-----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, GErZMmHTZ7pzSmH2dhEle1kjxlahKP+kIwGIuJDJC27CDhr+d0ByofMjcIN2OkqE jL27YmjVPtq0OVYzp/PkxQ== 0000812191-99-000006.txt : 19990517 0000812191-99-000006.hdr.sgml : 19990517 ACCESSION NUMBER: 0000812191-99-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REHABCARE GROUP INC CENTRAL INDEX KEY: 0000812191 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 510265872 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14655 FILM NUMBER: 99621076 BUSINESS ADDRESS: STREET 1: 7733 FORSYTH BLVD 17TH FLR STREET 2: SUITE 1700 CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3148637422 FORMER COMPANY: FORMER CONFORMED NAME: REHABCARE CORP DATE OF NAME CHANGE: 19940218 10-Q 1 10-Q FOR QUARTER ENDED MARCH 31, 1999 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 Commission File Number 0-19294 REHABCARE GROUP, INC. (Exact name of Registrant as specified in its charter) Delaware 51-0265872 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 7733 Forsyth Boulevard, Suite 1700, St. Louis, MO 63105 (Address of principal executive offices and Zip Code) 314-863-7422 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of the Registrant's common stock, as of the latest practicable date. Class Outstanding at May 12, 1999 - -------------------------------------- --------------------------- Common Stock, par value $.01 per share 6,527,270 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 of 16 2 REHABCARE GROUP, INC. Index Part I. - Financial Information Item 1. - Condensed Consolidated Financial Statements Condensed consolidated balance sheets, March 31, 1999 (unaudited) and December 31, 1998 3 Condensed consolidated statements of earnings for the three months ended March 31, 1999 and 1998 (unaudited) 4 Condensed consolidated statements of comprehensive earnings for the three months ended March 31, 1999 and 1998 (unaudited) 5 Condensed consolidated statements of cash flows for the three months ended March 31, 1999 and 1998 (unaudited) 6 Notes to condensed consolidated financial statements (unaudited) 7 Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II. - Other Information Item 4. - Submission of Matters to Security Holders 13 Item 6. - Exhibits and Reports on Form 8-K 14 Signatures 15 2 of 16 3 PART 1. - FINANCIAL INFORMATION Item 1. - Condensed Consolidated Financial Statements REHABCARE GROUP, INC. Condensed Consolidated Balance Sheets (Dollar amounts in thousands)
March 31, December 31, 1999 1998 --------- ------------ Assets: (unaudited) Current assets: Cash and cash equivalents $ 6,838 $ 5,666 Marketable securities, available-for-sale 3,017 3,017 Accounts receivable, net of allowance for doubtful accounts of $3,484 and $3,404, respectively 46,652 46,349 Deferred tax assets 3,340 3,382 Prepaid expenses and other current assets 1,443 938 ------- ------- Total current assets 61,290 59,352 ------- ------- Marketable securities, trading, non-current 1,590 1,240 ------- ------- Equipment and leasehold improvements, net 4,634 4,537 ------- ------- Other assets: Excess of cost over net assets acquired, net 85,479 86,285 Deferred contract costs, net 1,311 1,184 Investments in nonconsolidated subsidiary 1,634 1,648 Other 2,745 2,624 ------- ------- Total other assets 91,169 91,741 ------- ------- $158,683 $156,870 ======= ======= Liabilities and Stockholders' Equity: Current liabilities: Current portion of long-term debt $ 11,926 $ 11,926 Accounts payable 2,274 2,179 Accrued salaries and wages 13,538 14,049 Accrued expenses 9,116 8,601 Income taxes payable 2,460 1,991 ------- ------- Total current liabilities 39,314 38,746 ------- ------- Deferred compensation and other long-term liabilities 3,467 3,084 ------- ------- Deferred tax liabilities 1,042 955 ------- ------- Long-term debt, less current portion 50,967 53,929 ------- ------- Stockholders' equity: Common stock, $.01 par value; authorized 20,000,000 shares, issued 7,693,504 and 7,657,391 shares respectively 77 77 Additional paid-in capital 30,961 30,654 Retained earnings 50,820 47,390 Less common stock held in treasury at cost, 1,166,234 shares (17,975) (17,975) Accumulated other comprehensive earnings 10 10 ------- ------- Total stockholders' equity 63,893 60,156 ------- ------- $158,683 $156,870 ======= ======= See notes to condensed consolidated financial statements.
