Chemed Corp 8-K, filed Oct 31, 2022
Chemed Corp (CHE)
About this 8-K
Chemed Corp filed this 8-K on October 31, 2022.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
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 October 31, 2022 Chemed Corporation issued a press release announcing its financial results for the quarter ended September 30, 2022. 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: October 31, 2022 |
| 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 Third-Quarter 2022 Results –
Increases 2022 Earnings Guidance
CINCINNATI, October 31, 2022—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, 2022, versus the comparable prior-year period, as follows:
Consolidated operating results:
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Revenue declined 2.3% to $526 million |
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GAAP Diluted Earnings-per-Share (EPS) of $3.78 |
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Adjusted Diluted EPS of $4.74, a decline of 6.3% |
VITAS segment operating results:
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Average Daily Census (ADC) of 17,242, a decline of 4.4% |
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Admissions of 14,680, a decline of 16.6% |
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Net Income, excluding certain discrete items, of $33.2 million, a decline of 25.9% |
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Adjusted EBITDA, excluding Medicare Cap, of $45.4 million, a decline of 24.9% |
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Adjusted EBITDA margin, excluding Medicare Cap, of 15.3%, a decrease of 375-basis points |
Roto-Rooter segment operating results:
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Revenue of $230 million, an increase of 3.9% |
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Net Income, excluding certain discrete items, of $49.3 million, an increase of 5.9% |
VITAS
VITAS net revenue was $297 million in the third quarter of 2022, which is a decline of 6.6%, when compared to the prior-year period. This revenue decline is comprised primarily of a 4.4% reduction in days-of-care and a geographically weighted average Medicare reimbursement rate
decrease of approximately 0.2%. Reimbursement rates in the quarter were negatively impacted by 200-basis points as a result of CMS implementing the 2% sequestration cut that was suspended at the start of the pandemic. Acuity mix shift had a net impact of reducing revenue approximately $5.3 million, or 1.7%, in the quarter when compared to the prior-year revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes negatively impacted revenue growth by 30-basis points.
In the third quarter of 2022, VITAS accrued $0.6 million in Medicare Cap billing limitations. This compares to a $0.1 million Medicare Cap billing limitation in the third quarter of 2021.
Of VITAS’ 30 Medicare provider numbers, 25 provider numbers have a Medicare Cap cushion of 10% or greater, two provider numbers have a cushion between 5% and 10%, one provider number has a cushion between 0% and 5%, and two provider numbers have an estimated fiscal 2022 Medicare Cap billing limitation liability.
Average revenue per patient per day in the third quarter of 2022 was $190.78 which, including acuity mix shift, is 193-basis points below the prior-year period. Reimbursement for routine home care and high acuity care averaged $168.20 and $990.67, respectively. During the quarter, high acuity days-of-care were 2.7% of total days of care, 41-basis points below the prior-year quarter.
The third quarter 2022 gross margin, excluding Medicare Cap, expenses related to VITAS’ 12-month hiring and retention program, and increased costs directly related to operating during the pandemic, was 22.5%. This is a 323-basis point margin decline when compared to the third quarter of 2021. Approximately 200-basis points of this decline is from Medicare reimplementing sequestration effective July 1, 2022. An additional 70-basis points of this margin decline is attributed to increased staffing and patient capacity from VITAS’ hiring and retention program.
Selling, general and administrative expense was $21.6 million in the third quarter of 2022 and compares to $21.4 million incurred in the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $45.4 million in the quarter, a decrease of 24.9%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 15.3%, which is 375-basis points below the prior-year period. This Adjusted EBITDA margin was also negatively impacted by 200-basis points for the reimplementation of sequestration and approximately 70-basis points due to increased staffing and patient capacity from VITAS’ hiring and retention program.
Roto-Rooter
Roto-Rooter generated quarterly revenue of $230 million in the third quarter of 2022, an increase of 3.9%, when compared to the prior-year quarter.
Roto-Rooter branch commercial revenue in the quarter totaled $55.9 million, an increase of 6.9%, over the prior year. This aggregate commercial revenue growth consisted of drain cleaning revenue increasing 2.9%, plumbing increasing 11.6%, excavation increasing 9.8%, and water restoration increasing 6.7%.
Roto-Rooter branch residential revenue in the quarter totaled $155 million, an increase of 2.5%, over the prior-year period. This aggregate residential revenue growth consisted of drain cleaning decreasing 2.9%, plumbing expanding 5.9%, excavation expanding 0.9%, and water restoration increasing 7.6%.
Roto-Rooter’s gross margin in the quarter was 53.4%, a 37-basis point increase when compared to the third quarter of 2021. Adjusted EBITDA in the third quarter of 2022 totaled $69.5 million, an increase of 5.7%. The Adjusted EBITDA margin in the quarter was 30.2%, which is a 50-basis point improvement when compared to the prior year.
Chemed Consolidated
As of September 30, 2022, Chemed had total cash and cash equivalents of $7.8 million and $101 million of current and long-term debt.
In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consists 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. On September 30, 2022, the Company had approximately $401 million of undrawn borrowing capacity under this credit agreement.
During the quarter, the Company repurchased 50,000 shares of Chemed stock for $23.9 million which equates to a cost per share of $477.68. As of September 30, 2022, there was approximately $101 million of remaining share repurchase authorization under its plan.
Guidance for 2022
Historically, Chemed earnings guidance has been developed using previous periods’ key operating metrics which are then modeled and projected out for future periods. Critical within these projections is the understanding of traditional patterned correlations among key operating metrics. This modeling exercise also takes into consideration anticipated industry and macro-economic issues outside of management’s control but are somewhat predictable in terms of timing and impact on our business segments’ operating results.
