[October 30, 2014] |
|
Chemed Reports Third-Quarter 2014 Results
CINCINNATI --(Business Wire)--
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 period, as follows:
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
of 47.8%
-
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
VITAS
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
limitation.
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
quarter.
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
period.
Roto-Rooter
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.
Chemed Consolidated
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.
Guidance for 2014
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
of $5.62.
Conference Call
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
is 10057878. 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)
801-6888 for international callers and will be available for one week
following the live call. The replay passcode is 99376839. 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 over 14,000 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 and drain service through company-owned branches, independent
contractors and franchisees in the United States and Canada. Roto-Rooter
also has licensed master franchisees in Indonesia, Singapore, Japan, 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 STATEMENT OF INCOME
|
(in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
Service revenues and sales
|
|
|
$
|
358,389
|
|
|
$
|
340,886
|
|
|
|
$
|
1,076,871
|
|
|
$
|
1,064,725
|
|
Cost of services provided and goods sold
|
|
|
|
256,445
|
|
|
|
243,184
|
|
|
|
|
771,271
|
|
|
|
762,850
|
|
Selling, general and administrative expenses (aa)
|
|
|
|
53,566
|
|
|
|
48,870
|
|
|
|
|
162,886
|
|
|
|
157,537
|
|
Depreciation
|
|
|
|
7,450
|
|
|
|
6,971
|
|
|
|
|
21,871
|
|
|
|
20,665
|
|
Amortization
|
|
|
|
717
|
|
|
|
1,190
|
|
|
|
|
2,461
|
|
|
|
3,498
|
|
Other operating expenses (bb)
|
|
|
|
-
|
|
|
|
11,461
|
|
|
|
|
-
|
|
|
|
26,221
|
|
|
Total costs and expenses
|
|
|
|
318,178
|
|
|
|
311,676
|
|
|
|
|
958,489
|
|
|
|
970,771
|
|
|
Income from operations
|
|
|
|
40,211
|
|
|
|
29,210
|
|
|
|
|
118,382
|
|
|
|
93,954
|
|
Interest expense
|
|
|
|
(980
|
)
|
|
|
(3,500
|
)
|
|
|
|
(7,224
|
)
|
|
|
(11,291
|
)
|
Other income/(expense)--net (cc)
|
|
|
|
705
|
|
|
|
(90
|
)
|
|
|
|
2,277
|
|
|
|
3,312
|
|
|
Income before income taxes
|
|
|
|
39,936
|
|
|
|
25,620
|
|
|
|
|
113,435
|
|
|
|
85,975
|
|
Income taxes
|
|
|
|
(15,351
|
)
|
|
|
(8,188
|
)
|
|
|
|
(43,913
|
)
|
|
|
(31,657
|
)
|
Net income
|
|
|
$
|
24,585
|
|
|
$
|
17,432
|
|
|
|
$
|
69,522
|
|
|
$
|
54,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
1.44
|
|
|
$
|
0.96
|
|
|
|
$
|
4.03
|
|
|
$
|
2.95
|
|
|
Average number of shares outstanding
|
|
|
|
17,039
|
|
|
|
18,184
|
|
|
|
|
17,263
|
|
|
|
18,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
1.39
|
|
|
$
|
0.94
|
|
|
|
$
|
3.87
|
|
|
$
|
2.89
|
|
|
Average number of shares outstanding
|
|
|
|
17,627
|
|
|
|
18,522
|
|
|
|
|
17,968
|
|
|
|
18,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(aa)
|
Selling, general and administrative ("SG&A") expenses comprise (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
SG&A expenses before long-term incentive compensation and the
impact of market gains and losses of deferred compensation plans
|
|
|
$
|
51,668
|
|
|
$
|
49,004
|
|
|
|
$
|
158,190
|
|
|
$
|
154,030
|
|
|
|
Market value gains/(losses) related to assets held in deferred
compensation trusts
|
|
|
|
896
|
|
|
|
(189
|
)
|
|
|
|
2,708
|
|
|
|
2,346
|
|
|
|
Long-term incentive compensation
|
|
|
|
1,002
|
|
|
|
55
|
|
|
|
|
1,988
|
|
|
|
1,161
|
|
|
|
|
Total SG&A expenses
|
|
|
|
|
$
|
53,566
|
|
|
$
|
48,870
|
|
|
|
$
|
162,886
|
|
|
$
|
157,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(bb)
|
Other operating expenses comprise (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
Litigation settlement of VITAS segment
|
|
|
$
|
-
|
|
|
$
|
10,500
|
|
|
|
$
|
-
|
|
|
$
|
10,500
|
|
|
|
Litigation settlements of Roto-Rooter segment
|
|
|
|
-
|
|
|
|
961
|
|
|
|
|
-
|
|
|
|
15,721
|
|
|
|
|
Total other operating expenses
|
|
|
$
|
-
|
|
|
$
|
11,461
|
|
|
|
$
|
-
|
|
|
$
|
26,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(cc)
|
Other income/(expense)--net comprises (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value gains/(losses) related to assets held in deferred
compensation trusts
|
|
|
$
|
896
|
|
|
$
|
(189
|
)
|
|
|
$
|
2,708
|
|
|
$
|
2,346
|
|
|
|
Loss on disposal of property and equipment
|
|
|
|
(167
|
)
|
|
|
(101
|
)
|
|
|
|
(493
|
)
|
|
|
(180
|
)
|
|
|
Interest income
