Chemed Reports Third-Quarter 2012 Results

  Chemed Reports Third-Quarter 2012 Results

Business Wire

CINCINNATI -- October 29, 2012

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, reported financial results for its third
quarter ended September 30, 2012, versus the comparable prior-year period, as
follows:

Consolidated operating results:

  *Revenue increased 3.8% to $354 million
  *GAAP Diluted EPS increased 2.9% to $1.07
  *Adjusted Diluted EPS increased 6.7% to $1.28

VITAS segment operating results:

  *Net Patient Revenue of $268 million, an increase of 5.9%
  *Average Daily Census (ADC) of 14,277, an increase of 4.5%
  *Admissions of 15,539, an increase of 4.4%
  *Net Income of $21.9 million, an increase of 4.6%
  *Adjusted EBITDA of $39.8 million, an increase of 5.2%
  *Adjusted EBITDA margin of 14.8%, a decrease of 11 basis points

Roto-Rooter segment operating results:

  *Revenue of $86.4 million, a decrease of 2.4%
  *Unit-for-unit job count of 157,815, a decrease of 3.0%
  *Net Income of $6.1 million, a decrease of 23.3%
  *Adjusted EBITDA of $12.7 million, a decrease of 15.3%
  *Adjusted EBITDA margin of 14.7%, a decrease of 223 basis points

                                    VITAS

Net revenue for VITAS was $268 million in the third quarter of 2012, which is
an increase of 5.9% over the prior-year period. This revenue growth was the
result of increased ADC of 4.5%, driven by an increase in admissions of 4.4%,
increased discharges of 4.5% and Medicare price increases of approximately
2.5%. Revenue growth was partially offset by mix shift between routine home
care and high acuity care.

Average revenue per patient per day in the quarter, excluding the impact of
Medicare Cap, was $204.03, which is 1.5% above the prior-year period. Routine
home care reimbursement and high acuity care averaged $162.90 and $706.19,
respectively, per patient per day in the third quarter of 2012. During the
quarter, high acuity days of care were 7.57% of total days of care, 15 basis
points lower than the prior-year quarter.

VITAS did not incur any Medicare Cap billing limitations in the third quarter
of 2012. The Medicare Cap 2012 fiscal year is based upon Medicare admissions
from September 29, 2011, through September 28, 2012, and is compared to
Medicare hospice billings from November 1, 2011, through October 31, 2012.
Based upon admissions during this period, VITAS estimates there will not be
any billing limitations for the 2012 Medicare Cap fiscal year.

Of VITAS’ 35 unique Medicare provider numbers, 29 provider numbers have a
Medicare Cap cushion of 10% or greater during the 2012 Medicare Cap year; two
provider numbers have a Medicare Cap cushion between 5% and 10%; and four
provider numbers have a cap cushion between 0% and 5%. VITAS generated an
aggregate cap cushion of $217 million during in the 2012 Medicare Cap fiscal
year.

The third quarter of 2012 gross margin was 22.2%, which is equal to the gross
margin in the third quarter of 2011 when you exclude the impact of Medicare
Cap in the prior-year quarter.

Selling, general and administrative expense was $20.1 million in the third
quarter of 2012, which is an increase of 6.3% when compared to the prior-year
quarter. Adjusted EBITDA totaled $39.8million in the quarter, an increase of
5.2% over the prior-year period. Adjusted EBITDA margin, excluding the impact
from Medicare Cap, was 14.8% in the quarter which is equal to the prior year.

                                 Roto-Rooter

Roto-Rooter’s plumbing and drain cleaning business generated sales of $86.4
million for the third quarter of 2012, a decrease of $2.1 million, or 2.4%,
over the prior-year quarter. Approximately $1.0 million, or 113 basis points,
of this decline is attributed to Roto-Rooter eliminating a small HVAC
operation in an East Coast market. This resulted in effectively zero HVAC
revenue in the third quarter of 2012.

Unit-for-unit job count in the third quarter of 2012 declined 3.0% when
compared to the prior-year period. During the third quarter of 2012, total
residential jobs decreased 4.8%, as residential plumbing jobs declined 4.6%
and residential drain cleaning jobs decreased 4.9%, when compared to the third
quarter of 2011. Residential jobs represented 69% of total job count in the
quarter. Total commercial jobs increased 1.1%, with commercial
plumbing/excavation job count increasing 5.6% and commercial drain cleaning
declining 0.4% when compared to the prior-year quarter. The “All Other”
residential and commercial job category, which represents 1.6% of aggregate
job count, decreased 8.6%.

Roto-Rooter’s gross margin in the quarter was 44.3%, a 76 basis point decline
when compared to the third quarter of 2011. Adjusted EBITDA in the third
quarter of 2012 totaled $12.7million, a decline of 15.3%, and the Adjusted
EBITDA margin was 14.7% in the quarter, a decline of 223 basis points.

