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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 | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 527.96 | 46 | 12:51:33 |
From Oct 2024 to Jan 2025
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, 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 nine-months ended September 30, 2023, the pretax and after-tax Retention Program expense was $23.7 million and $18.0 million, respectively. There was no material impact on financial results for the quarter or nine months-ended September 30, 2024 as a result of the Retention Program.
Results for Quarter Ended September 30, 2024
Consolidated operating results:
VITAS segment operating results:
Roto-Rooter segment operating results:
VITAS
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 $85.0 million in cash. Before presenting VITAS’ overall results, it is important to disclose the methodology used in determining the impact of Covenant Health’s acquisition on VITAS’ overall results. VITAS had significant operations in two of the three Florida locations we acquired from Covenant Health. Those locations require that we estimate the Covenant Health impact, as once the operations are integrated, there are not separate results. For instance, there are no VITAS-specific referral sources versus Covenant Health-specific referral sources in these locations. It is very likely that referral sources in the area have historically referred to both VITAS and Covenant Health. We have used historical operating trends in these locations to determine what is “legacy” VITAS activity. All activity above those historical operating trends have been attributed as the Covenant Health impact. We have included the specifically determined impact as it relates to new operating territories acquired. Based on the above, we discuss the range of impact that Covenant had on the overall VITAS operating metrics.
Covenant Health contributed approximately $10 million to $11 million of revenue in the third quarter of 2024. This revenue translated to net income of approximately $1.8 million to $2.0 million. Adjusted EBITDA in the quarter attributed to Covenant Health is between $2.4 million and $2.6 million.
VITAS net revenue was $391.4 million in the third quarter of 2024, which is an increase of 17.3% when compared to the prior-year period. This revenue increase is comprised primarily of a 15.5% 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 144-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 64-basis points.
In the third quarter of 2024, VITAS accrued $2.2 million in Medicare Cap billing limitations. This compares to a $125,000 Medicare Cap billing limitation in the third quarter of 2023.
Of VITAS’ 32 Medicare provider numbers, 24 provider numbers have a trailing 12-month Medicare Cap cushion of 10% or greater, five provider numbers have a cushion between 0% and 10%, and three provider numbers have a trailing 12-month Medicare Cap billing limitation totaling $9.4 million.
Average revenue per patient per day in the third quarter of 2024 was $199.16 which is 139-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $175.82 and $1,094.97, respectively. During the quarter, high acuity days-of-care were 2.5% of total days of care, a decline of 26-basis points when compared to the prior-year quarter.
The third quarter 2024 gross margin, excluding Medicare Cap, was 25.1%. This compares to the prior year quarter’s gross margin of 24.0%, excluding Medicare Cap. Selling, general and administrative expenses were $25.9 million in the third quarter of 2024 compared to $25.3 million in the prior-year quarter.
Adjusted EBITDA, excluding Medicare Cap, totaled $73.1 million in the quarter, an increase of 33.1% when compared to the prior year period. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 18.6%, which is 212-basis points above the prior-year period.
Hurricane Helene, which impacted the panhandle of Florida and other parts of the southeastern United States in late September, did not result in any significant property loss or damage to VITAS. However, as with other similar events, we did experience a slowdown in admission activity while health systems prepared for the hurricane and then dealt with the aftermath. We estimate that admissions were negatively impacted during the quarter by approximately 60-100 patients. We also believe that the Florida admission impact will be more significant in the fourth quarter with the combination of Hurricanes Helene and Milton.
Roto-Rooter
Roto-Rooter generated quarterly revenue of $214.8 million in the third quarter of 2024, a decrease of 6.9%, when compared to the prior-year quarter.
Roto-Rooter branch commercial revenue in the quarter totaled $53.5 million, a decrease of 5.9% from the prior-year period. This aggregate commercial revenue change consisted of drain cleaning revenue declining 4.4%, plumbing declining 12.1%, excavation declining 2.3%, and water restoration declining 3.3%.
