Chemed Corporation Reports 2004 Fourth-Quarter Results: Diluted EPS of $1.22; Diluted EPS from Continuing Operations of $.57; Adjusted Diluted EPS from Continuing Operations of $.82.CINCINNATI Cincinnati (sĭnsənăt`ē, –năt`ə), city (1990 pop. 364,040), seat of Hamilton co., extreme SW Ohio, on the Ohio River opposite Newport and Covington, Ky.; inc. as a city 1819. -- Chemed Corporation (Chemed) (NYSE NYSE See: New York Stock Exchange :CHE), which operates VITAS VITAS Vietnam Textile and Apparel Association Healthcare Corporation (VITAS), the nation's largest provider of end-of-life end-of-life Cardiac pacing noun The point at which a pacemaker signals need for replacement, as its battery is nearing depletion Medtalk adjective care, and Roto-Rooter Roto-Rooter is a United States company which originally specialized in clearing tree roots and other obstructions from sewer lines. It is the largest plumbing and drain-cleaning company in North America. , the nation's largest commercial and residential plumbing plumbing, piping systems inside buildings for water supply and sewage. The Romans had a highly developed plumbing system; water was brought to Rome by aqueducts and distributed to homes in lead pipes—hence the name plumbing from the Latin word plumbum and drain One side of a field effect transistor. When the gate is pulsed, current flows from the source to the drain, or vice versa depending on the design. See collector. (jargon) drain cleaning services provider, today reported financial results for its fourth quarter ended December December: see month. 31, 2004, versus the comparable prior-year period, as follows: Operating Results in Accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ): --Consolidated Revenue increased 214% to $214 million --Diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $1.22 --VITAS EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $19.2 million --Roto-Rooter EBITDA of $7.6 million Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Adjusted Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Operating Results (Non GAAP): --Pro Forma forma, adj/n minor elements between the members of a botanical species. Adjusted Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $.82 --Pro Forma Adjusted EBITDA from Continuing Operations of $30.2 million VITAS generated record revenue and ADC (1) See A/D converter. (2) (Apple Display Connector) A peripheral connector from Apple that combines digital video display, USB and power in one cable. levels: --Quarterly Net Patient Revenue of $142 million, up 18% --Average Daily Census daily census See Census. (ADC) of 9,134, up 14% --Pro forma net income of $10.7 million, up 56% --Adjusted EBITDA (Non GAAP) of $20.4 million, an increase of 49% Roto-Rooter segment reported increased Revenue and Adjusted EBITDA: --Revenue of $71.7 million, an increase of 5.3% --Adjusted EBITDA (Non GAAP) of $11.9 million, an increase of 45% "The fourth quarter showed exceptional strength in both of our businesses," stated Kevin McNamara Kevin McNamara may refer to:
"Roto-Rooter also had good financial operating results. For the fourth quarter of 2004, Roto-Rooter had net income of $3.3 million. This includes an estimated $1.9 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. cost for the anticipated settlement of our Madison County Madison County is the name of twenty counties in the United States, named after President James Madison:
When a person begins a civil lawsuit, the person enters into a process called litigation. ." "Our fourth quarter GAAP financial statements include a number of items that need to be considered when evaluating our operating results," said David Williams David Williams is the name of: Musicians
Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). and final valuation adjustments, direct expensing of telephone directory costs, and the estimated settlement expense of the Madison County class action litigation." For a detailed presentation of Chemed's operating results, reconciling items and related definitions and components, please refer to the attached schedules. VITAS The merger of VITAS was completed on February February: see month. 24, 2004. Prior to that date the Company accounted for its 37% ownership of VITAS under the equity method of accounting. As a result, under GAAP, only a portion of VITAS' operating results are fully consolidated into Chemed's first quarter of 2004 results. For the 2004 fourth quarter, VITAS had net patient revenue of $142.3 million and pro forma net income of $10.7 million. Adjusted EBITDA was $20.4 million. VITAS generated revenue growth of 18.0% over the prior year period and 5.3% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . Gross margins were 23.5% in the fourth quarter of 2004, an improvement of 50 basis points when compared to the prior year quarter. The fourth quarter 2004 gross margin includes $1.5 million in start-up Start-up The earliest stage of a new business venture. losses, which is an incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. $1.0 million over the prior-year period. The incremental portion of these losses negatively impacted fourth quarter 2004 margins by 70 basis points. Central support costs for VITAS, which are classified as selling, general and administrative expenses in the VITAS Pro Forma Quarterly Statement of Income, totaled $13.0 million which is a decline of 7.8% from the prior year quarter and up 2.8% sequentially. VITAS' ADC in the fourth quarter of 2004 was 9,134. This compares to an ADC of 7,979 in the comparable prior year period, an increase of 14% and 2.1% sequential One after the other in some consecutive order such as by name or number. growth. LOS per patient was 64.1 days for the quarter and compares to 60.8 days in the third quarter of 2004 and 59.0 days in the fourth quarter of 2003. Our established programs, which exclude start-up programs, had a range of LOS from 40.5 days to 112.6 days in the fourth quarter of 2004. "We continue to see strong organic ADC growth across all levels of VITAS," said McNamara Mc·Na·mar·a , Robert Strange Born 1916. American public official who served as U.S. secretary of defense (1961-1968) during the Kennedy and Johnson administrations. . "The