che-20240424x8k
false000001958400000195842024-04-242024-04-24

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 24, 2024

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 24, 2024, Chemed Corporation issued a press release announcing its financial results for the quarter ended March 31, 2024. 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 24, 2024

 

 

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 24, 2024

By:

/s/ Michael D. Witzeman

Michael D. Witzeman

Vice President and Chief Financial Officer

Page 3 of 3

Exhibit 99

Picture 2

CONTACT:  Michael D. Witzeman

(513) 762-6714



Chemed Reports First-Quarter 2024 Results



CINCINNATI, April 24, 2024—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, 2024, versus the comparable prior-year period.



Changes to Non-GAAP Metrics



Chemed uses certain non-GAAP metrics such as EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, to provide additional context and perspective to reported operational results. 



Chemed’s previously reported non-GAAP metrics during the four sequential quarters from September 30, 2022 through June 30, 2023 excluded the 12-month pandemic-related licensed healthcare professional retention bonus (Retention Program).



Starting with the quarter-ended September 30, 2023, the Company no longer excludes the cost of the Retention Program when presenting non-GAAP operating metrics in current or prior periods.



For the quarter-ended March 31, 2023, the pretax and after-tax Retention Program expense was $10.9 million and $8.3 million, respectively.  There was no material impact on financial results for the quarter-ended March 31, 2024 as a result of the Retention Program.



Results for Quarter Ended March 31, 2024



Consolidated operating results:

·

Revenue increased 5.2% to $589.2 million

·

GAAP Diluted Earnings-per-Share (EPS) of $4.24, an increase of 18.4%

·

Adjusted Diluted EPS of $5.20, an increase of 21.5%



VITAS segment operating results:

·

Net Patient Revenue of $354.0 million, an increase of 14.0%

·

Average Daily Census (ADC) of 19,665, an increase of 10.3%

·

Admissions of 16,911, an increase of 4.5%


 

·

Net Income, excluding certain discrete items, of $44.0 million, an increase of 77.6%

·

Adjusted EBITDA, excluding Medicare Cap, of $60.7 million, an increase of 67.2%

·

Adjusted EBITDA margin, excluding Medicare Cap, of 17.0%, an increase of 544-basis points



Roto-Rooter segment operating results:

·

Revenue of $235.2 million, a decrease of 5.8%

·

Net Income, excluding certain discrete items, of $42.7 million, a decrease of 15.8%

·

Adjusted EBITDA of $60.7 million, a decline of 15.6%

·

Adjusted EBITDA margin of 25.8%, a decline of 299-basis points







VITAS





VITAS net revenue was $354.0 million in the first quarter of 2024, which is an increase of 14.0% when compared to the prior-year period.  This revenue increase is comprised primarily of an 11.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%.  Acuity mix shift negatively impacted revenue growth 60-basis points in the quarter when compared to the prior-year period’s revenue and level-of-care mix.  The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 50-basis points.

 

In the first quarter of 2024, VITAS accrued $2.4 million in Medicare Cap billing limitations.  This compares to a $2.8 million Medicare Cap billing limitation in the first quarter of 2023.



Of VITAS’ 30 Medicare provider numbers, 27 provider numbers have a trailing 12-month Medicare Cap cushion of 10% or greater, two provider numbers have a cushion between 0% and 10%, and one provider number has a trailing 12-month Medicare Cap billing limitation totaling $6.4 million.



Average revenue per patient per day in the first quarter of 2024 was $203.08 which is 212-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $177.67 and $1,074.78, respectively.  During the quarter, high acuity days-of-care were 2.8% of total days of care, a decline of 10-basis points when compared to the prior-year quarter.



The first quarter 2024 gross margin, excluding Medicare Cap, was 23.7%.  This compares to the prior year quarter’s gross margin of 19.0%, excluding Medicare Cap.  Approximately 370-basis points of this difference is attributable to the expense associated with the Retention Program.  Selling, general and administrative expenses were $23.8 million in the first quarter of 2024 and compares to $23.3 million in the prior-year quarter. 