Roto-Rooter branch residential revenue in the quarter totaled $146.0 million, a decrease of 6.3%, over the prior-year period. This aggregate residential revenue change consisted of drain cleaning declining 5.9%, plumbing declining 11.2%, excavation declining 6.1%, and water restoration declining 6.9%.
Roto-Rooter’s gross margin in the quarter was 52.9%, essentially flat when compared to the third quarter of 2023. Roto-Rooter’s selling, general and administrative expenses were $57.1 million in the quarter, which is an increase of 3.5% compared to the third quarter of 2023. This increase was caused by continued enhanced marketing efforts designed to drive additional demand.
Adjusted EBITDA in the third quarter of 2024 totaled $56.4 million, a decrease of 15.8% when compared to the third quarter of 2023. The Adjusted EBITDA margin in the quarter was 26.3% which represents a 275-basis point decline from the third quarter of 2023.
Chemed Consolidated
As of September 30, 2024, Chemed had total cash and cash equivalents of $238.5 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 100,000 shares of Chemed stock for $57.8 million which equates to a cost per share of $578.21. As of September 30, 2024, there was approximately $168.1 million of remaining share repurchase authorization under its plan.
Revision to Guidance for 2024
VITAS continues to perform as anticipated, and we reiterate the metrics for VITAS as presented in our second quarter 2024 press release. Roto-Rooter’s revenue and resulting adjusted EBITDA and adjusted net income was softer than anticipated during the third quarter of 2024. As a result of these factors, full-year consolidated 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, is estimated to be in the range of $23.00 to $23.15. This range represents a 13.3% to 14.0% increase from Chemed’s 2023 reported adjusted earnings per diluted share of $20.30. This guidance assumes an effective corporate tax rate on adjusted earnings of 24.3% and a diluted share count of 15.22 million shares.
Conference Call
As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday October 30, 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 website https://edge.media-server.com/mmc/p/c93ntfig/.
Participants may also register via teleconference at: https://register.vevent.com/register/BI0022c41ceecf4b83a582584604bc732b.
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 September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Service revenues and sales $606,181
$
564,532
$
1,791,294
$
1,678,505
Cost of services provided and goods sold
396,187
362,358
1,171,064
1,107,256
Selling, general and administrative expenses (aa)
101,981
99,602
320,109
294,684
Depreciation
13,147
12,858
39,601
37,778
Amortization
2,550
2,521
7,617
7,548
Other operating expense
159
343
288
2,064
Total costs and expenses
514,024
477,682
1,538,679
1,449,330
Income from operations
92,157
86,850
252,615
229,175
Interest expense
(427
)
(444
)
(1,281
)
(2,766
)
Other income--net (bb)9,299
6,859
28,008
8,365
Income before income taxes
101,029
93,265
279,342
234,774
Income taxes
(25,253
)
(18,307
)
(67,662
)
(52,318
)
Net income $75,776
$
74,958
$
211,680
$
182,456
Earnings Per Share Net income $
5.04
$
4.97
$
14.04
$
12.14
Average number of shares outstanding
15,025
15,075
15,082
15,034
