Chemed Corporation Reports 2005 First-Quarter Results From Continuing Operations; Consolidated Diluted EPS of $.61; Adjusted Pro Forma Diluted EPS of $.79.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 first quarter ended March 31, 2005, versus the comparable prior-year period, as follows:
-- Operating Results in Accordance with Generally Accepted
Accounting Principles (GAAP)
-- Consolidated Revenue increased 82% to $219 million
-- Diluted EPS from Continuing Operations of $.61
-- Pro Forma Adjusted Consolidated Operating Results (Non GAAP)
-- Adjusted Diluted EPS from Continuing Operations of $.79
-- Adjusted EBITDA from Continuing Operations of $27.0 million
-- VITAS generated record revenue and ADC levels
-- Quarterly Net Patient Revenue of $146 million, up 18%
-- Average Daily Census (ADC) of 9,523, up 18%
-- Net income of $9.4 million, up 67% over prior period
Pro Forma Net Income
-- Pro Forma Adjusted EBITDA (Non GAAP) of $17.6 million, an
increase of 56%
-- Roto-Rooter segment reported increased Revenue, Net Income and
Adjusted EBITDA
-- Revenue of $73 million, an increase of 5%
-- Net Income of $7.1 million
-- Adjusted EBITDA (Non GAAP) of $11.8 million, an increase of
12%
"The first quarter of 2005 operating results are consistent with the momentum we developed in the prior year," stated Kevin McNamara Kevin McNamara may refer to:
(2) (Apple Display Connector) A peripheral connector from Apple that combines digital video display, USB and power in one cable. totaling 9,523, up 18%, and admissions in the quarter of 12,948, an increase of 6% over the prior year quarter and 12% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . Our average length-of-stay for discharges (ALOS) was 66.2 days. During the quarter, we completed the Pittsburgh Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. acquisition and currently have nine programs classified as new starts in various stages of development. "Roto-Rooter also had good financial operating results. For the first quarter of 2005, Roto-Rooter had revenue of $73 million and net income of $7.1 million. Adjusted 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 was $11.8 million at a margin of 16.2%." "The first quarter of 2005 includes several items that should be taken into consideration when evaluating our operating results," said David Williams David Williams is the name of: Musicians
Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of Chemed's $110 million floating rate notes, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). the Company's credit agreements, a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. adjustment to casualty insurance accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. related to prior years' experience, long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. incentive payment (LTIP LTIP Long Term Incentive Plan LTIP Laughing Till I Puke LTIP Local Transportation Improvement Program LTIP Long Term Instrument Plan LTIP Long Term Infrastructure Program LTIP Long Term Independent Project ) compensation and a noncash charge Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. related to accelerating the vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of stock options." 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , only a portion of VITAS' operating results is fully 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: into Chemed's first quarter 2004 results. In the first quarter of 2005, VITAS had net patient revenue of $146 million and net income of $9.4 million. Adjusted EBITDA was $17.6 million at a margin of 12.1%. VITAS generated revenue growth of 17.8% over the prior year period and 2.6% sequentially. Gross margins were 21.1% in the first quarter of 2005, an improvement of 120 basis points when compared to the prior year quarter. The first quarter 2005 gross margin includes $1.2 million in start-up Start-up The earliest stage of a new business venture. losses, which is essentially flat with the losses from programs classified as new starts in the prior year period. Central support costs for VITAS, which are classified as selling, general and administrative expenses in the Statement of Operations See Income statement. , totaled $13.1 million, which is a decline of 1.4% from the prior year quarter and up 91 basis points sequentially. VITAS' ADC in the first quarter of 2005 was 9,523. This compares to an ADC of 8,097 in the comparable prior year period, an increase of 17.6% and 4.3% sequential One after the other in some consecutive order such as by name or number. growth. The month of March 2005 had an ADC of 9,667. ALOS for patients discharged DISCHARGED. Released, or liberated from custody. It is not equivalent to acquitted in a declaration for a malicious prosecution. 