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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (date of earliest event reported):
April 19, 2018

CHEMED CORPORATION
(Exact name of registrant as specified in its charter)



Delaware

1-8351

31-0791746

(State or other

 jurisdiction of

 incorporation)

(Commission File Number)

 

(I.R.S. Employer

Identification

Number)

Suite 2600, 255 East 5th Street, Cincinnati, OH

45202

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:
(513) 762-6690

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ⃞

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⃞

Page 1 of 2

Item 2.02     Results of Operations and Financial Condition

On April 19, 2018 Chemed Corporation issued a press release announcing its financial results for the quarter ended March 31, 2018.  A copy of the release is furnished herewith as Exhibit 99.

Item 9.01     Financial Statements and Exhibits

  d)   Exhibit

(99) Registrant’s press release dated

            April 19, 2018









SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

CHEMED CORPORATION

 

 

Dated:

  April 19, 2018

By:

   /s/   Michael D. Witzeman

Michael D. Witzeman

Vice President and Controller

Page 2 of 2

Exhibit 99

Chemed Reports First-Quarter 2018 Results

CINCINNATI--(BUSINESS WIRE)--April 19, 2018--Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), the nation’s largest provider of end-of-life care, and Roto-Rooter, the nation’s largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its first quarter ended March 31, 2018, versus the comparable prior-year period, as follows:

Consolidated operating results:

  • Revenue increased 8.2% to $439 million
  • GAAP Diluted Earnings-per-Share of $2.66, an increase of 49.4%
  • Adjusted Diluted EPS of $2.72, an increase of 49.5%

VITAS segment operating results:

  • Net Patient Revenue of $292 million, an increase of 3.4%
  • Average Daily Census (ADC) of 17,209, an increase of 6.1%
  • Admissions of 18,279, an increase of 4.1%
  • Net Income of $32.0 million, an increase of 55.4%
  • Adjusted EBITDA of $44.7 million, an increase of 16.3%

Roto-Rooter segment operating results:

  • Revenue of $147 million, an increase of 19.1%
  • Net Income of $22.9 million, an increase of 56.9%
  • Adjusted EBITDA of $33.9 million, an increase of 28.7%
  • Adjusted EBITDA margin of 23.0%, an increase of 171 basis points

Effective January 1, 2018, the Financial Accounting Standards Board (FASB) mandated changes in revenue recognition under Generally Accepted Accounting Principles (GAAP). For Chemed the accounting standard mandated reclassification of certain costs within the 2018 income statement when compared to prior-year formats. These reclassifications do not impact EBITDA, pretax income or net income. This accounting standard has been adopted on a modified retrospective basis, meaning prior-year results are not reclassified and are reported using historical revenue recognition accounting standards.

This resulted in the reclassification of net room and board expenses associated with certain patients residing in nursing homes to be reclassified from cost of services to revenue, effectively reducing VITAS revenue and cost of sales by $2.6 million. In addition, uncollectable accounts receivable, commonly referred to as normal bad debt expense, historically included in selling, general and administrative expenses for VITAS and Roto-Rooter, are now netted against service revenue and sales.

The discussion of operating results below does recast net room and board and estimated uncollectable receivables in the first quarter of 2017 to facilitate analysis of operating results in a format consistent with the 2018 revenue recognition accounting standard.

VITAS

VITAS net revenue was $292 million in the first quarter of 2018, which is an increase of 5.5%, when compared to the prior-year period. This revenue increase is comprised primarily of a geographically weighted average Medicare reimbursement rate increase of approximately 0.7%, a 6.1% increase in average daily census, and a reduction in Medicare Cap that increased revenue 0.6%. This growth is partially offset by acuity mix shift that negatively impacted revenue growth 1.8% when compared to the prior-year period.

In the first quarter of 2018, VITAS reversed $1.8 million in Medicare Cap billing limitations recorded in the fourth quarter of 2017 related to the 2018 Medicare Cap billing period.

At March 31, 2018, VITAS had 30 Medicare provider numbers, two of which have a current estimated 2018 Medicare Cap billing limitation of approximately $616,000.

Of VITAS’ 30 unique Medicare provider numbers, 27 provider numbers have a Medicare Cap cushion of 10% or greater, one provider number has a cap cushion between 5% and 10% and two provider numbers have a Medicare Cap billing limitation for the 2018 Medicare Cap period.

Average revenue per patient per day in the quarter was $189.76, which is 1.2% below the prior-year period. Routine home care reimbursement and high acuity care averaged $163.53 and $706.24, respectively. During the quarter, high acuity days of care were 4.8% of total days of care, 60-basis points less than the prior-year quarter.

The first quarter of 2018 gross margin, excluding Medicare Cap, was 21.7%, which is a 97-basis point improvement when compared to the first quarter of 2017.

Selling, general and administrative expense was $20.5 million in the first quarter of 2018, which is a favorable decrease of 2.4% compared to the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $42.9 million in the quarter, an increase of 11.6%. Adjusted EBITDA margin, excluding Medicare Cap, was 14.8% in the quarter which is an 89-basis point improvement when compared to the prior-year period.

Roto-Rooter

Roto-Rooter’s plumbing and drain cleaning business generated sales of $147 million for the first quarter of 2018, an increase of $24.7 million, or 20.2%, over the prior-year quarter. Revenue from water restoration totaled $27.7 million, an increase of $9.6 million, or 53.3%, when compared to the prior-year quarter.

Roto-Rooter’s gross margin in the quarter was 47.5%, a 69-basis point decline when compared to the first quarter of 2017. Adjusted EBITDA in the first quarter of 2018 totaled $33.9 million, an increase of 28.7%. The Adjusted EBITDA margin in the quarter was 23.0% which is a 152-basis point improvement over the prior year.

Chemed Consolidated

As of March 31, 2018, Chemed had total cash and cash equivalents of $14 million and debt of $143 million.

In June 2014, Chemed entered into a five-year Amended and Restated Credit Agreement that consisted of a $100 million amortizable term loan and a $350 million revolving credit facility. The interest rate on this facility has a floating rate that is currently LIBOR plus 112.5 basis points. At March 31, 2018, the Company had approximately $244 million of undrawn borrowing capacity under this credit agreement.

During the quarter, the Company repurchased 300,000 shares of Chemed stock for $81.1 million which equates to a cost per share of $270.42. On March 6, 2018, Chemed’s Board of Directors authorized an additional $150 million for stock repurchase under Chemed’s existing share repurchase program. As of March 31, 2018, there was $124.4 million of remaining share repurchase authorization under this plan.

Chemed restarted its share repurchase program in 2007. Since that time Chemed has repurchased 13.6 million shares, aggregating over $1.0 billion at an average share cost of $76.75. Including dividends over this period, Chemed has returned over $1.2 billion to shareholders.

Guidance for 2018

The first-quarter 2018 operating results did exceed Chemed management’s expectations. The Company has reiterated the earnings guidance issued in February 2018 and anticipates providing updated guidance for the second half of 2018 when it reports second-quarter results.

Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Friday, April 20, 2018, to discuss the Company's quarterly results and to provide an update on its business. The dial-in number for the conference call is (844) 743-2500 for U.S. and Canadian participants and +1 (661) 378-9533 for international participants. The participant passcode/Conference ID is 9986979. A live webcast of the call can be accessed on Chemed's website at www.chemed.com by clicking on Investor Relations Home.

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 9986979. An archived webcast will also be available at www.chemed.com.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to over 17,000 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 restoration 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 March 31,
2018 2017
Service revenues and sales $ 439,176   $ 405,864  
Cost of services provided and goods sold 304,536 285,140
Selling, general and administrative expenses (aa) 69,000 69,458
Depreciation 9,267 8,893
Amortization 27 46
Other operating (income)/expense   (51 )   873  
Total costs and expenses   382,779     364,410  
Income from operations 56,397 41,454
Interest expense (1,207 ) (995 )
Other income--net (bb)   1,018     2,463  
Income before income taxes 56,208 42,922
Income taxes   (11,212 )   (13,078 )
Net income $ 44,996   $ 29,844  
 
Earnings Per Share
Net income $ 2.79   $ 1.84  
Average number of shares outstanding   16,100     16,219  
 
Diluted Earnings Per Share
Net income $ 2.66   $ 1.78  
Average number of shares outstanding   16,887     16,801  
 
                 
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
Three Months Ended March 31,
2018 2017
SG&A expenses before long-term incentive compensation, expenses
related to the O.I.G. investigation and the impact of market value
adjustments related to deferred compensation trusts $ 66,220 $ 63,732
Long-term incentive compensation 1,920 961
Market value gains related to deferred compensation trusts 860 2,615
Expenses related to O.I.G. investigation   -     2,150  
Total SG&A expenses $ 69,000   $ 69,458  
 
(bb) Other income--net comprises (in thousands):
Three Months Ended March 31,
2018 2017
Market value gains related to deferred compensation trusts $ 860 $ 2,615
Interest income 158 85
Loss on disposal of property and equipment - (236 )
Other   -     (1 )
Total other income--net $ 1,018   $ 2,463  
 
   
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)(unaudited)
                 
March 31,
2018 2017
Assets
Current assets

Cash and cash equivalents

$ 13,686 $ 47,049
Accounts receivable less allowances 111,332 109,726
Inventories 5,274 5,433
Prepaid income taxes 16,160 1,663
Prepaid expenses   15,047     12,102  
Total current assets 161,499 175,973
Investments of deferred compensation plans held in trust 66,163 56,596
Properties and equipment, at cost less accumulated depreciation 144,706 119,394
Identifiable intangible assets less accumulated amortization 55,163 54,976
Goodwill 477,964 472,391
Other assets   7,161     6,901  
Total Assets $ 912,656   $ 886,231  
 
Liabilities
Current liabilities
Accounts payable $ 42,639 $ 29,341
Current portion of long-term debt 10,000 9,375
Income taxes - 12,614
Accrued insurance 48,303 54,150
Accrued compensation 49,685 37,382
Accrued legal 1,643 2,471
Other current liabilities   25,027     19,050  
Total current liabilities 177,297 164,383
Deferred income taxes 13,832 11,875
Long-term debt 132,500 137,500
Deferred compensation liabilities 65,289 56,024
Other liabilities   16,779     15,805  
Total Liabilities   405,697     385,587  
Stockholders' Equity
Capital stock 34,885 34,404
Paid-in capital 712,991 651,269
Retained earnings 1,078,690 983,742
Treasury stock, at cost (1,321,843 ) (1,170,933 )
Deferred compensation payable in Company stock   2,236     2,162  
Total Stockholders' Equity   506,959     500,644  
Total Liabilities and Stockholders' Equity $ 912,656   $ 886,231  
 
     
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)(unaudited)
                 
Three Months Ended
March 31,
2018 2017
Cash Flows from Operating Activities
Net income $ 44,996 $ 29,844
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 9,294 8,939
Provision for uncollectible accounts receivable

-

4,249
Stock option expense 3,653 3,001
Benefit for deferred income taxes (2,807 ) (2,415 )
Noncash long-term incentive compensation 1,721 827
Amortization of restricted stock awards 291 336
Amortization of debt issuance costs 128 129
Changes in operating assets and liabilities

Decrease in accounts receivable

1,591

 

17,972
Decrease in inventories 60 322
Decrease in prepaid expenses 1,045 1,003
Decrease in accounts payable and other current liabilities (7,911 ) (10,766 )
Increase in income taxes 13,642 14,655

Increase in other assets

(4,263

) (2,140 )
Increase in other liabilities 3,758 1,992
Other sources/(uses)   (5 )   838  
Net cash provided by operating activities   65,193     68,786  
Cash Flows from Investing Activities
Capital expenditures (12,648 ) (9,020 )
Business combinations (1,450 ) -
Other sources/(uses)   181     (70 )
Net cash used by investing activities   (13,917 )   (9,090 )
Cash Flows from Financing Activities
Proceeds from revolving line of credit 134,300 116,000
Payments on revolving line of credit (90,500 ) (76,000 )
Purchase of treasury stock (81,125 ) (54,262 )
Proceeds from exercise of stock options 8,923 5,635
Change in cash overdrafts payable (6,671 ) (8,607 )
Capital stock surrendered to pay taxes on stock-based compensation (6,377 ) (4,744 )
Dividends paid (4,533 ) (4,251 )
Payments on other long-term debt (2,500 ) (1,875 )
Other sources/(uses)   (228 )   147  
Net cash used by financing activities   (48,711 )   (27,957 )
Increase in Cash and Cash Equivalents 2,565 31,739
Cash and cash equivalents at beginning of year   11,121     15,310  
Cash and cash equivalents at end of period $ 13,686   $ 47,049  
 
   

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017
(in thousands)(unaudited)
             
Chemed
VITAS Roto-Rooter Corporate Consolidated
2018
Service revenues and sales $ 292,013   $ 147,163   $ -   $ 439,176  
Cost of services provided and goods sold 227,256 77,280 - 304,536
Selling, general and administrative expenses (a) 20,510 36,098 12,392 69,000
Depreciation 4,797 4,443 27 9,267
Amortization - 27 - 27
Other operating expenses   (18 )   (33 )   -     (51 )
Total costs and expenses   252,545     117,815     12,419     382,779  
Income/(loss) from operations 39,468 29,348 (12,419 ) 56,397
Interest expense (52 ) (91 ) (1,064 ) (1,207 )
Intercompany interest income/(expense) 3,095 1,677 (4,772 ) -
Other income/(expense)—net   142     16     860   1,018  
Income/(loss) before income taxes 42,653 30,950 (17,395 ) 56,208
Income taxes (a)   (10,638 )   (8,012 )   7,438     (11,212 )
Net income/(loss) $ 32,015   $ 22,938   $ (9,957 ) $ 44,996  
 
2017
Service revenues and sales $ 282,316   $ 123,548   $ -   $ 405,864  
Cost of services provided and goods sold 221,678 63,462 - 285,140
Selling, general and administrative expenses (b) 24,294 33,460 11,704 69,458
Depreciation 4,778 3,984 131 8,893
Amortization 14 32 - 46
Other operating expenses   873     -     -     873  
Total costs and expenses   251,637     100,938     11,835     364,410  
Income/(loss) from operations 30,679 22,610 (11,835 ) 41,454
Interest expense (55 ) (99 ) (841 ) (995 )
Intercompany interest income/(expense) 2,702 1,310 (4,012 ) -
Other income/(expense)-net   (80 )   (72 )   2,615   2,463  
Income/(loss) before income taxes 33,246 23,749 (14,073 ) 42,922
Income taxes (b)   (12,649 )   (9,125 )   8,696     (13,078 )
Net income/(loss) $ 20,597   $ 14,624   $ (5,377 ) $ 29,844  

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 MARCH 31, 2018 AND 2017
(in thousands)(unaudited)
              Chemed
VITAS Roto-Rooter Corporate Consolidated
2018
Net income/(loss) $ 32,015 $ 22,938 $ (9,957 ) $ 44,996
Add/(deduct):
Interest expense 52 91 1,064 1,207
Income taxes 10,638 8,012 (7,438 ) 11,212
Depreciation 4,797 4,443 27 9,267
Amortization   -     27     -     27  
EBITDA 47,502 35,511 (16,304 ) 66,709
Add/(deduct):

Intercompany interest income/(expense)

(3,095 ) (1,677 ) 4,772 -
Interest income (142 ) (16 ) - (158 )
Amortization of stock awards 70 65 156 291
Medicare cap sequestration adjustment 352 - - 352
Stock option expense - - 3,653 3,653
Long-term incentive compensation   -     -     1,920     1,920  
Adjusted EBITDA $ 44,687   $ 33,883   $ (5,803 ) $ 72,767  
 
2017
Net income/(loss) $ 20,597 $ 14,624 $ (5,377 ) $ 29,844
Add/(deduct):
Interest expense 55 99 841 995
Income taxes 12,649 9,125 (8,696 ) 13,078
Depreciation 4,778 3,984 131 8,893
Amortization   14     32     -     46  
EBITDA 38,093 27,864 (13,101 ) 52,856
Add/(deduct):
Intercompany interest income/(expense) (2,702 ) (1,310 ) 4,012 -
Interest income (70 ) (15 ) - (85 )
Expenses related to O.I.G. investigation 2,150 - - 2,150
Amortization of stock awards 78 70 188 336
Program closure expenses 873 - - 873
Advertising cost adjustment - (274 ) - (274 )
Stock option expense - - 3,001 3,001
Long-term incentive compensation   -     -     961     961  
Adjusted EBITDA $ 38,422   $ 26,335   $ (4,939 ) $ 59,818  

The "Footnotes to Financial Statements" are integral parts of this financial information.

   
 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)
           
Three Months Ended March 31,
2018 2017
Net income as reported $ 44,996 $ 29,844
 
Add after-tax cost of:
Excess tax benefits on stock compensation (3,798 ) (3,695 )
Stock option expense 2,891 1,897
Long-term incentive compensation 1,499 608
Medicare cap sequestration adjustment 263 -
Expenses related to O.I.G. investigation - 1,328
Program closure expenses -     513  
Adjusted net income $ 45,851   $ 30,495  
 
 
 
Diluted Earnings Per Share As Reported
Net income $ 2.66   $ 1.78  
Average number of shares outstanding   16,887     16,801  
 
Adjusted Diluted Earnings Per Share
Adjusted net income $ 2.72   $ 1.82  
Average number of shares outstanding   16,887     16,801  

The "Footnotes to Financial Statements" are integral parts of this financial information.

