CINCINNATI--(BUSINESS WIRE)--October 27, 2009--Chemed Corporation (Chemed) (NYSE:CHE), which operates VITAS Healthcare Corporation (VITAS), the nation’s largest provider 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, 2009, versus the comparable prior-year period, as follows:

Net revenue for VITAS was $217.1 million in the third quarter of 2009, which is an increase of 5.9% over the prior-year period. This revenue growth was the result of increased admissions of 3.1%, a Medicare price increase of approximately 3.5%, partially offset by an increase in discharged patients of 1.2%. The remaining difference is attributed to the timing within the quarter of admissions and discharges as well as revenue and patient geographic mix.

Average revenue per patient per day in the quarter was $194.76, which is 5.2% above the prior-year period. Routine home care reimbursement and high acuity care averaged $153.11 and $675.70, respectively, per patient per day in the third quarter of 2009. During the quarter, high acuity days-of-care were 8.0% of total days-of-care.

Of VITAS’ 34 unique Medicare provider numbers, 31 provider numbers, or 91%, have a Medicare Cap cushion greater than 10% for the 2009 Medicare Cap period with two provider numbers having cushion of less than 5%. VITAS generated an aggregate cap cushion of $174 million or 25% during the 2009 Medicare Cap period. In the third quarter of 2009, we received notification from our fiscal intermediary of a $43,000 Medicare Cap billing limitation for one program related to the 2006 cap period.

The third quarter of 2009 gross margin was 23.4%, which is essentially flat with the third quarter of 2008.

Selling, general and administrative expense was $18.2 million in the third quarter of 2009, which is an increase of 6.6% when compared to the prior year. Adjusted EBITDA totaled $32.9 million, an increase of 5.8% over the comparable prior-year period. Adjusted EBITDA margin was 15.1% in the quarter, which is essentially equal to the third quarter of 2008.

Roto-Rooter’s plumbing and drain cleaning business generated sales of $79.7 million for the third quarter of 2009, a decline of 4.4%. Despite the decline in revenues, Roto-Rooter’s gross margin expanded 133 basis points to 46.4%, as compared to the third quarter of 2008. This is attributable primarily to favorable technician turnover rate, lower fuel costs and lower health insurance expense. Favorable technician turnover rates improve margins by reducing hiring expenses and training costs. Adjusted EBITDA in the third quarter of 2009 totaled $13.8 million, an increase of 1.2% from the third quarter of 2008, and equated to an Adjusted EBITDA margin of 17.3%.

Job count in the third quarter of 2009 declined 8.3% when compared to the prior-year period. Total residential jobs declined 6.1%, as residential plumbing jobs decreased 6.8% and residential drain cleaning jobs declined 5.6%, when compared to the third quarter of 2008. Residential jobs represented 71% of total job count in the quarter. Total commercial jobs declined 13.3% with commercial plumbing job count declining 17.1% and commercial drain cleaning decreasing 13.1%, when compared to the prior-year quarter. These declines were partially offset by a 21.3% increase in jobs in the “Other” category.

This job count decline was significantly mitigated relative to total revenue through a combination of increased pricing and favorable job mix shift to more expensive jobs such as excavation.

Management continues to have discussions with existing franchisees to acquire Roto-Rooter franchise territories. This activity is attributed to the current state of the capital markets, the potential increase in tax rates and the recessionary difficulties our franchisees are experiencing. Management will continue to be highly disciplined in terms of valuation, risk assessment and overall return on investment of any potential acquisition. However, the timing or actual completion of any acquisition cannot be predicted.

Effective January 1, 2009, the Company retrospectively adopted a new accounting standard to account for its convertible debt instrument. This accounting standard required the Company to separately account for the debt and equity portions of its 1.875% Senior Convertible Notes (Notes). This accounting method assumed the Company could have borrowed under a conventional seven-year fixed rate interest-only note at 6.875%. The difference between the actual 1.875% coupon rate of the Notes and this estimated borrowing rate created a discount on the Notes that is recorded in equity at the inception of the debt. The Notes, net of this discount, will be accreted to their face value over the life of the Notes using the effective interest method. The impact of this accounting change for the year ended December 31, 2009, is projected to be a non-cash increase in pretax interest expense of approximately $6.3 million ($4.0 million after-tax).