ADC in our 22 base programs now average 401 patients per program. In our large programs, those with an average-daily-census in excess of 450, ADC growth was 11.5% over the prior year quarter and was flat sequentially. Our small and medium programs generated ADC growth of 16.5% over the prior year and 3.2% sequentially." "Our mix of revenue at VITAS was relatively stable this quarter," Williams stated. "Routine home care aggregated 69.4% of revenue, an increase of 60 basis points over the prior year quarter and a 40 basis point decline on a sequential basis. Our inpatient inpatient /in·pa·tient/ (in´pa-shent) a patient who comes to a hospital or other health care facility for diagnosis or treatment that requires an overnight stay. in·pa·tient n. revenue aggregated 13.5% of total revenue and continuous care was 17.1% of revenue in the fourth quarter of 2004." Roto-Rooter Segment Roto-Rooter's plumbing and drain cleaning business generated sales of $71.7 million for the fourth quarter of 2004, 5.3% higher than the $68.1 million reported in the comparable prior-year quarter. Net income for the quarter, including $1.9 million of after-tax expense for the anticipated settlement of our Madison County class action litigation, totaled $3.3 million. Adjusted EBITDA in the fourth quarter of 2004 totaled $11.9 million, an increase of 45% over the fourth quarter of 2003. "There are several factors contributing to the improvement in the plumbing and drain cleaning segment," stated McNamara. "Job count was basically flat in the fourth quarter, increasing a modest 0.3% over the prior-year period. However, commercial demand remains strong with job count increasing 3.7% over the prior year quarter. On a full year basis, job count increased 1.1%, with commercial demand growing 3.3% and residential job count demand increasing 0.2% over the prior year. Our expense control at the field level resulted in a fourth quarter 2004 gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. of 48.1%, which is 484 basis points above the fourth quarter of 2003 and 267 basis points above the third quarter of 2004." Consolidated Financial Position "Our balance sheet is in excellent condition," Williams stated. "As of December 31, 2004, we had over $71 million in cash and cash equivalents. In February 2005, we restructured our debt. Effective February 18, 2005, Chemed redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. the $110 million of floating rate notes that had a current interest rate of LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 4%. On February 24, 2005, we amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and restated Chemed's bank credit facility. Terms of this amended facility increased the aggregate amount of term loan from a current balance of $30.5 million to $85 million at a rate of LIBOR plus 2.0%. The revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility was increased from $100 million to $175 million at a current rate of LIBOR plus 2.5%. The end result of this refinancing Refinancing An extension and/or increase in amount of existing debt. was to de-leverage our balance sheet by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $55 million, reduce aggregate interest expense and expand Chemed's access to capital for acquisitions and other corporate purposes." Guidance for 2005 "Looking ahead into 2005," Williams stated, "we anticipate VITAS to increase revenue in the range of 16% to 18% in 2005 with margins increasing modestly from the 2004 levels. This operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: expansion will be generated from leveraging our central support costs. Roto-Rooter is estimated to generate a 5% to 7% increase in revenue with margins that approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. those generated in 2004. Debt refinancing will favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact interest expense in 2005, although this will be partially offset by an increase in the LIBOR rate. "Based upon these factors, and a current diluted share count of 12.9 million, our expectation is that earnings per diluted share for 2005, excluding costs associated with the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt, will be in the range of $3.30 to $3.50." Conference Call Chemed will hold a conference call to discuss fourth quarter results Wednesday Wednesday: see week. , March 9, 2005, at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The dial-in number for the conference call is 800-945-0061 for U.S. and Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. participants and 706-679-7146 for international participants. A live webcast of the call can be accessed on Chemed's website at www.chemed.com by clicking on "Investor Relations Investor relations The process by which the corporation communicates with its investors. Home" and then on "Featured Event: Web Cast-Live Q4 2004 Chemed Corporation Earnings Conference Call." An archived webcast will also be available at www.chemed.com and will remain available for 14 days following the live call. A taped replay of the conference call will be available approximately two hours after the call's conclusion. It can be accessed by dialing 800-642-1687 for U.S. and Canadian callers and 706-645-9291 for international callers. The conference identification number is 4165174. The telephone replay will be available for one week following the live call. Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice hospice, program of humane and supportive care for the terminally ill and their families; the term also applies to a professional facility that provides care to dying patients who can no longer be cared for at home. services to approximately 9,000 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill Terminally Ill When a person is not expected to live more than 12 months. Notes: Any gifts given out by the afflicted person at this time may be considered as a dispersion of the estate rather than a gift. 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 A person who contracts to do work for another person according to his or her own processes and methods; the contractor is not subject to another's control except for what is specified in a mutually binding agreement for a specific job. and franchisees in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Roto-Rooter also has licensed master franchisees in China/Hong Kong Kong is the Danish word for king, but can also refer to the following:
Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , the Philippines Philippines officially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. and the United Kingdom. This press release contains information about Chemed's adjusted EBITDA, which is not a measure derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. in accordance with generally accepted accounting principles, and which excludes components that are important to understanding Chemed's financial performance. Chemed provides adjusted EBITDA to help investors and others evaluate its 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 Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . Chemed's adjusted EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. A reconciliation of Chemed's net income to its adjusted EBITDA is presented in the tables following the text of this press release. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements contained in this press release and the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. the hospice care, plumbing and drain cleaning industries; periodic changes in reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. levels and procedures under Medicare and Medicaid Medicare and Medicaid U.S. government programs in effect since 1966. Medicare covers most people 65 or older and those with long-term disabilities. Part A, a hospital insurance plan, also pays for home health visits and hospice care. programs; difficulties predicting patient length of stay and estimating potential Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. 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 Form 10-Q See 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
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)(unaudited)
For the For the
Three Months Ended Years Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Continuing Operations
Service revenues and sales $213,981 $ 68,117 $735,341 $260,776
-------- -------- -------- --------
Cost of services provided
and goods sold 146,029 38,638 507,078 146,818
Selling, general and
administrative
expenses (aa) 40,226 26,405 138,285 95,363
Depreciation 4,774 2,353 14,542 9,519
Amortization 517 122 3,779 302
Other expenses (aa) 6,355 - 13,551 -
-------- -------- -------- --------
Total costs and expenses 197,901 67,518 677,235 252,002
-------- -------- -------- --------
Income from operations 16,080 599 58,106 8,774
Interest expense (5,971) (776) (21,158) (3,177)
Loss on extinguishment of
debt (aa) - - (3,330) -
Other income--net (aa) 1,505 1,355 3,469 10,849
-------- -------- -------- --------
Income before income
taxes 11,614 1,178 37,087 16,446
Income taxes (aa) (4,236) (557) (13,796) (6,180)
Equity in earnings/(loss)
of affiliate (aa) - 922 (4,105) 922
-------- -------- -------- --------
Income from
continuing
operations 7,378 1,543 19,186 11,188
Discontinued Operations (bb) 8,314 (14,748) 8,326 (14,623)
-------- -------- -------- --------
Net Income/(Loss) $ 15,692 $(13,205) $ 27,512 $ (3,435)
======== ======== ======== ========
Earnings/(Loss) Per Share
Income from continuing
operations (aa) $ 0.59 $ 0.16 $ 1.59 $ 1.13
======== ======== ======== ========
Net Income/(Loss) $ 1.26 $ (1.33) $ 2.28 $ (0.35)
======== ======== ======== ========
Average number of shares
outstanding 12,497 9,954 12,060 9,924
======== ======== ======== ========
Diluted Earnings/(Loss)
Per Share
Income from continuing
operations (aa) $ 0.57 $ 0.15 $ 1.56 $ 1.12
======== ======== ======== ========
Net Income/(Loss) $ 1.22 $ (1.32) $ 2.23 $ (0.35)
======== ======== ======== ========
Average number of shares
outstanding 12,836 10,000 12,318 9,954
========= ========= ========= ========
----------------------------------------
(aa) Included in the results of operations are the following
significant credits/(charges) which may not be indicative of
ongoing operations (in thousands, except per share data):
For the For the
Three Months Ended Years Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Selling, general and
administrative expenses
Corporate severance
charges $ - $ - $ - $ (3,627)
Other expenses
Costs related to class
action litigation (3,135) - (3,135) -
Transaction-related
costs of the VITAS
acquisition (2,029) - (442) -
Professional fees
incurred for debt
registration statement (1,191) - (1,191) -
Long-term incentive
compensation - - (8,783) -
Loss on extinguishment
of debt
Prepayment penalty for
extinguishment of debt - - (3,330) -
Other income--net
Capital gains on disposal
of investments - - - 5,390
--------- --------- --------- ---------
Pretax impact on income (6,355) - (16,881) 1,763
Income tax benefit/(provision)
on the above 2,557 - 6,568 (770)
Adjustments of income taxes
related to prior-year issues 600 - 1,620 -
Equity in loss of
affiliate atttributable to
transaction-related expenses
incurred by VITAS prior to
its acquisition by Chemed - - (4,105) -
--------- --------- --------- ---------
Aftertax impact
on income $ (3,198) $ - $(12,798) $ 993
========= ========= ========= =========
Impact on earnings per share $ (0.26) $ - $ (1.06) $ 0.10
Impact on diluted
earnings per share (0.25) - (1.04) 0.10
(bb) Discontinued operations include Service America, discontinued in
the fourth quarter of 2004, and accrual adjustments related to
operations discontinued in prior years.
CHEMED CORPORATION
CONSOLIDATED BALANCE SHEET
(in thousands, except per share data)(unaudited)
December 31,
--------------------
2004 2003(cc)
--------- ----------
Assets
Current assets
Cash and cash equivalents $ 71,448 $ 50,688
Accounts receivable less allowances 64,663 14,351
Inventories 7,019 6,011
Current deferred income taxes 31,250 8,430
Current assets of discontinued operations 13,397 15,583
Prepaid expenses and other current assets 9,842 6,411
-------- ---------
Total current assets 197,619 101,474
Investments of deferred compensation plans
held in trust 18,317 17,391
Other investments 1,445 25,081
Note receivable 12,500 12,500
Properties and equipment, at cost less
