Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Chemed Reports First-Quarter 2024 Results By: Chemed Corporation via Business Wire April 24, 2024 at 16:15 PM EDT 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, 2024, versus the comparable prior-year period. Changes to Non-GAAP Metrics Chemed uses certain non-GAAP metrics such as EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, to provide additional context and perspective to reported operational results. Chemed’s previously reported non-GAAP metrics during the four sequential quarters from September 30, 2022 through June 30, 2023 excluded the 12-month pandemic-related licensed healthcare professional retention bonus (Retention Program). Starting with the quarter-ended September 30, 2023, the Company no longer excludes the cost of the Retention Program when presenting non-GAAP operating metrics in current or prior periods. For the quarter-ended March 31, 2023, the pretax and after-tax Retention Program expense was $10.9 million and $8.3 million, respectively. There was no material impact on financial results for the quarter-ended March 31, 2024 as a result of the Retention Program. Results for Quarter Ended March 31, 2024 Consolidated operating results: Revenue increased 5.2% to $589.2 million GAAP Diluted Earnings-per-Share (EPS) of $4.24, an increase of 18.4% Adjusted Diluted EPS of $5.20, an increase of 21.5% VITAS segment operating results: Net Patient Revenue of $354.0 million, an increase of 14.0% Average Daily Census (ADC) of 19,665, an increase of 10.3% Admissions of 16,911, an increase of 4.5% Net Income, excluding certain discrete items, of $44.0 million, an increase of 77.6% Adjusted EBITDA, excluding Medicare Cap, of $60.7 million, an increase of 67.2% Adjusted EBITDA margin, excluding Medicare Cap, of 17.0%, an increase of 544-basis points Roto-Rooter segment operating results: Revenue of $235.2 million, a decrease of 5.8% Net Income, excluding certain discrete items, of $42.7 million, a decrease of 15.8% Adjusted EBITDA of $60.7 million, a decline of 15.6% Adjusted EBITDA margin of 25.8%, a decline of 299-basis points VITAS VITAS net revenue was $354.0 million in the first quarter of 2024, which is an increase of 14.0% when compared to the prior-year period. This revenue increase is comprised primarily of an 11.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%. Acuity mix shift negatively impacted revenue growth 60-basis points in the quarter when compared to the prior-year period’s revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 50-basis points. In the first quarter of 2024, VITAS accrued $2.4 million in Medicare Cap billing limitations. This compares to a $2.8 million Medicare Cap billing limitation in the first quarter of 2023. Of VITAS’ 30 Medicare provider numbers, 27 provider numbers have a trailing 12-month Medicare Cap cushion of 10% or greater, two provider numbers have a cushion between 0% and 10%, and one provider number has a trailing 12-month Medicare Cap billing limitation totaling $6.4 million. Average revenue per patient per day in the first quarter of 2024 was $203.08 which is 212-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $177.67 and $1,074.78, respectively. During the quarter, high acuity days-of-care were 2.8% of total days of care, a decline of 10-basis points when compared to the prior-year quarter. The first quarter 2024 gross margin, excluding Medicare Cap, was 23.7%. This compares to the prior year quarter’s gross margin of 19.0%, excluding Medicare Cap. Approximately 370-basis points of this difference is attributable to the expense associated with the Retention Program. Selling, general and administrative expenses were $23.8 million in the first quarter of 2024 and compares to $23.3 million in the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $60.7 million in the quarter, an increase of 67.2%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 17.0%, which is 544-basis points above the prior-year period. Approximately 370-basis points of this difference is attributable to the expense associated with the Retention Program. As previously announced, VITAS completed its acquisition of the hospice assets and an assisted living facility of Covenant Health and Community Services, Inc. (Covenant Health) on April 17, 2024 for $85 million in cash. Roto-Rooter Roto-Rooter generated quarterly revenue of $235.2 million in the first quarter of 2024, a decrease of 5.8%, when compared to the prior-year quarter. Roto-Rooter branch commercial revenue in the quarter totaled $53.7 million, a decrease of 10.5% from the prior-year period. This aggregate commercial revenue decline consisted of drain cleaning revenue declining 9.9%, plumbing declining 11.9%, excavation declining 13.0%, and water restoration declining 2.5%. Roto-Rooter branch residential revenue in the quarter totaled $162.9 million, a decrease of 3.5%, over the prior-year period. This aggregate residential revenue decline consisted of drain cleaning decreasing 5.6%, plumbing decreasing 1.1%, excavation expanding 1.5%, and water restoration decreasing 8.5%. Roto-Rooter’s gross margin in the quarter was 51.9%, a 126-basis point decline when compared to the first quarter of 2023. Adjusted EBITDA in the first quarter of 2024 totaled $60.7 million, a decrease of 15.6%. The Adjusted EBITDA margin in the quarter was 25.8%, which is 299-basis points below the prior-year period. Chemed Consolidated As of March 31, 2024, Chemed had total cash and cash equivalents of $313.4 million and no current or long-term debt. In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consisted of a $100 million amortizable term loan and a $450 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. There is approximately $404.8 million of undrawn borrowing capacity under the Credit Agreement after excluding $45.2 million for Letters of Credit. During the quarter, the Company repurchased 50,000 shares of Chemed stock for $32.3 million which equates to a cost per share of $646.87. As of March 31, 2024, there was approximately $281.7 million of remaining share repurchase authorization under its plan. Guidance for 2024 Management reiterates its estimated full-year 2024 earnings per diluted share, excluding: non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation, and other discrete items, guidance range of $23.30 to $23.70. Management anticipates providing updated 2024 earnings guidance and related subsidiary operating metrics as part of the June 30, 2024 earnings press release. Conference Call As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Thursday April 25, 2024, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed’s website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/as75yrfc. Participants may also register via teleconference at: https://register.vevent.com/register/BIc1af400b429d468491b37732bcb93819. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time. A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investor relations section of Chemed’s website. Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to 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, 2024 2023 Service revenues and sales $ 589,233 $ 560,157 Cost of services provided and goods sold 385,127 370,705 Selling, general and administrative expenses (aa) 115,873 100,095 Depreciation 13,287 12,286 Amortization 2,521 2,513 Other operating expense 92 1,739 Total costs and expenses 516,900 487,338 Income from operations 72,333 72,819 Interest expense (425 ) (1,551 ) Other income/(expense)--net (bb) 12,577 (103 ) Income before income taxes 84,485 71,165 Income taxes (19,468 ) (17,044 ) Net income $ 65,017 $ 54,121 Earnings Per Share Net income $ 4.30 $ 3.62 Average number of shares outstanding 15,121 14,966 Diluted Earnings Per Share Net income $ 4.24 $ 3.58 Average number of shares outstanding 15,339 15,110 (aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands): Three Months Ended March 31, 2024 2023 SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation plans $ 98,418 $ 97,902 Long-term incentive compensation 9,121 2,514 Market value adjustments related to deferred compensation trusts 8,334 (321 ) Total SG&A expenses $ 115,873 $ 100,095 (bb) Other income/(expense)--net comprises (in thousands): Three Months Ended March 31, 2024 2023 Market value adjustments related to deferred compensation trusts $ 8,334 $ (321 ) Interest income 4,243 150 Other - 68 Total other income/(expense)--net $ 12,577 $ (103 ) CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)(unaudited) March 31, 2024 2023 Assets Current assets Cash and cash equivalents $ 313,350 $ 58,054 Accounts receivable less allowances 177,334 153,816 Inventories 10,712 10,663 Prepaid income taxes 9,790 10,633 Prepaid expenses 28,431 29,055 Total current assets 539,617 262,221 Investments of deferred compensation plans held in trust 117,649 97,436 Properties and equipment, at cost less accumulated depreciation 202,784 204,164 Lease right of use asset 131,751 131,219 Identifiable intangible assets less accumulated amortization 88,137 97,348 Goodwill 591,519 581,586 Other assets 56,176 57,511 Total Assets $ 1,727,633 $ 1,431,485 Liabilities Current liabilities Accounts payable $ 56,203 $ 40,279 Current portion of long-term debt - 5,000 Income taxes 27,353 11,223 Accrued insurance 62,055 63,150 Accrued compensation 49,802 50,152 Accrued legal 7,183 6,061 Short-term lease liability 39,279 38,291 Other current liabilities 40,099 69,304 Total current liabilities 281,974 283,460 Deferred income taxes 24,899 35,418 Long-term debt - 16,250 Deferred compensation liabilities 117,550 97,285 Long-term lease liability 106,861 106,212 Other liabilities 12,854 12,507 Total Liabilities 544,138 551,132 Stockholders' Equity Capital stock 37,297 36,884 Paid-in capital 1,398,733 1,186,119 Retained earnings 2,505,892 2,246,354 Treasury stock, at cost (2,760,543 ) (2,591,588 ) Deferred compensation payable in Company stock 2,116 2,284 Total Stockholders' Equity 1,183,495 880,053 Total Liabilities and Stockholders' Equity $ 1,727,633 $ 1,431,185 CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)(unaudited) For the Three Months Ended March 31, 2024 2023 Cash Flows from Operating Activities Net income $ 65,017 $ 54,121 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,808 14,799 Noncash long-term incentive compensation 9,106 2,024 Stock option expense 9,025 8,482 Benefit for deferred income taxes (5,422 ) (3,195 ) Amortization of debt issuance costs 80 95 Changes in operating assets and liabilities, excluding amounts acquired in business combinations: Decrease/(increase) in accounts receivable 5,345 (14,318 ) Decrease/(increase) in inventories 1,302 (391 ) Decrease in prepaid expenses 1,909 1,236 Decrease in accounts payable and other current liabilities (43,012 ) (24,109 ) Change in current income taxes 23,871 19,118 Net change in lease assets and liabilities 25 (632 ) Increase in other assets (12,243 ) (2,173 ) Increase in other liabilities 13,332 5,313 Other sources 406 122 Net cash provided by operating activities 84,549 60,492 Cash Flows from Investing Activities Capital expenditures (12,163 ) (17,020 ) Business combinations, net of cash acquired (7,300 ) - Proceeds from sale of fixed assets 86 146 Other uses (8 ) (139 ) Net cash used by investing activities (19,385 ) (17,013 ) Cash Flows from Financing Activities Purchases of treasury stock (38,460 ) - Proceeds from exercise of stock options 37,242 25,680 Dividends paid (6,050 ) (5,685 ) Capital stock surrendered to pay taxes on stock-based compensation (5,725 ) (3,166 ) Change in cash overdrafts payable (2,115 ) - Payments on long-term debt - (76,250 ) Other uses (664 ) (130 ) Net cash used by financing activities (15,772 ) (59,551 ) Increase/(decrease) in Cash and Cash Equivalents 49,392 (16,072 ) Cash and cash equivalents at beginning of year 263,958 74,126 Cash and cash equivalents at end of year $ 313,350 $ 58,054 CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2024 (a) Service revenues and sales $ 354,007 $ 235,226 $ - $ 589,233 Cost of services provided and goods sold 271,896 113,231 - 385,127 Selling, general and administrative expenses 23,792 61,260 30,821 115,873 Depreciation 5,166 8,108 13 13,287 Amortization 26 2,495 - 2,521 Other operating expense 7 85 - 92 Total costs and expenses 300,887 185,179 30,834 516,900 Income/(loss) from operations 53,120 50,047 (30,834 ) 72,333 Interest expense (46 ) (117 ) (262 ) (425 ) Intercompany interest income/(expense) 5,194 3,442 (8,636 ) - Other income—net 29 22 12,526 12,577 Income/(loss) before income taxes 58,297 53,394 (27,206 ) 84,485 Income taxes (14,327 ) (12,541 ) 7,400 (19,468 ) Net income/(loss) $ 43,970 $ 40,853 $ (19,806 ) $ 65,017 2023 (b) Service revenues and sales $ 310,478 $ 249,679 $ - $ 560,157 Cost of services provided and goods sold 253,654 117,051 - 370,705 Selling, general and administrative expenses 23,336 60,813 15,946 100,095 Depreciation 4,958 7,312 16 12,286 Amortization 26 2,487 - 2,513 Other operating expense 12 1,727 - 1,739 Total costs and expenses 281,986 189,390 15,962 487,338 Income/(loss) from operations 28,492 60,289 (15,962 ) 72,819 Interest expense (50 ) (133 ) (1,368 ) (1,551 ) Intercompany interest income/(expense) 4,648 2,743 (7,391 ) - Other income/(expense)—net 189 29 (321 ) (103 ) Income/(loss) before income taxes 33,279 62,928 (25,042 ) 71,165 Income taxes (8,515 ) (15,275 ) 6,746 (17,044 ) Net income/(loss) $ 24,764 $ 47,653 $ (18,296 ) $ 54,121 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARIES OF EBITDA FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2024 Net income/(loss) $ 43,970 $ 40,853 $ (19,806 ) $ 65,017 Add/(deduct): Interest expense 46 117 262 425 Income taxes 14,327 12,541 (7,400 ) 19,468 Depreciation 5,166 8,108 13 13,287 Amortization 26 2,495 - 2,521 EBITDA 63,535 64,114 (26,931 ) 100,718 Add/(deduct): Intercompany interest expense/(income) (5,194 ) (3,442 ) 8,636 - Interest income (29 ) (22 ) (4,192 ) (4,243 ) Stock option expense - - 9,026 9,026 Severance arrangement - - 5,337 5,337 Long-term incentive compensation - - 3,784 3,784 Adjusted EBITDA $ 58,312 $ 60,650 $ (4,340 ) $ 114,622 2023 Net income/(loss) $ 24,764 $ 47,653 $ (18,296 ) $ 54,121 Add/(deduct): Interest expense 50 133 1,368 1,551 Income taxes 8,515 15,275 (6,746 ) 17,044 Depreciation 4,958 7,312 16 12,286 Amortization 26 2,487 - 2,513 EBITDA 38,313 72,860 (23,658 ) 87,515 Add/(deduct): Intercompany interest expense/(income) (4,648 ) (2,743 ) 7,391 - Interest income (121 ) (29 ) - (150 ) Stock option expense - - 8,482 8,482 Long-term incentive compensation - - 2,514 2,514 Litigation settlement - 1,756 - 1,756 Adjusted EBITDA $ 33,544 $ 71,844 $ (5,271 ) $ 100,117 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES RECONCILIATION OF ADJUSTED NET INCOME (in thousands, except per share data)(unaudited) Three Months Ended March 31, 2024 2023 Net income as reported $ 65,017 $ 54,121 Add/(deduct) pre-tax cost of: Stock option expense 9,026 8,482 Severance arrangement 5,337 - Long-term incentive compensation 3,784 2,514 Amortization of reacquired franchise agreements 2,352 2,352 Litigation settlements - 1,756 Add/(deduct) tax impacts: Tax impact of the above pre-tax adjustments (1) (2,388 ) (2,852 ) Excess tax benefits on stock compensation (3,297 ) (1,650 ) Adjusted net income $ 79,831 $ 64,723 Diluted Earnings Per Share As Reported Net income $ 4.24 $ 3.58 Average number of shares outstanding 15,339 15,110 Adjusted Diluted Earnings Per Share Adjusted net income $ 5.20 $ 4.28 Average number of shares outstanding 15,339 15,110 (1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated. 