Full Press Release Details
Reports Fourth-Quarter 2014 Results
CINCINNATI--(BUSINESS WIRE)--February 17, 2015--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
fourth quarter ended December 31, 2014, versus the comparable prior-year
Consolidated operating results:
Revenue increased 8.8% to $379 million
GAAP Diluted EPS increased 33.6% to $1.71
Adjusted Diluted EPS increased 24.1% to $1.80
VITAS segment operating results:
Net Patient Revenue of $274 million, an increase of 7.1%
Average Daily Census (ADC) of 14,838, an increase of 4.6%
Admissions of 16,313, an increase of 5.6%
Net Income, including litigation costs, of $25.5 million, an increase
Adjusted EBITDA of $45.7 million, an increase of 18.4%
Adjusted EBITDA margin of 16.7%, an increase of 159 basis points
Roto-Rooter segment operating results:
Revenue of $105 million, an increase of 13.7%
Net Income of $11.5 million, an increase of 14.5%
Adjusted EBITDA of $21.1 million, an increase of 14.5%
Adjusted EBITDA margin of 20.1%, an increase of 15 basis points
Net revenue for VITAS was $274 million in the fourth quarter of 2014,
which is an increase of $18.2 million, or 7.1%, when compared to the
prior-year period. This revenue increase is comprised of an average
Medicare reimbursement rate increase of approximately 1.4%, a 4.6%
increase in average daily census, and a favorable comparison relative to
the Medicare Cap billing limitation.
In the fourth quarter of 2014, VITAS reversed $0.5 million in estimated
Medicare Cap billing limitations. This compares to $3.8 million of
Medicare Cap billing limitations recorded in the fourth quarter of 2013.
At December 31, 2014, VITAS had 35 Medicare provider numbers with one
provider number having an estimated 2015 Medicare Cap billing limitation.
Of VITAS' 35 unique Medicare provider numbers, 29 provider numbers have
a Medicare Cap cushion of 10% or greater for the 2015 Medicare Cap
period; two provider numbers have a Medicare Cap cushion between 5% to
10%; three provider numbers have a cap cushion between 0% and 5% and one
provider number is in a Medicare Cap billing limitation. VITAS generated
an aggregate cap cushion of $276 million during the trailing
twelve-month period.
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was $200.62, which is 0.7% above the prior-year period.
Routine home care reimbursement and high acuity care averaged $164.58
and $702.86, respectively. During the quarter, high acuity days of care
were 6.7% of total days of care, 14 basis points below the prior-year
The fourth quarter of 2014 gross margin, excluding the impact of
Medicare Cap, was 24.3%, which is a 12 basis point increase when
compared to the fourth quarter of 2013.
Selling, general and administrative expense was $21.7 million in the
fourth quarter of 2014, which is an increase of 3.4% when compared to
the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$45.2 million in the quarter, an increase 6.5% over the prior-year
period. Adjusted EBITDA margin, excluding the impact from Medicare Cap,
was 16.5% in the quarter which is 18 basis points favorable to the
Roto-Rooter's plumbing and drain cleaning business generated sales of
$105 million for the fourth quarter of 2014, an increase of $12.6
million, or 13.7%, over the prior-year quarter.
Roto-Rooter utilizes a universal calendar of four 13-week quarters
equating to a 52 week full year reporting period and then accrues for an
additional one or two days of operating results in the fourth quarter to
equate to a full 365 or 366 day year. In the fourth quarter of 2014,
Roto-Rooter had 14 weeks of operating activity during the quarter. This
additional week of operating activity, net of the accrued operating
results from earlier years, resulted in Roto-Rooter recognizing an
incremental $2.8 million of revenue, $0.9 million of Adjusted EBITDA and
$0.5 million of net income in the fourth quarter of 2014 when compared
to the fourth quarter of 2013.
Roto-Rooter's gross margin in the quarter was 46.7%, a 59 basis point
decline when compared to the fourth quarter of 2013. Adjusted EBITDA in
the fourth quarter of 2014 totaled $21.1 million, an increase of 14.5%,
and the Adjusted EBITDA margin was 20.1% in the quarter, 15 basis points
higher than the prior year.
As of December 31, 2014, Chemed had total cash and cash equivalents of
$14 million and debt of $148 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 125 basis
points. At December 31, 2014, the Company had approximately $263 million
of undrawn borrowing capacity under this credit agreement.
Capital expenditures through December 31, 2014, aggregated $43.6 million
and compares to depreciation and amortization during the same period of
The Company repurchased $110 million of Chemed stock through December
31, 2014. This equates to 1.2 million shares of Chemed stock repurchased
during the year at an average cost of $93.01 Chemed currently has $11.8
million of authorization remaining under this share repurchase plan.
Full-year 2015 revenue growth for VITAS, prior to Medicare Cap, is
estimated to be in the range of 3% to 4%. Admissions in 2015 are
estimated to increase 4% and full-year Adjusted EBITDA margin, prior to
Medicare Cap, is estimated to be 14% to 15%. Medicare Cap billing
limitations for calendar year 2015 are estimated to be $5.5 million.
Roto-Rooter is forecasted to achieve full-year 2015 revenue growth of 3%
to 4%. This revenue estimate is based upon increased job pricing of
approximately 1%. Adjusted EBITDA margin for 2015 is estimated in the
range of 19% to 20%.
Management estimates that full-year 2015 adjusted earnings per diluted
share, which excludes non-cash expense for stock options, costs related
to litigation and other discrete items, will be in the range of $6.50 to
$6.70. This compares to Chemed's 2014 reported adjusted earnings per