[July 23, 2015] |
|
Chemed Reports Second-Quarter 2015 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 second quarter ended June 30, 2015, versus the
comparable prior-year period, as follows:
Consolidated operating results:
-
Revenue increased 6.0% to $382 million
-
GAAP Diluted EPS increased 14.0% to $1.55
-
Adjusted Diluted EPS increased 14.0% to $1.71
VITAS segment operating results:
-
Net Patient Revenue of $276 million, an increase of 4.7%
-
Average Daily Census (ADC) of 15,283, an increase of 5.1%
-
Admissions of 16,683, an increase of 5.8%
-
Net Income, including litigation costs, of $21.8 million, an increase
of 4.3%
-
Adjusted EBITDA of $39.8 million, an increase of 6.3%
-
Adjusted EBITDA margin of 14.4%, an increase of 21 basis points
Roto-Rooter segment operating results:
-
Revenue of $105 million, an increase of 9.7%
-
Net Income of $12.2 million, an increase of 13.4%
-
Adjusted EBITDA of $22.0 million, an increase of 15.5%
-
Adjusted EBITDA margin of 20.9%, an increase of 105 basis points
VITAS
Net revenue for VITAS was $276 million in the second quarter of 2015,
which is an increase of $12.4 million, or 4.7%, when compared to the
prior-year period. This revenue increase is comprised of an average
Medicare reimbursement rate increase of approximately 1.4%, a 5.1%
increase in average daily census, offset by level of care and geographic
mix shift, when compared to the prior year.
In the second quarter of 2015, VITAS did not record any adjustments in
estimated Medicare Cap billing limitations. This compares to $0.1
million of Medicare Cap billing limitations recorded in the second
quarter of 2014.
At June 30, 2015, VITAS had 34 Medicare provider numbers, none of which
has an estimated 2015 Medicare Cap billing limitation.
Of VITAS' 34 unique Medicare provider numbers, 32 provider numbers have
a Medicare Cap cushion of 10% or greater for the 2015 Medicare Cap
period, one provider number has a cap cushion between 5% and 10% and one
provider number has a cap cushion between 0% and 5%. VITAS generated an
aggregate cap cushion of $297 million during the trailing twelve-month
period.
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was $198.79, which is 0.5% below the prior-year period.
Routine home care reimbursement and high acuity care averaged $164.07
and $698.96, respectively. During the quarter, high acuity days of care
were 6.5% of total days of care, 40 basis points less than the
prior-year quarter.
The second quarter of 2015 gross margin, excluding the impact of
Medicare Cap, was 21.9%, which is 14 basis points below the second
quarter of 2014.
Selling, general and administrative expense was $22.2 million in the
second quarter of 2015, which is an increase of 5.9% when compared to
the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$39.8 million in the quarter, an increase of 5.9% over the prior-year
period. Adjusted EBITDA margin, excluding the impact from Medicare Cap,
was 14.4% in the quarter which is 17 basis points favorable to the
prior-year period.
Roto-Rooter
Roto-Rooter generated sales of $105 million for the second quarter of
2015, an increase of $9.3 million, or 9.7%, over the prior-year quarter.
Water restoration accounted for the majority of this revenue growth,
with water and flood remediation services increasing $5.8 million in the
quarter.
Roto-Rooter's gross margin in the quarter was 48.0%, a 119 basis point
improvement when compared to the second quarter of 2014. Adjusted EBITDA
in the second quarter of 2015 totaled $22.0 million, an increase of
15.5%, and the Adjusted EBITDA margin was 20.9% in the quarter, 105
basis points higher than the prior year.
Chemed Consolidated
As of June 30, 2015, Chemed had total cash and cash equivalents of $32.7
million and debt of $160 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 June 30, 2015, the Company had approximately $248 million of
undrawn borrowing capacity under this credit agreement.
Capital expenditures through June 30, 2015, aggregated $18.8 million and
compares to depreciation and amortization during the same period of
$17.3 million.
The Company repurchased $29.8 million of Chemed stock during the
quarter. This equates to 250,000 shares of Chemed stock repurchased at
an average cost of $119.05 Chemed currently has $82.0 million of
authorization remaining under this share repurchase plan.
Guidance for 2015
Full-year 2015 revenue growth for VITAS, prior to Medicare Cap, is
estimated to be in the range of 4% to 5%. Admissions in 2015 are
estimated to increase 4% to 5% and full-year Adjusted EBITDA margin,
prior to Medicare Cap, is estimated to be 14% to 15%. Medicare Cap
billing limitations for calendar year 2015 are estimated to be $2.8
million.
Roto-Rooter is forecasted to achieve full-year 2015 revenue growth of 5%
to 6%. This revenue estimate is based upon continued expansion in water
restoration services coupled with increased job pricing of approximately
1%. Adjusted EBITDA margin for 2015 is estimated in the range of 19.5%
to 20.0%.
Management estimates that full-year 2015 adjusted earnings per diluted
share, which excludes non-cash expense for stock options, costs related
to litigation, and other discrete items, will be in the range of $6.60
to $6.75. This compares to Chemed's 2014 reported adjusted earnings per
diluted share of $6.07.