Chemed had total debt of $150.5 million at September 30, 2009. This debt is net of the discount taken as a result of the new accounting standard. Excluding this discount, aggregate debt is $187.0 million and is due in May 2014. During the third quarter of 2009, the Company prepaid the remaining $5.0 million bank term loan utilizing cash on hand. Chemed’s total debt equates to less than one times trailing Adjusted EBITDA.

Chemed’s $175.0 million revolving credit facility expires in May 2012. At September 30, 2009, this credit facility had approximately $147.1 million of undrawn borrowing capacity after deducting $27.9 million for letters of credit issued under this facility to secure the Company’s workers’ compensation insurance.

Total cash and cash equivalents as of September 30, 2009, was $42.0 million, which represents 23.1% of total current assets. Net cash provided from operations in the first nine months of 2009 aggregated $80.5 million. Capital expenditures for the first nine months of 2009 aggregated $14.5 million and compares favorably to depreciation and amortization in the first nine months of 2009 of $20.8 million.

In the third quarter of 2009, the Company increased its quarterly dividend per share from $0.06 per share to $0.12 per share. Management continually evaluates alternatives, including share or debt repurchase, acquisitions and increased dividends, to determine the most beneficial use of available capital resources.

VITAS expects to achieve full-year 2009 revenue growth, prior to Medicare Cap, of 5.7% to 6.2%. Admissions in 2009 are estimated to be in the range of 98% to 100% of total 2008 admissions and full-year Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 15.2% to 15.5%. Effective October 1, 2009, Medicare increased average hospice reimbursement rates by approximately 1.4%. This guidance includes $1.25 million of estimated Medicare contractual billing limitations in the fourth quarter of 2009.

Roto-Rooter expects to achieve full-year 2009 revenue to range from 98% to 101% of 2008 full-year sales. The revenue estimate is a result of increased pricing of 5.0%, a favorable mix shift to higher revenue jobs, offset by a job count decline estimated at 7.0% to 8.0%. Adjusted EBITDA margin for 2009 is estimated in the range of 17.9% to 18.2%.

Based upon these factors and a full-year average diluted share count of 22.7 million shares, management estimates 2009 earnings per diluted share from continuing operations, excluding non-cash expenses for stock options, the non-cash increase in interest expense related to the accounting change for convertible debt interest expense and other items not indicative of ongoing operations will be in the range of $3.85 to $3.95.

Chemed will host a conference call and webcast at 10 a.m., EDT, on Wednesday, October 28, 2009, to discuss the Company's quarterly results and to provide an update on its business. The dial-in number for the conference call is (866) 804-6924 for U.S. and Canadian participants and (857) 350-1670 for international participants. The participant passcode is 36347073. 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 (888) 286-8010 for U.S. and Canadian callers and (617) 801-6888 for international callers and will be available for one week following the live call. The replay passcode is 89632552. 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 12,000 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 and drain service through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in Indonesia, Singapore, Japan, 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.

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 STATEMENT OF INCOME
(in thousands, except per share data)(unaudited)

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2009			2008 (aa)			2009			2008 (aa)
Service revenues and sales		$	296,794		$	288,312		$	886,987		$	856,736
Cost of services provided and goods sold			208,888			202,446			623,238			609,397
Selling, general and administrative expenses (bb)			48,148			44,022			143,521			133,070
Depreciation			5,361			5,441			16,024			16,249
Amortization			1,611			1,494			4,765			4,433
Other operating expense (cc)			-			-			3,989			-
	Total costs and expenses		264,008			253,403			791,537			763,149
	Income from operations		32,786			34,909			95,450			93,587
Interest expense			(2,853	)		(3,140	)		(8,839	)		(9,213	)
Other income/(expense)--net (dd)			1,733			(1,908	)		4,815			(2,211	)
	Income before income taxes		31,666			29,861			91,426			82,163
Income taxes			(12,456	)		(12,910	)		(35,627	)		(33,081	)
Net Income		$	19,210		$	16,951		$	55,799		$	49,082

