Results as of March 31, 2007

Transcription

1 Results as of March 31, 2007

2 Safe Harbor and Regulation G Statement The Securities and Exchange Commission encourages companies to disclose forwardlooking information so that investors can better understand a company s future prospects and make informed investment decisions. This presentation contains these types of statements, which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Words such as anticipates, estimates, expects, projects, intends, plans, believes and words and terms of similar substance used in connection with any discussion of future operating results or financial performance identify forward-looking statements. All forwardlooking statements reflect management s present expectations of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The factors listed in the Risk Factors section as well as any cautionary language in Chemed Corporation s December 31st, 2006 Annual Report on SEC Form 10-K, provide examples of these risks and uncertainties. CHEMED CORPORATION 2

3 Chemed Corporation Revenue 68% 2005 Roto-Rooter 32% 69% 2006 Roto-Rooter 31% VITAS VITAS Roto-Rooter Central Support 9.6% Roto-Rooter COS 17.5% Chemed Central Support 0.9% Chemed Adjusted EBITDA 13.2% Roto-Rooter Central Support 9.1% Roto-Rooter COS 17.0% Chemed Central Support 1.0% Chemed Adjusted EBITDA 12.9% VITAS Central Support 5.9% VITAS COS 52.9% VITAS Central Support 5.3% VITAS COS 54.7% CHEMED CORPORATION 3

4 Chemed Corporation Results from Continuing Operations (US$ in thousands) (1) (2) (3) (4) (5) (6) Full Year Results Year-To-Date March 31, Fav/(Unfav) Fav/(Unfav) % Growth % Growth (1) Revenue $ 915,970 $ 1,018, % $ 243,921 $ 270, % (2) Adjusted EBITDA (a) 120, , % 29,593 39, % (3) Adjusted EBITDA Margin 13.2% 12.9% (0.3) pts. 12.1% 14.6% 2.5 pts. (4) Adjusted Income from Operations (a) 49,542 58, % 12,393 19, % (5) Capital Expenditures 25,734 21, % 3,852 5,764 (49.6%) (a) Adjusted for the expense of stock options and other long-term incentive compensation, OIG litigation costs, and other income and expense items that may not be indicative of ongoing operations. CHEMED CORPORATION 4

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6 Roto-Rooter Company Overview Founded in 1935 by Samuel Blanc in Des Moines, IA; purchased by Chemed in 1980 Largest provider of plumbing and drain cleaning services in North America Provides plumbing services to approximately 90% of the United States and 40% of the Canadian population Provides plumbing and drain cleaning services in more than 110 company-owned territories and more than 500 franchise territories Maintains an estimated 15% of the drain cleaning market and 2-3% share of the same-day service plumbing market Residential customers represent 55% of revenues, while commercial customers represent 34% of revenues Revenues (2006) Adjusted EBITDA (2006) Product & Equipment Sales 2% Residential Plumbing 25% Residential Drain Cleaning 30% Contractors 6% Franchise Fees 1% Commercial Plumbing 16% Other 2% Commercial Drain Cleaning 18% Product & Equipment Sales 7% Franchise Fees 5% Contractors 15% Roto-Rooter Branches 73% CHEMED CORPORATION 6

7 Chemed Growth Strategy Roto-Rooter Rooter Continue to strive for increased efficiency Maintain focus on commercial jobs Acquire franchisee territories at reasonable valuations Focus on earnings and cash flow Company-owned Territories CHEMED CORPORATION 7

8 Roto-Rooter Group Historical Financial Performance (US$ in thousands) (1) (2) (3) (4) (5) (6) Full Year Results Year-To-Date March 31, Fav/(Unfav) Fav/(Unfav) % Growth % Growth (1) Net Revenue $297,337 $319, % $77,864 $86, % (2) Adjusted EBITDA (a) 49,234 55, % 12,728 16, % (3) Adjusted EBITDA Margin 16.6% 17.4% 0.8 pts. 16.3% 18.9% 2.6 pts. (4) Adjusted EBIT (a) 40,873 47, % 10,739 14, % (5) Adjusted EBIT Margin 13.7% 15.0% 1.3 pts. 13.8% 16.4% 2.6 pts. (6) Capital Expenditures 7,438 7,467 (0.4%) 1,742 2,467 (41.6%) (a) Adjusted for the timing of expense recognition related to our telephone directories and other income and expense items that may not be indicative of ongoing operations. CHEMED CORPORATION 8

