Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - RES CARE INC /KY/ | f8k_022112.htm |
EXHIBIT 99.1
RESCARE FOURTH QUARTER AND FULL YEAR 2011 RESULTS
Fourth Quarter 2011 Financial Results
Revenues for the fourth quarter of 2011 were $397.9 million, a 2.5% increase over the prior year period revenues of $388.4 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 $11.4 million for the fourth quarter of 2011, compared with a loss of $145 million in the same period of 2010. Included in the fourth quarter of 2010 results was a pre-tax, non-cash charge of $198.4 million as a result of the impairment of goodwill. Also included in the fourth quarter of 2010 results was $10.1 million related to Onex transaction costs. Acquisition growth and leverage of fixed costs offset the higher interest expense and the contract losses in our Workforce Services segment. Adjusted EBITDA for the fourth quarter of 2011 was $36.5 million versus $27.7 million in the prior year quarter, driven primarily by operating improvements, acquisition growth and general and administrative cost savings.
Full Year 2011 Financial Results
Revenues for the full year 2011 increased 1% over 2010 to $1.58 billion. Income from continuing operations was $41.8 million compared with net loss of $152.1 million in 2010, which included a pre-tax charge of $250.2 million for goodwill impairment. Adjusted EBITDA for 2011 was $129.3 million versus $111.5 million in 2010. Reconciliations of non-GAAP financial measures follow on pages 3 and 6 of this release.
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. The twelve month period ended December 31, 2011, includes U.S. tax benefits of $19.8 million attributed to the discontinued international operations.
-MORE-
Page 2
RESCARE, INC.
Unaudited Financial Highlights
(In thousands)
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
Income Statement Data:
|
||||||||||||||||
|
Revenues
|
$ | 397,892 | $ | 388,373 | $ | 1,579,335 | $ | 1,562,677 | ||||||||
|
Cost of services
|
297,559 | 297,510 | 1,190,410 | 1,188,423 | ||||||||||||
|
Gross profit
|
100,333 | 90,863 | 388,925 | 374,254 | ||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
Operational general and administrative
|
56,799 | 55,540 | 229,254 | 230,987 | ||||||||||||
|
Goodwill impairment charge
|
– | 198,447 | – | 250,181 | ||||||||||||
|
Corporate general and administrative
|
16,247 | 23,645 | 55,771 | 71,591 | ||||||||||||
|
Total operating expenses
|
73,046 | 277,632 | 285,025 | 552,759 | ||||||||||||
|
Operating income (loss)
|
27,287 | (186,769 | ) | 103,900 | (178,505 | ) | ||||||||||
|
Interest expense, net
|
10,302 | 4,844 | 42,059 | 19,271 | ||||||||||||
|
Income (loss) before income taxes
|
16,985 | (191,613 | ) | 61,841 | (197,776 | ) | ||||||||||
|
Income tax expense (benefit)
|
5,606 | (46,609 | ) | 20,005 | (45,713 | ) | ||||||||||
|
Income (loss) from continuing operations
|
11,379 | (145,004 | ) | 41,836 | (152,063 | ) | ||||||||||
|
Income (loss) from discontinued operations,
net of tax
|
715 | (1,965 | ) | 11,156 | (18,103 | ) | ||||||||||
|
Net income (loss) – including
noncontrolling interest
|
12,094 | (146,969 | ) | 52,992 | (170,166 | ) | ||||||||||
|
Net loss – noncontrolling interest
|
(46 | ) | (34 | ) | (171 | ) | (190 | ) | ||||||||
|
Net income (loss) – ResCare, Inc.
|
$ | 12,140 | $ | (146,935 | ) | $ | 53,163 | $ | (169,976 | ) | ||||||
-MORE-
Page 3
RESCARE, INC.
