-----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, U46L+S9+wpZ1Ga5VWcViSDAtelElsjwBThZFcKnhUy8ZXQlzo4+x6A004GJ1S1s7 220GWNxPVq855I8NwFASNA== 0000950152-04-000609.txt : 20040130 0000950152-04-000609.hdr.sgml : 20040130 20040130082726 ACCESSION NUMBER: 0000950152-04-000609 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040130 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANOR CARE INC CENTRAL INDEX KEY: 0000878736 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 341687107 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10858 FILM NUMBER: 04554101 BUSINESS ADDRESS: STREET 1: 333 N. SUMMIT STREET CITY: TOLEDO STATE: OH ZIP: 43604-2617 BUSINESS PHONE: 4192525500 MAIL ADDRESS: STREET 1: P.O. BOX 10086 CITY: TOLEDO STATE: OH ZIP: 43699-0086 FORMER COMPANY: FORMER CONFORMED NAME: HCR MANOR CARE INC DATE OF NAME CHANGE: 19981001 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH CARE & RETIREMENT CORP / DE DATE OF NAME CHANGE: 19930328 8-K 1 l05340ae8vk.txt MANOR CARE, INC. 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): January 30, 2004 MANOR CARE, INC. (Exact name of registrant as specified in its charter) Delaware 1-10858 34-1687107 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 333 N. Summit Street, Toledo, Ohio 43604-2617 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (419) 252-5500 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibit. 99.1 Press Release dated January 30, 2004 issued by Manor Care, Inc. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following information, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934. On January 30, 2004, Manor Care, Inc. issued a news release to report its financial results for the fourth quarter of 2003. A copy of this press release is filed herewith as Exhibit 99.1. 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. Manor Care, Inc. (Registrant) Date: January 30, 2004 By: /s/ Geoffrey G. Meyers ------------------------------ Geoffrey G. Meyers Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description - ------ ----------- 99.1 Press Release dated January 30, 2004 issued by Manor Care, Inc. EX-99.1 3 l05340aexv99w1.txt EXHIBIT 99.1 [MANORCARE LOGO] Exhibit 99.1 News Release FOR IMMEDIATE RELEASE CONTACT: Geoffrey G. Meyers, Chief Financial Officer 419/252-5545 e-mail: gmeyers@hcr-manorcare.com MANOR CARE ANNOUNCES FOURTH-QUARTER EARNINGS BOARD INCREASES QUARTERLY DIVIDEND 12 PERCENT TOLEDO, Ohio, January 30, 2004 -- Manor Care, Inc. (NYSE:HCR) today announced fourth-quarter net income of $37.9 million, or 42 cents per diluted share. Revenues in the 2003 fourth quarter were $787 million, an increase of $59 million, or 8.1 percent, from the 2002 fourth quarter. For the year 2003, net earnings per share were $1.31, including unusual charges, and revenues rose to $3.03 billion, a $124 million increase over 2002. This performance led Manor Care's Board of Directors to increase the quarterly cash dividend on the company's common stock to 14 cents per share from 12.5 cents per share, a 12 percent increase. The dividend is payable on February 27, 2004 to shareholders of record on February 13, 2004. Paul A. Ormond, Manor Care chairman, president and CEO, said, "The operational strengths that fueled our performance the first three quarters of the year continued to drive our successes in the fourth quarter. Occupancy in our skilled nursing centers reached a five-year high in the fourth quarter, exceeding 89 percent. This was achieved primarily by our focus on providing care for those with complex medical conditions and in need of intensive rehabilitation, which also resulted in an increase in our percentage of Medicare revenues to a record level. Our hospice and home health -More- Manor Care Reports Earnings, Page 2 care business contributed to growth as well, continuing the rapid expansion that has made us one of the largest providers of hospice services in the United States." Manor Care generated vigorous operating cash flow the entire year, fueled by its operational performance, which allowed the company the following uses of funds: - Purchased $145 million, or over 7 percent, of its shares outstanding at an average price under $21. - Reduced its net debt by $35 million. - Declared the first dividend in the company's history and then increased it, providing additional investment return to shareholders. The company invested in its growth by: - Providing over $100 million for facility maintenance, renovation, upgrades and expansions. - Completing 10 nursing center expansions, with 16 more currently under way. - Starting construction on two nursing centers. - Signing a definitive agreement to acquire four Ohio nursing centers now being leased. - Fine-tuning its skilled nursing center portfolio by divesting three nursing centers and signing definitive agreements to divest five others which no longer fit its strategic growth plans. The company maintained its emphasis on managing costs, especially those