Chemed Reports Second-Quarter 2022 Results
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Chemed Reports Second-Quarter 2022 Results

CINCINNATI--(BUSINESS WIRE)--Jul. 27, 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 second quarter ended June 30, 2022, versus the comparable prior-year period, as follows:

Consolidated operating results:

  • Revenue declined 0.2% to $531 million
  • GAAP Diluted Earnings-per-Share (EPS) of $4.40, an increase of 25.4%
  • Adjusted Diluted EPS of $4.84, an increase of 5.2%

VITAS segment operating results:

  • Net Patient Revenue of $298 million, a decline of 4.5%
  • Average Daily Census (ADC) of 17,315, a decline of 3.8%
  • Admissions of 14,735, a decline of 12.5%
  • Net Income, excluding certain discrete items, of $35.3 million, a decline of 10.4%
  • Adjusted EBITDA, excluding Medicare Cap, of $50.0 million, a decline of 8.8%
  • Adjusted EBITDA margin, excluding Medicare Cap, of 16.7%, a decrease of 78-basis points

Roto-Rooter segment operating results:

  • Revenue of $233 million, an increase of 6.0%
  • Net Income, excluding certain discrete items, of $48.8 million, an increase of 8.8%
  • Adjusted EBITDA of $69.0 million, an increase of 7.4%
  • Adjusted EBITDA margin of 29.6%, an increase of 39-basis points

VITAS

VITAS net revenue was $298 million in the second quarter of 2022, which is a decline of 4.5%, when compared to the prior-year period. This revenue decline is comprised primarily of a 3.8% decline in days-of-care partially offset by a geographically weighted average Medicare reimbursement rate increase of approximately 0.8%. Acuity mix shift had a net impact of reducing revenue approximately $5.2 million, or 1.6%, 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 reduced the revenue decline by approximately 10-basis points.

In the second quarter of 2022, VITAS accrued $2.0 million in Medicare Cap billing limitations. This is equal to the Medicare Cap billing limitation in the second quarter of 2021.

Of VITAS’ 30 Medicare provider numbers, 27 provider numbers have a Medicare Cap cushion of 10% or greater, one provider number has a cushion between 5% and 10%, and two provider numbers have an estimated fiscal 2022 Medicare Cap billing limitation liability.

Average revenue per patient per day in the second quarter of 2022 was $193.57 which, including acuity mix shift, is 84-basis points below the prior-year period. Reimbursement for routine home care and high acuity care averaged $170.29 and $1,004.55, respectively. During the quarter, high acuity days-of-care were 2.8% of total days of care, 40-basis points less than the prior-year quarter.

The second quarter 2022 gross margin, excluding Medicare Cap and increased costs directly related to operating during the pandemic, was 24.1%. This is a 61-basis point margin decline when compared to the second quarter of 2021.

Selling, general and administrative expense was $23.1 million in the second quarter of 2022 and compares to $22.6 million incurred in the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $50.0 million in the quarter, a decrease of 8.8%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 16.7%, which is 78-basis points below the prior-year period.

Roto-Rooter

Roto-Rooter generated quarterly revenue of $233 million in the second quarter of 2022, an increase of $13.2 million, or 6.0%, when compared to the prior-year quarter.

Roto-Rooter branch commercial revenue in the quarter totaled $54.8 million, an increase of $3.8 million, or 7.5%, over the prior year. This aggregate commercial revenue growth consisted of drain cleaning revenue increasing 8.4%, plumbing increasing 10.4%, water restoration increasing 4.1%, and excavation increasing 4.2%.

Roto-Rooter branch residential revenue in the quarter totaled $159 million, an increase of $7.6 million, or 5.0%, over the prior-year period. This aggregate residential revenue growth consisted of drain cleaning remaining essentially equal to the prior year quarter, plumbing expanding 9.3%, excavation declining 0.1%, and water restoration increasing 14.0%.

Roto-Rooter’s gross margin in the quarter was 53.2%, a 6-basis point decline when compared to the second quarter of 2021. Adjusted EBITDA in the second quarter of 2022 totaled $69.0 million, an increase of 7.4%. The Adjusted EBITDA margin in the quarter was 29.6%, which is a 39-basis point improvement when compared to the prior year.

Chemed Consolidated

As of June 30, 2022, Chemed had total cash and cash equivalents of $9.6 million and $117 million of current and long-term debt.

In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consists of a $100 million amortizable term loan and a $450 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. On June 30, 2022, the Company had approximately $387 million of undrawn borrowing capacity under this credit agreement.

During the quarter, the Company repurchased 100,000 shares of Chemed stock for $49.9 million which equates to a cost per share of $498.61. As of June 30, 2022, there was approximately $125 million of remaining share repurchase authorization under this plan.

Chemed restarted its share repurchase program in 2007. Since that time, Chemed has repurchased approximately 15.9 million shares, aggregating approximately $2.0 billion at an average share cost of $128.76. Including dividends over this period, Chemed has returned approximately $2.3 billion to shareholders.

Guidance for 2022

Historically, Chemed earnings guidance has been developed using previous periods’ key operating metrics which are then modeled and projected out for future periods. 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, uncertainty regarding forward looking inflation, and a potential economic recession, 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 remainder of the 2022 calendar year. However, this guidance should be taken with the recognition the above macro issues could materially impact the company’s ability to achieve this guidance.

Based upon the above discussion, VITAS 2022 revenue, prior to Medicare Cap, is estimated to decline 4.5% to 5.0% 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 3.5%. Full year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 17.0% to 17.2%. We are currently estimating $10 million for Medicare Cap billing limitations in calendar year 2022.

Roto-Rooter is forecasted to achieve full-year 2022 revenue growth of 5.5% to 5.7%. Roto-Rooter’s adjusted EBITDA margin for 2022 is expected to be 29.2% 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 $19.30 to $19.50. This compares to our previous 2022 adjusted earnings per share guidance of $19.10 to $19.50. Current 2022 guidance assumes an effective corporate tax rate on adjusted earnings of 25.1% and a diluted share count of 15.12 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 Thursday, July 28, 2022, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed’s website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/z8752xj3.

Participants may also register via teleconference at: https://register.vevent.com/register/BIb15c9a69666f4f3f8c4010ce89314068. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.

A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investors relations section of Chemed’s website.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to approximately 17,300 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 June 30,

 

Six Months Ended June 30,

2022

 

2021

 

2022

 

2021

Service revenues and sales $

531,288

 

$

532,256

 

1,061,837

 

$

1,059,616

 

Cost of services provided and goods sold

336,821

 

350,493

 

673,373

 

690,966

 

Selling, general and administrative expenses (aa)

87,853

 

93,838

 

177,807

 

185,437

 

Depreciation

12,714

 

13,612

 

24,852

 

25,327

 

Amortization

2,520

 

2,510

 

5,038

 

5,020

 

Other operating (income)/expense

(558

)

104

 

(545

)

726

 

Total costs and expenses

439,350

 

460,557

 

880,525

 

907,476

 

Income from operations

91,938

 

71,699

 

181,312

 

152,140

 

Interest expense

(902

)

(379

)

(1,712

)

(760

)

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

(4,930

)

3,785

 

(8,792

)

7,387

 

Income before income taxes

86,106

 

75,105

 

170,808

 

158,767

 

Income taxes

(19,650

)

(18,583

)

(40,183

)

(36,845

)

Net income $

66,456

 

$

56,522

 

$

130,625

 

$

121,922

 

Earnings Per Share
Net income $

4.45

 

$

3.57

 

$

8.73

 

$

7.66

 

Average number of shares outstanding

14,932

 

15,829

 

14,959

 

15,919

 

Diluted Earnings Per Share
Net income $

4.40

 

$

3.51

 

$

8.62

 

$

7.52

 

Average number of shares outstanding

15,111

 

16,101

 

15,152

 

16,205

 

 
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
 
Three Months Ended June 30, Six Months Ended June 30,

2022

 

2021

 

2022

 

2021

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

91,422

 

$

88,510

 

$

184,000

 

$

175,178

 

Market value adjustments related to deferred
compensation trusts

(5,086

)

3,655

 

(9,020

)

6,693

 

Long-term incentive compensation

1,517

 

1,673

 

2,827

 

3,566

 

Total SG&A expenses $

87,853

 

$

93,838

 

$

177,807

 

$

185,437

 

 
(bb) Other (expense)/income--net comprises (in thousands):
Three Months Ended June 30, Six Months Ended June 30,

2022

 

2021

 

2022

 

2021

Market value adjustments related to deferred
compensation trusts $

(5,086

)

$

3,655

 

$

(9,020

)

$

6,693

 

Interest income

154

 

138

 

226

 

230

 

Other

2

 

(8

)

2

 

464

 

Total other (expense)/income--net $

(4,930

)

$

3,785

 

$

(8,792

)

$

7,387

 

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

June 30,

2022

 

2021

Assets
Current assets
Cash and cash equivalents $

9,640

 

$

92,120

 

Accounts receivable less allowances

136,555

 

123,329

 

Inventories

10,696

 

7,411

 

Prepaid income taxes

17,256

 

23,386

 

Prepaid expenses

28,999

 

22,840

 

Total current assets

203,146

 

269,086

 

Investments of deferred compensation plans held in trust

96,061

 

98,256

 

Properties and equipment, at cost less accumulated depreciation

192,005

 

192,653

 

Lease right of use asset

128,290

 

123,207

 

Identifiable intangible assets less accumulated amortization

103,837

 

113,137

 

Goodwill

579,653

 

578,650

 

Other assets

9,972

 

8,807

 

Total Assets $

1,312,964

 

$

1,383,796

 

Liabilities
Current liabilities
Accounts payable $

73,975

 

$

55,975

 

Current portion of long-term debt

5,000

 

-

 

Income taxes

-

 

5

 

Accrued insurance

54,828

 

51,963

 

Accrued compensation

68,290

 

83,608

 

Accrued legal

808

 

1,391

 

Short-term lease liability

39,062

 

36,440

 

Other current liabilities

43,105

 

38,020

 

Total current liabilities

285,068

 

267,402

 

Deferred income taxes

21,054

 

21,713

 

Long-term debt

111,800

 

-

 

Deferred compensation liabilities

95,624

 

97,374

 

Long-term lease liability

103,389

 

99,093

 

Other liabilities

11,069

 

27,440

 

Total Liabilities

628,004

 

513,022

 

Stockholders' Equity
Capital stock

36,651

 

36,385

 

Paid-in capital

1,089,129

 

999,697

 

Retained earnings

2,090,214

 

1,834,835

 

Treasury stock, at cost

(2,533,306

)

(2,002,326

)

Deferred compensation payable in Company stock

2,272

 

2,183

 

Total Stockholders' Equity

684,960

 

870,774

 

Total Liabilities and Stockholders' Equity $

1,312,964

 

$

1,383,796

 

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

For the Six Months Ended June 30,

2022

 

2021

Cash Flows from Operating Activities
Net income $

130,625

 

$

121,922

 

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

29,890

 

30,347

 

Stock option expense

14,667

 

12,345

 

(Benefit)/provision for deferred income taxes

(2,129

)

1,051

 

Noncash long-term incentive compensation

2,497

 

3,402

 

Noncash directors' compensation

1,170

 

1,173

 

Amortization of debt issuance costs

153

 

153

 

Provision for bad debts

-

 

40

 

Payments on previously accrued litigation settlements

-

 

(9,440

)

Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
Decrease in accounts receivable

887

 

4,722

 

Increase in inventories

(587

)

(316

)

Decrease in prepaid expenses

3,689

 

3,337

 

Decrease in accounts payable and
other current liabilities

(24,001

)

(10,815

)

Change in current income taxes

27

 

(26,242

)

Net change in lease assets and liabilities

705

 

(436

)

Decrease/(increase) in other assets

2,071

 

(10,088

)

(Decrease)/increase in other liabilities

(1,491

)

10,088

 

Other (uses)/sources

(503

)

796

 

Net cash provided by operating activities

157,670

 

132,039

 

Cash Flows from Investing Activities
Capital expenditures

(25,610

)

(33,604

)

Proceeds from sale of fixed assets

1,757

 

522

 

Business combinations, net of cash acquired

(1,650

)

-

 

Other uses

(132

)

(220

)

Net cash used by investing activities

(25,635

)

(33,302

)

Cash Flows from Financing Activities
Payments on revolving line of credit

(263,300

)

-

 

Proceeds from revolving line of credit

95,100

 

-

 

Proceeds from other long-term debt

100,000

 

-

 

Purchases of treasury stock

(77,214

)

(166,649

)

Proceeds from exercise of stock options

12,869

 

16,186

 

Capital stock surrendered to pay taxes on stock-based compensation

(12,115

)

(8,598

)

Dividends paid

(10,722

)

(10,864

)

Change in cash overdrafts payable

1,716

 

-

 

Debt issuance costs

(1,510

)

-

 

Other (uses)/sources

(114

)

633

 

Net cash used by financing activities

(155,290

)

(169,292

)

Decrease in Cash and Cash Equivalents

(23,255

)

(70,555

)

Cash and cash equivalents at beginning of year

32,895

 

162,675

 

Cash and cash equivalents at end of year $

9,640

 

$

92,120

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated
2022 (a)
Service revenues and sales $

297,781

 

$

233,507

 

$

-

 

$

531,288

 

Cost of services provided and goods sold

227,533

 

109,288

 

-

 

336,821

 

Selling, general and administrative expenses

23,148

 

54,982

 

9,723

 

87,853

 

Depreciation

6,062

 

6,634

 

18

 

12,714

 

Amortization

26

 

2,494

 

-

 

2,520

 

Other operating (income)/expense

(807

)

249

 

-

 

(558

)

Total costs and expenses

255,962

 

173,647

 

9,741

 

439,350

 

Income/(loss) from operations

41,819

 

59,860

 

(9,741

)

91,938

 

Interest expense

(44

)

(115

)

(743

)

(902

)

Intercompany interest income/(expense)

4,683

 

2,205

 

(6,888

)

-

 

Other income/(expense)—net

119

 

37

 

(5,086

)

(4,930

)

Income/(loss) before income taxes

46,577

 

61,987

 

(22,458

)

86,106

 

Income taxes

(11,365

)

(14,915

)

6,630

 

(19,650

)

Net income/(loss) $

35,212

 

$

47,072

 

$

(15,828

)

$

66,456

 

 
2021 (b)
Service revenues and sales $

311,935

 

$

220,321

 

$

-

 

$

532,256

 

Cost of services provided and goods sold

247,519

 

102,974

 

-

 

350,493

 

Selling, general and administrative expenses

22,631

 

53,556

 

17,651

 

93,838

 

Depreciation

7,125

 

6,468

 

19

 

13,612

 

Amortization

18

 

2,492

 

-

 

2,510

 

Other operating expense

87

 

17

 

-

 

104

 

Total costs and expenses

277,380

 

165,507

 

17,670

 

460,557

 

Income/(loss) from operations

34,555

 

54,814

 

(17,670

)

71,699

 

Interest expense

(43

)

(89

)

(247

)

(379

)

Intercompany interest income/(expense)

4,486

 

1,649

 

(6,135

)

-

 

Other income—net

99

 

32

 

3,654

 

3,785

 

Income/(loss) before income taxes

39,097

 

56,406

 

(20,398

)

75,105

 

Income taxes

(9,385

)

(13,633

)

4,435

 

(18,583

)

Net income/(loss) $

29,712

 

$

42,773

 

$

(15,963

)

$

56,522

 

 
 
The "Footnotes to Financial Statements" are integral parts of this financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(in thousands)(unaudited)
 
Chemed
VITAS Roto-Rooter Corporate Consolidated
2022 (a)
Service revenues and sales $

596,970

 

$

464,867

 

$

-

 

$

1,061,837

 

Cost of services provided and goods sold

454,773

 

218,600

 

-

 

673,373

 

Selling, general and administrative expenses

45,600

 

111,937

 

20,270

 

177,807

 

Depreciation

11,613

 

13,203

 

36

 

24,852

 

Amortization

49

 

4,989

 

-

 

5,038

 

Other operating (income)/expense

(955

)

410

 

-

 

(545

)

Total costs and expenses

511,080

 

349,139

 

20,306

 

880,525

 

Income/(loss) from operations

85,890

 

115,728

 

(20,306

)

181,312

 

Interest expense

(96

)

(229

)

(1,387

)

(1,712

)

Intercompany interest income/(expense)

9,339

 

4,381

 

(13,720

)

-

 

Other income/(expense)—net

156

 

72

 

(9,020

)

(8,792

)

Income/(loss) before income taxes

95,289

 

119,952

 

(44,433

)

170,808

 

Income taxes

(23,595

)

(28,943

)

12,355

 

(40,183

)

Net income/(loss) $

71,694

 

$

91,009

 

$

(32,078

)

$

130,625

 

 
2021 (b)
Service revenues and sales $

627,723

 

$

431,893

 

$

-

 

$

1,059,616

 

Cost of services provided and goods sold

486,186

 

204,780

 

-

 

690,966

 

Selling, general and administrative expenses

44,721

 

106,878

 

33,838

 

185,437

 

Depreciation

12,462

 

12,821

 

44

 

25,327

 

Amortization

36

 

4,984

 

-

 

5,020

 

Other operating expense

590

 

136

 

-

 

726

 

Total costs and expenses

543,995

 

329,599

 

33,882

 

907,476

 

Income/(loss) from operations

83,728

 

102,294

 

(33,882

)

152,140

 

Interest expense

(85

)

(179

)

(496

)

(760

)

Intercompany interest income/(expense)

9,011

 

3,269

 

(12,280

)

-

 

Other income—net

632

 

63

 

6,692

 

7,387

 

Income/(loss) before income taxes

93,286

 

105,447

 

(39,966

)

158,767

 

Income taxes

(22,805

)

(25,497

)

11,457

 

(36,845

)

Net income/(loss) $

70,481

 

$

79,950

 

$

(28,509

)

$

121,922

 

 
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 JUNE 30, 2022 AND 2021
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated

2022

Net income/(loss)

$

35,212

 

$

47,072

 

$

(15,828

)

$

66,456

 

Add/(deduct):

Interest expense

44

 

115

 

743

 

902

 

Income taxes

11,365

 

14,915

 

(6,630

)

19,650

 

Depreciation

6,062

 

6,634

 

18

 

12,714

 

Amortization

26

 

2,494

 

-

 

2,520

 

EBITDA

52,709

 

71,230

 

(21,697

)

102,242

 

Add/(deduct):

Intercompany interest expense/(income)

(4,683

)

(2,205

)

6,888

 

-

 

Interest income

(118

)

(37

)

1

 

(154

)

Stock option expense

-

 

-

 

7,216

 

7,216

 

Long-term incentive compensation

-

 

-

 

1,517

 

1,517

 

Medicare cap sequestration adjustment

138

 

-

 

-

 

138

 

Direct costs related to COVID-19

(80

)

-

 

-

 

(80

)

Other

-

 

28

 

-

 

28

 

Adjusted EBITDA

$

47,966

 

$

69,016

 

$

(6,075

)

$

110,907

 

 

2021

Net income/(loss)

$

29,712

 

$

42,773

 

$

(15,963

)

$

56,522

 

Add/(deduct):

Interest expense

43

 

89

 

247

 

379

 

Income taxes

9,385

 

13,633

 

(4,435

)

18,583

 

Depreciation

7,125

 

6,468

 

19

 

13,612

 

Amortization

18

 

2,492

 

-

 

2,510

 

EBITDA

46,283

 

65,455

 

(20,132

)

91,606

 

Add/(deduct):

Intercompany interest expense/(income)

(4,486

)

(1,649

)

6,135

 

-

 

Interest income

(106

)

(32

)

-

 

(138

)

Direct costs related to COVID-19

11,084

 

582

 

-

 

11,666

 

Stock option expense

-

 

-

 

6,239

 

6,239

 

Long-term incentive compensation

-

 

-

 

1,673

 

1,673

 

Litigation settlements

-

 

(98

)

-

 

(98

)

Adjusted EBITDA

$

52,775

 

$

64,258

 

$

(6,085

)

$

110,948

 

 
The "Footnotes to Financial Statements" are integral parts of this financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARIES OF EBITDA
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated

2022

Net income/(loss)

$

71,694

 

$

91,009

 

$

(32,078

)

$

130,625

 

Add/(deduct):

Interest expense

96

 

229

 

1,387

 

1,712

 

Income taxes

23,595

 

28,943

 

(12,355

)

40,183

 

Depreciation

11,613

 

13,203

 

36

 

24,852

 

Amortization

49

 

4,989

 

-

 

5,038

 

EBITDA

107,047

 

138,373

 

(43,010

)

202,410

 

Add/(deduct):

Intercompany interest expense/(income)

(9,339

)

(4,381

)

13,720

 

-

 

Interest income

(155

)

(71

)

-

 

(226

)

Stock option expense

-

 

-

 

14,667

 

14,667

 

Long-term incentive compensation

-

 

-

 

2,827

 

2,827

 

Direct costs related to COVID-19

310

 

960

 

-

 

1,270

 

Medicare cap sequestration adjustment

138

 

-

 

-

 

138

 

Other

-

 

28

 

-

 

28

 

Adjusted EBITDA

$

98,001

 

$

134,909

 

$

(11,796

)

$

221,114

 

2021

Net income/(loss)

$

70,481

 

$

79,950

 

$

(28,509

)

$

121,922

 

Add/(deduct):

Interest expense

85

 

179

 

496

 

760

 

Income taxes

22,805

 

25,497

 

(11,457

)

36,845

 

Depreciation

12,462

 

12,821

 

44

 

25,327

 

Amortization

36

 

4,984

 

-

 

5,020

 

EBITDA

105,869

 

123,431

 

(39,426

)

189,874

 

Add/(deduct):

Intercompany interest expense/(income)

(9,011

)

(3,269

)

12,280

 

-

 

Interest income

(167

)

(63

)

-

 

(230

)

Direct costs related to COVID-19

12,836

 

1,136

 

38

 

14,010

 

Stock option expense

-

 

-

 

12,345

 

12,345

 

Long-term incentive compensation

-

 

-

 

3,566

 

3,566

 

Litigation settlements

-

 

(98

)

-

 

(98

)

Adjusted EBITDA

$

109,527

 

$

121,137

 

$

(11,197

)

$

219,467

 

 
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,

2022

 

2021

 

2022

 

2021

Net income as reported $

66,456

 

$

56,522

 

$

130,625

 

$

121,922

 

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

7,216

 

6,239

 

14,667

 

12,345

 

Amortization of reacquired franchise agreements

2,352

 

2,352

 

4,704

 

4,704

 

Long-term incentive compensation

1,517

 

1,673

 

2,827

 

3,566

 

Direct costs related to COVID-19

(80

)

11,666

 

1,270

 

14,010

 

Medicare cap sequestration adjustment

138

 

-

 

138

 

-

 

Other

28

 

-

 

28

 

-

 

Facility relocation expenses

-

 

1,855

 

-

 

1,855

 

Litigation settlements

-

 

(98

)

-

 

(98

)

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

(2,038

)

(5,241

)

(4,449

)

(7,728

)

Excess tax benefits on stock compensation

(2,499

)

(868

)

(3,940

)

(4,106

)

Adjusted net income $

73,090

 

$

74,100

 

$

145,870

 

$

146,470

 

 
Diluted Earnings Per Share As Reported
Net income $

4.40

 

$

3.51

 

$

8.62

 

$

7.52

 

Average number of shares outstanding

15,111

 

16,101

 

15,152

 

16,205

 

 
Adjusted Diluted Earnings Per Share
Adjusted net income $

4.84

 

$

4.60

 

$

9.63

 

$

9.04

 

Average number of shares outstanding

15,111

 

16,101

 

15,152

 

16,205

 

 
(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 June 30,

 

Six Months Ended June 30,

OPERATING STATISTICS

2022

2021

 

2022

2021

Net revenue ($000) (c)
Homecare $

257,631

 

$

264,926

 

$

515,267

 

$

528,680

 

Inpatient

24,619

 

27,371

 

51,189

 

56,527

 

Continuous care

19,538

 

24,282

 

39,116

 

51,631

 

Other

3,213

 

3,078

 

6,220

 

6,016

 

Subtotal $

305,001

 

$

319,657

 

$

611,792

 

$

642,854

 

Room and board, net

(2,166

)

(2,657

)

(4,283

)

(5,322

)

Contractual allowances

(3,054

)

(3,065

)

(6,039

)

(6,309

)

Medicare cap allowance

(2,000

)

(2,000

)

(4,500

)

(3,500

)

Net Revenue $

297,781

 

$

311,935

 

$

596,970

 

$

627,723

 

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

84.5

%

82.9

%

84.2

%

82.2

%

Inpatient

8.1

 

8.6

 

8.4

 

8.8

 

Continuous care

6.4

 

7.6

 

6.4

 

8.0

 

Other

1.0

 

0.9

 

1.0

 

1.0

 

Subtotal

100.0

 

100.0

 

100.0

 

100.0

 

Room and board, net

(0.7

)

(0.8

)

(0.7

)

(0.8

)

Contractual allowances

(1.0

)

(1.0

)

(1.0

)

(1.0

)

Medicare cap allowance

(0.7

)

(0.6

)

(0.7

)

(0.6

)

Net Revenue

97.6

%

97.6

%

97.6

%

97.6

%

Days of care
Homecare

1,266,604

 

1,335,482

 

2,525,276

 

2,665,374

 

Nursing home

259,046

 

244,423

 

507,514

 

477,206

 

Respite

6,095

 

5,338

 

11,463

 

10,178

 

Subtotal routine homecare and respite

1,531,745

 

1,585,243

 

3,044,253

 

3,152,758

 

Inpatient

23,155

 

26,493

 

47,742

 

54,167

 

Continuous care

20,802

 

25,786

 

41,884

 

55,086

 

Total

1,575,702

 

1,637,522

 

3,133,879

 

3,262,011

 

 
Number of days in relevant time period

91

 

91

 

181

 

181

 

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

13,918

 

14,676

 

13,952

 

14,726

 

Nursing home

2,847

 

2,686

 

2,804

 

2,636

 

Respite

67

 

59

 

63

 

57

 

Subtotal routine homecare and respite

16,832

 

17,421

 

16,819

 

17,419

 

Inpatient

254

 

291

 

264

 

299

 

Continuous care

229

 

283

 

231

 

304

 

Total

17,315

 

17,995

 

17,314

 

18,022

 

Total Admissions

14,735

 

16,840

 

31,265

 

34,975

 

Total Discharges

14,603

 

16,525

 

31,465

 

35,054

 

Average length of stay (days)

103.7

 

94.5

 

104.3

 

94.4

 

Median length of stay (days)

17.0

 

14.0

 

16.0

 

13.0

 

ADC by major diagnosis
Cerebro

37.6

%

36.8

%

37.5

%

36.5

%

Neurological

22.7

 

22.4

 

22.8

 

22.3

 

Cancer

11.2

 

12.1

 

11.2

 

12.2

 

Cardio

15.8

 

15.6

 

15.8

 

15.6

 

Respiratory

7.2

 

7.3

 

7.3

 

7.5

 

Other

5.5

 

5.8

 

5.4

 

5.9

 

Total

100.0

%

100.0

%

100.0

%

100.0

%

Admissions by major diagnosis
Cerebro

23.8

%

21.4

%

23.4

%

21.5

%

Neurological

13.0

 

12.3

 

12.9

 

12.3

 

Cancer

27.3

 

28.9

 

26.0

 

26.9

 

Cardio

15.4

 

14.8

 

14.7

 

14.5

 

Respiratory

9.9

 

10.5

 

10.6

 

10.7

 

Other

10.6

 

12.1

 

12.4

 

14.1

 

Total

100.0

%

100.0

%

100.0

%

100.0

%

 
Estimated uncollectible accounts as a percent of revenues

1.0

%

1.0

%

1.0

%

1.0

%

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

33.7

 

36.3

 

n.a. n.a.
Days of revenue outstanding-including unapplied Medicare payments

28.2

 

21.0

 

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, 2022 AND 2021
(unaudited)
 
(a) Included in the results of operations for 2022 are the following significant credits/(charges) which may not be indicative of ongoing operations
(in thousands):
Three Months Ended June 30, 2022
VITAS Roto-Rooter Corporate Consolidated
 
Stock option expense

$

-

 

 

$

-

 

 

$

(7,216

)

 

$

(7,216

)

Amortization of reacquired franchise agreements

 

-

 

 

 

(2,352

)

 

 

-

 

 

 

(2,352

)

Long-term incentive compensation

 

-

 

 

 

-

 

 

 

(1,517

)

 

 

(1,517

)

Medicare cap sequestration adjustment

 

(138

)

 

 

-

 

 

 

-

 

 

 

(138

)

Direct costs related to COVID-19

 

80

 

 

 

-

 

 

 

-

 

 

 

80

 

Other

 

-

 

 

 

(28

)

 

 

-

 

 

 

(28

)

Pretax impact on earnings

 

(58

)

 

 

(2,380

)

 

 

(8,733

)

 

 

(11,171

)

Excess tax benefits on stock compensation

 

-

 

 

 

-

 

 

 

2,499

 

 

 

2,499

 

Income tax benefit on the above

 

15

 

 

 

631

 

 

 

1,392

 

 

 

2,038

 

After-tax impact on earnings

$

(43

)

 