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10 VITAS Healthcare Company Overview Largest provider of hospice services for patients with severe, life-limiting illnesses with approximately 8% of the U.S. market share Operates a comprehensive range of hospice services through 42 operating programs in 15 states and the District of Columbia Utilizes a standardized model for patient care which is intended to maximize quality and enhance patient satisfaction Operating statistics: Sales: $699 million (2006) Average Daily Census per established program: over 300 ADC, largest approximately 1,300 (Q1 2007) Average Length of Stay: 76.9 days (Q1 2007) Total of 8,635 employees, including over 3,300 nurses and more than 3,000 home health aides and other direct caregivers (Q1 2007) Revenues 2006 (Before Cap) Adjusted EBITDA 2006 Routine Home Care 70% 13% 17% General Inpatient Care Continuous Home Care Central Support 8.1% Hospice Program Indirect 19.6% EBITDA 12.3% Medicare Cap 0.6% Hospice Program Direct 59.4% CHEMED CORPORATION 10

11 Medicare Hospice Spending (in billions) $9.0 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $2.4 $2.9 $3.6 21% 24% Growth Growth $4.5 25% Growth $5.7 27% Growth $6.7 18% Growth $7.9 18% Growth $8.5 8% Growth $ % Compounded annual growth rate from 1999 to 2006 Source: CMS, Office of the Actuary, President s Budget (February 2006) - (2005 and 2006 Estimated) CHEMED CORPORATION 11

12 VITAS Locations & ADC (as of March 31, 2007) Petaluma Milwaukee Chicagoland Northwest Chicagoland Central Chicagoland South Inland Empire (San Bernardino/ Palm Springs) Sacramento Oakland San Francisco San Gabriel Cities (Covina) San Fernando (Los Angeles & Ventura County, Encino) Coastal Cities (Torrance) Orange County San Diego Kansas City St. Louis Detroit Cleveland Daytona Brevard Waterbury, CT Hartford, CT Fairfield, CT New Jersey North New Jersey West New Jersey Shore Philadelphia Pittsburgh Delaware Washington, DC Northern Virginia Richmond Cincinnati Atlanta 15 Small (1 199 ADC) 15 Medium ( ADC) 6 Large (450+ ADC) 6 New Starts (Rev < 12 Mos.) Fort Worth Dallas Houston San Antonio Central Florida Dade Palm Beach Broward CHEMED CORPORATION 12

13 VITAS Growth Strategy VITAS will expand its market preeminence by: Organic growth in established programs New Start programs Niche acquisitions Organic growth will continue to be generated through sales and marketing: Increase marketing activities Targeting Assisted Living Special Access Offerings for patients Increased focus on obtaining referrals earlier in a patients terminal illness diagnosis (increased length of stay) VITAS continues to be successful on New Start programs: Current pipeline of new programs in various stages of development New Starts generally reach break even within 9 to 18 months Start-up losses range between $0.5 million to $1.5 million and CAPEX of $0.2 million 6-8 New Starts are anticipated to be launched annually CHEMED CORPORATION 13

14 VITAS Results from Continuing Operations (US$ in thousands) (1) (2) (3) (4) (5) (6) Full Year Results Year-To-Date March 31, Fav/(Unfav) Fav/(Unfav) % Growth % Growth (1) Revenue Before Medicare Cap $ 618,633 $ 702, % $ 166,057 $ 183, % (2) Medicare Cap - (3,898) (3) Net Revenue $ 618,633 $ 699, % $ 166,057 $ 184, % (4) Adjusted EBITDA (a) 80,455 85, % 19,349 26, % (5) Adjusted EBITDA Margin 13.0% 12.3% (0.7) pts. 11.7% 14.1% 2.4 pts. (6) Capital Expenditures 17,852 14, % 2,059 3,229 (56.8%) (a) Adjusted for OIG litigation costs and other income and expense items that may not be indicative of ongoing operations. CHEMED CORPORATION 14

15 VITAS Operating Metrics (1) (2) (3) (4) (5) (6) (7) (8) Operating Metrics Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (1) Average Daily Census (ADC) 8,097 8,582 8,949 9,096 9,302 9,646 10,052 10,210 (2) Admissions 12,236 11,473 11,270 11,545 12,804 12,532 12,269 12,380 (3) Discharges 11,681 10,990 10,930 11,557 12,492 11,991 11,910 12,482 (4) Average Length of Stay (ALOS) (Days): (5) Median Length of Stay (Days) (9) (10) (11) (12) (13) Q1 Q2 Q3 Q4 Q1 10,291 10,704 11,020 11,174 11,309 13,773 12,987 12,686 13,291 14,110 13,299 12,529 12,525 13,199 14, (6) Total Revenue Before Medicare Cap Reduction ($000) $123,982 $130,240 $135,101 $141,813 $143,421 $150,710 $157,971 $166,531 $166,057 $172,126 $177,900 $186,907 $183,577 (7) Medicare Cap Reduction (8) Revenue After Medicare Cap $123,982 $130,240 $135,101 $141,813 $143,421 $150,710 $157,971 $166,531 Reduction ($000) (9) % Routine Home Care 66.9% 68.3% 69.8% 69.3% 68.6% 68.7% 69.3% 69.0% (10) % InPatient 15.2% 14.3% 13.6% 13.5% 14.5% 14.0% 13.5% 13.6% (11) % Continuous Care 17.9% 17.4% 16.6% 17.2% 16.9% 17.3% 17.2% 17.4% (12) % Medicare Cap Direct Care Margins: (a) (13) Routine Home Care 48.8% 49.9% 50.1% 51.2% 49.9% 49.2% 50.5% 50.9% (14) In Patient Care 27.1% 25.9% 20.8% 23.8% 22.8% 23.0% 21.2% 23.6% (15) Continuous Care 19.2% 19.0% 18.5% 18.6% 17.5% 19.5% 18.1% 20.4% - ($599) ($2,611) ($688) $472 $166,057 $171,527 $175,289 $186,219 $184, % 70.2% 70.8% 70.6% 71.6% 13.9% 12.6% 12.3% 12.5% 12.8% 18.0% 17.2% 16.9% 16.9% 15.6% (0.3%) (1.5%) (0.4%) 0.3% 47.6% 49.5% 49.1% 49.7% 50.8% 23.1% 20.9% 16.5% 19.4% 20.1% 18.3% 20.3% 17.5% 17.0% 20.0% (16) Gross Profit (Direct and Indirect) ($000) (b) (c) $24,648 $28,450 $29,406 $33,291 $29,926 $31,742 $34,153 $38,202 $32,461 $34,829 $32,669 $41,872 $41,954 (17) Gross Profit Margin (b) (c) 19.9% 21.8% 21.8% 23.5% 20.9% 21.1% 21.6% 22.9% 19.5% 20.3% 18.6% 22.5% 22.8% (18) Pro Forma Selling, General & Admin Exp (c) (19) Pro Forma Adjusted EBITDA ($000) (c) (20) Pro Forma Adjusted EBITDA Margin (c) $13,314 $12,319 $12,653 $12,868 $13,003 $13,419 $13,814 $13,904 $11,334 $16,111 $16,752 $20,409 $16,908 $18,554 $20,630 $24, % 12.4% 12.4% 14.4% 11.8% 12.3% 13.1% 14.6% $13,216 $13,702 $13,619 $16,425 $15,904 $19,349 $21,480 $19,377 $25,675 $26, % 12.5% 11.1% 13.8% 14.1% (a) Excludes any Medicare cap reduction (b) Includes any Medicare cap reduction (c) Excludes depreciation, amortization CHEMED CORPORATION 15

16 2600 Chemed Center 255 East 5 th Street Cincinnati, OH (513) Phone (513) Fax Kevin J. McNamara President and CEO Kevin.McNamara@chemed.com David P. Williams Chief Financial Officer Dwilliams@chemed.com