Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS
Healthcare Corporation (VITAS), one of the nation’s largest
providers of end-of-life care, and Roto-Rooter, the nation’s
largest commercial and residential plumbing and drain cleaning
services provider, reported financial results for its fourth
quarter ended December 31, 2023, versus the comparable prior-year
period.
Changes to Non-GAAP
Metrics
Chemed uses certain non-GAAP metrics such as EBITDA, adjusted
EBITDA, adjusted net income and adjusted diluted earnings per
share, to provide additional context and perspective to reported
operational results.
Chemed’s previously reported non-GAAP metrics during the four
sequential quarters from September 30, 2022 through June 30, 2023
excluded the 12-month pandemic-related licensed healthcare
professional retention bonus (Retention Program).
Starting with the quarter-ended September 30, 2023, the Company
no longer excludes the cost of the Retention Program when
presenting non-GAAP operating metrics in current or prior
periods.
For the quarter-ended December 31, 2023, there is a pre-tax and
after-tax expense reversal related to the Retention Program of $2.9
million and $2.2 million, respectively. For the quarter-ended
December 31, 2022, the pretax and after-tax Retention Program
expense was $10.1 million and $7.5 million, respectively.
For the year ended December 31, 2023 pretax and after-tax
expense for the Retention Program is $20.8 million and $15.8
million, respectively. For the year ended December 31, 2022 pretax
and after-tax expense for the Retention Program was $19.6 million
and $14.6 million, respectively.
Results for Quarter Ended
December 31, 2023
Consolidated operating results:
- Revenue increased 7.2% to $585.9 million
- GAAP Diluted Earnings-per-Share (EPS) of $5.90, an increase of
42.9%
- Adjusted Diluted EPS of $6.60, an increase of 35.0%
VITAS segment operating results:
- Net Patient Revenue of $350.0 million, an increase of
13.6%
- Average Daily Census (ADC) of 19,352, an increase of 11.0%
- Admissions of 15,867, an increase of 7.0%
- Net Income, excluding certain discrete items, of $63.3 million,
an increase of 72.6%
- Adjusted EBITDA, excluding Medicare Cap, of $83.3 million, an
increase of 61.6%
- Adjusted EBITDA margin, excluding Medicare Cap, of 23.7%, an
increase of 705-basis points
Roto-Rooter segment operating results:
- Revenue of $235.9 million, a decrease of 1.1%
- Net Income, excluding certain discrete items, of $47.7 million,
a decrease of 3.2%
- Adjusted EBITDA of $64.9 million, a decline of 6.4%
- Adjusted EBITDA margin of 27.5%, a decline of 154-basis
points
VITAS
VITAS net revenue was $350.0 million in the fourth quarter of
2023, which is an increase of 13.6% when compared to the prior-year
period. This revenue increase is comprised primarily of an 11.0%
increase in days-of-care and a geographically weighted average
Medicare reimbursement rate increase of approximately 2.3%. Acuity
mix shift negatively impacted revenue growth 38-basis points in the
quarter when compared to the prior-year period’s revenue and
level-of-care mix. The combination of Medicare Cap and other contra
revenue changes increased revenue growth by approximately 61-basis
points.
In the fourth quarter of 2023, VITAS accrued $2.4 million in
Medicare Cap billing limitations. This compares to a $2.8 million
Medicare Cap billing limitation in the fourth quarter of 2022.
Of VITAS’ 30 Medicare provider numbers, 26 provider numbers have
a trailing 12-month Medicare Cap cushion of 10% or greater, two
provider numbers have a cushion between 5% and 10%, no provider
number has a cushion between 0% and 5%, and two provider numbers
have a trailing 12-month Medicare Cap billing limitation totaling
$7.8 million.
Average revenue per patient per day in the fourth quarter of
2023 was $201.33 which is 200-basis points above the prior-year
period. Reimbursement for routine home care and high acuity care
averaged $177.62 and $1,058.60, respectively. During the quarter,
high acuity days-of-care were 2.7% of total days of care, a decline
of 6-basis points when compared to the prior-year quarter.
The fourth quarter 2023 gross margin, excluding Medicare Cap,
was 29.9%. This compares to the prior year gross margin of 23.6%,
excluding Medicare Cap. Approximately 406-basis points of this
difference is attributable to the expense associated with the
Retention Program. Selling, general and administrative expenses
were $22.0 million in the fourth quarter of 2023 and compares to
$22.0 million in the prior-year quarter.