accumulated depreciation 55,796 31,440
Identifiable intangible assets less
accumulated amortization 76,924 592
Goodwill 432,732 105,335
Noncurrent assets of discontinued operations 5,705 10,954
Other assets 24,528 23,691
-------- ---------
Total Assets $825,566 $ 328,458
======== =========
Liabilities
Current liabilities
Accounts payable $ 37,777 $ 6,081
Current portion of long-term debt 13,580 193
Income taxes 10,944 6,633
Accrued insurance 26,350 14,382
Accrued salaries and wages 17,030 1,210
Current liabilities of discontinued
operations 22,117 21,131
Other current liabilities 42,777 19,066
-------- ---------
Total current liabilities 170,575 68,696
Deferred income taxes 16,814 -
Long-term debt 278,115 25,931
Convertible junior subordinated debentures - 14,126
Deferred compensation liabilities 18,311 17,380
Noncurrent liabilities of discontinued
operations 811 417
Other liabilities 8,848 9,215
-------- ---------
Total Liabilities 493,474 135,765
-------- ---------
Stockholders' Equity
Capital stock 13,491 13,453
Paid-in capital 212,691 170,501
Retained earnings 141,542 119,746
Treasury stock, at cost (33,873) (109,427)
Unearned compensation (3,590) (2,954)
Deferred compensation payable in
Company stock 2,375 2,308
Notes receivable for shares sold (544) (934)
-------- ---------
Total Stockholders' Equity 332,092 192,693
-------- ---------
Total Liabilities and
Stockholders' Equity $825,566 $ 328,458
======== =========
Book Value Per Share $ 26.55 $ 19.38
======== =========
(cc) Reclassified to conform to 2004 presentation
CHEMED CORPORATION
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated
---------- ------------- ---------- ------------
2004
------------------
Service revenues
and sales $ 142,277 $ 71,704 $ - $ 213,981
--------- --------- --------- ---------
Cost of services
provided and
goods sold 108,830 37,199 - 146,029
Selling,
general and
administrative
expenses 13,006 24,770 2,450 40,226
Depreciation 2,634 2,082 58 4,774
Amortization 354 (37) 200 517
Other expenses 1,680 (a) 3,135 (a) 1,540 (a) 6,355
--------- --------- --------- ---------
Total costs
and expenses 126,504 67,149 4,248 197,901
--------- --------- --------- ---------
Income/(loss)
from operations 15,773 4,555 (4,248) 16,080
Interest expense (38) (104) (5,829) (5,971)
Intercompany
interest
income/(expense) 339 341 (680) -
Loss on
extinguishment
of debt - - - -
Other income--net 127 674 704 1,505
--------- --------- --------- ---------
Income/(loss)
before income
taxes 16,201 5,466 (10,053) 11,614
Income taxes (6,541) (2,125) 4,430 (e) (4,236)
Equity in
earnings of
VITAS - - - -
--------- --------- --------- ---------
Income/(loss)
from continuing
operations 9,660 3,341 (5,623) 7,378
Discontinued
operations - - 8,314 8,314
--------- --------- --------- ---------
Net income $ 9,660 $ 3,341 $ 2,691 $ 15,692
========= ========= ========= =========
2003
------------------
Service revenues
and sales $ - $ 68,117 $ - $ 68,117
--------- --------- --------- ---------
Cost of services
provided and
goods sold - 38,638 - 38,638
Selling,
general and
administrative
expenses - 24,573 1,832 26,405
Depreciation - 2,279 74 2,353
Amortization - 122 - 122
--------- --------- --------- ---------
Total costs
and expenses - 65,612 1,906 67,518
--------- --------- --------- ---------
Income/(loss)
from operations - 2,505 (1,906) 599
Interest expense - (22) (754) (776)
Intercompany
interest
income/(expense) - 181 (181) -
Other income--net - 735 620 1,355
--------- --------- --------- ---------
Income/(loss)
before income
taxes - 3,399 (2,221) 1,178
Income taxes - (1,324) 767 (557)
Equity in
earnings of
VITAS - - 922 922
--------- --------- --------- ---------
Income/(loss)
from continuing
operations - 2,075 (532) 1,543
Discontinued
operations - - (14,748) (14,748)
--------- --------- --------- ---------
Net income/
(loss) $ - $ 2,075 $ (15,280) $ (13,205)
========= ========= ========= =========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated
---------- ------------- ---------- ------------
2004
------------------
Service revenues
and sales $ 458,730 $ 276,611 $ - $ 735,341
--------- --------- --------- ---------
Cost of services
provided and
goods sold 356,801 150,277 - 507,078
Selling,
general and
administrative
expenses 42,946 85,636 9,703 138,285
Depreciation 5,712 8,583 247 14,542
Amortization 3,349 119 311 3,779
Other expenses 1,680 (a) 4,693 (a) 7,178 (a) 13,551
--------- --------- --------- ---------
Total costs
and expenses 410,488 249,308 17,439 677,235
--------- --------- --------- ---------
Income/(loss)
from operations 48,242 27,303 (17,439) 58,106
Interest expense (128) (206) (20,824) (21,158)
Intercompany
interest
income/(expense) 759 1,041 (1,800) -
Loss on
extinguishment
of debt - - (3,330)(b) (3,330)
Other income--net 296 1,268 1,905 3,469
--------- --------- --------- ---------
Income/(loss)
before income
taxes 49,169 29,406 (41,488) 37,087
Income taxes (20,030) (10,611)(e) 16,845 (e) (13,796)
Equity in loss of
VITAS - - (4,105)(f) (4,105)
--------- --------- --------- ---------
Income/(loss)
from continuing
operations 29,139 18,795 (28,748) 19,186
Discontinued
operations - - 8,326 8,326
--------- --------- --------- ---------
Net income/
(loss) $ 29,139 $ 18,795 $ (20,422) $ 27,512
========= ========= ========= =========
2003
------------------
Service revenues
and sales $ - $ 260,776 $ - $ 260,776
--------- --------- --------- ---------
Cost of services
provided and
goods sold - 146,818 - 146,818
Selling,
general and
administrative
expenses - 85,114 10,249 (c) 95,363
Depreciation - 9,179 340 9,519
Amortization - 302 - 302
--------- --------- --------- ---------
Total costs
and expenses - 241,413 10,589 252,002
--------- --------- --------- ---------
Income/(loss)
from
operations - 19,363 (10,589) 8,774
Interest expense - (170) (3,007) (3,177)
Intercompany
interest
income/(expense) - 595 (595) -
Other income--net - 1,442 9,407 (d) 10,849
--------- --------- --------- ---------
Income/(loss)
before income
taxes - 21,230 (4,784) 16,446
Income taxes - (8,054) 1,874 (6,180)
Equity in
earnings of
VITAS - - 922 922
--------- --------- --------- ---------
Income/(loss)
from continuing
operations - 13,176 (1,988) 11,188
Discontinued
operations - - (14,623) (14,623)