Unaudited Financial Highlights (continued)
(In thousands)
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
Income from Continuing Operations to EBITDA and Adjusted EBITDA:
|
||||||||||||||||
|
Income (loss) from continuing operations
|
$ | 11,379 | $ | (145,004 | ) | $ | 41,836 | $ | (152,063 | ) | ||||||
|
Add: Interest, net
|
10,302 | 4,844 | 42,059 | 19,271 | ||||||||||||
|
Depreciation and amortization
|
6,773 | 5,346 | 20,929 | 23,881 | ||||||||||||
|
Income tax expense (benefit)
|
5,606 | (46,609 | ) | 20,005 | (45,713 | ) | ||||||||||
|
EBITDA (1)
|
34,060 | (181,423 | ) | 124,829 | (154,624 | ) | ||||||||||
|
Add: Onex transaction costs
|
– | 10,059 | 1,737 | 12,449 | ||||||||||||
|
Goodwill impairment charge
|
– | 198,447 | – | 250,181 | ||||||||||||
|
Share-based compensation
|
2,383 | 259 | 2,383 | 2,483 | ||||||||||||
|
Acquisition costs
|
60 | 329 | 326 | 999 | ||||||||||||
|
Adjusted EBITDA (1)
|
$ | 36,503 | $ | 27,671 | $ | 129,275 | $ | 111,488 | ||||||||
|
December 31,
2011
|
As Adjusted
December 31,
2010
|
|||||||
|
Balance Sheet Data:
|
||||||||
|
ASSETS
|
||||||||
|
Cash and cash equivalents
|
$ | 25,651 | $ | 27,552 | ||||
|
Accounts receivable, net
|
221,089 | 215,941 | ||||||
|
Other current assets
|
50,316 | 41,787 | ||||||
|
Total current assets
|
297,056 | 285,280 | ||||||
|
Property and equipment, net
|
84,893 | 86,883 | ||||||
|
Goodwill
|
267,697 | 247,305 | ||||||
|
Other intangible assets, net
|
314,954 | 315,376 | ||||||
|
Other assets, net
|
27,658 | 30,108 | ||||||
| $ | 992,258 | $ | 964,952 | |||||
|
LIABILITIES AND SHAREHOLDER’S EQUITY
|
||||||||
|
Current liabilities
|
$ | 174,337 | $ | 223,992 | ||||
|
Other long-term liabilities
|
153,770 | 131,032 | ||||||
|
Long-term debt
|
365,196 | 367,315 | ||||||
|
Shareholder’s equity
|
298,955 | 242,613 | ||||||
| $ | 992,258 | $ | 964,952 | |||||
|
(1)
|
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 Onex transaction costs, goodwill impairment charge, 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.
|
-MORE-
Page 4
RESCARE, INC.
Unaudited Financial Highlights (continued)
(In thousands)
|
Twelve Months ended
December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Cash Flow Data:
|
||||||||
|
Net income (loss) – including noncontrolling interest
|
$ | 52,992 | $ | (170,166 | ) | |||
|
Adjustments to reconcile net income including noncontrolling interest
to cash provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
20,992 | 24,763 | ||||||
|
Goodwill impairment charge
|
– | 263,155 | ||||||
|
Amortization of discount and deferred debt issuance costs
|
2,943 | 1,647 | ||||||
|
Share-based compensation
|
2,383 | 6,201 | ||||||
|
Deferred income taxes, net
|
4,450 | (53,155 | ) | |||||
|
Excess tax expense from share-based compensation
|
– | 1,176 | ||||||
|
Provision for losses on accounts receivable
|
5,851 | 10,417 | ||||||
|
Write down of assets held for sale
|
1,642 | – | ||||||
|
Loss on sale of assets
|
481 | 171 | ||||||
|
Changes in operating assets and liabilities
|
(19,122 | ) | 1,091 | |||||
|
Cash provided by operating activities
|
72,612 | 85,300 | ||||||
|
Cash flows from investing activities:
|
||||||||
|
Proceeds from sale of assets
|
221 | 179 | ||||||
|
Purchases of property and equipment
|
(13,507 | ) | (10,720 | ) | ||||
|
Acquisitions of businesses, net of cash acquired
|
(23,106 | ) | (28,426 | ) | ||||
|
Cash used in investing activities
|
(36,392 | ) | (38,967 | ) | ||||
|
Cash flows from financing activities:
|
||||||||
|
Debt repayments, net
|
(38,916 | ) | 201,315 | |||||
|
Redemption of preferred shares
|
– | (158,843 | ) | |||||
|
Debt issuance costs
|
(561 | ) | (20,406 | ) | ||||
|
Funds contributed by co-investors
|
1,400 | – | ||||||
|
Excess tax expense from share-based compensation
|
– | (1,176 | ) | |||||
|
Payments on common share exchange
|
– | (56,875 | ) | |||||
|
Return on preferred shares
|
– | (753 | ) | |||||
|
Employee withholding payments on share-based compensation
|
– | (2,683 | ) | |||||
|
Cash used in financing activities
|
(38,077 | ) | (39,421 | ) | ||||
|
Effect of exchange rate on cash and cash equivalents
|
(44 | ) | (32 | ) | ||||
|
(Decrease) increase in cash and cash equivalents
|
$ | (1,901 | ) | $ | 6,880 | |||
-MORE-
Page 5
RESCARE, INC.