Earnings Per Share
	Net income	$	0.86		$	0.75		$	2.49		$	2.11
	Average number of shares outstanding		22,461			22,503			22,425			23,285
Diluted Earnings Per Share
	Net income	$	0.84		$	0.74		$	2.46		$	2.08
	Average number of shares outstanding		22,744			22,818			22,679			23,620

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEET

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

September 30,

2009

2008 (aa)

Assets

Current assets

Cash and cash equivalents

42,047

6,804

Accounts receivable less allowances

106,667

88,206

Inventories

8,071

7,494

Current deferred income taxes

16,648

15,500

Prepaid expenses and other current assets

8,579

7,702

Total current assets

182,012

125,706

Investments of deferred compensation plans held in trust

22,441

28,897

Properties and equipment, at cost less accumulated depreciation

73,918

70,970

Identifiable intangible assets less accumulated amortization

58,853

62,152

Goodwill

450,130

439,909

Other assets

14,049

14,913

Total Assets

801,403

742,547

Liabilities

Current liabilities

Accounts payable

47,788

46,187

Current portion of long-term debt

10,166

Income taxes

8,022

2,736

Accrued insurance

34,955

34,567

Accrued compensation

41,383

38,385

Other current liabilities

12,992

13,412

Total current liabilities

145,210

145,453

Deferred income taxes

22,389

21,239

Long-term debt

150,431

161,036

Deferred compensation liabilities

21,962

29,133

Other liabilities

4,435

6,123

Total Liabilities

344,427

362,984

Stockholders' Equity

Capital stock

29,763

29,446

Paid-in capital

327,918

311,388

Retained earnings

388,109

320,731

Treasury stock, at cost

(290,748

)

(284,436

)

Deferred compensation payable in Company stock

1,934

2,434

Total Stockholders' Equity

456,976

379,563

Total Liabilities and Stockholders' Equity

801,403

742,547

(aa)

Effective January 1, 2009, we retrospectively adopted the provisions of the FASB's guidance, issued in May 2008, for accounting for certain convertible debt instruments.

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

						Nine Months Ended September 30,
						2009			2008 (aa)
Cash Flows from Operating Activities
	Net income					$	55,799		$	49,082
	Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation and amortization				20,789			20,682
			Provision for uncollectible accounts receivable				8,297			7,101
			Stock option expense				6,699			5,084
			Amortization of discount on convertible notes				4,921			4,920
			Provision for deferred income taxes				(1,336	)		(3,945	)
			Amortization of debt issuance costs				480			464
			Changes in operating assets and liabilities, excluding amounts acquired in business combinations:
					Decrease/(increase) in accounts receivable		(16,936	)		5,846
					Increase in inventories		(499	)		(851	)
					Decrease in prepaid expenses and other current assets
					Decrease in prepaid expenses and other current assets		1,406			2,804
					Decrease in accounts payable and other current liabilities		(4,584	)		(875	)
					Increase/(decrease) in income taxes		8,657			(329	)
					Increase in other assets		(103	)		(547	)
					Increase/(decrease) in other liabilities		(1,632	)		674
			Excess tax benefit on share-based compensation				(1,519	)		(1,234	)
			Other sources				108			654
				Net cash provided by operating activities			80,547			89,530
Cash Flows from Investing Activities
	Capital expenditures						(14,471	)		(13,103	)
	Business combinations, net of cash acquired						(1,859	)		(1,578	)
	Proceeds from sales of property and equipment						1,519			200
	Net proceeds/(uses) from the sale of discontinued operations						(558	)		8,980
	Other uses						(392	)		(421	)
				Net cash used by investing activities			(15,761	)		(5,922	)
Cash Flows from Financing Activities
	Repayment of long-term debt						(14,599	)		(7,595	)
	Net decrease in revolving line of credit						(8,200	)		-
	Dividends paid						(5,429	)		(4,352	)
	Purchases of treasury stock						(1,684	)		(69,136	)
	Excess tax benefit on share-based compensation						1,519			1,234
	Increase/(decrease) in cash overdrafts payable						943			(1,913	)
	Other sources/(uses)						1,083			(30	)
				Net cash used by financing activities			(26,367	)		(81,792	)
Increase in Cash and Cash Equivalents							38,419			1,816
Cash and cash equivalents at beginning of year							3,628			4,988
Cash and cash equivalents at end of period						$	42,047		$	6,804

(aa)		Effective January 1, 2009, we retrospectively adopted the provisions of the FASB's guidance, issued in May 2008, for accounting for certain convertible debt instruments.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands)(unaudited)

											Chemed
		VITAS			Roto-Rooter			Corporate			Consolidated
2009
Service revenues and sales		$	217,067		$	79,727		$	-		$	296,794
Cost of services provided and goods sold			166,182			42,706			-			208,888
Selling, general and administrative expenses (a)			18,227			22,739			7,182			48,148
Depreciation			3,292			2,005			64			5,361
Amortization			990			33			588			1,611
	Total costs and expenses		188,691			67,483			7,834			264,008
	Income/(loss) from operations		28,376			12,244			(7,834	)		32,786
Interest expense (a)			(51	)		(43	)		(2,759	)		(2,853	)
Intercompany interest income/(expense)			1,178			684			(1,862	)		-
Other income/(expense)—net			(86	)		15			1,804			1,733
	Income/(loss) before income taxes		29,417			12,900			(10,651	)		31,666
Income taxes (a)			(11,150	)		(4,912	)		3,606			(12,456	)
	Net income/(loss)	$	18,267		$	7,988		$	(7,045	)	$	19,210

2008 (f)
Service revenues and sales		$	204,956		$	83,356		$	-		$	288,312
Cost of services provided and goods sold			156,685			45,761			-			202,446
Selling, general and administrative expenses (b)			17,100			23,576			3,346			44,022
Depreciation			3,256			2,102			83			5,441
Amortization			996			11			487			1,494
	Total costs and expenses		178,037			71,450			3,916			253,403
	Income/(loss) from operations		26,919			11,906			(3,916	)		34,909
Interest expense (b)			(35	)		(56	)		(3,049	)		(3,140	)
Intercompany interest income/(expense)			1,435			1,026			(2,461	)		-
Other income/(expense)—net			(59	)		45			(1,894	)		(1,908	)
	Income/(loss) before income taxes		28,260			12,921			(11,320	)		29,861
Income taxes (b)			(10,699	)		(4,964	)		2,753			(12,910	)
	Net income/(loss)	$	17,561		$	7,957		$	(8,567	)	$	16,951

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



CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands)(unaudited)

											Chemed
		VITAS			Roto-Rooter			Corporate			Consolidated
2009
Service revenues and sales		$	636,787		$	250,200		$	-		$	886,987
Cost of services provided and goods sold			487,989			135,249			-			623,238
Selling, general and administrative expenses (a)			53,650			69,958			19,913			143,521
Depreciation			9,767			6,094			163			16,024
Amortization			2,969			81			1,715			4,765
Other operating expense (a)			-			-			3,989			3,989
	Total costs and expenses		554,375			211,382			25,780			791,537
	Income/(loss) from operations		82,412			38,818			(25,780	)		95,450
Interest expense (a)			(416	)		(137	)		(8,286	)		(8,839	)
Intercompany interest income/(expense)			3,091			1,801			(4,892	)		-
Other income/(expense)—net			34			137			4,644			4,815
	Income/(loss) before income taxes		85,121			40,619			(34,314	)		91,426
Income taxes (a)			(32,327	)		(15,504	)		12,204			(35,627	)
	Net income/(loss)	$	52,794		$	25,115		$	(22,110	)	$	55,799