                             Chemed Consolidated

Chemed had total debt of $173 million at September 30, 2012. This debt is net
of the discount taken as a result of convertible debt accounting requirements.
Excluding this discount, aggregate debt is $187million and is due in May
2014. Chemed’s total debt equates to less than one times trailing twelve-month
adjusted EBITDA.

In March 2011 Chemed entered into a five-year Credit Agreement that consists
of a $350 million revolving credit facility. The interest rate on this Credit
Agreement has a floating rate that is currently LIBOR plus 175 basis points.
In addition, an expansion feature is included in this Credit Agreement that
provides Chemed the opportunity to increase its revolver and/or enter into
term loans for an additional $150 million. At September 30, 2012, this
facility had approximately $321 million of undrawn borrowing capacity after
deducting $29 million for letters of credit issued to secure the Company’s
workers’ compensation insurance.

Capital expenditures through September 2012 aggregated $26.5 million and
compares to depreciation and amortization during the same period of $22.6
million.

During the quarter, the Company purchased 9,334 shares of Chemed stock at an
aggregate cost of $586,000. The Company has $63.5 million remaining under
Chemed’s previously announced share repurchase program.

                              Guidance for 2012

VITAS expects to achieve full-year 2012 revenue growth, prior to Medicare Cap,
of 7.5% to 8.0%. Admissions in 2012 are estimated to increase approximately
4.0% to 4.5% and full-year Adjusted EBITDA margin, prior to Medicare Cap, is
estimated to be 14.5% to 15.0%. Effective October1, 2012, Medicare increased
the average hospice reimbursement rates by approximately 0.9%. Guidance
assumes VITAS will incur $1.25 million of estimated Medicare contractual
billing limitations for the remainder of calendar year 2012.

Roto-Rooter expects to achieve full-year 2012 revenue 2.0% below the prior
year. The revenue estimate is a result of increased pricing of approximately
1.5%, a favorable mix shift to higher revenue jobs, with job count estimated
to decrease 3% to 4%. Adjusted EBITDA margin for 2012 is estimated in the
range of 15.8% to 16.3%.

Based upon the above, management estimates 2012 earnings per diluted share,
excluding non-cash expense for stock options, the non-cash interest expense
related to the accounting for convertible debt and other items not indicative
of ongoing operations, will be in the range of $5.20 to $5.30. This compares
to Chemed’s 2011 reported adjusted earnings per diluted share of $4.78.

                               Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Tuesday,
October 30, 2012, to discuss the Company's quarterly results and to provide an
update on its business. The dial-in number for the conference call is (866)
700-0133 for U.S. and Canadian participants and (617)213-8831 for
international participants. The participant passcode is 88495350. 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 24 hours after the call's conclusion. It can be accessed by
dialing (888) 286-8010 for U.S. and Canadian callers and (617) 801-6888 for
international callers and will be available for one week following the live
call. The replay passcode is 32895198. An archived webcast will also be
available at www.chemed.com.

Chemed Corporation operates in the healthcare field through its VITAS
Healthcare Corporation subsidiary. VITAS provides daily hospice services to
approximately 14,000 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, Adjusted EBITDA
and Adjusted Diluted EPS, which are not measures derived in accordance with
GAAP and which exclude components that are important to understanding Chemed’s
financial performance. In reporting its operating results, Chemed provides
EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors
and others evaluate the Company’s 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 management similarly
uses EBITDA, Adjusted EBITDA and Adjusted Diluted EPS to assist it in
evaluating the performance of the Company across fiscal periods and in
assessing how its performance compares to its peer companies. These measures
also help Chemed’s management to estimate the resources required to meet
Chemed’s future financial obligations and expenditures. Chemed’s EBITDA,
Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation
or as a substitute for comparable measures calculated and presented in
accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing
Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed’s net
income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS 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.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)(unaudited)
                                                               
                                                                           
                             Three Months Ended          Nine Months Ended
                             September 30,               September 30,
                             2012          2011          2012            2011
Service revenues and sales   $ 354,353    $ 341,439    $ 1,061,466    $ 1,005,717 
Cost of services provided      256,610       245,063       771,423         722,118
and goods sold
Selling, general and
administrative expenses        52,955        47,618        155,892         153,696
(aa)
Depreciation                   6,557         6,313         19,178          18,959
Amortization                   1,135         1,134         3,375           3,243
Other operating expenses      1,126       -           1,126         -         
(bb)
     Total costs and          318,383     300,128     950,994       898,016   
     expenses
     Income from               35,970        41,311        110,472         107,701
     operations
Interest expense               (3,743  )     (3,555  )     (11,032   )     (10,260   )
Other                         1,840       (1,935  )    2,965         881       
income/(expense)--net (cc)
     Income before income      34,067        35,821        102,405         98,322
     taxes
Income taxes                  (13,222 )    (13,934 )    (39,841   )    (38,048   )
Net income                   $ 20,845     $ 21,887     $ 62,564       $ 60,274    
                                                                           
