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Chemed Reports Fourth-Quarter 2007 Results

CINCINNATI--(BUSINESS WIRE)--Feb. 21, 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 fourth quarter ended December 31, 2007, versus the comparable prior-year period, as follows:

Consolidated operating results from Continuing Operations:

  • Revenue increased 5.1% to $286 million


  • Diluted EPS from Continuing Operations of $.83


  • Diluted EPS from Continuing Operations, excluding special items, of $.92


  • Full-year diluted EPS from Continuing Operations, excluding special items, of $3.16

VITAS segment operating results from Continuing Operations:

  • Net Patient Revenue of $197 million, up 5.9%


  • Average Daily Census (ADC) of 11,660, up 4.3%


  • Admissions of 13,594, an increase of 2.3%


  • Average Length of Stay in the quarter of 75.7 days


  • Net income of $16.8 million


  • Adjusted EBITDA of $28.4 million

Roto-Rooter segment operating results:

  • Revenue of $89 million, an increase of 3.3%


  • Job count of 204,875


  • Net Income of $9.7 million


  • Adjusted EBITDA of $19.0 million

VITAS

VITAS generated 13,594 admissions in the quarter, which represents an increase of 2.3% over the prior year. Discharges totaled 13,700, an increase of 3.8%, and ADC in the quarter increased 4.3%, to 11,660. VITAS' Average Length of Stay (ALOS) for patients discharged in the quarter was 75.7 days. This compares to an ALOS of 76.7 days in the third quarter of 2007 and is equal to the ALOS in the fourth quarter of 2006. Median Length of Stay (MLOS) was 14 days.

Net revenue for VITAS was $197 million in the fourth quarter of 2007, which is an increase of 5.9% over the prior-year period. This revenue growth was the result of increased ADC of 4.3%, a Medicare price increase of approximately 3%, partially offset by the continued shift in revenue mix from high acuity care to routine home care.

In the fourth quarter of 2006, high acuity days-of-care was 8.68% of total days-of-care. High acuity days-of-care averaged 8.39% in the first quarter of 2007, 8.04% in the second quarter, 8.01% in the third quarter and 7.97% in the fourth quarter of 2007.

This mix shift from high acuity care to routine home care negatively impacted revenue growth by $3.8 million in the quarter. Routine home care reimbursement and high acuity care averaged $144.97 and $632.49, respectively, per patient per day in the fourth quarter of 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 mix shift had minimal impact on gross profit and net income.

VITAS did not have any billing restrictions related to Medicare Cap for its fourth-quarter 2007 operating activity. As of December 31, 2007, VITAS has not accrued any Medicare billing restrictions for the 2008 or 2007 Cap years.

VITAS measures its Medicare Cap cushion, or Medicare Cap liability, on a program-by-program basis. Of VITAS' 37 unique Medicare provider numbers, 29 provider numbers, or 78%, have a Cap cushion greater than 20% on a trailing twelve-month basis, four provider numbers are between 15% and 20%, one is between 10% and 15%, and three provider numbers have Cap cushion ranging between 4% and 9%. VITAS had aggregate Cap cushion in excess of $219 million on a trailing twelve-month basis.

Gross margin in the fourth quarter of 2007 was 23.2%. This is a 70 basis point improvement over the prior-year quarter. Selling, general and administrative expense was $17.3 million in the fourth quarter of 2007, which is an increase of 5.2% over the prior year. Adjusted EBITDA totaled $28.4 million, an increase of 11% over the prior year and equates to an adjusted EBITDA margin of 14.4%, an increase of 63 basis points over the fourth quarter of 2006.

Roto-Rooter

Roto-Rooter's plumbing and drain cleaning business generated sales of $89 million for the fourth quarter of 2007, 3.3% higher than the $86 million reported in the comparable prior-year quarter. Net income for the quarter was $9.7 million. The fourth quarter net income includes a $1.9 million pretax and $1.2 million aftertax charge for a tentative settlement of a class action lawsuit that alleged wage and hour violations in California. This suit claimed Roto-Rooter failed to provide meal and break time as well as credit for work time beginning from the first call to dispatch rather than arrival at the day's first assignment. Excluding this tentative settlement, net income in the fourth quarter of 2007 increased 12%. Adjusted EBITDA in the fourth quarter of 2007 totaled $19.0 million, an increase of 10.5% over the fourth quarter of 2006 and equated to an adjusted EBITDA margin of 21.5%, an increase of 140 basis points over the prior-year period.

Job count in the fourth quarter of 2007 declined 2.8% when compared to the prior-year period, and increased 3.3% sequentially. Total residential jobs declined 0.8% and consisted of residential plumbing jobs increasing 4.5% and residential drain cleaning jobs declining 3.1%, when compared to the fourth quarter of 2006. Residential jobs represent approximately 70% of total job count.

Total commercial jobs declined 7.3% with commercial plumbing job count declining 1.6% and commercial drain cleaning decreasing 10.0%, over the prior-year quarter. A significant portion of the commercial job count decline is attributed to the elimination of low revenue, low margin commercial business. This mix shift has favorably impacted the average revenue per commercial job, which increased 8.0% in the fourth quarter of 2007 and has increased 10.6% on a year-to-date basis.

