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Chemed > Investor Relations > News Releases > News Release
News Releases
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Chemed Reports First-Quarter 2008 Results

CINCINNATI--(BUSINESS WIRE)--April 24, 2008--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, today reported financial results for its first quarter ended March 31, 2008, versus the comparable prior-year period, as follows:

Consolidated operating results:

  • Revenue increased 5.5% to $285 million


  • Diluted EPS of $.69


  • Diluted EPS, excluding special items, of $.73

VITAS segment operating results:

  • Net Patient Revenue of $199 million, up 7.9%


  • Average Daily Census (ADC) of 11,691, up 3.4%


  • Admissions of 15,212, an increase of 7.8%


  • Average Length of Stay in the quarter of 71.5 days


  • Adjusted EBITDA of $23.6 million, a decline of 9.3%

Roto-Rooter segment operating results:

  • Revenue of $87 million, an increase of 0.3%


  • Job count of 196,249, a decline of 7.0%


  • Adjusted EBITDA of $15.9 million, a decline of 2.7%

VITAS

Net revenue for VITAS was $199 million in the first quarter of 2008, which is an increase of 7.9% over the prior-year period. This revenue growth was the result of increased ADC of 3.4%, a Medicare price increase of approximately 3%, and a favorable shift in revenue mix from routine home care to high acuity care.

Average revenue per patient per day in the quarter was $186.67, which is 3.5% above the prior-year period. Routine home care reimbursement and high acuity care averaged $145.42 and $633.10, respectively, per patient per day in the first quarter of 2008. During the quarter, high acuity days-of-care was 8.5% of total days-of-care. Quarterly high acuity days-of-care had averaged between 8.0% and 8.4% in 2007. Any shift in revenue mix will have a noticeable impact on overall revenue given the significant disparity in reimbursement. However, given the relatively low profitability margin on high acuity care, this favorable mix shift had minimal impact on gross profit and net income in the quarter.

VITAS did not have any billing restrictions related to Medicare Cap for its first-quarter 2008 operating activity. As of March 31, 2008, VITAS has not accrued any Medicare billing restrictions for the 2008 or 2007 Cap years. Of VITAS' 35 unique Medicare provider numbers, 30 provider numbers, or 86%, have a Cap cushion greater than 20% for the 2008 Cap year, four provider numbers are between 10% and 20%, and one provider number has Cap cushion of approximately 4%.

Gross margin in the first quarter of 2008 was 20.0%. This is 257 basis points below the first quarter of 2007, excluding the 2007 benefit from Medicare cap. This margin decline is a combination of increased expenses related to admissions and increased costs for direct patient care labor.

As part of its growth strategy, VITAS has expanded its investment in the admissions process. At the end of the first quarter of 2008, VITAS increased staffing of sales representatives, admissions coordinators and admissions nurses by 18%. This resulted in an additional $2.1 million of admission expense in the quarter and equates to 106 basis points of the decline in gross margin in the quarter.

The remaining margin decline is due to an increase in direct patient care labor. This additional labor is a combination of salary rate increases for existing employees as well as excess staffing relative to current patient census and individual plans of care. In the first quarter of 2008, total field salary increases averaged 4.2% over the prior-year period which is largely commensurate with local market salary requirements. This is above the 3.0% inflation per diem increase VITAS received from CMS in October 2007. Over the past several years the CMS calculated inflation factor has been below the actual inflation on direct patient care costs, primarily wages. Historically, VITAS has been able to offset this inflation adjustment shortfall through scale in management systems and infrastructure.

VITAS continues to refine the process of scheduling direct labor to allow for more daily flexibility with the goal of ensuring proper levels of staffing notwithstanding length of stay and census fluctuations. This involves more efficient utilization of field-based labor management tools designed to meet and respond to hospice team staffing requirements. VITAS anticipates more efficient labor management during the second quarter of 2008 with margins returning to more historical levels in the second half of 2008.

Selling, general and administrative expense was $16.1 million in the first quarter of 2008, which is an increase of 1.5% over the prior year. Adjusted EBITDA totaled $23.6 million, a decline of 9.3% over the prior year and equates to an adjusted EBITDA margin of 11.9%.

Roto-Rooter

Roto-Rooter's plumbing and drain cleaning business generated sales of $87 million for the first quarter of 2008, 0.3% higher than the $86 million reported in the comparable prior-year quarter. Net income for the quarter was $9.1 million. The first-quarter net income includes a $0.4 million aftertax charge for a settlement of litigation relating to a 2003 fire that, for unique technical reasons, was not covered by Roto-Rooter's secondary insurance carrier. Excluding this settlement, net income in the first quarter of 2008 declined approximately 0.6% over the first quarter of 2007. Adjusted EBITDA in the first quarter of 2008 totaled $15.9 million, a decrease of 2.7% over the first quarter of 2007, and equated to an adjusted EBITDA margin of 18.4%.

Job count in the first quarter of 2008 declined 7.0% when compared to the prior-year period. Total residential jobs declined 6.4% and consisted of residential plumbing jobs decreasing 4.9% and residential drain cleaning jobs declining 7.1%, when compared to the first quarter of 2007. Residential jobs represent approximately 70% of total job count. Total commercial jobs declined 8.4% with commercial plumbing job count declining 4.9% and commercial drain cleaning decreasing 9.9%, over the prior-year quarter.

The first quarter of 2008 clearly indicates recessionary pressures impacting demand for certain plumbing and drain cleaning services. This is evidenced by an 11% decline in aggregate call volume tracked in Roto-Rooter's two centralized call centers. This decline in call volume has been partially offset by an increase in call conversion rate to paid jobs.

There is also greater disparity in demand within the United States. The Southeast region has experienced a 14.1% decline in commercial jobs while the Northeast had a modest 1.8% decline in commercial volume. Residential demand is also following a similar pattern in the Southeast, with job count declining 10.1% while the remaining regions have experienced a job count decline ranging between 4.3% and 6.7%.

Guidance for 2008

VITAS is estimated to generate full-year revenue growth from continuing operations, prior to Medicare Cap, of 8% to 10%. Admissions are estimated to increase 5% to 8% and full-year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 13% to 14%. EBITDA margins are forecasted to improve sequentially throughout 2008, with an adjusted EBITDA margin averaging 13.5% to 14.0% in the second half of 2008. This guidance assumes the hospice industry receives a full Medicare basket price increase of 3.0% in the fourth quarter of 2008. Full calendar year 2008 Medicare contractual billing limitations are estimated at $3.75 million.

Roto-Rooter is estimated to generate revenue totaling $343 million to $349 million. This guidance assumes revenue of approximately $83 million to $85 million in the second and third quarters of 2008 and $90 million to $92 million in the fourth quarter of the year. Adjusted EBITDA margin for 2008 is estimated in the range of 18.5% to 19.5%.

Based upon these factors, an effective tax rate of 39% and an average diluted share count of 24.2 million shares, our estimate is that full-year 2008 earnings per diluted share from continuing operations, excluding noncash expenses for stock options and charges or credits not indicative of ongoing operations, will be in the range of $3.05 to $3.20.

Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Friday, April 25, 2008, to discuss the company's quarterly results and provide an update on its business. The dial-in number for the conference call is (866) 510-0710 for U.S. and Canadian participants and (617) 597-5378 for international participants. The participant passcode is 12125956. 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 two hours after the call's conclusion. It can be accessed by dialing 888-286-8010 for U.S. and Canadian callers and 617-801-6888 for international callers and will be available for one week following the live call. The replay passcode is 61838951. An archived webcast will also be available at www.chemed.com and will remain available for 14 days following the live call.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to over 11,600 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing and drain service through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in Indonesia, Singapore, Japan, and the Philippines.

This press release contains information about Chemed's EBITDA and adjusted EBITDA, which are not measures derived in accordance with generally accepted accounting principles and which exclude components that are important to understanding Chemed's financial performance. Chemed provides EBITDA and adjusted EBITDA to help investors and others evaluate its 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 EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. A reconciliation of Chemed's net income to its adjusted EBITDA 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 March 31,
                                          ----------------------------
                                               2008          2007
                                          -------------- -------------
 Service revenues and sales               $     285,268  $    270,439
                                          -------------- -------------
 Cost of services provided and goods sold
  (aa)                                          205,812       188,247
 Selling, general and administrative
  expenses (aa)                                  42,727        48,070
 Depreciation                                     5,438         4,715
 Amortization                                     1,450         1,315
 Other operating expense/(income) (aa)                -        (1,138)
                                          -------------- -------------
  Total costs and expenses                      255,427       241,209
                                          -------------- -------------
  Income from operations                         29,841        29,230
 Interest expense                                (1,597)       (3,742)
 Other income--net                               (1,189)          869
                                          -------------- -------------
  Income before income taxes                     27,055        26,357
 Income taxes                                   (10,235)      (10,136)
                                          -------------- -------------
 Net Income                               $      16,820  $     16,221
                                          ============== =============

 Earnings Per Share (aa)
  Net income                              $        0.70  $       0.63
                                          ============== =============
  Average number of shares outstanding           23,873        25,716
                                          ============== =============

 Diluted Earnings Per Share (aa)
  Net income                              $        0.69  $       0.62
                                          ============== =============
  Average number of shares outstanding           24,285        26,162
                                          ============== =============

------------------------------------------
 (aa)Included in the results of operations are the following
      credits/(charges) which may not be indicative of ongoing
      operations (in thousands, except per share data):

                                          Three Months Ended March 31,
                                          ----------------------------
                                               2008          2007
                                          -------------- -------------


     Cost of services provided and goods
      sold
         Unreserved prior year's insurance
          claim                           $        (597) $          -
     Selling, general and administrative
      expenses
         Stock option expense                    (1,391)         (585)
         Adjustments/(expenses) associated
          with OIG investigation                     15           (66)
         Long-term incentive compensation             -        (5,447)
         Other                                        -           467
     Other operating expenses/(income)
         Gain on sale of property                     -         1,138
                                          -------------- -------------
            Pretax impact on earnings            (1,973)       (4,493)
     Income tax benefit on the above                740         1,687
     Income tax credit related to prior
      years                                         322             -
                                          -------------- -------------
            Aftertax impact on earnings   $        (911) $     (2,806)
                                          ============== =============

         CHEMED CORPORATION AND SUBSIDIARY COMPANIES
                 CONSOLIDATED BALANCE SHEET
      (in thousands, except per share data)(unaudited)


                                                       March 31,
                                                 ---------------------
                                                    2008    2007 (bb)
                                                 ---------- ----------
 Assets
  Current assets
        Cash and cash equivalents                $  29,704  $  30,137
        Accounts receivable less allowances         87,004     83,280
        Inventories                                  7,439      6,752
        Current deferred income taxes               14,996     21,595
        Prepaid expenses and other current assets    9,035      9,110
                                                 ---------- ----------
             Total current assets                  148,178    150,874
  Investments of deferred compensation plans held
   in trust                                         29,524     27,736
  Notes receivable                                       -     14,701
  Properties and equipment, at cost less
   accumulated depreciation                         72,910     69,295
  Identifiable intangible assets less accumulated
   amortization                                     64,168     68,205
  Goodwill                                         438,656    435,040
  Other assets                                      15,467     16,194
                                                 ---------- ----------
               Total Assets                      $ 768,903  $ 782,045
                                                 ========== ==========

 Liabilities
  Current liabilities
        Accounts payable                         $  46,450  $  53,341
        Current portion of long-term debt           10,166        164
        Income taxes                                10,100      9,410
        Accrued insurance                           37,600     39,889
        Accrued compensation                        31,195     29,110
        Other current liabilities                   14,474     26,653
                                                 ---------- ----------
             Total current liabilities             149,985    158,567
  Deferred income taxes                              5,465     24,970
  Long-term debt                                   212,070    150,235
  Deferred compensation liabilities                 29,653     27,157
  Other liabilities                                  5,540      5,382
                                                 ---------- ----------
               Total Liabilities                   402,713    366,311
                                                 ---------- ----------
 Stockholders' Equity
  Capital stock                                     29,379     29,036
  Paid-in capital                                  271,296    260,641
  Retained earnings                                293,707    234,914
  Treasury stock, at cost                         (230,594)  (111,293)
  Deferred compensation payable in Company stock     2,402      2,436
                                                 ---------- ----------
               Total Stockholders' Equity          366,190    415,734
                                                 ---------- ----------
               Total Liabilities and
                Stockholders' Equity             $ 768,903  $ 782,045
                                                 ========== ==========

 Book Value Per Share                            $   15.43  $   16.43
                                                 ========== ==========


-------------------------------------------------
(bb) Reclassified to conform to 2008 presentation.

             CHEMED CORPORATION AND SUBSIDIARY COMPANIES
                 CONSOLIDATED STATEMENT OF CASH FLOWS
                      (in thousands)(unaudited)

                                                   Three Months Ended
                                                        March 31,
                                                   -------------------
                                                     2008    2007 (bb)
                                                   --------- ---------
 Cash Flows from Operating Activities
  Net income                                       $ 16,820  $ 16,221
  Adjustments to reconcile net income to net cash
   provided/(used) by operating activities:
      Depreciation and amortization                   6,888     6,030
      Provision for uncollectible accounts
       receivable                                     2,002     2,084
      Provision for deferred income taxes            (1,126)     (345)
      Amortization of debt issuance costs               254       455
      Noncash long-term incentive compensation            -     4,719
      Changes in operating assets and
       liabilities, excluding amounts acquired in
       business combinations:
          Decrease in accounts receivable            12,112     5,275
          Increase in inventories                      (843)     (174)
          Decrease in prepaid expenses and other
           current assets                             1,488       858
          Decrease in accounts payable and other
           current liabilities                       (5,679)   (9,091)
          Increase in income taxes                    6,677     9,538
          Increase in other assets                     (293)   (2,102)
          Increase in other liabilities                 532     2,218
      Excess tax benefit on share-based
       compensation                                    (825)     (611)
      Other sources/(uses)                            1,524      (375)
                                                   --------- ---------
        Net cash provided by operating activities    39,531    34,700
                                                   --------- ---------
 Cash Flows from Investing Activities
  Net proceeds/(uses) from the disposition of
   discontinued operations                            9,556    (3,876)
  Capital expenditures                               (3,891)   (5,764)
  Proceeds from sales of property and equipment          19     2,975
  Other uses                                           (122)     (361)
                                                   --------- ---------
        Net cash provided/(used) by investing
         activities                                   5,562    (7,026)
                                                   --------- ---------
 Cash Flows from Financing Activities
  Purchases of treasury stock                       (16,263)  (24,199)
  Repayment of long-term debt                        (2,595)     (141)
  Dividends paid                                     (1,449)   (1,555)
  Decrease in cash overdrafts payable                  (963)   (1,608)
  Excess tax benefit on share-based compensation        825       611
  Other sources                                          68        81
                                                   --------- ---------
        Net cash used by financing activities       (20,377)  (26,811)
                                                   --------- ---------
 Increase in Cash and Cash Equivalents               24,716       863
 Cash and cash equivalents at beginning of year       4,988    29,274
                                                   --------- ---------
 Cash and cash equivalents at end of period          29,704  $ 30,137
                                                   ========= =========

---------------------------------------------------
(bb)Reclassified to conform to 2008 presentation.

             CHEMED CORPORATION AND SUBSIDIARY COMPANIES
                  CONSOLIDATING STATEMENT OF INCOME
          FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
                      (in thousands)(unaudited)



                                                             Chemed
                            VITAS   Roto-Rooter Corporate Consolidated
                          --------- ----------- --------- ------------
 2008
 ------------------------
 Service revenues and
  sales                   $198,585     $86,683  $      -     $285,268
                          --------- ----------- --------- ------------
 Cost of services
  provided and goods sold  158,803      47,009         -      205,812
 Selling, general and
  administrative expenses
  (a)                       16,147      23,771     2,809       42,727
 Depreciation                3,280       2,082        76        5,438
 Amortization                  996          13       441        1,450
                          --------- ----------- --------- ------------
  Total costs and
   expenses                179,226      72,875     3,326      255,427
                          --------- ----------- --------- ------------
  Income/(loss) from
   operations               19,359      13,808    (3,326)      29,841
 Interest expense              (51)        (83)   (1,463)      (1,597)
 Intercompany interest
  income/(expense)           1,365       1,042    (2,407)           -
 Other income--net              23          28    (1,240)      (1,189)
                          --------- ----------- --------- ------------
  Income/(loss) before
   income taxes             20,696      14,795    (8,436)      27,055
 Income taxes (a)           (7,398)     (5,700)    2,863      (10,235)
                          --------- ----------- --------- ------------
  Net income/(loss)       $ 13,298       9,095    (5,573)      16,820
                          ========= =========== ========= ============


 2007 (f)
 ------------------------
 Service revenues and
  sales                   $184,049     $86,390  $      -     $270,439
                          --------- ----------- --------- ------------
 Cost of services
  provided and goods sold  142,095      46,152         -      188,247
 Selling, general and
  administrative expenses
  (b)                       15,904      23,542     8,624       48,070
 Depreciation                2,538       2,101        76        4,715
 Amortization                  996          15       304        1,315
 Other operating
  expense/(income) (b)           -           -    (1,138)      (1,138)
                          --------- ----------- --------- ------------
  Total costs and
   expenses                161,533      71,810     7,866      241,209
                          --------- ----------- --------- ------------
  Income/(loss) from
   operations               22,516      14,580    (7,866)      29,230
 Interest expense              (36)        (83)   (3,623)      (3,742)
 Intercompany interest
  income/(expense)           1,712       1,156    (2,868)           -
 Other income--net             (88)         50       907          869
                          --------- ----------- --------- ------------
  Income/(loss) before
   income taxes             24,104      15,703   (13,450)      26,357
 Income taxes (b)           (9,117)     (6,197)    5,178      (10,136)
                          --------- ----------- --------- ------------
  Net income/(loss)       $ 14,987     $ 9,506  $ (8,272)    $ 16,221
                          ========= =========== ========= ============

 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 MARCH 31, 2008 AND 2007
                      (in thousands)(unaudited)



                                                             Chemed
                            VITAS   Roto-Rooter Corporate Consolidated
                           -------- ----------- --------- ------------
 2008
 -------------------------
 Net income/(loss)         $13,298     $ 9,095   $(5,573)     $16,820
 Add/(deduct):
    Interest expense            51          83     1,463        1,597
    Income taxes             7,398       5,700    (2,863)      10,235
    Depreciation             3,280       2,082        76        5,438
    Amortization               996          13       441        1,450
                           -------- ----------- --------- ------------
     EBITDA                 25,023      16,973    (6,456)      35,540
 Add/(deduct):
    Unreserved insurance
     claim                       -         597         -          597
    Legal expenses of OIG
     investigation             (15)          -         -          (15)
    Stock option expense         -           -     1,391        1,391
    Advertising cost
     adjustment (c)              -        (570)        -         (570)
    Interest income            (38)        (18)     (281)        (337)
    Intercompany interest
     income/(expense)       (1,365)     (1,042)    2,407            -
                           -------- ----------- --------- ------------
     Adjusted EBITDA       $23,605     $15,940   $(2,939)     $36,606
                           ======== =========== ========= ============

 2007 (f)
 -------------------------
 Net income/(loss)         $14,987     $ 9,506   $(8,272)     $16,221
 Add/(deduct):
    Interest expense            36          83     3,623        3,742
    Income taxes             9,117       6,197    (5,178)      10,136
    Depreciation             2,538       2,101        76        4,715
    Amortization               996          15       304        1,315
                           -------- ----------- --------- ------------
     EBITDA                 27,674      17,902    (9,447)      36,129
 Add/(deduct):
    Long-term incentive
     compensation                -           -     5,447        5,447
    Gain on sale of
     property                    -           -    (1,138)      (1,138)
    Legal expenses of OIG
     investigation              66           -         -           66
    Stock option expense         -           -       585          585
    Advertising cost
     adjustment (c)              -        (297)        -         (297)
    Interest income            (13)        (59)     (695)        (767)
    Intercompany interest
     income/(expense)       (1,712)     (1,156)    2,868            -
    Other                        -           -      (467)        (467)
                           -------- ----------- --------- ------------
     Adjusted EBITDA       $26,015     $16,390   $(2,847)     $39,558
                           ======== =========== ========= ============

 The "Footnotes to Financial Statements" are integral parts of this
  financial information.

             CHEMED CORPORATION AND SUBSIDIARY COMPANIES
                RECONCILIATION OF ADJUSTED NET INCOME
          FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
           (in thousands, except per share data)(unaudited)


                                                       2008     2007
                                                     -------- --------
 Net income as reported                              $16,820  $16,221

 Add/(deduct):
   Aftertax cost of long-term incentive compensation       -    3,414
   Aftertax cost of legal expenses/(adjustments) of
    OIG investigation                                     (9)      41
   Aftertax stock option expense                         884      371
   Aftertax gain on sale of property                       -     (724)
   Aftertax other                                          -     (296)
   Income tax credit related to prior years             (322)       -
   Aftertax unreserved insurance cost                    358        -
                                                     -------- --------

 Adjusted Net Income                                 $17,731  $19,027
                                                     ======== ========


 Earnings Per Share As Reported
   Net Income                                        $  0.70  $  0.63
                                                     ======== ========
   Average number of shares outstanding               23,873   25,716
                                                     ======== ========
 Diluted Earnings Per Share As Reported
   Net Income                                        $  0.69  $  0.62
                                                     ======== ========
   Average number of shares outstanding               24,285   26,162
                                                     ======== ========


 Adjusted Earnings Per Share
   Net Income                                        $  0.74  $  0.74
                                                     ======== ========
   Average number of shares outstanding               23,873   25,716
                                                     ======== ========
 Adjusted Diluted Earnings Per Share
   Net Income                                        $  0.73  $  0.73
                                                     ======== ========
   Average number of shares outstanding               24,285   26,162
                                                     ======== ========

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 MONTHS ENDED MARCH 31, 2008 AND 2007
                             (unaudited)

                                                      2008     2007
                                                    -------- --------
OPERATING STATISTICS
 Net revenue ($000) (d)
  Homecare                                          $141,617 $131,548
  Inpatient                                           25,971   23,462
  Continuous care                                     30,997   28,567
                                                    -------- --------
   Total before Medicare cap allowance               198,585 $183,577
  Medicare cap allowance                                   -      472
                                                    -------- --------
   Total                                            $198,585 $184,049
                                                    ======== ========
 Net revenue as a percent of total before Medicare
  cap allowance
  Homecare                                              71.3%    71.6%
  Inpatient                                             13.1     12.8
  Continuous care                                       15.6     15.6
                                                    -------- --------
   Total before Medicare cap allowance                 100.0    100.0
  Medicare cap allowance                                   -      0.3
                                                    -------- --------
   Total                                               100.0%   100.3%
                                                    ======== ========
 Average daily census ("ADC") (days)
  Homecare                                             7,154    6,786
  Nursing home                                         3,548    3,574
                                                    -------- --------
   Routine homecare                                   10,702   10,360
  Inpatient                                              453      426
  Continuous care                                        536      523
                                                    -------- --------
   Total                                              11,691   11,309
                                                    ======== ========

 Total Admissions                                     15,212   14,110
 Total Discharges                                     14,992   14,051
 Average length of stay (days)                          71.5     76.9
 Median length of stay (days)                           13.0     13.0
 ADC by major diagnosis
  Neurological                                          32.5%    33.3%
  Cancer                                                20.0     19.7
  Cardio                                                13.0     14.6
  Respiratory                                            6.9      7.0
  Other                                                 27.6     25.4
                                                    -------- --------
   Total                                               100.0%   100.0%
                                                    ======== ========
 Admissions by major diagnosis
  Neurological                                          19.0%    18.9%
  Cancer                                                33.4     33.6
  Cardio                                                11.9     13.3
  Respiratory                                            8.5      7.8
  Other                                                 27.2     26.4
                                                    -------- --------
   Total                                               100.0%   100.0%
                                                    ======== ========
 Direct patient care margins (e)
  Routine homecare                                      49.5%    50.8%
  Inpatient                                             19.3     20.1
  Continuous care                                       16.5     20.0
 Homecare margin drivers (dollars per patient day)
  Labor costs                                       $  52.26 $  49.12
  Drug costs                                            7.49     8.18
  Home medical equipment                                6.17     5.75
  Medical supplies                                      2.57     2.17
 Inpatient margin drivers (dollars per patient day)
  Labor costs                                       $ 266.18 $ 252.42
 Continuous care margin drivers (dollars per
  patient day)
  Labor costs                                       $ 509.62 $ 464.54
 Bad debt expense as a percent of revenues               0.9%     0.9%
  Accounts receivable -- days of revenue
   outstanding                                          45.5     38.1

 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 ENDED MARCH 31, 2008 AND 2007
                             (unaudited)


(a) Included in the results of operations for the three months ended
     March 31, 2008 are the following significant credits/(charges)
     which may not be indicative of ongoing operations (in thousands):

                        VITAS  Roto-Rooter   Corporate    Consolidated
                       ------ ------------ ------------- -------------

   Cost of services
    provided and goods
    sold
    Unreserved prior
     year's insurance
     claim              $   -     $  (597)      $      -      $  (597)
   Selling, general and
    administrative
    expenses
    Stock option
     expense                -            -       (1,391)       (1,391)
    Adjustments/
     (expenses)
     associated with
     OIG investigation     15            -             -            15
                       ------ ------------ ------------- -------------
       Pretax impact on
        earnings           15        (597)       (1,391)       (1,973)
   Income tax
    benefit/(charge) on
    the above             (6)          239           507           740
   Income tax credit
    related to prior
    years                 322            -             -           322
                       ------ ------------ ------------- -------------
       Aftertax impact
        on earnings     $ 331     $  (358)      $  (884)      $  (911)
                       ====== ============ ============= =============

(b)Included in the results of operations for the three months ended
    March 31, 2007 are the following significant credits/(charges)
    which may not be indicative of ongoing operations (in thousands):

                        VITAS   Corporate   Consolidated
                       ------ ------------ -------------
   Selling, general and
    administrative
    expenses
    Long-term incentive
     compensation       $   -     $(5,447)      $(5,447)
    Costs associated
     with OIG
     investigation       (66)            -          (66)
    Stock option
     expense                -        (585)         (585)
    Other                   -          467           467
   Other operating
    expenses/(income)
    Gain on sale of
     property               -        1,138         1,138
                       ------ ------------ -------------
       Pretax impact on
        earnings         (66)      (4,427)       (4,493)
   Income tax
    benefit/(charge) on
    the above              25        1,662         1,687
                       ------ ------------ -------------
       Aftertax impact
        on earnings     $(41)     $(2,765)      $(2,806)
                       ====== ============ =============

(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 first quarters of 2008 and 2007, GAAP advertising
    expense for Roto-Rooter totaled $5,456,000 and $5,193,000,
    respectively. If the expense of the telephone directories were
    spread over the periods they are in circulation, advertising
    expense for the first quarters of 2008 and 2007 would total
    $6,026,000 and $5,490,000, respectively.

(d)VITAS has 5 large (greater than 450 ADC), 17 medium (greater than
    200 but less than 450 ADC) and 21 small (less than 200 ADC)
    hospice programs. There is one program continuing at March 31,
    2008 with Medicare cap cushion of less than 10% for the 2008
    measurement period.

(e)Amounts exclude indirect patient care and administrative costs, as
    well as Medicare Cap billing limitation.

(f)Reclassified to conform to 2008 presentation.

CONTACT: Chemed Corporation
David P. Williams, 513-762-6901

SOURCE: Chemed Corporation

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Copyright © 2005, Chemed Corporation. All rights reserved.
Page last modified: 04/18/05