2 Yeates, 475 2 Term Rep. 231; 1 Strange, 114; Doug. 205 3 Leon. 100. in the quarter was 66.2 days and compares to 64.1 days in the fourth quarter of 2004 and 55.7 days in the first quarter of 2004. ALOS is calculated from the patients discharged in the period. Only one of our programs has an ALOS that exceeds 100 days and this program maintains a current cap cushion Cushion In the context of project financing, the extra amount of net cash flow remaining after expected debt service. cushion See call protection. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 12%. "We continue to see strong ADC and admissions growth," said Williams. "The ADC in our 24 base programs, which excludes acquisitions and new starts, averaged 377 patients per program. ADC growth in these established programs was 11.9% over the prior year quarter and 1.2% sequentially. Admissions for the established programs totaled 12,252, which was an increase of 0.5% over the prior year quarter and 10.4% sequentially. "Our mix of revenue at VITAS was relatively stable this quarter," Williams added. "Routine home care aggregated 69.1% of revenue, an increase of 220 basis points over the prior year quarter and a 30 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 14.3% of total revenue and continuous care was 16.6% of revenue in the first quarter of 2005." Roto-Rooter Segment Roto-Rooter's plumbing and drain cleaning business generated sales of $73 million for the first quarter of 2005, 4.9% higher than the $69 million reported in the comparable prior-year quarter. Net income for the quarter was $7.1 million, including $1.0 million of aftertax benefit from favorable experience and adjustments in estimated insurance accruals for claims incurred in prior periods. Adjusted EBITDA in the first quarter of 2005 totaled $11.8 million, an increase of 12.4% over the first quarter of 2004. Adjusted EBITDA margin in the first quarter of 2005 was 16.2% and compares to Adjusted EBITDA margin of 15.2% in the prior year period. "Job count in aggregate declined a modest 1.0% from the prior-year period," stated Williams. "However, commercial plumbing and drain cleaning job count increased 7.4% and 2.3%, respectively, over the prior year quarter. Residential plumbing jobs increased 3.1% but were offset by a 5.2% decline in residential drain cleaning jobs in the quarter. A commercial job will typically average approximately 34% more revenue than a residential job. Accordingly, this type of demand mix shift will have a positive impact on revenue." Consolidated Financial Position "Our balance sheet is in excellent condition," Williams stated. "As of March 31, 2005, we had $8.6 million in cash and cash equivalents. This cash balance is net of the approximately $55 million used to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. the floating rate notes. In addition, the first quarter of 2005 ended on a Thursday Thursday: see week. , one day prior to receiving our scheduled 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. billing payment. This payment, received on April 1, 2005, totaled $19.6 million. Net cash provided 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 was $5.0 million and capital expenditures totaled $6.2 million in the first quarter of 2005." 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 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. Our consolidated effective tax rate was unusually high in the first quarter of 2005 due to the earnings mix and state and local tax impact of the unusual items noted earlier. The 2005 consolidated full year 2005 income tax rate is estimated to be 39.5% to 40.0%. "Based upon these factors, and a current 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. share count of 13.0 million, our expectation is that earnings per diluted share for 2005, excluding the early extinguishment of debt and other items noted earlier, will be in the range of $3.40 to $3.50." Conference Call Chemed will hold a conference call to discuss first quarter results Wednesday Wednesday: see week. , May 4, 2005, at 11 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . The dial-in number for the conference call is 800-510-9834 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 617-614-3669 for international participants. The participant Participant A party of a funding. It usually refers to the lowest rank or smallest level of funding. passcode is 41187439. 