Chemed Reports First-Quarter 2007 Results.

* Full-Year 2007 Guidance Increased

* Board Authorizes an Additional $150 Million Share Buy-Back Program

CINCINNATI -- Chemed Corporation (Chemed) (NYSE:CHE), which operates VITAS Healthcare Corporation (VITAS), the nation's largest provider of end-of-life care, and Roto-Rooter, the nation's largest commercial and residential plumbing and drain cleaning services provider, today reported financial results for its first quarter ended March 31, 2007, versus the comparable prior-year period, as follows:

Consolidated operating results from Continuing Operations:

* Revenue increased 10.9% to $270 million

* Diluted EPS from Continuing Operations of $.62

* Adjusted diluted EPS from Continuing Operations of $.73

VITAS segment operating results from Continuing Operations:

* Net Patient Revenue of $184 million, up 10.8%

* Average Daily Census (ADC) of 11,309, up 9.9%

* Admissions of 14,110, an increase of 2.4%

* Average Length of Stay in the quarter of 76.9 days

* Net income of $15.0 million

* Adjusted EBITDA of $26.0 million

Roto-Rooter segment operating results:

* Revenue of $86 million, an increase of 10.9%

* Job count of 211,022, up 1.9%

* Net Income of $9.5 million

* Adjusted EBITDA of $16.3 million

VITAS

VITAS generated a record 14,110 in admissions in the quarter, which represents an increase of 2.4% over the prior year and a 6.2% increase sequentially. ADC in the quarter increased 9.9% to 11,309. VITAS' Average Length of Stay (ALOS) for patients discharged in the quarter was 76.9 days and median length of stay (MLOS) was 13 days. This compares to an ALOS of 75.7 days in the fourth quarter of 2006 and 72.4 days in the first quarter of 2006.

VITAS generated net revenue of $184 million in the first quarter of 2007, which was an increase of 10.8% over the prior-year period. Net income from continuing operations for the first quarter was $15.0 million, an increase of 40%.

VITAS did not record any billing restrictions related to Medicare Cap in the first quarter of 2007. In addition, approximately $472,000 of Medicare billing restrictions recorded in the fourth quarter of 2006 was reversed into revenue in the first quarter of 2007. As of March 31, 2007, VITAS has not accrued any Medicare billing restrictions for the 2007 cap year. The ability to eliminate these Medicare billing restrictions is a result of improved admissions metrics, improved MLOS and the continued combination of various hospice programs that qualify to bill Medicare under a single provider number.

Starting in 2006, VITAS merged several hospice programs and eliminated the corresponding Medicare provider numbers in three states. VITAS is in the process of eliminating one additional Medicare provider number that is not currently in a cap situation. Once completed, all of VITAS' hospice programs will have a cap cushion greater than 10% on a trailing twelve-month basis, with the exception of two programs. These two programs have a cap cushion between 5% and 10%. The same analysis through the first five months of the 2007 cap year results in all of VITAS' Medicare provider numbers having a cap cushion greater than 10% with the exception of one program. This program has a cap cushion between 5% and 10%.

Gross margin in the quarter, excluding the reversal of $472,000 of Medicare Cap, was 22.6%. This compares to 19.5% in the prior-year quarter. The majority of this 310 basis point increase in margin is a result of VITAS managing labor costs to more historical levels. In addition, 80 basis points of this improvement is the result of certain expenses that had been historically charged to cost of services and are now expensed into central support.

Effective October 1, 2006, management realigned certain processes and expenses related to hospice program support such as recruiting and information technology. These processes and related expenses were centralized effective the beginning of the fourth quarter of 2006 and are now incurred and controlled at VITAS corporate and classified as selling, general and administrative expenses. In the first quarter of 2006, approximately $1.3 million of this type of expense was classified as cost of services. These expenses were charged to central support in the first quarter of 2007.

Central support costs for VITAS, which are classified as selling, general and administrative expenses in the Consolidating Statement of Income, totaled $15.9 million, which is an increase of 20.3% over the prior year and a decline of 3.2% sequentially. Adjusting for the reclassification of expenses noted above, first-quarter 2007 central support costs increased 9.4% over the prior year.

