Chemed Reports Second-Quarter 2013 Results

  Chemed Reports Second-Quarter 2013 Results

Business Wire

CINCINNATI -- July 18, 2013

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 second
quarter ended June 30, 2013, versus the comparable prior-year period, as
follows:

Consolidated operating results:

  *Revenue increased 0.9% to $357 million
  *GAAP Diluted EPS, including litigation settlement, decreased 30.0% to
    $0.77
  *Adjusted Diluted EPS increased 14.3% to $1.44

VITAS segment operating results:

  *Net Patient Revenue of $264 million, a decrease of 0.6%
  *Average Daily Census (ADC) of 14,679, an increase of 4.0%
  *Admissions of 15,721, a decrease of 1.2%
  *Net Income of $20.5 million, an increase of 0.3%
  *Adjusted EBITDA of $37.7 million, an increase of 1.7%
  *Adjusted EBITDA margin of 14.3%, an increase of 32 basis points

Roto-Rooter segment operating results:

  *Revenue of $93.6 million, an increase of 5.3%
  *Unit-for-unit job count of 162,432, an increase of 1.0%
  *Net Income, including litigation settlement, of $1.4 million
  *Adjusted EBITDA of $18.9 million, an increase of 31.1%
  *Adjusted EBITDA margin of 20.2%, an increase of 398 basis points

                                    VITAS

Net revenue for VITAS was $264 million in the second quarter of 2013, which is
a decline of 0.6% when compared to the prior-year period. This revenue decline
is a combination of Medicare reimbursement rates decreasing approximately
1.1%, increased ADC of 4.0% and level of care mix shifting as the proportion
of high acuity days-of-care declined 89 basis points.

In the second quarter of 2013, VITAS recorded a Medicare Cap billing
adjustment of $0.9 million related to one provider number.

Of VITAS’ 36 unique Medicare provider numbers, 32 provider numbers have a
Medicare Cap cushion of 10% or greater during the first nine months of the
2013 Medicare Cap year; two provider numbers have a Medicare Cap cushion
between 5% to 10%; and one provider number has a cap cushion between 0% and
5%. VITAS generated an aggregate cap cushion of $233 million during the
trailing twelve-month period.

Average revenue per patient per day in the quarter, excluding the impact of
Medicare Cap, was $197.95, which is 4.2% below the prior-year period. The
average revenue includes the 2.0% reduction in Medicare hospice reimbursement
effective April 1, 2013. Routine home care reimbursement and high acuity care
averaged $161.08 and $693.20, respectively, per patient per day in the second
quarter of 2013. During the quarter, high acuity days of care were 6.9% of
total days of care, 89 basis points below the prior-year quarter.

The second quarter of 2013 gross margin, excluding the impact of Medicare Cap,
was 22.2%, which is a 54 basis point improvement when compared to the second
quarter of 2012.

Selling, general and administrative expense was $21.1 million in the second
quarter of 2013, which is an increase of 2.9% when compared to the prior-year
quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $38.5million in the
quarter, an increase of 4.0% over the prior-year period. Adjusted EBITDA
margin, excluding the impact from Medicare Cap, was 14.6% in the quarter which
is 60 basis points above the prior-year quarter.

                                 Roto-Rooter

Roto-Rooter’s plumbing and drain cleaning business generated sales of $93.6
million for the second quarter of 2013, an increase of 5.3%, over the
prior-year quarter.

Total unit-for-unit job count increased 1.0% in the second quarter of 2013
when compared to the prior-year period. This consisted of a residential drain
cleaning job count increase of 5.8% and residential plumbing job count decline
of 4.5%, when compared to the second quarter of 2012. Residential jobs
represented 69% of total job count in the quarter. Commercial drain cleaning
increased 0.8% and commercial plumbing/excavation job count declined 2.2% when
compared to the prior-year quarter.

Roto-Rooter’s gross margin in the quarter was 47.1%, a 273 basis point
increase when compared to the second quarter of 2012. Adjusted EBITDA in the
second quarter of 2013 totaled $18.9million, an increase of 31.1%, and the
Adjusted EBITDA margin was 20.2% in the quarter, an increase of 398 basis
points.

In June 2013 Roto-Rooter reached a tentative agreement, subject to Court
approval, to settle litigation claims for alleged violation of the Fair Labor
Standards Act (“FLSA”) and alleged claims for violations of the labor laws of
multiple states. As a result of this tentative settlement, Roto-Rooter
recorded an after-tax expense in the quarter of $9.0 million.