Adjusted EBITDA, excluding Medicare Cap, totaled $83.3 million
in the quarter, an increase of 61.6%. Adjusted EBITDA margin in the
quarter, excluding Medicare Cap, was 23.7%, which is 705-basis
points above the prior-year period. Approximately 406-basis points
of this difference is attributable to the expense associated with
the Retention Program.
Roto-Rooter
Roto-Rooter generated quarterly revenue of $235.9 million in the
fourth quarter of 2023, a decrease of 1.1%, when compared to the
prior-year quarter.
Roto-Rooter branch commercial revenue in the quarter totaled
$54.0 million, a decrease of 7.9% from the prior-year. This
aggregate commercial revenue decline consisted of drain cleaning
revenue declining 8.6%, plumbing declining 6.3%, excavation
declining 5.9%, and water restoration declining 16.1%.
Roto-Rooter branch residential revenue in the quarter totaled
$162.5 million, an increase of 2.0%, over the prior-year period.
This aggregate residential revenue growth consisted of drain
cleaning decreasing 5.6%, plumbing increasing 1.4%, excavation
expanding 4.0%, and water restoration increasing 8.6%.
Roto-Rooter’s gross margin in the quarter was 52.9%, a 9-basis
point decline when compared to the fourth quarter of 2022. Adjusted
EBITDA in the fourth quarter of 2023 totaled $64.9 million, a
decrease of 6.4%. The Adjusted EBITDA margin in the quarter was
27.5%, which is 154-basis points below the prior-year period.
Chemed
Consolidated
As of December 31, 2023, Chemed had total cash and cash
equivalents of $264.0 million and no current or long-term debt.
In June 2022, Chemed entered into a five-year $550 million
Amended and Restated Credit Agreement (Credit Agreement). This
Credit Agreement consisted of a $100 million amortizable term loan
and a $450 million revolving credit facility. The interest rate on
this Credit Agreement has a floating rate that is currently SOFR
plus 100-basis points. The Company paid off the remaining portion
of the term loan in the second quarter of 2023. There is
approximately $404.8 million of undrawn borrowing capacity under
the Credit Agreement after excluding $45.2 million for Letters of
Credit.
During the quarter, the Company repurchased 79,512 shares of
Chemed stock for $46.0 million which equates to a cost per share of
$579.09. As of December 31, 2023, there was approximately $314.1
million of remaining share repurchase authorization under its
plan.
Guidance for
2024
VITAS 2024 revenue, prior to Medicare Cap, is estimated to
increase 9.0% to 9.8% when compared to 2023. ADC is estimated to
increase 6.5% to 7.0%. Full year adjusted EBITDA margin, prior to
Medicare Cap, is estimated to be 17.8% to 18.3%. Medicare Cap
billing limitations are estimated to be $9.5 million in calendar
year 2024.
Roto-Rooter is forecasted to achieve full-year 2024 revenue
growth of 3.5% to 4.0%. Roto-Rooter’s adjusted EBITDA margin for
2024 is expected to be 28.7% to 29.1%.
Based upon the above, full-year 2024 earnings per diluted share,
excluding: non-cash expense for stock options, tax benefits from
stock option exercises, costs related to litigation, and other
discrete items, is estimated to be in the range of $23.30 to
$23.70.
The 2024 guidance assumes an effective corporate tax rate on
adjusted earnings of 24.2% and a diluted share count of 15.2
million shares. Chemed’s 2023 adjusted earnings per diluted share
was $20.30, including $1.04 per share for costs associated with the
2023 portion of the Retention Program.
Conference
Call
As previously disclosed, Chemed will host a conference call and
webcast at 10 a.m., ET, on Wednesday, February 28, 2024, to discuss
the company's quarterly results and to provide an update on its
business. Participants may access a live webcast of the conference
call through the investor relations section of Chemed’s website,
Investor Relations Home | Chemed Corporation or the hosting website
https://edge.media-server.com/mmc/p/586r6wmh.
Participants may also register via teleconference at:
https://register.vevent.com/register/BIefc8b6001c2b43b09e16a655471d87c4.
Once registration is completed, participants will be provided
with a dial-in number containing a personalized conference code to
access the call. All participants are instructed to dial-in 15
minutes prior to the start time.
A taped replay of the conference call will be available
beginning approximately two hours after the call's conclusion. You
may access the replay via webcast through the investor relations
section of Chemed’s website.
Chemed Corporation operates in the healthcare field through its
VITAS Healthcare Corporation subsidiary. VITAS provides daily
hospice services to approximately 18,600 patients with severe,
life-limiting illnesses. This type of care is focused on making the
terminally ill patient's final days as comfortable and pain-free as
possible.
