Chemed Reports Fourth-Quarter 2015 Results
Consolidated operating results:
-
Revenue increased 5.1% to
$399 million -
GAAP Diluted EPS increased 0.6% to
$1.72 -
Adjusted Diluted EPS increased 9.4% to
$1.97
VITAS segment operating results:
-
Net Patient Revenue of
$284 million , an increase of 3.7% - Average Daily Census (ADC) of 15,697, an increase of 5.8%
- Admissions of 15,790, a decrease of 3.2%
-
Net Income, including litigation costs, of
$26.5 million , an increase of 3.8% -
Adjusted EBITDA, excluding cap, of
$46.4 million , an increase of 2.7% - Adjusted EBITDA margin, excluding cap, of 16.3%, a decrease of 19 basis points
Roto-Rooter segment operating results:
-
Revenue of
$114 million , an increase of 8.7% -
Net Income of
$13.5 million , an increase of 17.2% -
Adjusted EBITDA of
$24.4 million , an increase of 15.5% - Adjusted EBITDA margin of 21.4%, an increase of 126 basis points
VITAS
Net revenue for VITAS was
In the fourth quarter of 2015, VITAS did not record any adjustments in
estimated Medicare Cap billing limitations. This compares to
At
Of VITAS’ 31 unique
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was
The fourth quarter of 2015 gross margin, excluding the impact of Medicare Cap, was 24.1%, which is 12 basis points less than the fourth quarter of 2014.
Selling, general and administrative expense was
Roto-Rooter
Roto-Rooter generated sales of
Roto-Rooter’s gross margin in the quarter was 47.3%, a 56 basis point
improvement when compared to the fourth quarter of 2014. Adjusted EBITDA
in the fourth quarter of 2015 totaled
Chemed Consolidated
As of
In
Capital expenditures through
The Company repurchased
Guidance for 2016
On
The two-tiered national per diem rate for RHC is
Historically, VITAS had a 32/68 aggregate Days-of-Care ratio. High acuity care historically has represented 6% to 7% of VITAS’ total days-of-care. VITAS high acuity days-of-care provided to patients within the first 60 days of admission represented approximately 15% of days-of-care provided to patients in the first 60 days of admission. This results in a VITAS RHC Days-of-Care ratio of approximately 29/71.
The impact to VITAS for the 2016 rebasing is estimated to reduce
aggregate 2016 revenue by
The estimated impact from rebasing is similar to the impact of
sequestration. It will have a one-year impact relative to revenue and
profitability growth when compared to the prior year. However, similar
to sequestration, VITAS anticipates a significant portion of this
Including the impact of rebasing, full-year 2016 revenue growth for
VITAS, prior to Medicare Cap, is estimated to be in the range of 2.5% to
3.5%. Admissions in 2016 are estimated to increase 3% and full-year
Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 14% to
15%. This guidance includes
Roto-Rooter is forecasted to achieve full-year 2016 revenue growth of 3.5% to 4.5%. This revenue estimate is based upon increased job pricing of approximately 1% and continued growth in water restoration services. Adjusted EBITDA margin for 2016 is estimated in the range of 20% to 21%.
Based upon the above, full-year 2016 adjusted earnings per diluted
share, excluding non-cash expense for stock options, costs related to
litigation, and other discrete items, is estimated to be in the range of
The impact on diluted earnings per share from rebasing is approximately
Conference Call
A taped replay of the conference call will be available beginning approximately 24 hours after the call's conclusion. It can be accessed by dialing (888) 286-8010 for U.S. and Canadian callers and (617) 801-6888 for international callers and will be available for one week following the live call. The replay pass code is 33220503. An archived webcast will also be available at www.chemed.com.
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,
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.