|
|
|
(13
|
)
|
|
|
192
|
|
|
|
|
(5
|
)
|
|
|
1,165
|
|
|
|
Other
|
|
|
|
(11
|
)
|
|
|
8
|
|
|
|
|
67
|
|
|
|
(19
|
)
|
|
|
|
Total other income--net
|
|
|
$
|
705
|
|
|
$
|
(90
|
)
|
|
|
$
|
2,277
|
|
|
$
|
3,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED BALANCE SHEET
|
(in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
18,562
|
|
|
$
|
83,204
|
|
|
|
Accounts receivable less allowances
|
|
|
|
132,340
|
|
|
|
80,117
|
|
|
|
Inventories
|
|
|
|
6,385
|
|
|
|
6,729
|
|
|
|
Current deferred income taxes
|
|
|
|
14,543
|
|
|
|
25,101
|
|
|
|
Prepaid income taxes
|
|
|
|
3,488
|
|
|
|
3,538
|
|
|
|
Prepaid expenses
|
|
|
|
13,420
|
|
|
|
17,684
|
|
|
|
|
Total current assets
|
|
|
|
188,738
|
|
|
|
216,373
|
|
|
Investments of deferred compensation plans held in trust
|
|
|
|
47,780
|
|
|
|
40,683
|
|
|
Properties and equipment, at cost less accumulated depreciation
|
|
|
|
101,845
|
|
|
|
89,800
|
|
|
Identifiable intangible assets less accumulated amortization
|
|
|
|
56,158
|
|
|
|
56,979
|
|
|
Goodwill
|
|
|
|
466,844
|
|
|
|
466,940
|
|
|
Other assets
|
|
|
|
8,143
|
|
|
|
10,765
|
|
|
|
|
|
Total Assets
|
|
|
$
|
869,508
|
|
|
$
|
881,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
57,067
|
|
|
$
|
44,523
|
|
|
|
Current portion of long-term debt
|
|
|
|
20,425
|
|
|
|
181,340
|
|
|
|
Income taxes
|
|
|
|
4,608
|
|
|
|
5,529
|
|
|
|
Accrued insurance
|
|
|
|
39,927
|
|
|
|
41,737
|
|
|
|
Accrued compensation
|
|
|
|
50,412
|
|
|
|
46,689
|
|
|
|
Accrued legal
|
|
|
|
685
|
|
|
|
33,304
|
|
|
|
Other current liabilities
|
|
|
|
24,131
|
|
|
|
23,232
|
|
|
|
|
Total current liabilities
|
|
|
|
197,255
|
|
|
|
376,354
|
|
|
Deferred income taxes
|
|
|
|
27,853
|
|
|
|
27,454
|
|
|
Long-term debt
|
|
|
|
153,125
|
|
|
|
-
|
|
|
Deferred compensation liabilities
|
|
|
|
47,736
|
|
|
|
39,406
|
|
|
Other liabilities
|
|
|
|
11,108
|
|
|
|
11,499
|
|
|
|
|
|
Total Liabilities
|
|
|
|
437,077
|
|
|
|
454,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock
|
|
|
|
33,199
|
|
|
|
32,086
|
|
|
Paid-in capital
|
|
|
|
528,973
|
|
|
|
469,934
|
|
|
Retained earnings
|
|
|
|
745,077
|
|
|
|
666,894
|
|
|
Treasury stock, at cost
|
|
|
|
(877,067
|
)
|
|
|
(744,210
|
)
|
|
Deferred compensation payable in Company stock
|
|
|
|
2,249
|
|
|
|
2,123
|
|
|
|
|
|
Total Stockholders' Equity
|
|
|
|
432,431
|
|
|
|
426,827
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
|
$
|
869,508
|
|
|
$
|
881,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
69,522
|
|
|
$
|
54,318
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
24,332
|
|
|
|
24,163
|
|
|
|
|
Provision for deferred income taxes
|
|
|
|
5,630
|
|
|
|
(11,681
|
)
|
|
|
|
Provision for uncollectible accounts receivable
|
|
|
|
9,573
|
|
|
|
8,211
|
|
|
|
|
Amortization of discount on convertible notes
|
|
|
|
3,392
|
|
|
|
6,450
|
|
|
|
|
Stock option expense
|
|
|
|
3,430
|
|
|
|
4,732
|
|
|
|
|
Amortization of debt issuance costs
|
|
|
|
697
|
|
|
|
1,421
|
|
|
|
|
Noncash long-term incentive compensation
|
|
|
|
1,988
|
|
|
|
1,161
|
|
|
|
|
Changes in operating assets and liabilities, excluding amounts
acquired in business combinations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease/(increase) in accounts receivable
|
|
|
|
(50,027
|
)
|
|
|
5,293
|
|
|
|
|
|
|
Decrease in inventories
|
|
|
|
318
|
|
|
|
329
|
|
|
|
|
|
|
Decrease/(increase) in prepaid expenses
|
|
|
|
4,398
|
|
|
|
(6,183
|
)
|
|
|
|
|
|
Increase/(decrease) in accounts payable and other current
liabilities
|
|
|
|
(29,680
|
)
|
|
|
48,967
|
|
|
|
|
|
|
Increase in income taxes
|
|
|
|
8,186
|
|
|
|
1,923
|
|
|
|
|
|
|
Increase in other assets
|
|
|
|
(3,138
|
)
|
|
|
(5,002
|
)
|
|
|
|
|
|
Increase in other liabilities
|
|
|
|
5,370
|
|
|
|
3,978
|
|
|
|
|
Excess tax benefit on share-based compensation
|
|
|
|
(3,737
|
)
|
|
|
(2,507
|
)
|
|
|
|
Other sources
|
|
|
|
755
|
|
|
|
285
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
51,009
|
|
|
|
135,858
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(31,745
|
)
|
|
|
(18,887
|
)
|
|
Business combinations, net of cash acquired
|
|
|
|
(250
|
)
|
|
|
(2,210
|
)
|
|
Other sources
|
|
|
|
189
|
|
|
|
139
|
|
|
|
|
|
Net cash used by investing activities
|
|
|
|
(31,806
|
)
|
|
|
(20,958
|
)
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from revolving line of credit
|
|
|
|
308,600
|
|
|
|
-
|
|
|
Payments on revolving line of credit
|
|
|
|
(233,800
|
)
|
|
|
-
|
|
|
Payments on other long-term debt
|
|
|
|
(188,206
|
)
|
|
|
-
|
|
|
Proceeds from other long-term debt
|
|
|
|
100,000
|
|
|
|
-
|
|
|
Purchases of treasury stock
|
|
|
|
(99,103
