UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
(Exact name of registrant as specified in its charter)
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(State or other | (Commission File Number) | (I.R.S. Employer |
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(
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):
Securities registered pursuant to 12(b) of the Act:
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Title of each class |
Trading symbol | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]
Item 2.02 Results of Operations and Financial Condition
On April 27, 2021 Chemed Corporation issued a press release announcing its financial results for the quarter ended March 31, 2021. A copy of the release is furnished herewith as Exhibit 99.
Item 9.01 Financial Statements and Exhibits
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d) | Exhibit |
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| 104 The cover page from this Current Report on Form 8-K formatted in Inline XBRL |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| CHEMED CORPORATION | |
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Dated: April 27, 2021 |
| By: | /s/ Michael D. Witzeman |
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| Michael D. Witzeman |
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| Vice President and Controller |
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CONTACT: David P. Williams
(513) 762-6901
Chemed Reports First-Quarter 2021 Results
CINCINNATI, April 27, 2021—Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), one of the nation’s largest providers of end-of-life care, and Roto-Rooter, the nation’s largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its first quarter ended March 31, 2021, versus the comparable prior-year period, as follows:
Consolidated operating results:
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Revenue increased 2.2% to $527 million |
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GAAP Diluted Earnings-per-Share (EPS) of $4.01, an increase of 18.6% |
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Adjusted Diluted EPS of $4.44, an increase of 20.7% |
VITAS segment operating results:
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Average Daily Census (ADC) of 18,050, a decline of 6.1% |
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Admissions of 18,135 a decline of 2.5% |
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Net Income, excluding certain discrete items, of $42.1 million, a decline of 1.0% |
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Adjusted EBITDA, excluding Medicare Cap, of $58.3 million, a decline of 3.3% |
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Adjusted EBITDA margin, excluding Medicare Cap, of 18.4%, an increase of 66-basis points |
Roto-Rooter segment operating results:
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Revenue of $212 million, an increase of 18.9% |
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Net Income, excluding certain discrete items, of $39.3 million, an increase of 47.3% |
VITAS
VITAS net revenue was $316 million in the first quarter of 2021, which is a decline of 6.5%, when compared to the prior-year period. This revenue decline is comprised primarily of a 7.1% decline in days-of-care offset by a geographically weighted average Medicare reimbursement rate increase (including the suspension of sequestration on May 1, 2020) of approximately 2.8%. Acuity mix shift had a net impact of reducing revenue approximately $9.1 million, or 2.7%, in the quarter when compared to the prior year revenue and level-of-care mix. The combination of a lower Medicare Cap and other contra revenue changes offset a portion of the revenue decline by approximately 50-basis points.
In the first quarter of 2021, VITAS accrued $1.5 million in Medicare Cap billing limitations. This compares to a $2.5 million Medicare Cap billing limitation in the first quarter of 2020.
Of VITAS’ 30 Medicare provider numbers, 27 provider numbers currently have a Medicare Cap cushion
of 10% or greater, one provider number has a cap cushion between 5% and 10%, one provider number has a cap cushion between 0% and 5% and one provider number currently has a fiscal 2021 Medicare Cap billing limitation liability. This is based on actual Medicare revenue and admissions in the first six months of the Medicare Cap fiscal year.
Average revenue per patient per day in the first quarter of 2021 was $198.95, which, including acuity mix shift, is 2-basis points below the prior-year period. Reimbursement for routine home care and high acuity care averaged $170.14 and $991.77, respectively. During the quarter, high acuity days-of-care were 3.5% of total days of care, 71-basis points less than the prior-year quarter.
The first quarter 2021 gross margin, excluding Medicare Cap, increased costs for personal protection equipment (PPE), disinfecting facilities and other costs related to operating during the pandemic, was 25.3%. This is a 123-basis point margin improvement when compared to the first quarter of 2020.
Selling, general and administrative expense was $22.1 million in the first quarter of 2021 and compares favorably to the $22.3 million incurred in the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $58.3 million in the quarter, a decrease of 3.3%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 18.4%, which is a 66-basis point improvement when compared to the prior-year period.
Roto-Rooter
Roto-Rooter generated quarterly revenue of $212 million in the first quarter of 2021, an increase of $33.7 million, or 18.9%, over the prior-year quarter.
Total Roto-Rooter branch commercial revenue in the quarter totaled $46.9 million, a decrease of 8.4% over the prior year. This aggregate commercial revenue decline consisted of drain cleaning revenue declining 5.8%, plumbing declining 5.0% and excavation declining 19.5%. Water restoration increased 8.8%.
Total Roto-Rooter branch residential revenue in the quarter totaled $144 million, an increase of 32.0% over the prior year period. This aggregate residential revenue growth consisted of drain cleaning increasing 29.5%, plumbing expanding 34.9%, excavation increasing 35.8%, and water restoration increasing 28.7%.
Roto-Rooter’s gross margin in the quarter was 51.9%, a 378-basis point increase when compared to the first quarter of 2020. Adjusted EBITDA in the first quarter of 2021 totaled $56.9 million, an increase of 42.1%. The Adjusted EBITDA margin in the quarter was 26.9% which is a 439-basis point increase when compared to the prior year.
Chemed Consolidated
As of March 31, 2021, Chemed had total cash and cash equivalents of $210 million and no long-term debt.
In June 2018, Chemed entered into a five-year Amended and Restated Credit Agreement that consists of a $450 million revolving credit facility. The interest rate on this facility has a floating rate that is currently LIBOR plus 100-basis points. At March 31, 2021, the Company had approximately $412 million of undrawn borrowing capacity under this credit agreement.
During the quarter, the Company repurchased 100,000 shares of Chemed stock for $44.8 million which equates to a cost per share of $447.67. As of March 31, 2021, there was approximately $134 million of remaining share repurchase authorization under this plan.
Chemed restarted its share repurchase program in 2007. Since that time, Chemed has repurchased approximately 14.6 million shares, aggregating approximately $1.4 billion at an average share cost of $98.15. Including dividends over this period, Chemed has returned approximately $1.6 billion to shareholders.
Guidance for 2021
Management anticipates providing updated 2021 earnings guidance in July 2021 as part of the June 30, 2021, earnings press release.
Conference Call
Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday, April 28, 2021, 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 Conference ID is 9096486. 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 9096486. 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 approximately 18,000 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 cleanup services through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in the republics of Indonesia and Singapore, and the Philippines.
This press release contains information about Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed’s financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company’s operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed’s management similarly uses EBITDA, Adjusted EBITDA and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed’s management to estimate the resources required to meet Chemed’s future financial obligations and expenditures. Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed’s net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.
Forward-Looking Statements
Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements.
These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed’s dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed’s most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED STATEMENTS OF INCOME |
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(in thousands, except per share data)(unaudited) |
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Three Months Ended March 31, |
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2021 |
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2020 |
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Service revenues and sales |
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$ |
527,360 |
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$ |
515,798 |
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Cost of services provided and goods sold |
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340,473 |
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351,745 |
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Selling, general and administrative expenses (aa) |
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91,599 |
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70,583 |
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Depreciation |
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11,715 |
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11,388 |
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Amortization |
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2,510 |
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2,477 |
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Other operating expense |
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622 |
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242 |
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Total costs and expenses |
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446,919 |
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436,435 |
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Income from operations |
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80,441 |
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79,363 |
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Interest expense |
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(381) |
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(975) |
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Other income/(expense)--net (bb) |
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3,602 |
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(9,466) |
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Income before income taxes |
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83,662 |
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68,922 |
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Income taxes |
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(18,262) |
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(13,031) |
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Net income |
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$ |
65,400 |
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$ |
55,891 |
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Earnings Per Share |
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Net income |
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$ |
4.08 |
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$ |
3.50 |
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Average number of shares outstanding |
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16,010 |
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15,991 |
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Diluted Earnings Per Share |
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Net income |
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$ |
4.01 |
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$ |
3.38 |
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Average number of shares outstanding |
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16,310 |
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16,516 |
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(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands): |
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Three Months Ended March 31, |
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2021 |
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2020 |
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SG&A expenses before long-term incentive compensation |
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and the impact of market value adjustments related to |
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deferred compensation plans |
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$ |
86,668 |
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$ |
78,334 |
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Market value adjustments related to deferred |
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compensation trusts |
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3,038 |
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(9,572) |
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Long-term incentive compensation |
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1,893 |
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1,821 |
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Total SG&A expenses |
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$ |
91,599 |
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$ |
70,583 |
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(bb) Other income/(expense)--net comprises (in thousands): |
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Three Months Ended March 31, |
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2021 |
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2020 |
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Market value adjustments related to deferred |
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compensation trusts |
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$ |
3,038 |
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$ |
(9,572) |
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Interest income |
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92 |
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109 |
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Other |
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472 |
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(3) |
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Total other income/(expense)--net |
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$ |
3,602 |
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$ |
(9,466) |
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED BALANCE SHEETS |
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(in thousands, except per share data)(unaudited) |
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March 31, |
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2021 |
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2020 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
210,156 |
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$ |
28,951 |
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Accounts receivable less allowances |
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104,748 |
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134,695 |
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Inventories |
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6,777 |
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7,313 |
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Prepaid income taxes |
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3,518 |
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5,917 |
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Prepaid expenses |
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21,775 |
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21,939 |
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Total current assets |
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346,974 |
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198,815 |
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Investments of deferred compensation plans held in trust |
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93,705 |
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72,296 |
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Properties and equipment, at cost less accumulated depreciation |
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190,154 |
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183,729 |
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Lease right of use asset |
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124,104 |
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112,302 |
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Identifiable intangible assets less accumulated amortization |
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115,517 |
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124,219 |
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Goodwill |
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578,618 |
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577,236 |
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Other assets |
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9,061 |
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8,962 |
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Total Assets |
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$ |
1,458,133 |
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$ |
1,277,559 |
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Liabilities |
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Current liabilities |
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Accounts payable |
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$ |
55,447 |
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$ |
37,838 |
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Income taxes |
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24,774 |
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6,133 |
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Accrued insurance |
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57,533 |
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56,480 |
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Accrued compensation |
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73,907 |
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63,622 |
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Accrued legal |
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2,102 |
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7,114 |
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Short-term lease liability |
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37,897 |
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36,252 |
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Other current liabilities |
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38,555 |
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39,298 |
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Total current liabilities |
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290,215 |
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246,737 |
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Deferred income taxes |
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19,733 |
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20,681 |
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Long-term debt |
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- |
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160,000 |
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Deferred compensation liabilities |
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93,755 |
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70,363 |
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Long-term lease liability |
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98,813 |
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88,278 |
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Other liabilities |
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26,733 |
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7,899 |
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Total Liabilities |
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529,249 |
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593,958 |
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Stockholders' Equity |
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Capital stock |
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36,345 |
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35,912 |
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Paid-in capital |
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982,739 |
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878,550 |
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Retained earnings |
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1,783,740 |
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1,476,151 |
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Treasury stock, at cost |
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(1,876,315) |
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(1,709,390) |
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Deferred compensation payable in Company stock |
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2,375 |
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2,378 |
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Total Stockholders' Equity |
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928,884 |
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683,601 |
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Total Liabilities and Stockholders' Equity |
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$ |
1,458,133 |
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$ |
1,277,559 |
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands)(unaudited) |
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For the Three Months Ended March 31, |
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2021 |
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2020 |
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Cash Flows from Operating Activities |
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Net income |
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$ |
65,400 |
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$ |
55,891 |
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Adjustments to reconcile net income to net cash provided |
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by operating activities: |
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Depreciation and amortization |
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14,225 |
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13,865 |
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Payments on previously accrued litigation settlements |
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(8,490) |
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- |
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Stock option expense |
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6,106 |
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5,045 |
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Noncash long-term incentive compensation |
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1,642 |
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1,598 |
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Deferred payroll taxes |
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(930) |
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2,290 |
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Amortization of debt issuance costs |
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76 |
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76 |
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Provision for bad debts |
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- |
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594 |
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Changes in operating assets and liabilities, excluding |
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amounts acquired in business combinations: |
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Decrease in accounts receivable |
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22,773 |
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6,269 |
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Decrease in inventories |
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318 |
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149 |
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Decrease in prepaid expenses |
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4,402 |
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1,211 |
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Decrease in accounts payable and |
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other current liabilities |
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(18,369) |
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(7,037) |
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Change in current income taxes |
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18,395 |
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10,159 |
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Net change in lease assets and liabilities |
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(24) |
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(153) |
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Decrease/(increase) in other assets |
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(5,274) |
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5,048 |
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Increase/(decrease) in other liabilities |
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5,759 |
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(6,067) |
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Other sources |
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710 |
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388 |
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Net cash provided by operating activities |
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106,719 |
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89,326 |
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Cash Flows from Investing Activities |
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Capital expenditures |
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(17,697) |
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(19,897) |
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Business combinations |
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- |
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(1,452) |
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Other sources/(uses) |
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274 |
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(144) |
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Net cash used by investing activities |
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(17,423) |
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(21,493) |
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Cash Flows from Financing Activities |
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Purchases of treasury stock |
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(41,107) |
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(100,235) |
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Proceeds from exercise of stock options |
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|
11,026 |
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9,241 |
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Capital stock surrendered to pay taxes on stock-based compensation |
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(6,613) |
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(7,951) |
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Dividends paid |
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(5,437) |
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(5,130) |
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Payments on revolving line of credit |
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- |
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(104,100) |
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Proceeds from revolving line of credit |
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- |
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174,100 |
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Change in cash overdrafts payable |
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- |
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(9,849) |
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Other sources/uses) |
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316 |
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(1,116) |
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Net cash used by financing activities |
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(41,815) |
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(45,040) |
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Increase in Cash and Cash Equivalents |
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47,481 |
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|
22,793 |
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Cash and cash equivalents at beginning of year |
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|
162,675 |
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|
6,158 |
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Cash and cash equivalents at end of year |
|
$ |
210,156 |
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$ |
28,951 |
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CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATING STATEMENTS OF INCOME |
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FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 |
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(in thousands)(unaudited) |
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Roto- |
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Chemed |
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VITAS |
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Rooter |
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Corporate |
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Consolidated |
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2021 (a) |
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Service revenues and sales |
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$ |
315,788 |
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$ |
211,572 |
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$ |
- |
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$ |
527,360 |
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Cost of services provided and goods sold |
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|
238,667 |
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|
101,806 |
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- |
|
|
340,473 |
|
Selling, general and administrative expenses |
|
|
22,090 |
|
|
53,322 |
|
|
16,187 |
|
|
91,599 |
|
Depreciation |
|
|
5,338 |
|
|
6,353 |
|
|
24 |
|
|
11,715 |
|
Amortization |
|
|
18 |
|
|
2,492 |
|
|
- |
|
|
2,510 |
|
Other operating expense |
|
|
502 |
|
|
120 |
|
|
- |
|
|
622 |
|
Total costs and expenses |
|
|
266,615 |
|
|
164,093 |
|
|
16,211 |
|
|
446,919 |
|
Income/(loss) from operations |
|
|
49,173 |
|
|
47,479 |
|
|
(16,211) |
|
|
80,441 |
|
Interest expense |
|
|
(42) |
|
|
(89) |
|
|
(250) |
|
|
(381) |
|
Intercompany interest income/(expense) |
|
|
4,525 |
|
|
1,620 |
|
|
(6,145) |
|
|
- |
|
Other income—net |
|
|
533 |
|
|
31 |
|
|
3,038 |
|
|
3,602 |
|
Income/(loss) before income taxes |
|
|
54,189 |
|
|
49,041 |
|
|
(19,568) |
|
|
83,662 |
|
Income taxes |
|
|
(13,419) |
|
|
(11,864) |
|
|
7,021 |
|
|
(18,262) |
|
Net income/(loss) |
|
$ |
40,770 |
|
$ |
37,177 |
|
$ |
(12,547) |
|
$ |
65,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales |
|
$ |
337,916 |
|
$ |
177,882 |
|
$ |
- |
|
$ |
515,798 |
|
Cost of services provided and goods sold |
|
|
259,429 |
|
|
92,316 |
|
|
- |
|
|
351,745 |
|
Selling, general and administrative expenses |
|
|
22,269 |
|
|
46,282 |
|
|
2,032 |
|
|
70,583 |
|
Depreciation |
|
|
5,474 |
|
|
5,878 |
|
|
36 |
|
|
11,388 |
|
Amortization |
|
|
18 |
|
|
2,459 |
|
|
- |
|
|
2,477 |
|
Other operating expense |
|
|
114 |
|
|
128 |
|
|
- |
|
|
242 |
|
Total costs and expenses |
|
|
287,304 |
|
|
147,063 |
|
|
2,068 |
|
|
436,435 |
|
Income/(loss) from operations |
|
|
50,612 |
|
|
30,819 |
|
|
(2,068) |
|
|
79,363 |
|
Interest expense |
|
|
(45) |
|
|
(102) |
|
|
(828) |
|
|
(975) |
|
Intercompany interest income/(expense) |
|
|
4,386 |
|
|
1,349 |
|
|
(5,735) |
|
|
- |
|
Other income/(expense)—net |
|
|
65 |
|
|
40 |
|
|
(9,571) |
|
|
(9,466) |
|
Income/(loss) before income taxes |
|
|
55,018 |
|
|
32,106 |
|
|
(18,202) |
|
|
68,922 |
|
Income taxes |
|
|
(13,739) |
|
|
(7,784) |
|
|
8,492 |
|
|
(13,031) |
|
Net income/(loss) |
|
$ |
41,279 |
|
$ |
24,322 |
|
$ |
(9,710) |
|
$ |
55,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this financial information. |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||
|
CONSOLIDATING SUMMARIES OF EBITDA |
||||||||||||
|
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 |
||||||||||||
|
(in thousands)(unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
Chemed |
||||
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
$ |
40,770 |
|
$ |
37,177 |
|
$ |
(12,547) |
|
$ |
65,400 |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
42 |
|
|
89 |
|
|
250 |
|
|
381 |
|
Income taxes |
|
|
13,419 |
|
|
11,864 |
|
|
(7,021) |
|
|
18,262 |
|
Depreciation |
|
|
5,338 |
|
|
6,353 |
|
|
24 |
|
|
11,715 |
|
Amortization |
|
|
18 |
|
|
2,492 |
|
|
- |
|
|
2,510 |
|
EBITDA |
|
|
59,587 |
|
|
57,975 |
|
|
(19,294) |
|
|
98,268 |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income) |
|
|
(4,525) |
|
|
(1,620) |
|
|
6,145 |
|
|
- |
|
Interest income |
|
|
(61) |
|
|
(31) |
|
|
- |
|
|
(92) |
|
Stock option expense |
|
|
- |
|
|
- |
|
|
6,106 |
|
|
6,106 |
|
Direct costs related to COVID-19 |
|
|
1,753 |
|
|
553 |
|
|
38 |
|
|
2,344 |
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
1,893 |
|
|
1,893 |
|
Adjusted EBITDA |
|
$ |
56,754 |
|
$ |
56,877 |
|
$ |
(5,112) |
|
$ |
108,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
$ |
41,279 |
|
$ |
24,322 |
|
$ |
(9,710) |
|
$ |
55,891 |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
45 |
|
|
102 |
|
|
828 |
|
|
975 |
|
Income taxes |
|
|
13,739 |
|
|
7,784 |
|
|
(8,492) |
|
|
13,031 |
|
Depreciation |
|
|
5,474 |
|
|
5,878 |
|
|
36 |
|
|
11,388 |
|
Amortization |
|
|
18 |
|
|
2,459 |
|
|
- |
|
|
2,477 |
|
EBITDA |
|
|
60,555 |
|
|
40,545 |
|
|
(17,338) |
|
|
83,762 |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income) |
|
|
(4,386) |
|
|
(1,349) |
|
|
5,735 |
|
|
- |
|
Interest income |
|
|
(68) |
|
|
(40) |
|
|
- |
|
|
(108) |
|
Stock option expense |
|
|
- |
|
|
- |
|
|
5,045 |
|
|
5,045 |
|
Direct costs related to COVID-19 |
|
|
973 |
|
|
861 |
|
|
- |
|
|
1,834 |
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
1,821 |
|
|
1,821 |
|
Medicare cap sequestration adjustment |
|
|
675 |
|
|
- |
|
|
- |
|
|
675 |
|
Adjusted EBITDA |
|
$ |
57,749 |
|
$ |
40,017 |
|
$ |
(4,737) |
|
$ |
93,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
||||
|
|
|
2021 |
|
2020 |
||
|
Net income as reported |
|
$ |
65,400 |
|
$ |
55,891 |
|
Add/(deduct) pre-tax cost of: |
|
|
|
|
|
|
|
Stock option expense |
|
|
6,106 |
|
|
5,045 |
|
Amortization of reacquired franchise agreements |
|
|
2,352 |
|
|
2,352 |
|
Direct costs related to COVID-19 |
|
|
2,344 |
|
|
1,834 |
|
Long-term incentive compensation |
|
|
1,893 |
|
|
1,821 |
|
Medicare cap sequestration adjustments |
|
|
- |
|
|
675 |
|
Add/(deduct) tax impacts: |
|
|
|
|
|
|
|
Tax impact of the above pre-tax adjustments (1) |
|
|
(2,487) |
|
|
(2,350) |
|
Excess tax benefits on stock compensation |
|
|
(3,238) |
|
|
(4,553) |
|
Adjusted net income |
|
$ |
72,370 |
|
$ |
60,715 |
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share As Reported |
|
|
|
|
|
|
|
Net income |
|
$ |
4.01 |
|
$ |