Conference Call
Chemed will host a conference call and webcast at 10 a.m., ET, on
Friday, July 24, 2015, 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) 510-0712 for U.S. and Canadian participants and (617)
597-5380 for international participants. The participant passcode is
60045204. 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 pass code is 19930482. 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 15,000 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 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.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED STATEMENT OF INCOME
|
(in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Service revenues and sales
|
|
$
|
381,921
|
|
|
$
|
360,182
|
|
|
$
|
758,573
|
|
|
$
|
718,482
|
|
Cost of services provided and goods sold
|
|
|
270,663
|
|
|
|
257,007
|
|
|
|
539,548
|
|
|
|
514,826
|
|
Selling, general and administrative expenses (aa)
|
|
|
57,994
|
|
|
|
53,649
|
|
|
|
116,582
|
|
|
|
109,320
|
|
Depreciation
|
|
|
8,082
|
|
|
|
7,272
|
|
|
|
16,114
|
|
|
|
14,421
|
|
Amortization
|
|
|
582
|
|
|
|
735
|
|
|
|
1,158
|
|
|
|
1,744
|
|
|
Total costs and expenses
|
|
|
337,321
|
|
|
|
318,663
|
|
|
|
673,402
|
|
|
|
640,311
|
|
|
Income from operations
|
|
|
44,600
|
|
|
|
41,519
|
|
|
|
85,171
|
|
|
|
78,171
|
|
Interest expense
|
|
|
(969
|
)
|
|
|
(2,429
|
)
|
|
|
(1,938
|
)
|
|
|
(6,244
|
)
|
Other income--net (bb)
|
|
|
536
|
|
|
|
756
|
|
|
|
1,099
|
|
|
|
1,572
|
|
|
Income before income taxes
|
|
|
44,167
|
|
|
|
39,846
|
|
|
|
84,332
|
|
|
|
73,499
|
|
Income taxes
|
|
|
(17,192
|
)
|
|
|
(15,483
|
)
|
|
|
(32,820
|
)
|
|
|
(28,562
|
)
|
Net income
|
|
$
|
26,975
|
|
|
$
|
24,363
|
|
|
$
|
51,512
|
|
|
$
|
44,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.60
|
|
|
$
|
1.41
|
|
|
$
|
3.05
|
|
|
$
|
2.59
|
|
|
Average number of shares outstanding
|
|
|
16,880
|
|
|
|
17,236
|
|
|
|
16,872
|
|
|
|
17,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.55
|
|
|
$
|
1.36
|
|
|
$
|
2.96
|
|
|
$
|
2.48
|
|
|
Average number of shares outstanding
|
|
|
17,419
|
|
|
|
17,880
|
|
|
|
17,419
|
|
|
|
18,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(aa)
|
Selling, general and administrative ("SG&A") expenses comprise (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
SG&A expenses before long-term incentive compensation and the
impact of market gains related to deferred compensation plans
|
|
$
|
56,039
|
|
|
$
|
52,386
|
|
|
$
|
112,743
|
|
|
$
|
106,522
|
|
|
|
Market value gains related to deferred compensation plans (cc)
|
|
|
498
|
|
|
|
650
|
|
|
|
1,448
|
|
|
|
1,812
|
|
|
|
Long-term incentive compensation
|
|
|
1,457
|
|
|
|
613
|
|
|
|
2,391
|
|
|
|
986
|
|
|
|
|
Total SG&A expenses
|
|
$
|
57,994
|
|
|
$
|
53,649
|
|
|
$
|
116,582
|
|
|
$
|
109,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(bb)
|
Other income--net comprises (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
Market value gains related to deferred compensation plans
|
|
$
|
498
|
|
|
$
|
650
|
|
|
$
|
1,448
|
|
|
$
|
1,812
|
|
|
|
Interest income
|
|
|
86
|
|
|
|
58
|
|
|
|
130
|
|
|
|
8
|
|
|
|
Loss on disposal of property and equipment
|
|
|
(63
|
)
|
|
|
(48
|
)
|
|
|
(15
|
)
|
|
|
(326
|
)
|
|
|
Other
|
|
|
15
|
|
|
|
96
|
|
|
|
(464
|
)
|
|
|
78
|
|
|
|
|
Total other income--net
|
|
$
|
536
|
|
|
$
|
756
|
|
|
$
|
1,099
|
|
|
$
|
1,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED BALANCE SHEET
|
(in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
32,705
|
|
|
$
|
27,913
|
|
|
|
Accounts receivable less allowances
|
|
|
119,116
|
|
|
|
92,152
|
|
|
|
Inventories
|
|
|
6,250
|
|
|
|
6,856
|
|
|
|
Current deferred income taxes
|
|
|
16,432
|
|
|
|
13,459
|
|
|
|
Prepaid income taxes
|
|
|
3,474
|
|
|
|
4,001
|
|
|
|
Prepaid expenses
|
|
|
12,069
|
|
|
|
21,119
|
|
|
|
|
Total current assets
|
|
|
190,046
|
|
|
|
165,500
|
|
|
Investments of deferred compensation plans held in trust
|
|
|
51,940
|
|
|
|
47,314
|
|
|
Properties and equipment, at cost less accumulated depreciation
|
|
|
107,556
|
|
|
|
97,206
|
|
|
Identifiable intangible assets less accumulated amortization
|
|
|
55,979
|
|
|
|
56,288
|
|
|
Goodwill
|
|
|
472,546
|
|
|
|
466,867
|
|
|
Other assets
|
|
|
7,216
|
