Chemed Reports Fourth-Quarter 2021 Results
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Chemed Reports Fourth-Quarter 2021 Results

CINCINNATI--(BUSINESS WIRE)--Feb. 24, 2022-- Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), one of the nation’s largest providers of end-of-life care, and Roto-Rooter, the nation’s largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its fourth quarter ended December 31, 2021, versus the comparable prior-year period, as follows:

Consolidated operating results:

  • Revenue increased 1.4% to $541 million
  • GAAP Diluted Earnings-per-Share (EPS) of $4.81
  • Adjusted Diluted EPS of $5.25, an increase of 2.3%

VITAS segment operating results:

  • Net Patient Revenue of $316 million, a decline of 4.8%
  • Average Daily Census (ADC) of 17,935, a decline of 4.2%
  • Admissions of 16,250, a decline of 9.5%
  • Net Income, excluding certain discrete items, of $49.7 million, a decline of 14.4%
  • Adjusted EBITDA, excluding Medicare Cap, of $69.3 million, a decline of 11.9%
  • Adjusted EBITDA margin, excluding Medicare Cap, of 21.7%, a decrease of 179-basis points

Roto-Rooter segment operating results:

  • Revenue of $225 million, an increase of 11.8%
  • Net Income, excluding certain discrete items, of $44.2 million, an increase of 16.5%
  • Adjusted EBITDA of $62.2 million, an increase of 14.2%
  • Adjusted EBITDA margin of 27.7%, an increase of 58-basis points

VITAS

VITAS net revenue was $316 million in the fourth quarter of 2021, which is a decline of 4.8%, when compared to the prior-year period. This revenue decline is comprised primarily of a 4.2% decline in days-of-care partially offset by a geographically weighted average Medicare reimbursement rate increase of approximately 1.1%. Acuity mix shift had a net impact of reducing revenue approximately $7.1 million, or 2.1%, in the quarter when compared to the prior-year revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes offset a portion of this revenue decline by approximately 40-basis points.

In the fourth quarter of 2021, VITAS accrued $3.0 million in Medicare Cap billing limitations. This compares to $2.5 million in Medicare Cap billing limitation in the fourth quarter of 2020.

Of VITAS’ 30 Medicare provider numbers, 25 provider numbers have a Medicare Cap cushion of 10% or greater, two provider numbers have a cap cushion between 5% and 10%, one provider number has cushion between 0% and 5% and two provider numbers have an estimated fiscal 2022 Medicare Cap billing limitation liability.

Average revenue per patient per day in the fourth quarter of 2021 was $196.26, which, including acuity mix shift, is 105-basis points below the prior-year period. Reimbursement for routine home care and high acuity care averaged $172.16 and $1,005.47, respectively. During the quarter, high acuity days-of-care were 2.9% of total days of care, 55-basis points less than the prior-year quarter.

The fourth quarter 2021 gross margin, excluding Medicare Cap and increased costs directly related to operating during the pandemic, was 28.5%. This is a 109-basis point margin decline when compared to the fourth quarter of 2020.

Selling, general and administrative expense, excluding increased costs directly related to operating during the pandemic, was $21.5 million in the fourth quarter of 2021 and compares to $19.3 million incurred in the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $69.3 million in the quarter, a decrease of 11.9%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 21.7%, which is 179-basis points less than the prior-year period.

Roto-Rooter

Roto-Rooter generated quarterly revenue of $225 million in the fourth quarter of 2021, an increase of $23.8 million, or 11.8%, when compared to the prior-year quarter.

Roto-Rooter branch commercial revenue in the quarter totaled $53.9 million, an increase of $6.9 million, or 14.8%, over the prior year. This aggregate commercial revenue growth consisted of drain cleaning revenue increasing 17.0%, plumbing increasing 18.0% and excavation expanding 10.5%. Water restoration increased 4.5%.

Roto-Rooter branch residential revenue in the quarter totaled $152 million, an increase of $15.3 million, or 11.2%, over the prior-year period. This aggregate residential revenue growth consisted of drain cleaning increasing 10.6%, plumbing expanding 13.5%, excavation increasing 12.0%, and water restoration increasing 9.2%.

Roto-Rooter’s gross margin in the quarter, excluding the impact from COVID, was 52.7%, a 77-basis point increase when compared to the fourth quarter of 2020. Adjusted EBITDA in the fourth quarter of 2021 totaled $62.2 million, an increase of 14.2%. The Adjusted EBITDA margin in the quarter was 27.7%, which is a 58-basis point improvement when compared to the prior year. The fourth quarter of 2021 included approximately $1.9 million for increased casualty and health care insurance claims expense. In addition, there was approximately $1.2 million of increased eMarketing, repairs & maintenance and payroll fringes not anticipated to be incurred in future quarters. Combined, this spike in fourth quarter expenses negatively impacted fourth quarter 2021 adjusted EBITDA margin by approximately 138-basis points.

Chemed Consolidated

As of December 31, 2021, Chemed had total cash and cash equivalents of $33 million and $185 million of long-term debt.

In June 2018, Chemed entered into a five-year Amended and Restated Credit Agreement that consists of a $450 million revolving credit facility. The interest rate on this facility has a floating rate that is currently LIBOR plus 100-basis points. At December 31, 2021, the Company had approximately $219 million of undrawn borrowing capacity under this credit agreement.

During the quarter, the Company repurchased 495,529 shares of Chemed stock for $246 million which equates to a cost per share of $496.65. As of December 31, 2021, there was approximately $202 million of remaining share repurchase authorization under this plan.

Chemed restarted its share repurchase program in 2007. Since that time, Chemed has repurchased approximately 15.7 million shares, aggregating approximately $2.0 billion at an average share cost of $125.14. Including dividends over this period, Chemed has returned approximately $2.2 billion to shareholders.

Guidance for 2022

Historically, Chemed earnings guidance has been developed using previous years’ key operating metrics which are then modeled and projected out for the calendar year. Critical within these projections is the understanding of traditional patterned correlations among key operating metrics. This modeling exercise also takes into consideration anticipated industry and macro-economic issues outside of management’s control but are somewhat predictable in terms of timing and impact on our business segments’ operating results.

The COVID-19 pandemic has made accurate modeling and providing meaningful earnings guidance exceptionally challenging. Since the start of the pandemic, Chemed has been able to successfully navigate within this rapidly changing environment and produce operating results that we believe provide us with the ability to issue earnings guidance for the 2022 calendar year. However, this guidance should be taken with the recognition the pandemic will continue to disrupt our healthcare system and general economy to such an extent that future rules, regulations and government mandates could materially impact the company’s ability to achieve this guidance.

Statistically, patients residing in senior housing are identified as hospice appropriate earlier into their terminal prognosis and have a much greater probability of having a length of stay in excess of 90 days. Hospice patients referred from hospitals, oncology practices and similar referral sources are generally more acute and have a significantly lower probability of lengths-of-stay exceeding 90 days. According to data released by the National Investment Center for Seniors Housing & Care, COVID-19 continues to adversely affect senior housing occupancy. This reduced occupancy in senior housing has had a corresponding reduction in VITAS nursing home admissions. Nursing home patients represented 15.6% of VITAS’ fourth-quarter 2021 patient census. This compares to nursing home patients averaging 18.2% of total census just prior to the pandemic.

A November 2021 article in US News and World Report estimated that approximately 20% of all health care workers in the US have left the industry since the start of the pandemic. This shortage of licensed healthcare workers will generate short-term to medium-term pressure on VITAS’ labor costs and related margins.

Medicare hospice reimbursement rate increases are based on a government formula that utilizes the Bureau of Labor and Statistics’ measurement of healthcare wage inflation reflected in the hospital wage index basket. However, this formulaic methodology is based upon healthcare wage inflation and increased CPI measured from April 1 through March 31 to determine the following October 1 reimbursement rates. This methodology effectively delays actual wage inflation from impacting hospice reimbursement by 12 to 18 months.

VITAS anticipates that senior housing will continue to have weak occupancy rates at least through the first half of 2022. Accordingly, VITAS anticipates senior housing hospice referrals will not have meaningful growth until the second half of 2022. Labor cost increases and related margin pressure are anticipated to continue through all of 2022 with some moderation starting with the next reimbursement increase on October 1, 2022.

Based upon the above discussion, VITAS 2022 revenue, prior to Medicare Cap, is estimated to decline 1.5% to 2.5% when compared to 2021. A portion of the estimated revenue reduction, approximately $15 million, is the result of the phase out of sequestration relief over the first half of 2022 compared to a full year of sequestration relief in 2021. ADC is estimated to decline 1.0% to 1.5%. Full year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 15.5% to 16.0%. We are currently estimating $12 million for Medicare Cap billing limitations in calendar year 2022.

Roto-Rooter is forecasted to achieve full-year 2022 revenue growth of 8.0% to 9.5%. Roto-Rooter’s adjusted EBITDA margin for 2022 is expected to be 28.5% to 29.5%.

Based upon the above, full-year 2022 earnings per diluted share, excluding non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, is estimated to be in the range of $19.10 to $19.50. This 2022 guidance assumes an effective corporate tax rate on adjusted earnings of 25.1% and a diluted share count of 15.25 million shares. Chemed’s 2021 reported adjusted earnings per diluted share was $19.33.

Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Friday, February 25, 2022, to discuss the Company's quarterly results and to provide an update on its business. The dial-in number for the conference call is (844) 743-2500 for U.S. and Canadian participants and +1 (661) 378-9533 for international participants. The Conference ID is 3267032. A live webcast of the call can be accessed on Chemed's website at www.chemed.com by clicking on Investor Relations Home.

A taped replay of the conference call will be available beginning approximately 24 hours after the call's conclusion. It can be accessed by dialing (855) 859-2056 for U.S. and Canadian callers and +1 (404) 537-3406 for international callers and will be available for one week following the live call. The replay Conference ID is 3267032. An archived webcast will also be available at www.chemed.com.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to approximately 18,000 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

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

This press release contains information about Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed’s financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company’s operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed’s management similarly uses EBITDA, Adjusted EBITDA and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed’s management to estimate the resources required to meet Chemed’s future financial obligations and expenditures. Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed’s net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.

Forward-Looking Statements

Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements.

These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed’s dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed’s most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)(unaudited)
 

Three Months Ended December 31,

 

For the Years Ended December 31,

2021

 

2020

 

2021

 

2020

Service revenues and sales $

540,978

 

$

533,289

 

2,139,261

 

$

2,079,583

 

Cost of services provided and goods sold

336,328

 

335,049

 

1,369,458

 

1,378,197

 

Selling, general and administrative expenses (aa)

92,073

 

86,805

 

366,727

 

330,218

 

Depreciation

11,840

 

11,835

 

49,011

 

46,596

 

Amortization

2,510

 

2,511

 

10,040

 

9,987

 

Other operating expense/(income)

198

 

(46,160

)

987

 

(75,095

)

Total costs and expenses

442,949

 

390,040

 

1,796,223

 

1,689,903

 

Income from operations

98,029

 

143,249

 

343,038

 

389,680

 

Interest expense

(525

)

(350

)

(1,868

)

(2,355

)

Other (expense)/income--net (bb)

(1,377

)

2,942

 

9,144

 

8,665

 

Income before income taxes

96,127

 

145,841

 

350,314

 

395,990

 

Income taxes

(21,502

)

(32,089

)

(81,764

)

(76,524

)

Net income $

74,625

 

$

113,752

 

$

268,550

 

$

319,466

 

Earnings Per Share
Net income $

4.89

 

$

7.12

 

$

17.14

 

$

20.02

 

Average number of shares outstanding

15,266

 

15,973

 

15,671

 

15,955

 

Diluted Earnings Per Share
Net income $

4.81

 

$

6.96

 

$

16.85

 

$

19.48

 

Average number of shares outstanding

15,513

 

16,348

 

15,938

 

16,398

 

 
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
 

Three Months Ended December 31,

 

For the Years Ended December 31,

2021

 

2020

 

2021

 

2020

SG&A expenses before long-term incentive compensation
and the impact of market value adjustments related to
deferred compensation plans $

89,875

 

$

80,551

 

$

349,250

 

$

313,348

 

Long-term incentive compensation

3,658

 

3,414

 

9,167

 

8,937

 

Market value adjustments related to deferred
compensation trusts

(1,460

)

2,840

 

8,310

 

7,933

 

Total SG&A expenses $

92,073

 

$

86,805

 

$

366,727

 

$

330,218

 

 
(bb) Other (expense)/income--net comprises (in thousands):

Three Months Ended December 31,

 

For the Years Ended December 31,

2021

 

2020

 

2021

 

2020

Market value adjustments related to deferred
compensation trusts $

(1,460

)

$

2,840

 

$

8,310

 

$

7,933

 

Interest income

89

 

109

 

377

 

757

 

Other

(6

)

(7

)

457

 

(25

)

Total other (expense)/income--net $

(1,377

)

$

2,942

 

$

9,144

 

$

8,665

 

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

December 31,

2021

2020

Assets
Current assets
Cash and cash equivalents $

32,895

 

$

162,675

 

Accounts receivable less allowances

137,217

 

126,853

 

Inventories

10,109

 

7,095

 

Prepaid income taxes

17,377

 

6,603

 

Prepaid expenses

32,688

 

26,177

 

Total current assets

230,286

 

329,403

 

Investments of deferred compensation plans held in trust

98,884

 

88,811

 

Properties and equipment, at cost less accumulated depreciation

193,680

 

187,820

 

Lease right of use asset

125,048

 

123,448

 

Identifiable intangible assets less accumulated amortization

108,096

 

118,085

 

Goodwill

578,591

 

578,585

 

Other assets

8,138

 

8,759

 

Total Assets $

1,342,723

 

$

1,434,911

 

Liabilities
Current liabilities
Accounts payable $

73,024

 

$

54,234

 

Income taxes

41

 

9,464

 

Accrued insurance

55,918

 

54,703

 

Accrued compensation

95,598

 

91,282

 

Accrued legal

872

 

10,632

 

Short-term lease liability

37,913

 

36,200

 

Other current liabilities

39,033

 

42,593

 

Total current liabilities

302,399

 

299,108

 

Deferred income taxes

23,183

 

20,664

 

Long-term debt

185,000

 

-

 

Deferred compensation liabilities

98,597

 

88,456

 

Long-term lease liability

100,629

 

99,210

 

Other liabilities

9,642

 

26,273

 

Total Liabilities

719,450

 

533,711

 

Stockholders' Equity
Capital stock

36,514

 

36,259

 

Paid-in capital

1,044,341

 

961,404

 

Retained earnings

1,970,311

 

1,723,777

 

Treasury stock, at cost

(2,430,094

)

(1,822,579

)

Deferred compensation payable in Company stock

2,201

 

2,339

 

Total Stockholders' Equity

623,273

 

901,200

 

Total Liabilities and Stockholders' Equity $

1,342,723

 

$

1,434,911

 

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

For the Years Ended December 31,

2021

 

2020

Cash Flows from Operating Activities
Net income $

268,550

 

$

319,466

 

Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization

59,051

 

56,583

 

Stock option expense

22,502

 

18,422

 

Deferred payroll taxes

(18,175

)

36,350

 

Litigation settlements

(9,440

)

2,684

 

Noncash long-term incentive compensation

7,745

 

7,208

 

Provision for deferred income taxes

2,400

 

1,433

 

Noncash directors' compensation

1,173

 

1,171

 

Amortization of debt issuance costs

306

 

306

 

Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
(Increase)/decrease in accounts receivable

(8,431

)

12,773

 

(Increase)/decrease in inventories

(3,014

)

367

 

Increase in prepaid expenses

(6,511

)

(3,027

)

Increase in accounts payable and
other current liabilities

9,832

 

19,096

 

Change in current income taxes

(20,401

)

13,525

 

Net change in lease assets and liabilities

(44

)

1,206

 

Increase in other assets

(10,305

)

(11,834

)

Increase in other liabilities

12,074

 

12,323

 

Other sources

1,285

 

1,237

 

Net cash provided by operating activities

308,597

 

489,289

 

Cash Flows from Investing Activities
Capital expenditures

(58,675

)

(58,831

)

Business combinations

-

 

(3,600

)

Other sources

918

 

871

 

Net cash used by investing activities

(57,757

)

(61,560

)

Cash Flows from Financing Activities
Purchases of treasury stock

(576,042

)

(175,594

)

Proceeds from revolving line of credit

210,300

 

174,900

 

Proceeds from exercise of stock options

35,848

 

50,382

 

Payments on revolving line of credit

(25,300

)

(264,900

)

Dividends paid

(22,016

)

(21,079

)

Capital stock surrendered to pay taxes on stock-based compensation

(15,129

)

(25,328

)

Change in cash overdrafts payable

11,884

 

(9,849

)

Other (uses)/sources

(165

)

256

 

Net cash used by financing activities

(380,620

)

(271,212

)

(Decrease)/Increase in Cash and Cash Equivalents

(129,780

)

156,517

 

Cash and cash equivalents at beginning of year

162,675

 

6,158

 

Cash and cash equivalents at end of year $

32,895

 

$

162,675

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 2021 AND 2020
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated
2021 (a)
Service revenues and sales $

316,112

 

$

224,866

 

$

-

 

$

540,978

 

Cost of services provided and goods sold

229,023

 

107,305

 

-

 

336,328

 

Selling, general and administrative expenses

21,491

 

56,246

 

14,336

 

92,073

 

Depreciation

5,365

 

6,456

 

19

 

11,840

 

Amortization

18

 

2,492

 

-

 

2,510

 

Other operating expense/(income)

221

 

(23

)

-

 

198

 

Total costs and expenses

256,118

 

172,476

 

14,355

 

442,949

 

Income/(loss) from operations

59,994

 

52,390

 

(14,355

)

98,029

 

Interest expense

(31

)

(132

)

(362

)

(525

)

Intercompany interest income/(expense)

4,601

 

2,064

 

(6,665

)

-

 

Other income—net

58

 

26

 

(1,461

)

(1,377

)

Income/(loss) before income taxes

64,622

 

54,348

 

(22,843

)

96,127

 

Income taxes

(15,621

)

(12,519

)

6,638

 

(21,502

)

Net income/(loss) $

49,001

 

$

41,829

 

$

(16,205

)

$

74,625

 

 
2020 (b)
Service revenues and sales $

332,190

 

$

201,099

 

$

-

 

$

533,289

 

Cost of services provided and goods sold

237,812

 

97,237

 

-

 

335,049

 

Selling, general and administrative expenses

20,305

 

49,679

 

16,821

 

86,805

 

Depreciation

5,546

 

6,257

 

32

 

11,835

 

Amortization

18

 

2,493

 

-

 

2,511

 

Other operating expense

(46,929

)

769

 

-

 

(46,160

)

Total costs and expenses

216,752

 

156,435

 

16,853

 

390,040

 

Income/(loss) from operations

115,438

 

44,664

 

(16,853

)

143,249

 

Interest expense

(29

)

(68

)

(253

)

(350

)