3.38 |
|
Average number of shares outstanding |
|
|
16,310 |
|
|
16,516 |
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share |
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
4.44 |
|
$ |
3.68 |
|
Average number of shares outstanding |
|
|
16,310 |
|
|
16,516 |
|
|
|
|
|
|
|
|
|
(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated. |
||||||
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this financial information. |
||||||
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
||||||
|
OPERATING STATISTICS FOR VITAS SEGMENT |
||||||
|
(unaudited) |
||||||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|||
|
OPERATING STATISTICS |
|
2021 |
|
2020 |
|
|
|
Net revenue ($000) (c) |
|
|
|
|
|
|
|
Homecare |
|
263,754 |
|
$ |
271,762 |
|
|
Inpatient |
|
29,156 |
|
|
32,482 |
|
|
Continuous care |
|
27,349 |
|
|
40,555 |
|
|
Other |
|
2,938 |
|
|
3,147 |
|
|
Subtotal |
|
323,197 |
|
$ |
347,946 |
|
|
Room and board, net |
|
(2,665) |
|
|
(3,381) |
|
|
Contractual allowances |
|
(3,244) |
|
|
(4,149) |
|
|
Medicare cap allowance |
|
(1,500) |
|
|
(2,500) |
|
|
Net Revenue |
|
315,788 |
|
$ |
337,916 |
|
|
Net revenue as a percent of total before Medicare cap allowance |
|
|
|
|
|
|
|
Homecare |
|
81.6 |
% |
|
78.1 |
% |
|
Inpatient |
|
9.0 |
|
|
9.3 |
|
|
Continuous care |
|
8.5 |
|
|
11.7 |
|
|
Other |
|
0.9 |
|
|
0.9 |
|
|
Subtotal |
|
100.0 |
|
|
100.0 |
|
|
Room and board, net |
|
(0.8) |
|
|
(1.0) |
|
|
Contractual allowances |
|
(1.0) |
|
|
(1.2) |
|
|
Medicare cap allowance |
|
(0.5) |
|
|
(0.7) |
|
|
Net Revenue |
|
97.7 |
% |
|
97.1 |
% |
|
Days of care |
|
|
|
|
|
|
|
Homecare |
|
1,329,892 |
|
|
1,364,746 |
|
|
Nursing home |
|
232,783 |
|
|
303,374 |
|
|
Respite |
|
4,840 |
|
|
6,692 |
|
|
Subtotal routine homecare and respite |
|
1,567,515 |
|
|
1,674,812 |
|
|
Inpatient |
|
27,674 |
|
|
32,348 |
|
|
Continuous care |
|
29,300 |
|
|
41,373 |
|
|
Total |
|
1,624,489 |
|
|
1,748,533 |
|
|
|
|
|
|
|
|
|
|
Number of days in relevant time period |
|
90 |
|
|
91 |
|
|
Average daily census ("ADC") (days) |
|
|
|
|
|
|
|
Homecare |
|
14,777 |
|
|
14,997 |
|
|
Nursing home |
|
2,586 |
|
|
3,334 |
|
|
Respite |
|
54 |
|
|
74 |
|
|
Subtotal routine homecare and respite |
|
17,417 |
|
|
18,405 |
|
|
Inpatient |
|
307 |
|
|
355 |
|
|
Continuous care |
|
326 |
|
|
455 |
|
|
Total |
|
18,050 |
|
|
19,215 |
|
|
Total Admissions |
|
18,135 |
|
|
18,603 |
|
|
Total Discharges |
|
18,516 |
|
|
18,196 |
|
|
Average length of stay (days) |
|
94.4 |
|
|
90.7 |
|
|
Median length of stay (days) |
|
12.0 |
|
|
14.0 |
|
|
ADC by major diagnosis |
|
|
|
|
|
|
|
Cerebro |
|
35.9 |
% |
|
35.9 |
% |
|
Neurological |
|
22.1 |
|
|
21.4 |
|
|
Cancer |
|
12.2 |
|
|
12.7 |
|
|
Cardio |
|
15.8 |
|
|
15.9 |
|
|
Respiratory |
|
7.8 |
|
|
8.3 |
|
|
Other |
|
6.2 |
|
|
5.8 |
|
|
Total |
|
100.0 |
% |
|
100.0 |
% |
|
Admissions by major diagnosis |
|
|
|
|
|
|
|
Cerebro |
|
21.4 |
% |
|
21.1 |
% |
|
Neurological |
|
12.3 |
|
|
12.5 |
|
|
Cancer |
|
25.0 |
|
|
28.3 |
|
|
Cardio |
|
14.2 |
|
|
15.1 |
|
|
Respiratory |
|
11.0 |
|
|
12.2 |
|
|
Other |
|
16.1 |
|
|
10.8 |
|
|
Total |
|
100.0 |
% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
Estimated uncollectible accounts as a percent of revenues |
|
1.0 |
% |
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
Accounts receivable -- |
|
|
|
|
|
|
|
Days of revenue outstanding-excluding unapplied Medicare payments |
37.8 |
|
|
33.9 |
|
|
|
Days of revenue outstanding-including unapplied Medicare payments |
26.9 |
|
|
26.1 |
|
|
|
|
|
|
|
|
|
|
|
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 MARCH 31, 2021 AND 2020 |
|||||||||||||
|
(unaudited) |
|||||||||||||
|
|
|||||||||||||
|
(a) |
Included in the results of operations for 2021 are the following significant credits/(charges) which may not be indicative of ongoing operations |
||||||||||||
|
|
(in thousands): |
||||||||||||
|
|
Three Months Ended March 31, 2021 |
||||||||||||
|
|
VITAS |
Roto-Rooter |
Corporate |
Consolidated |
|||||||||
|
|
|||||||||||||
|
|
Stock option expense |
$ |
- |
$ |
- |
$ |
(6,106) |
$ |
(6,106) | ||||
|
|
Amortization of reacquired franchise agreements |
- |
(2,352) |
- |
(2,352) | ||||||||
|
|
Direct costs related to COVID-19 |
(1,753) | (553) | (38) | (2,344) | ||||||||
|
|
Long-term incentive compensation |
- |
- |
(1,893) | (1,893) | ||||||||
|
|
Pretax impact on earnings |
(1,753) | (2,905) | (8,037) | (12,695) | ||||||||
|
|
Excess tax benefits on stock compensation |
- |
- |
3,238 | 3,238 | ||||||||
|
|
Income tax benefit on the above |
445 | 769 | 1,273 | 2,487 | ||||||||
|
|
After-tax impact on earnings |
$ |
(1,308) |
$ |
(2,136) |
$ |
(3,526) |
$ |
(6,970) | ||||
|
|
|||||||||||||
|
|
|||||||||||||
|
(b) |
Included in the results of operations for 2020 are the following significant credits/(charges) which may not be indicative of ongoing operations |
||||||||||||
|
|
(in thousands): |
||||||||||||
|
|
Three Months Ended March 31, 2020 |
||||||||||||
|
|
VITAS |
Roto-Rooter |
Corporate |
Consolidated |
|||||||||
|
|
|||||||||||||
|
|
Stock option expense |
$ |
- |
$ |
- |
$ |
(5,045) |
$ |
(5,045) | ||||
|
|
Amortization of reacquired franchise agreements |
- |
(2,352) |
- |
(2,352) | ||||||||
|
|
Direct costs related to COVID-19 |
(973) | (861) |
- |
(1,834) | ||||||||
|
|
Long-term incentive compensation |
- |
- |
(1,821) | (1,821) | ||||||||
|
|
Medicare cap sequestration adjustment |
(675) |
- |
- |
(675) | ||||||||
|
|
Pretax impact on earnings |
(1,648) | (3,213) | (6,866) | (11,727) | ||||||||
|
|
Excess tax benefits on stock compensation |
- |
- |
4,553 | 4,553 | ||||||||
|
|
Income tax benefit on the above |
419 | 851 | 1,080 | 2,350 | ||||||||
|
|
After-tax impact on earnings |
$ |
(1,229) |
$ |
(2,362) |
$ |
(1,233) |
$ |
(4,824) | ||||
|
|
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|
|
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|
(c) |
VITAS has 10 large (greater than 450 ADC), 19 medium (greater than 200 but less than 450 ADC) and 20 small (less than 200 ADC) hospice programs. Of Vitas' 30 Medicare provider numbers, for the current cap year, 27 provider numbers have a Medicare cap cushion of 10% or greater, one provider number has a cap cushion between 5% and 10%, one provider number has a cap cushion between 0% and 5%, and one provider number has a Medicare cap liability. |
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