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 March 31, OPERATING STATISTICS 2024 2023 Net revenue ($000) (c) Homecare $ 304,860 $ 267,050 Inpatient 30,303 29,093 Continuous care 24,169 19,941 Other 4,084 3,021 Subtotal $ 363,416 $ 319,105 Room and board, net (2,944 ) (2,769 ) Contractual allowances (4,090 ) (3,108 ) Medicare cap allowance (2,375 ) (2,750 ) Net Revenue $ 354,007 $ 310,478 Net revenue as a percent of total before Medicare cap allowance Homecare 83.9 % 83.7 % Inpatient 8.3 9.1 Continuous care 6.7 6.2 Other 1.1 1.0 Subtotal 100.0 100.0 Room and board, net (0.8 ) (0.8 ) Contractual allowances (1.1 ) (1.0 ) Medicare cap allowance (0.7 ) (0.9 ) Net Revenue 97.4 % 97.3 % Days of care Homecare 1,447,912 1,286,437 Nursing home 283,158 265,429 Respite 7,752 5,760 Subtotal routine homecare and respite 1,738,822 1,557,626 Inpatient 26,645 26,369 Continuous care 24,037 20,686 Total 1,789,504 1,604,681 Number of days in relevant time period 91 90 Average daily census ("ADC") (days) Homecare 15,911 14,294 Nursing home 3,112 2,949 Respite 85 64 Subtotal routine homecare and respite 19,108 17,307 Inpatient 293 293 Continuous care 264 230 Total 19,665 17,830 Total Admissions 16,911 16,179 Total Discharges 16,170 15,405 Average length of stay (days) 103.9 99.9 Median length of stay (days) 16.0 15.0 ADC by major diagnosis Cerebro 43.6 % 41.8 % Neurological 13.4 19.3 Cancer 10.1 10.5 Cardio 16.1 16.0 Respiratory 7.2 7.3 Other 9.6 5.1 Total 100.0 % 100.0 % Admissions by major diagnosis Cerebro 27.7 % 26.4 % Neurological 7.5 10.7 Cancer 24.6 24.7 Cardio 15.6 16.2 Respiratory 10.8 10.9 Other 13.8 11.1 Total 100.0 % 100.0 % Estimated uncollectible accounts as a percent of revenues 1.1 % 1.0 % Accounts receivable -- Days of revenue outstanding-excluding unapplied Medicare payments 42.3 34.7 Days of revenue outstanding-including unapplied Medicare payments 34.3 29.2 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES FOOTNOTES TO FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (unaudited) (a) Included in the results of operations for 2024 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended March 31, 2024 VITAS Roto-Rooter Corporate Consolidated Stock option expense $ - $ - $ (9,026 ) $ (9,026 ) Severance arrangement - - (5,337 ) (5,337 ) Long-term incentive compensation - - (3,784 ) (3,784 ) Amortization of reacquired franchise agreements - (2,352 ) - (2,352 ) Pretax impact on earnings - (2,352 ) (18,147 ) (20,499 ) Excess tax benefits on stock compensation - - 3,297 3,297 Income tax benefit on the above - 548 1,840 2,388 After-tax impact on earnings $ - $ (1,804 ) $ (13,010 ) $ (14,814 ) (b) Included in the results of operations for 2023 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended March 31, 2023 VITAS Roto-Rooter Corporate Consolidated Stock option expense $ - $ - $ (8,482 ) $ (8,482 ) Long-term incentive compensation - - (2,514 ) (2,514 ) Amortization of reacquired franchise agreements - (2,352 ) - (2,352 ) Litigation settlements - (1,756 ) - (1,756 ) Pretax impact on earnings - (4,108 ) (10,996 ) (15,104 ) Excess tax benefits on stock compensation - - 1,650 1,650 Income tax benefit on the above - 1,089 1,763 2,852 After-tax impact on earnings $ - $ (3,019 ) $ (7,583 ) $ (10,602 ) (c) VITAS has 11 large (greater than 450 ADC), 19 medium (greater than 200 but less than 450 ADC) and 20 small (less than 200 ADC) hospice programs. Of Vitas' 30 Medicare provider numbers, for the trailing 12 months, 27 provider numbers have a Medicare cap cushion of greater than 10%, one provider number has a Medicare cap cushion between 5% and 10%, one provider number has a Medicare cap cushion between 0% and 5%, and one provider number has a Medicare cap liability. View source version on businesswire.com: https://www.businesswire.com/news/home/20240424189490/en/ContactsMichael D. Witzeman (513) 762-6714 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Chemed Reports First-Quarter 2024 Results By: Chemed Corporation via Business Wire April 24, 2024 at 16:15 PM EDT 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, 2024, versus the comparable prior-year period. Changes to Non-GAAP Metrics Chemed uses certain non-GAAP metrics such as EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, to provide additional context and perspective to reported operational results. Chemed’s previously reported non-GAAP metrics during the four sequential quarters from September 30, 2022 through June 30, 2023 excluded the 12-month pandemic-related licensed healthcare professional retention bonus (Retention Program). Starting with the quarter-ended September 30, 2023, the Company no longer excludes the cost of the Retention Program when presenting non-GAAP operating metrics in current or prior periods. For the quarter-ended March 31, 2023, the pretax and after-tax Retention Program expense was $10.9 million and $8.3 million, respectively. There was no material impact on financial results for the quarter-ended March 31, 2024 as a result of the Retention Program. Results for Quarter Ended March 31, 2024 Consolidated operating results: Revenue increased 5.2% to $589.2 million GAAP Diluted Earnings-per-Share (EPS) of $4.24, an increase of 18.4% Adjusted Diluted EPS of $5.20, an increase of 21.5% VITAS segment operating results: Net Patient Revenue of $354.0 million, an increase of 14.0% Average Daily Census (ADC) of 19,665, an increase of 10.3% Admissions of 16,911, an increase of 4.5% Net Income, excluding certain discrete items, of $44.0 million, an increase of 77.6% Adjusted EBITDA, excluding Medicare Cap, of $60.7 million, an increase of 67.2% Adjusted EBITDA margin, excluding Medicare Cap, of 17.0%, an increase of 544-basis points Roto-Rooter segment operating results: Revenue of $235.2 million, a decrease of 5.8% Net Income, excluding certain discrete items, of $42.7 million, a decrease of 15.8% Adjusted EBITDA of $60.7 million, a decline of 15.6% Adjusted EBITDA margin of 25.8%, a decline of 299-basis points VITAS VITAS net revenue was $354.0 million in the first quarter of 2024, which is an increase of 14.0% when compared to the prior-year period. This revenue increase is comprised primarily of an 11.