Chemed Reports First-Quarter Core Earnings of $0.39 versus $0.42 in 2000 First Quarter.

Business Editors

CINCINNATI--(BUSINESS WIRE)--April 18, 2001

Chemed Corporation (NYSE:CHE) (OTCBB:CHEQP) today reported that, for the first quarter, ended March 31, 2001, service revenues and sales reached $123.3 million as compared with $121.5 million in the 2000 first quarter. Earnings before capital gains, interest, taxes, depreciation, and amortization (EBITDA) for the 2001 first quarter amounted to $13.6 million versus $14.3 million the first quarter of 2000.

Income before capital gains -- Chemed's core operating earnings -- was $.39 per share, or $3.8 million, for the 2001 first quarter versus $.42 per share, or $4.2 million, in 2000. Net income of $.46 per share, or $4.5 million, in the first quarter included capital gains on sales of investments of $703,000, or $.07 per share. Likewise, net income of $.49 per share, or $4.9 million, in the year-ago first quarter included capital gains of $677,000, or $.07 per share.

Commenting on the quarter's results, Chemed Chairman and Chief Executive Officer Edward L. Hutton said, "As we expected, the first quarter of 2001 produced difficult comparisons with the prior-year first quarter, which was highlighted by a strong performance by Roto-Rooter Inc., Chemed's largest subsidiary. Two years of exuberant growth at Roto-Rooter have plateaued for the quarter, with total revenues growing 1 percent in the 2001 first quarter to $68.5 million. The resultant adverse leverage, along with Roto-Rooter's divestiture of a nonperforming heating and air-conditioning branch at an aftertax loss of $189,000, resulted in net income of $4.1 million, 13 percent lower than Roto-Rooter's earnings in the prior-year first quarter."

Discussing Chemed's operations, Mr. Hutton continued, "We are most pleased, however, with the upturns at Patient Care Inc., our home healthcare subsidiary, and Service America, our heating and air-conditioning service subsidiary, both of which have operated under difficult circumstances in the past year. We expect easing labor markets and each subsidiary's investments in automation and information systems, along with an improved federal reimbursement opportunity for Patient Care, to enable both companies to show improved results. Indeed, Patient Care's and Service America's earnings each grew by 44 percent over earnings in the year-ago first quarter.

"Roto-Rooter looks to the remainder of the year with optimism as it accelerates its marketing efforts to commercial accounts. Drain care product sales increased 11 percent in the first quarter as service technicians sold more Roto-Rooter-branded products to residential customers. In addition to profiting from the product sales, Roto-Rooter benefits by putting its name in front of customers more often, with the expectation that when they need service, they'll think of Roto-Rooter first. Further, Roto-Rooter is developing a commercial drain-maintenance program targeting commercial food-service customers. This preventive maintenance effort not only will save restaurants from costly and disruptive drain backups, but should provide a regular revenue stream to Roto-Rooter."

Commenting on the 2001 first-quarter dividend increase, Mr. Hutton said, "Confirming its confidence in the outlook for Chemed, in February 2001, the Board of Directors increased the quarterly dividend by 10 percent to $.11 per share. Paid in March, this dividend represented the 119th consecutive quarterly dividend paid to Chemed shareholders."

Concluding, Mr. Hutton said, "Chemed's strategy to provide essential services to home owners and businesses continues to focus on Roto-Rooter, augmented by Service America and Patient Care. We expect better comparisons at Roto-Rooter in the coming quarters, and we continue to seek opportunities to optimize Chemed's operations. Our balance sheet remains very healthy, and we look to the future with determination."

Chemed Corporation (www.chemed.com), headquartered in Cincinnati, is a New York Stock Exchange-listed corporation with strategic positions in plumbing and drain cleaning; residential 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,
                                           ------------------------
                                             2001           2000
                                           ---------      ---------
Service Revenues and Sales                 $123,281       $121,534
                                           =========      =========
Income from Operations                     $  7,348       $  7,539
Interest Expense                             (1,486)        (1,782)
Distributions on Preferred Securities          (277)          (288)
Other Income -- Net                           1,762 (a)      2,396 (b)
                                           ---------      ---------
Income before Income Taxes                    7,347 (a)      7,865 (b)
Income Taxes                                 (2,837)        (2,963)
                                           ---------      ---------
Net Income                                 $  4,510 (a)   $  4,902 (b)
                                           =========      =========

Earnings Per Share
  Income before Capital Gains              $    .39       $    .42
                                           =========      =========
  Net Income                               $    .46 (a)   $    .49 (b)
                                           =========      =========
  Average Number of Shares Outstanding        9,746         10,064
                                           =========      =========

Diluted Earnings Per Share
  Income before Capital Gains              $    .39       $    .42
                                           =========      =========
  Net Income                               $    .46 (a)   $    .48 (b)
                                           =========      =========
  Average Number of Shares Outstanding       10,026         10,171
                                           =========      =========

(a) Amount includes pretax gains aggregating $1,112,000 ($703,000
aftertax or $.07 per share) from the sales of investments in the first
quarter of 2001.

(b) Amount includes pretax gains aggregating $951,000 ($677,000
aftertax or $.07 per share and $.06 per diluted share) from the sales
of investments in the first quarter of 2000.