Chemed Reports First-Quarter 2021 Results
Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), one of the nation’s largest providers 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 first quarter ended March 31, 2021, versus the comparable prior-year period, as follows:
Consolidated operating results:
-
Revenue increased
2.2% to$527 million -
GAAP Diluted Earnings-per-Share (EPS) of
$4.01 , an increase of18.6% -
Adjusted Diluted EPS of
$4.44 , an increase of20.7%
VITAS segment operating results:
-
Net Patient Revenue of
$316 million , a decline of6.5% -
Average Daily Census (ADC) of 18,050, a decline of
6.1% -
Admissions of 18,135 a decline of
2.5% -
Net Income, excluding certain discrete items, of
$42.1 million , a decline of1.0% -
Adjusted EBITDA, excluding Medicare Cap, of
$58.3 million , a decline of3.3% -
Adjusted EBITDA margin, excluding Medicare Cap, of
18.4% , an increase of 66-basis points
Roto-Rooter segment operating results:
-
Revenue of
$212 million , an increase of18.9% -
Net Income, excluding certain discrete items, of
$39.3 million , an increase of47.3% -
Adjusted EBITDA of
$56.9 million , an increase of42.1% -
Adjusted EBITDA margin of
26.9% , an increase of 439-basis points
VITAS
VITAS net revenue was
In the first quarter of 2021, VITAS accrued
Of VITAS’ 30 Medicare provider numbers, 27 provider numbers currently have a Medicare Cap cushion of
Average revenue per patient per day in the first quarter of 2021 was
The first quarter 2021 gross margin, excluding Medicare Cap, increased costs for personal protection equipment (PPE), disinfecting facilities and other costs related to operating during the pandemic, was
Selling, general and administrative expense was
Roto-Rooter
Roto-Rooter generated quarterly revenue of
Total Roto-Rooter branch commercial revenue in the quarter totaled
Total Roto-Rooter branch residential revenue in the quarter totaled
Roto-Rooter’s gross margin in the quarter was
Chemed Consolidated
As of March 31, 2021, Chemed had total cash and cash equivalents of
In June 2018, Chemed entered into a five-year Amended and Restated Credit Agreement that consists of a
During the quarter, the Company repurchased 100,000 shares of Chemed stock for
Chemed restarted its share repurchase program in 2007. Since that time, Chemed has repurchased approximately 14.6 million shares, aggregating approximately
Guidance for 2021
Management anticipates providing updated 2021 earnings guidance in July 2021 as part of the June 30, 2021, earnings press release.
Conference Call
Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday, April 28, 2021, 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 Conference ID is 9096486. 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 (855) 859-2056 for U.S. and Canadian callers and +1 (404) 537-3406 for international callers and will be available for one week following the live call. The replay Conference ID is 9096486. An archived webcast will also be available at www.chemed.com.
Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to approximately 18,000 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.
Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing, drain cleaning, and water cleanup services through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in the republics of Indonesia and Singapore, and the Philippines.
This press release contains information about Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed’s financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company’s operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed’s management similarly uses EBITDA, Adjusted EBITDA and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed’s management to estimate the resources required to meet Chemed’s future financial obligations and expenditures. Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed’s net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.
Forward-Looking Statements
Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements.
These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed’s dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed’s most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.
| CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (in thousands, except per share data)(unaudited) | ||||||||
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
| Service revenues and sales | $ | 527,360 |
|
$ | 515,798 |
|
||
| Cost of services provided and goods sold | 340,473 |
|
351,745 |
|
||||
| Selling, general and administrative expenses (aa) | 91,599 |
|
70,583 |
|
||||
| Depreciation | 11,715 |
|
11,388 |
|
||||
| Amortization | 2,510 |
|
2,477 |
|
||||
| Other operating expense | 622 |
|
242 |
|
||||
| Total costs and expenses | 446,919 |
|
436,435 |
|
||||
| Income from operations | 80,441 |
|
79,363 |
|
||||
| Interest expense | (381 |
) |
(975 |
) |
||||
| Other income/(expense)--net (bb) | 3,602 |
|
(9,466 |
) |
||||
| Income before income taxes | 83,662 |
|
68,922 |
|
||||
| Income taxes | (18,262 |
) |
(13,031 |
) |
||||
| Net income | $ | 65,400 |
|
$ | 55,891 |
|
||
| Earnings Per Share | ||||||||
| Net income | $ | 4.08 |
|
$ | 3.50 |
|
||
| Average number of shares outstanding | 16,010 |
|
15,991 |
|
||||
| Diluted Earnings Per Share | ||||||||
| Net income | $ | 4.01 |
|
$ | 3.38 |
|
||
| Average number of shares outstanding | 16,310 |
|
16,516 |
|
||||
| (aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands): | ||||||||
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
| SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation plans | $ | 86,668 |
|
$ | 78,334 |
|
||
| Market value adjustments related to deferred compensation trusts | 3,038 |
|
(9,572 |
) |
||||
| Long-term incentive compensation | 1,893 |
|
1,821 |
|
||||
| Total SG&A expenses | $ | 91,599 |
|
$ | 70,583 |
|
||
| (bb) Other income/(expense)--net comprises (in thousands): | ||||||||
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
| Market value adjustments related to deferred compensation trusts | $ | 3,038 |
|
$ | (9,572 |
) |
||
| Interest income | 92 |
|
109 |
|
||||
| Other | 472 |
|
(3 |
) |
||||
| Total other income/(expense)--net | $ | 3,602 |
|
$ | (9,466 |
) |
||
| CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except per share data)(unaudited) | ||||||||
March 31, |
||||||||
2021 |
2020 |
|||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 210,156 |
|
$ | 28,951 |
|
||
| Accounts receivable less allowances | 104,748 |
|
134,695 |
|
||||
| Inventories | 6,777 |
|
7,313 |
|
||||
| Prepaid income taxes | 3,518 |
|
5,917 |
|
||||
| Prepaid expenses | 21,775 |
|
21,939 |
|
||||
| Total current assets | 346,974 |
|
198,815 |
|
||||
| Investments of deferred compensation plans held in trust | 93,705 |
|
72,296 |
|
||||
| Properties and equipment, at cost less accumulated depreciation | 190,154 |
|
183,729 |
|
||||
| Lease right of use asset | 124,104 |
|
112,302 |
|
||||
| Identifiable intangible assets less accumulated amortization | 115,517 |
|
124,219 |
|
||||
| Goodwill | 578,618 |
|
577,236 |
|
||||
| Other assets | 9,061 |
|
8,962 |
|
||||
| Total Assets | $ | 1,458,133 |
|
$ | 1,277,559 |
|
||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 55,447 |
|
$ | 37,838 |
|
||
| Income taxes | 24,774 |
|
6,133 |
|
||||
| Accrued insurance | 57,533 |
|
56,480 |
|
||||
| Accrued compensation | 73,907 |
|
63,622 |
|
||||
| Accrued legal | 2,102 |
|
7,114 |
|
||||
| Short-term lease liability | 37,897 |
|
36,252 |
|
||||
| Other current liabilities | 38,555 |
|
39,298 |
|
||||
| Total current liabilities | 290,215 |
|
246,737 |
|
||||
| Deferred income taxes | 19,733 |
|
20,681 |
|
||||
| Long-term debt | - |
|
160,000 |
|
||||
| Deferred compensation liabilities | 93,755 |
|
70,363 |
|
||||
| Long-term lease liability | 98,813 |
|
88,278 |
|
||||
| Other liabilities | 26,733 |
|
7,899 |
|
||||
| Total Liabilities | 529,249 |
|
593,958 |
|
||||
| Stockholders' Equity | ||||||||
| Capital stock | 36,345 |
|
35,912 |
|
||||
| Paid-in capital | 982,739 |
|
878,550 |
|
||||
| Retained earnings | 1,783,740 |
|
1,476,151 |
|
||||
| Treasury stock, at cost | (1,876,315 |
) |
(1,709,390 |
) |
||||
| Deferred compensation payable in Company stock | 2,375 |
|
2,378 |
|
||||
| Total Stockholders' Equity | 928,884 |
|
683,601 |
|
||||
| Total Liabilities and Stockholders' Equity | $ | 1,458,133 |
|
$ | 1,277,559 |