                             Chemed Consolidated

As of June 30, 2013, Chemed had total cash and cash equivalents of $113
million, and debt of $179 million. 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.

In January 2013 Chemed entered into a five-year Amended and Restated Credit
Agreement that consists of a $350 million revolving credit facility. The
interest rate on this facility has a floating rate that is currently LIBOR
plus 125 basis points. At June 30, 2013, the Company had approximately $317
million of undrawn borrowing capacity under this credit agreement after
deducting $33 million for letters of credit issued to secure the Company’s
workers’ compensation insurance.

Capital expenditures through June 30, 2013, aggregated $12.2 million and
compares to depreciation and amortization during the same period of $16.0
million.

During the quarter, the Company repurchased $18.4 million of Chemed stock.
This equates to 280,701 of Chemed shares repurchased at an average cost of
$65.72. Chemed currently has $96.3 million of authorization remaining under
this share repurchase plan.

                              Guidance for 2013

Effective October1, 2012, Medicare increased the average hospice
reimbursement rates by approximately 0.9%. Effective April 1, 2013, Medicare
reduced hospice reimbursement rates 2.0%. As a result, effective April 1,
2013, this 0.9% increase was reduced to a 1.1% decline in Medicare rates when
compared to the prior year. The impact from sequestration impacts
approximately 91.2% of Vitas’ revenue base and is factored into the 2013
guidance detailed below.

VITAS estimates its full-year 2013 revenue growth will be constrained in the
second half of 2013 as a result of mix shift from high acuity care to routine
home care. This mix shift is anticipated to have a modest impact on overall
profitability given the relatively low direct contribution margins of high
acuity care.

Full year 2013 revenue growth, prior to Medicare Cap, is estimated to be in
the range of 0.5% to 2.0%. Admissions in 2013 are estimated to increase
approximately 2.0% to 4.0% and full-year Adjusted EBITDA margin, prior to
Medicare Cap, is estimated to be 14.0% to 14.5%.

Roto-Rooter is forecasted to achieve full-year 2013 revenue growth of 4.0% to
5.0%. This revenue estimate is based upon increased job pricing of
approximately 3.5% and job count increasing 0.5% to 1.0%. Adjusted EBITDA
margin for 2013 is estimated in the range of 19.0% to 19.5%.

Management reaffirms previous guidance that full-year 2013 earnings per
diluted share, excluding non-cash expense for stock options, the non-cash
interest expense related to the accounting for convertible debt, litigation
and other items not indicative of ongoing operations, will be in the range of
$5.65 to $5.80. This compares to Chemed’s 2012 reported adjusted earnings per
diluted share of $5.29.

                               Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Friday, July
19, 2013, 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) 578-5771
for U.S. and Canadian participants and (617)213-8055 for international
participants. The participant passcode is 98464909. 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 78884155. 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
over 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 June     Six Months Ended June 30,
                         30,
                         2013          2012          2013          2012
Service revenues and     $ 357,198    $ 354,170    $ 723,839    $ 707,113 
sales
Cost of services
provided and goods         255,359       257,368       519,666       514,813
sold
Selling, general and
administrative             53,107        49,770        108,667       102,937
expenses (aa)
Depreciation               6,899         6,380         13,694        12,621
Amortization               1,181         1,127         2,308         2,240
Other operating           14,760      -           14,760      -       
expenses (bb)
     Total costs and      331,306     314,645     659,095     632,611 
     expenses
     Income from           25,892        39,525        64,744        74,502
     operations
Interest expense           (3,697  )     (3,672  )     (7,791  )     (7,289  )
Other
income/(expense)--net     1,696       (970    )    3,402       1,125   
(cc)
     Income before         23,891        34,883        60,355        68,338
     income taxes
Income taxes              (9,283  )    (13,609 )    (23,469 )    (26,619 )
Net income               $ 14,608     $ 21,274     $ 36,886     $ 41,719  
                                                                     
                                                                     
Earnings Per Share
     Net income          $ 0.79       $ 1.12       $ 1.99       $ 2.20    
     Average number of
     shares               18,606      18,998      18,564      18,976  
     outstanding
                                                                     
Diluted Earnings Per
Share
     Net income          $ 0.77       $ 1.10       $ 1.94       $ 2.16    
     Average number of
     shares               18,966      19,369      18,980      19,357  
     outstanding
                                                                     
                                                                     
                           
