Full Press Release Details
Reports Third-Quarter 2014 Results
CINCINNATI--(BUSINESS WIRE)--October 30, 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
third quarter ended September 30, 2014, versus the comparable prior-year
Consolidated operating results:
Revenue increased 5.1% to $358 million
GAAP Diluted EPS increased 47.9% to $1.39
Adjusted Diluted EPS increased 8.8% to $1.48
VITAS segment operating results:
Net Patient Revenue of $265 million, an increase of 4.5%
Average Daily Census (ADC) of 14,639, an increase of 2.8%
Admissions of 15,653, an increase of 7.5%
Net Income, including litigation costs, of $21.6 million, an increase
Adjusted EBITDA of $38.3 million, an increase of 2.7%
Adjusted EBITDA margin of 14.4%, a decrease of 24 basis points
Roto-Rooter segment operating results:
Revenue of $93.0 million, an increase of 7.0%
Net Income of $9.8 million, an increase of 20.4%
Adjusted EBITDA of $17.3 million, an increase of 6.8%
Adjusted EBITDA margin of 18.6%, a decrease of 4 basis points
Net revenue for VITAS was $265 million in the third quarter of 2014,
which is an increase of $11.4 million, or 4.5%, when compared to the
prior-year period. This revenue increase is comprised of an average
Medicare reimbursement rate increase of 1.4% and a 2.8% increase in
average daily census.
In the third quarter of 2014, VITAS recorded $2.5 million in estimated
Medicare Cap billing limitations. This compares to $3.2 million of
Medicare Cap billing limitations recorded in the third quarter of 2013.
At September 30, 2014, VITAS had 38 Medicare provider numbers of which
two of the provider numbers have an estimated 2014 Medicare Cap billing
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; one provider number has a Medicare Cap cushion of 5% to 10%; and
two provider numbers have a cap cushion between 0% and 5%. VITAS
generated an aggregate cap cushion of $268 million in the 2014
government fiscal year.
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was $198.90, which is 1.3% above the prior-year period.
Routine home care reimbursement and high acuity care averaged $163.08
and $699.19, respectively. During the quarter, high acuity days of care
were 6.7% of total days of care, essentially equal to the prior-year
The third quarter of 2014 gross margin, excluding the impact of Medicare
Cap, was 22.7%, which is a 56 basis point decline when compared to the
third quarter of 2013.
Selling, general and administrative expense was $20.2 million in the
third quarter of 2014, which is an increase of 8.5% when compared to the
prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$40.8 million in the quarter, an increase of 0.9% over the prior-year
period. Adjusted EBITDA margin, excluding the impact from Medicare Cap,
was 15.2% in the quarter which is 50 basis points below the prior-year
Roto-Rooter's plumbing and drain cleaning business generated sales of
$93.0 million for the third quarter of 2014, an increase of 7.0% over
the prior-year quarter.
Roto-Rooter's gross margin in the quarter was 46.9%, a 34 basis point
decline when compared to the third quarter of 2013. Adjusted EBITDA in
the third quarter of 2014 totaled $17.3 million, an increase of 6.8%,
and the Adjusted EBITDA margin was 18.6% in the quarter, essentially
equal to the prior year.
As of September 30, 2014, Chemed had total cash and cash equivalents of
$19 million and debt of $174 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 113 basis
points. At September 30, 2014, the Company had approximately $238
million of undrawn borrowing capacity under this credit agreement.
Capital expenditures through September 30, 2014, aggregated $31.7
million and compares to depreciation and amortization during the same
period of $24.3 million.
The Company repurchased $99.1 million of Chemed stock through September
30, 2014. This equates to 1.1 million shares of Chemed stock repurchased
during the year at an average cost of $91.51 Chemed currently has $22.7
million of authorization remaining under this share repurchase plan.
VITAS revenue growth was constrained in the first half of 2014. This was
primarily the result of the 2.0% Medicare rate cut implemented in the
third 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 $3.6 million in 2014.
Roto-Rooter is forecasted to achieve full-year 2014 revenue growth of 4%
to 5%. This revenue estimate is based upon increased job pricing of
approximately 2.0%. Adjusted EBITDA margin for 2014 is estimated in the
range of 19.0% to 19.5%.
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 $6.00 to $6.05. 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
Friday, October 31, 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) 700-0133 for U.S. and Canadian participants and
(617) 213-8831 for international participants. The participant passcode