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 Q1 2005 Chemed Corporation 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 888-286-8010 for U.S. and Canadian callers and 617-801-6888 for international callers. The replay passcode is 87752802. 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 9,500 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 EBITDA and Adjusted EBITDA, which are not measures derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. 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 , and which excludes components that are important to understanding Chemed's financial performance. Chemed provides EBITDA and 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 EBITDA and 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 or 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 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 AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)(unaudited)
Three Months Ended March 31,
-----------------------------
2005 2004 (bb)
------------- -------------
Continuing Operations
Service revenues and sales $ 218,637 $ 120,340
------------- -------------
Cost of services provided and
goods sold (aa) 152,952 78,849
Selling, general and
administrative expenses 36,595 28,212
Depreciation 3,920 3,061
Amortization 1,192 461
Other expenses (aa) 1,324 8,783
------------- -------------
Total costs and expenses 195,983 119,366
------------- -------------
Income from operations 22,654 974
Interest expense (5,835) (2,900)
Loss on extinguishment of
debt (aa) (3,971) (3,330)
Other income--net 727 1,479
------------- -------------
Income/(loss) before income
taxes 13,575 (3,777)
Income taxes (5,670) 626
Equity in loss of affiliate (aa) - (4,105)
------------- -------------
Income/(loss) from continuing
operations 7,905 (7,256)
Discontinued Operations (bb) 211 146
------------- -------------
Net Income/(Loss) $ 8,116 $ (7,110)
============= =============
Earnings/(Loss) Per Share (aa)
Income/(loss) from continuing
operations $ 0.63 $ (0.66)
============= =============
Net income/(loss) $ 0.65 $ (0.65)
============= =============
Average number of shares
outstanding 12,576 10,912
============= =============
Diluted Earnings/(Loss) Per Share
(aa)
Income/(loss) from continuing
operations $ 0.61 $ (0.66)
============= =============
Net income/(loss) $ 0.63 $ (0.65)
============= =============
Average number of shares
outstanding 12,955 10,912
============= =============
---------------------------------------
(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):
Three Months Ended March 31,
-----------------------------
2005 2004
------------- -------------
Cost of services provided and
goods sold
Favorable adjustment to
casualty insurance accruals
related to prior years'
experience $ 1,663 $ -
Other expenses
Long-term incentive
compensation (1,109) (8,783)
Cost of accelerating vesting
of stock options (215) -
Loss on extinguishment of debt (3,971) (3,330)
------------- -------------
Pretax impact on earnings (3,632) (12,113)
Income tax benefit on the above 1,291 4,226
Equity in loss of affiliate
attributable to transaction-
related expenses incurred by
VITAS prior to its acquisition
by Chemed - (4,105)
------------- -------------
Aftertax impact on earnings $ (2,341) $ (11,992)
============= =============
Impact on earnings per share $ (0.19) $ (1.10)
============= =============
Impact on diluted earnings per
share $ (0.18) $ (1.10)
============= =============
(bb) Results of operations for 2004 have been restated for
operations discontinued in December 2004. Discontinued
operations for both periods comprise solely the results of
operations of the Service America segment.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(in thousands, except per share data)(unaudited)
March 31,
-----------------------
2005 2004 (cc)
----------- -----------
Assets
Current assets
Cash and cash equivalents $ 8,557 $ 43,036
Accounts receivable less allowances 81,880 65,446
Inventories 7,012 6,031
Current deferred income taxes 33,559 26,103
Prepaid income taxes - 12,756
Current assets of discontinued operations 15,162 15,608
Prepaid expenses and other current assets 8,461 16,008
----------- -----------
Total current assets 154,631 184,988
Investments of deferred compensation plans
