[February 15, 2017] |
|
Chemed Reports Fourth-Quarter 2016 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, 2016, versus
the comparable prior-year period, as follows:
Consolidated operating results:
-
Revenue increased 1.2% to $403 million
-
GAAP Diluted EPS increased 12.8% to $1.94
-
Adjusted Diluted EPS increased 6.6% to $2.10
VITAS segment operating results:
-
Net Patient Revenue of $284 million, a decrease of 0.1%
-
Average Daily Census (ADC) of 16,160, an increase of 2.9%
-
Unit for Unit admissions of 15,889, an increase of 0.7%
-
Net Income, including discrete items, of $26.4 million, a decrease of
0.3%
-
Adjusted EBITDA of $46.2 million, a decrease of 0.4%
Roto-Rooter segment operating results:
-
Revenue of $119 million, an increase of 4.5%
-
Net Income of $13.7 million, an increase of 1.7%
-
Adjusted EBITDA of $25.0 million, an increase of 2.7%
-
Adjusted EBITDA margin of 21.0%, a decrease of 38 basis points
VITAS
Net revenue for VITAS was $284 million in the fourth quarter of 2016,
which is a decrease of 0.1%, when compared to the prior-year period.
This revenue decrease is comprised primarily of an average Medicare
reimbursement rate increase of approximately 2.1%, a 2.9% increase in
average daily census, offset by acuity mix shift which negatively
impacted revenue 1.9% and changes in Medicare hospice reimbursement
methodology which negatively impacted revenue 2.3%.
On January 1, 2016, CMS implemented a refinement to the Medicare hospice
reimbursement per diem. This refinement eliminated the single-tier per
diem for routine home care (RHC) and replaced it with a two-tiered rate,
with a higher per diem rate for the first 60 days of a hospice patient's
care, and a lower rate for days 61 and after. In addition, CMS provided
for a Service Intensity Add-on (SIA) payment which provides for
reimbursement of care provided by a registered nurse or social worker
for RHC patients within seven days prior to death. The reimbursement for
continuous care, inpatient care and respite care are not impacted by
this rebasing.
The current two-tiered national per diem rate for RHC is $190.41 for the
first 60 days and $149.68 for RHC provided to patients in hospice beyond
60 days. An individual hospice's actual per diem rate is adjusted for
differences in geographic cost of living.
Rebasing in 2016 would be revenue neutral to a hospice if 37.6% of total
RHC days-of-care being provided to patients in their first 60 days of
admission and 62.4% of total RHC days-of-care provided to patients after
the 60 days. (RHC Days-of-Care ratio).
In the fourth quarter of 2016, VITAS had a 24.2/75.8 RHC Days-of-Care
ratio and generated approximately $1.2 million in SIA payments. This
resulted in $6.5 million less revenue than under the previous Medicare
reimbursement methodology.
VITAS did not have any adjustments to revenue related to the Medicare
Cap billing limitation in the current or prior-year quarter.
At December 31, 2016, VITAS had 31 Medicare provider numbers, none of
which has an estimated 2017 Medicare Cap billing limitation.
All of VITAS' 31 unique Medicare provider numbers have a Medicare Cap
cushion of 10% or greater for the trailing twelve month period.
Average revenue per patient per day in the quarter was $191.15, which is
3.0% below the prior-year period. Routine home care reimbursement and
high acuity care averaged $162.23 and $709.64, respectively. During the
quarter, high acuity days of care were 5.3% of total days of care, 63
basis points less than the prior-year quarter.
The fourth quarter of 2016 gross margin was 24.1%, which is essentially
equal to the fourth quarter of 2015.
Selling, general and administrative expense was $23.4 million in the
fourth quarter of 2016, which is an increase of 1.2% when compared to
the prior-year quarter. Adjusted EBITDA totaled $46.2 million in the
quarter, a decrease of 0.4% over the prior-year period. Adjusted EBITDA
margin was 16.3% in the quarter which is essentially equal to the
prior-year quarter.
Roto-Rooter
Roto-Rooter's plumbing and drain cleaning business generated sales of
$119 million for the fourth quarter of 2016, an increase of $5.2
million, or 4.5%, over the prior-year quarter. Revenue from water
restoration totaled $13.7 million, an increase of 31.7% over the prior
year.
Roto-Rooter's gross margin in the quarter was 46.9%, a 38 basis point
decline when compared to the fourth quarter of 2015. Adjusted EBITDA in
the fourth quarter of 2016 totaled $25.0 million, an increase of 2.7%,
and the Adjusted EBITDA margin was 21.0% in the quarter, 38 basis points
below the prior year.
Chemed Consolidated
As of December 31, 2016, Chemed had total cash and cash equivalents of
$15 million and debt of $109 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, 2016, the Company had approximately $287 million
of undrawn borrowing capacity under this credit agreement.
Capital expenditures through December 31, 2016, aggregated $39.8 million
and compares to depreciation and amortization during the same period of
$34.6 million.
