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News Release Details

Chemed Reports Third-Quarter 2024 Results

October 29, 2024 at 4:15 PM EDT

CINCINNATI--(BUSINESS WIRE)--Oct. 29, 2024-- 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 third quarter ended September 30, 2024, versus the comparable prior-year period.

Changes to Non-GAAP Metrics

Chemed uses certain non-GAAP metrics such as EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, to provide additional context and perspective to reported operational results.

Chemed’s previously reported non-GAAP metrics during the four sequential quarters from September 30, 2022 through June 30, 2023 excluded the 12-month pandemic-related licensed healthcare professional retention bonus (Retention Program). Starting with the quarter-ended September 30, 2023, the Company no longer excludes the cost of the Retention Program when presenting non-GAAP operating metrics in current or prior periods.

For the nine-months ended September 30, 2023, the pretax and after-tax Retention Program expense was $23.7 million and $18.0 million, respectively. There was no material impact on financial results for the quarter or nine months-ended September 30, 2024 as a result of the Retention Program.

Results for Quarter Ended September 30, 2024

Consolidated operating results:

  • Revenue increased 7.4% to $606.2 million
  • GAAP Diluted Earnings-per-Share (EPS) of $5.00, an increase of 1.4%
  • Adjusted Diluted EPS of $5.64, an increase of 6.0%

VITAS segment operating results:

  • Net Patient Revenue of $391.4 million, an increase of 17.3%
  • Average Daily Census (ADC) of 21,785, an increase of 15.5%
  • Admissions of 16,775, an increase of 6.3%
  • Net Income, excluding certain discrete items, of $53.8 million, an increase of 26.4%
  • Adjusted EBITDA, excluding Medicare Cap, of $73.1 million, an increase of 33.1%
  • Adjusted EBITDA margin, excluding Medicare Cap, of 18.6%, an increase of 212-basis points

Roto-Rooter segment operating results:

  • Revenue of $214.8 million, a decrease of 6.9%
  • Net Income, excluding certain discrete items, of $39.8 million, a decrease of 18.9%
  • Adjusted EBITDA of $56.4 million, a decline of 15.8%
  • Adjusted EBITDA margin of 26.3%, a decline of 275-basis points

VITAS

As previously announced, VITAS completed its acquisition of the hospice assets and an assisted living facility of Covenant Health and Community Services, Inc. (Covenant Health) on April 17, 2024 for $85.0 million in cash. Before presenting VITAS’ overall results, it is important to disclose the methodology used in determining the impact of Covenant Health’s acquisition on VITAS’ overall results. VITAS had significant operations in two of the three Florida locations we acquired from Covenant Health. Those locations require that we estimate the Covenant Health impact, as once the operations are integrated, there are not separate results. For instance, there are no VITAS-specific referral sources versus Covenant Health-specific referral sources in these locations. It is very likely that referral sources in the area have historically referred to both VITAS and Covenant Health. We have used historical operating trends in these locations to determine what is “legacy” VITAS activity. All activity above those historical operating trends have been attributed as the Covenant Health impact. We have included the specifically determined impact as it relates to new operating territories acquired. Based on the above, we discuss the range of impact that Covenant had on the overall VITAS operating metrics.

Covenant Health contributed approximately $10 million to $11 million of revenue in the third quarter of 2024. This revenue translated to net income of approximately $1.8 million to $2.0 million. Adjusted EBITDA in the quarter attributed to Covenant Health is between $2.4 million and $2.6 million.

VITAS net revenue was $391.4 million in the third quarter of 2024, which is an increase of 17.3% when compared to the prior-year period. This revenue increase is comprised primarily of a 15.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%. Acuity mix shift negatively impacted revenue growth 144-basis points in the quarter when compared to the prior-year period’s revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 64-basis points.

In the third quarter of 2024, VITAS accrued $2.2 million in Medicare Cap billing limitations. This compares to a $125,000 Medicare Cap billing limitation in the third quarter of 2023.

Of VITAS’ 32 Medicare provider numbers, 24 provider numbers have a trailing 12-month Medicare Cap cushion of 10% or greater, five provider numbers have a cushion between 0% and 10%, and three provider numbers have a trailing 12-month Medicare Cap billing limitation totaling $9.4 million.

Average revenue per patient per day in the third quarter of 2024 was $199.16 which is 139-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $175.82 and $1,094.97, respectively. During the quarter, high acuity days-of-care were 2.5% of total days of care, a decline of 26-basis points when compared to the prior-year quarter.

The third quarter 2024 gross margin, excluding Medicare Cap, was 25.1%. This compares to the prior year quarter’s gross margin of 24.0%, excluding Medicare Cap. Selling, general and administrative expenses were $25.9 million in the third quarter of 2024 compared to $25.3 million in the prior-year quarter.

Adjusted EBITDA, excluding Medicare Cap, totaled $73.1 million in the quarter, an increase of 33.1% when compared to the prior year period. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 18.6%, which is 212-basis points above the prior-year period.

Hurricane Helene, which impacted the panhandle of Florida and other parts of the southeastern United States in late September, did not result in any significant property loss or damage to VITAS. However, as with other similar events, we did experience a slowdown in admission activity while health systems prepared for the hurricane and then dealt with the aftermath. We estimate that admissions were negatively impacted during the quarter by approximately 60-100 patients. We also believe that the Florida admission impact will be more significant in the fourth quarter with the combination of Hurricanes Helene and Milton.

Roto-Rooter

Roto-Rooter generated quarterly revenue of $214.8 million in the third quarter of 2024, a decrease of 6.9%, when compared to the prior-year quarter.

Roto-Rooter branch commercial revenue in the quarter totaled $53.5 million, a decrease of 5.9% from the prior-year period. This aggregate commercial revenue change consisted of drain cleaning revenue declining 4.4%, plumbing declining 12.1%, excavation declining 2.3%, and water restoration declining 3.3%.

Roto-Rooter branch residential revenue in the quarter totaled $146.0 million, a decrease of 6.3%, over the prior-year period. This aggregate residential revenue change consisted of drain cleaning declining 5.9%, plumbing declining 11.2%, excavation declining 6.1%, and water restoration declining 6.9%.

Roto-Rooter’s gross margin in the quarter was 52.9%, essentially flat when compared to the third quarter of 2023. Roto-Rooter’s selling, general and administrative expenses were $57.1 million in the quarter, which is an increase of 3.5% compared to the third quarter of 2023. This increase was caused by continued enhanced marketing efforts designed to drive additional demand.

Adjusted EBITDA in the third quarter of 2024 totaled $56.4 million, a decrease of 15.8% when compared to the third quarter of 2023. The Adjusted EBITDA margin in the quarter was 26.3% which represents a 275-basis point decline from the third quarter of 2023.

Chemed Consolidated

As of September 30, 2024, Chemed had total cash and cash equivalents of $238.5 million and no current or long-term debt.

In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consisted of a $100 million amortizable term loan and a $450 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. There is approximately $404.8 million of undrawn borrowing capacity under the Credit Agreement after excluding $45.2 million for Letters of Credit.

During the quarter, the Company repurchased 100,000 shares of Chemed stock for $57.8 million which equates to a cost per share of $578.21. As of September 30, 2024, there was approximately $168.1 million of remaining share repurchase authorization under its plan.

Revision to Guidance for 2024

VITAS continues to perform as anticipated, and we reiterate the metrics for VITAS as presented in our second quarter 2024 press release. Roto-Rooter’s revenue and resulting adjusted EBITDA and adjusted net income was softer than anticipated during the third quarter of 2024. As a result of these factors, full-year consolidated 2024 earnings per diluted share, excluding non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, is estimated to be in the range of $23.00 to $23.15. This range represents a 13.3% to 14.0% increase from Chemed’s 2023 reported adjusted earnings per diluted share of $20.30. This guidance assumes an effective corporate tax rate on adjusted earnings of 24.3% and a diluted share count of 15.22 million shares.

Conference Call

As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday October 30, 2024, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed’s website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/c93ntfig/.

Participants may also register via teleconference at: https://register.vevent.com/register/BI0022c41ceecf4b83a582584604bc732b.

Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.

A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investor relations section of Chemed’s website.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing, drain cleaning, and water cleanup services through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in the republics of Indonesia and Singapore, and the Philippines.

This press release contains information about Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed’s financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company’s operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed’s management similarly uses EBITDA, Adjusted EBITDA and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed’s management to estimate the resources required to meet Chemed’s future financial obligations and expenditures. Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed’s net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.

Forward-Looking Statements

Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements.

These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed’s dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed’s most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)(unaudited)
 

Three Months Ended September 30,

 

Nine Months Ended September 30,

2024

 

2023

 

2024

 

2023

Service revenues and sales $

606,181

 

$

564,532

 

$

1,791,294

 

$

1,678,505

 

Cost of services provided and goods sold

396,187

 

362,358

 

1,171,064

 

1,107,256

 

Selling, general and administrative expenses (aa)

101,981

 

99,602

 

320,109

 

294,684

 

Depreciation

13,147

 

12,858

 

39,601

 

37,778

 

Amortization

2,550

 

2,521

 

7,617

 

7,548

 

Other operating expense

159

 

343

 

288

 

2,064

 

Total costs and expenses

514,024

 

477,682

 

1,538,679

 

1,449,330

 

Income from operations

92,157

 

86,850

 

252,615

 

229,175

 

Interest expense

(427

)

(444

)

(1,281

)

(2,766

)

Other income--net (bb)

9,299

 

6,859

 

28,008

 

8,365

 

Income before income taxes

101,029

 

93,265

 

279,342

 

234,774

 

Income taxes

(25,253

)

(18,307

)

(67,662

)

(52,318

)

Net income $

75,776

 

$

74,958

 

$

211,680

 

$

182,456

 

Earnings Per Share
Net income $

5.04

 

$

4.97

 

$

14.04

 

$

12.14

 

Average number of shares outstanding

15,025

 

15,075

 

15,082

 

15,034

 

Diluted Earnings Per Share
Net income $

5.00

 

$

4.93

 

$

13.88

 

$

12.02

 

Average number of shares outstanding

15,168

 

15,200

 

15,253

 

15,178

 

 
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
 

Three Months Ended September 30,

 

Nine Months Ended September 30,

2024

 

2023

 

2024

 

2023

SG&A expenses before long-term incentive compensation
and the impact of market value adjustments related to
deferred compensation plans $

93,269

 

$

91,792

 

$

287,712

 

$

281,426

 

Market value adjustments related to deferred
compensation trusts

5,629

 

4,257

 

16,600

 

5,441

 

Long-term incentive compensation

3,083

 

3,553

 

15,797

 

7,817

 

Total SG&A expenses $

101,981

 

$

99,602

 

$

320,109

 

$

294,684

 

 
(bb) Other income--net comprises (in thousands):

Three Months Ended September 30,

 

Nine Months Ended September 30,

2024

 

2023

 

2024

 

2023

Market value adjustments related to deferred
compensation trusts $

5,629

 

$

4,257

 

$

16,600

 

$

5,441

 

Interest income

3,668

 

2,600

 

11,405

 

2,863

 

Other

2

 

2

 

3

 

61

 

Total other income--net $

9,299

 

$

6,859

 

$

28,008

 

$

8,365

 

 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)(unaudited)
 

September 30,

2024

2023

Assets
Current assets
Cash and cash equivalents $

238,451

 

$

173,150

 

Accounts receivable less allowances

196,481

 

168,031

 

Inventories

9,899

 

12,511

 

Prepaid income taxes

14,229

 

11,337

 

Prepaid expenses

31,377

 

29,510

 

Total current assets

490,437

 

394,539

 

Investments of deferred compensation plans held in trust

126,631

 

104,410

 

Properties and equipment, at cost less accumulated depreciation

200,939

 

205,462

 

Lease right of use asset

134,111

 

123,353

 

Identifiable intangible assets less accumulated amortization

94,753

 

92,768

 

Goodwill

666,860

 

584,977

 

Other assets

55,704

 

56,570

 

Total Assets $

1,769,435

 

$

1,562,079

 

Liabilities
Current liabilities
Accounts payable $

44,938

 

$

56,508

 

Accrued insurance

60,308

 

61,122

 

Accrued income taxes

3,385

 

5,135

 

Accrued compensation

73,141

 

74,865

 

Short-term lease liability

42,490

 

37,615

 

Other current liabilities

40,517

 

61,974

 

Total current liabilities

264,779

 

297,219

 

Deferred income taxes

28,076

 

30,381

 

Deferred compensation liabilities

122,240

 

102,815

 

Long-term lease liability

105,416

 

99,346

 

Other liabilities

13,169

 

13,075

 

Total Liabilities

533,680

 

542,836

 

Stockholders' Equity
Capital stock

37,395

 

37,013

 

Paid-in capital

1,462,569

 

1,254,356

 

Retained earnings

2,639,011

 

2,362,928

 

Treasury stock, at cost

(2,905,430

)

(2,637,102

)

Deferred compensation payable in Company stock

2,210

 

2,048

 

Total Stockholders' Equity

1,235,755

 

1,019,243

 

Total Liabilities and Stockholders' Equity $

1,769,435

 

$

1,562,079

 

 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)(unaudited)
 

Nine Months Ended September 30,

2024

 

2023

Cash Flows from Operating Activities
Net income $

211,680

 

$

182,456

 

Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization

47,218

 

45,326

 

Stock option expense

23,933

 

22,376

 

Noncash long-term incentive compensation

15,783

 

6,637

 

Litigation settlements

(5,750

)

2,050

 

Benefit for deferred income taxes

(2,245

)

(8,232

)

Noncash directors' compensation

1,282

 

1,444

 

Amortization of debt issuance costs

241

 

500

 

Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
Increase in accounts receivable

(14,336

)

(27,843

)

Decrease/(increase) in inventories

2,125

 

(2,239

)

(Increase)/decrease in prepaid expenses

(1,173

)

781

 

Decrease in accounts payable and

other current liabilities

(19,641

)

(15,815

)

Change in current income taxes

(4,545

)

12,314

 

Net change in lease assets and liabilities

(400

)

(892

)

Increase in other assets

(21,101

)

(8,622

)

Increase in other liabilities

18,348

 

11,426

 

Other sources

1,165

 

69

 

Net cash provided by operating activities

252,584

 

221,736

 

Cash Flows from Investing Activities
Business combinations, net of cash acquired

(97,400

)

(3,994

)

Capital expenditures

(36,770

)

(45,075

)

Proceeds from sale of fixed assets

3,060

 

506

 

Other uses

(281

)

(409

)

Net cash used by investing activities

(131,391

)

(48,972

)

Cash Flows from Financing Activities
Purchases of treasury stock

(152,049

)

(27,769

)

Proceeds from exercise of stock options

49,906

 

58,277

 

Dividends paid

(19,594

)

(17,446

)

Change in cash overdrafts payable

(15,749

)

16,182

 

Capital stock surrendered to pay taxes on stock-based compensation

(8,827

)

(5,446

)

Payments on long-term debt

-

 

(97,500

)

Other uses

(387

)

(38

)

Net cash used by financing activities

(146,700

)

(73,740

)

(Decrease)/increase in Cash and Cash Equivalents

(25,507

)

99,024

 

Cash and cash equivalents at beginning of year

263,958

 

74,126

 

Cash and cash equivalents at end of year $

238,451

 

$

173,150

 

 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(in thousands)(unaudited)

 

 

 

 

 

 

Chemed

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

2024 (a)
Service revenues and sales $

391,406

 

$

214,775

 

$

-

 

$

606,181

 

Cost of services provided and goods sold

294,936

 

101,251

 

-

 

396,187

 

Selling, general and administrative expenses

25,883

 

57,072

 

19,026

 

101,981

 

Depreciation

5,063

 

8,071

 

13

 

13,147

 

Amortization

26

 

2,524

 

-

 

2,550

 

Other operating expense

97

 

62

 

-

 

159

 

Total costs and expenses

326,005

 

168,980

 

19,039

 

514,024

 

Income/(loss) from operations

65,401

 

45,795

 

(19,039

)

92,157

 

Interest expense

(46

)

(114

)

(267

)

(427

)

Intercompany interest income/(expense)

4,920

 

3,656

 

(8,576

)

-

 

Other income—net

62

 

18

 

9,219

 

9,299

 

Income/(loss) before income taxes

70,337

 

49,355

 

(18,663

)

101,029

 

Income taxes

(16,851

)

(11,400

)

2,998

 

(25,253

)

Net income/(loss) $

53,486

 

$

37,955

 

$

(15,665

)

$

75,776

 

 
2023 (b)
Service revenues and sales $

333,728

 

$

230,804

 

$

-

 

$

564,532

 

Cost of services provided and goods sold

253,731

 

108,627

 

-

 

362,358

 

Selling, general and administrative expenses

25,256

 

55,141

 

19,205

 

99,602

 

Depreciation

5,009

 

7,836

 

13

 

12,858

 

Amortization

26

 

2,495

 

-

 

2,521

 

Other operating expense/(income)

(53

)

396

 

-

 

343

 

Total costs and expenses

283,969

 

174,495

 

19,218

 

477,682

 

Income/(loss) from operations

49,759

 

56,309

 

(19,218

)

86,850

 

Interest expense

(52

)

(131

)

(261

)

(444

)

Intercompany interest income/(expense)

4,935

 

3,040

 

(7,975

)

-

 

Other income—net

849

 

34

 

5,976

 

6,859

 

Income/(loss) before income taxes

55,491

 

59,252

 

(21,478

)

93,265

 

Income taxes

(11,160

)

(8,925

)

1,778

 

(18,307

)

Net income/(loss) $

44,331

 

$

50,327

 

$

(19,700

)

$

74,958

 

 
 
The "Footnotes to Financial Statements" are integral parts of this financial information.
 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(in thousands)(unaudited)
 
Chemed
VITAS Roto-Rooter Corporate Consolidated
2024 (a)
Service revenues and sales $

1,119,970

 

$

671,324

 

$

-

 

$

1,791,294

 

Cost of services provided and goods sold

852,347

 

318,717

 

-

 

1,171,064

 

Selling, general and administrative expenses

73,968

 

175,683

 

70,458

 

320,109

 

Depreciation

15,288

 

24,275

 

38

 

39,601

 

Amortization

79

 

7,538

 

-

 

7,617

 

Other operating expense

160

 

128

 

-

 

288

 

Total costs and expenses

941,842

 

526,341

 

70,496

 

1,538,679

 

Income/(loss) from operations

178,128

 

144,983

 

(70,496

)

252,615

 

Interest expense

(138

)

(349

)

(794

)

(1,281

)

Intercompany interest income/(expense)

15,096

 

10,638

 

(25,734

)

-

 

Other income—net

138

 

64

 

27,806

 

28,008

 

Income/(loss) before income taxes

193,224

 

155,336

 

(69,218

)

279,342

 

Income taxes

(46,517

)

(36,010

)

14,865

 

(67,662

)

Net income/(loss) $

146,707

 

$

119,326

 

$

(54,353

)

$

211,680

 

 
2023 (b)
Service revenues and sales $

965,066

 

$

713,439

 

$

-

 

$

1,678,505

 

Cost of services provided and goods sold

770,470

 

336,786

 

-

 

1,107,256

 

Selling, general and administrative expenses

71,248

 

171,966

 

51,470

 

294,684

 

Depreciation

14,907

 

22,830

 

41

 

37,778

 

Amortization

78

 

7,470

 

-

 

7,548

 

Other operating expense/(income)

(15

)

2,079

 

-

 

2,064

 

Total costs and expenses

856,688

 

541,131

 

51,511

 

1,449,330

 

Income/(loss) from operations

108,378

 

172,308

 

(51,511

)

229,175

 

Interest expense

(154

)

(387

)

(2,225

)

(2,766

)

Intercompany interest income/(expense)

14,393

 

8,652

 

(23,045

)

-

 

Other income—net

1,109

 

96

 

7,160

 

8,365

 

Income/(loss) before income taxes

123,726

 

180,669

 

(69,621

)

234,774

 

Income taxes

(28,503

)

(38,315

)

14,500

 

(52,318

)

Net income/(loss) $

95,223

 

$

142,354

 

$

(55,121

)

$

182,456

 

 
 
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 SEPTEMBER 30, 2024 AND 2023
(in thousands)(unaudited)

 

 

 

 

 

 

Chemed

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

2024

Net income/(loss) $

53,486

 

$

37,955

 

$

(15,665

)

$

75,776

 

Add/(deduct):
Interest expense

46

 

114

 

267

 

427

 

Income taxes

16,851

 

11,400

 

(2,998

)

25,253

 

Depreciation

5,063

 

8,071

 

13

 

13,147

 

Amortization

26

 

2,524

 

-

 

2,550

 

EBITDA

75,472

 

60,064

 

(18,383

)

117,153

 

Add/(deduct):
Intercompany interest expense/(income)

(4,920

)

(3,656

)

8,576

 

-

 

Interest income

(59

)

(18

)

(3,589

)

(3,666

)

Stock option expense

-

 

-

 

6,038

 

6,038

 

Long-term incentive compensation

-

 

-

 

3,083

 

3,083

 

Acquisition expense

394

 

(8

)

-

 

386

 

Adjusted EBITDA $

70,887

 

$

56,382

 

$

(4,275

)

$

122,994

 

 

2023

Net income/(loss) $

44,331

 

$

50,327

 

$

(19,700

)

$

74,958

 

Add/(deduct):
Interest expense

52

 

131

 

261

 

444

 

Income taxes

11,160

 

8,925

 

(1,778

)

18,307

 

Depreciation

5,009

 

7,836

 

13

 

12,858

 

Amortization

26

 

2,495

 

-

 

2,521

 

EBITDA

60,578

 

69,714

 

(21,204

)

109,088

 

Add/(deduct):
Intercompany interest expense/(income)

(4,935

)

(3,040

)

7,975

 

-

 

Interest income

(847

)

(34

)

(1,719

)

(2,600

)

Litigation settlement

-

 

300

 

-

 

300

 

Stock option expense

-

 

-

 

5,495

 

5,495

 

Long-term incentive compensation

-

 

-

 

3,553

 

3,553

 

Adjusted EBITDA $

54,796

 

$

66,940

 

$

(5,900

)

$

115,836

 

 
The "Footnotes to Financial Statements" are integral parts of this financial information.
 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARIES OF EBITDA
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated

2024

Net income/(loss) $

146,707

 

$

119,326

 

$

(54,353

)

$

211,680

 

Add/(deduct):
Interest expense

138

 

349

 

794

 

1,281

 

Income taxes

46,517

 

36,010

 

(14,865

)

67,662

 

Depreciation

15,288

 

24,275

 

38

 

39,601

 

Amortization

79

 

7,538

 

-

 

7,617

 

EBITDA

208,729

 

187,498

 

(68,386

)

327,841

 

Add/(deduct):
Intercompany interest expense/(income)

(15,096

)

(10,638

)

25,734

 

-

 

Interest income

(136

)

(64

)

(11,205

)

(11,405

)

Stock option expense

-

 

-

 

23,933

 

23,933

 

Long-term incentive compensation

-

 

-

 

10,460

 

10,460

 

Severance arrangement

-

 

-

 

5,337

 

5,337

 

Acquisition expense

1,302

 

37

 

-

 

1,339

 

Adjusted EBITDA $

194,799

 

$

176,833

 

$

(14,127

)

$

357,505

 

2023

Net income/(loss) $

95,223

 

$

142,354

 

$

(55,121

)

$

182,456

 

Add/(deduct):
Interest expense

154

 

387

 

2,225

 

2,766

 

Income taxes

28,503

 

38,315

 

(14,500

)

52,318

 

Depreciation

14,907

 

22,830

 

41

 

37,778

 

Amortization

78

 

7,470

 

-

 

7,548

 

EBITDA

138,865

 

211,356

 

(67,355

)

282,866

 

Add/(deduct):
Intercompany interest expense/(income)

(14,393

)

(8,652

)

23,045

 

-

 

Interest income

(1,046

)

(96

)

(1,720

)

(2,862

)

Stock option expense

-

 

-

 

22,376

 

22,376

 

Long-term incentive compensation

-

 

-

 

7,817

 

7,817

 

Litigation settlements

-

 

2,056

 

-

 

2,056

 

Adjusted EBITDA $

123,426

 

$

204,664

 

$

(15,837

)

$

312,253

 

 
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 September 30,

 

Nine Months Ended September 30,

2024

 

2023

 

2024

 

2023

Net income as reported $

75,776

 

$

74,958

 

$

211,680

 

$

182,456

 

Add/(deduct) pre-tax cost of:
Stock option expense

6,038

 

5,495

 

23,933

 

22,376

 

Long-term incentive compensation

3,083

 

3,553

 

10,460

 

7,817

 

Amortization of reacquired franchise rights

2,352

 

2,352

 

7,056

 

7,056

 

Severance arrangement

-

 

-

 

5,337

 

-

 

Acquisition expense

386

 

-

 

1,339

 

-

 

Litigation settlement

-

 

300

 

-

 

2,056

 

Add/(deduct) tax impacts:
Tax impact of the above pre-tax adjustments (1)

(1,761

)

(1,326

)

(6,762

)

(6,443

)

Tax impact of deferred tax rate change

-

 

(4,241

)

-

 

(4,241

)

Excess tax benefits on stock compensation

(389

)

(225

)

(4,308

)

(3,376

)

Adjusted net income $

85,485

 

$

80,866

 

$

248,735

 

$

207,701

 

 
Diluted Earnings Per Share As Reported
Net income $

5.00

 

$

4.93

 

$

13.88

 

$

12.02

 

Average number of shares outstanding

15,168

 

15,200

 

15,253

 

15,178

 

 
Adjusted Diluted Earnings Per Share
Adjusted net income $

5.64

 

$

5.32

 

$

16.31

 

$

13.68

 

Average number of shares outstanding

15,168

 

15,200

 

15,253

 

15,178

 

 
(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 September 30,

 

 

Nine Months Ended September 30,

OPERATING STATISTICS

2024

 

2023

 

 

2024

 

2023

Net revenue ($000) (c)
Homecare $

338,344

 

$

287,389

 

$

967,981

 

$

832,554

 

Inpatient

29,923

 

27,818

 

89,297

 

84,312

 

Continuous care

25,799

 

22,032

 

74,295

 

63,054

 

Other

5,082

 

3,562

 

13,900

 

9,738

 

Subtotal $

399,148

 

$

340,801

 

$

1,145,473

 

$

989,658

 

Room and board, net

(3,336

)

(2,646

)

(9,437

)

(8,317

)

Contractual allowances

(2,167

)

(4,302

)

(10,077

)

(10,650

)

Medicare cap allowance

(2,239

)

(125

)

(5,989

)

(5,625

)

Net Revenue $

391,406

 

$

333,728

 

$

1,119,970

 

$

965,066

 

Net revenue as a percent of total before Medicare cap allowance
Homecare

84.8

 

%

84.3

 

%

84.5

 

%

84.1

 

%

Inpatient

7.5

 

8.2

 

7.8

 

8.5

 

Continuous care

6.5

 

6.5

 

6.5

 

6.4

 

Other

1.2

 

1.0

 

1.2

 

1.0

 

Subtotal

100.0

 

100.0

 

100.0

 

100.0

 

Room and board, net

(0.8

)

(0.8

)

(0.8

)

(0.8

)

Contractual allowances

(0.5

)

(1.3

)

(0.9

)

(1.1

)

Medicare cap allowance

(0.6

)

-

 

(0.5

)

(0.6

)

Net Revenue

98.1

 

%

97.9

 

%

97.8

 

%

97.5

 

%

Days of care
Homecare

1,622,680

 

1,391,377

 

4,621,755

 

4,018,469

 

Nursing home

320,664

 

287,785

 

908,013

 

833,112

 

Respite

9,952

 

7,292

 

26,806

 

19,211

 

Subtotal routine homecare and respite

1,953,296

 

1,686,454

 

5,556,574

 

4,870,792

 

Inpatient

26,524

 

25,493

 

79,064

 

76,987

 

Continuous care

24,365

 

23,071

 

72,335

 

65,630

 

Total

2,004,185

 

1,735,018

 

5,707,973

 

5,013,409

 

 
Number of days in relevant time period

92

 

92

 

274

 

273

 

Average daily census ("ADC") (days)
Homecare

17,639

 

15,124

 

16,867

 

14,720

 

Nursing home

3,485

 

3,128

 

3,314

 

3,052

 

Respite

108

 

79

 

98

 

70

 

Subtotal routine homecare and respite

21,232

 

18,331

 

20,279

 

17,842

 

Inpatient

288

 

277

 

289

 

282

 

Continuous care

265

 

251

 

264

 

240

 

Total

21,785

 

18,859

 

20,832

 

18,364

 

 
Total Admissions

16,775

 

15,774

 

51,020

 

47,564

 

Total Discharges

16,217

 

15,328

 

48,285

 

45,837

 

Average length of stay (days)

102.0

 

103.1

 

102.2

 

100.8

 

Median length of stay (days)

18.0

 

17.0

 

17.0

 

16.0

 

 
ADC by major diagnosis
Cerebro

43.6

 

%

42.0

 

%

43.7

 

%

42.2

 

%

Neurological

13.3

 

14.7

 

13.3

 

15.9

 

Cancer

10.0

 

10.6

 

10.0

 

10.6

 

Cardio

16.3

 

16.4

 

16.2

 

16.1

 

Respiratory

7.1

 

7.2

 

7.2

 

7.1

 

Other

9.7

 

9.1

 

9.6

 

8.1

 

Total

100.0

 

%

100.0

 

%

100.0

 

%

100.0

 

%

Admissions by major diagnosis
Cerebro

28.4

 

%

26.6

 

%

27.7

 

%

26.3

 

%

Neurological

7.7

 

8.8

 

7.9

 

9.9

 

Cancer

25.7

 

26.1

 

25.1

 

26.0

 

Cardio

15.1

 

16.0

 

15.7

 

16.2

 

Respiratory

9.5

 

9.7

 

9.9

 

10.1

 

Other

13.6

 

12.8

 

13.7

 

11.5

 

Total

100.0

 

%

100.0

 

%

100.0

 

%

100.0

 

%

 
Estimated uncollectible accounts as a percent of revenues

0.6

 

%

1.3

 

%

0.9

 

%

1.1

 

%

 
Accounts receivable --
Days of revenue outstanding-excluding unapplied Medicare payments

37.5

 

36.4

 

n.a. n.a.
Days of revenue outstanding-including unapplied Medicare payments

35.5

 

33.8

 

n.a. n.a.
 
The "Footnotes to Financial Statements" are integral parts of this financial information.
 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(unaudited)
 
(a) Included in the results of operations for 2024 are the following significant credits/(charges) which may not be indicative of ongoing operations
(in thousands):

Three Months Ended September 30, 2024

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

 
Stock option expense $

-

 

$

-

 

$

(6,038

)

$

(6,038

)

Long-term incentive compensation

-

 

-

 

(3,083

)

(3,083

)

Amortization of reacquired franchise agreements

-

 

(2,352

)

-

 

(2,352

)

Acquisition expense

(394

)

8

 

-

 

(386

)

Pretax impact on earnings

(394

)

(2,344

)

(9,121

)

(11,859

)

Excess tax benefits on stock compensation

-

 

-

 

389

 

389

 

Income tax benefit on the above

96

 

546

 

1,119

 

1,761

 

After-tax impact on earnings $

(298

)

$

(1,798

)

$

(7,613

)

$

(9,709

)

 

Nine Months Ended September 30, 2024

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

 
Stock option expense $

-

 

$

-

 

$

(23,933

)

$

(23,933

)

Long-term incentive compensation

-

 

-

 

(10,460

)

(10,460

)

Amortization of reacquired franchise agreements

-

 

(7,056

)

-

 

(7,056

)

Severance arrangement

-

 

-

 

(5,337

)

(5,337

)

Acquisition expense

(1,302

)

(37

)

-

 

(1,339

)

Pretax impact on earnings

(1,302

)

(7,093

)

(39,730

)

(48,125

)

Excess tax benefits on stock compensation

-

 

-

 

4,308

 

4,308

 

Income tax benefit on the above

317

 

1,652

 

4,793

 

6,762

 

After-tax impact on earnings $

(985

)

$

(5,441

)

$

(30,629

)

$

(37,055

)

 
(b) Included in the results of operations for 2023 are the following significant credits/(charges) which may not be indicative of ongoing operations
(in thousands):

Three Months Ended September 30, 2023

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

 
Stock option expense $

-

 

$

-

 

$

(5,495

)

$

(5,495

)

Long-term incentive compensation

-

 

-

 

(3,553

)

(3,553

)

Amortization of reacquired franchise agreements

-

 

(2,352

)

-

 

(2,352

)

Litigation settlement

-

 

(300

)

-

 

(300

)

Pretax impact on earnings

-

 

(2,652

)

(9,048

)

(11,700

)

Excess tax benefits on stock compensation

-

 

-

 

225

 

225

 

Tax impact of deferred tax rate change

1,772

 

3,559

 

(1,090

)

4,241

 

Income tax benefit on the above

-

 

412

 

914

 

1,326

 

After-tax impact on earnings $

1,772

 

$

1,319

 

$

(8,999

)

$

(5,908

)

 

Nine Months Ended September 30, 2023

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

 
Stock option expense $

-

 

$

-

 

$

(22,376

)

$

(22,376

)

Long-term incentive compensation

-

 

-

 

(7,817

)

(7,817

)

Amortization of reacquired franchise agreements

-

 

(7,056

)

-

 

(7,056

)

Litigation settlements

-

 

(2,056

)

-

 

(2,056

)

Pretax impact on earnings

-

 

(9,112

)

(30,193

)

(39,305

)

Excess tax benefits on stock compensation

-

 

-

 

3,376

 

3,376

 

Tax impact of deferred tax rate change

1,772

 

3,559

 

(1,090

)

4,241

 

Income tax benefit on the above

-

 

2,123

 

4,320

 

6,443

 

After-tax impact on earnings $

1,772

 

$

(3,430

)

$

(23,587

)

$

(25,245

)

 
 
(c) VITAS has 10 large (greater than 450 ADC), 23 medium (greater than 200 but less than 450 ADC) and 22 small (less than 200 ADC) hospice programs. Of Vitas' 32 Medicare provider numbers, for the trailing 12 months, 24 provider numbers have a Medicare cap cushion of greater than 10%, one provider number has a Medicare cap cushion between 5% and 10%, four provider numbers have a Medicare cap cushion between 0% and 5%, and three provider numbers have a Medicare cap liability.

 

Michael D. Witzeman
(513) 762-6714

Source: Chemed Corporation