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)
|
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
|
Class
|
Amount
|
Date
|
Capital Stock $1 Par Value
|
17,010,464 Shares
|
September 30, 2014
|
Page No.
|
|
PART I. FINANCIAL INFORMATION:
|
|
Item 1. Financial Statements
|
|
3 | |
Unaudited Consolidated Statement of Income - Three and nine months ended September 30, 2014 and 2013 | 4 |
Unaudited Consolidated Statement of Cash Flows - Nine months ended September 30, 2014 and 2013 | 5 |
6
|
|
15
|
|
32
|
|
32
|
|
PART II. OTHER INFORMATION
|
|
32
|
|
32
|
|
33
|
|
33
|
|
33
|
|
Item 5. Other Information | 33 |
34
|
|
EX – 31.1
|
|
EX – 31.2
|
|
EX – 31.3
|
|
EX – 32.1
|
|
EX – 32.2
|
|
EX – 32.3
|
|
EX – 101.INS
|
|
EX – 101.SCH
|
|
EX – 101.CAL
|
|
EX – 101.DEF
|
|
EX – 101.LAB
|
|
EX – 101.PRE
|
PART I. FINANCIAL INFORMATION
|
||||||||
Item 1. Financial Statements
|
||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||
(in thousands, except share and per share data)
|
||||||||
September 30, 2014
|
December 31, 2013
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 18,562 | $ | 84,418 | ||||
Accounts receivable less allowances of $13,887 (2013 - $12,590)
|
132,340 | 91,770 | ||||||
Inventories
|
6,385 | 6,703 | ||||||
Current deferred income taxes
|
14,543 | 20,257 | ||||||
Prepaid income taxes
|
3,488 | 3,690 | ||||||
Prepaid expenses
|
13,420 | 17,818 | ||||||
Total current assets
|
188,738 | 224,656 | ||||||
Investments of deferred compensation plans
|
47,780 | 42,465 | ||||||
Properties and equipment, at cost, less accumulated depreciation of $187,983 (2013 - $180,550)
|
101,845 | 92,955 | ||||||
Identifiable intangible assets less accumulated amortization of $32,644 (2013 - $32,055)
|
56,158 | 56,556 | ||||||
Goodwill
|
466,844 | 466,871 | ||||||
Other assets
|
8,143 | 10,198 | ||||||
Total Assets
|
$ | 869,508 | $ | 893,701 | ||||
LIABILITIES
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$ | 57,067 | $ | 41,758 | ||||
Current portion of long-term debt
|
20,425 | 183,564 | ||||||
Income taxes
|
4,608 | 111 | ||||||
Accrued insurance
|
39,927 | 41,859 | ||||||
Accrued compensation
|
50,412 | 48,323 | ||||||
Accrued legal
|
685 | 23,210 | ||||||
Other current liabilities
|
24,131 | 25,161 | ||||||
Total current liabilities
|
197,255 | 363,986 | ||||||
Deferred income taxes
|
27,853 | 27,301 | ||||||
Long-term debt
|
153,125 | - | ||||||
Deferred compensation liabilities
|
47,736 | 42,348 | ||||||
Other liabilities
|
11,108 | 11,176 | ||||||
Total Liabilities
|
437,077 | 444,811 | ||||||
Commitments and contingencies
|
||||||||
STOCKHOLDERS' EQUITY
|
||||||||
Capital stock - authorized 80,000,000 shares $1 par; issued 33,199,078 shares (2013 - 32,245,226 shares)
|
33,199 | 32,245 | ||||||
Paid-in capital
|
528,973 | 481,011 | ||||||
Retained earnings
|
745,077 | 686,114 | ||||||
Treasury stock - 16,287,526 shares (2013 - 14,660,427)
|
(877,067 | ) | (752,634 | ) | ||||
Deferred compensation payable in Company stock
|
2,249 | 2,154 | ||||||
Total Stockholders' Equity
|
432,431 | 448,890 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 869,508 | $ | 893,701 |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||||||||||
(in thousands, except per share data)
|
||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Service revenues and sales
|
$ | 358,389 | $ | 340,886 | $ | 1,076,871 | $ | 1,064,725 | ||||||||
Cost of services provided and goods sold (excluding depreciation)
|
256,445 | 243,184 | 771,271 | 762,850 | ||||||||||||
Selling, general and administrative expenses
|
53,566 | 48,870 | 162,886 | 157,537 | ||||||||||||
Depreciation
|
7,450 | 6,971 | 21,871 | 20,665 | ||||||||||||
Amortization
|
717 | 1,190 | 2,461 | 3,498 | ||||||||||||
Other operating expenses
|
- | 11,461 | - | 26,221 | ||||||||||||
Total costs and expenses
|
318,178 | 311,676 | 958,489 | 970,771 | ||||||||||||
Income from operations
|
40,211 | 29,210 | 118,382 | 93,954 | ||||||||||||
Interest expense
|
(980 | ) | (3,500 | ) | (7,224 | ) | (11,291 | ) | ||||||||
Other income - net
|
705 | (90 | ) | 2,277 | 3,312 | |||||||||||
Income before income taxes
|
39,936 | 25,620 | 113,435 | 85,975 | ||||||||||||
Income taxes
|
(15,351 | ) | (8,188 | ) | (43,913 | ) | (31,657 | ) | ||||||||
Net income
|
$ | 24,585 | $ | 17,432 | $ | 69,522 | $ | 54,318 | ||||||||
Earnings Per Share
|
||||||||||||||||
Net income
|
$ | 1.44 | $ | 0.96 | $ | 4.03 | $ | 2.95 | ||||||||
Average number of shares outstanding
|
17,039 | 18,184 | 17,263 | 18,436 | ||||||||||||
Diluted Earnings Per Share
|
||||||||||||||||
Net income
|
$ | 1.39 | $ | 0.94 | $ | 3.87 | $ | 2.89 | ||||||||
Average number of shares outstanding
|
17,627 | 18,522 | 17,968 | 18,824 | ||||||||||||
Cash Dividends Per Share
|
$ | 0.22 | $ | 0.20 | $ | 0.62 | $ | 0.56 |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||
(in thousands)
|
||||||||
Nine Months Ended September 30,
|
||||||||
2014
|
2013
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$ | 69,522 | $ | 54,318 | ||||
Adjustments to reconcile net income to net cash provided
|
||||||||
by operating activities:
|
||||||||
Depreciation and amortization
|
24,332 | 24,163 | ||||||
Deferred income taxes
|
5,630 | (11,681 | ) | |||||
Provision for uncollectible accounts receivable
|
9,573 | 8,211 | ||||||
Amortization of discount on convertible notes
|
3,392 | 6,450 | ||||||
Stock option expense
|
3,430 | 4,732 | ||||||
Amortization of debt issuance costs
|
697 | 1,421 | ||||||
Noncash long-term incentive compensation
|
1,988 | 1,161 | ||||||
Changes in operating assets and liabilities, excluding
|
||||||||
amounts acquired in business combinations:
|
||||||||
Decrease/(increase) in accounts receivable
|
(50,027 | ) | 5,293 | |||||
Decrease in inventories
|
318 | 329 | ||||||
Decrease/(increase) in prepaid expenses
|
4,398 | (6,183 | ) | |||||
