[February 14, 2012]

Chemed Reports Fourth-Quarter 2011 Results

Chemed Corporation (Chemed) (NYSE:CHE), which operates VITAS Healthcare Corporation (VITAS), the nation's largest provider of end-of-life care, and Roto-Rooter, the nation's largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its fourth quarter ended December 31, 2011, versus the comparable prior-year period, as follows:

Consolidated operating results:

• Revenue increased 4.2% to $350 million
• GAAP Diluted EPS increased 33.7% to $1.31
• Adjusted Diluted EPS increased 19.8% to $1.45

VITAS segment operating results:

• Net Patient Revenue of $255 million, an increase of 5.1%
• Average Daily Census (ADC) of 13,724, an increase of 4.9%
• Admissions of 15,191, an increase of 2.8%
• Net Income of $22.7 million, a decrease of 2.6%
• Adjusted EBITDA of $40.0 million, a decrease of 5.2%
• Adjusted EBITDA margin of 15.7%, a decrease of 171 basis points

Roto-Rooter segment operating results:

• Revenue of $95.7 million, an increase of 1.8%
• Unit-for-unit job count of 165,841, a decrease of 0.2%
• Net Income of $9.3 million, an increase of 27.6%
• Adjusted EBITDA of $17.8 million, an increase of 12.0%
• Adjusted EBITDA margin of 18.7%, an increase of 169 basis points

VITAS

Net revenue for VITAS was $255 million in the fourth quarter of 2011, which is an increase of 5.1% over the prior-year period. Excluding the impact of Medicare Cap, revenue increased 5.7%. This revenue growth was the result of increased ADC of 4.9%, driven by an increase in admissions of 2.8% and Medicare price increases of approximately 2.5%. This growth was partially offset by geographic and level of acuity mix shift of the patient base.

Average revenue per patient per day in the quarter, excluding the impact of Medicare Cap, was $203.68, which is 0.7% above the prior-year period. Routine home care reimbursement and high acuity care averaged $161.90 and $707.89, respectively, per patient per day in the fourth quarter of 2011. During the quarter, high acuity days of care were 7.6% of total days of care, 27 basis points lower than the prior-year quarter.

In the fourth quarter of 2011, VITAS recorded a Medicare Cap liability of $2.6 million. This compares to $1.1 million of Medicare Cap liability recorded in the fourth quarter of 2010. The government's Medicare Cap fiscal year begins on September 29. The first quarter of a Medicare Cap year has the potential to be volatile if a program experiences unusual or seasonal admission and discharge patterns. Based upon actual January 2012 admissions, VITAS anticipates reversing a significant portion of this Medicare Cap liability in the first quarter of 2012.

Of VITAS' 37 unique Medicare provider numbers, 32 provider numbers have a Medicare Cap cushion of 10% or greater during the trailing twelve-month period; two provider numbers have a Medicare Cap cushion between 5% to 10%; and three provider numbers have a cap cushion between 0% and 5%. VITAS generated an aggregate cap cushion of $218 million during the trailing twelve-month period.

The fourth quarter of 2011 gross margin, excluding the impact of Medicare Cap, was 23.8%, which is a decline of 155 basis points from the fourth quarter of 2010. This decline in margin is primarily the result of increased costs related to the 2011 mandated physician visit for recertification, expansion of our community liaison program, expansion of losses in start-up locations, as well as increased costs associated with expansion of inpatient units.

Selling, general and administrative expense was $18.3 million in the fourth quarter of 2011, which is a decrease of 2.8% when compared to the prior-year quarter. Adjusted EBITDA totaled $40.0 million in the quarter, a decrease of 5.2% over the prior-year period. Adjusted EBITDA margin, excluding the impact from Medicare Cap, was 16.6% in the quarter which was 122 basis points below the prior-year quarter.

Roto-Rooter

Roto-Rooter's plumbing and drain cleaning business generated sales of $95.7 million for the fourth quarter of 2011, an increase of 1.8% over the prior-year quarter. This revenue growth was the result of a combination of selective price increases and favorable mix shift, partially offset by a slight decline in aggregate job count.

Unit-for-unit job count in the fourth quarter of 2011 declined 0.2% when compared to the prior-year period. During the fourth quarter of 2011, total residential jobs decreased 2.6%, as residential plumbing jobs increased 5.6% and residential drain cleaning jobs decreased 6.6%, when compared to the fourth quarter of 2010. Residential jobs represented 70% of total job count in the quarter. Total commercial jobs increased 5.7%, with commercial plumbing/excavation job count increasing 10.8% and commercial drain cleaning increasing 4.3% when compared to the prior-year quarter. The "All Other" residential and commercial job category, which represents less than 2% of aggregate job count, decreased 6.1%.