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
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME | ||||||||||||||||||||||||
(in thousands, except per share data)(unaudited) | ||||||||||||||||||||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
Service revenues and sales | $ | 398,589 | $ | 379,411 | $ | 1,543,388 | $ | 1,456,282 | ||||||||||||||||
Cost of services provided and goods sold | 275,973 | 263,402 | 1,087,610 | 1,034,673 | ||||||||||||||||||||
Selling, general and administrative expenses (aa) | 64,554 | 57,832 | 237,821 | 222,589 | ||||||||||||||||||||
Depreciation | 8,180 | 8,010 | 32,369 | 29,881 | ||||||||||||||||||||
Amortization | 723 | 130 | 1,130 | 720 | ||||||||||||||||||||
Total costs and expenses | 349,430 | 329,374 | 1,358,930 | 1,287,863 | ||||||||||||||||||||
Income from operations | 49,159 | 50,037 | 184,458 | 168,419 | ||||||||||||||||||||
Interest expense | (799 | ) | (962 | ) | (3,645 | ) | (8,186 | ) | ||||||||||||||||
Other income--net (bb) |
569 | 244 | (687 | ) | 2,521 | |||||||||||||||||||
Income before income taxes | 48,929 | 49,319 | 180,126 | 162,754 | ||||||||||||||||||||
Income taxes | (19,000 | ) | (19,524 | ) | (69,852 | ) | (63,437 | ) | ||||||||||||||||
Net income | $ | 29,929 | $ | 29,795 | $ | 110,274 | $ | 99,317 | ||||||||||||||||
Earnings Per Share | ||||||||||||||||||||||||
Net income | $ | 1.78 | $ | 1.77 | $ | 6.54 | $ | 5.79 | ||||||||||||||||
Average number of shares outstanding | 16,819 | 16,878 | 16,870 | 17,165 | ||||||||||||||||||||
Diluted Earnings Per Share | ||||||||||||||||||||||||
Net income | $ | 1.72 | $ | 1.71 | $ | 6.33 | $ | 5.57 | ||||||||||||||||
Average number of shares outstanding | 17,365 | 17,469 | 17,422 | 17,840 | ||||||||||||||||||||
(aa) | Selling, general and administrative ("SG&A") expenses comprise (in thousands): | |||||||||||||||||||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
SG&A expenses before long-term incentive compensation, O.I.G. expenses and the impact of market value gains related to deferred compensation plans |
$ | 58,625 | $ | 56,308 | $ | 225,180 | $ | 214,761 | ||||||||||||||||
Long-term incentive compensation | 3,764 | 581 | 7,519 | 2,569 | ||||||||||||||||||||
O.I.G. expenses | 1,137 | 533 | 4,974 | 2,141 | ||||||||||||||||||||
Market value gains related to deferred compensation trusts |
1,028 | 410 | 148 | 3,118 | ||||||||||||||||||||
Total SG&A expenses | $ | 64,554 | $ | 57,832 | $ | 237,821 | $ | 222,589 | ||||||||||||||||
(bb) |
Other income--net comprises (in thousands): | |||||||||||||||||||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
Market value gains related to deferred compensation trusts |
$ | 1,028 | $ | 410 | $ | 148 | $ | 3,118 | ||||||||||||||||
Loss on disposal of property and equipment | (567 | ) | (147 | ) | (698 | ) | (640 | ) | ||||||||||||||||
Interest income | 74 | (24 | ) | 281 | (29 | ) | ||||||||||||||||||
Other | 34 | 5 | (418 | ) | 72 | |||||||||||||||||||
Total other income--net | $ | 569 | $ | 244 | $ | (687 | ) | $ | 2,521 | |||||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||||
CONSOLIDATED BALANCE SHEET | |||||||||||||||||||
(in thousands, except per share data)(unaudited) | |||||||||||||||||||
December 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Assets | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | 14,727 | $ | 14,132 | |||||||||||||||
Accounts receivable less allowances | 106,262 | 124,607 | |||||||||||||||||
Inventories | 6,314 | 6,168 | |||||||||||||||||
Current deferred income taxes | - | 15,414 | |||||||||||||||||
Prepaid income taxes | 10,653 | 2,787 | |||||||||||||||||
Prepaid expenses | 12,852 | 11,456 | |||||||||||||||||
Total current assets | 150,808 | 174,564 | |||||||||||||||||
Investments of deferred compensation plans held in trust | 49,481 | 49,147 | |||||||||||||||||
Properties and equipment, at cost less accumulated depreciation | 117,370 | 105,336 | |||||||||||||||||
Identifiable intangible assets less accumulated amortization | 55,111 | 56,027 | |||||||||||||||||
Goodwill | 472,322 | 466,722 | |||||||||||||||||
Other assets | 7,233 | 8,136 | |||||||||||||||||
Total Assets | $ | 852,325 | $ | 859,932 | |||||||||||||||
Liabilities | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Accounts payable | $ | 43,695 | $ | 46,849 | |||||||||||||||
Current portion of long-term debt | 7,500 | 6,250 | |||||||||||||||||
Income taxes | - | 5,818 | |||||||||||||||||
Accrued insurance | 43,972 | 40,814 | |||||||||||||||||