                                                                           
Earnings Per
Share
     Net income              $ 1.10       $ 1.06       $ 3.30         $ 2.88      
     Average number of        18,960      20,674      18,977        20,934    
     shares outstanding
                                                                           
Diluted Earnings
Per Share
     Net income              $ 1.07       $ 1.04       $ 3.23         $ 2.82      
     Average number of        19,404      21,055      19,382        21,400    
     shares outstanding
                                                                           
                 
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
                             Three Months Ended          Nine Months Ended September
                             September 30,               30,
                             2012          2011          2012            2011
        SG&A expenses
        before long-term
        incentive
        compensation and     $ 51,379      $ 49,629      $ 153,131       $ 149,888
        the impact of
        market gains and
        losses of deferred
        compensation plans
        Market value
        gains/(losses)
        related to assets      1,576         (2,011  )     2,761           796
        held in deferred
        compensation
        trusts
        Long-term
        incentive             -           -           -             3,012     
        compensation
           Total
           SG&A              $ 52,955     $ 47,618     $ 155,892      $ 153,696   
           expenses
                                                                           
     Other operating
     expenses comprise
     severance and other
(bb) costs related to
     closing Roto-Rooter's
     HVAC business in the
     third quarter of
     2012.
                                                                           
     Other
(cc) income/(expense)--net
     comprises (in
     thousands):
                             Three Months Ended          Nine Months Ended September
                             September 30,               30,
                             2012          2011          2012            2011
        Market value
        gains/(losses)
        related to assets    $ 1,576       $ (2,011  )   $ 2,761         $ 796
        held in deferred
        compensation
        trusts
        Interest income        291           74            401             197
        Loss on disposal
        of property and        (80     )     (79     )     (228      )     (68       )
        equipment
        Other                 53          81          31            (44       )
           Total other       $ 1,840      $ (1,935  )   $ 2,965        $ 881       
           income--net
                                                                                     

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(in thousands, except per share data)(unaudited)
                                                       
                                                                    
                                                   September 30,
                                                   2012           2011
Assets
      Current assets
              Cash and cash equivalents            $ 69,296       $ 21,342
              Accounts receivable less               101,152        112,721
              allowances
              Inventories                            7,639          8,888
              Current deferred income taxes          14,118         14,850
              Prepaid income taxes                   3,044          764
              Prepaid expenses                      9,855        10,031   
                   Total current assets              205,104        168,596
      Investments of deferred compensation plans     35,053         31,339
      held in trust
      Properties and equipment, at cost less         90,135         83,484
      accumulated depreciation
      Identifiable intangible assets less            57,507         58,644
      accumulated amortization
      Goodwill                                       465,861        460,747
      Other assets                                  11,127       12,246   
                        Total Assets               $ 864,787     $ 815,056  
                                                                    
Liabilities
      Current liabilities
              Accounts payable                     $ 44,056       $ 59,186
              Income taxes                           1,496          8,267
              Accrued insurance                      39,518         35,655
              Accrued compensation                   44,117         40,376
              Other current liabilities             18,494       17,308   
                   Total current liabilities         147,681        160,792
      Deferred income taxes                          24,264         23,262
      Long-term debt                                 172,812        164,841
      Deferred compensation liabilities              34,626         30,267
      Other liabilities                             10,779       9,559    
                        Total Liabilities           390,162      388,721  
                                                                    
Stockholders' Equity
      Capital stock                                  31,451         30,913
      Paid-in capital                                428,232        394,822
      Retained earnings                              599,680        524,197
      Treasury stock, at cost                        (586,744 )     (525,555 )
      Deferred compensation payable in Company      2,006        1,958    
      stock
                        Total Stockholders'         474,625      426,335  
                        Equity
                        Total Liabilities and      $ 864,787     $ 815,056  
                        Stockholders' Equity
                                                                             

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)(unaudited)
                                                   