Chemed operates in the residential and commercial plumbing and
drain cleaning industry under the brand name Roto-Rooter.
Roto-Rooter provides plumbing, drain cleaning, and water cleanup
services through company-owned branches, independent contractors
and franchisees in the United States and Canada. Roto-Rooter also
has licensed master franchisees in the republics of Indonesia and
Singapore, and the Philippines.
This press release contains information about Chemed’s EBITDA,
Adjusted EBITDA and Adjusted Diluted EPS, which are not measures
derived in accordance with GAAP and which exclude components that
are important to understanding Chemed’s financial performance. In
reporting its operating results, Chemed provides EBITDA, Adjusted
EBITDA and Adjusted Diluted EPS measures to help investors and
others evaluate the Company’s operating results, compare its
operating performance with that of similar companies that have
different capital structures and evaluate its ability to meet its
future debt service, capital expenditures and working capital
requirements. Chemed’s management similarly uses EBITDA, Adjusted
EBITDA and Adjusted Diluted EPS to assist it in evaluating the
performance of the Company across fiscal periods and in assessing
how its performance compares to its peer companies. These measures
also help Chemed’s management to estimate the resources required to
meet Chemed’s future financial obligations and expenditures.
Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should
not be considered in isolation or as a substitute for comparable
measures calculated and presented in accordance with GAAP. We
calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by
service revenue and sales. A reconciliation of Chemed’s net income
to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is
presented in the tables following the text of this press
release.
Forward-Looking
Statements
Certain statements contained in this press release and the
accompanying tables are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
The words "believe," "expect," "hope," "anticipate," "plan" and
similar expressions identify forward-looking statements, which
speak only as of the date the statement was made. Chemed does not
undertake and specifically disclaims any obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. These
statements are based on current expectations and assumptions and
involve various risks and uncertainties, which could cause Chemed's
actual results to differ from those expressed in such
forward-looking statements.
These risks and uncertainties arise from, among other things,
possible changes in regulations governing the hospice care or
plumbing and drain cleaning industries; periodic changes in
reimbursement levels and procedures under Medicare and Medicaid
programs; difficulties predicting patient length of stay and
estimating potential Medicare reimbursement obligations; challenges
inherent in Chemed's growth strategy; the current shortage of
qualified nurses, other healthcare professionals and licensed
plumbing and drain cleaning technicians; Chemed’s dependence on
patient referral sources; and other factors detailed under the
caption "Description of Business by Segment" or "Risk Factors" in
Chemed’s most recent report on form 10-Q or 10-K and its other
filings with the Securities and Exchange Commission. You are
cautioned not to place undue reliance on such forward-looking
statements and there are no assurances that the matters contained
in such statements will be achieved.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per
share data)(unaudited) Three Months Ended December 31, For
the Years Ended December 31,
2023
2022
2023
2022
Service revenues and sales
$
585,912
$
546,654
$
2,264,417
$
2,134,963
Cost of services provided and goods sold
358,346
349,570
1,465,602
1,369,877
Selling, general and administrative expenses (aa)
100,436
96,928
395,120
358,727
Depreciation
13,024
12,096
50,802
49,102
Amortization
2,515
2,512
10,063
10,070
Other operating expense
197
4,221
2,261
3,691
Total costs and expenses
474,518
465,327
1,923,848
1,791,467
Income from operations
111,394
81,327
340,569
343,496
Interest expense
(342
)
(1,601
)
(3,108
)
(4,584
)
Other income/(expense)--net (bb)
4,541
2,674
12,906
(9,233
)
Income before income taxes
115,593
82,400
350,367
329,679
Income taxes
(25,540
)
(20,274
)