Accrued compensation | 52,817 | 50,718 | |||||||||||||||||
Accrued legal | 1,233 | 753 | |||||||||||||||||
Other current liabilities | 22,119 | 24,352 | |||||||||||||||||
Total current liabilities | 171,336 | 175,554 | |||||||||||||||||
Deferred income taxes | 21,041 | 29,945 | |||||||||||||||||
Long-term debt | 83,750 | 141,250 | |||||||||||||||||
Deferred compensation liabilities | 49,467 | 48,684 | |||||||||||||||||
Other liabilities | 13,478 | 13,143 | |||||||||||||||||
Total Liabilities | 339,072 | 408,576 | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||||
Capital stock | 33,985 | 33,337 | |||||||||||||||||
Paid-in capital | 603,006 | 538,845 | |||||||||||||||||
Retained earnings | 865,845 | 771,176 | |||||||||||||||||
Treasury stock, at cost | (991,978 | ) | (894,285 | ) | |||||||||||||||
Deferred compensation payable in Company stock | 2,395 | 2,283 | |||||||||||||||||
Total Stockholders' Equity | 513,253 | 451,356 | |||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 852,325 | $ | 859,932 | |||||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||||||||
(in thousands)(unaudited) | |||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Cash Flows from Operating Activities | |||||||||||||||||
Net income | $ | 110,274 | $ | 99,317 | |||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||||
Depreciation and amortization | 33,499 | 30,601 | |||||||||||||||
Provision for uncollectible accounts receivable | 14,247 | 13,173 | |||||||||||||||
Noncash long-term incentive compensation | 6,644 | 2,569 | |||||||||||||||
Provision for deferred income taxes | 6,325 | 6,978 | |||||||||||||||
Stock option expense | 5,445 | 4,802 | |||||||||||||||
Amortization of restricted stock awards | 2,107 | 2,471 | |||||||||||||||
Directors' stock awards | 540 | 480 | |||||||||||||||
Amortization of debt issuance costs | 523 | 826 | |||||||||||||||
Amortization of discount on convertible notes | - | 3,392 | |||||||||||||||
Changes in operating assets and liabilities, excluding amounts acquired in business combinations: |
|||||||||||||||||
Decrease/(increase) in accounts receivable | 4,132 | (45,785 | ) | ||||||||||||||
Decrease/(increase) in inventories | (142 | ) | 535 | ||||||||||||||
Decrease/(increase) in prepaid expenses | (1,290 | ) | 6,362 | ||||||||||||||
Increase/(decrease) in accounts payable and other current liabilities | 476 | (26,304 | ) | ||||||||||||||
Increase in income taxes | 344 | 11,279 | |||||||||||||||
Increase in other assets | (47 | ) | (4,769 | ) | |||||||||||||
Increase in other liabilities | 1,320 | 8,484 | |||||||||||||||
Excess tax benefit on stock-based compensation | (14,042 | ) | (5,172 | ) | |||||||||||||
Other sources | 1,145 | 1,040 | |||||||||||||||
Net cash provided by operating activities | 171,500 | 110,279 | |||||||||||||||
Cash Flows from Investing Activities | |||||||||||||||||
Capital expenditures | (44,135 | ) | (43,571 | ) | |||||||||||||
Business combinations, net of cash acquired | (6,614 | ) | (250 | ) | |||||||||||||
Other sources | 432 | 294 | |||||||||||||||
Net cash used by investing activities | (50,317 | ) | (43,527 | ) | |||||||||||||
Cash Flows from Financing Activities | |||||||||||||||||
Payments on revolving line of credit | (153,200 | ) | (336,350 | ) | |||||||||||||
Proceeds from revolving line of credit | 103,200 | 386,350 | |||||||||||||||
Purchases of treasury stock | (59,323 | ) | (110,019 | ) | |||||||||||||
Capital stock surrendered to pay taxes on stock-based compensation | (15,734 | ) | (7,524 | ) | |||||||||||||
Dividends paid | (15,605 | ) | (14,255 | ) | |||||||||||||
Proceeds from exercise of stock options | 15,424 | 23,910 | |||||||||||||||
Excess tax benefit on stock-based compensation | 14,042 | 5,172 | |||||||||||||||
Payments on other long-term debt | (6,250 | ) | (189,456 | ) | |||||||||||||
Increase/(decrease) in cash overdrafts payable | (1,177 | ) | 9,714 | ||||||||||||||
Proceeds from other long-term debt | - | 100,000 | |||||||||||||||
Retirement of warrants | - | (2,648 | ) | ||||||||||||||
Debt issuances costs | - | (914 | ) | ||||||||||||||
Other uses | (1,965 | ) | (1,018 | ) | |||||||||||||
Net cash used by financing activities | (120,588 | ) | (137,038 | ) | |||||||||||||
Increase/(Decrease) in Cash and Cash Equivalents | 595 | (70,286 | ) | ||||||||||||||
Cash and cash equivalents at beginning of year | 14,132 | 84,418 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 14,727 | $ | 14,132 | |||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME | ||||||||||||||||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, 2015 AND 2014 | ||||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||||