                                                                    
                                               Nine Months Ended September 30,
                                               2012              2011
Cash Flows from Operating Activities
  Net income                                   $  62,564         $  60,274
  Adjustments to reconcile net income to net
  cash provided by operating activities:
      Depreciation and amortization               22,553            22,202
      Provision for uncollectible accounts        7,303             6,640
      receivable
      Provision for deferred income taxes         (6,808   )        (1,608   )
      Stock option expense                        6,709             6,903
      Amortization of discount on                 6,028             5,633
      convertible notes
      Noncash long-term incentive                 -                 2,595
      compensation
      Changes in operating assets and
      liabilities, excluding amounts
      acquired in business combinations:
              Increase in accounts                (30,409  )        (5,991   )
              receivable
              Decrease/(increase) in              1,029             (1,160   )
              inventories
              Decrease in prepaid expenses        1,554             254
              Increase in accounts payable        4,454             2,654
              and other current liabilities
              Increase in income taxes            1,292             12,253
              Increase in other assets            (3,944   )        (3,811   )
              Increase in other liabilities       6,648             3,567
      Excess tax benefit on share-based           (2,714   )        (3,368   )
      compensation
      Other sources                              1,078           899      
          Net cash provided by operating         77,337          107,936  
          activities
Cash Flows from Investing Activities
  Capital expenditures                            (26,489  )        (23,459  )
  Business combinations, net of cash              (5,900   )        (3,689   )
  acquired
  Other uses                                     528             (829     )
          Net cash used by investing             (31,861  )       (27,977  )
          activities
Cash Flows from Financing Activities
  Purchases of treasury stock                     (15,047  )        (110,288 )
  Proceeds from issuance of capital stock         10,483            7,979
  Dividends paid                                  (9,641   )        (9,393   )
  Increase/(decrease) in cash overdrafts          (3,299   )        2,297
  payable
  Excess tax benefit on share-based               2,714             3,368
  compensation
  Debt issuances costs                            -                 (2,723   )
  Other sources                                  529             226      
          Net cash used by financing             (14,261  )       (108,534 )
          activities
Increase/(Decrease) in Cash and Cash              31,215            (28,575  )
Equivalents
Cash and cash equivalents at beginning of        38,081          49,917   
year
Cash and cash equivalents at end of period     $  69,296        $  21,342   
                                                  

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
(in thousands)(unaudited)
                                                        
                                                                  Chemed
                        VITAS         Roto-Rooter   Corporate     Consolidated
2012
Service revenues and    $ 267,990    $  86,363    $ -          $  354,353 
sales
Cost of services
provided and goods        208,473        48,137       -              256,610
sold
Selling, general and
administrative            20,148         25,350       7,457          52,955
expenses (a)
Depreciation              4,333          2,093        131            6,557
Amortization              489            160          486            1,135
Other operating          -            1,126      -            1,126   
expenses (a)
     Total costs and     233,443      76,866     8,074        318,383 
     expenses
     Income/(loss)        34,547         9,497        (8,074  )      35,970
     from operations
Interest expense (a)      (62     )      (150   )     (3,531  )      (3,743  )
Intercompany interest     795            396          (1,191  )      -
income/(expense)
Other                    176          63         1,601        1,840   
income/(expense)—net
     Income/(loss)
     before income        35,456         9,806        (11,195 )      34,067
     taxes
Income taxes (a)         (13,516 )     (3,661 )    3,955        (13,222 )
     Net                $ 21,940     $  6,145     $ (7,240  )   $  20,845  
     income/(loss)
                                                                     
2011
Service revenues and    $ 252,944    $  88,495    $ -          $  341,439 
sales
Cost of services
provided and goods        196,407        48,656       -              245,063
sold
Selling, general and
administrative            18,945         25,057       3,616          47,618
expenses (b)
Depreciation              4,123          2,058        132            6,313
Amortization             510          156        468          1,134   
     Total costs and     219,985      75,927     4,216        300,128 
     expenses
     Income/(loss)        32,959         12,568       (4,216  )      41,311
     from operations
Interest expense (b)      (62     )      (132   )     (3,361  )      (3,555  )
Intercompany interest     834            451          (1,285  )      -
income/(expense)
Other                    62           (7     )    (1,990  )     (1,935  )
income/(expense)—net
     Income/(loss)
     before income        33,793         12,880       (10,852 )      35,821
     taxes
Income taxes (b)         (12,823 )     (4,864 )    3,753        (13,934 )
     Net                $ 20,970     $  8,016     $ (7,099  )   $  21,887  
     income/(loss)


The "Footnotes to Financial Statements" are integral parts of this financial
information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
(in thousands)(unaudited)
                                                       
                                                                 Chemed
                       VITAS         Roto-Rooter   Corporate     Consolidated
2012
Service revenues and   $ 794,050    $ 267,416    $ -          $ 1,061,466 
sales
Cost of services
provided and goods       621,933       149,490       -             771,423
sold
Selling, general and
administrative           60,367        75,875        19,650        155,892
expenses (a)
Depreciation             12,521        6,264         393           19,178
Amortization             1,467         471           1,437         3,375
Other operating         -           1,126       -           1,126     
expenses (a)
    Total costs and     696,288     233,226     21,480      950,994   
    expenses
    Income/(loss)        97,762        34,190        (21,480 )     110,472
    from operations
Interest expense (a)     (188    )     (364    )     (10,480 )     (11,032   )
Intercompany
interest                 2,361         1,221         (3,582  )     -
income/(expense)
Other                   144         9           2,812       2,965     
income/(expense)—net
    Income/(loss)
    before income        100,079       35,056        (32,730 )     102,405
    taxes
Income taxes (a)        (38,080 )    (13,341 )    11,580      (39,841   )
    Net                $ 61,999     $ 21,715     $ (21,150 )   $ 62,564    
    income/(loss)
                                                                   
