Chemed Reports Fourth-Quarter 2019 Results
Consolidated operating results:
-
Revenue increased 14.2% to
$522 million -
GAAP Diluted Earnings-per-Share (EPS) of
$3.96 , an increase of 21.5% -
Adjusted Diluted EPS of
$4.22 , an increase of 26.0%
VITAS segment operating results:
-
Net Patient Revenue of
$340 million , an increase of 10.7% - Average Daily Census (ADC) of 19,258, an increase of 6.1%
- Admissions of 17,479, an increase of 5.4%
-
Net Income, excluding certain discrete items, of
$50.1 million , an increase of 24.5% -
Adjusted EBITDA, excluding Medicare Cap, of
$70.5 million , an increase of 27.0%
Roto-Rooter segment operating results:
-
Revenue of
$182 million , an increase of 21.2% -
Net Income, excluding certain discrete items, of
$30.5 million , an increase of 16.3% -
Adjusted EBITDA of
$43.7 million , an increase of 20.9% - Adjusted EBITDA margin of 24.0%, equal to the prior year
VITAS
VITAS net revenue was
In the fourth quarter of 2019, VITAS accrued
VITAS currently has 30
Average revenue per patient per day in the fourth quarter of 2019 was
The fourth quarter 2019 gross margin, excluding Medicare Cap, was 26.3%, which is a 204-basis point margin improvement when compared to the fourth quarter of 2018.
Selling, general and administrative expense was
Roto-Rooter
Roto-Rooter generated quarterly revenue of
Including acquisitions, total commercial revenue increased 26.4%. This aggregate commercial revenue growth consisted of drain cleaning revenue expanding 34.9%, commercial plumbing and excavation increasing 25.2%, and commercial water restoration declining 8.8%.
Excluding acquisitions, commercial drain cleaning revenue increased 7.1%, commercial plumbing and excavation declined 0.1%, and commercial water restoration declined 17.4%. Commercial water restoration represents approximately 10% of total water restoration service revenue. Overall, commercial revenue excluding acquisitions increased 1.2%.
Including acquisitions, total residential revenue increased 19.4%. This aggregate residential revenue growth consisted of residential drain cleaning increasing 25.5%, plumbing and excavation expanding 18.1%, and residential water restoration increasing 16.3%.
Excluding acquisitions, residential drain cleaning increased 10.1%, plumbing and excavation increased 7.4%, and residential water restoration increased 14.6%. Overall, residential sales excluding acquisitions increased 9.5%.
Roto-Rooter’s gross margin in the quarter was 48.6%, a 15-basis point decline when compared to the fourth quarter of 2018. Adjusted EBITDA in the fourth quarter of 2019 totaled
Chemed Consolidated
As of
In
During the quarter, the Company repurchased 50,000 shares of
Guidance for 2020
Revenue growth for VITAS in 2020, prior to Medicare Cap, is estimated to be in the range of 8.5% to 9.5%. Admissions and Average Daily Census in 2020 are estimated to expand approximately 3.5% to 4.5%. High acuity days-of-care are estimated at 4.1% of total 2020 days-of-care. Full-year Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 18.7% to 19.0%. We are currently estimating
Roto-Rooter is forecasted to achieve full-year 2020 revenue growth of 13.0% to 14.0%. This revenue estimate is based upon unit for unit revenue growth of 4.0% to 5.0% in core plumbing and drain cleaning services, continued but slowing revenue growth from water restoration services, combined with 12-months of revenue in the Oakland and HSW acquisitions. Roto-Rooter’s Adjusted EBITDA margin for 2020 is estimated to be in the range of 23.0% to 23.5%.
Based upon the above, full-year 2020 adjusted earnings per diluted share, excluding non-cash expense for stock options, tax benefits from stock options, costs related to litigation, intangible amortization of reacquired franchise rights and other discrete items, is estimated to be in the range of
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 (855) 859-2056 for U.S. and Canadian callers and +1 (404) 537-3406 for international callers and will be available for one week following the live call. The replay Conference ID is 4939797. 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 STATEMENTS OF INCOME | |||||||||||||||||