Diluted Earnings Per Share Net income $
5.00
$
4.93
$
13.88
$
12.02
Average number of shares outstanding
15,168
15,200
15,253
15,178
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation plans $93,269
$
91,792
$
287,712
$
281,426
Market value adjustments related to deferred compensation trusts
5,629
4,257
16,600
5,441
Long-term incentive compensation
3,083
3,553
15,797
7,817
Total SG&A expenses $
101,981
$
99,602
$
320,109
$
294,684
(bb) Other income--net comprises (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Market value adjustments related to deferred compensation trusts $5,629
$
4,257
$
16,600
$
5,441
Interest income
3,668
2,600
11,405
2,863
Other
2
2
3
61
Total other income--net $
9,299
$
6,859
$
28,008
$
8,365
CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)(unaudited)
September 30,
2024
2023
Assets Current assets Cash and cash equivalents $238,451
$
173,150
Accounts receivable less allowances
196,481
168,031
Inventories
9,899
12,511
Prepaid income taxes
14,229
11,337
Prepaid expenses
31,377
29,510
Total current assets
490,437
394,539
Investments of deferred compensation plans held in trust
126,631
104,410
Properties and equipment, at cost less accumulated depreciation
200,939
205,462
Lease right of use asset
134,111
123,353
Identifiable intangible assets less accumulated amortization
94,753
92,768
Goodwill
666,860
584,977
Other assets
55,704
56,570
Total Assets $
1,769,435
$
1,562,079
Liabilities Current liabilities Accounts payable $
44,938
$
56,508
Accrued insurance
60,308
61,122
Accrued income taxes
3,385
5,135
Accrued compensation
73,141
74,865
Short-term lease liability
42,490
37,615
Other current liabilities
40,517
61,974
Total current liabilities
264,779
297,219
Deferred income taxes
28,076
30,381
Deferred compensation liabilities
122,240
102,815
Long-term lease liability
105,416
99,346
Other liabilities
13,169
13,075
Total Liabilities
533,680
542,836
Stockholders' Equity Capital stock
37,395
37,013
Paid-in capital
1,462,569
1,254,356
Retained earnings
2,639,011
2,362,928
Treasury stock, at cost
(2,905,430
)
(2,637,102
)
Deferred compensation payable in Company stock2,210
2,048
Total Stockholders' Equity
1,235,755
1,019,243
Total Liabilities and Stockholders' Equity $
1,769,435
$
1,562,079
CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)(unaudited)
Nine Months Ended September 30,
2024
2023
Cash Flows from Operating Activities Net income $211,680
$
182,456
Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization
47,218
45,326
Stock option expense
23,933
22,376
Noncash long-term incentive compensation
15,783
6,637
Litigation settlements
(5,750
)
2,050
Benefit for deferred income taxes
(2,245
)
(8,232
)
Noncash directors' compensation1,282
1,444
Amortization of debt issuance costs
241
500
Changes in operating assets and liabilities, excluding amounts acquired in business combinations: Increase in accounts receivable
(14,336
)
(27,843
)
Decrease/(increase) in inventories2,125
(2,239
)
(Increase)/decrease in prepaid expenses(1,173
)
781
Decrease in accounts payable and
other current liabilities
(19,641
)
(15,815
)
Change in current income taxes(4,545
)
12,314
Net change in lease assets and liabilities
(400
)
(892
)
Increase in other assets(21,101
)
(8,622
)
Increase in other liabilities18,348
11,426
Other sources
