8-K 1 eightk21704starmed.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: February 17, 2004 Date of earliest event reported: February 2, 2004 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 2. Acquisition or Disposition of Assets. On February 2, 2004, pursuant to a Stock Purchase and Sale Agreement dated December 30, 2003 ("Agreement"), RehabCare Group, Inc. ("RehabCare") completed the sale of its StarMed Staffing Division (StarMed Health Personnel, Inc. and certain other assets relating to the "Business" as defined in the Agreement) to InteliStaf Holdings, Inc. ("InteliStaf") in a stock for stock transaction. Under the terms of the Agreement, RehabCare became a substantial shareholder in InteliStaff holding approximately 25% of InteliStaf's outstanding equity. Prior to the completion of the sale, no material relationship existed between InteliStaf and RehabCare or any of its affiliates, any director or officer of RehabCare or any associate of any such director or officer. Subsequent to the transaction, pursuant to the terms of the Agreement, RehabCare now holds two seats on the Board of Directors of InteliStaf. John H. Short Ph.D., Interim President and CEO of RehabCare and C. Ray Holman, a director of RehabCare are RehabCare's representatives on the InteliStaf Board of Directors. The Stock Purchase and Sale Agreement dated December 30, 2003 by and among InteliStaf Holdings, Inc., RehabCare Group, Inc., StarMed Health Personnel, Inc. and StarMed Management, Inc. filed as Exhibit 2 to RehabCare's Form 8-K filed on December 31, 2003 is incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial statements of businesses acquired Not applicable. (b) Pro forma financial information Unaudited pro forma condensed consolidated balance sheet at September 30, 2003 and unaudited pro forma condensed consolidated statements of earnings for the nine months ended September 30, 2003 and the year ended December 31, 2002. Item 7(b)
RehabCare Group, Inc. Pro Forma Condensed Consolidated Balance Sheet September 30, 2003 Unaudited (Dollars in thousands) Pro forma Pro forma As reported Adjustments(3) Result ----------- -------------- ------ ASSETS Current assets: Cash and cash equivalents $ 22,420 $ (793) $ 21,627 Marketable securities, available for sale 5,008 (8) 5,000 Accounts receivable, net 90,550 (27,057) 63,493 Income taxes receivable 1,856 - 1,856 Deferred tax assets 5,274 - 5,274 Other current assets 3,758 (1,503) 2,255 ------- ------- ------- Total current assets 128,866 (29,361) 99,505 Marketable securities, trading 3,398 - 3,398 Investment in associated companies, at equity - 40,000 40,000 Equipment and leasehold improvements, net 18,403 (3,829) 14,574 Excess cost over net assets acquired, net 101,685 (52,956) 48,729 Other 3,598 (467) 3,131 -------- -------- -------- Total assets $255,950 $(46,613) $209,337 ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,752 $(347) $1,405 Accrued salaries and wages 30,529 (5,887) 24,642 Accrued expenses 9,830 (1,039) 8,791 ------- ------ ------- Total current liabilities 42,111 (7,273) 34,838 Deferred compensation 3,417 - 3,417 Deferred tax liabilities 7,220 (5,252) 1,968 ------- ------- ------- Total liabilities 52,748 (12,525) 40,223 ------- ------- ------- Stockholders' equity: Preferred stock - - - Common stock 201 - 201 Additional paid in capital 114,428 - 114,428 Retained earnings 143,276 (34,088) 109,188 Treasury stock (54,704) - (54,704) Accumulated other comprehensive earnings 1 - 1 ------- ------- ------- Total stockholders' equity 203,202 (34,088) 169,114 ------- ------- ------- Total liabilities and stockholders' equity $255,950 $(46,613) $209,337 ======== ======== ========
See accompanying explanatory notes