related to labor. Manor Care's wage rate increases decelerated through the year, declining to a 4 percent rate of increase by year-end. Temporary agency staff was also reduced during 2003, and over 80 percent of the company's facilities continue to use no supplemental staffing. Managing the high general and professional liability costs has been an ongoing, primary company focus. During 2003, strong tort reform legislation was passed in Texas and upheld by a state constitutional amendment. Other key states also made a -More- Manor Care Reports Earnings, Page 3 start at meaningful tort reform. Following the fourth-quarter actuarial review, it was determined that these efforts, in concert with the company's proactive management initiatives and stable claims activity, would enable Manor Care to lower its quarterly accrual rate by about $4 million. This is an important step forward for the company, but the situation will continue to be monitored closely. There is still significant work to be done on this serious, industry-wide issue, especially in the state of Florida. It is hoped that legislators will intensify their focus on implementing effective tort reform across the country to help insure that access to high-quality care is not jeopardized for those who are most in need. The long-term care industry entered 2003 having experienced a 10 percent reduction in Medicare reimbursement. Manor Care's initiatives on increasing occupancy; hiring, training and retaining quality professionals; and deploying specialized programs to care for our more complex patients enabled it to continue to grow revenues in spite of this reduction. Beginning with the fourth quarter, about one-third of the money that had been taken away a year earlier was returned through corrective adjustments to the Medicare reimbursement rates. The company remains optimistic that favorable Medicare rates will continue as recognition of the increased complex medical and rehabilitation needs of skilled nursing center patients becomes more widely understood by legislators. At the same time, there is caution about increases in Medicaid reimbursement. States continue to wrestle with fiscal shortfalls, and many traditional programs, such as Medicaid, are being scrutinized. Although Manor Care's Medicaid rates in the fourth quarter were about 3 percent higher compared to the prior year, several states continue to underfund this critical area for their most needy citizens. "The successes we achieved in 2003 would not have been possible without the commitment of our 61,000 employees," Mr. Ormond said. "You do not tackle the challenges faced by our industry this past year and improve on your performance -More- Manor Care Reports Earnings, Page 4 without a lot of hard work and dedication. I commend our employees for their efforts, and know that they can be counted on to remain committed to a high level of care, which, in turn, will be the force behind our continuing growth." At 9:00 a.m. Eastern Time today, Manor Care will hold a conference call to discuss the company's results and performance for the 2003 fourth quarter and year. The toll-free number for the call is 1-888-634-8435. Callers to this number will be able to listen to the company's discussion and have the opportunity to ask questions. The call will also be webcast live in the Investor Information section of Manor Care's website www.hcr-manorcare.com. For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the live call. To access the rebroadcast, dial 1-800-642-1687. The conference ID number is 4807581. This rebroadcast will be available until midnight, February 5. A recording of the call will also be available on Manor Care's website for 90 days. Manor Care, Inc., through its operating group HCR Manor Care, is the leading owner and operator of long-term care centers in the United States. The company's 61,000 employees provide high-quality care for patients, residents and clients through a network of more than 500 skilled nursing centers, assisted living facilities, outpatient rehabilitation clinics, and hospice and home health care offices. Alliances and other ventures supply high-quality pharmaceutical products and management services for professional organizations. The company operates primarily under the respected Heartland, ManorCare and Arden Courts names. Manor Care is committed to being the preeminent care provider in the industry. Shares are traded on the New York Stock Exchange under the ticker symbol HCR. Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law. Such forward-looking statements reflect management's beliefs and assumptions and are based on information currently available to management. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual -More- Manor Care Reports Earnings, Page 5 results, performance or achievements of the company to differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by the company with the Securities and Exchange Commission and include changes in the health care industry because of political and economic influences, changes in regulations governing the industry, changes in reimbursement levels including those under the Medicare and Medicaid programs, changes in the competitive marketplace, changes in current trends in the cost and volume of general and professional liability claims, and our ability to complete the previously announced settlement with the Department of Justice. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements. -More- Manor Care Reports Earnings, page 6 Manor Care, Inc. Consolidated Statements of Income (unaudited)