On March 11, 2016, Chemed's Board of Directors authorized an additional
$100 million for stock repurchase under Chemed's existing share
repurchase program. On a year-to-date basis, the company has purchased
780,134 shares of Chemed stock at an aggregate cost of $102.3 million.
The company did not purchase any shares of Chemed stock in the fourth
quarter of 2016. As of December 31, 2016, there is $50.2 million of
share repurchase authorization under this plan.
Guidance for 2017
Revenue growth for VITAS in 2017, prior to Medicare Cap, is estimated to
be in the range of 4% to 5%. Admissions and Average Daily Census in 2017
are estimated to expand approximately 3% to 4% and full-year Adjusted
EBITDA margin, prior to Medicare Cap, is estimated to be 14.5% to 15.0%.
We are currently estimating $5.0 million for Medicare Cap billing
limitations in 2017.
Roto-Rooter is forecasted to achieve full-year 2017 revenue growth of 3%
to 4%. This revenue estimate is based upon increased job pricing of
approximately 2% and continued growth in water restoration services.
Adjusted EBITDA margin for 2017 is estimated in the range of 21.5% to
22.0%.
Based upon the above, full-year 2017 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
$7.80 to $8.00. This compares to Chemed's 2016 reported adjusted
earnings per diluted share of $7.24.
Conference Call
Chemed will host a conference call and webcast at 10 a.m., ET, on
Thursday, February 16, 2017, to discuss the Company's quarterly results
and to provide an update on its business. The dial-in number for the
conference call is (855) 715-1324 for U.S. and Canadian participants and
+1 (503) 343-6664 for international participants. The participant
passcode/Conference ID is 57003963. 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 57003963. 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 16,000 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, 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.
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED STATEMENT OF INCOME
|
(in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Service revenues and sales
|
|
$
|
403,476
|
|
|
$
|
398,589
|
|
|
$
|
1,576,881
|
|
|
$
|
1,543,388
|
|
Cost of services provided and goods sold
|
|
|
279,083
|
|
|
|
275,973
|
|
|
|
1,115,431
|
|
|
|
1,087,610
|
|
Selling, general and administrative expenses (aa)
|
|
|
62,526
|
|
|
|
64,554
|
|
|
|
243,572
|
|
|
|
237,821
|
|
Depreciation
|
|
|
8,660
|
|
|
|
8,180
|
|
|
|
34,279
|
|
|
|
32,369
|
|
Amortization
|
|
|
85
|
|
|
|
723
|
|
|
|
359
|
|
|
|
1,130
|
|
Other operating expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
4,491
|
|
|
|
-
|
|
|
|
Total costs and expenses
|
|
|
350,354
|
|
|
|
349,430
|
|
|
|
1,398,132
|
|
|
|
1,358,930
|
|
|
|
Income from operations
|
|
|
53,122
|
|
|
|
49,159
|
|
|
|
178,749
|
|
|
|
184,458
|
|
Interest expense
|
|
|
(884
|
)
|
|
|
(799
|
)
|
|
|
(3,715
|
)
|
|
|
(3,645
|
)
|
Other income--net (bb)
|
|
|
87
|
|
|
|
569
|
|
|
|
2,020
|
|
|
|
(687
|
)
|
|
|
Income before income taxes
|
|
|
52,325
|
|
|
|
48,929
|
|
|
|
177,054
|
|
|
|
180,126
|
|
Income taxes
|
|
|
(20,136
|
)
|
|
|
(19,000
|
)
|
|
|
(68,311
|
)
|
|
|
(69,852
|
)
|
Net income
|
|
$
|
32,189
|
|
|
$
|
29,929
|
|
|
$
|
108,743
|
|
|
$
|
110,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.99
|
|
|
$
|
1.78
|
|
|
$
|
6.64
|
|
|
$
|
6.54
|
|
|
|
Average number of shares outstanding
|
|
|
16,206
|
|
|
|
16,819
|
|
|
|
16,383
|
|
|
|
16,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.94
|
|
|
$
|
1.72
|
|
|
$
|
6.48
|
|
|
$
|
6.33
|
|
|
|
Average number of shares outstanding
|
|
|
16,598
|
|
|
|
17,365
|
|
|
|
16,789
|
|
|
|
17,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(aa)
|
|
Selling, general and administrative ("SG&A") expenses comprise (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
SG&A expenses before long-term incentive compensation, O.I.G.
