Full Press Release Details
Reports Fourth-Quarter 2017 Results
CINCINNATI--(BUSINESS WIRE)--February 14, 2018--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, 2017, versus the comparable prior-year
Consolidated operating results:
Revenue increased 6.2% to $428 million
GAAP Diluted Earnings-per-Share of $3.25, an increase of 67.5%
Adjusted Diluted EPS of $2.32, an increase of 10.5%
VITAS segment operating results:
Net Patient Revenue of $292 million, an increase of 2.8%
Average Daily Census (ADC) of 16,920, an increase of 4.7%
Admissions of 16,575, an increase of 4.3%
Net Income of $42.8 million, an increase of 62.2%
Adjusted EBITDA of $47.5 million, an increase of 2.7%
Roto-Rooter segment operating results:
Revenue of $136 million, an increase of 14.1%
Net Income of $25.6 million, an increase of 87.0%
Adjusted EBITDA of $31.1 million, an increase of 24.2%
Adjusted EBITDA margin of 22.8%, an increase of 185 basis points
Net revenue for VITAS was $292 million in the fourth quarter of 2017,
which is an increase of 2.8%, when compared to the prior-year period.
This revenue increase is comprised of a geographically weighted average
Medicare reimbursement rate increase of approximately 0.8%, a 4.7%
increase in average daily census, offset by Medicare Cap which reduced
revenue 0.9% and acuity mix shift which negatively impacted revenue
1.7%, when compared to the prior-year period.
In the fourth quarter of 2017, VITAS had a 24.3/75.7 RHC Days-of-Care
ratio and generated approximately $1.3 million in SIA revenue. This
compares to a fourth-quarter 2016 RHC Days-of-Care ratio of 24.2/75.8
and SIA revenue of $1.2 million.
VITAS recorded $2.4 million in Medicare Cap billing limitations for two
programs in the quarter, all of which are related to the 2018 Medicare
At December 31, 2017, VITAS had 30 Medicare provider numbers, two of
which have an estimated 2018 Medicare Cap billing limitation.
Of VITAS' 30 unique Medicare provider numbers, 25 provider numbers have
a Medicare Cap cushion of 10% or greater, three provider numbers have a
cap cushion between 5% and 10% and two provider numbers have a Medicare
Cap liability on a trailing twelve-month period.
Average revenue per patient per day in the quarter was $189.33, which is
1.0% below the prior-year period. Routine home care reimbursement and
high acuity care averaged $163.50 and $713.35, respectively. During the
quarter, high acuity days of care were 4.7% of total days of care, 58
basis points less than the prior-year quarter.
The fourth quarter of 2017 gross margin, excluding Medicare Cap, was
24.5%, which is a 41-basis point improvement when compared to the fourth
Selling, general and administrative expense was $22.6 million in the
fourth quarter of 2017, which is a decrease of 3.2% compared to the
prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$49.9 million in the quarter, an increase of 7.9%. Adjusted EBITDA
margin, excluding Medicare Cap, was 16.9% in the quarter which is a 66
basis point improvement when compared to the prior-year period.
Roto-Rooter's plumbing and drain cleaning business generated sales of
$136 million for the fourth quarter of 2017, an increase of $16.8
million, or 14.1%, over the prior-year quarter. Revenue from water
restoration totaled $22.1 million, an increase of $8.4 million or,
61.7%, when compared to the prior-year quarter.
Roto-Rooter's gross margin in the quarter was 49.3%, a 241 basis point
improvement when compared to the fourth quarter of 2016. Adjusted EBITDA
in the fourth quarter of 2017 totaled $31.1 million, an increase of
24.2%, and the Adjusted EBITDA margin was 22.8% in the quarter, 185
basis points higher than the prior year.
As of December 31, 2017, Chemed had total cash and cash equivalents of
$11 million and debt of $101 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, 2017, the Company had approximately $288 million
of undrawn borrowing capacity under this credit agreement.
The Company did not repurchase any shares of Chemed stock in the
quarter. Chemed repurchased a total of 500,000 shares in 2017 for $95
million which equates to a cost per share of $189.28. As of December 31,
2017, there was $55.5 million of remaining share repurchase
authorization under this plan.
Revenue growth for VITAS in 2018, prior to Medicare Cap, is estimated to
be in the range of 2.5% to 3.5%. Admissions and Average Daily Census in
2018 are estimated to expand approximately 3% to 4% and full-year
Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 15.4%.
We are currently estimating $5.0 million for Medicare Cap billing
limitations in the 2018 calendar year.
Roto-Rooter is forecasted to achieve full-year 2018 revenue growth of
4.0% to 5.0%. This revenue estimate is based upon increased job pricing
of approximately 2% and continued growth in water restoration services.
Adjusted EBITDA margin for 2018 is estimated at 22.3%.
Based upon the above, full-year 2018 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
$10.60 to $10.85. This compares to Chemed's 2017 reported adjusted
earnings per diluted share of $8.43. This 2018 guidance assumes
an effective corporate tax rate of 25.7%.
Chemed will host a conference call and webcast at 10 a.m., ET, on
Thursday, February 15, 2018, 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
+1 (661) 378-9533 for international participants. The participant
passcode/Conference ID is 3768588. A live webcast of the call can be
accessed on Chemed's website at www.chemed.com by clicking on