Adjusted EBITDA, excluding Medicare Cap, totaled $60.7 million in the quarter, an increase of 67.2%.  Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 17.0%, which is


 

544-basis points above the prior-year period.  Approximately 370-basis points of this difference is attributable to the expense associated with the Retention Program.



As previously announced, VITAS completed its acquisition of the hospice assets and an assisted living facility of Covenant Health and Community Services, Inc. (Covenant Health) on April 17, 2024 for $85 million in cash. 



Roto-Rooter



Roto-Rooter generated quarterly revenue of $235.2 million in the first quarter of 2024, a decrease of 5.8%, when compared to the prior-year quarter.



Roto-Rooter branch commercial revenue in the quarter totaled $53.7 million, a decrease of 10.5% from the prior-year period.  This aggregate commercial revenue decline consisted of drain cleaning revenue declining 9.9%, plumbing declining 11.9%, excavation declining 13.0%, and water restoration declining 2.5%.



Roto-Rooter branch residential revenue in the quarter totaled $162.9 million, a decrease of 3.5%, over the prior-year period.  This aggregate residential revenue decline consisted of drain cleaning decreasing 5.6%, plumbing decreasing 1.1%, excavation expanding 1.5%, and water restoration decreasing 8.5%.



Roto-Rooter’s gross margin in the quarter was 51.9%, a 126-basis point decline when compared to the first quarter of 2023.  Adjusted EBITDA in the first quarter of 2024 totaled $60.7 million, a decrease of 15.6%.  The Adjusted EBITDA margin in the quarter was 25.8%, which is 299-basis points below the prior-year period.



Chemed Consolidated



As of March 31, 2024, Chemed had total cash and cash equivalents of $313.4 million and no current or long-term debt.



In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement).  This Credit Agreement consisted 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.  There is approximately $404.8 million of undrawn borrowing capacity under the Credit Agreement after excluding $45.2 million for Letters of Credit.



During the quarter, the Company repurchased 50,000 shares of Chemed stock for $32.3 million which equates to a cost per share of $646.87.  As of March 31, 2024, there was approximately $281.7 million of remaining share repurchase authorization under its plan.










 

Guidance for 2024



Management reiterates its estimated full-year 2024 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, guidance range of $23.30 to $23.70.  Management anticipates providing updated 2024 earnings guidance and related subsidiary operating metrics as part of the June 30, 2024 earnings press release. 



Conference Call



As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Thursday April 25, 2024, 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 websitehttps://edge.media-server.com/mmc/p/as75yrfc.



Participants may also register via teleconference at: https://register.vevent.com/register/BIc1af400b429d468491b37732bcb93819.  

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 investor 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 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,



 

2024

 

2023

Service revenues and sales

 

$

589,233 

 

$

560,157 

Cost of services provided and goods sold

 

 

385,127 

 

 

370,705 

Selling, general and administrative expenses (aa)

 

 

115,873 

 

 

100,095 

Depreciation

 

 

13,287 

 

 

12,286 

Amortization

 

 

2,521 

 

 

2,513 

Other operating expense

 

 

92 

 

 

1,739 

Total costs and expenses

 

 

516,900 

 

 

487,338 

Income from operations

 

 

72,333 

 

 

72,819 

Interest expense

 

 

(425)

 

 

(1,551)

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

 

 

12,577 

 

 

(103)

Income before income taxes

 

 

84,485 

 

 

71,165 

Income taxes

 

 

(19,468)

 

 

(17,044)

Net income

 

$

65,017 

 

$

54,121 

Earnings Per Share

 

 

 

 

 

 

Net income

 

$

4.30 

 

$

3.62 

Average number of shares outstanding

 

 

15,121 

 

 

14,966 

Diluted Earnings Per Share

 

 

 

 

 

 

Net income

 

$

4.24 

 

$

3.58 

Average number of shares outstanding

 

 

15,339 

 

 

15,110 



 

 

 

 

 

 

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



 

 

 

 

 

 



 

Three Months Ended March 31,



 

2024

 

2023

SG&A expenses before long-term incentive compensation

 

 

 