2008 (f)
Service revenues and sales		$	602,589		$	254,147		$	-		$	856,736
Cost of services provided and goods sold (b)			471,018			138,379			-			609,397
Selling, general and administrative expenses (b)			50,520			70,710			11,840			133,070
Depreciation			9,769			6,249			231			16,249
Amortization			2,988			36			1,409			4,433
	Total costs and expenses		534,295			215,374			13,480			763,149
	Income/(loss) from operations		68,294			38,773			(13,480	)		93,587
Interest expense (b)			(118	)		(216	)		(8,879	)		(9,213	)
Intercompany interest income/(expense)			3,862			2,832			(6,694	)		-
Other income/(expense)—net			(48	)		58			(2,221	)		(2,211	)
	Income/(loss) before income taxes		71,990			41,447			(31,274	)		82,163
Income taxes (b)			(26,810	)		(16,002	)		9,731			(33,081	)
	Net income/(loss)	$	45,180		$	25,445		$	(21,543	)	$	49,082

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

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARY OF EBITDA
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands)(unaudited)

												Chemed
			VITAS			Roto-Rooter			Corporate			Consolidated
2009
Net income/(loss)			$	18,267		$	7,988		$	(7,045	)	$	19,210
Add/(deduct):
	Interest expense			51			43			2,759			2,853
	Income taxes			11,150			4,912			(3,606	)		12,456
	Depreciation			3,292			2,005			64			5,361
	Amortization			990			33			588			1,611
		EBITDA		33,750			14,981			(7,240	)		41,491
Add/(deduct):
	Legal expenses of OIG investigation			343			-			-			343
	Stock option expense			-			-			2,214			2,214
	Advertising cost adjustment (c)			-			(466	)		-			(466	)
	Interest income			(54	)		(9	)		(23	)		(86	)
	Intercompany interest income/(expense)			(1,178	)		(684	)		1,862			-
		Adjusted EBITDA	$	32,861		$	13,822		$	(3,187	)	$	43,496

2008 (f)
Net income/(loss)			$	17,561		$	7,957		$	(8,567	)	$	16,951
Add/(deduct):
	Interest expense			35			56			3,049			3,140
	Income taxes			10,699			4,964			(2,753	)		12,910
	Depreciation			3,256			2,102			83			5,441
	Amortization			996			11			487			1,494
		EBITDA		32,547			15,090			(7,701	)		39,936
Add/(deduct):
	Legal expenses of OIG investigation			2			-			-			2
	Stock option expense			-			-			2,102			2,102
	Advertising cost adjustment (c)			-			(351	)		-			(351	)
	Interest income			(58	)		(51	)		(50	)		(159	)
	Intercompany interest income/(expense)			(1,435	)		(1,026	)		2,461			-
		Adjusted EBITDA	$	31,056		$	13,662		$	(3,188	)	$	41,530

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

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARY OF EBITDA
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands)(unaudited)

												Chemed
			VITAS			Roto-Rooter			Corporate			Consolidated
2009
Net income/(loss)			$	52,794		$	25,115		$	(22,110	)	$	55,799
Add/(deduct):
	Interest expense			416			137			8,286			8,839
	Income taxes			32,327			15,504			(12,204	)		35,627
	Depreciation			9,767			6,094			163			16,024
	Amortization			2,969			81			1,715			4,765
		EBITDA		98,273			46,931			(24,150	)		121,054
Add/(deduct):
	Non-taxable income from certain investments held in deferred compensation trusts			-			-			(1,211	)		(1,211	)
	Expenses associated with contested proxy solicitation.			-			-			3,989			3,989
	Legal expenses of OIG investigation			442			-			-			442
	Stock option expense			-			-			6,699			6,699
	Advertising cost adjustment (c)			-			(1,228	)		-			(1,228	)
	Interest income			(250	)		(44	)		(81	)		(375	)
	Intercompany interest income/(expense)			(3,091	)		(1,801	)		4,892			-
		Adjusted EBITDA	$	95,374		$	43,858		$	(9,862	)	$	129,370