2011
Service revenues and   $ 731,712    $ 274,005    $ -          $ 1,005,717 
sales
Cost of services
provided and goods       570,648       151,470       -             722,118
sold
Selling, general and
administrative           57,392        76,181        20,123        153,696
expenses (b)
Depreciation             12,489        6,067         403           18,959
Amortization            1,513       443         1,287       3,243     
    Total costs and     642,042     234,161     21,813      898,016   
    expenses
    Income/(loss)        89,670        39,844        (21,813 )     107,701
    from operations
Interest expense (b)     (172    )     (274    )     (9,814  )     (10,260   )
Intercompany
interest                 3,263         1,742         (5,005  )     -
income/(expense)
Other                   3           (2      )    880         881       
income/(expense)—net
    Income/(loss)
    before income        92,764        41,310        (35,752 )     98,322
    taxes
Income taxes (b)        (35,080 )    (15,692 )    12,724      (38,048   )
    Net                $ 57,684     $ 25,618     $ (23,028 )   $ 60,274    
    income/(loss)
                                                                   

The "Footnotes to Financial Statements" are integral parts of this financial
information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARY OF EBITDA
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
(in thousands)(unaudited)
                                                       
                                                                     
                                                                  Chemed
                          VITAS        Roto-Rooter   Corporate    Consolidated
2012
Net income/(loss)         $ 21,940     $  6,145      $ (7,240 )   $  20,845
Add/(deduct):
    Interest expense        62            150          3,531         3,743
    Income taxes            13,516        3,661        (3,955 )      13,222
    Depreciation            4,333         2,093        131           6,557
    Amortization            489         160        486         1,135   
         EBITDA             40,340        12,209       (7,047 )      45,502
Add/(deduct):
    Intercompany
    interest                (795   )      (396   )     1,191         -
    expense/(income)
    Interest income         (256   )      (12    )     (23    )      (291    )
    Legal expenses of       483           -            -             483
    OIG investigation
    Acquisition             2             85           -             87
    expenses
    Cost to shut down       -             1,126        -             1,126
    HVAC operations
    Advertising cost        -             (468   )     -             (468    )
    adjustment (c)
    Expenses of class       -             116          -             116
    action litigation
    Stock option            -             -            2,397         2,397
    expense
    Expenses of
    securities             -           -          68          68      
    litigation
         Adjusted         $ 39,774    $  12,660    $ (3,414 )   $  49,020  
         EBITDA
                                                                     
2011
Net income/(loss)         $ 20,970     $  8,016      $ (7,099 )   $  21,887
Add/(deduct):
    Interest expense        62            132          3,361         3,555
    Income taxes            12,823        4,864        (3,753 )      13,934
    Depreciation            4,123         2,058        132           6,313
    Amortization           510         156        468         1,134   
         EBITDA             38,488        15,226       (6,891 )      46,823
Add/(deduct):
    Intercompany
    interest                (834   )      (451   )     1,285         -
    expense/(income)
    Interest income         (43    )      (12    )     (19    )      (74     )
    Legal expenses of       212           -            -             212
    OIG investigation
    Acquisition             2             -            -             2
    expenses
    Advertising cost        -             (585   )     -             (585    )
    adjustment (c)
    Expenses of class       -             770          -             770
    action litigation
    Stock option           -           -          2,408       2,408   
    expense
         Adjusted         $ 37,825    $  14,948    $ (3,217 )   $  49,556  
         EBITDA
                                                                     

The "Footnotes to Financial Statements" are integral parts of this financial
information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARY OF EBITDA
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
(in thousands)(unaudited)
                                                         
