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 second
quarter ended June 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 quarter-ended June 30, 2023, the pretax and after-tax
Retention Program expense was $12.8 million and $9.7 million,
respectively. For the six-months ended June 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 six months-ended June 30, 2024 as a
result of the Retention Program.
Results for Quarter Ended
June 30, 2024
Consolidated operating results:
- Revenue increased 7.6% to $595.9 million
- GAAP Diluted Earnings-per-Share (EPS) of $4.65, an increase of
32.5%
- Adjusted Diluted EPS of $5.47, an increase of 34.1%
VITAS segment operating results:
- Net Patient Revenue of $374.6 million, an increase of
16.7%
- Average Daily Census (ADC) of 21,036, an increase of 14.4%
- Admissions of 17,334, an increase of 11.0%
- Net Income, excluding certain discrete items, of $49.9 million,
an increase of 91.1%
- Adjusted EBITDA, excluding Medicare Cap, of $67.0 million, an
increase of 77.0%
- Adjusted EBITDA margin, excluding Medicare Cap, of 17.8%, an
increase of 613-basis points
Roto-Rooter segment operating results:
- Revenue of $221.3 million, a decrease of 5.0%
- Net Income, excluding certain discrete items, of $42.4 million,
a decrease of 8.1%
- Adjusted EBITDA of $59.8 million, a decline of 9.2%
- Adjusted EBITDA margin of 27.0%, a decline of 126-basis
points
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 2 of the 3
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 $8.2 million to $8.7 million of
revenue in the second quarter of 2024. This revenue translated to
net income of approximately $1.6 million to $1.8 million. Adjusted
EBITDA in the quarter attributed to Covenant Health is between $2.2
million and $2.4 million.
VITAS net revenue was $374.6 million in the second quarter of
2024, which is an increase of 16.7% when compared to the prior-year
period. This revenue increase is comprised primarily of a 14.4%
increase in days-of-care and a geographically weighted average
Medicare reimbursement rate increase of approximately 2.5%. Acuity
mix shift negatively impacted revenue growth 112-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 92-basis
points.
In the second quarter of 2024, VITAS accrued $1.4 million in
Medicare Cap billing limitations which includes a $1.0 million
reversal of prior period accruals. This compares to a $2.8 million
Medicare Cap billing limitation in the second quarter of 2023.
Of VITAS’ 32 Medicare provider numbers, 28 provider numbers have
a trailing 12-month Medicare Cap cushion of 10% or greater, three
provider numbers have a cushion between 0% and 10%, and one
provider number has a trailing 12-month Medicare Cap billing
limitation totaling $7.5 million.
Average revenue per patient per day in the second quarter of
2024 was $200.03 which is 153-basis points above the prior-year
period. Reimbursement for routine home care and high acuity care
averaged $176.73 and $1,071.65, respectively. During the quarter,
high acuity days-of-care were 2.6% of total days of care, a decline
of 21-basis points when compared to the prior-year quarter.
The second quarter 2024 gross margin, excluding Medicare Cap,
was 24.1%. This compares to the prior year quarter’s gross margin
of 18.7%, excluding Medicare Cap. Approximately 397-basis points of
this difference is attributable to the expense associated with the
Retention Program. Selling, general and administrative expenses
were $24.3 million in the second quarter of 2024 compared to $22.7
million in the prior-year quarter.
Adjusted EBITDA, excluding Medicare Cap, totaled $67.0 million
in the quarter, an increase of 77.0%. Adjusted EBITDA margin in the
quarter, excluding Medicare Cap, was 17.8%, which is 613-basis
points above the prior-year period. Approximately 397-basis points
of this difference is attributable to the expense associated with
the Retention Program in 2023.
In the second quarter of 2024, VITAS was awarded a Certificate
of Need to begin hospice operations in Pasco County, Florida. This
represents a new operating territory for VITAS.
Roto-Rooter
Roto-Rooter generated quarterly revenue of $221.3 million in the
second quarter of 2024, a decrease of 5.0%, when compared to the
prior-year quarter.
Roto-Rooter branch commercial revenue in the quarter totaled
$50.9 million, a decrease of 8.2% from the prior-year period. This
aggregate commercial revenue decline consisted of drain cleaning
revenue declining 6.4%, plumbing declining 10.4%, excavation
declining 11.1%, and water restoration declining 8.8%.