(aa) Selling, general and administrative ("SG&A") expenses comprise (in
     thousands):
                         Three Months Ended June     Six Months Ended June 30,
                         30,
                         2013          2012          2013          2012
       SG&A expenses
       before
       long-term
       incentive
       compensation
       and the impact    $ 51,550      $ 50,718      $ 105,026     $ 101,752
       of market gains
       and losses
       related to
       deferred
       compensation
       plans
       Market value
       gains/(losses)
       related to          1,063         (948    )     2,535         1,185
       deferred
       compensation
       plans (cc)
       Long-term
       incentive          494         -           1,106       -       
       compensation
           Total SG&A    $ 53,107     $ 49,770     $ 108,667    $ 102,937 
           expenses
                                                                     
(bb) Other operating expenses comprise a litigation settlement in June 2013.
                                                                     
(cc) Other income/(expense)--net comprises (in thousands):
                         Three Months Ended June     Six Months Ended June 30,
                         30,
                         2013          2012          2013          2012
       Market value
       gains/(losses)
       related to        $ 1,063       $ (948    )   $ 2,535       $ 1,185
       deferred
       compensation
       plans
       Interest income     670           59            973           110
       Loss on
       disposal of         (1      )     (67     )     (79     )     (148    )
       property and
       equipment
       Other              (36     )    (14     )    (27     )    (22     )
           Total other   $ 1,696      $ (970    )   $ 3,402      $ 1,125   
           income--net
                                                                             

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(in thousands, except per share data)(unaudited)
                                                       
                                                                    
                                                   June 30,
                                                   2013           2012
Assets
      Current assets
              Cash and cash equivalents            $ 113,047      $ 59,966
              Accounts receivable less               76,356         81,811
              allowances
              Inventories                            6,156          8,146
              Current deferred income taxes          19,322         13,226
              Prepaid income taxes                   4,911          4,187
              Prepaid expenses                      13,518       10,737   
                   Total current assets              233,310        178,073
      Investments of deferred compensation plans     40,583         33,215
      held in trust
      Properties and equipment, at cost less         90,229         88,571
      accumulated depreciation
      Identifiable intangible assets less            57,348         57,635
      accumulated amortization
      Goodwill                                       466,271        461,965
      Other assets                                  11,137       11,669   
                        Total Assets               $ 898,878     $ 831,128  
                                                                    
Liabilities
      Current liabilities
              Accounts payable                     $ 35,921       $ 51,002
              Current portion of long-term debt      179,154        -
              Income taxes                           4,561          167
              Accrued insurance                      42,616         36,786
              Accrued compensation                   42,156         39,729
              Other current liabilities             33,840       14,906   
                   Total current liabilities         338,248        142,590
      Deferred income taxes                          27,981         25,257
      Long-term debt                                 -              170,769
      Deferred compensation liabilities              39,660         33,149
      Other liabilities                             11,702       11,918   
                        Total Liabilities           417,591      383,683  
                                                                    
Stockholders' Equity
      Capital stock                                  32,075         31,142
      Paid-in capital                                466,980        410,957
      Retained earnings                              653,146        582,316
      Treasury stock, at cost                        (673,008 )     (579,013 )
      Deferred compensation payable in Company      2,094        2,043    
      stock
                        Total Stockholders'         481,287      447,445  
                        Equity
                        Total Liabilities and      $ 898,878     $ 831,128  
                        Stockholders' Equity
                                                                             

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)(unaudited)
                                                       
