[February 14, 2018] |
|
Chemed Reports Fourth-Quarter 2017 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, 2017, versus
the comparable prior-year period, as follows:
Consolidated operating results:
-
Revenue increased 6.2% to $428 million
-
GAAP Diluted Earnings-per-Share of $3.25, an increase of 67.5%
-
Adjusted Diluted EPS of $2.32, an increase of 10.5%
VITAS segment operating results:
-
Net Patient Revenue of $292 million, an increase of 2.8%
-
Average Daily Census (ADC) of 16,920, an increase of 4.7%
-
Admissions of 16,575, an increase of 4.3%
-
Net Income of $42.8 million, an increase of 62.2%
-
Adjusted EBITDA of $47.5 million, an increase of 2.7%
Roto-Rooter segment operating results:
-
Revenue of $136 million, an increase of 14.1%
-
Net Income of $25.6 million, an increase of 87.0%
-
Adjusted EBITDA of $31.1 million, an increase of 24.2%
-
Adjusted EBITDA margin of 22.8%, an increase of 185 basis points
VITAS
Net revenue for VITAS was $292 million in the fourth quarter of 2017,
which is an increase of 2.8%, when compared to the prior-year period.
This revenue increase is comprised of a geographically weighted average
Medicare reimbursement rate increase of approximately 0.8%, a 4.7%
increase in average daily census, offset by Medicare Cap which reduced
revenue 0.9% and acuity mix shift which negatively impacted revenue
1.7%, when compared to the prior-year period.
In the fourth quarter of 2017, VITAS had a 24.3/75.7 RHC Days-of-Care
ratio and generated approximately $1.3 million in SIA revenue. This
compares to a fourth-quarter 2016 RHC Days-of-Care ratio of 24.2/75.8
and SIA revenue of $1.2 million.
VITAS recorded $2.4 million in Medicare Cap billing limitations for two
programs in the quarter, all of which are related to the 2018 Medicare
Cap billing period.
At December 31, 2017, VITAS had 30 Medicare provider numbers, two of
which have an estimated 2018 Medicare Cap billing limitation.
Of VITAS' 30 unique Medicare provider numbers, 25 provider numbers have
a Medicare Cap cushion of 10% or greater, three provider numbers have a
cap cushion between 5% and 10% and two provider numbers have a Medicare
Cap liability on a trailing twelve-month period.
Average revenue per patient per day in the quarter was $189.33, which is
1.0% below the prior-year period. Routine home care reimbursement and
high acuity care averaged $163.50 and $713.35, respectively. During the
quarter, high acuity days of care were 4.7% of total days of care, 58
basis points less than the prior-year quarter.
The fourth quarter of 2017 gross margin, excluding Medicare Cap, was
24.5%, which is a 41-basis point improvement when compared to the fourth
quarter of 2016.
Selling, general and administrative expense was $22.6 million in the
fourth quarter of 2017, which is a decrease of 3.2% compared to the
prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$49.9 million in the quarter, an increase of 7.9%. Adjusted EBITDA
margin, excluding Medicare Cap, was 16.9% in the quarter which is a 66
basis point improvement when compared to the prior-year period.
Roto-Rooter
Roto-Rooter's plumbing and drain cleaning business generated sales of
$136 million for the fourth quarter of 2017, an increase of $16.8
million, or 14.1%, over the prior-year quarter. Revenue from water
restoration totaled $22.1 million, an increase of $8.4 million or,
61.7%, when compared to the prior-year quarter.
Roto-Rooter's gross margin in the quarter was 49.3%, a 241 basis point
improvement when compared to the fourth quarter of 2016. Adjusted EBITDA
in the fourth quarter of 2017 totaled $31.1 million, an increase of
24.2%, and the Adjusted EBITDA margin was 22.8% in the quarter, 185
basis points higher than the prior year.
Chemed Consolidated
As of December 31, 2017, Chemed had total cash and cash equivalents of
$11 million and debt of $101 million.
In June 2014, Chemed entered into a five-year Amended and Restated
Credit Agreement that consisted of a $100 million amortizable term loan
and a $350 million revolving credit facility. The interest rate on this
facility has a floating rate that is currently LIBOR plus 112.5 basis
points. At December 31, 2017, the Company had approximately $288 million
of undrawn borrowing capacity under this credit agreement.
The Company did not repurchase any shares of Chemed stock in the
quarter. Chemed repurchased a total of 500,000 shares in 2017 for $95
million which equates to a cost per share of $189.28. As of December 31,
2017, there was $55.5 million of remaining share repurchase
authorization under this plan.
Guidance for 2018
Revenue growth for VITAS in 2018, prior to Medicare Cap, is estimated to
be in the range of 2.5% to 3.5%. Admissions and Average Daily Census in
2018 are estimated to expand approximately 3% to 4% and full-year
Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 15.4%.
We are currently estimating $5.0 million for Medicare Cap billing
limitations in the 2018 calendar year.
Roto-Rooter is forecasted to achieve full-year 2018 revenue growth of
4.0% to 5.0%. This revenue estimate is based upon increased job pricing
of approximately 2% and continued growth in water restoration services.
Adjusted EBITDA margin for 2018 is estimated at 22.3%.
Based upon the above, full-year 2018 adjusted earnings per diluted
share, excluding non-cash expense for stock options, costs related to
litigation, and other discrete items, is estimated to be in the range of
$10.60 to $10.85. This compares to Chemed's 2017 reported adjusted
earnings per diluted share of $8.43. This 2018 guidance assumes
an effective corporate tax rate of 25.7%.
Conference Call
Chemed will host a conference call and webcast at 10 a.m., ET, on
Thursday, February 15, 2018, to discuss the Company's quarterly results
and to provide an update on its business. The dial-in number for the
conference call is (844) 743-2500 for U.S. and Canadian participants and
+1 (661) 378-9533 for international participants. The participant
passcode/Conference ID is 3768588. 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 (855) 859-2056 for U.S. and Canadian callers and +1 (404)
537-3406 for international callers and will be available for one week
following the live call. The replay Conference ID is 3768588. 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 over 16,500 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, drain cleaning, and water restoration services through
company-owned branches, independent contractors and franchisees in the
United States and Canada. Roto-Rooter also has licensed master
franchisees in the republics of Indonesia and Singapore, 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.
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED STATEMENTS OF INCOME
|
(in thousands, except per share data)(unaudited)
|
|
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|
|
|
|
|
|
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|
|
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Three Months Ended December 31,
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For the Years Ended December 31,
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|
|
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2017
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|
2016
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|
2017
|
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2016
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Service revenues and sales
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$
|
428,357
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|
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$
|
403,476
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|
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$
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1,666,724
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|
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$
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1,576,881
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Cost of services provided and goods sold
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291,493
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279,083
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1,150,532
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1,115,431
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Selling, general and administrative expenses (aa)
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71,621
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62,526
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276,652
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|
|
243,572
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Depreciation
|
|
|
8,943
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|
|
|
8,660
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|
|
35,488
|
|
|
|
34,279
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Amortization
|
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|
26
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|
|
|
85
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137
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359
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Other operating expenses
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(258
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)
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-
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90,880
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|
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4,491
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Total costs and expenses
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371,825
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350,354
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1,553,689
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1,398,132
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Income from operations
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56,532
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|
|
53,122
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|
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113,035
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|
|
178,749
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Interest expense
|
|
|
(1,108
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)
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|
|
(884
|
)
|
|
|
(4,272
|
)
|
|
|
(3,715
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)
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Other income--net (bb)
|
|
|
2,715
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|
|
|
87
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|
|
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8,154
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|
|
|
2,020
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Income before income taxes
|
|
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58,139
|
|
|
|
52,325
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|
|
|
116,917
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|
|
|
177,054
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Income taxes
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(3,587
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)
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|
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(20,136
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)
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(18,740
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)
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(68,311
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)
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Net income
|
|
$
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54,552
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|
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$
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32,189
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|
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$
|
98,177
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|
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$
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108,743
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Earnings Per Share
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Net income
|
|
$
|
3.40
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|
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$
|
1.99
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|
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$
|
6.11
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|
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$
|
6.64
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Average number of shares outstanding
|
|
|
16,026
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|
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16,206
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|
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16,057
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|
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16,383
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Diluted Earnings Per Share
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Net income
|
|
$
|
3.25
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|
|
$
|
1.94
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|
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$
|
5.86
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|
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$
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6.48
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Average number of shares outstanding
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|
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16,776
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|
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16,598
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|
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16,742
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16,789
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(aa)
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Selling, general and administrative ("SG&A") expenses comprise (in
thousands):
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Three Months Ended December 31,
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For the Years Ended December 31,
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|
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|
|
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|
|
2017
|
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2016
|
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2017
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2016
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SG&A expenses before long-term incentive
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compensation, expenses related to the O.I.G.
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investigation and the impact of market value
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adjustments related to deferred compensation
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plans
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|
$
|
66,821
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$
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60,137
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$
|
258,034
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$
|
234,321
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Market value adjustments related to
|
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deferred compensation plans
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2,811
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|
|
205
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8,430
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|
2,061
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Long-term incentive compensation
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|
|
1,973
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|
1,029
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|
4,994
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1,930
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Expenses related to the O.I.G. investigation
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|
16
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|
1,155
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5,194
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|
5,260
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Total SG&A expenses
|
|
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|
$
|
71,621
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|
|
$
|
62,526
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$
|
276,652
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|
|
$
|
243,572
|
|
|
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|
|
|
|
|
|
|
|
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(bb)
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Other income--net comprises (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
For the Years Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
Market value adjustments related to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
deferred compensation plans
|
|
$
|
2,811
|
|
|
$
|
205
|
|
|
$
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8,430
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|
|
$
|
2,061
|
|
|
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Loss on disposal of property and equipment
|
|
|
(226
|
)
|
|
|
(200
|
)
|
|
|
(707
|
)
|
|
|
(424
|
)
|
|
|
Interest income
|
|
|
131
|
|
|
|
82
|
|
|
|
427
|
|
|
|
383
|
|
|
|
Other
|
|
|
(1
|
)
|
|
|
-
|
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|
|
4
|
|
|
|
-
|
|
|
|
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Total other income--net
|
|
$
|
2,715
|
|
|
$
|
87
|
|
|
$
|
8,154
|
|
|
$
|
2,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED BALANCE SHEETS
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
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|
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|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
11,121
|
|
|
$
|
15,310
|
|
|
|
Accounts receivable less allowances
|
|
|
113,651
|
|
|
|
132,021
|
|
|
|
Inventories
|
|
|
5,334
|
|
|
|
5,755
|
|
|
|
Prepaid income taxes
|
|
|
29,848
|
|
|
|
3,709
|
|
|
|
Prepaid expenses
|
|
|
16,092
|
|
|
|
13,105
|
|
|
|
|
Total current assets
|
|
|
176,046
|
|
|
|
169,900
|
|
|
Investments of deferred compensation plans held in trust
|
|
|
62,067
|
|
|
|
54,389
|
|
|
Properties and equipment, at cost less accumulated depreciation
|
|
|
143,034
|
|
|
|
121,302
|
|
|
Identifiable intangible assets less accumulated amortization
|
|
|
54,865
|
|
|
|
55,065
|
|
|
Goodwill
|
|
|
476,887
|
|
|
|
472,366
|
|
|
Other assets
|
|
|
7,127
|
|
|
|
7,037
|
|
|
|
|
|
Total Assets
|
|
$
|
920,026
|
|
|
$
|
880,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
48,372
|
|
|
$
|
39,586
|
|
|
|
Current portion of long-term debt
|
|
|
10,000
|
|
|
|
8,750
|
|
|
|
Accrued insurance
|
|
|
46,968
|
|
|
|
47,960
|
|
|
|
Accrued compensation
|
|
|
62,933
|
|
|
|
53,979
|
|
|
|
Accrued legal
|
|
|
1,786
|
|
|
|
1,805
|
|
|
|
Other current liabilities
|
|
|
23,463
|
|
|
|
19,752
|
|
|
|
|
Total current liabilities
|
|
|
193,522
|
|
|
|
171,832
|
|
|
Deferred income taxes
|
|
|
16,640
|
|
|
|
14,291
|
|
|
Long-term debt
|
|
|
91,200
|
|
|
|
100,000
|
|
|
Deferred compensation liabilities
|
|
|
61,800
|
|
|
|
54,288
|
|
|
Other liabilities
|
|
|
16,510
|
|
|
|
15,549
|
|
|
|
|
|
Total Liabilities
|
|
|
379,672
|
|
|
|
355,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock
|
|
|
34,732
|
|
|
|
34,270
|
|
|
Paid-in capital
|
|
|
695,797
|
|
|
|
639,703
|
|
|
Retained earnings
|
|
|
1,038,955
|
|
|
|
958,149
|
|
|
Treasury stock, at cost
|
|
|
(1,231,332
|
)
|
|
|
(1,110,536
|
)
|
|
Deferred compensation payable in Company stock
|
|
|
2,202
|
|
|
|
2,513
|
|
|
|
|
|
Total Stockholders' Equity
|
|
|
540,354
|
|
|
|
524,099
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
920,026
|
|
|
$
|
880,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
98,177
|
|
|
$
|
108,743
|
|
|
Adjustments to reconcile net income to net cash provided
|
|
|
|
|
|
|
|
|
by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
35,625
|
|
|
|
34,638
|
|
|
|
|
Provision for uncollectible accounts receivable
|
|
|
17,306
|
|
|
|
16,319
|
|
|
|
|
Stock option expense
|
|
|
10,485
|
|
|
|
8,330
|
|
|
|
|
Loss on sale of transportation equipment
|
|
|
5,266
|
|
|
|
-
|
|
|
|
|
Noncash long-term incentive compensation
|
|
|
3,774
|
|
|
|
1,301
|
|
|
|
|
Provision/(benefit) for deferred income taxes
|
|
|
2,407
|
|
|
|
(6,707
|
)
|
|
|
|
Amortization of restricted stock awards
|
|
|
1,231
|
|
|
|
1,855
|
|
|
|
|
Noncash directors' compensation
|
|
|
766
|
|
|
|
541
|
|
|
|
|
Amortization of debt issuance costs
|
|
|
516
|
|
|
|
519
|
|
|
|
|
Noncash early retirement expense
|
|
|
-
|
|
|
|
1,747
|
|
|
|
|
Changes in operating assets and liabilities, excluding
|
|
|
|
|
|
|
|
|
|
|
amounts acquired in business combinations:
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)/decrease in accounts receivable
|
|
|
1,072
|
|
|
|
(42,142
|
)
|
|
|
|
|
|
Decrease in inventories
|
|
|
421
|
|
|
|
559
|
|
|
|
|
|
|
Increase in prepaid expenses
|
|
|
(2,987
|
)
|
|
|
(253
|
)
|
|
|
|
|
|
Increase in accounts payable and
|
|
|
|
|
|
|
|
|
|
|
|
|
other current liabilities
|
|
|
12,890
|
|
|
|
891
|
|
|
|
|
|
|
(Decrease)/increase in income taxes
|
|
|
(26,104
|
)
|
|
|
13,886
|
|
|
|
|
|
|
Increase in other assets
|
|
|
(8,330
|
)
|
|
|
(5,224
|
)
|
|
|
|
|
|
Increase in other liabilities
|
|
|
8,561
|
|
|
|
7,105
|
|
|
|
|
Excess tax benefit on share-based compensation
|
|
|
-
|
|
|
|
(7,195
|
)
|
|
|
|
Other sources
|
|
|
1,419
|
|
|
|
480
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
162,495
|
|
|
|
135,393
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(64,300
|
)
|
|
|
(39,772
|
)
|
|
Business combinations, net of cash acquired
|
|
|
(4,725
|
)
|
|
|
-
|
|
|
Other sources/(uses)
|
|
|
1,417
|
|
|
|
(90
|
)
|
|
|
|
|
Net cash used by investing activities
|
|
|
(67,608
|
)
|
|
|
(39,862
|
)
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
Proceeds from revolving line of credit
|
|
|
261,650
|
|
|
|
184,550
|
|
|
Payments on revolving line of credit
|
|
|
(260,450
|
)
|
|
|
(159,550
|
)
|
|
Purchases of treasury stock
|
|
|
(94,640
|
)
|
|
|
(102,313
|
)
|
|
Proceeds from exercise of stock options
|
|
|
27,092
|
|
|
|
8,421
|
|
|
Dividends paid
|
|
|
(17,371
|
)
|
|
|
(16,439
|
)
|
|
Capital stock surrendered to pay taxes on stock-based compensation
|
|
|
(14,223
|
)
|
|
|
(8,772
|
)
|
|
Payments on other long-term debt
|
|
|
(8,750
|
)
|
|
|
(7,500
|
)
|
|
Decrease in cash overdrafts payable
|
|
|
6,700
|
|
|
|
(736
|
)
|
|
Excess tax benefit on share-based compensation
|
|
|
-
|
|
|
|
7,195
|
|
|
Other sources
|
|
|
916
|
|
|
|
196
|
|
|
|
|
|
Net cash used by financing activities
|
|
|
(99,076
|
)
|
|
|
(94,948
|
)
|
(Decrease)/Increase in Cash and Cash Equivalents
|
|
|
(4,189
|
)
|
|
|
583
|
|
Cash and cash equivalents at beginning of year
|
|
|
15,310
|
|
|
|
14,727
|
|
Cash and cash equivalents at end of period
|
|
$
|
11,121
|
|
|
$
|
15,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING STATEMENTS OF INCOME
|
FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales (a)
|
|
$
|
292,283
|
|
|
$
|
136,074
|
|
|
$
|
-
|
|
|
$
|
428,357
|
|
Cost of services provided and goods sold
|
|
|
222,497
|
|
|
|
68,996
|
|
|
|
-
|
|
|
|
291,493
|
|
Selling, general and administrative expenses (a)
|
|
|
22,607
|
|
|
|
35,330
|
|
|
|
13,684
|
|
|
|
71,621
|
|
Depreciation
|
|
|
4,568
|
|
|
|
4,344
|
|
|
|
31
|
|
|
|
8,943
|
|
Amortization
|
|
|
-
|
|
|
|
26
|
|
|
|
-
|
|
|
|
26
|
|
Other operating expenses (a)
|
|
|
(5,524
|
)
|
|
|
-
|
|
|
|
5,266
|
|
|
|
(258
|
)
|
|
Total costs and expenses
|
|
|
244,148
|
|
|
|
108,696
|
|
|
|
18,981
|
|
|
|
371,825
|
|
|
Income/(loss) from operations
|
|
|
48,135
|
|
|
|
27,378
|
|
|
|
(18,981
|
)
|
|
|
56,532
|
|
Interest expense
|
|
|
(27
|
)
|
|
|
(65
|
)
|
|
|
(1,016
|
)
|
|
|
(1,108
|
)
|
Intercompany interest income/(expense)
|
|
|
3,177
|
|
|
|
1,562
|
|
|
|
(4,739
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
(31
|
)
|
|
|
(64
|
)
|
|
|
2,810
|
|
|
|
2,715
|
|
|
Income/(loss) before income taxes
|
|
|
51,254
|
|
|
|
28,811
|
|
|
|
(21,926
|
)
|
|
|
58,139
|
|
Income taxes (a)
|
|
|
(8,406
|
)
|
|
|
(3,228
|
)
|
|
|
8,047
|
|
|
|
(3,587
|
)
|
|
Net income/(loss)
|
|
$
|
42,848
|
|
|
$
|
25,583
|
|
|
$
|
(13,879
|
)
|
|
$
|
54,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales (b)
|
|
$
|
284,186
|
|
|
$
|
119,290
|
|
|
$
|
-
|
|
|
$
|
403,476
|
|
Cost of services provided and goods sold
|
|
|
215,722
|
|
|
|
63,361
|
|
|
|
-
|
|
|
|
279,083
|
|
Selling, general and administrative expenses (b)
|
|
|
23,354
|
|
|
|
30,922
|
|
|
|
8,250
|
|
|
|
62,526
|
|
Depreciation
|
|
|
4,690
|
|
|
|
3,838
|
|
|
|
132
|
|
|
|
8,660
|
|
Amortization
|
|
|
14
|
|
|
|
71
|
|
|
|
-
|
|
|
|
85
|
|
|
Total costs and expenses
|
|
|
243,780
|
|
|
|
98,192
|
|
|
|
8,382
|
|
|
|
350,354
|
|
|
Income/(loss) from operations
|
|
|
40,406
|
|
|
|
21,098
|
|
|
|
(8,382
|
)
|
|
|
53,122
|
|
Interest expense
|
|
|
(35
|
)
|
|
|
(68
|
)
|
|
|
(781
|
)
|
|
|
(884
|
)
|
Intercompany interest income/(expense)
|
|
|
2,130
|
|
|
|
981
|
|
|
|
(3,111
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
(57
|
)
|
|
|
(60
|
)
|
|
|
204
|
|
|
|
87
|
|
|
Income/(loss) before income taxes
|
|
|
42,444
|
|
|
|
21,951
|
|
|
|
(12,070
|
)
|
|
|
52,325
|
|
Income taxes (b)
|
|
|
(16,023
|
)
|
|
|
(8,272
|
)
|
|
|
4,159
|
|
|
|
(20,136
|
)
|
|
Net income/(loss)
|
|
$
|
26,421
|
|
|
$
|
13,679
|
|
|
$
|
(7,911
|
)
|
|
$
|
32,189
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING STATEMENTS OF INCOME
|
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales (a)
|
|
$
|
1,148,260
|
|
|
$
|
518,464
|
|
|
$
|
-
|
|
|
$
|
1,666,724
|
|
Cost of services provided and goods sold
|
|
|
886,062
|
|
|
|
264,470
|
|
|
|
-
|
|
|
|
1,150,532
|
|
Selling, general and administrative expenses (a)
|
|
|
95,215
|
|
|
|
136,248
|
|
|
|
45,189
|
|
|
|
276,652
|
|
Depreciation
|
|
|
18,616
|
|
|
|
16,667
|
|
|
|
205
|
|
|
|
35,488
|
|
Amortization
|
|
|
14
|
|
|
|
123
|
|
|
|
-
|
|
|
|
137
|
|
Other operating expenses (a)
|
|
|
85,614
|
|
|
|
-
|
|
|
|
5,266
|
|
|
|
90,880
|
|
|
Total costs and expenses
|
|
|
1,085,521
|
|
|
|
417,508
|
|
|
|
50,660
|
|
|
|
1,553,689
|
|
|
Income/(loss) from operations
|
|
|
62,739
|
|
|
|
100,956
|
|
|
|
(50,660
|
)
|
|
|
113,035
|
|
Interest expense
|
|
|
(188
|
)
|
|
|
(323
|
)
|
|
|
(3,761
|
)
|
|
|
(4,272
|
)
|
Intercompany interest income/(expense)
|
|
|
11,656
|
|
|
|
5,596
|
|
|
|
(17,252
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
(126
|
)
|
|
|
(148
|
)
|
|
|
8,428
|
|
|
|
8,154
|
|
|
Income/(loss) before income taxes
|
|
|
74,081
|
|
|
|
106,081
|
|
|
|
(63,245
|
)
|
|
|
116,917
|
|
Income taxes (a)
|
|
|
(16,436
|
)
|
|
|
(32,782
|
)
|
|
|
30,478
|
|
|
|
(18,740
|
)
|
|
Net income/(loss)
|
|
$
|
57,645
|
|
|
$
|
73,299
|
|
|
$
|
(32,767
|
)
|
|
$
|
98,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales (b)
|
|
$
|
1,123,317
|
|
|
$
|
453,564
|
|
|
$
|
-
|
|
|
$
|
1,576,881
|
|
Cost of services provided and goods sold
|
|
|
878,092
|
|
|
|
237,339
|
|
|
|
-
|
|
|
|
1,115,431
|
|
Selling, general and administrative expenses (b)
|
|
|
92,550
|
|
|
|
118,812
|
|
|
|
32,210
|
|
|
|
243,572
|
|
Depreciation
|
|
|
19,035
|
|
|
|
14,698
|
|
|
|
546
|
|
|
|
34,279
|
|
Amortization
|
|
|
55
|
|
|
|
304
|
|
|
|
-
|
|
|
|
359
|
|
Other operating expenses (b)
|
|
|
4,491
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,491
|
|
|
Total costs and expenses
|
|
|
994,223
|
|
|
|
371,153
|
|
|
|
32,756
|
|
|
|
1,398,132
|
|
|
Income/(loss) from operations
|
|
|
129,094
|
|
|
|
82,411
|
|
|
|
(32,756
|
)
|
|
|
178,749
|
|
Interest expense
|
|
|
(211
|
)
|
|
|
(332
|
)
|
|
|
(3,172
|
)
|
|
|
(3,715
|
)
|
Intercompany interest income/(expense)
|
|
|
7,969
|
|
|
|
3,595
|
|
|
|
(11,564
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
19
|
|
|
|
(62
|
)
|
|
|
2,063
|
|
|
|
2,020
|
|
|
Income/(loss) before income taxes
|
|
|
136,871
|
|
|
|
85,612
|
|
|
|
(45,429
|
)
|
|
|
177,054
|
|
Income taxes (b)
|
|
|
(51,910
|
)
|
|
|
(32,719
|
)
|
|
|
16,318
|
|
|
|
(68,311
|
)
|
|
Net income/(loss)
|
|
$
|
84,961
|
|
|
$
|
52,893
|
|
|
$
|
(29,111
|
)
|
|
$
|
108,743
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING SUMMARIES OF EBITDA
|
FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
42,848
|
|
|
$
|
25,583
|
|
|
$
|
(13,879
|
)
|
|
$
|
54,552
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
27
|
|
|
|
65
|
|
|
|
1,016
|
|
|
|
1,108
|
|
|
|
Income taxes
|
|
|
8,406
|
|
|
|
3,228
|
|
|
|
(8,047
|
)
|
|
|
3,587
|
|
|
|
Depreciation
|
|
|
4,568
|
|
|
|
4,344
|
|
|
|
31
|
|
|
|
8,943
|
|
|
|
Amortization
|
|
|
-
|
|
|
|
26
|
|
|
|
-
|
|
|
|
26
|
|
|
|
|
EBITDA
|
|
|
55,849
|
|
|
|
33,246
|
|
|
|
(20,879
|
)
|
|
|
68,216
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(3,177
|
)
|
|
|
(1,562
|
)
|
|
|
4,739
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
(121
|
)
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
(131
|
)
|
|
|
Litigation settlement
|
|
|
(5,524
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,524
|
)
|
|
|
Loss on sale of transportation equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
5,266
|
|
|
|
5,266
|
|
|
|
Medicare cap sequestration adjustment
|
|
|
342
|
|
|
|
-
|
|
|
|
-
|
|
|
|
342
|
|
|
|
Expenses related to OIG investigation
|
|
|
16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16
|
|
|
|
Amortization of stock awards
|
|
|
71
|
|
|
|
66
|
|
|
|
160
|
|
|
|
297
|
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
(664
|
)
|
|
|
-
|
|
|
|
(664
|
)
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
2,747
|
|
|
|
2,747
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
1,973
|
|
|
|
1,973
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
47,456
|
|
|
$
|
31,076
|
|
|
$
|
(5,994
|
)
|
|
$
|
72,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
26,421
|
|
|
$
|
13,679
|
|
|
$
|
(7,911
|
)
|
|
$
|
32,189
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
35
|
|
|
|
68
|
|
|
|
781
|
|
|
|
884
|
|
|
|
Income taxes
|
|
|
16,023
|
|
|
|
8,272
|
|
|
|
(4,159
|
)
|
|
|
20,136
|
|
|
|
Depreciation
|
|
|
4,690
|
|
|
|
3,838
|
|
|
|
132
|
|
|
|
8,660
|
|
|
|
Amortization
|
|
|
14
|
|
|
|
71
|
|
|
|
-
|
|
|
|
85
|
|
|
|
|
EBITDA
|
|
|
47,183
|
|
|
|
25,928
|
|
|
|
(11,157
|
)
|
|
|
61,954
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(2,130
|
)
|
|
|
(981
|
)
|
|
|
3,111
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
(69
|
)
|
|
|
(13
|
)
|
|
|
-
|
|
|
|
(82
|
)
|
|
|
Expenses related to OIG investigation
|
|
|
1,155
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,155
|
|
|
|
Amortization of stock awards
|
|
|
86
|
|
|
|
76
|
|
|
|
279
|
|
|
|
441
|
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
20
|
|
|
|
-
|
|
|
|
20
|
|
|
|
Litigation settlement costs
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
2,071
|
|
|
|
2,071
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
1,029
|
|
|
|
1,029
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
46,225
|
|
|
$
|
25,031
|
|
|
$
|
(4,667
|
)
|
|
$
|
66,589
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING SUMMARIES OF EBITDA
|
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
57,645
|
|
|
$
|
73,299
|
|
|
$
|
(32,767
|
)
|
|
$
|
98,177
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
188
|
|
|
|
323
|
|
|
|
3,761
|
|
|
|
4,272
|
|
|
|
Income taxes
|
|
|
16,436
|
|
|
|
32,782
|
|
|
|
(30,478
|
)
|
|
|
18,740
|
|
|
|
Depreciation
|
|
|
18,616
|
|
|
|
16,667
|
|
|
|
205
|
|
|
|
35,488
|
|
|
|
Amortization
|
|
|
14
|
|
|
|
123
|
|
|
|
-
|
|
|
|
137
|
|
|
|
|
EBITDA
|
|
|
92,899
|
|
|
|
123,194
|
|
|
|
(59,279
|
)
|
|
|
156,814
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(11,656
|
)
|
|
|
(5,596
|
)
|
|
|
17,252
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
(388
|
)
|
|
|
(39
|
)
|
|
|
-
|
|
|
|
(427
|
)
|
|
|
Litigation settlement
|
|
|
84,476
|
|
|
|
213
|
|
|
|
-
|
|
|
|
84,689
|
|
|
|
Medicare cap sequestration adjustment
|
|
|
447
|
|
|
|
-
|
|
|
|
-
|
|
|
|
447
|
|
|
|
Loss on sale of transportation equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
5,266
|
|
|
|
5,266
|
|
|
|
Program closure expenses
|
|
|
1,138
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,138
|
|
|
|
Expenses related to OIG investigation
|
|
|
5,194
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,194
|
|
|
|
Amortization of stock awards
|
|
|
291
|
|
|
|
269
|
|
|
|
670
|
|
|
|
1,230
|
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
(1,371
|
)
|
|
|
-
|
|
|
|
(1,371
|
)
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
10,485
|
|
|
|
10,485
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
4,994
|
|
|
|
4,994
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
172,401
|
|
|
$
|
116,670
|
|
|
$
|
(20,612
|
)
|
|
$
|
268,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
84,961
|
|
|
$
|
52,893
|
|
|
$
|
(29,111
|
)
|
|
$
|
108,743
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
211
|
|
|
|
332
|
|
|
|
3,172
|
|
|
|
3,715
|
|
|
|
Income taxes
|
|
|
51,910
|
|
|
|
32,719
|
|
|
|
(16,318
|
)
|
|
|
68,311
|
|
|
|
Depreciation
|
|
|
19,035
|
|
|
|
14,698
|
|
|
|
546
|
|
|
|
34,279
|
|
|
|
Amortization
|
|
|
55
|
|
|
|
304
|
|
|
|
-
|
|
|
|
359
|
|
|
|
|
EBITDA
|
|
|
156,172
|
|
|
|
100,946
|
|
|
|
(41,711
|
)
|
|
|
215,407
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(7,969
|
)
|
|
|
(3,595
|
)
|
|
|
11,564
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
(325
|
)
|
|
|
(58
|
)
|
|
|
-
|
|
|
|
(383
|
)
|
|
|
Early retirement expenses
|
|
|
4,491
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,491
|
|
|
|
Expenses related to OIG investigation
|
|
|
5,260
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,260
|
|
|
|
Amortization of stock awards
|
|
|
387
|
|
|
|
307
|
|
|
|
1,161
|
|
|
|
1,855
|
|
|
|
Medicare cap sequestration adjustment
|
|
|
228
|
|
|
|
-
|
|
|
|
-
|
|
|
|
228
|
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
(1,333
|
)
|
|
|
-
|
|
|
|
(1,333
|
)
|
|
|
Net expenses related to litigation settlements
|
|
|
1,149
|
|
|
|
45
|
|
|
|
-
|
|
|
|
1,194
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
1,930
|
|
|
|
1,930
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
8,330
|
|
|
|
8,330
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
159,393
|
|
|
$
|
96,312
|
|
|
$
|
(18,726
|
)
|
|
$
|
236,979
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
RECONCILIATION OF ADJUSTED NET INCOME
|
(in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
For the Years Ended December 31,
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income as reported
|
|
$
|
54,552
|
|
|
$
|
32,189
|
|
$
|
98,177
|
|
|
$
|
108,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add/(deduct) after-tax cost of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess tax benefits on stock compensation
|
|
|
(10,811
|
)
|
|
|
-
|
|
|
(18,932
|
)
|
|
|
-
|
|
|
Impact of tax reform
|
|
|
(8,302
|
)
|
|
|
-
|
|
|
(8,302
|
)
|
|
|
-
|
|
|
Litigation settlement
|
|
|
(3,425
|
)
|
|
|
-
|
|
|
52,504
|
|
|
|
-
|
|
|
Loss on sale of transportation equipment
|
|
|
3,314
|
|
|
|
-
|
|
|
3,314
|
|
|
|
-
|
|
|
Stock option expense
|
|
|
2,000
|
|
|
|
1,308
|
|
|
6,892
|
|
|
|
5,266
|
|
|
Long-term incentive compensation
|
|
|
1,332
|
|
|
|
651
|
|
|
3,243
|
|
|
|
1,221
|
|
|
Expenses of OIG investigation
|
|
|
9
|
|
|
|
713
|
|
|
3,207
|
|
|
|
3,248
|
|
|
Program closure expenses
|
|
|
-
|
|
|
|
-
|
|
|
675
|
|
|
|
-
|
|
|
Expenses related to litigation settlements
|
|
|
-
|
|
|
|
1
|
|
|
-
|
|
|
|
28
|
|
|
Medicare cap sequestration adjustments
|
|
|
211
|
|
|
|
-
|
|
|
276
|
|
|
|
141
|
|
|
Early retirement expenses
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
2,840
|
Adjusted net income
|
|
$
|
38,880
|
|
|
$
|
34,862
|
|
$
|
141,054
|
|
|
$
|
121,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share As Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3.25
|
|
|
$
|
1.94
|
|
$
|
5.86
|
|
|
$
|
6.48
|
|
|
Average number of shares outstanding
|
|
|
16,776
|
|
|
|
16,598
|
|
|
16,742
|
|
|
|
16,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
2.32
|
|
|
$
|
2.10
|
|
$
|
8.43
|
|
|
$
|
7.24
|
|
|
Average number of shares outstanding
|
|
|
16,776
|
|
|
|
16,598
|
|
|
16,742
|
|
|
|
16,789
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
|
|
OPERATING STATISTICS FOR VITAS SEGMENT
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
For the Years Ended December 31,
|
|
OPERATING STATISTICS
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
|
|
Net revenue ($000) (d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
$
|
242,554
|
|
|
|
$
|
228,463
|
|
|
|
$
|
935,913
|
|
|
|
$
|
887,940
|
|
|
|
|
Inpatient
|
|
|
22,033
|
|
|
|
|
23,724
|
|
|
|
|
90,472
|
|
|
|
|
97,580
|
|
|
|
|
Continuous care
|
|
|
30,131
|
|
|
|
|
31,999
|
|
|
|
|
124,557
|
|
|
|
|
138,025
|
|
|
|
|
|
Total before Medicare cap allowance
|
|
$
|
294,718
|
|
|
|
$
|
284,186
|
|
|
|
$
|
1,150,942
|
|
|
|
$
|
1,123,545
|
|
|
|
|
Medicare cap allowance
|
|
|
(2,435
|
)
|
|
|
|
-
|
|
|
|
|
(2,682
|
)
|
|
|
|
(228
|
)
|
|
|
|
|
Total
|
|
$
|
292,283
|
|
|
|
$
|
284,186
|
|
|
|
$
|
1,148,260
|
|
|
|
$
|
1,123,317
|
|
|
|
Net revenue as a percent of total before Medicare cap allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
82.3
|
|
%
|
|
|
80.4
|
|
%
|
|
|
81.2
|
|
%
|
|
|
78.9
|
|
%
|
|
|
Inpatient
|
|
|
7.5
|
|
|
|
|
8.3
|
|
|
|
|
7.9
|
|
|
|
|
8.7
|
|
|
|
|
Continuous care
|
|
|
10.2
|
|
|
|
|
11.3
|
|
|
|
|
10.9
|
|
|
|
|
12.4
|
|
|
|
|
|
Total before Medicare cap allowance
|
|
|
100.0
|
|
|
|
|
100.0
|
|
|
|
|
100.0
|
|
|
|
|
100.0
|
|
|
|
|
Medicare cap allowance
|
|
|
(0.8
|
)
|
|
|
|
-
|
|
|
|
|
(0.2
|
)
|
|
|
|
-
|
|
|
|
|
|
Total
|
|
|
99.2
|
|
%
|
|
|
100.0
|
|
%
|
|
|
99.8
|
|
%
|
|
|
100.0
|
|
%
|
|
Average daily census ("ADC") (days)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
12,861
|
|
|
|
|
12,241
|
|
|
|
|
12,549
|
|
|
|
|
12,040
|
|
|
|
|
Nursing home
|
|
|
3,265
|
|
|
|
|
3,065
|
|
|
|
|
3,177
|
|
|
|
|
3,037
|
|
|
|
|
|
Routine homecare
|
|
|
16,126
|
|
|
|
|
15,306
|
|
|
|
|
15,726
|
|
|
|
|
15,077
|
|
|
|
|
Inpatient
|
|
|
342
|
|
|
|
|
383
|
|
|
|
|
354
|
|
|
|
|
400
|
|
|
|
|
Continuous care
|
|
|
452
|
|
|
|
|
471
|
|
|
|
|
470
|
|
|
|
|
515
|
|
|
|
|
|
Total
|
|
|
16,920
|
|
|
|
|
16,160
|
|
|
|
|
16,550
|
|
|
|
|
15,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Admissions
|
|
|
16,575
|
|
|
|
|
15,889
|
|
|
|
|
66,449
|
|
|
|
|
65,094
|
|
|
|
Total Discharges
|
|
|
16,553
|
|
|
|
|
16,282
|
|
|
|
|
65,637
|
|
|
|
|
64,689
|
|
|
|
Average length of stay (days)
|
|
|
91.4
|
|
|
|
|
91.4
|
|
|
|
|
88.8
|
|
|
|
|
86.7
|
|
|
|
Median length of stay (days)
|
|
|
16.0
|
|
|
|
|
16.0
|
|
|
|
|
16.0
|
|
|
|
|
16.0
|
|
|
|
ADC by major diagnosis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerebro
|
|
|
36.1
|
|
%
|
|
|
33.4
|
|
%
|
|
|
35.5
|
|
%
|
|
|
32.7
|
|
%
|
|
|
Neurological
|
|
|
18.5
|
|
|
|
|
20.3
|
|
|
|
|
19.2
|
|
|
|
|
21.1
|
|
|
|
|
Cardio
|
|
|
16.4
|
|
|
|
|
16.9
|
|
|
|
|
16.5
|
|
|
|
|
17.1
|
|
|
|
|
Cancer
|
|
|
14.1
|
|
|
|
|
15.4
|
|
|
|
|
14.6
|
|
|
|
|
15.3
|
|
|
|
|
Respiratory
|
|
|
8.0
|
|
|
|
|
7.8
|
|
|
|
|
7.9
|
|
|
|
|
7.8
|
|
|
|
|
Other
|
|
|
6.9
|
|
|
|
|
6.2
|
|
|
|
|
6.3
|
|
|
|
|
6.0
|
|
|
|
|
|
Total
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
Admissions by major diagnosis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerebro
|
|
|
22.3
|
|
%
|
|
|
21.6
|
|
%
|
|
|
22.0
|
|
%
|
|
|
21.0
|
|
%
|
|
|
Neurological
|
|
|
10.7
|
|
|
|
|
11.3
|
|
|
|
|
10.6
|
|
|
|
|
11.0
|
|
|
|
|
Cancer
|
|
|
30.0
|
|
|
|
|
32.2
|
|
|
|
|
30.6
|
|
|
|
|
31.8
|
|
|
|
|
Cardio
|
|
|
14.9
|
|
|
|
|
16.0
|
|
|
|
|
15.0
|
|
|
|
|
15.4
|
|
|
|
|
Respiratory
|
|
|
10.7
|
|
|
|
|
10.8
|
|
|
|
|
10.8
|
|
|
|
|
10.2
|
|
|
|
|
Other
|
|
|
11.4
|
|
|
|
|
8.1
|
|
|
|
|
11.0
|
|
|
|
|
10.6
|
|
|
|
|
|
Total
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
Direct patient care margins (e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Routine homecare
|
|
|
53.9
|
|
%
|
|
|
53.1
|
|
%
|
|
|
52.6
|
|
%
|
|
|
52.1
|
|
%
|
|
|
Inpatient
|
|
|
8.5
|
|
|
|
|
1.2
|
|
|
|
|
5.4
|
|
|
|
|
2.3
|
|
|
|
|
Continuous care
|
|
|
16.8
|
|
|
|
|
15.8
|
|
|
|
|
16.9
|
|
|
|
|
14.2
|
|
|
|
Homecare margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
55.65
|
|
|
|
$
|
56.11
|
|
|
|
$
|
56.80
|
|
|
|
$
|
56.41
|
|
|
|
|
Combined drug, home medical equipment and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
medical supplies cost
|
|
|
14.30
|
|
|
|
|
14.99
|
|
|
|
|
14.65
|
|
|
|
|
15.66
|
|
|
|
Inpatient margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
355.96
|
|
|
|
$
|
363.06
|
|
|
|
$
|
366.41
|
|
|
|
$
|
350.56
|
|
|
|
Continuous care margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
583.45
|
|
|
|
$
|
602.30
|
|
|
|
$
|
584.49
|
|
|
|
$
|
607.52
|
|
|
|
Bad debt expense as a percent of revenues
|
|
|
1.1
|
|
%
|
|
|
1.2
|
|
%
|
|
|
1.1
|
|
%
|
|
|
1.2
|
|
%
|
|
Accounts receivable --
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days of revenue outstanding- excluding unapplied Medicare payments
|
|
|
33.7
|
|
|
|
|
36.5
|
|
|
|
|
n.a.
|
|
|
|
|
n.a.
|
|
|
|
Days of revenue outstanding- including unapplied Medicare payments
|
|
|
25.0
|
|
|
|
|
32.6
|
|
|
|
|
n.a.
|
|
|
|
|
n.a.