The COVID-19 pandemic, uncertainty regarding forward looking inflation, and a potential economic recession, has made accurate modeling and providing meaningful earnings guidance exceptionally challenging. Since the start of the pandemic, Chemed has been able to successfully navigate within this rapidly changing environment and produce operating results that we believe provide us with the ability to issue earnings guidance for the remainder of the 2022 calendar year. This guidance should be taken with the recognition that the above macro issues could materially impact the company’s ability to achieve this guidance.
Based upon the above discussion, VITAS 2022 revenue, prior to Medicare Cap, is estimated to decline 4.5% to 5.0% when compared to 2021. A portion of the estimated revenue decline, approximately $15 million or 118-basis points, is the result of the phase out of sequestration relief over the first half of 2022 compared to a full year of sequestration relief in 2021. ADC is estimated to decline 3.4%. Full year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 17.1% to 17.2%. We are currently estimating $8.1 million for Medicare Cap billing limitations in calendar year 2022.
Roto-Rooter is forecasted to achieve full-year 2022 revenue growth of 6.2% to 6.5%. Roto-Rooter’s adjusted EBITDA margin for 2022 is expected to be 29.5% to 29.7%.
Based upon the above, full-year 2022 earnings per diluted share, excluding non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation, retention program for licensed healthcare employees, and other discrete items, is estimated to be in the range of $19.60 to $19.70. This compares to our previous 2022 adjusted earnings per share guidance of $19.30 to $19.50. Current 2022 guidance assumes an effective corporate tax rate on adjusted earnings of 25.1% and a diluted share count of 15.12 million shares. Chemed’s 2021 reported adjusted earnings per diluted share was $19.33.
Conference Call
Chemed will host a conference call and webcast at 10 a.m., ET, on Tuesday November 1, 2022, 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/8ovxyhbq.
Participants may also register via teleconference at:
https://register.vevent.com/register/BId400f56fad7a4877af359aca78465824. 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 approximately 17,300 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 September 30, |
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Nine Months Ended September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Service revenues and sales |
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$ |
526,472 |
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$ |
538,667 |
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1,588,309 |
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$ |
1,598,283 |
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Cost of services provided and goods sold |
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346,934 |
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342,164 |
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1,020,307 |
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1,033,130 |
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Selling, general and administrative expenses (aa) |
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83,992 |
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89,217 |
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261,799 |
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274,654 |
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Depreciation |
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12,154 |
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11,844 |
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37,006 |
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37,171 |
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Amortization |
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2,520 |
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2,510 |
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7,558 |
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7,530 |
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Other operating expense/(income) |
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15 |
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63 |
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(530) |
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789 |
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Total costs and expenses |
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445,615 |
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445,798 |
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1,326,140 |
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1,353,274 |
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Income from operations |
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80,857 |
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92,869 |
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262,169 |
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245,009 |
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Interest expense |
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(1,271) |
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(583) |
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(2,983) |
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(1,343) |
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Other (expense)/income--net (bb) |
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(3,115) |
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3,134 |
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(11,907) |
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10,521 |
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Income before income taxes |
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76,471 |
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95,420 |
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247,279 |
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254,187 |
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Income taxes |
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(19,598) |