Guidance for 2008

VITAS is estimated to generate full-year revenue growth from continuing operations, prior to Medicare Cap, of 7.0% to 8.0%. Admissions are estimated to increase 4.0% to 5.0% and adjusted EBITDA margin, prior to Medicare Cap, of 14.2% to 15.0%. 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 $5.0 million.

Roto-Rooter is estimated to generate a 6.0% to 8.0% increase in revenue in 2008, job count growth from flat to 1.0% and adjusted EBITDA margin in the range of 19.5% to 20.5%.

Based upon these factors, an effective tax rate of 38.5% and an average diluted share count for 2008 of 24.55 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 $3.60 to $3.70.

Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Friday, February 22, 2008, to discuss the company's quarterly results and provide an update on its business. The dial-in number for the conference call is (800) 265-0241 for U.S. and Canadian participants and (617) 847-8704 for international participants. The participant passcode is 41680742. 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 32730528. 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 11,500 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

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

This press release contains information about Chemed's EBITDA 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)

                          For the Three Months      For the Years
                                 Ended                  Ended
                              December 31,          December 31,
                          -------------------- -----------------------
                            2007       2006       2007        2006
                          --------- ---------- ----------- -----------
 Continuing Operations
     Service revenues and
      sales               $285,729  $271,903   $1,100,058  $1,018,587
                          --------- ---------- ----------- -----------
     Cost of services
      provided and goods
      sold                 197,221   189,586      767,066     730,123
     Selling, general and
      administrative
      expenses (aa)         47,374    44,969      184,060     161,183
     Depreciation            5,221     4,390       20,118      16,775
     Amortization            1,369     1,287        5,270       5,255
      Other operating
       expenses--net (aa)    1,927         -          789         272
                          --------- ---------- ----------- -----------
       Total costs and
        expenses           253,112   240,232      977,303     913,608
                          --------- ---------- ----------- -----------
       Income from
        operations          32,617    31,671      122,755     104,979
     Interest expense       (1,587)   (3,742)     (11,244)    (17,468)
     Loss on
      extinguishment of
      debt (aa)                  -         -      (13,798)       (430)
     Loss from impairment
      of investment (aa)         -         -            -      (1,445)
     Other income--net       1,057     1,914        4,125       4,648
                          --------- ---------- ----------- -----------
       Income before
        income taxes        32,087    29,843      101,838      90,284
     Income taxes (aa)     (11,882)  (10,584)     (39,063)    (32,562)
                          --------- ---------- ----------- -----------
       Income from
        continuing
        operations          20,205    19,259       62,775      57,722
 Discontinued Operations
  (bb)                           -    (1,626)       1,201      (7,071)
                          --------- ---------- ----------- -----------
 Net Income               $ 20,205  $ 17,633   $   63,976  $   50,651
                          ========= ========== =========== ===========

Earnings Per Share
     Income from
      continuing
      operations          $   0.84  $   0.74   $     2.56  $     2.21
                          ========= ========== =========== ===========
     Net Income           $   0.84  $   0.68   $     2.61  $     1.94
                          ========= ========== =========== ===========
     Average number of
      shares outstanding    23,959    26,030       24,520      26,118
                          ========= ========== =========== ===========
 Diluted Earnings Per
  Share
     Income from
      continuing
      operations          $   0.83  $   0.73   $     2.50  $     2.16
                          ========= ========== =========== ===========
     Net Income           $   0.83  $   0.67   $     2.55  $     1.90
                          ========= ========== =========== ===========
     Average number of
      shares outstanding    24,460    26,411       25,077      26,669
                          ========= ========== =========== ===========

--------------------------

 (aa) Included in the consolidated statement of income are the
       following significant credits/(charges) which may not be
       indicative of ongoing operations (in thousands):

                          For the Three Months      For the Years
                                 Ended                  Ended
                              December 31,          December 31,
                          -------------------- -----------------------
                            2007       2006       2007        2006
                          --------- ---------- ----------- -----------
     Continuing
      Operations
      Selling, general
       and administrative
       expenses
       Stock option
        expense           $ (1,591) $   (596)  $   (4,665) $   (1,211)
       Costs associated
        with OIG
        investigation          (39)     (250)        (227)     (1,068)
       Long-term
        incentive
        compensation             -         -       (7,067)          -
       Other                     -       467          467         467
      Other operating
       expenses -- net
        Costs related to
         litigation
         settlements        (1,927)        -       (1,927)       (272)
        Gain on sale of
         property                -         -        1,138           -
      Loss from
       impairment of
       investment                -         -            -      (1,445)
      Loss on
       extinguishment of
       debt                      -         -      (13,798)       (430)
                          --------- ---------- ----------- -----------
       Pretax impact on
        earnings            (3,557)     (379)     (26,079)     (3,959)
      Income tax benefit
       on the above          1,355       142        9,623       1,464
      Income tax benefit
       from finalizing
       prior years'
       returns                   -       324            -       2,115
                          --------- ---------- ----------- -----------
       Aftertax impact on
        continuing
        operations        $ (2,202) $     87   $  (16,456) $     (380)
                          ========= ========== =========== ===========