3 of 16 4 REHABCARE GROUP, INC. Condensed Consolidated Statements of Earnings (Amounts in thousands, except per share data) (Unaudited)
Three Months Ended March 31, 1999 1998 ---------------------------- Operating revenues $69,185 $43,564 Costs and expenses: Operating expenses 49,478 29,735 General and administrative 11,811 7,598 Depreciation and amortization 1,208 892 ------ ------ Total costs and expenses 62,497 38,225 ------ ------ Operating earnings 6,688 5,339 Interest income 65 54 Interest expense (1,065) (693) Other income (expense), net (2) 42 ------ ------ Earnings before income taxes and cumulative effect of change in accounting principle 5,686 4,742 Income taxes 2,256 1,950 ------ ------ Earnings before cumulative effect of change in accounting principle 3,430 2,792 Cumulative effect of change in accounting for start-up costs, net of tax -- (776) ------ ------ Net earnings $ 3,430 $ 2,016 ====== ====== Net earnings per common share: Basic Earnings before cumulative effect of change in accounting principle $ .53 $ .47 Cumulative effect of change in accounting for start-up costs -- (.13) ------ ------ Net earnings $ .53 $ .34 ====== ====== Diluted Earnings before cumulative effect of change in accounting principle $ .47 $ .40 Cumulative effect of change in accounting for start-up costs -- (.11) ------ ------ Net earnings $ .47 $ .29 ====== ====== Weighted average number of common shares outstanding: Basic 6,508 5,920 ====== ====== Diluted 7,358 7,172 ====== ======
See notes to condensed consolidated financial statements. 4 of 16 5 REHABCARE GROUP, INC. Condensed Consolidated Statements of Comprehensive Earnings (Amounts in thousands) (Unaudited)
Three Months Ended March 31, 1999 1998 ---------------------------- Net earnings $ 3,430 $ 2,016 Other comprehensive earnings, net of tax Unrealized gains on securities: Unrealized holding gains arising during period -- 60 Less: reclassification adjustment for realized gains included in net earnings -- -- ------ ------ Comprehensive earnings $ 3,430 $ 2,076 ====== ======
See notes to condensed consolidated financial statements. 5 of 16 6 REHABCARE GROUP, INC. Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited)
Three Months Ended March 31, 1999 1998 ---- ---- Cash flows from operating activities: Net earnings $ 3,430 $ 2,016 Adjustments to reconcile net earnings to net cash provided by operating activities: Cumulative effect of change in accounting for start-up costs -- 776 Depreciation and amortization 1,208 892 Provision for losses on accounts receivable 351 255 Equity in loss (earnings) of affiliate 9 (39) Increase (decrease) in deferred compensation 416 (216) Decrease (increase) in accounts receivable, net (654) 297 Increase in prepaid expenses and other current assets (505) (4) Decrease (increase) in other assets (61) 64 Increase in accounts payable and accrued expenses 577 886 Decrease in accrued salaries and wages (511) (177) Increase in income taxes payable and deferred 598 966 ------ ------ Net cash provided by operating activities 4,858 5,716 ------ ------ Cash flows from investing activities: Additions to equipment and leasehold improvements, net (453) (150) Purchase of marketable securities (350) (330) Deferred contract costs (200) (150) Proceeds from sale/maturities of investments -- 615 Other (28) (209) Cash paid in acquisition of businesses, net of cash received -- (2,104) ------ ------ Net cash used in investing activities (1,031) (2,328) ------ ------ Cash flows from financing activities: Payments on long-term debt (2,962) (2,344) Exercise of stock options, including tax benefit 307 1,165 ------ ------ Net cash used in financing activities (2,655) (1,179) ------ ------ Net increase in cash and cash equivalents 1,172 2,209 Cash and cash equivalents at beginning of period 5,666 1,975 ------ ------ Cash and cash equivalents at end of period $ 6,838 $ 4,184 ====== ====== See notes to condensed consolidated financial statements.
