che-20210427x8k
false000001958400000195842021-04-272021-04-27

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):

April 27, 2021

CHEMED CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

     1-8351

  31-0791746

(State or other
jurisdiction of
incorporation)

(Commission File Number)

(I.R.S. Employer
Identification
Number)

2600 First Financial Center, 255 East 5th Street, Cincinnati, OH 45202

(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:

(513) 762-6690

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[_]      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[_]      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240-14a-12)

[_]      Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240-14d-2(b))

[_]      Pre-commencement communications pursuant to Rule 13e-4 (c) under Exchange Act (17 CFR 240-13e-4(c))

Securities registered pursuant to 12(b) of the Act:

 

Title of each class

 

Trading symbol

Name of each exchange on which

registered

Capital stock $1 par value

CHE

NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.  [_]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [_]

Page 1 of 3


Item 2.02 Results of Operations and Financial Condition

On April 27, 2021 Chemed Corporation issued a press release announcing its financial results for the quarter ended March 31, 2021. A copy of the release is furnished herewith as Exhibit 99.

Item 9.01 Financial Statements and Exhibits

d)

Exhibit

 

 

 

 

 

(99) Registrant’s press release dated April 27, 2021

 

 

104 The cover page from this Current Report on Form 8-K formatted in Inline XBRL

Page 2 of 3


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CHEMED CORPORATION

Dated:   April 27, 2021

By:

/s/ Michael D. Witzeman

Michael D. Witzeman

Vice President and Controller

Page 3 of 3

Exhibit 99

 

Picture 2

CONTACT:  David P. Williams

(513) 762-6901



Chemed Reports First-Quarter 2021 Results



CINCINNATI, April 27, 2021—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 first quarter ended March 31, 2021, versus the comparable prior-year period, as follows:



Consolidated operating results:

·

Revenue increased 2.2% to $527 million

·

GAAP Diluted Earnings-per-Share (EPS) of $4.01, an increase of 18.6%

·

Adjusted Diluted EPS of $4.44, an increase of 20.7%



VITAS segment operating results:

·

Net Patient Revenue of $316 million, a  decline of 6.5%

·

Average Daily Census (ADC) of 18,050, a decline of 6.1%

·

Admissions of 18,135 a decline of 2.5%

·

Net Income, excluding certain discrete items, of $42.1 million, a decline of 1.0%

·

Adjusted EBITDA, excluding Medicare Cap, of $58.3 million, a decline of 3.3%

·

Adjusted EBITDA margin, excluding Medicare Cap, of 18.4%, an increase of 66-basis points



Roto-Rooter segment operating results:

·

Revenue of $212 million, an increase of 18.9%

·

Net Income, excluding certain discrete items, of $39.3 million, an increase of 47.3%

·

Adjusted EBITDA of $56.9 million, an increase of 42.1%

·

Adjusted EBITDA margin of 26.9%, an increase of 439-basis points



VITAS



VITAS net revenue was $316 million in the first quarter of 2021, which is a decline of 6.5%, when compared to the prior-year period.  This revenue decline is comprised primarily of a 7.1% decline in days-of-care offset by a geographically weighted average Medicare reimbursement rate increase (including the suspension of sequestration on May 1, 2020) of approximately 2.8%.   Acuity mix shift had a net impact of reducing revenue approximately $9.1 million, or 2.7%, in the quarter when compared to the prior year revenue and level-of-care mix.  The combination of a lower Medicare Cap and other contra revenue changes offset a portion of the revenue decline by approximately 50-basis points.

 

In the first quarter of 2021, VITAS accrued $1.5 million in Medicare Cap billing limitations.  This compares to a $2.5 million Medicare Cap billing limitation in the first quarter of 2020.



Of VITAS’ 30 Medicare provider numbers, 27 provider numbers currently have a Medicare Cap cushion


 

of 10% or greater, one provider number has a cap cushion between 5% and 10%, one provider number has a cap cushion between 0% and 5% and one provider number currently has a fiscal 2021 Medicare Cap billing limitation liability.  This is based on actual Medicare revenue and admissions in the first six months of the Medicare Cap fiscal year.