held in trust 19,415 18,904
Other investments 1,445 1,445
Note receivable 12,500 12,500
Properties and equipment, at cost less
accumulated depreciation 58,172 52,275
Identifiable intangible assets less
accumulated amortization 75,904 25,235
Goodwill 436,820 452,705
Noncurrent assets of discontinued operations 5,717 10,688
Other assets 22,519 31,217
----------- -----------
Total Assets $ 787,123 $ 789,957
=========== ===========
Liabilities
Current liabilities
Accounts payable $ 40,470 $ 38,317
Current portion of long-term debt 1,277 5,634
Income taxes 16,529 3,660
Accrued insurance 26,087 18,154
Accrued salaries and wages 22,656 18,344
Current liabilities of discontinued
operations 21,929 20,637
Other current liabilities 32,253 38,688
----------- -----------
Total current liabilities 161,201 143,434
Deferred income taxes 17,395 1,258
Convertible junior subordinated debentures - 14,001
Other long-term debt 234,738 315,800
Deferred compensation liabilities 19,357 19,121
Noncurrent liabilities of discontinued
operations 802 615
Other liabilities 8,062 9,069
----------- -----------
Total Liabilities 441,555 503,298
----------- -----------
Stockholders' Equity
Capital stock 13,662 13,056
Paid-in capital 222,062 195,609
Retained earnings 148,141 111,428
Treasury stock, at cost (36,241) (32,741)
Unearned compensation (3,836) (2,480)
Deferred compensation payable in Company
stock 2,318 2,324
Notes receivable for shares sold (538) (537)
----------- -----------
Total Stockholders' Equity 345,568 286,659
----------- -----------
Total Liabilities and Stockholders'
Equity $ 787,123 $ 789,957
=========== ===========
Book Value Per Share $ 27.32 $ 23.58
=========== ===========
(cc) Reclassified for operations discontinued in 2004.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)(unaudited)
Three Months Ended
March 31,
------------------------
2005 2004 (cc)
----------- -----------
Cash Flows from Operating Activities
Net income/(loss) $ 8,116 $ (7,110)
Adjustments to reconcile net income/(loss)
to net cash provided/(used) by operating
activities:
Depreciation and amortization 5,112 3,522
Write-off of unamortized debt issuance
costs 2,871 -
Provision for deferred income taxes (1,892) (1,341)
Provision for uncollectible accounts
receivable 1,530 883
Noncash long-term incentive
compensation 948 5,808
Amortization of debt issuance costs 522 -
Discontinued operations (211) (146)
Equity in loss of affiliate - 4,105
Changes in operating assets and
liabilities, excluding amounts
acquired in business combinations:
Increase in accounts receivable (18,747) (4,170)
Decrease/(increase) in inventories 7 (20)
Decrease in prepaid expenses and
other current assets 1,381 7,250
Decrease in accounts payable and
other current liabilities (1,785) (20,550)
Increase in income taxes 7,484 848
Decrease/(increase) in other assets (882) 358
Increase in other liabilities 635 1,317
Noncash expense of internally financed
ESOPs 286 474
Other uses (419) (991)
----------- -----------
Net cash provided/(used) by
continuing operations 4,956 (9,763)
Net cash provided/(used) by
discontinued operations (1,081) 1,330
----------- -----------
Net cash provided/(used) by operating
activities 3,875 (8,433)
----------- -----------
Cash Flows from Investing Activities
Capital expenditures (6,201) (1,653)
Business combinations, net of cash acquired (4,401) (324,075)
Net uses from discontinued operations (817) (448)
Proceeds from sales of property and
equipment 36 166
Return of merger deposit - 10,000
Other uses (136) (105)
----------- -----------
Net cash used by investing activities (11,519) (316,115)
----------- -----------
Cash Flows from Financing Activities
Repayment of long-term debt (140,680) (92,178)
Proceeds from issuance of long-term debt 85,000 295,000
Issuance of capital stock, net of costs 4,208 97,234
Debt issuance costs (1,555) (13,095)
Dividends paid (1,517) (1,209)
Purchases of treasury stock (833) (2,202)
Net increase in revolving line of credit - 25,000
Repayment of stock subscription note
receivable - 8,053
Other sources 130 293
----------- -----------
Net cash provided/(used) by financing
activities (55,247) 316,896
----------- -----------
Decrease in Cash and Cash Equivalents (62,891) (7,652)
Cash and cash equivalents at beginning of
year 71,448 50,688
----------- -----------
Cash and cash equivalents at end of period $ 8,557 $ 43,036
=========== ===========
(cc) Reclassified for operations discontinued in December 2004.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(in thousands)(unaudited)
