Chemed Reports First-Quarter Results.Business Editors CINCINNATI--(BUSINESS WIRE)--April 18, 2002 Chemed Corporation (NYSE NYSE See: New York Stock Exchange :CHE)(OTCBB OTCBB See OTC Bulletin Board (OTCBB). :CHEQP) today reported net income of $.47 per share for the first quarter, ended March 31, 2002, as compared with $.46 per share in 2001's first quarter. Net income included capital gains of $.07 per share in both years. For 2001, net income also included $.12 per share from the amortization of goodwill and a loss of $.01 per share from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . On an adjusted basis, before capital gains and amortization of goodwill, income 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 amounted to $.40 in the 2002 first quarter versus $.52 in the same 2001 quarter. Service revenues and sales from continuing operations for the 2002 first quarter were $117.0 million versus $121.2 million in 2001. 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 2002 first quarter totaled $11.1 million versus EBITDA of $13.7 million for the 2001 quarter, and for 2002, EBITDA represented 9% of revenues. Commenting on the first quarter's results, Chemed President and Chief Executive Officer Kevin KEVIN Keepers of the Eternal Vigilance of the Islamic Nation (fictional, from White Teeth by Zadie Smith) J. McNamara Mc·Na·mar·a , Robert Strange Born 1916. American public official who served as U.S. secretary of defense (1961-1968) during the Kennedy and Johnson administrations. said, "Chemed's overall performance reflects the benefits of reduced expenses at Chemed headquarters, offset by the effects of margin erosion at our flagship 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. subsidiary." Mr. McNamara continued, "Roto-Rooter recorded revenues of $65.3 million for the 2002 first quarter, 4.6% below the prior-year first quarter. Excluding acquisitions and divestitures in both periods, Roto-Rooter's revenues on a comparable basis would have been 3.4% below revenues in the prior year. "Roto-Rooter company operations and franchisees continue to feel the impact of economy-related issues. Soft demand, coupled with significantly higher casualty and health insurance costs and higher labor costs, has put pressure on the gross margin, which declined 2.9 percentage points in company operations in the first quarter. As a result, earnings at Roto-Rooter amounted to $3.5 million for the 2002 first quarter versus $4.9 million before goodwill amortization a year ago. "Many of these cost increases are necessary in order to maintain competitive advantage, particularly in the areas of advertising and marketing and service force recruiting and training. Management is working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to rein in to check the speed of, or cause to stop, by drawing the reins. to cause (a person) to slow down or cease some activity; - to rein in is used commonly of superiors in a chain of command, ordering a subordinate to moderate or cease some activity deemed excessive. See also: Rein Rein insurance costs and adjust work schedules to reduce labor costs." Discussing Chemed's other operations, Mr. McNamara said, "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. continues to make progress on its centralization 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. projects, which are near completion, and expects to realize service improvements and cost efficiencies as a result. Even so, for the quarter just ended, Service America recorded profits 51% below the prior-year first quarter excluding goodwill amortization, while revenues of $15.6 million were off 13%. Patient Care, Chemed's home-healthcare services business, however, turned in excellent first-quarter results with a 14% increase in earnings on revenue growth of 3.6% to $36.2 million." Concluding, Mr. McNamara said, "Management is working to restore historical margins within Roto-Rooter. Service America will benefit from lower costs as the year progresses, and Patient Care is performing as expected. Investments in training and selling efforts at Roto-Rooter have historically increased revenues, and as the economy picks up momentum, we expect Roto-Rooter's revenue growth and profit performance will improve." In February February: see month. , the Chemed Board of Directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly dividend of $.11 per share, which was paid in March. This dividend represented the 123rd consecutive quarterly dividend paid to Chemed shareholders. Chemed Corporation (www.chemed.com), headquartered in 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. , 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 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 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 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 repair; and home healthcare services. Statements in this press release or in other Chemed communications may relate to future events or Chemed's future performance. Such statements are 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. and are based on present information Chemed has related to its existing business circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Investors are cautioned that such forward-looking statements are subject to inherent risk that actual results may differ materially from such forward-looking statements. Further, investors are cautioned that Chemed does not assume any obligation to update forward-looking statements based on unanticipated events or changed expectations.
Chemed Corporation and Subsidiary Companies
Comparative Results (Unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
-----------------------
2002 2001
-------- --------
Continuing Operations
Service Revenues and Sales $117,035 $121,200
======== ========
Income from Operations $ 5,703 $ 7,517 (b)
Interest Expense (773) (1,486)
Distributions on
Preferred Securities (270) (277)
Other Income--Net 2,329 (a) 1,759 (c)
-------- --------
Income before Income Taxes 6,989 (a) 7,513 (b,c)
Income Taxes (2,317) (2,899)
-------- --------
Income from Continuing Operations 4,672 (a) 4,614 (b,c)
Discontinued Operations -- (104)
-------- --------
Net Income $ 4,672 (a) $ 4,510 (b,c)
======== ========
Earnings Per Share
Income from Continuing Operations $ 0.47 (a) $ 0.47 (b,c)
======== ========
Net Income $ 0.47 (a) $ 0.46 (b,c)
======== ========
Diluted Earnings Per Share
Income from Continuing Operations $ 0.47 (a) $ 0.47 (b,c)
======== ========
Net Income $ 0.47 (a) $ 0.46 (b,c)
======== ========
Adjusted Earnings Data (d)
Income from Continuing
Operations before Capital Gains $ 3,897 $ 5,070
======== ========
Income from Continuing Operations $ 4,672 (a) $ 5,773 (c)
======== ========
Net Income $ 4,672 (a) $ 5,669 (c)
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Adjusted Earnings Per Share (d)
Income from Continuing
Operations before Capital Gains $ 0.40 $ 0.52
======== ========
Income from Continuing Operations $ 0.47 (a) $ 0.59 (c)
======== ========
Net Income $ 0.47 (a) $ 0.58 (c)
======== ========
Adjusted Diluted Earnings Per Share (d)
Income from Continuing
Operations before Capital Gains $ 0.40 $ 0.51
======== ========
Income from Continuing Operations $ 0.47 (a) $ 0.58 (c)
======== ========
Net Income $ 0.47 (a) $ 0.57 (c)
======== ========
Average Number of Shares Outstanding
Earnings Per Share 9,843 9,746
======== ========
Diluted Earnings Per Share 10,267 10,303
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(a) Amount includes pretax gains aggregating $1,141,000 ($775,000
aftertax or $.07 per share) from the sales of investments in the
first quarter of 2002.
(b) Amount includes pretax amortization of goodwill of $1,255,000 for
the first quarter of 2001 ($1,159,000 net of income tax benefit,
$.12 per share and $.11 per diluted share).
(c) 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.
(d) Goodwill amortization ceased January 1, 2002. Accordingly,
adjusted data exclude the amortization of goodwill for the first
quarter of 2001 in the amounts disclosed in note (b).
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