(in thousands, except per share data)(unaudited) | |||||||||||||||||
Three Months Ended December 31, |
|
For the Years Ended December 31, |
|||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||||
Service revenues and sales |
522,324 |
|
$ |
457,507 |
|
$ |
1,938,555 |
|
$ |
1,782,648 |
|
||||||
Cost of services provided and goods sold |
347,355 |
|
312,054 |
|
1,321,126 |
|
1,227,644 |
|
|||||||||
Selling, general and administrative expenses (aa) |
83,291 |
|
66,735 |
|
305,712 |
|
271,209 |
|
|||||||||
Depreciation |
11,126 |
|
9,822 |
|
40,870 |
|
38,464 |
|
|||||||||
Amortization |
2,969 |
|
303 |
|
4,335 |
|
399 |
|
|||||||||
Other operating expenses |
131 |
|
1,212 |
|
9,132 |
|
1,300 |
|
|||||||||
Total costs and expenses |
444,872 |
|
390,126 |
|
1,681,175 |
|
1,539,016 |
|
|||||||||
Income from operations |
77,452 |
|
67,381 |
|
257,380 |
|
243,632 |
|
|||||||||
Interest expense |
(1,133 |
) |
(1,177 |
) |
(4,535 |
) |
(4,990 |
) |
|||||||||
Other income--net (bb) |
3,276 |
|
(3,398 |
) |
8,764 |
|
958 |
|
|||||||||
Income before income taxes |
79,595 |
|
62,806 |
|
261,609 |
|
239,600 |
|
|||||||||
Income taxes |
(14,015 |
) |
(8,478 |
) |
(41,686 |
) |
(34,056 |
) |
|||||||||
Net income |
$ |
|
65,580 |
|
$ |
54,328 |
|
$ |
219,923 |
|
$ |
205,544 |
|
||||
Earnings Per Share | |||||||||||||||||
Net income |
$ |
|
4.09 |
|
$ |
3.39 |
|
$ |
13.77 |
|
$ |
12.80 |
|
||||
Average number of shares outstanding |
16,022 |
|
16,026 |
|
15,969 |
|
16,059 |
|
|||||||||
Diluted Earnings Per Share | |||||||||||||||||
Net income |
$ |
|
3.96 |
|
$ |
3.26 |
|
$ |
13.31 |
|
$ |
12.23 |
|
||||
Average number of shares outstanding |
16,565 |
|
16,670 |
|
16,527 |
|
16,803 |
|
|||||||||
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands): | |||||||||||||||||
Three Months Ended December 31, |
|
For the Years Ended December 31, |
|||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||||
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation plans |
$ |
|
77,053 |
|
$ |
68,034 |
|
$ |
289,828 |
|
$ |
264,304 |
|
||||
Market value adjustments related to deferred compensation trusts |
3,160 |
|
(3,541 |
) |
8,254 |
|
287 |
|
|||||||||
Long-term incentive compensation |
3,078 |
|
2,242 |
|
7,630 |
|
6,618 |
|
|||||||||
Total SG&A expenses |
$ |
|
83,291 |
|
$ |
66,735 |
|
$ |
305,712 |
|
$ |
271,209 |
|
||||
(bb) Other income--net comprises (in thousands): | |||||||||||||||||
Three Months Ended December 31, |
|
For the Years Ended December 31, |
|||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||||
Market value adjustments related to deferred compensation trusts |
$ |
|
3,160 |
|
$ |
(3,541 |
) |
$ |
8,254 |
|
$ |
287 |
|
||||
Interest income |
126 |
|
143 |
|
513 |
|
671 |
|
|||||||||
Other |
(10 |
) |
- |
|
(3 |
) |
- |
|
|||||||||
Total other income--net |
$ |
|
3,276 |
|
$ |
(3,398 |
) |
$ |
8,764 |
|
$ |
958 |
|
||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(in thousands, except per share data)(unaudited) | ||||||||||
December 31, |
||||||||||
2019 |
|
2018 |
||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents |
$ |
|
6,158 |
|
$ |
|
4,831 |
|
||
Accounts receivable less allowances |
143,827 |
|
119,504 |
|
||||||
Inventories |
7,462 |
|
5,705 |
|
||||||
Prepaid income taxes |
10,074 |
|
10,646 |
|
||||||
Prepaid expenses |
23,150 |
|
19,154 |
|
||||||
Total current assets |
190,671 |
|
159,840 |
|
||||||
Investments of deferred compensation plans held in trust |
77,446 |
|
65,624 |
|
||||||
Properties and equipment, at cost less accumulated depreciation |
175,763 |
|
162,033 |
|
||||||
Lease right of use asset |
111,652 |
|
- |
|
||||||
Identifiable intangible assets less accumulated amortization |
126,370 |
|
68,253 |
|
||||||
Goodwill |
577,367 |
|
510,570 |
|
||||||
Other assets |
9,048 |
|
9,209 |
|
||||||
Total Assets |
$ |
|
1,268,317 |
|
$ |
|
975,529 |
|
||
Liabilities | ||||||||||
Current liabilities | ||||||||||
Accounts payable |
$ |
|
51,101 |
|
$ |
|
50,150 |
|
||
Accrued insurance |
50,328 |
|
46,095 |
|
||||||
Accrued compensation |
70,814 |
|
63,329 |
|
||||||
Accrued legal |
6,941 |
|
1,857 |
|
||||||
Short-term lease liability |
