Consolidated operating results:
-
Revenue increased 6.4% to
$442 million -
GAAP Diluted Earnings-per-Share (EPS) of
$3.27 -
Adjusted Diluted EPS of
$2.81 , an increase of 30.7%
VITAS segment operating results:
-
Net Patient Revenue of
$297 million , an increase of 4.2% - Average Daily Census (ADC) of 17,643, an increase of 7.6%
- Admissions of 16,858, an increase of 3.4%
-
Net Income, excluding special items, of
$31.8 million , an increase of 25.6% -
Adjusted EBITDA of
$43.1 million , an increase of 1.2%
Roto-Rooter segment operating results:
-
Revenue of
$145 million , an increase of 11.3% -
Net Income of
$25.3 million , an increase of 48.3% -
Adjusted EBITDA of
$36.5 million , an increase of 19.8% - Adjusted EBITDA margin of 25.2%, an increase of 179-basis points
Effective
This resulted in the reclassification of net room and board expenses
associated with certain patients residing in nursing homes to be
reclassified from cost of services to revenue, effectively reducing
VITAS’ second quarter 2018 revenue and cost of sales by
The discussion of operating results below does recast net room and board and estimated uncollectable receivables in the second quarter of 2017 to facilitate analysis of operating results in a format consistent with the 2018 revenue recognition accounting standard.
VITAS
VITAS net revenue was
In the second quarter of 2018, VITAS accrued
Of VITAS’ 30
Average revenue per patient per day in the quarter was
The second quarter of 2018 gross margin, excluding Medicare Cap, was 21.6%, which is a 54-basis point decline when compared to the second quarter of 2017.
Selling, general and administrative expense was
Roto-Rooter
Roto-Rooter generated quarterly revenue of
Commercial drain cleaning revenue increased 9.7%, commercial plumbing and excavation increased 8.8% and commercial water restoration grew 9.9%. Overall, commercial revenue increased 8.8%.
Residential drain cleaning increased 12.5%, plumbing and excavation increased 15.4% and residential water restoration expanded 19.6%. Aggregate residential sales increased 15.1%.
Roto-Rooter’s gross margin in the quarter was 49.9%, an 89-basis point
increase when compared to the second quarter of 2017. Adjusted EBITDA in
the second quarter of 2018 totaled
Chemed Consolidated
As of
In
During the quarter, the Company repurchased 10,000 shares of
Guidance for 2018
Revenue growth for VITAS in 2018, prior to Medicare Cap, is estimated to
be in the range of 4.0% to 5.0%. Admissions are estimated to expand
approximately 4.5% to 5.0% and Average Daily Census in 2018 is estimated
to expand approximately 6.5% and full-year Adjusted EBITDA margin, prior
to Medicare Cap, is estimated to be 15.9%. We are currently estimating
Roto-Rooter is forecasted to achieve full-year 2018 revenue growth of 12.0% to 13.0%. This revenue estimate is based upon increased job pricing of approximately 2%, continued growth in core plumbing and drain cleaning services as well as revenue growth from water restoration services. Roto-Rooter’s adjusted EBITDA margin for 2018 is estimated at 24.0%.
Based upon the above, full-year 2018 adjusted earnings per diluted
share, excluding non-cash expense for stock options, costs related to
litigation, and other discrete items, is estimated to be in the range of
Conference Call
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 7691818. An archived webcast will also be available at www.chemed.com.
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,
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.
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
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
|||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME |
|||||||||||||||||||||||||
(in thousands, except per share data)(unaudited) | |||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
Service revenues and sales | $ | 441,813 | $ | 415,059 | $ | 880,989 | $ | 820,923 | |||||||||||||||||
Cost of services provided and goods sold | 305,741 | 285,852 | 610,277 | 570,992 | |||||||||||||||||||||
Selling, general and administrative expenses (aa) | 68,297 | 68,654 | 137,297 | 138,112 | |||||||||||||||||||||
Depreciation | 9,718 | 8,833 | 18,985 | 17,726 | |||||||||||||||||||||
Amortization | 34 | 32 | 61 | 78 | |||||||||||||||||||||
Other operating (income)/expenses | (118 | ) | 90,636 | (169 | ) | 91,509 | |||||||||||||||||||
