Chemed Reports Second-Quarter 2018 Results – Earnings Guidance Increased
Consolidated operating results:
- Revenue increased 6.4% to
$442 million - GAAP Diluted Earnings-per-Share (EPS) of
$3.27 - Adjusted Diluted EPS of
$2.81 , an increase of 30.7%
VITAS segment operating results:
- Net Patient Revenue of
$297 million , an increase of 4.2% - Average Daily Census (ADC) of 17,643, an increase of 7.6%
- Admissions of 16,858, an increase of 3.4%
- Net Income, excluding special items, of
$31.8 million , an increase of 25.6% - Adjusted EBITDA of
$43.1 million , an increase of 1.2%
- Revenue of
$145 million , an increase of 11.3% - Net Income of
$25.3 million , an increase of 48.3% - Adjusted EBITDA of
$36.5 million , an increase of 19.8% - Adjusted EBITDA margin of 25.2%, an increase of 179-basis points
Effective
This resulted in the reclassification of net room and board expenses associated with certain patients residing in nursing homes to be reclassified from cost of services to revenue, effectively reducing VITAS’ second quarter 2018 revenue and cost of sales by
The discussion of operating results below does recast net room and board and estimated uncollectable receivables in the second quarter of 2017 to facilitate analysis of operating results in a format consistent with the 2018 revenue recognition accounting standard.
VITAS
VITAS net revenue was
In the second quarter of 2018, VITAS accrued
Of VITAS’ 30 Medicare provider numbers, 26 provider numbers have a Medicare Cap cushion of 10% or greater, two provider numbers have a cap cushion between 5% and 10% and two provider numbers have a Medicare Cap billing limitation for the 2018 Medicare Cap period.
Average revenue per patient per day in the quarter was
The second quarter of 2018 gross margin, excluding Medicare Cap, was 21.6%, which is a 54-basis point decline when compared to the second quarter of 2017.
Selling, general and administrative expense was
Commercial drain cleaning revenue increased 9.7%, commercial plumbing and excavation increased 8.8% and commercial water restoration grew 9.9%. Overall, commercial revenue increased 8.8%.
Residential drain cleaning increased 12.5%, plumbing and excavation increased 15.4% and residential water restoration expanded 19.6%. Aggregate residential sales increased 15.1%.
Roto-Rooter’s gross margin in the quarter was 49.9%, an 89-basis point increase when compared to the second quarter of 2017. Adjusted EBITDA in the second quarter of 2018 totaled
Chemed Consolidated
As of
In
During the quarter, the Company repurchased 10,000 shares of Chemed stock for
Chemed restarted its share repurchase program in 2007. Since that time Chemed has repurchased 13.6 million shares, aggregating over
Guidance for 2018
Revenue growth for VITAS in 2018, prior to Medicare Cap, is estimated to be in the range of 4.0% to 5.0%. Admissions are estimated to expand approximately 4.5% to 5.0% and Average Daily Census in 2018 is estimated to expand approximately 6.5% and full-year Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 15.9%. We are currently estimating
Based upon the above, full-year 2018 adjusted earnings per diluted share, excluding non-cash expense for stock options, costs related to litigation, and other discrete items, is estimated to be in the range of
Conference Call
Chemed will host a conference call and webcast at
A taped replay of the conference call will be available beginning approximately 24 hours after the call's conclusion. It can be accessed by dialing (855) 859-2056 for
Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name
This press release contains information about Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed’s financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company’s operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed’s management similarly uses EBITDA, Adjusted EBITDA and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed’s management to estimate the resources required to meet Chemed’s future financial obligations and expenditures. Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed’s net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.
Forward-Looking Statements
Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements.
These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed’s dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed’s most recent report on form 10-Q or 10-K and its other filings with the
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED STATEMENT OF INCOME |
|||||||||||||||||||||||||