Chemed
Roto- Consol-
VITAS Rooter Corporate idated
--------- --------- --------- ---------
2005
------------------------
Service revenues and
sales $145,990 $ 72,647 $ - $218,637
--------- --------- --------- ---------
Cost of services
provided and goods
sold 115,220 37,732 (a) - 152,952
Selling, general and
administrative
expenses 13,124 21,150 2,321 36,595
Depreciation 1,785 2,062 73 3,920
Amortization 995 26 171 1,192
Other expenses 293 (b) 248 (b) 783 (b) 1,324
--------- --------- --------- ---------
Total costs and
expenses 131,417 61,218 3,348 195,983
--------- --------- --------- ---------
Income/(loss) from
operations 14,573 11,429 (3,348) 22,654
Interest expense (38) (182) (5,615) (5,835)
Intercompany interest
income/(expense) 509 424 (933) -
Loss on extinguishment
of debt - - (3,971)(c) (3,971)
Other income--net 108 296 323 727
--------- --------- --------- ---------
Income/(loss) before
income taxes 15,152 11,967 (13,544) 13,575
Income taxes (5,783) (4,822) 4,935 (5,670)
--------- --------- --------- ---------
Income/(loss) from
continuing operations 9,369 7,145 (8,609) 7,905
Discontinued operations - - 211 211
--------- --------- --------- ---------
Net income/(loss) $ 9,369 $ 7,145 $ (8,398) $ 8,116
========= ========= ========= =========
2004
------------------------
Service revenues and
sales $ 51,112 $ 69,228 $ - $120,340
--------- --------- --------- ---------
Cost of services
provided and goods
sold 40,486 38,363 - 78,849
Selling, general and
administrative
expenses 4,989 20,947 2,276 28,212
Depreciation 748 2,246 67 3,061
Amortization 402 59 - 461
Other expenses - 1,558 (b) 7,225 (b) 8,783
--------- --------- --------- ---------
Total costs and
expenses 46,625 63,173 9,568 119,366
--------- --------- --------- ---------
Income/(loss) from
operations 4,487 6,055 (9,568) 974
Interest expense (28) (26) (2,846) (2,900)
Intercompany interest
income/(expense) - 184 (184) -
Loss on extinguishment
of debt - - (3,330)(c) (3,330)
Other income--net 31 818 630 1,479
--------- --------- --------- ---------
Income/(loss) before
income taxes 4,490 7,031 (15,298) (3,777)
Income taxes (1,893) (2,794) 5,313 626
Equity in loss of VITAS - - (4,105)(d) (4,105)
--------- --------- --------- ---------
Income/(loss) from
continuing operations 2,597 4,237 (14,090) (7,256)
Discontinued operations - - 146 146
--------- --------- --------- ---------
Net income/(loss) $ 2,597 $ 4,237 $(13,944) $ (7,110)
========= ========= ========= =========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
PRO FORMA CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(in thousands, except per share data) (unaudited)
Chemed
Roto- Consol-
VITAS Rooter Corporate idated
--------- --------- --------- ---------
2005
------------------------
Service revenues and
sales $145,990 $ 72,647 $ - $218,637
--------- --------- --------- ---------
Cost of services
provided and goods
sold 115,220 37,732 (a) - 152,952
Selling, general and
administrative
expenses 13,124 21,150 2,321 36,595
Depreciation 1,785 2,062 73 3,920
Amortization 995 26 171 1,192
Other expenses 293 (b) 248 (b) 783 (b) 1,324
--------- --------- --------- ---------
Total costs and
expenses 131,417 61,218 3,348 195,983
--------- --------- --------- ---------
Income/(loss) from
operations 14,573 11,429 (3,348) 22,654
Interest expense (38) (182) (5,615) (5,835)
Intercompany interest
income/(expense) 509 424 (933) -
Loss on extinguishment
of debt - - (3,971)(c) (3,971)
Other income--net 108 296 323 727
--------- --------- --------- ---------
Income/(loss) before
income taxes 15,152 11,967 (13,544) 13,575
Income taxes (5,783) (4,822) 4,935 (5,670)
--------- --------- --------- ---------
Income/(loss) from
continuing operations 9,369 7,145 (8,609) 7,905
Discontinued operations - - 211 211
--------- --------- --------- ---------
Net income/(loss) $ 9,369 $ 7,145 $ (8,398) $ 8,116
========= ========= ========= =========
Earnings Per Share
Continuing operations $ 0.63
=========
Net income $ 0.65
=========
Average number of
shares outstanding 12,576
=========
Diluted Earnings Per
Share
Continuing operations $ 0.61
=========
Net income $ 0.63
=========
Average number of
shares outstanding 12,955
=========
2004 (e)
------------------------
Service revenues and
sales $123,982 $ 69,228 $ - $193,210
--------- --------- --------- ---------
Cost of services
provided and goods
sold 99,334 38,363 - 137,697
Selling, general and
administrative