Increase/(decrease) in accounts payable and other current liabilities
|
(29,680 | ) | 48,967 | |||||
Increase in income taxes
|
8,186 | 1,923 | ||||||
Increase in other assets
|
(3,138 | ) | (5,002 | ) | ||||
Increase in other liabilities
|
5,370 | 3,978 | ||||||
Excess tax benefit on share-based compensation
|
(3,737 | ) | (2,507 | ) | ||||
Other sources
|
755 | 285 | ||||||
Net cash provided by operating activities
|
51,009 | 135,858 | ||||||
Cash Flows from Investing Activities
|
||||||||
Capital expenditures
|
(31,745 | ) | (18,887 | ) | ||||
Business combinations, net of cash acquired
|
(250 | ) | (2,210 | ) | ||||
Other sources
|
189 | 139 | ||||||
Net cash used by investing activities
|
(31,806 | ) | (20,958 | ) | ||||
Cash Flows from Financing Activities
|
||||||||
Proceeds from revolving line of credit
|
308,600 | - | ||||||
Payments on revolving line of credit
|
(233,800 | ) | - | |||||
Payments on other long-term debt
|
(188,206 | ) | - | |||||
Proceeds from other long-term debt
|
100,000 | - | ||||||
Purchases of treasury stock
|
(99,103 | ) | (89,611 | ) | ||||
Dividends paid
|
(10,558 | ) | (10,459 | ) | ||||
Capital stock surrendered to pay taxes on stock-based compensation
|
(6,121 | ) | (4,280 | ) | ||||
Retirement of warrants
|
(2,645 | ) | - | |||||
Proceeds from exercise of stock options
|
22,123 | 13,125 | ||||||
Excess tax benefit on share-based compensation
|
3,737 | 2,507 | ||||||
Increase/(decrease) in cash overdrafts payable
|
22,233 | (10,928 | ) | |||||
Debt issuance costs
|
(939 | ) | (1,108 | ) | ||||
Other uses
|
(380 | ) | (473 | ) | ||||
Net cash used by financing activities
|
(85,059 | ) | (101,227 | ) | ||||
Increase/(Decrease) in Cash and Cash Equivalents
|
(65,856 | ) | 13,673 | |||||
Cash and cash equivalents at beginning of year
|
84,418 | 69,531 | ||||||
Cash and cash equivalents at end of period
|
$ | 18,562 | $ | 83,204 |
September 30,
|
||||||||
2014
|
2013
|
|||||||
Beginning balance January 1,
|
$ | 8,260 | $ | 1,261 | ||||
2014 measurement period
|
1,796 | - | ||||||
2013 measurement period
|
- | 3,161 | ||||||
Payments
|
(3,439 | ) | - | |||||
Ending balance September 30,
|
$ | 6,617 | $ | 4,422 |
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||
2014
|
2013 |
2014
|
2013
|
|||||||||||
$ | 1,827 | $ | 1,909 | $ | 5,518 | $ | 5,793 |
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Service Revenues and Sales
|
|
|
||||||||||||||
VITAS
|
$ | 265,384 | $ | 254,001 | $ | 789,822 | $ | 788,896 | ||||||||
Roto-Rooter
|
93,005 | 86,885 | 287,049 | 275,829 | ||||||||||||
Total
|
$ | 358,389 | $ | 340,886 | $ | 1,076,871 | $ | 1,064,725 | ||||||||
After-tax Earnings
|
||||||||||||||||
VITAS
|
$ | 21,593 | $ | 14,608 | $ | 60,645 | $ | 55,237 | ||||||||
Roto-Rooter
|
9,848 | 8,181 | 30,599 | 19,218 | ||||||||||||
Total
|
31,441 | 22,789 | 91,244 | 74,455 | ||||||||||||
Corporate
|
(6,856 | ) | (5,357 | ) | (21,722 | ) | (20,137 | ) | ||||||||
Net income
|
$ | 24,585 | $ | 17,432 | $ | 69,522 | $ | 54,318 |
Net Income | |||||||||||||
For the Three Months Ended September 30,
|
Income
|
Shares
|
Earnings
per Share
|
||||||||||
2014
|
|||||||||||||
Earnings
|
$ | 24,585 | 17,039 | $ | 1.44 | ||||||||
Dilutive stock options
|
- | 416 | |||||||||||
Nonvested stock awards
|
- | 151 | |||||||||||
Impact of warrants outstanding
|
- | 21 | |||||||||||
Diluted earnings
|
$ | 24,585 | 17,627 | $ | 1.39 | ||||||||
2013
|
|||||||||||||
Earnings
|
$ | 17,432 | 18,184 | $ | 0.96 | ||||||||
Dilutive stock options
|
- | 235 | |||||||||||
Nonvested stock awards
|
- | 103 | |||||||||||
Diluted earnings
|
$ | 17,432 | 18,522 | $ | 0.94 |
Net Income | |||||||||||||
For the Nine Months Ended September 30,
|
Income
|
Shares
|
Earnings
per Share
|
||||||||||
2014
|
|||||||||||||
Earnings
|
$ | 69,522 | 17,263 | $ | 4.03 | ||||||||
Dilutive stock options
|
- | 402 | |||||||||||
Nonvested stock awards
|
- | 147 | |||||||||||
Conversion of Notes and impact of warrants outstanding
|
- | 156 | |||||||||||
Diluted earnings
|
$ | 69,522 | 17,968 | $ | 3.87 | ||||||||
2013
|
|||||||||||||
Earnings
|
$ | 54,318 | 18,436 | $ | 2.95 | ||||||||
Dilutive stock options
|
- | 287 | |||||||||||
Nonvested stock awards
|
- | 101 | |||||||||||
Diluted earnings
|
$ | 54,318 | 18,824 | $ | 2.89 |
Revolver
|
$ | 74,800,000 | ||
Term loan
|
98,750,000 | |||
Total
|
173,550,000 | |||
Current portion of term and revolving loan
|
(20,425,000 | ) | ||
Long-term debt
|
$ | 153,125,000 |
2014
|
$ | 1,250,000 | ||
2015
|
6,250,000 | |||
2016
|
7,500,000 | |||
2017
|
8,750,000 | |||
2018
|
10,000,000 | |||
2019
|
65,000,000 | |||
$ | 98,750,000 |
Description
|
Requirement
|
|
Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA)
|
< 3.50 to 1.00
|
|
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges)
|
> 1.50 to 1.00
|
|
Annual Operating Lease Commitment
|
< $50.0 million
|
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Market value gains/(losses) on assets held in | ||||||||||||||||
deferred compensation trust
|
$ | 896 | $ | (189 | ) | $ | 2,708 | $ | 2,346 | |||||||
Loss on disposal of property and equipment
|
(167 | ) | (101 | ) | (493 | ) | (180 | ) | ||||||||
Interest income - net
|
(13 | ) | 192 | (5 | ) | 1,165 | ||||||||||
Other - net
|
(11 | ) | 8 | 67 | (19 | ) | ||||||||||
Total other income - net
|
$ | 705 | $ | (90 | ) | $ | 2,277 | $ | 3,312 |
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Revenues
|
$ | 8,751 | $ | 8,054 | $ | 26,964 | $ | 24,418 | ||||||||
Pretax profits
|
4,946 | 4,243 | 15,341 | 13,015 |
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||
$ | 3,635 | $ | 2,098 | $ | 10,856 | $ | 9,796 |
Fair Value Measure
|
||||||||||||||||
Carrying Value
|
Quoted Prices in
Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
|||||||||||||
Mutual fund investments of deferred compensation plans held in trust | $ | 47,780 | $ | 47,780 | $ | - | $ | - | ||||||||