(in thousands, except per share data)(unaudited) | |||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
Service revenues and sales | $ | 441,813 | $ | 415,059 | $ | 880,989 | $ | 820,923 | |||||||||||||||||
Cost of services provided and goods sold | 305,741 | 285,852 | 610,277 | 570,992 | |||||||||||||||||||||
Selling, general and administrative expenses (aa) | 68,297 | 68,654 | 137,297 | 138,112 | |||||||||||||||||||||
Depreciation | 9,718 | 8,833 | 18,985 | 17,726 | |||||||||||||||||||||
Amortization | 34 | 32 | 61 | 78 | |||||||||||||||||||||
Other operating (income)/expenses | (118 | ) | 90,636 | (169 | ) | 91,509 | |||||||||||||||||||
Total costs and expenses | 383,672 | 454,007 | 766,451 | 818,417 | |||||||||||||||||||||
Income/(loss) from operations | 58,141 | (38,948 | ) | 114,538 | 2,506 | ||||||||||||||||||||
Interest expense | (1,524 | ) | (1,121 | ) | (2,731 | ) | (2,116 | ) | |||||||||||||||||
Other income--net (bb) | 1,038 | 1,653 | 2,056 | 4,116 | |||||||||||||||||||||
Income/(loss) before income taxes | 57,655 | (38,416 | ) | 113,863 | 4,506 | ||||||||||||||||||||
Income taxes | (2,684 | ) | 16,760 | (13,896 | ) | 3,682 | |||||||||||||||||||
Net income/(loss) | $ | 54,971 | $ | (21,656 | ) | $ | 99,967 | $ | 8,188 | ||||||||||||||||
Earnings Per Share | |||||||||||||||||||||||||
Net income/(loss) | $ | 3.43 | $ | (1.35 | ) | $ | 6.22 | $ | 0.51 | ||||||||||||||||
Average number of shares outstanding | 16,035 | 16,010 | 16,067 | 16,114 | |||||||||||||||||||||
Diluted Earnings Per Share | |||||||||||||||||||||||||
Net income/(loss) | $ | 3.27 | $ | (1.35 | ) | $ | 5.93 | $ | 0.49 | ||||||||||||||||
Average number of shares outstanding | 16,811 | 16,010 | 16,854 | 16,758 | |||||||||||||||||||||
(aa) | Selling, general and administrative ("SG&A") expenses comprise (in thousands): | ||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||
2018 |
2017 | 2018 | 2017 | ||||||||||||||||||||||
SG&A expenses before long-term incentive compensation, expenses related to the OIG investigation and the impact of market value adjustments related to deferred compensation plans |
$ |
66,296 |
$ | 64,018 | $ |
132,517 |
$ | 127,750 | |||||||||||||||||
Long-term incentive compensation |
1,222 |
956 |
3,142 |
1,917 | |||||||||||||||||||||
Market value adjustments related to deferred compensation plans |
779 | 1,587 | 1,638 | 4,202 | |||||||||||||||||||||
Expenses related to the OIG investigation |
- | 2,093 | - | 4,243 | |||||||||||||||||||||
Total SG&A expenses | $ | 68,297 | $ | 68,654 | $ | 137,297 | $ | 138,112 | |||||||||||||||||
(bb) | Other income--net comprises (in thousands): | ||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
Market value adjustments related to deferred compensation plans |
$ | 779 | $ | 1,587 | $ | 1,638 | $ | 4,202 | |||||||||||||||||
Interest income | 259 | 161 | 417 | 245 | |||||||||||||||||||||
Loss on disposal of property and equipment | - | (98 | ) | - | (334 | ) | |||||||||||||||||||
Other | - | 3 | 1 | 3 | |||||||||||||||||||||
Total other income--net | $ | 1,038 | $ | 1,653 | $ | 2,056 | $ | 4,116 | |||||||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED BALANCE SHEET | ||||||||||||||||||
(in thousands, except per share data)(unaudited) |
||||||||||||||||||
|
||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Assets | ||||||||||||||||||
Current assets | ||||||||||||||||||
Cash and cash equivalents | $ | 12,668 | $ | 13,753 | ||||||||||||||
Accounts receivable less allowances | 119,206 | 117,906 | ||||||||||||||||
Inventories | 5,696 | 5,618 | ||||||||||||||||
Prepaid income taxes | 19,666 | 4,537 | ||||||||||||||||
Prepaid expenses | 16,205 | 14,678 | ||||||||||||||||
Total current assets | 173,441 | 156,492 | ||||||||||||||||
Investments of deferred compensation plans held in trust | 67,573 | 58,579 | ||||||||||||||||
Properties and equipment, at cost less accumulated depreciation | 145,903 | 140,209 | ||||||||||||||||
Identifiable intangible assets less accumulated amortization | 55,250 | 54,737 | ||||||||||||||||
|
478,202 | 472,897 | ||||||||||||||||
Deferred income taxes |
- |
20,593 | ||||||||||||||||
Other assets |
7,845 |
6,767 | ||||||||||||||||
Total Assets | $ | 928,214 | $ | 910,274 | ||||||||||||||
Liabilities | ||||||||||||||||||
Current liabilities | ||||||||||||||||||
Accounts payable | $ | 48,236 | $ | 49,154 | ||||||||||||||
Current portion of long-term debt | - | 10,000 | ||||||||||||||||
Income taxes | - | 3,815 | ||||||||||||||||
Accrued insurance |
42,826 |
44,905 | ||||||||||||||||
Accrued compensation | 49,372 | 48,082 | ||||||||||||||||