2008 (f)
Net income/(loss)			$	45,180		$	25,445		$	(21,543	)	$	49,082
Add/(deduct):
	Interest expense			118			216			8,879			9,213
	Income taxes			26,810			16,002			(9,731	)		33,081
	Depreciation			9,769			6,249			231			16,249
	Amortization			2,988			36			1,409			4,433
		EBITDA		84,865			47,948			(20,755	)		112,058
Add/(deduct):
	Unreserved insurance claim			-			597			-			597
	Legal expenses of OIG investigation			44			-			-			44
	Stock option expense			-			-			5,084			5,084
	Advertising cost adjustment (c)			-			(1,176	)		-			(1,176	)
	Interest income			(109	)		(91	)		(402	)		(602	)
	Intercompany interest income/(expense)			(3,862	)		(2,832	)		6,694			-
		Adjusted EBITDA	$	80,938		$	44,446		$	(9,379	)	$	116,005

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

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF ADJUSTED NET INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands, except per share data)(unaudited)

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2009		2008 (f)		2009			2008 (f)
Net income as reported		$	19,210	$	16,951	$	55,799		$	49,082

Add/(deduct):
	After-tax stock option expense		1,401		1,334		4,237			3,228
	After-tax additional interest expense resulting from the change in accounting for the conversion feature of the convertible notes		1,006		997		2,961			2,936
	After-tax cost of legal expenses of OIG investigation		213		1		274			27
	After-tax impact of non-deductible losses and non-taxable gains on investments held in deferred compensation trusts		-		1,237		(756	)		1,237
	After-tax expenses associated with contested proxy solicitation		-		-		2,525			-
	After-tax unreserved insurance cost		-		-		-			358
	Income tax credit related to prior years		-		-		-			(322	)

Adjusted net income		$	21,830	$	20,520	$	65,040		$	56,546


Earnings Per Share As Reported
	Net income	$	0.86	$	0.75	$	2.49		$	2.11
	Average number of shares outstanding		22,461		22,503		22,425			23,285
Diluted Earnings Per Share As Reported
	Net income	$	0.84	$	0.74	$	2.46		$	2.08
	Average number of shares outstanding		22,744		22,818		22,679			23,620


Adjusted Earnings Per Share
	Net income	$	0.97	$	0.91	$	2.90		$	2.43
	Average number of shares outstanding		22,461		22,503		22,425			23,285
Adjusted Diluted Earnings Per Share
	Net income	$	0.96	$	0.90	$	2.87		$	2.39
	Average number of shares outstanding		22,744		22,818		22,679			23,620

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

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(unaudited)

				Three Months Ended September 30,						Nine Months Ended September 30,
OPERATING STATISTICS				2009			2008			2009			2008
	Net revenue ($000) (d)
		Homecare		$	157,079		$	149,732		$	456,160		$	436,075
		Inpatient			24,057			24,155			72,806			74,497
		Continuous care			35,974			31,069			105,679			92,017
			Total before Medicare cap allowance and 2008 BNAF*	$	217,110		$	204,956		$	634,645		$	602,589
		Estimated BNAF* Accrual Q4 2008			-			-			1,950			-
		Medicare cap allowance			(43	)		-			192			-
			Total	$	217,067		$	204,956		$	636,787		$	602,589
	Net revenue as a percent of total before Medicare cap allowance
		Homecare			72.3	%		73.0	%		71.8	%		72.4	%
		Inpatient			11.1			11.8			11.5			12.3
		Continuous care			16.6			15.2			16.7			15.3
			Total before Medicare cap allowance and 2008 BNAF*		100.0			100.0			100.0			100.0
		Estimated BNAF* Accrual Q4 2008			-			-			0.3			-
		Medicare cap allowance			-			-			-			-
			Total		100.0	%		100.0	%		100.3	%		100.0	%
	Average daily census ("ADC") (days)
		Homecare			7,835			7,534			7,661			7,346
		Nursing home			3,316			3,570			3,291			3,562
			Routine homecare		11,151			11,104			10,952			10,908
		Inpatient			404			410			406			429
		Continuous care			562			519			565			521
			Total		12,117			12,033			11,923			11,858