Total costs and expenses | 383,672 | 454,007 | 766,451 | 818,417 | |||||||||||||||||||||
Income/(loss) from operations | 58,141 | (38,948 | ) | 114,538 | 2,506 | ||||||||||||||||||||
Interest expense | (1,524 | ) | (1,121 | ) | (2,731 | ) | (2,116 | ) | |||||||||||||||||
Other income--net (bb) | 1,038 | 1,653 | 2,056 | 4,116 | |||||||||||||||||||||
Income/(loss) before income taxes | 57,655 | (38,416 | ) | 113,863 | 4,506 | ||||||||||||||||||||
Income taxes | (2,684 | ) | 16,760 | (13,896 | ) | 3,682 | |||||||||||||||||||
Net income/(loss) | $ | 54,971 | $ | (21,656 | ) | $ | 99,967 | $ | 8,188 | ||||||||||||||||
Earnings Per Share | |||||||||||||||||||||||||
Net income/(loss) | $ | 3.43 | $ | (1.35 | ) | $ | 6.22 | $ | 0.51 | ||||||||||||||||
Average number of shares outstanding | 16,035 | 16,010 | 16,067 | 16,114 | |||||||||||||||||||||
Diluted Earnings Per Share | |||||||||||||||||||||||||
Net income/(loss) | $ | 3.27 | $ | (1.35 | ) | $ | 5.93 | $ | 0.49 | ||||||||||||||||
Average number of shares outstanding | 16,811 | 16,010 | 16,854 | 16,758 | |||||||||||||||||||||
(aa) | Selling, general and administrative ("SG&A") expenses comprise (in thousands): | ||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2018 |
2017 | 2018 | 2017 | ||||||||||||||||||||||
SG&A expenses before long-term incentive compensation, expenses related to the OIG investigation and the impact of market value adjustments related to deferred compensation plans |
$ |
66,296 |
$ | 64,018 | $ |
132,517 |
$ | 127,750 | |||||||||||||||||
Long-term incentive compensation |
1,222 |
956 |
3,142 |
1,917 | |||||||||||||||||||||
Market value adjustments related to deferred compensation plans |
779 | 1,587 | 1,638 | 4,202 | |||||||||||||||||||||
Expenses related to the OIG investigation |
- | 2,093 | - | 4,243 | |||||||||||||||||||||
Total SG&A expenses | $ | 68,297 | $ | 68,654 | $ | 137,297 | $ | 138,112 | |||||||||||||||||
(bb) | Other income--net comprises (in thousands): | ||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
Market value adjustments related to deferred compensation plans |
$ | 779 | $ | 1,587 | $ | 1,638 | $ | 4,202 | |||||||||||||||||
Interest income | 259 | 161 | 417 | 245 | |||||||||||||||||||||
Loss on disposal of property and equipment | - | (98 | ) | - | (334 | ) | |||||||||||||||||||
Other | - | 3 | 1 | 3 | |||||||||||||||||||||
Total other income--net | $ | 1,038 | $ | 1,653 | $ | 2,056 | $ | 4,116 | |||||||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||||||||
CONSOLIDATED BALANCE SHEET | ||||||||||||||||||
(in thousands, except per share data)(unaudited) |
||||||||||||||||||
June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Assets | ||||||||||||||||||
Current assets | ||||||||||||||||||
Cash and cash equivalents | $ | 12,668 | $ | 13,753 | ||||||||||||||
Accounts receivable less allowances | 119,206 | 117,906 | ||||||||||||||||
Inventories | 5,696 | 5,618 | ||||||||||||||||
Prepaid income taxes | 19,666 | 4,537 | ||||||||||||||||
Prepaid expenses | 16,205 | 14,678 | ||||||||||||||||
Total current assets | 173,441 | 156,492 | ||||||||||||||||
Investments of deferred compensation plans held in trust | 67,573 | 58,579 | ||||||||||||||||
Properties and equipment, at cost less accumulated depreciation | 145,903 | 140,209 | ||||||||||||||||
Identifiable intangible assets less accumulated amortization | 55,250 | 54,737 | ||||||||||||||||
Goodwill | 478,202 | 472,897 | ||||||||||||||||
Deferred income taxes |
- |
20,593 | ||||||||||||||||
Other assets |
7,845 |
6,767 | ||||||||||||||||
Total Assets | $ | 928,214 | $ | 910,274 | ||||||||||||||
Liabilities | ||||||||||||||||||
Current liabilities | ||||||||||||||||||
Accounts payable | $ | 48,236 | $ | 49,154 | ||||||||||||||
Current portion of long-term debt | - | 10,000 | ||||||||||||||||
Income taxes | - | 3,815 | ||||||||||||||||
Accrued insurance |
42,826 |
44,905 | ||||||||||||||||
Accrued compensation | 49,372 | 48,082 | ||||||||||||||||
Accrued legal | 823 | 92,502 | ||||||||||||||||
Other current liabilities | 25,159 | 20,142 | ||||||||||||||||
Total current liabilities |
166,416 |
268,600 | ||||||||||||||||
Deferred income taxes | 18,811 | - | ||||||||||||||||
Long-term debt | 103,400 | 115,000 | ||||||||||||||||
Deferred compensation liabilities | 66,154 | 57,811 | ||||||||||||||||
Other liabilities |
17,042 |
15,780 | ||||||||||||||||
Total Liabilities | 371,823 | 457,191 | ||||||||||||||||