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%. Acuity mix shift negatively impacted revenue growth 60-basis points in the quarter when compared to the prior-year period’s revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 50-basis points. In the first quarter of 2024, VITAS accrued $2.4 million in Medicare Cap billing limitations. This compares to a $2.8 million Medicare Cap billing limitation in the first quarter of 2023. Of VITAS’ 30 Medicare provider numbers, 27 provider numbers have a trailing 12-month Medicare Cap cushion of 10% or greater, two provider numbers have a cushion between 0% and 10%, and one provider number has a trailing 12-month Medicare Cap billing limitation totaling $6.4 million. Average revenue per patient per day in the first quarter of 2024 was $203.08 which is 212-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $177.67 and $1,074.78, respectively. During the quarter, high acuity days-of-care were 2.8% of total days of care, a decline of 10-basis points when compared to the prior-year quarter. The first quarter 2024 gross margin, excluding Medicare Cap, was 23.7%. This compares to the prior year quarter’s gross margin of 19.0%, excluding Medicare Cap. Approximately 370-basis points of this difference is attributable to the expense associated with the Retention Program. Selling, general and administrative expenses were $23.8 million in the first quarter of 2024 and compares to $23.3 million in the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $60.7 million in the quarter, an increase of 67.2%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 17.0%, which is 544-basis points above the prior-year period. Approximately 370-basis points of this difference is attributable to the expense associated with the Retention Program. As previously announced, VITAS completed its acquisition of the hospice assets and an assisted living facility of Covenant Health and Community Services, Inc. (Covenant Health) on April 17, 2024 for $85 million in cash. Roto-Rooter Roto-Rooter generated quarterly revenue of $235.2 million in the first quarter of 2024, a decrease of 5.8%, when compared to the prior-year quarter. Roto-Rooter branch commercial revenue in the quarter totaled $53.7 million, a decrease of 10.5% from the prior-year period. This aggregate commercial revenue decline consisted of drain cleaning revenue declining 9.9%, plumbing declining 11.9%, excavation declining 13.0%, and water restoration declining 2.5%. Roto-Rooter branch residential revenue in the quarter totaled $162.9 million, a decrease of 3.5%, over the prior-year period. This aggregate residential revenue decline consisted of drain cleaning decreasing 5.6%, plumbing decreasing 1.1%, excavation expanding 1.5%, and water restoration decreasing 8.5%. Roto-Rooter’s gross margin in the quarter was 51.9%, a 126-basis point decline when compared to the first quarter of 2023. Adjusted EBITDA in the first quarter of 2024 totaled $60.7 million, a decrease of 15.6%. The Adjusted EBITDA margin in the quarter was 25.8%, which is 299-basis points below the prior-year period. Chemed Consolidated As of March 31, 2024, Chemed had total cash and cash equivalents of $313.4 million and no current or long-term debt. In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consisted of a $100 million amortizable term loan and a $450 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. There is approximately $404.8 million of undrawn borrowing capacity under the Credit Agreement after excluding $45.2 million for Letters of Credit. During the quarter, the Company repurchased 50,000 shares of Chemed stock for $32.3 million which equates to a cost per share of $646.87. As of March 31, 2024, there was approximately $281.7 million of remaining share repurchase authorization under its plan. Guidance for 2024 Management reiterates its estimated full-year 2024 earnings per diluted share, excluding: non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation, and other discrete items, guidance range of $23.30 to $23.70. Management anticipates providing updated 2024 earnings guidance and related subsidiary operating metrics as part of the June 30, 2024 earnings press release. Conference Call As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Thursday April 25, 2024, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed’s website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/as75yrfc. Participants may also register via teleconference at: https://register.vevent.com/register/BIc1af400b429d468491b37732bcb93819. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time. A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investor relations section of Chemed’s website. Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to 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, 2024 2023 Service revenues and sales $ 589,233 $ 560,157 Cost of services provided and goods sold 385,127 370,705 Selling, general and administrative expenses (aa) 115,873 100,095 Depreciation 13,287 12,286 Amortization 2,521 2,513 Other operating expense 92 1,739 Total costs and expenses 516,900 487,338 Income from operations 72,333 72,819 Interest expense (425 ) (1,551 ) Other income/(expense)--net (bb) 12,577 (103 ) Income before income taxes 84,485 71,165 Income taxes (19,468 ) (17,044 ) Net income $ 65,017 $ 54,121 Earnings Per Share Net income $ 4.30 $ 3.62 Average number of shares outstanding 15,121 14,966 Diluted Earnings Per Share Net income $ 4.24 $ 3.58 Average number of shares outstanding 15,339 15,110 (aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands): Three Months Ended March 31, 2024 2023 SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation plans $ 98,418 $ 97,902 Long-term incentive compensation 9,121 2,514 Market value adjustments related to deferred compensation trusts 8,334 (321 ) Total SG&A expenses $ 115,873 $ 100,095 (bb) Other income/(expense)--net comprises (in thousands): Three Months Ended March 31, 2024 2023 Market value adjustments related to deferred compensation trusts $ 8,334 $ (321 ) Interest income 4,243 150 Other - 68 Total other income/(expense)--net $ 12,577 $ (103 ) CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)(unaudited) March 31, 2024 2023 Assets Current assets Cash and cash equivalents $ 313,350 $ 58,054 Accounts receivable less allowances 177,334 153,816 Inventories 10,712 10,663 Prepaid income taxes 9,790 10,633 Prepaid expenses 28,431 29,055 Total current assets 539,617 262,221 Investments of deferred compensation plans held in trust 117,649 97,436 Properties and equipment, at cost less accumulated depreciation 202,784 204,164 Lease right of use asset 131,751 131,219 Identifiable intangible assets less accumulated amortization 88,137 97,348 Goodwill 591,519 581,586 Other assets 56,176 57,511 Total Assets $ 1,727,633 $ 1,431,485 Liabilities Current liabilities Accounts payable $ 56,203 $ 40,279 Current portion of long-term debt - 5,000 Income taxes 27,353 11,223 Accrued insurance 62,055 63,150 Accrued compensation 49,802 50,152 Accrued legal 7,183 6,061 Short-term lease liability 39,279 38,291 Other current liabilities 40,099 69,304 Total current liabilities 281,974 283,460 Deferred income taxes 24,899 35,418 Long-term debt - 16,250 Deferred compensation liabilities 117,550 97,285 Long-term lease liability 