expenses and the impact of market value gains related to deferred
compensation plans
|
|
$
|
60,137
|
|
|
$
|
58,625
|
|
|
$
|
234,321
|
|
|
$
|
225,180
|
|
|
|
|
Long-term incentive compensation
|
|
|
1,029
|
|
|
|
3,764
|
|
|
|
1,930
|
|
|
|
7,519
|
|
|
|
|
O.I.G. expenses
|
|
|
1,155
|
|
|
|
1,137
|
|
|
|
5,260
|
|
|
|
4,974
|
|
|
|
|
Market value gains related to deferred compensation trusts
|
|
|
205
|
|
|
|
1,028
|
|
|
|
2,061
|
|
|
|
148
|
|
|
|
|
|
Total SG&A expenses
|
|
|
|
|
|
$
|
62,526
|
|
|
$
|
64,554
|
|
|
$
|
243,572
|
|
|
$
|
237,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(bb)
|
|
Other income--net comprises (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
Market value gains related to deferred compensation trusts
|
|
$
|
205
|
|
|
$
|
1,028
|
|
|
$
|
2,061
|
|
|
$
|
148
|
|
|
|
|
Loss on disposal of property and equipment
|
|
|
(200
|
)
|
|
|
(567
|
)
|
|
|
(424
|
)
|
|
|
(698
|
)
|
|
|
|
Interest income
|
|
|
82
|
|
|
|
74
|
|
|
|
383
|
|
|
|
281
|
|
|
|
|
Other
|
|
|
-
|
|
|
|
34
|
|
|
|
-
|
|
|
|
(418
|
)
|
|
|
|
|
Total other income--net
|
|
$
|
87
|
|
|
$
|
569
|
|
|
$
|
2,020
|
|
|
$
|
(687
|
)
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED BALANCE SHEET
|
(in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
15,310
|
|
|
$
|
14,727
|
|
|
|
Accounts receivable less allowances
|
|
|
132,021
|
|
|
|
106,262
|
|
|
|
Inventories
|
|
|
5,755
|
|
|
|
6,314
|
|
|
|
Prepaid income taxes
|
|
|
3,709
|
|
|
|
10,653
|
|
|
|
Prepaid expenses
|
|
|
13,105
|
|
|
|
12,852
|
|
|
|
|
Total current assets
|
|
|
169,900
|
|
|
|
150,808
|
|
|
Investments of deferred compensation plans held in trust
|
|
|
54,389
|
|
|
|
49,481
|
|
|
Properties and equipment, at cost less accumulated depreciation
|
|
|
121,302
|
|
|
|
117,370
|
|
|
Identifiable intangible assets less accumulated amortization
|
|
|
55,065
|
|
|
|
55,111
|
|
|
Goodwill
|
|
|
472,366
|
|
|
|
472,322
|
|
|
Other assets
|
|
|
7,037
|
|
|
|
7,233
|
|
|
|
|
|
Total Assets
|
|
$
|
880,059
|
|
|
$
|
852,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
39,586
|
|
|
$
|
43,695
|
|
|
|
Current portion of long-term debt
|
|
|
8,750
|
|
|
|
7,500
|
|
|
|
Accrued insurance
|
|
|
47,960
|
|
|
|
43,972
|
|
|
|
Accrued compensation
|
|
|
53,979
|
|
|
|
52,817
|
|
|
|
Accrued legal
|
|
|
1,805
|
|
|
|
1,233
|
|
|
|
Other current liabilities
|
|
|
19,752
|
|
|
|
22,119
|
|
|
|
|
Total current liabilities
|
|
|
171,832
|
|
|
|
171,336
|
|
|
Deferred income taxes
|
|
|
14,291
|
|
|
|
21,041
|
|
|
Long-term debt
|
|
|
100,000
|
|
|
|
83,750
|
|
|
Deferred compensation liabilities
|
|
|
54,288
|
|
|
|
49,467
|
|
|
Other liabilities
|
|
|
15,549
|
|
|
|
13,478
|
|
|
|
|
|
Total Liabilities
|
|
|
355,960
|
|
|
|
339,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock
|
|
|
34,270
|
|
|
|
33,985
|
|
|
Paid-in capital
|
|
|
639,703
|
|
|
|
603,006
|
|
|
Retained earnings
|
|
|
958,149
|
|
|
|
865,845
|
|
|
Treasury stock, at cost
|
|
|
(1,110,536
|
)
|
|
|
(991,978
|
)
|
|
Deferred compensation payable in Company stock
|
|
|
2,513
|
|
|
|
2,395
|
|
|
|
|
|
Total Stockholders' Equity
|
|
|
524,099
|
|
|
|
513,253
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
880,059
|
|
|
$
|
852,325
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
108,743
|
|
|
$
|
110,274
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
34,638
|
|
|
|
33,499
|
|
|
|
|
Provision for uncollectible accounts receivable
|
|
|
16,319
|
|
|
|
14,247
|
|
|
|
|
Stock option expense
|
|
|
8,330
|
|
|
|
5,445
|
|
|
|
|
Provision/(benefit) for deferred income taxes
|
|
|
(6,707
|
)
|
|
|
6,325
|
|
|
|
|
Amortization of restricted stock awards
|
|
|
1,855
|
|
|
|
2,107
|
|
|
|
|
Noncash early retirement expense
|
|
|
1,747
|
|
|
|
-
|
|
|
|
|
Noncash long-term incentive compensation
|
|
|
1,301
|
|
|
|
6,644
|
|
|
|
|
Noncash directors' compensation
|
|
|
541
|
|
|
|
540
|
|
|
|
|
Amortization of debt issuance costs
|
|
|