|
|
|
8,420
|
|
|
|
|
|
Total Assets
|
|
$
|
885,283
|
|
|
$
|
841,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
39,327
|
|
|
$
|
35,013
|
|
|
|
Current portion of long-term debt
|
|
|
7,500
|
|
|
|
5,000
|
|
|
|
Income taxes
|
|
|
20
|
|
|
|
6,029
|
|
|
|
Accrued insurance
|
|
|
42,589
|
|
|
|
40,164
|
|
|
|
Accrued compensation
|
|
|
48,909
|
|
|
|
42,527
|
|
|
|
Accrued legal
|
|
|
1,815
|
|
|
|
7,429
|
|
|
|
Other current liabilities
|
|
|
21,752
|
|
|
|
20,511
|
|
|
|
|
Total current liabilities
|
|
|
161,912
|
|
|
|
156,673
|
|
|
Deferred income taxes
|
|
|
28,280
|
|
|
|
27,270
|
|
|
Long-term debt
|
|
|
152,500
|
|
|
|
155,000
|
|
|
Deferred compensation liabilities
|
|
|
52,051
|
|
|
|
46,917
|
|
|
Other liabilities
|
|
|
12,742
|
|
|
|
11,251
|
|
|
|
|
|
Total Liabilities
|
|
|
407,485
|
|
|
|
397,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock
|
|
|
33,620
|
|
|
|
32,980
|
|
|
Paid-in capital
|
|
|
562,654
|
|
|
|
511,794
|
|
|
Retained earnings
|
|
|
815,229
|
|
|
|
724,295
|
|
|
Treasury stock, at cost
|
|
|
(936,056
|
)
|
|
|
(826,802
|
)
|
|
Deferred compensation payable in Company stock
|
|
|
2,351
|
|
|
|
2,217
|
|
|
|
|
|
Total Stockholders' Equity
|
|
|
477,798
|
|
|
|
444,484
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
885,283
|
|
|
$
|
841,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
51,512
|
|
|
$
|
44,937
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
17,272
|
|
|
|
16,165
|
|
|
|
|
Provision for uncollectible accounts receivable
|
|
|
7,734
|
|
|
|
6,449
|
|
|
|
|
Stock option expense
|
|
|
2,787
|
|
|
|
2,453
|
|
|
|
|
Provision for deferred income taxes
|
|
|
(2,783
|
)
|
|
|
6,180
|
|
|
|
|
Noncash long-term incentive compensation
|
|
|
2,391
|
|
|
|
986
|
|
|
|
|
Amortization of debt issuance costs
|
|
|
262
|
|
|
|
564
|
|
|
|
|
Amortization of discount on convertible notes
|
|
|
-
|
|
|
|
3,392
|
|
|
|
|
Changes in operating assets and liabilities, excluding amounts
acquired in business combinations:
|
|
|
|
|
|
|
|
|
|
|
|
Increase in accounts receivable
|
|
|
(2,182
|
)
|
|
|
(6,782
|
)
|
|
|
|
|
|
Increase in inventories
|
|
|
(78
|
)
|
|
|
(153
|
)
|
|
|
|
|
|
Increase in prepaid expenses
|
|
|
(507
|
)
|
|
|
(3,301
|
)
|
|
|
|
|
|
Decrease in accounts payable and other current liabilities
|
|
|
(1,314
|
)
|
|
|
(33,584
|
)
|
|
|
|
|
|
Increase/(decrease) in income taxes
|
|
|
(2,384
|
)
|
|
|
7,224
|
|
|
|
|
|
|
Increase in other assets
|
|
|
(2,229
|
)
|
|
|
(2,748
|
)
|
|
|
|
|
|
Increase in other liabilities
|
|
|
2,966
|
|
|
|
4,644
|
|
|
|
|
Excess tax benefit on share-based compensation
|
|
|
(3,998
|
)
|
|
|
(1,866
|
)
|
|
|
|
Other sources
|
|
|
189
|
|
|
|
553
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
69,638
|
|
|
|
45,113
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(18,846
|
)
|
|
|
(19,454
|
)
|
|
Business combinations, net of cash acquired
|
|
|
(6,614
|
)
|
|
|
(250
|
)
|
|
Other sources
|
|
|
395
|
|
|
|
192
|
|
|
|
|
|
Net cash used by investing activities
|
|
|
(25,065
|
)
|
|
|
(19,512
|
)
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
Proceeds from revolving line of credit
|
|
|
103,200
|
|
|
|
245,500
|
|
|
Payments on revolving line of credit
|
|
|
(88,200
|
)
|
|
|
(185,500
|
)
|
|
Payments on other long-term debt
|
|
|
(2,500
|
)
|
|
|
(186,956
|
)
|
|
Proceeds from other long-term debt
|
|
|
-
|
|
|
|
100,000
|
|
|
Purchases of treasury stock
|
|
|
(29,762
|
)
|
|
|
(58,493
|
)
|
|
Proceeds from exercise of stock options
|
|
|
8,044
|
|
|
|
16,092
|
|
|
Dividends paid
|
|
|
(7,459
|
)
|
|
|
(6,757
|
)
|
|
Decrease in cash overdrafts payable
|
|
|
(6,791
|
)
|
|
|
(479
|
)
|
|
Capital stock surrendered to pay taxes on stock-based compensation
|
|
|
(5,876
|
)
|
|
|
(3,543
|
)
|
|
Excess tax benefit on share-based compensation
|
|
|
3,998
|
|
|
|
1,866
|
|
|
Debt issuances costs
|
|
|
-
|
|
|
|
(939
|
)
|
|
Retirement of warrants
|
|
|
-
|
|
|
|
(2,645
|
)
|
|
Other uses
|
|
|
(654
|
)
|
|
|
(252
|
)
|
|
|
|
|
Net cash used by financing activities
|
|
|
(26,000
|
)
|
|
|
(82,106
|
)
|
Increase/(Decrease) in Cash and Cash Equivalents
|
|
|
18,573
|
|
|
|
(56,505
|
)
|
Cash and cash equivalents at beginning of year
|
|
|
14,132
|
|
|
|
84,418
|
|