                                                                     
                                                     Six Months Ended June 30,
                                                     2013          2012
Cash Flows from Operating Activities
  Net income                                         $ 36,886      $ 41,719
  Adjustments to reconcile net income to net cash
  provided by operating activities:
      Depreciation and amortization                    16,002        14,861
      Provision for uncollectible accounts             5,432         4,730
      receivable
      Provision for deferred income taxes              (5,375  )     (4,895  )
      Amortization of discount on convertible          4,264         3,985
      notes
      Stock option expense                             3,103         4,312
      Noncash long-term incentive compensation         1,106         -
      Amortization of debt issuance costs              1,097         621
      Changes in operating assets and liabilities,
      excluding amounts acquired in business
      combinations:
               Decrease/(increase) in accounts         11,745        (8,543  )
               receivable
               Decrease in inventories                 902           522
               Decrease/(increase) in prepaid          (2,017  )     672
               expenses
               Increase/(decrease) in accounts
               payable and other current               14,721        (3,593  )
               liabilities
               Decrease in income taxes                (409    )     (1,029  )
               Increase in other assets                (4,914  )     (2,283  )
               Increase in other liabilities           4,401         4,493
      Excess tax benefit on share-based                (2,478  )     (1,069  )
      compensation
      Other sources                                   200         152     
          Net cash provided by operating              84,666      54,655  
          activities
Cash Flows from Investing Activities
  Capital expenditures                                 (12,200 )     (18,474 )
  Business combinations, net of cash acquired          (1,501  )     (1,500  )
  Other sources                                       101         357     
          Net cash used by investing activities       (13,600 )    (19,617 )
Cash Flows from Financing Activities
  Purchases of treasury stock                          (18,448 )     (11,138 )
  Proceeds from issuance of capital stock              12,558        3,670
  Increase/(decrease) in cash overdrafts payable       (11,608 )     985
  Dividends paid                                       (6,775  )     (6,160  )
  Capital stock surrendered to pay taxes on            (4,269  )     (1,645  )
  stock-based compensation
  Excess tax benefit on share-based compensation       2,478         1,069
  Debt issuances costs                                 (1,104  )     -
  Other sources/(uses)                                (382    )    66      
          Net cash used by financing activities       (27,550 )    (13,153 )
Increase in Cash and Cash Equivalents                  43,516        21,885
Cash and cash equivalents at beginning of year        69,531      38,081  
Cash and cash equivalents at end of period           $ 113,047    $ 59,966  
                                                                             

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2013 AND 2012
(in thousands)(unaudited)
                                                        
                                                                  Chemed
                        VITAS         Roto-Rooter   Corporate     Consolidated
2013
Service revenues and    $ 263,568    $  93,630    $ -          $  357,198 
sales
Cost of services
provided and goods        205,788        49,571       -              255,359
sold
Selling, general and
administrative            21,063         25,230       6,814          53,107
expenses (a)
Depreciation              4,520          2,246        133            6,899
Amortization              536            149          496            1,181
Other operating          -            14,760     -            14,760  
expenses
     Total costs and     231,907      91,956     7,443        331,306 
     expenses
     Income/(loss)        31,661         1,674        (7,443  )      25,892
     from operations
Interest expense (a)      (51     )      (97    )     (3,549  )      (3,697  )
Intercompany interest     866            436          (1,302  )      -
income/(expense)
Other                    585          34         1,077        1,696   
income/(expense)—net
     Income/(loss)
     before income        33,061         2,047        (11,217 )      23,891
     taxes
Income taxes (a)         (12,576 )     (633   )    3,926        (9,283  )
     Net                $ 20,485     $  1,414     $ (7,291  )   $  14,608  
     income/(loss)
                                                                     
2012
Service revenues and    $ 265,213    $  88,957    $ -          $  354,170 
sales
Cost of services
provided and goods        207,839        49,529       -              257,368
sold
Selling, general and
administrative            20,471         24,372       4,927          49,770
expenses (b)
Depreciation              4,164          2,085        131            6,380
Amortization             488          157        482          1,127   
     Total costs and     232,962      76,143     5,540        314,645 
     expenses
     Income/(loss)        32,251         12,814       (5,540  )      39,525
     from operations
Interest expense (b)      (63     )      (107   )     (3,502  )      (3,672  )
Intercompany interest     812            430          (1,242  )      -
income/(expense)
Other                    (1      )     (33    )    (936    )     (970    )
income/(expense)—net
     Income/(loss)
     before income        32,999         13,104       (11,220 )      34,883
     taxes
Income taxes (b)         (12,566 )     (5,030 )    3,987        (13,609 )
     Net                $ 20,433     $  8,074     $ (7,233  )   $  21,274  
     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 SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(in thousands)(unaudited)
                                                        
                                                                  Chemed
                        VITAS         Roto-Rooter   Corporate     Consolidated
2013
Service revenues and    $ 534,895    $ 188,944    $ -          $  723,839 
sales
Cost of services
provided and goods        418,949       100,717       -              519,666
sold
Selling, general and
administrative            42,667        51,892        14,108         108,667
expenses (a)
Depreciation              9,033         4,394         267            13,694
Amortization              1,026         303           979            2,308
Other operating          -           14,760      -            14,760  
expenses
     Total costs and     471,675     172,066     15,354       659,095 
     expenses
     Income/(loss)        63,220        16,878        (15,354 )      64,744
     from operations
Interest expense (a)      (97     )     (156    )     (7,538  )      (7,791  )
Intercompany interest     1,709         864           (2,573  )      -
income/(expense)
Other                    805         34          2,563        3,402   
income/(expense)—net
     Income/(loss)
     before income        65,637        17,620        (22,902 )      60,355
     taxes
Income taxes (a)         (25,009 )    (6,582  )    8,122        (23,469 )
     Net                $ 40,628     $ 11,038     $ (14,780 )   $  36,886  
     income/(loss)
                                                                     