RehabCare Group, Inc. Pro Forma Condensed Consolidated Statement of Earnings Nine Months Ended September 30, 2003 Unaudited (Dollars and shares in thousands, except per share data) Pro forma Pro forma As reported Adjustments Result ----------- ----------- ------ Operating revenues $409,847 $(173,425) (1) $236,422 Costs and expenses: Operating 310,486 (140,779) (1) 169,707 Selling, general & administrative: Divisions 51,213 (29,220) (1) 21,993 Corporate 20,288 - 20,288 Restructuring charge 1,286 - 1,286 Depreciation and amortization 6,429 (1,412) (1) 5,017 ------- -------- ------- Total costs and expenses 389,702 (171,411) 218,291 ------- -------- ------- Operating earnings 20,145 (2,014) 18,131 Interest income 83 (7) (1) 76 Interest expense (532) - (532) Other income (expense), net (63) 1 (1) (62) -------- -------- ------- Earnings before income taxes and equity in earnings of affiliates 19,633 (2,020) 17,613 Income taxes 7,809 (803) (1) 7,006 Equity in earnings of affiliates - 29 (2) 29 ------- ------- ------- Net earnings $11,824 $(1,188) $10,636 ======= ======= ======= Net earnings per common share: Basic $0.74 $(0.07) $0.67 ===== ====== ===== Diluted $0.72 $(0.07) $0.65 ===== ====== ===== Weighted-average number of common shares outstanding: Basic 15,962 15,962 15,962 ====== ====== ====== Diluted 16,507 16,507 16,507 ====== ====== ======
See accompanying explanatory notes
RehabCare Group, Inc. Pro Forma Condensed Consolidated Statement of Earnings Year Ended December 31, 2002 Pro forma Amounts Unaudited (Dollars and shares in thousands, except per share data) Pro forma Pro forma As reported Adjustments Result ----------- ----------- ------ Operating revenues $562,565 $(277,543) (1) $285,022 Costs and expenses: Operating 413,081 (216,334) (1) 196,747 Selling, general & administrative: Divisions 74,621 (47,555) (1) 27,066 Corporate 26,832 - 26,832 Depreciation and amortization 8,334 (1,808) (1) 6,526 ------- -------- -------- Total costs and expenses 522,868 (265,697) 257,171 ------- -------- -------- Operating earnings 39,697 (11,846) 27,851 Interest income 319 (16) (1) 303 Interest expense (676) - (676) Other income (expense), net 9 - 9 ------- -------- -------- Earnings (loss) before income Taxes and equity in earnings of affiliates 39,349 (11,862) 27,487 Income taxes 14,954 (4,508) (1) 10,446 Equity in earnings of affiliates - 508 (2) 508 ------- -------- -------- Net earnings $24,395 $(6,846) $17,549 ======= ======== ======== Net earnings per common share: Basic $1.45 $(0.41) $1.04 ===== ====== ===== Diluted $1.38 $(0.39) $0.99 ===== ====== ===== Weighted-average number of common shares outstanding: Basic 16,833 16,833 16,833 ====== ====== ====== Diluted 17,642 17,642 17,642 ====== ====== ======
See accompanying explanatory notes RehabCare Group, Inc. Pro Forma Condensed Financial Statements Explanatory Notes (1) The pro forma condensed consolidated statements of earnings for the nine months ended September 30, 2003 and the year ended December 31, 2002 presented herein, reflect the results for RehabCare Group, Inc. ("RehabCare") as historically reported, adjusted for the sale of our StarMed Staffing Division to InteliStaf Holdings, Inc. ("InteliStaf") in a stock for stock transaction. Operating revenues, costs and expenses, interest income, other income/expense and income taxes have been adjusted to remove the period results of the StarMed Staffing Division. No adjustments have been made to interest expense as no cash consideration was paid in the transaction and RehabCare held no debt specific to the StarMed Staffing Division in the periods presented. (2) Equity in earnings from affiliates has been added to the pro forma statements of earnings for the nine months ended September 30, 20003 and the twelve months ended December 31, 2002 to reflect RehabCare's 25% post transaction equity interest in InteliStaf. The pro forma adjustment amounts represent 25% of InteliStaf's net income, as derived from their internally prepared financial statements, for each of the respective periods. (3) The pro forma balance sheet presented reflects the financial position of RehabCare as of September 30, 2003, as historically reported, and as adjusted for the transaction described in footnote 1, including an adjustment to retained earnings for the estimated after tax loss on the sale of the StarMed Division of approximately $29.1 million (assuming the transaction had occurred on January 1, 2002). The value of RehabCare's investment in InteliStaf was determined based on the estimated fair market value of a 25% post transaction share of InteliStaf. 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: February 17, 2004 REHABCARE GROUP, INC. By: /s/ Vincent L. Germanese ----------------------------------------- Vincent L. Germanese Senior Vice President, Chief Financial Officer and Secretary