Cash and cash equivalents at end of period
|
|
$
|
32,705
|
|
|
$
|
27,913
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING STATEMENT OF INCOME
|
FOR THE THREE MONTHS ENDED JUNE 30, 2015 AND 2014
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
$
|
276,460
|
|
|
$
|
105,461
|
|
|
$
|
-
|
|
|
$
|
381,921
|
|
Cost of services provided and goods sold
|
|
|
215,778
|
|
|
|
54,885
|
|
|
|
-
|
|
|
|
270,663
|
|
Selling, general and administrative expenses (a)
|
|
|
22,237
|
|
|
|
28,241
|
|
|
|
7,516
|
|
|
|
57,994
|
|
Depreciation
|
|
|
4,724
|
|
|
|
3,205
|
|
|
|
153
|
|
|
|
8,082
|
|
Amortization
|
|
|
171
|
|
|
|
128
|
|
|
|
283
|
|
|
|
582
|
|
|
Total costs and expenses
|
|
|
242,910
|
|
|
|
86,459
|
|
|
|
7,952
|
|
|
|
337,321
|
|
|
Income/(loss) from operations
|
|
|
33,550
|
|
|
|
19,002
|
|
|
|
(7,952
|
)
|
|
|
44,600
|
|
Interest expense (a)
|
|
|
(53
|
)
|
|
|
(98
|
)
|
|
|
(818
|
)
|
|
|
(969
|
)
|
Intercompany interest income/(expense)
|
|
|
1,755
|
|
|
|
805
|
|
|
|
(2,560
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
49
|
|
|
|
(12
|
)
|
|
|
499
|
|
|
|
536
|
|
|
Income/(loss) before income taxes
|
|
|
35,301
|
|
|
|
19,697
|
|
|
|
(10,831
|
)
|
|
|
44,167
|
|
Income taxes (a)
|
|
|
(13,501
|
)
|
|
|
(7,544
|
)
|
|
|
3,853
|
|
|
|
(17,192
|
)
|
|
Net income/(loss)
|
|
$
|
21,800
|
|
|
$
|
12,153
|
|
|
$
|
(6,978
|
)
|
|
$
|
26,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
$
|
264,026
|
|
|
$
|
96,156
|
|
|
$
|
-
|
|
|
$
|
360,182
|
|
Cost of services provided and goods sold
|
|
|
205,818
|
|
|
|
51,189
|
|
|
|
-
|
|
|
|
257,007
|
|
Selling, general and administrative expenses (b)
|
|
|
21,002
|
|
|
|
25,705
|
|
|
|
6,942
|
|
|
|
53,649
|
|
Depreciation
|
|
|
4,564
|
|
|
|
2,561
|
|
|
|
147
|
|
|
|
7,272
|
|
Amortization
|
|
|
205
|
|
|
|
137
|
|
|
|
393
|
|
|
|
735
|
|
|
Total costs and expenses
|
|
|
231,589
|
|
|
|
79,592
|
|
|
|
7,482
|
|
|
|
318,663
|
|
|
Income/(loss) from operations
|
|
|
32,437
|
|
|
|
16,564
|
|
|
|
(7,482
|
)
|
|
|
41,519
|
|
Interest expense (b)
|
|
|
(57
|
)
|
|
|
(111
|
)
|
|
|
(2,261
|
)
|
|
|
(2,429
|
)
|
Intercompany interest income/(expense)
|
|
|
1,517
|
|
|
|
680
|
|
|
|
(2,197
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
(95
|
)
|
|
|
198
|
|
|
|
653
|
|
|
|
756
|
|
|
Income/(loss) before income taxes
|
|
|
33,802
|
|
|
|
17,331
|
|
|
|
(11,287
|
)
|
|
|
39,846
|
|
Income taxes (b)
|
|
|
(12,910
|
)
|
|
|
(6,612
|
)
|
|
|
4,039
|
|
|
|
(15,483
|
)
|
|
Net income/(loss)
|
|
$
|
20,892
|
|
|
$
|
10,719
|
|
|
$
|
(7,248
|
)
|
|
$
|
24,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING STATEMENT OF INCOME
|
FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
$
|
546,073
|
|
|
$
|
212,500
|
|
|
$
|
-
|
|
|
$
|
758,573
|
|
Cost of services provided and goods sold
|
|
|
428,274
|
|
|
|
111,274
|
|
|
|
-
|
|
|
|
539,548
|
|
Selling, general and administrative expenses (a)
|
|
|
44,207
|
|
|
|
57,002
|
|
|
|
15,373
|
|
|
|
116,582
|
|
Depreciation
|
|
|
9,509
|
|
|
|
6,299
|
|
|
|
306
|
|
|
|
16,114
|
|
Amortization
|
|
|
338
|
|
|
|
236
|
|
|
|
584
|
|
|
|
1,158
|
|
|
Total costs and expenses
|
|
|
482,328
|
|
|
|
174,811
|
|
|
|
16,263
|
|
|
|
673,402
|
|
|
Income/(loss) from operations
|
|
|
63,745
|
|
|
|
37,689
|
|
|
|
(16,263
|
)
|
|
|
85,171
|
|
Interest expense (a)
|
|
|
(110
|
)
|
|
|
(194
|
)
|
|
|
(1,634
|
)
|
|
|
(1,938
|
)
|
Intercompany interest income/(expense)
|
|
|
3,482
|
|
|
|
1,642
|
|
|
|
(5,124
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
(384
|
)
|
|
|
35
|
|
|
|
1,448
|
|
|
|
1,099
|
|
|
Income/(loss) before income taxes
|
|
|
66,733
|
|
|
|
39,172
|
|
|
|
(21,573
|
)
|
|
|
84,332
|
|
Income taxes (a)
|
|
|
(25,617
|
)
|
|
|
(15,011
|
)
|
|
|
7,808
|
|
|
|
(32,820
|
)
|
|
Net income/(loss)
|
|
$
|
41,116
|
|
|
$
|
24,161
|
|
|
$
|
(13,765
|
)
|
|
$
|
51,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
$
|
524,438
|
|
|
$
|
194,044
|
|
|
$
|
-
|
|
|
$
|
718,482
|
|
Cost of services provided and goods sold
|
|
|
411,210
|
|
|
|
103,616
|
|
|
|
-
|
|
|
|
514,826
|
|
Selling, general and administrative expenses (c)
|
|
|
42,716
|
|
|
|
52,887
|
|
|
|
13,717
|
|
|
|
109,320
|
|
Depreciation
|
|
|
9,178
|
|
|
|
4,961
|
|
|
|
282
|
|
|
|
14,421
|
|
Amortization
|
|
|
624
|
|
|
|
282
|
|
|
|
838
|
|
|
|
1,744
|
|
|
Total costs and expenses
|
|
|
463,728
|
|
|
|
161,746
|
|
|
|
14,837
|
|
|
|
640,311
|
|
|
Income/(loss) from operations
|
|
|
60,710
|
|
|
|
32,298
|
|
|
|
(14,837
|
)
|
|
|
78,171
|
|
Interest expense (c)
|
|
|
(112
|
)
|
|
|
(208
|
)
|
|
|
(5,924
|
)
|
|
|
(6,244
|
)
|
Intercompany interest income/(expense)
|
|
|
2,860
|
|
|
|
1,330
|
|
|
|
(4,190
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
(388
|
)
|
|
|
139
|
|
|
|
1,821
|
|
|
|
1,572
|
|
|
Income/(loss) before income taxes
|
|
|
63,070
|
|
|
|
33,559
|
|
|
|
(23,130
|
)
|
|
|
73,499
|
|
Income taxes (c)
|
|
|
(24,019
|
)
|
|
|
(12,808
|
)
|
|
|
8,265
|
|
|
|
(28,562
|
)
|
|
Net income/(loss)
|
|
$
|
39,051
|
|
|
$
|
20,751
|
|
|
$
|
(14,865
|
)
|
|
$
|
44,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING SUMMARY OF EBITDA
|
FOR THE THREE MONTHS ENDED JUNE 30, 2015 AND 2014
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
21,800
|
|
|
$
|
12,153
|
|
|
$
|
(6,978
|
)
|
|
$
|
26,975
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
53
|
|
|
|
98
|
|
|
|
818
|
|
|
|
969
|
|
|
|
Income taxes
|
|
|
13,501
|
|
|
|
7,544
|
|
|
|
(3,853
|
)
|
|
|
17,192
|
|
|
|
Depreciation
|
|
|
4,724
|
|
|
|
3,205
|
|
|
|
153
|
|
|
|
8,082
|
|
|
|
Amortization
|
|
|
171
|
|
|
|
128
|
|
|
|
283
|
|
|
|
582
|
|
|
|
|
EBITDA
|
|
|
40,249
|
|
|
|
23,128
|
|
|
|
(9,577
|
)
|
|
|
53,800
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(1,755
|
)
|
|
|
(805
|
)
|
|
|
2,560
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
(78
|
)
|
|
|
(9
|
)
|
|
|
1
|
|
|
|
(86
|
)
|
|
|
Expenses related to OIG investigation
|
|
|
1,412
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,412
|
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
(405
|
)
|
|
|
-
|
|
|
|
(405
|
)
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
|
131
|
|
|
|
-
|
|
|
|
131
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
1,343
|
|
|
|
1,343
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
1,457
|
|
|
|
1,457
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
37
|
|
|
|
37
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
39,828
|
|
|
$
|
22,040
|
|
|
$
|
(4,179
|
)
|
|
$
|
57,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
20,892
|
|
|
$
|
10,719
|
|
|
$
|
(7,248
|
)
|
|
$
|
24,363
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
57
|
|
|
|
111
|
|
|
|
2,261
|
|
|
|
2,429
|
|
|
|
Income taxes
|
|
|
12,910
|
|
|
|
6,612
|
|
|
|
(4,039
|
)
|
|
|
15,483
|
|
|
|
Depreciation
|
|
|
4,564
|
|
|
|
2,561
|
|
|
|
147
|
|
|
|
7,272
|
|
|
|
Amortization
|
|
|
205
|
|
|
|
137
|
|
|
|
393
|
|
|
|
735
|
|
|
|
|
EBITDA
|
|
|
38,628
|
|
|
|
20,140
|
|
|
|
(8,486
|
)
|
|
|
50,282
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(1,517
|
)
|
|
|
(680
|
)
|
|
|
2,197
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
(43
|
)
|
|
|
(12
|
)
|
|
|
(3
|
)
|
|
|
(58
|
)
|
|
|
Expenses related to OIG investigation
|
|
|
410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
410
|
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
(399
|
)
|
|
|
-
|
|
|
|
(399
|
)
|
|
|
Expenses related to litigation settlements
|
|
|
-
|
|
|
|
32
|
|
|
|
-
|
|
|
|
32
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
1,144
|
|
|
|
1,144
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
613
|
|
|
|
613
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
189
|
|
|
|
189
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
37,478
|
|
|
$
|
19,081
|
|
|
$
|
(4,346
|
)
|
|
$
|
52,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING SUMMARY OF EBITDA
|
FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
41,116
|
|
|
$
|
24,161
|
|
|
$
|
(13,765
|
)
|
|
$
|
51,512
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
110
|
|
|
|
194
|
|
|
|
1,634
|
|
|
|
1,938
|
|
|
|
Income taxes
|
|
|
25,617
|
|
|
|
15,011
|
|
|
|
(7,808
|
)
|
|
|
32,820
|
|
|
|
Depreciation
|
|
|
9,509
|
|
|
|
6,299
|
|
|
|
306
|
|
|
|
16,114
|
|
|
|
Amortization
|
|
|
338
|
|
|
|
236
|
|
|
|
584
|
|
|
|
1,158
|
|
|
|
|
EBITDA
|
|
|
76,690
|
|
|
|
45,901
|
|
|
|
(19,049
|
)
|
|
|
103,542
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(3,482
|
)
|
|
|
(1,642
|
)
|
|
|
5,124
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
(110
|
)
|
|
|
(20
|
)
|
|
|
-
|
|
|
|
(130
|
)
|
|
|
Expenses related to OIG investigation
|
|
|
2,686
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,686
|
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
|
131
|
|
|
|
-
|
|
|
|
131
|
|
|
|
Advertising cost adjustment (d)
|
|
|
-
|
|
|
|
(911
|
)
|
|
|
-
|
|
|
|
(911
|
)
|
|
|
Expenses related to litigation settlements
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
5
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
2,787
|
|
|
|
2,787
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
2,391
|
|
|
|
2,391
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
37
|
|
|
|
37
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
75,784
|
|
|
$
|
43,464
|
|
|
$
|
(8,710
|
)
|
|
$
|
110,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
39,051
|
|
|
$
|
20,751
|
|
|
$
|
(14,865
|
)
|
|
$
|
44,937
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
112
|
|
|
|
208
|
|
|
|
5,924
|
|
|
|
6,244
|
|
|
|
Income taxes
|
|
|
24,019
|
|
|
|
12,808
|
|
|
|
(8,265
|
)
|
|
|
28,562
|
|
|
|
Depreciation
|
|
|
9,178
|
|
|
|
4,961
|
|
|
|
282
|
|
|
|
14,421
|
|
|
|
Amortization
|
|
|
624
|
|
|
|
282
|
|
|
|
838
|
|
|
|
1,744
|
|
|
|
|
EBITDA
|
|
|
72,984
|
|
|
|
39,010
|
|
|
|
(16,086
|
)
|
|
|
95,908
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(2,860
|
)
|
|
|
(1,330
|
)
|
|
|
4,190
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
20
|
|
|
|
(19
|
)
|
|
|
(9
|
)
|
|
|
(8
|
)
|
|
|
Expenses related to OIG investigation
|
|
|
1,158
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,158
|
|
|
|
Expenses related to litigation settlements
|
|
|
113
|
|
|
|
225
|
|
|
|
-
|
|
|
|
338
|
|
|
|
Acquisition expenses
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
Advertising cost adjustment (d)
|
|
|
-
|
|
|
|
(1,140
|
)
|
|
|
-
|
|
|
|
(1,140
|
)
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
2,453
|
|
|
|
2,453
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
986
|
|
|
|
986
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
189
|
|
|
|
189
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
71,416
|
|
|
$
|
36,746
|
|
|
$
|
(8,277
|
)
|
|
$
|
99,885
|
|
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 June 30,
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income as reported
|
|
$
|
26,975
|
|
$
|
24,363
|
|
$
|
51,512
|
|
$
|
44,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add/(deduct) after-tax cost of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock option expense
|
|
|
849
|
|
|
722
|
|
|
1,759
|
|
|
1,544
|
|
|
Long-term incentive compensation
|
|
|
921
|
|
|
388
|
|
|
1,512
|
|
|
624
|
|
|
Expenses of OIG investigation
|
|
|
868
|
|
|
254
|
|
|
1,658
|
|
|
718
|
|
|
Acquisition expenses
|
|
|
80
|
|
|
-
|
|
|
80
|
|
|
1
|
|
|
Expenses related to securities litigation
|
|
|
23
|
|
|
119
|
|
|
23
|
|
|
119
|
|
|
Additional interest expense resulting from the change in
accounting for the conversion feature of the convertible notes
|
|
|
-
|
|
|
714
|
|
|
-
|
|
|
2,143
|
|
|
Expenses related to litigation settlements
|
|
|
-
|
|
|
20
|
|
|
3
|
|
|
207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
29,716
|
|
$
|
26,580
|
|
$
|
56,547
|
|
$
|
50,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share As Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.55
|
|
$
|
1.36
|
|
$
|
2.96
|
|
$
|
2.48
|
|
|
Average number of shares outstanding
|
|
|
17,419
|
|
|
17,880
|
|
|
17,419
|
|
|
18,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
1.71
|
|
$
|
1.50
|
|
$
|
3.25
|
|
$
|
2.81
|
|
|
Adjusted average number of shares outstanding (e)
|
|
|
17,419
|
|
|
17,759
|
|
|
17,419
|
|
|
17,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
OPERATING STATISTICS FOR VITAS SEGMENT
|
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
OPERATING STATISTICS
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
Net revenue ($000) (f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
$
|
213,374
|
|
|
$
|
200,418
|
|
|
|
$
|
417,915
|
|
|
$
|
395,815
|
|
|
|
|
Inpatient
|
|
|
25,498
|
|
|
|
26,032
|
|
|
|
|
52,214
|
|
|
|
52,025
|
|
|
|
|
Continuous care
|
|
|
37,588
|
|
|
|
37,719
|
|
|
|
|
75,779
|
|
|
|
75,894
|
|
|
|
|
|
