Chemed Reports 31 Percent Increase in Second-Quarter Earnings Per Share; Roto-Rooter Earnings Up 47 Percent.Business Editors CINCINNATI--(BUSINESS WIRE)--July 20, 2000 Chemed Corporation (NYSE NYSE See: New York Stock Exchange :CHE) today reported that, for the second quarter, ended June June: see month. 30, 2000, income before capital gains--Chemed's core operating earnings--increased 31 percent from $.39 per share in the 1999 second quarter to $.51 per share in 2000. Including capital gains on sales of investments of $.11 per share, net income reached $.62 in the 2000 second quarter, 27 percent ahead of the 1999 second quarter's net income of $.49 per share, which included $.10 per share of capital gains. 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 second quarter increased to $15.8 million, 22 percent above the second quarter of 1999. Chemed's service revenues and sales for the 2000 second quarter grew 12 percent to $125.2 million from $111.4 million in 1999. 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, "We are pleased to report the sixth consecutive quarter that Chemed has achieved core earnings growth exceeding 25 percent, led by another outstanding performance by our 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. "In the second quarter, Roto-Rooter achieved a 47 percent increase in net income on revenue growth of 19 percent, both as compared with the prior-year second quarter. Roto-Rooter revenues reached $69.8 million in the quarter, with net income reaching $4.9 million. This impressive increase in net income was driven by expanding operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: which continued to benefit from the leverage provided by lower field and office expenses as compared with revenue growth. "Excluding acquisitions made in 1999 and 2000, Roto-Rooter's 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 for the second quarter grew on a unit-for-unit basis by 46 percent, 57 percent, and 14 percent, respectively. "Roto-Rooter's company-owned locations again achieved excellent growth in both drain cleaning and 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 service revenues. Drain cleaning revenues jumped by 24 percent over the second quarter of 1999, and plumbing revenues grew by 17 percent. Roto-Rooter's product sales for the second quarter also contributed to overall results, increasing by 17 percent, with drain care product sales leading A sales lead is the identity of a person or entity potentially interested in purchasing a product or service, and represents the first stage of a sales process. The lead may have a corporation or business associated with the person(s). the way. Income from the product sales and international franchise portions of Roto-Rooter's business grew by 24 percent. Roto-Rooter currently has a signed letter of intent for its seventh overseas master franchise." Commenting on Chemed's other major subsidiaries, Mr. Hutton continued, "Service America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. , our heating and air-conditioning air-conditioning Control of temperature, humidity, purity, and motion of air in an enclosed space, independent of outside conditions. In a self-contained air-conditioning unit, air is heated in a boiler unit or cooled by being blown across a refrigerant-filled coil and then service subsidiary, continues to experience increased labor, material, and fuel costs, which primarily affect its service contract business. Service America's profitable retail segment remains strong, with air conditioner conditioner, n 1. an additive substance used to increase the effectiveness of another substance. 2. a substance added to enamel that improves a sealant's ability to adhere. and duct cleaning sales climbing by 36 percent in the second quarter. Service America is centralizing cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. purchasing and various office services to reduce costs, while at the same time aggressively pursuing its 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. goal of growing the retail business to equal the size of the service contract business. "Patient Care Inc., Chemed's home healthcare subsidiary, increased its revenues by 5 percent to $33.7 million in the second quarter, while net income of $549,000 was 44 percent below the 1999 second quarter's results. Patient Care's operating results remain under pressure from a changing 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 Reimbursement Payment made to someone for out-of-pocket expenses has incurred. environment, as well as increasing labor costs. Furthermore, Patient Care is absorbing greater interest expense this year as a result of increased working capital, higher interest rates, and systems automation development costs. A better indication of Patient Care's internal performance, EBITDA were $1.9 million in the 2000 second quarter, down 17 percent from the prior-year second quarter's $2.3 million." For the six months ended June 30, 2000, Chemed's core earnings grew 29 percent to $.93 per share versus $.72 in the first six months of 1999. Net income, including capital gains of $.18 in 2000 and $.28 in 1999, grew 11 percent to $1.11 per share in year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 2000 versus $1.00 in 1999. Service revenues and sales for the year to date increased 14 percent to $246.8 million versus $217.1 million in 1999. In June 2000, Chemed paid a quarterly dividend of $.10 per share, representing the 116th consecutive quarterly dividend paid to Chemed shareholders. In summary, Mr. Hutton said, "Chemed continues to produce excellent financial results. Our managers are doing an exceptional job controlling difficult conditions at Service America and Patient Care, and we expect progress during the year. Roto-Rooter, however, is key to our growth strategy. Chemed's balance sheet remains healthy, and we look for continued strong growth at Roto-Rooter and, thus, for Chemed for the balance of the year." 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 Six Months Ended
June 30, June 30,
-------------------- --------------------
2000 1999 2000 1999
-------- -------- -------- --------
Service Revenues
and Sales $125,218 $111,385 $246,752 $217,120
-------- -------- -------- --------
-------- -------- -------- --------
Income from Operations $ 9,183 $ 6,199 $ 16,722 $ 11,991
Interest Expense (1,787) (1,507) (3,569) (3,101)
Distributions on
Preferred Securities (286) - (574) -
Other Income - Net 2,793(a) 3,735(a) 5,189(b) 8,344(b)
-------- -------- -------- --------
Income before Income
Taxes 9,903(a) 8,427(a) 17,768(b) 17,234(b)
Income Taxes (3,790) (3,313) (6,753) (6,765)
-------- -------- -------- --------
Net Income $ 6,113(a) $ 5,114(a) $ 11,015(b) $ 10,469(b)
-------- -------- -------- --------
-------- -------- -------- --------
Earnings Per Share
Income before
capital gains(c) $ .51 $ .39 $ .93 $ .72
-------- -------- -------- --------
-------- -------- -------- --------
Net income $ .62(a) $ .49(a) $ 1.11(b) $ 1.00(b)
-------- -------- -------- --------
-------- -------- -------- --------
Average Number of
Shares Outstanding 9,797 10,473 9,931 10,473
-------- -------- -------- --------
-------- -------- -------- --------
Diluted Earnings Per
Share
Income before
capital gains(c) $ .50 $ .39 $ .92 $ .71
-------- -------- -------- --------
-------- -------- -------- --------
Net income $ .61(a) $ .49(a) $ 1.10(b) $ 1.00(b)
-------- -------- -------- --------
-------- -------- -------- --------
Average Number of
Shares Outstanding 10,295 10,512 10,353 10,515
-------- -------- -------- --------
-------- -------- -------- --------
(a) Amounts for the second quarter include pretax capital gains of
$1,711,000 ($1,122,000 aftertax or $.11 per share) and $1,593,000
($1,026,000 aftertax or $.10 per share) in 2000 and 1999,
respectively, from the sales of investments.
(b) Amounts for the six-month periods include pretax capital gains of
$2,662,000 ($1,799,000 aftertax or $.18 per share) and $4,661,000
($2,960,000 aftertax or $.28 per share) in 2000 and 1999,
respectively, from the sales of investments.
(c) Amounts exclude investment gains described in notes (a) and (b).
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