Average revenue per patient per day in the first quarter of 2021 was $198.95, which, including acuity mix shift, is 2-basis points below the prior-year period. Reimbursement for routine home care and high acuity care averaged $170.14 and $991.77, respectively.  During the quarter, high acuity days-of-care were 3.5% of total days of care, 71-basis points less than the prior-year quarter.



The first quarter 2021 gross margin, excluding Medicare Cap, increased costs for personal protection equipment (PPE), disinfecting facilities and other costs related to operating during the pandemic, was 25.3%.  This is a 123-basis point margin improvement when compared to the first quarter of 2020.



Selling, general and administrative expense was $22.1 million in the first quarter of 2021 and compares favorably to the $22.3 million incurred in the prior-year quarter.  Adjusted EBITDA, excluding Medicare Cap, totaled $58.3 million in the quarter, a decrease of 3.3%.  Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 18.4%, which is a 66-basis point improvement when compared to the prior-year period.



Roto-Rooter



Roto-Rooter generated quarterly revenue of $212 million in the first quarter of 2021, an increase of $33.7 million, or 18.9%, over the prior-year quarter.



Total Roto-Rooter branch commercial revenue in the quarter totaled $46.9 million, a decrease of 8.4% over the prior year.  This aggregate commercial revenue decline consisted of drain cleaning revenue declining 5.8%, plumbing declining 5.0% and excavation declining 19.5%.  Water restoration increased 8.8%.



Total Roto-Rooter branch residential revenue in the quarter totaled $144 million, an increase of  32.0% over the prior year period.  This aggregate residential revenue growth consisted of drain cleaning increasing 29.5%, plumbing expanding 34.9%, excavation increasing 35.8%, and water restoration increasing 28.7%.



Roto-Rooter’s gross margin in the quarter was 51.9%, a 378-basis point increase when compared to the first quarter of 2020.  Adjusted EBITDA in the first quarter of 2021 totaled $56.9 million, an increase of 42.1%.  The Adjusted EBITDA margin in the quarter was 26.9% which is a 439-basis point increase when compared to the prior year.



Chemed Consolidated



As of March 31, 2021, Chemed had total cash and cash equivalents of $210 million and no 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 March 31, 2021, the Company had approximately $412 million of undrawn borrowing capacity under this credit agreement.



During the quarter, the Company repurchased 100,000 shares of Chemed stock for $44.8 million which equates to a cost per share of $447.67.  As of March 31, 2021, there was approximately $134 million of remaining share repurchase authorization under this plan.




 

Chemed restarted its share repurchase program in 2007.  Since that time, Chemed has repurchased approximately 14.6 million shares, aggregating approximately $1.4 billion at an average share cost of $98.15.  Including dividends over this period, Chemed has returned approximately $1.6 billion to shareholders.



Guidance for 2021



Management anticipates providing updated 2021 earnings guidance in July 2021 as part of the June 30, 2021, earnings press release.



Conference Call



Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday, April 28, 2021, 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 9096486.  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 9096486.  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 March 31,



 

2021

 

2020

Service revenues and sales

 

$

527,360 

 

$

515,798 

Cost of services provided and goods sold

 

 

340,473 

 

 

351,745 

Selling, general and administrative expenses (aa)

 

 

91,599 

 

 

70,583 

Depreciation

 

 

11,715 

 

 

11,388 

Amortization

 

 

2,510 

 

 

2,477 

Other operating expense

 

 

622 

 

 

242 

Total costs and expenses

 

 

446,919 

 

 

436,435 

Income from operations

 

 

80,441 

 

 

79,363 

Interest expense

 

 

(381)

 

 

(975)

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

 

 

3,602 

 

 

(9,466)

Income before income taxes

 

 