106,861 106,212 Other liabilities 12,854 12,507 Total Liabilities 544,138 551,132 Stockholders' Equity Capital stock 37,297 36,884 Paid-in capital 1,398,733 1,186,119 Retained earnings 2,505,892 2,246,354 Treasury stock, at cost (2,760,543 ) (2,591,588 ) Deferred compensation payable in Company stock 2,116 2,284 Total Stockholders' Equity 1,183,495 880,053 Total Liabilities and Stockholders' Equity $ 1,727,633 $ 1,431,185 CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)(unaudited) For the Three Months Ended March 31, 2024 2023 Cash Flows from Operating Activities Net income $ 65,017 $ 54,121 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,808 14,799 Noncash long-term incentive compensation 9,106 2,024 Stock option expense 9,025 8,482 Benefit for deferred income taxes (5,422 ) (3,195 ) Amortization of debt issuance costs 80 95 Changes in operating assets and liabilities, excluding amounts acquired in business combinations: Decrease/(increase) in accounts receivable 5,345 (14,318 ) Decrease/(increase) in inventories 1,302 (391 ) Decrease in prepaid expenses 1,909 1,236 Decrease in accounts payable and other current liabilities (43,012 ) (24,109 ) Change in current income taxes 23,871 19,118 Net change in lease assets and liabilities 25 (632 ) Increase in other assets (12,243 ) (2,173 ) Increase in other liabilities 13,332 5,313 Other sources 406 122 Net cash provided by operating activities 84,549 60,492 Cash Flows from Investing Activities Capital expenditures (12,163 ) (17,020 ) Business combinations, net of cash acquired (7,300 ) - Proceeds from sale of fixed assets 86 146 Other uses (8 ) (139 ) Net cash used by investing activities (19,385 ) (17,013 ) Cash Flows from Financing Activities Purchases of treasury stock (38,460 ) - Proceeds from exercise of stock options 37,242 25,680 Dividends paid (6,050 ) (5,685 ) Capital stock surrendered to pay taxes on stock-based compensation (5,725 ) (3,166 ) Change in cash overdrafts payable (2,115 ) - Payments on long-term debt - (76,250 ) Other uses (664 ) (130 ) Net cash used by financing activities (15,772 ) (59,551 ) Increase/(decrease) in Cash and Cash Equivalents 49,392 (16,072 ) Cash and cash equivalents at beginning of year 263,958 74,126 Cash and cash equivalents at end of year $ 313,350 $ 58,054 CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2024 (a) Service revenues and sales $ 354,007 $ 235,226 $ - $ 589,233 Cost of services provided and goods sold 271,896 113,231 - 385,127 Selling, general and administrative expenses 23,792 61,260 30,821 115,873 Depreciation 5,166 8,108 13 13,287 Amortization 26 2,495 - 2,521 Other operating expense 7 85 - 92 Total costs and expenses 300,887 185,179 30,834 516,900 Income/(loss) from operations 53,120 50,047 (30,834 ) 72,333 Interest expense (46 ) (117 ) (262 ) (425 ) Intercompany interest income/(expense) 5,194 3,442 (8,636 ) - Other income—net 29 22 12,526 12,577 Income/(loss) before income taxes 58,297 53,394 (27,206 ) 84,485 Income taxes (14,327 ) (12,541 ) 7,400 (19,468 ) Net income/(loss) $ 43,970 $ 40,853 $ (19,806 ) $ 65,017 2023 (b) Service revenues and sales $ 310,478 $ 249,679 $ - $ 560,157 Cost of services provided and goods sold 253,654 117,051 - 370,705 Selling, general and administrative expenses 23,336 60,813 15,946 100,095 Depreciation 4,958 7,312 16 12,286 Amortization 26 2,487 - 2,513 Other operating expense 12 1,727 - 1,739 Total costs and expenses 281,986 189,390 15,962 487,338 Income/(loss) from operations 28,492 60,289 (15,962 ) 72,819 Interest expense (50 ) (133 ) (1,368 ) (1,551 ) Intercompany interest income/(expense) 4,648 2,743 (7,391 ) - Other income/(expense)—net 189 29 (321 ) (103 ) Income/(loss) before income taxes 33,279 62,928 (25,042 ) 71,165 Income taxes (8,515 ) (15,275 ) 6,746 (17,044 ) Net income/(loss) $ 24,764 $ 47,653 $ (18,296 ) $ 54,121 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARIES OF EBITDA FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2024 Net income/(loss) $ 43,970 $ 40,853 $ (19,806 ) $ 65,017 Add/(deduct): Interest expense 46 117 262 425 Income taxes 14,327 12,541 (7,400 ) 19,468 Depreciation 5,166 8,108 13 13,287 Amortization 26 2,495 - 2,521 EBITDA 63,535 64,114 (26,931 ) 100,718 Add/(deduct): Intercompany interest expense/(income) (5,194 ) (3,442 ) 8,636 - Interest income (29 ) (22 ) (4,192 ) (4,243 ) Stock option expense - - 9,026 9,026 Severance arrangement - - 5,337 5,337 Long-term incentive compensation - - 3,784 3,784 Adjusted EBITDA $ 58,312 $ 60,650 $ (4,340 ) $ 114,622 2023 Net income/(loss) $ 24,764 $ 47,653 $ (18,296 ) $ 54,121 Add/(deduct): Interest expense 50 133 1,368 1,551 Income taxes 8,515 15,275 (6,746 ) 17,044 Depreciation 4,958 7,312 16 12,286 Amortization 26 2,487 - 2,513 EBITDA 38,313 72,860 (23,658 ) 87,515 Add/(deduct): Intercompany interest expense/(income) (4,648 ) (2,743 ) 7,391 - Interest income (121 ) (29 ) - (150 ) Stock option expense - - 8,482 8,482 Long-term incentive compensation - - 2,514 2,514 Litigation settlement - 1,756 - 1,756 Adjusted EBITDA $ 33,544 $ 71,844 $ (5,271 ) $ 100,117 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES RECONCILIATION OF ADJUSTED NET INCOME (in thousands, except per share data)(unaudited) Three Months Ended March 31, 2024 2023 Net income as reported $ 65,017 $ 54,121 Add/(deduct) pre-tax cost of: Stock option expense 9,026 8,482 Severance arrangement 5,337 - Long-term incentive compensation 3,784 2,514 Amortization of reacquired franchise agreements 2,352 2,352 Litigation settlements - 1,756 Add/(deduct) tax impacts: Tax impact of the above pre-tax adjustments (1) (2,388 ) (2,852 ) Excess tax benefits on stock compensation (3,297 ) (1,650 ) Adjusted net income $ 79,831 $ 64,723 Diluted Earnings Per Share As Reported Net income $ 4.24 $ 3.58 Average number of shares outstanding 15,339 15,110 Adjusted Diluted Earnings Per Share Adjusted net income $ 5.20 $ 4.28 Average number of shares outstanding 15,339 15,110 (1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated. 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 March 31, OPERATING STATISTICS 2024 2023 Net revenue ($000) (c) Homecare $ 304,860 $ 267,050 Inpatient 30,303 29,093 Continuous care 24,169 19,941 Other 4,084 3,021 Subtotal $ 363,416 $ 319,105 Room and board, net (2,944 ) (2,769 ) Contractual allowances (4,090 ) (3,108 ) Medicare cap allowance (2,375 ) (2,750 ) Net Revenue $ 354,007 $ 310,478 Net revenue as a percent of total before Medicare cap allowance Homecare 83.9 % 83.7 % Inpatient 8.3 9.1 Continuous care 6.7 6.2 Other 1.1 1.0 Subtotal 100.0 100.0 Room and board, net (0.8 ) (0.8 ) Contractual allowances (1.1 ) (1.0 ) Medicare cap allowance (0.7 ) (0.9 ) Net Revenue 97.4 % 97.3 % Days of care Homecare 1,447,912 1,286,437 Nursing home 283,158 265,429 Respite 7,752 5,760 Subtotal routine homecare and respite 1,738,822 1,557,626 Inpatient 26,645 26,369 Continuous care 24,037 20,686 Total 1,789,504 1,604,681 Number of days in relevant time period 91 90 Average daily census ("ADC") (days) Homecare 15,911 14,294 Nursing home 3,112 2,949 Respite 85 64 Subtotal routine homecare and respite 19,108 17,307 Inpatient 293 293 Continuous care 264 230 Total 19,665 17,830 Total Admissions 16,911 16,179 Total Discharges 16,170 15,405 Average length of stay (days) 103.9 99.9 Median length of