Total before Medicare cap allowance
|
|
$
|
276,460
|
|
|
$
|
264,169
|
|
|
|
$
|
545,908
|
|
|
$
|
523,734
|
|
|
|
|
Medicare cap allowance
|
|
|
-
|
|
|
|
(143
|
)
|
|
|
|
165
|
|
|
|
704
|
|
|
|
|
|
Total
|
|
$
|
276,460
|
|
|
$
|
264,026
|
|
|
|
$
|
546,073
|
|
|
$
|
524,438
|
|
|
|
Net revenue as a percent of total before Medicare cap allowance
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
77.2
|
|
%
|
|
75.9
|
|
%
|
|
|
76.5
|
|
%
|
|
75.6
|
|
%
|
|
|
Inpatient
|
|
|
9.2
|
|
|
|
9.8
|
|
|
|
|
9.6
|
|
|
|
9.9
|
|
|
|
|
Continuous care
|
|
|
13.6
|
|
|
|
14.3
|
|
|
|
|
13.9
|
|
|
|
14.5
|
|
|
|
|
|
Total before Medicare cap allowance
|
|
|
100.0
|
|
|
|
100.0
|
|
|
|
|
100.0
|
|
|
|
100.0
|
|
|
|
|
Medicare cap allowance
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
|
|
Total
|
|
|
100.0
|
|
%
|
|
99.9
|
|
%
|
|
|
100.0
|
|
%
|
|
100.1
|
|
%
|
|
Average daily census ("ADC") (days)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
11,285
|
|
|
|
10,546
|
|
|
|
|
11,082
|
|
|
|
10,511
|
|
|
|
|
Nursing home
|
|
|
3,006
|
|
|
|
2,989
|
|
|
|
|
2,964
|
|
|
|
2,909
|
|
|
|
|
|
Routine homecare
|
|
|
14,291
|
|
|
|
13,535
|
|
|
|
|
14,046
|
|
|
|
13,420
|
|
|
|
|
Inpatient
|
|
|
429
|
|
|
|
433
|
|
|
|
|
434
|
|
|
|
435
|
|
|
|
|
Continuous care
|
|
|
563
|
|
|
|
568
|
|
|
|
|
575
|
|
|
|
572
|
|
|
|
|
|
Total
|
|
|
15,283
|
|
|
|
14,536
|
|
|
|
|
15,055
|
|
|
|
14,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Admissions
|
|
|
16,683
|
|
|
|
15,771
|
|
|
|
|
33,951
|
|
|
|
32,124
|
|
|
|
Total Discharges
|
|
|
15,912
|
|
|
|
15,673
|
|
|
|
|
33,019
|
|
|
|
31,678
|
|
|
|
Average length of stay (days)
|
|
|
78.5
|
|
|
|
82.4
|
|
|
|
|
79.1
|
|
|
|
81.7
|
|
|
|
Median length of stay (days)
|
|
|
15.0
|
|
|
|
16.0
|
|
|
|
|
14.0
|
|
|
|
15.0
|
|
|
|
ADC by major diagnosis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerebro
|
|
|
28.6
|
|
%
|
|
6.3
|
|
%
|
|
|
28.4
|
|
%
|
|
6.4
|
|
%
|
|
|
Neurological
|
|
|
23.0
|
|
|
|
41.2
|
|
|
|
|
23.4
|
|
|
|
40.9
|
|
|
|
|
Cancer
|
|
|
16.8
|
|
|
|
17.3
|
|
|
|
|
16.9
|
|
|
|
17.4
|
|
|
|
|
Cardio
|
|
|
17.4
|
|
|
|
15.7
|
|
|
|
|
17.5
|
|
|
|
15.4
|
|
|
|
|
Respiratory
|
|
|
8.0
|
|
|
|
7.7
|
|
|
|
|
7.9
|
|
|
|
7.8
|
|
|
|
|
Other
|
|
|
6.2
|
|
|
|
11.8
|
|
|
|
|
5.9
|
|
|
|
12.1
|
|
|
|
|
|
Total
|
|
|
100.0
|
|
%
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
100.0
|
|
%
|
|
Admissions by major diagnosis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerebro
|
|
|
18.9
|
|
%
|
|
7.7
|
|
%
|
|
|
18.8
|
|
%
|
|
7.3
|
|
%
|
|
|
Neurological
|
|
|
11.7
|
|
|
|
21.6
|
|
|
|
|
12.3
|
|
|
|
22.0
|
|
|
|
|
Cancer
|
|
|
32.5
|
|
|
|
33.4
|
|
|
|
|
31.5
|
|
|
|
33.1
|
|
|
|
|
Cardio
|
|
|
15.6
|
|
|
|
15.3
|
|
|
|
|
15.7
|
|
|
|
14.6
|
|
|
|
|
Respiratory
|
|
|
10.0
|
|
|
|
9.6
|
|
|
|
|
10.4
|
|
|
|
9.8
|
|
|
|
|
Other
|
|
|
11.3
|
|
|
|
12.4
|
|
|
|
|
11.3
|
|
|
|
13.2
|
|
|
|
|
|
Total
|
|
|
100.0
|
|
%
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
100.0
|
|
%
|
|
Direct patient care margins (g)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Routine homecare
|
|
|
52.4
|
|
%
|
|
53.4
|
|
%
|
|
|
52.6
|
|
%
|
|
53.2
|
|
%
|
|
|
Inpatient
|
|
|
6.0
|
|
|
|
6.9
|
|
|
|
|
7.2
|
|
|
|
5.6
|
|
|
|
|
Continuous care
|
|
|
16.7
|
|
|
|
17.5
|
|
|
|
|
16.3
|
|
|
|
17.0
|
|
|
|
Homecare margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
56.38
|
|
|
$
|
53.89
|
|
|
|
$
|
56.79
|
|
|
$
|
54.65
|
|
|
|
|
Drug costs
|
|
|
6.94
|
|
|
|
7.26
|
|
|
|
|
6.73
|
|
|
|
7.25
|
|
|
|
|
Home medical equipment
|
|
|
6.57
|
|
|
|
6.76
|
|
|
|
|
5.90
|
|
|
|
6.69
|
|
|
|
|
Medical supplies
|
|
|
3.06
|
|
|
|
3.17
|
|
|
|
|
2.99
|
|
|
|
3.20
|
|
|
|
Inpatient margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
348.40
|
|
|
$
|
337.30
|
|
|
|
$
|
343.85
|
|
|
$
|
343.50
|
|
|
|
Continuous care margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
589.84
|
|
|
$
|
581.00
|
|
|
|
$
|
588.72
|
|
|
$
|
587.40
|
|
|
|
Bad debt expense as a percent of revenues
|
|
|
1.0
|
|
%
|
|
1.0
|
|
%
|
|
|
1.0
|
|
%
|
|
1.0
|
|
%
|
|
Accounts receivable --
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days of revenue outstanding- excluding unapplied Medicare payments
|
|
|
40.8
|
|
|
|
36.6
|
|
|
|
|
n.a.
|
|
|
|
n.a.
|
|
|
|
Days of revenue outstanding- including unapplied Medicare payments
|
|
|
31.0
|
|
|
|
24.4
|
|
|
|
|
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 AND SIX MONTHS ENDED JUNE 30, 2015 AND 2014
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Included in the results of operations 2015 are the following
significant credits/(charges) which may not be indicative of
ongoing operations (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
$
|
(1,412
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1,412
|
)
|
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
|
(131
|
)
|
|
|
-
|
|
|
|
(131
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,343
|
)
|
|
|
(1,343
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,457
|
)
|
|
|
(1,457
|
)
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
(37
|
)
|
|
|
(37
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(1,412
|
)
|
|
|
(131
|
)
|
|
|
(2,837
|
)
|
|
|
(4,380
|
)
|
|
|
Income tax benefit on the above
|
|
|
544
|
|
|
|
51
|
|
|
|
1,044
|
|
|
|
1,639
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(868
|
)
|
|
$
|
(80
|
)
|
|
$
|
(1,793
|
)
|
|
$
|
(2,741
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
$
|
(2,686
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(2,686
|
)
|
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
|
(131
|
)
|
|
|
-
|
|
|
|
(131
|
)
|
|
|
|
Expenses related to litigation settlements
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,787
|
)
|
|
|
(2,787
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,391
|
)
|
|
|
(2,391
|
)
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
(37
|
)
|
|
|
(37
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(2,686
|
)
|
|
|
(136
|
)
|
|
|
(5,215
|
)
|
|
|
(8,037
|
)
|
|
|
Income tax benefit on the above
|
|
|
1,028
|
|
|
|
53
|
|
|
|
1,921
|
|
|
|
3,002
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(1,658
|
)
|
|
$
|
(83
|
)
|
|
$
|
(3,294
|
)
|
|
$
|
(5,035
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Included in the results of operations for the three months ended
June 30, 2014 are the following significant credits/(charges)
which may not be indicative of ongoing operation (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
$
|
(410
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(410
|
)
|
|
|
|
Expenses related to litigation settlements
|
|
|
-
|
|
|
|
(32
|
)
|
|
|
-
|
|
|
|
(32
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,144
|
)
|
|
|
(1,144
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(613
|
)
|
|
|
(613
|
)
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
(189
|
)
|
|
|
(189
|
)
|
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional interest expense resulting from the change in
accounting for the conversion feature of the convertible notes
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,130
|
)
|
|
|
(1,130
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(410
|
)
|
|
|
(32
|
)
|
|
|
(3,076
|
)
|
|
|
(3,518
|
)
|
|
|
Income tax benefit on the above
|
|
|
156
|
|
|
|
12
|
|
|
|
1,133
|
|
|
|
1,301
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(254
|
)
|
|
$
|
(20
|
)
|
|
$
|
(1,943
|
)
|
|
$
|
(2,217
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
Included in the results of operations for the six months ended
June 30, 2014 are the following significant credits/(charges)
which may not be indicative of ongoing (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
$
|
(1,158
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1,158
|
)
|
|
|
|
Expenses related to litigation settlements
|
|
|
(113
|
)
|
|
|
(225
|
)
|
|
|
-
|
|
|
|
(338
|
)
|
|
|
|
Acquisition expenses
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,453
|
)
|
|
|
(2,453
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(986
|
)
|
|
|
(986
|
)
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
(189
|
)
|
|
|
(189
|
)
|
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional interest expense resulting from the change in
accounting for the conversion feature of the convertible notes
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,389
|
)
|
|
|
(3,389
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(1,272
|
)
|
|
|
(225
|
)
|
|
|
(7,017
|
)
|
|
|
(8,514
|
)
|
|
|
Income tax benefit on the above
|
|
|
483
|
|
|
|
88
|
|
|
|
2,587
|
|
|
|
3,158
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(789
|
)
|
|
$
|
(137
|
)
|
|
$
|
(4,430
|
)
|
|
$
|
(5,356
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
|
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 second quarters of 2015 and 2014, GAAP advertising
expense for Roto-Rooter totaled $6,391,000 and $6,087,000,
respectively. If the expense of the telephone directories were
spread over the periods they are in circulation, advertising
expense for the second quarters of 2015 and 2014 would total
$6,796,000 and $6,486,000, respectively.
|
|
|
|
|
|
Similarly, for the first six months of 2015 and 2014, GAAP
advertising expense for Roto-Rooter totaled $12,458,000 and
$12,602,000, respectively. If the expense of the telephone
directories were spread over the periods they are in circulation,
advertising expense for the first six months of 2015 and 2014
would total $13,369,000 and $13,742,000, respectively
|
|
|
|
(e)
|
|
Adjusted diluted average shares outstanding excludes the estimated
dilutive impact of the convertible notes prior to conversion of
these notes on May 15, 2014 (121,000 shares for the three months
ended June 30, 2014 and 202,000 shares for the six months ended
June 30, 2014) as this impact was entirely offset upon the
exercise of the note hedges on May 15, 2014.
|
|
|
|
(f)
|
|
VITAS has 10 large (greater than 450 ADC), 17 medium (greater than
200 but less than 450 ADC) and 20 small (less than 200 ADC)
hospice programs. Of VITAS' 34 unique Medicare provider numbers,
32 provider numbers have a Medicare cap cushion of 10% or greater
during the first nine months of the current cap year; one provider
number has a Medicare cap cushion between 5% and 10%; and one
provider number has a cap cushion between 0% and 5%.
|
|
|
|
(g)
|
|
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/20150723006380/en/
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