che-20200729x8k
false000001958400000195842020-07-292020-07-29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

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

Date of Report (date of earliest event reported):

July 29, 2020

CHEMED CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

     1-8351

  31-0791746

(State or other
jurisdiction of
incorporation)

(Commission File Number)

(I.R.S. Employer
Identification
Number)

2600 First Financial Center, 255 East 5th Street, Cincinnati, OH 45202

(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:

(513) 762-6690

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

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

[_]      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240-14a-12)

[_]      Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240-14d-2(b))

[_]      Pre-commencement communications pursuant to Rule 13e-4 (c) under Exchange Act (17 CFR 240-13e-4(c))

Securities registered pursuant to 12(b) of the Act:

 

Title of each class

 

Trading symbol

Name of each exchange on which

registered

Capital stock $1 par value

CHE

NYSE

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.  [_]

Page 1 of 3


Item 2.02 Results of Operations and Financial Condition

On July 29, 2020 Chemed Corporation issued a press release announcing its financial results for the quarter ended June 30, 2020. A copy of the release is furnished herewith as Exhibit 99.

Item 9.01 Financial Statements and Exhibits

d)

Exhibit

 

 

 

 

 

(99) Registrant’s press release dated July 29, 2020

 

 

104 The cover page from this Current Report on Form 8-K formatted in Inline XBRL

Page 2 of 3


SIGNATURES

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

CHEMED CORPORATION

Dated:   July 29, 2020

By:

/s/ Michael D. Witzeman

Michael D. Witzeman

Vice President and Controller

Page 3 of 3

Exhibit 99

CONTACT:  David P. Williams

(513) 762-6901



Chemed Reports Second-Quarter 2020 Results



CINCINNATI, July 29, 2020—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 second quarter ended June 30, 2020, versus the comparable prior-year period, as follows:



Consolidated operating results:

·

Revenue increased 6.0% to $502 million

·

GAAP Diluted Earnings-per-Share (EPS) of $5.01, an increase of 62.7%

·

Adjusted Diluted EPS of $4.41, an increase of 31.3%



VITAS segment operating results:

·

Net Patient Revenue of $327 million, an increase of 4.7%

·

Average Daily Census (ADC) of 19,195, an increase of 2.8%

·

Admissions of 16,822 a decline of 3.8%

·

Net Income, excluding certain discrete items, of $50.1 million, an increase of 29.8%

·

Adjusted EBITDA, excluding Medicare Cap, of $72.5 million, an increase of 32.2%

·

Adjusted EBITDA margin, excluding Medicare Cap, of 21.7%, an increase of 440-basis points



Roto-Rooter segment operating results:

·

Revenue of $175 million, an increase of 8.6%

·

Net Income, excluding certain discrete items, of $32.0 million, an increase of 16.5%

·

Adjusted EBITDA of $46.8 million, an increase of 20.7%

·

Adjusted EBITDA margin of 26.8%, an increase of 269-basis points




 

VITAS



VITAS net revenue was $327 million in the second quarter of 2020, which is an increase of 4.7%, when compared to the prior-year period.  This revenue increase is comprised primarily of a 2.8% increase in days-of-care, a geographically weighted average Medicare reimbursement rate increase (including the suspension of sequestration on May 1, 2020) of approximately 5.4%, and acuity mix shift which then reduced the blended average Medicare rate increase approximately 310-basis points.  The combination of increased Medicare Cap and a decrease in Medicaid net room and board pass-through, as well as reductions in other contra revenue activity, reduced revenue growth an additional 42-basis points in the quarter.



VITAS accrued $5.8 million in Medicare Cap billing limitations in the second quarter of 2020.  This $5.8 million of Medicare Cap includes approximately $2.3 million of Cap liability attributed to the pandemic. The suspension of sequestration resulted in an additional 2% increase in reimbursement effective May 1, 2020.  In Medicare provider numbers that were in a Medicare Cap liability situation, this 2% reimbursement increase was effectively eliminated by a corresponding increase in Medicare Cap liability in those markets.  In addition, disruption in Medicare admissions in these markets resulted in a further increase in the projected 2020 Medicare Cap billing limitation. 



VITAS currently has 30 Medicare provider numbers.  During the first nine months of the fiscal 2020 Medicare Cap year, 22 of these provider numbers have a Medicare Cap cushion of 10% or greater, three provider numbers have a cap cushion between 5% and 10%, two provider numbers have a cap cushion between 0% and 5%, and three provider numbers have an estimated 2020 Medicare Cap billing limitation.



Average revenue per patient per day in the second quarter of 2020 was $194.02, which, including acuity mix shift, is 2.3% above the prior-year period. Reimbursement for routine home care and high acuity care averaged $165.22 and $985.23, respectively.  During the quarter, high acuity days-of-care were 3.5% of total days of care, 69-basis points less than the prior-year quarter.  This 69-basis point mix shift in high acuity days-of-care reduced the increase in average revenue per patient per day from 5.4% to 2.3% in the quarter.



The second quarter 2020 gross margin, excluding Medicare Cap, increased costs for personal protection equipment (PPE), disinfecting facilities and increased costs for additional paid time off (PTO) for our front-line employees, was 27.2%, which is a 352-basis point margin improvement when compared to the second quarter of 2019.  This increase in gross margin is attributed to a level-of-care mix shift to higher margin, lower reimbursement routine home care; efficiencies from utilizing telehealth when appropriate; and lower wage costs from reduced admission intake, including reduced hospital referred admissions that typically result in short length-of-stays and negative gross margins.



Selling, general and administrative expense was $21.1 million in the second quarter of 2020, which is a favorable decrease of 2.8% compared to the prior-year quarter.  Adjusted EBITDA, excluding Medicare Cap, totaled $72.5 million in the quarter, an increase of 32.2%.  Adjusted EBITDA margin, excluding Medicare Cap, was 21.7% in the quarter, which is a 440-basis point


 

improvement when compared to the prior-year period.



Roto-Rooter



Roto-Rooter generated quarterly revenue of $175 million in the second quarter of 2020, an increase of $13.9 million, or 8.6%, over the prior-year quarter.  On a unit-for-unit basis, which excludes the Oakland and HSW acquisitions completed in July 2019 and September 2019, respectively, Roto-Rooter generated quarterly revenue of $158 million for the second quarter of 2020, a decline of 1.9% over the prior-year quarter.