stay (days) 16.0 15.0 ADC by major diagnosis Cerebro 43.6 % 41.8 % Neurological 13.4 19.3 Cancer 10.1 10.5 Cardio 16.1 16.0 Respiratory 7.2 7.3 Other 9.6 5.1 Total 100.0 % 100.0 % Admissions by major diagnosis Cerebro 27.7 % 26.4 % Neurological 7.5 10.7 Cancer 24.6 24.7 Cardio 15.6 16.2 Respiratory 10.8 10.9 Other 13.8 11.1 Total 100.0 % 100.0 % Estimated uncollectible accounts as a percent of revenues 1.1 % 1.0 % Accounts receivable -- Days of revenue outstanding-excluding unapplied Medicare payments 42.3 34.7 Days of revenue outstanding-including unapplied Medicare payments 34.3 29.2 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES FOOTNOTES TO FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (unaudited) (a) Included in the results of operations for 2024 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended March 31, 2024 VITAS Roto-Rooter Corporate Consolidated Stock option expense $ - $ - $ (9,026 ) $ (9,026 ) Severance arrangement - - (5,337 ) (5,337 ) Long-term incentive compensation - - (3,784 ) (3,784 ) Amortization of reacquired franchise agreements - (2,352 ) - (2,352 ) Pretax impact on earnings - (2,352 ) (18,147 ) (20,499 ) Excess tax benefits on stock compensation - - 3,297 3,297 Income tax benefit on the above - 548 1,840 2,388 After-tax impact on earnings $ - $ (1,804 ) $ (13,010 ) $ (14,814 ) (b) Included in the results of operations for 2023 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended March 31, 2023 VITAS Roto-Rooter Corporate Consolidated Stock option expense $ - $ - $ (8,482 ) $ (8,482 ) Long-term incentive compensation - - (2,514 ) (2,514 ) Amortization of reacquired franchise agreements - (2,352 ) - (2,352 ) Litigation settlements - (1,756 ) - (1,756 ) Pretax impact on earnings - (4,108 ) (10,996 ) (15,104 ) Excess tax benefits on stock compensation - - 1,650 1,650 Income tax benefit on the above - 1,089 1,763 2,852 After-tax impact on earnings $ - $ (3,019 ) $ (7,583 ) $ (10,602 ) (c) VITAS has 11 large (greater than 450 ADC), 19 medium (greater than 200 but less than 450 ADC) and 20 small (less than 200 ADC) hospice programs. Of Vitas' 30 Medicare provider numbers, for the trailing 12 months, 27 provider numbers have a Medicare cap cushion of greater than 10%, one provider number has a Medicare cap cushion between 5% and 10%, one provider number has a Medicare cap cushion between 0% and 5%, and one provider number has a Medicare cap liability. View source version on businesswire.com: https://www.businesswire.com/news/home/20240424189490/en/ContactsMichael D. Witzeman (513) 762-6714
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, 2024, versus the comparable prior-year period. Changes to Non-GAAP Metrics Chemed uses certain non-GAAP metrics such as EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, to provide additional context and perspective to reported operational results. Chemed’s previously reported non-GAAP metrics during the four sequential quarters from September 30, 2022 through June 30, 2023 excluded the 12-month pandemic-related licensed healthcare professional retention bonus (Retention Program). Starting with the quarter-ended September 30, 2023, the Company no longer excludes the cost of the Retention Program when presenting non-GAAP operating metrics in current or prior periods. For the quarter-ended March 31, 2023, the pretax and after-tax Retention Program expense was $10.9 million and $8.3 million, respectively. There was no material impact on financial results for the quarter-ended March 31, 2024 as a result of the Retention Program. Results for Quarter Ended March 31, 2024 Consolidated operating results: Revenue increased 5.2% to $589.2 million GAAP Diluted Earnings-per-Share (EPS) of $4.24, an increase of 18.4% Adjusted Diluted EPS of $5.20, an increase of 21.5% VITAS segment operating results: Net Patient Revenue of $354.0 million, an increase of 14.0% Average Daily Census (ADC) of 19,665, an increase of 10.3% Admissions of 16,911, an increase of 4.5% Net Income, excluding certain discrete items, of $44.0 million, an increase of 77.6% Adjusted EBITDA, excluding Medicare Cap, of $60.7 million, an increase of 67.2% Adjusted EBITDA margin, excluding Medicare Cap, of 17.0%, an increase of 544-basis points Roto-Rooter segment operating results: Revenue of $235.2 million, a decrease of 5.8% Net Income, excluding certain discrete items, of $42.7 million, a decrease of 15.8% Adjusted EBITDA of $60.7 million, a decline of 15.6% Adjusted EBITDA margin of 25.8%, a decline of 299-basis points VITAS VITAS net revenue was $354.0 million in the first quarter of 2024, which is an increase of 14.0% when compared to the prior-year period. This revenue increase is comprised primarily of an 11.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%. Acuity mix shift negatively impacted revenue growth 60-basis points in the quarter when compared to the prior-year period’s revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 50-basis points. In the first quarter of 2024, VITAS accrued $2.4 million in Medicare Cap billing limitations. This compares to a $2.8 million Medicare Cap billing limitation in the first quarter of 2023. Of VITAS’ 30 Medicare provider numbers, 27 provider numbers have a trailing 12-month Medicare Cap cushion of 10% or greater, two provider numbers have a cushion between 0% and 10%, and one provider number has a trailing 12-month Medicare Cap billing limitation totaling $6.4 million. Average revenue per patient per day in the first quarter of 2024 was $203.08 which is 212-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $177.67 and $1,074.78, respectively. During the quarter, high acuity days-of-care were 2.8% of total days of care, a decline of 10-basis points when compared to the prior-year quarter. The first quarter 2024 gross margin, excluding Medicare Cap, was 23.7%. This compares to the prior year quarter’s gross margin of 19.0%, excluding Medicare Cap. Approximately 370-basis points of this difference is attributable to the expense associated with the Retention Program. Selling, general and administrative expenses were $23.8 million in the first quarter of 2024 and compares to $23.3 million in the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $60.7 million in the quarter, an increase of 67.2%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 17.0%, which is 544-basis points above the prior-year period. Approximately 370-basis points of this difference is attributable to the expense associated with the Retention Program. As previously announced, VITAS completed its acquisition of the hospice assets and an assisted living facility of Covenant Health and Community Services, Inc. (Covenant Health) on April 17, 2024 for $85 million in cash. Roto-Rooter Roto-Rooter generated quarterly revenue of $235.2 million in the first quarter of 2024, a decrease of 5.8%, when compared to the prior-year quarter. Roto-Rooter branch commercial revenue in the quarter totaled $53.7 million, a decrease of 10.5% from the prior-year period. This aggregate commercial revenue decline consisted of drain cleaning revenue declining 9.9%, plumbing declining 11.9%, excavation declining 13.0%, and water restoration declining 2.5%. Roto-Rooter branch residential revenue in the quarter totaled $162.9 million, a decrease