LOUISVILLE, Ky., March 9, 2009 (GLOBE NEWSWIRE) -- ResCare (Nasdaq:RSCR) today announced results for the fourth quarter and year ended December 31, 2008.
Fourth Quarter 2008 Financial Highlights
Consolidated revenues for the fourth quarter of 2008 increased 7.5% over the prior year period to $394.9 million. The Company reported income from continuing operations of $14.7 million, or $0.44 per diluted common share. Income from continuing operations includes a $4.1 million ($2.5 million, net of tax, or $0.07 per diluted common share) reduction of the legal reserves established during the second quarter of 2008. Income from continuing operations for the fourth quarter of 2007 was $12.1 million, or $0.36 per diluted common share.
Full Year 2008 Financial Highlights
Consolidated revenues for the full year 2008 increased 7.7% over 2007 to $1.54 billion. The Company reported income from continuing operations in 2008 of $36.9 million, or $1.10 per diluted common share, compared with $44.2 million, or $1.32 per diluted common share, in 2007. The operating results for 2008 include a charge of $20.3 million ($12.4 million, net of tax, or $0.37 per diluted common share) relating to four resolved legal matters. In 2008 and 2007, diluted loss per common share from discontinued operations was $0.01.
"In a challenging environment, our business remains solid," said Ralph G. Gronefeld, Jr., president and chief executive officer. "We grew revenue, effectively controlled costs, managed working capital, and protected our balance sheet."
In closing, Mr. Gronefeld added, "Our payors continue to face difficult conditions, and our company will have more challenges in 2009. However, we feel we are well positioned to address these challenges. Our strong balance sheet enables us to take advantage of opportunities for growth, and we will continue to focus on quality services and fiscal discipline."
2009 Guidance Confirmed
The Company confirmed its 2009 guidance of diluted earnings per common share from continuing operations in the range of $1.52 to $1.58 and revenues of $1.61 billion to $1.67 billion. The 2009 guidance assumes a decrease of approximately one-half of one percent in aggregate reimbursement rates for the second half of 2009 within the Company's Community Services Group. Additionally, the guidance assumes an income tax rate of 37% and acquisition-related costs of approximately $0.03 per diluted common share associated with planned 2009 acquisitions as a result of the adoption of a new accounting standard.
A listen-only simulcast of ResCare's fourth quarter and year-end 2008 conference call will be available on-line at www.rescare.com on March 10, 2009, beginning at 9:00 a.m. Eastern Time and a replay available at 11:00 a.m. Eastern Time.
ResCare has 35 years of experience helping people reach their highest level of independence and is one of the largest providers of home care to the elderly and persons with disabilities. We also offer residential and support services to people with intellectual and developmental disabilities and provide education, vocational training and job placement for people of all ages and skill levels. Based in Louisville, Kentucky, ResCare and its more than 45,000 dedicated employees serve daily more than 65,000 people in 39 states, Washington, D.C., Puerto Rico and in a growing number of international locations. For more information about ResCare, please visit the Company's website at www.rescare.com.
From time to time, ResCare makes forward-looking statements in its public disclosures, including statements relating to expected financial results, revenues that might be expected from new or acquired programs and facilities, its development and acquisition activities, reimbursement under federal and state programs, financing plans, compliance with debt covenants and other risk factors, and various trends favoring privatization of government programs. In ResCare's filings under the federal securities laws, including its annual, periodic and current reports, the Company identifies important factors that could cause its actual results to differ materially from those anticipated in forward-looking statements. Please refer to the discussion of those factors in the Company's filed reports. Statements related to expected financial results are as of this date only, and ResCare does not assume any responsibility to update these statements.
RESCARE, INC.
Unaudited Financial Highlights
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Income Statement Data:
Revenues $ 394,883 $ 367,182 $1,543,583 $1,433,298
Facility and program
expenses(1)(2) 351,727 331,177 1,407,829 1,292,412
----------- ----------- ----------- -----------
Facility and program
contribution 43,156 36,005 135,754 140,886
Corporate general and
administrative(1) 14,547 13,689 58,893 54,293
Other operating expense
(income), net 45 (157) 41 (571)
----------- ----------- ----------- -----------
Operating income 28,564 22,473 76,820 87,164
Interest expense, net 5,471 4,487 19,099 18,518
----------- ----------- ----------- -----------
Income from continuing
operations before
income taxes 23,093 17,986 57,721 68,646
Income tax expense 8,353 5,846 20,822 24,413
----------- ----------- ----------- -----------
Income from continuing
operations 14,740 12,140 36,899 44,233
(Loss) income from
discontinued
operations, net of
taxes (60) 56 (339) (342)
----------- ----------- ----------- -----------
Net income 14,680 12,196 36,560 43,891
Net income attributable
to preferred
shareholders 2,112 1,750 5,263 6,320
----------- ----------- ----------- -----------
Net income attributable
to common
shareholders $ 12,568 $ 10,446 $ 31,297 $ 37,571
=========== =========== =========== ===========
Basic earnings (loss)
per common share:
From continuing
operations $ 0.44 $ 0.37 $ 1.11 $ 1.34
From discontinued
operations (0.00) (0.00) (0.01) (0.01)
----------- ----------- ----------- -----------
Basic earnings per
common share $ 0.44 $ 0.37 $ 1.10 $ 1.33
=========== =========== =========== ===========
Diluted earnings (loss)
per common share:
From continuing
operations $ 0.44 $ 0.36 $ 1.10 $ 1.32
From discontinued
operations (0.00) (0.00) (0.01) (0.01)
----------- ----------- ----------- -----------
Diluted earnings per
common share $ 0.44 $ 0.36 $ 1.09 $ 1.31
=========== =========== =========== ===========
Weighted average number
of common shares:
Basic 28,613 28,409 28,462 28,215
Diluted 28,613 28,715 28,600 28,589
(1) The Company recorded share-based compensation expense of
$1.3 million ($0.03 per diluted common share) and $1.3 million
($0.03 per diluted common share) for the three months ended
December 31, 2008 and 2007, respectively. Of the $1.3 million
for the three months ended December 31, 2008, the Company
included $0.8 million in corporate general and administrative
expenses and $0.5 million in facility and program expenses. Of
the $1.3 million recorded for the three months ended December 31,
2007, the Company included $0.8 million in corporate general and
administrative expenses and $0.5 million in facility and program
expenses. The Company recorded share-based compensation expense
of $4.8 million ($0.09 per diluted common share) and $6.6 million
($0.13 per diluted common share) for the year ended December 31,
2008 and 2007, respectively. Of the $4.8 million for the year
ended December 31, 2008, the Company included $2.7 million in
corporate general and administrative expenses and $2.1 million in
facility and program expenses. Of the $6.6 million recorded for
the year ended December 31, 2007, the Company included $3.7
million in corporate general and administrative expenses and
$2.9 million in facility and program expenses.
(2) Facility and program expenses for the three months ended
December 31, 2008, include a $4.1 million reduction of legal
reserves. Facility and program expenses for the year ended
December 31, 2008, include a charge of $20.3 million recorded
when the Company increased its legal reserves to reflect the
estimated cost to resolve four legal matters.
RESCARE, INC.
Unaudited Financial Highlights (continued)
(In thousands)
Dec. 31, Dec. 31,
2008 2007
-------- --------
Balance Sheet Data:
ASSETS
Cash and cash equivalents $ 13,594 $ 10,809
Accounts receivable, net 230,976 206,529
Other current assets 46,913 42,234
-------- --------
Total current assets 291,483 259,572
Property and equipment, net 84,157 83,336
Goodwill 476,196 443,623
Other assets 62,307 48,012
-------- --------
$914,143 $834,543
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $155,921 $150,025
Other long-term liabilities 65,959 57,158
Long-term debt 255,386 220,491
Shareholders' equity 436,877 406,869
-------- --------
$914,143 $834,543
======== ========
RESCARE, INC.
Unaudited Financial Highlights (continued)
(In thousands)
Year Ended
December 31,
---------------------
2008 2007
---------- ----------
Cash Flow Data:
Net income $ 36,560 $ 43,891
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 22,943 19,789
Amortization of discount 1,192 1,084
Impairment charge 313 331
Deferred compensation 95 202
Deferred income taxes 6,311 3,531
Excess tax benefits from share-based
compensation (935) (1,387)
Provision for losses on accounts receivable 7,104 6,364
Share-based compensation 4,846 6,621
Gain on sale of assets (5) (72)
Changes in operating assets and liabilities (31,872) 5,421
---------- ----------
Cash provided by operating activities 46,552 85,775
---------- ----------
Cash flows from investing activities:
Proceeds from sale of assets 633 984
Purchases of property and equipment (19,391) (24,011)
Acquisitions of businesses (56,659) (72,375)
---------- ----------
Cash used in investing activities (75,417) (95,402)
---------- ----------
Cash flows from financing activities:
Debt borrowings, net 31,894 9,426
Proceeds from sale and leaseback transactions -- 1,966
Debt issuance costs (118) (225)
Excess tax benefits from share-based
compensation 935 1,387
Employee withholding payments on share-based
compensation (1,593) --
Proceeds received from exercise of stock
options 1,562 2,341
---------- ----------
Cash provided by financing activities 32,680 14,895
---------- ----------
Effect of exchange rate on cash and cash
equivalents (1,030) --
---------- ----------
Increase in cash and cash equivalents $ 2,785 $ 5,268
========== ==========
RESCARE, INC.
Unaudited Financial Highlights (continued)
(Dollars in thousands)
Three Months Ended Year Ended
December 31, December 31,
--------------------- -------------------------
2008 2007 2008 2007
---------- ---------- ------------ ------------
Segment Data:
Revenues:
Community Services $284,056 $270,553 $1,109,275 $1,052,409
Job Corps Training
Services 41,674 41,278 163,944 163,904
Employment Training
Services 55,753 50,501 222,394 197,588
Other 13,400 4,850 47,970 19,397
---------- ---------- ------------ ------------
Consolidated $394,883 $367,182 $1,543,583 $1,433,298
========== ========== ============ ============
Operating Income:
Community Services(1) $ 34,924 $ 29,186 $ 99,633 $ 111,350
Job Corps Training
Services 2,946 2,883 11,782 11,588
Employment Training
Services 5,253 3,657 22,692 17,093
Other 188 456 1,903 1,446
Corporate general and
administrative (14,747) (13,709) (59,190) (54,313)
---------- ---------- ------------ ------------
Consolidated(1) $ 28,564 $ 22,473 $ 76,820 $ 87,164
========== ========== ============ ============
Operating Margin:
Community Services(1) 12.3% 10.8% 9.0% 10.6%
Job Corps Training
Services 7.1% 7.0% 7.2% 7.1%
Employment Training
Services 9.4% 7.2% 10.2% 8.7%
Other 1.4% 9.4% 4.0% 7.5%
Corporate general
and administrative (3.7%) (3.7%) (3.8%) (3.8%)
Consolidated(1) 7.2% 6.1% 5.0% 6.1%
(1) The three months ended December 31, 2008, includes an increase of
$4.1 million recorded as a result of a settlement of a lawsuit.
Year ended December 31, 2008, includes a pre-tax charge of
$20.3 million, recorded when the Company increased its legal
reserves due to the resolution of four legal matters.