6 of 16 7 REHABCARE GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. - Basis of Presentation The condensed consolidated balance sheets and related condensed consolidated statements of earnings, comprehensive earnings and cash flows contained in this Form 10-Q, which are unaudited, include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and activity have been eliminated in consolidation. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Adjustments consisted only of normal recurring items. The results of operations for the three months ended March 31, 1999, are not necessarily indicative of the results to be expected for the fiscal year. The condensed consolidated financial statements do not include all information and footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. Reference is made to the Company's audited consolidated financial statements and the related notes as of December 31, 1998 and 1997 and for the years ended December 31, 1998 and 1997, and for the ten months ended December 31, 1996, included in the Annual Report on Form 10-K on file with the Securities and Exchange Commission, which provide additional disclosures and a further description of accounting policies. Note 2. - Acquisitions On July 31, 1998, the Company acquired Rehabilitative Care Systems of America, Inc. ("RCSA"), a provider of program outpatient therapy, for consideration consisting of cash and stock. On August 17, 1998, the Company acquired StarMed Staffing, Inc. ("StarMed"), a provider of nurse staffing, and certain related entities for cash from Medical Resources, Inc. On September 9, 1998, the Company acquired Therapeutic Systems, Ltd. ("Therapeutic Systems"), a provider of contract therapy, for consideration consisting of cash, stock and notes. The aggregate purchase prices for these acquisitions paid at closing was $41,150,000, consisting of $37,950,000 in cash, 130,426 shares of stock and $1,000,000 in subordinated notes. An additional $2,000,000 in cash consideration in the purchase of StarMed has been deferred until certain contingencies expire and is secured by a bank letter of credit held by a third-party escrow agent. Additional consideration may be paid to the former stockholders of RCSA, contingent upon the retention of clients, and Therapeutic Systems, contingent upon the attainment of certain financial goals over the next three years, of up to $4,950,000. The cash purchase price was funded through borrowings made available by an increase in the company's bank credit facility to $90,000,000. Goodwill of approximately $33,000,000 related to the acquisitions is being amortized over 40 years. 7 of 16 8 Note 3. - Earnings per Share Three Months Ended March 31, 1999 1998 ---- ---- Numerator: Numerator for basic earnings per share - earnings available to common stockholders (net earnings) $3,430,000 $2,016,000 Effect of dilutive securities - after-tax interest on convertible subordinated promissory notes 55,000 55,000 --------- --------- Numerator for diluted earnings per share - earnings available to common stockholders after assumed conversions $3,485,000 $2,071,000 ========== ========= Denominator: Denominator for basic earnings per share- weighted-average shares outstanding 6,508,000 5,920,000 Effect of dilutive securities: Stock options 427,000 737,000 Convertible subordinated promissory notes 423,000 423,000 Contingently issuable shares -- 92,000 --------- --------- Denominator for diluted earnings per share - adjusted weighted-average shares and assumed conversions 7,358,000 7,172,000 ========= ========= Basic earnings per share $.53 $.34 === === Diluted earnings per share $.47 $.29 === ===
Note 4. - Industry Segment Information The Company operates in two business segments that are managed separately based on fundamental differences in operations: program management and staffing. The program management segment includes the management of acute rehabilitation and skilled nursing units, outpatient programs and contract therapy services. The staffing segment includes staffing of nurses and therapists on a temporary and permanent basis. All of the Company's services are provided in the United States. Summarized information about the Company's operations for the three months ended March 31, 1999 and 1998 in each industry segment is as follows: 8 of 16 9 Revenues from Unaffiliated Customers Operating Earnings --------------------------------- ----------------------------- 1999 1998 1999 1998 ---- ---- ---- ---- Program management $38,121,000 $32,146,000 $5,705,000 $4,742,000 Staffing $31,064,000 $11,418,000 $ 983,000 $ 597,000 ---------- ---------- --------- --------- Total $69,185,000 $43,564,000 $6,688,000 $5,339,000 ========== ========== ========= =========
Total Assets Depreciation and Amortization -------------------------------- ----------------------------- 1999 1998 1999 1998 ---- ---- ---- ---- Program management $ 87,407,000 $66,065,000 $ 779,000 $652,000 Staffing $ 71,276,000 $32,823,000 $ 429,000 $240,000 ----------- ---------- --------- ------- Total $158,683,000 $98,888,000 $1,208,000 $892,000 =========== ========== ========= =======
Capital Expenditures ------------------------------ 1999 1998 ---- ---- Program management $339,000 $100,000 Staffing $114,000 $ 64,000 ------- ------- Total $453,000 $164,000 ======= =======
Item 2.-Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The Company provides physical medicine, rehabilitation and chronic care services in a variety of settings under multi-year contracts. These settings include distinct-part acute rehabilitation units that may or may not be exempt from the Medicare Prospective Payment System (PPS), depending on their stage of development; subacute units that are operated within licensed skilled nursing units; outpatient clinics, both on and off campus of the host hospital, and therapy services for long-term care facilities and school districts. The Company also is a contract provider of therapist and nurse staffing on a continuing and temporary basis to hospitals and long-term care and rehabilitation facilities. Three Months Ended Operating Statistics March 31, 1999 1998 ---------------------- Operating Statistics Inpatient Units (Acute and Subacute) Average bed capacity 2,590 2,292 Average billable length of stay (days) 14.3 14.6 Billable patient days served 174,583 153,353 Admissions 12,217 10,539 Average daily billable census 1,940 1,704 Average occupied beds per unit 14.8 14.4 Total units in operation at end of period 131 120
9 of 16 10 Three Months Ended March 31, 1999 1998 --------------------- Outpatient Clinics Patient visits 158,603 62,872 Units of service 427,339 196,184 Total clinics in operation at end of period 34 20 Contract Therapy Number of locations at end of period 77 42 Staffing Weeks worked 27,430 7,195
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998 Operating revenues during the first quarter 1999 increased by $25,621,000, or 58.8%, to $69,185,000 as compared to the first quarter of 1998. Acquisitions accounted for substantially all of the net increase as increases in inpatient, outpatient and nurse travel revenues were offset by a decline in therapy staffing revenue. Inpatient unit revenue increased by $2,225,000. A 10.6% increase in the average number of inpatient units from 118.7 to 131.3 units, and an increase in the average daily billable census per inpatient unit of 2.8% from 14.4 to 14.8, generated a 13.8% increase in billable patient days to 174,583 and an 8.3% increase in revenue from inpatient units. The increase in billable census per unit for inpatient units is primarily attributable to a 4.7% increase in admissions per unit, offset by a 1.8% decline in average billable length of stay. The decline in average length of stay reflects the continued trend of reduced rehabilitation lengths of stay. The increase in billable patient days was offset by a 4.9% decrease in average per diem billing rates, reflecting lower per diem billing rates for subacute units subject to the Balanced Budget Act of 1997 ("BBA"). Outpatient revenue increased 136.8% to $6,356,000 reflecting $986,000 from the July 1998 acquisition of RCSA, an increase in the average number of outpatient clinics managed from 18.5 to 35.7 (including 12 from RCSA) and an increase in units of service per clinic. Contract therapy revenue increased 2.9% to $2,778,000 reflecting $1,529,000 from the acquisition of Therapeutic Systems in September 1998, offset by a 42.8% decrease in revenue per unit to $36,796, reflecting lower reimbursement rates under the BBA. Staffing revenue increased 164.9% to $31,102,000, reflecting the addition of $23,404,000 in per diem nurse staffing revenue achieved through the August 1998 acquisition of StarMed and an increase in travel nursing staffing revenue of $5,428,000, offset by an approximate $9,441,000 decrease in therapy staffing revenues. Demand for therapists has declined significantly as a result of the implementation of a prospective payment system for skilled nursing facilities and units. Operating expenses for the three months ending March 31, 1999 increased by $19,743,000, or 66.4%, to $49,478,000 as compared to the three months ending March 31, 1998. Acquisitions accounted for substantially all of the net increase. A $3,226,000 increase in operating expenses attributable to the increase in patient days and units of services was offset by decreased therapy staffing costs. The excess of operating expenses over operating revenues associated with non-exempt units decreased from $132,000 to $99,000, on an increase in the average number of non-exempt units from 3.0 to 4.0. The per unit average excess 10 of 16 11 of operating expenses over operating revenues decreased from $44,000 to $25,000 reflecting an increase in the average billable census per unit from 2.8 to 5.5. The average excess of operating expenses over operating revenues for units during their non-exempt year can range to as high as $150,000 to $200,000. General and administrative expenses increased $4,213,000, or 55.4%, to $11,811,000, reflecting increases in corporate office expenses as well as marketing, business development, operations and professional services in support of the increase in units, plus the addition of general and administrative expenses of companies acquired. Depreciation and amortization increased $316,000 reflecting an increase in goodwill from acquisitions. Interest expense increased $372,000 reflecting interest on additional debt issued in the 1998 acquisitions. Earnings before income taxes and cumulative effect of change in accounting principle increased by $944,000, or 19.9%, to $5,686,000. The provision for income taxes for 1999 was $2,256,000 compared to $1,950,000 in 1998, reflecting effective income tax rates of 39.7% and 41.1%, respectively. Earnings before cumulative effect of change in accounting principle increased by $638,000, or 22.9%, to $3,430,000. The cumulative effect of change in accounting principle of $776,000 represents the after-tax charge related to the adoption, effective January 1, 1998, of Statement of Position No. 98-5 Reporting on the Costs of Start-up Activities. Net earnings increased by $1,414,000, or 70.1%, to $3,430,000. Diluted earnings per share increased 62.1% to $.47 from $.29 on a 2.6% increase in the weighted-average shares and assumed conversions outstanding. The cumulative effect of change in accounting principle reduced earnings per share by $.11 in 1998 with no comparable reduction in 1999. Excluding the cumulative effect of the change in accounting principle, diluted earnings per share increased 17.5% from $.40 in 1998 to $.47 in 1999. The increase in shares outstanding is attributable primarily to stock option exercises and shares issued in the 1998 acquisitions, offset by a decrease in the dilutive effect of stock options resulting from a decrease in the average market price of the Company's stock relative to the underlying exercise prices of outstanding options. Liquidity and Capital Resources As of March 31, 1999, the Company had $9,855,000 in cash and current marketable securities and a current ratio of 1.6:1. Working capital increased by $1,370,000 as of March 31, 1999, compared to December 31, 1998, reflecting cash generated by operations. Net accounts receivable were $46,652,000 at March 31, 1999, compared to $46,349,000 at December 31, 1998. The number of days average net revenue in net receivables was 60.7 at March 31, 1999 compared to 63.8 at December 31, 1998. The Company's operating cash flows constitute its primary source of liquidity and historically have been sufficient to fund its working capital and capital expansion requirements. The Company expects to meet its future working capital, capital expenditure, business expansion and debt service requirements from a combination of internal sources and outside financing. The Company has a $30,000,000 revolving line of credit with no balance outstanding as of March 31, 1999. Additionally, a letter of credit was outstanding in the amount of 11 of 16 12 $2,000,000, which reduces the amount the Company could borrow under the revolving line of credit. Year 2000 The Company is subject to risks associated with "Year 2000" compliance, a term which refers to the ability of various data processing hardware and software systems to interpret dates correctly after the beginning of January 1, 2000. The Company has developed a plan that includes five phases relating to awareness, assessment, renovation, validation and implementation. The plan establishes a time table and summarizes each major phase of the project and the estimated costs to renovate the systems in preparation for year 2000. Status of the project is regularly reported to the Board of Directors. The awareness phase included a communication of Year 2000 compliance issues and the potential ramifications to the Company, education and identification of key systems. The assessment phase included the inventorying of systems that may be impacted by Year 2000 issues. Systems were then prioritized from critical to non critical, based upon the potential adverse effect on the financial condition of the Company in the event of loss or interruption in the use of each system. Most of the Company's systems are purchased from or outsourced to industry- known vendors and are generally used in their standard configuration including payroll/human resources, accounting, word processing and spread sheets. Other systems such as recruiting and clinical systems will be replaced by or converted to Year 2000 compatible systems. The Company has closely reviewed the Year 2000 progress as reported by each vendor. The Company has been assured by certain of these vendors, that new Year 2000 compliant systems have been installed. In all other cases, compliant systems will be delivered in time for installation and testing prior to year end 1999. Where possible, the company is testing its systems in a non-operating environment. The Company's costs associated with Year 2000 implementation will be reduced due to its outsourcing arrangements; however, incremental direct costs have been incurred in updating telephone and accounting systems in the amount of $80,000, and accelerated capital improvements of $40,000. Although the Company estimates that additional costs will be minimal, unforeseen circumstances could develop in implementing the plan that could result in the cost varying significantly from current estimates. The final phase of the action plan