Full Press Release Details
Reports Third-Quarter 2015 Results
CINCINNATI--(BUSINESS WIRE)--October 22, 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
third quarter ended September 30, 2015, versus the comparable prior-year
Consolidated operating results:
Revenue increased 7.8% to $386 million
GAAP Diluted EPS increased 18.7% to $1.65
Adjusted Diluted EPS increased 20.3% to $1.78
VITAS segment operating results:
Net Patient Revenue of $285 million, an increase of 7.4%
Average Daily Census (ADC) of 15,722, an increase of 7.4%
Admissions of 16,131, an increase of 3.1%
Net Income, including litigation costs, of $25.7 million, an increase
Adjusted EBITDA of $45.3 million, an increase of 18.2%
Adjusted EBITDA margin of 15.9%, an increase of 145 basis points
Roto-Rooter segment operating results:
Revenue of $101 million, an increase of 8.8%
Net Income of $11.0 million, an increase of 11.3%
Adjusted EBITDA of $19.8 million, an increase of 14.6%
Adjusted EBITDA margin of 19.5%, an increase of 98 basis points
Net revenue for VITAS was $285 million in the third quarter of 2015,
which is an increase of $19.6 million, or 7.4%, when compared to the
prior-year period. This revenue increase is comprised of an average
Medicare reimbursement rate increase of approximately 1.4%, a 7.4%
increase in average daily census, offset by level of care and geographic
mix shift, when compared to the prior year.
In the third quarter of 2015, VITAS did not record any adjustments in
estimated Medicare Cap billing limitations. This compares to $2.5
million of Medicare Cap billing limitations recorded in the third
At September 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 $302 million during the trailing twelve-month
Average revenue per patient per day in the quarter, excluding the impact
of Medicare Cap, was $197.04, which is 0.9% below the prior-year period.
Routine home care reimbursement and high acuity care averaged $164.22
and $699.04, respectively. During the quarter, high acuity days of care
were 6.1% of total days of care, 54 basis points less than the
The third quarter of 2015 gross margin, excluding the impact of Medicare
Cap, was 23.3%, which is 64 basis points above the third quarter of 2014.
Selling, general and administrative expense was $22.2 million in the
third quarter of 2015, which is an increase of 10.0% when compared to
the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$45.3 million in the quarter, an increase of 11.0% over the prior-year
period. Adjusted EBITDA margin, excluding the impact from Medicare Cap,
was 15.9% in the quarter which is 65 basis points favorable to the
Roto-Rooter generated sales of $101 million for the third quarter of
2015, an increase of $8.2 million, or 8.8%, over the prior-year quarter.
Water restoration accounted for $2.8 million of this revenue growth,
with water and flood remediation services aggregating $8.2 million in
Roto-Rooter's gross margin in the quarter was 47.1%, a 13 basis point
improvement when compared to the third quarter of 2014. Adjusted EBITDA
in the third quarter of 2015 totaled $19.8 million, an increase of
14.6%, and the Adjusted EBITDA margin was 19.5% in the quarter, 98 basis
points higher than the prior year.
As of September 30, 2015, Chemed had total cash and cash equivalents of
$38 million and debt of $138 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 September 30, 2015, the Company had approximately $268
million of undrawn borrowing capacity under this credit agreement.
Capital expenditures through September 30, 2015, aggregated $30.2
million and compares to depreciation and amortization during the same
period of $26.1 million.
The Company repurchased $18.2 million of Chemed stock during the
quarter. This equates to 135,765 shares of Chemed stock repurchased at
an average cost of $134.28. Chemed currently has $63.8 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 $1.0
Roto-Rooter is forecasted to achieve full-year 2015 revenue growth of 6%
to 7%. 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 forecasted to be in the range of
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 $6.75
to $6.80. 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, October 23, 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 (877) 703-6103 for U.S. and Canadian participants and
(857) 244-7302 for international participants. The participant passcode
is 66337784. 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)