--------- --------- --------- ---------
Net income/
(loss) $ - $ 13,176 $ (16,611) $ (3,435)
========= ========= ========= =========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
PRO FORMA CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(in thousands, except per share data) (unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated
---------- ------------- ------------- ------------
2004 (g)
-------------------
Service revenues
and sales $ 142,277 $ 71,704 $ - $ 213,981
--------- --------- --------- ---------
Cost of services
provided and
goods sold 108,830 37,199 - 146,029
Selling,
general and
administrative
expenses 13,006 24,770 2,450 40,226
Depreciation 2,123 2,082 58 4,263
Amortization 869 (37) 200 1,032
Other expenses - 3,135 (a) 1,191 (a) 4,326
--------- --------- --------- ---------
Total costs and
expenses 124,828 67,149 3,899 195,876
--------- --------- --------- ---------
Income/(loss)
from operations 17,449 4,555 (3,899) 18,105
Interest expense (38) (104) (5,829) (5,971)
Intercompany
interest
income/(expense) 339 341 (680) -
Loss on
extinguishment
of debt - - - -
Other income--net 127 674 704 1,505
--------- --------- --------- ---------
Income/(loss)
before income
taxes 17,877 5,466 (9,704) 13,639
Income taxes (7,213) (2,125) 4,247 (e) (5,091)
--------- --------- --------- ---------
Income/(loss) from
continuing
operations 10,664 3,341 (5,457) 8,548
Discontinued
operations - - 8,314 8,314
--------- --------- --------- ---------
Net income $ 10,664 $ 3,341 $ 2,857 $ 16,862
========= ========= ========= =========
Earnings Per Share
Continuing operations $ 0.68
=========
Net income $ 1.35
=========
Average number of shares outstanding 12,497
=========
Diluted Earnings Per Share
Continuing operations $ 0.67
=========
Net income $ 1.31
=========
Average number of shares outstanding 12,836
=========
2003 (h)
-------------------
Service revenues
and sales $ 121,062 $ 68,117 $ - $ 189,179
--------- --------- --------- ---------
Cost of services
provided and goods
sold 93,214 38,638 - 131,852
Selling,
general and
administrative
expenses 14,103 24,573 1,697 40,373
Depreciation 1,275 2,279 74 3,628
Amortization 1,061 122 - 1,183
--------- --------- --------- ---------
Total costs and
expenses 109,653 65,612 1,771 177,036
--------- --------- --------- ---------
Income/(loss)
from operations 11,409 2,505 (1,771) 12,143
Interest expense - (22) (4,226) (4,248)
Intercompany
interest
income/(expense) - 181 (181) -
Loss on
extinguishment
of debt - - - -
Other income--net 163 735 620 1,518
--------- --------- --------- ---------
Income/(loss)
before income
taxes 11,572 3,399 (5,558) 9,413
Income taxes (4,728) (1,324) 1,926 (4,126)
--------- --------- --------- ---------
Income/(loss) from
continuing
operations 6,844 2,075 (3,632) 5,287
Discontinued
operations - - (14,748) (14,748)
--------- --------- --------- ---------
Net income/
(loss) $ 6,844 $ 2,075 $ (18,380) $ (9,461)
========= ========= ========= =========
Earnings/(Loss) Per Share
Continuing operations $ 0.44
=========
Net loss $ (0.79)
=========
Average number of shares outstanding 11,954
=========
Diluted Earnings/(Loss) Per Share
Continuing operations $ 0.44
=========
Net loss $ (0.79)
=========
Average number of shares outstanding 12,000
=========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
PRO FORMA CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
(in thousands, except per share data) (unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated
---------- ------------- ------------- ------------
2004 (g)
-------------------
Service revenues
and sales $ 531,600 $ 276,611 $ - $ 808,211
--------- --------- --------- ---------
Cost of services
provided and goods
sold 415,649 150,277 - 565,926
Selling,
general and
administrative
expenses 51,271 85,636 9,564 146,471
Depreciation 6,192 8,583 247 15,022
Amortization 3,957 119 311 4,387
Other expenses - 4,693 (a) 8,416 (a) 13,109
--------- --------- --------- ---------
Total costs and
expenses 477,069 249,308 18,538 744,915
--------- --------- --------- ---------
Income/(loss)
from operations 54,531 27,303 (18,538) 63,296
Interest expense (128) (206) (24,226) (24,560)
Intercompany
interest
income/(expense) 759 1,041 (1,800) -
Loss on
extinguishment
of debt - - (3,330)(b) (3,330)
Other income--net 337 1,268 1,905 3,510
--------- --------- --------- ---------
Income/(loss)
before income
taxes 55,499 29,406 (45,989) 38,916
Income taxes (22,447) (10,611)(e) 18,431 (e) (14,627)
--------- --------- --------- ---------
Income/(loss) from
continuing
operations 33,052 18,795 (27,558) 24,289
Discontinued
operations - - 8,326 8,326
--------- --------- --------- ---------
Net income/
(loss) $ 33,052 $ 18,795 $ (19,232) $ 32,615
========= ========= ========= =========
Earnings Per Share
Continuing operations $ 1.93
=========
Net income $ 2.59
=========
Average number of shares outstanding 12,609
=========
Diluted Earnings Per Share
Continuing operations $ 1.89
=========
Net income $ 2.53
=========
Average number of shares outstanding 12,867
=========
2003 (h)
-------------------
Service revenues
and sales $ 441,017 $ 260,776 $ - $ 701,793
--------- --------- --------- ---------
Cost of services
provided and goods
sold 345,189 146,818 - 492,007
Selling,
general and
administrative
expenses 53,526 85,114 9,708 (c) 148,348
Depreciation 5,100 9,179 340 14,619
Amortization 4,185 302 - 4,487
--------- --------- --------- ---------
Total costs and
expenses 408,000 241,413 10,048 659,461
--------- --------- --------- ---------
Income/(loss)
from operations 33,017 19,363 (10,048) 42,332
Interest expense - (170) (23,337) (23,507)
Intercompany
interest
income/(expense) - 595 (595) -
Loss on
extinguishment
of debt - - (3,330)(b) (3,330)
Other income--net 684 1,442 5,767 (d) 7,893
--------- --------- --------- ---------
Income/(loss)
before income
taxes 33,701 21,230 (31,543) 23,388
Income taxes (13,543) (8,054) 10,788 (10,809)
--------- --------- --------- ---------
Income/(loss) from
continuing
operations 20,158 13,176 (20,755) 12,579
Discontinued
operations - - (14,623) (14,623)
--------- --------- --------- ---------
Net income/
(loss) $ 20,158 $ 13,176 $ (35,378) $ (2,044)
========= ========= ========= =========
Earnings/(Loss) Per Share
Continuing operations $ 1.05
=========
Net loss $ (0.17)
=========
Average number of shares outstanding 11,924
=========
Diluted Earnings/(Loss) Per Share
Continuing operations $ 1.05
=========
Net loss $ (0.17)
=========
Average number of shares outstanding 11,954
=========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
VITAS PRO FORMA QUARTERLY STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
(in thousands) (unaudited)
First Second Third Fourth Full
Quarter Quarter Quarter Quarter Year
--------- --------- --------- --------- ---------
2004 (g)
---------------------
Service revenues and
sales $123,982 $130,240 $135,101 $142,277 $531,600
-------- -------- -------- -------- --------
Cost of services
provided and goods
sold 99,334 101,790 105,695 108,830 415,649
Selling, general
and administrative
expenses 13,385 12,227 12,653 13,006 51,271
Depreciation 982 1,270 1,306 2,634 6,192
Amortization 1,024 1,324 1,251 358 3,957
Long-term
incentive costs - - - - -
-------- -------- -------- -------- --------
Total costs and
expenses 114,725 116,611 120,905 124,828 477,069
-------- -------- -------- -------- --------
Income from
operations 9,257 13,629 14,196 17,449 54,531
Interest expense (28) (30) (32) (38) (128)
Intercompany interest
income/(expense) - 131 289 339 759
Loss on
extinguishment
of debt - - - - -
Other income--net 72 45 93 127 337
-------- -------- -------- -------- --------
Income before
income taxes 9,301 13,775 14,546 17,877 55,499
Income taxes (3,701) (5,647) (5,886) (7,213) (22,447)
-------- -------- -------- -------- --------
Net income $ 5,600 $ 8,128 $ 8,660 $ 10,664 $ 33,052
======== ======== ======== ======== ========
2003 (h)
---------------------
Service revenues and
sales $100,182 $106,245 $113,528 $121,062 $441,017
-------- -------- -------- -------- --------
Cost of services
provided and goods
sold 80,919 82,684 88,372 93,214 345,189
Selling, general
and administrative
expenses 11,714 13,686 14,023 14,103 53,526
Depreciation 1,318 1,373 1,134 1,275 5,100
Amortization 1,041 1,042 1,041 1,061 4,185
Long-term
incentive costs - - - - -
-------- -------- -------- -------- --------
Total costs and
expenses 94,992 98,785 104,570 109,653 408,000
-------- -------- -------- -------- --------
Income from
operations 5,190 7,460 8,958 11,409 33,017
Interest expense - - - - -
Intercompany interest
income/(expense) - - - - -
Loss on
extinguishment
of debt - - - - -
Other income--net 150 203 168 163 684
-------- -------- -------- -------- --------
Income before
income taxes 5,340 7,663 9,126 11,572 33,701
Income taxes (2,132) (3,069) (3,614) (4,728) (13,543)
-------- -------- -------- -------- --------
Net income $ 3,208 $ 4,594 $ 5,512 $ 6,844 $ 20,158
======== ======== ======== ======== ========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
CONSOLIDATING SUMMARY OF EBITDA
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated
---------- ----------- ----------- ------------
2004
----------------------
Net income $ 9,660 $ 3,341 $ 2,691 $ 15,692
Add/(deduct):
Discontinued
operations - - (8,314) (8,314)
Interest expense 38 104 5,829 5,971
Income taxes 6,541 2,125 (4,430) 4,236
Depreciation 2,634 2,082 58 4,774
Amortization 354 (37) 200 517
-------- -------- -------- --------
EBITDA 19,227 7,615 (3,966) 22,876
Add/(deduct):
Long-term incentive
compensation - - - -
Lawsuit settlement - 3,135 - 3,135
Debt registration
expenses - - 1,191 1,191
Advertising cost
adjustment (j) - 1,571 - 1,571
Interest income (142) (31) (434) (607)
Intercompany interest
income/(expense) (339) (341) 680 -
Loss on
extinguishment
of debt - - - -
VITAS transaction
costs and
adjustments 1,680 - 349 2,029
Equity in earnings
of VITAS - - - -
-------- -------- -------- --------
Adjusted EBITDA $ 20,426 $ 11,949 $ (2,180) $ 30,195
======== ======== ======== ========
2003
-----------------------
Net income/(loss) $ - $ 2,075 $(15,280) $(13,205)
Add/(deduct):
Discontinued
operations - - 14,748 14,748
Interest expense - 22 754 776
Income taxes - 1,324 (768) 556
Depreciation - 2,279 74 2,353
Amortization - 122 - 122
-------- -------- -------- --------
EBITDA - 5,822 (472) 5,350
Add/(deduct):
Severance charges - - - -
Advertising cost
adjustment (j) - 2,689 - 2,689
Interest income - (92) (365) (457)
Intercompany interest
income/(expense) - (181) 181 -
Dividend income
from VITAS - - - -
Equity in earnings
of VITAS - - (922) (922)
Gains on sales of
investments - - - -
-------- -------- -------- --------
Adjusted EBITDA $ - $ 8,238 $ (1,578) $ 6,660
======== ======== ======== ========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
CONSOLIDATING SUMMARY OF EBITDA
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
(in thousands)(unaudited)
Chemed
VITAS Roto-Rooter Corporate Consolidated
---------- ----------- ----------- ------------
2004
----------------------
Net income/(loss) $ 29,139 $ 18,795 $(20,422) $ 27,512
Add/(deduct):
Discontinued
operations - - (8,326) (8,326)
Interest expense 128 206 20,824 21,158
Income taxes 20,030 10,611 (16,845) 13,796
Depreciation 5,712 8,583 247 14,542
Amortization 3,349 119 311 3,779
-------- -------- -------- --------
EBITDA 58,358 38,314 (24,211) 72,461
Add/(deduct):
Long-term incentive
compensation - 1,558 7,225 8,783
Lawsuit settlement - 3,135 - 3,135
Debt registration
expenses - - 1,191 1,191
Advertising cost
adjustment (j) - 528 - 528
Interest income (332) (139) (1,403) (1,874)
Intercompany interest
income/(expense) (759) (1,041) 1,800 -
Loss on
extinguishment
of debt - - 3,330 3,330
VITAS transaction
costs and
adjustments 1,680 - (1,238) 442
Equity in loss
of VITAS - - 4,105 4,105
-------- -------- -------- --------
Adjusted EBITDA $ 58,947 $ 42,355 $ (9,201) $ 92,101
======== ======== ======== ========
2003
-----------------------
Net income/(loss) $ - $ 13,176 $(16,611) $ (3,435)
Add/(deduct):
Discontinued
operations - - 14,623 14,623
Interest expense - 170 3,007 3,177
Income taxes - 8,054 (1,874) 6,180
Depreciation - 9,179 340 9,519
Amortization - 302 - 302
-------- -------- -------- --------
EBITDA - 30,881 (515) 30,366
Add/(deduct):
Severance charges - - 3,627 3,627
Advertising cost
adjustment (j) - 829 - 829
Interest income - (268) (1,592) (1,860)
Intercompany interest