                                                                      
                                                                   Chemed
                         VITAS         Roto-Rooter   Corporate     Consolidated
2012
Net income/(loss)        $ 61,999      $  21,715     $ (21,150 )   $  62,564
Add/(deduct):
    Interest expense       188            364          10,480         11,032
    Income taxes           38,080         13,341       (11,580 )      39,841
    Depreciation           12,521         6,264        393            19,178
    Amortization          1,467        471        1,437        3,375   
         EBITDA            114,255        42,155       (20,420 )      135,990
Add/(deduct):
    Intercompany
    interest               (2,361  )      (1,221 )     3,582          -
    expense/(income)
    Interest income        (328    )      (22    )     (51     )      (401    )
    Legal expenses
    of OIG                 749            -            -              749
    investigation
    Acquisition            2              120          -              122
    expenses
    Cost to shut
    down HVAC              -              1,126        -              1,126
    operations
    Expenses of
    class action           -              843          -              843
    litigation
    Advertising cost       -              (1,870 )     -              (1,870  )
    adjustment (c)
    Stock option           -              -            6,709          6,709
    expense
    Expenses of
    securities            -            -          265          265     
    litigation
         Adjusted        $ 112,317    $  41,131    $ (9,915  )   $  143,533 
         EBITDA
                                                                      
2011
Net income/(loss)        $ 57,684      $  25,618     $ (23,028 )   $  60,274
Add/(deduct):
    Interest expense       172            274          9,814          10,260
    Income taxes           35,080         15,692       (12,724 )      38,048
    Depreciation           12,489         6,067        403            18,959
    Amortization          1,513        443        1,287        3,243   
         EBITDA            106,938        48,094       (24,248 )      130,784
Add/(deduct):
    Intercompany
    interest               (3,263  )      (1,742 )     5,005          -
    expense/(income)
    Interest income        (86     )      (28    )     (83     )      (197    )
    Legal expenses
    of OIG                 1,209          -            -              1,209
    investigation
    Acquisition            117            (6     )     -              111
    expenses
    Expenses of
    class action           -              1,451        -              1,451
    litigation
    Advertising cost       -              (1,442 )     -              (1,442  )
    adjustment (c)
    Stock option           -              -            6,903          6,903
    expense
    Long-term
    incentive             -            -          3,012        3,012   
    compensation
         Adjusted        $ 104,915    $  46,327    $ (9,411  )   $  141,831 
         EBITDA
                                                                      

The "Footnotes to Financial Statements" are integral parts of this financial
information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)
                                                           
                                                                        
                                                                        
                                     Three Months Ended    Nine Months Ended
                                     September 30,         September 30,
                                     2012       2011       2012       2011
Net income as reported               $ 20,845   $ 21,887   $ 62,564   $ 60,274
                                                                        
Add/(deduct) impact of:
    After-tax stock option expense     1,516      1,523      4,243      4,366
    After-tax additional interest
    expense resulting from the
    change in accounting for the       1,272      1,177      3,744      3,464
    conversion feature of the
    convertible notes
    After-tax cost to shut down        649        -          649        -
    HVAC operations
    After-tax cost of legal            300        131        465        749
    expenses of OIG investigation
    After-tax cost of expenses of      70         467        512        881
    class action litigation
    After-tax cost of acquisition      53         2          74         69
    expenses
    After-tax cost of securities       44         -          168        -
    litigation
    After-tax long-term incentive      -         -         -         1,880
    compensation
                                                                        
Adjusted net income                  $ 24,749   $ 25,187   $ 72,419   $ 71,683
                                                                        
                                                                        
Earnings Per Share As Reported
    Net income                       $ 1.10     $ 1.06     $ 3.30     $ 2.88
    Average number of shares          18,960    20,674    18,977    20,934
    outstanding
Diluted Earnings Per Share As
Reported
    Net income                       $ 1.07     $ 1.04     $ 3.23     $ 2.82
    Average number of shares          19,404    21,055    19,382    21,400
    outstanding
                                                                        
                                                                        
Adjusted Earnings Per Share
    Net income                       $ 1.31     $ 1.22     $ 3.82     $ 3.42
    Average number of shares          18,960    20,674    18,977    20,934
    outstanding
Adjusted Diluted Earnings Per
Share
    Net income                       $ 1.28     $ 1.20     $ 3.74     $ 3.35
    Average number of shares          19,404    21,055    19,382    21,400
    outstanding
                                                                        

The "Footnotes to Financial Statements" are integral parts of this financial
information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
                                                         
                                                                             
                         Three Months Ended          Nine Months Ended
                         September 30,               September 30,
OPERATING STATISTICS     2012          2011          2012          2011
  Net revenue ($000)
  (d)
      Homecare           $ 197,764     $ 184,155     $ 577,511     $ 529,874
      Inpatient            28,082        28,292        86,481        82,861
      Continuous care     42,144       40,113       127,481      117,950
          Total before
          Medicare cap   $ 267,990     $ 252,560     $ 791,473     $ 730,685
          allowance
      Medicare cap        -            384          2,577        1,027
      allowance
          Total          $ 267,990     $ 252,944     $ 794,050     $ 731,712
  Net revenue as a
  percent of total
  before Medicare cap
  allowance
      Homecare             73.8    %     72.9    %     73.0    %     72.5    %
      Inpatient            10.5          11.2          10.9          11.3
      Continuous care     15.7         15.9         16.1         16.2
          Total before
          Medicare cap     100.0         100.0         100.0         100.0
          allowance
      Medicare cap        -            0.2          0.3          0.1
      allowance
          Total           100.0   %    100.2   %    100.3   %     100.1   %
  Average daily census
  ("ADC") (days)
      Homecare             10,123        9,485         9,904         9,185
      Nursing home        3,073        3,118        3,031        3,062
          Routine          13,196        12,603        12,935        12,247
          homecare
      Inpatient            460           456           466           451
      Continuous care     621          599          630          601
          Total           14,277       13,658       14,031       13,299
                                                                             
