Chemed First-Quarter Earnings Per Share Rise 27 Percent on Impressive Roto-Rooter Performance.Business Editors CINCINNATI--(BUSINESS WIRE)--April 20, 2000 Chemed Corporation (NYSE NYSE See: New York Stock Exchange :CHE) today reported that, for the first quarter, ended March 31, 2000, income before capital gains -- Chemed's core operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before -- increased 27 percent from $.33 per share, or $3.4 million, in the 1999 quarter to $.42 per share, or $4.2 million, in 2000. Earnings before capital gains, interest, taxes, depreciation, and amortization (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 ) for the first quarter increased to $14.3 million, 21 percent above the first quarter of 1999. Chemed's service revenues and sales for the 2000 first quarter accelerated by 15 percent to $121.5 million from $105.7 million in 1999. Including capital gains on sales of investments of $677,000, or $.07 per share, net income reached $.49 per share, or $4.9 million, in the 2000 first quarter. Discussing the highlights for the quarter, Chemed Chairman and Chief Executive Officer Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide L. Hutton Hut·ton , James 1726-97. Scottish physician and geologist whose ideas, presented in A Theory of the Earth (1785), form the basis of modern geology. Noun 1. said, "Chemed's largest subsidiary, 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. Inc., continued its dynamic performance, with net income rising 46 percent on revenue growth of 20 percent. Roto-Rooter revenues reached $67.7 million in the quarter, and its operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: expanded, leveraged by field and office expenses that have grown at a slower rate than revenue. With its increasing presence in the 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 market and home owners' preference for service from nationally known firms like Roto-Rooter, its opportunity for further growth remains excellent. "During the first quarter, Roto-Rooter completed two acquisitions, as we previously announced. Even excluding the acquisitions made in 1999 and 2000, net income, operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. , and revenues grew on a unit-for-unit basis by 44 percent, 41 percent, and 15 percent, respectively. Roto-Rooter expects to complete additional franchise repurchases as the year unfolds. "Roto-Rooter's company-owned locations experienced excellent growth in both drain cleaning and plumbing service revenues. Drain cleaning revenues jumped by 23 percent over the first quarter of 1999, and plumbing revenues grew by 17 percent. Further driving Roto-Rooter's results was outstanding growth in revenues and profits across all categories of Roto-Rooter's manufactured equipment, accessories, cable, and drain care product lines. Revenues and profits from the sales of international franchises also contributed to Roto-Rooter's strong performance. Roto-Rooter's foreign presence is expanding, with operations in Canada and franchise programs in Japan; the Philippines; Australia; the United Kingdom; China, including Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. ; and Indonesia, including Singapore." Commenting on Chemed's other major subsidiaries, Mr. Hutton continued, "Service America, our heating and air-conditioning service subsidiary, is a well-known brand in its Florida and Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). market areas and delivers high-quality maintenance, repair, and replacement services to its customers. Results were hampered by a difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. in the first quarter in Service America's service contract business. Service America is making great strides, however, in building its retail sales and service business and is poised to take advantage of the growing demand for its services in the future. "Patient Care, too, is a well-run company offering much-needed and in-demand home-healthcare services more efficiently than many of its competitors. Despite modest revenue growth, results for the first quarter were below prior year. Well-known for providing high-quality care cost-effectively, Patient Care remains in the forefront as a preferred provider among patients, families, healthcare professionals, and insurers alike." In summary, Mr. Hutton said, "Chemed's strategy to provide essential services to home owners home owner home n → propriétaire occupant and businesses, individuals and families continues to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the high brand recognition of Roto-Rooter. Through improved compensation and benefit programs, Roto-Rooter has been successful in attracting and training an excellent service force, which is necessary to meet the burgeoning demand for plumbing services. Service technician See PC technician and software technician. staffing on a unit-for-unit basis grew 4.4 percent in the first quarter alone over year-end 1999. "In March 2000, Chemed paid a quarterly dividend of $.10 per share. While reduced from its previously high level, this dividend represents the 115th consecutive quarterly dividend paid to Chemed shareholders. Also in March, the Board of Directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: an increase of $10 million for Chemed's stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program, further confirming its confidence in the outlook for Chemed. "We are pleased with Chemed's excellent financial results in the first quarter, which we achieved despite the challenges at Service America and Patient Care. Chemed's balance sheet is very healthy, and we stand prepared to take full advantage of opportunities that will benefit Chemed's shareholders. We look to the future with enthusiasm." Chemed Corporation (www.chemed.com), headquartered in Cincinnati, is a New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Stock Exchange-listed corporation with strategic positions in plumbing and drain cleaning; residential appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. and air-conditioning repair; and home healthcare services.
Chemed Corporation and Subsidiary Companies
Comparative Results (Unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
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2000 1999
-------- --------
Service Revenues and Sales $121,534 $105,735
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Income from Operations $ 7,539 $ 5,792
Interest Expense (1,782) (1,594)
Distributions on Preferred Securities (288) -
Other Income-Net 2,396(a) 4,609(b)
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Income before Income Taxes 7,865(a) 8,807(b)
Income Taxes (2,963) (3,452)
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Net Income $ 4,902(a) $ 5,355(b)
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Earnings Per Share
Income before Capital Gains $ .42 $ .33
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Net Income $ .49(a) $ .51(b)
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Average Number of Shares Outstanding 10,064 10,471
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Diluted Earnings Per Share
Income before Capital Gains $ .42 $ .33
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Net Income $ .48(a) $ .51(b)
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Average Number of Shares Outstanding 10,171 10,516
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(a) Amount includes pretax gains aggregating $951,000 ($677,000
aftertax or $.07 per share) from the sales of investments in the first
quarter of 2000.
(b) Amount includes pretax gains aggregating $3,068,000 ($1,934,000
aftertax or $.18 per share) from the sales of investments in the first
quarter of 1999.
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