8-K 1 eightk1103.txt 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 18, 2003 REHABCARE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 0-19294 51-0265872 (State or other (Commission File (I.R.S. Employer jurisdiction of Number) Identification incorporation) Number) 7733 Forsyth Boulevard 17th Floor St. Louis, Missouri 63105 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (314) 863-7422 Item 7. Financial Statements and Exhibits. (c) Exhibits. See Exhibit Index. Item 9. Regulation FD Disclosure. Beginning on November 18, 2003, RehabCare executives will make presentations at investor conferences to analysts and in other forums using the slides as included in this Form 8-K as Exhibit 99. Presentations will be made using these slides, or modifications thereof, in connection with other presentations in the foreseeable future. The current slides incorporated into the investor relations presentation are included in this Form 8-K as Exhibit 99. The full slide presentation is available in the Investor Info section on our website at www. rehabcare.com. Information contained in this presentation is an overview and intended to be considered in the context of RehabCare's SEC filings and all other publicly disclosed information. We undertake no duty or obligation to update or revise this information. However, we may update the presentation periodically in a Form 8-K filing. The presentation included in this report does not include images included in the actual slides. In order that all investors be provided with substantially the same information, RehabCare is making these slides available on its website. The presentation in its entirety will be made available in the Investor Info section of the RehabCare website, www.rehabcare.com, although this availability may be discontinued at any time. Forward-looking statements have been provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. They involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties may include, but are not limited to, the cost, effect and timing of restructuring activities that have been commenced, including our ability to achieve and sustain the annual expense reductions anticipated; the timing and rate of the resumed growth in the staffing division; changes in and compliance with governmental reimbursement rates; regulations or policies affecting the hospital rehabilitation services and contract therapy divisions, including our estimates with respect to the effect of newly promulgated regulations on the Company's business; our ability to attract new client relationships or to retain and grow existing client relationships through the integration of our new information system with those of our clients and the development of alternative product offerings; our ability to identify and consummate, within the expected timeframes, strategic acquisitions to accelerate growth in our divisions; our ability, and the additional costs, to attract operational and professional employees; significant increases in health, worker's compensation and professional and general liability insurance premiums; the adequacy and effectiveness of operating and administrative systems; litigation risks, including our ability to predict the ultimate costs and liabilities or the disruption of RehabCare Group's operations; competitive and regulatory effects on pricing and margins; and general economic conditions, including efforts by governmental reimbursement programs, insurers, healthcare providers and others to contain healthcare costs. 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 hereunto duly authorized. Dated: November 18, 2003 REHABCARE GROUP, INC. By: /s/ Vincent L. Germanese ----------------------------------------- Vincent L. Germanese Senior Vice President, Chief Financial Officer and Secretary EXHIBIT INDEX Exhibit No. Description 99 Text of Investor Relations Presentation in Use Beginning November 18, 2003 Exhibit 99 Safe Harbor Forward-looking statements have been provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. They involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties may include, but are not limited to, the cost, effect and timing of restructuring activities that have been commenced, including our ability to achieve and sustain the annual expense reductions anticipated; the timing and rate of the resumed growth in the staffing division; changes in and compliance with governmental reimbursement rates; regulations or policies affecting the hospital rehabilitation services and contract therapy divisions, including our estimates with respect to the effect of newly promulgated regulations on the Company's business; our ability to attract new client relationships or to retain and grow existing client relationships through the integration of our new information system with those of our clients and the development of alternative product offerings; our ability to identify and consummate, within the expected timeframes, strategic acquisitions to accelerate growth in our divisions; our ability, and the additional costs, to attract operational and professional employees; significant increases in health, worker's compensation and professional and general liability insurance premiums; the adequacy and effectiveness of operating and administrative systems; litigation risks, including our ability to predict the ultimate costs and liabilities or the disruption of RehabCare Group's operations; competitive and regulatory effects on pricing and margins; and general economic conditions, including efforts by governmental reimbursement programs, insurers, healthcare providers and others to contain healthcare costs.
RHB Financial Performance Q3/03 Vs. Q2/03 Q2/03 Q3/03 % Change Revenue $136.0 million $135.0 million (0.7%) EBITDA* $9.8 million $7.8 million (20.4%) Net Earnings $4.5 million $3.3 million (26.7%) EPS $0.27 $0.20** (26.0%)
* Earnings before interest, taxes, depreciation and amortization **Includes restructuring charge of $0.8, or $0.05 per diluted share, after tax. RHB Financial Position Strong Balance Sheet o Current cash - $22 million o Cash generated per month - $2 million o No Debt o Unused $110 million/5 year revolver - 2 years remaining o Current Ratio - 3.1:1 o DSO - 62 days RHB Performance Adjusted EPS Growth (Graphic Omitted) Fiscal Year Ended February 28 1992 - $0.20 1993 - $0.24 1994 - $0.29 1995 - $0.35 1996 - $0.42 Fiscal Year Ended December 31 1996 - $0.47** 1997 - $0.68* 1998 - $0.85* 1999 - $1.08* 2000 - $1.45 2001 - $1.18* 2002 - $1.38 2003 - $.95-$1.10 Guidance **Annualized *The results for 2001 and 1999 do not reflect non-operating losses associated with write-down of investments of $0.02 per share and $0.05 per share, respectively. The results for 1998 do not include a $0.06 per share gain on sale of securities or a $0.05 per share charge for the cumulative effect of change in accounting for start-up costs. The results for 1997 do not reflect a $0.06 per share gain on sale of securities. Considering the effects of these non-operating items, EPS in 2001, 1999, 1998 and 1997 was $1.16, $1.03, $0.86 and $0.73, respectively. RHB Revenues Q3/03 Total Revenue $135 million (Graphic Omitted) Program Management $80.1 million Hospital Rehabilitation Services $46.5 million Contract Therapy $33.6 million Healthcare Staffing $54.9 million Supplemental $29.3 million Travel $25.6 million RHB Business Profile Hospital Rehabilitation Services (Graphic Omitted) Management of inpatient and outpatient rehabilitation programs, skilled nursing units and the delivery of therapy to medical/surgical patients. Inpatient $34.2 million Outpatient $12.3 million 159 Hospital Clients as of September 30, 2003 4 ARU, SNU & OP 12 ARU & SNU 23 ARU & OP 87 ARU only 30 OP only Acute Rehabilitation Units Elderly - 44% orthopedic, 19% stroke, 6% neurological Skilled Nursing Units Elderly - 21% circulatory, 13% respiratory, 10% musculoskeletal Outpatient Middle-aged - over 80% musculoskeletal
RHB Business Profile Hospital Rehabilitation Services (Graphic Omitted) Annual Revenue (in millions) ARU OP SNU 1992 $44.5 1993 48.4 1994 61.7 1995 75.5 $ 7.2 $ 0.5 1996 76.7 10.5 4.4 1997 86.6 9.4 10.8 1998 96.5 16.5 15.2 1999 106.2 30.7 10.3 2000 109.3 42.3 10.7 2001 112.5 50.0 10.8 2002 120.7 49.0 10.0
Billable Patient Admissions/Visits ARU OP Visits SNU Admissions Admissions 1992 11,696 1993 13,147 1994 17,027 1995 21,329 135,064 628 1996 23,135 223,904 3,732 1997 27,019 231,256 8,381 1998 32,537 378,108 12,856 1999 37,320 785,943 11,375 2000 39,313 1,173,324 11,345 2001 42,278 1,439,169 11,804 2002 44,986 1,366,439 10,302
"RehabCare manages the complete continuum of rehabilitation care, from acute therapy through outpatient services. It's a large commitment." Eileen Malo Executive VP, Continuing Care Services Bon Secours Hampton Roads Health System Norfolk, VA RHB Business Profile Hospital Rehabilitation Services Locations (Graphic Omitted) Map omitted showing HRS Acute Rehab Unit locations, HRS Outpatient locations, HRS Skilled Nursing Unit locations and Corporate Headquarters location. RHB Business Profile Contract Therapy (as of September 30, 2003) (Graphic Omitted) Management of post-acute rehabilitation services for patients in skilled nursing and continuing care facilities 200 Clients 473 Locations Elderly; stroke, orthopedic, neurological, complex medical Contract therapy revenues Q3/03 $33.6M "We were looking for a partner that could not only provide high-quality services, but also help us grow our business." Mr. Dean Eliason Vice President Fountains Retirement Communities, Inc. Tucson, AZ
RHB Business Profile Contract Therapy (Graphic Omitted) Annual Revenue (in millions) Average Revenue Per Location 1997 $8.4 $234,921 1998 13.9 281,547 1999 14.1 154,899 2000 30.0 192,130 2001 64.7 258,902 2002 105.3 278,427