2012
Service revenues and    $ 526,060    $ 181,053    $ -          $  707,113 
sales
Cost of services
provided and goods        413,459       101,354       -              514,813
sold
Selling, general and
administrative            40,219        50,525        12,193         102,937
expenses (b)
Depreciation              8,188         4,171         262            12,621
Amortization             978         311         951          2,240   
     Total costs and     462,844     156,361     13,406       632,611 
     expenses
     Income/(loss)        63,216        24,692        (13,406 )      74,502
     from operations
Interest expense (b)      (126    )     (214    )     (6,949  )      (7,289  )
Intercompany interest     1,566         825           (2,391  )      -
income/(expense)
Other                    (32     )    (54     )    1,211        1,125   
income/(expense)—net
     Income/(loss)
     before income        64,624        25,249        (21,535 )      68,338
     taxes
Income taxes (b)         (24,564 )    (9,680  )    7,625        (26,619 )
     Net                $ 40,060     $ 15,569     $ (13,910 )   $  41,719  
     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 JUNE 30, 2013 AND 2012
(in thousands)(unaudited)
                                                       
                                                                     
                                                                  Chemed
                          VITAS        Roto-Rooter   Corporate    Consolidated
2013
Net income/(loss)         $ 20,485     $  1,414      $ (7,291 )   $  14,608
Add/(deduct):
    Interest expense        51            97           3,549         3,697
    Income taxes            12,576        633          (3,926 )      9,283
    Depreciation            4,520         2,246        133           6,899
    Amortization            536         149        496         1,181   
         EBITDA             38,168        4,539        (7,039 )      35,668
Add/(deduct):
    Intercompany
    interest                (866   )      (436   )     1,302         -
    expense/(income)
    Interest income         (642   )      (14    )     (14    )      (670    )
    Expenses related to     996           -            -             996
    OIG investigation
    Acquisition             19            1            -             20
    expenses
    Litigation              -             14,760       -             14,760
    settlement
    Expenses related to
    litigation              -             567          -             567
    settlements
    Advertising cost        -             (505   )     -             (505    )
    adjustment (c)
    Stock option            -             -            1,612         1,612
    expense
    Long-term incentive     -             -            494           494
    compensation
    Expenses related to
    securities             -           -          1           1       
    litigation
         Adjusted         $ 37,675    $  18,912    $ (3,644 )   $  52,943  
         EBITDA
                                                                     
2012
Net income/(loss)         $ 20,433     $  8,074      $ (7,233 )   $  21,274
Add/(deduct):
    Interest expense        63            107          3,502         3,672
    Income taxes            12,566        5,030        (3,987 )      13,609
    Depreciation            4,164         2,085        131           6,380
    Amortization           488         157        482         1,127   
         EBITDA             37,714        15,453       (7,105 )      46,062
Add/(deduct):
    Intercompany
    interest                (812   )      (430   )     1,242         -
    expense/(income)
    Interest income         (42    )      (2     )     (15    )      (59     )
    Expenses related to     195           -            -             195
    OIG investigation
    Acquisition             -             20           -             20
    expenses
    Expenses related to
    litigation              -             80           -             80
    settlements
    Advertising cost        -             (696   )     -             (696    )
    adjustment (c)
    Stock option            -             -            2,374         2,374
    expense
    Expenses related to
    securities             -           -          197         197     
    litigation
         Adjusted         $ 37,055    $  14,425    $ (3,307 )   $  48,173  
         EBITDA
                                                                             

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

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARY OF EBITDA
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(in thousands)(unaudited)
                                                       