Intercompany interest income/(expense)

5,434

 

1,834

 

(7,268

)

-

 

Other income—net

95

 

7

 

2,840

 

2,942

 

Income/(loss) before income taxes

120,938

 

46,437

 

(21,534

)

145,841

 

Income taxes

(29,419

)

(11,007

)

8,337

 

(32,089

)

Net income/(loss) $

91,519

 

$

35,430

 

$

(13,197

)

$

113,752

 

 
 
The "Footnotes to Financial Statements" are integral parts of this financial information.
 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(in thousands)(unaudited)
 
Chemed
VITAS Roto-Rooter Corporate Consolidated
2021 (a)
Service revenues and sales $

1,261,246

 

$

878,015

 

$

-

 

$

2,139,261

 

Cost of services provided and goods sold

953,420

 

416,038

 

-

 

1,369,458

 

Selling, general and administrative expenses

87,585

 

215,036

 

64,106

 

366,727

 

Depreciation

23,114

 

25,816

 

81

 

49,011

 

Amortization

71

 

9,969

 

-

 

10,040

 

Other operating expense

876

 

111

 

-

 

987

 

Total costs and expenses

1,065,066

 

666,970

 

64,187

 

1,796,223

 

Income/(loss) from operations

196,180

 

211,045

 

(64,187

)

343,038

 

Interest expense

(160

)

(595

)

(1,113

)

(1,868

)

Intercompany interest income/(expense)

18,125

 

7,180

 

(25,305

)

-

 

Other income—net

712

 

123

 

8,309

 

9,144

 

Income/(loss) before income taxes

214,857

 

217,753

 

(82,296

)

350,314

 

Income taxes

(52,426

)

(51,420

)

22,082

 

(81,764

)

Net income/(loss) $

162,431

 

$

166,333

 

$

(60,214

)

$

268,550

 

 
2020 (b)
Service revenues and sales $

1,334,667

 

$

744,916

 

$

-

 

$

2,079,583

 

Cost of services provided and goods sold

1,010,693

 

367,504

 

-

 

1,378,197

 

Selling, general and administrative expenses

85,445

 

188,268

 

56,505

 

330,218

 

Depreciation

22,168

 

24,292

 

136

 

46,596

 

Amortization

71

 

9,916

 

-

 

9,987

 

Other operating (income)/expense

(78,590

)

3,495

 

-

 

(75,095

)

Total costs and expenses

1,039,787

 

593,475

 

56,641

 

1,689,903

 

Income/(loss) from operations

294,880

 

151,441

 

(56,641

)

389,680

 

Interest expense

(166

)

(340

)

(1,849

)

(2,355

)

Intercompany interest income/(expense)

19,897

 

6,256

 

(26,153

)

-

 

Other income—net

644

 

75

 

7,946

 

8,665

 

Income/(loss) before income taxes

315,255

 

157,432

 

(76,697

)

395,990

 

Income taxes

(76,473

)

(37,038

)

36,987

 

(76,524

)

Net income/(loss) $

238,782

 

$

120,394

 

$

(39,710

)

$

319,466

 

 
 

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

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARIES OF EBITDA
FOR THE THREE MONTHS ENDED DECEMBER 31, 2021 AND 2020
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated

2021

Net income/(loss) $

49,001

 

$

41,829

 

$

(16,205

)

$

74,625

 

Add/(deduct):
Interest expense

31

 

132

 

362

 

525

 

Income taxes

15,621

 

12,519

 

(6,638

)

21,502

 

Depreciation

5,365

 

6,456

 

19

 

11,840

 

Amortization

18

 

2,492

 

-

 

2,510

 

EBITDA

70,036

 

63,428

 

(22,462

)

111,002

 

Add/(deduct):
Intercompany interest expense/(income)

(4,601

)

(2,064

)

6,665

 

-

 

Interest income

(63

)

(26

)

-

 

(89

)

Stock option expense

-

 

-

 

6,159

 

6,159

 

Long-term incentive compensation

-

 

-

 

3,659

 

3,659

 

Direct costs related to COVID-19

959

 

884

 

-

 

1,843

 

Adjusted EBITDA $

66,331

 

$

62,222

 

$

(5,979

)

$

122,574

 

 

2020

Net income/(loss) $

91,519

 

$

35,430

 

$

(13,197

)

$

113,752

 

Add/(deduct):
Interest expense

29

 

68

 

253

 

350

 

Income taxes

29,419

 

11,007

 

(8,337

)

32,089

 

Depreciation

5,546

 

6,257

 

32

 

11,835

 

Amortization

18

 

2,493

 

-

 

2,511

 

EBITDA

126,531

 

55,255

 

(21,249

)

160,537

 

Add/(deduct):
Intercompany interest expense/(income)

(5,434

)

(1,834

)

7,268

 

-

 

Interest income

(102

)

(7

)

-

 

(109

)

CARES Act grant

(48,041

)

-

 

-

 

(48,041

)

Stock option expense

-

 

-

 

5,127

 

5,127

 

Direct costs related to COVID-19

3,257

 

520

 

-

 

3,777

 

Long-term incentive compensation

-

 

-

 

3,413

 

3,413

 

Litigation settlements

-

 

544

 

-

 

544

 

Adjusted EBITDA $

76,211

 

$

54,478

 

$

(5,441

)

$

125,248

 

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

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING SUMMARIES OF EBITDA
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(in thousands)(unaudited)

 

Chemed
VITAS

Roto-Rooter

Corporate Consolidated

2021

Net income/(loss) $

162,431

 

$

166,333

 

$

(60,214

)

$

268,550

 

Add/(deduct):
Interest expense

160

 

595

 

1,113

 

1,868

 

Income taxes

52,426

 

51,420

 

(22,082

)

81,764

 

Depreciation

23,114

 

25,816

 

81

 

49,011

 

Amortization

71

 

9,969

 

-

 

10,040

 

EBITDA

238,202

 

254,133

 

(81,102

)

411,233

 

Add/(deduct):
Intercompany interest expense/(income)

(18,125

)

(7,180

)

25,305

 

-

 

Interest income

(253

)

(124

)

-

 

(377

)

Stock option expense

-

 

-

 

22,502

 

22,502

 

Direct costs related to COVID-19

16,296

 

2,435

 

38

 

18,769

 

Long-term incentive compensation

-

 

-

 

9,167

 

9,167

 

Litigation settlements

-

 

(98

)

-

 

(98

)

Other

-

 

-

 

218

 

218

 

Adjusted EBITDA $

236,120

 

$

249,166

 

$

(23,872

)

$

461,414

 

2020

Net income/(loss) $

238,782

 

$

120,394

 

$

(39,710

)

$

319,466

 

Add/(deduct):
Interest expense

166

 

340

 

1,849

 

2,355

 

Income taxes

76,473

 

37,038

 

(36,987

)

76,524

 

Depreciation

22,168

 

24,292

 

136

 

46,596

 

Amortization

71

 

9,916

 

-

 

9,987

 

EBITDA

337,660

 

191,980

 

(74,712

)

454,928

 

Add/(deduct):
Intercompany interest expense/(income)

(19,897

)

(6,256

)

26,153

 

-

 

Interest income

(668

)

(76

)

(13

)

(757

)

CARES Act grant

(80,225

)

-

 

-

 

(80,225

)

Direct costs related to COVID-19

35,441

 

3,819

 

-

 

39,260

 

Stock option expense

-

 

-

 

18,422

 

18,422

 

Long-term incentive compensation

-

 

-

 

8,937

 

8,937

 

Litigation settlements

-

 

3,639

 

-

 

3,639

 

Medicare cap sequestration adjustment

619

 

-

 

-

 

619

 

Adjusted EBITDA $

272,930

 

$

193,106

 

$

(21,213

)

$

444,823

 

 
The "Footnotes to Financial Statements" are integral parts of this financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)
 
 

Three Months Ended December 31,

For the Years Ended December 31,

2021

2020

2021

2020

Net income as reported $

74,625

 

$

113,752

 

$

268,550

 

$

319,466

 

Add/(deduct) pre-tax cost of:
Stock option expense

6,159

 

5,127

 

22,502

 

18,422

 

Direct costs related to COVID-19

1,843

 

3,777

 

18,769

 

39,260

 

Amortization of reacquired franchise agreements

2,352

 

2,352

 

9,408

 

9,408

 

Long-term incentive compensation

3,659

 

3,413

 

9,167

 

8,937

 

Facility relocation expenses

-

 

-

 

1,855

 

-

 

Litigation settlements

-

 

544

 

(98

)

3,639

 

Other

-

 

-

 

218

 

-

 

CARES Act grant

-

 

(48,041

)

-

 

(80,225

)

Medicare cap sequestration adjustments

-

 

-

 

-

 

619

 

Add/(deduct) tax impacts:
Tax impact of the above pre-tax adjustments (1)

(2,606

)

9,141

 

(12,480

)

2,976

 

Excess tax benefits on stock compensation

(4,579

)

(6,146

)

(9,884

)

(26,089

)

Adjusted net income $

81,453

 

$

83,919

 

$

308,007

 

$

296,413

 

 
Diluted Earnings Per Share As Reported
Net income $

4.81

 

$

6.96

 

$

16.85

 

$

19.48

 

Average number of shares outstanding

15,513

 

16,348

 

15,938

 

16,398

 

 
Adjusted Diluted Earnings Per Share
Adjusted net income $

5.25

 

$

5.13

 

$

19.33

 

$

18.08

 

Average number of shares outstanding

15,513

 

16,348

 

15,938

 

16,398

 

 
(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated.
 
The "Footnotes to Financial Statements" are integral parts of this financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
 

Three Months Ended December 31,

 

For the Years Ended December 31,

OPERATING STATISTICS

2021

 

2020

 

2021

 

2020

Net revenue ($000) (c)
Homecare $

272,949

 

$

279,410

 

$

1,069,766

 

$

1,106,358

 

Inpatient

27,291

 

28,973

 

113,187

 

114,956

 

Continuous care

20,680

 

30,175

 

94,338

 

136,011

 

Other

2,902

 

2,984

 

12,142

 

11,164

 

Subtotal $

323,822

 

$

341,542

 

$

1,289,433

 

$

1,368,489

 

Room and board, net

(2,609

)

(2,858

)

(10,060

)

(12,174

)

Contractual allowances

(2,101

)

(3,994

)

(11,530

)

(14,970

)

Medicare cap allowance

(3,000

)

(2,500

)

(6,597

)

(6,678

)

Net Revenue $

316,112

 

$

332,190

 

$

1,261,246

 

$

1,334,667

 

Net revenue as a percent of total before Medicare cap allowance
Homecare

84.3

%

81.8

%

83.0

%

80.8

%

Inpatient

8.4

 

8.5

 

8.8

 

8.4

 

Continuous care

6.4

 

8.8

 

7.3

 

9.9

 

Other

0.9

 

0.9

 

0.9

 

0.9

 

Subtotal

100.0

 

100.0

 

100.0

 

100.0

 

Room and board, net

(0.9

)

(0.8

)

(0.8

)

(0.9

)

Contractual allowances

(0.6

)

(1.2

)

(0.9

)

(1.1

)

Medicare cap allowance

(0.9

)

(0.7

)

(0.5

)

(0.5

)

Net Revenue

97.6

%

97.3

%

97.8

%

97.5

%

Days of care
Homecare

1,338,955

 

1,404,532

 

5,347,170

 

5,597,213

 

Nursing home

257,416

 

253,261

 

993,322

 

1,097,493

 

Respite

5,894

 

4,971

 

21,403

 

20,387

 

Subtotal routine homecare and respite

1,602,265

 

1,662,764

 

6,361,895

 

6,715,093

 

Inpatient

25,556

 

27,811

 

107,685

 

112,718

 

Continuous care

22,154

 

31,493

 

101,539

 

141,693

 

Total

1,649,975

 

1,722,068

 

6,571,119

 

6,969,504

 

 
Number of days in relevant time period

92

 

92

 

365

 

366

 

Average daily census ("ADC") (days)
Homecare

14,554

 

15,267

 

14,649

 

15,293

 

Nursing home

2,798

 

2,753

 

2,721

 

2,999

 

Respite

64

 

54

 

59

 

55

 

Subtotal routine homecare and respite

17,416

 

18,074

 

17,429

 

18,347

 

Inpatient

278

 

302

 

295

 

308

 

Continuous care

241

 

342

 

279

 

387

 

Total

17,935

 

18,718

 

18,003

 

19,042

 

Total Admissions

16,250

 

17,960

 

68,823

 

71,328

 

Total Discharges

16,684

 

18,570

 

69,411

 

72,009

 

Average length of stay (days)

97.9

 

97.2

 

95.7

 

94.0

 

Median length of stay (days)

15.0

 

14.0

 

13.0

 

14.0

 

ADC by major diagnosis
Cerebro

36.5

%

35.5

%

36.7

%

35.8

%

Neurological

23.0

 

22.4

 

22.6

 

21.9

 

Cancer

11.5

 

12.3

 

11.9

 

12.5

 

Cardio

15.6

 

15.9

 

15.5

 

15.8

 

Respiratory

7.5

 

7.9

 

7.5

 

8.1

 

Other

5.9

 

6.0

 

5.8

 

5.9

 

Total

100.0

%

100.0

%

100.0

%

100.0

%

Admissions by major diagnosis
Cerebro

22.5

%

20.9

%

21.5

%

21.1

%

Neurological

12.7

 

12.6

 

12.3

 

12.9

 

Cancer

26.6

 

26.7

 

26.9

 

27.6

 

Cardio

14.8

 

13.8

 

14.5

 

14.3

 

Respiratory

11.0

 

10.4

 

10.9

 

10.6

 

Other

12.4

 

15.6

 

13.9

 

13.5

 

Total

100.0

%

100.0

%

100.0

%

100.0

%

 
Estimated uncollectible accounts as a percent of revenues

0.7

%

1.2

%

0.9

%

1.1

%

 
Accounts receivable --
Days of revenue outstanding-excluding unapplied Medicare payments

33.8

 

36.0

 

n.a.

 

n.a.

 

Days of revenue outstanding-including unapplied Medicare payments

28.1

 

25.6

 

n.a.

 

n.a.