Roto-Rooter branch residential revenue in the quarter totaled
$155.0 million, a decrease of 1.6%, over the prior-year period.
This aggregate residential revenue decline consisted of drain
cleaning decreasing 2.6%, plumbing decreasing 3.3%, excavation
declining 1.0%, and water restoration decreasing 4.6%.
Roto-Rooter’s gross margin in the quarter was 52.9%, a 60-basis
point improvement when compared to the second quarter of 2023.
Adjusted EBITDA in the second quarter of 2024 totaled $59.8
million, a decrease of 9.2%. The Adjusted EBITDA margin in the
quarter was 27.0%. The second quarter Adjusted EBITDA margin
represents a 120-basis point sequential improvement from the first
quarter of 2024 based mainly on lower internet marketing costs.
Chemed
Consolidated
As of June 30, 2024, Chemed had total cash and cash equivalents
of $222.9 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 $55.8 million which equates to a cost per share of
$557.68. As of June 30, 2024, there was approximately $225.9
million of remaining share repurchase authorization under its
plan.
Upward Revision to
Guidance for 2024
VITAS 2024 revenue, prior to Medicare Cap, is estimated to
increase 16.3% to 17.3% when compared to 2023. ADC is estimated to
increase 13.3% to 14.4%. Full year adjusted EBITDA margin, prior to
Medicare Cap, is estimated to be 19.3% to 19.7%. We are currently
estimating $8.5 million in Medicare Cap billing limitations in
calendar 2024. The cost of the retention program negatively
impacted VITAS’ 2023 full year adjusted EBITDA by 159 basis
points.
Covenant Health is estimated to contribute approximately $30
million to $32 million of revenue to VITAS’ full year revenue.
There is no estimated Medicare Cap billing limitation expected
related to Covenant Health. This translates into adjusted net
income attributable to Covenant Health of $5.5 million to $6.0
million and adjusted EBITDA of $8.0 million to $8.5 million.
Roto-Rooter is forecasted to have a 4.0% to 5.0% revenue decline
in 2024 compared to 2023. Roto-Rooter’s adjusted EBITDA margin for
2024 is expected to be 26.5% to 27.0%.
Based on the above, 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, is estimated to be in the range of $23.55 to
$23.80. This guidance assumes an effective corporate tax rate on
adjusted earnings of 24.3% and a diluted share count of 15.25
million shares. Chemed’s previously issued 2024 guidance range was
$23.30 to $23.70. Chemed’s 2023 reported adjusted earnings per
diluted share was $20.30.
Conference
Call
As previously disclosed, Chemed will host a conference call and
webcast at 10 a.m., ET, on Thursday July 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 website
https://edge.media-server.com/mmc/p/unbdyk8k.
Participants may also register via teleconference at:
https://register.vevent.com/register/BI1a861ca332ea4e9bbf8c4d66fe30ff51.