                                                                     
                                                                  Chemed
                         VITAS        Roto-Rooter   Corporate     Consolidated
2013
Net income/(loss)        $ 40,628     $  11,038     $ (14,780 )   $  36,886
Add/(deduct):
    Interest expense       97            156          7,538          7,791
    Income taxes           25,009        6,582        (8,122  )      23,469
    Depreciation           9,033         4,394        267            13,694
    Amortization          1,026       303        979          2,308   
        EBITDA             75,793        22,473       (14,118 )      84,148
Add/(deduct):
    Intercompany
    interest               (1,709 )      (864   )     2,573          -
    expense/(income)
    Interest income        (888   )      (56    )     (29     )      (973    )
    Expenses related
    to OIG                 2,035         -            -              2,035
    investigation
    Acquisition            20            1            -              21
    expenses
    Litigation             -             14,760       -              14,760
    settlement
    Expenses related
    to litigation          -             708          -              708
    settlements
    Advertising cost       -             (974   )     -              (974    )
    adjustment (c)
    Cost of severance      -             302          -              302
    arrangements
    Stock option           -             -            3,103          3,103
    expense
    Long-term
    incentive              -             -            1,106          1,106
    compensation
    Expenses related
    to securities         -           -          3            3       
    litigation
        Adjusted         $ 75,251    $  36,350    $ (7,362  )   $  104,239 
        EBITDA
                                                                     
2012                  
Net income/(loss)        $ 40,060     $  15,569     $ (13,910 )   $  41,719
Add/(deduct):
    Interest expense       126           214          6,949          7,289
    Income taxes           24,564        9,680        (7,625  )      26,619
    Depreciation           8,188         4,171        262            12,621
    Amortization          978         311        951          2,240   
        EBITDA             73,916        29,945       (13,373 )      90,488
Add/(deduct):
    Intercompany
    interest               (1,566 )      (825   )     2,391          -
    expense/(income)
    Interest income        (72    )      (10    )     (28     )      (110    )
    Expenses related
    to OIG                 266           -            -              266
    investigation
    Acquisition            -             35           -              35
    expenses
    Expenses related
    to litigation          -             727          -              727
    settlements
    Advertising cost       -             (1,402 )     -              (1,402  )
    adjustment (c)
    Stock option           -             -            4,312          4,312
    expense
    Expenses related
    to securities         -           -          197          197     
    litigation
        Adjusted         $ 72,544    $  28,470    $ (6,501  )   $  94,513  
        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 June    Six Months Ended June
                           30,                        30,
                           2013          2012         2013          2012
Net income as reported     $  14,608     $  21,274    $  36,886     $  41,719
                                                                       
Add/(deduct) after-tax
cost of:
    Litigation                8,967         -            8,967         -
    settlement
    Additional interest
    expense resulting
    from the change in
    accounting for the        1,348         1,248        2,671         2,472
    conversion feature
    of the convertible
    notes
    Stock option expense      1,020         1,502        1,963         2,727
    Expenses of OIG           618           121          1,262         165
    investigation
    Expenses related to
    litigation                344           49           430           442
    settlements
    Long-term incentive       313           -            700           -
    compensation
    Acquisition expenses      13            12           13            21
    Expenses related to
    securities                1             124          2             124
    litigation
    Loss on
    extinguishment of         -             -            294           -
    debt
    Severance                -            -           184          
    arrangements
                                                                       
Adjusted net income        $  27,232     $  24,330    $  53,372     $  47,670
                                                                       
                                                                       
Earnings Per Share As
Reported
    Net income             $  0.79       $  1.12      $  1.99       $  2.20
    Average number of        18,606       18,998      18,564       18,976
    shares outstanding
Diluted Earnings Per
Share As Reported
    Net income             $  0.77       $  1.10      $  1.94       $  2.16
    Average number of        18,966       19,369      18,980       19,357
    shares outstanding
                                                                       
                                                                       
Adjusted Earnings Per
Share
    Net income             $  1.46       $  1.28      $  2.88       $  2.51
    Average number of        18,606       18,998      18,564       18,976
    shares outstanding
Adjusted Diluted
Earnings Per Share
    Net income             $  1.44       $  1.26      $  2.81       $  2.46
    Average number of        18,966       19,369      18,980       19,357
    shares outstanding
                                                                       

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

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(unaudited)
                                                                 