Long-term debt
|
173,550 | - | 173,550 | - |
Fair Value Measure
|
||||||||||||||||
Carrying Value
|
Quoted Prices in
Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
|||||||||||||
Mutual fund investments of deferred compensation plans held in trust
|
$ | 42,465 | $ | 42,465 | $ | - | $ | - | ||||||||
Long-term debt
|
183,564 | 193,032 | - | - |
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Shares repurchased
|
400,000 | 1,032,754 | 1,082,934 | 1,313,455 | ||||||||||||
Weighted average price per share
|
$ | 101.53 | $ | 68.91 | $ | 91.51 | $ | 68.23 |
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Service revenues and sales
|
$ | 358,389 | $ | 340,886 | $ | 1,076,871 | $ | 1,064,725 | ||||||||
Net income
|
$ | 24,585 | $ | 17,432 | $ | 69,522 | $ | 54,318 | ||||||||
Diluted EPS
|
$ | 1.39 | $ | 0.94 | $ | 3.87 | $ | 2.89 | ||||||||
Adjusted net income
|
$ | 26,058 | $ | 25,098 | $ | 76,351 | $ | 78,470 | ||||||||
Adjusted diluted EPS
|
$ | 1.48 | $ | 1.36 | $ | 4.28 | $ | 4.17 | ||||||||
Adjusted EBITDA
|
$ | 50,946 | $ | 49,739 | $ | 150,831 | $ | 153,978 | ||||||||
Adjusted EBITDA as a % of revenue
|
14.2 | % | 14.6 | % | 14.0 | % | 14.5 | % |
● | A $65.9 million decrease in cash due to purchases of treasury stock and capital expenditures, partially offset by cash generated by operations. |
● | A $40.6 million increase in accounts receivable related to the timing of payments. |
● | A $15.3 million increase in accounts payable due to timing of payments. |
● | A $10.0 million decrease in total long-term debt as a result of net payments of outstanding debt using cash on-hand. |
● | A $22.5 million decrease in accrued legal due to the payment of litigation settlements. |
Increase/(Decrease)
|
||||||
Amount
|
Percent
|
|||||
VITAS
|
||||||
Routine homecare
|
$
|
8,489
|
4.3
|
|||
Continuous care
|
2,027
|
5.6
|
||||
General inpatient
|
188
|
0.8
|
||||
Medicare cap
|
679
|
21.4
|
||||
Roto-Rooter
|
||||||
Plumbing
|
996
|
2.5
|
||||
Drain cleaning
|
92
|
0.3
|
||||
Contractor operations
|
697
|
8.7
|
||||
Other
|
4,335
|
70.0
|
||||
Total
|
$
|
17,503
|
5.1
|
Three months ended September 30,
|
||||||||
2014
|
2013
|
|||||||
SG&A expenses before the impact of market gains/(losses) of deferred compensation
|
||||||||
plans, long-term incentive compensation, and OIG investigation expenses
|
$ | 51,218 | $ | 49,595 | ||||
Long-term incentive compensation
|
1,002 | 55 | ||||||
Net expenses/(cost recovery) related to OIG investigation
|
450 | (591 | ) | |||||
Market value gains/(losses) related to assets held in deferred compensation
|
||||||||
trusts
|
896 | (189 | ) | |||||
Total SG&A expenses
|
$ | 53,566 | $ | 48,870 |
Three months ended September 30,
|
||||||||
2014
|
2013
|
|||||||
Market value gains/(losses) on assets held in
|
||||||||
deferred compensation trusts
|
$ | 896 | $ | (189 | ) | |||
Loss on disposal of property and equipment
|
(167 | ) | (101 | ) | ||||
Interest income - net
|
(13 | ) | 192 | |||||
Other
|
(11 | ) | 8 | |||||
Total other income - net
|
$ | 705 | $ | (90 | ) |
Three months ended September 30,
|
||||||||
2014
|
2013
|
|||||||
VITAS
|
||||||||
Litigation settlements
|
$ | - | $ | (6,510 | ) | |||
Net cost recovery/(expenses) related to OIG investigation
|
(279 | ) | 367 | |||||
Acquisition expenses
|
- | (11 | ) | |||||
Roto-Rooter
|
||||||||
Net recoveries related to litigation settlements
|
143 | - | ||||||
Litigation settlements
|
- | (584 | ) | |||||
Expenses related to litigation settlements
|
- | (269 | ) | |||||
Acquisition expenses
|
- | (1 | ) | |||||
Corporate
|
||||||||
Stock option expense
|
(615 | ) | (1,030 | ) | ||||
Noncash impact of change in accounting for convertible debt
|
- | (1,375 | ) | |||||
Uncertain tax position adjustments
|
- | 1,782 | ||||||
Long-term incentive compensation
|
(634 | ) | (34 | ) | ||||
Expenses related to securities litigation
|
(88 | ) | (1 | ) | ||||
Total
|
$ | (1,473 | ) | $ | (7,666 | ) |
Increase/(Decrease)
|
||||||||
Amount
|
Percent
|
|||||||
VITAS
|
$ | 6,985 | 47.8 | |||||
Roto-Rooter
|
1,667 | 20.4 | ||||||
Corporate
|
(1,499 | ) | (28.0 | ) | ||||
$ | 7,153 | 41.0 |
Increase/(Decrease)
|
||||||
Amount
|
Percent
|
|||||
VITAS
|
||||||
Routine homecare
|
$
|
7,370
|
1.2
|
|||
Continuous care
|
(5,665)
|
(4.7)
|
||||
General inpatient
|
(2,144)
|
(2.7)
|
||||
Medicare cap
|
1,365
|
43.2
|
||||
Roto-Rooter
|
||||||
Plumbing
|
3,687
|
2.9
|
||||
Drain cleaning
|
(2,336)
|
(2.2)
|
||||
Contractor operations
|
2,546
|
10.4
|
||||
Other
|
7,323
|
39.3
|
||||
Total
|
$
|
12,146
|
1.1
|
Nine months ended September 30,
|
||||||||
2014
|
2013
|
|||||||
SG&A expenses before the impact of market gains of deferred compensation
|
||||||||
plans, long-term incentive compensation, and OIG investigation expenses
|
$ | 156,582 | $ | 152,586 | ||||
Long-term incentive compensation
|
1,988 | 1,161 | ||||||
Expenses related to OIG investigation
|
1,608 | 1,444 | ||||||
Market value gains related to assets held in
|
||||||||
deferred compensation trusts
|
2,708 | 2,346 | ||||||
Total SG&A expenses
|
$ | 162,886 | $ | 157,537 |
Nine months ended September 30,
|
||||||||
2014
|
2013
|
|||||||
Market value gains on assets held in deferred
|
||||||||
compensation trusts
|
$ | 2,708 | $ | 2,346 | ||||
Loss on disposal of property and equipment
|
(493 | ) | (180 | ) | ||||
Interest income - net
|
(5 | ) | 1,165 | |||||
Other
|
67 | (19 | ) | |||||
Total other income - net
|
$ | 2,277 | $ | 3,312 |
Nine Months Ended September 30,
|
||||||||
2014
|
2013
|
|||||||
VITAS
|
||||||||
Litigation settlements
|
$ | - | $ | (6,510 | ) | |||
Expenses related to litigation settlements
|
(70 | ) | - | |||||
Legal expenses of OIG investigation
|
(997 | ) | (895 | ) | ||||
Acquisition expenses
|
(1 | ) | (23 | ) | ||||
Roto-Rooter
|
||||||||
Net recoveries related to litigation settlements
|
6 | - | ||||||
Litigation settlements