Total commercial revenue, excluding acquisitions, decreased 29.1%.  This aggregate commercial revenue decline consisted of drain cleaning revenue declining 31.2%, commercial plumbing and excavation declining 28.0%, and commercial water restoration declining 20.3%.



Total residential revenue, excluding acquisitions, increased 10.4%.  This aggregate residential revenue growth consisted of residential drain cleaning increasing 10.2%, plumbing and excavation expanding 14.4%, and residential water restoration increasing 4.3%.



Roto-Rooter started the second quarter of 2020 with plummeting demand in our commercial business and very soft demand in our residential services when compared to the prior year.  Fortunately, service demand began to improve in the later part of April and continued to strengthen throughout the remainder of the second quarter.  This is reflected in our monthly performance with unit-for-unit commercial revenue declining 38.6%, 31.8% and 19.7% in April, May and June 2020, respectively.  Unit-for-unit residential revenue sales declined 1.6% in April, increased 11.7% in May and increased 18.7% in June.



Roto-Rooter’s gross margin in the quarter was 51.2%, a 247-basis point increase when compared to the second quarter of 2019.  Adjusted EBITDA in the second quarter of 2020 totaled $46.8 million, an increase of 20.7%.  The Adjusted EBITDA margin in the quarter was 26.8% which is a 269-basis point increase when compared to the prior year.  The increase in Adjusted EBITDA margin is attributed to residential services having a higher margin than commercial services,  as well as increased residential excavation and water restoration services which have a significantly higher direct contribution margin compared to commercial plumbing and drain cleaning services.



Chemed Consolidated



As of June 30, 2020, Chemed had total cash and cash equivalents of $20.4 million and no long-term debt. 



In June 2018, Chemed entered into a five-year Amended and Restated Credit Agreement that consists of a $450 million revolving credit facility. The interest rate on this facility has a floating rate that is currently LIBOR plus 100-basis points.  At June 30, 2020, the Company had approximately $412 million of undrawn borrowing capacity under this credit agreement.




 

During the quarter, the Company repurchased 50,000 shares of Chemed stock for $21.9 million which equates to a cost per share of $438.27.  As of June 30, 2020, there was approximately $232 million of remaining share repurchase authorization under this plan.



Chemed restarted its share repurchase program in 2007.  Since that time Chemed has repurchased approximately 14.4 million shares, aggregating approximately $1.3 billion at an average share cost of $92.76.  Including dividends over this period, Chemed has returned approximately $1.5 billion to shareholders.



Guidance for 2020



Historically, Chemed earnings guidance has been developed using previous years’ key operating metrics which are then modeled and projected out for the calendar year.  Critical within these projections is the understanding of traditional patterned correlations among key operating metrics. Once we complete this phase of our projected operating results, we would then modify the projections for the timing of price increases, changes in commission structure, wages, marketing programs and a variety of continuous improvement initiatives that our business segments plan on executing over the coming year.  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 2020 pandemic has made accurate modeling and providing meaningful earnings guidance for Chemed exceptionally challenging.  Federal, state and local government authorities are forced to make swift decisions within our healthcare system, labor pools and general economy. These governmental decisions have the potential for an immediate and material impact on VITAS and Roto-Rooter operating results.



Over the past four months, 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 provide guidance for the remainder of the calendar year.  However, this guidance should be taken with the recognition the pandemic will continue to materially disrupt all aspects of our healthcare system and general economy to such an extent that future rules, regulations and government mandates could materially impact our ability to achieve this guidance.



Revenue growth for VITAS in 2020, prior to Medicare Cap, is estimated to be in the range of 5% to 7%. Average Daily Census in 2020 is estimated to expand approximately 2% to 4%.  Full-year Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 19% to 20%.  We are currently estimating $17 million for Medicare Cap billing limitations for calendar year 2020.  We also anticipate the $80.2 million of CARES Act funds formulaically calculated by the federal government based upon our 2019 Medicare fee-for-service revenue will be adequate to cover increased costs specifically related to operating our healthcare unit during the pandemic as well as any incremental Medicare Cap billing limitations triggered from declines in Medicare admissions.  Chemed’s full year adjusted earnings per share guidance eliminates any financial benefit from the CARES Act funds that relate to lost revenue.  We anticipate returning any unused CARES Act funds to the federal government at the end of the pandemic measurement period.




 

Roto-Rooter is forecasted to achieve full-year 2020 revenue growth of 9% to 10%.  Roto-Rooter’s Adjusted EBITDA margin for 2020 is estimated to be in the range of 23% to 25%.



Based upon the above, full-year 2020 adjusted earnings per diluted share, excluding non-cash expense for stock options, tax benefits from stock options, costs related to litigation, and other discrete items, is estimated to be in the range of $16.20 to $16.40.  This 2020 guidance assumes an effective corporate tax rate of 25.2%. Chemed’s 2019 reported adjusted earnings per diluted share was $13.96. 



Conference Call



Chemed will host a conference call and webcast at 10 a.m., ET, on Thursday, July 30, 2020, to discuss the Company's quarterly results and to provide an update on its business.  The dial-in number for the conference call is (844) 743-2500 for U.S. and Canadian participants and +1  (661)  378-9533 for international participants.  The Conference ID is 2266476.  A live webcast of the call can be accessed on Chemed's website at www.chemed.com by clicking on Investor Relations Home.



A taped replay of the conference call will be available beginning approximately 24 hours after the call's conclusion.  It can be accessed by dialing (855) 859-2056 for U.S. and Canadian callers and +1 (404) 537-3406 for international callers and will be available for one week following the live call.  The replay Conference ID is 2266476.  An archived webcast will also be available at www.chemed.com.



Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary.  VITAS provides daily hospice services to approximately 19,000 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.



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



 


 

 

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



Forward-Looking Statements



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



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


 









 

 

 

 

 

 

 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)(unaudited)



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,



 

2020

 

2019

 

2020

 

2019

Service revenues and sales

 

$

502,199 

 

$

473,584 

 

$

1,017,997 

 

$

935,618 

Cost of services provided and goods sold

 

 

352,163 

 

 

323,637 

 

 

703,908 

 

 

645,588 

Selling, general and administrative expenses (aa)

 

 

84,513 

 

 

71,556 

 

 

155,096 

 

 

145,585 

Depreciation

 

 

11,659 

 

 

9,887 

 

 

23,047 

 

 

19,597 

Amortization

 

 

2,488 

 

 

406 

 

 

4,965 

 

 

925 

Other operating (income)/expenses

 

 

(41,384)

 

 

2,570 

 

 

(41,142)

 

 

8,923 

Total costs and expenses

 

 

409,439 

 

 

408,056 

 

 

845,874 

 

 

820,618 

Income from operations

 

 

92,760 

 

 

65,528 

 

 

172,123 

 

 

115,000 

Interest expense

 

 

(651)

 

 

(1,237)

 

 

(1,626)

 

 

(2,361)

Other (expense)/income--net (bb)

 

 

7,514 

 

 

13 

 

 

(1,952)

 

 

2,452 

Income before income taxes

 

 

99,623 

 

 

64,304 

 

 

168,545 

 

 

115,091 

Income taxes

 

 

(17,522)

 

 

(13,575)

 

 

(30,553)

 

 

(19,695)

Net income

 

$

82,101 

 

$

50,729 

 

$

137,992 

 

$

95,396 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

5.16 

 

$

3.18 

 

$

8.65 

 

$

5.98 

Average number of shares outstanding

 

 

15,914 

 

 

15,928 

 

 

15,953 

 

 

15,941 

Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

5.01 

 

$

3.08 

 

$

8.39 

 

$

5.79 

Average number of shares outstanding

 

 

16,373 

 

 

16,449 

 

 

16,445 

 

 

16,489 



 

 

 

 

 

 

 

 

 

 

 

 

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



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,



 

2020

 

2019

 

2020

 

2019

SG&A expenses before long-term incentive compensation

 

 

 

 

 

 

 

 

 

 

 

 

and the impact of market value adjustments related to

 

 

 

 

 

 

 

 

 

 

 

 

deferred compensation plans

 

$

75,176 

 

$

70,300 

 

$

153,511 

 

$

140,504 

Market value adjustments related to deferred

 

 

 

 

 

 

 

 

 

 

 

 

compensation trusts

 

 

7,408 

 

 

(130)

 

 

(2,164)

 

 

2,207 

Long-term incentive compensation

 

 

1,929 

 

 

1,386 

 

 

3,749 

 

 

2,874 

Total SG&A expenses

 

$

84,513 

 

$

71,556 

 

$

155,096 

 

$

145,585 



 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,



 

2020

 

2019

 

2020

 

2019

Market value adjustments related to deferred

 

 

 

 

 

 

 

 

 

 

 

 

compensation trusts

 

$

7,408 

 

$

(130)

 

$

(2,164)

 

$

2,207 

Interest income

 

 

116 

 

 

112 

 

 

225 

 

 

214 

Other

 

 

(10)

 

 

31 

 

 

(13)

 

 

31 

Total other (expense)/income--net

 

$

7,514 

 

$

13 

 

$

(1,952)

 

$

2,452 




 





 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)(unaudited)



 

 

 

 

 

 



 

June 30,



 

2020

 

2019

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

20,376 

 

$

3,323 

Accounts receivable less allowances

 

 

132,487 

 

 

136,113 

Inventories

 

 

7,467 

 

 

6,336 

Prepaid income taxes

 

 

5,794 

 

 

12,951 

Prepaid expenses

 

 

23,183 

 

 

21,455 

Total current assets

 

 

189,307 

 

 

180,178 

Investments of deferred compensation plans held in trust

 

 

80,113 

 

 

70,460 

Properties and equipment, at cost less accumulated depreciation

 

 

183,017 

 

 

149,917 

Assets held for sale

 

 

 -

 

 

15,750 

Lease right of use asset

 

 

128,418 

 

 

90,755 

Identifiable intangible assets less accumulated amortization

 

 

122,791 

 

 

67,511 

Goodwill

 

 

578,491 

 

 

510,627 

Other assets

 

 

9,055 

 

 

8,874 

Total Assets

 

$

1,291,192 

 

$

1,094,072 

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

36,704 

 

$

51,143 

Income taxes

 

 

19,576 

 

 

56 

Accrued insurance

 

 

50,847 

 

 

46,912 

Accrued compensation

 

 

80,552 

 

 

50,123 

Accrued legal

 

 

6,959 

 

 

8,431 

Short-term lease liability

 

 

36,093 

 

 

31,614 

Unutilized CARES Act grant

 

 

39,236 

 

 

 -

Other current liabilities

 

 

48,549 

 

 

35,390 

Total current liabilities

 

 

318,516 

 

 

223,669 

Deferred income taxes

 

 

21,108 

 

 

18,828 

Long-term debt

 

 

 -

 

 

85,000 

Deferred compensation liabilities

 

 

77,639 

 

 

70,273 

Long-term lease liability

 

 

104,444 

 

 

69,979 

Other liabilities

 

 

18,789 

 

 

7,754 

Total Liabilities

 

 

540,496 

 

 

475,503 

Stockholders' Equity

 

 

 

 

 

 

Capital stock

 

 

36,040 

 

 

35,591 

Paid-in capital

 

 

904,421 

 

 

817,255 

Retained earnings

 

 

1,553,144 

 

 

1,311,446 

Treasury stock, at cost

 

 

(1,745,299)

 

 

(1,548,138)

Deferred compensation payable in Company stock

 

 

2,390 

 

 

2,415 

Total Stockholders' Equity

 

 

750,696 

 

 

618,569 

Total Liabilities and Stockholders' Equity

 

$

1,291,192 

 

$

1,094,072 






 









 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)(unaudited)



 

 

 

 

 

 



 

For the Six Months Ended June 30,



 

2020

 

2019

Cash Flows from Operating Activities

 

 

 

 

 

 

Net income

 

$

137,992 

 

$

95,396 

Adjustments to reconcile net income to net cash provided

 

 

 

 

 

 

by operating activities:

 

 

 

 

 

 

Unutilized CARES Act grant

 

 

39,236 

 

 

 -

Depreciation and amortization

 

 

28,012 

 

 

20,522 

Deferred payroll taxes

 

 

10,716 

 

 

 -

Stock option expense

 

 

10,113 

 

 

8,018 

Noncash long-term incentive compensation

 

 

3,527 

 

 

2,506 

Provision/(benefit) for deferred income taxes

 

 

2,717 

 

 

(2,769)

Noncash directors' compensation

 

 

1,171 

 

 

767 

Provision for bad debts

 

 

871 

 

 

 -

Amortization of debt issuance costs

 

 

153 

 

 

153 

Litigation settlement

 

 

 -

 

 

6,000 

Asset impairment loss

 

 

 -

 

 

2,266 

Changes in operating assets and liabilities, excluding

 

 

 

 

 

 

amounts acquired in business combinations:

 

 

 

 

 

 

Decrease/(increase) in accounts receivable

 

 

6,696 

 

 

(16,613)

Increase in inventories

 

 

(5)

 

 

(631)

Increase in prepaid expenses

 

 

(33)

 

 

(2,301)

Increase/(decrease) in accounts payable and

 

 

 

 

 

 

other current liabilities

 

 

13,303 

 

 

(4,175)

Change in current income taxes

 

 

23,725 

 

 

(2,249)

Net change in lease assets and liabilities

 

 

1,287 

 

 

(338)

Increase in other assets

 

 

(2,988)

 

 

(4,653)

Increase in other liabilities

 

 

1,383 

 

 

5,833 

Other (uses)/sources

 

 

(54)

 

 

1,175 

Net cash provided by operating activities

 

 

277,822 

 

 

108,907 

Cash Flows from Investing Activities

 

 

 

 

 

 

Capital expenditures

 

   

(32,251)

 

   

(28,312)

Business combinations

 

 

(3,600)

 

 

 -

Other sources/(uses)

 

 

473 

 

 

(137)

Net cash used by investing activities

 

 

(35,378)

 

 

(28,449)

Cash Flows from Financing Activities

 

 

 

 

 

 

Payments on revolving line of credit

 

 

(264,900)

 

 

(227,000)

Proceeds from revolving line of credit

 

 

174,900 

 

 

222,800 

Purchases of treasury stock

 

 

(122,148)

 

 

(71,926)

Proceeds from exercise of stock options

 

 

19,440 

 

 

16,517 

Capital stock surrendered to pay taxes on stock-based compensation

 

 

(14,845)

 

 

(14,884)

Dividends paid

 

 

(10,238)

 

 

(9,567)

Change in cash overdrafts payable

 

 

(9,849)

 

 

1,710 

Other (uses)/sources

 

 

(586)

 

 

384 

Net cash used by financing activities

 

 

(228,226)

 

 

(81,966)

Increase/(decrease) in Cash and Cash Equivalents

 

 

14,218 

 

 

(1,508)

Cash and cash equivalents at beginning of year

 

 

6,158 

 

 

4,831 

Cash and cash equivalents at end of year

 

$

20,376 

 

$

3,323 










 





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2020 AND 2019

(in thousands)(unaudited)



 

 

 

Roto-

 

 

 

Chemed



 

VITAS

 

Rooter

 

Corporate

 

Consolidated

2020 (a)

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues and sales

 

$

327,465 

 

$

174,734 

 

$

 -

 

$

502,199 

Cost of services provided and goods sold

 

 

266,815 

 

 

85,348 

 

 

 -

 

 

352,163 

Selling, general and administrative expenses

 

 

21,072 

 

 

44,231 

 

 

19,210 

 

 

84,513 

Depreciation

 

 

5,556 

 

 

6,069 

 

 

34 

 

 

11,659 

Amortization

 

 

18 

 

 

2,470 

 

 

 -

 

 

2,488 

Other operating income

 

 

(40,826)

 

 

(558)

 

 

 -

 

 

(41,384)

Total costs and expenses

 

 

252,635 

 

 

137,560 

 

 

19,244 

 

 

409,439 

Income/(loss) from operations

 

 

74,830 

 

 

37,174 

 

 

(19,244)

 

 

92,760 

Interest expense

 

 

(45)

 

 

(90)

 

 

(516)

 

 

(651)

Intercompany interest income/(expense)

 

 

4,739 

 

 

1,422 

 

 

(6,161)

 

 

 -

Other (expense)/income—net

 

 

104 

 

 

(10)

 

 

7,420 

 

 

7,514 

Income/(loss) before income taxes

 

 

79,628 

 

 

38,496 

 

 

(18,501)

 

 

99,623 

Income taxes

 

 

(19,383)

 

 

(9,028)

 

 

10,889 

 

 

(17,522)

Net income/(loss)

 

$

60,245 

 

$

29,468 

 

$

(7,612)

 

$

82,101 



 

 

 

 

 

 

 

 

 

 

 

 

2019 (b)

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues and sales

 

$

312,750 

 

$

160,834 

 

$

 -

 

$

473,584 

Cost of services provided and goods sold

 

 

241,104 

 

 

82,533 

 

 

 -

 

 

323,637 

Selling, general and administrative expenses

 

 

21,682 

 

 

39,377 

 

 

10,497 

 

 

71,556 

Depreciation

 

 

4,831 

 

 

5,017 

 

 

39 

 

 

9,887 

Amortization

 

 

18 

 

 

388 

 

 

 -

 

 

406 

Other operating expense

 

 

69 

 

 

235 

 

 

2,266 

 

 

2,570 

Total costs and expenses

 

 

267,704 

 

 

127,550 

 

 

12,802 

 

 

408,056 

Income/(loss) from operations

 

 

45,046 

 

 

33,284 

 

 

(12,802)

 

 

65,528 

Interest expense

 

 

(53)

 

 

(100)

 

 

(1,084)

 

 

(1,237)

Intercompany interest income/(expense)

 

 

4,382 

 

 

2,180 

 

 

(6,562)

 

 

 -

Other (expense)/income—net

 

 

101 

 

 

42 

 

 

(130)

 

 

13 

Income/(loss) before income taxes

 

 

49,476 

 

 

35,406 

 

 

(20,578)

 

 

64,304 

Income taxes

 

 

(12,137)

 

 

(8,231)

 

 

6,793 

 

 

(13,575)

Net income/(loss)

 

$

37,339 

 

$

27,175 

 

$

(13,785)

 

$

50,729 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

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




 





 

 

 

 

 

 

 

 

 

 

 

 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(in thousands)(unaudited)



 

 

 

 

 

 

 

 

 



 

 

 

Roto-

 

 

 

Chemed



 

VITAS

 

Rooter

 

Corporate

 

Consolidated

2020 (a)

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues and sales

 

$

665,380 

 

$

352,617 

 

$

 -

 

$

1,017,997 

Cost of services provided and goods sold

 

 

526,244 

 

 

177,664 

 

 

 -

 

 

703,908 

Selling, general and administrative expenses

 

 

43,341 

 

 

90,513 

 