519
|
|
|
|
523
|
|
|
|
|
Changes in operating assets and liabilities, excluding amounts
acquired in business combinations:
|
|
|
|
|
|
|
|
|
|
|
|
Decrease/(increase) in accounts receivable
|
|
|
(42,142
|
)
|
|
|
4,132
|
|
|
|
|
|
|
Decrease/(increase) in inventories
|
|
|
559
|
|
|
|
(142
|
)
|
|
|
|
|
|
Decrease/(increase) in prepaid expenses
|
|
|
(253
|
)
|
|
|
(1,290
|
)
|
|
|
|
|
|
Increase/(decrease) in accounts payable and other current liabilities
|
|
|
891
|
|
|
|
476
|
|
|
|
|
|
|
Increase in income taxes
|
|
|
13,886
|
|
|
|
344
|
|
|
|
|
|
|
Increase in other assets
|
|
|
(5,224
|
)
|
|
|
(47
|
)
|
|
|
|
|
|
Increase in other liabilities
|
|
|
7,105
|
|
|
|
1,320
|
|
|
|
|
Excess tax benefit on stock-based compensation
|
|
|
(7,195
|
)
|
|
|
(14,042
|
)
|
|
|
|
Other sources
|
|
|
480
|
|
|
|
1,145
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
135,393
|
|
|
|
171,500
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(39,772
|
)
|
|
|
(44,135
|
)
|
|
Business combinations, net of cash acquired
|
|
|
-
|
|
|
|
(6,614
|
)
|
|
Other sources
|
|
|
(90
|
)
|
|
|
432
|
|
|
|
|
|
Net cash used by investing activities
|
|
|
(39,862
|
)
|
|
|
(50,317
|
)
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
Proceeds from revolving line of credit
|
|
|
184,550
|
|
|
|
103,200
|
|
|
Payments on revolving line of credit
|
|
|
(159,550
|
)
|
|
|
(153,200
|
)
|
|
Purchases of treasury stock
|
|
|
(102,313
|
)
|
|
|
(59,323
|
)
|
|
Dividends paid
|
|
|
(16,439
|
)
|
|
|
(15,605
|
)
|
|
Capital stock surrendered to pay taxes on stock-based compensation
|
|
|
(8,772
|
)
|
|
|
(15,734
|
)
|
|
Proceeds from exercise of stock options
|
|
|
8,421
|
|
|
|
15,424
|
|
|
Payments on other long-term debt
|
|
|
(7,500
|
)
|
|
|
(6,250
|
)
|
|
Excess tax benefit on stock-based compensation
|
|
|
7,195
|
|
|
|
14,042
|
|
|
Increase/(decrease) in cash overdrafts payable
|
|
|
(736
|
)
|
|
|
(1,177
|
)
|
|
Other uses
|
|
|
196
|
|
|
|
(1,965
|
)
|
|
|
|
|
Net cash used by financing activities
|
|
|
(94,948
|
)
|
|
|
(120,588
|
)
|
Increase/(Decrease) in Cash and Cash Equivalents
|
|
|
583
|
|
|
|
595
|
|
Cash and cash equivalents at beginning of year
|
|
|
14,727
|
|
|
|
14,132
|
|
Cash and cash equivalents at end of period
|
|
$
|
15,310
|
|
|
$
|
14,727
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING STATEMENT OF INCOME
|
FOR THE THREE MONTHS ENDED DECEMBER 31, 2016 AND 2015
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
$
|
284,186
|
|
|
$
|
119,290
|
|
|
$
|
-
|
|
|
$
|
403,476
|
|
Cost of services provided and goods sold
|
|
|
215,722
|
|
|
|
63,361
|
|
|
|
-
|
|
|
|
279,083
|
|
Selling, general and administrative expenses (a)
|
|
|
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 (a)
|
|
|
(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 (a)
|
|
|
(16,023
|
)
|
|
|
(8,272
|
)
|
|
|
4,159
|
|
|
|
(20,136
|
)
|
|
Net income/(loss)
|
|
$
|
26,421
|
|
|
$
|
13,679
|
|
|
$
|
(7,911
|
)
|
|
$
|
32,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
$
|
284,470
|
|
|
$
|
114,119
|
|
|
$
|
-
|
|
|
$
|
398,589
|
|
Cost of services provided and goods sold
|
|
|
215,786
|
|
|
|
60,187
|
|
|
|
-
|
|
|
|
275,973
|
|
Selling, general and administrative expenses (b)
|
|
|
23,086
|
|
|
|
29,649
|
|
|
|
11,819
|
|
|
|
64,554
|
|
Depreciation
|
|
|
4,647
|
|
|
|
3,390
|
|
|
|
143
|
|
|
|
8,180
|
|
Amortization
|
|
|
578
|
|
|
|
145
|
|
|
|
-
|
|
|
|
723
|
|
|
Total costs and expenses
|
|
|
244,097
|
|
|
|
93,371
|
|
|
|
11,962
|
|
|
|
349,430
|
|
|
Income/(loss) from operations
|
|
|
40,373
|
|
|
|
20,748
|
|
|
|
(11,962
|
)
|
|
|
49,159
|
|
Interest expense (b)
|
|
|
(36
|
)
|
|
|
(74
|
)
|
|
|
(689
|
)
|
|
|
(799
|
)
|
Intercompany interest income/(expense)
|
|
|
2,039
|
|
|
|
884
|
|
|
|
(2,923
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
(422
|
)
|
|
|
(38
|
)
|
|
|
1,029
|
|
|
|
569
|
|
|
Income/(loss) before income taxes
|
|
|
41,954
|
|
|
|
21,520
|
|
|
|
(14,545
|
)
|
|
|
48,929
|
|
Income taxes (b)
|
|
|
(15,446
|
)
|
|
|
(8,069
|
)
|
|
|
4,515
|
|
|
|
(19,000
|
)
|
|
Net income/(loss)
|
|
$
|
26,508
|
|
|
$
|
13,451
|
|
|
$
|
(10,030
|
)
|
|
$
|
29,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING STATEMENT OF INCOME
|
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
$
|
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 (a)
|
|
|
92,550
|
|
|
|
118,812
|
|
|
|
32,210
|
|
|
|
243,572
|
|
Depreciation
|
|
|
19,035
|
|
|
|
14,698
|
|
|
|
546
|
|
|
|
34,279
|
|
Amortization
|
|
|
55
|
|
|
|
304
|
|
|
|
-
|
|
|
|
359
|
|
Other operating expenses
|
|
|
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 (a)
|
|
|
(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 (a)
|
|
|
(51,910
|
)
|
|
|
(32,719
|
)
|
|
|
16,318
|
|
|
|
(68,311
|
)
|
|
Net income/(loss)
|
|
$
|
84,961
|
|
|
$
|
52,893
|
|
|
$
|
(29,111
|
)
|
|
$
|
108,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
$
|
1,115,551
|
|
|
$
|
427,837
|
|
|
$
|
-
|
|
|
$
|
1,543,388
|
|
Cost of services provided and goods sold
|
|
|
862,587
|
|
|
|
225,023
|
|
|
|
-
|
|
|
|
1,087,610
|
|
Selling, general and administrative expenses (b)
|
|
|
89,879
|
|
|
|
114,269
|
|
|
|
33,673
|
|
|
|
237,821
|
|
Depreciation
|
|
|
18,789
|
|
|
|
12,988
|
|
|
|
592
|
|
|
|
32,369
|
|
Amortization
|
|
|
758
|
|
|
|
372
|
|
|
|
-
|
|
|
|
1,130
|
|
|
Total costs and expenses
|
|
|
972,013
|
|
|
|
352,652
|
|
|
|
34,265
|
|
|
|
1,358,930
|
|
|
Income/(loss) from operations
|
|
|
143,538
|
|
|
|
75,185
|
|
|
|
(34,265
|
)
|
|
|
184,458
|
|
Interest expense (b)
|
|
|
(200
|
)
|
|
|
(348
|
)
|
|
|
(3,097
|
)
|
|
|
(3,645
|
)
|
Intercompany interest income/(expense)
|
|
|
7,499
|
|
|
|
3,385
|
|
|
|
(10,884
|
)
|
|
|
-
|
|
Other income-net
|
|
|
(816
|
)
|
|
|
(19
|
)
|
|
|
148
|
|
|
|
(687
|
)
|
|
Income/(loss) before income taxes
|
|
|
150,021
|
|
|
|
78,203
|
|
|
|
(48,098
|
)
|
|
|
180,126
|
|
Income taxes (b)
|
|
|
(56,675
|
)
|
|
|
(29,630
|
)
|
|
|
16,453
|
|
|
|
(69,852
|
)
|
|
Net income/(loss)
|
|
$
|
93,346
|
|
|
$
|
48,573
|
|
|
$
|
(31,645
|
)
|
|
$
|
110,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 DECEMBER 31, 2016 AND 2015
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
26,508
|
|
|
$
|
13,451
|
|
|
$
|
(10,030
|
)
|
|
$
|
29,929
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
36
|
|
|
|
74
|
|
|
|
689
|
|
|
|
799
|
|
|
|
Income taxes
|
|
|
15,446
|
|
|
|
8,069
|
|
|
|
(4,515
|
)
|
|
|
19,000
|
|
|
|
Depreciation
|
|
|
4,647
|
|
|
|
3,390
|
|
|
|
143
|
|
|
|
8,180
|
|
|
|
Amortization
|
|
|
578
|
|
|
|
145
|
|
|
|
-
|
|
|
|
723
|
|
|
|
|
EBITDA
|
|
|
47,215
|
|
|
|
25,129
|
|
|
|
(13,713
|
)
|
|
|
58,631
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(2,039
|
)
|
|
|
(884
|
)
|
|
|
2,923
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
(61
|
)
|
|
|
(13
|
)
|
|
|
-
|
|
|
|
(74
|
)
|
|
|
Expenses related to OIG investigation
|
|
|
1,137
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,137
|
|
|
|
Amortization of stock awards
|
|
|
152
|
|
|
|
87
|
|
|
|
380
|
|
|
|
619
|
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
11
|
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
50
|
|
|
|
-
|
|
|
|
50
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
1,845
|
|
|
|
1,845
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
3,764
|
|
|
|
3,764
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
46,404
|
|
|
$
|
24,380
|
|
|
$
|
(4,801
|
)
|
|
$
|
65,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING SUMMARY OF EBITDA
|
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
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
|
)
|
|
Expenses related to OIG investigation
|
|
|
5,260
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,260
|
|
|
Early retirement expenses
|
|
|
4,491
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,491
|
|
|
Medicare cap sequestration adjustment
|
|
|
228
|
|
|
|
-
|
|
|
|
-
|
|
|
|
228
|
|
|
Amortization of stock awards
|
|
|
387
|
|
|
|
307
|
|
|
|
1,161
|
|
|
|
1,855
|
|
|
Net expenses related to litigation settlements
|
|
|
1,149
|
|
|
|
45
|
|
|
|
-
|
|
|
|
1,194
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
(1,333
|
)
|
|
|
-
|
|
|
|
(1,333
|
)
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
8,330
|
|
|
|
8,330
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
1,930
|
|
|
|
1,930
|
|
|
Adjusted EBITDA
|
|
$
|
159,393
|
|
|
$
|
96,312
|
|
|
$
|
(18,726
|
)
|
|
$
|
236,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
93,346
|
|
|
$
|
48,573
|
|
|
$
|
(31,645
|
)
|
|
$
|
110,274
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
200
|
|
|
|
348
|
|
|
|
3,097
|
|
|
|
3,645
|
|
|
Income taxes
|
|
|
56,675
|
|
|
|
29,630
|
|
|
|
(16,453
|
)
|
|
|
69,852
|
|
|
Depreciation
|
|
|
18,789
|
|
|
|
12,988
|
|
|
|
592
|
|
|
|
32,369
|
|
|
Amortization
|
|
|
758
|
|
|
|
372
|
|
|
|
-
|
|
|
|
1,130
|
|
|
EBITDA
|
|
|
169,768
|
|
|
|
91,911
|
|
|
|
(44,409
|
)
|
|
|
217,270
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
(7,499
|
)
|
|
|
(3,385
|
)
|
|
|
10,884
|
|
|
|
-
|
|
|
Interest income
|
|
|
(241
|
)
|
|
|
(40
|
)
|
|
|
-
|
|
|
|
(281
|
)
|
|
Expenses related to OIG investigation
|
|
|
4,974
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,974
|
|
|
Amortization of stock awards
|
|
|
496
|
|
|
|
268
|
|
|
|
1,343
|
|
|
|
2,107
|
|
|
Net expenses related to litigation settlements
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
5
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
|
172
|
|
|
|
-
|
|
|
|
172
|
|
|
Advertising cost adjustment (c)
|
|
|
-
|
|
|
|
(1,317
|
)
|
|
|
-
|
|
|
|
(1,317
|
)
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
5,445
|
|
|
|
5,445
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
7,519
|
|
|
|
7,519
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
37
|
|
|
|
37
|
|
|
Adjusted EBITDA
|
|
$
|
167,498
|
|
|
$
|
87,614
|
|
|
$
|
(19,181
|
)
|
|
$
|
235,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Years Ended
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income as reported
|
|
$
|
32,189
|
|
$
|
29,929
|
|
$
|
108,743
|
|
$
|
110,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add/(deduct) the after-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term incentive compensation
|
|
|
651
|
|
|
2,377
|
|
|
1,221
|
|
|
4,752
|
|
|
Stock option expense
|
|
|
1,308
|
|
|
1,171
|
|
|
5,266
|
|
|
3,439
|
|
|
Early retirement expenses
|
|
|
-
|
|
|
-
|
|
|
2,840
|
|
|
-
|
|
|
Expenses related to OIG investigation
|
|
|
713
|
|
|
703
|
|
|
3,248
|
|
|
3,072
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
6
|
|
|
-
|
|
|
104
|
|
|
Medicare cap sequestration adjustment
|
|
|
-
|
|
|
-
|
|
|
141
|
|
|
-
|
|
|
Net expenses related to litigation settlements
|
|
|
1
|
|
|
-
|
|
|
28
|
|
|
3
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
23
|
Adjusted net income
|
|
$
|
34,862
|
|
$
|
34,186
|
|
$
|
121,487
|
|
$
|
121,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share As Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.94
|
|
$
|
1.72
|
|
$
|
6.48
|
|
$
|
6.33
|
|
|
Average number of shares outstanding
|
|
|
16,598
|
|
|
17,365
|
|
|
16,789
|
|
|
17,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
2.10
|
|
$
|
1.97
|
|
$
|
7.24
|
|
$
|
6.98
|
|
|
Adjusted average number of shares outstanding (d)
|
|
|
16,598
|
|
|
17,365
|
|
|
16,789
|
|
|
17,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
OPERATING STATISTICS FOR VITAS SEGMENT
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Years Ended
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
OPERATING STATISTICS
|
|
2016
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Net revenue ($000) (e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
$
|
228,463
|
|
$
|
224,278
|
|
|
$
|
887,940
|
|
|
$
|
865,145
|
|
|
|
Inpatient
|
|
|
23,724
|
|
|
22,954
|
|
|
|
97,580
|
|
|
|
99,439
|
|
|
|
Continuous care
|
|
|
31,999
|
|
|
37,238
|
|
|
|
138,025
|
|
|
|
150,802
|
|
|
|
|
Total before Medicare cap allowance
|
|
$
|
284,186
|
|
$
|
284,470
|
|
|
$
|
1,123,545
|
|
|
$
|
1,115,386
|
|
|
|
Medicare cap allowance
|
|
|
-
|
|
|
-
|
|
|
|
(228
|
)
|
|
|
165
|
|
|
|
|
Total
|
|
$
|
284,186
|
|
$
|
284,470
|
|
|
$
|
1,123,317
|
|
|
$
|
1,115,551
|
|
|
Net revenue as a percent of total before Medicare cap allowance
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
80.4
|
%
|
|
78.8
|
%
|
|
|
78.9
|
%
|
|
77.6
|
%
|
|
|
Inpatient
|
|
|
8.3
|
|
|
8.1
|
|
|
|
8.7
|
|
|
|
8.9
|
|
|
|
Continuous care
|
|
|
11.3
|
|
|
13.1
|
|
|
|
12.4
|
|
|
|
13.5
|
|
|
|
|
Total before Medicare cap allowance
|
|
|
100.0
|
|
|
100.0
|
|
|
|
100.0
|
|
|
|
100.0
|
|
|
|
Medicare cap allowance
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
Total
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Average daily census ("ADC") (days)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
12,241
|
|
|
11,707
|
|
|
|
12,040
|
|
|
|
11,372
|
|
|
|
Nursing home
|
|
|
3,065
|
|
|
3,062
|
|
|
|
3,037
|
|
|
|
3,035
|
|
|
|
|
Routine homecare
|
|
|
15,306
|
|
|
14,769
|
|
|
|
15,077
|
|
|
|
14,407
|
|
|
|
Inpatient
|
|
|
383
|
|
|
377
|
|
|
|
400
|
|
|
|
412
|
|
|
|
Continuous care
|
|
|
471
|
|
|
551
|
|
|
|
515
|
|
|
|
566
|
|
|
|
|
Total
|
|
|
16,160
|
|
|
15,697
|
|
|
|
15,992
|
|
|
|
15,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Admissions
|
|
|
15,889
|
|
|
15,790
|
|
|
|
65,094
|
|
|
|
65,872
|
|
|
Total Discharges
|
|
|
16,282
|
|
|
15,915
|
|
|
|
64,689
|
|
|
|
64,900
|
|
|
Average length of stay (days)
|
|
|
91.4
|
|
|
89.8
|
|
|
|
86.7
|
|
|
|
81.6
|
|
|
Median length of stay (days)
|
|
|
16.0
|
|
|
17.0
|
|
|
|
16.0
|
|
|
|
15.0
|
|
|
ADC by major diagnosis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neurological
|
|
|
20.3
|
%
|
|
22.8
|
%
|
|
|
21.1
|
%
|
|
23.2
|
%
|
|
|
Cancer
|
|
|
15.4
|
|
|
15.6
|
|
|
|
15.3
|
|
|
|
16.4
|
|
|
|
Cardio
|
|
|
16.9
|
|
|
17.4
|
|
|
|
17.1
|
|
|
|
17.4
|
|
|
|
Cerebro
|
|
|
33.4
|
|
|
29.9
|
|
|
|
32.7
|
|
|
|
29.1
|
|
|
|
Respiratory
|
|
|
7.8
|
|
|
7.7
|
|
|
|
7.8
|
|
|
|
7.8
|
|
|
|
Other
|
|
|
6.2
|
|
|
6.6
|
|
|
|
6.0
|
|
|
|
6.1
|
|
|
|
|
Total
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Admissions by major diagnosis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neurological
|
|
|
11.3
|
%
|
|
12.1
|
%
|
|
|
11.0
|
%
|
|
12.3
|
%
|
|
|
Cancer
|
|
|
32.2
|
|
|
31.5
|
|
|
|
31.8
|
|
|
|
32.0
|
|
|
|
Cardio
|
|
|
16.0
|
|
|
15.2
|
|
|
|
15.4
|
|
|
|
15.3
|
|
|
|
Cerebro
|
|
|
21.6
|
|
|
19.7
|
|
|
|
21.0
|
|
|
|
19.0
|
|
|
|
Respiratory
|
|
|
10.8
|
|
|
9.5
|
|
|
|
10.2
|
|
|
|
9.9
|
|
|
|
Other
|
|
|
8.1
|
|
|
12.0
|
|
|
|
10.6
|
|
|
|
11.5
|
|
|
|
|
Total
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Direct patient care margins (f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Routine homecare
|
|
|
53.1
|
%
|
|
54.7
|
%
|
|
|
52.1
|
%
|
|
53.4
|
%
|
|
|
Inpatient
|
|
|
1.2
|
|
|
1.3
|
|
|
|
2.3
|
|
|
|
5.0
|
|
|
|
Continuous care
|
|
|
15.8
|
|
|
16.1
|
|
|
|
14.2
|
|
|
|
16.1
|
|
|
Homecare margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
56.11
|
|
$
|
53.96
|
|
|
$
|
56.41
|
|
|
$
|
55.58
|
|
|
|
Combined drug, home medical equipment and medical supplies cost
|
|
|
14.99
|
|
|
16.08
|
|
|
|
15.66
|
|
|
|
16.15
|
|
|
Inpatient margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
363.06
|
|
$
|
358.52
|
|
|
$
|
350.56
|
|
|
$
|
350.06
|
|
|
Continuous care margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
$
|
602.30
|
|
$
|
596.21
|
|
|
$
|
607.52
|
|
|
$
|
592.48
|
|
|
Bad debt expense as a percent of revenues
|
|
|
1.2
|
%
|
|
1.0
|
%
|
|
|
1.2
|
%
|
|
1.0
|
%
|
|
Accounts receivable --
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days of revenue outstanding- excluding unapplied Medicare payments
|
|
|
36.5
|
|
|
37.5
|
|
|
|
n.a.
|
|
|
|
n.a.
|
|
|
Days of revenue outstanding- including unapplied Medicare payments
|
|
|
32.6
|
|
|
26.7
|
|
|
|
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, 2016 AND 2015
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Included in the results of operations 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
|
)
|
|
|
|
Litigation settlement expenses
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,029
|
)
|
|
|
(1,029
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,071
|
)
|
|
|
(2,071
|
)
|
|
|
|
|
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
|
|
|
Services revenues and sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare cap sequestration adjustment
|
|
$
|
(228
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(228
|
)
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
|
(5,260
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,260
|
)
|
|
|
|
Litigation settlement expenses
|
|
|
-
|
|
|
|
(45
|
)
|
|
|
-
|
|
|
|
(45
|
)
|
|
|
|
Early retirement expenses
|
|
|
(4,491
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,491
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,930
|
)
|
|
|
(1,930
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,330
|
)
|
|
|
(8,330
|
)
|
|
|
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Included in the results of operations 2015 are the following
significant credits/(charges) which may not be indicative of ongoing
operations
|
|
|
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
$
|
(1,137
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1,137
|
)
|
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,764
|
)
|
|
|
(3,764
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,845
|
)
|
|
|
(1,845
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(1,137
|
)
|
|
|
(11
|
)
|
|
|
(5,609
|
)
|
|
|
(6,757
|
)
|
|
|
Income tax benefit on the above
|
|
|
434
|
|
|
|
5
|
|
|
|
2,061
|
|
|
|
2,500
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(703
|
)
|
|
$
|
(6
|
)
|
|
$
|
(3,548
|
)
|
|
$
|
(4,257
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
$
|
(4,974
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(4,974
|
)
|
|
|
|
Net expenses related to litigation settlements
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
|
Acquisition expenses
|
|
|
-
|
|
|
|
(172
|
)
|
|
|
-
|
|
|
|
(172
|
)
|
|
|
|
Long-term incentive compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,519
|
)
|
|
|
(7,519
|
)
|
|
|
|
Stock option expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,445
|
)
|
|
|
(5,445
|
)
|
|
|
|
Expenses related to securities litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
(37
|
)
|
|
|
(37
|
)
|
|
|
|
|
Pretax impact on earnings
|
|
|
(4,974
|
)
|
|
|
(177
|
)
|
|
|
(13,001
|
)
|
|
|
(18,152
|
)
|
|
|
Income tax benefit on the above
|
|
|
1,902
|
|
|
|
70
|
|
|
|
4,787
|
|
|
|
6,759
|
|
|
|
|
|
After-tax impact on earnings
|
|
$
|
(3,072
|
)
|
|
$
|
(107
|
)
|
|
$
|
(8,214
|
)
|
|
$
|
(11,393
|
)
|
|
|
|
(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 2016 and 2015, GAAP advertising
expense for Roto-Rooter totaled $7,323,000 and $6,952,000,
respectively. If the expense of the telephone directories were
spread over the periods they are in circulation, advertising
expense for the fourth quarters of 2016 and 2015 would total
$7,303,000 and $6,902,000, respectively.
|
|
|
|
|
|
Similarly, for the years ended December 31, 2016 and 2015, GAAP
advertising expense for Roto-Rooter totaled $26,717,000 and
$25,438,000, 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, 2016 and 2015
would total $28,050,000 and $26,755,000, respectively.
|
|
|
|
(d)
|
|
VITAS has 9 large (greater than 450 ADC), 18 medium (greater than
200 but less than 450 ADC) and 17 small (less than 200 ADC)
hospice programs. For the current Medicare cap year there are no
programs with a cap liability.
|
|
|
|
(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/20170215005990/en/
[ Back To TMCnet.com's Homepage ]
|