                     Three Months Ended June       Six Months Ended June
                     30,                           30,
OPERATING            2013          2012            2013          2012
STATISTICS
  Net revenue
  ($000) (d)
     Homecare        $ 200,273     $ 193,150       $ 396,934     $ 379,747
     Inpatient         25,889        29,247          54,357        58,399
     Continuous       38,261      42,816         83,586       85,337
     care
         Total
         before
         Medicare    $ 264,423     $ 265,213       $ 534,877     $ 523,483
         cap
         allowance
     Medicare cap     (855    )    -              18           2,577
     allowance
         Total       $ 263,568    $ 265,213       $ 534,895     $ 526,060
  Net revenue as a
  percent of total
  before Medicare
  cap allowance
     Homecare          75.7      %   72.9      %     74.2      %   72.5      %
     Inpatient         9.8           11.0            10.2          11.2
     Continuous       14.5        16.1           15.6         16.3
     care
         Total
         before
         Medicare      100.0         100.0           100.0         100.0
         cap
         allowance
     Medicare cap     (0.3    )    -              -            0.5
     allowance
         Total        99.7     %  100.0     %    100.0     %   100.5     %
  Average daily
  census ("ADC")
  (days)
     Homecare          10,719        9,971           10,538        9,792
     Nursing home     2,943       3,036          2,936        3,011
         Routine       13,662        13,007          13,474        12,803
         homecare
     Inpatient         434           466             451           469
     Continuous       583         638            631          635
     care
         Total        14,679      14,111         14,556       13,907
                                                                             
  Total Admissions     15,721        15,912          32,858        32,234
  Total Discharges     15,763        15,508          32,622        31,707
  Average length       84.8          74.0            80.9          78.3
  of stay (days)
  Median length of     16.0          14.0            14.0          14.0
  stay (days)
  ADC by major
  diagnosis
     Neurological      35.5      %   33.6      %     35.1      %   34.0      %
     Cancer            16.9          17.7            16.9          17.8
     Cardio            12.5          11.6            12.0          11.5
     Respiratory       7.5           6.7             7.3           6.7
     Other            27.6        30.4           28.7         30.0
         Total        100.0    %  100.0     %    100.0     %   100.0     %
  Admissions by
  major diagnosis
     Neurological      20.1      %   18.9      %     19.8      %   19.2      %
     Cancer            33.6          33.5            32.3          32.9
     Cardio            13.2          10.8            12.5          11.3
     Respiratory       9.1           8.1             9.4           8.5
     Other            24.0        28.7           26.0         28.1
         Total        100.0    %  100.0     %    100.0     %   100.0     %
  Direct patient
  care margins (e)
     Routine           52.3      %   52.4      %     52.1      %   51.4      %
     homecare
     Inpatient         3.6           12.7            7.4           13.4
     Continuous        14.6          19.7            16.3          19.8
     care
  Homecare margin
  drivers (dollars
  per patient day)
     Labor costs     $ 55.04       $ 54.56         $ 56.09       $ 56.13
     Drug costs        7.55          8.31            7.56          8.32
     Home medical      6.56          6.79            6.70          6.80
     equipment
     Medical           3.13          2.79            3.03          2.77
     supplies
  Inpatient margin
  drivers (dollars
  per patient day)
     Labor costs     $ 346.46      $ 321.16        $ 333.15      $ 317.73
  Continuous care
  margin drivers
  (dollars per
  patient day)
     Labor costs     $ 595.29      $ 569.98        $ 591.24      $ 569.76
  Bad debt expense
  as a percent of      0.8       %   0.8       %     0.8       %   0.8       %
  revenues
  Accounts
  receivable --
  Days of revenue
  outstanding-
  excluding            36.8          35.0            n.a.          n.a.
  unapplied
  Medicare
  payments
  Days of revenue
  outstanding-
  including            20.5          30.6            n.a.          n.a.
  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 SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(unaudited)
    
(a) Included in the results of operations 2013 are the following significant
    credits/(charges) which may not be indicative of ongoing operations
    (in thousands):
    

                Three Months Ended June 30, 2013
                          VITAS       Roto-Rooter  Corporate   Consolidated
      Selling, general
      and
      administrative
      expenses:
         Expenses
         related to OIG   $ (996   )   $ -           $ -          $  (996    )
         investigation
         Acquisition        (19    )     (1      )     -             (20     )
         expenses
         Expenses
         related to         -            (567    )     -             (567    )
         litigation
         settlements
         Stock option       -            -             (1,612 )      (1,612  )
         expense
         Long-term
         incentive          -            -             (494   )      (494    )
         compensation
         Expenses
         related to         -            -             (1     )      (1      )
         securities
         litigation
      Other operating
      expenses:
         Litigation         -            (14,760 )     -             (14,760 )
         settlement
      Interest
      expense:
         Additional
         interest
         expense
         resulting from
         the change in     -          -           (2,132 )     (2,132  )
         accounting for
         the conversion
         feature of the
         convertible
         notes
              Pretax
              impact on     (1,015 )     (15,328 )     (4,239 )      (20,582 )
              earnings
      Income tax
      benefit on the       385        6,016       1,557       7,958   
      above
              After-tax
              impact on   $ (630   )   $ (9,312  )   $ (2,682 )   $  (12,624 )
              earnings
                                                                     