RHB Business Profile Contract Therapy Locations (Graphic Omitted) Map omitted showing Contract Therapy locations and Corporate Office location RHB Business Profile StarMed Supplemental (as of September 30, 2003) (Graphic Omitted) Placement of healthcare professionals in single shift to multiple shift assignments in local StarMed markets - 1,620 clients, 75% Hospitals in Q3/03 - 90% nursing, 10% allied - Any healthcare environment including hospitals, physician offices, etc. - 65 branches, 3,490 professionals on assignment, September 30, 2003 Supplemental revenues Q3/03 $29.3M "StarMed has the assignments that I want, when I want them. That's why StarMed's my company." Valerie Sanders Registered Nurse StarMed Ambassador RHB Business Profile StarMed Travel (as of September 30, 2003) (Graphic Omitted) Placement of healthcare professionals in generally 8 to 26 week assignments at healthcare facilities throughout the U.S. - 449 clients, 79% Hospitals in Q3/03 - 76% nursing, 17% radiology - Hospitals or other healthcare facilities - 1,010 professionals on assignment, September 30, 2003 Travel revenues Q3/03 $25.6M "Promises fulfilled. I stick with StarMed because I've learned to trust what they tell me." Renato Oliveros Physical Therapy Assistant StarMed Ambassador
RHB Business Profile StarMed (Graphic Omitted) Annual Revenue (in millions) Weeks Worked Supplemental Travel Supplemental Travel 1996 $28.9 21,908 1997 46.4 29,652 1998 $ 28.4 38.2 27,673 24,592 1999 112.9 35.4 106,447 24,663 2000 205.9 54.2 190,806 33,145 2001 225.6 79.0 188,368 45,530 2002 172.1 105.5 128,396 54,156
RHB Business Profile StarMed Locations (Graphic Omitted) Map omitted showing StarMed locations and Corporate Office location RHB Business Description Market Drivers (Graphics Omitted)
Aging of Baby Boomers U. S. Population Over 65 (in millions) 2000 34.4 2005 36.3 2010 39.7 2015 45.9 2020 53.7 2025 62.6
Source: U.S. Census Bureau, Population Projections Bureau, January 13, 2000
Shortage of Healthcare Professionals RN Demand Vs. Supply (in millions) Demand Supply 2000 1.999 1.889 2005 2.161 2.012 2010 2.344 2.069 2015 2.562 2.055 2020 2.810 2.001
Source: National Center for Health Workforce Analysis, U.S.D.H.H.S., July 2002 RHB Business Description Client Needs Program Management - Increased facility profitability - Increased census (with the "right" patients) - Post-acute care management - Qualified therapists - LOS management - Partners that understand PPS (acute, rehab & SNF) - Innovative clinical programs - Partnerships backed with capital - Systems expertise RHB Business Description Client Needs Staffing - Profitable units at all census levels - Competency assurance - Good value - Integration with permanent staff - Staffing partners, not vendors - Easy staffing solutions RHB Strategic Initiatives (Graphic omitted) Restructuring Service Offerings Build Relationships Acquisitions RHB Strategic Initiatives (Graphic omitted) 1. Restructure Operations - $12 million in cost reductions 48% Personnel Related 31% Vendor Relationships 21% Discretionary Expenditures RHB Strategic Initiatives 2. Re-design Service Offering Post-Acute Continuum (Graphic omitted) StarMed - integrate Travel and Supplemental into single source staffing provider (Graphic omitted) RHB Strategic Initiatives 3. Build parnerships instead of transactional relationships Program Management - Develop joint venture and capital infusion models - Create a la carte service offering for HRS - Develop parnerships models for long-term care chains Healthcare Staffing - Consolidate Travel & Supplemental into an operations and sales model that builds partnerships with our clients - Technology consolidation - Simulis - proving competencies - Economies of scale RHB Strategic Initiatives (Graphic omitted) 4. Acquisitions Capital available Key executives focused on acquisitions Experience with acquisitions Hospital Rehabilitation Services -------------------------------- Advanced Rehabilitation Resources, Inc. - IP Physical Therapy Resources, Inc. - OP Rehabilitative Care Systems of America - OP Salt Lake Physical Therapy - OP DiversiCare Rehab Services, Inc. - OP Contract Therapy ---------------- TeamRehab Moore Rehabilitation Services, Inc. Rehab Unlimited, Inc. Therapeutic Systems, Ltd Healthcare Staffing ------------------- Healthcare Staffing Solutions, Inc. StarMed All Staff, Inc. eai Healthcare Staffing Solutions, Inc. RHB Elements of Success (Graphic omitted) Consistent Long-Term EPS Growth Strong Cash Flow Strong Client Experienced Innovative Products Relationships Management Team & Services Market Trend Shortage of Positive To Partnering Clinicians Demographics