Full Press Release Details
Reports Third-Quarter 2017 Results
CINCINNATI--(BUSINESS WIRE)--October 26, 2017--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, 2017, versus the comparable prior-year
Consolidated operating results:
Revenue increased 6.3% to $417 million
GAAP Earnings-per-Share of $2.13, an increase of 31.5%
Adjusted Diluted EPS of $2.15 an increase of 24.3%
VITAS segment operating results:
Net Patient Revenue of $289 million, an increase of 2.2%
Average Daily Census (ADC) of 16,652 an increase of 2.8%
Admissions of 16,000, a decrease of 1.0%
Net Income of $26.5 million, an increase of 26.6%
Adjusted EBITDA of $43.9 million, an increase of 13.7%
Roto-Rooter segment operating results:
Revenue of $128 million, an increase of 17.1%
Net Income of $16.0 million, an increase of 24.7%
Adjusted EBITDA of $28.8 million, an increase of 21.3%
Adjusted EBITDA margin of 22.4%, an increase of 77 basis points
Net revenue for VITAS was $289 million in the third quarter of 2017,
which is an increase of 2.2%, when compared to the prior-year period.
This revenue increase is comprised of a geographically weighted average
Medicare reimbursement rate increase of approximately 1.3%, a 2.8%
increase in average daily census, offset by acuity mix shift which
negatively impacted revenue 2.2%, when compared to the prior-year period.
In the third quarter of 2017, VITAS had a 24.4/75.6 RHC Days-of-Care
ratio and generated approximately $1.2 million in SIA revenue. This
compares to a 2016 RHC Days-of-Care ratio of 24.6/75.4 and SIA revenue
VITAS did not incur any Medicare Cap billing limitations in the quarter.
At September 30, 2017, VITAS had 30 Medicare provider numbers, none of
which has an estimated 2017 Medicare Cap billing limitation.
Of VITAS' 30 unique Medicare provider numbers, 28 provider numbers have
a Medicare Cap cushion of 10% or greater and two provider numbers had a
cap cushion between 5% and 10% for the 2017 Medicare Cap period.
Average revenue per patient per day in the quarter was $188.62, which is
0.7% below the prior-year period. Routine home care reimbursement and
high acuity care averaged $162.24 and $709.80, respectively. During the
quarter, high acuity days of care were 4.8% of total days of care, 74
basis points less than the prior-year quarter.
The third quarter of 2017 gross margin was 23.1%, which, excluding 2016
Medicare Cap, is a 240-basis point improvement when compared to the
third quarter of 2016.
Selling, general and administrative expense was $23.8 million in the
third quarter of 2017, which is an increase of 9.2% compared to the
prior-year quarter. Adjusted EBITDA totaled $43.9 million in the
quarter, an increase of 13.7%. Adjusted EBITDA margin was 15.2% in the
quarter which is 154 basis point improvement when compared to the
Roto-Rooter's plumbing and drain cleaning business generated sales of
$128 million for the third quarter of 2017, an increase of $18.8
million, or 17.1%, over the prior-year quarter. Revenue from water
restoration totaled $21.1 million, an increase of $9.2 million or,
77.2%, when compared to the prior-year quarter.
Roto-Rooter's gross margin in the quarter was 48.7%, an 86 basis point
improvement when compared to the third quarter of 2016. Adjusted EBITDA
in the third quarter of 2017 totaled $28.8 million, an increase of
21.3%, and the Adjusted EBITDA margin was 22.4% in the quarter, 77 basis
points higher than the prior year.
As of September 30, 2017, Chemed had total cash and cash equivalents of
$19 million and debt of $83 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, 2017, the Company had approximately $309
million of undrawn borrowing capacity under this credit agreement.
During the quarter, the Company repurchased 50,000 shares of Chemed
stock for $9.6 million which equates to a cost per share of $191.52. On
March 10, 2017, Chemed's Board of Directors authorized an additional
$100 million for stock repurchase under Chemed's existing share
repurchase program. As of September 30, 2017, there was $55.5 million of
remaining share repurchase authorization under this plan.
Updated Guidance for 2017
Revenue growth for VITAS in 2017, prior to Medicare Cap, is estimated to
be in the range of 2% to 3%. Admissions and Average Daily Census in 2017
are estimated to expand approximately 2% to 3% and full-year Adjusted
EBITDA margin, prior to Medicare Cap, is estimated to be 15.0%. We are
currently estimating $1.5 million for Medicare Cap billing limitations
in the 2017 calendar year.
Roto-Rooter is forecasted to achieve full-year 2017 revenue growth of
13% to 14%. This revenue estimate is based upon increased job pricing of
approximately 2% and continued growth in water restoration services.
Adjusted EBITDA margin for 2017 is estimated at 22.5%.
Based upon the above, full-year 2017 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
$8.35 to $8.40. This compares to Chemed's 2016 reported adjusted
earnings per diluted share of $7.24.
Chemed will host a conference call and webcast at 10 a.m., ET, on
Friday, October 27, 2017, 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 92685764. 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