Stockholders' Equity | ||||||||||||||||||
Capital stock | 35,141 | 34,470 | ||||||||||||||||
Paid-in capital | 744,228 | 661,553 | ||||||||||||||||
Retained earnings | 1,129,289 | 957,941 | ||||||||||||||||
Treasury stock, at cost | (1,354,538 | ) | (1,203,077 | ) | ||||||||||||||
Deferred compensation payable in Company stock | 2,271 | 2,196 | ||||||||||||||||
Total Stockholders' Equity | 556,391 | 453,083 | ||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 928,214 | $ | 910,274 | ||||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||
Net income | $ | 99,967 | $ | 8,188 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||||
Depreciation and amortization | 19,046 | 17,804 | ||||||||||||||||
Stock option expense | 7,305 | 6,055 | ||||||||||||||||
Noncash long-term incentive compensation | 2,942 | 1,783 | ||||||||||||||||
Provision/(benefit) for deferred income taxes | 2,173 | (34,876 | ) | |||||||||||||||
Noncash directors' compensation | 766 | 766 | ||||||||||||||||
Amortization of restricted stock awards | 446 | 638 | ||||||||||||||||
Amortization of debt issuance costs | 288 | 258 | ||||||||||||||||
Provision for uncollectible accounts receivable | - | 8,250 | ||||||||||||||||
Potential litigation settlement | - | 90,000 | ||||||||||||||||
Changes in operating assets and liabilities, excluding amounts acquired in business combinations: |
||||||||||||||||||
(Increase)/decrease in accounts receivable | (6,057 | ) | 5,804 | |||||||||||||||
(Increase)/decrease in inventories | (362 | ) | 137 | |||||||||||||||
Increase in prepaid expenses | (113 | ) | (1,573 | ) | ||||||||||||||
Decrease in accounts payable and other current liabilities |
(14,909 | ) | (6,931 | ) | ||||||||||||||
Change in current income taxes |
10,136 | 2,982 | ||||||||||||||||
Increase in other assets | (5,667 | ) | (4,152 | ) | ||||||||||||||
Increase in other liabilities | 4,889 | 3,754 | ||||||||||||||||
Other sources | 186 | 1,437 | ||||||||||||||||
Net cash provided by operating activities | 121,036 | 100,324 | ||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||
Capital expenditures | (23,872 | ) | (28,133 | ) | ||||||||||||||
Business combinations, net of cash acquired | (1,875 | ) | (525 | ) | ||||||||||||||
Other sources | 533 | 87 | ||||||||||||||||
Net cash used by investing activities | (25,214 | ) | (28,571 | ) | ||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||
Proceeds from revolving line of credit | 358,350 | 135,800 | ||||||||||||||||
Payments on revolving line of credit | (281,150 | ) | (115,800 | ) | ||||||||||||||
Purchases of treasury stock | (84,304 | ) | (85,063 | ) | ||||||||||||||
Payments on other long-term debt | (75,000 | ) | (3,750 | ) | ||||||||||||||
Capital stock surrendered to pay taxes on stock-based compensation | (21,022 | ) | (5,716 | ) | ||||||||||||||
Proceeds from exercise of stock options | 20,209 | 10,398 | ||||||||||||||||
Dividends paid | (9,016 | ) | (8,396 | ) | ||||||||||||||
Debt issuance costs | (968 | ) | - | |||||||||||||||
Decrease in cash overdrafts payable | (711 | ) | (1,090 | ) | ||||||||||||||
Other (uses)/sources | (663 | ) | 307 | |||||||||||||||
Net cash used by financing activities | (94,275 | ) | (73,310 | ) | ||||||||||||||
Increase/(Decrease) in Cash and Cash Equivalents | 1,547 | (1,557 | ) | |||||||||||||||
Cash and cash equivalents at beginning of year | 11,121 | 15,310 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 12,668 | $ | 13,753 | ||||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||||||
FOR THE THREE MONTHS ENDED JUNE 30, 2018 AND 2017 | |||||||||||||||||||||
(in thousands)(unaudited) | |||||||||||||||||||||
Chemed | |||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | ||||||||||||||||||
2018 | |||||||||||||||||||||
Service revenues and sales | $ | 296,799 | $ | 145,014 | $ | - | $ | 441,813 | |||||||||||||
Cost of services provided and goods sold | 233,073 | 72,668 | - | 305,741 | |||||||||||||||||
Selling, general and administrative expenses (a) | 20,702 | 35,909 | 11,686 | 68,297 | |||||||||||||||||
Depreciation | 5,050 | 4,628 | 40 | 9,718 | |||||||||||||||||
Amortization | - | 34 | - | 34 | |||||||||||||||||
Other operating (income)/expense | (67 | ) | (51 | ) | - | (118 | ) | ||||||||||||||
Total costs and expenses | 258,758 | 113,188 | 11,726 | 383,672 | |||||||||||||||||
Income/(loss) from operations | 38,041 | 31,826 | (11,726 | ) | 58,141 | ||||||||||||||||
Interest expense | (53 | ) | (92 | ) | (1,379 | ) | (1,524 | ) | |||||||||||||
Intercompany interest income/(expense) | 3,124 | 1,739 | (4,863 | ) | - | ||||||||||||||||
Other income/(expense)—net | 238 | 21 | 779 | 1,038 | |||||||||||||||||
Income/(loss) before income taxes | 41,350 | 33,494 | (17,189 | ) | 57,655 | ||||||||||||||||
Income taxes (a) | (9,565 | ) | (8,196 | ) | 15,077 | (2,684 | ) | ||||||||||||||
Net income/(loss) | $ | 31,785 | $ | 25,298 | $ | (2,112 | ) | $ | 54,971 | ||||||||||||
2017 | |||||||||||||||||||||
Service revenues and sales | $ | 284,710 | $ |
130,349 |
$ | - | $ | 415,059 | |||||||||||||
Cost of services provided and goods sold | 219,769 | 66,083 | - | 285,852 | |||||||||||||||||
Selling, general and administrative expenses (b) | 24,531 | 33,763 | 10,360 | 68,654 | |||||||||||||||||
Depreciation | 4,741 | 4,070 | 22 | 8,833 | |||||||||||||||||
Amortization | - | 32 | - | 32 | |||||||||||||||||
Other operating expenses | 90,636 | - | - | 90,636 | |||||||||||||||||
Total costs and expenses | 339,677 | 103,948 | 10,382 | 454,007 | |||||||||||||||||
Income/(loss) from operations | (54,967 | ) | 26,401 | (10,382 | ) | (38,948 | ) | ||||||||||||||
Interest expense | (53 | ) | (87 | ) | (981 | ) | (1,121 | ) | |||||||||||||
Intercompany interest income/(expense) | 2,826 | 1,346 | (4,172 | ) | - | ||||||||||||||||
Other income/(expense)—net | 71 | (4 | ) | 1,586 | 1,653 | ||||||||||||||||
Income/(loss) before income taxes | (52,123 | ) | 27,656 | (13,949 | ) | (38,416 | ) | ||||||||||||||
Income taxes (b) | 19,869 | (10,598 | ) | 7,489 | 16,760 | ||||||||||||||||
Net income/(loss) | $ | (32,254 | ) | $ | 17,058 | $ | (6,460 | ) | $ | (21,656 | ) | ||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017 | |||||||||||||||||||||
(in thousands)(unaudited) | |||||||||||||||||||||
Chemed | |||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | ||||||||||||||||||
2018 | |||||||||||||||||||||
Service revenues and sales | $ | 588,813 | $ | 292,176 | $ | - | $ | 880,989 | |||||||||||||
Cost of services provided and goods sold | 460,329 | 149,948 | - | 610,277 | |||||||||||||||||
Selling, general and administrative expenses (a) | 41,213 | 72,006 | 24,078 | 137,297 | |||||||||||||||||
Depreciation | 9,846 | 9,072 | 67 | 18,985 | |||||||||||||||||
Amortization | - | 61 | - | 61 | |||||||||||||||||
Other operating income | (84 | ) | (85 | ) | - | (169 | ) | ||||||||||||||
Total costs and expenses | 511,304 | 231,002 | 24,145 | 766,451 | |||||||||||||||||
Income/(loss) from operations | 77,509 | 61,174 | (24,145 | ) | 114,538 | ||||||||||||||||
Interest expense | (104 | ) | (184 | ) | (2,443 | ) | (2,731 | ) | |||||||||||||
Intercompany interest income/(expense) | 6,218 | 3,417 | (9,635 | ) | - | ||||||||||||||||
Other income/(expense)—net | 380 | 37 | 1,639 | 2,056 | |||||||||||||||||
Income/(loss) before income taxes | 84,003 | 64,444 | (34,584 | ) | 113,863 | ||||||||||||||||
Income taxes (a) | (20,203 | ) | (16,208 | ) | 22,515 | (13,896 | ) | ||||||||||||||
Net income/(loss) | $ | 63,800 | $ | 48,236 | $ | (12,069 | ) | $ | 99,967 | ||||||||||||
2017 | |||||||||||||||||||||
Service revenues and sales | $ | 567,026 | $ | 253,897 | $ | - | $ | 820,923 | |||||||||||||
Cost of services provided and goods sold | 441,446 | 129,546 | - | 570,992 | |||||||||||||||||
Selling, general and administrative expenses (b) | 48,825 | 67,223 | 22,064 | 138,112 | |||||||||||||||||
Depreciation | 9,519 | 8,054 | 153 | 17,726 | |||||||||||||||||
Amortization | 14 | 64 | - | 78 | |||||||||||||||||
Other operating expenses | 91,509 | - | - | 91,509 | |||||||||||||||||
Total costs and expenses | 591,313 | 204,887 | 22,217 | 818,417 | |||||||||||||||||
Income/(loss) from operations | (24,287 | ) | 49,010 | (22,217 | ) | 2,506 | |||||||||||||||
Interest expense | (108 | ) | (185 | ) | (1,823 | ) | (2,116 | ) | |||||||||||||
Intercompany interest income/(expense) | 5,528 | 2,656 | (8,184 | ) | - | ||||||||||||||||
Other income/(expense)—net | (9 | ) | (77 | ) | 4,202 | 4,116 | |||||||||||||||
Income/(loss) before income taxes | (18,876 | ) | 51,404 | (28,022 | ) | 4,506 | |||||||||||||||
Income taxes (b) | 7,219 | (19,722 | ) | 16,185 | 3,682 | ||||||||||||||||
Net income/(loss) | $ | (11,657 | ) | $ | 31,682 | $ | (11,837 | ) | $ | 8,188 | |||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||
CONSOLIDATING SUMMARY OF EBITDA | ||||||||||||||||||||||
FOR THE THREE MONTHS ENDED JUNE 30, 2018 AND 2017 | ||||||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||||||
Chemed | ||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | |||||||||||||||||||
2018 | ||||||||||||||||||||||
Net income/(loss) | $ | 31,785 | $ | 25,298 | $ | (2,112 | ) | $ | 54,971 | |||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 53 | 92 | 1,379 | 1,524 | ||||||||||||||||||
Income taxes | 9,565 | 8,196 | (15,077 | ) | 2,684 | |||||||||||||||||
Depreciation | 5,050 | 4,628 | 40 | 9,718 | ||||||||||||||||||
Amortization | - | 34 | - | 34 | ||||||||||||||||||
EBITDA | 46,453 | 38,248 | (15,770 | ) | 68,931 | |||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (3,124 | ) | (1,739 | ) | 4,863 | - | ||||||||||||||||
Interest income | (237 | ) | (22 | ) | - | (259 | ) | |||||||||||||||
Amortization of stock awards | 37 | 35 | 83 | 155 | ||||||||||||||||||
Medicare cap sequestration adjustment | 185 | - | - | 185 | ||||||||||||||||||
Accrued litigation settlement | (204 | ) | - | - | (204 | ) | ||||||||||||||||
Stock option expense |
- | - | 3,652 | 3,652 | ||||||||||||||||||
Long-term incentive compensation | - | - | 1,222 | 1,222 | ||||||||||||||||||
Adjusted EBITDA | $ | 43,110 | $ | 36,522 | $ | (5,950 | ) | $ | 73,682 | |||||||||||||
2017 | ||||||||||||||||||||||
Net income/(loss) | $ | (32,254 | ) | $ | 17,058 | $ | (6,460 | ) | $ | (21,656 | ) | |||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 53 | 87 | 981 | 1,121 | ||||||||||||||||||
Income taxes | (19,869 | ) | 10,598 | (7,489 | ) | (16,760 | ) | |||||||||||||||
Depreciation | 4,741 | 4,070 | 22 | 8,833 | ||||||||||||||||||
Amortization | - | 32 | - | 32 | ||||||||||||||||||
EBITDA | (47,329 | ) | 31,845 | (12,946 | ) | (28,430 | ) | |||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (2,826 | ) | (1,346 | ) | 4,172 | - | ||||||||||||||||
Interest income | (149 | ) | (12 | ) | - | (161 | ) | |||||||||||||||
Accrued litigation settlement | 90,000 | - | - | 90,000 | ||||||||||||||||||
Expenses related to OIG investigation | 2,093 | - | - | 2,093 | ||||||||||||||||||
Program closure expenses | 636 | - | - | 636 | ||||||||||||||||||
Medicare cap sequestration adjustment | 105 | - | - | 105 | ||||||||||||||||||
Amortization of stock awards | 71 | 66 | 166 | 303 | ||||||||||||||||||
Advertising cost adjustment | - | (272 | ) | - | (272 | ) | ||||||||||||||||
Expenses related to litigation settlements | - | 213 | - | 213 | ||||||||||||||||||
Stock option expense |
- | - | 3,054 | 3,054 | ||||||||||||||||||
Long-term incentive compensation | - | - | 956 | 956 | ||||||||||||||||||
Adjusted EBITDA | $ | 42,601 | $ | 30,494 | $ | (4,598 | ) | $ | 68,497 | |||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||
CONSOLIDATING SUMMARY OF EBITDA | ||||||||||||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017 | ||||||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||||||
Chemed | ||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | |||||||||||||||||||
2018 | ||||||||||||||||||||||
Net income/(loss) | $ | 63,800 | $ | 48,236 | $ | (12,069 | ) | $ | 99,967 | |||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 104 | 184 | 2,443 | 2,731 | ||||||||||||||||||
Income taxes | 20,203 | 16,208 | (22,515 | ) | 13,896 | |||||||||||||||||
Depreciation | 9,846 | 9,072 | 67 | 18,985 | ||||||||||||||||||
Amortization | - | 61 | - | 61 | ||||||||||||||||||
EBITDA | 93,953 | 73,761 | (32,074 | ) | 135,640 | |||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (6,218 | ) | (3,417 | ) | 9,635 | - | ||||||||||||||||
Interest income | (380 | ) | (37 | ) | - | (417 | ) | |||||||||||||||
Amortization of stock awards | 107 | 100 | 239 | 446 | ||||||||||||||||||
Medicare cap sequestration adjustment | 537 | - | - | 537 | ||||||||||||||||||
Stock option expense | - | - | 7,305 | 7,305 | ||||||||||||||||||
Accrued litigation settlement |
(204 | ) | - | - | (204 | ) | ||||||||||||||||
Long-term incentive compensation | - | - | 3,142 | 3,142 | ||||||||||||||||||
Adjusted EBITDA | $ | 87,795 | $ | 70,407 | $ | (11,753 | ) | $ | 146,449 | |||||||||||||
2017 | ||||||||||||||||||||||
Net income/(loss) | $ | (11,657 | ) | $ | 31,682 | $ | (11,837 | ) | $ | 8,188 | ||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 108 | 185 | 1,823 | 2,116 | ||||||||||||||||||
Income taxes | (7,219 | ) | 19,722 | (16,185 | ) | (3,682 | ) | |||||||||||||||
Depreciation | 9,519 | 8,054 | 153 | 17,726 | ||||||||||||||||||
Amortization | 14 | 64 | - | 78 | ||||||||||||||||||
EBITDA | (9,235 | ) | 59,707 | (26,046 | ) | 24,426 | ||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (5,528 | ) | (2,656 | ) | 8,184 | - | ||||||||||||||||
Interest income | (219 | ) | (26 | ) | - | (245 | ) | |||||||||||||||
Accrued litigation settlement |
90,000 | - | - | 90,000 | ||||||||||||||||||
Medicare cap sequestration adjustment | 105 | - | - | 105 | ||||||||||||||||||
Program closure expenses | 1,509 | - | - | 1,509 | ||||||||||||||||||
Expenses related to OIG investigation | 4,243 | - | - | 4,243 | ||||||||||||||||||
Amortization of stock awards | 148 | 136 | 354 | 638 | ||||||||||||||||||
Advertising cost adjustment | - | (545 | ) | - | (545 | ) | ||||||||||||||||
Expenses related to litigation settlements | - | 213 | - | 213 | ||||||||||||||||||
Stock option expense | - | - | 6,055 | 6,055 | ||||||||||||||||||
Long-term incentive compensation | - | - | 1,917 | 1,917 | ||||||||||||||||||
Adjusted EBITDA | $ | 81,023 | $ | 56,829 | $ | (9,536 | ) | $ | 128,316 | |||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NET INCOME |
||||||||||||||||||||||
(in thousands, except per share data)(unaudited) |
||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Net income/(loss) as reported | $ | 54,971 | $ | (21,656 | ) | $ | 99,967 | $ | 8,188 | |||||||||||||
Add/(deduct) after-tax cost of: | ||||||||||||||||||||||
Excess tax benefits on stock compensation | (11,702 | ) | (2,643 | ) | (15,500 | ) | (6,338 | ) | ||||||||||||||
Stock option expense | 2,900 | 1,931 | 5,791 | 3,828 | ||||||||||||||||||
Long-term incentive compensation | 1,003 | 604 | 2,502 | 1,212 | ||||||||||||||||||
Accrued litigation settlement | (152 | ) | 55,800 | (152 | ) | 55,800 | ||||||||||||||||
Medicare cap sequestration adjustments | 138 | 65 | 401 | 65 | ||||||||||||||||||
Expenses of OIG investigation | - | 1,292 | - | 2,620 | ||||||||||||||||||
Program closure expenses | - | 385 | - | 898 | ||||||||||||||||||
Expenses related to litigation settlements | - | 129 | - | 129 | ||||||||||||||||||
Adjusted net income | $ | 47,158 | $ | 35,907 | $ | 93,009 | $ | 66,402 | ||||||||||||||
Diluted Earnings Per Share As Reported | ||||||||||||||||||||||
Net income/(loss) | $ | 3.27 | $ | (1.35 | ) | $ | 5.93 | $ | 0.49 | |||||||||||||
Average number of shares outstanding | 16,811 | 16,010 | 16,854 | 16,758 | ||||||||||||||||||
Adjusted Diluted Earnings Per Share | ||||||||||||||||||||||
Adjusted net income | $ | 2.81 | $ | 2.15 | $ | 5.52 | $ | 3.96 | ||||||||||||||
Average number of shares outstanding | 16,811 | 16,702 | 16,854 | 16,758 | ||||||||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
|||||||||||||||||||||||||
OPERATING STATISTICS FOR VITAS SEGMENT |
|||||||||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017 |
|||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
OPERATING STATISTICS | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
Net revenue ($000) (c) | |||||||||||||||||||||||||
Homecare | $ | 250,381 | $ | 229,948 | $ | 491,412 | $ | 454,147 | |||||||||||||||||
Inpatient | 20,077 | 21,316 | 42,186 | 44,562 | |||||||||||||||||||||
Continuous care | 30,513 | 31,699 | 61,279 | 64,556 | |||||||||||||||||||||
Other | 1,998 | 1,994 | 3,740 | 4,008 | |||||||||||||||||||||
Subtotal | $ | 302,969 | $ | 284,957 | $ | 598,617 | $ | 567,273 | |||||||||||||||||
Room and board, net | (2,675 | ) | - | (5,294 | ) | - | |||||||||||||||||||
Contractual allowances | (2,959 | ) | - | (5,792 | ) | - | |||||||||||||||||||
Medicare cap allowance | (536 | ) | (247 | ) | 1,282 | (247 | ) | ||||||||||||||||||
Net Revenue | $ | 296,799 | $ | 284,710 | $ | 588,813 | $ | 567,026 | |||||||||||||||||
Net revenue as a percent of total before Medicare cap allowance | |||||||||||||||||||||||||
Homecare | 82.6 | % | 80.7 | % | 82.1 | % | 80.1 | % | |||||||||||||||||
Inpatient | 6.6 | 7.5 | 7.0 | 7.9 | |||||||||||||||||||||
Continuous care | 10.1 | 11.1 | 10.2 | 11.4 | |||||||||||||||||||||
Other | 0.7 | 0.7 | 0.7 | 0.6 | |||||||||||||||||||||
Subtotal | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
Room and board, net | (0.9 | ) | - | (0.9 | ) | - | |||||||||||||||||||
Contractual allowances | (1.0 | ) | - | (1.0 | ) | - | |||||||||||||||||||
Medicare cap allowance | (0.1 | ) | (0.1 | ) | 0.3 | - | |||||||||||||||||||
Net Revenue | 98.0 | % | 99.9 | % | 98.4 | % | 100.0 | % | |||||||||||||||||
Average daily census ("ADC") (days) | |||||||||||||||||||||||||
Homecare | 13,583 | 12,446 | 13,375 | 12,368 | |||||||||||||||||||||
Nursing home | 3,275 | 3,135 | 3,245 | 3,093 | |||||||||||||||||||||
Routine homecare | 16,858 | 15,581 | 16,620 | 15,461 | |||||||||||||||||||||
Inpatient | 318 | 343 | 335 | 360 | |||||||||||||||||||||
Continuous care | 467 | 474 | 473 | 489 | |||||||||||||||||||||
Total | 17,643 | 16,398 | 17,428 | 16,310 | |||||||||||||||||||||
Total Admissions | 16,858 | 16,311 | 35,137 | 33,874 | |||||||||||||||||||||
Total Discharges | 16,474 | 16,124 | 34,054 | 33,344 | |||||||||||||||||||||
Average length of stay (days) | 89.0 | 85.2 | 88.4 | 87.1 | |||||||||||||||||||||
Median length of stay (days) | 17.0 | 16.0 | 16.0 | 16.0 | |||||||||||||||||||||
ADC by major diagnosis | |||||||||||||||||||||||||
Cerebro | 36.2 | % | 34.8 | % | 36.4 | % | 34.7 | % | |||||||||||||||||
Neurological | 18.6 | 19.5 | 18.6 | 19.6 | |||||||||||||||||||||
Cardio | 16.6 | 16.5 | 16.4 | 16.5 | |||||||||||||||||||||
Cancer | 13.9 | 14.9 | 13.9 | 15.0 | |||||||||||||||||||||
Respiratory | 8.3 | 7.9 | 8.2 | 7.9 | |||||||||||||||||||||
Other | 6.4 | 6.4 | 6.5 | 6.3 | |||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||
Admissions by major diagnosis | |||||||||||||||||||||||||
Cerebro | 21.7 | % | 21.4 | % | 22.2 | % | 21.7 | % | |||||||||||||||||
Neurological | 11.1 | 10.7 | 11.2 | 10.8 | |||||||||||||||||||||
Cardio | 15.6 | 15.1 | 15.6 | 15.1 | |||||||||||||||||||||
Cancer | 30.5 | 31.5 | 29.2 | 30.4 | |||||||||||||||||||||
Respiratory | 10.8 | 10.2 | 11.3 | 11.0 | |||||||||||||||||||||
Other | 10.3 | 11.1 | 10.5 | 11.0 | |||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||
Direct patient care margins (d) | |||||||||||||||||||||||||
Routine homecare | 52.6 | % | 52.8 | % | 52.4 | % | 52.1 | % | |||||||||||||||||
Inpatient | 4.2 | 3.7 | 5.9 | 4.8 | |||||||||||||||||||||
Continuous care | 17.3 | 18.0 | 17.5 | 16.8 | |||||||||||||||||||||
Homecare margin drivers (dollars per patient day) | |||||||||||||||||||||||||
Labor costs | $ | 57.67 | $ | 56.55 | $ | 58.14 | $ | 57.58 | |||||||||||||||||
Combined drug, home medical equipment and medical supplies cost |
14.39 | 14.51 | 14.43 | 14.82 | |||||||||||||||||||||
Inpatient margin drivers (dollars per patient day) | |||||||||||||||||||||||||
Labor costs | $ | 380.94 | $ | 377.13 | $ | 371.44 | $ | 373.41 | |||||||||||||||||
Continuous care margin drivers (dollars per patient day) | |||||||||||||||||||||||||
Labor costs | $ | 575.36 | $ | 583.87 | $ | 571.41 | $ | 587.39 | |||||||||||||||||
Bad debt expense as a percent of revenues | 1.0 | % | 1.1 | % | 1.0 | % | 1.1 | % | |||||||||||||||||
Accounts receivable -- | |||||||||||||||||||||||||
Days of revenue outstanding- excluding unapplied Medicare payments | 31.9 | 34.5 |
n.a. |
n.a. |
|||||||||||||||||||||
Days of revenue outstanding- including unapplied Medicare payments | 25.6 | 28.0 |
n.a. |
n.a. |
|||||||||||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
|||||||||||||||||||||||||
FOOTNOTES TO FINANCIAL STATEMENTS |
|||||||||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017 |
|||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
(a) |
Included in the results of operations for 2018 are the following significant credits/(charges) which may not be indicative of ongoing operations |
||||||||||||||||||||||||
(in thousands): | |||||||||||||||||||||||||
Three Months Ended June 30, 2018 | |||||||||||||||||||||||||
VITAS | Corporate |
|
Consolidated | ||||||||||||||||||||||
Service revenues and sales: | |||||||||||||||||||||||||
Medicare cap sequestration adjustment | $ | (185 | ) | $ | - | $ | (185 | ) | |||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||||
Stock option expense | - | (3,652 | ) | (3,652 | ) | ||||||||||||||||||||
Long-term incentive compensation | - | (1,222 | ) | (1,222 | ) | ||||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||
Accrued litigation settlement | 204 | - | 204 | ||||||||||||||||||||||
Pretax impact on earnings | 19 | (4,874 | ) | (4,855 | ) | ||||||||||||||||||||
Excess tax benefits on stock compensation | - | 11,702 | 11,702 | ||||||||||||||||||||||
Income tax benefit on the above | (5 | ) | 971 | 966 | |||||||||||||||||||||
After-tax impact on earnings | $ | 14 | $ | 7,799 | $ | 7,813 | |||||||||||||||||||
Six Months Ended June 30, 2018 | |||||||||||||||||||||||||
VITAS | Corporate | Consolidated | |||||||||||||||||||||||
Service revenues and sales: | |||||||||||||||||||||||||
Medicare cap sequestration adjustment | $ | (537 | ) | $ | - | $ | (537 | ) | |||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||||
Stock option expense | - | (7,305 | ) | (7,305 | ) | ||||||||||||||||||||
Long-term incentive compensation | - | (3,142 | ) | (3,142 | ) | ||||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||
Accrued litigation settlement |
204 | - | 204 | ||||||||||||||||||||||
Pretax impact on earnings | (333 | ) | (10,447 | ) | (10,780 | ) | |||||||||||||||||||
Excess tax benefits on stock compensation | - | 15,500 | 15,500 | ||||||||||||||||||||||
Income tax benefit on the above | 84 | 2,154 | 2,238 | ||||||||||||||||||||||
After-tax impact on earnings | $ | (249 | ) | $ | 7,207 | $ | 6,958 | ||||||||||||||||||
(b) | Included in the results of operations for 2076 are the following significant credits/(charges) which may not be indicative of ongoing operations | ||||||||||||||||||||||||
(in thousands): | |||||||||||||||||||||||||
Three Months Ended June 30, 2017 | |||||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | ||||||||||||||||||||||
Service revenues and sales: | |||||||||||||||||||||||||
Medicare cap sequestration adjustment | $ | (105 | ) | $ | - | $ | - | $ | (105 | ) | |||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||||
Expenses related to OIG investigation | (2,093 | ) | - | - | (2,093 | ) | |||||||||||||||||||
Expenses related to litigation settlements | - | (213 | ) | - | (213 | ) | |||||||||||||||||||
Stock option expense | - | - | (3,054 | ) | (3,054 | ) | |||||||||||||||||||
Long-term incentive compensation | - | - | (956 | ) | (956 | ) | |||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||
Accrued litigation settlement | (90,000 | ) | - | - | (90,000 | ) | |||||||||||||||||||
Program closure expenses | (636 | ) | - | - | (636 | ) | |||||||||||||||||||
Pretax impact on earnings | (92,834 | ) | (213 | ) | (4,010 | ) | (97,057 | ) | |||||||||||||||||
Excess tax benefits on stock compensation | - | - | 2,643 | 2,643 | |||||||||||||||||||||
Income tax benefit on the above | 35,292 | 84 | 1,475 | 36,851 | |||||||||||||||||||||
After-tax impact on earnings | $ | (57,542 | ) | $ | (129 | ) | $ | 108 | $ | (57,563 | ) | ||||||||||||||
Six Months Ended June 30, 2017 | |||||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | ||||||||||||||||||||||
Service revenues and sales: | |||||||||||||||||||||||||
Medicare cap sequestration adjustment | $ | (105 | ) | $ | - | $ | - | $ | (105 | ) | |||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||||
Expenses related to OIG investigation | (4,243 | ) | - | - | (4,243 | ) | |||||||||||||||||||
Expenses related to litigation settlements | - | (213 | ) | - | (213 | ) | |||||||||||||||||||
Stock option expense | - | - | (6,055 | ) | (6,055 | ) | |||||||||||||||||||
Long-term incentive compensation | - | - | (1,917 | ) | (1,917 | ) | |||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||
Accrued litigation settlement | (90,000 | ) | - | - | (90,000 | ) | |||||||||||||||||||
Program closure expenses | (1,509 | ) | - | - | (1,509 | ) | |||||||||||||||||||
Pretax impact on earnings | (95,857 | ) | (213 | ) | (7,972 | ) | (104,042 | ) | |||||||||||||||||
Excess tax benefits on stock compensation | - | - | 6,338 | 6,338 | |||||||||||||||||||||
Income tax benefit on the above | 36,474 | 84 | 2,932 | 39,490 | |||||||||||||||||||||
After-tax impact on earnings | $ | (59,383 | ) | $ | (129 | ) | $ | 1,298 | $ | (58,214 | ) | ||||||||||||||
(c) |
VITAS has 12 large (greater than 450 ADC), 18 medium (greater than 200 but less than 450 ADC) and 15 small (less than 200 ADC) hospice programs. Of VITAS' 30 unique Medicare provider numbers, 28 provider numbers have a Medicare cap cushion of 5% or greater during the first six months of the current cap year and two provider number have a Medicare cap liability. |
||||||||||||||||||||||||
|
|||||||||||||||||||||||||
(d) | Amounts exclude indirect patient care and administrative costs, as well as Medicare Cap billing limitation. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180725005776/en/
Source:
Chemed Corporation
David P. Williams, 513-762-6901