income/(expense) - (595) 595 -
Dividend income
from VITAS - - (1,532) (1,532)
Equity in earnings
of VITAS - - (922) (922)
Gains on sales of
investments - - (5,390) (5,390)
-------- -------- -------- --------
Adjusted EBITDA $ - $ 30,847 $ (5,729) $ 25,118
======== ======== ======== ========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
PRO FORMA CONSOLIDATING SUMMARY OF EBITDA
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(in thousands)(unaudited)
Chemed
VITAS (i) Roto-Rooter Corporate (i) Consolidated
--------- ----------- ------------- ------------
2004
----------------------
Pro forma net income $ 10,664 $ 3,341 $ 2,857 $ 16,862
Add/(deduct):
Discontinued
operations - - (8,314) (8,314)
Interest expense 38 104 5,829 5,971
Income taxes 7,213 2,125 (4,247) 5,091
Depreciation 2,123 2,082 58 4,263
Amortization 869 (37) 200 1,032
-------- -------- -------- --------
Pro forma EBITDA 20,907 7,615 (3,617) 24,905
Add/(deduct):
Long-term incentive
compensation - - - -
Lawsuit settlement - 3,135 - 3,135
Debt registration
expenses - - 1,191 1,191
Advertising cost
adjustment (j) - 1,571 - 1,571
Interest income (142) (31) (434) (607)
Intercompany interest
income/(expense) (339) (341) 680 -
Loss on
extinguishment of
debt - - - -
-------- -------- -------- --------
Pro forma adjusted
EBITDA $ 20,426 $ 11,949 $ (2,180) $ 30,195
======== ======== ======== ========
2003
----------------------
Pro forma net
income/(loss) $ 6,844 $ 2,075 $(18,380) $ (9,461)
Add/(deduct):
Discontinued
operations - - 14,748 14,748
Interest expense - 22 4,226 4,248
Income taxes 4,728 1,324 (1,926) 4,126
Depreciation 1,275 2,279 74 3,628
Amortization 1,061 122 - 1,183
-------- -------- -------- --------
Pro forma EBITDA 13,908 5,822 (1,258) 18,472
Add/(deduct):
Severance charges - - - -
Advertising cost
adjustment (j) - 2,689 - 2,689
Interest income (163) (92) (365) (620)
Intercompany interest
income/(expense) - (181) 181 -
Gains on sales of
investments - - - -
Loss on
extinguishment of
debt - - - -
-------- -------- -------- --------
Pro forma adjusted
EBITDA $ 13,745 $ 8,238 $ (1,442) $ 20,541
======== ======== ======== ========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
PRO FORMA CONSOLIDATING SUMMARY OF EBITDA
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
(in thousands)(unaudited)
Chemed
VITAS (i) Roto-Rooter Corporate (i) Consolidated
--------- ----------- ------------- ------------
2004
----------------------
Pro forma
net income/(loss) $ 33,052 $ 18,795 $(19,232) $ 32,615
Add/(deduct):
Discontinued
operations - - (8,326) (8,326)
Interest expense 128 206 24,226 24,560
Income taxes 22,447 10,611 (18,431) 14,627
Depreciation 6,192 8,583 247 15,022
Amortization 3,957 119 311 4,387
-------- -------- -------- --------
Pro forma EBITDA 65,776 38,314 (21,205) 82,885
Add/(deduct):
Long-term incentive
compensation - 1,558 7,225 8,783
Lawsuit settlement - 3,135 - 3,135
Debt registration
expenses - - 1,191 1,191
Advertising cost
adjustment (j) - 528 - 528
Interest income (373) (139) (1,403) (1,915)
Intercompany interest
income/(expense) (759) (1,041) 1,800 -
Loss on
extinguishment
of debt - - 3,330 3,330
-------- -------- -------- --------
Pro forma
adjusted EBITDA $ 64,644 $ 42,355 $ (9,062) $ 97,937
======== ======== ======== ========
2003
----------------------
Pro forma
net income/(loss) $ 20,158 $ 13,176 $(35,378) $ (2,044)
Add/(deduct):
Discontinued
operations - - 14,623 14,623
Interest expense - 170 23,337 23,507
Income taxes 13,543 8,054 (10,788) 10,809
Depreciation 5,100 9,179 340 14,619
Amortization 4,185 302 - 4,487
-------- -------- -------- --------
Pro forma EBITDA 42,986 30,881 (7,866) 66,001
Add/(deduct):
Severance charges - - 3,627 3,627
Advertising cost
adjustment (j) - 829 - 829
Interest income (684) (268) (1,330) (2,282)
Intercompany interest
income/(expense) - (595) 595 -
Gains on sales of
investments - - (3,544) (3,544)
Loss on
extinguishment
of debt - - 3,330 3,330
-------- -------- -------- --------
Pro forma
adjusted EBITDA $ 42,302 $ 30,847 $ (5,188) $ 67,961
======== ======== ======== ========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
VITAS PRO FORMA QUARTERLY SUMMARY OF EBITDA
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
(in thousands) (unaudited)
First Second Third Fourth Full
2004 (g) Quarter Quarter Quarter Quarter Year
------------------------- -------- -------- -------- -------- --------
Pro forma net income $ 5,600 $ 8,128 $ 8,660 $10,664 $33,052
Add/(deduct):
Interest expense 28 30 32 38 128
Income taxes 3,701 5,647 5,886 7,213 22,447
Depreciation 982 1,270 1,306 2,634 6,192
Amortization 1,024 1,324 1,251 358 3,957
------- ------- ------- ------- -------
Pro forma EBITDA 11,335 16,399 17,135 20,907 65,776
Add/(deduct):
Interest income (72) (65) (94) (142) (373)
Intercompany interest
income/(expense) - (131) (289) (339) (759)
------- ------- ------- ------- -------
Pro forma
adjusted EBITDA $11,263 $16,203 $16,752 $20,426 $64,644
======= ======= ======= ======= =======
2003 (h)
------------------------
Pro forma net income $ 3,208 $ 4,594 $ 5,512 $ 6,844 $20,158
Add/(deduct):
Interest expense - - - - -
Income taxes 2,132 3,069 3,614 4,728 13,543
Depreciation 1,318 1,373 1,134 1,275 5,100
Amortization 1,041 1,042 1,041 1,061 4,185
------- ------- ------- ------- -------
Pro forma EBITDA 7,699 10,078 11,301 13,908 42,986
Add/(deduct):
Interest income (150) (203) (168) (163) (684)
Intercompany interest
income/(expense) - - - - -
------- ------- ------- ------- -------
Pro forma
adjusted EBITDA $ 7,549 $ 9,875 $11,133 $13,745 $42,302
======= ======= ======= ======= =======
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
RECONCILIATION OF PRO FORMA ADJUSTED NET INCOME
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2004 AND 2003
(in thousands, except per share data)(unaudited)
For the For the
Three Months Ended Years Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Net income/(loss) as reported $ 15,692 $(13,205) $ 27,512 $ (3,435)
Add/(deduct):
Pro forma VITAS net income
contribution for the
period (k) - 6,923 2,987 20,477
Pro forma prior-period
VITAS intangibles
amortization (4) - - -
Pro forma financing costs
related to acquisition of
VITAS (l) - (2,257) (2,211) (13,215)
Pro forma loss on