(77,858
)
(80,055
)
Net income
$
90,053
$
62,126
$
272,509
$
249,624
Earnings Per Share Net income
$
5.96
$
4.17
$
18.11
$
16.72
Average number of shares outstanding
15,099
14,913
15,050
14,929
Diluted Earnings Per Share Net income
$
5.90
$
4.13
$
17.93
$
16.53
Average number of shares outstanding
15,270
15,052
15,200
15,099
(aa) Selling, general and administrative ("SG&A")
expenses comprise (in thousands): Three Months Ended
December 31, For the Years Ended December 31,
2023
2022
2023
2022
SG&A expenses before long-term incentive compensation and the
impact of market value adjustments related to deferred compensation
plans
$
95,601
$
91,779
$
377,027
$
360,896
Long-term incentive compensation
3,872
2,923
11,689
7,801
Market value adjustments related to deferred compensation trusts
963
2,226
6,404
(9,970
)
Total SG&A expenses
$
100,436
$
96,928
$
395,120
$
358,727
(bb) Other income/(expense)--net comprises (in thousands):
Three Months Ended December 31, For the Years Ended December 31,
2023
2022
2023
2022
Market value adjustments related to deferred compensation trusts
$
963
$
2,226
$
6,404
$
(9,970
)
Interest income
3,408
65
6,270
355
Other
170
383
232
382
Total other income/(expense)--net
$
4,541
$
2,674
$
12,906
$
(9,233
)
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS (in thousands, except per share
data)(unaudited) December 31,
2023
2022
Assets Current assets Cash and cash equivalents
$
263,958
$
74,126
Accounts receivable less allowances
181,511
139,408
Inventories
12,004
10,272
Prepaid income taxes
13,166
18,515
Prepaid expenses
30,204
30,291
Total current assets
500,843
272,612
Investments of deferred compensation plans held in trust
106,126
93,196
Properties and equipment, at cost less accumulated depreciation
203,840
199,714
Lease right of use asset
126,387
135,662
Identifiable intangible assets less accumulated amortization
90,264
99,726
Goodwill
585,017
581,295
Other assets
55,618
59,807
Total Assets
$
1,668,095
$
1,442,012
Liabilities Current liabilities Accounts payable
$
64,034
$
41,884
Current portion of long-term debt
-
5,000
Income taxes
6,858
-
Accrued insurance
58,568
58,515
Accrued compensation
88,381
87,350
Accrued legal
6,386
4,456
Short-term lease liability
38,635
38,996
Other current liabilities
49,188
61,004
Total current liabilities
312,050
297,205
Deferred income taxes
30,321
38,613
Long-term debt
-
92,500
Deferred compensation liabilities
104,069
92,330
Long-term lease liability
100,776
110,513
Other liabilities
13,003
12,136
Total Liabilities
560,219
643,297
Stockholders' Equity Capital stock
37,184
36,796
Paid-in capital
1,341,273
1,149,899
Retained earnings
2,446,925
2,197,918
Treasury stock, at cost
(2,719,588
)
(2,588,145
)
Deferred compensation payable in Company stock
2,082
2,247
Total Stockholders' Equity
1,107,876
798,715
Total Liabilities and Stockholders' Equity
$
1,668,095
$
1,442,012
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands)(unaudited) For the Years Ended December 31,
2023
2022
Cash Flows from Operating Activities Net income
$
272,509
$
249,624
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
60,865
59,172
Stock option expense
30,082
26,254
Deferred payroll taxes
-
(18,175
)
Noncash long-term incentive compensation
9,267
6,188
(Benefit)/provision for deferred income taxes
(8,027
)
14,827
Litigation settlements
2,050
4,000
Noncash directors' compensation
1,444
1,170
Amortization of debt issuance costs
580
342
Changes in operating assets and liabilities, excluding amounts
acquired in business combinations: Increase in accounts receivable
(41,488
)
(2,414
)
Increase in inventories
(1,732
)
(162
)
Decrease in prepaid expenses
87
2,397
(Decrease)/increase in accounts payable and other current
liabilities
(9,348
)
15,343
Change in current income taxes
11,748
(996
)
Net change in lease assets and liabilities
(1,424
)
1,471
Increase in other assets
(9,952
)
(45,779
)
Increase/(decrease) in other liabilities
12,802
(3,350
)
Other sources/(uses)
836
(26
)
Net cash provided by operating activities
330,299
309,886
Cash Flows from Investing Activities Capital expenditures
(56,854
)
(57,325
)
Business combinations, net of cash acquired
(3,994
)
(3,529
)
Proceeds from sale of fixed assets
640
2,330
Other uses
(434
)
(878
)
Net cash used by investing activities
(60,642
)
(59,402
)
Cash Flows from Financing Activities Proceeds from exercise
of stock options
102,192
44,968
Payments on other long-term debt
(97,500
)
(2,500
)
Proceeds from other long-term debt
-
100,000
Purchases of treasury stock
(67,697
)
(114,515
)
Dividends paid
(23,502
)
(22,017
)
Change in cash overdrafts payable
15,749
(11,884
)
Capital stock surrendered to pay taxes on stock-based compensation
(9,557
)
(15,611
)
Debt issuance costs
-
(1,586
)
Payments on revolving line of credit
-
(306,800
)
Proceeds from revolving line of credit
-
121,800
Other sources/(uses)
490
(1,108
)
Net cash used by financing activities
(79,825
)
(209,253
)
Increase/(decrease) in Cash and Cash Equivalents
189,832
41,231
Cash and cash equivalents at beginning of year
74,126
32,895
Cash and cash equivalents at end of year
$
263,958
$
74,126
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS
ENDED DECEMBER 31, 2023 AND 2022 (in thousands)(unaudited)
Chemed VITAS Roto-Rooter Corporate
Consolidated 2023 (a) Service revenues and sales $
349,998
$
235,914
$
-
$
585,912
Cost of services provided and goods sold
247,151
111,195
-
358,346
Selling, general and administrative expenses
22,048
59,621
18,767
100,436
Depreciation
5,052
7,959
13
13,024
Amortization
26
2,489
-
2,515
Other operating (income)/expense
4
193
-
197
Total costs and expenses
274,281
181,457
18,780
474,518
Income/(loss) from operations
75,717
54,457
(18,780
)
111,394
Interest expense
(26
)
(55
)
(261
)
(342
)
Intercompany interest income/(expense)
5,008
3,265
(8,273
)
-
Other income—net
201
29
4,311
4,541
Income/(loss) before income taxes
80,900
57,696
(23,003
)
115,593
Income taxes
(17,613
)
(11,809
)
3,882
(25,540
)
Net income/(loss) $
63,287
$
45,887
$
(19,121
)
$
90,053
2022 (b) Service revenues and sales $
308,059
$
238,595
$
-
$
546,654
Cost of services provided and goods sold
237,333
112,237
-
349,570
Selling, general and administrative expenses
22,005
57,096
17,827
96,928
Depreciation
5,061
7,017
18
12,096
Amortization
26
2,486
-
2,512
Other operating expense/(income)
4,266
(45
)
-
4,221
Total costs and expenses
268,691
178,791
17,845
465,327
Income/(loss) from operations
39,368
59,804
(17,845
)
81,327
Interest expense
(31
)
(76
)
(1,494
)
(1,601
)
Intercompany interest income/(expense)
4,720
2,594
(7,314
)
-
Other income/(expense)—net
417
31
2,226
2,674
Income/(loss) before income taxes
44,474
62,353
(24,427
)
82,400
Income taxes
(10,800
)
(14,829
)
5,355
(20,274
)
Net income/(loss) $
33,674
$
47,524
$
(19,072
)
$
62,126
The "Footnotes to Financial Statements" are integral
parts of this financial information.
CONSOLIDATING
STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2023
AND 2022 (in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate
Consolidated 2023 (a) Service revenues and sales $
1,315,065
$
949,352
$
-
$
2,264,417
Cost of services provided and goods sold
1,017,623
447,979
-
1,465,602
Selling, general and administrative expenses
93,296
231,587
70,237
395,120
Depreciation
19,959
30,790
53
50,802
Amortization
104
9,959
-
10,063
Other operating (income)/expense
(12
)
2,273
-
2,261
Total costs and expenses
1,130,970
722,588
70,290
1,923,848
Income/(loss) from operations
184,095
226,764
(70,290
)
340,569
Interest expense
(180
)
(442
)
(2,486
)
(3,108
)
Intercompany interest income/(expense)
19,400
11,918
(31,318
)
-
Other income—net
1,309
126
11,471
12,906
Income/(loss) before income taxes
204,624
238,366
(92,623
)
350,367
Income taxes
(46,115
)
(50,125
)
18,382
(77,858
)
Net income/(loss) $
158,509
$
188,241
$
(74,241
)
$
272,509
2022 (b) Service revenues and sales $
1,201,564
$
933,399
$
-
$
2,134,963
Cost of services provided and goods sold
931,861
438,016
-
1,369,877
Selling, general and administrative expenses
89,187
222,257
47,283
358,727
Depreciation
21,955
27,075
72
49,102
Amortization
101
9,969
-
10,070
Other operating (income)/expense
3,337
354
-
3,691
Total costs and expenses
1,046,441
697,671
47,355
1,791,467
Income/(loss) from operations
155,123
235,728
(47,355
)
343,496
Interest expense
(172
)
(396
)
(4,016
)
(4,584
)
Intercompany interest income/(expense)
18,901
9,345
(28,246
)
-
Other income/(expense)—net
600
138
(9,971
)
(9,233
)
Income/(loss) before income taxes
174,452
244,815
(89,588
)
329,679
Income taxes
(43,000
)
(58,695
)
21,640
(80,055
)
Net income/(loss) $
131,452
$
186,120
$
(67,948
)
$
249,624
The "Footnotes to Financial Statements" are integral
parts of this financial information.