|
)
|
|
|
(89,611
|
)
|
|
Increase/(decrease) in cash overdrafts payable
|
|
|
|
22,233
|
|
|
|
(10,928
|
)
|
|
Proceeds from exercise of stock options
|
|
|
|
22,123
|
|
|
|
13,125
|
|
|
Dividends paid
|
|
|
|
(10,558
|
)
|
|
|
(10,459
|
)
|
|
Capital stock surrendered to pay taxes on stock-based compensation
|
|
|
|
(6,121
|
)
|
|
|
(4,280
|
)
|
|
Excess tax benefit on share-based compensation
|
|
|
|
3,737
|
|
|
|
2,507
|
|
|
Retirement of warrants
|
|
|
|
(2,645
|
)
|
|
|
-
|
|
|
Debt issuances costs
|
|
|
|
(939
|
)
|
|
|
(1,108
|
)
|
|
Other sources/(uses)
|
|
|
|
(380
|
)
|
|
|
(473
|
)
|
|
|
|
|
Net cash used by financing activities
|
|
|
|
(85,059
|
)
|
|
|
(101,227
|
)
|
Increase/(Decrease) in Cash and Cash Equivalents
|
|
|
|
(65,856
|
)
|
|
|
13,673
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
84,418
|
|
|
|
69,531
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
18,562
|
|
|
$
|
83,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING STATEMENT OF INCOME
|
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
|
$
|
265,384
|
|
|
$
|
93,005
|
|
|
$
|
-
|
|
|
$
|
358,389
|
|
Cost of services provided and goods sold
|
|
|
|
207,105
|
|
|
|
49,340
|
|
|
|
-
|
|
|
|
256,445
|
|
Selling, general and administrative expenses (a)
|
|
|
|
20,224
|
|
|
|
25,682
|
|
|
|
7,660
|
|
|
|
53,566
|
|
Depreciation
|
|
|
|
4,530
|
|
|
|
2,772
|
|
|
|
148
|
|
|
|
7,450
|
|
Amortization
|
|
|
|
205
|
|
|
|
114
|
|
|
|
398
|
|
|
|
717
|
|
|
Total costs and expenses
|
|
|
|
232,064
|
|
|
|
77,908
|
|
|
|
8,206
|
|
|
|
318,178
|
|
|
Income/(loss) from operations
|
|
|
|
33,320
|
|
|
|
15,097
|
|
|
|
(8,206
|
)
|
|
|
40,211
|
|
Interest expense (a)
|
|
|
|
(55
|
)
|
|
|
(87
|
)
|
|
|
(838
|
)
|
|
|
(980
|
)
|
Intercompany interest income/(expense)
|
|
|
|
1,660
|
|
|
|
760
|
|
|
|
(2,420
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
|
(189
|
)
|
|
|
(2
|
)
|
|
|
896
|
|
|
|
705
|
|
|
Income/(loss) before income taxes
|
|
|
|
34,736
|
|
|
|
15,768
|
|
|
|
(10,568
|
)
|
|
|
39,936
|
|
Income taxes (a)
|
|
|
|
(13,143
|
)
|
|
|
(5,920
|
)
|
|
|
3,712
|
|
|
|
(15,351
|
)
|
|
Net income/(loss)
|
|
|
$
|
21,593
|
|
|
$
|
9,848
|
|
|
$
|
(6,856
|
)
|
|
$
|
24,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
|
$
|
254,001
|
|
|
$
|
86,885
|
|
|
$
|
-
|
|
|
$
|
340,886
|
|
Cost of services provided and goods sold
|
|
|
|
197,387
|
|
|
|
45,797
|
|
|
|
-
|
|
|
|
243,184
|
|
Selling, general and administrative expenses (b)
|
|
|
|
18,637
|
|
|
|
25,009
|
|
|
|
5,224
|
|
|
|
48,870
|
|
Depreciation
|
|
|
|
4,545
|
|
|
|
2,292
|
|
|
|
134
|
|
|
|
6,971
|
|
Amortization
|
|
|
|
538
|
|
|
|
151
|
|
|
|
501
|
|
|
|
1,190
|
|
Other operating expenses (a)
|
|
|
|
10,500
|
|
|
|
961
|
|
|
|
-
|
|
|
|
11,461
|
|
|
Total costs and expenses
|
|
|
|
231,607
|
|
|
|
74,210
|
|
|
|
5,859
|
|
|
|
311,676
|
|
|
Income/(loss) from operations
|
|
|
|
22,394
|
|
|
|
12,675
|
|
|
|
(5,859
|
)
|
|
|
29,210
|
|
Interest expense (b)
|
|
|
|
(48
|
)
|
|
|
(82
|
)
|
|
|
(3,370
|
)
|
|
|
(3,500
|
)
|
Intercompany interest income/(expense)
|
|
|
|
1,231
|
|
|
|
579
|
|
|
|
(1,810
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
|
73
|
|
|
|
8
|
|
|
|
(171
|
)
|
|
|
(90
|
)
|
|
Income/(loss) before income taxes
|
|
|
|
23,650
|
|
|
|
13,180
|
|
|
|
(11,210
|
)
|
|
|
25,620
|
|
Income taxes (b)
|
|
|
|
(9,042
|
)
|
|
|
(4,999
|
)
|
|
|
5,853
|
|
|
|
(8,188
|
)
|
|
Net income/(loss)
|
|
|
$
|
14,608
|
|
|
$
|
8,181
|
|
|
$
|
(5,357
|
)
|
|
$
|
17,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING STATEMENT OF INCOME
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
|
$
|
789,822
|
|
|
$
|
287,049
|
|
|
$
|
-
|
|
|
$
|
1,076,871
|
|
Cost of services provided and goods sold
|
|
|
|
618,315
|
|
|
|
152,956
|
|
|
|
-
|
|
|
|
771,271
|
|
Selling, general and administrative expenses (a)
|
|
|
|
62,939
|
|
|
|
78,569
|
|
|
|
21,378
|
|
|
|
162,886
|
|
Depreciation
|
|
|
|
13,709
|
|
|
|
7,732
|
|
|
|
430
|
|
|
|
21,871
|
|
Amortization
|
|
|
|
829
|
|
|
|
397
|
|
|
|
1,235
|
|
|
|
2,461
|
|
|
Total costs and expenses
|
|
|
|
695,792
|
|
|
|
239,654
|
|
|
|
23,043
|
|
|
|
958,489
|
|
|
Income/(loss) from operations
|
|
|
|
94,030
|
|
|
|
47,395
|
|
|
|
(23,043
|
)
|
|
|
118,382
|
|
Interest expense (a)
|
|
|
|
(167
|
)
|
|
|
(295
|
)
|
|
|
(6,762
|
)
|
|
|
(7,224
|
)
|
Intercompany interest income/(expense)
|
|
|
|
4,520
|
|
|
|
2,090
|
|
|
|
(6,610
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
|
(577
|
)
|
|
|
137
|
|
|
|
2,717
|
|
|
|
2,277
|
|
|
Income/(loss) before income taxes
|
|
|
|
97,806
|
|
|
|
49,327
|
|
|
|
(33,698
|
)
|
|
|
113,435
|
|
Income taxes (a)
|
|
|