 

 
The "Footnotes to Financial Statements" are integral parts of this financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2021 AND 2020
(unaudited)
 
(a) Included in the results of operations for 2021 are the following significant credits/(charges) which may not be indicative of ongoing operations
(in thousands):
Three Months Ended December 31, 2021
VITAS Roto-Rooter Corporate Consolidated
 
Stock option expense $

-

 

$

-

 

$

(6,159

)

$

(6,159

)

Long-term incentive compensation

-

 

-

 

(3,659

)

(3,659

)

Amortization of reacquired franchise agreements

-

 

(2,352

)

-

 

(2,352

)

Direct costs related to COVID-19

(959

)

(884

)

-

 

(1,843

)

Pretax impact on earnings

(959

)

(3,236

)

(9,818

)

(14,013

)

Excess tax benefits on stock compensation

-

 

-

 

4,579

 

4,579

 

Income tax benefit on the above

243

 

859

 

1,504

 

2,606

 

After-tax impact on earnings $

(716

)

$

(2,377

)

$

(3,735

)

$

(6,828

)

 
For the Year Ended December 31, 2021
VITAS Roto-Rooter Corporate Consolidated
 
Stock option expense $

-

 

$

-

 

$

(22,502

)

$

(22,502

)

Direct costs related to COVID-19

(16,297

)

(2,434

)

(38

)

(18,769

)

Amortization of reacquired franchise agreements

-

 

(9,408

)

-

 

(9,408

)

Long-term incentive compensation

-

 

-

 

(9,167

)

(9,167

)

Facility relocation expenses

(1,855

)

-

 

-

 

(1,855

)

Litigation settlements

-

 

98

 

-

 

98

 

Other

-

 

-

 

(218

)

(218

)

Pretax impact on earnings

(18,152

)

(11,744

)

(31,925

)

(61,821

)

Excess tax benefits on stock compensation

-

 

-

 

9,884

 

9,884

 

Income tax benefit on the above

4,611

 

3,112

 

4,757

 

12,480

 

After-tax impact on earnings $

(13,541

)

$

(8,632

)

$

(17,284

)

$

(39,457

)

 
(b) Included in the results of operations for 2020 are the following significant credits/(charges) which may not be indicative of ongoing operations
(in thousands):
Three Months Ended December 31, 2020
VITAS Roto-Rooter Corporate Consolidated
 
CARES Act grant $

48,041

 

$

-

 

$

-

 

$

48,041

 

Stock option expense

-

 

-

 

(5,127

)

(5,127

)

Direct costs related to COVID-19

(3,257

)

(520

)

-

 

(3,777

)

Long-term incentive compensation

-

 

-

 

(3,413

)

(3,413

)

Amortization of reacquired franchise agreements

-

 

(2,352

)

-

 

(2,352

)

Litigation settlements

-

 

(544

)

-

 

(544

)

Pretax impact on earnings

44,784

 

(3,416

)

(8,540

)

32,828

 

Excess tax benefits on stock compensation

-

 

-

 

6,146

 

6,146

 

Income tax benefit on the above

(11,367

)

906

 

1,320

 

(9,141

)

After-tax impact on earnings $

33,417

 

$

(2,510

)

$

(1,074

)

$

29,833

 

 
For the Year Ended December 31, 2020
VITAS Roto-Rooter Corporate Consolidated
 
CARES Act grant $

80,225

 

$

-

 

$

-

 

$

80,225

 

Direct costs related to COVID-19

(35,441

)

(3,819

)

-

 

(39,260

)

Stock option expense

-

 

-

 

(18,422

)

(18,422

)

Amortization of reacquired franchise agreements

-

 

(9,408

)

-

 

(9,408

)

Long-term incentive compensation

-

 

-

 

(8,937

)

(8,937

)

Litigation settlements

-

 

(3,639

)

-

 

(3,639

)

Medicare cap sequestration adjustment

(619

)

-

 

-

 

(619

)

Pretax impact on earnings

44,165

 

(16,866

)

(27,359

)

(60

)

Excess tax benefits on stock compensation

-

 

-

 

26,089

 

26,089

 

Income tax benefit on the above

(11,209

)

4,469

 

3,764

 

(2,976

)

After-tax impact on earnings $

32,956

 

$

(12,397

)

$

2,494

 

$

23,053

 

 
(c) VITAS has 9 large (greater than 450 ADC), 18 medium (greater than 200 but less than 450 ADC) and 25 small (less than 200 ADC) hospice programs. Of Vitas' 30 Medicare provider numbers, for the current cap year, 25 provider numbers have a Medicare cap cushion of greater than 10%, two providers have a cap cushion between 5% and 10%, one provider number has a cap cushion between 0% and 5%, and two provider numbers have a Medicare cap liability.

 

David P. Williams
(513) 762-6901

Source: Chemed Corporation

All information current at time of original publication. Read complete disclaimer for details.
Copyright © 2017, Chemed Corporation. All rights reserved.
Page last modified: 04/18/05