83,662 

 

 

68,922 

Income taxes

 

 

(18,262)

 

 

(13,031)

Net income

 

$

65,400 

 

$

55,891 

Earnings Per Share

 

 

 

 

 

 

Net income

 

$

4.08 

 

$

3.50 

Average number of shares outstanding

 

 

16,010 

 

 

15,991 

Diluted Earnings Per Share

 

 

 

 

 

 

Net income

 

$

4.01 

 

$

3.38 

Average number of shares outstanding

 

 

16,310 

 

 

16,516 



 

 

 

 

 

 

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



 

 

 

 

 

 



 

Three Months Ended March 31,



 

2021

 

2020

SG&A expenses before long-term incentive compensation

 

 

 

 

 

 

and the impact of market value adjustments related to

 

 

 

 

 

 

deferred compensation plans

 

$

86,668 

 

$

78,334 

Market value adjustments related to deferred

 

 

 

 

 

 

compensation trusts

 

 

3,038 

 

 

(9,572)

Long-term incentive compensation

 

 

1,893 

 

 

1,821 

Total SG&A expenses

 

$

91,599 

 

$

70,583 



 

 

 

 

 

 

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



 

Three Months Ended March 31,



 

2021

 

2020

Market value adjustments related to deferred

 

 

 

 

 

 

compensation trusts

 

$

3,038 

 

$

(9,572)

Interest income

 

 

92 

 

 

109 

Other

 

 

472 

 

 

(3)

Total other income/(expense)--net

 

$

3,602 

 

$

(9,466)




 





 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)(unaudited)



 

 

 

 

 

 



 

March 31,



 

2021

 

2020

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

210,156 

 

$

28,951 

Accounts receivable less allowances

 

 

104,748 

 

 

134,695 

Inventories

 

 

6,777 

 

 

7,313 

Prepaid income taxes

 

 

3,518 

 

 

5,917 

Prepaid expenses

 

 

21,775 

 

 

21,939 

Total current assets

 

 

346,974 

 

 

198,815 

Investments of deferred compensation plans held in trust

 

 

93,705 

 

 

72,296 

Properties and equipment, at cost less accumulated depreciation

 

 

190,154 

 

 

183,729 

Lease right of use asset

 

 

124,104 

 

 

112,302 

Identifiable intangible assets less accumulated amortization

 

 

115,517 

 

 

124,219 

Goodwill

 

 

578,618 

 

 

577,236 

Other assets

 

 

9,061 

 

 

8,962 

Total Assets

 

$

1,458,133 

 

$

1,277,559 

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

55,447 

 

$

37,838 

Income taxes

 

 

24,774 

 

 

6,133 

Accrued insurance

 

 

57,533 

 

 

56,480 

Accrued compensation

 

 

73,907 

 

 

63,622 

Accrued legal

 

 

2,102 

 

 

7,114 

Short-term lease liability

 

 

37,897 

 

 

36,252 

Other current liabilities

 

 

38,555 

 

 

39,298 

Total current liabilities

 

 

290,215 

 

 

246,737 

Deferred income taxes

 

 

19,733 

 

 

20,681 

Long-term debt

 

 

 -

 

 

160,000 

Deferred compensation liabilities

 

 

93,755 

 

 

70,363 

Long-term lease liability

 

 

98,813 

 

 

88,278 

Other liabilities

 

 

26,733 

 

 

7,899 

Total Liabilities

 

 

529,249 

 

 

593,958 

Stockholders' Equity

 

 

 

 

 

 

Capital stock

 

 

36,345 

 

 

35,912 

Paid-in capital

 

 

982,739 

 

 

878,550 

Retained earnings

 

 

1,783,740 

 

 

1,476,151 

Treasury stock, at cost

 

 

(1,876,315)

 

 

(1,709,390)

Deferred compensation payable in Company stock

 

 

2,375 

 

 

2,378 

Total Stockholders' Equity

 

 

928,884 

 

 

683,601 

Total Liabilities and Stockholders' Equity

 

$

1,458,133 

 

$

1,277,559 




 









 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)(unaudited)



 

 

 

 

 

 



 

For the Three Months Ended March 31,



 

2021

 

2020

Cash Flows from Operating Activities

 

 

 

 

 

 

Net income

 

$

65,400 

 

$

55,891 

Adjustments to reconcile net income to net cash provided

 

 

 

 

 

 

by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

14,225 

 

 

13,865 

Payments on previously accrued litigation settlements

 

 

(8,490)

 

 

 -

Stock option expense

 

 

6,106 

 

 

5,045 

Noncash long-term incentive compensation

 

 

1,642 

 

 

1,598 

Deferred payroll taxes

 

 

(930)

 

 

2,290 

Amortization of debt issuance costs

 

 

76 

 

 

76 

Provision for bad debts

 

 

 -

 

 

594 

Changes in operating assets and liabilities, excluding

 

 

 

 

 

 

amounts acquired in business combinations:

 

 

 

 

 

 

Decrease in accounts receivable

 

 

22,773 

 

 

6,269 

Decrease in inventories

 

 

318 

 

 

149 

Decrease in prepaid expenses

 

 

4,402 

 

 

1,211 

Decrease in accounts payable and

 

 

 

 

 

 

other current liabilities

 

 

(18,369)

 

 

(7,037)

Change in current income taxes

 

 

18,395 

 

 

10,159 

Net change in lease assets and liabilities

 

 

(24)

 

 

(153)

Decrease/(increase) in other assets

 

 

(5,274)

 

 

5,048 

Increase/(decrease) in other liabilities

 

 

5,759 

 

 

(6,067)

Other sources

 

 

710 

 

 

388 

Net cash provided by operating activities

 

 

106,719 

 

 

89,326 

Cash Flows from Investing Activities

 

 

 

 

 

 

Capital expenditures

 

   

(17,697)

 

   

(19,897)

Business combinations

 

 

 -

 

 

(1,452)

Other sources/(uses)

 

 

274 

 

 

(144)

Net cash used by investing activities

 

 

(17,423)

 

 

(21,493)

Cash Flows from Financing Activities

 

 

 

 

 

 

Purchases of treasury stock

 

 

(41,107)

 

 

(100,235)

Proceeds from exercise of stock options

 

 

11,026 

 

 

9,241 

Capital stock surrendered to pay taxes on stock-based compensation

 

 

(6,613)

 

 

(7,951)

Dividends paid

 

 

(5,437)

 

 

(5,130)

Payments on revolving line of credit

 

 

 -

 

 

(104,100)

Proceeds from revolving line of credit

 

 

 -

 

 

174,100 

Change in cash overdrafts payable

 

 

 -

 

 

(9,849)

Other sources/uses)

 

 

316 

 

 

(1,116)

Net cash used by financing activities

 

 

(41,815)

 

 

(45,040)

Increase in Cash and Cash Equivalents

 

 

47,481 

 

 

22,793 

Cash and cash equivalents at beginning of year

 

 

162,675 

 

 

6,158 

Cash and cash equivalents at end of year

 

$

210,156 

 

$

28,951 










 





 

 

 

 

 

 

 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(in thousands)(unaudited)



 

 

 

Roto-

 

 

 

Chemed



 

VITAS

 

Rooter

 

Corporate

 

Consolidated

2021 (a)

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues and sales

 

$

315,788 

 

$

211,572 

 

$

 -

 

$

527,360 

Cost of services provided and goods sold

 

 

238,667 

 

 

101,806 

 

 

 -

 

 

340,473 

Selling, general and administrative expenses

 

 

22,090 

 

 

53,322 

 

 

16,187 

 

 

91,599 

Depreciation

 

 

5,338 

 

 

6,353 

 

 

24 

 

 

11,715 

Amortization

 

 

18 

 

 

2,492 

 

 

 -

 

 

2,510 

Other operating expense

 

 

502 

 

 

120 

 

 

 -

 

 

622 

Total costs and expenses

 

 

266,615 

 

 

164,093 

 

 

16,211 

 

 

446,919 

Income/(loss) from operations

 

 

49,173 

 

 

47,479 

 

 

(16,211)

 

 

80,441 

Interest expense

 

 

(42)

 

 

(89)

 

 

(250)

 

 

(381)

Intercompany interest income/(expense)

 

 

4,525 

 

 

1,620 

 

 

(6,145)

 

 

 -

Other income—net

 

 

533 

 

 

31 

 

 

3,038 

 

 

3,602 

Income/(loss) before income taxes

 

 

54,189 

 

 

49,041 

 

 

(19,568)

 

 

83,662 

Income taxes

 

 

(13,419)

 

 

(11,864)

 

 

7,021 

 

 

(18,262)

Net income/(loss)

 

$

40,770 

 

$

37,177 

 

$

(12,547)

 

$

65,400 



 

 

 

 

 

 

 

 

 

 

 

 

2020 (b)

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues and sales

 

$

337,916 

 

$

177,882 

 

$

 -

 

$

515,798 

Cost of services provided and goods sold

 

 

259,429 

 

 

92,316 

 

 

 -

 

 

351,745 

Selling, general and administrative expenses

 

 

22,269 

 

 

46,282 

 

 

2,032 

 

 

70,583 

Depreciation

 

 

5,474 

 

 

5,878 

 

 

36 

 

 

11,388 

Amortization

 

 

18 

 

 

2,459 

 

 

 -

 

 

2,477 

Other operating expense

 

 

114 

 

 

128 

 

 

 -

 

 

242 

Total costs and expenses

 

 

287,304 

 

 

147,063 

 

 

2,068 

 

 

436,435 

Income/(loss) from operations

 

 

50,612 

 

 

30,819 

 

 

(2,068)

 

 

79,363 

Interest expense

 

 

(45)

 

 

(102)

 

 

(828)

 

 

(975)

Intercompany interest income/(expense)

 

 

4,386 

 

 

1,349 

 

 

(5,735)

 

 

 -

Other income/(expense)—net

 

 

65 

 

 

40 

 

 

(9,571)

 

 

(9,466)

Income/(loss) before income taxes

 

 

55,018 

 

 

32,106 

 

 

(18,202)

 

 

68,922 

Income taxes

 

 

(13,739)

 

 

(7,784)

 

 

8,492 

 

 

(13,031)

Net income/(loss)

 

$

41,279 

 

$

24,322 

 

$

(9,710)

 

$

55,891 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

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 MARCH 31, 2021 AND 2020

(in thousands)(unaudited)



 

 

 

 

 

 

 

Chemed



 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

2021

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

40,770 

 

$

37,177 

 

$

(12,547)

 

$

65,400 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

42 

 

 

89 

 

 

250 

 

 

381 

Income taxes

 

 

13,419 

 

 

11,864 

 

 

(7,021)

 

 

18,262 

Depreciation

 

 

5,338 

 

 

6,353 

 

 

24 

 

 

11,715 

Amortization

 

 

18 

 

 

2,492 

 

 

 -

 

 

2,510 

EBITDA

 

 

59,587 

 

 

57,975 

 

 

(19,294)

 

 

98,268 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany interest expense/(income)

 

 

(4,525)

 

 

(1,620)

 

 

6,145 

 

 

 -

Interest income

 

 

(61)

 

 

(31)

 

 

 -

 

 

(92)

Stock option expense

 

 

 -

 

 

 -

 

 

6,106 

 

 

6,106 

Direct costs related to COVID-19

 

 

1,753 

 

 

553 

 

 

38 

 

 

2,344 

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

1,893 

 

 

1,893 

Adjusted EBITDA

 

$

56,754 

 

$

56,877 

 

$

(5,112)

 

$

108,519 



 

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

41,279 

 

$

24,322 

 

$

(9,710)

 

$

55,891 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

45 

 

 

102 

 

 

828 

 

 

975 

Income taxes

 

 

13,739 

 

 

7,784 

 

 

(8,492)

 

 

13,031 

Depreciation

 

 

5,474 

 

 

5,878 

 

 

36 

 

 

11,388 

Amortization

 

 

18 

 

 

2,459 

 

 

 -

 

 

2,477 

EBITDA

 

 

60,555 

 

 

40,545 

 

 

(17,338)

 

 

83,762 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany interest expense/(income)

 

 

(4,386)

 

 

(1,349)

 

 

5,735 

 

 

 -

Interest income

 

 

(68)

 

 

(40)

 

 

 -

 

 

(108)

Stock option expense

 

 

 -

 

 

 -

 

 

5,045 

 

 

5,045 

Direct costs related to COVID-19

 

 

973 

 

 

861 

 

 

 -

 

 

1,834 

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

1,821 

 

 

1,821 

Medicare cap sequestration adjustment

 

 

675 

 

 

 -

 

 

 -

 

 

675 

Adjusted EBITDA

 

$

57,749 

 

$

40,017 

 

$

(4,737)

 

$

93,029 



 

 

 

 

 

 

 

 

 

 

 

 

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 March 31,



 

2021

 

2020

Net income as reported

 

$

65,400 

 

$

55,891 

Add/(deduct) pre-tax cost of:

 

 

 

 

 

 

Stock option expense

 

 

6,106 

 

 

5,045 

Amortization of reacquired franchise agreements

 

 

2,352 

 

 

2,352 

Direct costs related to COVID-19

 

 

2,344 

 

 

1,834 

Long-term incentive compensation

 

 

1,893 

 

 

1,821 

Medicare cap sequestration adjustments

 

 

 -

 

 

675 

Add/(deduct) tax impacts:

 

 

 

 

 

 

Tax impact of the above pre-tax adjustments (1)

 

 

(2,487)

 

 

(2,350)

Excess tax benefits on stock compensation

 

 

(3,238)

 

 

(4,553)

Adjusted net income

 

$

72,370 

 

$

60,715 



 

 

 

 

 

 

Diluted Earnings Per Share As Reported

 

 

 

 

 

 

Net income

 

$

4.01 

 

$

3.38 

Average number of shares outstanding

 

 

16,310 

 

 

16,516 



 

 

 

 

 

 

Adjusted Diluted Earnings Per Share

 

 

 

 

 

 

Adjusted net income

 

$

4.44 

 

$

3.68 

Average number of shares outstanding

 

 

16,310 

 

 

16,516 



 

 

 

 

 

 

(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 March 31,

 

OPERATING STATISTICS

 

2021

 

2020

 

Net revenue ($000) (c)

 

 

 

 

 

 

Homecare

 

263,754 

 

$

271,762 

 

Inpatient

 

29,156 

 

 

32,482 

 

Continuous care

 

27,349 

 

 

40,555 

 

Other

 

2,938 

 

 

3,147 

 

Subtotal

 

323,197 

 

$

347,946 

 

Room and board, net

 

(2,665)

 

 

(3,381)

 

Contractual allowances

 

(3,244)

 

 

(4,149)

 

Medicare cap allowance

 

(1,500)

 

 

(2,500)

 

Net Revenue

 

315,788 

 

$

337,916 

 

Net revenue as a percent of total before Medicare cap allowance

 

 

 

 

 

 

Homecare

 

81.6 

%

 

78.1 

%

Inpatient

 

9.0 

 

 

9.3 

 

Continuous care

 

8.5 

 

 

11.7 

 

Other

 

0.9 

 

 

0.9 

 

Subtotal

 

100.0 

 

 

100.0 

 

Room and board, net

 

(0.8)

 

 

(1.0)

 