- ---------------------------------------------------------------------------------------------------------- Three months ended Year ended December 31, December 31, 2003 2002 2003 2002 - ---------------------------------------------------------------------------------------------------------- (In thousands, except earnings per share) Revenues $ 787,056 $ 728,106 $ 3,029,441 $ 2,905,448 Expenses Operating 640,788 604,814 2,523,534 2,401,636 General and administrative 43,571 42,053 157,566 131,628 Depreciation and amortization 33,215 30,713 128,810 124,895 Asset impairment 5,953 33,574 ----------- ----------- ----------- ----------- 717,574 683,533 2,809,910 2,691,733 ----------- ----------- ----------- ----------- Income before other income (expenses) and income taxes 69,482 44,573 219,531 213,715 Other income (expenses): Interest expense (10,893) (8,883) (41,927) (37,651) Gain (loss) on sale of assets (107) 248 3,947 30,651 Equity in earnings of affiliated companies 2,006 1,147 7,236 4,761 Interest income and other 186 98 1,625 1,208 ----------- ----------- ----------- ----------- Total other expenses, net (8,808) (7,390) (29,119) (1,031) ----------- ----------- ----------- ----------- Income before income taxes 60,674 37,183 190,412 212,684 Income taxes 22,753 14,129 71,405 80,820 ----------- ----------- ----------- ----------- Income before cumulative effect 37,921 23,054 119,007 131,864 Cumulative effect of change in accounting for goodwill (1,314) ----------- ----------- ----------- ----------- Net income $ 37,921 $ 23,054 $ 119,007 $ 130,550 =========== =========== =========== =========== Earnings per share - basic: Income before cumulative effect $ .43 $ .24 $ 1.33 $ 1.34 Cumulative effect (.01) ----------- ----------- ----------- ----------- Net income $ .43 $ .24 $ 1.33 $ 1.33 =========== =========== =========== =========== Earnings per share - diluted: Income before cumulative effect $ .42 $ .24 $ 1.31 $ 1.33 Cumulative effect (.01) ----------- ----------- ----------- ----------- Net income $ .42 $ .24 $ 1.31 $ 1.31(*) =========== =========== =========== ========== Weighted average shares: Basic 88,120 95,290 89,729 98,165 Diluted 89,897 96,250 91,119 99,328 Cash dividends declared per common share $ .125 $ .25
(*) Doesn't add due to rounding -More- Manor Care Reports Earnings, page 7 Manor Care, Inc. Condensed Consolidated Balance Sheets (unaudited)
- ---------------------------------------------------------------------------- December 31, December 31, 2003 2002 - ---------------------------------------------------------------------------- (In thousands) Cash $ 86,251 $ 30,554 Other current assets 499,148 480,263 Property and equipment 1,514,250 1,534,339 Other 297,062 283,916 ---------- ---------- Total assets $2,396,711 $2,329,072 ========== ========== Current liabilities $ 387,502 $ 641,864 Long-term debt 659,181 373,112 Other long-term liabilities 374,923 298,049 Shareholders' equity 975,105 1,016,047 ---------- ---------- Total liabilities and shareholders' equity $2,396,711 $2,329,072 ========== ========== Shares outstanding 89,014 95,052 YTD shares repurchased $145.1 million 6,941 - ----------------------------------------------------------------------------
Selected Statistics (unaudited) - ---------------------------------------------------------------------------- Quarter ended December 31, 2003 2002 - ---------------------------------------------------------------------------- Occupancy 89% 87% Revenue allocation: Private and other 34% 37% Medicare 34% 30% Medicaid 32% 33% Quality Mix 68% 67% Per Diems: Private and other (excluding assisted living) $190.87 $186.01 Private and other (assisted living) $105.56 $101.04 Medicare $333.57 $310.14 Medicaid $131.12 $127.57 Number of Facilities: Skilled nursing facilities 293 296 Assisted living facilities: Springhouses 16 16 Arden Courts 54 54 ------- ------- Total 70 70 ======= ======= Number of Beds: Skilled nursing facilities 40,846 41,195 Assisted living facilities 5,459 5,457 Outpatient therapy clinics 92 91 Home health offices 89 88 Skilled nursing facility wage rate increases fourth quarter 2003 to 2002 4% Cash flow from operations (in millions): Fourth Quarter $ 46 $ 65 Year-to-date $ 300 $ 283 Capital Expenditures (in millions): Maintenance and renovations $ 20 $ 23 New construction $ 8 $ 3
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