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
FOOTNOTES TO FINANCIAL STATEMENTS
|
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2017 AND 2016
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Included in the results of operations for 2017 are the following
significant credits/(charges) which may not be indicative of ongoing
operations
|
|
|
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Service revenues and sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare cap sequestration adjustment
|
|
$
|
(342
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(342
|
)
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
|
(16
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,747
|
)
|
|
|
(2,747
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,973
|
)
|
|
|
(1,973
|
)
|
|
|
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation settlements
|
|
|
5,524
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,524
|
|
|
|
|
Loss on sale of transportation equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,266
|
)
|
|
|
(5,266
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
5,166
|
|
|
|
-
|
|
|
|
(9,986
|
)
|
|
|
(4,820
|
)
|
|
|
Impact of tax reform
|
|
|
11,057
|
|
|
|
7,761
|
|
|
|
(10,516
|
)
|
|
|
8,302
|
|
|
|
Excess tax benefits on stock compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
10,811
|
|
|
|
10,811
|
|
|
|
Income tax benefit on the above
|
|
|
(1,961
|
)
|
|
|
-
|
|
|
|
3,340
|
|
|
|
1,379
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
14,262
|
|
|
$
|
7,761
|
|
|
$
|
(6,351
|
)
|
|
$
|
15,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Service revenues and sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare cap sequestration adjustment
|
|
$
|
(447
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(447
|
)
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
|
(5,194
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,194
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,485
|
)
|
|
|
(10,485
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,994
|
)
|
|
|
(4,994
|
)
|
|
|
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation settlements
|
|
|
(84,476
|
)
|
|
|
(213
|
)
|
|
|
-
|
|
|
|
(84,689
|
)
|
|
|
|
Loss on sale of transportation equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,266
|
)
|
|
|
(5,266
|
)
|
|
|
|
Program closure expenses
|
|
|
(1,138
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,138
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(91,255
|
)
|
|
|
(213
|
)
|
|
|
(20,745
|
)
|
|
|
(112,213
|
)
|
|
|
Impact of tax reform
|
|
|
11,057
|
|
|
|
7,761
|
|
|
|
(10,516
|
)
|
|
|
8,302
|
|
|
|
Excess tax benefits on stock compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
18,932
|
|
|
|
18,932
|
|
|
|
Income tax benefit on the above
|
|
|
34,722
|
|
|
|
84
|
|
|
|
7,296
|
|
|
|
42,102
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(45,476
|
)
|
|
$
|
7,632
|
|
|
$
|
(5,033
|
)
|
|
$
|
(42,877
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Included in the results of operations for 2016 are the following
significant credits/(charges) which may not be indicative of ongoing
operations
|
|
|
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
$
|
(1,155
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1,155
|
)
|
|
|
|
Expenses related to litigation settlements
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,071
|
)
|
|
|
(2,071
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,029
|
)
|
|
|
(1,029
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(1,155
|
)
|
|
|
(1
|
)
|
|
|
(3,100
|
)
|
|
|
(4,256
|
)
|
|
|
Income tax benefit on the above
|
|
|
442
|
|
|
|
-
|
|
|
|
1,141
|
|
|
|
1,583
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(713
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1,959
|
)
|
|
$
|
(2,673
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Service revenues and sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare cap sequestration adjustment
|
|
$
|
(228
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(228
|
)
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
|
(5,260
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,260
|
)
|
|
|
|
Expenses related to litigation settlements
|
|
|
-
|
|
|
|
(45
|
)
|
|
|
-
|
|
|
|
(45
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,330
|
)
|
|
|
(8,330
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,930
|
)
|
|
|
(1,930
|
)
|
|
|
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early retirement expenses
|
|
|
(4,491
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,491
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(9,979
|
)
|
|
|
(45
|
)
|
|
|
(10,260
|
)
|
|
|
(20,284
|
)
|
|
|
Income tax benefit on the above
|
|
|
3,750
|
|
|
|
17
|
|
|
|
3,773
|
|
|
|
7,540
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(6,229
|
)
|
|
$
|
(28
|
)
|
|
$
|
(6,487
|
)
|
|
$
|
(12,744
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
Under Generally Accepted Accounting Principles ("GAAP"), the
Roto-Rooter segment expenses all advertising, including the cost
of telephone directories, immediately upon the initial release of
the advertising. Telephone directories are generally in
circulation 12 months. If a directory is in circulation for a time
period greater or less than 12 months, the publisher adjusts the
directory billing for the change in billing period. The timing of
when a telephone directory is published can and does fluctuate
significantly on a quarterly basis. This "direct expensing"
results in significant fluctuations in quarterly advertising
expense. In the fourth quarters of 2017 and 2016, GAAP advertising
expense for Roto-Rooter totaled $8,145,000 and $7,323,000,
respectively. If the expense of the telephone directories were
spread over the periods they are in circulation, advertising
expense for the fourth quarters of 2017 and 2016 would total
$8,809,000 and $7,303,000, respectively.
|
|
|
|
|
|
Similarly, for the years ended December 31, 2017 and 2016, GAAP
advertising expense for Roto-Rooter totaled $31,042,000 and
$26,717,000, respectively. If the expense of the telephone
directories were spread over the periods they are in circulation,
advertising expense for the years ended December 31, 2017 and 2016
would total $32,413,000 and $28,050,000, respectively.
|
|
|
|
(d)
|
|
VITAS has 11 large (greater than 450 ADC), 16 medium (greater than
200 but less than 450 ADC) and 17 small (less than 200 ADC)
hospice programs. Of VITAS' 30 unique Medicare provider numbers,
23 provider numbers have a Medicare cap cushion of 10%, five
provider numbers have Medicare cap cushion between 3% and 5% and
two provider numbers have a Medicare cap liability for the current
cap year.
|
|
|
|
(e)
|
|
Amounts exclude indirect patient care and administrative costs, as
well as Medicare Cap billing limitation.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180214006100/en/
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