|
(37,161
|
)
|
|
|
(18,728
|
)
|
|
|
11,976
|
|
|
|
(43,913
|
)
|
|
Net income/(loss)
|
|
|
$
|
60,645
|
|
|
$
|
30,599
|
|
|
$
|
(21,722
|
)
|
|
$
|
69,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales
|
|
|
$
|
788,896
|
|
|
$
|
275,829
|
|
|
$
|
-
|
|
|
$
|
1,064,725
|
|
Cost of services provided and goods sold
|
|
|
|
616,334
|
|
|
|
146,516
|
|
|
|
-
|
|
|
|
762,850
|
|
Selling, general and administrative expenses (b)
|
|
|
|
61,304
|
|
|
|
76,901
|
|
|
|
19,332
|
|
|
|
157,537
|
|
Depreciation
|
|
|
|
13,579
|
|
|
|
6,685
|
|
|
|
401
|
|
|
|
20,665
|
|
Amortization
|
|
|
|
1,564
|
|
|
|
454
|
|
|
|
1,480
|
|
|
|
3,498
|
|
Other operating expenses (a)
|
|
|
|
10,500
|
|
|
|
15,721
|
|
|
|
-
|
|
|
|
26,221
|
|
|
Total costs and expenses
|
|
|
|
703,281
|
|
|
|
246,277
|
|
|
|
21,213
|
|
|
|
970,771
|
|
|
Income/(loss) from operations
|
|
|
|
85,615
|
|
|
|
29,552
|
|
|
|
(21,213
|
)
|
|
|
93,954
|
|
Interest expense (b)
|
|
|
|
(145
|
)
|
|
|
(239
|
)
|
|
|
(10,907
|
)
|
|
|
(11,291
|
)
|
Intercompany interest income/(expense)
|
|
|
|
2,940
|
|
|
|
1,443
|
|
|
|
(4,383
|
)
|
|
|
-
|
|
Other income/(expense)-net
|
|
|
|
878
|
|
|
|
42
|
|
|
|
2,392
|
|
|
|
3,312
|
|
|
Income/(loss) before income taxes
|
|
|
|
89,288
|
|
|
|
30,798
|
|
|
|
(34,111
|
)
|
|
|
85,975
|
|
Income taxes (b)
|
|
|
|
(34,051
|
)
|
|
|
(11,580
|
)
|
|
|
13,974
|
|
|
|
(31,657
|
)
|
|
Net income/(loss)
|
|
|
$
|
55,237
|
|
|
$
|
19,218
|
|
|
$
|
(20,137
|
)
|
|
$
|
54,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING SUMMARY OF EBITDA
|
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
|
$
|
21,593
|
|
|
$
|
9,848
|
|
|
$
|
(6,856
|
)
|
|
$
|
24,585
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
55
|
|
|
|
87
|
|
|
|
838
|
|
|
|
980
|
|
|
|
Income taxes
|
|
|
|
13,143
|
|
|
|
5,920
|
|
|
|
(3,712
|
)
|
|
|
15,351
|
|
|
|
Depreciation
|
|
|
|
4,530
|
|
|
|
2,772
|
|
|
|
148
|
|
|
|
7,450
|
|
|
|
Amortization
|
|
|
|
205
|
|
|
|
114
|
|
|
|
398
|
|
|
|
717
|
|
|
|
|
EBITDA
|
|
|
|
39,526
|
|
|
|
18,741
|
|
|
|
(9,184
|
)
|
|
|
49,083
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
|
(1,660
|
)
|
|
|
(760
|
)
|
|
|
2,420
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
|
23
|
|
|
|
(9
|
)
|
|
|
(1
|
)
|
|
|
13
|
|
|
|
Expenses related to OIG investigation
|
|
|
|
450
|
|
|
|
-
|
|
|
|
-
|
|
|
|
450
|
|
|
|
Net recoveries related to litigation settlements
|
|
|
|
-
|
|
|
|
(234
|
)
|
|
|
-
|
|
|
|
(234
|
)
|
|
|
Advertising cost adjustment (c)
|
|
|
|
-
|
|
|
|
(483
|
)
|
|
|
-
|
|
|
|
(483
|
)
|
|
|
Long-term incentive compensation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,002
|
|
|
|
1,002
|
|
|
|
Stock option expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
977
|
|
|
|
977
|
|
|
|
Expenses of securities litigation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
138
|
|
|
|
138
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
38,339
|
|
|
$
|
17,255
|
|
|
$
|
(4,648
|
)
|
|
$
|
50,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
|
$
|
14,608
|
|
|
$
|
8,181
|
|
|
$
|
(5,357
|
)
|
|
$
|
17,432
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
48
|
|
|
|
82
|
|
|
|
3,370
|
|
|
|
3,500
|
|
|
|
Income taxes
|
|
|
|
9,042
|
|
|
|
4,999
|
|
|
|
(5,853
|
)
|
|
|
8,188
|
|
|
|
Depreciation
|
|
|
|
4,545
|
|
|
|
2,292
|
|
|
|
134
|
|
|
|
6,971
|
|
|
|
Amortization
|
|
|
|
538
|
|
|
|
151
|
|
|
|
501
|
|
|
|
1,190
|
|
|
|
|
EBITDA
|
|
|
|
28,781
|
|
|
|
15,705
|
|
|
|
(7,205
|
)
|
|
|
37,281
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
|
(1,231
|
)
|
|
|
(579
|
)
|
|
|
1,810
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
|
(163
|
)
|
|
|
(10
|
)
|
|
|
(19
|
)
|
|
|
(192
|
)
|
|
|
Litigation settlements
|
|
|
|
10,500
|
|
|
|
961
|
|
|
|
-
|
|
|
|
11,461
|
|
|
|
Net expenses/(cost recovery) related to OIG investigation
|
|
|
|
(591
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(591
|
)
|
|
|
Acquisition expenses
|
|
|
|
18
|
|
|
|
3
|
|
|
|
-
|
|
|
|
21
|
|
|
|
Expenses related to litigation settlements
|
|
|
|
-
|
|
|
|
443
|
|
|
|
-
|
|
|
|
443
|
|
|
|
Advertising cost adjustment (c)
|
|
|
|
-
|
|
|
|
(369
|
)
|
|
|
-
|
|
|
|
(369
|
)
|
|
|
Stock option expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,629
|
|
|
|
1,629
|
|
|
|
Long-term incentive compensation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
55
|
|
|
|
55
|
|
|
|
Expenses of securities litigation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
37,314
|
|
|
$
|
16,154
|
|
|
$
|
(3,729
|
)
|
|
$
|
49,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
CONSOLIDATING SUMMARY OF EBITDA
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