 

21,242 

 

 

155,096 

Depreciation

 

 

11,030 

 

 

11,947 

 

 

70 

 

 

23,047 

Amortization

 

 

36 

 

 

4,929 

 

 

 -

 

 

4,965 

Other operating income

 

 

(40,712)

 

 

(430)

 

 

 -

 

 

(41,142)

Total costs and expenses

 

 

539,939 

 

 

284,623 

 

 

21,312 

 

 

845,874 

Income/(loss) from operations

 

 

125,441 

 

 

67,994 

 

 

(21,312)

 

 

172,123 

Interest expense

 

 

(90)

 

 

(192)

 

 

(1,344)

 

 

(1,626)

Intercompany interest income/(expense)

 

 

9,125 

 

 

2,771 

 

 

(11,896)

 

 

 -

Other (expense)/income—net

 

 

169 

 

 

30 

 

 

(2,151)

 

 

(1,952)

Income/(loss) before income taxes

 

 

134,645 

 

 

70,603 

 

 

(36,703)

 

 

168,545 

Income taxes

 

 

(33,121)

 

 

(16,813)

 

 

19,381 

 

 

(30,553)

Net income/(loss)

 

$

101,524 

 

$

53,790 

 

$

(17,322)

 

$

137,992 



 

 

 

 

 

 

 

 

 

 

 

 

2019 (b)

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues and sales

 

$

619,531 

 

$

316,087 

 

$

 -

 

$

935,618 

Cost of services provided and goods sold

 

 

480,847 

 

 

164,741 

 

 

 -

 

 

645,588 

Selling, general and administrative expenses

 

 

43,218 

 

 

78,978 

 

 

23,389 

 

 

145,585 

Depreciation

 

 

9,539 

 

 

9,980 

 

 

78 

 

 

19,597 

Amortization

 

 

35 

 

 

890 

 

 

 -

 

 

925 

Other operating expense

 

 

6,423 

 

 

234 

 

 

2,266 

 

 

8,923 

Total costs and expenses

 

 

540,062 

 

 

254,823 

 

 

25,733 

 

 

820,618 

Income/(loss) from operations

 

 

79,469 

 

 

61,264 

 

 

(25,733)

 

 

115,000 

Interest expense

 

 

(101)

 

 

(194)

 

 

(2,066)

 

 

(2,361)

Intercompany interest income/(expense)

 

 

8,777 

 

 

4,375 

 

 

(13,152)

 

 

 -

Other income—net

 

 

188 

 

 

56 

 

 

2,208 

 

 

2,452 

Income/(loss) before income taxes

 

 

88,333 

 

 

65,501 

 

 

(38,743)

 

 

115,091 

Income taxes

 

 

(21,707)

 

 

(15,339)

 

 

17,351 

 

 

(19,695)

Net income/(loss)

 

$

66,626 

 

$

50,162 

 

$

(21,392)

 

$

95,396 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

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 JUNE 30, 2020 AND 2019

(in thousands)(unaudited)



 

 

 

 

 

 

 

Chemed



 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

2020

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

60,245 

 

$

29,468 

 

$

(7,612)

 

$

82,101 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

45 

 

 

90 

 

 

516 

 

 

651 

Income taxes

 

 

19,383 

 

 

9,028 

 

 

(10,889)

 

 

17,522 

Depreciation

 

 

5,556 

 

 

6,069 

 

 

34 

 

 

11,659 

Amortization

 

 

18 

 

 

2,470 

 

 

 -

 

 

2,488 

EBITDA

 

 

85,247 

 

 

47,125 

 

 

(17,951)

 

 

114,421 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany interest expense/(income)

 

 

(4,739)

 

 

(1,422)

 

 

6,161 

 

 

 -

Interest income

 

 

(113)

 

 

10 

 

 

(13)

 

 

(116)

CARES Act grant

 

 

(40,989)

 

 

 -

 

 

 -

 

 

(40,989)

Direct costs related to COVID-19

 

 

24,265 

 

 

1,117 

 

 

 -

 

 

25,382 

Stock option expense

 

 

 -

 

 

 -

 

 

5,068 

 

 

5,068 

COVID-19 related Medicare cap

 

 

2,250 

 

 

 -

 

 

 -

 

 

2,250 

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

1,929 

 

 

1,929 

Medicare cap sequestration adjustment

 

 

796 

 

 

 -

 

 

 -

 

 

796 

Adjusted EBITDA

 

$

66,717 

 

$

46,830 

 

$

(4,806)

 

$

108,741 



 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

37,339 

 

$

27,175 

 

$

(13,785)

 

$

50,729 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

53 

 

 

100 

 

 

1,084 

 

 

1,237 

Income taxes

 

 

12,137 

 

 

8,231 

 

 

(6,793)

 

 

13,575 

Depreciation

 

 

4,831 

 

 

5,017 

 

 

39 

 

 

9,887 

Amortization

 

 

18 

 

 

388 

 

 

 -

 

 

406 

EBITDA

 

 

54,378 

 

 

40,911 

 

 

(19,455)

 

 

75,834 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany interest expense/(income)

 

 

(4,382)

 

 

(2,180)

 

 

6,562 

 

 

 -

Interest income

 

 

(69)

 

 

(43)

 

 

 -

 

 

(112)

Stock option expense

 

 

 -

 

 

 -

 

 

3,929 

 

 

3,929 

Impairment loss on transportation equipment

 

 

 -

 

 

 -

 

 

2,266 

 

 

2,266 

Medicare cap sequestration adjustment

 

 

1,689 

 

 

 -

 

 

 -

 

 

1,689 

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

1,386 

 

 

1,386 

Acquisition expense

 

 

 -

 

 

97 

 

 

 -

 

 

97 

Adjusted EBITDA

 

$

51,616 

 

$

38,785 

 

$

(5,312)

 

$

85,089 



 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

 

 


 

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING SUMMARIES OF EBITDA

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(in thousands)(unaudited)



 

 

 

 

 

 

 

 

 

 

Chemed



 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated

2020

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

101,524 

 

$

53,790 

 

$

(17,322)

 

$

137,992 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

90 

 

 

192 

 

 

1,344 

 

 

1,626 

Income taxes

 

 

33,121 

 

 

16,813 

 

 

(19,381)

 

 

30,553 

Depreciation

 

 

11,030 

 

 

11,947 

 

 

70 

 

 

23,047 

Amortization

 