of 3.5%, over the prior-year period. This aggregate residential revenue decline consisted of drain cleaning decreasing 5.6%, plumbing decreasing 1.1%, excavation expanding 1.5%, and water restoration decreasing 8.5%. Roto-Rooter’s gross margin in the quarter was 51.9%, a 126-basis point decline when compared to the first quarter of 2023. Adjusted EBITDA in the first quarter of 2024 totaled $60.7 million, a decrease of 15.6%. The Adjusted EBITDA margin in the quarter was 25.8%, which is 299-basis points below the prior-year period. Chemed Consolidated As of March 31, 2024, Chemed had total cash and cash equivalents of $313.4 million and no current or long-term debt. In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consisted of a $100 million amortizable term loan and a $450 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. There is approximately $404.8 million of undrawn borrowing capacity under the Credit Agreement after excluding $45.2 million for Letters of Credit. During the quarter, the Company repurchased 50,000 shares of Chemed stock for $32.3 million which equates to a cost per share of $646.87. As of March 31, 2024, there was approximately $281.7 million of remaining share repurchase authorization under its plan. Guidance for 2024 Management reiterates its estimated full-year 2024 earnings per diluted share, excluding: non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation, and other discrete items, guidance range of $23.30 to $23.70. Management anticipates providing updated 2024 earnings guidance and related subsidiary operating metrics as part of the June 30, 2024 earnings press release. Conference Call As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Thursday April 25, 2024, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed’s website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/as75yrfc. Participants may also register via teleconference at: https://register.vevent.com/register/BIc1af400b429d468491b37732bcb93819. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time. A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investor relations section of Chemed’s website. Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to 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, 2024 2023 Service revenues and sales $ 589,233 $ 560,157 Cost of services provided and goods sold 385,127 370,705 Selling, general and administrative expenses (aa) 115,873 100,095 Depreciation 13,287 12,286 Amortization 2,521 2,513 Other operating expense 92 1,739 Total costs and expenses 516,900 487,338 Income from operations 72,333 72,819 Interest expense (425 ) (1,551 ) Other income/(expense)--net (bb) 12,577 (103 ) Income before income taxes 84,485 71,165 Income taxes (19,468 ) (17,044 ) Net income $ 65,017 $ 54,121 Earnings Per Share Net income $ 4.30 $ 3.62 Average number of shares outstanding 15,121 14,966 Diluted Earnings Per Share Net income $ 4.24 $ 3.58 Average number of shares outstanding 15,339 15,110 (aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands): Three Months Ended March 31, 2024 2023 SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation plans $ 98,418 $ 97,902 Long-term incentive compensation 9,121 2,514 Market value adjustments related to deferred compensation trusts 8,334 (321 ) Total SG&A expenses $ 115,873 $ 100,095 (bb) Other income/(expense)--net comprises (in thousands): Three Months Ended March 31, 2024 2023 Market value adjustments related to deferred compensation trusts $ 8,334 $ (321 ) Interest income 4,243 150 Other - 68 Total other income/(expense)--net $ 12,577 $ (103 ) CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)(unaudited) March 31, 2024 2023 Assets Current assets Cash and cash equivalents $ 313,350 $ 58,054 Accounts receivable less allowances 177,334 153,816 Inventories 10,712 10,663 Prepaid income taxes 9,790 10,633 Prepaid expenses 28,431 29,055 Total current assets 539,617 262,221 Investments of deferred compensation plans held in trust 117,649 97,436 Properties and equipment, at cost less accumulated depreciation 202,784 204,164 Lease right of use asset 131,751 131,219 Identifiable intangible assets less accumulated amortization 88,137 97,348 Goodwill 591,519 581,586 Other assets 56,176 57,511 Total Assets $ 1,727,633 $ 1,431,485 Liabilities Current liabilities Accounts payable $ 56,203 $ 40,279 Current portion of long-term debt - 5,000 Income taxes 27,353 11,223 Accrued insurance 62,055 63,150 Accrued compensation 49,802 50,152 Accrued legal 7,183 6,061 Short-term lease liability 39,279 38,291 Other current liabilities 40,099 69,304 Total current liabilities 281,974 283,460 Deferred income taxes 24,899 35,418 Long-term debt - 16,250 Deferred compensation liabilities 117,550 97,285 Long-term lease liability 106,861 106,212 Other liabilities 12,854 12,507 Total Liabilities 544,138 551,132 Stockholders' Equity Capital stock 37,297 36,884 Paid-in capital 1,398,733 1,186,119 Retained earnings 2,505,892 2,246,354 Treasury stock, at cost (2,760,543 ) (2,591,588 ) Deferred compensation payable in Company stock 2,116 2,284 Total Stockholders' Equity 1,183,495 880,053 Total Liabilities and Stockholders' Equity $ 1,727,633 $ 1,431,185 CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)(unaudited) For the Three Months Ended March 31, 2024 2023 Cash Flows from Operating Activities Net income $ 65,017 $ 54,121 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,808 14,799 Noncash long-term incentive compensation 9,106 2,024 Stock option expense 9,025 8,482 Benefit for deferred income taxes (5,422 ) (3,195 ) Amortization of debt issuance costs 80 95 Changes in operating assets and liabilities, excluding amounts acquired in business combinations: Decrease/(increase) in accounts receivable 5,345 (14,318 ) Decrease/(increase) in inventories 1,302 (391 ) Decrease in prepaid expenses 1,909 1,236 Decrease in accounts payable and other current liabilities (43,012 ) (24,109 ) Change in current income taxes 23,871 19,118 Net change in lease assets and liabilities 25 (632 ) Increase in other assets (12,243 ) (2,173 ) Increase in other liabilities 13,332 5,313 Other sources 406 122 Net cash provided by operating activities 84,549 60,492 Cash Flows from Investing Activities Capital expenditures (12,163 ) (17,020 ) Business combinations, net of cash acquired (7,300 ) - Proceeds from sale of fixed assets 86 146 Other uses (8 ) (139 ) Net cash used by investing activities (19,385 ) (17,013 ) Cash Flows from Financing Activities Purchases of treasury stock (38,460 ) - Proceeds from exercise of stock options 37,242 25,680 Dividends paid (6,050 ) (5,685 ) Capital stock surrendered to pay taxes on stock-based compensation (5,725 ) (3,166 ) Change in cash overdrafts payable (2,115 ) - Payments on long-term debt - (76,250 ) Other uses (664 ) (130 ) Net cash used by financing activities (15,772 ) (59,551 ) Increase/(decrease) in Cash and Cash Equivalents 49,392 (16,072 ) Cash and cash equivalents at beginning of year 263,958 74,126 Cash and cash equivalents at end of year $ 313,350 $ 58,054 CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2024 (a) Service revenues and sales $ 354,007 $ 235,226 $ - $ 589,233 Cost of services provided and goods sold 271,896 113,231 - 385,127 Selling, general and administrative expenses 23,792 