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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Chemed Corporation | NYSE:CHE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
2.00 | 0.36% | 561.65 | 566.28 | 556.88 | 564.38 | 70,751 | 22:30:00 |
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 third quarter ended September 30, 2019, versus the comparable prior-year period, as follows:
Consolidated operating results:
VITAS segment operating results:
Roto-Rooter segment operating results:
VITAS
VITAS net revenue was $322 million in the third quarter of 2019, which is an increase of 6.6%, when compared to the prior-year period. This revenue increase is comprised primarily of a geographically weighted average Medicare reimbursement rate increase of approximately 0.5%, a 6.3% increase in days-of-care and a reduction in the Medicare Cap billing limitation that increased revenue 0.2%. This growth was partially offset by acuity mix shift, fluctuations in net room and board and contractual adjustments, the combination of which negatively impacted revenue growth approximately 0.4%, when compared to the prior-year period.
In the third quarter of 2019, VITAS accrued $1.3 million in Medicare Cap billing limitations. This compares favorably to the prior-year Medicare Cap billing limitation of $2.0 million. At September 30, 2019, VITAS had 30 Medicare provider numbers, three of which have an estimated fiscal 2019 Medicare Cap billing limitation liability of approximately $9.6 million.
Of VITAS’ 30 Medicare provider numbers, 23 provider numbers have a Medicare Cap cushion of 10% or greater, one provider number has a cap cushion between 5% and 10%, three provider numbers have a cap cushion between 0% and 5%, and three provider numbers have a fiscal 2019 Medicare Cap billing limitation.
Average revenue per patient per day in the quarter was $188.02, which is 0.4% above the prior-year period. Reimbursement for routine home care and high acuity care averaged $164.39 and $755.38, respectively. During the quarter, high acuity days-of-care were 4.0% of total days of care, 7-basis points less than the prior-year quarter.
The third quarter of 2019 gross margin, excluding Medicare Cap, was 23.4%, which is a 9-basis point margin improvement when compared to the third quarter of 2018.
Selling, general and administrative expense was $22.0 million in the third quarter of 2019, which is an increase of 7.7% compared to the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $54.3 million in the quarter, an increase of 6.7%. Adjusted EBITDA margin, excluding Medicare Cap, was 16.8% in the quarter, which is a 5-basis point margin improvement when compared to the prior-year period.
Roto-Rooter
Roto-Rooter generated quarterly revenue of $159 million for the third quarter of 2019, an increase of $16.5 million, or 11.6%, over the prior-year quarter. Revenue from the water restoration service segment totaled $25.7 million, an increase of 3.0%, when compared to the prior-year quarter. Approximately 90% of the water restoration revenue is generated from residential customers and the remaining 10% is generated from commercial accounts.
Commercial drain cleaning revenue increased 16.5%, commercial plumbing and excavation increased 24.9%, and commercial water restoration increased 3.1%. Overall, commercial revenue increased 19.3%.
Residential drain cleaning increased 9.8%, plumbing and excavation increased 7.0%, and residential water restoration increased 2.9%. Aggregate residential sales increased 6.5%.
Roto-Rooter’s gross margin in the quarter was 49.2%, a slight increase when compared to the third quarter of 2018. Adjusted EBITDA in the third quarter of 2019 totaled $39.8 million, an increase of 17.0%. The Adjusted EBITDA margin in the quarter was 25.0% which is a 116-basis point margin expansion over the prior year.
Chemed Consolidated
As of September 30, 2019, Chemed had total cash and cash equivalents of $9 million and debt of $130 million.
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 September 30, 2019, the Company had approximately $282 million of undrawn borrowing capacity under this credit agreement.
The Company did not purchase any shares during the third quarter of 2019. As of September 30, 2019, there was approximately $125 million of remaining share repurchase authorization under this share repurchase program.
Chemed restarted its share repurchase program in 2007. Since that time Chemed has repurchased over 14 million shares, aggregating approximately $1.2 billion at an average share cost of $84.76. Including dividends over this period, Chemed has returned approximately $1.4 billion to shareholders.
