Attached files
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| 8-K - FORM 8-K - RES CARE INC /KY/ | f8k_050712.htm |
RESCARE FIRST QUARTER 2012 RESULTS
Revenues for the first quarter of 2012 were $397.3 million, a 2.9% increase over the prior year period revenues of $386.1 million. Increased revenues from our pharmacy business, along with acquisition growth in our Residential Services and HomeCare segments were partially offset by the loss of certain Workforce Services contracts and rate and service level reductions in certain states.
Income from continuing operations was $6.2 million for the first quarter of 2012, compared with $6.8 million in the same period of 2011. Higher depreciation expense and a higher effective income tax rate, due to the expiration of the jobs tax credit, were partially offset by acquisition growth and leverage of fixed costs. Adjusted EBITDA for the first quarter of 2012 was $28.3 million versus $25.9 million in the prior year quarter, driven primarily by operating improvements and acquisition growth.
The company ceased providing international workforce services in Europe during the second quarter of 2011. The closure and disposal of these operations have been accounted for as discontinued operations. Accordingly, the results of these operations, net of income taxes, have been classified as discontinued operations for all periods presented.
RESCARE, INC.
Unaudited Financial Highlights
(In thousands)
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Three Months Ended
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March 31,
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2012
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2011
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Income Statement Data:
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Revenues
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$ | 397,342 | $ | 386,084 | ||||
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Cost of services
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298,890 | 293,383 | ||||||
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Gross profit
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98,452 | 92,701 | ||||||
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Operating expenses:
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Operational general and administrative
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60,285 | 57,989 | ||||||
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Corporate general and administrative
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17,667 | 14,055 | ||||||
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Total operating expenses
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77,952 | 72,044 | ||||||
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Operating income
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20,500 | 20,657 | ||||||
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Interest expense, net
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10,208 | 10,766 | ||||||
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Income from continuing operations before income taxes
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10,292 | 9,891 | ||||||
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Income tax expense
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4,137 | 3,061 | ||||||
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Income from continuing operations
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6,155 | 6,830 | ||||||
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Loss from discontinued operations, net of tax
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— | (3,156 | ) | |||||
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Net income
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6,155 | 3,674 | ||||||
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Net loss – noncontrolling interest
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(30 | ) | (32 | ) | ||||
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Net income – ResCare, Inc.
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6,185 | 3,706 | ||||||
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Other comprehensive income:
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Foreign currency translation adjustments
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161 | 94 | ||||||
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Comprehensive income attributable to ResCare, Inc.
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$ | 6,346 | $ | 3,800 | ||||
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Total comprehensive income
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$ | 6,316 | $ | 3,768 | ||||
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RESCARE, INC.
Unaudited Financial Highlights (continued)
(In thousands)
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Three Months Ended
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March 31,
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2012
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2011
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Income from Continuing Operations to EBITDA and Adjusted EBITDA:
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Income from continuing operations
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$ | 6,155 | $ | 6,830 | ||||
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Add: Interest, net
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10,208 | 10,766 | ||||||
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Depreciation and amortization
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6,645 | 4,964 | ||||||
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Income tax expense
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4,137 | 3,061 | ||||||
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EBITDA (1)
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27,145 | 25,621 | ||||||
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Add: Share-based compensation
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1,174 | — | ||||||
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Acquisition costs
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— | 265 | ||||||
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Adjusted EBITDA (1)
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$ | 28,319 | $ | 25,886 | ||||
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March 31,
2012
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December 31,
2011
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Balance Sheet Data:
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ASSETS
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Cash and cash equivalents
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$ | 13,253 | $ | 25,651 | ||||
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Accounts receivable, net
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234,078 | 221,089 | ||||||
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Other current assets
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45,793 | 50,316 | ||||||
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Total current assets
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293,124 | 297,056 | ||||||
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Property and equipment, net
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84,308 | 84,893 | ||||||
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Goodwill
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270,778 | 267,697 | ||||||
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Other intangible assets, net
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314,652 | 314,954 | ||||||
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Other assets
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33,798 | 27,658 | ||||||
| $ | 996,660 | $ | 992,258 | |||||
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LIABILITIES AND SHAREHOLDER’S EQUITY
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Current liabilities
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$ | 168,467 | $ | 174,337 | ||||
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Other long-term liabilities
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157,163 | 153,770 | ||||||
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Long-term debt
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364,584 | 365,196 | ||||||
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Shareholder’s equity
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306,446 | 298,955 | ||||||
| $ | 996,660 | $ | 992,258 | |||||
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(1)
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EBITDA is defined as income from continuing operations before depreciation and amortization, net interest expense and income taxes. Adjusted EBITDA is defined as EBITDA before share-based compensation and acquisition costs. EBITDA and Adjusted EBITDA should not be considered as measures of financial performance under accounting principles generally accepted in the United States of America. The items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing financial performance. Management routinely calculates and presents EBITDA and Adjusted EBITDA because it believes that EBITDA and Adjusted EBITDA are useful to investors and are used as analytical indicators within the industry to evaluate performance, measure leverage capacity and debt service ability, and to estimate current or prospective enterprise value. EBITDA is also used in measurements under certain covenants contained in the Company’s credit agreement.
