-----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, PukvqlQ+YwDE5Dr55JFlgQz/n8saK2lALJCIzREcB9qbVNbS7cmmw3qwEiH82m/I 4VAolHNM1vKMBAIBMTEaUg== 0000890925-96-000003.txt : 19960816 0000890925-96-000003.hdr.sgml : 19960816 ACCESSION NUMBER: 0000890925-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MULTICARE COMPANIES INC CENTRAL INDEX KEY: 0000890925 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 223152527 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22090 FILM NUMBER: 96614910 BUSINESS ADDRESS: STREET 1: 411 HACKENSACK AVE CITY: HACKENSACK STATE: NJ ZIP: 07601 BUSINESS PHONE: 2014888818 MAIL ADDRESS: STREET 1: 411 HACKENSACK AVENUE CITY: HACKENSACK STATE: NJ ZIP: 07601 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1996 Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 34-22090 THE MULTICARE COMPANIES, INC. (Exact name of Registrant as specified in its Charter) Delaware 22-3152527 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification #) 411 Hackensack Avenue Hackensack, New Jersey 07601 Address of principal executive offices Zip Code Registrant's telephone number, including area code (201) 488-8818 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 each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 9, 1996 Common Stock ($.01 Par Value) 26,551,791 shares THE MULTICARE COMPANIES, INC. AND SUBSIDIARIES Index Page Special Note Regarding Forward-Looking Statements 1-2 Part I. Financial Information Consolidated Balance Sheets December 31, 1995 and June 30, 1996 3 Consolidated Statements of Operations Three and six months ended June 30, 1995 and 1996 4 Consolidated Statements of Cash Flows Six months ended June 30, 1995 and 1996 5 Notes to Consolidated Financial Statements 6-8 Management's Discussion and Analysis of Financial Condition and Results of Operations 9-11 Part II. Other Information 12 Signatures 13 Special Note Regarding Forward-Looking Statements Certain statements in this Form 10-Q, including information set forth under "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations", constitute "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). The Multicare Companies, Inc. ("Multicare" or the "Company") desires to take advantage of certain "safe harbor" provisions of the Reform Act and is including this special note to enable the Company to do so. Forward-looking statements included in this Form 10-Q, or hereafter included in other publicly available documents filed with the Securities and Exchange Commission, reports to the Company's stockholders and other publicly available statements issued or released by the Company involve known and unknown risks, uncertainties, and other factors which could cause the Company's actual results, performance (financial or operating) or achievements to differ materially from the future results, performance (financial or operating) achievements expressed or implied by such forward-looking statement. The Company believes the following important factors could cause such a material difference to occur: 1) The Company's ability to grow through the acquisition and development of long-term care facilities or the acquisition of ancillary businesses. 2) The Company's ability to identify suitable acquisition candidates, to consummate or complete construction projects, or to profitably operate or successfully integrate enterprises into the Company's other operations. 3) The occurrence of changes in the mix of payment sources utilized by the Company's patients to pay for the Company's services. 4) The adoption of cost containment measures by private pay sources such as commercial insurers and managed care organizations, as well as efforts by governmental reimbursement sources to impose cost containment measures. 5) Changes in the United States healthcare system, including changes in reimbursement levels under Medicaid and Medicare, and other changes in applicable government regulations that might affect the profitability of the Company. 6) The Company's continued ability to operate in a heavily regulated environment and to satisfy regulatory authorities, thereby avoiding a number of potentially adverse consequences, such as the imposition of fines, temporary suspension of admission of patients, restrictions on the ability to acquire new facilities, suspension or decertification from Medicaid or Medicare programs, and, in extreme cases, revocation of a facility's license or the closure of a facility, including as a result of unauthorized activities by employees. 7) The Company's ability to secure the capital and the related cost of such capital necessary to fund its future growth through acquisition and development, as well as internal growth. 