
Loss on extinguishment of debt   -    -    659    - 
Depreciation and amortization   9,421    8,809    27,489    25,535 
Income tax expense   4,521    5,450    12,367    12,683 
EBITDA (1)    29,023    33,733    83,133    95,429 
Add: Share-based compensation   527    824    1,510    2,376 
Incentive compensation – options   -    -    7,584    - 
Acquisition costs   30    -    30    - 
Adjusted EBITDA (1)  $29,580   $34,557   $92,257   $97,805 

 

 

   September 30,
2014		   December 31,
2013		 
Balance Sheet Data:        
ASSETS
           
Cash and cash equivalents  $25,891   $29,997 
Accounts receivable, net   260,952    241,873 
Other current assets   56,198    46,241 
Total current assets   343,041    318,111 
Property and equipment, net   104,618    101,021 
Goodwill   313,416    308,350 
Other intangible assets, net   336,267    333,613 
Other assets   25,536    25,182 
   $1,122,878   $1,086,277 
           
LIABILITIES AND SHAREHOLDER’S EQUITY
           
Current liabilities  $203,783   $175,699 
Other long-term liabilities   165,188    155,227 
Long-term debt   461,543    359,230 
Shareholder’s equity   292,364    396,121 
   $1,122,878   $1,086,277 

 

 

(1)EBITDA is defined as net income 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, incentive compensation-options 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 and incentive compensation plan.

 

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RES-CARE, INC.

Unaudited Financial Highlights (continued)

(In thousands)

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2014   2013   2014   2013 
Cash Flow Data:                    
Net income  $6,510   $11,334   $17,473   $32,869 
Adjustments to reconcile net income to cash provided by (used in) operating activities:                    
Depreciation and amortization   9,421    8,809    27,489    25,535 
Amortization of deferred debt issuance costs   571    870    1,753    2,612 
Share-based compensation   527    824    1,510    2,376 
Deferred income taxes, net   (154)   (867)   (4,058)   1,480 
Provision for losses on accounts receivable   3,073    1,087    8,214    4,430 
Loss on extinguishment of debt   -    -    659    - 
Loss (gain) on sale of assets   111    (19)   207    81 
Changes in operating assets and liabilities   (4,083)   (656)   7,469    (13,935)
Cash provided by operating activities   15,976    21,382    60,716    55,448 
                     
Cash flows from investing activities:                    
Proceeds from sale of assets   352    160    555    344 
Purchases of property and equipment   (8,004)   (6,795)   (17,980)   (15,007)
Acquisitions of businesses, net of cash acquired   (14,108)   (17,761)   (15,057)   (19,995)
Cash used in investing activities   (21,760)   (24,396)   (32,482)   (34,658)
                     
Cash flows from financing activities:                    
Debt (repayments) borrowing, net   (5,288)   (6,857)   93,420    (19,636)
Dividends paid   -    -    (122,448)   - 
Debt issuance costs   (13)   -    (3,631)   (2)
Cash used in financing activities   (5,301)   (6,857)   (32,659)   (19,638)
Effect of exchange rate on cash and cash equivalents   108    (15)   319    (96)
(Decrease) increase in cash and cash equivalents  $(10,977)  $(9,886)  $(4,106)  $1,056 

 

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RES-CARE, INC.

Unaudited Financial Highlights (continued)

(Dollars in thousands)

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2014   2013   2014   2013 
Segment Data:                    
Revenues:                    
Residential Services  $246,209   $225,407   $717,968   $653,464 
ResCare HomeCare   93,523    93,061    282,786    270,100 
Education & Training Services   31,995    31,074    100,165    100,492 
Workforce Services   43,699    42,257    125,887    121,671 
Pharmacy Services   22,381    18,135    63,918    49,894 
Consolidated  $437,807   $409,934   $1,290,724   $1,195,621 
                     
Operating Income (1):                    
Residential Services  $29,047   $30,670   $89,098   $83,270 
ResCare HomeCare   5,714    9,837    22,069    24,858 
Education & Training Services   2,598    2,949    8,143    7,846 
Workforce Services   4,446    5,096    13,062    13,150 
Pharmacy Services   2,014    844    4,894    4,448 
Corporate   (24,217)   (24,472)   (81,622)   (63,678)
Consolidated  $19,602   $24,924   $55,644   $69,894 
                     
Operating Margin (1):                    
Residential Services   11.8%   13.6%   12.4%   12.7%
ResCare HomeCare   6.1%   10.6%   7.8%   9.2%
Education & Training Services   8.1%   9.5%   8.1%   7.8%
Workforce Services   10.2%   12.1%   10.4%   10.8%
Pharmacy Services   9.0%   4.7%   7.7%   8.9%
Corporate   (5.5%)   (6.0%)   (6.3%)   (5.3%)
Consolidated   4.5%   6.1%   4.3%   5.8%

 

 

(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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