Conference Call
Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday, October 30, 2019, 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 5229315. 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 5229315. 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 19,000 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 September 30,
Nine Months Ended September 30,
2019
2018
2019
2018
Service revenues and sales$
480,613
$
444,151
$
1,416,231
$
1,325,140
Cost of services provided and goods sold
328,183
305,312
973,771
915,589
Selling, general and administrative expenses (aa)
76,836
67,177
222,421
204,474
Depreciation
10,147
9,657
29,744
28,642
Amortization
441
35
1,366
96
Other operating expenses
78
257
9,001
88
Total costs and expenses
415,685
382,438
1,236,303
1,148,889
Income from operations
64,928
61,713
179,928
176,251
Interest expense
(1,041
)
(1,082
)
(3,402
)
(3,813
)
Other income--net (bb)3,036
2,300
5,488
4,356
Income before income taxes
66,923
62,931
182,014
176,794
Income taxes
(7,976
)
(11,682
)
(27,671
)
(25,578
)
Net income$
58,947
$
51,249
$
154,343
$
151,216
Earnings Per Share Net income
$
3.69
$
3.19
$
9.68
$
9.41
Average number of shares outstanding
15,970
16,074
15,952
16,070
Diluted Earnings Per Share Net income
$
3.56
$
3.06
$
9.35
$
8.98
Average number of shares outstanding
16,555
16,772
16,514
16,830
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2019
2018
2019
2018
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation plans$
72,273
$
63,754
$
212,775
$
196,271
Market value adjustments related to deferred compensation trusts
2,886
2,189
5,094
3,827
Long-term incentive compensation
1,677
1,234
4,552
4,376
Total SG&A expenses
$
76,836
$
67,177
$
222,421
$
204,474
(bb) Other income--net comprises (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2019
2018
2019
2018
Market value adjustments related to deferred compensation trusts$
2,886
$
2,189
$
5,094
$
3,827
Interest income
173
111
387
529
Other
(23
)
-
7
-
Total other income--net
$
3,036
$
2,300
$
5,488
$
4,356
CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)(unaudited)
September 30,
2019
2018
Assets Current assets Cash and cash equivalents$
9,066
$
67,459
Accounts receivable less allowances
114,480
108,999
Inventories
7,354
5,763
Prepaid income taxes
10,745
6,039
Prepaid expenses
26,150
17,610
Total current assets
167,795
205,870
Investments of deferred compensation plans held in trust
73,714
70,237
Properties and equipment, at cost less accumulated depreciation
172,932
154,434
Lease right of use asset
103,286
-
Identifiable intangible assets less accumulated amortization
129,276
56,649
Goodwill
576,600
483,281
Other assets
8,982
8,653
Total Assets
$
1,232,585
$
979,124
Liabilities Current liabilities Accounts payable
$
44,027
$
36,977
Accrued insurance
47,726
43,503
Accrued compensation
75,208
70,687
Accrued legal
7,283
1,423
Short-term lease liability
33,761
-
Other current liabilities
43,496
27,608
Total current liabilities
251,501
180,198
Deferred income taxes
15,512
15,293
Long-term debt
130,000
130,000
Deferred compensation liabilities
73,335
68,492
Long-term lease liability
82,012
-
Other liabilities
7,845
16,988
Total Liabilities.
560,205
410,971
Stockholders' Equity Capital stock
35,738
35,211
Paid-in capital
841,837
755,263
Retained earnings
1,365,303
1,175,949
Treasury stock, at cost
(1,572,844
)
(1,400,577
)
Deferred compensation payable in Company stock2,346
2,307
Total Stockholders' Equity
672,380
568,153
Total Liabilities and Stockholders' Equity
$
1,232,585
$
979,124
CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)(unaudited)
Nine Months Ended September 30,
2019
2018
Cash Flows from Operating Activities Net income$
154,343