8) Changes in certificate of need laws that might increase competition in the Company's industry, including, particularly, in the states in which the Company currently operates or anticipates operating in the future. 9) The Company's ability to staff its facilities appropriately with qualified health care personnel, including in times of shortages of such personnel and to maintain a satisfactory relationship with labor unions. 10) The continued active involvement of the Company's key management personnel, including particularly, Moshael J. Straus and Daniel E. Straus, co- chief executive officers of the Company. 11) The level of competition in the Company's industry, including without limitation, increased competition from acute care hospitals, providers of assisted and independent living and providers of home health care and changes in the regulatory system in the state in which the Company operates that facilitate such competition. 12) The continued availability of insurance for the inherent risks of liability in the healthcare industry. 13) Price increases in pharmaceuticals, durable medical equipment and other items. 14) The Company's reputation for delivering high-quality care and its ability to attract and retain patients, including patients with relatively high acuity levels. 1 15) Changes in general economic conditions, including changes that pressure governmental reimbursement sources to reduce the amount and scope of healthcare coverage. Many of the foregoing factors have been discussed in the Company's prior SEC filings and other publicly available documents. Had the Reform Act been effective at an earlier time, this special note would have been included in earlier SEC filings. The foregoing review of significant factors should not be construed as exhaustive or as an admission regarding the adequacy of disclosures previously made by the Company prior to the effective date of the Reform Act. 2 THE MULTICARE COMPANIES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share data)
December 31, June 30, 1995 1996 (Unaudited) Assets Current assets: Cash and cash equivalents $ 3,921 2,034 Accounts receivable, net 86,168 107,356 Prepaid expenses and other current assets 8,181 13,318 Deferred taxes 3,353 3,498 Total current assets 101,623 126,206 Property, plant and equipment, net 286,767 382,140 Goodwill, net 59,610 115,528 Debt issuance costs, net 4,738 5,622 Other assets 18,220 20,657 $ 470,958 650,153 Liabilities and Stockholders' Equity Current liabilities: Accounts payable 13,619 15,484 Accrued liabilities 30,850 40,829 Current portion of long-term debt and capitalized lease obligations 1,612 1,052 Total current liabilities 46,081 57,365 Long-term debt and capitalized lease obligations 281,470 419,510 Deferred taxes 24,200 42,376 Contingent stock purchase commitment 5,312 --- Stockholders' equity: Preferred stock, par value $.01, 7,000,000 shares authorized, none issued --- --- Common stock, par value $.01, 70,000,000 shares authorized; 17,680,932 and 26,541,592 issued and outstanding in 1995 and 1996, respectively 177 265 Additional paid-in-capital 75,419 80,930 Retained earnings 38,299 49,707 Total stockholders' equity 113,895 130,902 $ 470,958 650,153
See accompanying notes to consolidated financial statements. 3 THE MULTICARE COMPANIES, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) (In thousands, except per share data)
Three months Six months ended June 30, ended June 30, 1995 1996 1995 1996 Net revenues $ 85,605 131,889 167,305 251,946 Expenses: Operating expenses 65,333 102,468 127,696 196,238 Corporate, general and administrative 4,319 6,258 8,262 12,413 Depreciation and amortization 3,301 5,553 6,345 10,207 Total expenses 72,953 114,279 142,303 218,858 Income from operations 12,652 17,610 25,002 33,088 Other income (expense): Investment income 814 132 925 213 Interest expense (4,878) (6,753) (9,121) (12,297) Total other income (expense) (4,064) (6,621) (8,196) (12,084) Income before income taxes and extraordinary item 8,588 10,989 16,806 21,004 Income tax expense 3,324 4,209 6,448 8,027 Income before extraordinary item 5,264 6,780 10,358 12,977 Extraordinary item - loss on extinguishment of debt, net of tax benefit --- --- --- 1,481 Net income $ 5,264 6,780 10,358 11,496 Income per common and common equivalent share data: Income before extraordinary item $ .20 .25 .39 .47 Net income $ .20 .25 .39 .42 Weighted average number of common and common equivalent shares outstanding 26,850 27,589 26,885 27,446 Income per common share assuming full dilution: Income before extraordinary item $ .20 .24 .39 .46 Net income $ .20 .24 .39 .41 Weighted average number of common shares outstanding assuming full dilution 31,826 32,565 29,863 32,511 See accompanying notes to consolidated financial statements.
4 THE MULTICARE COMPANIES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Six months ended June 30, 1995 1996 Cash flows from operating activities: Net cash (used in) provided by operating activities $ (4,983) 6,217 Cash flows from investing activities: Assets and operations acquired (12,951) (122,940) Capital expenditures (14,775) (28,787) Other assets (896) (2,201) Net marketable securities (purchased) sold (39,485) 202 Net cash used in investing activities (68,107) (153,726) Cash flows from financing activities: Proceeds from exercise of stock options 153 128 Proceeds from long-term debt 162,354 193,700 Payments of long-term debt and capitalized lease obligations (79,897) (45,871) Debt issuance costs (3,497) (2,406) Other --- 71 Net cash provided by financing activities 79,113 145,622 Increase (decrease) in cash and cash equivalents 6,023 (1,887) Cash and cash equivalents at beginning of period 8,009 3,921 Cash and cash equivalents at end of period $ 14,032 2,034
See accompanying notes to consolidated financial statements. 5 THE MULTICARE COMPANIES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements June 30, 1996 (Unaudited) (In thousands, except share data) (1) Organization and Basis of Presentation The Multicare Companies, Inc. and Subsidiaries (Multicare or the Company) own, operate and manage skilled nursing facilities which provide long-term care and specialty medical services in selected geographic regions within the eastern and midwestern United States. In addition, the Company operates institutional pharmacies, medical supply companies, outpatient rehabilitation centers and other ancillary healthcare businesses. The financial information as of June 30, 1996 and for the three and six months ended June 30, 1995 and 1996, is unaudited and has been prepared in conformity with the accounting principles and practices as reflected in the Company's audited annual financial statements. The unaudited financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of June 30, 1996 and the operating results and cash flows for the three and six months ended June 30, 1995 and 1996. Results for interim periods are not necessarily indicative of those to be expected for the year. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto incorporated in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. All significant intercompany transactions and accounts of the Company have been eliminated. (2) Commitments and Contingencies A significant portion of the Company's net revenues and accounts receivable are due from services reimbursable under the Medicaid and the Medicare programs. There are numerous healthcare reform proposals being considered on the federal and state levels. Although no reform legislation changes have been implemented, the current proposals for the Medicare program include a shift to a prospective payment system, a limit on interim payments for ancillary services, a reduction of reimbursement for capital costs, a continued freeze on routine cost limits, and salary equivalency limits for occupational and speech therapies. In addition, current Medicaid proposals being considered include the elimination of the Boren amendment and the establishment of state block grants. The Company cannot predict at this time whether any of these proposals will be adopted or, if adopted and implemented, what effect such proposals would have on the Company. The Company is from time to time subject to claims and suits arising in the ordinary course of business. In the opinion of management, the ultimate reso lution of pending legal proceedings will not have a material effect on the Company's financial statements. 6 (3) Capital Stock and Earnings Per Share In May 1996, the Company effected a three-for two stock split in the form of a 50% stock dividend. In 1996, Stockholders' equity has been restated to give recognition to the stock split by reclassifying from retained earnings to common stock the par value of the additional shares arising from the stock split. In addition, all references in the financial statements to number of shares, per share amounts and stock option data have been restated. The computation of primary earnings per share is based on the weighted average number of outstanding shares during the period and includes when their effect is dilutive, common stock equivalents consisting of certain shares subject to stock options. Fully diluted earnings per share additionally assumes the conversion of the Company's Convertible Subordinated Debentures Net income used in the computation of fully diluted earnings per share was determined on the assumption that the convertible debentures were converted on January 1, 1995 and net income was adjusted for the amounts representing interest and amortization of debt issuance costs, net of tax effect. (4) Financing Obligations In May 1996, the Company restructured its credit agreement with a group of banks led by The Chase Manhattan Bank to extend the amount of credit available from $300,000 to $350,000. (5) Acquisitions In December 1995, the Company completed the acquisition of Glenmark Associates, Inc. (Glenmark). The Company acquired the outstanding capital stock of Glenmark for approximately $32,000 including transaction costs, repaid approximately $24,200 of debt, and assumed historical debt of approximately $24,700. Total goodwill approximated $25,600. In February 1996, the Company completed the acquisition of Concord Health Group, Inc. (Concord). The Company acquired the outstanding capital stock and warrants of Concord for approximately $75,000 including transaction costs, repaid approximately $41,000 of debt, and assumed historical debt of approximately $4,000. Total goodwill approximated $55,000. The following unaudited pro forma financial information gives effect to the acquisitions of Glenmark and Concord as if such transactions occurred on January 1, 1995:
Pro forma Pro forma six months ended six months ended June 30, 1995 June 30, 1996 Net revenues $ 219,104 260,036 Income before extraordinary item 8,519 13,025 Net income 8,246 11,544 Income before extraordninary item per common and common equivalent share .32 .47 Net income per common and common equivalent share .31 .42 Income before extraordinary item per share assuming full dilution .32 .46 Net income per share assuming full dilution .31 .42
7 In June 1996, the Company signed a definitive agreement to acquire the A.D.S Group, a privately held long-term care company. The A.D.S Group is controlled by Alan D. Solomont who is a member of the Company's Board of Directors. Under the terms of the agreement, Multicare will pay approximately $62,600, assume or repay approximately $27,000 in debt and issue 531,507 shares of its common stock for A.D.S. The closing will occur upon receipt of all required regulatory consents and licenses, the approval of A.D.S' shareholders, the satisfactory completion of Multicare's due diligence and the receipt of consent of Multicare's lender. The transaction is expected to be completed during the fourth quarter of 1996. 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General The Company has experienced significant growth, primarily through acquisitions of long-term care facilities and ancillary businesses and increased utilization of specialty medical services. It is the Company's strategy to expand through construction and development of new facilities and selective acquisitions with geographically concentrated operations. Summarized below are the recent significant acquisitions completed in 1995 and 1996: - In December 1995, the Company acquired the outstanding capital stock of Glenmark Associates, Inc., a long-term care provider through 21 facilities and several ancillary businesses with approximately 1,700 beds, located mainly in West Virginia. - In February 1996, the Company acquired the outstanding capital stock of Concord Health Group, Inc., a long-term care provider through 15 long-term care facilities with approximately 2,600 beds and ancillary businesses in Pennsylvania. Results of Operations Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995 Net Revenues. Net revenues increased to $251.9 million for the six months ended June 30, 1996 from $167.3 million for the comparable period in 1995, an increase of $84.6 million or 50.6%. Of this increase, $79.4 million was due to the inclusion of revenues for the Company's recent acquisitions. The balance principally represents higher payor rates and growth in specialty medical services. Specialty medical service revenues increased to $97.7 million in the first six months of 1996 compared to $67.2 million in the same period of 1995. The Company's quality mix of non-Medicaid patient revenues was 64% in the first six months of 1996 compared to 68% in the similar period last year. The 1996 percentages reflect the impact of certain recent acquisitions which have historically generated lower revenues in these areas. Operating Expenses. Operating expenses increased to $196.2 million for the six months ended June 30, 1996 from $127.7 million for the comparable period in 1995, an increase of $68.5 million or 53.6%. Salaries, wages and benefits increased to $123.6 million for the six months ended June 30, 1996 from $80.4 million for the comparable period in 1995, an increase of $43.2 million or 53.7%. Of this increase, $36.3 million was due to the Company's recent acquisitions. The remainder of the increase was due to the expanded utilization of salaried therapists and nursing staffing levels to support higher usage of specialty medical services, in addition to cost of living increases. Other operating expenses increased to $72.6 million for the six months ended June 30, 1996 from $47.3 million for the comparable period in 1995, an increase of $25.3 million or 53.5%. Other operating expenses include independent contractor fees for therapy, dietary supplies and food, utilities, facility maintenance and housekeeping. The increase in these expenses was due principally to the inclusion of the recent acquisitions. Corporate, General and Administrative. Corporate, general and administrative expense increased to $12.4 million in the first six months of 1996 from $8.3 million in the same period of 1995, an increase of $4.1 million. This increase was primarily attributable to additional resources devoted to operations, finance, accounting, and information systems in order to support the facilities acquired and for present and planned growth. Depreciation and Amortization. Depreciation and amortization increased to $10.2 million in the first six months ended June 30, 1996 from $6.3 million in the same period of 1995, an increase of $3.9 million. The increase was primarily due to the inclusion of depreciation and amortization for the facilities recently acquired. Interest Expense. Interest expense increased to $12.3 million in the six months ended June 30, 1996 from $9.1 million in the same period of 1995, an increase of $3.2 million. This increase was due primarily to higher borrowing levels on the Company's credit agreement and interest associated with the Company's Convertible Debentures. 9 Three Months Ended June 30, 1996 Compared to Three Months Ended June 30, 1995 Net Revenues. Net revenues increased to $131.9 million for the three months ended June 30, 1996 from $85.6 million for the comparable period in 1996, an increase of $46.3 million or 54.1%. Of this increase, $41.3 million was due to the inclusion of revenues for the Company's recent acquisitions. The balance principally represents higher payor rates and growth in specialty medical service revenues. Specialty medical service revenues amounted to $52.4 million in the second quarter of 1996 compared to $34.8 million in the comparable period of 1995. The Company's quality mix of non-Medicaid patient revenues was 65% in the second quarter of 1996 compared to 68% in the similar period last year. The 1996 percentages reflect the impact of certain recent acquisitions which have historically generated lower revenues in these areas. Operating Expenses. Operating expenses increased to $102.5 million for the three months ended June 30, 1996 from $65.3 million for the comparable period in 1995, an increase of $37.2 million or 57.0%. Salaries, wages and benefits increased to $63.6 million for the three months ended June 30, 1996 from $41.1 million for the comparable period in 1995, an increase of $22.5 million or 54.7%. Of this increase, $19.9 million was due to inclusion of results for the recent acquisitions. The remainder of the increase was due to the expanded utilization of salaried therapists and nursing staffing levels to support higher usage of specialty medical services, in addition to cost of living increases. Other operating expenses increased to $38.9 million for the three months ended June 30, 1996 from $24.2 million for the comparable period in 1995, an increase of $14.7 million or 60.2%. Other operating expenses include independent contractor fees for therapy, dietary supplies and food, utilities, facility maintenance and housekeeping. The increase in these expenses was due principally to the inclusion of the recent acquisitions. Corporate, General and Administrative. Corporate, general and administrative expenses increased to $6.3 million in the second quarter of 1996 from $4.3 million in the same period of 1995, an increase of $2.0 million. The increase was primarily attributable to additional resources devoted to operation, finance, accounting, and information systems in order to support the facilities acquired and for present and planned growth. Depreciation and amortization. Depreciation and amortization increased to $5.6 million in the three months ended June 30, 1996 from $3.3 million in the same period of 1995, an increase of $2.3 million. The increase was primarily due to the inclusion of depreciation and amortization for the recently acquired facilities. Interest Expense. Interest expense increased to $6.8 million in 1996 from $4.9 million in 1995, an increase of $1.9 million. This increase was due primarily to higher borrowing levels on the Company's various credit agreements. Liquidity and Capital Resources The Company maintains working capital from operating cash flows and lines of credit that are adequate for continuing operations, debt payments, and anticipated capital expenditures. At June 30, 1996, the Company had working capital of $68.8 million, compared to $55.5 million at December 31, 1995. In May 1996, the Company restructured its credit agreement with a group of banks led by The Chase Manhattan Bank to extend the amount of credit available to it from $300 million to $350 million. At June 30, 1996, the amount available under the line of credit approximated $86.6 million. In June 1996, the Company signed a definitive agreement to acquire the A.D.S Group, a privately held long-term care company. Under the terms of the agreement, Multicare will pay approximately $62.6 million, assume or repay approximately $27.0 million in debt and issue 531,507 shares of its common stock for A.D.S. The closing will occur upon the receipt of all required regulatory consents and licenses, the approval by A.D.S' shareholders, the satisfactory completion of Multicare's due diligence and the receipt of consent of Multicare's lender. The transaction is expected to be completed during the fourth quarter of 1996. Net accounts receivable were $107.4 million at June 30, 1996, compared to $86.2 million at December 31, 1995. This increase is primarily attributable to the recent acquisitions, the utilization of specialty medical services for higher acuity level patients, and the timing of third-party interim and settlement payments. The allowance for doubtful accounts represents approximately 6% of gross accounts receivable at June 30, 1996 and December 31, 1995. Legislative and regulatory action and government budgetary constraints could change the timing of payments and reimbursement rates of the Medicare and Medicaid programs in the future. These changes could have a material adverse effect on the Company's future operating results and cash flows. 10 A significant portion of the Company's net revenues and accounts receivable are due from services reimbursable under the Medicaid and the Medicare programs. There are numerous healthcare reform proposals being considered on the federal and state levels. Although no reform legislation changes have been implemented, the current proposals for the Medicare program include a shift to a prospective payment system, a limit on interim payments for ancillary services, a reduction of reimbursement for capital costs, a continued freeze on routine cost limits, and salary equivalency limits for occupational and speech therapies. In addition, current Medicaid proposals being considered include the elimination of the Boren amendment and the establishment of state block grants. The Company cannot predict at this time whether any of these proposals will be adopted or, if adopted and implemented, what effect such proposals would have on the Company. The Company plans to continue its growth oriented strategy for the foreseeable future. The Company anticipates using operating cash flows, bank credit facilities, leasing arrangements, and the sale of additional debt or equity securities to finance its growth. The Company estimates its capital requirements for the construction of new facilities and the expansion and renovation of existing facilities to approximate $37 million over the next twelve months based on existing construction commitments and plans. 11 Part II-Other Information Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. (a) The Annual Meeting of Stockholders was held on May 8, 1996. (b) None. (c) The following matters were voted upon and approved at the Annual Meeting of Stockholders: (i) the election of five directors with 16,254,870 votes cast in favor and 59,682 negative votes for each of four nominees and 16,254,770 votes cast in favor and 59,782 negative votes for one nominee; (ii ) a proposal to amend the Company's Restated Certificate of Incorporation increasing the number of authorized shares of common stock for the purpose of effecting a three-for-two stock split in the form of a 50% stock dividend with 14,121,748 votes cast in favor, 2,186,354 negative votes and 6,450 abstentions; (iii ) a proposal to approve the Company's Employee Stock Purchase Plan with 15,772,262 votes cast in favor, 534,390 negative votes and 7,900 abstentions; (iv) a proposal to approve the Company's Key Employee Incentive Compensation Plan with 15,411,043 votes cast in favor, 896,084 negative votes and 7,425 abstentions; (v) a proposal to approve the Company's Non-Employee Director Retainer and Meeting Fee Plan with 16,020,660 votes cast in favor, 286,542 negative votes and 7,350 abstentions; and (vi) a proposal to ratify the appointment of KPMG Peat Marwick LLP as the Company's independent auditors for the year ending December 31, 1996 with 16,111,852 votes cast in favor, 1,300 negative votes and 201,400 abstentions. Item 5. Other Information. None. Item 6. (a) Exhibits. Exhibit No. 11 Statement re computation of per share earnings 27 Financial Data Schedule (b) Reports on Form 8-K. On May 6, 1996, the Company filed a Current Report on Form 8-K/A relating to the acquisition of Concord pursuant to Item 7(4) of Form 8-K, which allows the filing of required financial statements and pro forma financial information within 60 days after the date on which the report on Form 8-K must be filed. On June 28, 1996 the Company filed a Current Report on Form 8-K to report that the Company signed a definitive agreement to acquire the A.D.S Group. 12 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. The Multicare Companies, Inc. STEPHEN R. BAKER BY: ----------------- Stephen R. Baker Executive Vice President and Chief Financial Officer August 14, 1996 13 EX-11 2 The Multicare Companies, Inc. Computation of earnings per share June 30, 1996 (Unaudited) (in thousands, except share data)
Three months Six months ended ended June 30, 1996 June 30, 1996 Income per common and common equivalent share: Income before extraordinary item $ 6,780 12,977 Net Income $ 6,780 11,496 Weighted average number of common and common equivalent shares outstanding 27,589 27,446 Income before extraordinary item per common and common equivalent share $ .25 .47 Net income per common and common equivalent share $ .25 .42 Income per common share assuming full dilution: Income before extraordinary item $ 6,780 12,977 Net income $ 6,780 11,496 Adjustments to income: Interest expense and amortization of debt issuance costs relating to convertible debt, net of tax 985 1,982 Adjusted net income $ 7,765 13,478 Weighted average number of common and common equivalent shares outstanding 27,589 27,535 Convertible debt shares 4,976 4,976 Adjusted shares 32,565 32,511 Income before extraordinary item per common share assuming full dilution $ .24 .46 Net income per common share assuming full dilution $ .24 .41
EX-27 3
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MULTICARE COMPANIES, INC. FORM 10-Q QUARTERLY REPORT FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000890925 THE MULTICARE COMPANIES, INC. 1,000 6-MOS DEC-31-1996 JUN-30-1996 2,034 0 107,356 0 0 126,206 382,140 0 650,153 57,365 419,510 0 0 265 130,637 650,153 0 251,946 0 196,238 10,207 0 12,297 21,004 8,027 12,977 0 1,481 0 11,496 .42 .41
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