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 June 30, Six Months
Ended June 30,
2024
2023
2024
2023
Service revenues and sales
$
595,880
$
553,816
$
1,185,113
$
1,113,973
Cost of services provided and goods sold
389,750
374,193
774,877
744,898
Selling, general and administrative expenses (aa)
102,255
94,987
218,128
195,082
Depreciation
13,167
12,634
26,454
24,920
Amortization
2,546
2,514
5,067
5,027
Other operating expense/(income)
37
(18
)
129
1,721
Total costs and expenses
507,755
484,310
1,024,655
971,648
Income from operations
88,125
69,506
160,458
142,325
Interest expense
(429
)
(771
)
(854
)
(2,322
)
Other income--net (bb)
6,132
1,609
18,709
1,506
Income before income taxes
93,828
70,344
178,313
141,509
Income taxes
(22,941
)
(16,967
)
(42,409
)
(34,011
)
Net income
$
70,887
$
53,377
$
135,904
$
107,498
Earnings Per Share Net income
$
4.70
$
3.54
$
8.99
$
7.16
Average number of shares outstanding
15,097
15,058
15,109
15,013
Diluted Earnings Per Share Net income
$
4.65
$
3.51
$
8.89
$
7.09
Average number of shares outstanding
15,251
15,219
15,295
15,167
(aa) Selling, general and administrative ("SG&A")
expenses comprise (in thousands): Three Months Ended June
30, Six Months Ended June 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
$
96,025
$
91,733
$
194,443
$
189,634
Long-term incentive compensation
3,593
1,750
12,714
4,264
Market value adjustments related to deferred compensation trusts
2,637
1,504
10,971
1,184
Total SG&A expenses
$
102,255
$
94,987
$
218,128
$
195,082
(bb) Other income--net comprises (in thousands): Three
Months Ended June 30, Six Months Ended June 30,
2024
2023
2024
2023
Market value adjustments related to deferred compensation trusts
$
2,637
$
1,504
$
10,971
$
1,184
Interest income
3,495
113
7,737
263
Other
-
(8
)
1
59
Total other income--net
$
6,132
$
1,609
$
18,709
$
1,506
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS (in thousands, except per share
data)(unaudited) June 30,
2024
2023
Assets Current assets Cash and cash equivalents
$
222,903
$
159,924
Accounts receivable less allowances
184,961
120,314
Inventories
10,735
11,684
Prepaid income taxes
17,084
16,666
Prepaid expenses
28,929
28,572
Total current assets
464,612
337,160
Investments of deferred compensation plans held in trust
120,784
99,522
Properties and equipment, at cost less accumulated depreciation
202,249
208,101
Lease right of use asset
132,262
127,215
Identifiable intangible assets less accumulated amortization
97,035
94,932
Goodwill
662,124
581,542
Other assets
55,918
56,708
Total Assets
$
1,734,984
$
1,505,180
Liabilities Current liabilities Accounts payable
$
43,001
$
41,058
Accrued insurance
59,899
57,461
Accrued compensation
78,374
74,384
Short-term lease liability
41,169
38,779
Other current liabilities
39,310
90,805
Total current liabilities
261,753
302,487
Deferred income taxes
27,901
36,681
Deferred compensation liabilities
119,780
98,941
Long-term lease liability
105,233
102,112
Other liabilities
13,020
12,880
Total Liabilities
527,687
553,101
Stockholders' Equity Capital stock
37,313
36,996
Paid-in capital
1,416,166
1,240,415
Retained earnings
2,570,722
2,294,004
Treasury stock, at cost
(2,819,053
)
(2,621,657
)
Deferred compensation payable in Company stock
2,149
2,321
Total Stockholders' Equity
1,207,297
952,079
Total Liabilities and Stockholders' Equity
$
1,734,984
$
1,505,180
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands)(unaudited) Six Months Ended June 30,
2024
2023
Cash Flows from Operating Activities Net income
$
135,904
$
107,498
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
31,521
29,947
Stock option expense
17,895
16,882
Noncash long-term incentive compensation
12,699
3,493
Litigation settlements
(5,750
)
1,750
Benefit for deferred income taxes