 
 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
           
Three Months Ended March 31,
OPERATING STATISTICS 2018 2017

Net revenue ($000) (c)

Homecare $ 241,031 $

224,562

Inpatient 22,108 23,246
Continuous care 30,766 32,857
Other   1,741    

1,651

 

Subtotal

$ 295,646 $ 282,316
Room and board, net (2,618 ) -
Contractual allowances (2,833 ) -
Medicare cap allowance   1,818     -  
Net Revenue $ 292,013   $ 282,316  

Net revenue as a percent of total before Medicare cap allowance

Homecare 81.5 %

79.5

%
Inpatient 7.5 8.2
Continuous care 10.4 11.6
Other   0.6    

0.7

 

Subtotal

100.0 100.0
Room and board, net (0.9 ) -
Contractual allowances

(0.9

) -
Medicare cap allowance   0.6     -  
Net Revenue   98.8   % 100.0   %
Average daily census ("ADC") (days)
Homecare 13,162 12,287
Nursing home   3,215     3,052  
Routine homecare 16,377 15,339
Inpatient 352 378
Continuous care   480     505  
Total   17,209     16,222  
 
Total Admissions 18,279 17,563
Total Discharges 17,558 17,213
Average length of stay (days) 87.9 88.7
Median length of stay (days) 15.0 15.0
ADC by major diagnosis
Neurological 18.5 % 19.7 %
Cerebro 36.2 34.4
Cancer 13.9 15.1
Cardio 16.4 16.6
Respiratory 8.2 7.9
Other   6.8     6.3  
Total   100.0   % 100.0   %
Admissions by major diagnosis
Neurological 11.4 % 10.9 %
Cerebro 22.6 22.1
Cancer 28.0 29.5
Cardio 15.5 15.1
Respiratory 11.7 11.7
Other   10.8     10.7  
Total   100.0   % 100.0   %

Direct patient care margins (d)

Routine homecare

52.1

% 51.3 %
Inpatient

7.5

5.9
Continuous care

17.7

15.6
Homecare margin drivers (dollars per patient day)
Labor costs $ 58.63 $ 58.64

Combined drug, home medical equipment and medical supplies cost

14.47 15.14
Inpatient margin drivers (dollars per patient day)
Labor costs $ 362.75

 

$ 369.99
Continuous care margin drivers (dollars per patient day)
Labor costs $ 567.51 $ 590.73

Estimated uncollectable accounts as a percent of revenues

1.0

%

1.2 %
Accounts receivable --
Days of revenue outstanding- excluding unapplied Medicare payments 32.6 35.9
Days of revenue outstanding- including unapplied Medicare payments 31.4 24.9

The "Footnotes to Financial Statements" are integral parts of this financial information.

       
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017
(unaudited)
         
(a)

Included in the results of operations for the three months ended March 31, 2018, are the following significant credits/(charges)
which may not be indicative of ongoing operations (in thousands):

 
VITAS Corporate Total
Selling, general and administrative expenses
Medicare cap sequestration adjustment $ (352 ) $ - $ (352 )
Stock option expense - (3,653 ) (3,653 )
Long-term incentive compensation   -     (1,920 )   (1,920 )
Pretax impact on earnings (352 ) (5,573 ) (5,925 )
Excess tax benefits on stock compensation - 3,798 3,798
Income tax benefit on the above   89     1,183     1,272  
After-tax impact on earnings $ (263 ) $ (592 ) $ (855 )

 

(b)

Included in the results of operations for the three months ended March 31, 2017, are the following significant credits/(charges)
which may not be indicative of ongoing operations (in thousands):

 
VITAS Corporate Total
Selling, general and administrative expenses
Expenses related to O.I.G. investigation $ (2,150 ) $ - $ (2,150 )
Program closure expenses (873 ) - (873 )
Stock option expense - (3,001 ) (3,001 )
Long-term incentive compensation   -     (961 )   (961 )
Pretax impact on earnings (3,023 ) (3,962 ) (6,985 )
Excess tax benefits on stock compensation - 3,695 3,695
Income tax benefit on the above   1,182     1,457     2,639  
After-tax impact on earnings $ (1,841 ) $ 1,190   $ (651 )
 

(c)

VITAS has 11 large (greater than 450 ADC), 18 medium (greater than 200 but less than 450 ADC) and 16 small (less than 200 ADC) hospice
programs. Of VITAS' 30 unique Medicare provider numbers, 27 provider numbers have a Medicare cap cushion of 10% or greater, one provider
number has a cap cushion between 5% and 10%, and two provider numbers have a Medicare cap billing limitation for the 2018 Medicare cap period.

 

(d)

Amounts exclude indirect patient care and administrative costs, as well as Medicare Cap billing limitation.

CONTACT:
Chemed Corporation
David P. Williams, 513-762-6901