Full Press Release Details
Reports Fourth-Quarter 2015 Results
CINCINNATI--(BUSINESS WIRE)--February 17, 2016--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, 2015, versus the comparable prior-year
Consolidated operating results:
Revenue increased 5.1% to $399 million
GAAP Diluted EPS increased 0.6% to $1.72
Adjusted Diluted EPS increased 9.4% to $1.97
VITAS segment operating results:
Net Patient Revenue of $284 million, an increase of 3.7%
Average Daily Census (ADC) of 15,697, an increase of 5.8%
Admissions of 15,790, a decrease of 3.2%
Net Income, including litigation costs, of $26.5 million, an increase
Adjusted EBITDA, excluding cap, of $46.4 million, an increase of 2.7%
Adjusted EBITDA margin, excluding cap, of 16.3%, a decrease of 19
Roto-Rooter segment operating results:
Revenue of $114 million, an increase of 8.7%
Net Income of $13.5 million, an increase of 17.2%
Adjusted EBITDA of $24.4 million, an increase of 15.5%
Adjusted EBITDA margin of 21.4%, an increase of 126 basis points
Net revenue for VITAS was $284 million in the fourth quarter of 2015,
which is an increase of $10.1 million, or 3.7%, when compared to the
prior-year period. This revenue increase is comprised of an average
Medicare reimbursement rate increase of approximately 0.6%, a 5.8%
increase in average daily census, offset by level of care and geographic
mix shift, when compared to the prior year.
In the fourth quarter of 2015, VITAS did not record any adjustments in
estimated Medicare Cap billing limitations. This compares to $0.5
million of Medicare Cap billing limitations reversed in the fourth
At December 31, 2015, VITAS had 31 Medicare provider numbers, none of
which has an estimated 2015 Medicare Cap billing limitation.
Of VITAS' 31 unique Medicare provider numbers, 28 provider numbers have
a Medicare Cap cushion of 10% or greater for the trailing twelve-month
period, one provider number has a cap cushion between 5% and 10% and two
provider numbers have a cap cushion between 0% and 5%. VITAS generated
an aggregate cap cushion of $274 million during the trailing
twelve-month period.
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was $196.98, which is 1.8% below the prior-year period.
Routine home care reimbursement and high acuity care averaged $165.06
and $704.93, respectively. During the quarter, high acuity days of care
were 5.9% of total days of care, 78 basis points less than the
The fourth quarter of 2015 gross margin, excluding the impact of
Medicare Cap, was 24.1%, which is 12 basis points less than the fourth
Selling, general and administrative expense was $23.1 million in the
fourth quarter of 2015, which is an increase of 5.9% when compared to
the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$46.4 million in the quarter, an increase of 2.7% over the prior-year
period. Adjusted EBITDA margin, excluding the impact from Medicare Cap,
was 16.3% in the quarter which is a decline of 19 basis points when
compared to the prior-year.
Roto-Rooter generated sales of $114 million for the fourth quarter of
2015, an increase of $9.1 million, or 8.7%, over the prior-year quarter.
This increase consisted of a 10.3% increase in plumbing and a 4.4%
increase in sewer and drain services. Water restoration accounted for
$2.1 million of this revenue growth, with water and flood remediation
services aggregating $10.4 million in the quarter.
Roto-Rooter's gross margin in the quarter was 47.3%, a 56 basis point
improvement when compared to the fourth quarter of 2014. Adjusted EBITDA
in the fourth quarter of 2015 totaled $24.4 million, an increase of
15.5%, and the Adjusted EBITDA margin was 21.4% in the quarter, a 126
basis point improvement when compared to the prior year.
As of December 31, 2015, Chemed had total cash and cash equivalents of
$14.7 million and debt of $91.3 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 December 31, 2015, the Company had approximately $312 million
of undrawn borrowing capacity under this credit agreement.
Capital expenditures through December 31, 2015, aggregated $44.1 million
and compares to depreciation and amortization during the same period of
The Company repurchased $11.3 million of Chemed stock during the
quarter. This equates to 75,000 shares of Chemed stock repurchased at an
average cost of $151.09. Chemed currently has $52.5 million of
authorization remaining under this share repurchase plan.
On January 1, 2016, CMS implemented a revenue neutral rebasing to the
Medicare hospice reimbursement per diem. This rebasing eliminated the
single-tier per diem for routine home care (RHC) and replaced it with a
two-tiered rate, with a higher rate for the first 60 days of a hospice
patient's care, and a lower rate for days 61 and after. In addition, CMS
provided for a Service Intensity Add-on (SIA) payment which provides for
reimbursement of care provided by a registered nurse or social worker
for RHC patients within seven days prior to death. The reimbursement for
continuous care, inpatient care and respite care are not impacted by
The two-tiered national per diem rate for RHC is $186.84 for the first
60 days and $146.83 for RHC provided to patients in hospice beyond 60
days. An individual hospice's actual per diem rate is adjusted for
differences in geographic cost of living. Rebasing in 2016 would be
revenue neutral to a hospice if it has 37.6% of total RHC days-of-care
being provided to patients in their first 60 days of admission and 62.4%
of total RHC days-of-care provided to patients after the 60 days.
(Days-of-Care ratio).
Historically, VITAS had a 32/68 aggregate Days-of-Care ratio. High
acuity care historically has represented 6% to 7% of VITAS' total
days-of-care. VITAS high acuity days-of-care provided to patients within
the first 60 days of admission represented approximately 15% of