1,165
69
Net cash provided by operating activities
252,584
221,736
Cash Flows from Investing Activities Business combinations, net of cash acquired
(97,400
)
(3,994
)
Capital expenditures(36,770
)
(45,075
)
Proceeds from sale of fixed assets3,060
506
Other uses
(281
)
(409
)
Net cash used by investing activities(131,391
)
(48,972
)
Cash Flows from Financing Activities Purchases of treasury stock(152,049
)
(27,769
)
Proceeds from exercise of stock options49,906
58,277
Dividends paid
(19,594
)
(17,446
)
Change in cash overdrafts payable(15,749
)
16,182
Capital stock surrendered to pay taxes on stock-based compensation
(8,827
)
(5,446
)
Payments on long-term debt-
(97,500
)
Other uses(387
)
(38
)
Net cash used by financing activities(146,700
)
(73,740
)
(Decrease)/increase in Cash and Cash Equivalents(25,507
)
99,024
Cash and cash equivalents at beginning of year
263,958
74,126
Cash and cash equivalents at end of year $
238,451
$
173,150
CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2024 (a) Service revenues and sales $391,406
$
214,775
$
-
$
606,181
Cost of services provided and goods sold
294,936
101,251
-
396,187
Selling, general and administrative expenses
25,883
57,072
19,026
101,981
Depreciation
5,063
8,071
13
13,147
Amortization
26
2,524
-
2,550
Other operating expense
97
62
-
159
Total costs and expenses
326,005
168,980
19,039
514,024
Income/(loss) from operations
65,401
45,795
(19,039
)
92,157
Interest expense
(46
)
(114
)
(267
)
(427
)
Intercompany interest income/(expense)4,920
3,656
(8,576
)
-
Other income—net
62
18
9,219
9,299
Income/(loss) before income taxes
70,337
49,355
(18,663
)
101,029
Income taxes
(16,851
)
(11,400
)
2,998
(25,253
)
Net income/(loss) $53,486
$
37,955
$
(15,665
)
$75,776
2023 (b) Service revenues and sales $
333,728
$
230,804
$
-
$
564,532
Cost of services provided and goods sold
253,731
108,627
-
362,358
Selling, general and administrative expenses
25,256
55,141
19,205
99,602
Depreciation
5,009
7,836
13
12,858
Amortization
26
2,495
-
2,521
Other operating expense/(income)
(53
)
396
-
343
Total costs and expenses
283,969
174,495
19,218
477,682
Income/(loss) from operations
49,759
56,309
(19,218
)
86,850
Interest expense
(52
)
(131
)
(261
)
(444
)
Intercompany interest income/(expense)4,935
3,040
(7,975
)
-
Other income—net
849
34
5,976
6,859
Income/(loss) before income taxes
55,491
59,252
(21,478
)
93,265
Income taxes
(11,160
)
(8,925
)
1,778
(18,307
)
Net income/(loss) $44,331
$
50,327
$
(19,700
)
$74,958
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, 2024 AND 2023 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2024 (a) Service revenues and sales $
1,119,970
$
671,324
$
-
$
1,791,294
Cost of services provided and goods sold
852,347
318,717
-
1,171,064
Selling, general and administrative expenses
73,968
175,683
70,458
320,109
Depreciation
15,288
24,275
38
39,601
Amortization
79
7,538
-
7,617
Other operating expense
160
128
-
288
Total costs and expenses
941,842
526,341
70,496
1,538,679
Income/(loss) from operations
178,128
144,983
(70,496
)
252,615
Interest expense
(138
)
(349
)
(794
)
(1,281
)
Intercompany interest income/(expense)15,096
10,638
(25,734
)
-
Other income—net
138
64
27,806
28,008
Income/(loss) before income taxes
193,224
155,336
(69,218
)
279,342
Income taxes
(46,517
)
(36,010
)
14,865
(67,662
)
Net income/(loss) $146,707
$
119,326
$
(54,353
)
$211,680
2023 (b) Service revenues and sales $
965,066
$
713,439
$
-
$
1,678,505
Cost of services provided and goods sold
770,470
336,786
-
1,107,256
Selling, general and administrative expenses
71,248
171,966
51,470
294,684
Depreciation
14,907
22,830
41
37,778
Amortization
78
7,470
-
7,548
Other operating expense/(income)
(15
)
2,079
-
2,064
Total costs and expenses
856,688
541,131
51,511
1,449,330
Income/(loss) from operations
108,378
172,308
(51,511
)
229,175
Interest expense
(154
)
(387
)
(2,225
)
(2,766
)
Intercompany interest income/(expense)14,393
8,652
(23,045
)
-
Other income—net
1,109
96
7,160
8,365
Income/(loss) before income taxes
123,726
180,669
(69,621
)
234,774
Income taxes
(28,503
)
(38,315
)
14,500
(52,318
)
Net income/(loss) $95,223
$
142,354
$
(55,121
)
$182,456
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, 2024 AND 2023 (in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2024
Net income/(loss) $53,486
$
37,955
$
(15,665
)
$75,776
Add/(deduct): Interest expense
46
114
267
427
Income taxes
16,851
11,400
(2,998
)
25,253
Depreciation
5,063
8,071
13
13,147
Amortization
26
2,524
-
2,550
EBITDA
75,472
60,064
(18,383
)
117,153
Add/(deduct): Intercompany interest expense/(income)
(4,920
)
(3,656
)
8,576
-
Interest income
(59
)
(18
)
(3,589
)
(3,666
)
Stock option expense-
-
6,038
6,038
Long-term incentive compensation
-
-
3,083
3,083
Acquisition expense
394
(8
)
-
386
Adjusted EBITDA $
70,887
$
56,382
$
(4,275
)
$122,994
2023
Net income/(loss) $44,331
$
50,327
$
(19,700
)
$74,958
Add/(deduct): Interest expense
52
131
261
444
Income taxes
11,160
8,925
(1,778
)
18,307
Depreciation
5,009
7,836
13
12,858
Amortization
26
2,495
-
2,521
EBITDA
60,578
69,714
(21,204
)
109,088
Add/(deduct): Intercompany interest expense/(income)
(4,935
)
(3,040
)
7,975
-
Interest income
(847
)
(34
)
(1,719
)
(2,600
)
Litigation settlement-
300
-
300
Stock option expense
-
-
5,495
5,495
Long-term incentive compensation
-
-
3,553
3,553
Adjusted EBITDA $
54,796
$
66,940
$
(5,900
)
$115,836
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, 2024 AND 2023 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated
2024
Net income/(loss) $146,707
$
119,326
$
(54,353
)
$211,680
Add/(deduct): Interest expense
138
349
794
1,281
Income taxes
46,517
36,010
(14,865
)
67,662
Depreciation
15,288
24,275
38
39,601
Amortization
79
7,538
-
7,617
EBITDA
208,729
187,498
(68,386
)
327,841
Add/(deduct): Intercompany interest expense/(income)
(15,096
)
(10,638
)
25,734
-
Interest income
(136
)
(64
)
(11,205
)
(11,405
)
Stock option expense-
-
23,933
23,933
Long-term incentive compensation
-
-
10,460
10,460
Severance arrangement
-
-
5,337
5,337
Acquisition expense
1,302
37
-
1,339
Adjusted EBITDA $
194,799
$
176,833
$
(14,127
)
$357,505
2023
Net income/(loss) $95,223
$
142,354
$
(55,121
)
$182,456
Add/(deduct): Interest expense
154
387
2,225
2,766
Income taxes
28,503
38,315
(14,500
)
52,318
Depreciation
14,907
22,830
41
37,778
Amortization
78
7,470
-
7,548
EBITDA
138,865
211,356
(67,355
)
282,866
Add/(deduct): Intercompany interest expense/(income)
(14,393
)
(8,652
)
23,045
-
Interest income
(1,046
)
(96
)
(1,720
)
(2,862
)
Stock option expense-
-
22,376
22,376
Long-term incentive compensation
-
-
7,817
7,817
Litigation settlements