39,280 |
|
- |
|
||||||
Other current liabilities |
43,756 |
|
30,239 |
|
||||||
Total current liabilities |
262,220 |
|
191,670 |
|
||||||
Deferred income taxes |
18,504 |
|
21,598 |
|
||||||
Long-term debt |
90,000 |
|
89,200 |
|
||||||
Deferred compensation liabilities |
76,446 |
|
64,616 |
|
||||||
Long-term lease liability |
86,656 |
|
- |
|
||||||
Other liabilities |
7,883 |
|
17,111 |
|
||||||
Total Liabilities |
541,709 |
|
384,195 |
|
||||||
Stockholders' Equity | ||||||||||
Capital stock |
35,811 |
|
35,311 |
|
||||||
Paid-in capital |
860,671 |
|
774,358 |
|
||||||
Retained earnings |
1,425,752 |
|
1,225,617 |
|
||||||
Treasury stock, at cost |
(1,597,940 |
) |
(1,446,296 |
) |
||||||
Deferred compensation payable in Company stock |
2,314 |
|
2,344 |
|
||||||
Total Stockholders' Equity |
726,608 |
|
591,334 |
|
||||||
Total Liabilities and Stockholders' Equity |
$ |
|
1,268,317 |
|
$ |
|
975,529 |
|
||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands)(unaudited) | ||||||||
For the Years Ended December 31, |
||||||||
2019 |
|
2018 |
||||||
Cash Flows from Operating Activities | ||||||||
Net income |
$ |
219,923 |
|
$ |
205,544 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization |
45,205 |
|
38,863 |
|
||||
Stock option expense |
14,831 |
|
12,611 |
|
||||
Litigation settlement |
6,000 |
|
- |
|
||||
Noncash long-term incentive compensation |
5,740 |
|
5,405 |
|
||||
(Benefit)/provision for deferred income taxes |
(2,770 |
) |
5,187 |
|
||||
Loss on sale of transportation equipment |
2,266 |
|
- |
|
||||
Noncash directors' compensation |
767 |
|
766 |
|
||||
Amortization of debt issuance costs |
306 |
|
441 |
|
||||
Amortization of restricted stock awards |
- |
|
446 |
|
||||
Changes in operating assets and liabilities, excluding amounts acquired in business combinations: | ||||||||
Increase in accounts receivable |
(19,247 |
) |
(5,570 |
) |
||||
Increase in inventories |
(1,757 |
) |
(351 |
) |
||||
Increase in prepaid expenses |
(3,491 |
) |
(2,665 |
) |
||||
Increase in accounts payable and other current liabilities |
28,417 |
|
8,935 |
|
||||
Change in current income taxes |
161 |
|
18,898 |
|
||||
Net change in lease assets and liabilities |
3,108 |
|
- |
|
||||
Increase in other assets |
(11,963 |
) |
(5,544 |
) |
||||
Increase in other liabilities |
12,354 |
|
3,451 |
|
||||
Other sources |
1,399 |
|
721 |
|
||||
Net cash provided by operating activities |
301,249 |
|
287,138 |
|
||||
Cash Flows from Investing Activities | ||||||||
Business combinations, net of cash acquired |
(138,010 |
) |
(53,177 |
) |
||||
Capital expenditures |
(53,022 |
) |
(52,872 |
) |
||||
Other sources |
272 |
|
824 |
|
||||
Net cash used by investing activities |
(190,760 |
) |
(105,225 |
) |
||||
Cash Flows from Financing Activities | ||||||||
Proceeds from revolving line of credit |
482,900 |
|
469,550 |
|
||||
Payments on revolving line of credit |
(482,100 |
) |
(406,550 |
) |
||||
Purchases of treasury stock |
(92,631 |
) |
(158,884 |
) |
||||
Proceeds from exercise of stock options |
34,380 |
|
32,412 |
|
||||
Capital stock surrendered to pay taxes on stock-based compensation |
(28,474 |
) |
(27,548 |
) |
||||
Dividends paid |
(19,788 |
) |
(18,662 |
) |
||||
Change in cash overdrafts payable |
(3,927 |
) |
(1,531 |
) |
||||
Payments on other long-term debt |
- |
|
(75,000 |
) |
||||
Debt issuance costs |
- |
|
(1,052 |
) |
||||
Other sources/(uses) |
478 |
|
(938 |
) |
||||
Net cash used by financing activities |
(109,162 |
) |
(188,203 |
) |
||||
Increase/(decrease) in Cash and Cash Equivalents |
1,327 |
|
(6,290 |
) |
||||
Cash and cash equivalents at beginning of year |
4,831 |
|
11,121 |
|
||||
Cash and cash equivalents at end of year |
$ |
6,158 |
|
$ |
4,831 |
|
||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||
CONSOLIDATING STATEMENTS OF INCOME | ||||||||||||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, 2019 AND 2018 | ||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||
|
|
|
|
|
|
Chemed |
||||||||||
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||||||||
2019 |
||||||||||||||||
Service revenues and sales (a) |
$ |
339,905 |
|
$ |
182,419 |