|
||
| CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (in thousands)(unaudited) | ||||||||
For the Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
| Cash Flows from Operating Activities | ||||||||
| Net income | $ | 65,400 |
|
$ | 55,891 |
|
||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 14,225 |
|
13,865 |
|
||||
| Payments on previously accrued litigation settlements | (8,490 |
) |
- |
|
||||
| Stock option expense | 6,106 |
|
5,045 |
|
||||
| Noncash long-term incentive compensation | 1,642 |
|
1,598 |
|
||||
| Deferred payroll taxes | (930 |
) |
2,290 |
|
||||
| Amortization of debt issuance costs | 76 |
|
76 |
|
||||
| Provision for bad debts | - |
|
594 |
|
||||
| Changes in operating assets and liabilities, excluding amounts acquired in business combinations: | ||||||||
| Decrease in accounts receivable | 22,773 |
|
6,269 |
|
||||
| Decrease in inventories | 318 |
|
149 |
|
||||
| Decrease in prepaid expenses | 4,402 |
|
1,211 |
|
||||
| Decrease in accounts payable and other current liabilities | (18,369 |
) |
(7,037 |
) |
||||
| Change in current income taxes | 18,395 |
|
10,159 |
|
||||
| Net change in lease assets and liabilities | (24 |
) |
(153 |
) |
||||
| Decrease/(increase) in other assets | (5,274 |
) |
5,048 |
|
||||
| Increase/(decrease) in other liabilities | 5,759 |
|
(6,067 |
) |
||||
| Other sources | 710 |
|
388 |
|
||||
| Net cash provided by operating activities | 106,719 |
|
89,326 |
|
||||
| Cash Flows from Investing Activities | ||||||||
| Capital expenditures | (17,697 |
) |
(19,897 |
) |
||||
| Business combinations | - |
|
(1,452 |
) |
||||
| Other sources/(uses) | 274 |
|
(144 |
) |
||||
| Net cash used by investing activities | (17,423 |
) |
(21,493 |
) |
||||
| Cash Flows from Financing Activities | ||||||||
| Purchases of treasury stock | (41,107 |
) |
(100,235 |
) |
||||
| Proceeds from exercise of stock options | 11,026 |
|
9,241 |
|
||||
| Capital stock surrendered to pay taxes on stock-based compensation | (6,613 |
) |
(7,951 |
) |
||||
| Dividends paid | (5,437 |
) |
(5,130 |
) |
||||
| Payments on revolving line of credit | - |
|
(104,100 |
) |
||||
| Proceeds from revolving line of credit | - |
|
174,100 |
|
||||
| Change in cash overdrafts payable | - |
|
(9,849 |
) |
||||
| Other sources/(uses) | 316 |
|
(1,116 |
) |
||||
| Net cash used by financing activities | (41,815 |
) |
(45,040 |
) |
||||
| Increase in Cash and Cash Equivalents | 47,481 |
|
22,793 |
|
||||
| Cash and cash equivalents at beginning of year | 162,675 |
|
6,158 |
|
||||
| Cash and cash equivalents at end of year | $ | 210,156 |
|
$ | 28,951 |
|
||
| CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||||||
| CONSOLIDATING STATEMENTS OF INCOME | ||||||||||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 | ||||||||||||||||
| (in thousands)(unaudited) | ||||||||||||||||
| Chemed | ||||||||||||||||
| VITAS | Roto-Rooter | Corporate | Consolidated | |||||||||||||
| 2021 (a) | ||||||||||||||||
| Service revenues and sales | $ | 315,788 |
|
$ | 211,572 |
|
$ | - |
|
$ | 527,360 |
|
||||
| Cost of services provided and goods sold | 238,667 |
|
101,806 |
|
- |
|
340,473 |
|
||||||||
| Selling, general and administrative expenses | 22,090 |
|
53,322 |
|
16,187 |
|
91,599 |
|
||||||||
| Depreciation | 5,338 |
|
6,353 |
|
24 |
|
11,715 |
|
||||||||
| Amortization | 18 |
|
2,492 |
|
- |
|
2,510 |
|
||||||||
| Other operating expense | 502 |
|
120 |
|
- |
|
622 |
|
||||||||
| Total costs and expenses | 266,615 |
|
164,093 |
|
16,211 |
|
446,919 |
|
||||||||
| Income/(loss) from operations | 49,173 |
|
47,479 |
|
(16,211 |
) |
80,441 |
|
||||||||
| Interest expense |
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CHE Stock Data
8.57B
14.83M
2.39%
97.7%
2.98%
Home Health Care Services
Health Care and Social Assistance
United States of America
CINCINNATI
About CHEchemed is a holding company. our wholly owned subsidiaries are vitas and roto-rooter services company. vitas is a healthcare company that specializes in hospice or end of life care for the terminally ill. roto-rooter is the nation's largest provider of plumbing and drain care services.
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