$
151,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
31,110
28,738
Stock option expense
10,729
9,360
Benefit for deferred income taxes
(6,085
)
(1,344
)
Litigation settlement6,000
-
Noncash long-term incentive compensation
4,184
4,176
Asset impairment loss
2,266
-
Noncash directors' compensation
767
766
Amortization of debt issuance costs
229
361
Amortization of restricted stock awards
-
446
Changes in operating assets and liabilities, excluding amounts acquired in business combinations: Decrease in accounts receivable
10,558
4,637
Increase in inventories
(1,649
)
(429
)
Increase in prepaid expenses(6,836
)
(1,518
)
Increase in accounts payable and other current liabilities
28,622
12,182
Change in current income taxes
(81
)
23,858
Net change in lease assets and liabilities
1,311
-
Increase in other assets
(8,145
)
(9,441
)
Increase in other liabilities9,045
7,190
Other sources
1,277
410
Net cash provided by operating activities
237,645
230,608
Cash Flows from Investing Activities Business combinations, net of cash acquired
(138,010
)
(12,875
)
Capital expenditures(39,753
)
(36,554
)
Other sources101
480
Net cash used by investing activities
(177,662
)
(48,949
)
Cash Flows from Financing Activities Proceeds from revolving line of credit400,700
428,150
Payments on revolving line of credit
(359,900
)
(324,350
)
Purchases of treasury stock(71,926
)
(121,976
)
Capital stock surrendered to pay taxes on stock-based compensation(26,108
)
(24,763
)
Proceeds from exercise of stock options23,383
23,079
Dividends paid
(14,657
)
(13,850
)
Change in cash overdrafts payable(7,535
)
(15,307
)
Payments on other long-term debt-
(75,000
)
Debt issuance costs-
(985
)
Other sources/(uses)295
(319
)
Net cash used by financing activities(55,748
)
(125,321
)
Increase in Cash and Cash Equivalents4,235
56,338
Cash and cash equivalents at beginning of year
4,831
11,121
Cash and cash equivalents at end of year
$
9,066
$
67,459
CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2019
Service revenues and sales (a)$
321,748
$
158,865
$
-
$
480,613
Cost of services provided and goods sold
247,551
80,632
-
328,183
Selling, general and administrative expenses (a)
21,965
41,758
13,113
76,836
Depreciation
5,105
5,003
39
10,147
Amortization
18
423
-
441
Other operating expense/(income)
97
(19
)
-
78
Total costs and expenses
274,736
127,797
13,152
415,685
Income/(loss) from operations
47,012
31,068
(13,152
)
64,928
Interest expense.
(48
)
(80
)
(913
)
(1,041
)
Intercompany interest income/(expense)4,618
2,234
(6,852
)
-
Other income—net
121
31
2,884
3,036
Income/(loss) before income taxes
51,703
33,253
(18,033
)
66,923
Income taxes (a)
(11,930
)
(7,113
)
11,067
(7,976
)
Net income/(loss)$
39,773
$
26,140
$
(6,966
)
$
58,947
2018
Service revenues and sales (b)$
301,764
$
142,387
$
-
$
444,151
Cost of services provided and goods sold
233,006
72,306
-
305,312
Selling, general and administrative expenses (b)
20,394
36,112
10,671
67,177
Depreciation
4,905
4,712
40
9,657
Amortization
-
35
-
35
Other operating expense
100
157
-
257
Total costs and expenses
258,405
113,322
10,711
382,438
Income/(loss) from operations
43,359
29,065
(10,711
)
61,713
Interest expense
(49
)
(71
)
(962
)
(1,082
)
Intercompany interest income/(expense)3,306
1,814
(5,120
)
-
Other income—net
89
22
2,189
2,300
Income/(loss) before income taxes
46,705
30,830
(14,604
)
62,931
Income taxes (b)
(10,784
)
(6,267
)
5,369
(11,682
)
Net income/(loss)$
35,921
$
24,563
$
(9,235
)
$
51,249
The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2019
Service revenues and sales (a)$
941,279
$
474,952
$
-
$
1,416,231
Cost of services provided and goods sold
728,397
245,374
-
973,771
Selling, general and administrative expenses (a)
65,182
120,736
36,503
222,421
Depreciation
14,644
14,983
117
29,744
Amortization
53
1,313
-
1,366
Other operating expense (a)
6,521
214
2,266
9,001
Total costs and expenses
814,797
382,620
38,886
1,236,303
Income/(loss) from operations
126,482
92,332
(38,886
)
179,928
Interest expense
(150
)
(273
)
(2,979
)
(3,402
)
Intercompany interest income/(expense)13,395
6,609
(20,004
)
-
Other income—net
309
86
5,093
5,488
Income/(loss) before income taxes
140,036
98,754
(56,776
)
182,014
Income taxes (a)
(33,636
)
(22,452
)
28,417
(27,671
)
Net income/(loss)$
106,400
$
76,302
$
(28,359
)
$
154,343
2018
Service revenues and sales (b)$
890,577
$
434,563
$
-
$
1,325,140
Cost of services provided and goods sold
693,335
222,254
-
915,589
Selling, general and administrative expenses (b)
61,606
108,120
34,748
204,474
Depreciation
14,753
13,782
107
28,642
Amortization
-
96
-
96
Other operating expense (b)
16
72
-
88
Total costs and expenses
769,710
344,324
34,855
1,148,889
Income/(loss) from operations
120,867
90,239
(34,855
)
176,251
Interest expense
(153
)
(255
)
(3,405
)
(3,813
)
Intercompany interest income/(expense)9,524
5,231
(14,755
)
-
Other income—net
469
60
3,827
4,356
Income/(loss) before income taxes
130,707
95,275
(49,188
)
176,794
Income taxes (b)
(30,987
)
(22,476
)
27,885
(25,578
)
Net income/(loss)$
99,720
$
72,799
$
(21,303
)
$
151,216
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 SEPTEMBER 30, 2019 AND 2018 (in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2019
Net income/(loss)$
39,773
$
26,140
$
(6,966
)
$
58,947
Add/(deduct): Interest expense
48
80
913
1,041
Income taxes
11,930
7,113
(11,067
)
7,976
Depreciation
5,105
5,003
39
10,147
Amortization
18
423
-
441
EBITDA
56,874
38,759
(17,081
)
78,552
Add/(deduct): Intercompany interest expense/(income)
(4,618
)
(2,234
)
6,852
-
Interest income
(139
)
(34
)
-
(173
)
Acquisition expense-
3,281
-
3,281
Stock option expense
-
-
2,711
2,711
Long-term incentive compensation
-
-
1,677
1,677
Medicare cap sequestration adjustment
859
-
-
859
Adjusted EBITDA
$
52,976
$
39,772
$
(5,841
)
$
86,907
2018
Net income/(loss)$
35,921
$
24,563
$
(9,235
)
$
51,249
Add/(deduct): Interest expense
49
71
962
1,082
Income taxes
10,784
6,267
(5,369
)
11,682
Depreciation
4,905
4,712
40
9,657
Amortization
-
35
-
35
EBITDA
51,659
35,648
(13,602
)
73,705
Add/(deduct): Intercompany interest expense/(income)
(3,306
)
(1,814
)
5,120
-
Interest income..
(88
)
(23
)
-
(111
)
Medicare cap sequestration adjustment..503
-
-
503
Acquisition expense
177
177
-
354
Stock option expense
-
-
2,055
2,055
Long-term incentive compensation
-
-
1,234
1,234
Adjusted EBITDA
$
48,945
$
33,988
$
(5,193
)
$
77,740
The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARIES OF EBITDA FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2019
Net income/(loss)$
106,400
$
76,302
$
(28,359
)
$
154,343
Add/(deduct): Interest expense
150
273
2,979
3,402
Income taxes
33,636
22,452
(28,417
)
27,671
Depreciation
14,644
14,983
117
29,744
Amortization
53
1,313
-
1,366
EBITDA
154,883
115,323
(53,680
)
216,526
Add/(deduct): Intercompany interest expense/(income)
(13,395
)
(6,609
)
20,004
-
Interest income
(296
)
(91
)
-
(387
)
Stock option expense-
-
10,729
10,729
Litigation settlement
6,000
-
-
6,000
Long-term incentive compensation
-
-
4,552
4,552
Acquisition Expense
-
3,377
120
3,497
Medicare cap sequestration adjustment
3,063
-
-
3,063
Impairment loss on transportation equipment
-
-
2,266
2,266
Non cash ASC 842 expenses/(benefit)
656
55
(163
)
548
Adjusted EBITDA
$
150,911
$
112,055
$
(16,172
)
$
246,794
2018
Net income/(loss)$
99,720
$
72,799
$
(21,303
)
$
151,216
Add/(deduct): Interest expense
153
255
3,405
3,813
Income taxes..
30,987
22,476
(27,885
)
25,578
Depreciation
14,753
13,782
107
28,642
Amortization
-
96
-
96
EBITDA
145,613
109,408
(45,676
)
209,345
Add/(deduct): Intercompany interest expense/(income)
(9,524
)
(5,231
)
14,755
-
Interest income
(468
)
(60
)
-
(528
)
Stock option expense-
-
9,360
9,360
Long-term incentive compensation
-
-
4,376
4,376
Medicare cap sequestration adjustment
1,040
-
-
1,040
Amortization of stock awards
107
100
239
446
Acquisition expense
177
177
-
354
Litigation settlement
(204
)
-
-
(204
)
Adjusted EBITDA$
136,741
$
104,394
$
(16,946
)
$
224,189
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 September 30,
Nine Months Ended September 30,
2019
2018
2019
2018
Net income as reported$
58,947
$
51,249
$
154,343
$
151,216
Add/(deduct) pre-tax cost of: Stock option expense
2,711
2,055
10,729
9,360
Litigation settlement
-
-
6,000
(204
)
Long-term incentive compensation1,677
1,234
4,552
4,376
Acquisition expense
3,281
354
3,497
354
Medicare cap sequestration adjustments
859
503
3,063
1,040
Impairment loss on transportation equipment
-
-
2,266
-
Amortization of acquired and cancelled franchise agreements
331
-
1,103
-
Non cash ASC 842 expenses
-
-
548
-
Add/(deduct) tax impacts: Tax impact of the above pre-tax adjustments (1)
(1,801
)
(821
)
(6,761
)
(3,059
)
Excess tax benefits on stock compensation(8,792
)
(3,118
)
(18,737
)
(18,618
)
Adjusted net income$
57,213
$
51,456
$
160,603
$
144,465
Diluted Earnings Per Share As Reported Net income
$
3.56
$
3.06
$
9.35
$
8.98
Average number of shares outstanding
16,555
16,772
16,514
16,830
Adjusted Diluted Earnings Per Share Adjusted net income
$
3.46
$
3.07
$
9.73
$
8.58
Average number of shares outstanding
16,555
16,772
16,514
16,830
(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 September 30,
Nine Months Ended September 30,
OPERATING STATISTICS2019
2018
2019
2018
Net revenue ($000) (c) Homecare$
274,746
$
257,134
$
800,059
$
748,546
Inpatient
23,599
19,617
69,063
61,803
Continuous care
29,446
30,385
92,476
91,664
Other
2,356
2,104
6,598
5,844
Subtotal
$
330,147
$
309,240
$
968,196
$
907,857
Room and board, net
(2,846
)
(2,569
)
(8,098
)
(7,863
)
Contractual allowances(4,236
)
(2,957
)
(10,904
)
(8,749
)
Medicare cap allowance(1,317
)
(1,950
)
(7,915
)
(668
)
Net Revenue$
321,748
$
301,764
$
941,279
$
890,577
Net revenue as a percent of total before Medicare cap allowance Homecare
83.2
%
83.2
%
82.6
%
82.5
%
Inpatient7.1
6.3
7.1
6.8
Continuous care
8.9
9.8
9.6
10.1
Other
0.8
0.7
0.7
0.6
Subtotal
100.0
100.0
100.0
100.0
Room and board, net
(0.9
)
(0.8
)
(0.8
)
(0.9
)
Contractual allowances(1.3
)
(1.0
)
(1.2
)
(1.0
)
Medicare cap allowance(0.4
)
(0.6
)
(0.8
)
(0.1
)
Net Revenue97.4
%
97.6
%
97.2
%
98.0
%
Average daily census ("ADC") (days) Homecare14,799
13,791
14,510
13,515
Nursing home
3,483
3,402
3,374
3,298
Routine homecare
18,282
17,193
17,884
16,813
Inpatient
373
313
363
328
Continuous care
431
451
460
466
Total
19,086
17,957
18,707
17,607
Total Admissions
17,131
16,403
52,380
51,540
Total Discharges
16,915
16,171
51,274
50,234
Average length of stay (days)
92.6
90.0
91.6
89.0
Median length of stay (days)
17.0
18.0
16.0
16.0
ADC by major diagnosis Cerebro
35.7
%
36.2
%
35.9
%
36.5
%
Neurological20.7
18.8
20.4
18.7
Cancer
12.9
13.8
12.9
13.8
Cardio
16.6
16.4
16.7
16.4
Respiratory
8.1
8.1
8.1
8.1
Other
6.0
6.7
6.0
6.5
Total
100.0
%
100.0
%
100.0
%
100.0
%
Admissions by major diagnosis Cerebro21.1
%
21.1
%
20.8
%
21.9
%
Neurological12.7
11.6
12.6
11.3
Cancer
30.5
31.5
29.2
30.0
Cardio
14.8
14.7
15.7
15.3
Respiratory
10.2
10.3
11.3
11.0
Other
10.7
10.8
10.4
10.5
Total
100.0
%
100.0
%
100.0
%
100.0
%
Estimated uncollectible accounts as a percent of revenues1.3
%
1.0
%
1.1
%
1.0
%
Accounts receivable -- Days of revenue outstanding- excluding unapplied Medicare payments32.7
36.0
n.a.
n.a.
Days of revenue outstanding- including unapplied Medicare payments21.0
22.8
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 NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (unaudited)(a)
Included in the results of operations for 2019 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands):Three Months Ended September 30, 2019
VITAS
Roto-Rooter
Corporate
Consolidated
Service revenues and sales: Medicare cap sequestration adjustment$
(859
)
$
-
$
-
$
(859
)
Selling, general and administrative expenses: Acquisition expense-
(3,281
)
-
(3,281
)
Stock option expense-
-
(2,711
)
(2,711
)
Long-term incentive compensation-
-
(1,677
)
(1,677
)
Amortization of acquired and cancelled franchise agreements-
(331
)
-
(331
)
Pretax impact on earnings(859
)
(3,612
)
(4,388
)
(8,859
)
Excess tax benefits on stock compensation-
-
8,792
8,792
Income tax benefit on the above
220
957
624
1,801
After-tax impact on earnings
$
(639
)
$
(2,655
)
$
5,028
$
1,734
Nine Months Ended September 30, 2019
VITAS
Roto-Rooter
Corporate
Consolidated
Service revenues and sales: Medicare cap sequestration adjustment$
(3,063
)
$
-
$
-
$
(3,063
)
Selling, general and administrative expenses: Stock option expense-
-
(10,729
)
(10,729
)
Long-term incentive compensation-
-
(4,552
)
(4,552
)
Acquisition expense-
(3,377
)
(120
)
(3,497
)
Amortization of acquired and cancelled franchise agreements-
(1,103
)
-
(1,103
)
Non cash ASC 842 (expenses)/benefit(656
)
(55
)
163
(548
)
Other operating expenses: Litigation settlement(6,000
)
-
-
(6,000
)
Impairment loss on transportation equipment-
-
(2,266
)
(2,266
)
Pretax impact on earnings(9,719
)
(4,535
)
(17,504
)
(31,758
)
Excess tax benefits on stock compensation-
-
18,737
18,737
Income tax benefit on the above
2,474
1,202
3,085
6,761
After-tax impact on earnings
$
(7,245
)
$
(3,333
)
$
4,318
$
(6,260
)
(b)
Included in the results of operations for 2018 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands):Three Months Ended September 30, 2018
VITAS
Roto-Rooter
Corporate
Consolidated
Service revenues and sales: Medicare cap sequestration adjustment$
(503
)
$
-
$
-
$
(503
)
Selling, general and administrative expenses: Stock option expense-
-
(2,055
)
(2,055
)
Long-term incentive compensation-
-
(1,234
)
(1,234
)
Acquisition expense(177
)
(177
)
-
(354
)
Pretax impact on earnings(680
)
(177
)
(3,289
)
(4,146
)
Excess tax benefits on stock compensation-
-
3,118
3,118
Income tax benefit on the above
172
47
602
821
After-tax impact on earnings
$
(508
)
$
(130
)
$
431
$
(207
)
Nine Months Ended September 30, 2018
VITAS
Roto-Rooter
Corporate
Consolidated
Service revenues and sales: Medicare cap sequestration adjustment$
(1,040
)
$
-
$
-
$
(1,040
)
Selling, general and administrative expenses: Stock option expense-
-
(9,360
)
(9,360
)
Long-term incentive compensation-
-
(4,376
)
(4,376
)
Acquisition expense(177
)
(177
)
-
(354
)
Other operating expenses: Litigation settlement204
-
-
204
Pretax impact on earnings
(1,013
)
(177
)
(13,736
)
(14,926
)
Excess tax benefits on stock compensation-
-
18,618
18,618
Income tax benefit on the above
256
47
2,756
3,059
After-tax impact on earnings
$
(757
)
$
(130
)
$
7,638
$
6,751
(c) VITAS has 12 large (greater than 450 ADC), 19 medium (greater than 200 but less than 450 ADC) and 17 small (less than 200 ADC) hospice programs. Of VITAS' 30 Medicare provider numbers, 24 provider numbers have a Medicare cap cushion of 5% or greater during the current cap year, three provider numbers have a cap cushion between 0% and 5%, and three provider numbers have a Medicare cap liability.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191029005950/en/
David P. Williams (513) 762-6901
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