|
$ |
- |
|
$ |
522,324 |
|
||||
Cost of services provided and goods sold |
253,659 |
|
93,696 |
|
- |
|
347,355 |
|
||||||||
Selling, general and administrative expenses (a) |
21,162 |
|
46,198 |
|
15,931 |
|
83,291 |
|
||||||||
Depreciation |
5,341 |
|
5,747 |
|
38 |
|
11,126 |
|
||||||||
Amortization |
18 |
|
2,951 |
|
- |
|
2,969 |
|
||||||||
Other operating expense |
25 |
|
106 |
|
- |
|
131 |
|
||||||||
Total costs and expenses |
280,205 |
|
148,698 |
|
15,969 |
|
444,872 |
|
||||||||
Income/(loss) from operations |
59,700 |
|
33,721 |
|
(15,969 |
) |
77,452 |
|
||||||||
Interest expense |
(19 |
) |
(72 |
) |
(1,042 |
) |
(1,133 |
) |
||||||||
Intercompany interest income/(expense) |
4,740 |
|
1,543 |
|
(6,283 |
) |
- |
|
||||||||
Other income—net |
76 |
|
40 |
|
3,160 |
|
3,276 |
|
||||||||
Income/(loss) before income taxes |
64,497 |
|
35,232 |
|
(20,134 |
) |
79,595 |
|
||||||||
Income taxes (a) |
(15,075 |
) |
(7,823 |
) |
8,883 |
|
(14,015 |
) |
||||||||
Net income/(loss) |
$ |
49,422 |
|
$ |
27,409 |
|
$ |
(11,251 |
) |
$ |
65,580 |
|
||||
2018 |
||||||||||||||||
Service revenues and sales (b) |
$ |
306,985 |
|
$ |
150,522 |
|
$ |
- |
|
$ |
457,507 |
|
||||
Cost of services provided and goods sold |
234,971 |
|
77,083 |
|
- |
|
312,054 |
|
||||||||
Selling, general and administrative expenses (b) |
20,363 |
|
37,563 |
|
8,809 |
|
66,735 |
|
||||||||
Depreciation |
4,935 |
|
4,847 |
|
40 |
|
9,822 |
|
||||||||
Amortization |
12 |
|
291 |
|
- |
|
303 |
|
||||||||
Other operating expense |
1,114 |
|
98 |
|
- |
|
1,212 |
|
||||||||
Total costs and expenses |
261,395 |
|
119,882 |
|
8,849 |
|
390,126 |
|
||||||||
Income/(loss) from operations |
45,590 |
|
30,640 |
|
(8,849 |
) |
67,381 |
|
||||||||
Interest expense |
(22 |
) |
(64 |
) |
(1,091 |
) |
(1,177 |
) |
||||||||
Intercompany interest income/(expense) |
3,308 |
|
1,678 |
|
(4,986 |
) |
- |
|
||||||||
Other income—net |
110 |
|
32 |
|
(3,540 |
) |
(3,398 |
) |
||||||||
Income/(loss) before income taxes |
48,986 |
|
32,286 |
|
(18,466 |
) |
62,806 |
|
||||||||
Income taxes (b) |
(9,860 |
) |
(6,375 |
) |
7,757 |
|
(8,478 |
) |
||||||||
Net income/(loss) |
$ |
39,126 |
|
$ |
25,911 |
|
$ |
(10,709 |
) |
$ |
54,328 |
|
||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||
CONSOLIDATING STATEMENTS OF INCOME | ||||||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 | ||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||
|
|
|
|
|
|
Chemed |
||||||||||
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||||||||
2019 |
||||||||||||||||
Service revenues and sales (a) |
$ |
1,281,184 |
|
$ |
657,371 |
|
$ |
- |
|
$ |
1,938,555 |
|
||||
Cost of services provided and goods sold |
982,056 |
|
339,070 |
|
- |
|
1,321,126 |
|
||||||||
Selling, general and administrative expenses (a) |
86,345 |
|
166,934 |
|
52,433 |
|
305,712 |
|
||||||||
Depreciation |
19,984 |
|
20,730 |
|
156 |
|
40,870 |
|
||||||||
Amortization |
71 |
|
4,264 |
|
- |
|
4,335 |
|
||||||||
Other operating expense (a) |
6,546 |
|
320 |
|
2,266 |
|
9,132 |
|
||||||||
Total costs and expenses |
1,095,002 |
|
531,318 |
|
54,855 |
|
1,681,175 |
|
||||||||
Income/(loss) from operations |
186,182 |
|
126,053 |
|
(54,855 |
) |
257,380 |
|
||||||||
Interest expense |
(169 |
) |
(345 |
) |
(4,021 |
) |
(4,535 |
) |
||||||||
Intercompany interest income/(expense) |
18,135 |
|
8,152 |
|
(26,287 |
) |
- |
|
||||||||
Other income—net |
385 |
|
126 |
|
8,253 |
|
8,764 |
|
||||||||
Income/(loss) before income taxes |
204,533 |
|
133,986 |
|
(76,910 |
) |
261,609 |
|
||||||||
Income taxes (a) |
(48,711 |
) |
(30,276 |
) |
37,301 |
|
(41,686 |
) |
||||||||
Net income/(loss) |
$ |
155,822 |
|
$ |
103,710 |
|
$ |
(39,609 |
) |
$ |
219,923 |
|
||||
2018 |
||||||||||||||||
Service revenues and sales (b) |
$ |
1,197,562 |
|
$ |
585,086 |
|
$ |
- |
|
$ |
1,782,648 |
|
||||
Cost of services provided and goods sold |
928,306 |
|
299,338 |
|
- |
|
1,227,644 |
|
||||||||
Selling, general and administrative expenses (b) |
81,969 |
|
145,683 |
|
43,557 |
|
271,209 |
|
||||||||
Depreciation |
19,688 |
|
18,629 |
|
147 |
|
38,464 |
|
||||||||
Amortization |
12 |
|
387 |
|
- |
|
399 |
|
||||||||