(2,420
)
(1,932
)
Noncash directors' compensation
1,282
1,444
Amortization of debt issuance costs
160
420
Changes in operating assets and liabilities, excluding amounts
acquired in business combinations: (Increase)/decrease in accounts
receivable
(2,422
)
20,100
Decrease/(increase) in inventories
1,289
(1,412
)
Decrease in prepaid expenses
1,275
1,719
(Decrease)/increase in accounts payable and other current
liabilities
(19,499
)
8,561
Change in current income taxes
(10,776
)
1,865
Net change in lease assets and liabilities
(109
)
(1,046
)
Increase in other assets
(15,365
)
(3,810
)
Increase in other liabilities
15,730
7,344
Other sources/(uses)
652
(14
)
Net cash provided by operating activities
162,066
192,809
Cash Flows from Investing Activities Business combinations,
net of cash acquired
(92,300
)
(305
)
Capital expenditures
(23,225
)
(33,420
)
Proceeds from sale of fixed assets
2,916
360
Other uses
(265
)
(169
)
Net cash used by investing activities
(112,874
)
(33,534
)
Cash Flows from Financing Activities Purchases of treasury
stock
(94,228
)
(13,425
)
Proceeds from exercise of stock options
38,594
53,675
Dividends paid
(12,107
)
(11,412
)
Change in cash overdrafts payable
(15,749
)
-
Capital stock surrendered to pay taxes on stock-based compensation
(5,960
)
(5,313
)
Payments on long-term debt
-
(97,500
)
Other (uses)/sources
(797
)
498
Net cash used by financing activities
(90,247
)
(73,477
)
(Decrease)/increase in Cash and Cash Equivalents
(41,055
)
85,798
Cash and cash equivalents at beginning of year
263,958
74,126
Cash and cash equivalents at end of year
$
222,903
$
159,924
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS
ENDED JUNE 30, 2024 AND 2023 (in thousands)(unaudited)
Chemed VITAS Roto-Rooter Corporate
Consolidated 2024 (a) Service revenues and sales $
374,558
$
221,322
$
-
$
595,880
Cost of services provided and goods sold
285,517
104,233
-
389,750
Selling, general and administrative expenses
24,293
57,351
20,611
102,255
Depreciation
5,058
8,096
13
13,167
Amortization
26
2,520
-
2,546
Other operating expense/(income)
56
(19
)
-
37
Total costs and expenses
314,950
172,181
20,624
507,755
Income/(loss) from operations
59,608
49,141
(20,624
)
88,125
Interest expense
(46
)
(118
)
(265
)
(429
)
Intercompany interest income/(expense)
4,982
3,540
(8,522
)
-
Other income—net
46
24
6,062
6,132
Income/(loss) before income taxes
64,590
52,587
(23,349
)
93,828
Income taxes
(15,338
)
(12,070
)
4,467
(22,941
)
Net income/(loss) $
49,252
$
40,517
$
(18,882
)
$
70,887
2023 (b) Service revenues and sales $
320,861
$
232,955
$
-
$
553,816
Cost of services provided and goods sold
263,085
111,108
-
374,193
Selling, general and administrative expenses
22,656
56,012
16,319
94,987
Depreciation
4,940
7,681
13
12,634
Amortization
26
2,488
-
2,514
Other operating expense/(income)
26
(44
)
-
(18
)
Total costs and expenses
290,733
177,245
16,332
484,310
Income/(loss) from operations
30,128
55,710
(16,332
)
69,506
Interest expense
(51
)
(124
)
(596
)
(771
)
Intercompany interest income/(expense)
4,810
2,869
(7,679
)
-
Other income—net
70
35
1,504
1,609
Income/(loss) before income taxes
34,957
58,490
(23,103
)
70,344
Income taxes
(8,829
)
(14,116
)
5,978
(16,967
)
Net income/(loss) $
26,128
$
44,374
$
(17,125
)
$
53,377
The "Footnotes to Financial Statements" are integral
parts of this financial information.
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (in
thousands)(unaudited)
Chemed VITAS
Roto-Rooter Corporate Consolidated 2024
(a) Service revenues and sales $
728,564
$
456,549
$
-
$
1,185,113
Cost of services provided and goods sold
557,411
217,466
-
774,877
Selling, general and administrative expenses
48,085
118,611
51,432
218,128
Depreciation
10,225
16,204
25
26,454
Amortization
52
5,015
-
5,067
Other operating expense
63
66
-
129
Total costs and expenses
615,836
357,362
51,457
1,024,655
Income/(loss) from operations
112,728
99,187
(51,457
)
160,458
Interest expense
(92
)
(235
)
(527
)
(854
)
Intercompany interest income/(expense)
10,176
6,982
(17,158
)
-
Other income—net
75
47
18,587
18,709
Income/(loss) before income taxes
122,887
105,981
(50,555
)
178,313
Income taxes
(29,666
)
(24,610
)
11,867
(42,409
)
Net income/(loss) $
93,221
$
81,371
$
(38,688
)
$
135,904
2023 (b) Service revenues and sales $
631,339
$
482,634
$
-
$
1,113,973
Cost of services provided and goods sold
516,739
228,159
-
744,898
Selling, general and administrative expenses
45,992
116,825
32,265
195,082
Depreciation
9,898
14,994
28
24,920
Amortization
52
4,975
-
5,027
Other operating expense
38
1,683
-
1,721
Total costs and expenses
572,719
366,636
32,293
971,648
Income/(loss) from operations
58,620
115,998
(32,293
)
142,325
Interest expense
(102
)
(257
)
(1,963
)
(2,322
)
Intercompany interest income/(expense)
9,458
5,612
(15,070
)
-
Other income—net
259
64
1,183
1,506
Income/(loss) before income taxes
68,235
121,417
(48,143
)
141,509
Income taxes
(17,343
)
(29,390
)
12,722
(34,011
)
Net income/(loss) $
50,892
$
92,027
$
(35,421
)
$
107,498
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 JUNE 30, 2024 AND 2023 (in
thousands)(unaudited)
Chemed VITAS Roto-Rooter
Corporate Consolidated
2024
Net income/(loss) $
49,252
$
40,517
$
(18,882
)
$
70,887
Add/(deduct): Interest expense
46
118
265
429
Income taxes
15,338
12,070
(4,467
)
22,941
Depreciation
5,058
8,096
13
13,167
Amortization
26
2,520
-
2,546
EBITDA
69,720
63,321
(23,071
)
109,970
Add/(deduct): Intercompany interest expense/(income)
(4,982
)
(3,540
)
8,522
-
Interest income
(45
)
(25
)
(3,425
)
(3,495
)
Stock option expense
-
-
8,870
8,870
Long-term incentive compensation
-
-
3,593
3,593
Acquisition expense
907
45
-
952
Adjusted EBITDA $
65,600
$
59,801
$
(5,511
)
$
119,890
2023
Net income/(loss) $
26,128
$
44,374
$
(17,125
)
$
53,377
Add/(deduct): Interest expense
51
124
596
771
Income taxes
8,829
14,116
(5,978
)
16,967
Depreciation
4,940
7,681
13
12,634
Amortization
26
2,488
-
2,514
EBITDA
39,974
68,783
(22,494
)
86,263
Add/(deduct): Intercompany interest expense/(income)
(4,810
)
(2,869
)
7,679
-
Interest income
(79
)
(34
)
-
(113
)
Stock option expense
-
-
8,400
8,400
Long-term incentive compensation
-
-
1,750
1,750
Adjusted EBITDA $
35,085
$
65,880
$
(4,665
)
$
96,300
The "Footnotes to Financial Statements" are integral parts
of this financial information.
CHEMED CORPORATION AND SUBSIDIARY
COMPANIES CONSOLIDATING SUMMARIES OF EBITDA FOR THE
SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (in
thousands)(unaudited)
Chemed VITAS Roto-Rooter
Corporate Consolidated
2024
Net income/(loss) $
93,221
$
81,371
$
(38,688
)
$
135,904
Add/(deduct): Interest expense
92
235
527
854
Income taxes
29,666
24,610
(11,867
)
42,409
Depreciation
10,225
16,204
25
26,454
Amortization
52
5,015
-
5,067
EBITDA
133,256
127,435
(50,003
)
210,688
Add/(deduct): Intercompany interest expense/(income)
(10,176
)
(6,982
)
17,158
-
Interest income
(75
)
(47
)
(7,615
)
(7,737
)
Stock option expense
-
-
17,895
17,895
Long-term incentive compensation
-
-
7,377
7,377
Severance arrangement
-
-
5,337
5,337
Acquisition expense
907
45
-
952
Adjusted EBITDA $
123,912
$
120,451
$
(9,851
)
$
234,512
2023
Net income/(loss) $
50,892
$
92,027
$
(35,421
)
$
107,498
Add/(deduct): Interest expense
102
257
1,963
2,322
Income taxes
17,343
29,390
(12,722
)
34,011
Depreciation
9,898
14,994
28
24,920
Amortization
52
4,975
-
5,027
EBITDA
78,287
141,643
(46,152
)
173,778
Add/(deduct): Intercompany interest expense/(income)
(9,458
)
(5,612
)
15,070
-
Interest income
(199
)
(64
)
-
(263
)
Stock option expense
-
-
16,882
16,882
Long-term incentive compensation
-
-
4,264
4,264
Litigation settlements
-
1,756
-
1,756
Adjusted EBITDA $
68,630
$
137,723
$
(9,936
)
$
196,417
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 June 30, Six Months Ended June 30,
2024
2023
2024
2023
Net income as reported
$
70,887
$
53,377
$
135,904
$
107,498
Add/(deduct) pre-tax cost of: Stock option expense
8,870
8,400
17,895
16,882
Long-term incentive compensation
3,593
1,750
7,377
4,264
Severance arrangement
-
-
5,337
-
Amortization of reacquired franchise agreements
2,352
2,352
4,704
4,704
Acquisition expense
952
-
952
-
Litigation settlement
-
-
-
1,756
Add/(deduct) tax impacts: Tax impact of the above pre-tax
adjustments (1)
(2,613
)
(2,266
)
(5,000
)
(5,118
)
Excess tax benefits on stock compensation
(622
)
(1,501
)
(3,919
)
(3,150
)
Adjusted net income
$
83,419
$
62,112
$
163,250
$
126,836
Diluted Earnings Per Share As Reported Net income
$
4.65
$
3.51
$
8.89
$
7.09
Average number of shares outstanding
15,251
15,219
15,295
15,167
Adjusted Diluted Earnings Per Share Adjusted net income
$
5.47
$
4.08
$
10.67
$
8.36
Average number of shares outstanding
15,251
15,219
15,295
15,167
(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 June 30, Six Months Ended June 30, OPERATING STATISTICS
2024
2023
2024
2023
Net revenue ($000) (c) Homecare
$
324,778
$
278,116
$
629,637
$
545,166
Inpatient
29,071
27,401
59,374
56,494
Continuous care
24,327
21,081
48,497
41,022
Other
4,733
3,154
8,817
6,175
Subtotal
$
382,909
$
329,752
$
746,325
$
648,857
Room and board, net
(3,156
)
(2,904
)
(6,101
)
(5,672
)
Contractual allowances
(3,820
)
(3,237
)
(7,910
)
(6,346
)
Medicare cap allowance
(1,375
)
(2,750
)
(3,750
)
(5,500
)
Net Revenue
$
374,558
$
320,861
$
728,564
$
631,339
Net revenue as a percent of total before Medicare cap allowance
Homecare
84.8
%
84.3
%
84.4
%
84.0
%
Inpatient
7.6
8.3
8.0
8.7
Continuous care
6.4
6.4
6.5
6.3
Other
1.2
1.0
1.1
1.0
Subtotal
100.0
100.0
100.0
100.0
Room and board, net
(0.8
)
(0.8
)
(0.8
)
(0.9
)
Contractual allowances
(1.0
)
(1.0
)
(1.1
)
(1.0
)
Medicare cap allowance
(0.4
)
(0.8
)
(0.5
)
(0.8
)
Net Revenue
97.8
%
97.4
%
97.6
%
97.3
%
Days of care
Homecare
1,551,163
1,340,655
2,999,075
2,627,092
Nursing home
304,191
279,898
587,349
545,327
Respite
9,102
6,159
16,854
11,919
Subtotal routine homecare and respite
1,864,456
1,626,712
3,603,278
3,184,338
Inpatient
25,895
25,125
52,540
51,494
Continuous care
23,933
21,873
47,970
42,559
Total
1,914,284
1,673,710
3,703,788
3,278,391
Number of days in relevant time period
91
91
182
181
Average daily census ("ADC") (days)
Homecare
17,046
14,732
16,478
14,514
Nursing home
3,343
3,076
3,227
3,013
Respite
100
68
93
66
Subtotal routine homecare and respite
20,489
17,876
19,798
17,593
Inpatient
284
276
288
286
Continuous care
263
240
264
235
Total
21,036
18,392
20,350
18,114
Total Admissions
17,334
15,611
34,245
31,790
Total Discharges
15,898
15,104
32,068
30,509
Average length of stay (days)
100.6
99.5
102.2
99.7
Median length of stay (days)
18.0
16.0
17.0
15.0
ADC by major diagnosis
Cerebro
42.5
%
41.9
%
43.4
%
42.0
%
Neurological
13.3
18.8
13.4
19.0
Cancer
10.0
10.8
10.0
10.6
Cardio
16.2
16.1
16.2
16.0
Respiratory
7.3
7.1
7.3
7.2
Other
10.7
5.3
9.7
5.2
Total
100.0
%
100.0
%
100.0
%
100.0
%
Admissions by major diagnosis
Cerebro
27.1
%
25.9
%
27.4
%
26.2
%
Neurological
8.3
10.1
7.9
10.4
Cancer
25.0
27.1
24.8
25.9
Cardio
16.1
16.3
15.9
16.3
Respiratory
9.6
9.8
10.1
10.4
Other
13.9
10.8
13.9
10.8
Total
100.0
%
100.0
%
100.0
%
100.0
%
Estimated uncollectible accounts as a percent of revenues
1.0
%
1.0
%
1.1
%
1.0
%
Accounts receivable --
Days of revenue outstanding-excluding unapplied Medicare payments
38.8
35.2
n.a.
n.a.
Days of revenue outstanding-including unapplied Medicare payments
34.7
22.6
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 SIX MONTHS ENDED JUNE 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 June 30, 2024 VITAS Roto-Rooter
Corporate Consolidated Stock option expense $
-
$
-
$
(8,870
)
$
(8,870
)
Long-term incentive compensation
-
-
(3,593
)
(3,593
)
Amortization of reacquired franchise agreements
-
(2,352
)
-
(2,352
)
Acquisition expense
(907
)
(45
)
-
(952
)
Pretax impact on earnings
(907
)
(2,397
)
(12,463
)
(15,767
)
Excess tax benefits on stock compensation
-
-
622
622
Income tax benefit on the above
220
559
1,834
2,613
After-tax impact on earnings $
(687
)
$
(1,838
)
$
(10,007
)
$
(12,532
)
Six Months Ended June 30, 2024 VITAS
Roto-Rooter Corporate Consolidated
Stock option expense $
-
$
-
$
(17,895
)
$
(17,895
)
Long-term incentive compensation
-
-
(7,377
)
(7,377
)
Severance arrangement
-
-
(5,337
)
(5,337
)
Amortization of reacquired franchise agreements
-
(4,704
)
-
(4,704
)
Acquisition expense
(907
)
(45
)
-
(952
)
Pretax impact on earnings
(907
)
(4,749
)
(30,609
)
(36,265
)
Excess tax benefits on stock compensation
-
-
3,919
3,919
Income tax benefit on the above
220
1,107
3,673
5,000
After-tax impact on earnings $
(687
)
$
(3,642
)
$
(23,017
)
$
(27,346
)
(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 June
30, 2023 VITAS Roto-Rooter Corporate
Consolidated Stock option expense $
-
$
-
$
(8,400
)
$
(8,400
)
Amortization of reacquired franchise agreements
-
(2,352
)
-
(2,352
)
Long-term incentive compensation
-
-
(1,750
)
(1,750
)
Pretax impact on earnings
-
(2,352
)
(10,150
)
(12,502
)
Excess tax benefits on stock compensation
-
-
1,501
1,501
Income tax benefit on the above
-
623
1,643
2,266
After-tax impact on earnings $
-
$
(1,729
)
$
(7,006
)
$
(8,735
)
Six Months Ended June 30, 2023 VITAS
Roto-Rooter Corporate Consolidated
Stock option expense $
-
$
-
$
(16,882
)
$
(16,882
)
Amortization of reacquired franchise agreements
-
(4,704
)
-
(4,704
)
Long-term incentive compensation
-
-
(4,264
)
(4,264
)
Litigation settlements
-
(1,756
)
-
(1,756
)
Pretax impact on earnings
-
(6,460
)
(21,146
)
(27,606
)
Excess tax benefits on stock compensation
-
-
3,150
3,150
Income tax benefit on the above
-
1,712
3,406
5,118
After-tax impact on earnings $
-
$
(4,748
)
$
(14,590
)
$
(19,338
)
(c) VITAS has 10 large (greater than 450 ADC), 22
medium (greater than 200 but less than 450 ADC) and 21 small (less
than 200 ADC) hospice programs. Of Vitas' 32 Medicare provider
numbers, for the trailing 12 months, 28 provider numbers have a
Medicare cap cushion of greater than 10%, one provider number has a
Medicare cap cushion between 5% and 10%, two provider numbers has a
Medicare cap cushion between 0% and 5%, and one provider number has
a Medicare cap liability.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240724583414/en/
Michael D. Witzeman (513) 762-6714
Chemed (NYSE:CHE)
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From Nov 2024 to Dec 2024
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