	Total Admissions				13,735			13,317			41,743			42,485
	Total Discharges				13,441			13,279			41,064			41,992
	Average length of stay (days)				78.0			74.1			75.0			72.9
	Median length of stay (days)				14.0			15.0			14.0			14.0
	ADC by major diagnosis
		Neurological			33.1	%		32.5	%		33.0	%		32.5	%
		Cancer			19.1			19.9			19.2			19.9
		Cardio			12.2			12.8			12.2			12.9
		Respiratory			6.2			6.5			6.5			6.7
		Other			29.4			28.3			29.1			28.0
			Total		100.0	%		100.0	%		100.0	%		100.0	%
	Admissions by major diagnosis
		Neurological			17.9	%		18.2	%		17.9	%		18.4	%
		Cancer			36.8			37.6			35.6			35.6
		Cardio			11.1			11.3			11.8			11.8
		Respiratory			6.8			7.0			7.5			7.8
		Other			27.4			25.9			27.2			26.4
			Total		100.0	%		100.0	%		100.0	%		100.0	%
	Direct patient care margins (e)
		Routine homecare			51.7	%		52.4	%		51.8	%		51.2	%
		Inpatient			12.8			16.6			15.7			17.9
		Continuous care			20.6			18.0			20.3			17.4
	Homecare margin drivers (dollars per patient day)
		Labor costs		$	52.56		$	48.59		$	52.40		$	50.16
		Drug costs			7.59			7.85			7.65			7.70
		Home medical equipment			7.03			6.28			6.85			6.22
		Medical supplies			2.48			2.17			2.37			2.35
	Inpatient margin drivers (dollars per patient day)
		Labor costs		$	294.24		$	262.98		$	282.74		$	263.71
	Continuous care margin drivers (dollars per patient day)
		Labor costs		$	530.88		$	512.04		$	524.84		$	511.81
	Bad debt expense as a percent of revenues				1.1	%		1.0	%		1.1	%		1.0	%
	Accounts receivable --
	days of revenue outstanding excluding unapplied Medicare payments				52.8			46.9			N.A.			N.A.
	days of revenue outstanding including unapplied Medicare payments				37.0			30.4			N.A.			N.A.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(unaudited)

(a)	Included in the results of operations for the three and nine months ended September 30, 2009, are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands):


				Three Months Ended September 30, 2009
				VITAS			Corporate			Consolidated
	Selling, general and administrative expenses
		Stock option expense		$	-		$	(2,214	)	$	(2,214	)
		Legal expenses of OIG investigation			(343	)		-			(343	)
	Interest expense
		Additional interest expense resulting from the change in accounting for the conversion feature of the convertible notes			-			(1,591	)		(1,591	)
			Pretax impact on earnings		(343	)		(3,805	)		(4,148	)
	Income tax benefit on the above				130			1,398			1,528
			After-tax impact on earnings	$	(213	)	$	(2,407	)	$	(2,620	)

				Nine Months Ended September 30, 2009
				VITAS			Corporate			Consolidated
	Selling, general and administrative expenses
		Stock option expense		$	-		$	(6,699	)	$	(6,699	)
		Legal expenses of OIG investigation			(442	)		-			(442	)
	Other operating expense
		Expenses associated with contested proxy solicitation			-			(3,989	)		(3,989	)
	Interest expense
		Additional interest expense resulting from the change in accounting for the conversion feature of the convertible notes			-			(4,682	)		(4,682	)
	Other income-net
		Non-taxable income from certain investments held in deferred compensation trusts			-			1,211			1,211
			Pretax impact on earnings		(442	)		(14,159	)		(14,601	)
	Income tax benefit on the above				168			5,192			5,360
			After-tax impact on earnings	$	(274	)	$	(8,967	)	$	(9,241	)

(b)	Included in the results of operations for the three and nine months ended September 30, 2008, are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands):

