Full Press Release Details
Reports First-Quarter 2013 Results
Full-Year 2013 Earnings Guidance
CINCINNATI--(BUSINESS WIRE)--April 18, 2013--Chemed Corporation (Chemed)
(NYSE:CHE), which operates VITAS Healthcare Corporation (VITAS),
the nation's largest provider of end-of-life care, and Roto-Rooter, the
nation's largest commercial and residential plumbing and drain cleaning
services provider, reported financial results for its first quarter
ended March 31, 2013, versus the comparable prior-year period, as
Consolidated operating results:
Revenue increased 3.9% to $367 million
GAAP Diluted EPS increased 10.4% to $1.17
Adjusted Diluted EPS increased 14.0% to $1.38
VITAS segment operating results:
Net Patient Revenue of $271 million, an increase of 4.0%
Average Daily Census (ADC) of 14,432, an increase of 5.3%
Admissions of 17,137, an increase of 5.0%
Net Income of $20.1 million, an increase of 2.6%
Adjusted EBITDA of $37.6 million, an increase of 5.9%
Adjusted EBITDA margin of 13.8%, a increase of 24 basis points
Roto-Rooter segment operating results:
Revenue of $95.3 million, an increase of 3.5%
Unit-for-unit job count of 168,967, an increase of 0.1%
Net Income of $9.6 million, a increase of 28.4%
Adjusted EBITDA of $17.4 million, an increase of 24.1%
Adjusted EBITDA margin of 18.3%, an increase of 304 basis points
Net revenue for VITAS was $271 million in the first quarter of 2013,
which is an increase of 4.0% over the prior-year period. This revenue
growth was the result of increased ADC of 5.3%, driven by an increase in
admissions of 5.0%, increased discharges of 4.0% and Medicare price
increases of approximately 0.9%. Revenue growth aggregated 5.9%
excluding the impact of 2012 leap year and the impact of revenue
recognition related from the reversal of prior years Medicare Cap
In the first quarter of 2013, VITAS recorded a positive revenue
adjustment of $0.9 million related to eliminating the Medicare Cap
billing limitation recorded in the fourth quarter of 2012. This compares
with $2.6 million of additional revenue recorded in the first quarter of
Of VITAS' 36 unique Medicare provider numbers, 31 provider numbers have
a Medicare Cap cushion of 10% or greater during the first six months of
the 2013 Medicare Cap year; two provider numbers have a Medicare Cap
cushion between 5% to 10%; and three provider numbers have a cap cushion
between 0% and 5%. VITAS generated an aggregate cap cushion of $233
million during the trailing twelve-month period.
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was $208.23, which is 0.5% above the prior-year period.
Routine home care reimbursement and high acuity care averaged $164.51
and $713.65, respectively, per patient per day in the first quarter of
2013. During the quarter, high acuity days of care were 8.0% of total
days of care, 10 basis points below the prior-year quarter.
The first quarter of 2013 gross margin, excluding the impact of Medicare
Cap, was 21.2%, which is an 80 basis point improvement when compared to
the first quarter of 2012.
Selling, general and administrative expense was $21.6 million in the
first quarter of 2013, which is an increase of 9.4% when compared to the
prior-year quarter. Adjusted EBITDA totaled $37.6 million in the
quarter, an increase of 5.9% over the prior-year period. Adjusted EBITDA
margin, excluding the impact from Medicare Cap, was 13.6% in the quarter
which is 83 basis points above the prior-year quarter.
Roto-Rooter's plumbing and drain cleaning business generated sales of
$95.3 million for the first quarter of 2013, an increase of 3.5%, over
the prior-year quarter.
Total residential and commercial unit-for-unit job count increased 0.1%
in the first quarter of 2013 when compared to the prior-year period.
This consisted of a residential plumbing job count decline of 4.9% and
residential drain cleaning job increase of 5.4%, when compared to the
first quarter of 2012. Residential jobs represent over 70% of total job
count in the quarter. Commercial plumbing/excavation job count declined
2.6% and commercial drain cleaning decreased 2.4% when compared to the
Roto-Rooter's gross margin in the quarter was 46.3%, a 261 basis point
increase when compared to the first quarter of 2012. Adjusted EBITDA in
the first quarter of 2013 totaled $17.4 million, an increase of 24.1%,
and the Adjusted EBITDA margin was 18.3% in the quarter, an increase of
Chemed had total cash and cash equivalents of $73 million, and debt of
$177 million, at March 31, 2013. This debt is net of the discount taken
as a result of convertible debt accounting requirements. Excluding this
discount, aggregate debt is $187 million and is due in May 2014.
Chemed's total debt equates to less than one times trailing twelve-month
In January 2013 Chemed entered into a five-year Amended and Restated
Credit Agreement that consists of a $350 million revolving credit
facility. The interest rate on this facility has a floating rate that is
currently LIBOR plus 125 basis points. At March 31, 2013, the Company
had approximately $321 million of undrawn borrowing capacity under this
credit agreement after deducting $29 million for letters of credit
issued to secure the Company's workers' compensation insurance.
Capital expenditures for the first quarter of 2013 aggregated $5.4
million and compares to depreciation and amortization during the same
period of $7.9 million.
During the quarter, the Board of Directors authorized an additional $100
million for share repurchase. Chemed currently has $114.7 million of
authorization remaining under this share repurchase plan. The Company
did not repurchase any shares during the first quarter of 2013.
Effective April 1, 2013, Medicare reduced hospice reimbursement rates
2.0% for Medicare beneficiaries. This reduction impacts approximately
91.2% of Vitas' revenue base and is factored into the 2013 guidance
VITAS estimates its full-year 2013 revenue growth, prior to Medicare
Cap, will be in the range of 4.5% to 5.5%. Admissions in 2013 are
estimated to increase approximately 5.0% to 6.0% and full-year Adjusted
EBITDA margin, prior to Medicare Cap, is estimated to be 13.8% to 14.2%.
Effective October 1, 2012, Medicare increased the average hospice
reimbursement rates by approximately 0.9%. As a result of sequestration,
effective April 1, 2013, this 0.9% increase was reduced to a 1.1%