|
- | (9,551 | ) | |||||
Expenses related to litigation settlements
|
- | (699 | ) | |||||
Expenses of severance arrangements
|
- | (184 | ) | |||||
Acquisition expenses
|
- | (2 | ) | |||||
Corporate
|
||||||||
Stock option expense
|
(2,159 | ) | (2,993 | ) | ||||
Noncash impact of change in accounting for convertible debt
|
(2,143 | ) | (4,046 | ) | ||||
Uncertain tax position adjustments
|
- | 1,782 | ||||||
Long-term incentive compensation
|
(1,258 | ) | (734 | ) | ||||
Expenses of securities litigation
|
(207 | ) | (3 | ) | ||||
Loss on extinguishment of debt
|
- | (294 | ) | |||||
Total
|
$ | (6,829 | ) | $ | (24,152 | ) |
Increase/(Decrease)
|
||||||||
Amount
|
Percent
|
|||||||
VITAS
|
$ | 5,408 | 9.8 | |||||
Roto-Rooter
|
11,381 | 59.2 | ||||||
Corporate
|
(1,585 | ) | (7.9 | ) | ||||
$ | 15,204 | 28.0 |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME
|
||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014
|
||||||||||||||||
(in thousands)(unaudited)
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated
|
|||||||||||||
2014 (a)
|
||||||||||||||||
Service revenues and sales
|
$ | 265,384 | $ | 93,005 | $ | - | $ | 358,389 | ||||||||
Cost of services provided and goods sold
|
207,105 | 49,340 | - | 256,445 | ||||||||||||
Selling, general and administrative expenses
|
20,224 | 25,682 | 7,660 | 53,566 | ||||||||||||
Depreciation
|
4,530 | 2,772 | 148 | 7,450 | ||||||||||||
Amortization
|
205 | 114 | 398 | 717 | ||||||||||||
Total costs and expenses
|
232,064 | 77,908 | 8,206 | 318,178 | ||||||||||||
Income/(loss) from operations
|
33,320 | 15,097 | (8,206 | ) | 40,211 | |||||||||||
Interest expense
|
(55 | ) | (87 | ) | (838 | ) | (980 | ) | ||||||||
Intercompany interest income/(expense)
|
1,660 | 760 | (2,420 | ) | - | |||||||||||
Other income/(expense)—net
|
(189 | ) | (2 | ) | 896 | 705 | ||||||||||
Income/(expense) before income taxes
|
34,736 | 15,768 | (10,568 | ) | 39,936 | |||||||||||
Income taxes
|
(13,143 | ) | (5,920 | ) | 3,712 | (15,351 | ) | |||||||||
Net income/(loss)
|
$ | 21,593 | $ | 9,848 | $ | (6,856 | ) | $ | 24,585 | |||||||
(a) The following amounts are included in net income (in thousands):
|
||||||||||||||||
Chemed
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Consolidated
|
|||||||||||||
Pretax benefit/(cost):
|
||||||||||||||||
Stock option expense
|
$ | - | $ | - | $ | (977 | ) | $ | (977 | ) | ||||||
Long-term incentive compensation
|
- | - | (1,002 | ) | (1,002 | ) | ||||||||||
Net recoveries related to litigation settlements
|
- | 234 | - | 234 | ||||||||||||
Expenses related to securities litigation
|
- | - | (138 | ) | (138 | ) | ||||||||||
Expenses related to OIG investigation
|
(450 | ) | - | - | (450 | ) | ||||||||||
Total
|
$ | (450 | ) | $ | 234 | $ | (2,117 | ) | $ | (2,333 | ) | |||||
Chemed
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Consolidated
|
|||||||||||||
After-tax benefit/(cost):
|
||||||||||||||||
Stock option expense
|
$ | - | $ | - | $ | (615 | ) | $ | (615 | ) | ||||||
Long-term incentive compensation
|
- | - | (634 | ) | (634 | ) | ||||||||||
Net recoveries related to litigation settlements
|
- | 143 | - | 143 | ||||||||||||
Expenses related to securities litigation
|
- | - | (88 | ) | (88 | ) | ||||||||||
Expenses related to OIG investigation
|
(279 | ) | - | - | (279 | ) | ||||||||||
Total
|
$ | (279 | ) | $ | 143 | $ | (1,337 | ) | $ | (1,473 | ) |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME
|
||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013
|
||||||||||||||||
(in thousands)(unaudited)
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed Consolidated
|
|||||||||||||
2013 (a) | ||||||||||||||||
Service revenues and sales
|
$ | 254,001 | $ | 86,885 | $ | - | $ | 340,886 | ||||||||
Cost of services provided and goods sold
|
197,387 | 45,797 | - | 243,184 | ||||||||||||
Selling, general and administrative expenses
|
18,637 | 25,009 | 5,224 | 48,870 | ||||||||||||
Depreciation
|
4,545 | 2,292 | 134 | 6,971 | ||||||||||||
Amortization
|
538 | 151 | 501 | 1,190 | ||||||||||||
Other operating expenses
|
10,500 | 961 | - | 11,461 | ||||||||||||
Total costs and expenses
|
231,607 | 74,210 | 5,859 | 311,676 | ||||||||||||
Income/(loss) from operations
|
22,394 | 12,675 | (5,859 | ) | 29,210 | |||||||||||
Interest expense
|
(48 | ) | (82 | ) | (3,370 | ) | (3,500 | ) | ||||||||
Intercompany interest income/(expense)
|
1,231 | 579 | (1,810 | ) | - | |||||||||||
Other income/(expense)—net
|
73 | 8 | (171 | ) | (90 | ) | ||||||||||
Income/(expense) before income taxes
|
23,650 | 13,180 | (11,210 | ) | 25,620 | |||||||||||
Income taxes
|
(9,042 | ) | (4,999 | ) | 5,853 | (8,188 | ) | |||||||||
Net income/(loss)
|
$ | 14,608 | $ | 8,181 | $ | (5,357 | ) | $ | 17,432 | |||||||
(a) The following amounts are included in net income (in thousands):
|
||||||||||||||||
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated |
|||||||||||||
Pretax benefit/(cost):
|
||||||||||||||||
Stock option expense
|
$ | - | $ | - | $ | (1,629 | ) | $ | (1,629 | ) | ||||||
Noncash impact of accounting for convertible debt
|
- | - | (2,174 | ) | (2,174 | ) | ||||||||||
Long-term incentive compensation
|
- | - | (55 | ) | (55 | ) | ||||||||||
Litigation settlements
|
(10,500 | ) | (961 | ) | - | (11,461 | ) | |||||||||
Expenses related to litigation settlements
|
- | (443 | ) | - | (443 | ) | ||||||||||
Expenses related to securities litigation
|
- | - | (1 | ) | (1 | ) | ||||||||||
Acquisition expenses
|
(18 | ) | (3 | ) | - | (21 | ) | |||||||||
Net cost recovery related to OIG investigation
|
591 | - | - | 591 | ||||||||||||
Total
|
$ | (9,927 | ) | $ | (1,407 | ) | $ | (3,859 | ) | $ | (15,193 | ) | ||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated |
|||||||||||||
After-tax benefit/(cost):
|
||||||||||||||||
Stock option expense
|
$ | - | $ | - | $ | (1,030 | ) | $ | (1,030 | ) | ||||||