|
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
|
$
|
60,645
|
|
|
$
|
30,599
|
|
|
$
|
(21,722
|
)
|
|
$
|
69,522
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
167
|
|
|
|
295
|
|
|
|
6,762
|
|
|
|
7,224
|
|
|
|
Income taxes
|
|
|
|
37,161
|
|
|
|
18,728
|
|
|
|
(11,976
|
)
|
|
|
43,913
|
|
|
|
Depreciation
|
|
|
|
13,709
|
|
|
|
7,732
|
|
|
|
430
|
|
|
|
21,871
|
|
|
|
Amortization
|
|
|
|
829
|
|
|
|
397
|
|
|
|
1,235
|
|
|
|
2,461
|
|
|
|
|
EBITDA
|
|
|
|
112,511
|
|
|
|
57,751
|
|
|
|
(25,271
|
)
|
|
|
144,991
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
|
(4,520
|
)
|
|
|
(2,090
|
)
|
|
|
6,610
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
|
43
|
|
|
|
(28
|
)
|
|
|
(10
|
)
|
|
|
5
|
|
|
|
Net expense/(recoveries) related to litigation settlements
|
|
|
|
113
|
|
|
|
(9
|
)
|
|
|
-
|
|
|
|
104
|
|
|
|
Expenses related to OIG investigation
|
|
|
|
1,608
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,608
|
|
|
|
Acquisition expenses
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
Advertising cost adjustment (c)
|
|
|
|
-
|
|
|
|
(1,623
|
)
|
|
|
-
|
|
|
|
(1,623
|
)
|
|
|
Stock option expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,430
|
|
|
|
3,430
|
|
|
|
Long-term incentive compensation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,988
|
|
|
|
1,988
|
|
|
|
Expenses of securities litigation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
327
|
|
|
|
327
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
109,756
|
|
|
$
|
54,001
|
|
|
$
|
(12,926
|
)
|
|
$
|
150,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
|
$
|
55,237
|
|
|
$
|
19,218
|
|
|
$
|
(20,137
|
)
|
|
$
|
54,318
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
145
|
|
|
|
239
|
|
|
|
10,907
|
|
|
|
11,291
|
|
|
|
Income taxes
|
|
|
|
34,051
|
|
|
|
11,580
|
|
|
|
(13,974
|
)
|
|
|
31,657
|
|
|
|
Depreciation
|
|
|
|
13,579
|
|
|
|
6,685
|
|
|
|
401
|
|
|
|
20,665
|
|
|
|
Amortization
|
|
|
|
1,564
|
|
|
|
454
|
|
|
|
1,480
|
|
|
|
3,498
|
|
|
|
|
EBITDA
|
|
|
|
104,576
|
|
|
|
38,176
|
|
|
|
(21,323
|
)
|
|
|
121,429
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany interest expense/(income)
|
|
|
|
(2,940
|
)
|
|
|
(1,443
|
)
|
|
|
4,383
|
|
|
|
-
|
|
|
|
Interest income
|
|
|
|
(1,051
|
)
|
|
|
(66
|
)
|
|
|
(48
|
)
|
|
|
(1,165
|
)
|
|
|
Litigation settlements
|
|
|
|
10,500
|
|
|
|
15,721
|
|
|
|
-
|
|
|
|
26,221
|
|
|
|
Net expenses related to OIG investigation
|
|
|
|
1,444
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,444
|
|
|
|
Acquisition expenses
|
|
|
|
38
|
|
|
|
4
|
|
|
|
-
|
|
|
|
42
|
|
|
|
Expenses related to litigation settlements
|
|
|
|
-
|
|
|
|
1,151
|
|
|
|
-
|
|
|
|
1,151
|
|
|
|
Advertising cost adjustment (c)
|
|
|
|
-
|
|
|
|
(1,343
|
)
|
|
|
-
|
|
|
|
(1,343
|
)
|
|
|
Cost of severance arrangements
|
|
|
|
-
|
|
|
|
302
|
|
|
|
-
|
|
|
|
302
|
|
|
|
Stock option expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,732
|
|
|
|
4,732
|
|
|
|
Long-term incentive compensation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,161
|
|
|
|
1,161
|
|
|
|
Expenses of securities litigation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
4
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
112,567
|
|
|
$
|
52,502
|
|
|
$
|
(11,091
|
)
|
|
$
|
153,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER
SHARE
|
(in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net income as reported
|
|
|
$
|
24,585
|
|
|
$
|
17,432
|
|
|
$
|
69,522
|
|
$
|
54,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add/(deduct) after-tax costs of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term incentive compensation
|
|
|
|
634
|
|
|
|
34
|
|
|
|
1,258
|
|
|
734
|
|
|
|
Stock option expense
|
|
|
|
615
|
|
|
|
1,030
|
|
|
|
2,159
|
|
|
2,993
|
|
|
|
Net expenses/(cost recovery) related to OIG investigation
|
|
|
|
279
|
|
|
|
(367
|
)
|
|
|
997
|
|
|
895
|
|
|
|
Net expenses/(recoveries) related to litigation settlements
|
|
|
|
(143
|
)
|
|
|
269
|
|
|
|
64
|
|
|
699
|
|
|
|
Securities litigation
|
|
|
|
88
|
|
|
|
1
|
|
|
|
207
|
|
|
3
|
|
|
|
Uncertain tax position adjustments
|
|
|
|
-
|
|
|
|
(1,782
|
)
|
|
|
-
|
|
|
(1,782
|
)
|
|
|
Additional interest expense resulting from the change in
accounting for the conversion feature of the convertible notes
|
|
|
|
-
|
|
|
|
1,375
|
|
|
|
2,143
|
|
|
4,046
|
|
|
|
Litigation settlements
|
|
|
|
-
|
|
|
|
7,094
|
|
|
|
-
|
|
|
16,061
|
|
|
|
Acquisition expenses
|
|
|
|
-
|
|
|
|
12
|
|
|
|
1
|
|
|
25
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
294
|
|
|
|
Severance arrangements