Contractual allowances

 

(1.0)

 

 

(1.2)

 

Medicare cap allowance

 

(0.5)

 

 

(0.7)

 

Net Revenue

 

97.7 

%

 

97.1 

%

Days of care

 

 

 

 

 

 

Homecare

 

1,329,892 

 

 

1,364,746 

 

Nursing home

 

232,783 

 

 

303,374 

 

Respite

 

4,840 

 

 

6,692 

 

Subtotal routine homecare and respite

 

1,567,515 

 

 

1,674,812 

 

Inpatient

 

27,674 

 

 

32,348 

 

Continuous care

 

29,300 

 

 

41,373 

 

Total

 

1,624,489 

 

 

1,748,533 

 



 

 

 

 

 

 

Number of days in relevant time period

 

90 

 

 

91 

 

Average daily census ("ADC") (days)

 

 

 

 

 

 

Homecare

 

14,777 

 

 

14,997 

 

Nursing home

 

2,586 

 

 

3,334 

 

Respite

 

54 

 

 

74 

 

Subtotal routine homecare and respite

 

17,417 

 

 

18,405 

 

Inpatient

 

307 

 

 

355 

 

Continuous care

 

326 

 

 

455 

 

Total

 

18,050 

 

 

19,215 

 

Total Admissions

 

18,135 

 

 

18,603 

 

Total Discharges

 

18,516 

 

 

18,196 

 

Average length of stay (days)

 

94.4 

 

 

90.7 

 

Median length of stay (days)

 

12.0 

 

 

14.0 

 

ADC by major diagnosis

 

 

 

 

 

 

Cerebro

 

35.9 

%

 

35.9 

%

Neurological

 

22.1 

 

 

21.4 

 

Cancer

 

12.2 

 

 

12.7 

 

Cardio

 

15.8 

 

 

15.9 

 

Respiratory

 

7.8 

 

 

8.3 

 

Other

 

6.2 

 

 

5.8 

 

Total

 

100.0 

%

 

100.0 

%

Admissions by major diagnosis

 

 

 

 

 

 

Cerebro

 

21.4 

%

 

21.1 

%

Neurological

 

12.3 

 

 

12.5 

 

Cancer

 

25.0 

 

 

28.3 

 

Cardio

 

14.2 

 

 

15.1 

 

Respiratory

 

11.0 

 

 

12.2 

 

Other

 

16.1 

 

 

10.8 

 

Total

 

100.0 

%

 

100.0 

%



 

 

 

 

 

 

Estimated uncollectible accounts as a percent of revenues

 

1.0 

%

 

1.2 

%



 

 

 

 

 

 

Accounts receivable --

 

 

 

 

 

 

Days of revenue outstanding-excluding unapplied Medicare payments

37.8 

 

 

33.9 

 

Days of revenue outstanding-including unapplied Medicare payments

26.9 

 

 

26.1 

 



 

 

 

 

 

 

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




 



 

 

 

 

 

 

 

 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

FOOTNOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS MARCH 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 March 31, 2021



 

 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated



 

 

 

 

 

 

 

 

 

 

 

 

 



Stock option expense

 

$

 -

 

$

 -

 

$

(6,106)

 

$

(6,106)



Amortization of reacquired franchise agreements

 

 

 -

 

 

(2,352)

 

 

 -

 

 

(2,352)



Direct costs related to COVID-19

 

 

(1,753)

 

 

(553)

 

 

(38)

 

 

(2,344)



Long-term incentive compensation

 

 

 -

 

 

 -

 

 

(1,893)

 

 

(1,893)



Pretax impact on earnings

 

 

(1,753)

 

 

(2,905)

 

 

(8,037)

 

 

(12,695)



Excess tax benefits on stock compensation

 

 

 -

 

 

 -

 

 

3,238 

 

 

3,238 



Income tax benefit on the above

 

 

445 

 

 

769 

 

 

1,273 

 

 

2,487