-
2,056
-
2,056
Adjusted EBITDA $
123,426
$
204,664
$
(15,837
)
$312,253
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,
2024
2023
2024
2023
Net income as reported $75,776
$
74,958
$
211,680
$
182,456
Add/(deduct) pre-tax cost of: Stock option expense
6,038
5,495
23,933
22,376
Long-term incentive compensation
3,083
3,553
10,460
7,817
Amortization of reacquired franchise rights
2,352
2,352
7,056
7,056
Severance arrangement
-
-
5,337
-
Acquisition expense
386
-
1,339
-
Litigation settlement
-
300
-
2,056
Add/(deduct) tax impacts: Tax impact of the above pre-tax adjustments (1)
(1,761
)
(1,326
)
(6,762
)
(6,443
)
Tax impact of deferred tax rate change-
(4,241
)
-
(4,241
)
Excess tax benefits on stock compensation(389
)
(225
)
(4,308
)
(3,376
)
Adjusted net income $85,485
$
80,866
$
248,735
$
207,701
Diluted Earnings Per Share As Reported Net income $
5.00
$
4.93
$
13.88
$
12.02
Average number of shares outstanding
15,168
15,200
15,253
15,178
Adjusted Diluted Earnings Per Share Adjusted net income $
5.64
$
5.32
$
16.31
$
13.68
Average number of shares outstanding
15,168
15,200
15,253
15,178
(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 STATISTICS2024
2023
2024
2023
Net revenue ($000) (c) Homecare $338,344
$
287,389
$
967,981
$
832,554
Inpatient
29,923
27,818
89,297
84,312
Continuous care
25,799
22,032
74,295
63,054
Other
5,082
3,562
13,900
9,738
Subtotal $
399,148
$
340,801
$
1,145,473
$
989,658
Room and board, net
(3,336
)
(2,646
)
(9,437
)
(8,317
)
Contractual allowances(2,167
)
(4,302
)
(10,077
)
(10,650
)
Medicare cap allowance(2,239
)
(125
)
(5,989
)
(5,625
)
Net Revenue $391,406
$
333,728
$
1,119,970
$
965,066
Net revenue as a percent of total before Medicare cap allowance Homecare
84.8
%
84.3
%
84.5
%
84.1
%
Inpatient7.5
8.2
7.8
8.5
Continuous care
6.5
6.5
6.5
6.4
Other
1.2
1.0
1.2
1.0
Subtotal
100.0
100.0
100.0
100.0
Room and board, net
(0.8
)
(0.8
)
(0.8
)
(0.8
)
Contractual allowances(0.5
)
(1.3
)
(0.9
)
(1.1
)
Medicare cap allowance(0.6
)
-
(0.5
)
(0.6
)
Net Revenue98.1
%
97.9
%
97.8
%
97.5
%
Days of care Homecare1,622,680
1,391,377
4,621,755
4,018,469
Nursing home
320,664
287,785
908,013
833,112
Respite
9,952
7,292
26,806
19,211
Subtotal routine homecare and respite
1,953,296
1,686,454
5,556,574
4,870,792
Inpatient
26,524
25,493
79,064
76,987
Continuous care
24,365
23,071
72,335
65,630
Total
2,004,185
1,735,018
5,707,973
5,013,409
Number of days in relevant time period
92
92
274
273
Average daily census ("ADC") (days) Homecare
17,639
15,124
16,867
14,720
Nursing home
3,485
3,128
3,314
3,052
Respite
108
79
98
70
Subtotal routine homecare and respite
21,232
18,331
20,279
17,842
Inpatient
288
277
289
282
Continuous care
265
251
264
240
Total
21,785
18,859
20,832
18,364
Total Admissions
16,775
15,774
51,020
47,564
Total Discharges
16,217
15,328
48,285
45,837
Average length of stay (days)
102.0
103.1
102.2
100.8
Median length of stay (days)
18.0
17.0
17.0
16.0
ADC by major diagnosis Cerebro
43.6
%
42.0
%
43.7
%
42.2
%
Neurological13.3
14.7
13.3
15.9
Cancer
10.0
10.6
10.0
10.6
Cardio
16.3
16.4
16.2
16.1
Respiratory
7.1
7.2
7.2
7.1
Other
9.7
9.1
9.6
8.1
Total
100.0
%
100.0
%
100.0
%
100.0
%
Admissions by major diagnosis Cerebro28.4
%
26.6
%
27.7
%
26.3
%
Neurological7.7
8.8
7.9
9.9
Cancer
25.7
26.1
25.1
26.0
Cardio
15.1
16.0
15.7
16.2