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
|
$
|
26,058
|
|
|
$
|
25,098
|
|
|
$
|
76,351
|
|
$
|
78,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share As Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
1.39
|
|
|
$
|
0.94
|
|
|
$
|
3.87
|
|
$
|
2.89
|
|
|
|
Average number of shares outstanding
|
|
|
|
17,627
|
|
|
|
18,522
|
|
|
|
17,968
|
|
|
18,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
1.48
|
|
|
$
|
1.36
|
|
|
$
|
4.28
|
|
$
|
4.17
|
|
|
|
Adjusted average number of shares outstanding (e)
|
|
|
|
17,627
|
|
|
|
18,522
|
|
|
|
17,833
|
|
|
18,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
OPERATING STATISTICS FOR VITAS SEGMENT
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
September 30,
|
|
OPERATING STATISTICS
|
|
|
|
2014
|
|
|
2013
|
|
|
|
2014
|
|
|
2013
|
|
|
Net revenue ($000) (d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
$
|
204,965
|
|
|
|
$
|
196,476
|
|
|
|
|
$
|
600,780
|
|
|
|
$
|
593,410
|
|
|
|
|
Inpatient
|
|
|
|
25,012
|
|
|
|
|
24,824
|
|
|
|
|
|
77,037
|
|
|
|
|
79,181
|
|
|
|
|
Continuous care
|
|
|
|
37,907
|
|
|
|
|
35,880
|
|
|
|
|
|
113,801
|
|
|
|
|
119,466
|
|
|
|
|
|
Total before Medicare cap allowance
|
|
|
|
267,884
|
|
|
|
|
257,180
|
|
|
|
|
|
791,618
|
|
|
|
|
792,057
|
|
|
|
|
Medicare cap allowance
|
|
|
|
(2,500
|
)
|
|
|
|
(3,179
|
)
|
|
|
|
|
(1,796
|
)
|
|
|
|
(3,161
|
)
|
|
|
|
|
Total
|
|
|
$
|
265,384
|
|
|
|
$
|
254,001
|
|
|
|
|
$
|
789,822
|
|
|
|
$
|
788,896
|
|
|
|
Net revenue as a percent of total before Medicare cap allowance
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
|
76.5
|
|
%
|
|
|
76.4
|
|
%
|
|
|
|
75.9
|
|
%
|
|
|
74.9
|
|
%
|
|
|
Inpatient
|
|
|
|
9.3
|
|
|
|
|
9.7
|
|
|
|
|
|
9.7
|
|
|
|
|
10.0
|
|
|
|
|
Continuous care
|
|
|
|
14.2
|
|
|
|
|
14.0
|
|
|
|
|
|
14.5
|
|
|
|
|
15.2
|
|
|
|
|
|
Total before Medicare cap allowance
|
|
|
|
100.0
|
|
|
|
|
100.1
|
|
|
|
|
|
100.1
|
|
|
|
|
100.1
|
|
|
|
|
Medicare cap allowance
|
|
|
|
(0.9
|
)
|
|
|
|
(1.3
|
)
|
|
|
|
|
(0.2
|
)
|
|
|
|
(0.4
|
)
|
|
|
|
|
Total
|
|
|
|
99.1
|
|
%
|
|
|
98.8
|
|
%
|
|
|
|
99.9
|
|
%
|
|
|
99.7
|
|
%
|
|
Average daily census ("ADC") (days)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homecare
|
|
|
|
10,662
|
|
|
|
|
10,373
|
|
|
|
|
|
10,562
|
|
|
|
|
10,482
|
|
|
|
|
Nursing home
|
|
|
|
2,999
|
|
|
|
|
2,911
|
|
|
|
|
|
2,940
|
|
|
|
|
2,928
|
|
|
|
|
|
Routine homecare
|
|
|
|
13,661
|
|
|
|
|
13,284
|
|
|
|
|
|
13,502
|
|
|
|
|
13,410
|
|
|
|
|
Inpatient
|
|
|
|
417
|
|
|
|
|
417
|
|
|
|
|
|
429
|
|
|
|
|
440
|
|
|
|
|
Continuous care
|
|
|
|
561
|
|
|
|
|
540
|
|
|
|
|
|
568
|
|
|
|
|
600
|
|
|
|
|
|
Total
|
|
|
|
14,639
|
|
|
|
|
14,241
|
|
|
|
|
|
14,499
|
|
|
|
|
14,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Admissions
|
|
|
|
15,653
|
|
|
|
|
14,555
|
|
|
|
|
|
47,777
|
|
|
|
|
47,413
|
|
|
|
Total Discharges
|
|
|
|
15,460
|
|
|
|
|
14,971
|
|
|
|
|
|
47,139
|
|
|
|
|
47,603
|
|
|
|
Average length of stay (days)
|
|
|
|
83.7
|
|
|
|
|
82.2
|
|
|
|
|
|
82.4
|
|
|
|
|
81.3
|
|
|
|
Median length of stay (days)
|
|
|
|
15.0
|
|
|
|
|
16.0
|
|
|
|
|
|
15.0
|
|
|
|
|
15.0
|
|
|
|
ADC by major diagnosis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neurological
|
|
|
|
32.7
|
|
%
|
|
|
37.8
|
|
%
|
|
|
|
35.0
|
|
%
|
|
|
36.8
|
|
%
|
|
|
Cancer
|
|
|
|
17.3
|
|
|
|
|
17.1
|
|
|
|
|
|
17.4
|
|
|
|
|
17.0
|
|
|
|
|
Cardio
|
|
|
|
17.6
|
|
|
|
|
13.9
|
|
|
|
|
|
16.6
|
|
|
|
|
12.8
|
|
|
|
|
Respiratory
|
|
|
|
8.0
|
|
|
|
|
7.8
|
|
|
|
|
|
7.9
|
|
|
|
|
7.5
|
|
|
|
|
Other
|
|
|
|
24.4
|
|
|
|
|
23.4
|
|
|
|
|
|
23.1
|
|
|
|
|
25.9
|
|
|
|
|
|
Total
|
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
Admissions by major diagnosis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neurological
|
|
|
|
18.2
|
|
%
|
|
|
21.0
|
|
%
|
|
|
|
20.6
|
|
%
|
|
|
20.3
|
|
%
|
|
|
Cancer
|
|
|
|
34.0
|
|
|
|
|
34.4
|
|
|
|
|
|
33.3
|
|
|
|
|
33.0
|
|
|
|
|
Cardio
|
|
|
|
15.2
|
|
|
|
|
13.8
|
|
|
|
|
|
14.8
|
|
|
|
|
13.0
|
|
|
|
|
Respiratory
|
|
|
|
9.1
|
|
|
|
|
9.0
|
|
|
|
|
|
9.5
|
|
|
|
|
9.3
|
|
|
|
|
Other
|
|
|
|
23.5
|
|
|
|
|
21.8
|
|
|
|
|
|
21.8
|
|
|
|
|
24.4
|
|
|
|
|
|
Total
|
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
|
|
100.0
|
|
%
|
|
|
100.0
|
|
%
|
|
Direct patient care margins (f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Routine homecare
|
|
|
|
53.8
|
|
%
|
|
|
52.5
|
|
%
|
|
|
|
53.4
|
|
%
|
|
|
52.2
|
|
%
|
|
|
Inpatient
|
|
|
|
4.9
|
|
|
|
|
1.7
|
|
|
|
|
|
5.4
|
|
|
|
|
5.6
|
|
|
|
|
Continuous care
|
|
|
|
17.4
|
|
|
|
|
14.8
|
|
|
|
|
|
17.2
|
|
|
|
|
15.8
|
|
|
|
Homecare margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