Noncash impact of accounting for convertible debt
|
- | - | (1,375 | ) | (1,375 | ) | ||||||||||
Long-term incentive compensation
|
- | - | (34 | ) | (34 | ) | ||||||||||
Litigation settlements
|
(6,510 | ) | (584 | ) | - | (7,094 | ) | |||||||||
Uncertain tax position adjustments
|
- | - | 1,782 | 1,782 | ||||||||||||
Expenses related to litigation settlements
|
- | (269 | ) | - | (269 | ) | ||||||||||
Expenses related to securities litigation
|
- | - | (1 | ) | (1 | ) | ||||||||||
Acquisition expenses
|
(11 | ) | (1 | ) | - | (12 | ) | |||||||||
Net cost recovery related to OIG investigation
|
367 | - | - | 367 | ||||||||||||
Total
|
$ | (6,154 | ) | $ | (854 | ) | $ | (658 | ) | $ | (7,666 | ) |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME
|
||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
|
||||||||||||||||
(in thousands)(unaudited)
|
||||||||||||||||
VITAS | Roto-Rooter | Corporate |
Chemed Consolidated
|
|||||||||||||
2014 (a) | ||||||||||||||||
Service revenues and sales
|
$ | 789,822 | $ | 287,049 | $ | - | $ | 1,076,871 | ||||||||
Cost of services provided and goods sold
|
618,315 | 152,956 | - | 771,271 | ||||||||||||
Selling, general and administrative expenses
|
62,939 | 78,569 | 21,378 | 162,886 | ||||||||||||
Depreciation
|
13,709 | 7,732 | 430 | 21,871 | ||||||||||||
Amortization
|
829 | 397 | 1,235 | 2,461 | ||||||||||||
Total costs and expenses
|
695,792 | 239,654 | 23,043 | 958,489 | ||||||||||||
Income/(loss) from operations
|
94,030 | 47,395 | (23,043 | ) | 118,382 | |||||||||||
Interest expense
|
(167 | ) | (295 | ) | (6,762 | ) | (7,224 | ) | ||||||||
Intercompany interest income/(expense)
|
4,520 | 2,090 | (6,610 | ) | - | |||||||||||
Other income/(expense)—net
|
(577 | ) | 137 | 2,717 | 2,277 | |||||||||||
Income/(expense) before income taxes
|
97,806 | 49,327 | (33,698 | ) | 113,435 | |||||||||||
Income taxes
|
(37,161 | ) | (18,728 | ) | 11,976 | (43,913 | ) | |||||||||
Net income/(loss)
|
$ | 60,645 | $ | 30,599 | $ | (21,722 | ) | $ | 69,522 | |||||||
(a) The following amounts are included in net income (in thousands):
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated
|
|||||||||||||
Pretax benefit/(cost):
|
||||||||||||||||
Stock option expense
|
$ | - | $ | - | $ | (3,430 | ) | $ | (3,430 | ) | ||||||
Noncash impact of accounting for convertible debt
|
- | - | (3,389 | ) | (3,389 | ) | ||||||||||
Long-term incentive compensation
|
- | - | (1,988 | ) | (1,988 | ) | ||||||||||
Net recoveries/(expenses) related to litigation settlements
|
(113 | ) | 9 | - | (104 | ) | ||||||||||
Expenses related to securities litigation
|
- | - | (327 | ) | (327 | ) | ||||||||||
Acquisition expenses
|
(1 | ) | - | - | (1 | ) | ||||||||||
Expenses related to OIG investigation
|
(1,608 | ) | - | - | (1,608 | ) | ||||||||||
Total
|
$ | (1,722 | ) | $ | 9 | $ | (9,134 | ) | $ | (10,847 | ) | |||||
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated |
|||||||||||||
After-tax benefit/(cost):
|
||||||||||||||||
Stock option expense
|
$ | - | $ | - | $ | (2,159 | ) | $ | (2,159 | ) | ||||||
Noncash impact of accounting for convertible debt
|
- | - | (2,143 | ) | (2,143 | ) | ||||||||||
Long-term incentive compensation
|
- | - | (1,258 | ) | (1,258 | ) | ||||||||||
Net recoveries/(expenses) related to litigation settlements
|
(70 | ) | 6 | - | (64 | ) | ||||||||||
Expenses related to securities litigation
|
- | - | (207 | ) | (207 | ) | ||||||||||
Acquisition expenses
|
(1 | ) | - | - | (1 | ) | ||||||||||
Expenses related to OIG investigation
|
(997 | ) | - | - | (997 | ) | ||||||||||
Total
|
$ | (1,068 | ) | $ | 6 | $ | (5,767 | ) | $ | (6,829 | ) |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME
|
||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013
|
||||||||||||||||
(in thousands)(unaudited)
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated
|
|||||||||||||
2013 (a)
|
||||||||||||||||
Service revenues and sales
|
$ | 788,896 | $ | 275,829 | $ | - | $ | 1,064,725 | ||||||||
Cost of services provided and goods sold
|
616,334 | 146,516 | - | 762,850 | ||||||||||||
Selling, general and administrative expenses
|
61,304 | 76,901 | 19,332 | 157,537 | ||||||||||||
Depreciation
|
13,579 | 6,685 | 401 | 20,665 | ||||||||||||
Amortization
|
1,564 | 454 | 1,480 | 3,498 | ||||||||||||
Other operating expenses
|
10,500 | 15,721 | - | 26,221 | ||||||||||||
Total costs and expenses
|
703,281 | 246,277 | 21,213 | 970,771 | ||||||||||||
Income/(loss) from operations
|
85,615 | 29,552 | (21,213 | ) | 93,954 | |||||||||||
Interest expense
|
(145 | ) | (239 | ) | (10,907 | ) | (11,291 | ) | ||||||||
Intercompany interest income/(expense)
|
2,940 | 1,443 | (4,383 | ) | - | |||||||||||
Other income/(expense)—net
|
878 | 42 | 2,392 | 3,312 | ||||||||||||
Income/(expense) before income taxes
|
89,288 | 30,798 | (34,111 | ) | 85,975 | |||||||||||
Income taxes
|
(34,051 | ) | (11,580 | ) | 13,974 | (31,657 | ) | |||||||||
Net income/(loss)
|
$ | 55,237 | $ | 19,218 | $ | (20,137 | ) | $ | 54,318 | |||||||
(a) The following amounts are included in net income (in thousands):
|
||||||||||||||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated |
|||||||||||||
Pretax benefit/(cost):
|
||||||||||||||||
Stock option expense
|
$ | - | $ | - | $ | (4,732 | ) | $ | (4,732 | ) | ||||||
Noncash impact of accounting for convertible debt
|
- | - | (6,397 | ) | (6,397 | ) | ||||||||||
Long-term incentive compensation
|
- | - | (1,161 | ) | (1,161 | ) | ||||||||||
Expenses of severance arrangements
|
- | (302 | ) | - | (302 | ) | ||||||||||
Loss on extinguishment of debt
|
- | - | (465 | ) | (465 | ) | ||||||||||
Litigation settlements
|
(10,500 | ) | (15,721 | ) | - | (26,221 | ) | |||||||||
Expenses related to litigation settlements
|
- | (1,151 | ) | - | (1,151 | ) | ||||||||||
Expenses related to securities litigation
|
- | - | (4 | ) | (4 | ) | ||||||||||