				Three Months Ended September 30, 2008
				VITAS			Corporate (f)			Consolidated
	Selling, general and administrative expenses
		Stock option expense		$	-		$	(2,102	)	$	(2,102	)
		Legal expenses of OIG investigation			(2	)		-			(2	)
	Interest expense
		Additional interest expense resulting from the change in accounting for the conversion feature of the convertible notes			-			(1,570	)		(1,570	)
			Pretax impact on earnings		(2	)		(3,672	)		(3,674	)
	Income tax benefit on the above				1			1,341			1,342
	Income tax impact of non-deductible net market losses on investments held in deferred compensation trusts				-			(1,237	)		(1,237	)
			After-tax impact on earnings	$	(1	)	$	(3,568	)	$	(3,569	)

(c)		Under Generally Accepted Accounting Principles ("GAAP"), the Roto-Rooter segment expenses all advertising, including the cost of telephone directories, immediately upon the initial release of the advertising. Telephone directories are generally in circulation 12 months. If a directory is in circulation for a time period greater or less than 12 months, the publisher adjusts the directory billing for the change in billing period. The timing of when a telephone directory is published can and does fluctuate significantly on a quarterly basis. This "direct expensing" results in significant fluctuations in quarterly advertising expense. In the third quarters of 2009 and 2008, GAAP advertising expense for Roto-Rooter totaled $5,674,000 and $5,498,000, respectively. If the expense of the telephone directories were spread over the periods they are in circulation, advertising expense for the third quarters of 2009 and 2008 would total $6,140,000 and $5,849,000, respectively. For the nine months ended September 30, 2009 and 2008, GAAP advertising expense for Roto-Rooter totaled $17,202,000 and $16,656,000, respectively. If the expense of the telephone directories were spread over the periods they are in circulation, advertising expense for the nine months ended September 30, 2009 and 2008, would total $18,430,000 and $17,832,000, respectively.

(d)		VITAS has 4 large (greater than 450 ADC), 19 medium (greater than 200 but less than 450 ADC) and 21 small (less than 200 ADC) hospice programs. There are three programs continuing at September 30, 2009, with Medicare cap cushion of less than 10% for the 2009 Medicare cap period.

(e)		Amounts exclude indirect patient care and administrative costs, as well as Medicare cap billing limitation.

(f)		Effective January 1, 2009, we retrospectively adopted the provisions of the FASB's guidance, issued in May 2008, for accounting for certain convertible debt instruments.

			CHEMED CORPORATION


Dated:	October 27, 2009	By:	/s/ Arthur V. Tucker, Jr.
			Arthur V. Tucker, Jr.
			Vice President and Controller

	Three Months Ended September 30,					Nine Months Ended September 30,
	2009		2008			2009		2008

SG&A expenses before the impact of market gains and losses of deferred compensation plans	$	46,359	$	45,966		$	140,147	$	135,695
Impact of market gains and losses		1,789		(1,944	)		3,374		(2,625	)
Total SG&A expenses	$	48,148	$	44,022		$	143,521	$	133,070

	d)		Exhibit
			(99) Registrant’s press release dated October 27, 2009

(aa)	Effective January 1, 2009, we retrospectively adopted the provisions of the FASB's guidance, issued in May 2008, for accounting for certain convertible debt instruments.

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

(cc)	Amount represents expenses associated with contested proxy situation

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

		* Budget Neutrality Adjustment Factor.
		The "Footnotes to Financial Statements" are integral parts of this financial information.

			Nine Months Ended September 30, 2008
			VITAS		Roto-Rooter		Corporate (f)		Consolidated
Cost of services provided and goods sold
	Unreserved prior-year's insurance claim		$	-	$	(597)	$	-	$	(597)
Selling, general and administrative expenses
	Stock option expense			-		-		(5,084)		(5,084)
	Legal expenses of OIG investigation			(44)		-		-		(44)
Interest expense
	Additional interest expense resulting from the change in accounting
		for the conversion feature of the convertible notes		-		-		(4,624)		(4,624)
		Pretax impact on earnings		(44)		(597)		(9,708)		(10,349)
Income tax benefit on the above				17		239		3,544		3,800
Income tax impact of non-deductible net market losses on
	investments held in deferred compensation trusts			-		-		(1,237)		(1,237)
Income tax credit related to prior years				322		-		-		322
		After-tax impact on earnings	$	295	$	(358)	$	(7,401)	$	(7,464)