Delaware

31-0791746

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

255 E. Fifth Street, Suite 2600, Cincinnati, Ohio

45202

(Address of principal executive offices)

(Zip code)

(513) 762-6690

(Registrant’s telephone number, including area code)

Yes  

x   

No  

o  

Yes  

x   

No  

o  

Large Accelerated Filer

x

Accelerated Filer

o

Non-accelerated Filer

o

Smaller Reporting Company

o

Yes  

 o 

No  

x  

Title of Each Class

Trading Symbol

Name of Each Exchange

on which Registered

Amount

Date

Capital Stock $1 Par Value

CHE

New York Stock Exchange

15,919,194 Shares

June 30, 2020

Page No.

PART I. FINANCIAL INFORMATION:

Item 1. Financial Statements

Unaudited Consolidated Balance Sheets -

June 30, 2020 and December 31, 2019

3

Unaudited Consolidated Statements of Income -

Three and six months ended June 30, 2020 and 2019

4

Unaudited Consolidated Statements of Cash Flows -

Six months ended June 30, 2020 and 2019

5

Unaudited Consolidated Statements of Changes in Stockholders’ Equity-

Three and six months ended June 30, 2020 and 2019

6

Notes to Unaudited Consolidated Financial Statements

7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3. Quantitative and Qualitative Disclosures about Market Risk

43

Item 4. Controls and Procedures

43

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

43

Item 1A. Risk Factors

43

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

44

Item 3. Defaults Upon Senior Securities

44

Item 4. Mine Safety Disclosures

44

Item 5. Other Information

44

Item 6. Exhibits

45

EX – 31.1

EX – 31.2

EX – 31.3

EX – 32.1

EX – 32.2

EX – 32.3

EX – 101

EX – 104

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

June 30, 2020

December 31, 2019

ASSETS

Current assets

Cash and cash equivalents

$

20,376 

$

6,158 

Accounts receivable less allowances of $1,425 (2019 - $353)

132,487 

143,827 

Inventories

7,467 

7,462 

Prepaid income taxes

5,794 

10,074 

Prepaid expenses

23,183 

23,150 

Total current assets

189,307 

190,671 

Investments of deferred compensation plans

80,113 

77,446 

Properties and equipment, at cost, less accumulated depreciation of $281,237 (2019 - $270,140)

183,017 

175,763 

Lease right of use asset

128,418 

111,652 

Identifiable intangible assets less accumulated amortization of $42,584 (2019 - $37,620)

122,791 

126,370 

Goodwill

578,491 

577,367 

Other assets

9,055 

9,048 

Total Assets

$

1,291,192 

$

1,268,317 

LIABILITIES

Current liabilities

Accounts payable

$

36,704 

$

51,101 

Income taxes

19,576 

-

Accrued insurance

50,847 

50,328 

Accrued compensation

80,552 

70,814 

Accrued legal

6,959 

6,941 

Short-term lease liability

36,093 

39,280 

Unutilized CARES Act grant

39,236 

-

Other current liabilities

48,549

43,756 

Total current liabilities

318,516

262,220 

Deferred income taxes

21,108 

18,504 

Long-term debt

-

90,000 

Deferred compensation liabilities

77,639 

76,446 

Long-term lease liability

104,444 

86,656 

Other liabilities

18,789 

7,883 

Total Liabilities

540,496

541,709 

Commitments and contingencies (Note 11)

STOCKHOLDERS' EQUITY

Capital stock - authorized 80,000,000 shares $1 par; issued 36,039,794 shares (2019 - 35,810,528 shares)

36,040 

35,811 

Paid-in capital

904,421 

860,671 

Retained earnings

1,553,144 

1,425,752 

Treasury stock - 20,198,753 shares (2019 - 19,867,220 shares)

(1,745,299)

(1,597,940)

Deferred compensation payable in Company stock

2,390 

2,314 

Total Stockholders' Equity

750,696 

726,608 

Total Liabilities and Stockholders' Equity

$

1,291,192

$

1,268,317 

See accompanying Notes to Unaudited Consolidated Financial Statements.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

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 (excluding depreciation)

352,163

323,637 

703,908

645,588 

Selling, general and administrative expenses

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

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 

Cash Dividends Per Share

$

0.32

$

0.30 

$

0.64

$

0.60 

See accompanying Notes to Unaudited Consolidated Financial Statements.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

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 

Asset impairment loss

-

2,266 

Litigation settlement

-

6,000 

Changes in operating assets and liabilities:

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 period

$

20,376 

$

3,323 

See accompanying Notes to Unaudited Consolidated Financial Statements.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

(in thousands, except per share data)

For the three months ended June 30, 2020 and 2019:

Deferred

Compensation

Treasury

Payable in

Capital

Paid-in

Retained

Stock-

Company

Stock

Capital

Earnings

at Cost

Stock

Total

Balance at March 31, 2020

35,912 

878,550 

1,476,151 

(1,709,390)

2,378 

683,601 

Net income

-

-

82,101 

-

-

-

82,101 

Dividends paid ($0.32 per share)

-

-

(5,108)

-

-

(5,108)

Stock awards and exercise of stock options

128 

25,340 

-

(13,995)

-

11,473 

Purchases of treasury stock

-

-

-

(21,914)

-

(21,914)

Other

-

531 

-

-

12 

543 

Balance at June 30, 2020

$

36,040 

$

904,421 

$

1,553,144 

$

(1,745,299)

$

2,390 

$

750,696 

Deferred

Compensation

`

Treasury

Payable in

Capital

Paid-in