Acquisition expenses
|
(38 | ) | (4 | ) | - | (42 | ) | |||||||||
Expenses of OIG investigation
|
(1,444 | ) | - | - | (1,444 | ) | ||||||||||
Total
|
$ | (11,982 | ) | $ | (17,178 | ) | $ | (12,759 | ) | $ | (41,919 | ) | ||||
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated |
|||||||||||||
After-tax benefit/(cost):
|
||||||||||||||||
Stock option expense
|
$ | - | $ | - | $ | (2,993 | ) | $ | (2,993 | ) | ||||||
Noncash impact of accounting for convertible debt
|
- | - | (4,046 | ) | (4,046 | ) | ||||||||||
Long-term incentive compensation
|
- | - | (734 | ) | (734 | ) | ||||||||||
Uncertain tax position position adjustments
|
- | - | 1,782 | 1,782 | ||||||||||||
Expenses of severance arrangements
|
- | (184 | ) | - | (184 | ) | ||||||||||
Loss on extinguishment of debt
|
- | - | (294 | ) | (294 | ) | ||||||||||
Litigation settlements
|
(6,510 | ) | (9,551 | ) | - | (16,061 | ) | |||||||||
Expenses related to litigation settlements
|
- | (699 | ) | - | (699 | ) | ||||||||||
Expenses related to securities litigation
|
- | - | (3 | ) | (3 | ) | ||||||||||
Acquisition expenses
|
(23 | ) | (2 | ) | - | (25 | ) | |||||||||
Expenses of OIG investigation
|
(895 | ) | - | - | (895 | ) | ||||||||||
Total
|
$ | (7,428 | ) | $ | (10,436 | ) | $ | (6,288 | ) | $ | (24,152 | ) |
Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA
|
||||||||||||||||
Chemed Corporation and Subsidiary Companies
|
||||||||||||||||
(in thousands)
|
|
|||||||||||||||
For the three months ended September 30, 2014
|
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated |
||||||||||||
Net income/(loss)
|
$ | 21,593 | $ | 9,848 | $ | (6,856 | ) | $ | 24,585 | |||||||
Add/(deduct):
|
- | |||||||||||||||
Interest expense
|
55 | 87 | 838 | 980 | ||||||||||||
Income taxes
|
13,143 | 5,920 | (3,712 | ) | 15,351 | |||||||||||
Depreciation
|
4,530 | 2,772 | 148 | 7,450 | ||||||||||||
Amortization
|
205 | 114 | 398 | 717 | ||||||||||||
EBITDA
|
39,526 | 18,741 | (9,184 | ) | 49,083 | |||||||||||
Add/(deduct):
|
||||||||||||||||
Intercompany interest expense/(income)
|
(1,660 | ) | (760 | ) | 2,420 | - | ||||||||||
Interest income
|
23 | (9 | ) | (1 | ) | 13 | ||||||||||
Expenses related to OIG investigation
|
450 | - | - | 450 | ||||||||||||
Net recoveries related to litigation settlements
|
- | (234 | ) | - | (234 | ) | ||||||||||
Advertising cost adjustment
|
- | (483 | ) | - | (483 | ) | ||||||||||
Stock option expense
|
- | - | 977 | 977 | ||||||||||||
Long-term incentive compensation
|
- | - | 1,002 | 1,002 | ||||||||||||
Expenses related to securities litigation
|
- | - | 138 | 138 | ||||||||||||
Adjusted EBITDA
|
$ | 38,339 | $ | 17,255 | $ | (4,648 | ) | $ | 50,946 | |||||||
|
||||||||||||||||
For the three months ended September 30, 2013
|
VITAS
|
Roto-Rooter
|
Corporate
|
Chemed
Consolidated |
||||||||||||
Net income/(loss)
|
$ | 14,608 | $ | 8,181 | $ | (5,357 | ) | $ | 17,432 | |||||||
Add/(deduct):
|
||||||||||||||||
Interest expense
|
48 | 82 | 3,370 | 3,500 | ||||||||||||
Income taxes
|
9,042 | 4,999 | (5,853 | ) | 8,188 | |||||||||||
Depreciation
|
4,545 | 2,292 | 134 | 6,971 | ||||||||||||
Amortization
|
538 | 151 | 501 | 1,190 | ||||||||||||
EBITDA
|
28,781 | 15,705 | (7,205 | ) | 37,281 | |||||||||||
Add/(deduct):
|
||||||||||||||||
Intercompany interest expense/(income)
|
(1,231 | ) | (579 | ) | 1,810 | - | ||||||||||
Interest income
|
(163 | ) | (10 | ) | (19 | ) | (192 | ) | ||||||||
Expenses related to OIG investigation
|
(591 | ) | - | - | (591 | ) | ||||||||||
Acquisition expenses
|
18 | 3 | - | 21 | ||||||||||||
Litigation settlements
|
10,500 | 961 | - | 11,461 | ||||||||||||
Advertising cost adjustment
|
- | (369 | ) | - | (369 | ) | ||||||||||
Expenses related to litigation settlements
|
- | 443 | - | 443 | ||||||||||||
Long-term incentive compensation
|
- | - | 55 | 55 | ||||||||||||
Stock option expense
|
- | - | 1,629 | 1,629 | ||||||||||||
Expenses of securities litigation
|
- | - | 1 | 1 | ||||||||||||
Adjusted EBITDA
|
$ | 37,314 | $ | 16,154 | $ | (3,729 | ) | $ | 49,739 |
Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA
|
||||||||||||||||
Chemed Corporation and Subsidiary Companies
|
||||||||||||||||
(in thousands)
|
Chemed
|
|||||||||||||||
For the nine months ended September 30, 2014
|
VITAS
|
Roto-Rooter
|
Corporate
|
Consolidated
|
||||||||||||
Net income/(loss)
|
$ | 60,645 | $ | 30,599 | $ | (21,722 | ) | $ | 69,522 | |||||||
Add/(deduct):
|
||||||||||||||||
Interest expense
|
167 | 295 | 6,762 | 7,224 | ||||||||||||
Income taxes
|
37,161 | 18,728 | (11,976 | ) | 43,913 | |||||||||||
Depreciation
|
13,709 | 7,732 | 430 | 21,871 | ||||||||||||
Amortization
|
829 | 397 | 1,235 | 2,461 | ||||||||||||
EBITDA
|
112,511 | 57,751 | (25,271 | ) | 144,991 | |||||||||||
Add/(deduct):
|
||||||||||||||||
Intercompany interest expense/(income)
|
(4,520 | ) | (2,090 | ) | 6,610 | - | ||||||||||
Interest income
|
43 | (28 | ) | (10 | ) | 5 | ||||||||||
Expenses related to OIG investigation
|
1,608 | - | - | 1,608 | ||||||||||||
Acquisition expenses
|
1 | - | - | 1 | ||||||||||||
Net expenses/(recoveries) related to litigation settlements
|
113 | (9 | ) | - | 104 | |||||||||||
Advertising cost adjustment
|
- | (1,623 | ) | - | (1,623 | ) | ||||||||||
Stock option expense
|
- | - | 3,430 | 3,430 | ||||||||||||
Long-term incentive compensation
|
- | - | 1,988 | 1,988 | ||||||||||||
Expenses related to securities litigation
|
- | - | 327 | 327 | ||||||||||||
Adjusted EBITDA
|
$ | 109,756 | $ | 54,001 | $ | (12,926 | ) | $ | 150,831 | |||||||
Chemed
|
||||||||||||||||
For the nine months ended September 30, 2013
|
VITAS
|
Roto-Rooter
|
Corporate
|
Consolidated
|
||||||||||||
Net income/(loss)
|
$ | 55,237 | $ | 19,218 | $ | (20,137 | ) | $ | 54,318 | |||||||
Add/(deduct):
|
||||||||||||||||
Interest expense | 145 | 239 | 10,907 | 11,291 | ||||||||||||