 

36 

 

 

4,929 

 

 

 -

 

 

4,965 

EBITDA

 

 

145,801 

 

 

87,671 

 

 

(35,289)

 

 

198,183 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany interest expense/(income)

 

 

(9,125)

 

 

(2,771)

 

 

11,896 

 

 

 -

Interest income

 

 

(181)

 

 

(31)

 

 

(13)

 

 

(225)

Direct costs related to COVID-19

 

 

25,238 

 

 

1,978 

 

 

 -

 

 

27,216 

CARES Act grant

 

 

(40,989)

 

 

 -

 

 

 -

 

 

(40,989)

Stock option expense

 

 

 -

 

 

 -

 

 

10,114 

 

 

10,114 

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

3,749 

 

 

3,749 

COVID-19 Medicare cap

 

 

2,250 

 

 

 -

 

 

 -

 

 

2,250 

Medicare cap sequestration adjustment

 

 

1,472 

 

 

 -

 

 

 -

 

 

1,472 

Adjusted EBITDA

 

$

124,466 

 

$

86,847 

 

$

(9,543)

 

$

201,770 

2019

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

66,626 

 

$

50,162 

 

$

(21,392)

 

$

95,396 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

101 

 

 

194 

 

 

2,066 

 

 

2,361 

Income taxes

 

 

21,707 

 

 

15,339 

 

 

(17,351)

 

 

19,695 

Depreciation

 

 

9,539 

 

 

9,980 

 

 

78 

 

 

19,597 

Amortization

 

 

35 

 

 

890 

 

 

 -

 

 

925 

EBITDA

 

 

98,008 

 

 

76,565 

 

 

(36,599)

 

 

137,974 

Add/(deduct):

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany interest expense/(income)

 

 

(8,777)

 

 

(4,375)

 

 

13,152 

 

 

 -

Interest (income)/expense

 

 

(157)

 

 

(56)

 

 

 -

 

 

(213)

Stock option expense

 

 

 -

 

 

 -

 

 

8,018 

 

 

8,018 

Litigation settlement costs

 

 

6,000 

 

 

 -

 

 

 -

 

 

6,000 

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

2,874 

 

 

2,874 

Impairment loss on transportation equipment

 

 

 -

 

 

 -

 

 

2,266 

 

 

2,266 

Medicare cap sequestration adjustment

 

 

2,204 

 

 

 -

 

 

 -

 

 

2,204 

Acquisition expense

 

 

 -

 

 

97 

 

 

120 

 

 

217 

Non cash ASC 842 expenses/(benefit)

 

 

656 

 

 

55 

 

 

(163)

 

 

548 

Adjusted EBITDA

 

$

97,934 

 

$

72,286 

 

$

(10,332)

 

$

159,888 



 

 

 

 

 

 

 

 

 

 

 

 

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 June 30,

 

Six Months Ended June 30,



 

2020

 

2019

 

2020

 

2019

Net income as reported

 

$

82,101 

 

$

50,729 

 

$

137,992 

 

$

95,396 

Add/(deduct) pre-tax cost of:

 

 

 

 

 

 

 

 

 

 

 

 

CARES Act grant

 

 

(40,989)

 

 

 -

 

 

(40,989)

 

 

 -

Direct costs related to COVID-19

 

 

25,382 

 

 

 -

 

 

27,216 

 

 

 -

Stock option expense

 

 

5,068 

 

 

3,929 

 

 

10,114 

 

 

8,018 

Amortization of reacquired franchise agreements

 

 

2,352 

 

 

331 

 

 

4,704 

 

 

772 

COVID-19 Medicare cap

 

 

2,250 

 

 

 -

 

 

2,250 

 

 

 -

Long-term incentive compensation

 

 

1,929 

 

 

1,386 

 

 

3,749 

 

 

2,874 

Medicare cap sequestration adjustments

 

 

796 

 

 

1,689 

 

 

1,472 

 

 

2,204 

Impairment loss on transportation equipment

 

 

 -

 

 

2,266 

 

 

 -

 

 

2,266 

Litigation settlement

 

 

 -

 

 

 -

 

 

 -

 

 

6,000 

Acquisition expense

 

 

 -

 

 

97 

 

 

 -

 

 

217 

Non cash ASC 842 expenses

 

 

 -

 

 

 -

 

 

 -

 

 

548 

Add/(deduct) tax impacts:

 

 

 

 

 

 

 

 

 

 

 

 

Tax impact of the above pre-tax adjustments (1)

 

 

1,537 

 

 

(2,000)

 

 

(814)

 

 

(4,961)

Excess tax benefits on stock compensation

 

 

(8,203)

 

 

(3,212)

 

 

(12,756)

 

 

(9,944)

Adjusted net income

 

$

72,223 

 

$

55,215 

 

$

132,938 

 

$

103,390 



 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share As Reported

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

5.01 

 

$

3.08 

 

$

8.39 

 

$

5.79 

Average number of shares outstanding

 

 

16,373 

 

 

16,449 

 

 

16,445 

 

 

16,489 



 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

$

4.41 

 

$

3.36 

 

$

8.08 

 

$

6.27 

Average number of shares outstanding

 

 

16,373 

 

 

16,449 

 

 

16,445 

 

 

16,489 



 

 

 

 

 

 

 

 

 

 

 

 

(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 June 30,

 

 

Six Months Ended June 30,

 

OPERATING STATISTICS

 

2020

 

2019

 

 

2020

 

2019

 

Net revenue ($000) (c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Homecare

 

$

276,345 

 

$

266,461 

 

 

$

548,098 

 

$

525,312 

 

Inpatient

 

 

25,868 

 

 

22,894 

 

 

 

58,350 

 

 

45,464 

 

Continuous care

 

 

34,582 

 

 

30,786 

 

 

 

75,137 

 

 

63,030 

 

Other

 

 

2,109 

 

 

2,237 

 

 

 

5,265 

 

 

4,242 

 

Subtotal

 

$

338,904 

 

$

322,378 

 

 

$

686,850 

 

$

638,048 

 

Room and board, net

 

 

(2,647)

 

 

(2,710)

 

 

 

(6,028)

 

 

(5,252)

 

Contractual allowances

 

 

(3,042)

 

 

(3,720)

 

 

 

(7,192)

 

 

(6,667)

 

Medicare cap allowance

 

 

(5,750)

 

 

(3,198)

 

 

 

(8,250)

