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che-20230630x10q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended June 30, 2023

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

Commission File Number: 1-8351

CHEMED CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		31-0791746
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
255 E. Fifth Street, Suite 2600, Cincinnati, Ohio		45202
(Address of principal executive offices)		(Zip code)
(513) 762-6690 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes	x	No	o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes	x	No	o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging growth company o

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes	o	No	x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

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


Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered	Amount	Date

Capital Stock $1 Par Value	CHE	New York Stock Exchange	15,076,619 Shares	June 30, 2023

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CHEMED CORPORATION AND

SUBSIDIARY COMPANIES

Index



	Page No.
PART I. FINANCIAL INFORMATION:

Item 1. Financial Statements
Unaudited Consolidated Balance Sheets -
June 30, 2023 and December 31, 2022	3

Unaudited Consolidated Statements of Income -
Three and six months ended June 30, 2023 and 2022	4

Unaudited Consolidated Statements of Cash Flows -
Six months ended June 30, 2023 and 2022	5

Unaudited Consolidated Statements of Changes in Stockholders’ Equity-
Three and six months ended June 30, 2023 and 2022	6

Notes to Unaudited Consolidated Financial Statements	8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3. Quantitative and Qualitative Disclosures about Market Risk	39

Item 4. Controls and Procedures	39

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	39

Item 1A. Risk Factors	39

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3. Defaults Upon Senior Securities	40

Item 4. Mine Safety Disclosures	40

Item 5. Other Information	40

Item 6. Exhibits	41

EX – 31.1
EX – 31.2
EX – 31.3
EX – 32.1
EX – 32.2
EX – 32.3
EX – 101
EX – 104

SIGNATURES	42

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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)



	June 30, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	159,924	$	74,126
Accounts receivable		120,314		139,408
Inventories		11,684		10,272
Prepaid income taxes		16,666		18,515
Prepaid expenses		28,572		30,291
Total current assets		337,160		272,612
Investments of deferred compensation plans		99,522		93,196
Properties and equipment, at cost, less accumulated depreciation of $341,908 (2022- $335,920)		208,101		199,714
Lease right of use asset		127,215		135,662
Identifiable intangible assets less accumulated amortization of $43,929 (2022 - $67,716)		94,932		99,726
Goodwill		581,542		581,295
Other assets		56,708		59,807
Total Assets	$	1,505,180	$	1,442,012

LIABILITIES
Current liabilities
Accounts payable	$	41,058	$	41,884
Current portion of long-term debt		-		5,000
Accrued insurance		57,461		58,515
Accrued compensation		74,384		87,350
Accrued legal		6,096		4,456
Short-term lease liability		38,779		38,996
Other current liabilities		84,709		61,004
Total current liabilities		302,487		297,205
Deferred income taxes		36,681		38,613
Long-term debt		-		92,500
Deferred compensation liabilities		98,941		92,330
Long-term lease liability		102,112		110,513
Other liabilities		12,880		12,136
Total Liabilities		553,101		643,297
Commitments and contingencies (Note 10)
STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 36,996,451 shares (2022 - 36,795,792 shares)		36,996		36,796
Paid-in capital		1,240,415		1,149,899
Retained earnings		2,294,004		2,197,918
Treasury stock - 21,983,002 shares (2022 - 21,920,993 shares)		(2,621,657)		(2,588,145)
Deferred compensation payable in Company stock		2,321		2,247
Total Stockholders' Equity		952,079		798,715
Total Liabilities and Stockholders' Equity	$	1,505,180	$	1,442,012

See Accompanying Notes to Unaudited Consolidated Financial Statements.

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



	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Service revenues and sales	$	553,816	$	531,288	$	1,113,973	$	1,061,837
Cost of services provided and goods sold (excluding depreciation)		374,193		336,821		744,898		673,373
Selling, general and administrative expenses		94,987		87,853		195,082		177,807
Depreciation		12,634		12,714		24,920		24,852
Amortization		2,514		2,520		5,027		5,038
Other operating expense/(income)		(18)		(558)		1,721		(545)
Total costs and expenses		484,310		439,350		971,648		880,525
Income from operations		69,506		91,938		142,325		181,312
Interest expense		(771)		(902)		(2,322)		(1,712)
Other expense/(income) - net		1,609		(4,930)		1,506		(8,792)
Income before income taxes		70,344		86,106		141,509		170,808
Income taxes		(16,967)		(19,650)		(34,011)		(40,183)
Net income	$	53,377	$	66,456	$	107,498	$	130,625

Earnings Per Share:
Net income	$	3.54	$	4.45	$	7.16	$	8.73
Average number of shares outstanding		15,058		14,932		15,013		14,959

Diluted Earnings Per Share:
Net income	$	3.51	$	4.40	$	7.09	$	8.62
Average number of shares outstanding		15,219		15,111		15,167		15,152

Cash Dividends Per Share	$	0.38	$	0.36	$	0.76	$	0.72

See Accompanying Notes to Unaudited Consolidated Financial Statements.

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

	Six Months Ended June 30,
	2023		2022
Cash Flows from Operating Activities
Net income	$	107,498	$	130,625
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		29,947		29,890
Stock option expense		16,882		14,667
Noncash long-term incentive compensation		3,493		2,497
Benefit of deferred income taxes		(1,932)		(2,129)
Noncash directors' compensation		1,444		1,170
Amortization of debt issuance costs		420		153
Changes in operating assets and liabilities:
Decrease in accounts receivable		20,100		887
Increase in inventories		(1,412)		(587)
Decrease in prepaid expenses		1,719		3,689
Increase/(decrease) in accounts payable and other current liabilities		8,561		(24,001)
Change in current income taxes		1,865		27
Net change in lease assets and liabilities		(1,046)		705
(Increase)/decrease in other assets		(3,810)		2,071
Increase/(decrease) in other liabilities		7,344		(1,491)
Other sources/(uses)		1,736		(503)
Net cash provided by operating activities		192,809		157,670
Cash Flows from Investing Activities
Capital expenditures		(33,420)		(25,610)
Proceeds from sale of fixed assets		360		1,757
Business combinations, net of cash acquired		(305)		(1,650)
Other uses		(169)		(132)
Net cash used by investing activities		(33,534)		(25,635)
Cash Flows from Financing Activities
Payments on other long-term debt		(97,500)		-
Proceeds from other long-term debt		-		100,000
Proceeds from exercise of stock options		53,675		12,869
Purchases of treasury stock		(13,425)		(77,214)
Dividends paid		(11,412)		(10,722)
Capital stock surrendered to pay taxes on stock-based compensation		(5,313)		(12,115)
Payments on revolving line of credit		-		(263,300)
Proceeds from revolving line of credit		-		95,100
Change in cash overdrafts payable		-		1,716
Debt issuance costs		-		(1,510)
Other sources/(uses)		498		(114)
Net cash used by financing activities		(73,477)		(155,290)
Increase/(Decrease) in Cash and Cash Equivalents		85,798		(23,255)
Cash and cash equivalents at beginning of period		74,126		32,895
Cash and cash equivalents at end of period	$	159,924	$	9,640

See Accompanying Notes to Unaudited Consolidated Financial Statements.

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