ResCare Reports Fourth Quarter And Year-End 2008 Results

ResCare Reports Fourth Quarter And Year-End 2008 Results

LOUISVILLE, KY (March 9, 2009) – 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, with nearly 35 years of experience helping people reach their highest level of independence, is one of the largest providers of home care to the elderly and those with disabilities. It also offers residential and support services to people with intellectual and developmental disabilities and provides education, vocational training and job placement for people of all ages and skill levels. Based in Louisville, Kentucky, ResCare and its 44,000 dedicated employees serve daily more than 65,000 people in 38 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.