Roto-Rooter's gross margin was 45.4% in the quarter, a 228 basis point increase when compared to the fourth quarter of 2010. Adjusted EBITDA in the fourth quarter of 2011 totaled $17.8 million, an increase of 12.0%, and the Adjusted EBITDA margin was 18.7% in the quarter, an increase of 169 basis points, when compared to the prior-year quarter.

Roto-Rooter continues to have periodic discussions with existing franchisees to acquire franchise territories. Management will be highly disciplined in terms of valuation, risk assessment and overall return on investment of any potential acquisition. The timing or actual completion of any acquisition cannot be predicted.

Chemed Consolidated Debt and Cash Flows

Chemed had total debt of $167 million at December 31, 2011. This debt is net of the discount taken as a result of convertible debt accounting requirements. Excluding this discount, aggregate debt is $187 million and is due in May 2014. Chemed's total debt equates to less than one times trailing twelve-month adjusted EBITDA.

In March 2011 Chemed replaced its existing credit facility with a new Credit Agreement. Terms of this Credit Agreement consist of a five-year $350 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently LIBOR plus 175 basis points. This Credit Agreement provides Chemed with increased flexibility in terms of acquisitions, share repurchases, dividends and other corporate needs. In addition, an expansion feature is included in this Credit Agreement that provides Chemed the opportunity to increase its revolver and/or enter into term loans for an additional $150 million. At December 31, 2011, this facility had approximately $321 million of undrawn borrowing capacity after deducting $29 million for letters of credit issued to secure the Company's workers' compensation insurance.

Capital expenditures in 2011 aggregated $29.6 million and compares to depreciation and amortization during the same period of $29.5 million.

The Company increased its quarterly dividend from $0.14 to $0.16 per share in the third quarter of 2011. In addition, the company has purchased $144 million, or 2,602,513 shares, of Chemed stock in 2011. As of December 31, 2011, $75.3 million is remaining under Chemed's previously announced share repurchase program. Management will continually evaluate cash utilization alternatives, including share repurchase, debt repurchase, acquisitions and increased dividends to determine the most beneficial use of available capital resources.

Guidance for 2012

VITAS expects to achieve full-year 2012 revenue growth, prior to Medicare Cap, of 5.0% to 8.0%. Admissions in 2012 are estimated to increase approximately 2.5% to 4.0% and full-year Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 15.0% to 15.5%. Effective October 1, 2011, Medicare increased the average hospice reimbursement rates by approximately 2.5%. Our guidance assumes VITAS will incur $5.0 million of estimated Medicare contractual billing limitations for calendar year 2012.

Roto-Rooter expects to achieve full-year 2012 revenue growth of 4.0% to 5.0%. The revenue estimate is a result of increased pricing of approximately 2%, a favorable mix shift to higher revenue jobs, with job count growth estimated at 0% to 1.5%. Adjusted EBITDA margin for 2012 is estimated in the range of 17.0% to 18.0%.

Based upon the above, management estimates 2012 earnings per diluted share, excluding non-cash expense for stock options, the non-cash interest expense related to the accounting for convertible debt and other items not indicative of ongoing operations, will be in the range of $5.35 to $5.55. This compares to Chemed's 2011 adjusted earnings per diluted share of $4.78.

Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday, February 15, 2012, to discuss the Company's quarterly results and to provide an update on its business. The dial-in number for the conference call is (866) 203-3436 for U.S. and Canadian participants and (617) 213-8849 for international participants. The participant passcode is 77396059. A live webcast of the call can be accessed on Chemed's website at www.chemed.com by clicking on Investor Relations Home.

A taped replay of the conference call will be available beginning approximately 24 hours after the call's conclusion. It can be accessed by dialing (888) 286-8010 for U.S. and Canadian callers and (617) 801-6888 for international callers and will be available for one week following the live call. The replay passcode is 43136718. An archived webcast will also be available at www.chemed.com.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to approximately 13,500 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing and drain service through company-owned branches, independent contractors and franchisees in the United States and

Canada. Roto-Rooter also has licensed master franchisees in Indonesia, Singapore, Japan, and the Philippines.

This press release contains information about Chemed's EBITDA, Adjusted EBITDA and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed's financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company's operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed's management similarly uses EBITDA, Adjusted EBITDA and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed's management to estimate the resources required to meet Chemed's future financial obligations and expenditures. Chemed's EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed's net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.

Forward-Looking Statements

Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed's dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed's most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.