Full Press Release Details
Reports Second-Quarter 2014 Results
CINCINNATI--(BUSINESS WIRE)--July 23, 2014--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 second quarter
ended June 30, 2014, versus the comparable prior-year period, as follows:
Consolidated operating results:
Revenue increased 0.8% to $360 million
GAAP Diluted EPS increased 76.6% to $1.36
Adjusted Diluted EPS increased 4.2% to $1.50
VITAS segment operating results:
Net Patient Revenue of $264 million, an increase of 0.2%
Average Daily Census (ADC) of 14,536, a decrease of 1.0%
Admissions of 15,771, an increase of 0.3%
Net Income, including litigation costs, of $20.9 million, an increase
Adjusted EBITDA of $37.5 million, a decrease of 0.5%
Adjusted EBITDA margin of 14.2%, a decrease of 10 basis points
Roto-Rooter segment operating results:
Revenue of $96.2 million, an increase of 2.7%
Net Income of $10.7 million
Adjusted EBITDA of $19.1 million, an increase of 0.9%
Adjusted EBITDA margin of 19.8%, a decrease of 35 basis points
Net revenue for VITAS was $264 million in the second quarter of 2014,
which is an increase of $0.5 million, or 0.2%, when compared to the
prior-year period. This revenue increase consists of a Medicare
reimbursement rate increase of 1.4%, offset by a 1.0% decline in average
In the second quarter of 2014, VITAS recorded $0.1 million in estimated
Medicare Cap billing limitations. VITAS has 38 unique Medicare provider
numbers. At June 30, 2014, VITAS had two programs with an estimated 2014
Medicare Cap billing limitation.
Of the 36 remaining Medicare provider numbers, 33 provider numbers have
a Medicare Cap cushion of 10% or greater for the 2014 Medicare Cap
period; two provider numbers have a Medicare Cap cushion of 5% to 10%;
and one provider number has a cap cushion between 0% and 5%. VITAS
generated an aggregate cap cushion of $248 million during the trailing
twelve-month period.
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was $199.70, which is 0.9% above the prior-year period.
Routine home care reimbursement and high acuity care averaged $162.71
and $699.97, respectively. During the quarter, high acuity days of care
were 6.9% of total days of care, 4 basis points below the prior-year
The second quarter of 2014 gross margin, excluding the impact of
Medicare Cap, was 22.1%, which is a 9 basis point decline when compared
to the second quarter of 2013.
Selling, general and administrative expense was $21.0 million in the
second quarter of 2014, which is a decrease of 0.3% when compared to the
prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$37.6 million in the quarter, a decrease of 2.4% over the prior-year
period. Adjusted EBITDA margin, excluding the impact from Medicare Cap,
was 14.2% in the quarter which is 33 basis points below the prior-year
Roto-Rooter's plumbing and drain cleaning business generated sales of
$96.2 million for the second quarter of 2014, an increase of 2.7% over
the prior-year quarter.
Roto-Rooter's gross margin in the quarter was 46.8%, a 29 basis point
decline when compared to the second quarter of 2013. Adjusted EBITDA in
the second quarter of 2014 totaled $19.1 million, an increase of 0.9%,
and the Adjusted EBITDA margin was 19.8% in the quarter, a decrease of
As of June 30, 2014, Chemed had total cash and cash equivalents of $28
million and debt of $160 million.
In June 2014 Chemed entered into a five-year Amended and Restated Credit
Agreement that consists 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 June 30, 2014, the Company had approximately $253 million of
undrawn borrowing capacity under this credit agreement.
Capital expenditures through June 30, 2014, aggregated $19.5 million and
compares to depreciation and amortization during the same period of
The Company repurchased $25.5 million of Chemed stock during the
quarter. This equates to 300,000 of Chemed shares repurchased at an
average cost of $85.04 Chemed currently has $63.3 million of
authorization remaining under this share repurchase plan.
VITAS revenue growth was constrained in the first half of 2014. This is
primarily the result of the 2.0% Medicare rate cut implemented in the
second quarter of 2013 as well as mix shift from high acuity care to
routine home care. These factors negatively impacted revenue comparisons
in the first half of 2014.
Full-year 2014 revenue growth for VITAS, prior to Medicare Cap, is
estimated to be in the range of 1% to 2%. Admissions in 2014 are
estimated to increase 2% and full-year Adjusted EBITDA margin, prior to
Medicare Cap, is estimated to be 14.5% to 15.0%. Medicare Cap is
estimated to be $3.7 million in 2014.
Roto-Rooter is forecasted to achieve full-year 2014 revenue growth of 3%
to 4%. This revenue estimate is based upon increased job pricing of
approximately 2.0%. Adjusted EBITDA margin for 2014 is estimated in the
range of 19.5% to 20.0%.
Management estimates that full-year 2014 earnings per diluted share,
excluding non-cash expense for stock options, the non-cash interest
expense related to the accounting for convertible debt, litigation and
other discrete items, will be in the range of $5.90 to $6.10. This
compares to Chemed's 2013 reported adjusted earnings per diluted share
Chemed will host a conference call and webcast at 10 a.m., ET, on
Thursday, July 24th, 2014, to discuss the Company's quarterly results
and to provide an update on its business. The dial-in number for the
conference call is (800) 901-5213 for U.S. and Canadian participants and
(617) 786-2962 for international participants. The participant passcode
is 55015302. A live webcast of the call can be accessed on Chemed's
website at www.chemed.com by clicking on Investor Relations Home.
A taped replay of the conference call will be available beginning
approximately 24 hours after the call's conclusion. It can be accessed