extinguishment of debt (l) - - - (2,164)
Pro forma elimination of
VITAS transaction costs
and adjustments 1,174 - 222 -
Pro forma elimination of
equity in income of
VITAS (m) - (922) 4,105 (922)
Pro forma elimination of
gain on redemption of
VITAS preferred stock (m) - - - (1,200)
Pro forma elimination of
preferred dividend income
from VITAS (m) - - - (1,585)
-------- -------- -------- --------
Pro forma net income/(loss) 16,862 (9,461) 32,615 (2,044)
Add/(deduct):
Discontinued operations (8,314) 14,748 (8,326) 14,623
Prior-period tax
adjustments and
settlements (600) - (1,620) -
Severance charges - - - 2,358
Capital gains - - - (3,351)
Aftertax cost of long-term
incentive payout - - 5,437 -
Aftertax cost of lawsuit
settlement 1,897 - 1,897 -
Aftertax cost of debt
registration expenses 727 - 727 -
Aftertax cost of loss on
extinguishment of debt - - 2,030 2,164
-------- -------- -------- --------
Adjusted pro forma income
from continuing operations $ 10,572 $ 5,287 $ 32,760 $ 13,750
======== ======== ======== ========
Earnings/(Loss) Per Share
As Reported
Net income/(loss) $ 1.26 $ (1.33) $ 2.28 $ (0.35)
======== ======== ======== ========
Average number of shares
outstanding 12,497 9,954 12,060 9,924
======== ======== ======== ========
Diluted Earnings/(Loss)
Per Share As Reported
Net income/(loss) $ 1.22 $ (1.32) $ 2.23 $ (0.35)
======== ======== ======== ========
Average number of shares
outstanding 12,836 10,000 12,318 9,954
======== ======== ======== ========
Adjusted Pro Forma Earnings
Per Share
Income from continuing
operations $ 0.85 $ 0.44 $ 2.60 $ 1.15
======== ======== ======== ========
Average number of shares
outstanding 12,497 11,954 12,609 11,924
======== ======== ======== ========
Adjusted Pro Forma Diluted
Earnings Per Share
Income from continuing
operations $ 0.82 $ 0.44 $ 2.55 $ 1.15
======== ======== ======== ========
Average number of shares
outstanding 12,836 12,000 12,867 11,954
======== ======== ======== ========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2004 AND 2003
(unaudited)
(a) For the fourth quarter of 2004, amounts include settlement of a
lawsuit for Roto-Rooter of $3,135,000 ($1,897,000 aftertax),
expenses related to Corporate debt registration of $1,191,000
($727,000 aftertax) and additional VITAS transaction costs and
adjustments of $1,680,000 ($1,008,000 aftertax) for VITAS and
$349,000 ($166,000 aftertax) for Corporate. For the year 2004, all
of the foregoing apply except that the Corporate adjustment to
VITAS transaction costs amounts to an annual net credit of
$1,238,000 ($786,000 aftertax). In addition, the annual amount
includes payouts under the Company's 2002 Executive Long-term
Incentive Plan in the first quarter of 2004 of $7,225,000
($4,455,000 aftertax) for Corporate and $1,558,000 ($982,000
aftertax) for Roto-Rooter. For pro forma financial statements, all
of the foregoing apply except for amounts related to VITAS
transaction expenses and adjustments.
(b) Amount represents the prepayment penalty incurred on the early
extinguishment of the Company's debt ($2,030,000 aftertax) in the
first quarter of 2004. For pro forma financial statements, the
aftertax amount is $2,164,000 for 2003.
(c) Amount includes pretax charges of $3,627,000 ($2,358,000 aftertax)
for severance charges in the first quarter of 2003.
(d) Amount includes a pretax gain of $3,544,000 ($2,151,000 aftertax)
from the sales of investments in the first quarter of 2003 and a
pretax gain of $1,846,000 ($1,200,000 aftertax) from the
redemption of VITAS preferred stock in the third quarter of 2003.
(e) Amounts include favorable prior-period tax adjustments and tax
settlements. For the fourth quarter of 2004, the aftertax benefit
received from these adjustments was $600,000 for Corporate. For
the year 2004, the aftertax benefit received from these
adjustments was $990,000 for Corporate and $630,000 for
Roto-Rooter.
(f) Amount includes the Company's aftertax share of VITAS' charges
related to the Company's acquisition of VITAS in the first quarter
of 2004 prior to the acquisition date. These charges comprise
transaction-related expenses that reduced the Company's equity in
the earnings/(loss) of VITAS by $4,621,000 during 2004.
(g) The pro forma statement of operations for 2004 assumes the
Company's acquisition of VITAS and its financing (including the
retirement of existing debt) were completed as of January 1, 2004,
on the same terms and conditions as completed on February 24,
2004.
(h) The pro forma statement of operations for 2003 assumes the
Company's acquisition of VITAS and its financing (including the
retirement of existing debt) were completed as of January 1, 2003,
on the same terms and conditions as completed on February 24,
2004.
(i) Pro forma amounts for VITAS and Corporate assume the acquisition
of VITAS and the related financing were both completed on
January 1 of the respective years.
(j) 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 fourth quarters of 2004 and 2003, GAAP advertising
expense for Roto-Rooter totaled $6,417,000 and $6,859,000,
respectively. If the expense of the telephone directories were
spread over the periods they are in circulation, advertising
expense for the fourth quarters of 2004 and 2003 would total
$4,846,000 and $4,170,000, respectively. For the years 2004 and
2003, GAAP advertising expense for Roto-Rooter totaled $18,587,000
and $16,361,000, respectively. If the expense of the telephone
directories were spread over the periods they are in circulation,
advertising expense for the years 2004 and 2003 would total
$18,059,000 and $15,532,000, respectively.
(k) Amount represents the additional net income VITAS would contribute
assuming the acquisition were completed on January 1 of the
respective years (excluding Chemed management fees).
(l) Amounts represent the additional financing costs, including a loss
on early extinguishment of debt in 2003, that would have been
incurred assuming the financing were completed on January 1 of the
respective years.
(m) Amounts represent the impact of eliminating the Company's prior
investments in VITAS, assuming the acquisition of VITAS were
completed on January 1 of the respective years.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion