CHE 8-K

Chemed Corp (CHE)

8-K 2023-04-26 For: 2023-03-31

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Added on April 08, 2026

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Delaware	1-8351	31-0791746
(State or other ‎jurisdiction of ‎incorporation)	(Commission File Number)	(I.R.S. Employer ‎Identification ‎Number)


d)	Exhibit

	(99) Registrant’s press release dated April 26, 2023
	104 The cover page from this Current Report on Form 8-K formatted in Inline XBRL


	CHEMED CORPORATION

Dated: April 26, 2023	By:	/s/ Michael D. Witzeman
		Michael D. Witzeman
		Vice President and Controller


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

	Three Months Ended March 31,
	2023		2022
Service revenues and sales	$	560,157	$	530,549
Cost of services provided and goods sold		370,705		336,552
Selling, general and administrative expenses (aa)		100,095		89,954
Depreciation		12,286		12,138
Amortization		2,513		2,518
Other operating expense		1,739		13
Total costs and expenses		487,338		441,175
Income from operations		72,819		89,374
Interest expense		(1,551)		(810)
Other expense--net (bb)		(103)		(3,862)
Income before income taxes		71,165		84,702
Income taxes		(17,044)		(20,533)
Net income	$	54,121	$	64,169
Earnings Per Share
Net income	$	3.62	$	4.28
Average number of shares outstanding		14,966		14,986
Diluted Earnings Per Share
Net income	$	3.58	$	4.22
Average number of shares outstanding		15,110		15,192

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

	Three Months Ended March 31,
	2023		2022
SG&A expenses before long-term incentive compensation
and the impact of market value adjustments related to
deferred compensation plans	$	97,902	$	92,578
Long-term incentive compensation		2,514		1,310
Market value adjustments related to deferred
compensation trusts		(321)		(3,934)
Total SG&A expenses	$	100,095	$	89,954

(bb) Other expense--net comprises (in thousands):
	Three Months Ended March 31,
	2023		2022
Market value adjustments related to deferred
compensation trusts	$	(321)	$	(3,934)
Interest income		150		73
Other		68		(1)
Total other expense--net	$	(103)	$	(3,862)


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

	March 31,
	2023		2022
Assets
Current assets
Cash and cash equivalents	$	58,054	$	18,160
Accounts receivable less allowances		153,816		117,319
Inventories		10,663		10,540
Prepaid income taxes		10,633		9,143
Prepaid expenses		29,055		29,589
Total current assets		262,221		184,751
Investments of deferred compensation plans held in trust		97,436		100,139
Properties and equipment, at cost less accumulated depreciation		204,164		192,405
Lease right of use asset		131,219		134,169
Identifiable intangible assets less accumulated amortization		97,348		106,367
Goodwill		581,286		579,704
Other assets		57,511		8,222
Total Assets	$	1,431,185	$	1,305,757
Liabilities
Current liabilities
Accounts payable	$	40,279	$	64,710
Current portion of long-term debt		5,000		-
Income taxes		11,223		15,390
Accrued insurance		63,150		58,952
Accrued compensation		50,152		62,205
Accrued legal		6,061		871
Short-term lease liability		38,291		38,856
Other current liabilities		69,304		38,667
Total current liabilities		283,460		279,651
Deferred income taxes		35,418		19,136
Long-term debt		16,250		120,000
Deferred compensation liabilities		97,285		100,812
Long-term lease liability		106,212		109,121
Other liabilities		12,507		10,332
Total Liabilities		551,132		639,052
Stockholders' Equity
Capital stock		36,884		36,579
Paid-in capital		1,186,119		1,064,448
Retained earnings		2,246,354		2,029,158
Treasury stock, at cost		(2,591,588)		(2,465,716)
Deferred compensation payable in Company stock		2,284		2,236
Total Stockholders' Equity		880,053		666,705
Total Liabilities and Stockholders' Equity	$	1,431,185	$	1,305,757


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

	Three Months Ended March 31,
	2023		2022
Cash Flows from Operating Activities
Net income	$	54,121	$	64,169
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		14,799		14,656
Stock option expense		8,482		7,451
Benefit for deferred income taxes		(3,195)		(4,047)
Noncash long-term incentive compensation		2,024		1,185
Amortization of debt issuance costs		95		76
Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
(Increase)/decrease in accounts receivable		(14,318)		19,610
Increase in inventories		(391)		(431)
Decrease in prepaid expenses		1,236		3,099
Decrease in accounts payable and
other current liabilities		(24,109)		(30,332)
Change in current income taxes		19,118		23,530
Net change in lease assets and liabilities		(632)		743
Increase in other assets		(2,173)		(1,562)
Increase in other liabilities		5,313		2,958
Other sources/(uses)		122		(15)
Net cash provided by operating activities		60,492		101,090
Cash Flows from Investing Activities
Capital expenditures		(17,020)		(12,649)
Business combinations, net of cash acquired		-		(1,650)
Proceeds from sale of fixed assets		146		485
Other uses		(139)		(134)
Net cash used by investing activities		(17,013)		(13,948)
Cash Flows from Financing Activities
Payments on long-term debt		(76,250)		-
Proceeds from exercise of stock options		25,680		7,692
Dividends paid		(5,685)		(5,322)
Capital stock surrendered to pay taxes on stock-based compensation		(3,166)		(4,893)
Payments on revolving line of credit		-		(86,500)
Proceeds from revolving line of credit		-		21,500
Purchases of treasury stock		-		(27,794)
Change in cash overdrafts payable		-		(7,051)
Other (uses)/sources		(130)		491
Net cash used by financing activities		(59,551)		(101,877)
Decrease in Cash and Cash Equivalents		(16,072)		(14,735)
Cash and cash equivalents at beginning of year		74,126		32,895
Cash and cash equivalents at end of year	$	58,054	$	18,160


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(in thousands)(unaudited)
							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
2023 (a)
Service revenues and sales	$	310,478	$	249,679	$	-	$	560,157
Cost of services provided and goods sold		253,654		117,051		-		370,705
Selling, general and administrative expenses		23,336		60,813		15,946		100,095
Depreciation		4,958		7,312		16		12,286
Amortization		26		2,487		-		2,513
Other operating expense		12		1,727		-		1,739
Total costs and expenses		281,986		189,390		15,962		487,338
Income/(loss) from operations		28,492		60,289		(15,962)		72,819
Interest expense		(50)		(133)		(1,368)		(1,551)
Intercompany interest income/(expense)		4,648		2,743		(7,391)		-
Other income/(expense)—net		189		29		(321)		(103)
Income/(loss) before income taxes		33,279		62,928		(25,042)		71,165
Income taxes		(8,515)		(15,275)		6,746		(17,044)
Net income/(loss)	$	24,764	$	47,653	$	(18,296)	$	54,121

2022 (b)
Service revenues and sales	$	299,189	$	231,360	$	-	$	530,549
Cost of services provided and goods sold		227,240		109,312		-		336,552
Selling, general and administrative expenses		22,453		56,954		10,547		89,954
Depreciation		5,551		6,569		18		12,138
Amortization		24		2,494		-		2,518
Other operating expense/(income)		(148)		161		-		13
Total costs and expenses		255,120		175,490		10,565		441,175
Income/(loss) from operations		44,069		55,870		(10,565)		89,374
Interest expense		(52)		(115)		(643)		(810)
Intercompany interest income/(expense)		4,656		2,176		(6,832)		-
Other income/(expense)—net		37		35		(3,934)		(3,862)
Income/(loss) before income taxes		48,710		57,966		(21,974)		84,702
Income taxes		(12,229)		(14,029)		5,725		(20,533)
Net income/(loss)	$	36,481	$	43,937	$	(16,249)	$	64,169


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


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARIES OF EBITDA
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(in thousands)(unaudited)
							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
2023
Net income/(loss)	$	24,764	$	47,653	$	(18,296)	$	54,121
Add/(deduct):
Interest expense		50		133		1,368		1,551
Income taxes		8,515		15,275		(6,746)		17,044
Depreciation		4,958		7,312		16		12,286
Amortization		26		2,487		-		2,513
EBITDA		38,313		72,860		(23,658)		87,515
Add/(deduct):
Intercompany interest expense/(income)		(4,648)		(2,743)		7,391		-
Interest (income)/expense		(121)		(29)		-		(150)
Licensed healthcare retention bonus		10,916		-		-		10,916
Stock option expense		-		-		8,482		8,482
Long-term incentive compensation		-		-		2,514		2,514
Litigation settlements		-		1,756		-		1,756
Adjusted EBITDA	$	44,460	$	71,844	$	(5,271)	$	111,033

2022
Net income/(loss)	$	36,481	$	43,937	$	(16,249)	$	64,169
Add/(deduct):
Interest expense		52		115		643		810
Income taxes		12,229		14,029		(5,725)		20,533
Depreciation		5,551		6,569		18		12,138
Amortization		24		2,494		-		2,518
EBITDA		54,337		67,144		(21,313)		100,168
Add/(deduct):
Intercompany interest expense/(income)		(4,656)		(2,176)		6,832		-
Interest income		(37)		(36)		-		(73)
Stock option expense		-		-		7,451		7,451
Direct costs related to COVID-19		391		961		-		1,352
Long-term incentive compensation		-		-		1,310		1,310
Adjusted EBITDA	$	50,035	$	65,893	$	(5,720)	$	110,208

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


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)


	Three Months Ended March 31,
	2023		2022
Net income as reported	$	54,121	$	64,169
Add/(deduct) pre-tax cost of:
Licensed healthcare worker retention bonus		10,916		-
Stock option expense		8,482		7,451
Long-term incentive compensation		2,514		1,310
Amortization of reacquired franchise agreements		2,352		2,352
Litigation settlements		1,756		-
Direct costs related to COVID-19		-		1,352
Add/(deduct) tax impacts:
Tax impact of the above pre-tax adjustments (1)		(5,624)		(2,413)
Excess tax benefits on stock compensation		(1,650)		(1,441)
Adjusted net income	$	72,867	$	72,780

Diluted Earnings Per Share As Reported
Net income	$	3.58	$	4.22
Average number of shares outstanding		15,110		15,192

Adjusted Diluted Earnings Per Share
Adjusted net income	$	4.82	$	4.79
Average number of shares outstanding		15,110		15,192

(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated.

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


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)

	Three Months Ended March 31,
OPERATING STATISTICS	2023			2022
Net revenue ($000) (c)
Homecare	$	267,050		$	257,636
Inpatient		29,093			26,570
Continuous care		19,941			19,578
Other		3,021			3,007
Subtotal	$	319,105		$	306,791
Room and board, net		(2,769)			(2,117)
Contractual allowances		(3,108)			(2,985)
Medicare cap allowance		(2,750)			(2,500)
Net Revenue	$	310,478		$	299,189
Net revenue as a percent of total before Medicare cap allowance
Homecare		83.7	%		84.0	%
Inpatient		9.1			8.7
Continuous care		6.2			6.4
Other		1.0			0.9
Subtotal		100.0			100.0
Room and board, net		(0.8)			(0.7)
Contractual allowances		(1.0)			(1.0)
Medicare cap allowance		(0.9)			(0.8)
Net Revenue		97.3	%		97.5	%
Days of care
Homecare		1,286,437			1,258,672
Nursing home		265,429			248,468
Respite		5,760			5,368
Subtotal routine homecare and respite		1,557,626			1,512,508
Inpatient		26,369			24,587
Continuous care		20,686			21,082
Total		1,604,681			1,558,177

Number of days in relevant time period		90			90
Average daily census ("ADC") (days)
Homecare		14,294			13,985
Nursing home		2,949			2,761
Respite		64			60
Subtotal routine homecare and respite		17,307			16,806
Inpatient		293			273
Continuous care		230			234
Total		17,830			17,313
Total Admissions		16,179			16,530
Total Discharges		15,405			16,862
Average length of stay (days)		99.9			104.8
Median length of stay (days)		15.0			14.0
ADC by major diagnosis
Cerebro		41.8	%		36.7	%
Neurological		19.3			22.9
Cancer		10.5			11.1
Cardio		16.0			15.9
Respiratory		7.3			7.4
Other		5.1			6.0
Total		100.0	%		100.0	%
Admissions by major diagnosis
Cerebro		26.4	%		22.9	%
Neurological		10.7			12.9
Cancer		24.7			24.9
Cardio		16.2			14.1
Respiratory		10.9			11.1
Other		11.1			14.1
Total		100.0	%		100.0	%

Estimated uncollectible accounts as a percent of revenues		1.0	%		1.0	%

Accounts receivable --
Days of revenue outstanding-excluding unapplied Medicare payments		34.7			33.6
Days of revenue outstanding-including unapplied Medicare payments		29.2			23.9

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


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(unaudited)

(a)	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 March 31, 2023
		VITAS		Roto-Rooter		Corporate		Consolidated

	Licensed healthcare worker retention bonus	$	(10,916)	$	-	$	-	$	(10,916)
	Stock option expense		-		-		(8,482)		(8,482)
	Long-term incentive compensation		-		-		(2,514)		(2,514)
	Amortization of reacquired franchise agreements		-		(2,352)		-		(2,352)
	Litigation settlements		-		(1,756)		-		(1,756)
	Pretax impact on earnings		(10,916)		(4,108)		(10,996)		(26,020)
	Excess tax benefits on stock compensation		-		-		1,650		1,650
	Income tax benefit on the above		2,772		1,089		1,763		5,624
	After-tax impact on earnings	$	(8,144)	$	(3,019)	$	(7,583)	$	(18,746)


(b)	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 March 31, 2022
		VITAS		Roto-Rooter		Corporate		Consolidated

	Stock option expense	$	-	$	-	$	(7,451)	$	(7,451)
	Long-term incentive compensation		-		-		(1,310)		(1,310)
	Amortization of reacquired franchise agreements		-		(2,352)		-		(2,352)
	Direct costs related to COVID-19		(391)		(961)		-		(1,352)
	Pretax impact on earnings		(391)		(3,313)		(8,761)		(12,465)
	Excess tax benefits on stock compensation		-		-		1,441		1,441
	Income tax benefit on the above		99		878		1,436		2,413
	After-tax impact on earnings	$	(292)	$	(2,435)	$	(5,884)	$	(8,611)


(c)	VITAS has 9 large (greater than 450 ADC), 17 medium (greater than 200 but less than 450 ADC) and 24 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 a Medicare cap cushion between zero and 10% and three provider numbers have a Medicare cap liability.