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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
<TABLE>
THE MULTICARE COMPANIES, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
<CAPTION>
December 31, June 30,
1995 1996
(Unaudited)
<S> <C> <C>
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
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
<TABLE>
THE MULTICARE COMPANIES, INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1995 1996 1995 1996
<S> <C> <C> <C> <C>
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.
</TABLE>
4
<PAGE>
<TABLE>
THE MULTICARE COMPANIES, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
<CAPTION>
Six months ended
June 30,
1995 1996
<S> <C> <C>
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
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
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
<PAGE>
(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:
<TABLE>
<CAPTION>
Pro forma Pro forma
six months ended six months ended
June 30, 1995 June 30, 1996
<S> <C> <C>
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
</TABLE>
7
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<TABLE>
The Multicare Companies, Inc.
Computation of earnings per share
June 30, 1996
(Unaudited)
(in thousands, except share data)
<CAPTION>
Three months Six months
ended ended
June 30, 1996 June 30, 1996
<S> <C> <C>
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
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<CIK> 0000890925
<NAME> THE MULTICARE COMPANIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,034
<SECURITIES> 0
<RECEIVABLES> 107,356
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 126,206
<PP&E> 382,140
<DEPRECIATION> 0
<TOTAL-ASSETS> 650,153
<CURRENT-LIABILITIES> 57,365
<BONDS> 419,510
0
0
<COMMON> 265
<OTHER-SE> 130,637
<TOTAL-LIABILITY-AND-EQUITY> 650,153
<SALES> 0
<TOTAL-REVENUES> 251,946
<CGS> 0
<TOTAL-COSTS> 196,238
<OTHER-EXPENSES> 10,207
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,297
<INCOME-PRETAX> 21,004
<INCOME-TAX> 8,027
<INCOME-CONTINUING> 12,977
<DISCONTINUED> 0
<EXTRAORDINARY> 1,481
<CHANGES> 0
<NET-INCOME> 11,496
<EPS-PRIMARY> .42
<EPS-DILUTED> .41
</TABLE>