 

 

(6,598)

 

Net Revenue

 

$

327,465 

 

$

312,750 

 

 

$

665,380 

 

$

619,531 

 

Net revenue as a percent of total before Medicare cap allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Homecare

 

 

81.5 

%

 

82.7 

%

 

 

79.8 

%

 

82.3 

%

Inpatient

 

 

7.6 

 

 

7.1 

 

 

 

8.5 

 

 

7.1 

 

Continuous care

 

 

10.2 

 

 

9.5 

 

 

 

10.9 

 

 

9.9 

 

Other

 

 

0.7 

 

 

0.7 

 

 

 

0.8 

 

 

0.7 

 

Subtotal

 

 

100.0 

 

 

100.0 

 

 

 

100.0 

 

 

100.0 

 

Room and board, net

 

 

(0.8)

 

 

(0.8)

 

 

 

(0.9)

 

 

(0.8)

 

Contractual allowances

 

 

(0.9)

 

 

(1.2)

 

 

 

(1.0)

 

 

(1.0)

 

Medicare cap allowance

 

 

(1.7)

 

 

(1.0)

 

 

 

(1.2)

 

 

(1.0)

 

Net Revenue

 

 

96.6 

%

 

97.0 

%

 

 

96.9 

%

 

97.2 

%

Days of care

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Homecare

 

 

1,401,744 

 

 

1,317,854 

 

 

 

2,766,490 

 

 

2,599,753 

 

Nursing home

 

 

279,462 

 

 

303,983 

 

 

 

582,836 

 

 

593,752 

 

Respite

 

 

4,158 

 

 

6,669 

 

 

 

10,850 

 

 

12,970 

 

Subtotal routine homecare and respite

 

 

1,685,364 

 

 

1,628,506 

 

 

 

3,360,176 

 

 

3,206,475 

 

Inpatient

 

 

25,542 

 

 

29,663 

 

 

 

57,890 

 

 

58,813 

 

Continuous care

 

 

35,814 

 

 

41,804 

 

 

 

77,187 

 

 

85,727 

 

Total

 

 

1,746,720 

 

 

1,699,973 

 

 

 

3,495,253 

 

 

3,351,015 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of days in relevant time period

 

 

91 

 

 

91 

 

 

 

182 

 

 

181 

 

Average daily census ("ADC") (days)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Homecare

 

 

15,404 

 

 

14,482 

 

 

 

15,201 

 

 

14,364 

 

Nursing home

 

 

3,071 

 

 

3,340 

 

 

 

3,202 

 

 

3,280 

 

Respite

 

 

45 

 

 

73 

 

 

 

60 

 

 

72 

 

Subtotal routine homecare and respite

 

 

18,520 

 

 

17,895 

 

 

 

18,463 

 

 

17,716 

 

Inpatient

 

 

281 

 

 

327 

 

 

 

318 

 

 

325 

 

Continuous care

 

 

394 

 

 

459 

 

 

 

424 

 

 

474 

 

Total

 

 

19,195 

 

 

18,681 

 

 

 

19,205 

 

 

18,515 

 

Total Admissions

 

 

16,822 

 

 

17,491 

 

 

 

35,425 

 

 

35,249 

 

Total Discharges

 

 

17,000 

 

 

17,008 

 

 

 

35,208 

 

 

34,350 

 

Average length of stay (days)

 

 

90.9 

 

 

91.1 

 

 

 

90.8 

 

 

91.2 

 

Median length of stay (days)

 

 

14.0 

 

 

16.0 

 

 

 

14.0 

 

 

15.0 

 

ADC by major diagnosis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cerebro

 

 

35.2 

%

 

35.7 

%

 

 

35.7 

%

 

35.8 

%

Neurological

 

 

21.7 

 

 

20.4 

 

 

 

21.6 

 

 

20.2 

 

Cancer

 

 

12.8 

 

 

12.7 

 

 

 

12.7 

 

 

12.7 

 

Cardio

 

 

16.1 

 

 

17.0 

 

 

 

15.9 

 

 

16.9 

 

Respiratory

 

 

8.2 

 

 

8.2 

 

 

 

8.3 

 

 

8.2 

 

Other

 

 

6.0 

 

 

6.0 

 

 

 

5.8 

 

 

6.2 

 

Total

 

 

100.0 

%

 

100.0 

%

 

 

100.0 

%

 

100.0 

%

Admissions by major diagnosis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cerebro

 

 

20.9 

%

 

20.6 

%

 

 

21.0 

%

 

20.7 

%

Neurological

 

 

13.4 

 

 

12.2 

 

 

 

12.9 

 

 

12.5 

 

Cancer

 

 

27.6 

 

 

29.2 

 

 

 

28.0 

 

 

28.6 

 

Cardio

 

 

14.6 

 

 

16.0 

 

 

 

14.9 

 

 

16.1 

 

Respiratory

 

 

9.8 

 

 

11.7 

 

 

 

10.9 

 

 

11.8 

 

Other

 

 

13.7 

 

 

10.3 

 

 

 

12.3 

 

 

10.3 

 

Total

 

 

100.0 

%

 

100.0 

%

 

 

100.0 

%

 

100.0 

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated uncollectible accounts as a percent of revenues

 

 

0.9 

%

 

1.2 

%

 

 

1.1 

%

 

1.1 

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable --

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Days of revenue outstanding-excluding unapplied Medicare payments

 

 

31.9 

 

 

32.7 

 

 

 

n.a.

 

 

n.a.

 

Days of revenue outstanding-including unapplied Medicare payments

 

 

26.7 

 

 

27.7 

 

 

 

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 SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(unaudited)



 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Included in the results of operations for 2020 are the following significant credits/(charges) which may not be indicative of ongoing operations



(in thousands):

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended June 30, 2020



 

 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated



 

 

 

 

 

 

 

 

 

 

 

 

 



CARES Act grant

 

$

40,989 

 

$

 -

 

$

 -

 

$

40,989 



Direct costs related to COVID-19

 

 

(24,265)

 

 

(1,117)

 

 

 -

 

 

(25,382)



Stock option expense

 

 

 -

 

 

 -

 

 

(5,068)

 

 

(5,068)



Amortization of reacquired franchise agreements

 

 

 -

 

 

(2,352)

 

 

 -

 

 

(2,352)



COVID-19 Medicare cap

 

 

(2,250)

 

 

 -

 

 

 -

 

 

(2,250)



Long-term incentive compensation

 

 

 -

 

 

 -

 

 

(1,929)

 

 

(1,929)



Medicare cap sequestration adjustment

 

 

(796)

 

 

 -

 

 

 -

 

 

(796)



Pretax impact on earnings

 

 

13,678 

 

 

(3,469)

 

 

(6,997)

 

 

3,212 



Excess tax benefits on stock compensation

 

 

 -

 

 

 -

 

 

8,203 

 

 

8,203 



Income tax benefit on the above

 

 

(3,515)

 

 

918 

 

 

1,060 

 

 

(1,537)



After-tax impact on earnings

 

$

10,163 

 

$

(2,551)

 

$

2,266 

 

$

9,878 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Six Months Ended June 30, 2020



 

 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated



 

 

 

 

 

 

 

 

 

 

 

 

 



CARES Act grant

 

$

40,989 

 

$

 -

 

$

 -

 

$

40,989 



Direct costs related to COVID-19

 

 

(25,238)

 

 

(1,978)

 

 

 -

 

 

(27,216)



Stock option expense

 

 

 -

 

 

 -

 

 

(10,114)

 

 

(10,114)



Amortization of acquired and cancelled franchise agreements

 

 

 -

 

 

(4,704)

 

 

 -

 

 

(4,704)



Long-term incentive compensation

 

 

 -

 

 

 -

 

 

(3,749)

 

 

(3,749)



COVID-19 Medicare cap

 

 

(2,250)

 

 

 -

 

 

 -

 

 

(2,250)



Medicare cap sequestration adjustment

 

 

(1,472)

 

 

 -

 

 

 -

 

 

(1,472)



Pretax impact on earnings

 

 

12,029 

 

 

(6,682)

 

 

(13,863)

 

 

(8,516)



Excess tax benefits on stock compensation

 

 

 -

 

 

 -

 

 

12,756 

 

 

12,756 



Income tax benefit on the above

 

 

(3,096)

 

 

1,770 

 

 

2,140 

 

 

814 



After-tax impact on earnings

 

$

8,933 

 

$

(4,912)

 

$

1,033 

 

$

5,054 



 

 

 

 

 

 

 

 

 

 

 

 

 




 



 

 

 

 

 

 

 

 

 

 

 

 

Included in the results of operations for 2019 are the following significant credits/(charges) which may not be indicative of ongoing operations

(in thousands):

 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30, 2019



 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated



 

 

 

 

 

 

 

 

 

 

 

 

Stock option expense

 

$

 -

 

$

 -

 

$

(3,929)

 

$

(3,929)

Impairment loss on transportation equipment

 

 

 -

 

 

 -

 

 

(2,266)

 

 

(2,266)

Medicare cap sequestration adjustment

 

 

(1,689)

 

 

 -

 

 

 -

 

 

(1,689)

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

(1,386)

 

 

(1,386)

Amortization of reacquired franchise agreements

 

 

 -

 

 

(331)

 

 

 

 

 

(331)

Acquisition expense

 

 

 -

 

 

(97)

 

 

 -

 

 

(97)

Pretax impact on earnings

 

 

(1,689)

 

 

(428)

 

 

(7,581)

 

 

(9,698)

Excess tax benefits on stock compensation

 

 

 -

 

 

 -

 

 

3,212 

 

 

3,212 

Income tax benefit on the above

 

 

435 

 

 

113 

 

 

1,452 

 

 

2,000 

After-tax impact on earnings

 

$

(1,254)

 

$

(315)

 

$

(2,917)

 

$

(4,486)



 

 

 

 

 

 

 

 

 

 

 

 



 

Six Months Ended June 30, 2019



 

VITAS

 

Roto-Rooter

 

Corporate

 

Consolidated



 

 

 

 

 

 

 

 

 

 

 

 

Stock option expense

 

$

 -

 

$

 -

 

$

(8,018)

 

$

(8,018)

Litigation settlement

 

 

(6,000)

 

 

 -

 

 

 -

 

 

(6,000)

Long-term incentive compensation

 

 

 -

 

 

 -

 

 

(2,874)

 

 

(2,874)

Impairment loss on transportation equipment

 

 

 -

 

 

 -

 

 

(2,266)

 

 

(2,266)

Medicare cap sequestration adjustment

 

 

(2,204)

 

 

 -

 

 

 -

 

 

(2,204)

Amortization of reacquired franchise agreements

 

 

 -

 

 

(772)

 

 

 

 

 

(772)

Non cash ASC 842 (expenses)/benefit

 

 

(656)

 

 

(55)

 

 

163 

 

 

(548)

Acquisition expense

 

 

 -

 

 

(97)

 

 

(120)

 

 

(217)

Pretax impact on earnings

 

 

(8,860)

 

 

(924)

 

 

(13,115)

 

 

(22,899)

Excess tax benefits on stock compensation

 

 

 -

 

 

 -

 

 

9,944 

 

 

9,944 

Income tax benefit on the above

 

 

2,254 

 

 

245 

 

 

2,462 

 

 

4,961 

After-tax impact on earnings

 

$

(6,606)

 

$

(679)

 

$

(709)

 

$

(7,994)



 

 

 

 

 

 

 

 

 

 

 

 

VITAS has 11 large (greater than 450 ADC), 20 medium (greater than 200 but less than 450 ADC) and 18 small (less than 200 ADC) hospice programs.  Of Vitas' 30 Medicare provider numbers, for the first nine months of the current cap year, 22 provider numbers have a Medicare cap cushion of 10% or greater, three provider numbers have a cap cushion between 5% and 10%, two provider numbers have a cap cushion between 0% and 5%, and three provider numbers have a Medicare cap liability.




v3.20.2
Document And Entity Information
Jul. 29, 2020
Document And Entity Information [Abstract]  
Document Type 8-K
Document Period End Date Jul. 29, 2020
Entity Registrant Name CHEMED CORPORATION
Entity Incorporation, State or Country Code DE
Entity File Number 1-8351
Entity Tax Identification Number 31-0791746
Entity Address, Address Line One 2600 First Financial Center, 255 East 5th Street
Entity Address, City or Town Cincinnati
Entity Address, State or Province OH
Entity Address, Postal Zip Code 45202
City Area Code 513
Local Phone Number 762-6690
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Title of 12(b) Security Capital stock $1 par value
Trading Symbol CHE
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000019584
Amendment Flag false