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(23,417) |
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(59,781) |
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(60,262) |
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Net income |
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$ |
56,873 |
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$ |
72,003 |
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$ |
187,498 |
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$ |
193,925 |
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Earnings Per Share |
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Net income |
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$ |
3.82 |
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$ |
4.62 |
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$ |
12.55 |
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$ |
12.27 |
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Average number of shares outstanding |
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14,888 |
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15,587 |
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14,935 |
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15,808 |
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Diluted Earnings Per Share |
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Net income |
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$ |
3.78 |
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$ |
4.55 |
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$ |
12.41 |
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$ |
12.06 |
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Average number of shares outstanding |
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15,042 |
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15,842 |
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15,114 |
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16,083 |
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(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands): |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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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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$ |
85,118 |
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$ |
84,197 |
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$ |
269,118 |
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$ |
259,376 |
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Market value adjustments related to deferred |
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compensation trusts |
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(3,176) |
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3,078 |
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(12,196) |
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9,770 |
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Long-term incentive compensation |
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2,050 |
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1,942 |
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4,877 |
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5,508 |
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Total SG&A expenses |
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$ |
83,992 |
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$ |
89,217 |
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$ |
261,799 |
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$ |
274,654 |
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(bb) Other (expense)/income--net comprises (in thousands): |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Market value adjustments related to deferred |
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compensation trusts |
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$ |
(3,176) |
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$ |
3,078 |
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$ |
(12,196) |
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$ |
9,770 |
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Interest income |
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62 |
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57 |
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288 |
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288 |
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Other |
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(1) |
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(1) |
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1 |
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463 |
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Total other (expense)/income--net |
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$ |
(3,115) |
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$ |
3,134 |
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$ |
(11,907) |
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$ |
10,521 |
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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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September 30, |
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2022 |
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2021 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
7,781 |
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$ |
28,743 |
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Accounts receivable less allowances |
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121,662 |
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118,193 |
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Inventories |
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10,469 |
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8,394 |
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Prepaid income taxes |
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27,526 |
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12,940 |
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Prepaid expenses |
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31,431 |
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32,294 |
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Total current assets |
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198,869 |
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200,564 |
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Investments of deferred compensation plans held in trust |
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90,097 |
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102,045 |
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Properties and equipment, at cost less accumulated depreciation |
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193,705 |
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190,781 |
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Lease right of use asset |
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131,430 |
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127,077 |
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Identifiable intangible assets less accumulated amortization |
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102,103 |
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110,606 |
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Goodwill |
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579,887 |
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578,610 |
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Other assets |
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60,104 |
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8,450 |
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Total Assets |
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$ |
1,356,195 |
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$ |
1,318,133 |
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Liabilities |
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Current liabilities |
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Accounts payable |
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$ |
77,170 |
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$ |
60,042 |
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Current portion of long-term debt |
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5,000 |
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- |
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Income taxes |
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- |
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180 |
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Accrued insurance |
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56,732 |
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52,645 |
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Accrued compensation |
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67,230 |
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97,256 |
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Accrued legal |
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653 |
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1,497 |
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Short-term lease liability |
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39,813 |
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35,148 |
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Other current liabilities |
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51,552 |
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39,318 |
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Total current liabilities |
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298,150 |
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286,086 |
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Deferred income taxes |
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33,590 |
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20,100 |
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Long-term debt |
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95,850 |
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- |
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Deferred compensation liabilities |
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89,873 |
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100,409 |
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Long-term lease liability |
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105,594 |
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104,198 |
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Other liabilities |
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11,722 |
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27,621 |
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Total Liabilities |
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634,779 |
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538,414 |
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Stockholders' Equity |
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Capital stock |
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36,670 |
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36,402 |
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Paid-in capital |
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1,100,161 |
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1,007,506 |
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Retained earnings |
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2,141,418 |
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1,901,245 |
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Treasury stock, at cost |
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(2,559,141) |
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(2,167,640) |
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Deferred compensation payable in Company stock |
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2,308 |
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2,206 |
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Total Stockholders' Equity |
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721,416 |
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779,719 |
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Total Liabilities and Stockholders' Equity |
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$ |
1,356,195 |
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$ |
1,318,133 |
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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 Nine Months Ended September 30, |
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2022 |
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2021 |
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Cash Flows from Operating Activities |
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Net income |
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$ |
187,498 |
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$ |
193,925 |
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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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44,564 |
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44,701 |
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Stock option expense |
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19,343 |
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16,342 |
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Provision/(benefit) for deferred income taxes |
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10,408 |
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(561) |
|
Noncash long-term incentive compensation |
|
|
4,343 |
|
|
5,344 |
|
Noncash directors' compensation |
|
|
1,170 |
|
|
1,173 |
|
Amortization of debt issuance costs |
|
|
247 |
|
|
229 |
|
Payments on previously accrued litigation settlements |
|
|
- |
|
|
(9,440) |
|
Changes in operating assets and liabilities, excluding |
|
|
|
|
|
|
|
amounts acquired in business combinations: |
|
|
|
|
|
|
|
Decrease in accounts receivable |
|
|
16,166 |
|
|
9,247 |
|
Increase in inventories |
|
|
(360) |
|
|
(1,299) |
|
Decrease/(increase) in prepaid expenses |
|
|
1,257 |
|
|
(6,117) |
|
(Increase)/decrease in accounts payable and |
|
|
|
|
|
|
|
other current liabilities |
|
|
(15,765) |
|
|
6,330 |
|
Change in current income taxes |
|
|
(10,277) |
|
|
(15,749) |
|
Net change in lease assets and liabilities |
|
|
313 |
|
|
15 |
|
Increase in other assets |
|
|
(42,424) |
|
|
(13,561) |
|
(Decrease)/increase in other liabilities |
|
|
(6,555) |
|
|
13,474 |
|
Other (uses)/sources |
|
|
(241) |
|
|
974 |
|
Net cash provided by operating activities |
|
|
209,687 |
|
|
245,027 |
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
Capital expenditures |
|
|
(39,066) |
|
|
(44,472) |
|
Proceeds from sale of fixed assets |
|
|
2,037 |
|
|
710 |
|
Business combinations, net of cash acquired |
|
|
(2,044) |
|
|
- |
|
Other (uses)/sources |
|
|
(841) |
|
|
50 |
|
Net cash used by investing activities |
|
|
(39,914) |
|
|
(43,712) |
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
Payments on revolving line of credit |
|
|
(299,400) |
|
|
(1,500) |
|
Proceeds from revolving line of credit |
|
|
116,500 |
|
|
1,500 |
|
Proceeds from other long-term debt |
|
|
100,000 |
|
|
- |
|
Payments on other long-term debt |
|
|
(1,250) |
|
|
- |
|
Purchases of treasury stock |
|
|
(101,539) |
|
|
(330,380) |
|
Proceeds from exercise of stock options |
|
|
17,128 |
|
|
17,918 |
|
Dividends paid |
|
|
(16,391) |
|
|
(16,457) |
|
Capital stock surrendered to pay taxes on stock-based compensation |
|
|
(12,497) |
|
|
(9,445) |
|
Change in cash overdrafts payable |
|
|
5,535 |
|
|
3,054 |
|
Debt issuance costs |
|
|
(1,584) |
|
|
- |
|
Other (uses)/sources |
|
|
(1,389) |
|
|
63 |
|
Net cash used by financing activities |
|
|
(194,887) |
|
|
(335,247) |
|
Decrease in Cash and Cash Equivalents |
|
|
(25,114) |
|
|
(133,932) |
|
Cash and cash equivalents at beginning of year |
|
|
32,895 |
|
|
162,675 |
|
Cash and cash equivalents at end of year |
|
$ |
7,781 |
|
$ |
28,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||
|
CONSOLIDATING STATEMENTS OF INCOME |
||||||||||||
|
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 |
||||||||||||
|
(in thousands)(unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
Chemed |
||||
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||
|
2022 (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales |
|
$ |
296,536 |
|
$ |
229,936 |
|
$ |
- |
|
$ |
526,472 |
|
Cost of services provided and goods sold |
|
|
239,755 |
|
|
107,179 |
|
|
- |
|
|
346,934 |
|
Selling, general and administrative expenses |
|
|
21,581 |
|
|
53,225 |
|
|
9,186 |
|
|
83,992 |
|
Depreciation |
|
|
5,281 |
|
|
6,855 |
|
|
18 |
|
|
12,154 |
|
Amortization |
|
|
26 |
|
|
2,494 |
|
|
- |
|
|
2,520 |
|
Other operating expense/(income) |
|
|
26 |
|
|
(11) |
|
|
- |
|
|
15 |
|
Total costs and expenses |
|
|
266,669 |
|
|
169,742 |
|
|
9,204 |
|
|
445,615 |
|
Income/(loss) from operations |
|
|
29,867 |
|
|
60,194 |
|
|
(9,204) |
|
|
80,857 |
|
Interest expense |
|
|
(44) |
|
|
(91) |
|
|
(1,136) |
|
|
(1,271) |
|
Intercompany interest income/(expense) |
|
|
4,842 |
|
|
2,371 |
|
|
(7,213) |
|
|
- |
|
Other income/(expense)—net |
|
|
26 |
|
|
36 |
|
|
(3,177) |
|
|
(3,115) |
|
Income/(loss) before income taxes |
|
|
34,691 |
|
|
62,510 |
|
|
(20,730) |
|
|
76,471 |
|
Income taxes |
|
|
(8,605) |
|
|
(14,924) |
|
|
3,931 |
|
|
(19,598) |
|
Net income/(loss) |
|
$ |
26,086 |
|
$ |
47,586 |
|
$ |
(16,799) |
|
$ |
56,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales |
|
$ |
317,411 |
|
$ |
221,256 |
|
$ |
- |
|
$ |
538,667 |
|
Cost of services provided and goods sold |
|
|
238,212 |
|
|
103,952 |
|
|
- |
|
|
342,164 |
|
Selling, general and administrative expenses |
|
|
21,372 |
|
|
51,914 |
|
|
15,931 |
|
|
89,217 |
|
Depreciation |
|
|
5,286 |
|
|
6,539 |
|
|
19 |
|
|
11,844 |
|
Amortization |
|
|
18 |
|
|
2,492 |
|
|
|
|
|
2,510 |
|
Other operating expense/(income) |
|
|
65 |
|
|
(3) |
|
|
1 |
|
|
63 |
|
Total costs and expenses |
|
|
264,953 |
|
|
164,894 |
|
|
15,951 |
|
|
445,798 |
|
Income/(loss) from operations |
|
|
52,458 |
|
|
56,362 |
|
|
(15,951) |
|
|
92,869 |
|
Interest expense |
|
|
(43) |
|
|
(285) |
|
|
(255) |
|
|
(583) |
|
Intercompany interest income/(expense) |
|
|
4,513 |
|
|
1,847 |
|
|
(6,360) |
|
|
- |
|
Other income—net |
|
|
22 |
|
|
34 |
|
|
3,078 |
|
|
3,134 |
|
Income/(loss) before income taxes |
|
|
56,950 |
|
|
57,958 |
|
|
(19,488) |
|
|
95,420 |
|
Income taxes |
|
|
(14,000) |
|
|
(13,404) |
|
|
3,987 |
|
|
(23,417) |
|
Net income/(loss) |
|
$ |
42,950 |
|
$ |
44,554 |
|
$ |
(15,501) |
|
$ |
72,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2022 AND 2021 |
|||||||||||||
|
(in thousands)(unaudited) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
Chemed |
|||||
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
|||||
|
2022 (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales |
|
$ |
893,506 |
|
$ |
694,803 |
|
$ |
- |
|
$ |
1,588,309 | |
|
Cost of services provided and goods sold |
|
|
694,528 |
|
|
325,779 |
|
|
- |
|
|
1,020,307 | |
|
Selling, general and administrative expenses |
|
|
67,181 |
|
|
165,162 |
|
|
29,456 |
|
|
261,799 | |
|
Depreciation |
|
|
16,894 |
|
|
20,058 |
|
|
54 |
|
|
37,006 | |
|
Amortization |
|
|
76 |
|
|
7,482 |
|
|
- |
|
|
7,558 | |
|
Other operating (income)/expense |
|
|
(929) |
|
|
399 |
|
|
- |
|
|
(530) | |
|
Total costs and expenses |
|
|
777,750 |
|
|
518,880 |
|
|
29,510 |
|
|
1,326,140 | |
|
Income/(loss) from operations |
|
|
115,756 |
|
|
175,923 |
|
|
(29,510) |
|
|
262,169 | |
|
Interest expense |
|
|
(142) |
|
|
(319) |
|
|
(2,522) |
|
|
(2,983) | |
|
Intercompany interest income/(expense) |
|
|
14,181 |
|
|
6,751 |
|
|
(20,932) |
|
|
- |
|
|
Other income/(expense)—net |
|
|
183 |
|
|
107 |
|
|
(12,197) |
|
|
(11,907) | |
|
Income/(loss) before income taxes |
|
|
129,978 |
|
|
182,462 |
|
|
(65,161) |
|
|
247,279 | |
|
Income taxes |
|
|
(32,199) |
|
|
(43,867) |
|
|
16,285 |
|
|
(59,781) | |
|
Net income/(loss) |
|
$ |
97,779 |
|
$ |
138,595 |
|
$ |
(48,876) |
|
$ |
187,498 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales |
|
$ |
945,135 |
|
$ |
653,148 |
|
$ |
- |
|
$ |
1,598,283 | |
|
Cost of services provided and goods sold |
|
|
724,398 |
|
|
308,732 |
|
|
- |
|
|
1,033,130 | |
|
Selling, general and administrative expenses |
|
|
66,094 |
|
|
158,791 |
|
|
49,769 |
|
|
274,654 | |
|
Depreciation |
|
|
17,749 |
|
|
19,359 |
|
|
63 |
|
|
37,171 | |
|
Amortization |
|
|
53 |
|
|
7,477 |
|
|
- |
|
|
7,530 | |
|
Other operating expense |
|
|
655 |
|
|
133 |
|
|
1 |
|
|
789 | |
|
Total costs and expenses |
|
|
808,949 |
|
|
494,492 |
|
|
49,833 |
|
|
1,353,274 | |
|
Income/(loss) from operations |
|
|
136,186 |
|
|
158,656 |
|
|
(49,833) |
|
|
245,009 | |
|
Interest expense |
|
|
(129) |
|
|
(464) |
|
|
(750) |
|
|
(1,343) | |
|
Intercompany interest income/(expense) |
|
|
13,524 |
|
|
5,116 |
|
|
(18,640) |
|
|
- |
|
|
Other income—net |
|
|
654 |
|
|
97 |
|
|
9,770 |
|
|
10,521 | |
|
Income/(loss) before income taxes |
|
|
150,235 |
|
|
163,405 |
|
|
(59,453) |
|
|
254,187 | |
|
Income taxes |
|
|
(36,805) |
|
|
(38,901) |
|
|
15,444 |
|
|
(60,262) | |
|
Net income/(loss) |
|
$ |
113,430 |
|
$ |
124,504 |
|
$ |
(44,009) |
|
$ |
193,925 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2022 AND 2021 |
||||||||||||
|
(in thousands)(unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
Chemed |
||||
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
$ |
26,086 |
|
$ |
47,586 |
|
$ |
(16,799) |
|
$ |
56,873 |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
44 |
|
|
91 |
|
|
1,136 |
|
|
1,271 |
|
Income taxes |
|
|
8,605 |
|
|
14,924 |
|
|
(3,931) |
|
|
19,598 |
|
Depreciation |
|
|
5,281 |
|
|
6,855 |
|
|
18 |
|
|
12,154 |
|
Amortization |
|
|
26 |
|
|
2,494 |
|
|
- |
|
|
2,520 |
|
EBITDA |
|
|
40,042 |
|
|
71,950 |
|
|
(19,576) |
|
|
92,416 |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income) |
|
|
(4,842) |
|
|
(2,371) |
|
|
7,213 |
|
|
- |
|
Interest income |
|
|
(27) |
|
|
(35) |
|
|
- |
|
|
(62) |
|
Licensed healthcare retention bonus |
|
|
9,559 |
|
|
- |
|
|
- |
|
|
9,559 |
|
Stock option expense |
|
|
- |
|
|
- |
|
|
4,676 |
|
|
4,676 |
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
2,050 |
|
|
2,050 |
|
Direct costs related to COVID-19 |
|
|
- |
|
|
- |
|
|
89 |
|
|
89 |
|
Adjusted EBITDA |
|
$ |
44,732 |
|
$ |
69,544 |
|
$ |
(5,548) |
|
$ |
108,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
$ |
42,950 |
|
$ |
44,554 |
|
$ |
(15,501) |
|
$ |
72,003 |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
43 |
|
|
285 |
|
|
255 |
|
|
583 |
|
Income taxes |
|
|
14,000 |
|
|
13,404 |
|
|
(3,987) |
|
|
23,417 |
|
Depreciation |
|
|
5,286 |
|
|
6,539 |
|
|
19 |
|
|
11,844 |
|
Amortization |
|
|
18 |
|
|
2,492 |
|
|
- |
|
|
2,510 |
|
EBITDA |
|
|
62,297 |
|
|
67,274 |
|
|
(19,214) |
|
|
110,357 |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income) |
|
|
(4,513) |
|
|
(1,847) |
|
|
6,360 |
|
|
- |
|
Interest income |
|
|
(24) |
|
|
(34) |
|
|
- |
|
|
(58) |
|
Stock option expense |
|
|
- |
|
|
- |
|
|
3,998 |
|
|
3,998 |
|
Direct costs related to COVID-19 |
|
|
2,501 |
|
|
415 |
|
|
- |
|
|
2,916 |
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
1,942 |
|
|
1,942 |
|
Other |
|
|
- |
|
|
- |
|
|
218 |
|
|
218 |
|
Adjusted EBITDA |
|
$ |
60,261 |
|
$ |
65,808 |
|
$ |
(6,696) |
|
$ |
119,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2022 AND 2021 |
|||||||||||||
|
(in thousands)(unaudited) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Chemed |
||
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
|||||
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
$ |
97,779 |
|
$ |
138,595 |
|
$ |
(48,876) |
|
$ |
187,498 | |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
142 |
|
|
319 |
|
|
2,522 |
|
|
2,983 | |
|
Income taxes |
|
|
32,199 |
|
|
43,867 |
|
|
(16,285) |
|
|
59,781 | |
|
Depreciation |
|
|
16,894 |
|
|
20,058 |
|
|
54 |
|
|
37,006 | |
|
Amortization |
|
|
76 |
|
|
7,482 |
|
|
- |
|
|
7,558 | |
|
EBITDA |
|
|
147,090 |
|
|
210,321 |
|
|
(62,585) |
|
|
294,826 | |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income) |
|
|
(14,181) |
|
|
(6,751) |
|
|
20,932 |
|
|
- |
|
|
Interest income |
|
|
(181) |
|
|
(107) |
|
|
- |
|
|
(288) | |
|
Stock option expense |
|
|
- |
|
|
- |
|
|
19,343 |
|
|
19,343 | |
|
Licensed healthcare retention bonus |
|
|
9,559 |
|
|
- |
|
|
- |
|
|
9,559 | |
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
4,877 |
|
|
4,877 | |
|
Direct costs related to COVID-19 |
|
|
310 |
|
|
988 |
|
|
89 |
|
|
1,387 | |
|
Medicare cap sequestration adjustment |
|
|
138 |
|
|
- |
|
|
- |
|
|
138 | |
|
Adjusted EBITDA |
|
$ |
142,735 |
|
$ |
204,451 |
|
$ |
(17,344) |
|
$ |
329,842 | |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
$ |
113,430 |
|
$ |
124,504 |
|
$ |
(44,009) |
|
$ |
193,925 | |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
129 |
|
|
464 |
|
|
750 |
|
|
1,343 | |
|
Income taxes |
|
|
36,805 |
|
|
38,901 |
|
|
(15,444) |
|
|
60,262 | |
|
Depreciation |
|
|
17,749 |
|
|
19,359 |
|
|
63 |
|
|
37,171 | |
|
Amortization |
|
|
53 |
|
|
7,477 |
|
|
- |
|
|
7,530 | |
|
EBITDA |
|
|
168,166 |
|
|
190,705 |
|
|
(58,640) |
|
|
300,231 | |
|
Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income) |
|
|
(13,524) |
|
|
(5,116) |
|
|
18,640 |
|
|
- |
|
|
Interest income |
|
|
(191) |
|
|
(97) |
|
|
- |
|
|
(288) | |
|
Direct costs related to COVID-19 |
|
|
15,338 |
|
|
1,551 |
|
|
38 |
|
|
16,927 | |
|
Stock option expense |
|
|
- |
|
|
- |
|
|
16,342 |
|
|
16,342 | |
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
5,508 |
|
|
5,508 | |
|
Litigation settlements |
|
|
- |
|
|
(98) |
|
|
- |
|
|
(98) | |
|
Other |
|
|
- |
|
|
- |
|
|
218 |
|
|
218 | |
|
Adjusted EBITDA |
|
$ |
169,789 |
|
$ |
186,945 |
|
$ |
(17,894) |
|
$ |
338,840 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
||||||||
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
Net income as reported |
|
$ |
56,873 |
|
$ |
72,003 |
|
$ |
187,498 |
|
$ |
193,925 |
|
Add/(deduct) pre-tax cost of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock option expense |
|
|
4,676 |
|
|
3,998 |
|
|
19,343 |
|
|
16,342 |
|
Licensed healthcare worker retention bonus |
|
|
9,559 |
|
|
- |
|
|
9,559 |
|
|
- |
|
Amortization of reacquired franchise agreements |
|
|
2,352 |
|
|
2,352 |
|
|
7,056 |
|
|
7,056 |
|
Long-term incentive compensation |
|
|
2,050 |
|
|
1,942 |
|
|
4,877 |
|
|
5,508 |
|
Direct costs related to COVID-19 |
|
|
89 |
|
|
2,916 |
|
|
1,387 |
|
|
16,927 |
|
Medicare cap sequestration adjustment |
|
|
- |
|
|
- |
|
|
138 |
|
|
- |
|
Facility relocation expenses |
|
|
- |
|
|
- |
|
|
- |
|
|
1,855 |
|
Litigation settlements |
|
|
- |
|
|
- |
|
|
- |
|
|
(98) |
|
Other |
|
|
- |
|
|
218 |
|
|
- |
|
|
218 |
|
Add/(deduct) tax impacts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact of the above pre-tax adjustments (1) |
|
|
(3,902) |
|
|
(2,146) |
|
|
(8,351) |
|
|
(9,874) |
|
Excess tax benefits on stock compensation |
|
|
(450) |
|
|
(1,199) |
|
|
(4,390) |
|
|
(5,305) |
|
Adjusted net income |
|
$ |
71,247 |
|
$ |
80,084 |
|
$ |
217,117 |
|
$ |
226,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share As Reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3.78 |
|
$ |
4.55 |
|
$ |
12.41 |
|
$ |
12.06 |
|
Average number of shares outstanding |
|
|
15,042 |
|
|
15,842 |
|
|
15,114 |
|
|
16,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
4.74 |
|
$ |
5.06 |
|
$ |
14.37 |
|
$ |
14.09 |
|
Average number of shares outstanding |
|
|
15,042 |
|
|
15,842 |
|
|
15,114 |
|
|
16,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
||||
|
Net revenue ($000) (c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare |
$ |
256,253 |
|
$ |
268,137 |
|
|
$ |
771,520 |
|
$ |
796,817 |
|
|
Inpatient |
|
24,526 |
|
|
29,368 |
|
|
|
75,714 |
|
|
85,895 |
|
|
Continuous care |
|
18,600 |
|
|
22,027 |
|
|
|
57,717 |
|
|
73,658 |
|
|
Other |
|
3,240 |
|
|
3,225 |
|
|
|
9,461 |
|
|
9,241 |
|
|
Subtotal |
$ |
302,619 |
|
$ |
322,757 |
|
|
$ |
914,412 |
|
$ |
965,611 |
|
|
Room and board, net |
|
(2,513) |
|
|
(2,130) |
|
|
|
(6,796) |
|
|
(7,451) |
|
|
Contractual allowances |
|
(2,952) |
|
|
(3,119) |
|
|
|
(8,992) |
|
|
(9,428) |
|
|
Medicare cap allowance |
|
(618) |
|
|
(97) |
|
|
|
(5,118) |
|
|
(3,597) |
|
|
Net Revenue |
$ |
296,536 |
|
$ |
317,411 |
|
|
$ |
893,506 |
|
$ |
945,135 |
|
|
Net revenue as a percent of total before Medicare cap allowance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare |
|
84.7 |
% |
|
83.1 |
% |
|
|
84.4 |
% |
|
82.5 |
% |
|
Inpatient |
|
8.1 |
|
|
9.1 |
|
|
|
8.3 |
|
|
8.9 |
|
|
Continuous care |
|
6.1 |
|
|
6.8 |
|
|
|
6.3 |
|
|
7.6 |
|
|
Other |
|
1.1 |
|
|
1.0 |
|
|
|
1.0 |
|
|
1.0 |
|
|
Subtotal |
|
100.0 |
|
|
100.0 |
|
|
|
100.0 |
|
|
100.0 |
|
|
Room and board, net |
|
(0.8) |
|
|
(0.7) |
|
|
|
(0.7) |
|
|
(0.8) |
|
|
Contractual allowances |
|
(1.0) |
|
|
(1.0) |
|
|
|
(1.0) |
|
|
(1.0) |
|
|
Medicare cap allowance |
|
(0.2) |
|
|
- |
|
|
|
(0.6) |
|
|
(0.3) |
|
|
Net Revenue |
|
98.0 |
% |
|
98.3 |
% |
|
|
97.7 |
% |
|
97.9 |
% |
|
Days of care |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare |
|
1,271,678 |
|
|
1,342,841 |
|
|
|
3,796,954 |
|
|
4,008,215 |
|
|
Nursing home |
|
264,407 |
|
|
258,700 |
|
|
|
771,921 |
|
|
735,906 |
|
|
Respite |
|
6,635 |
|
|
5,331 |
|
|
|
18,098 |
|
|
15,509 |
|
|
Subtotal routine homecare and respite |
|
1,542,720 |
|
|
1,606,872 |
|
|
|
4,586,973 |
|
|
4,759,630 |
|
|
Inpatient |
|
23,435 |
|
|
27,962 |
|
|
|
71,177 |
|
|
82,129 |
|
|
Continuous care |
|
20,097 |
|
|
24,299 |
|
|
|
61,981 |
|
|
79,385 |
|
|
Total |
|
1,586,252 |
|
|
1,659,133 |
|
|
|
4,720,131 |
|
|
4,921,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of days in relevant time period |
|
92 |
|
|
92 |
|
|
|
273 |
|
|
273 |
|
|
Average daily census ("ADC") (days) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare |
|
13,823 |
|
|
14,596 |
|
|
|
13,908 |
|
|
14,682 |
|
|
Nursing home |
|
2,874 |
|
|
2,812 |
|
|
|
2,828 |
|
|
2,696 |
|
|
Respite |
|
72 |
|
|
58 |
|
|
|
66 |
|
|
57 |
|
|
Subtotal routine homecare and respite |
|
16,769 |
|
|
17,466 |
|
|
|
16,802 |
|
|
17,435 |
|
|
Inpatient |
|
255 |
|
|
304 |
|
|
|
261 |
|
|
301 |
|
|
Continuous care |
|
218 |
|
|
264 |
|
|
|
227 |
|
|
291 |
|
|
Total |
|
17,242 |
|
|
18,034 |
|
|
|
17,290 |
|
|
18,027 |
|
|
Total Admissions |
|
14,680 |
|
|
17,598 |
|
|
|
45,945 |
|
|
52,573 |
|
|
Total Discharges |
|
14,603 |
|
|
17,686 |
|
|
|
46,139 |
|
|
52,747 |
|
|
Average length of stay (days) |
|
106.2 |
|
|
96.0 |
|
|
|
104.9 |
|
|
95.0 |
|
|
Median length of stay (days) |
|
17.0 |
|
|
13.0 |
|
|
|
16.0 |
|
|