Other operating expense (b) |
1,130 |
|
170 |
|
- |
|
1,300 |
|
||||||||
Total costs and expenses |
1,031,105 |
|
464,207 |
|
43,704 |
|
1,539,016 |
|
||||||||
Income/(loss) from operations |
166,457 |
|
120,879 |
|
(43,704 |
) |
243,632 |
|
||||||||
Interest expense |
(175 |
) |
(319 |
) |
(4,496 |
) |
(4,990 |
) |
||||||||
Intercompany interest income/(expense) |
12,832 |
|
6,908 |
|
(19,740 |
) |
- |
|
||||||||
Other income—net |
579 |
|
93 |
|
286 |
|
958 |
|
||||||||
Income/(loss) before income taxes |
179,693 |
|
127,561 |
|
(67,654 |
) |
239,600 |
|
||||||||
Income taxes (b) |
(40,847 |
) |
(28,850 |
) |
35,641 |
|
(34,056 |
) |
||||||||
Net income/(loss) |
$ |
138,846 |
|
$ |
98,711 |
|
$ |
(32,013 |
) |
$ |
205,544 |
|
||||
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 DECEMBER 31, 2019 AND 2018 | |||||||||||||||||
(in thousands)(unaudited) | |||||||||||||||||
|
|
|
|
|
|
Chemed |
|||||||||||
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
|||||||||||
2019 |
|||||||||||||||||
Net income/(loss) |
$ |
|
49,422 |
|
$ |
27,409 |
|
$ |
(11,251 |
) |
$ |
65,580 |
|
||||
Add/(deduct): | |||||||||||||||||
Interest expense |
19 |
|
72 |
|
1,042 |
|
1,133 |
|
|||||||||
Income taxes |
15,075 |
|
7,823 |
|
(8,883 |
) |
14,015 |
|
|||||||||
Depreciation |
5,341 |
|
5,747 |
|
38 |
|
11,126 |
|
|||||||||
Amortization |
18 |
|
2,951 |
|
- |
|
2,969 |
|
|||||||||
EBITDA |
69,875 |
|
44,002 |
|
(19,054 |
) |
94,823 |
|
|||||||||
Add/(deduct): | |||||||||||||||||
Intercompany interest expense/(income) |
(4,740 |
) |
(1,543 |
) |
6,283 |
|
- |
|
|||||||||
Interest income |
(84 |
) |
(42 |
) |
- |
|
(126 |
) |
|||||||||
Stock option expense |
- |
|
- |
|
4,102 |
|
4,102 |
|
|||||||||
Long-term incentive compensation |
- |
|
- |
|
3,079 |
|
3,079 |
|
|||||||||
Acquisition expense |
- |
|
1,286 |
|
50 |
|
1,336 |
|
|||||||||
Medicare cap sequestration adjustment |
919 |
|
- |
|
- |
|
919 |
|
|||||||||
Adjusted EBITDA |
$ |
|
65,970 |
|
$ |
43,703 |
|
$ |
(5,540 |
) |
$ |
104,133 |
|
||||
2018 |
|||||||||||||||||
Net income/(loss) |
$ |
|
39,126 |
|
$ |
25,911 |
|
$ |
(10,709 |
) |
$ |
54,328 |
|
||||
Add/(deduct): | |||||||||||||||||
Interest expense |
22 |
|
64 |
|
1,091 |
|
1,177 |
|
|||||||||
Income taxes |
9,860 |
|
6,375 |
|
(7,757 |
) |
8,478 |
|
|||||||||
Depreciation |
4,935 |
|
4,847 |
|
40 |
|
9,822 |
|
|||||||||
Amortization |
12 |
|
291 |
|
- |
|
303 |
|
|||||||||
EBITDA |
53,955 |
|
37,488 |
|
(17,335 |
) |
74,108 |
|
|||||||||
Add/(deduct): | |||||||||||||||||
Intercompany interest expense/(income) |
(3,308 |
) |
(1,678 |
) |
4,986 |
|
- |
|
|||||||||
Interest income |
(111 |
) |
(32 |
) |
- |
|
(143 |
) |
|||||||||
Stock option expense |
- |
|
- |
|
3,251 |
|
3,251 |
|
|||||||||
Long-term incentive compensation |
- |
|
- |
|
2,242 |
|
2,242 |
|
|||||||||
Litigation settlement costs |
1,000 |
|
- |
|
- |
|
1,000 |
|
|||||||||
Medicare cap sequestration adjustment |
456 |
|
- |
|
- |
|
456 |
|
|||||||||
Acquisition expense |
32 |
|
371 |
|
- |
|
403 |
|
|||||||||
Adjusted EBITDA |
$ |
|
52,024 |
|
$ |
36,149 |
|
$ |
(6,856 |
) |
$ |
81,317 |
|
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||
CONSOLIDATING SUMMARIES OF EBITDA | |||||||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 | |||||||||||||||||
(in thousands)(unaudited) | |||||||||||||||||
|
|
|
|
|
|
|
|
Chemed |
|||||||||
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
|||||||||||
2019 |
|||||||||||||||||
Net income/(loss) |
$ |
|
155,822 |
|
$ |
103,710 |
|
$ |
(39,609 |
) |
$ |
219,923 |
|
||||
Add/(deduct): | |||||||||||||||||
Interest expense |
169 |
|
345 |
|
4,021 |
|
4,535 |
|
|||||||||
Income taxes |
48,711 |
|
30,276 |
|
(37,301 |
) |
41,686 |
|
|||||||||
Depreciation |
19,984 |
|
20,730 |
|
156 |
|
40,870 |
|
|||||||||
Amortization |
71 |
|
4,264 |
|
- |
|
4,335 |
|
|||||||||
EBITDA |
224,757 |
|
159,325 |
|
(72,733 |
) |
311,349 |
|
|||||||||
Add/(deduct): | |||||||||||||||||
Intercompany interest expense/(income) |
(18,135 |
) |
(8,152 |
) |
26,287 |
|
- |
|
|||||||||
Interest income |
(380 |
) |
(133 |
) |
- |
|
(513 |
) |
|||||||||
Stock option expense |
- |
|
- |
|
14,831 |
|
14,831 |
|