Accrued legal | 823 | 92,502 | ||||||||||||||||
Other current liabilities | 25,159 | 20,142 | ||||||||||||||||
Total current liabilities |
166,416 |
268,600 | ||||||||||||||||
Deferred income taxes | 18,811 | - | ||||||||||||||||
Long-term debt | 103,400 | 115,000 | ||||||||||||||||
Deferred compensation liabilities | 66,154 | 57,811 | ||||||||||||||||
Other liabilities |
17,042 |
15,780 | ||||||||||||||||
Total Liabilities | 371,823 | 457,191 | ||||||||||||||||
Stockholders' Equity | ||||||||||||||||||
Capital stock | 35,141 | 34,470 | ||||||||||||||||
Paid-in capital | 744,228 | 661,553 | ||||||||||||||||
Retained earnings | 1,129,289 | 957,941 | ||||||||||||||||
|
(1,354,538 | ) | (1,203,077 | ) | ||||||||||||||
Deferred compensation payable in Company stock | 2,271 | 2,196 | ||||||||||||||||
Total Stockholders' Equity | 556,391 | 453,083 | ||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 928,214 | $ | 910,274 | ||||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
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CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||
Six Months Ended |
||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||
Net income | $ | 99,967 | $ | 8,188 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization | 19,046 | 17,804 | ||||||||||||||||
Stock option expense | 7,305 | 6,055 | ||||||||||||||||
Noncash long-term incentive compensation | 2,942 | 1,783 | ||||||||||||||||
Provision/(benefit) for deferred income taxes | 2,173 | (34,876 | ) | |||||||||||||||
Noncash directors' compensation | 766 | 766 | ||||||||||||||||
Amortization of restricted stock awards | 446 | 638 | ||||||||||||||||
Amortization of debt issuance costs | 288 | 258 | ||||||||||||||||
Provision for uncollectible accounts receivable | - | 8,250 | ||||||||||||||||
Potential litigation settlement | - | 90,000 | ||||||||||||||||
Changes in operating assets and liabilities, excluding amounts acquired in business combinations: |
||||||||||||||||||
(Increase)/decrease in accounts receivable | (6,057 | ) | 5,804 | |||||||||||||||
(Increase)/decrease in inventories | (362 | ) | 137 | |||||||||||||||
Increase in prepaid expenses | (113 | ) | (1,573 | ) | ||||||||||||||
Decrease in accounts payable and other current liabilities |
(14,909 | ) | (6,931 | ) | ||||||||||||||
Change in current income taxes |
10,136 | 2,982 | ||||||||||||||||
Increase in other assets | (5,667 | ) | (4,152 | ) | ||||||||||||||
Increase in other liabilities | 4,889 | 3,754 | ||||||||||||||||
Other sources | 186 | 1,437 | ||||||||||||||||
Net cash provided by operating activities | 121,036 | 100,324 | ||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||
Capital expenditures | (23,872 | ) | (28,133 | ) | ||||||||||||||
Business combinations, net of cash acquired | (1,875 | ) | (525 | ) | ||||||||||||||
Other sources | 533 | 87 | ||||||||||||||||
Net cash used by investing activities | (25,214 | ) | (28,571 | ) | ||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||
Proceeds from revolving line of credit | 358,350 | 135,800 | ||||||||||||||||
Payments on revolving line of credit | (281,150 | ) | (115,800 | ) | ||||||||||||||
Purchases of treasury stock | (84,304 | ) | (85,063 | ) | ||||||||||||||
Payments on other long-term debt | (75,000 | ) | (3,750 | ) | ||||||||||||||
Capital stock surrendered to pay taxes on stock-based compensation | (21,022 | ) | (5,716 | ) | ||||||||||||||
Proceeds from exercise of stock options | 20,209 | 10,398 | ||||||||||||||||
Dividends paid | (9,016 | ) | (8,396 | ) | ||||||||||||||
Debt issuance costs | (968 | ) | - | |||||||||||||||
Decrease in cash overdrafts payable | (711 | ) | (1,090 | ) | ||||||||||||||
Other (uses)/sources | (663 | ) | 307 | |||||||||||||||
Net cash used by financing activities | (94,275 | ) | (73,310 | ) | ||||||||||||||
Increase/(Decrease) in Cash and Cash Equivalents | 1,547 | (1,557 | ) | |||||||||||||||
Cash and cash equivalents at beginning of year | 11,121 | 15,310 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 12,668 | $ | 13,753 | ||||||||||||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||||||
FOR THE THREE MONTHS ENDED |
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(in thousands)(unaudited) | |||||||||||||||||||||
Chemed | |||||||||||||||||||||
VITAS | |
Corporate | Consolidated | ||||||||||||||||||
2018 | |||||||||||||||||||||
Service revenues and sales | $ | 296,799 | $ | 145,014 | $ | - | $ | 441,813 | |||||||||||||
Cost of services provided and goods sold | 233,073 | 72,668 | - | 305,741 | |||||||||||||||||
Selling, general and administrative expenses (a) | 20,702 | 35,909 | 11,686 | 68,297 | |||||||||||||||||
Depreciation | 5,050 | 4,628 | 40 | 9,718 | |||||||||||||||||
Amortization | - | 34 | - | 34 | |||||||||||||||||
Other operating (income)/expense | (67 | ) | (51 | ) | - | (118 | ) | ||||||||||||||
Total costs and expenses | 258,758 | 113,188 | 11,726 | 383,672 | |||||||||||||||||
Income/(loss) from operations | 38,041 | 31,826 | (11,726 | ) | 58,141 | ||||||||||||||||
Interest expense | (53 | ) | (92 | ) | (1,379 | ) | (1,524 | ) | |||||||||||||
Intercompany interest income/(expense) | 3,124 | 1,739 | (4,863 | ) | - | ||||||||||||||||
Other income/(expense)—net | 238 | 21 | 779 | 1,038 | |||||||||||||||||
Income/(loss) before income taxes | 41,350 | 33,494 | (17,189 | ) | 57,655 | ||||||||||||||||
Income taxes (a) | (9,565 | ) | (8,196 | ) | 15,077 | (2,684 | ) | ||||||||||||||
Net income/(loss) | $ | 31,785 | $ | 25,298 | $ | (2,112 | ) | $ | 54,971 | ||||||||||||
2017 | |||||||||||||||||||||
Service revenues and sales | $ | 284,710 | $ |
130,349 |
$ | - | $ | 415,059 | |||||||||||||
Cost of services provided and goods sold | 219,769 | 66,083 | - | 285,852 | |||||||||||||||||
Selling, general and administrative expenses (b) | 24,531 | 33,763 | 10,360 | 68,654 | |||||||||||||||||
Depreciation | 4,741 | 4,070 | 22 | 8,833 | |||||||||||||||||
Amortization | - | 32 | - | 32 | |||||||||||||||||
Other operating expenses | 90,636 | - | - | 90,636 | |||||||||||||||||
Total costs and expenses | 339,677 | 103,948 | 10,382 | 454,007 | |||||||||||||||||
Income/(loss) from operations | (54,967 | ) | 26,401 | (10,382 | ) | (38,948 | ) | ||||||||||||||
Interest expense | (53 | ) | (87 | ) | (981 | ) | (1,121 | ) | |||||||||||||
Intercompany interest income/(expense) | 2,826 | 1,346 | (4,172 | ) | - | ||||||||||||||||
Other income/(expense)—net | 71 | (4 | ) | 1,586 | 1,653 | ||||||||||||||||
Income/(loss) before income taxes | (52,123 | ) | 27,656 | (13,949 | ) | (38,416 | ) | ||||||||||||||
Income taxes (b) | 19,869 | (10,598 | ) | 7,489 | 16,760 | ||||||||||||||||
Net income/(loss) | $ | (32,254 | ) | $ | 17,058 | $ | (6,460 | ) | $ | (21,656 | ) | ||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||||||
CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||||||
FOR THE SIX MONTHS ENDED |
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(in thousands)(unaudited) | |||||||||||||||||||||
Chemed | |||||||||||||||||||||
VITAS | |
Corporate | Consolidated | ||||||||||||||||||
2018 | |||||||||||||||||||||
Service revenues and sales | $ | 588,813 | $ | 292,176 | $ | - | $ | 880,989 | |||||||||||||
Cost of services provided and goods sold | 460,329 | 149,948 | - | 610,277 | |||||||||||||||||
Selling, general and administrative expenses (a) | 41,213 | 72,006 | 24,078 | 137,297 | |||||||||||||||||
Depreciation | 9,846 | 9,072 | 67 | 18,985 | |||||||||||||||||
Amortization | - | 61 | - | 61 | |||||||||||||||||
Other operating income | (84 | ) | (85 | ) | - | (169 | ) | ||||||||||||||
Total costs and expenses | 511,304 | 231,002 | 24,145 | 766,451 | |||||||||||||||||
Income/(loss) from operations | 77,509 | 61,174 | (24,145 | ) | 114,538 | ||||||||||||||||
Interest expense | (104 | ) | (184 | ) | (2,443 | ) | (2,731 | ) | |||||||||||||
Intercompany interest income/(expense) | 6,218 | 3,417 | (9,635 | ) | - | ||||||||||||||||
Other income/(expense)—net | 380 | 37 | 1,639 | 2,056 | |||||||||||||||||
Income/(loss) before income taxes | 84,003 | 64,444 | (34,584 | ) | 113,863 | ||||||||||||||||
Income taxes (a) | (20,203 | ) | (16,208 | ) | 22,515 | (13,896 | ) | ||||||||||||||
Net income/(loss) | $ | 63,800 | $ | 48,236 | $ | (12,069 | ) | $ | 99,967 | ||||||||||||
2017 | |||||||||||||||||||||
Service revenues and sales | $ | 567,026 | $ | 253,897 | $ | - | $ | 820,923 | |||||||||||||
Cost of services provided and goods sold | 441,446 | 129,546 | - | 570,992 | |||||||||||||||||
Selling, general and administrative expenses (b) | 48,825 | 67,223 | 22,064 | 138,112 | |||||||||||||||||
Depreciation | 9,519 | 8,054 | 153 | 17,726 | |||||||||||||||||
Amortization | 14 | 64 | - | 78 | |||||||||||||||||
Other operating expenses | 91,509 | - | - | 91,509 | |||||||||||||||||
Total costs and expenses | 591,313 | 204,887 | 22,217 | 818,417 | |||||||||||||||||
Income/(loss) from operations | (24,287 | ) | 49,010 | (22,217 | ) | 2,506 | |||||||||||||||
Interest expense | (108 | ) | (185 | ) | (1,823 | ) | (2,116 | ) | |||||||||||||
Intercompany interest income/(expense) | 5,528 | 2,656 | (8,184 | ) | - | ||||||||||||||||
Other income/(expense)—net | (9 | ) | (77 | ) | 4,202 | 4,116 | |||||||||||||||
Income/(loss) before income taxes | (18,876 | ) | 51,404 | (28,022 | ) | 4,506 | |||||||||||||||
Income taxes (b) | 7,219 | (19,722 | ) | 16,185 | 3,682 | ||||||||||||||||
Net income/(loss) | $ | (11,657 | ) | $ | 31,682 | $ | (11,837 | ) | $ | 8,188 | |||||||||||
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 |
||||||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||||||
Chemed | ||||||||||||||||||||||
VITAS | |
Corporate | Consolidated | |||||||||||||||||||
2018 | ||||||||||||||||||||||
Net income/(loss) | $ | 31,785 | $ | 25,298 | $ | (2,112 | ) | $ | 54,971 | |||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 53 | 92 | 1,379 | 1,524 | ||||||||||||||||||
Income taxes | 9,565 | 8,196 | (15,077 | ) | 2,684 | |||||||||||||||||
Depreciation | 5,050 | 4,628 | 40 | 9,718 | ||||||||||||||||||
Amortization | - | 34 | - | 34 | ||||||||||||||||||
EBITDA | 46,453 | 38,248 | (15,770 | ) | 68,931 | |||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (3,124 | ) | (1,739 | ) | 4,863 | - | ||||||||||||||||
Interest income | (237 | ) | (22 | ) | - | (259 | ) | |||||||||||||||
Amortization of stock awards | 37 | 35 | 83 | 155 | ||||||||||||||||||
Medicare cap sequestration adjustment | 185 | - | - | 185 | ||||||||||||||||||
Accrued litigation settlement | (204 | ) | - | - | (204 | ) | ||||||||||||||||
Stock option expense |
- | - | 3,652 | 3,652 | ||||||||||||||||||
Long-term incentive compensation | - | - | 1,222 | 1,222 | ||||||||||||||||||
Adjusted EBITDA | $ | 43,110 | $ | 36,522 | $ | (5,950 | ) | $ | 73,682 | |||||||||||||
2017 | ||||||||||||||||||||||
Net income/(loss) | $ | (32,254 | ) | $ | 17,058 | $ | (6,460 | ) | $ | (21,656 | ) | |||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 53 | 87 | 981 | 1,121 | ||||||||||||||||||
Income taxes | (19,869 | ) | 10,598 | (7,489 | ) | (16,760 | ) | |||||||||||||||
Depreciation | 4,741 | 4,070 | 22 | 8,833 | ||||||||||||||||||
Amortization | - | 32 | - | 32 | ||||||||||||||||||
EBITDA | (47,329 | ) | 31,845 | (12,946 | ) | (28,430 | ) | |||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (2,826 | ) | (1,346 | ) | 4,172 | - | ||||||||||||||||
Interest income | (149 | ) | (12 | ) | - | (161 | ) | |||||||||||||||
Accrued litigation settlement | 90,000 | - | - | 90,000 | ||||||||||||||||||
Expenses related to OIG investigation | 2,093 | - | - | 2,093 | ||||||||||||||||||
Program closure expenses | 636 | - | - | 636 | ||||||||||||||||||
Medicare cap sequestration adjustment | 105 | - | - | 105 | ||||||||||||||||||
Amortization of stock awards | 71 | 66 | 166 | 303 | ||||||||||||||||||
Advertising cost adjustment | - | (272 | ) | - | (272 | ) | ||||||||||||||||
Expenses related to litigation settlements | - | 213 | - | 213 | ||||||||||||||||||
Stock option expense |
- | - | 3,054 | 3,054 | ||||||||||||||||||
Long-term incentive compensation | - | - | 956 | 956 | ||||||||||||||||||
Adjusted EBITDA | $ | 42,601 | $ | 30,494 | $ | (4,598 | ) | $ | 68,497 | |||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||
CONSOLIDATING SUMMARY OF EBITDA | ||||||||||||||||||||||
FOR THE SIX MONTHS ENDED |
||||||||||||||||||||||
(in thousands)(unaudited) | ||||||||||||||||||||||
Chemed | ||||||||||||||||||||||
VITAS | |
Corporate | Consolidated | |||||||||||||||||||
2018 | ||||||||||||||||||||||
Net income/(loss) | $ | 63,800 | $ | 48,236 | $ | (12,069 | ) | $ | 99,967 | |||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 104 | 184 | 2,443 | 2,731 | ||||||||||||||||||
Income taxes | 20,203 | 16,208 | (22,515 | ) | 13,896 | |||||||||||||||||
Depreciation | 9,846 | 9,072 | 67 | 18,985 | ||||||||||||||||||
Amortization | - | 61 | - | 61 | ||||||||||||||||||
EBITDA | 93,953 | 73,761 | (32,074 | ) | 135,640 | |||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (6,218 | ) | (3,417 | ) | 9,635 | - | ||||||||||||||||
Interest income | (380 | ) | (37 | ) | - | (417 | ) | |||||||||||||||
Amortization of stock awards | 107 | 100 | 239 | 446 | ||||||||||||||||||
Medicare cap sequestration adjustment | 537 | - | - | 537 | ||||||||||||||||||
Stock option expense | - | - | 7,305 | 7,305 | ||||||||||||||||||
Accrued litigation settlement |
(204 | ) | - | - | (204 | ) | ||||||||||||||||
Long-term incentive compensation | - | - | 3,142 | 3,142 | ||||||||||||||||||
Adjusted EBITDA | $ | 87,795 | $ | 70,407 | $ | (11,753 | ) | $ | 146,449 | |||||||||||||
2017 | ||||||||||||||||||||||