Respiratory
9.5
9.7
9.9
10.1
Other
13.6
12.8
13.7
11.5
Total
100.0
%
100.0
%
100.0
%
100.0
%
Estimated uncollectible accounts as a percent of revenues0.6
%
1.3
%
0.9
%
1.1
%
Accounts receivable -- Days of revenue outstanding-excluding unapplied Medicare payments37.5
36.4
n.a. n.a. Days of revenue outstanding-including unapplied Medicare payments
35.5
33.8
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, 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 September 30, 2024
VITAS
Roto-Rooter
Corporate
Consolidated
Stock option expense $-
$
-
$
(6,038
)
$(6,038
)
Long-term incentive compensation-
-
(3,083
)
(3,083
)
Amortization of reacquired franchise agreements-
(2,352
)
-
(2,352
)
Acquisition expense(394
)
8
-
(386
)
Pretax impact on earnings(394
)
(2,344
)
(9,121
)
(11,859
)
Excess tax benefits on stock compensation-
-
389
389
Income tax benefit on the above
96
546
1,119
1,761
After-tax impact on earnings $
(298
)
$(1,798
)
$(7,613
)
$(9,709
)
Nine Months Ended September 30, 2024
VITAS
Roto-Rooter
Corporate
Consolidated
Stock option expense $-
$
-
$
(23,933
)
$(23,933
)
Long-term incentive compensation-
-
(10,460
)
(10,460
)
Amortization of reacquired franchise agreements-
(7,056
)
-
(7,056
)
Severance arrangement-
-
(5,337
)
(5,337
)
Acquisition expense(1,302
)
(37
)
-
(1,339
)
Pretax impact on earnings(1,302
)
(7,093
)
(39,730
)
(48,125
)
Excess tax benefits on stock compensation-
-
4,308
4,308
Income tax benefit on the above
317
1,652
4,793
6,762
After-tax impact on earnings $
(985
)
$(5,441
)
$(30,629
)
$(37,055
)
(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 September 30, 2023
VITAS
Roto-Rooter
Corporate
Consolidated
Stock option expense $-
$
-
$
(5,495
)
$(5,495
)
Long-term incentive compensation-
-
(3,553
)
(3,553
)
Amortization of reacquired franchise agreements-
(2,352
)
-
(2,352
)
Litigation settlement-
(300
)
-
(300
)
Pretax impact on earnings-
(2,652
)
(9,048
)
(11,700
)
Excess tax benefits on stock compensation-
-
225
225
Tax impact of deferred tax rate change
1,772
3,559
(1,090
)
4,241
Income tax benefit on the above
-
412
914
1,326
After-tax impact on earnings $
1,772
$
1,319
$
(8,999
)
$(5,908
)
Nine Months Ended September 30, 2023
VITAS
Roto-Rooter
Corporate
Consolidated
Stock option expense $-
$
-
$
(22,376
)
$(22,376
)
Long-term incentive compensation-
-
(7,817
)
(7,817
)
Amortization of reacquired franchise agreements-
(7,056
)
-
(7,056
)
Litigation settlements-
(2,056
)
-
(2,056
)
Pretax impact on earnings-
(9,112
)
(30,193
)
(39,305
)
Excess tax benefits on stock compensation-
-
3,376
3,376
Tax impact of deferred tax rate change
1,772
3,559
(1,090
)
4,241
Income tax benefit on the above
-
2,123
4,320
6,443
After-tax impact on earnings $
1,772
$
(3,430
)
$(23,587
)
$(25,245
)
(c) VITAS has 10 large (greater than 450 ADC), 23 medium (greater than 200 but less than 450 ADC) and 22 small (less than 200 ADC) hospice programs. Of Vitas' 32 Medicare provider numbers, for the trailing 12 months, 24 provider numbers have a Medicare cap cushion of greater than 10%, one provider number has a Medicare cap cushion between 5% and 10%, four provider numbers have a Medicare 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/20241029394976/en/
Michael D. Witzeman (513) 762-6714
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