|||||||||
Long-term incentive compensation |
- |
|
- |
|
7,630 |
|
7,630 |
|
|||||||||
Litigation settlement |
6,000 |
|
- |
|
- |
|
6,000 |
|
|||||||||
Acquisition Expense |
- |
|
4,664 |
|
170 |
|
4,834 |
|
|||||||||
Medicare cap sequestration adjustment |
3,982 |
|
- |
|
- |
|
3,982 |
|
|||||||||
Loss on sale of transportation equipment |
- |
|
- |
|
2,266 |
|
2,266 |
|
|||||||||
Non cash ASC 842 expenses/(benefit) |
656 |
|
55 |
|
(163 |
) |
548 |
|
|||||||||
Adjusted EBITDA |
$ |
|
216,880 |
|
$ |
155,759 |
|
$ |
(21,712 |
) |
$ |
350,927 |
|
||||
2018 |
|||||||||||||||||
Net income/(loss) |
$ |
|
138,846 |
|
$ |
98,711 |
|
$ |
(32,013 |
) |
$ |
205,544 |
|
||||
Add/(deduct): | |||||||||||||||||
Interest expense |
175 |
|
319 |
|
4,496 |
|
4,990 |
|
|||||||||
Income taxes |
40,847 |
|
28,850 |
|
(35,641 |
) |
34,056 |
|
|||||||||
Depreciation |
19,688 |
|
18,629 |
|
147 |
|
38,464 |
|
|||||||||
Amortization |
12 |
|
387 |
|
- |
|
399 |
|
|||||||||
EBITDA |
199,568 |
|
146,896 |
|
(63,011 |
) |
283,453 |
|
|||||||||
Add/(deduct): | |||||||||||||||||
Intercompany interest expense/(income) |
(12,832 |
) |
(6,908 |
) |
19,740 |
|
- |
|
|||||||||
Interest (income)/expense |
(580 |
) |
(92 |
) |
1 |
|
(671 |
) |
|||||||||
Stock option expense |
- |
|
- |
|
12,611 |
|
12,611 |
|
|||||||||
Long-term incentive compensation |
- |
|
- |
|
6,618 |
|
6,618 |
|
|||||||||
Medicare cap sequestration adjustment |
1,496 |
|
- |
|
- |
|
1,496 |
|
|||||||||
Litigation settlement costs |
796 |
|
- |
|
- |
|
796 |
|
|||||||||
Acquisition expense |
209 |
|
548 |
|
- |
|
757 |
|
|||||||||
Amortization of stock awards |
107 |
|
100 |
|
239 |
|
446 |
|
|||||||||
Adjusted EBITDA |
$ |
|
188,764 |
|
$ |
140,544 |
|
$ |
(23,802 |
) |
$ |
305,506 |
|
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 December 31, |
|
For the Years Ended December 31, |
||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
Net income as reported |
$ |
65,580 |
|
$ |
54,328 |
|
$ |
219,923 |
|
$ |
205,544 |
|
||||
Add/(deduct) pre-tax cost of: | ||||||||||||||||
Stock option expense |
4,102 |
|
3,251 |
|
14,831 |
|
12,611 |
|
||||||||
Long-term incentive compensation |
3,079 |
|
2,242 |
|
7,630 |
|
6,618 |
|
||||||||
Litigation settlement |
- |
|
1,000 |
|
6,000 |
|
796 |
|
||||||||
Acquisition expense |
1,336 |
|
403 |
|
4,834 |
|
757 |
|
||||||||
Medicare cap sequestration adjustments |
919 |
|
456 |
|
3,982 |
|
1,496 |
|
||||||||
Amortization of acquired and cancelled franchise agreements |
2,861 |
|
- |
|
3,964 |
|
- |
|
||||||||
Loss on sale of transportation equipment |
- |
|
- |
|
2,266 |
|
- |
|
||||||||
Non cash ASC 842 expenses |
- |
|
- |
|
548 |
|
- |
|
||||||||
Add/(deduct) tax impacts: | ||||||||||||||||
Tax impact of the above pre-tax adjustments (1) |
(2,567 |
) |
(1,527 |
) |
(9,328 |
) |
(4,586 |
) |
||||||||
Excess tax benefits on stock compensation |
(5,440 |
) |
(4,244 |
) |
(24,177 |
) |
(22,862 |
) |
||||||||
Adjusted net income |
$ |
69,870 |
|
$ |
55,909 |
|
$ |
230,473 |
|
$ |
200,374 |
|
||||
Diluted Earnings Per Share As Reported | ||||||||||||||||
Net income |
$ |
3.96 |
|
$ |
3.26 |
|
$ |
13.31 |
|
$ |
12.23 |
|
||||
Average number of shares outstanding |
16,565 |
|
16,670 |
|
16,527 |
|
16,803 |
|
||||||||
Adjusted Diluted Earnings Per Share | ||||||||||||||||
Adjusted net income |
$ |
4.22 |
|
$ |
3.35 |
|
$ |
13.95 |
|
$ |
11.93 |
|
||||
Average number of shares outstanding |
16,565 |
|
16,670 |
|
16,527 |
|
16,803 |
|
||||||||
(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 December 31, |
|
For the Years Ended December 31, |
||||||||||||||
OPERATING STATISTICS |
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
Net revenue ($000) (c) | ||||||||||||||||
Homecare |
$ |
275,976 |
|
$ |
261,972 |
|
$ |
1,076,025 |
|
$ |
1,010,518 |
|
||||
Inpatient |
30,857 |
|
20,874 |
|
99,920 |
|
82,677 |
|
||||||||
Continuous care |
40,997 |
|
30,834 |
|
133,473 |
|
122,498 |
|
||||||||
Other |
3,825 |
|
1,986 |
|
10,433 |
|
7,831 |
|
||||||||
Subtotal |
$ |
351,655 |
|
$ |
315,666 |
|
$ |
1,319,851 |
|
$ |
1,223,524 |
|
||||
Room and board, net |
(3,260 |
) |
(2,191 |
) |
(11,359 |
) |
(10,054 |
) |
||||||||
Contractual allowances |
(3,990 |
) |
(3,036 |
) |
(14,893 |
) |
(11,785 |
) |
||||||||
Medicare cap allowance |
(4,500 |
) |
(3,454 |
) |
(12,415 |
) |
(4,123 |
) |
||||||||
Net Revenue |
$ |
339,905 |
|
$ |
306,985 |
|
$ |
1,281,184 |
|
$ |
1,197,562 |
|
||||
Net revenue as a percent of total before Medicare cap allowance | ||||||||||||||||
Homecare |
78.5 |
% |
83.0 |
% |
81.5 |
% |
82.6 |
% |
||||||||
Inpatient |
8.8 |
|
6.6 |
|
7.6 |
|
6.8 |
|
||||||||
Continuous care |
11.7 |
|
9.8 |
|
10.1 |
|
10.0 |
|
||||||||
Other |
1.0 |
|
0.6 |
|
0.8 |
|
0.6 |
|
||||||||
Subtotal |
100.0 |
|
100.0 |
|
100.0 |
|
100.0 |
|
||||||||
Room and board, net |
(0.9 |
) |
(0.7 |
) |
(0.9 |
) |
(0.8 |
) |
||||||||
Contractual allowances |
(1.1 |
) |
(1.0 |
) |
(1.1 |
) |
(1.1 |
) |
||||||||
Medicare cap allowance |
(1.3 |
) |
(1.1 |
) |
(0.9 |
) |
(0.2 |
) |
||||||||
Net Revenue |
96.7 |
% |
97.2 |
% |
97.1 |
% |
97.9 |
% |
||||||||
Average daily census ("ADC") (days) | ||||||||||||||||
Homecare |
14,972 |
|
14,062 |
|
14,626 |
|
13,652 |
|
||||||||
Nursing home |
3,461 |
|
3,297 |
|
3,396 |
|
3,298 |
|
||||||||
Routine homecare |
18,433 |
|
17,359 |
|
18,022 |
|
16,950 |
|
||||||||
Inpatient |
375 |
|
326 |
|
366 |
|
327 |
|
||||||||
Continuous care |
450 |
|
464 |
|
458 |
|
465 |
|
||||||||
Total |
19,258 |
|
18,149 |
|
18,846 |
|
17,742 |
|
||||||||
Total Admissions |
17,479 |
|
16,579 |
|
69,859 |
|
68,119 |
|
||||||||
Total Discharges |
17,575 |
|
16,623 |
|
68,857 |
|
66,868 |
|
||||||||
Average length of stay (days) |
95.2 |
|
92.6 |
|
92.6 |
|
89.9 |
|
||||||||
Median length of stay (days) |
16.0 |
|
17.0 |
|
16.0 |
|
17.0 |
|
||||||||
ADC by major diagnosis | ||||||||||||||||
Cerebro |
35.8 |
% |
35.8 |
% |
36.0 |
% |
36.3 |
% |
||||||||
Neurological |
21.1 |
|
18.6 |
|
20.6 |
|
19.0 |
|
||||||||
Cancer |
12.8 |
|
13.7 |
|
12.9 |
|
13.7 |
|
||||||||
Cardio |
16.2 |
|
16.3 |
|
16.5 |
|
16.4 |
|
||||||||
Respiratory |
8.1 |
|
8.0 |
|
8.1 |
|
8.2 |
|
||||||||
Other |
6.0 |
|
7.6 |
|
5.9 |
|
6.4 |
|
||||||||
Total |
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
||||||||
Admissions by major diagnosis | ||||||||||||||||
Cerebro |
21.9 |
% |
20.9 |
% |
21.1 |
% |
21.8 |
% |
||||||||
Neurological |
12.9 |
|
11.5 |
|
12.6 |
|
11.4 |
|
||||||||
Cancer |
29.2 |
|
31.1 |
|
29.2 |
|
30.2 |
|
||||||||
Cardio |
14.7 |
|
14.6 |
|
15.5 |
|
15.4 |
|
||||||||
Respiratory |
10.5 |
|
10.1 |
|
11.0 |
|
10.9 |
|
||||||||
Other |
10.8 |
|
11.8 |
|
10.6 |
|
10.3 |
|
||||||||
Total |
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
||||||||
Estimated uncollectible accounts as a percent of revenues |
1.2 |
% |
1.0 |
% |
1.2 |
% |
1.0 |
% |
||||||||
Accounts receivable -- | ||||||||||||||||
Days of revenue outstanding- excluding unapplied Medicare payments |
35.4 |
|
35.0 |
|
n.a. |
n.a. |
||||||||||
Days of revenue outstanding- including unapplied Medicare payments |
27.2 |
|
24.6 |
|
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, 2019 AND 2018 | ||||||||||||||
(unaudited) | ||||||||||||||
(a) |
Included in the results of operations for 2019 are the following significant credits/(charges) which may not be indicative of ongoing operations |
|||||||||||||
(in thousands): |
Three Months Ended December 31, 2019 |
|||||||||||||||||
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
|||||||||||
Service revenues and sales: | |||||||||||||||||
Medicare cap sequestration adjustment |
$ |
(919 |
) |
$ |
- |
|
$ |
- |
|
$ |
(919 |
) |
|||||
Selling, general and administrative expenses: | |||||||||||||||||
Stock option expense |
- |
|
- |
|
(4,102 |
) |
(4,102 |
) |
|||||||||
Long-term incentive compensation |
- |
|
- |
|
(3,079 |
) |
(3,079 |
) |
|||||||||
Amortization of acquired and cancelled franchise agreements |
- |
|
(2,861 |
) |
- |
|
(2,861 |
) |
|||||||||
Acquisition expense |
- |
|
(1,286 |
) |
(50 |
) |
(1,336 |
) |
|||||||||
Pretax impact on earnings |
(919 |
) |
(4,147 |
) |
(7,231 |
) |
(12,297 |
) |
|||||||||
Excess tax benefits on stock compensation |
- |
|
- |
|
5,440 |
|
5,440 |
|
|||||||||
Income tax benefit on the above |
233 |
|
1,101 |
|
1,233 |
|
2,567 |
|
|||||||||
After-tax impact on earnings |
