Chemed Reports Second-Quarter Core Earnings of $.34 versus $.50 in 2000 Second Quarter.Business Editors CINCINNATI--(BUSINESS WIRE)--July 19, 2001 Chemed Corporation (NYSE NYSE See: New York Stock Exchange :CHE) (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :CHEQP) today reported that, for the second quarter, ended June June: see month. 30, 2001, service revenues and sales 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 of $120.8 million were 2 percent below revenues of $123.0 million in the 2000 second quarter. Year to date, for the six months ended June 30, service revenues and sales from continuing operations of $242.0 million compare with $242.3 million in the first half of 2000. Earnings from continuing operations 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 2001 second quarter amounted to $12.8 million versus $15.6 million in the 2000 second quarter. Year to date, EBITDA totaled $26.5 million for 2001 as compared with $29.7 million for the same period last year. Income from continuing operations 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 -- of $.34 per share ($3.3 million) for the 2001 second quarter compares with $.50 per share ($4.9 million) in the 2000 second quarter. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. core earnings totaled $.74 per share ($7.2 million) versus $.92 per share ($9.1 million) in the 2000 first half. Net income of $.15 per share ($1.5 million) in the 2001 second quarter compares with net income of $.62 per share ($6.1 million) in the year-ago second quarter, which included capital gains of $.12 per share ($1.1 million). Year-to-date 2001 net income of $.61 per share ($6.0 million) compares with $1.11 per share ($11.0 million) for year-to-date 2000. Year-to-date net income includes capital gains of $.08 per share ($703,000) in 2001 and $.18 per share ($1.8 million) in 2000. Net income for the 2001 second quarter and year to date also includes a loss of $.19 per share ($1.9 million) and $.21 per share ($2.0 million), respectively, from the Cadre Computer Resources operation, which Chemed committed to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: in the second quarter. In 2000, Cadre recorded income of $68,000 for the second quarter and $.01 per share ($110,000) for the half. Commenting on the company'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 said, "The second quarter and first half of 2001 have proved difficult for your company, as our flagship Roto-Rooter subsidiary has been affected by the national economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. and resultant This article is about the resultant of polynomials. For the result of adding two or more vectors, see Parallelogram rule. For the technique in organ building, see Resultant (organ). In mathematics, the resultant of two monic polynomials softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. demand for both commercial and residential 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 services. Effective for the second quarter, we committed to discontinue our Cadre Computer subsidiary, and its results are now recorded as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Patient Care, our home healthcare subsidiary, performed extremely well during the six months and quarter just ended." Discussing the company's individual operations, Mr. McNamara continued, "For the 2001 second quarter, Roto-Rooter Inc. recorded revenues of $67.1 million and earnings of $3.6 million, 4 percent and 27 percent, respectively, below the year-ago second quarter. These results can be partially ascribed to the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. , as both company-operated locations and franchisees across the country have reported lower demand for elective elective non-urgent; at an elected time, e.g. of surgery. elective adjective Referring to that which is planned or undertaken by choice and without urgency, as in elective surgery, see there noun Graduate education noun , nonemergency plumbing and drain cleaning jobs. "Roto-Rooter is taking immediate action on those business factors within its control. It is boosting advertising expenditures and launching initiatives to build commercial sales, increase service representatives' close rates, and improve branch operations. In order to help fund these initiatives, Roto-Rooter is examining all areas for costs it can cut without reducing overall effectiveness. "On the international front, we are pleased to announce that Roto-Rooter has received a signed letter of intent to establish an international master franchise in Mexico and that a master franchisee for Roto-Rooter Malaysia plans to begin training in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. later this quarter. This brings to eight the master franchises established outside the United States. "During the 2001 second quarter, results at Patient Care continued to improve. Earnings grew 30 percent over earnings in the 2000 second quarter. Revenues of $35.8 million were 6 percent above revenues in the same prior-year quarter. Patient Care is benefiting from improved margins due to its high-quality relationships with larger referral sources and its increasing presence in supplemental staffing to 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. agencies and assisted-living facilities. Patient Care's earnings also benefited from the new Medicare prospective pay system as its company-operated Medicare business performed well in the quarter. "Earnings for Service America, our major-appliance and heating and air-conditioning service subsidiary, for the 2001 second quarter were 7 percent below the same year-ago quarter, and revenues of $17.9 million were down 8 percent. Contract revenues declined, as planned, with Service America's continued phase out of less-profitable contracts. Expense reductions in line with these anticipated revenues were on target. Retail sales and service revenues fell short of expectations, however, as consumers opted for repairs rather than replacement, particularly of air conditioners Conditioners used on leather take many shapes and forms. They are used mostly to keep leather from drying out and deteriorating. A very old and widely used conditioner is dubbin. . The company has taken measures to improve lead generation and close rates, which are expected to increase retail sales and service revenues during the third quarter. Year-to-date earnings for Service America are 12 percent ahead of the same period last year." In May, the Board of Directors declared a quarterly dividend of $.11 per share, which was paid in June. This dividend represented the 120th consecutive quarterly dividend paid to Chemed shareholders. Concluding, Mr. McNamara said, "We expect continued improvement and earnings contributions from Service America and Patient Care for the balance of the year. We are pursuing several initiatives at Roto-Rooter and are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op it will get back on track for consistent revenue and profit growth. Chemed is a resilient See resiliency. company, and our balance sheet is healthy. Our strategy remains clear: to provide essential services to home owners home owner home n → propriétaire occupant and businesses. By delivering these services with quality and reliability, Chemed's subsidiaries will remain at the forefront of their industries, positioned for 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. success." 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. 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 Six Months Ended
June 30, June 30,
-------------------- --------------------
2001 2000 2001 2000
-------- -------- -------- --------
Continuing Operations
Service Revenues
and Sales $120,789 $122,956 $241,989 $242,343
-------- -------- -------- --------
-------- -------- -------- --------
Income from
Operations $ 6,340 $ 9,079 $ 13,857 $ 16,552
Interest Expense (1,466) (1,787) (2,952) (3,569)
Distributions on
Preferred Securities (278) (286) (555) (574)
Other Income - Net 845(a) 2,792(b) 2,604(c) 5,188(c)
-------- -------- -------- --------
Income before
Income Taxes 5,441(a) 9,798(b) 12,954(c) 17,597(c)
Income Taxes (2,111) (3,753) (5,010) (6,692)
-------- -------- -------- --------
Income from
Continuing Operations 3,330 6,045(b) 7,944(c) 10,905(c)
Discontinued
Operations(d) (1,869) 68 (1,973) 110
-------- -------- -------- --------
Net Income $ 1,461 $ 6,113(b) $ 5,971(c) $ 11,015(c)
-------- -------- -------- --------
-------- -------- -------- --------
Earnings Per Share
Income from Continuing
Operations before
Capital Gains(e) $ 0.34 $ 0.50 $ 0.74 $ 0.92
-------- -------- -------- --------
-------- -------- -------- --------
Income from
Continuing
Operations $ 0.34 $ 0.62(b) $ 0.82(c) $ 1.10(c)
-------- -------- -------- --------
-------- -------- -------- --------
Net Income $ 0.15 $ 0.62(b) $ 0.61(c) $ 1.11(c)
-------- -------- -------- --------
-------- -------- -------- --------
Average Number of
Shares Outstanding 9,728 9,797 9,737 9,931
-------- -------- -------- --------
-------- -------- -------- --------
Diluted Earnings Per Share(f)
Income from Continuing
Operations before
Capital Gains(e) $ 0.34 $ 0.50 $ 0.73 $ 0.92
-------- -------- -------- --------
-------- -------- -------- --------
Income from
Continuing
Operations $ 0.34 $ 0.61(b) $ 0.80(c) $ 1.09(c)
-------- -------- -------- --------
-------- -------- -------- --------
Net Income $ 0.16 $ 0.61(b) $ 0.60(c) $ 1.10(c)
-------- -------- -------- --------
-------- -------- -------- --------
Average Number of
Shares Outstanding 10,257 10,295 9,885 10,353
-------- -------- -------- --------
-------- -------- -------- --------
(a) Amounts for the second quarter of 2001 include a pretax capital
loss of $119,000 (nil aftertax) from the sales of investments.
(b) Amounts for the second quarter of 2000 include a pretax capital
gain of $1,711,000 ($1,122,000 aftertax) from the sales of
investments.
(c) Amounts for the six-month periods include pretax capital gains of
$993,000 ($703,000 aftertax) and $2,662,000 ($1,799,000 aftertax)
in 2001 and 2000, respectively, from the sales of investments.
(d) Amounts for all periods include aftertax operating losses for
Cadre Computer. In addition, amounts for 2001 include an aftertax
loss of $1,641,000 ($.17 per share) on the discontinuance of
Cadre.
(e) Amounts exclude investment gains described in notes (b) and (c).
(f) For the second quarters of 2001 and 2000 and for the six months
ended June 30, 2000, diluted earnings per share include the impact
of outstanding stock options and nonvested stock awards and assume
conversion of the Preferred Securities. For the six months ended
June 30, 2001, diluted earnings per share do not assume conversion
of the Preferred Securities because the impact on diluted earnings
per share from continuing operations is anti-dilutive.
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