  Total Admissions         15,539        14,879        47,773        45,971
  Total Discharges         15,340        14,682        47,064        45,104
  Average length of        78.5          80.1          78.3          78.7
  stay (days)
  Median length of         15.0          15.0          15.0          14.0
  stay (days)
  ADC by major
  diagnosis
      Neurological         33.9    %     34.3    %     34.1    %     34.4    %
      Cancer               17.3          17.5          17.6          17.7
      Cardio               11.2          11.3          11.4          11.6
      Respiratory          6.7           6.6           6.7           6.8
      Other               30.9         30.3         30.2         29.5
          Total           100.0   %    100.0   %    100.0   %     100.0   %
  Admissions by major
  diagnosis
      Neurological         19.3    %     19.0    %     19.3    %     19.3    %
      Cancer               34.0          34.7          33.3          33.1
      Cardio               10.5          10.4          11.1          10.9
      Respiratory          7.4           7.8           8.1           8.5
      Other               28.8         28.1         28.2         28.2
          Total           100.0   %    100.0   %    100.0   %     100.0   %
  Direct patient care
  margins (e)
      Routine homecare     52.5    %     52.4    %     51.8    %     52.0    %
      Inpatient            9.2           12.4          12.0          12.9
      Continuous care      19.0          20.7          19.6          20.5
  Homecare margin
  drivers (dollars per
  patient day)
      Labor costs        $ 54.69       $ 53.13       $ 55.64       $ 53.88
      Drug costs           8.11          8.26          8.25          8.14
      Home medical         7.03          6.64          6.88          6.65
      equipment
      Medical supplies     2.77          2.81          2.77          2.80
  Inpatient margin
  drivers (dollars per
  patient day)
      Labor costs        $ 326.95      $ 312.72      $ 320.79      $ 310.25
  Continuous care
  margin drivers
  (dollars per patient
  day)
      Labor costs        $ 575.21      $ 555.63      $ 571.56      $ 550.09
  Bad debt expense as
  a percent of             0.8     %     0.8     %     0.8     %     0.7     %
  revenues
  Accounts receivable
  --
  Days of revenue
  outstanding-             35.4          38.9          n.a.          n.a.
  excluding unapplied
  Medicare payments
  Days of revenue
  outstanding-             27.9          34.6          n.a.          n.a.
  including unapplied
  Medicare payments
                                                                             

The "Footnotes to Financial Statements" are integral parts of this financial
information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
(unaudited)
                                                       
                                                                     
(a) Included in the results of operations 2012 are the following significant
    credits/(charges) which may not be indicative of ongoing operations
    (in thousands):
                           Three Months Ended September 30, 2012
                           VITAS      Roto-Rooter   Corporate     Consolidated
    Selling, general and
    administrative
    expenses:
        Legal expenses
        of OIG             $ (483 )   $  -          $ -           $  (483    )
        investigation
        Acquisition          (2   )      (85    )     -              (87     )
        expenses
        Expenses of
        class action         -           (116   )     -              (116    )
        litigation
        Stock option         -           -            (2,397  )      (2,397  )
        expense
        Expenses of
        securities           -           -            (68     )      (68     )
        litigation
    Other operating          -           (1,126 )     -              (1,126  )
    expenses
    Interest
    expense:
        Additional
        interest expense
        resulting from
        the change in
        accounting for      -         -          (2,011  )     (2,011  )
        the conversion
        feature of the
        convertible
        notes
             Pretax
             impact on       (485 )      (1,327 )     (4,476  )      (6,288  )
             earnings
    Income tax benefit      184       556        1,644        2,384   
    on the above
             After-tax
             impact on     $ (301 )   $  (771   )   $ (2,832  )   $  (3,904  )
             earnings
                                                                     