expenses 13,314 20,947 2,137 36,398
Depreciation 982 2,246 67 3,295
Amortization 1,095 59 - 1,154
Other expenses - 1,558 (b) 7,225 (b) 8,783
--------- --------- --------- ---------
Total costs and
expenses 114,725 63,173 9,429 187,327
--------- --------- --------- ---------
Income/(loss) from
operations 9,257 6,055 (9,429) 5,883
Interest expense (28) (26) (6,248) (6,302)
Intercompany interest
income/(expense) - 184 (184) -
Loss on extinguishment
of debt - - (3,330)(c) (3,330)
Other income--net 72 818 630 1,520
--------- --------- --------- ---------
Income/(loss) before
income taxes 9,301 7,031 (18,561) (2,229)
Income taxes (3,701) (2,794) 6,447 (48)
--------- --------- --------- ---------
Income/(loss) from
continuing operations 5,600 4,237 (12,114) (2,277)
Discontinued operations - - 146 146
--------- --------- --------- ---------
Net income/(loss) $ 5,600 $ 4,237 $(11,968) $ (2,131)
========= ========= ========= =========
Earnings/(Loss) Per
Share
Continuing operations $ (0.19)
=========
Net income $ (0.18)
=========
Average number of
shares outstanding 12,099
=========
Diluted Earnings/(Loss)
Per Share
Continuing operations $ (0.19)
=========
Net income $ (0.18)
=========
Average number of
shares outstanding 12,099
=========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARY OF EBITDA
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(in thousands)(unaudited)
Chemed
Roto- Consol-
VITAS Rooter Corporate idated
----------- ----------- ----------- -----------
2005
----------------------
Net income/(loss) $ 9,369 $ 7,145 $ (8,398) $ 8,116
Add/(deduct):
Discontinued
operations - - (211) (211)
Interest expense 38 182 5,615 5,835
Income taxes 5,783 4,822 (4,935) 5,670
Depreciation 1,785 2,062 73 3,920
Amortization 995 26 171 1,192
------------ ----------- ----------- -----------
EBITDA 17,970 14,237 (7,685) 24,522
Add/(deduct):
Long-term
incentive
compensation (k) 293 248 783 1,324
Prior-period
insurance
adjustment - (1,663) - (1,663)
Advertising cost
adjustment (g) - (553) - (553)
Interest income (126) (41) (483) (650)
Intercompany
interest
income/(expense) (509) (424) 933 -
Loss on
extinguishment
of debt - - 3,971 3,971
------------ ----------- ----------- -----------
Adjusted EBITDA $ 17,628 $ 11,804 $ (2,481) $ 26,951
============ =========== =========== ===========
2004
----------------------
Net income/(loss) $ 2,597 $ 4,237 $ (13,944) $ (7,110)
Add/(deduct):
Discontinued
operations - - (146) (146)
Interest expense 28 26 2,846 2,900
Income taxes 1,893 2,794 (5,313) (626)
Depreciation 748 2,246 67 3,061
Amortization 402 59 - 461
------------ ----------- ----------- -----------
EBITDA 5,668 9,362 (16,490) (1,460)
Add/(deduct):
Long-term
incentive
compensation - 1,558 7,225 8,783
Advertising cost
adjustment (g) - (193) - (193)
Interest income (31) (38) (439) (508)
Intercompany
interest
income/(expense) - (184) 184 -
Equity in loss of
VITAS - - 4,105 4,105
Loss on
extinguishment
of debt - - 3,330 3,330
------------ ----------- ----------- -----------
Adjusted EBITDA $ 5,637 $ 10,505 $ (2,085) $ 14,057
============ =========== =========== ===========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
PRO FORMA CONSOLIDATING SUMMARY OF EBITDA
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(in thousands)(unaudited)
Chemed
Roto- Corporate Consol-
VITAS (f) Rooter (f) idated
----------- ----------- ----------- -----------
2005
----------------------
Net income/(loss) $ 9,369 $ 7,145 $ (8,398) $ 8,116
Add/(deduct):
Discontinued
operations - - (211) (211)
Interest expense 38 182 5,615 5,835
Income taxes 5,783 4,822 (4,935) 5,670
Depreciation 1,785 2,062 73 3,920
Amortization 995 26 171 1,192
------------ ----------- ----------- -----------
EBITDA 17,970 14,237 (7,685) 24,522
Add/(deduct):
Long-term
incentive
compensation (k) 293 248 783 1,324
Prior-period
insurance
adjustment - (1,663) - (1,663)
Advertising cost
adjustment (g) - (553) - (553)
Interest income (126) (41) (483) (650)
Intercompany
interest
income/(expense) (509) (424) 933 -
Loss on
extinguishment
of debt - - 3,971 3,971
------------ ----------- ----------- -----------
Adjusted EBITDA $ 17,628 $ 11,804 $ (2,481) $ 26,951
============ =========== =========== ===========
2004
----------------------
Pro forma net
income/(loss) $ 5,600 $ 4,237 $ (11,968) $ (2,131)
Add/(deduct):
Discontinued
operations - - (146) (146)
Interest expense 28 26 6,248 6,302
Income taxes 3,701 2,794 (6,447) 48
Depreciation 982 2,246 67 3,295
Amortization 1,095 59 - 1,154