Chemed | ||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | |||||||||||||||||
2015 |
||||||||||||||||||||
Service revenues and sales | $ | 284,470 | $ | 114,119 | $ | - | $ | 398,589 | ||||||||||||
Cost of services provided and goods sold | 215,786 | 60,187 | - | 275,973 | ||||||||||||||||
Selling, general and administrative expenses (a) | 23,086 | 29,649 | 11,819 | 64,554 | ||||||||||||||||
Depreciation | 4,647 | 3,390 | 143 | 8,180 | ||||||||||||||||
Amortization | 578 | 145 | - | 723 | ||||||||||||||||
Total costs and expenses | 244,097 | 93,371 | 11,962 | 349,430 | ||||||||||||||||
Income/(loss) from operations | 40,373 | 20,748 | (11,962 | ) | 49,159 | |||||||||||||||
Interest expense (a) | (36 | ) | (74 | ) | (689 | ) | (799 | ) | ||||||||||||
Intercompany interest income/(expense) | 2,039 | 884 | (2,923 | ) | - | |||||||||||||||
Other income/(expense)—net | (422 | ) | (38 | ) | 1,029 | 569 | ||||||||||||||
Income/(loss) before income taxes | 41,954 | 21,520 | (14,545 | ) | 48,929 | |||||||||||||||
Income taxes (a) | (15,446 | ) | (8,069 | ) | 4,515 | (19,000 | ) | |||||||||||||
Net income/(loss) | $ | 26,508 | $ | 13,451 | $ | (10,030 | ) | $ | 29,929 | |||||||||||
2014 |
||||||||||||||||||||
Service revenues and sales | $ | 274,383 | $ | 105,028 | $ | - | $ | 379,411 | ||||||||||||
Cost of services provided and goods sold | 207,424 | 55,978 | - | 263,402 | ||||||||||||||||
Selling, general and administrative expenses (b) | 21,800 | 28,200 | 7,832 | 57,832 | ||||||||||||||||
Depreciation | 4,892 | 2,970 | 148 | 8,010 | ||||||||||||||||
Amortization | 62 | 68 | - | 130 | ||||||||||||||||
Total costs and expenses | 234,178 | 87,216 | 7,980 | 329,374 | ||||||||||||||||
Income/(loss) from operations | 40,205 | 17,812 | (7,980 | ) | 50,037 | |||||||||||||||
Interest expense (b) | (40 | ) | (68 | ) | (854 | ) | (962 | ) | ||||||||||||
Intercompany interest income/(expense) | 1,669 | 802 | (2,471 | ) | - | |||||||||||||||
Other income/(expense)—net | (176 | ) | 10 | 410 | 244 | |||||||||||||||
Income/(loss) before income taxes | 41,658 | 18,556 | (10,895 | ) | 49,319 | |||||||||||||||
Income taxes (b) | (16,116 | ) | (7,081 | ) | 3,673 | (19,524 | ) | |||||||||||||
Net income/(loss) | $ | 25,542 | $ | 11,475 | $ | (7,222 | ) | $ | 29,795 | |||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME | ||||||||||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 | ||||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||||
Chemed | ||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | |||||||||||||||||
2015 |
||||||||||||||||||||
Service revenues and sales | $ | 1,115,551 | $ | 427,837 | $ | - | $ | 1,543,388 | ||||||||||||
Cost of services provided and goods sold | 862,587 | 225,023 | - | 1,087,610 | ||||||||||||||||
Selling, general and administrative expenses (a) | 89,879 | 114,269 | 33,673 | 237,821 | ||||||||||||||||
Depreciation | 18,789 | 12,988 | 592 | 32,369 | ||||||||||||||||
Amortization | 758 | 372 | - | 1,130 | ||||||||||||||||
Total costs and expenses | 972,013 | 352,652 | 34,265 | 1,358,930 | ||||||||||||||||
Income/(loss) from operations | 143,538 | 75,185 | (34,265 | ) | 184,458 | |||||||||||||||
Interest expense (a) | (200 | ) | (348 | ) | (3,097 | ) | (3,645 | ) | ||||||||||||
Intercompany interest income/(expense) | 7,499 | 3,385 | (10,884 | ) | - | |||||||||||||||
Other income/(expense)—net | (816 | ) | (19 | ) | 148 | (687 | ) | |||||||||||||
Income/(loss) before income taxes | 150,021 | 78,203 | (48,098 | ) | 180,126 | |||||||||||||||
Income taxes (a) | (56,675 | ) | (29,630 | ) | 16,453 | (69,852 | ) | |||||||||||||
Net income/(loss) | $ | 93,346 | $ | 48,573 | $ | (31,645 | ) | $ | 110,274 | |||||||||||
2014 |
||||||||||||||||||||
Service revenues and sales | $ | 1,064,205 | $ | 392,077 | $ | - | $ | 1,456,282 | ||||||||||||
Cost of services provided and goods sold | 825,739 | 208,934 | - | 1,034,673 | ||||||||||||||||
Selling, general and administrative expenses (b) | 85,183 | 106,960 | 30,446 | 222,589 | ||||||||||||||||
Depreciation | 18,601 | 10,702 | 578 | 29,881 | ||||||||||||||||
Amortization | 447 | 273 | - | 720 | ||||||||||||||||
Total costs and expenses | 929,970 | 326,869 | 31,024 | 1,287,863 | ||||||||||||||||
Income/(loss) from operations | 134,235 | 65,208 | (31,024 | ) | 168,419 | |||||||||||||||
Interest expense (b) | (207 | ) | (363 | ) | (7,616 | ) | (8,186 | ) | ||||||||||||
Intercompany interest income/(expense) | 6,189 | 2,892 | (9,081 | ) | - | |||||||||||||||
Other income—net | (753 | ) | 146 | 3,128 | 2,521 | |||||||||||||||
Income/(loss) before income taxes | 139,464 | 67,883 | (44,593 | ) | 162,754 | |||||||||||||||
Income taxes (b) | (53,278 | ) | (25,808 | ) | 15,649 | (63,437 | ) | |||||||||||||
Net income/(loss) | $ | 86,186 | $ | 42,075 | $ | (28,944 | ) | $ | 99,317 | |||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||
CONSOLIDATING SUMMARY OF EBITDA | ||||||||||||||||||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, 2015 AND 2014 | ||||||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||||||
Chemed | ||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | |||||||||||||||||||
2015 |
||||||||||||||||||||||
Net income/(loss) | $ | 26,508 | $ | 13,451 | $ | (10,030 | ) | $ | 29,929 | |||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 36 | 74 | 689 | 799 | ||||||||||||||||||
Income taxes | 15,446 | 8,069 | (4,515 | ) | 19,000 | |||||||||||||||||
Depreciation | 4,647 | 3,390 | 143 | 8,180 | ||||||||||||||||||
Amortization | 578 | 145 | - | 723 | ||||||||||||||||||
EBITDA | 47,215 | 25,129 | (13,713 | ) | 58,631 | |||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (2,039 | ) | (884 | ) | 2,923 | - | ||||||||||||||||
Interest income | (61 | ) | (13 | ) | - | (74 | ) | |||||||||||||||
Expenses related to OIG investigation | 1,137 | - | - | 1,137 | ||||||||||||||||||
Amortization of stock awards | 152 | 87 | 380 | 619 | ||||||||||||||||||
Acquisition expenses | - | 11 | - | 11 | ||||||||||||||||||
Advertising cost adjustment (c) | - | 50 | - | 50 | ||||||||||||||||||
Stock option expense | - | - | 1,845 | 1,845 | ||||||||||||||||||
Long-term incentive compensation | - | - | 3,764 | 3,764 | ||||||||||||||||||
Adjusted EBITDA | $ | 46,404 | $ | 24,380 | $ | (4,801 | ) | $ | 65,983 | |||||||||||||
2014 |
||||||||||||||||||||||
Net income/(loss) | $ | 25,542 | $ | 11,475 | $ | (7,222 | ) | $ | 29,795 | |||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 40 | 68 | 854 | 962 | ||||||||||||||||||
Income taxes | 16,116 | 7,081 | (3,673 | ) | 19,524 | |||||||||||||||||
Depreciation | 4,892 | 2,970 | 148 | 8,010 | ||||||||||||||||||
Amortization | 62 | 68 | - | 130 | ||||||||||||||||||
EBITDA | 46,652 | 21,662 | (9,893 | ) | 58,421 | |||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (1,669 | ) | (802 | ) | 2,471 | - | ||||||||||||||||
Interest income | 35 | (10 | ) | (1 | ) | 24 | ||||||||||||||||
Expenses related to OIG investigation | 533 | - | - | 533 | ||||||||||||||||||
Amortization of stock awards | 143 | 60 | 397 | 600 | ||||||||||||||||||
Acquisition expenses | - | 23 | - | 23 | ||||||||||||||||||
Expenses related to litigation settlements | - | 16 | - | 16 | ||||||||||||||||||
Advertising cost adjustment (c) | - | 161 | - | 161 | ||||||||||||||||||
Stock option expense | - | - | 1,372 | 1,372 | ||||||||||||||||||
Long-term incentive compensation | - | - | 581 | 581 | ||||||||||||||||||
Adjusted EBITDA | $ | 45,694 | $ | 21,110 | $ | (5,073 | ) | $ | 61,731 | |||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||
CONSOLIDATING SUMMARY OF EBITDA | ||||||||||||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 | ||||||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||||||
Chemed | ||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | |||||||||||||||||||
2015 |
||||||||||||||||||||||
Net income/(loss) | $ | 93,346 | $ | 48,573 | $ | (31,645 | ) | $ | 110,274 | |||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 200 | 348 | 3,097 | 3,645 | ||||||||||||||||||
Income taxes | 56,675 | 29,630 | (16,453 | ) | 69,852 | |||||||||||||||||
Depreciation | 18,789 | 12,988 | 592 | 32,369 | ||||||||||||||||||
Amortization | 758 | 372 | - | 1,130 | ||||||||||||||||||
EBITDA | 169,768 | 91,911 | (44,409 | ) | 217,270 | |||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (7,499 | ) | (3,385 | ) | 10,884 | - | ||||||||||||||||
Interest income | (241 | ) | (40 | ) | - | (281 | ) | |||||||||||||||
Expenses related to OIG investigation | 4,974 | - | - | 4,974 | ||||||||||||||||||
Amortization of stock awards | 496 | 268 | 1,343 | 2,107 | ||||||||||||||||||
Net expenses related to litigation settlements | - | 5 | - | 5 | ||||||||||||||||||
Acquisition expenses | - | 172 | - | 172 | ||||||||||||||||||
Advertising cost adjustment (c) | - | (1,317 | ) | - | (1,317 | ) | ||||||||||||||||
Stock option expense | - | - | 5,445 | 5,445 | ||||||||||||||||||
Long-term incentive compensation | - | - | 7,519 | 7,519 | ||||||||||||||||||
Expenses related to securities litigation | - | - | 37 | 37 | ||||||||||||||||||
Adjusted EBITDA | $ | 167,498 | $ | 87,614 | $ | (19,181 | ) | $ | 235,931 | |||||||||||||
2014 |
||||||||||||||||||||||
Net income/(loss) | $ | 86,186 | $ | 42,075 | $ | (28,944 | ) | $ | 99,317 | |||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 207 | 363 | 7,616 | 8,186 | ||||||||||||||||||
Income taxes | 53,278 | 25,808 | (15,649 | ) | 63,437 | |||||||||||||||||
Depreciation | 18,601 | 10,702 | 578 | 29,881 | ||||||||||||||||||
Amortization | 447 | 273 | - | 720 | ||||||||||||||||||
EBITDA | 158,719 | 79,221 | (36,399 | ) | 201,541 | |||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (6,189 | ) | (2,892 | ) | 9,081 | - | ||||||||||||||||
Interest income | 78 | (39 | ) | (10 | ) | 29 | ||||||||||||||||
Expenses related to OIG investigation | 2,141 | - | - | 2,141 | ||||||||||||||||||
Amortization of stock awards | 586 | 252 | 1,633 | 2,471 | ||||||||||||||||||
Net expenses related to litigation settlements | 113 | 7 | - | 120 | ||||||||||||||||||
Acquisition expenses | 1 | 23 | - | 24 | ||||||||||||||||||
Advertising cost adjustment (c) | - | (1,462 | ) | - | (1,462 | ) | ||||||||||||||||
Stock option expense | - | - | 4,802 | 4,802 | ||||||||||||||||||
Long-term incentive compensation | - | - | 2,569 | 2,569 | ||||||||||||||||||
Expenses related to securities litigation | - | - | 327 | 327 | ||||||||||||||||||
Adjusted EBITDA | $ | 155,449 | $ | 75,110 | $ | (17,997 | ) | $ | 212,562 | |||||||||||||
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) | ||||||||||||||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Net income as reported | $ | 29,929 | $ | 29,795 | $ | 110,274 | $ | 99,317 | ||||||||||
Add/(deduct) the after-tax: | ||||||||||||||||||
Long-term incentive compensation | 2,377 | 367 | 4,752 | 1,625 | ||||||||||||||
Stock option expense | 1,171 | 863 | 3,439 | 3,022 | ||||||||||||||
Expenses related to OIG investigation | 703 | 331 | 3,072 | 1,328 | ||||||||||||||
Acquisition expenses | 6 | 14 | 104 | 15 | ||||||||||||||
Net expenses related to litigation settlements | - | 10 | 3 | 74 | ||||||||||||||
Expenses related to securities litigation | - | - | 23 | 207 | ||||||||||||||
Non-cash expense of change in accounting for convertible debt | - | - | - | 2,143 | ||||||||||||||
Adjusted net income | $ | 34,186 | $ | 31,380 | $ | 121,667 | $ | 107,731 | ||||||||||
Diluted Earnings Per Share As Reported | ||||||||||||||||||
Net income | $ | 1.72 | $ | 1.71 | $ | 6.33 | $ | 5.57 | ||||||||||
Average number of shares outstanding | 17,365 | 17,469 | 17,422 | 17,840 | ||||||||||||||
Adjusted Diluted Earnings Per Share | ||||||||||||||||||
Net income | $ | 1.97 | $ | 1.80 | $ | 6.98 | $ | 6.07 | ||||||||||
Adjusted average number of shares outstanding (d) | 17,365 | 17,469 | 17,422 | 17,738 | ||||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||
OPERATING STATISTICS FOR VITAS SEGMENT | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||
OPERATING STATISTICS | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Net revenue ($000) (e) | ||||||||||||||||||||||
Homecare | $ | 224,278 | $ | 209,633 | $ | 865,145 | $ | 810,413 | ||||||||||||||
Inpatient | 22,954 | 25,839 | 99,439 | 102,876 | ||||||||||||||||||
Continuous care | 37,238 | 38,405 | 150,802 | 152,206 | ||||||||||||||||||
Total before Medicare cap allowance | $ | 284,470 | $ | 273,877 | $ | 1,115,386 | $ | 1,065,495 | ||||||||||||||
Medicare cap allowance | - | 506 | 165 | (1,290 | ) | |||||||||||||||||
Total | $ | 284,470 | $ | 274,383 | $ | 1,115,551 | $ | 1,064,205 | ||||||||||||||
Net revenue as a percent of total before Medicare cap allowance | ||||||||||||||||||||||
Homecare | 78.8 | % | 76.6 | % | 77.6 | % | 76.0 | % | ||||||||||||||
Inpatient | 8.1 | 9.4 | 8.9 | 9.7 | ||||||||||||||||||
Continuous care | 13.1 | 14.0 | 13.5 | 14.3 | ||||||||||||||||||
Total before Medicare cap allowance | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||||||||
Medicare cap allowance | - | 0.2 | - | (0.1 | ) | |||||||||||||||||
Total | 100.0 | % | 100.2 | % | 100.0 | % | 99.9 | % | ||||||||||||||
Average daily census ("ADC") (days) | ||||||||||||||||||||||
Homecare | 11,707 | 10,850 | 11,372 | 10,634 | ||||||||||||||||||
Nursing home | 3,062 | 2,995 | 3,035 | 2,954 | ||||||||||||||||||
Routine homecare | 14,769 | 13,845 | 14,407 | 13,588 | ||||||||||||||||||
Inpatient | 377 | 427 | 412 | 428 | ||||||||||||||||||
Continuous care | 551 | 566 | 566 | 568 | ||||||||||||||||||
Total | 15,697 | 14,838 | 15,385 | 14,584 | ||||||||||||||||||
Total Admissions | 15,790 | 16,313 | 65,872 | 64,090 | ||||||||||||||||||
Total Discharges | 15,915 | 16,333 | 64,900 | 63,478 | ||||||||||||||||||
Average length of stay (days) | 89.8 | 82.7 | 81.6 | 82.4 | ||||||||||||||||||
Median length of stay (days) | 17.0 | 15.0 | 15.0 | 15.0 | ||||||||||||||||||
ADC by major diagnosis | ||||||||||||||||||||||
Neurological | 22.8 | % | 25.4 | % | 23.2 | % | 30.1 | % | ||||||||||||||
Cancer | 15.6 | 17.2 | 16.4 | 17.3 | ||||||||||||||||||
Cardio | 17.4 | 17.8 | 17.4 | 17.0 | ||||||||||||||||||
Cerebro | 29.9 | 26.4 | 29.1 | 20.6 | ||||||||||||||||||
Respiratory | 7.7 | 7.8 | 7.8 | 7.9 | ||||||||||||||||||
Other | 6.6 | 5.4 | 6.1 | 7.1 | ||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||
Admissions by major diagnosis | ||||||||||||||||||||||
Neurological | 12.1 | % | 13.2 | % | 12.3 | % | 18.6 | % | ||||||||||||||
Cancer | 31.5 | 33.1 | 32.0 | 33.3 | ||||||||||||||||||
Cardio | 15.2 | 15.2 | 15.3 | 14.9 | ||||||||||||||||||
Cerebro | 19.7 | 17.7 | 19.0 | 11.5 | ||||||||||||||||||
Respiratory | 9.5 | 9.3 | 9.9 | 9.4 | ||||||||||||||||||
Other | 12.0 | 11.5 | 11.5 | 12.3 | ||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||
Direct patient care margins (f) | ||||||||||||||||||||||
Routine homecare | 54.7 | % | 54.9 | % | 53.4 | % | 53.8 | % | ||||||||||||||
Inpatient | 1.3 | 7.2 | 5.0 | 5.8 | ||||||||||||||||||
Continuous care | 16.1 | 18.2 | 16.1 | 17.4 | ||||||||||||||||||
Homecare margin drivers (dollars per patient day) | ||||||||||||||||||||||
Labor costs | $ | 53.96 | $ | 53.06 | $ | 55.58 | $ | 53.99 | ||||||||||||||
Drug costs | 6.63 | 6.90 | 6.68 | 7.01 | ||||||||||||||||||
Home medical equipment | 6.61 | 6.41 | 6.57 | 6.61 | ||||||||||||||||||
Medical supplies | 2.84 | 3.10 | 2.90 | 3.18 | ||||||||||||||||||
Inpatient margin drivers (dollars per patient day) | ||||||||||||||||||||||
Labor costs | $ | 358.52 | $ | 327.53 | $ | 350.06 | $ | 339.90 | ||||||||||||||
Continuous care margin drivers (dollars per patient day) | ||||||||||||||||||||||
Labor costs | $ | 596.21 | $ | 582.69 | $ | 592.48 | $ | 585.61 | ||||||||||||||
Bad debt expense as a percent of revenues | 1.0 | % | 1.0 | % | 1.0 | % | 1.0 | % | ||||||||||||||
Accounts receivable -- | ||||||||||||||||||||||
Days of revenue outstanding- excluding unapplied Medicare payments | 37.5 | 38.9 | n.a. | n.a. | ||||||||||||||||||
Days of revenue outstanding- including unapplied Medicare payments | 26.7 | 33.6 | 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 MONTHS AND YEARS ENDED DECEMBER 31, 2014 AND 2015 |
||
(unaudited) | ||
(a) |
Included in the results of operations 2015 are the following significant credits/(charges) which may not be indicative of ongoing operations |
|
(in thousands): |
||
For the Three Months Ended December 31, 2015 | |||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | ||||||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||
Expenses related to OIG investigation | $ | (1,137 | ) | $ | - | $ | - | $ | (1,137 | ) | |||||||||||||
Acquisition expenses | - | (11 | ) | - | (11 | ) | |||||||||||||||||
Long-term incentive compensation | - | - | (3,764 | ) | (3,764 | ) | |||||||||||||||||
Stock option expense | - | - | (1,845 | ) | (1,845 | ) | |||||||||||||||||
Pretax impact on earnings | (1,137 | ) | (11 | ) | (5,609 | ) | (6,757 | ) | |||||||||||||||
Income tax benefit on the above | 434 | 5 | 2,061 | 2,500 | |||||||||||||||||||
After-tax impact on earnings | $ | (703 | ) | $ | (6 | ) | $ | (3,548 | ) | $ | (4,257 | ) | |||||||||||
For the Year Ended December 31, 2015 | |||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | ||||||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||
Expenses related to OIG investigation | $ | (4,974 | ) | $ | - | $ | - | $ | (4,974 | ) | |||||||||||||
Net expenses related to litigation settlements | - |
(5 |
) | - |
(5 |
) | |||||||||||||||||
Acquisition expenses | - |
(172 |
) | - |
(172 |
) | |||||||||||||||||
Long-term incentive compensation | - | - | (7,519 | ) | (7,519 | ) | |||||||||||||||||
Stock option expense | - | - | (5,445 | ) | (5,445 | ) | |||||||||||||||||
Expenses related to securities litigation | - | - | (37 | ) | (37 | ) | |||||||||||||||||
Pretax impact on earnings | (4,974 | ) | (177 | ) | (13,001 | ) | (18,152 | ) | |||||||||||||||
Income tax benefit on the above | 1,902 | 70 | 4,787 | 6,759 | |||||||||||||||||||