Roto-Rooter

Roto-Rooter's plumbing and drain cleaning business generated sales of $86 million for the first quarter of 2007, 11% higher than the $78 million reported in the comparable prior-year quarter. Net income for the quarter was $9.5 million, an increase of 32% over the prior year. Adjusted EBITDA in the first quarter of 2007 totaled $16.3 million, an increase of 28% over the first quarter of 2006 and equated to an adjusted EBITDA margin of 18.9%, an increase of 251 basis points over the prior-year period.

Job count in the first quarter of 2007 increased 1.9% over the prior-year period. Commercial jobs decreased 3.6% and residential jobs increased 4.5%. Commercial plumbing job count increased 0.2% and commercial drain cleaning decreased 4.3% over the prior-year quarter. Residential plumbing jobs increased 14.6% and residential drain cleaning jobs expanded 0.7% when compared to the first quarter of 2006.

Roto-Rooter company-owned and operated territories are divided into four regions. In 2006 all four regions struggled in various areas of commercial business. As of the first quarter of 2007, only one region is struggling commercially. This region accounts for over 100% of the commercial job count decline and is the only region to post a decline in residential job count during the quarter. Management is focused on correcting the issues impacting this region and improving both commercial and residential job count growth.

Guidance for 2007

VITAS is estimated to generate full-year revenue growth from continuing operations, prior to Medicare Cap, of 10% to 12%, increased admissions of 4% to 6%, increased ADC of 8% to 10% and adjusted EBITDA margins, prior to Medicare Cap, of 13.0% to 14.5%. This guidance assumes the hospice industry receives a full Medicare basket price increase of 3.6% in the fourth quarter of 2007. Full-year 2007 Medicare contractual billing limitations are estimated at $3.8 million.

Roto-Rooter is estimated to generate an 8.5% to 9.5% increase in revenue in 2007, job count growth between 0.5% and 1.5% and adjusted EBITDA margin in the range of 18.5% to 19.5%.

On April 4, 2007, Chemed announced the conditional redemption of its $150 million senior notes due February 2011. This redemption is conditioned upon the completion of one or more financing transactions prior to May 4, 2007. We anticipate completing a new Bank Credit Facility to fund this redemption by May 3, 2007. Based upon preliminary terms of this Bank Credit Facility, and assuming the redemption noted above is completed, this refinancing is anticipated to be accretive to 2007 earnings by $.08 per diluted share, or on an annualized basis, $.12 per diluted share. This excludes any related charge associated with the early extinguishment of debt.

The Company has purchased approximately $54 million of Chemed stock since the announcement of its intention to repurchase stock was made in 2006. At March 31, 2007, the remaining share repurchase authorization totaled $13.6 million. Chemed's Board of Directors has increased this stock repurchase authorization an additional $150 million, resulting in $163.6 million authorized for future Chemed stock repurchase.

Based upon these factors, an effective tax rate of 38.5% and an average full-year diluted share count of 25.9 million, our estimate is that full-year 2007 earnings per diluted share from continuing operations, excluding expense for stock options and other long-term incentive compensation, gain on sale of building, early extinguishment of debt or any other charges or credits not indicative of ongoing operations, will be in the range of $2.85 to $3.05.

Conference Call

Chemed will host a conference call and webcast at 11 a.m., EST, on Tuesday, May 1, 2007, to discuss the company's quarterly results and provide an update on its business. The dial-in number for the conference call is [phone] for U.S. and Canadian participants and

[phone] for international participants. The participant passcode is 49815399. A live webcast of the call can be accessed on Chemed's website at www.chemed.com by clicking on Investor Relations Home.

A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. It can be accessed by dialing [phone] for U.S. and Canadian callers and [phone] for international callers and will be available for one week following the live call. The replay passcode is 38128620. An archived webcast will also be available at www.chemed.com and will remain available for 14 days following the live call.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to over 11,000 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing and drain service through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in Indonesia, Singapore, Japan, and the Philippines.

This press release contains information about Chemed's EBITDA and Adjusted EBITDA, which are not measures derived in accordance with generally accepted accounting principles and which exclude 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. 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 

Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed's dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed's most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

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