Full Press Release Details
Reports First-Quarter 2017 Results
CINCINNATI--(BUSINESS WIRE)--April 26, 2017--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, 2017, versus the comparable prior-year period, as
Consolidated operating results:
Revenue increased 4.0% to $406 million
GAAP Diluted EPS increased 22.8% to $1.78
Adjusted Diluted EPS increased 12.3% to $1.82
VITAS segment operating results:
Net Patient Revenue of $282 million, an increase of 1.7%
Average Daily Census (ADC) of 16,222, an increase of 3.6%
Admissions of 17,563, an increase of 4.1%
Net Income, including discrete items, of $20.6 million, an increase of
Adjusted EBITDA of $38.4 million, an increase of 7.0%
Roto-Rooter segment operating results:
Revenue of $124 million, an increase of 9.5%
Net Income of $14.6 million, an increase of 12.3%
Adjusted EBITDA of $26.3 million, an increase of 12.7%
Adjusted EBITDA margin of 21.3%, an increase of 61 basis points
Net revenue for VITAS was $282 million in the first quarter of 2017,
which is an increase of 1.7%, when compared to the prior-year period.
This revenue increase is comprised of an average net Medicare
reimbursement rate increase of approximately 1.6%, a 3.6% increase in
average daily census, offset by acuity mix shift which negatively
impacted revenue 2.4% as well as the 1.1% negative impact from having
one less day in the quarter when compared to the prior-year period.
In the first quarter of 2017, VITAS had a 26.1/73.9 RHC Days-of-Care
ratio and generated approximately $1.4 million in SIA revenue. This
compares to a 2016 RHC Days-of-Care ratio of 25.0/75.0 and SIA revenue
VITAS did not have any adjustments to revenue related to the Medicare
Cap billing limitation in the current or prior-year quarter.
At March 31, 2017, VITAS had 31 Medicare provider numbers, none of which
has an estimated 2017 Medicare Cap billing limitation.
Of VITAS' 31 unique Medicare provider numbers, 30 provider numbers have
a Medicare Cap cushion of 10% or greater and one provider number has a
cap cushion between 5% and 10% on a trailing twelve-month period.
Average revenue per patient per day in the quarter was $193.37, which is
0.8% below the prior-year period. Routine home care reimbursement and
high acuity care averaged $163.37 and $715.10, respectively. During the
quarter, high acuity days of care were 5.4% of total days of care, 83
basis points less than the prior-year quarter.
The first quarter of 2017 gross margin was 21.5%, which is a 49 basis
point improvement when compared to the first quarter of 2016.
Selling, general and administrative expense was $24.3 million in the
first quarter of 2017, which is a decrease of 2.0% compared to the
prior-year quarter. Adjusted EBITDA totaled $38.4 million in the
quarter, an increase of 7.0% over the prior-year period. Adjusted EBITDA
margin was 13.6% in the quarter which is 67 basis points higher than the
Roto-Rooter's plumbing and drain cleaning business generated sales of
$124 million for the first quarter of 2017, an increase of $10.7
million, or 9.5%, over the prior-year quarter. Revenue from water
restoration totaled $18.1 million, an increase of $5.6 million or 45.1%,
when compared to the prior-year quarter.
Roto-Rooter's gross margin in the quarter was 48.6%, a 106 basis point
improvement when compared to the first quarter of 2016. Adjusted EBITDA
in the first quarter of 2017 totaled $26.3 million, an increase of
12.7%, and the Adjusted EBITDA margin was 21.3% in the quarter, 61 basis
points higher than the prior year.
As of March 31, 2017, Chemed had total cash and cash equivalents of $47
million and debt of $147 million.
In June 2014, Chemed entered into a five-year Amended and Restated
Credit Agreement that consisted of a $100 million amortizable term loan
and a $350 million revolving credit facility. The interest rate on this
facility has a floating rate that is currently LIBOR plus 112.5 basis
points. At March 31, 2017, the Company had approximately $246 million of
undrawn borrowing capacity under this credit agreement.
Capital expenditures through March 31, 2017, aggregated $9.0 million and
compares to depreciation and amortization during the same period of $8.9
During the quarter, the Company repurchased 300,000 shares of Chemed
stock for $54.3 million which equates to a cost per share of $180.87. On
March 10, 2017, Chemed's Board of Directors authorized an additional
$100 million for stock repurchase under Chemed's existing share
repurchase program. As of March 31, 2017, there was $95.9 million of
remaining share repurchase authorization under this plan.
Chemed restarted its share repurchase program in 2007. Since that time,
Chemed has repurchased 13.1 million shares, aggregating $923 million at
an average share cost of $70.41. Including dividends over this period,
Chemed has returned over $1.04 billion to our shareholders.
Revenue growth for VITAS in 2017, prior to Medicare Cap, is estimated to
be in the range of 4% to 5%. Admissions and Average Daily Census in 2017
are estimated to expand approximately 3% to 4% and full-year Adjusted
EBITDA margin, prior to Medicare Cap, is estimated to be 14.5% to 15.0%.
We are currently estimating $3.7 million for Medicare Cap billing
limitations in the 2017 calendar year.
Roto-Rooter is forecasted to achieve full-year 2017 revenue growth of 3%
to 4%. This revenue estimate is based upon increased job pricing of
approximately 2% and continued growth in water restoration services.
Adjusted EBITDA margin for 2017 is estimated in the range of 21.5% to
Based upon the above, full-year 2017 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
$7.80 to $8.00. This compares to Chemed's 2016 reported adjusted
earnings per diluted share of $7.24.
Chemed will host a conference call and webcast at 10 a.m., ET, on
Thursday, April 27, 2017, to discuss the Company's quarterly results and
to provide an update on its business. The dial-in number for the
conference call is (844) 743-2500 for U.S. and Canadian participants and