After-tax impact on earnings | $ | (3,072 | ) | $ | (107 | ) | $ | (8,214 | ) | $ | (11,393 | ) | |||||||||||
(b) |
Included in the results of operations 2014 are the following significant credits/(charges) which may not be indicative of ongoing operations |
|
(in thousands): |
||
For the Three Months Ended December 31, 2014 | |||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | ||||||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||
Expenses related to OIG investigation | $ | (533 | ) | $ | - | $ | - | $ | (533 | ) | |||||||||||||
Acquisition expenses | - | (23 | ) | - | (23 | ) | |||||||||||||||||
Expenses related to litigation settlements | - | (16 | ) | - | (16 | ) | |||||||||||||||||
Stock option expense | - | - | (1,372 | ) | (1,372 | ) | |||||||||||||||||
Long-term incentive compensation | - | - | (581 | ) | (581 | ) | |||||||||||||||||
Pretax impact on earnings | (533 | ) | (39 | ) | (1,953 | ) | (2,525 | ) | |||||||||||||||
Income tax benefit on the above | 202 | 15 | 723 | 940 | |||||||||||||||||||
After-tax impact on earnings | $ | (331 | ) | $ | (24 | ) | $ | (1,230 | ) | $ | (1,585 | ) | |||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||||||||
VITAS | Roto-Rooter | Corporate | Consolidated | ||||||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||
Expenses related to OIG investigation | $ | (2,141 | ) | $ | - | $ | - | $ | (2,141 | ) | |||||||||||||
Net expenses related to litigation settlements | (113 | ) | (7 | ) | - | (120 | ) | ||||||||||||||||
Acquisition expenses | (1 | ) | (23 | ) | - | (24 | ) | ||||||||||||||||
Stock option expense | - | - | (4,802 | ) | (4,802 | ) | |||||||||||||||||
Long-term incentive compensation | - | - | (2,569 | ) | (2,569 | ) | |||||||||||||||||
Expenses related to securities litigation | - | - | (327 | ) | (327 | ) | |||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Non-cash expense of change in accounting for convertible debt | - | - | (3,389 | ) | (3,389 | ) | |||||||||||||||||
Pretax impact on earnings | (2,255 | ) | (30 | ) | (11,087 | ) | (13,372 | ) | |||||||||||||||
Income tax benefit on the above | 856 | 12 | 4,090 | 4,958 | |||||||||||||||||||
After-tax impact on earnings | $ | (1,399 | ) | $ | (18 | ) | $ | (6,997 | ) | $ | (8,414 | ) | |||||||||||
(c) |
Under Generally Accepted Accounting Principles ("GAAP"), the Roto-Rooter segment expenses all advertising, including the cost of telephone directories, immediately upon the initial release of the advertising. Telephone directories are generally in circulation 12 months. If a directory is in circulation for a time period greater or less than 12 months, the publisher adjusts the directory billing for the change in billing period. The timing of when a telephone directory is published can and does fluctuate significantly on a quarterly basis. This "direct expensing" results in significant fluctuations in quarterly advertising expense. In the fourth quarters of 2015 and 2014, GAAP advertising expense for Roto-Rooter totaled $6,952,000 and $6,596,000, respectively. If the expense of the telephone directories were spread over the periods they are in circulation, advertising expense for the fourth quarters of 2015 and 2014 would total $6,902,000 and $6,435,000, respectively. |
|
Similarly, for the years ended December 31, 2015 and 2014, GAAP advertising expense for Roto-Rooter totaled $25,438,000 and $24,804,000, respectively. If the expense of the telephone directories were spread over the periods they are in circulation, advertising expense for the years ended December 31, 2015 and 2014 would total $26,755,000 and $26,266,000, respectively. |
||
(d) |
Adjusted diluted average shares outstanding excludes the estimated dilutive impact of the convertible notes prior to conversion of these notes on May 15, 2014 (impact of 102,000 shares for the year ended December 31, 2014) as this impact was entirely offset upon the exercise of the note hedges on May 15, 2014. |
|
(e) |
VITAS has 8 large (greater than 450 ADC), 19 medium (greater than 200 but less than 450 ADC) and 17 small (less than 200 ADC) hospice programs. For the current Medicare cap year there are no programs with a cap liability and four programs with Medicare cap cushion of less than 10%. |
|
(f) | Amounts exclude indirect patient care and administrative costs, as well as Medicare Cap billing limitation. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160217006503/en/
Source:
Chemed Corporation
David P. Williams, 513-762-6901