|
$
|
53.65
|
|
|
|
$
|
54.64
|
|
|
|
|
$
|
54.31
|
|
|
|
$
|
55.61
|
|
|
|
|
Drug costs
|
|
|
|
6.64
|
|
|
|
|
7.52
|
|
|
|
|
|
7.04
|
|
|
|
|
7.55
|
|
|
|
|
Home medical equipment
|
|
|
|
6.68
|
|
|
|
|
6.67
|
|
|
|
|
|
6.69
|
|
|
|
|
6.69
|
|
|
|
|
Medical supplies
|
|
|
|
3.22
|
|
|
|
|
2.83
|
|
|
|
|
|
3.20
|
|
|
|
|
2.96
|
|
|
|
Inpatient margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
|
$
|
345.18
|
|
|
|
$
|
354.09
|
|
|
|
|
$
|
344.05
|
|
|
|
$
|
339.84
|
|
|
|
Continuous care margin drivers (dollars per patient day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor costs
|
|
|
$
|
584.99
|
|
|
|
$
|
594.25
|
|
|
|
|
$
|
586.60
|
|
|
|
$
|
592.15
|
|
|
|
Bad debt expense as a percent of revenues
|
|
|
|
1.0
|
|
%
|
|
|
0.9
|
|
%
|
|
|
|
1.0
|
|
%
|
|
|
0.9
|
|
%
|
|
Accounts receivable --
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days of revenue outstanding- excluding unapplied Medicare payments
|
|
|
|
38.1
|
|
|
|
|
34.6
|
|
|
|
|
|
n.a.
|
|
|
|
n.a.
|
|
|
Days of revenue outstanding- including unapplied Medicare payments
|
|
|
|
36.3
|
|
|
|
|
21.9
|
|
|
|
|
|
n.a.
|
|
|
|
n.a.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The "Footnotes to Financial Statements" are integral parts of this
financial information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
|
FOOTNOTES TO FINANCIAL STATEMENTS
|
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Included in the results of operations 2014 are the following
significant credits/(charges) which may not be indicative of
ongoing operations (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
|
$
|
(450
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(450
|
)
|
|
|
Net recoveries related to litigation settlements
|
|
|
|
-
|
|
|
|
234
|
|
|
|
-
|
|
|
|
234
|
|
|
|
Long-term incentive compensation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,002
|
)
|
|
|
(1,002
|
)
|
|
|
Stock option expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(977
|
)
|
|
|
(977
|
)
|
|
|
Expenses of securities litigation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(138
|
)
|
|
|
(138
|
)
|
|
|
|
Pretax impact on earnings
|
|
|
|
(450
|
)
|
|
|
234
|
|
|
|
(2,117
|
)
|
|
|
(2,333
|
)
|
|
Income tax benefit/(cost) on the above
|
|
|
|
171
|
|
|
|
(91
|
)
|
|
|
780
|
|
|
|
860
|
|
|
|
|
After-tax impact on earnings
|
|
|
$
|
(279
|
)
|
|
$
|
143
|
|
|
$
|
(1,337
|
)
|
|
$
|
(1,473
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to OIG investigation
|
|
|
$
|
(1,608
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1,608
|
)
|
|
|
Net recoveries/(expenses) related to litigation settlements
|
|
|
|
(113
|
)
|
|
|
9
|
|
|
|
-
|
|
|
|
(104
|
)
|
|
|
Acquisition expenses
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
Stock option expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,430
|
)
|
|
|
(3,430
|
)
|
|
|
Long-term incentive compensation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,988
|
)
|
|
|
(1,988
|
)
|
|
|
Expenses of securities litigation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(327
|
)
|
|
|
(327
|
)
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional interest expense resulting from the change in
accounting for the conversion feature of the convertible notes
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,389
|
)
|
|
|
(3,389
|
)
|
|
|
|
Pretax impact on earnings
|
|
|
|
(1,722
|
)
|
|
|
9
|
|
|
|
(9,134
|
)
|
|
|
(10,847
|
)
|
|
Income tax benefit/(cost) on the above
|
|
|
|
654
|
|
|
|
(3
|
)
|
|
|
3,367
|
|
|
|
4,018
|
|
|
|
|
After-tax impact on earnings
|
|
|
$
|
(1,068
|
)
|
|
$
|
6
|
|
|
$
|
(5,767
|
)
|
|
$
|
(6,829
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Included in the results of operations 2013 are the following
significant credits/(charges) which may not be indicative of
ongoing operations (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cost recovery/(expenses) related to OIG investigation
|
|
|
$
|
591
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
591
|
|
|
|
Acquisition expenses
|
|
|
|
(18
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
Expenses related to litigation settlements
|
|
|
|
-
|
|
|
|
(443
|
)
|
|
|
-
|
|
|
|
(443
|
)
|
|
|
Stock option expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,629
|
)
|
|
|
(1,629
|
)
|
|
|
Long-term incentive compensation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(55
|
)
|
|
|
(55
|
)
|
|
|
Expenses of securities litigation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Other operating expenses
|
|
|
|
(10,500
|
)
|
|
|
(961
|
)
|
|
|
-
|
|
|
|
(11,461
|
)