Unaudited Financial Highlights (continued)
(Dollars in thousands)
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
Segment Data:
|
||||||||||||||||
|
Revenues:
|
||||||||||||||||
|
Residential Services
|
$ | 217,634 | $ | 209,043 | $ | 853,474 | $ | 828,838 | ||||||||
|
ResCare HomeCare
|
84,903 | 79,313 | 323,820 | 307,492 | ||||||||||||
|
Youth Services
|
46,898 | 45,134 | 185,658 | 181,217 | ||||||||||||
|
Workforce Services
|
48,457 | 54,883 | 216,383 | 245,130 | ||||||||||||
|
Consolidated
|
$ | 397,892 | $ | 388,373 | $ | 1,579,335 | $ | 1,562,677 | ||||||||
|
Adjusted Operating Income (Loss) (1):
|
||||||||||||||||
|
Residential Services
|
$ | 29,730 | $ | 28,537 | $ | 103,749 | $ | 95,147 | ||||||||
|
ResCare HomeCare
|
6,112 | 516 | 23,690 | 16,643 | ||||||||||||
|
Youth Services
|
3,370 | 4,141 | 14,042 | 15,002 | ||||||||||||
|
Workforce Services
|
4,404 | 2,363 | 18,434 | 16,475 | ||||||||||||
|
Corporate
|
(16,329 | ) | (13,820 | ) | (54,278 | ) | (59,142 | ) | ||||||||
|
Consolidated
|
$ | 27,287 | $ | 21,737 | $ | 105,637 | $ | 84,125 | ||||||||
|
Adjusted Operating Margin(1):
|
||||||||||||||||
|
Residential Services
|
13.7 | % | 13.7 | % | 12.2 | % | 11.5 | % | ||||||||
|
ResCare HomeCare
|
7.2 | % | 0.7 | % | 7.3 | % | 5.4 | % | ||||||||
|
Youth Services
|
7.2 | % | 9.2 | % | 7.6 | % | 8.3 | % | ||||||||
|
Workforce Services
|
9.1 | % | 4.3 | % | 8.5 | % | 6.7 | % | ||||||||
|
Corporate
|
(4.1 | %) | (3.6 | %) | (3.4 | %) | (3.8 | %) | ||||||||
|
Consolidated
|
6.9 | % | 5.6 | % | 6.7 | % | 5.4 | % | ||||||||
|
(1)
|
Other (expense) income (included in Corporate general and administrative expenses on page 2) has been allocated for purposes of segment reporting.
|
-MORE-
Page 6
RESCARE, INC.
Unaudited Financial Highlights (continued)
(Dollars in thousands)
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
Reconciliation of Operating Income (Loss)
to Adjusted Operating Income:
|
||||||||||||||||
|
Operating Income (Loss):
|
||||||||||||||||
|
Residential Services (1)
|
$ | 29,730 | $ | (112,374 | ) | $ | 103,749 | $ | (78,961 | ) | ||||||
|
ResCare HomeCare(2)
|
6,112 | (47,847 | ) | 23,690 | (43,114 | ) | ||||||||||
|
Youth Services (3)
|
3,370 | (5,032 | ) | 14,042 | (1,314 | ) | ||||||||||
|
Workforce Services
|
4,404 | 2,363 | 18,434 | 16,475 | ||||||||||||
|
Corporate (4)
|
(16,329 | ) | (23,879 | ) | (56,015 | ) | (71,591 | ) | ||||||||
|
Consolidated
|
$ | 27,287 | $ | (186,769 | ) | $ | 103,900 | $ | (178,505 | ) | ||||||
|
Adjustments:
|
||||||||||||||||
|
Residential Services (1)
|
$ | – | $ | 140,911 | $ | – | $ | 174,108 | ||||||||
|
ResCare HomeCare(2)
|
– | 48,363 | – | 59,757 | ||||||||||||
|
Youth Services (3)
|
– | 9,173 | – | 16,316 | ||||||||||||
|
Workforce Services
|
– | – | – | – | ||||||||||||
|
Corporate (4)
|
– | 10,059 | 1,737 | 12,449 | ||||||||||||
|
Consolidated
|
$ | – | $ | 208,506 | $ | 1,737 | $ | 262,630 | ||||||||
|
Adjusted Operating Income:
|
||||||||||||||||
|
Residential Services
|
$ | 29,730 | $ | 28,537 | $ | 103,749 | $ | 95,147 | ||||||||
|
ResCare HomeCare
|
6,112 | 516 | 23,690 | 16,643 | ||||||||||||
|
Youth Services
|
3,370 | 4,141 | 14,042 | 15,002 | ||||||||||||
|
Workforce Services
|
4,404 | 2,363 | 18,434 | 16,475 | ||||||||||||
|
Corporate
|
(16,329 | ) | (13,820 | ) | (54,278 | ) | (59,142 | ) | ||||||||
|
Consolidated
|
$ | 27,287 | $ | 21,737 | $ | 105,637 | $ | 84,125 | ||||||||
|
(1)
|
Operating income (loss) for the three month and twelve month periods ended December 31, 2010, included a $140.9 million and a $174.1 million goodwill impairment charge, respectively.
|
|
(2)
|
Operating income (loss) for the three month and twelve month periods ended December 31, 2010, included a $48.4 million and a $59.8 million goodwill impairment charge, respectively.
|
|
(3)
|
Operating income (loss) for the three month and twelve month periods ended December 31, 2010, included a $9.1 million and a $16.3 million goodwill impairment charge, respectively.
|
|
(4)
|
Operating loss for the three month and twelve month periods ended December 31, 2010, included a $10.1 million and a $12.4 million charge related to Onex transaction costs in our corporate general and administrative expenses. The twelve month period ended December 31, 2011, included $1.7 million related to the Onex transaction costs.
|
|
|
-END-
|