61,260 30,821 115,873 Depreciation 5,166 8,108 13 13,287 Amortization 26 2,495 - 2,521 Other operating expense 7 85 - 92 Total costs and expenses 300,887 185,179 30,834 516,900 Income/(loss) from operations 53,120 50,047 (30,834 ) 72,333 Interest expense (46 ) (117 ) (262 ) (425 ) Intercompany interest income/(expense) 5,194 3,442 (8,636 ) - Other income—net 29 22 12,526 12,577 Income/(loss) before income taxes 58,297 53,394 (27,206 ) 84,485 Income taxes (14,327 ) (12,541 ) 7,400 (19,468 ) Net income/(loss) $ 43,970 $ 40,853 $ (19,806 ) $ 65,017 2023 (b) Service revenues and sales $ 310,478 $ 249,679 $ - $ 560,157 Cost of services provided and goods sold 253,654 117,051 - 370,705 Selling, general and administrative expenses 23,336 60,813 15,946 100,095 Depreciation 4,958 7,312 16 12,286 Amortization 26 2,487 - 2,513 Other operating expense 12 1,727 - 1,739 Total costs and expenses 281,986 189,390 15,962 487,338 Income/(loss) from operations 28,492 60,289 (15,962 ) 72,819 Interest expense (50 ) (133 ) (1,368 ) (1,551 ) Intercompany interest income/(expense) 4,648 2,743 (7,391 ) - Other income/(expense)—net 189 29 (321 ) (103 ) Income/(loss) before income taxes 33,279 62,928 (25,042 ) 71,165 Income taxes (8,515 ) (15,275 ) 6,746 (17,044 ) Net income/(loss) $ 24,764 $ 47,653 $ (18,296 ) $ 54,121 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARIES OF EBITDA FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2024 Net income/(loss) $ 43,970 $ 40,853 $ (19,806 ) $ 65,017 Add/(deduct): Interest expense 46 117 262 425 Income taxes 14,327 12,541 (7,400 ) 19,468 Depreciation 5,166 8,108 13 13,287 Amortization 26 2,495 - 2,521 EBITDA 63,535 64,114 (26,931 ) 100,718 Add/(deduct): Intercompany interest expense/(income) (5,194 ) (3,442 ) 8,636 - Interest income (29 ) (22 ) (4,192 ) (4,243 ) Stock option expense - - 9,026 9,026 Severance arrangement - - 5,337 5,337 Long-term incentive compensation - - 3,784 3,784 Adjusted EBITDA $ 58,312 $ 60,650 $ (4,340 ) $ 114,622 2023 Net income/(loss) $ 24,764 $ 47,653 $ (18,296 ) $ 54,121 Add/(deduct): Interest expense 50 133 1,368 1,551 Income taxes 8,515 15,275 (6,746 ) 17,044 Depreciation 4,958 7,312 16 12,286 Amortization 26 2,487 - 2,513 EBITDA 38,313 72,860 (23,658 ) 87,515 Add/(deduct): Intercompany interest expense/(income) (4,648 ) (2,743 ) 7,391 - Interest income (121 ) (29 ) - (150 ) Stock option expense - - 8,482 8,482 Long-term incentive compensation - - 2,514 2,514 Litigation settlement - 1,756 - 1,756 Adjusted EBITDA $ 33,544 $ 71,844 $ (5,271 ) $ 100,117 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES RECONCILIATION OF ADJUSTED NET INCOME (in thousands, except per share data)(unaudited) Three Months Ended March 31, 2024 2023 Net income as reported $ 65,017 $ 54,121 Add/(deduct) pre-tax cost of: Stock option expense 9,026 8,482 Severance arrangement 5,337 - Long-term incentive compensation 3,784 2,514 Amortization of reacquired franchise agreements 2,352 2,352 Litigation settlements - 1,756 Add/(deduct) tax impacts: Tax impact of the above pre-tax adjustments (1) (2,388 ) (2,852 ) Excess tax benefits on stock compensation (3,297 ) (1,650 ) Adjusted net income $ 79,831 $ 64,723 Diluted Earnings Per Share As Reported Net income $ 4.24 $ 3.58 Average number of shares outstanding 15,339 15,110 Adjusted Diluted Earnings Per Share Adjusted net income $ 5.20 $ 4.28 Average number of shares outstanding 15,339 15,110 (1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated. 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 March 31, OPERATING STATISTICS 2024 2023 Net revenue ($000) (c) Homecare $ 304,860 $ 267,050 Inpatient 30,303 29,093 Continuous care 24,169 19,941 Other 4,084 3,021 Subtotal $ 363,416 $ 319,105 Room and board, net (2,944 ) (2,769 ) Contractual allowances (4,090 ) (3,108 ) Medicare cap allowance (2,375 ) (2,750 ) Net Revenue $ 354,007 $ 310,478 Net revenue as a percent of total before Medicare cap allowance Homecare 83.9 % 83.7 % Inpatient 8.3 9.1 Continuous care 6.7 6.2 Other 1.1 1.0 Subtotal 100.0 100.0 Room and board, net (0.8 ) (0.8 ) Contractual allowances (1.1 ) (1.0 ) Medicare cap allowance (0.7 ) (0.9 ) Net Revenue 97.4 % 97.3 % Days of care Homecare 1,447,912 1,286,437 Nursing home 283,158 265,429 Respite 7,752 5,760 Subtotal routine homecare and respite 1,738,822 1,557,626 Inpatient 26,645 26,369 Continuous care 24,037 20,686 Total 1,789,504 1,604,681 Number of days in relevant time period 91 90 Average daily census ("ADC") (days) Homecare 15,911 14,294 Nursing home 3,112 2,949 Respite 85 64 Subtotal routine homecare and respite 19,108 17,307 Inpatient 293 293 Continuous care 264 230 Total 19,665 17,830 Total Admissions 16,911 16,179 Total Discharges 16,170 15,405 Average length of stay (days) 103.9 99.9 Median length of stay (days) 16.0 15.0 ADC by major diagnosis Cerebro 43.6 % 41.8 % Neurological 13.4 19.3 Cancer 10.1 10.5 Cardio 16.1 16.0 Respiratory 7.2 7.3 Other 9.6 5.1 Total 100.0 % 100.0 % Admissions by major diagnosis Cerebro 27.7 % 26.4 % Neurological 7.5 10.7 Cancer 24.6 24.7 Cardio 15.6 16.2 Respiratory 10.8 10.9 Other 13.8 11.1 Total 100.0 % 100.0 % Estimated uncollectible accounts as a percent of revenues 1.1 % 1.0 % Accounts receivable -- Days of revenue outstanding-excluding unapplied Medicare payments 42.3 34.7 Days of revenue outstanding-including unapplied Medicare payments 34.3 29.2 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES FOOTNOTES TO FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (unaudited) (a) Included in the results of operations for 2024 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended March 31, 2024 VITAS Roto-Rooter Corporate Consolidated Stock option expense $ - $ - $ (9,026 ) $ (9,026 ) Severance arrangement - - (5,337 ) (5,337 ) Long-term incentive compensation - - (3,784 ) (3,784 ) Amortization of reacquired franchise agreements - (2,352 ) - (2,352 ) Pretax impact on earnings - (2,352 ) (18,147 ) (20,499 ) Excess tax benefits on stock compensation - - 3,297 3,297 Income tax benefit on the above - 548 1,840 2,388 After-tax impact on earnings $ - $ (1,804 ) $ (13,010 ) $ (14,814 ) (b) Included in the results of operations for 2023 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended March 31, 2023 VITAS Roto-Rooter Corporate Consolidated Stock option expense $ - $ - $ (8,482 ) $ (8,482 ) Long-term incentive compensation - - (2,514 ) (2,514 ) Amortization of reacquired franchise agreements - (2,352 ) - (2,352 ) Litigation settlements - (1,756 ) - (1,756 ) Pretax impact on earnings - (4,108 ) (10,996 ) (15,104 ) Excess tax benefits on stock compensation - - 1,650 1,650 Income tax benefit on the above - 1,089 1,763 2,852 After-tax impact on earnings $ - $ (3,019 ) $ (7,583 ) $ (10,602 ) (c) VITAS has 11 large (greater than 450 ADC), 19 medium (greater than 200 but less than 450 ADC) and 20 small (less than 200 ADC) hospice programs. Of Vitas' 30 Medicare provider numbers, for the trailing 12 months, 27 provider numbers have a Medicare cap cushion of greater than 10%, one provider number has a Medicare cap cushion between 5% and 10%, one provider number has a Medicare cap cushion between 0% and 5%, and one provider number has a Medicare cap liability. View source version on businesswire.com: https://www.businesswire.com/news/home/20240424189490/en/