Net income/(loss) | $ | (11,657 | ) | $ | 31,682 | $ | (11,837 | ) | $ | 8,188 | ||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Interest expense | 108 | 185 | 1,823 | 2,116 | ||||||||||||||||||
Income taxes | (7,219 | ) | 19,722 | (16,185 | ) | (3,682 | ) | |||||||||||||||
Depreciation | 9,519 | 8,054 | 153 | 17,726 | ||||||||||||||||||
Amortization | 14 | 64 | - | 78 | ||||||||||||||||||
EBITDA | (9,235 | ) | 59,707 | (26,046 | ) | 24,426 | ||||||||||||||||
Add/(deduct): | ||||||||||||||||||||||
Intercompany interest expense/(income) | (5,528 | ) | (2,656 | ) | 8,184 | - | ||||||||||||||||
Interest income | (219 | ) | (26 | ) | - | (245 | ) | |||||||||||||||
Accrued litigation settlement |
90,000 | - | - | 90,000 | ||||||||||||||||||
Medicare cap sequestration adjustment | 105 | - | - | 105 | ||||||||||||||||||
Program closure expenses | 1,509 | - | - | 1,509 | ||||||||||||||||||
Expenses related to OIG investigation | 4,243 | - | - | 4,243 | ||||||||||||||||||
Amortization of stock awards | 148 | 136 | 354 | 638 | ||||||||||||||||||
Advertising cost adjustment | - | (545 | ) | - | (545 | ) | ||||||||||||||||
Expenses related to litigation settlements | - | 213 | - | 213 | ||||||||||||||||||
Stock option expense | - | - | 6,055 | 6,055 | ||||||||||||||||||
Long-term incentive compensation | - | - | 1,917 | 1,917 | ||||||||||||||||||
Adjusted EBITDA | $ | 81,023 | $ | 56,829 | $ | (9,536 | ) | $ | 128,316 | |||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NET INCOME |
||||||||||||||||||||||
(in thousands, except per share data)(unaudited) |
||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Net income/(loss) as reported | $ | 54,971 | $ | (21,656 | ) | $ | 99,967 | $ | 8,188 | |||||||||||||
Add/(deduct) after-tax cost of: | ||||||||||||||||||||||
Excess tax benefits on stock compensation | (11,702 | ) | (2,643 | ) | (15,500 | ) | (6,338 | ) | ||||||||||||||
Stock option expense | 2,900 | 1,931 | 5,791 | 3,828 | ||||||||||||||||||
Long-term incentive compensation | 1,003 | 604 | 2,502 | 1,212 | ||||||||||||||||||
Accrued litigation settlement | (152 | ) | 55,800 | (152 | ) | 55,800 | ||||||||||||||||
Medicare cap sequestration adjustments | 138 | 65 | 401 | 65 | ||||||||||||||||||
Expenses of OIG investigation | - | 1,292 | - | 2,620 | ||||||||||||||||||
Program closure expenses | - | 385 | - | 898 | ||||||||||||||||||
Expenses related to litigation settlements | - | 129 | - | 129 | ||||||||||||||||||
Adjusted net income | $ | 47,158 | $ | 35,907 | $ | 93,009 | $ | 66,402 | ||||||||||||||
Diluted Earnings Per Share As Reported | ||||||||||||||||||||||
Net income/(loss) | $ | 3.27 | $ | (1.35 | ) | $ | 5.93 | $ | 0.49 | |||||||||||||
Average number of shares outstanding | 16,811 | 16,010 | 16,854 | 16,758 | ||||||||||||||||||
Adjusted Diluted Earnings Per Share | ||||||||||||||||||||||
Adjusted net income | $ | 2.81 | $ | 2.15 | $ | 5.52 | $ | 3.96 | ||||||||||||||
Average number of shares outstanding | 16,811 | 16,702 | 16,854 | 16,758 | ||||||||||||||||||
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 SIX MONTHS ENDED |
|||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||
OPERATING STATISTICS | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
Net revenue ( |
|||||||||||||||||||||||||
Homecare | $ | 250,381 | $ | 229,948 | $ | 491,412 | $ | 454,147 | |||||||||||||||||
Inpatient | 20,077 | 21,316 | 42,186 | 44,562 | |||||||||||||||||||||
Continuous care | 30,513 | 31,699 | 61,279 | 64,556 | |||||||||||||||||||||
Other | 1,998 | 1,994 | 3,740 | 4,008 | |||||||||||||||||||||
Subtotal | $ | 302,969 | $ | 284,957 | $ | 598,617 | $ | 567,273 | |||||||||||||||||
Room and board, net | (2,675 | ) | - | (5,294 | ) | - | |||||||||||||||||||
Contractual allowances | (2,959 | ) | - | (5,792 | ) | - | |||||||||||||||||||
Medicare cap allowance | (536 | ) | (247 | ) | 1,282 | (247 | ) | ||||||||||||||||||
Net Revenue | $ | 296,799 | $ | 284,710 | $ | 588,813 | $ | 567,026 | |||||||||||||||||
Net revenue as a percent of total before Medicare cap allowance | |||||||||||||||||||||||||
Homecare | 82.6 | % | 80.7 | % | 82.1 | % | 80.1 | % | |||||||||||||||||
Inpatient | 6.6 | 7.5 | 7.0 | 7.9 | |||||||||||||||||||||
Continuous care | 10.1 | 11.1 | 10.2 | 11.4 | |||||||||||||||||||||
Other | 0.7 | 0.7 | 0.7 | 0.6 | |||||||||||||||||||||
Subtotal | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
Room and board, net | (0.9 | ) | - | (0.9 | ) | - | |||||||||||||||||||
Contractual allowances | (1.0 | ) | - | (1.0 | ) | - | |||||||||||||||||||
Medicare cap allowance | (0.1 | ) | (0.1 | ) | 0.3 | - | |||||||||||||||||||
Net Revenue | 98.0 | % | 99.9 | % | 98.4 | % | 100.0 | % | |||||||||||||||||
Average daily census ("ADC") (days) | |||||||||||||||||||||||||
Homecare | 13,583 | 12,446 | 13,375 | 12,368 | |||||||||||||||||||||
Nursing home | 3,275 | 3,135 | 3,245 | 3,093 | |||||||||||||||||||||
Routine homecare | 16,858 | 15,581 | 16,620 | 15,461 | |||||||||||||||||||||
Inpatient | 318 | 343 | 335 | 360 | |||||||||||||||||||||
Continuous care | 467 | 474 | 473 | 489 | |||||||||||||||||||||
Total | 17,643 | 16,398 | 17,428 | 16,310 | |||||||||||||||||||||
Total Admissions | 16,858 | 16,311 | 35,137 | 33,874 | |||||||||||||||||||||
Total Discharges | 16,474 | 16,124 | 34,054 | 33,344 | |||||||||||||||||||||
Average length of stay (days) | 89.0 | 85.2 | 88.4 | 87.1 | |||||||||||||||||||||
Median length of stay (days) | 17.0 | 16.0 | 16.0 | 16.0 | |||||||||||||||||||||
ADC by major diagnosis | |||||||||||||||||||||||||
Cerebro | 36.2 | % | 34.8 | % | 36.4 | % | 34.7 | % | |||||||||||||||||
Neurological | 18.6 | 19.5 | 18.6 | 19.6 | |||||||||||||||||||||
Cardio | 16.6 | 16.5 | 16.4 | 16.5 | |||||||||||||||||||||
Cancer | 13.9 | 14.9 | 13.9 | 15.0 | |||||||||||||||||||||
Respiratory | 8.3 | 7.9 | 8.2 | 7.9 | |||||||||||||||||||||
Other | 6.4 | 6.4 | 6.5 | 6.3 | |||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||
Admissions by major diagnosis | |||||||||||||||||||||||||
Cerebro | 21.7 | % | 21.4 | % | 22.2 | % | 21.7 | % | |||||||||||||||||
Neurological | 11.1 | 10.7 | 11.2 | 10.8 | |||||||||||||||||||||
Cardio | 15.6 | 15.1 | 15.6 | 15.1 | |||||||||||||||||||||
Cancer | 30.5 | 31.5 | 29.2 | 30.4 | |||||||||||||||||||||
Respiratory | 10.8 | 10.2 | 11.3 | 11.0 | |||||||||||||||||||||
Other | 10.3 | 11.1 | 10.5 | 11.0 | |||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||
Direct patient care margins (d) | |||||||||||||||||||||||||
Routine homecare | 52.6 | % | 52.8 | % | 52.4 | % | 52.1 | % | |||||||||||||||||
Inpatient | 4.2 | 3.7 | 5.9 | 4.8 | |||||||||||||||||||||
Continuous care | 17.3 | 18.0 | 17.5 | 16.8 | |||||||||||||||||||||
Homecare margin drivers (dollars per patient day) | |||||||||||||||||||||||||
Labor costs | $ | 57.67 | $ | 56.55 | $ | 58.14 | $ | 57.58 | |||||||||||||||||
Combined drug, home medical equipment and medical supplies cost |
14.39 | 14.51 | 14.43 | 14.82 | |||||||||||||||||||||
Inpatient margin drivers (dollars per patient day) | |||||||||||||||||||||||||
Labor costs | $ | 380.94 | $ | 377.13 | $ | 371.44 | $ | 373.41 | |||||||||||||||||
Continuous care margin drivers (dollars per patient day) | |||||||||||||||||||||||||
Labor costs | $ | 575.36 | $ | 583.87 | $ | 571.41 | $ | 587.39 | |||||||||||||||||
Bad debt expense as a percent of revenues | 1.0 | % | 1.1 | % | 1.0 | % | 1.1 | % | |||||||||||||||||
Accounts receivable -- | |||||||||||||||||||||||||
Days of revenue outstanding- excluding unapplied Medicare payments | 31.9 | 34.5 |
n.a. |
n.a. |
|||||||||||||||||||||
Days of revenue outstanding- including unapplied Medicare payments | 25.6 | 28.0 |
n.a. |
n.a. |
|||||||||||||||||||||
The "Footnotes to Financial Statements" are integral parts of this financial information. |
CHEMED CORPORATION AND SUBSIDIARY COMPANIES |
|||||||||||||||||||||||||
FOOTNOTES TO FINANCIAL STATEMENTS |
|||||||||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED |
|||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
(a) |
Included in the results of operations for 2018 are the following significant credits/(charges) which may not be indicative of ongoing operations |
||||||||||||||||||||||||
(in thousands): | |||||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||||
VITAS | Corporate |
|
Consolidated | ||||||||||||||||||||||
Service revenues and sales: | |||||||||||||||||||||||||
Medicare cap sequestration adjustment | $ | (185 | ) | $ | - | $ | (185 | ) | |||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||||
Stock option expense | - | (3,652 | ) | (3,652 | ) | ||||||||||||||||||||
Long-term incentive compensation | - | (1,222 | ) | (1,222 | ) | ||||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||
Accrued litigation settlement | 204 | - | 204 | ||||||||||||||||||||||
Pretax impact on earnings | 19 | (4,874 | ) | (4,855 | ) | ||||||||||||||||||||
Excess tax benefits on stock compensation | - | 11,702 | 11,702 | ||||||||||||||||||||||
Income tax benefit on the above | (5 | ) | 971 | 966 | |||||||||||||||||||||
After-tax impact on earnings | $ | 14 | $ | 7,799 | $ | 7,813 | |||||||||||||||||||
Six Months Ended |
|||||||||||||||||||||||||
VITAS | Corporate | Consolidated | |||||||||||||||||||||||
Service revenues and sales: | |||||||||||||||||||||||||
Medicare cap sequestration adjustment | $ | (537 | ) | $ | - | $ | (537 | ) | |||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||||
Stock option expense | - | (7,305 | ) | (7,305 | ) | ||||||||||||||||||||
Long-term incentive compensation | - | (3,142 | ) | (3,142 | ) | ||||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||
Accrued litigation settlement |
204 | - | 204 | ||||||||||||||||||||||
Pretax impact on earnings | (333 | ) | (10,447 | ) | (10,780 | ) | |||||||||||||||||||
Excess tax benefits on stock compensation | - | 15,500 | 15,500 | ||||||||||||||||||||||
Income tax benefit on the above | 84 | 2,154 | 2,238 | ||||||||||||||||||||||
After-tax impact on earnings | $ | (249 | ) | $ | 7,207 | $ | 6,958 | ||||||||||||||||||
(b) | Included in the results of operations for 2076 are the following significant credits/(charges) which may not be indicative of ongoing operations | ||||||||||||||||||||||||
(in thousands): | |||||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||||
VITAS | |
Corporate | Consolidated | ||||||||||||||||||||||
Service revenues and sales: | |||||||||||||||||||||||||
Medicare cap sequestration adjustment | $ | (105 | ) | $ | - | $ | - | $ | (105 | ) | |||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||||
Expenses related to OIG investigation | (2,093 | ) | - | - | (2,093 | ) | |||||||||||||||||||
Expenses related to litigation settlements | - | (213 | ) | - | (213 | ) | |||||||||||||||||||
Stock option expense | - | - | (3,054 | ) | (3,054 | ) | |||||||||||||||||||
Long-term incentive compensation | - | - | (956 | ) | (956 | ) | |||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||
Accrued litigation settlement | (90,000 | ) | - | - | (90,000 | ) | |||||||||||||||||||
Program closure expenses | (636 | ) | - | - | (636 | ) | |||||||||||||||||||
Pretax impact on earnings | (92,834 | ) | (213 | ) | (4,010 | ) | (97,057 | ) | |||||||||||||||||
Excess tax benefits on stock compensation | - | - | 2,643 | 2,643 | |||||||||||||||||||||
Income tax benefit on the above | 35,292 | 84 | 1,475 | 36,851 | |||||||||||||||||||||
After-tax impact on earnings | $ | (57,542 | ) | $ | (129 | ) | $ | 108 | $ | (57,563 | ) | ||||||||||||||
Six Months Ended June 30, 2017 | |||||||||||||||||||||||||
VITAS | |
Corporate | Consolidated | ||||||||||||||||||||||
Service revenues and sales: | |||||||||||||||||||||||||
Medicare cap sequestration adjustment | $ | (105 | ) | $ | - | $ | - | $ | (105 | ) | |||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||||
Expenses related to OIG investigation | (4,243 | ) | - | - | (4,243 | ) | |||||||||||||||||||
Expenses related to litigation settlements | - | (213 | ) | - | (213 | ) | |||||||||||||||||||
Stock option expense | - | - | (6,055 | ) | (6,055 | ) | |||||||||||||||||||
Long-term incentive compensation | - | - | (1,917 | ) | (1,917 | ) | |||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||
Accrued litigation settlement | (90,000 | ) | - | - | (90,000 | ) | |||||||||||||||||||
Program closure expenses | (1,509 | ) | - | - | (1,509 | ) | |||||||||||||||||||
Pretax impact on earnings | (95,857 | ) | (213 | ) | (7,972 | ) | (104,042 | ) | |||||||||||||||||
Excess tax benefits on stock compensation | - | - | 6,338 | 6,338 | |||||||||||||||||||||
Income tax benefit on the above | 36,474 | 84 | 2,932 | 39,490 | |||||||||||||||||||||
After-tax impact on earnings | $ | (59,383 | ) | $ | (129 | ) | $ | 1,298 | $ | (58,214 | ) | ||||||||||||||
(c) |
VITAS has 12 large (greater than 450 ADC), 18 medium (greater than 200 but less than 450 ADC) and 15 small (less than 200 ADC) hospice programs. Of VITAS' 30 unique Medicare provider numbers, 28 provider numbers have a Medicare cap cushion of 5% or greater during the first six months of the current cap year and two provider number have a Medicare cap liability. |
||||||||||||||||||||||||
|
|||||||||||||||||||||||||
(d) | Amounts exclude indirect patient care and administrative costs, as well as Medicare Cap billing limitation. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180725005776/en/
Source:
Torchmark Corporation Reports Second Quarter 2018 Results
AXIS Capital Reports Second Quarter Net Income of $93 Million, or $1.11 Per Diluted Common Share; Operating Income of $106 Million, or $1.27 Per Diluted Common Share; Ex-PGAAP Operating Income of $120 Million, or $1.43 Per Diluted Common Share
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