                           Nine Months Ended September 30, 2012
                           VITAS      Roto-Rooter   Corporate     Consolidated
    Selling, general and
    administrative
    expenses:
        Legal expenses
        of OIG             $ (749 )   $  -          $ -           $  (749    )
        investigation
        Acquisition          (2   )      (120   )     -              (122    )
        expenses
        Expenses of
        class action         -           (843   )     -              (843    )
        litigation
        Stock option         -           -            (6,709  )      (6,709  )
        expense
        Expenses of
        securities           -           -            (265    )      (265    )
        litigation
    Other operating          -           (1,126 )     -              (1,126  )
    expenses
    Interest
    expense:
        Additional
        interest expense
        resulting from
        the change in
        accounting for      -         -          (5,919  )     (5,919  )
        the conversion
        feature of the
        convertible
        notes
             Pretax
             impact on       (751 )      (2,089 )     (12,893 )      (15,733 )
             earnings
    Income tax benefit      285       855        4,738        5,878   
    on the above
             After-tax
             impact on     $ (466 )   $  (1,234 )   $ (8,155  )   $  (9,855  )
             earnings
                                                                             

(b) Included in the results of operations 2011 are the following significant
    credits/(charges) which may not be indicative of ongoing operations
    (in thousands):
                  Three Months Ended September 30, 2011
                         VITAS       Roto-Rooter  Corporate    Consolidated
    Selling, general
    and administrative
    expenses:
        Legal expenses
        of OIG           $ (212   )   $  -          $ -           $  (212    )
        investigation
        Acquisition        (2     )      -            -              (2      )
        expenses
        Expenses of
        class action       -             (770   )     -              (770    )
        litigation
        Stock option       -             -            (2,408  )      (2,408  )
        expense
    Interest
    expense:
        Additional
        interest
        expense
        resulting from
        the change in     -           -          (1,861  )     (1,861  )
        accounting for
        the conversion
        feature of the
        convertible
        notes
           Pretax
           impact on       (214   )      (770   )     (4,269  )      (5,253  )
           earnings
    Income tax benefit    81          303        1,569        1,953   
    on the above
           After-tax
           impact on     $ (133   )   $  (467   )   $ (2,700  )   $  (3,300  )
           earnings
                                                                     
                         Nine Months Ended September 30, 2011
                         VITAS        Roto-Rooter   Corporate     Consolidated
    Selling, general
    and administrative
    expenses:
        Legal expenses
        of OIG           $ (1,209 )   $  -          $ -           $  (1,209  )
        investigation
        Acquisition        (117   )      6            -              (111    )
        expenses
        Expenses of
        class action       -             (1,451 )     -              (1,451  )
        litigation
        Stock option       -             -            (6,903  )      (6,903  )
        expense
        Long-term
        incentive          -             -            (3,012  )      (3,012  )
        compensation
    Interest
    expense:
           Additional
           interest
           expense
           resulting
           from the
           change in
           accounting     -           -          (5,476  )     (5,476  )
           for the
           conversion
           feature of
           the
           convertible
           notes
           Pretax
           impact on       (1,326 )      (1,445 )     (15,391 )      (18,162 )
           earnings
    Income tax benefit    504         568        5,681        6,753   
    on the above
           After-tax
           impact on     $ (822   )   $  (877   )   $ (9,710  )   $  (11,409 )
           earnings
                                                                     

      Under Generally Accepted Accounting Principles ("GAAP"), the Roto-Rooter
      segment expenses all advertising, including the cost of telephone
      directories, immediately upon the initial release of the advertising.
      Telephone directories are generally in circulation 12 months. If a
      directory is in circulation for a time period greater or less than 12
      months, the publisher adjusts the directory billing for the change in
(c)  billing period. The timing of when a telephone directory is published
      can and does fluctuate significantly on a quarterly basis. This "direct
      expensing" results in significant fluctuations in quarterly advertising
      expense. In the third quarters of 2012 and 2011, GAAP advertising
      expense for Roto-Rooter totaled $5,784,000 and $5,239,000, respectively.
      If the expense of the telephone directories were spread over the periods
      they are in circulation, advertising expense for the third quarters of
      2012 and 2011 would total $6,252,000 and $5,824,000, respectively.
      
      Similarly, for the first nine months of 2012 and 2011, GAAP advertising
      expense for Roto-Rooter totaled $16,678,000 and $16,461,00,
      respectively. If the expense of the telephone directories were spread
      over the periods they are in circulation, advertising expense for the
      first nine months of 2012 and 2011 would total $18,548,000 and
      $17,903,000, respectively.
      
      VITAS has 8 large (greater than 450 ADC), 16 medium (greater than 200
      but less than 450 ADC) and 27 small (less than 200 ADC) hospice
(d)   programs. For the current Medicare cap year there are no programs with a
      cap liability and six programs with Medicare cap cushion of less than
      10%.
      
(e)   Amounts exclude indirect patient care and administrative costs, as well
      as Medicare Cap billing limitation.

Contact:

Chemed Corporation
David P. Williams, 513-762-6901
 
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