------------ ----------- ----------- -----------
Pro forma
EBITDA 11,406 9,362 (12,246) 8,522
Add/(deduct):
Long-term
incentive
compensation - 1,558 7,225 8,783
Advertising cost
adjustment (g) - (193) - (193)
Interest income (72) (38) (439) (549)
Intercompany
interest
income/(expense) - (184) 184 -
Loss on
extinguishment
of debt - - 3,330 3,330
------------ ----------- ----------- -----------
Pro forma
adjusted
EBITDA $ 11,334 $ 10,505 $ (1,946) $ 19,893
============ =========== =========== ===========
The "Footnotes to Financial Statements" are integral parts of this
financial information.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF PRO FORMA ADJUSTED NET INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(in thousands, except per share data)(unaudited)
Three Months Ended
March 31,
------------------------
2005 2004
----------- -----------
Net income/(loss) as reported $ 8,116 $ (7,110)
Add/(deduct):
Pro forma VITAS net income contribution
for the period (h) - 3,085
Pro forma financing costs related to
acquisition of VITAS (i) - (2,211)
Pro forma elimination of equity in loss
of VITAS (j) - 4,105
----------- -----------
Pro forma net income/(loss) 8,116 (2,131)
Add/(deduct):
Discontinued operations (211) (146)
Aftertax prior-period insurance
adjustment (1,014) -
Aftertax cost of long-term incentive
compensation (k) 832 5,723
Aftertax cost of loss on extinguishment
of debt 2,523 2,164
----------- -----------
Adjusted pro forma income from continuing
operations $ 10,246 $ 5,610
=========== ===========
Earnings/(Loss) Per Share As Reported
Net income/(loss) $ 0.65 $ (0.65)
=========== ===========
Average number of shares outstanding 12,576 10,912
=========== ===========
Diluted Earnings/(Loss) Per Share As Reported
Net income/(loss) $ 0.63 $ (0.65)
=========== ===========
Average number of shares outstanding 12,955 10,912
=========== ===========
Adjusted Pro Forma Earnings Per Share
Income from continuing operations $ 0.81 $ 0.46
=========== ===========
Average number of shares outstanding 12,576 12,099
=========== ===========
Adjusted Pro Forma Diluted Earnings Per Share
Income from continuing operations $ 0.79 $ 0.46
=========== ===========
Average number of shares outstanding 12,955 12,099
=========== ===========
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, 2005 AND 2004
(unaudited)
(a) Amount includes a favorable adjustment to casualty insurance
accruals related to prior quarters' experience of $1,663,000
($1,014,000 aftertax).
(b) For the first quarter of 2005, amounts include payouts under the
Company's Executive Long-Term Incentive Plan of $568,000 ($360,000
aftertax) for Corporate, $293,000 ($182,000 aftertax) for VITAS
and $248,000 ($153,000 aftertax) for Roto-Rooter. In addition, the
amount for Corporate includes $215,000 ($137,000 aftertax) related
to accelerating the vesting of stock options. For the first
quarter of 2004, amounts include payouts under the Company's
Executive Long-Term Incentive Plan 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.
(c) For the first quarter of 2005, amount represents the prepayment
penalty and write-off of debt issuance costs related to the early
extinguishment and refinancing of certain portions of the
Company's debt ($2,523,000 aftertax). For the first quarter of
2004, amount represents the prepayment penalty incurred on the
early extinguishment of the Company's debt ($2,164,000 aftertax).
(d) 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 the first
quarter of 2004.
(e) 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.
(f) Pro forma amounts for VITAS and Corporate assume the acquisition
of VITAS and the related financing were both completed on January
1, 2004.
(g) 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 first quarters of 2005 and 2004, GAAP advertising
expense for Roto-Rooter totaled $3,251,000 and $3,375,000,
respectively. If the expense of the telephone directories were
spread over the periods they are in circulation, advertising
expense for the first quarters of 2005 and 2004 would total
$3,804,000 and $3,568,000, respectively.
(h) 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).
(i) 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.
(j) 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.
(k) For the first quarter of 2005, amount includes costs related to
accelerating the vesting of stock options in addition to payouts
under the Company's Executive Long-Term Incentive Plan.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion