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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)
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Delaware |
1-8351 |
31-0791746 |
(State or other |
(Commission File Number) |
(I.R.S. Employer |
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:
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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. [_]
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
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d) |
Exhibit |
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104 The cover page from this Current Report on Form 8-K formatted in Inline XBRL |
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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.
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CHEMED CORPORATION |
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Dated: April 24, 2024 |
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By: |
/s/ Michael D. Witzeman |
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Michael D. Witzeman |
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Vice President and Chief Financial Officer |
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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:
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Revenue increased 5.2% to $589.2 million |
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GAAP Diluted Earnings-per-Share (EPS) of $4.24, an increase of 18.4% |
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Adjusted Diluted EPS of $5.20, an increase of 21.5% |
VITAS segment operating results:
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Net Patient Revenue of $354.0 million, an increase of 14.0% |
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Average Daily Census (ADC) of 19,665, an increase of 10.3% |
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Admissions of 16,911, an increase of 4.5% |
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Net Income, excluding certain discrete items, of $44.0 million, an increase of 77.6% |
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Adjusted EBITDA, excluding Medicare Cap, of $60.7 million, an increase of 67.2% |
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Adjusted EBITDA margin, excluding Medicare Cap, of 17.0%, an increase of 544-basis points |
Roto-Rooter segment operating results:
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Revenue of $235.2 million, a decrease of 5.8% |
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Net Income, excluding certain discrete items, of $42.7 million, a decrease of 15.8% |
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Adjusted EBITDA of $60.7 million, a decline of 15.6% |
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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.
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED STATEMENTS OF INCOME |
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(in thousands, except per share data)(unaudited) |
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Three Months Ended March 31, |
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2024 |
2023 |
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Service revenues and sales |
$ |
589,233 |
$ |
560,157 | ||
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Cost of services provided and goods sold |
385,127 | 370,705 | ||||
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Selling, general and administrative expenses (aa) |
115,873 | 100,095 | ||||
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Depreciation |
13,287 | 12,286 | ||||
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Amortization |
2,521 | 2,513 | ||||
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Other operating expense |
92 | 1,739 | ||||
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Total costs and expenses |
516,900 | 487,338 | ||||
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Income from operations |
72,333 | 72,819 | ||||
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Interest expense |
(425) | (1,551) | ||||
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Other income/(expense)--net (bb) |
12,577 | (103) | ||||
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Income before income taxes |
84,485 | 71,165 | ||||
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Income taxes |
(19,468) | (17,044) | ||||
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Net income |
$ |
65,017 |
$ |
54,121 | ||
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Earnings Per Share |
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Net income |
$ |
4.30 |
$ |
3.62 | ||
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Average number of shares outstanding |
15,121 | 14,966 | ||||
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Diluted Earnings Per Share |
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Net income |
$ |
4.24 |
$ |
3.58 | ||
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Average number of shares outstanding |
15,339 | 15,110 | ||||
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(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands): |
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Three Months Ended March 31, |
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2024 |
2023 |
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SG&A expenses before long-term incentive compensation |
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and the impact of market value adjustments related to |
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deferred compensation plans |
$ |
98,418 |
$ |
97,902 | ||
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Long-term incentive compensation |
9,121 | 2,514 | ||||
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Market value adjustments related to deferred |
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compensation trusts |
8,334 | (321) | ||||
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Total SG&A expenses |
$ |
115,873 |
$ |
100,095 | ||
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(bb) Other income/(expense)--net comprises (in thousands): |
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Three Months Ended March 31, |
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2024 |
2023 |
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Market value adjustments related to deferred |
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compensation trusts |
$ |
8,334 |
$ |
(321) | ||
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Interest income |
4,243 | 150 | ||||
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Other |
- |
68 | ||||
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Total other income/(expense)--net |
$ |
12,577 |
$ |
(103) | ||
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED BALANCE SHEETS |
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(in thousands, except per share data)(unaudited) |
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March 31, |
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2024 |
2023 |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
313,350 |
$ |
58,054 | ||
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Accounts receivable less allowances |
177,334 | 153,816 | ||||
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Inventories |
10,712 | 10,663 | ||||
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Prepaid income taxes |
9,790 | 10,633 | ||||
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Prepaid expenses |
28,431 | 29,055 | ||||
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Total current assets |
539,617 | 262,221 | ||||
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Investments of deferred compensation plans held in trust |
117,649 | 97,436 | ||||
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Properties and equipment, at cost less accumulated depreciation |
202,784 | 204,164 | ||||
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Lease right of use asset |
131,751 | 131,219 | ||||
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Identifiable intangible assets less accumulated amortization |
88,137 | 97,348 | ||||
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Goodwill |
591,519 | 581,586 | ||||
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Other assets |
56,176 | 57,511 | ||||
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Total Assets |
$ |
1,727,633 |
$ |
1,431,485 | ||
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Liabilities |
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Current liabilities |
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Accounts payable |
$ |
56,203 |
$ |
40,279 | ||
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Current portion of long-term debt |
- |
5,000 | ||||
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Income taxes |
27,353 | 11,223 | ||||
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Accrued insurance |
62,055 | 63,150 | ||||
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Accrued compensation |
49,802 | 50,152 | ||||
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Accrued legal |
7,183 | 6,061 | ||||
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Short-term lease liability |
39,279 | 38,291 | ||||
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Other current liabilities |
40,099 | 69,304 | ||||
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Total current liabilities |
281,974 | 283,460 | ||||
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Deferred income taxes |
24,899 | 35,418 | ||||
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Long-term debt |
- |
16,250 | ||||
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Deferred compensation liabilities |
117,550 | 97,285 | ||||
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Long-term lease liability |
106,861 | 106,212 | ||||
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Other liabilities |
12,854 | 12,507 | ||||
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Total Liabilities |
544,138 | 551,132 | ||||
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Stockholders' Equity |
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Capital stock |
37,297 | 36,884 | ||||
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Paid-in capital |
1,398,733 | 1,186,119 | ||||
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Retained earnings |
2,505,892 | 2,246,354 | ||||
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Treasury stock, at cost |
(2,760,543) | (2,591,588) | ||||
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Deferred compensation payable in Company stock |
2,116 | 2,284 | ||||
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Total Stockholders' Equity |
1,183,495 | 880,053 | ||||
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Total Liabilities and Stockholders' Equity |
$ |
1,727,633 |
$ |
1,431,185 | ||
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands)(unaudited) |
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For the Three Months Ended March 31, |
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2024 |
2023 |
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Cash Flows from Operating Activities |
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Net income |
$ |
65,017 |
$ |
54,121 | ||
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Adjustments to reconcile net income to net cash provided |
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by operating activities: |
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Depreciation and amortization |
15,808 | 14,799 | ||||
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Noncash long-term incentive compensation |
9,106 | 2,024 | ||||
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Stock option expense |
9,025 | 8,482 | ||||
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Benefit for deferred income taxes |
(5,422) | (3,195) | ||||
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Amortization of debt issuance costs |
80 | 95 | ||||
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Changes in operating assets and liabilities, excluding |
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amounts acquired in business combinations: |
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Decrease/(increase) in accounts receivable |
5,345 | (14,318) | ||||
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Decrease/(increase) in inventories |
1,302 | (391) | ||||
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Decrease in prepaid expenses |
1,909 | 1,236 | ||||
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Decrease in accounts payable and |
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other current liabilities |
(43,012) | (24,109) | ||||
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Change in current income taxes |
23,871 | 19,118 | ||||
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Net change in lease assets and liabilities |
25 | (632) | ||||
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Increase in other assets |
(12,243) | (2,173) | ||||
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Increase in other liabilities |
13,332 | 5,313 | ||||
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Other sources |
406 | 122 | ||||
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Net cash provided by operating activities |
84,549 | 60,492 | ||||
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Cash Flows from Investing Activities |
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Capital expenditures |
(12,163) | (17,020) | ||||
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Business combinations, net of cash acquired |
(7,300) |
- |
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Proceeds from sale of fixed assets |
86 | 146 | ||||
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Other uses |
(8) | (139) | ||||
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Net cash used by investing activities |
(19,385) | (17,013) | ||||
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Cash Flows from Financing Activities |
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Purchases of treasury stock |
(38,460) |
- |
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Proceeds from exercise of stock options |
37,242 | 25,680 | ||||
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Dividends paid |
(6,050) | (5,685) | ||||
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Capital stock surrendered to pay taxes on stock-based compensation |
(5,725) | (3,166) | ||||
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Change in cash overdrafts payable |
(2,115) |
- |
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Payments on long-term debt |
- |
(76,250) | ||||
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Other uses |
(664) | (130) | ||||
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Net cash used by financing activities |
(15,772) | (59,551) | ||||
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Increase/(decrease) in Cash and Cash Equivalents |
49,392 | (16,072) | ||||
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Cash and cash equivalents at beginning of year |
263,958 | 74,126 | ||||
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Cash and cash equivalents at end of year |
$ |
313,350 |
$ |
58,054 | ||
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATING STATEMENTS OF INCOME |
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FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 |
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(in thousands)(unaudited) |
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Chemed |
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VITAS |
Roto-Rooter |
Corporate |
Consolidated |
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2024 (a) |
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Service revenues and sales |
$ |
354,007 |
$ |
235,226 |
$ |
- |
$ |
589,233 | ||||
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Cost of services provided and goods sold |
271,896 | 113,231 |
- |
385,127 | ||||||||
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Selling, general and administrative expenses |
23,792 | 61,260 | 30,821 | 115,873 | ||||||||
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Depreciation |
5,166 | 8,108 | 13 | 13,287 | ||||||||
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Amortization |
26 | 2,495 |
- |
2,521 | ||||||||
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Other operating expense |
7 | 85 |
- |
92 | ||||||||
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Total costs and expenses |
300,887 | 185,179 | 30,834 | 516,900 | ||||||||
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Income/(loss) from operations |
53,120 | 50,047 | (30,834) | 72,333 | ||||||||
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Interest expense |
(46) | (117) | (262) | (425) | ||||||||
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Intercompany interest income/(expense) |
5,194 | 3,442 | (8,636) |
- |
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Other income—net |
29 | 22 | 12,526 | 12,577 | ||||||||
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Income/(loss) before income taxes |
58,297 | 53,394 | (27,206) | 84,485 | ||||||||
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Income taxes |
(14,327) | (12,541) | 7,400 | (19,468) | ||||||||
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Net income/(loss) |
$ |
43,970 |
$ |
40,853 |
$ |
(19,806) |
$ |
65,017 | ||||
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2023 (b) |
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Service revenues and sales |
$ |
310,478 |
$ |
249,679 |
$ |
- |
$ |
560,157 | ||||
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Cost of services provided and goods sold |
253,654 | 117,051 |
- |
370,705 | ||||||||
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Selling, general and administrative expenses |
23,336 | 60,813 | 15,946 | 100,095 | ||||||||
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Depreciation |
4,958 | 7,312 | 16 | 12,286 | ||||||||
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Amortization |
26 | 2,487 |
- |
2,513 | ||||||||
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Other operating expense |
12 | 1,727 |
- |
1,739 | ||||||||
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Total costs and expenses |
281,986 | 189,390 | 15,962 | 487,338 | ||||||||
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Income/(loss) from operations |
28,492 | 60,289 | (15,962) | 72,819 | ||||||||
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Interest expense |
(50) | (133) | (1,368) | (1,551) | ||||||||
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Intercompany interest income/(expense) |
4,648 | 2,743 | (7,391) |
- |
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Other income/(expense)—net |
189 | 29 | (321) | (103) | ||||||||
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Income/(loss) before income taxes |
33,279 | 62,928 | (25,042) | 71,165 | ||||||||
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Income taxes |
(8,515) | (15,275) | 6,746 | (17,044) | ||||||||
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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. |
|||||||||||||
|
|
||||||||||||||