Income taxes
|
34,051 | 11,580 | (13,974 | ) | 31,657 | |||||||||||
Depreciation
|
13,579 | 6,685 | 401 | 20,665 | ||||||||||||
Amortization
|
1,564 | 454 | 1,480 | 3,498 | ||||||||||||
EBITDA
|
104,576 | 38,176 | (21,323 | ) | 121,429 | |||||||||||
Add/(deduct):
|
||||||||||||||||
Intercompany interest expense/(income)
|
(2,940 | ) | (1,443 | ) | 4,383 | - | ||||||||||
Interest income
|
(1,051 | ) | (66 | ) | (48 | ) | (1,165 | ) | ||||||||
Expenses related to OIG investigation
|
1,444 | - | - | 1,444 | ||||||||||||
Acquisition expenses
|
38 | 4 | - | 42 | ||||||||||||
Litigation settlement
|
10,500 | 15,721 | - | 26,221 | ||||||||||||
Advertising cost adjustment
|
- | (1,343 | ) | - | (1,343 | ) | ||||||||||
Cost of severance arrangements
|
- | 302 | - | 302 | ||||||||||||
Expenses related to litigation settlements
|
- | 1,151 | - | 1,151 | ||||||||||||
Long-term incentive compensation
|
- | - | 1,161 | 1,161 | ||||||||||||
Stock option expense
|
- | - | 4,732 | 4,732 | ||||||||||||
Expenses related to securities litigation
|
- | - | 4 | 4 | ||||||||||||
Adjusted EBITDA
|
$ | 112,567 | $ | 52,502 | $ | (11,091 | ) | $ | 153,978 |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||||||||||
RECONCILIATION OF ADJUSTED NET INCOME
|
||||||||||||||||
(in thousands, except per share data)(unaudited)
|
||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net income as reported
|
$ | 24,585 | $ | 17,432 | $ | 69,522 | $ | 54,318 | ||||||||
Add/(deduct) after-tax cost of:
|
||||||||||||||||
Net expenses/(recoveries) related to litigation settlements
|
(143 | ) | 269 | 64 | 699 | |||||||||||
Uncertain tax position adjustments
|
- | (1,782 | ) | - | (1,782 | ) | ||||||||||
Additional interest expense resulting from the change in accounting
|
||||||||||||||||
for the conversion feature of the convertible notes
|
- | 1,375 | 2,143 | 4,046 | ||||||||||||
Stock option expense
|
615 | 1,030 | 2,159 | 2,993 | ||||||||||||
Net expenses/(cost recovery) of OIG investigation
|
279 | (367 | ) | 997 | 895 | |||||||||||
Long-term incentive compensation
|
634 | 34 | 1,258 | 734 | ||||||||||||
Litigation settlements
|
- | 7,094 | - | 16,061 | ||||||||||||
Acquisition expenses
|
- | 12 | 1 | 25 | ||||||||||||
Loss on extinguishment of debt
|
- | - | - | 294 | ||||||||||||
Expenses of severance arrangements
|
- | - | - | 184 | ||||||||||||
Expenses related to securities litigation
|
88 | 1 | 207 | 3 | ||||||||||||
Adjusted net income
|
$ | 26,058 | $ | 25,098 | $ | 76,351 | $ | 78,470 | ||||||||
Diluted Earnings Per Share As Reported
|
||||||||||||||||
Net income
|
$ | 1.39 | $ | 0.94 | $ | 3.87 | $ | 2.89 | ||||||||
Average number of shares outstanding
|
17,627 | 18,522 | 17,968 | 18,824 | ||||||||||||
Adjusted Diluted Earnings Per Share
|
||||||||||||||||
Adjusted net income
|
$ | 1.48 | $ | 1.36 | $ | 4.28 | $ | 4.17 | ||||||||
Adjusted average number of shares outstanding*
|
17,627 | 18,522 | 17,833 | 18,824 |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||||||||||
OPERATING STATISTICS FOR VITAS SEGMENT
|
||||||||||||||||
(unaudited)
|
||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
OPERATING STATISTICS
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Net revenue ($000)
|
||||||||||||||||
Homecare
|
$ | 204,965 | $ | 196,476 | $ | 600,780 | $ | 593,410 | ||||||||
Inpatient
|
25,012 | 24,824 | 77,037 | 79,181 | ||||||||||||
Continuous care
|
37,907 | 35,880 | 113,801 | 119,466 | ||||||||||||
Total before Medicare cap allowance
|
$ | 267,884 | $ | 257,180 | $ | 791,618 | $ | 792,057 | ||||||||
Medicare cap allowance
|
(2,500 | ) | (3,179 | ) | (1,796 | ) | (3,161 | ) | ||||||||
Total
|
$ | 265,384 | $ | 254,001 | $ | 789,822 | $ | 788,896 | ||||||||
Net revenue as a percent of total before Medicare cap allowances
|
||||||||||||||||
Homecare
|
76.5 | % | 76.4 | % | 75.9 | % | 74.9 | % | ||||||||
Inpatient
|
9.3 | 9.7 | 9.7 | 10.0 | ||||||||||||
Continuous care
|
14.2 | 14.0 | 14.5 | 15.2 | ||||||||||||
Total before Medicare cap allowance
|
100.0 | 100.1 | 100.1 | 100.1 | ||||||||||||
Medicare cap allowance
|
(0.9 | ) | (1.3 | ) | (0.2 | ) | (0.4 | ) | ||||||||
Total
|
99.1 | % | 98.8 | % | 99.9 | % | 99.7 | % | ||||||||
Average daily census (days)
|
||||||||||||||||
Homecare
|
10,662 | 10,373 | 10,562 | 10,482 | ||||||||||||
Nursing home
|
2,999 | 2,911 | 2,940 | 2,928 | ||||||||||||
Routine homecare
|
13,661 | 13,284 | 13,502 | 13,410 | ||||||||||||
Inpatient
|
417 | 417 | 429 | 440 | ||||||||||||
Continuous care
|
561 | 540 | 568 | 600 | ||||||||||||
Total
|
14,639 | 14,241 | 14,499 | 14,450 | ||||||||||||
Total Admissions
|
15,653 | 14,555 | 47,777 | 47,413 | ||||||||||||
Total Discharges
|
15,460 | 14,971 | 47,139 | 47,603 | ||||||||||||
Average length of stay (days)
|
83.7 | 82.2 | 82.4 | 81.3 | ||||||||||||
Median length of stay (days)
|
15.0 | 16.0 | 15.0 | 15.0 | ||||||||||||
ADC by major diagnosis
|
||||||||||||||||
Neurological
|
32.7 | % | 37.8 | % | 35.0 | % | 36.8 | % | ||||||||
Cancer
|
17.3 | 17.1 | 17.4 | 17.0 | ||||||||||||
Cardio
|
17.6 | 13.9 | 16.6 | 12.8 | ||||||||||||
Respiratory
|
8.0 | 7.8 | 7.9 | 7.5 | ||||||||||||
Other
|
24.4 | 23.4 | 23.1 | 25.9 | ||||||||||||
Total
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Admissions by major diagnosis
|
||||||||||||||||
Neurological
|
18.2 | 21.0 | % | 20.6 | % | 20.3 | % | |||||||||
Cancer
|
34.0 | 34.4 | 33.3 | 33.0 | ||||||||||||
Cardio
|
15.2 | 13.8 | 14.8 | 13.0 | ||||||||||||
Respiratory
|
9.1 | 9.0 | 9.5 | 9.3 | ||||||||||||
Other
|
23.5 | 21.8 | 21.8 | 24.4 | ||||||||||||
Total
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Direct patient care margins
|
||||||||||||||||
Routine homecare
|
53.8 | % | 52.5 | % | 53.4 | % | 52.2 | % | ||||||||
Inpatient
|
4.9 | 1.7 | 5.4 | 5.6 | ||||||||||||
Continuous care
|
17.4 | 14.8 | 17.2 | 15.8 | ||||||||||||
Homecare margin drivers (dollars per patient day)
|
||||||||||||||||
Labor costs
|
$ | 53.65 | $ | 54.64 | $ | 54.31 | $ | 55.61 | ||||||||
Drug costs
|
6.64 | 7.52 | 7.04 | 7.55 | ||||||||||||
Home medical equipment
|
6.09 | 6.67 | 6.07 | 6.69 | ||||||||||||
Medical supplies
|
3.22 | 2.83 | 3.20 | 2.96 | ||||||||||||
Inpatient margin drivers (dollars per patient day)
|
||||||||||||||||
Labor costs
|
$ | 345.18 | $ | 354.09 | $ | 344.05 | $ | 339.84 | ||||||||
Continuous care margin drivers (dollars per patient day)
|
||||||||||||||||
Labor costs
|
$ | 584.99 | $ | 594.25 | $ | 586.60 | $ | 592.15 | ||||||||
Bad debt expense as a percent of revenues
|
1.0 | % | 0.9 | % | 1.0 | % | 0.9 | % | ||||||||
Accounts receivable --
|
||||||||||||||||
Days of revenue outstanding- excluding unapplied Medicare payments
|
38.1 | 34.6 |
n.a
|
n.a
|
||||||||||||
Days of revenue outstanding- including unapplied Medicare payments
|
36.3 | 21.9 |
n.a
|
n.a
|
Total Number
|
Weighted
|
Cumulative Shares
|
Dollar Amount
|
|||||||||||||
of Shares
|
Price Paid Per
|
Repurchased Under
|
Remaining Under
|
|||||||||||||
Repurchased
|
Share
|
the Program
|
The Program
|
|||||||||||||
February 2011 Program
|
||||||||||||||||
January 1 through January 31, 2014
|
- | $ | - | 4,891,885 | $ | 21,828,041 | ||||||||||
February 1 through February 28, 2014
|
132,934 | 82.50 | 5,024,819 | 110,860,736 | ||||||||||||
March 1 through March 31, 2014
|
250,000 | 88.06 | 5,274,819 | $ | 88,845,624 | |||||||||||
First Quarter Total
|
382,934 | $ | 86.13 | |||||||||||||
April 1 through April 30, 2014
|
- | $ | - | 5,274,819 | $ | 88,845,624 | ||||||||||
May 31 through May 31, 2014
|
300,000 | 85.04 | 5,574,819 | 63,334,823 | ||||||||||||
June 1 through June 30, 2014
|
- | - | 5,574,819 | $ | 63,334,823 | |||||||||||
Second Quarter Total
|
300,000 | $ | 85.04 | |||||||||||||
July 1 through July 31, 2014
|
- | $ | - | 5,574,819 | $ | 63,334,823 | ||||||||||
August 1 through August 31, 2014
|
358,178 | 101.35 | 5,932,997 | 27,032,332 | ||||||||||||
September 1 through September 30, 2014
|
41,822 | 103.00 | 5,974,819 | $ | 22,724,648 | |||||||||||
Third Quarter Total
|
400,000 | $ | 101.53 | |||||||||||||
On February 21, 2014, our Board of Directors authorized an additional $100 million under the February 2011 Repurchase
|
Item 3. | Defaults Upon Senior Securities |
None | |
Item 4. | Mine Safety Disclosures |
None | |
Item 5. | Other Information |
None |
Exhibit No.
|
Description
|
|
31.1
|
Certification by Kevin J. McNamara pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
|
|
31.2
|
Certification by David P. Williams pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
|
|
31.3
|
Certification by Arthur V. Tucker, Jr. pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
|
|
32.1
|
Certification by Kevin J. McNamara pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification by David P. Williams pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.3
|
Certification by Arthur V. Tucker, Jr. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
Chemed Corporation
|
||||||
(Registrant)
|
||||||
Dated:
|
November 5, 2014
|
By:
|
/s/ Kevin J. McNamara
|
|||
Kevin J. McNamara
|
||||||
(President and Chief Executive Officer)
|
||||||
Dated:
|
November 5, 2014
|
By:
|
/s/ David P. Williams
|
|||
David P. Williams
|
||||||
(Executive Vice President and Chief Financial Officer)
|
||||||
Dated:
|
November 5, 2014
|
By:
|
/s/ Arthur V. Tucker, Jr.
|
|||
Arthur V. Tucker, Jr.
|
||||||
(Vice President and Controller)
|
|
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: |
November 5, 2014
|
/s/ Kevin J. McNamara
|
Kevin J. McNamara | ||
(President and Chief | ||
Executive Officer) |
|
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: |
November 5, 2014
|
/s/ David P. Williams
|
David P. Williams
|
||
(Executive Vice President and Chief Financial Officer)
|
|
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
|
|
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: |
November 5, 2014
|
/s/ Arthur V. Tucker, Jr.
|
Arthur V. Tucker, Jr.
|
||
(Vice President and
|
||
Controller) |
|
1)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2014 (“Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: |
November 5, 2014
|
/s/ Kevin J. McNamara
|
Kevin J. McNamara
|
||
(President and Chief
|
||
Executive Officer)
|
|
1)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2014 (“Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: |
November 5, 2014
|
/s/ David P. Williams
|
David P. Williams | ||
(Executive Vice President and Chief Financial
|
||
Officer) |
|
1)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2014 (“Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: |
November 5, 2014
|
/s/ Arthur V. Tucker, Jr.
|
Arthur V. Tucker, Jr. | ||
(Vice President and Controller)
|
Long-Term Debt (Financial Debt Covenants) (Details) (USD $)
In Millions, unless otherwise specified |
9 Months Ended |
---|---|
Sep. 30, 2014
|
|
Long-Term Debt [Abstract] | |
Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA), Requirement | 3.50 |
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges), Requirement | 1.50 |
Annual Operating Lease Commitment, Requirement | $ 50.0 |
Financial Instruments (Carrying Value, Fair Value And Hierarchy Of Financial Instruments) (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2014
|
Dec. 31, 2013
|
---|---|---|
Carrying Value [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual fund investments of deferred compensation plans held in trust | $ 47,780 | $ 42,465 |
Long-term debt | 173,550 | 183,564 |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual fund investments of deferred compensation plans held in trust | 47,780 | 42,465 |
Long-term debt | 193,032 | |
Significant Other Observable Inputs (Level 2) [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 173,550 |
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