View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
October 31, 2003
ROTO-ROOTER, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8351 31-0791746
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification
incorporation) Number)
2600 Chemed Center, 255 East 5th Street, Cincinnati, OH 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(513) 762-6900
Page 1 of 2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
c) Exhibits
Exhibit No. Exhibit Description
----------- --------------------
99 Press release dated October 31, 2003.
Item 12. Results of Operations and Financial Condition
Roto-Rooter, Inc. announced that it is restating its results for the
years ended December 31, 2000, 2001 and 2002 and for the nine months ended
September 30, 2003, to reflect a change in accounting for deferred advertising.
A copy of the related press release is attached as Exhibit 99.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROTO-ROOTER, INC.
Dated: October 31, 2003 By: /s/ Arthur V. Tucker, Jr.
----------------- --------------------------
Arthur V. Tucker, Jr.
Vice President and Controller
Page 2 of 2
Exhibit 99
Roto-Rooter Inc. Revises Accounting for Yellow Pages Advertising;
No Effect on Cash Flows from Operations
CINCINNATI--(BUSINESS WIRE)--Oct. 31, 2003--Roto-Rooter Inc.
(NYSE:RRR) (OTCBB:CHEQP) today announced that it is restating results
for 2000, 2001, 2002, and the nine months ended September 30, 2003, in
order to revise its accounting for deferred advertising.
Roto-Rooter, in consultation with its independent accountants,
PricewaterhouseCoopers LLP, reevaluated its accounting for certain
advertising costs and revised its accounting to discontinue the
practice of capitalizing and then amortizing the cost of Yellow Pages
advertising.
Roto-Rooter had spread Yellow Pages costs over the period
directories were in circulation, typically 12 months. Roto-Rooter will
now expense the cost of all such directory advertising as the books
are distributed.
The effects of this noncash charge will be to reduce net earnings
for the years 2000, 2001, and 2002 by $613,000, $1,810,000, and
$732,000, respectively, and to increase net earnings by $1,210,000 for
the nine months ended September 30, 2003.
Roto-Rooter President and Chief Executive Officer Kevin J.
McNamara said, "Roto-Rooter has accounted for Yellow Pages directory
costs in the manner that the company thought best reflected the
results of our operations. We have consistently amortized Yellow Pages
costs over the 12-month circulation period since the current rules on
deferred advertising went into effect in 1995. This development will
have no impact on reported cash flows from operations. Roto-Rooter
will merely recognize the cost of Yellow Pages directories when the
books are initially distributed instead of spreading the cost over the
circulation period for each book."
Following are Roto-Rooter's financial data for the restated
periods. The company intends to file amended financial statements
promptly.
Roto-Rooter Inc. (www.RotoRooter.com), headquartered in
Cincinnati, is a New York Stock Exchange-listed corporation operating
in the residential and commercial repair-and-maintenance-service
industry through two wholly owned subsidiaries. Roto-Rooter is North
America's largest provider of plumbing and drain cleaning services.
Service America Network Inc. provides major-appliance and
heating/air-conditioning repair, maintenance, and replacement
services.
Statements in this press release or in other Roto-Rooter
communications may relate to future events or Roto-Rooter's future
performance. Such statements are forward-looking statements and are
based on present information Roto-Rooter has related to its existing
business circumstances. Investors are cautioned that such
forward-looking statements are subject to inherent risk that actual
results may differ materially from such forward-looking statements.
Further, investors are cautioned that Roto-Rooter does not assume any
obligation to update forward-looking statements based on unanticipated
events or changed expectations.
Roto-Rooter, Inc.
Restated Net Income/(Loss)
For the Nine Months Ended September 30, 2003 and 2002
For the Three Years Ended December 31, 2002, 2001 and 2000
(in thousands, except earnings per share)
2003
-----------------------------------------------
For the Three Months Ended For the Nine
-------------------------------- Months Ended
March 31 June 30 September 30 September 30,
-------- -------- ------------ -------------
Net Income
Previously reported $ 2,553 $ 2,792 $ 3,216 $ 8,561
Reduced/(additional)
advertising expense,
net of tax 1,004 508 (302) 1,210
------- -------- ------- -------
As restated $ 3,557 $ 3,300 $ 2,914 $ 9,771
======= ======== ======= =======
Earnings Per Share
Previously reported $ 0.26 $ 0.28 $ 0.32 $ 0.86
======= ======== ======= =======
As restated $ 0.36 $ 0.33 $ 0.29 $ 0.99
======= ======== ======= =======
Average Shares
Outstanding 9,890 9,908 9,941 9,913
======= ======== ======= =======
Diluted Earnings Per
Share
Previously reported $ 0.26 $ 0.28 $ 0.32 $ 0.86
======= ======== ======= =======
As restated $ 0.36 $ 0.33 $ 0.29 $ 0.98
======= ======== ======= =======
Average Shares
Outstanding 9,903(a) 9,942(a) 9,988(a) 9,940(a)
======= ======== ======= =======
2002
-----------------------------------------------
For the Three Months Ended For the Nine
-------------------------------- Months Ended
March 31 June 30 September 30 September 30,
-------- -------- ------------ -------------
Net Income
Previously reported $ 4,672 $ 4,569 $ 7,107 $16,348
Reduced/(additional)
advertising expense,
net of tax 902 410 (242) 1,070
------- -------- ------- -------
As restated $ 5,574 $ 4,979 $ 6,865 $17,418
======= ======== ======= =======
Earnings Per Share
Previously reported $ 0.47 $ 0.46 $ 0.72 $ 1.66
======= ======== ======= =======
As restated $ 0.57 $ 0.51 $ 0.70 $ 1.77
======= ======== ======= =======
Average Shares
Outstanding 9,843 9,857 9,861 9,854
======= ======== ======= =======
Diluted Earnings Per
Share
Previously reported $ 0.47 $ 0.46 $ 0.72 $ 1.65
======= ======== ======= =======
As restated $ 0.56 $ 0.50 $ 0.70 $ 1.76
======= ======== ======= =======
Average Shares
Outstanding -
previously reported 9,883(a) 9,898(a) 9,867(a) 9,882(a)
======= ======== ======= =======
Average Shares
Outstanding -
restated 10,267 9,898(a) 9,867(a) 9,882(a)
======= ======== ======= =======
For the Years Ended December 31,
--------------------------------
2002 2001 2000
------- -------- -------
Net Income/(Loss)
Previously reported $(1,813) $(10,375) $20,584
Additional
advertising
expense, net of tax (732) (1,810) (613)
------- -------- -------
As restated $(2,545) $(12,185) $19,971
======= ======== =======
Earnings/(Loss) Per
Share
Previously reported $ (0.18) $ (1.07) $ 2.09
======= ======== =======
As restated $ (0.26) $ (1.25) $ 2.03
======= ======== =======
Average Shares
Outstanding 9,858 9,714 9,833
======= ======== =======
Diluted Earnings/(Loss)
Per Share
Previously reported $ (0.18) $ (1.07) $ 2.07
======= ======== =======
As restated $ (0.26) $ (1.25) $ 2.01
======= ======== =======
Average Shares
Outstanding -
previously reported 9,858(a) 9,714(a) 10,305
======= ======== =======
Average Shares
Outstanding -
restated 9,858(a) 9,714(a) 9,927(a)
======= ======== =======
- ----------------------
(a) The impact of the convertible preferred securities has been
excluded because it is antidilutive on earnings per share from
continuing operations for the periods indicated.
CONTACT: Roto-Rooter Inc.
Timothy S. O'Toole, 513-762-6702