 (bb) Discontinued operations include (in thousands):

                          For the Three Months      For the Years
                                 Ended                  Ended
                              December 31,          December 31,
                          -------------------- -----------------------
                              2007      2006         2007     2006
                          --------- ---------- ----------- -----------
      VITAS' Phoenix
       operation,
       discontinued in
       2006               $      -  $ (1,653)  $    1,201  $   (4,872)
      Patient Care,
       discontinued in
       2002                      -        53            -      (1,426)
      Service America,
       discontinued in
       2004                      -       (25)           -         (32)
      Adjustments related
       to other
       discontinued
       operations                -        (1)           -        (741)
                          --------- ---------- ----------- -----------
       Total discontinued
        operations        $      -  $ (1,626)  $    1,201  $   (7,071)
                          ========= ========== =========== ===========

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


                                                      December 31,
                                                  --------------------
                                                     2007      2006
                                                  ---------- ---------
 Assets
 Current assets
          Cash and cash equivalents               $   4,988  $ 29,274
          Accounts receivable less allowances       103,113    93,086
          Inventories                                 6,596     6,578
          Current deferred income taxes              14,212    17,789
          Current assets of discontinued
           operations                                     -     5,418
          Prepaid expenses and other current
           assets                                    10,496     9,968
                                                  ---------- ---------
            Total current assets                    139,405   162,113
  Investments of deferred compensation plans held
   in trust                                          29,417    25,713
  Notes receivable                                    9,701    14,701
  Properties and equipment, at cost less
   accumulated depreciation                          74,513    70,140
  Identifiable intangible assets less accumulated
   amortization                                      65,177    69,215
  Goodwill                                          438,689   435,050
  Noncurrent assets of discontinued operations            -       287
  Other assets                                       15,411    16,068
                                                  ---------- ---------
               Total Assets                       $ 772,313  $793,287
                                                  ========== =========


Liabilities
  Current liabilities
          Accounts payable                        $  48,111  $ 49,744
          Current portion of long-term debt          10,162       209
          Income taxes                                4,221     6,765
          Accrued insurance                          36,337    38,457
          Accrued compensation                       40,072    35,990
          Current liabilities of discontinued
           operations                                     -    12,215
          Other current liabilities                  13,929    22,684
                                                  ---------- ---------
            Total current liabilities               152,832   166,064
  Deferred income taxes                               5,802    26,301
  Long-term debt                                    214,669   150,331
  Deferred compensation liabilities                  29,149    25,514
  Other liabilities                                   5,512     3,716
                                                  ---------- ---------
               Total Liabilities                    407,964   371,926
                                                  ---------- ---------
Stockholders' Equity
  Capital stock                                      29,261    28,850
  Paid-in capital                                   267,312   252,639
  Retained earnings                                 278,336   215,517
  Treasury stock, at cost                          (213,041)  (78,064)
  Deferred compensation payable in Company stock      2,481     2,419
                                                  ---------- ---------
               Total Stockholders' Equity           364,349   421,361
                                                  ---------- ---------
               Total Liabilities and
                Stockholders' Equity              $ 772,313  $793,287
                                                  ========== =========

 Book Value Per Share                             $   15.21  $  16.32
                                                  ========== =========

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

                                                  For the Years Ended
                                                      December 31,
                                                  --------------------
                                                     2007      2006
                                                  ---------- ---------
Cash Flows from Operating Activities
 Net income                                       $  63,976  $ 50,651
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                    25,388    22,030
    Provision for uncollectible accounts
     receivable                                       8,373     8,169
    Provision for deferred income taxes               8,113     7,408
    Write off unamortized debt issuance costs         7,235       430
   Noncash portion of long-term incentive
    compensation                                      6,154         -
    Discontinued operations                          (1,201)    7,071
    Amortization of debt issuance costs               1,186     1,774
    Loss on impairment of investment                      -     1,445
    Noncash long-term incentive compensation              -         -
    Changes in operating assets and liabilities,
     excluding amounts acquired in business
     combinations:
          Increase in accounts receivable           (18,416)  (12,527)
          Decrease/(increase) in inventories            (18)      (78)
          Decrease/(increase) in prepaid expenses
           and other current assets                    (549)   (2,188)
          Increase/(decrease) in accounts payable
           and other current liabilities             (8,299)  (13,017)
          Increase in income taxes                    6,321    18,726
          Increase in other assets                   (3,655)     (722)
          Increase/(decrease) in other
           liabilities                                4,426     3,788
    Excess tax benefit on share-based
     compensation                                    (3,091)   (5,600)
    Noncash expense of internally financed ESOPs          -         -
    Other sources/(uses)                              3,641     2,109
                                                  ---------- ---------
       Net cash provided by continuing operations    99,584    89,469
       Net cash provided/(used) by discontinued
        operations                                        -     9,120
                                                  ---------- ---------
       Net cash provided by operating activities     99,584    98,589
                                                  ---------- ---------
Cash Flows from Investing Activities
  Capital expenditures                              (26,640)  (21,987)
  Net uses from disposals of discontinued
   operations                                        (5,402)     (922)
  Proceeds from sales of property and equipment       3,104       347
  Business combinations, net of cash acquired        (1,079)   (4,145)
  Other uses                                         (1,701)   (1,025)
                                                   ---------  --------
    Net cash used by investing activities           (31,718)  (27,732)
                                                  ---------- ---------
Cash Flows from Financing Activities
  Proceeds from issuance of long-term debt          300,000         -
  Repayment of long-term debt                      (225,709)  (84,563)
  Purchases of treasury stock                      (131,704)  (19,885)
 Purchase of note hedges                            (55,100)        -
 Proceeds from issuance of warrants                  27,614         -
  Excess tax benefit on share-based compensation      3,091     5,600
  Debt issuance costs                                (6,949)     (154)
  Dividends paid                                     (5,888)   (6,322)
  Proceeds from exercise of stock options             2,467     3,861
  Increase in cash overdraft payable                   (919)    2,571
 Other sources                                          945       176
                                                  ---------- ---------
    Net cash used by financing activities           (92,152)  (98,716)
                                                  ---------- ---------
Decrease in Cash and Cash Equivalents               (24,286)  (27,859)
Cash and cash equivalents at beginning of year       29,274    57,133
                                                  ---------- ---------
Cash and cash equivalents at end of year          $   4,988  $ 29,274
                                                  ========== =========