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional interest expense resulting from the change in
accounting for the conversion feature of the convertible notes
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,174
|
)
|
|
|
(2,174
|
)
|
|
|
|
Pretax impact on earnings
|
|
|
|
(9,927
|
)
|
|
|
(1,407
|
)
|
|
|
(3,859
|
)
|
|
|
(15,193
|
)
|
|
Income tax benefit on the above
|
|
|
|
3,773
|
|
|
|
553
|
|
|
|
1,419
|
|
|
|
5,745
|
|
|
Uncertain tax position adjustments
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,782
|
|
|
|
1,782
|
|
|
|
|
After-tax impact on earnings
|
|
|
$
|
(6,154
|
)
|
|
$
|
(854
|
)
|
|
$
|
(658
|
)
|
|
$
|
(7,666
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
VITAS
|
|
Roto-Rooter
|
|
Corporate
|
|
Consolidated
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cost recovery/(expenses) related to OIG investigation
|
|
|
$
|
(1,444
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1,444
|
)
|
|
|
Acquisition expenses
|
|
|
|
(38
|
)
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
(42
|
)
|
|
|
Expenses related to litigation settlements
|
|
|
|
-
|
|
|
|
(1,151
|
)
|
|
|
-
|
|
|
|
(1,151
|
)
|
|
|
Cost of severance arrangements
|
|
|
|
-
|
|
|
|
(302
|
)
|
|
|
-
|
|
|
|
(302
|
)
|
|
|
Stock option expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,732
|
)
|
|
|
(4,732
|
)
|
|
|
Long-term incentive compensation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,161
|
)
|
|
|
(1,161
|
)
|
|
|
Expenses of securities litigation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
Other operating expenses
|
|
|
|
(10,500
|
)
|
|
|
(15,721
|
)
|
|
|
-
|
|
|
|
(26,221
|
)
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional interest expense resulting from the change in
accounting for the conversion feature of the convertible notes
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,397
|
)
|
|
|
(6,397
|
)
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(465
|
)
|
|
|
(465
|
)
|
|
|
|
Pretax impact on earnings
|
|
|
|
(11,982
|
)
|
|
|
(17,178
|
)
|
|
|
(12,759
|
)
|
|
|
(41,919
|
)
|
|
Income tax benefit on the above
|
|
|
|
4,554
|
|
|
|
6,742
|
|
|
|
4,689
|
|
|
|
15,985
|
|
|
Uncertain tax position adjustments
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,782
|
|
|
|
1,782
|
|
|
|
|
After-tax impact on earnings
|
|
|
$
|
(7,428
|
)
|
|
$
|
(10,436
|
)
|
|
$
|
(6,288
|
)
|
|
$
|
(24,152
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
Under Generally Accepted Accounting Principles ("GAAP"), the
Roto-Rooter segment expenses all advertising, including the cost of
telephone directories, immediately upon the initial release of the
advertising. Telephone directories are generally in circulation 12
months. If a directory is in circulation for a time period greater
or less than 12 months, the publisher adjusts the directory billing
for the change in billing period. The timing of when a telephone
directory is published can and does fluctuate significantly on a
quarterly basis. This "direct expensing" results in significant
fluctuations in quarterly advertising expense. In the third quarters
of 2014 and 2013, GAAP advertising expense for Roto-Rooter totaled
$5,606,000 and $5,776,000, respectively. If the expense of the
telephone directories were spread over the periods they are in
circulation, advertising expense for the third quarters of 2014 and
2013 would total $6,089,000 and $6,145,000, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Similarly, for the first nine months of 2014 and 2013, GAAP
advertising expense for Roto-Rooter totaled $18,208,000 and
$17,574,00, respectively. If the expense of the telephone
directories were spread over the periods they are in circulation,
advertising expense for the first nine months of 2014 and 2013 would
total $19,831,000 and $18,917,000, respectively.
|
|
|
|
|
|
|
|
(d)
|
|
VITAS has nine large (greater than 450 ADC), 16 medium (greater than
200 but less than 450 ADC) and 24 small (less than 200 ADC) hospice
programs. For the current Medicare cap year there are two programs
with a cap liability and three programs with a Medicare cap cushion
of less than 10%.
|
|
|
|
|
|
|
|
(e)
|
|
Adjusted diluted average shares outstanding excludes the estimated
dilutive impact of the convertible notes prior to conversion of
these notes on May 15, 2014 (impact of 135,000 shares for the nine
months ended September 30, 2014) as this impact was entirely offset
upon the exercise of the note hedges on May 15, 2014.
|
|
|
|
|
|
|
|
(f)
|
|
Amounts exclude indirect patient care and administrative costs, as
well as Medicare Cap billing limitation.
|
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|