is the implementation of remediated and other systems into the operating environment of the Company. For those systems that have not yet been delivered, the Company expects delivery of compliant systems not later than the second quarter of 1999. The final phase of the plan is scheduled to be completed by June 30, 1999. Concurrent with the development and execution of the plan is the evolution of a contingency plan that includes procedures to be followed should a system fail. The Company is also completing an assessment of Year 2000 risks relating to its lines of business separate from its dependence on data processing. The assessment includes corresponding with customers to ascertain their overall preparedness regarding Year 2000 risks. The plan also provides for the identification and communication with significant non-data processing third-party vendors regarding their preparedness for Year 2000 risks. It is not 12 of 16 possible to quantify the overall potential adverse effects to the compliance. The failure of a customer to prepare adequately for Year 2000 could have a significant adverse effect on such customer's operations and profitability, which, in turn, could inhibit its ability to pay for the Company's services in accordance with their terms. Failure of a non-data vendor to prepare adequately for Year 2000 could have a significant adverse effect on the vendor's operations, which, in turn, could inhibit the vendor's ability to deliver purchased goods and services to the Company in a timely manner. The Company also recognizes the importance of the Year 2000 compliance by customers, payment sources, and vendors to the Company's customers and vendors. The Company must necessarily rely upon the compliance programs of these third parties. The Company does not anticipate any material disruption in operations as the result of any failure by the Company or its subsidiaries. While the Company is making a substantial effort to become Year 2000 compliant, there is no assurance the failure to adequately address all issues relating to the Year 2000 issue would not have a material adverse effect on its financial condition or results of operations. Part II. - OTHER INFORMATION Item 4. - Submission of Matters to Security Holders The Annual Meeting of Stockholders of the Company was held on Friday, April 30, 1999, at which time the stockholders voted to elect the six incumbent directors to hold office until the next annual meeting of stockholders of the Company or until their successors have been duly elected and qualified. Also, the stockholders voted on a proposal to adopt the RehabCare Group, Inc. Amended and Restated 1996 Long-Term Performance Plan and the RehabCare Group, Inc. 1999 Non-Employee Director Stock Plan. The names of each of the directors of the Company who were reelected at the Annual Meeting and the votes cast "FOR" or for which authority to vote was "WITHHELD" is as follows: Name For Withheld Authority William G. Anderson 5,521,121 311,776 Alan C. Henderson 5,521,496 311,401 Richard E. Ragsdale 5,521,259 311,638 John H. Short 5,521,896 311,001 H. Edwin Trusheim 5,519,809 313,088 Theodore M. Wight 5,521,146 311,751 Regarding the proposal to adopt the Amended and Restated 1996 Long-Term Performance Plan, the votes cast were 2,194,725 "FOR", 2,152,026 "AGAINST", and 36,380 "ABSTAIN". Regarding the proposal to adopt the Non-Employee Director Stock Plan, the votes cast were 2,369,069 "FOR", 1,965,570 "AGAINST", and 48,492 "ABSTAIN". 13 of 16 14 Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits 10.1 RehabCare Group, Inc. Amended and Restated 1996 Long-Term Performance Plan (filed as Appendix A to the Registrant's Proxy Statement for the 1999 Annual Meeting of Stockholders and incorporated herein by reference) 10.2 RehabCare Group, Inc. 1999 Non-Employee Director Stock Plan (filed as Appendix B to the Registrant's Proxy Statement for the 1999 Annual Meeting of Stockholders and incorporated herein by reference) 27 Financial Data Schedule (b) Reports on Form 8-K None 14 of 16 15 SIGNATURES 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. REHABCARE GROUP, INC. May 13, 1999 By ----------------------------------- John R. Finkenkeller Senior Vice President and Chief Financial Officer (Chief Accounting Officer) 15 of 16 16 EXHIBIT INDEX Page Number ----------- 10.1 RehabCare Group, Inc. Amended and Restated 1996 Long-Term Performance Plan (filed as Appendix A to the Registrant's Proxy Statement for the 1999 Annual Meeting of Stockholders and incorporated herein by reference) 10.2 RehabCare Group, Inc. 1999 Non-Employee Director Stock Plan (filed as Appendix B to the Registrant's Proxy Statement for the 1999 Annual Meeting of Stockholders and incorporated herein by reference) 27 Financial Data Schedule Not included in paper filing 16 of 16 EX-27 2 FDS --
5 3-MOS DEC-31-1999 MAR-31-1999 6,838,000 3,017,000 50,136,000 3,484,000 0 61,290,000 4,634,000 0 158,683,000 39,314,000 50,907,000 0 0 77,000 63,816,000 158,683,000 69,185,000 69,185,000 49,478,000 62,497,000 0 0 1,000,000 5,686,000 2,256,000 3,430,000 0 0 0 3,430,000 .53 .47
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