             CHEMED CORPORATION AND SUBSIDIARY COMPANIES
                  CONSOLIDATING STATEMENT OF INCOME
        FOR THE THREE MONTHS ENDED DECEMBER 31, 2007 AND 2006
                      (in thousands)(unaudited)


                                                             Chemed
                            VITAS   Roto-Rooter Corporate Consolidated
                          --------- ----------- --------- ------------
2007
-------------------------
 Service revenues and
  sales                   $197,202  $   88,527  $      -  $   285,729
                          --------- ----------- --------- ------------
 Cost of services
  provided and goods sold  151,476      45,745         -      197,221
 Selling, general and
  administrative expenses
  (a)                       17,288      25,484     4,602       47,374
 Depreciation                3,069       2,075        77        5,221
 Amortization                  996          13       360        1,369
 Other operating expense
  (a)                            -       1,927         -        1,927
                          --------- ----------- --------- ------------
        Total costs and
         expenses          172,829      75,244     5,039      253,112
                          --------- ----------- --------- ------------
        Income/(loss)
         from operations    24,373      13,283    (5,039)      32,617
 Interest expense              (43)          1    (1,545)      (1,587)
 Intercompany interest
  income/(expense)           1,902       1,317    (3,219)           -
 Other income--net              23         194       840        1,057
                          --------- ----------- --------- ------------
        Income/(loss)
         before income
         taxes              26,255      14,795    (8,963)      32,087
 Income taxes (a)           (9,484)     (5,067)    2,669      (11,882)
                          --------- ----------- --------- ------------
        Net income/(loss) $ 16,771  $    9,728  $ (6,294) $    20,205
                          ========= =========== ========= ============

2006
-------------------------
 Service revenues and
  sales                   $186,219  $   85,684  $      -  $   271,903
                          --------- ----------- --------- ------------
 Cost of services
  provided and goods sold  144,347      45,239         -      189,586
 Selling, general and
  administrative expenses
  (b)                       16,426      25,345     3,198       44,969
 Depreciation                2,421       1,882        87        4,390
 Amortization                  964          16       307        1,287
                          --------- ----------- --------- ------------
        Total costs and
         expenses          164,158      72,482     3,592      240,232
                          --------- ----------- --------- ------------
        Income/(loss)
         from operations    22,061      13,202    (3,592)      31,671
 Interest expense              (35)        (87)   (3,620)      (3,742)
 Intercompany interest
  income/(expense)           1,583       1,108    (2,691)           -
 Other income--net              (7)        721     1,200        1,914
                          --------- ----------- --------- ------------
        Income/(loss)
         before income
         taxes              23,602      14,944    (8,703)      29,843
 Income taxes (b)           (8,457)     (5,203)    3,076      (10,584)
                          --------- ----------- --------- ------------
 Income/(loss) from
  continuing operations     15,145       9,741    (5,627)      19,259
 Discontinued operations    (1,653)          -        27       (1,626)
                          --------- ----------- --------- ------------
        Net income/(loss) $ 13,492  $    9,741  $ (5,600) $    17,633
                          ========= =========== ========= ============

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, 2007 AND 2006
                      (in thousands)(unaudited)


                                                             Chemed
                            VITAS   Roto-Rooter Corporate Consolidated
                          --------- ----------- --------- ------------
2007
-------------------------
 Service revenues and
  sales                   $755,426  $  344,632  $      -  $ 1,100,058
                          --------- ----------- --------- ------------
 Cost of services
  provided and goods sold  586,435     180,631         -      767,066
 Selling, general and
  administrative expenses
  (a)                       65,103      96,266    22,691      184,060
 Depreciation               11,446       8,365       307       20,118
 Amortization                3,984          54     1,232        5,270
 Other operating
  expense/(income) (a)           -       1,927    (1,138)         789
                          --------- ----------- --------- ------------
      Total costs and
       expenses            666,968     287,243    23,092      977,303
                          --------- ----------- --------- ------------
      Income/(loss) from
       operations           88,458      57,389   (23,092)     122,755
 Interest expense             (146)       (495)  (10,603)     (11,244)
 Intercompany interest
  income/(expense)           7,254       4,993   (12,247)           -
 Loss on extinguishment
  of debt (a)                    -           -   (13,798)     (13,798)
 Other income--net             (11)        820     3,316        4,125
                          --------- ----------- --------- ------------
      Income/(loss)
       before income
       taxes                95,555      62,707   (56,424)     101,838
 Income taxes (a)          (35,722)    (23,856)   20,515      (39,063)
                          --------- ----------- --------- ------------
 Income/(loss) from
  continuing operations     59,833      38,851   (35,909)      62,775
 Discontinued operations     1,201           -         -        1,201
                          --------- ----------- --------- ------------
      Net income/(loss)   $ 61,034  $   38,851  $(35,909) $    63,976
                          ========= =========== ========= ============

2006
-------------------------
 Service revenues and
  sales                   $699,092  $  319,495  $      -  $ 1,018,587
                          --------- ----------- --------- ------------
 Cost of services
  provided and goods sold  557,260     172,863         -      730,123
 Selling, general and
  administrative expenses
  (b)                       56,961      92,495    11,727      161,183
 Depreciation                8,753       7,665       357       16,775
 Amortization                3,916          72     1,267        5,255
 Other operating expense
  (b)                          272           -         -          272
                          --------- ----------- --------- ------------
      Total costs and
       expenses            627,162     273,095    13,351      913,608
                          --------- ----------- --------- ------------
      Income/(loss) from
       operations           71,930      46,400   (13,351)     104,979
 Interest expense             (191)       (368)  (16,909)     (17,468)
 Intercompany interest
  income/(expense)           5,329       3,997    (9,326)           -
 Loss on extinguishment
  of debt (b)                    -           -      (430)        (430)
 Loss from impairment of
  investment (b)                 -           -    (1,445)      (1,445)
 Other income--net              55       1,173     3,420        4,648
                          --------- ----------- --------- ------------
      Income/(loss)
       before income
       taxes                77,123      51,202   (38,041)      90,284
 Income taxes (b)          (28,705)    (18,748)   14,891      (32,562)
                          --------- ----------- --------- ------------
 Income/(loss) from
  continuing operations     48,418      32,454   (23,150)      57,722
 Discontinued operations    (4,872)          -    (2,199)      (7,071)
                          --------- ----------- --------- ------------
      Net income/(loss)   $ 43,546  $   32,454  $(25,349) $    50,651
                          ========= =========== ========= ============

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, 2007 AND 2006
                      (in thousands)(unaudited)


                                                             Chemed
                            VITAS   Roto-Rooter Corporate Consolidated
                           -------- ----------- --------- ------------
2007
--------------------------
 Net income/(loss)         $16,771     $ 9,728   $(6,294)     $20,205
 Add/(deduct):
         Interest expense       43          (1)    1,545        1,587
         Income taxes        9,484       5,067    (2,669)      11,882
         Depreciation        3,069       2,075        77        5,221
         Amortization          996          13       360        1,369
                           -------- ----------- --------- ------------
               EBITDA       30,363      16,882    (6,981)      40,264
 Add/(deduct):
         Lawsuit
          settlement             -       1,927         -        1,927
         Stock option
          expense                -           -     1,591        1,591
         Legal expenses of
          OIG
          investigation         39           -         -           39
         Advertising cost
          adjustment (c)         -       1,532         -        1,532
         Interest income       (61)        (19)     (616)        (696)
         Intercompany
          interest
          (income)/expense  (1,902)     (1,317)    3,219            -
                           -------- ----------- --------- ------------
               Adjusted
                EBITDA     $28,439     $19,005   $(2,787)     $44,657
                           ======== =========== ========= ============

2006
--------------------------
 Net income/(loss)         $13,492     $ 9,741   $(5,600)     $17,633
 Add/(deduct):
         Discontinued
          operations         1,653           -       (27)       1,626
         Interest expense       35          87     3,620        3,742
         Income taxes        8,457       5,203    (3,076)      10,584
         Depreciation        2,421       1,882        87        4,390
         Amortization          964          16       307        1,287
                           -------- ----------- --------- ------------
               EBITDA       27,022      16,929    (4,689)      39,262
 Add/(deduct):
         Stock option
          expense                -           -       596          596
         Legal expenses of
          OIG
          investigation        250           -         -          250
         Other                   -           -      (467)        (467)
         Advertising cost
          adjustment (c)         -       1,395         -        1,395
         Interest income       (14)        (16)     (684)        (714)
         Intercompany
          interest
          (income)/expense  (1,583)     (1,108)    2,691            -
                           -------- ----------- --------- ------------
               Adjusted
                EBITDA     $25,675     $17,200   $(2,553)     $40,322
                           ======== =========== ========= ============

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, 2007 AND 2006
                      (in thousands)(unaudited)


                                                             Chemed
                            VITAS   Roto-Rooter Corporate Consolidated
                          --------- ----------- --------- ------------
2007
-------------------------
 Net income/(loss)        $ 61,034     $38,851  $(35,909)    $ 63,976
 Add/(deduct):
      Discontinued
       operations           (1,201)          -         -       (1,201)
      Interest expense         146         495    10,603       11,244
      Income taxes          35,722      23,856   (20,515)      39,063
      Depreciation          11,446       8,365       307       20,118
      Amortization           3,984          54     1,232        5,270
                          --------- ----------- --------- ------------
               EBITDA      111,131      71,621   (44,282)     138,470
 Add/(deduct):
      Long-term incentive
       compensation              -           -     7,067        7,067
      Lawsuit settlement         -       1,927         -        1,927
      Stock option
       expense                   -           -     4,665        4,665
      Legal expenses of
       OIG investigation       227           -         -          227
      Gain on sale of
       property                  -           -    (1,138)      (1,138)
      Other                      -           -      (467)        (467)
      Loss on
       extinguishment of
       debt                      -           -    13,798       13,798
      Advertising cost
       adjustment (c)            -         601         -          601
      Interest income         (151)       (377)   (2,776)      (3,304)
      Intercompany
       interest
       (income)/expense     (7,254)     (4,993)   12,247            -
                          --------- ----------- --------- ------------
               Adjusted
                EBITDA    $103,953     $68,779  $(10,886)    $161,846
                          ========= =========== ========= ============

2006
-------------------------
 Net income/(loss)        $ 43,546     $32,454  $(25,349)    $ 50,651
 Add/(deduct):
      Discontinued
       operations            4,872           -     2,199        7,071
      Interest expense         191         368    16,909       17,468
      Income taxes          28,705      18,748   (14,891)      32,562
      Depreciation           8,753       7,665       357       16,775
      Amortization           3,916          72     1,267        5,255
                          --------- ----------- --------- ------------
               EBITDA       89,983      59,307   (19,508)     129,782
 Add/(deduct):
      Loss from
       impairment of
       investment                -           -     1,445        1,445
      Lawsuit settlement       272           -         -          272
      Stock option
       expense                   -           -     1,211        1,211
      Legal expenses of
       OIG investigation     1,068           -         -        1,068
      Other                      -           -      (467)        (467)
      Loss on
       extinguishment of
       debt                      -           -       430          430
      Advertising cost
       adjustment (c)            -         323         -          323
      Interest income         (114)        (85)   (2,492)      (2,691)
      Intercompany
       interest
       (income)/expense     (5,329)     (3,997)    9,326            -
                          --------- ----------- --------- ------------
               Adjusted
                EBITDA    $ 85,880     $55,548  $(10,055)    $131,373
                          ========= =========== ========= ============

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

             CHEMED CORPORATION AND SUBSIDIARY COMPANIES
                RECONCILIATION OF ADJUSTED NET INCOME
            FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
           (in thousands, except per share data)(unaudited)


                                  Three Months Ended    Year Ended
                                     December 31,      December 31,
                                  ------------------ -----------------
                                    2007      2006     2007     2006
                                  --------- -------- -------- --------
 Net income as reported           $  20,205 $17,633  $63,976  $50,651

 Add/(deduct):
   Discontinued operations                -   1,626   (1,201)   7,071
   Aftertax loss on impairment of
    investment                            -       -        -      918
   Aftertax costs related to
    litigation settlements            1,168       -    1,168      169
   Prior-period tax adjustments           -    (324)       -   (2,115)
   Aftertax cost of long-term
    incentive compensation                -       -    4,427        -
   Aftertax stock option expense      1,010     378    2,962      769
   Aftertax cost of legal
    expenses of OIG investigation        24     155      141      662
   Aftertax other                         -    (296)    (296)    (296)
   Aftertax gain on sale of
    property                     .        -       -     (724)
   Aftertax cost of loss on
    extinguishment of debt                -       -    8,778      273
                                  --------- -------- -------- --------

 Adjusted income from continuing
  operations                      $  22,407 $19,172  $79,231  $58,102
                                  ========= ======== ======== ========


 Earnings Per Share As Reported
   Net income                     $    0.84 $  0.68  $  2.61  $  1.94
                                  ========= ======== ======== ========
   Average number of shares
    outstanding                      23,959  26,030   24,520   26,118
                                  ========= ======== ======== ========
 Diluted Earnings Per Share As
  Reported
   Net income                     $    0.83 $  0.67  $  2.55  $  1.90
                                  ========= ======== ======== ========
   Average number of shares
    outstanding                      24,460  26,411   25,077   26,669
                                  ========= ======== ======== ========


 Adjusted Earnings Per Share
   Income from continuing
    operations                    $    0.94 $  0.74  $  3.23  $  2.22
                                  ========= ======== ======== ========
   Average number of shares
    outstanding                      23,959  26,030   24,520   26,118
                                  ========= ======== ======== ========
 Adjusted Diluted Earnings Per
  Share
   Income from continuing
    operations                    $    0.92 $  0.73  $  3.16  $  2.18
                                  ========= ======== ======== ========
   Average number of shares
    outstanding                      24,460  26,411   25,077   26,669
                                  ========= ======== ======== ========

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

             CHEMED CORPORATION AND SUBSIDIARY COMPANIES
                OPERATING STATISTICS FOR VITAS SEGMENT
            FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
                             (unaudited)


                              Three Months Ended      Years Ended
                                 December 31,        December 31,
                              ------------------- -------------------
                                2007      2006      2007       2006
                              --------  --------- --------- ----------
OPERATING STATISTICS
Net revenue ($000) (d)
 Homecare                     $143,125  $132,082  $546,872  $492,012
 Inpatient                      23,927    23,316    92,995    89,882
 Continuous care                30,150    31,509   115,801   121,096
                              --------  --------- --------- ---------
  Total before Medicare cap
   allowance                  $197,202  $186,907  $755,668  $702,990
 Medicare cap allowance              -      (688)     (242)   (3,898)
                              --------  --------- --------- ---------
  Total                       $197,202  $186,219  $755,426  $699,092
                              ========  ========= ========= =========
Net revenue as a percent of
 total before Medicare cap
 allowance
 Homecare                         72.6 %    70.6 %    72.4 %    70.0 %
 Inpatient                        12.1      12.5      12.3      12.8
 Continuous care                  15.3      16.9      15.3      17.2
                              --------  --------- --------- ---------
  Total before Medicare cap
   allowance                     100.0     100.0     100.0     100.0
 Medicare cap allowance              -      (0.4)        -      (0.6)
                              --------  --------- --------- ---------
  Total                          100.0 %    99.6 %   100.0 %    99.4 %
                              ========  ========= ========= =========
Average daily census ("ADC")
 (days)
 Homecare                        7,121     6,636     6,966     6,333
 Nursing home                    3,610     3,567     3,581     3,501
                              --------  --------- --------- ---------
  Routine homecare              10,731    10,203    10,547     9,834
 Inpatient                         417       411       417       411
 Continuous care                   512       560       513       555
                              --------  --------- --------- ---------
  Total                         11,660    11,174    11,477    10,800
                              ========  ========= ========= =========


Total Admissions                13,594    13,291    54,798    52,736
Total Discharges                13,700    13,199    54,530    51,552
Average length of stay (days)     75.7      75.7      76.5      71.9
Median length of stay (days)      14.0      14.0      13.0      13.0
ADC by major diagnosis
 Neurological                     32.8 %    33.7 %    33.1 %    33.4 %
 Cancer                           20.4      19.7      20.1      20.2
 Cardio                           13.5      14.7      14.1      14.8
 Respiratory                       6.8       7.0       6.8       7.1
 Other                            26.5      24.9      25.9      24.5
                              --------  --------- --------- ---------
  Total                          100.0 %   100.0 %   100.0 %   100.0 %
                              ========  ========= ========= =========
Admissions by major diagnosis
 Neurological                     18.5 %    19.8 %    18.5 %    19.8 %
 Cancer                           36.6      35.3      36.1      35.5
 Cardio                           11.9      12.7      12.6      13.1
 Respiratory                       7.3       7.2       7.5       7.3
 Other                            25.7      25.0      25.3      24.3
                              --------  --------- --------- ---------
  Total                          100.0 %   100.0 %   100.0 %   100.0 %
                              ========  ========= ========= =========
Direct patient care margins
 (e)
 Routine homecare                 51.6 %    49.7 %    51.1 %    49.0 %
 Inpatient                        18.8      19.4      18.4      20.0
 Continuous care                  17.6      17.0      18.0      18.2
Homecare margin drivers
   (dollars per patient day)
 Labor costs                  $  49.59  $  49.72  $  49.14  $  49.38
 Drug costs                       7.73      8.17      7.90      8.12
 Home medical equipment           5.91      5.81      5.78      5.63
 Medical supplies                 2.49      2.28      2.25      2.17
Inpatient margin drivers
   (dollars per patient day)
 Labor costs                  $ 272.46  $ 261.55  $ 265.47  $ 259.25
Continuous care margin
 drivers
   (dollars per patient day)
 Labor costs                  $ 506.72  $ 486.46  $ 486.90  $ 468.13
Bad debt expense as a percent
 of revenues                       1.0 %     1.0 %     0.9 %     0.9 %
 Accounts receivable --
  days of revenue outstanding     43.4      38.7       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, 2007 AND 2006
                             (unaudited)


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

                              Three Months Ended December 31, 2007
                          --------------------------------------------
                           VITAS   Roto-Rooter Corporate  Consolidated
                          -------- ----------- ---------- ------------
        Selling, general
         and
         administrative
         expenses
           Costs
            associated
            with OIG
            investigation $   (39) $        -   $      -     $    (39)
           Stock option
            expense             -           -     (1,591)      (1,591)
        Other operating
         expense - net
           Costs related
            to litigation
            settlement          -      (1,927)         -       (1,927)
                          -------- ----------- ---------- ------------
                Pretax
                 impact
                 on
                 earnings     (39)     (1,927)    (1,591)      (3,557)
        Income tax
         benefit/(charge)
         on the above          15         759        581        1,355
                          -------- ----------- ---------- ------------
                Aftertax
                 impact
                 on
                 earnings $   (24) $   (1,168)  $ (1,010)    $ (2,202)
                          ======== =========== ========== ============

                                  Year Ended December 31, 2007
                          --------------------------------------------
                           VITAS   Roto-Rooter Corporate  Consolidated
                          -------- ----------- ---------- ------------
        Selling, general
         and
         administrative
         expenses
           Long-term
            incentive
            compensation  $     -  $        -   $ (7,067)    $ (7,067)
           Costs
            associated
            with OIG
            investigation    (227)          -          -         (227)
           Stock option
            expense             -           -     (4,665)      (4,665)
           Other                -           -        467          467
        Other operating
         expense/(income)
           Costs related
            to litigation
            settlement          -      (1,927)         -       (1,927)
           Gain on sale
            of property         -           -      1,138        1,138
        Loss on
         extinguishment
         of debt                -           -    (13,798)     (13,798)
                          -------- ----------- ---------- ------------
                Pretax
                 impact
                 on
                 earnings    (227)     (1,927)   (23,925)     (26,079)
        Income tax
         benefit/(charge)
         on the above          86         759      8,778        9,623
                          -------- ----------- ---------- ------------
                Aftertax
                 impact
                 on
                 earnings $  (141) $   (1,168)  $(15,147)    $(16,456)
                          ======== =========== ========== ============

 (b)    Included in the results of operations for the three months and
         years ended December 31, 2006 are the following significant
         credits/(charges) which may not be indicative of ongoing
         operations (in thousands):

                           Three Months Ended December
                                     31, 2006
                          --------------------------------------------
                           VITAS   Roto-Rooter Corporate  Consolidated
                          -------- ----------- ---------- ------------
        Selling, general
         and
         administrative
         expenses
           Costs
            associated
            with OIG
            investigation $  (250) $        -   $      -     $   (250)
           Stock option
            expense             -           -       (596)        (596)
           Other                -           -        467          467
                          -------- ----------- ---------- ------------
                Pretax
                 impact
                 on
                 earnings    (250)          -       (129)        (379)
        Income tax
         benefit on the
         above                 95           -         47          142
        Income tax
         benefit from
         finalizing prior
         years' returns         -         324          -          324
                          -------- ----------- ---------- ------------
                Aftertax
                 impact
                 on
                 earnings $  (155) $      324   $    (82)    $     87
                          ======== =========== ========== ============

                                  Year Ended December 31, 2006
                          --------------------------------------------
                           VITAS   Roto-Rooter Corporate  Consolidated
                          -------- ----------- ---------- ------------
        Selling, general
         and
         administrative
         expenses
           Costs
            associated
            with OIG
            investigation $(1,068) $        -   $      -     $ (1,068)
           Stock option
            expense             -           -     (1,211)      (1,211)
           Other                -           -        467          467
        Other operating
         expense
           Costs related
            to litigation
            settlement       (272)          -          -         (272)
        Loss from
         impairment of
         investment             -           -     (1,445)      (1,445)
        Loss on
         extinguishment
         of debt                -           -       (430)        (430)
                          -------- ----------- ---------- ------------
                Pretax
                 impact
                 on
                 earnings  (1,340)          -     (2,619)      (3,959)
        Income tax
         benefit on the
         above                509           -        955        1,464
        Income tax
         benefit from
         finalizing prior
         years' returns         -       1,251        864        2,115
                          -------- ----------- ---------- ------------
                Aftertax
                 impact
                 on
                 earnings $  (831) $    1,251   $   (800)    $   (380)
                          ======== =========== ========== ============




   (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 2007 and 2006, GAAP advertising expense for Roto-
         Rooter totaled $7,330,000 and $6,579,000, respectively. If
         the expense of the telephone directories were spread over the
         periods they are in circulation, advertising expense for the
         fourth quarters of 2007 and 2006 would total $5,798,000 and
         $5,184,000, respectively. For the years ended December 31,
         2007 and 2006, GAAP advertising expense for Roto-Rooter
         totaled $22,980,000 and $20,563,000, 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, 2007 and 2006 would total 22,379,000
         and $20,240,000, respectively.

   (d)  VITAS has 6 large (greater than 450 ADC), 15 medium (greater
         than 200 but less than 450 ADC) and 22 small (less than 200
         ADC) hospice programs. There are two programs continuing at
         December 31, 2007 with Medicare cap cushion of less than 10%
         for the 2007 measurement period.

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

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

SOURCE: Chemed Corporation