 

 

 

and the impact of market value adjustments related to

 

 

 

 

 

 

deferred compensation plans

 

$

98,418 

 

$

97,902 

Long-term incentive compensation

 

 

9,121 

 

 

2,514 

Market value adjustments related to deferred

 

 

 

 

 

 

compensation trusts

 

 

8,334 

 

 

(321)

Total SG&A expenses

 

$

115,873 

 

$

100,095 



 

 

 

 

 

 

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



 

Three Months Ended March 31,



 

2024

 

2023

Market value adjustments related to deferred

 

 

 

 

 

 

compensation trusts

 

$

8,334 

 

$

(321)

Interest income

 

 

4,243 

 

 

150 

Other

 

 

 -

 

 

68 

Total other income/(expense)--net

 

$

12,577 

 

$

(103)




 





 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

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



 

 

 

 

 

 



 

March 31,



 

2024

 

2023

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

313,350 

 

$

58,054 

Accounts receivable less allowances

 

 

177,334 

 

 

153,816 

Inventories

 

 

10,712 

 

 

10,663 

Prepaid income taxes

 

 

9,790 

 

 

10,633 

Prepaid expenses

 

 

28,431 

 

 

29,055 

Total current assets

 

 

539,617 

 

 

262,221 

Investments of deferred compensation plans held in trust

 

 

117,649 

 

 

97,436 

Properties and equipment, at cost less accumulated depreciation

 

 

202,784 

 

 

204,164 

Lease right of use asset

 

 

131,751 

 

 

131,219 

Identifiable intangible assets less accumulated amortization

 

 

88,137 

 

 

97,348 

Goodwill

 

 

591,519 

 

 

581,586 

Other assets

 

 

56,176 

 

 

57,511 

Total Assets

 

$

1,727,633 

 

$

1,431,485 

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

56,203 

 

$

40,279 

Current portion of long-term debt

 

 

 -

 

 

5,000 

Income taxes

 

 

27,353 

 

 

11,223 

Accrued insurance

 

 

62,055 

 

 

63,150 

Accrued compensation

 

 

49,802 

 

 

50,152 

Accrued legal

 

 

7,183 

 

 

6,061 

Short-term lease liability

 

 

39,279 

 

 

38,291 

Other current liabilities

 

 

40,099 

 

 

69,304 

Total current liabilities

 

 

281,974 

 

 

283,460 

Deferred income taxes

 

 

24,899 

 

 

35,418 

Long-term debt

 

 

 -

 

 

16,250 

Deferred compensation liabilities

 

 

117,550 

 

 

97,285 

Long-term lease liability

 

 

106,861 

 

 

106,212 

Other liabilities

 

 

12,854 

 

 

12,507 

Total Liabilities

 

 

544,138 

 

 

551,132 

Stockholders' Equity

 

 

 

 

 

 

Capital stock

 

 

37,297 

 

 

36,884 

Paid-in capital

 

 

1,398,733 

 

 

1,186,119 

Retained earnings

 

 

2,505,892 

 

 

2,246,354 

Treasury stock, at cost

 

 

(2,760,543)

 

 

(2,591,588)

Deferred compensation payable in Company stock

 

 

2,116 

 

 

2,284 

Total Stockholders' Equity

 

 

1,183,495 

 

 

880,053 

Total Liabilities and Stockholders' Equity

 

$

1,727,633 

 

$

1,431,185 




 









 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)(unaudited)



 

 

 

 

 

 



 

For the Three Months Ended March 31,



 

2024

 

2023

Cash Flows from Operating Activities

 

 

 

 

 

 

Net income

 

$

65,017 

 

$

54,121 

Adjustments to reconcile net income to net cash provided

 

 

 

 

 

 

by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

15,808 

 

 

14,799 

Noncash long-term incentive compensation

 

 

9,106 

 

 

2,024 

Stock option expense

 

 

9,025 

 

 

8,482 

Benefit for deferred income taxes

 

 

(5,422)

 

 

(3,195)

Amortization of debt issuance costs

 

 

80 

 

 

95 

Changes in operating assets and liabilities, excluding

 

 

 

 

 

 

amounts acquired in business combinations:

 

 

 

 

 

 

Decrease/(increase) in accounts receivable

 

 

5,345 

 

 

(14,318)

Decrease/(increase) in inventories

 

 

1,302 

 

 

(391)

Decrease in prepaid expenses

 

 

1,909 

 

 

1,236 

Decrease in accounts payable and

 

 

 

 

 

 

other current liabilities

 

 

(43,012)

 

 

(24,109)

Change in current income taxes

 

 

23,871 

 

 

19,118 

Net change in lease assets and liabilities

 

 

25 

 

 

(632)

Increase in other assets

 

 

(12,243)

 

 

(2,173)

Increase in other liabilities

 

 

13,332 

 

 

5,313 

Other sources

 

 

406 

 

 

122 

Net cash provided by operating activities

 

 

84,549 

 

 

60,492 

Cash Flows from Investing Activities

 

 

 

 

 

 

Capital expenditures

 

   

(12,163)

 

   

(17,020)

Business combinations, net of cash acquired

 

 

(7,300)

 

 

 -

Proceeds from sale of fixed assets

 

 

86 

 

 

146 

Other uses

 

 

(8)

 

 

(139)

Net cash used by investing activities

 

 

(19,385)

 

 

(17,013)

Cash Flows from Financing Activities

 

 

 

 

 

 

Purchases of treasury stock

 

 

(38,460)

 

 

 -

Proceeds from exercise of stock options

 

 

37,242 

 

 

25,680 

Dividends paid

 

 

(6,050)

 

 

(5,685)

Capital stock surrendered to pay taxes on stock-based compensation

 

 

(5,725)

 

 

(3,166)

Change in cash overdrafts payable

 

 

(2,115)

 

 

 -

Payments on long-term debt

 

 

 -

 

 

(76,250)

Other uses

 

 

(664)

 

 

(130)

Net cash used by financing activities

 

 

(15,772)

 

 

(59,551)

Increase/(decrease) in Cash and Cash Equivalents

 

 

49,392 

 

 

(16,072)

Cash and cash equivalents at beginning of year

 

 

263,958 

 

 

74,126 

Cash and cash equivalents at end of year

 

$

313,350 

 

$

58,054 










 





 

 

 

 

 

 

 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(in thousands)(unaudited)



 

 

 

 

 

 

 

Chemed



 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

2024 (a)

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues and sales

 

$

354,007 

 

$

235,226 

 

$

 -

 

$

589,233 

Cost of services provided and goods sold

 

 

271,896 

 

 

113,231 

 

 

 -

 

 

385,127 

Selling, general and administrative expenses

 

 

23,792 

 

 

61,260 

 

 

30,821 

 

 

115,873 

Depreciation

 

 

5,166 

 

 

8,108 

 

 

13 

 

 

13,287 

Amortization

 

 

26 

 

 

2,495 

 

 

 -

 

 

2,521 

Other operating expense

 

 

 

 

85 

 

 

 -

 

 

92 

Total costs and expenses

 

 

300,887 

 

 

185,179 

 

 

30,834 

 

 

516,900 

Income/(loss) from operations

 

 

53,120 

 

 

50,047 

 

 

(30,834)

 

 

72,333 

Interest expense

 

 

(46)

 

 

(117)

 

 

(262)

 

 

(425)

Intercompany interest income/(expense)

 

 

5,194 

 

 

3,442 

 

 

(8,636)

 

 

 -

Other income—net

 

 

29 

 

 

22 

 

 

12,526 

 

 

12,577 

Income/(loss) before income taxes

 

 

58,297 

 

 

53,394 

 

 

(27,206)

 

 

84,485 

Income taxes

 

 

(14,327)

 

 

(12,541)

 

 

7,400 

 

 

(19,468)

Net income/(loss)

 

$

43,970 

 

$

40,853 

 

$

(19,806)

 

$

65,017 



 

 

 

 

 

 

 

 

 

 

 

 

2023 (b)

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues and sales

 

$

310,478 

 

$

249,679 

 

$

 -

 

$

560,157 

Cost of services provided and goods sold

 

 

253,654 

 

 

117,051 

 

 

 -

 

 

370,705 

Selling, general and administrative expenses

 

 

23,336 

 

 

60,813 

 

 

15,946 

 

 

100,095 

Depreciation

 

 

4,958 

 

 

7,312 

 

 

16 

 

 

12,286 

Amortization

 

 

26 

 

 

2,487 

 

 

 -

 

 

2,513 

Other operating expense

 

 

12 

 

 

1,727 

 

 

 -

 

 

1,739 

Total costs and expenses

 

 

281,986 

 

 

189,390 

 

 

15,962 

 

 

487,338 

Income/(loss) from operations

 

 

28,492 

 

 

60,289 

 

 

(15,962)

 

 

72,819 

Interest expense

 

 

(50)

 

 

(133)

 

 

(1,368)

 

 

(1,551)

Intercompany interest income/(expense)

 

 

4,648 

 

 

2,743 

 

 

(7,391)

 

 

 -

Other income/(expense)—net

 

 

189 

 

 

29 

 

 

(321)

 

 

(103)

Income/(loss) before income taxes

 

 

33,279 

 

 

62,928 

 

 

(25,042)

 

 

71,165 

Income taxes

 

 

(8,515)

 

 

(15,275)

 

 

6,746 

 

 

(17,044)

Net income/(loss)

 

$

24,764 

 

$

47,653 

 

$

(18,296)

 

$

54,121 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

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, 2024 AND 2023

(in thousands)(unaudited)



 

 

 

 

 

 

 

Chemed



 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

2024

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

43,970 

 

$

40,853 

 

$

(19,806)

 

$

65,017 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

46 

 

 

117 

 

 

262 

 

 

425 

Income taxes

 

 

14,327 

 

 

12,541 

 

 

(7,400)

 

 

19,468 

Depreciation

 

 

5,166 

 

 

8,108 

 

 

13 

 

 

13,287 

Amortization

 

 

26 

 

 

2,495 

 

 

 -

 

 

2,521 

EBITDA

 

 

63,535 

 

 

64,114 

 

 

(26,931)

 

 

100,718 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany interest expense/(income)

 

 

(5,194)

 

 

(3,442)

 

 

8,636 

 

 

 -

Interest income

 

 

(29)

 

 

(22)

 

 

(4,192)

 

 

(4,243)

Stock option expense

 

 

 -

 

 

 -

 

 

9,026 

 

 

9,026 

Severance arrangement

 

 

 -

 

 

 -

 

 

5,337 

 

 

5,337 

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

3,784 

 

 

3,784 

Adjusted EBITDA

 

$

58,312 

 

$

60,650 

 

$

(4,340)

 

$

114,622 



 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

24,764 

 

$

47,653 

 

$

(18,296)

 

$

54,121 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

50 

 

 

133 

 

 

1,368 

 

 

1,551 

Income taxes

 

 

8,515 

 

 

15,275 

 

 

(6,746)

 

 

17,044 

Depreciation

 

 

4,958 

 

 

7,312 

 

 

16 

 

 

12,286 

Amortization

 

 

26 

 

 

2,487 

 

 

 -

 

 

2,513 

EBITDA

 

 

38,313 

 

 

72,860 

 

 

(23,658)

 

 

87,515 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany interest expense/(income)

 

 

(4,648)

 

 

(2,743)

 

 

7,391 

 

 

 -

Interest income

 

 

(121)

 

 

(29)

 

 

 -

 

 

(150)

Stock option expense

 

 

 -

 

 

 -

 

 

8,482 

 

 

8,482 

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

2,514 

 

 

2,514 

Litigation settlement

 

 

 -

 

 

1,756 

 

 

 -

 

 

1,756 

Adjusted EBITDA

 

$

33,544 

 

$

71,844 

 

$

(5,271)

 

$

100,117 



 

 

 

 

 

 

 

 

 

 

 

 

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,



 

2024

 

2023

Net income as reported

 

$

65,017 

 

$

54,121 

Add/(deduct) pre-tax cost of:

 

 

 

 

 

 

Stock option expense

 

 

9,026 

 

 

8,482 

Severance arrangement

 

 

5,337 

 

 

 -

Long-term incentive compensation

 

 

3,784 

 

 

2,514 

Amortization of reacquired franchise agreements

 

 

2,352 

 

 

2,352 

Litigation settlements

 

 

 -

 

 

1,756 

Add/(deduct) tax impacts:

 

 

 

 

 

 

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

 

 

(2,388)

 

 

(2,852)

Excess tax benefits on stock compensation

 

 

(3,297)

 

 

(1,650)

Adjusted net income

 

$

79,831 

 

$

64,723 



 

 

 

 

 

 

Diluted Earnings Per Share As Reported

 

 

 

 

 

 

Net income

 

$

4.24 

 

$

3.58 

Average number of shares outstanding

 

 

15,339 

 

 

15,110 



 

 

 

 

 

 

Adjusted Diluted Earnings Per Share

 

 

 

 

 

 

Adjusted net income

 

$

5.20 

 

$

4.28 

Average number of shares outstanding

 

 

15,339 

 

 

15,110 



 

 

 

 

 

 

(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

2024

 

2023

 

Net revenue ($000) (c)

 

 

 

 

 

 

Homecare

$

304,860 

 

$

267,050 

 

Inpatient

 

30,303 

 

 

29,093 

 

Continuous care

 

24,169 

 

 

19,941 

 

Other

 

4,084 

 

 

3,021 

 

Subtotal

$

363,416 

 

$

319,105 

 

Room and board, net

 

(2,944)

 

 

(2,769)

 

Contractual allowances

 

(4,090)

 

 

(3,108)

 

Medicare cap allowance

 

(2,375)

 

 

(2,750)

 

Net Revenue

$

354,007 

 

$

310,478 

 

Net revenue as a percent of total before Medicare cap allowance

 

 

 

 

 

 

Homecare

 

83.9 

%

 

83.7 

%

Inpatient

 

8.3 

 

 

9.1 

 

Continuous care

 

6.7 

 

 

6.2 

 

Other

 

1.1 

 

 

1.0 

 

Subtotal

 

100.0 

 

 

100.0 

 

Room and board, net

 

(0.8)

 

 

(0.8)

 

Contractual allowances

 

(1.1)

 

 

(1.0)

 

Medicare cap allowance

 

(0.7)

 

 

(0.9)

 

Net Revenue

 

97.4 

%

 

97.3 

%

Days of care

 

 

 

 

 

 

Homecare

 

1,447,912 

 

 

1,286,437 

 

Nursing home

 

283,158 

 

 

265,429 

 

Respite

 

7,752 

 

 

5,760 

 

Subtotal routine homecare and respite

 

1,738,822 

 

 

1,557,626 

 

Inpatient

 

26,645 

 

 

26,369 

 

Continuous care

 

24,037 

 

 

20,686 

 

Total

 

1,789,504 

 

 

1,604,681 

 



 

 

 

 

 

 

Number of days in relevant time period

 

91 

 

 

90 

 

Average daily census ("ADC") (days)

 

 

 

 

 

 

Homecare

 

15,911 

 

 

14,294 

 

Nursing home

 

3,112 

 

 

2,949 

 

Respite

 

85 

 

 

64 

 

Subtotal routine homecare and respite

 

19,108 

 

 

17,307 

 

Inpatient

 

293 

 

 

293 

 

Continuous care

 

264 

 

 

230 

 

Total

 

19,665 

 

 

17,830 

 



 

 

 

 

 

 

Total Admissions

 

16,911 

 

 

16,179 

 

Total Discharges

 

16,170 

 

 

15,405 

 

Average length of stay (days)

 

103.9 

 

 

99.9 

 

Median length of stay (days)

 

16.0 

 

 

15.0 

 



 

 

 

 

 

 

ADC by major diagnosis

 

 

 

 

 

 

Cerebro

 

43.6 

%

 

41.8 

%

Neurological

 

13.4 

 

 

19.3 

 

Cancer

 

10.1 

 

 

10.5 

 

Cardio

 

16.1 

 

 

16.0 

 

Respiratory

 

7.2 

 

 

7.3 

 

Other

 

9.6 

 

 

5.1 

 

Total

 

100.0 

%

 

100.0 

%

Admissions by major diagnosis

 

 

 

 

 

 

Cerebro

 

27.7 

%

 

26.4 

%

Neurological

 

7.5 

 

 

10.7 

 

Cancer

 

24.6 

 

 

24.7 

 

Cardio

 

15.6 

 

 

16.2 

 

Respiratory

 

10.8 

 

 

10.9 

 

Other

 

13.8 

 

 

11.1 

 

Total

 

100.0 

%

 

100.0 

%



 

 

 

 

 

 

Estimated uncollectible accounts as a percent of revenues

 

1.1 

%

 

1.0 

%



 

 

 

 

 

 

Accounts receivable --

 

 

 

 

 

 

Days of revenue outstanding-excluding unapplied Medicare payments

42.3 

 

 

34.7 

 

Days of revenue outstanding-including unapplied Medicare payments

34.3 

 

 

29.2 

 



 

 

 

 

 

 

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 ENDED MARCH 31, 2024 AND 2023

 

(unaudited)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Included in the results of operations for 2024 are the following significant credits/(charges) which may not be indicative of ongoing operations

 



(in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended March 31, 2024

 



 

 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



Stock option expense

 

$

 -

 

$

 -

 

$

(9,026)

 

$

(9,026)

 



Severance arrangement

 

 

 -

 

 

 -

 

 

(5,337)

 

 

(5,337)

 



Long-term incentive compensation

 

 

 -

 

 

 -

 

 

(3,784)

 

 

(3,784)

 



Amortization of reacquired franchise agreements

 

 

 -

 

 

(2,352)

 

 

 -

 

 

(2,352)

 



Pretax impact on earnings

 

 

 -

 

 

(2,352)

 

 

(18,147)

 

 

(20,499)

 



Excess tax benefits on stock compensation

 

 

 -

 

 

 -

 

 

3,297 

 

 

3,297 

 



Income tax benefit on the above

 

 

 -

 

 

548 

 

 

1,840 

 

 

2,388 

 



After-tax impact on earnings

 

$

 -

 

$

(1,804)

 

$

(13,010)

 

$

(14,814)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)

Included in the results of operations for 2023 are the following significant credits/(charges) which may not be indicative of ongoing operations

 



(in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended March 31, 2023

 



 

 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



Stock option expense

 

$

 -

 

$

 -

 

$

(8,482)

 

$

(8,482)

 



Long-term incentive compensation

 

 

 -

 

 

 -

 

 

(2,514)

 

 

(2,514)

 



Amortization of reacquired franchise agreements

 

 

 -

 

 

(2,352)

 

 

 -

 

 

(2,352)

 



Litigation settlements

 

 

 -

 

 

(1,756)

 

 

 -

 

 

(1,756)

 



Pretax impact on earnings

 

 

 -

 

 

(4,108)

 

 

(10,996)

 

 

(15,104)

 



Excess tax benefits on stock compensation

 

 

 -

 

 

 -

 

 

1,650 

 

 

1,650 

 



Income tax benefit on the above

 

 

 -

 

 

1,089 

 

 

1,763 

 

 

2,852 

 



After-tax impact on earnings

 

$

 -

 

$

(3,019)

 

$

(7,583)

 

$

(10,602)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)

VITAS has 11 large (greater than 450 ADC), 19 medium (greater than 200 but less than 450 ADC) and 20 small (less than 200 ADC) hospice programs.  Of Vitas' 30 Medicare provider numbers, for the trailing 12 months, 27 provider numbers have a Medicare cap cushion of greater than 10%, one provider number has a Medicare cap cushion between 5% and 10%, one provider number has a Medicare cap cushion between 0% and 5%, and one provider number has a Medicare cap liability.