Full Press Release Details
Reports Second-Quarter 2015 Results
Increases 2015 Earnings Guidance
CINCINNATI--(BUSINESS WIRE)--July 23, 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 second quarter
ended June 30, 2015, versus the comparable prior-year period, as follows:
Consolidated operating results:
Revenue increased 6.0% to $382 million
GAAP Diluted EPS increased 14.0% to $1.55
Adjusted Diluted EPS increased 14.0% to $1.71
VITAS segment operating results:
Net Patient Revenue of $276 million, an increase of 4.7%
Average Daily Census (ADC) of 15,283, an increase of 5.1%
Admissions of 16,683, an increase of 5.8%
Net Income, including litigation costs, of $21.8 million, an increase
Adjusted EBITDA of $39.8 million, an increase of 6.3%
Adjusted EBITDA margin of 14.4%, an increase of 21 basis points
Roto-Rooter segment operating results:
Revenue of $105 million, an increase of 9.7%
Net Income of $12.2 million, an increase of 13.4%
Adjusted EBITDA of $22.0 million, an increase of 15.5%
Adjusted EBITDA margin of 20.9%, an increase of 105 basis points
Net revenue for VITAS was $276 million in the second quarter of 2015,
which is an increase of $12.4 million, or 4.7%, when compared to the
prior-year period. This revenue increase is comprised of an average
Medicare reimbursement rate increase of approximately 1.4%, a 5.1%
increase in average daily census, offset by level of care and geographic
mix shift, when compared to the prior year.
In the second quarter of 2015, VITAS did not record any adjustments in
estimated Medicare Cap billing limitations. This compares to $0.1
million of Medicare Cap billing limitations recorded in the second
At June 30, 2015, VITAS had 34 Medicare provider numbers, none of which
has an estimated 2015 Medicare Cap billing limitation.
Of VITAS' 34 unique Medicare provider numbers, 32 provider numbers have
a Medicare Cap cushion of 10% or greater for the 2015 Medicare Cap
period, one provider number has a cap cushion between 5% and 10% and one
provider number has a cap cushion between 0% and 5%. VITAS generated an
aggregate cap cushion of $297 million during the trailing twelve-month
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was $198.79, which is 0.5% below the prior-year period.
Routine home care reimbursement and high acuity care averaged $164.07
and $698.96, respectively. During the quarter, high acuity days of care
were 6.5% of total days of care, 40 basis points less than the
The second quarter of 2015 gross margin, excluding the impact of
Medicare Cap, was 21.9%, which is 14 basis points below the second
Selling, general and administrative expense was $22.2 million in the
second quarter of 2015, which is an increase of 5.9% when compared to
the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$39.8 million in the quarter, an increase of 5.9% over the prior-year
period. Adjusted EBITDA margin, excluding the impact from Medicare Cap,
was 14.4% in the quarter which is 17 basis points favorable to the
Roto-Rooter generated sales of $105 million for the second quarter of
2015, an increase of $9.3 million, or 9.7%, over the prior-year quarter.
Water restoration accounted for the majority of this revenue growth,
with water and flood remediation services increasing $5.8 million in the
Roto-Rooter's gross margin in the quarter was 48.0%, a 119 basis point
improvement when compared to the second quarter of 2014. Adjusted EBITDA
in the second quarter of 2015 totaled $22.0 million, an increase of
15.5%, and the Adjusted EBITDA margin was 20.9% in the quarter, 105
basis points higher than the prior year.
As of June 30, 2015, Chemed had total cash and cash equivalents of $32.7
million and debt of $160 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 June 30, 2015, the Company had approximately $248 million of
undrawn borrowing capacity under this credit agreement.
Capital expenditures through June 30, 2015, aggregated $18.8 million and
compares to depreciation and amortization during the same period of
The Company repurchased $29.8 million of Chemed stock during the
quarter. This equates to 250,000 shares of Chemed stock repurchased at
an average cost of $119.05 Chemed currently has $82.0 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 4% to 5%. Admissions in 2015 are
estimated to increase 4% to 5% 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 $2.8
Roto-Rooter is forecasted to achieve full-year 2015 revenue growth of 5%
to 6%. This revenue estimate is based upon continued expansion in water
restoration services coupled with increased job pricing of approximately
1%. Adjusted EBITDA margin for 2015 is estimated in the range of 19.5%
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 $6.60
to $6.75. This compares to Chemed's 2014 reported adjusted earnings per
diluted share of $6.07.
Chemed will host a conference call and webcast at 10 a.m., ET, on
Friday, July 24, 2015, to discuss the Company's quarterly results and to
provide an update on its business. The dial-in number for the conference
call is (866) 510-0712 for U.S. and Canadian participants and (617)
597-5380 for international participants. The participant passcode is
60045204. 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
by dialing (888) 286-8010 for U.S. and Canadian callers and (617)