13.0 |
|
|
ADC by major diagnosis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerebro |
|
39.3 |
% |
|
36.4 |
% |
|
|
38.5 |
% |
|
36.7 |
% |
|
Neurological |
|
22.0 |
|
|
22.7 |
|
|
|
22.3 |
|
|
22.5 |
|
|
Cancer |
|
10.7 |
|
|
12.0 |
|
|
|
11.0 |
|
|
12.1 |
|
|
Cardio |
|
15.4 |
|
|
15.5 |
|
|
|
15.6 |
|
|
15.5 |
|
|
Respiratory |
|
7.2 |
|
|
7.5 |
|
|
|
7.3 |
|
|
7.5 |
|
|
Other |
|
5.4 |
|
|
5.9 |
|
|
|
5.3 |
|
|
5.7 |
|
|
Total |
|
100.0 |
% |
|
100.0 |
% |
|
|
100.0 |
% |
|
100.0 |
% |
|
Admissions by major diagnosis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerebro |
|
25.9 |
% |
|
20.3 |
% |
|
|
24.2 |
% |
|
21.1 |
% |
|
Neurological |
|
12.4 |
|
|
12.1 |
|
|
|
12.7 |
|
|
12.2 |
|
|
Cancer |
|
26.6 |
|
|
27.0 |
|
|
|
26.2 |
|
|
26.9 |
|
|
Cardio |
|
14.9 |
|
|
14.1 |
|
|
|
14.8 |
|
|
14.4 |
|
|
Respiratory |
|
9.5 |
|
|
11.3 |
|
|
|
10.3 |
|
|
10.9 |
|
|
Other |
|
10.7 |
|
|
15.2 |
|
|
|
11.8 |
|
|
14.5 |
|
|
Total |
|
100.0 |
% |
|
100.0 |
% |
|
|
100.0 |
% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated uncollectible accounts as a percent of revenues |
|
1.0 |
% |
|
1.0 |
% |
|
|
1.0 |
% |
|
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable -- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days of revenue outstanding-excluding unapplied Medicare payments |
33.8 |
|
|
33.7 |
|
|
|
n.a. |
|
|
n.a. |
|
|
|
Days of revenue outstanding-including unapplied Medicare payments |
24.9 |
|
|
23.4 |
|
|
|
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, 2022 AND 2021 |
|||||||||||||
|
(unaudited) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Included in the results of operations for 2022 are the following significant credits/(charges) which may not be indicative of ongoing operations |
||||||||||||
|
|
(in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2022 |
||||||||||
|
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licensed healthcare worker retention bonus |
|
$ |
(9,559) |
|
$ |
- |
|
$ |
- |
|
$ |
(9,559) |
|
|
Stock option expense |
|
|
- |
|
|
- |
|
|
(4,676) |
|
|
(4,676) |
|
|
Amortization of reacquired franchise agreements |
|
|
- |
|
|
(2,352) |
|
|
- |
|
|
(2,352) |
|
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
(2,050) |
|
|
(2,050) |
|
|
Direct costs related to COVID-19 |
|
|
- |
|
|
- |
|
|
(89) |
|
|
(89) |
|
|
Pretax impact on earnings |
|
|
(9,559) |
|
|
(2,352) |
|
|
(6,815) |
|
|
(18,726) |
|
|
Excess tax benefits on stock compensation |
|
|
- |
|
|
- |
|
|
450 |
|
|
450 |
|
|
Income tax benefit on the above |
|
|
2,428 |
|
|
623 |
|
|
851 |
|
|
3,902 |
|
|
After-tax impact on earnings |
|
$ |
(7,131) |
|
$ |
(1,729) |
|
$ |
(5,514) |
|
$ |
(14,374) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2022 |
||||||||||
|
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock option expense |
|
$ |
- |
|
$ |
- |
|
$ |
(19,343) |
|
$ |
(19,343) |
|
|
Licensed healthcare worker retention bonus |
|
|
(9,559) |
|
|
- |
|
|
- |
|
|
(9,559) |
|
|
Amortization of reacquired franchise agreements |
|
|
- |
|
|
(7,056) |
|
|
- |
|
|
(7,056) |
|
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
(4,877) |
|
|
(4,877) |
|
|
Direct costs related to COVID-19 |
|
|
(310) |
|
|
(988) |
|
|
(89) |
|
|
(1,387) |
|
|
Medicare cap sequestration adjustment |
|
|
(138) |
|
|
- |
|
|
- |
|
|
(138) |
|
|
Pretax impact on earnings |
|
|
(10,007) |
|
|
(8,044) |
|
|
(24,309) |
|
|
(42,360) |
|
|
Excess tax benefits on stock compensation |
|
|
- |
|
|
- |
|
|
4,390 |
|
|
4,390 |
|
|
Income tax benefit on the above |
|
|
2,542 |
|
|
2,131 |
|
|
3,678 |
|
|
8,351 |
|
|
After-tax impact on earnings |
|
$ |
(7,465) |
|
$ |
(5,913) |
|
$ |
(16,241) |
|
$ |
(29,619) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
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 September 30, 2021 |
||||||||||
|
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock option expense |
|
$ |
- |
|
$ |
- |
|
$ |
(3,998) |
|
$ |
(3,998) |
|
|
Direct costs related to COVID-19 |
|
|
(2,501) |
|
|
(415) |
|
|
- |
|
|
(2,916) |
|
|
Amortization of reacquired franchise agreements |
|
|
- |
|
|
(2,352) |
|
|
- |
|
|
(2,352) |
|
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
(1,942) |
|
|
(1,942) |
|
|
Other |
|
|
- |
|
|
- |
|
|
(218) |
|
|
(218) |
|
|
Pretax impact on earnings |
|
|
(2,501) |
|
|
(2,767) |
|
|
(6,158) |
|
|
(11,426) |
|
|
Excess tax benefits on stock compensation |
|
|
- |
|
|
- |
|
|
1,199 |
|
|
1,199 |
|
|
Income tax benefit on the above |
|
|
635 |
|
|
733 |
|
|
778 |
|
|
2,146 |
|
|
After-tax impact on earnings |
|
$ |
(1,866) |
|
$ |
(2,034) |
|
$ |
(4,181) |
|
$ |
(8,081) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
||||||||||
|
|
|
|
VITAS |
|
Roto-Rooter |
|
Corporate |
|
Consolidated |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct costs related to COVID-19 |
|
$ |
(15,338) |
|
$ |
(1,551) |
|
$ |
(38) |
|
$ |
(16,927) |
|
|
Stock option expense |
|
|
- |
|
|
- |
|
|
(16,342) |
|
|
(16,342) |
|
|
Amortization of reacquired franchise agreements |
|
|
- |
|
|
(7,056) |
|
|
- |
|
|
(7,056) |
|
|
Long-term incentive compensation |
|
|
- |
|
|
- |
|
|
(5,508) |
|
|
(5,508) |
|
|
Facility relocation expenses |
|
|
(1,855) |
|
|
- |
|
|
- |
|
|
(1,855) |
|
|
Litigation settlements |
|
|
- |
|
|
98 |
|
|
- |
|
|
98 |
|
|
Other |
|
|
- |
|
|
- |
|
|
(218) |
|
|
(218) |
|
|
Pretax impact on earnings |
|
|
(17,193) |
|
|
(8,509) |
|
|
(22,106) |
|
|
(47,808) |
|
|
Excess tax benefits on stock compensation |
|
|
- |
|
|
- |
|
|
5,305 |
|
|
5,305 |
|
|
Income tax benefit on the above |
|
|
4,367 |
|
|
2,255 |
|
|
3,252 |
|
|
9,874 |
|
|
After-tax impact on earnings |
|
$ |
(12,826) |
|
$ |
(6,254) |
|
$ |
(13,549) |
|
$ |
(32,629) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) |
VITAS has 9 large (greater than 450 ADC), 16 medium (greater than 200 but less than 450 ADC) and 25 small (less than 200 ADC) hospice programs. Of VITAS’ 30 Medicare provider numbers, for the current cap year, 25 provider numbers have a Medicare cap cushion of greater than 10%, two provider numbers have Medicare cap cushion between 5% and 10%, one provider number has a Medicare cap cushion between 1% and 5% and two provider numbers have a Medicare cap liability. |
||||||||||||