$ |
(686 |
) |
$ |
(3,046 |
) |
$ |
(558 |
) |
$ |
(4,290 |
) |
|||||
For the Year Ended December 31, 2019 |
|||||||||||||||||
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
|||||||||||
Service revenues and sales: | |||||||||||||||||
Medicare cap sequestration adjustment |
$ |
(3,982 |
) |
$ |
- |
|
$ |
- |
|
$ |
(3,982 |
) |
|||||
Selling, general and administrative expenses: | |||||||||||||||||
Stock option expense |
- |
|
- |
|
(14,831 |
) |
(14,831 |
) |
|||||||||
Long-term incentive compensation |
- |
|
- |
|
(7,630 |
) |
(7,630 |
) |
|||||||||
Acquisition expense |
- |
|
(4,664 |
) |
(170 |
) |
(4,834 |
) |
|||||||||
Amortization of acquired and cancelled franchise agreements |
- |
|
(3,964 |
) |
- |
|
(3,964 |
) |
|||||||||
Non cash ASC 842 (expenses)/benefit |
(656 |
) |
(55 |
) |
163 |
|
(548 |
) |
|||||||||
Other operating expenses: | |||||||||||||||||
Litigation settlement |
(6,000 |
) |
- |
|
- |
|
(6,000 |
) |
|||||||||
Loss on sale of transportation equipment |
- |
|
- |
|
(2,266 |
) |
(2,266 |
) |
|||||||||
Pretax impact on earnings |
(10,638 |
) |
(8,683 |
) |
(24,734 |
) |
(44,055 |
) |
|||||||||
Excess tax benefits on stock compensation |
- |
|
- |
|
24,177 |
|
24,177 |
|
|||||||||
Income tax benefit on the above |
2,708 |
|
2,301 |
|
4,319 |
|
9,328 |
|
|||||||||
After-tax impact on earnings |
$ |
(7,930 |
) |
$ |
(6,382 |
) |
$ |
3,762 |
|
$ |
(10,550 |
) |
(b) |
Included in the results of operations for 2018 are the following significant credits/(charges) which may not be indicative of ongoing operations |
||||||||||||
(in thousands): |
Three Months Ended December 31, 2018 |
|||||||||||||||||
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
|||||||||||
Service revenues and sales: | |||||||||||||||||
Medicare cap sequestration adjustment |
$ |
(456 |
) |
$ |
- |
|
$ |
- |
|
$ |
(456 |
) |
|||||
Selling, general and administrative expenses: | |||||||||||||||||
Stock option expense |
- |
|
- |
|
(3,251 |
) |
(3,251 |
) |
|||||||||
Long-term incentive compensation |
- |
|
- |
|
(2,242 |
) |
(2,242 |
) |
|||||||||
Acquisition expense |
(32 |
) |
(371 |
) |
- |
|
(403 |
) |
|||||||||
Other operating expenses: | |||||||||||||||||
Litigation settlement |
(1,000 |
) |
- |
|
- |
|
(1,000 |
) |
|||||||||
Pretax impact on earnings |
(1,488 |
) |
(371 |
) |
(5,493 |
) |
(7,352 |
) |
|||||||||
Excess tax benefits on stock compensation |
- |
|
- |
|
4,244 |
|
4,244 |
|
|||||||||
Income tax benefit on the above |
381 |
|
98 |
|
1,048 |
|
1,527 |
|
|||||||||
After-tax impact on earnings |
$ |
(1,107 |
) |
$ |
(273 |
) |
$ |
(201 |
) |
$ |
(1,581 |
) |
|||||
For the Year Ended December 31, 2018 |
|||||||||||||||||
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
|||||||||||
Service revenues and sales: | |||||||||||||||||
Medicare cap sequestration adjustment |
$ |
(1,496 |
) |
$ |
- |
|
$ |
- |
|
$ |
(1,496 |
) |
|||||
Selling, general and administrative expenses: | |||||||||||||||||
Stock option expense |
- |
|
- |
|
(12,611 |
) |
(12,611 |
) |
|||||||||
Long-term incentive compensation |
- |
|
- |
|
(6,618 |
) |
(6,618 |
) |
|||||||||
Acquisition expense |
(209 |
) |
(548 |
) |
- |
|
(757 |
) |
|||||||||
Other operating expenses: | |||||||||||||||||
Litigation settlement |
(796 |
) |
- |
|
- |
|
(796 |
) |
|||||||||
Pretax impact on earnings |
(2,501 |
) |
(548 |
) |
(19,229 |
) |
(22,278 |
) |
|||||||||
Excess tax benefits on stock compensation |
- |
|
- |
|
22,862 |
|
22,862 |
|
|||||||||
Income tax benefit on the above |
637 |
|
145 |
|
3,804 |
|
4,586 |
|
|||||||||
After-tax impact on earnings |
$ |
(1,864 |
) |
$ |
(403 |
) |
$ |
7,437 |
|
$ |
5,170 |
|
|||||
(c) | VITAS has 12 large (greater than 450 ADC), 20 medium (greater than 200 but less than 450 ADC) and 16 small (less than 200 ADC) hospice programs. Of Vitas' 30 Medicare provider numbers, on a 12-month trailing basis, 23 provider numbers have a Medicare cap cushion of 10% or greater, three provider numbers have a cap cushion between 0% and 5%, and four provider numbers have a Medicare cap liability. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200218006005/en/
Source:
David P. Williams
(513) 762-6901