CHEMED CORPORATION
AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARIES OF
EBITDA FOR THE THREE MONTHS ENDED DECEMBER 31, 2023 AND
2022 (in thousands)(unaudited)
Chemed VITAS
Roto-Rooter Corporate Consolidated
2023
Net income/(loss) $
63,287
$
45,887
$
(19,121
)
$
90,053
Add/(deduct): Interest expense
26
55
261
342
Income taxes
17,613
11,809
(3,882
)
25,540
Depreciation
5,052
7,959
13
13,024
Amortization
26
2,489
-
2,515
EBITDA
86,004
68,199
(22,729
)
131,474
Add/(deduct): Intercompany interest expense/(income)
(5,008
)
(3,265
)
8,273
-
Interest income
(31
)
(29
)
(3,348
)
(3,408
)
Stock option expense
-
-
7,706
7,706
Long-term incentive compensation
-
-
3,872
3,872
Adjusted EBITDA $
80,965
$
64,905
$
(6,226
)
$
139,644
2022
Net income/(loss) $
33,674
$
47,524
$
(19,072
)
$
62,126
Add/(deduct): Interest expense
31
76
1,494
1,601
Income taxes
10,800
14,829
(5,355
)
20,274
Depreciation
5,061
7,017
18
12,096
Amortization
26
2,486
-
2,512
EBITDA
49,592
71,932
(22,915
)
98,609
Add/(deduct): Intercompany interest expense/(income)
(4,720
)
(2,594
)
7,314
-
Interest income
(36
)
(30
)
1
(65
)
Stock option expense
-
-
6,911
6,911
Litigation settlement
4,000
-
-
4,000
Long-term incentive compensation
-
-
2,923
2,923
Adjusted EBITDA $
48,836
$
69,308
$
(5,766
)
$
112,378
The "Footnotes to Financial Statements" are integral parts
of this financial information.
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES CONSOLIDATING SUMMARIES OF EBITDA
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (in
thousands)(unaudited)
Chemed VITAS Roto-Rooter
Corporate Consolidated
2023
Net income/(loss) $
158,509
$
188,241
$
(74,241
)
$
272,509
Add/(deduct): Interest expense
180
442
2,486
3,108
Income taxes
46,115
50,125
(18,382
)
77,858
Depreciation
19,959
30,790
53
50,802
Amortization
104
9,959
-
10,063
EBITDA
224,867
279,557
(90,084
)
414,340
Add/(deduct): Intercompany interest expense/(income)
(19,400
)
(11,918
)
31,318
-
Interest income
(1,078
)
(125
)
(5,067
)
(6,270
)
Stock option expense
-
-
30,082
30,082
Long-term incentive compensation
-
-
11,689
11,689
Litigation settlements
-
2,056
-
2,056
Adjusted EBITDA $
204,389
$
269,570
$
(22,062
)
$
451,897
2022
Net income/(loss) $
131,452
$
186,120
$
(67,948
)
$
249,624
Add/(deduct): Interest expense
172
396
4,016
4,584
Income taxes
43,000
58,695
(21,640
)
80,055
Depreciation
21,955
27,075
72
49,102
Amortization
101
9,969
-
10,070
EBITDA
196,680
282,255
(85,500
)
393,435
Add/(deduct): Intercompany interest expense/(income)
(18,901
)
(9,345
)
28,246
-
Interest income
(218
)
(138
)
1
(355
)
Stock option expense
-
-
26,254
26,254
Long-term incentive compensation
-
-
7,801
7,801
Litigation settlements
4,000
-
-
4,000
Direct costs related to COVID-19
310
988
89
1,387
Medicare cap sequestration adjustment
138
-
-
138
Adjusted EBITDA $
182,009
$
273,760
$
(23,109
)
$
432,660
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 December 31, For the Years Ended December
31,
2023
2022
2023
2022
Net income as reported
$
90,053
$
62,126
$
272,509
$
249,624
Add/(deduct) pre-tax cost of: Stock option expense
7,706
6,911
30,082
26,254
Long-term incentive compensation
3,872
2,923
11,689
7,801
Amortization of reacquired franchise agreements
2,352
2,352
9,408
9,408
Litigation settlements
-
4,000
2,056
4,000
Medicare cap sequestration adjustment
-
-
-
138
Direct costs related to COVID-19
-
-
-
1,387
Add/(deduct) tax impacts: Tax impact of the above pre-tax
adjustments (1)
(2,216
)
(3,151
)
(8,658
)
(9,075
)
Tax impact of deferred tax rate change
-
-
(4,241
)
-
Excess tax benefits on stock compensation
(954
)
(1,538
)
(4,330
)
(5,928
)
Adjusted net income
$
100,813
$
73,623
$
308,515
$
283,609
Diluted Earnings Per Share As Reported Net income
$
5.90
$
4.13
$
17.93
$
16.53
Average number of shares outstanding
15,270
15,052
15,200
15,099
Adjusted Diluted Earnings Per Share Adjusted net income
$
6.60
$
4.89
$
20.30
$
18.78
Average number of shares outstanding
15,270
15,052
15,200
15,099
(1) The tax impact of pre-tax adjustments was calculated
using the effective tax rate of the operating unit for which each
adjustment is associated. The "Footnotes to Financial
Statements" are integral parts of this financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT (unaudited)
Three Months Ended December 31, For the Years Ended December 31,
OPERATING STATISTICS
2023
2022
2023
2022
Net revenue ($000) (c) Homecare
$
303,883
$
267,691
$
1,136,437
$
1,039,211
Inpatient
28,107
26,647
112,419
102,361
Continuous care
22,620
19,284
85,674
77,000
Other
3,844
2,977
13,582
12,438
Subtotal
$
358,454
$
316,599
$
1,348,112
$
1,231,010
Room and board, net
(2,535
)
(2,778
)
(10,851
)
(9,574
)
Contractual allowances
(3,546
)
(3,012
)
(14,196
)
(12,004
)
Medicare cap allowance
(2,375
)
(2,750
)
(8,000
)
(7,868
)
Net Revenue
$
349,998
$
308,059
$
1,315,065
$
1,201,564
Net revenue as a percent of total before Medicare cap allowance
Homecare
84.8
%
84.6
%
84.3
%
84.4
%
Inpatient
7.8
8.4
8.3
8.3
Continuous care
6.3
6.1
6.4
6.3
Other
1.1
0.9
1.0
1.0
Subtotal
100.0
100.0
100.0
100.0
Room and board, net
(0.7
)
(0.9
)
(0.8
)
(0.8
)
Contractual allowances
(1.0
)
(0.9
)
(1.1
)
(1.0
)
Medicare cap allowance
(0.7
)
(0.9
)
(0.6
)
(0.6
)
Net Revenue
97.6
%
97.3
%
97.5
%
97.6
%
Days of care Homecare
1,439,494
1,289,067
5,457,963
5,086,021
Nursing home
285,616
264,895
1,118,728
1,036,816
Respite
7,394
5,807
26,605
23,905
Subtotal routine homecare and respite
1,732,504
1,559,769
6,603,296
6,146,742
Inpatient
24,918
24,254
101,905
95,431
Continuous care
23,001
19,909
88,631
81,890
Total
1,780,423
1,603,932
6,793,832
6,324,063
Number of days in relevant time period
92
92
365
365
Average daily census ("ADC") (days) Homecare
15,646
14,012
14,953
13,934
Nursing home
3,105
2,879
3,065
2,841
Respite
80
63
73
65
Subtotal routine homecare and respite
18,831
16,954
18,091
16,840
Inpatient
271
264
279
261
Continuous care
250
216
243
224
Total
19,352
17,434
18,613
17,325
Total Admissions
15,867
14,829
63,431
60,774
Total Discharges
15,705
14,862
61,242
60,930
Average length of stay (days)
105.9
103.9
102.2
104.6
Median length of stay (days)
17.0
16.0
16.0
16.0
ADC by major diagnosis Cerebro
42.8
%
41.0
%
42.5
%
39.8
%
Neurological
13.7
20.3
15.3
21.2
Cancer
10.3
10.7
10.5
10.9
Cardio
16.2
15.7
16.1
15.7
Respiratory
7.0
7.2
7.1
7.3
Other
10.0
5.1
8.5
5.1
Total
100.0
%
100.0
%
100.0
%
100.0
%
Admissions by major diagnosis Cerebro
26.5
%
25.6
%
26.4
%
24.6
%
Neurological
8.3
11.0
9.4
12.3
Cancer
25.9
26.7
26.0
26.3
Cardio
15.4
15.3
16.0
14.9
Respiratory
10.1
10.5
10.1
10.3
Other
13.8
10.9
12.1
11.6
Total
100.0
%
100.0
%
100.0
%
100.0
%
Estimated uncollectible accounts as a percent of revenues
1.0
%
1.0
%
1.1
%
1.0
%
Accounts receivable -- Days of revenue outstanding-excluding
unapplied Medicare payments
37.8
38.1
n.a. n.a. Days of revenue outstanding-including unapplied
Medicare payments
36.0
28.0
n.a. n.a. The "Footnotes to Financial Statements" are
integral parts of this financial information.
FOOTNOTES
TO FINANCIAL STATEMENTS FOR THE THREE MONTHS AND YEARS ENDED
DECEMBER 31, 2023 AND 2022 (unaudited) (a) Included in
the results of operations for 2023 are the following significant
credits/(charges) which may not be indicative of ongoing operations
(in thousands):
Three Months Ended December 31, 2023
VITAS Roto-Rooter Corporate
Consolidated Stock option expense $
-
$
-
$
(7,706
)
$
(7,706
)
Long-term incentive compensation
-
-
(3,872
)
(3,872
)
Amortization of reacquired franchise agreements
-
(2,352
)
-
(2,352
)
Pretax impact on earnings
-
(2,352
)
(11,578
)
(13,930
)
Excess tax benefits on stock compensation
-
-
954
954
Income tax benefit on the above
-
548
1,668
2,216
After-tax impact on earnings $
-
$
(1,804
)
$
(8,956
)
$
(10,760
)
For the Years Ended December 31, 2023 VITAS
Roto-Rooter Corporate Consolidated
Stock option expense $
-
$
-
$
(30,082
)
$
(30,082
)
Long-term incentive compensation
-
-
(11,689
)
(11,689
)
Amortization of reacquired franchise agreements
-
(9,408
)
-
(9,408
)
Litigation settlements
-
(2,056
)
-
(2,056
)
Pretax impact on earnings
-
(11,464
)
(41,771
)
(53,235
)
Excess tax benefits on stock compensation
-
-
4,330
4,330
Tax impact of deferred tax rate change
1,772
3,559
(1,090
)
4,241
Income tax benefit on the above
-
2,671
5,987
8,658
After-tax impact on earnings $
1,772
$
(5,234
)
$
(32,544
)
$
(36,006
)
(b) Included in the results of operations for 2022 are the
following significant credits/(charges) which may not be indicative
of ongoing operations (in thousands):
Three Months Ended
December 31, 2022 VITAS Roto-Rooter
Corporate Consolidated Stock option expense $
-
$
-
$
(6,911
)
$
(6,911
)
Litigation settlements
(4,000
)
-
-
(4,000
)
Long-term incentive compensation
-
-
(2,923
)
(2,923
)
Amortization of reacquired franchise agreements
-
(2,352
)
-
(2,352
)
Pretax impact on earnings
(4,000
)
(2,352
)
(9,834
)
(16,186
)
Excess tax benefits on stock compensation
-
-
1,538
1,538
Income tax benefit on the above
1,016
623
1,512
3,151
After-tax impact on earnings $
(2,984
)
$
(1,729
)
$
(6,784
)
$
(11,497
)
For the Years Ended December 31, 2022 VITAS
Roto-Rooter Corporate Consolidated
Stock option expense $
-
$
-
$
(26,254
)
$
(26,254
)
Amortization of reacquired franchise agreements
-
(9,408
)
-
(9,408
)
Long-term incentive compensation
-
-
(7,801
)
(7,801
)
Litigation settlements
(4,000
)
-
-
(4,000
)
Direct costs related to COVID-19
(310
)
(988
)
(89
)
(1,387
)
Medicare cap sequestration adjustment
(138
)
-
-
(138
)
Pretax impact on earnings
(4,448
)
(10,396
)
(34,144
)
(48,988
)
Excess tax benefits on stock compensation
-
-
5,928
5,928
Income tax benefit on the above
1,130
2,755
5,190
9,075
After-tax impact on earnings $
(3,318
)
$
(7,641
)
$
(23,026
)
$
(33,985
)
(c) VITAS has 11 large (greater than 450 ADC), 17 medium
(greater than 200 but less than 450 ADC) and 22 small (less than
200 ADC) hospice programs. Of Vitas' 30 Medicare provider numbers,
for the trailing 12 months, 26 provider numbers have a Medicare cap
cushion of greater than 10%, two provider numbers have a Medicare
cap cushion between 5% and 10%, and two provider numbers have a
Medicare cap liability.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227400148/en/
Michael D. Witzeman (513) 762-6714
Chemed (NYSE:CHE)
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