$

(1,749

)

 

$

(4,842

)

 

$

(6,634

)

 
Six Months Ended June 30, 2022
VITAS Roto-Rooter Corporate Consolidated
 
Stock option expense

$

-

 

 

$

-

 

 

$

(14,667

)

 

$

(14,667

)

Amortization of reacquired franchise agreements

 

-

 

 

 

(4,704

)

 

 

-

 

 

 

(4,704

)

Long-term incentive compensation

 

-

 

 

 

-

 

 

 

(2,827

)

 

 

(2,827

)

Direct costs related to COVID-19

 

(310

)

 

 

(960

)

 

 

-

 

 

 

(1,270

)

Medicare cap sequestration adjustment

 

(138

)

 

 

-

 

 

 

-

 

 

 

(138

)

Other

 

-

 

 

 

(28

)

 

 

-

 

 

 

(28

)

Pretax impact on earnings

 

(448

)

 

 

(5,692

)

 

 

(17,494

)

 

 

(23,634

)

Excess tax benefits on stock compensation

 

-

 

 

 

-

 

 

 

3,940

 

 

 

3,940

 

Income tax benefit on the above

 

114

 

 

 

1,508

 

 

 

2,827

 

 

 

4,449

 

After-tax impact on earnings

$

(334

)

 

$

(4,184

)

 

$

(10,727

)

 

$

(15,245

)

 
(b) 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 June 30, 2021
VITAS Roto-Rooter Corporate Consolidated
 
Direct costs related to COVID-19 $

(11,084

)

 

$

(582

)

 

$

-

 

 

$

(11,666

)

Stock option expense

-

 

 

 

-

 

 

 

(6,239

)

 

 

(6,239

)

Amortization of reacquired franchise agreements

-

 

 

 

(2,352

)

 

 

-

 

 

 

(2,352

)

Facility relocation expenses

(1,855

)

 

 

-

 

 

 

-

 

 

 

(1,855

)

Long-term incentive compensation

-

 

 

 

-

 

 

 

(1,673

)

 

 

(1,673

)

Litigation settlements

-

 

 

 

98

 

 

 

-

 

 

 

98

 

Pretax impact on earnings

(12,939

)

 

 

(2,836

)

 

 

(7,912

)

 

 

(23,687

)

Excess tax benefits on stock compensation

-

 

 

 

-

 

 

 

868

 

 

 

868

 

Income tax benefit on the above

3,287

 

 

 

751

 

 

 

1,203

 

 

 

5,241

 

After-tax impact on earnings $

(9,652

)

 

$

(2,085

)

 

$

(5,841

)

 

$

(17,578

)

 
Six Months Ended June 30, 2021
VITAS Roto-Rooter Corporate Consolidated
 
Direct costs related to COVID-19 $

(12,836

)

 

$

(1,136

)

 

$

(38

)

 

$

(14,010

)

Stock option expense

-

 

 

 

-

 

 

 

(12,345

)

 

 

(12,345

)

Amortization of reacquired franchise agreements

-

 

 

 

(4,704

)

 

 

-

 

 

 

(4,704

)

Long-term incentive compensation

-

 

 

 

-

 

 

 

(3,566

)

 

 

(3,566

)

Facility relocation expenses

(1,855

)

 

 

-

 

 

 

-

 

 

 

(1,855

)

Litigation settlements

-

 

 

 

98

 

 

 

-

 

 

 

98

 

Pretax impact on earnings

(14,691

)

 

 

(5,742

)

 

 

(15,949

)

 

 

(36,382

)

Excess tax benefits on stock compensation

-

 

 

 

-

 

 

 

4,106

 

 

 

4,106

 

Income tax benefit on the above

3,731

 

 

 

1,522

 

 

 

2,475

 

 

 

7,728

 

After-tax impact on earnings $

(10,960

)

 

$

(4,220

)

 

$

(9,368

)

 

$

(24,548

)

 
(c) VITAS has 8 large (greater than 450 ADC), 21 medium (greater than 200 but less than 450 ADC) and 23 small (less than 200 ADC) hospice programs. Of Vitas' 30 Medicare provider numbers, for the current cap year, 27 provider numbers have a Medicare cap cushion of greater than 10%, one provider number has Medicare cap cushion between 5% and 10% and two provider numbers have a Medicare cap liability.

 

Chemed Corporation
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