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RESCARE, INC.
Unaudited Financial Highlights (continued)
(In thousands)
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Three Months ended
March 31,
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2012
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2011
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Cash Flow Data:
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Net income
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$ | 6,155 | $ | 3,674 | ||||
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Adjustments to reconcile net income to cash (used in) provided by operating activities:
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Depreciation and amortization
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6,645 | 5,001 | ||||||
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Amortization of discount and deferred debt issuance costs
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675 | 888 | ||||||
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Share-based compensation
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1,174 | — | ||||||
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Deferred income taxes, net
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1,100 | 1,773 | ||||||
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Provision for losses on accounts receivable
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1,549 | 1,694 | ||||||
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Loss on sale of assets
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35 | 23 | ||||||
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Changes in operating assets and liabilities
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(19,854 | ) | 9,382 | |||||
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Cash (used in) provided by operating activities
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(2,521 | ) | 22,435 | |||||
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Cash flows from investing activities:
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Proceeds from sale of assets
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10 | — | ||||||
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Purchases of property and equipment
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(4,261 | ) | (2,081 | ) | ||||
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Acquisitions of businesses, net of cash acquired
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(4,550 | ) | (6,109 | ) | ||||
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Cash used in investing activities
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(8,801 | ) | (8,190 | ) | ||||
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Cash flows from financing activities:
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Debt repayments, net
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(1,140 | ) | (24,516 | ) | ||||
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Debt issuance costs
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— | (129 | ) | |||||
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Funds contributed by co-investors
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— | 1,400 | ||||||
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Cash used in financing activities
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(1,140 | ) | (23,245 | ) | ||||
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Effect of exchange rate on cash and cash equivalents
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64 | 90 | ||||||
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Decrease in cash and cash equivalents
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$ | (12,398 | ) | $ | (8,910 | ) | ||
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Page 3
RESCARE, INC.
Unaudited Financial Highlights (continued)
(Dollars in thousands)
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Three Months Ended
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March 31,
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2012
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2011
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Segment Data:
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Revenues:
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Residential Services
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$ | 218,309 | $ | 206,339 | ||||
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ResCare HomeCare
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86,250 | 80,657 | ||||||
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Youth Services
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43,954 | 43,077 | ||||||
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Workforce Services
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48,829 | 56,011 | ||||||
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Consolidated
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$ | 397,342 | $ | 386,084 | ||||
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Operating Income (Loss):
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Residential Services
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$ | 28,157 | $ | 22,013 | ||||
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ResCare HomeCare
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5,261 | 5,641 | ||||||
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Youth Services
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2,809 | 2,762 | ||||||
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Workforce Services
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1,948 | 4,458 | ||||||
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Corporate
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(17,675 | ) | (14,217 | ) | ||||
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Consolidated
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$ | 20,500 | $ | 20,657 | ||||
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Operating Margin:
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Residential Services
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12.9 | % | 10.7 | % | ||||
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ResCare HomeCare
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6.1 | % | 7.0 | % | ||||
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Youth Services
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6.4 | % | 6.4 | % | ||||
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Workforce Services
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4.0 | % | 8.0 | % | ||||
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Corporate
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(4.4 | %) | (3.7 | %) | ||||
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Consolidated
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5.2 | % | 5.4 | % | ||||
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-END-
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