                          Six Months Ended June 30, 2013
                          VITAS        Roto-Rooter   Corporate    Consolidated
      Selling, general
      and
      administrative
      expenses:
         Expenses
         related to OIG   $ (2,035 )   $ -           $ -          $  (2,035  )
         investigation
         Acquisition        (20    )     (1      )     -             (21     )
         expenses
         Expenses
         related to         -            (708    )     -             (708    )
         litigation
         settlements
         Costs of
         severance          -            (302    )     -             (302    )
         arrangements
         Stock option       -            -             (3,103 )      (3,103  )
         expense
         Long-term
         incentive          -            -             (1,106 )      (1,106  )
         compensation
         Expenses
         related to         -            -             (3     )      (3      )
         securities
         litigation
      Other operating
      expenses:
         Litigation         -            (14,760 )     -             (14,760 )
         settlement
      Interest
      expense:
         Additional
         interest
         expense
         resulting from
         the change in      -            -             (4,223 )      (4,223  )
         accounting for
         the conversion
         feature of the
         convertible
         notes
         Loss on
         extinguishment    -          -           (465   )     (465    )
         of debt
              Pretax
              impact on     (2,055 )     (15,771 )     (8,900 )      (26,726 )
              earnings
      Income tax
      benefit on the       781        6,189       3,270       10,240  
      above
              After-tax
              impact on   $ (1,274 )   $ (9,582  )   $ (5,630 )   $  (16,486 )
              earnings
                                                                     

(b) 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 June 30, 2012
                            VITAS     Roto-Rooter  Corporate   Consolidated
      Selling, general
     and administrative
      expenses:
          Expenses
          related to OIG    $ (195 )   $  -          $ -          $  (195    )
          investigation
          Acquisition         -           (20   )      -             (20     )
          expenses
          Expenses
          related to          -           (80   )      -             (80     )
          litigation
          settlements
          Stock option        -           -            (2,374 )      (2,374  )
          expense
          Expenses
          related to          -           -            (197   )      (197    )
          securities
          litigation
      Interest
      expense:
          Additional
          interest
          expense
          resulting from
          the change in      -         -          (1,973 )     (1,973  )
          accounting for
          the conversion
          feature of the
          convertible
          notes
              Pretax
              impact on       (195 )      (100  )      (4,544 )      (4,839  )
              earnings
      Income tax benefit     74        39         1,670       1,783   
      on the above
              After-tax
              impact on     $ (121 )   $  (61   )    $ (2,874 )   $  (3,056  )
              earnings
                                                                     
                            Six Months Ended June 30, 2012
                            VITAS      Roto-Rooter   Corporate    Consolidated
      Selling, general
      and administrative
      expenses:
          Expenses
          related to OIG    $ (266 )   $  -          $ -          $  (266    )
          investigation
          Acquisition         -           (35   )      -             (35     )
          expenses
          Expenses
          related to          -           (727  )      -             (727    )
          litigation
          settlements
          Stock option        -           -            (4,312 )      (4,312  )
          expense
          Expenses
          related to          -           -            (197   )      (197    )
          securities
          litigation
      Interest
      expense:
          Additional
          interest
          expense
          resulting from
          the change in      -         -          (3,908 )     (3,908  )
          accounting for
          the conversion
          feature of the
          convertible
          notes
              Pretax
              impact on       (266 )      (762  )      (8,417 )      (9,445  )
              earnings
      Income tax benefit     101       299        3,094       3,494   
      on the above
              After-tax
              impact on     $ (165 )   $  (463  )    $ (5,323 )   $  (5,951  )
              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 second quarters of 2013 and 2012, GAAP advertising expense
    for Roto-Rooter totaled $6,094,000 and $5,270,000, respectively. If the
    expense of the telephone directories were spread over the periods they are
    in circulation, advertising expense for the second quarters of 2013 and
    2012 would total $6,599,000 and $5,966,000, respectively.
    
    Similarly, for the first six months of 2013 and 2012, GAAP advertising
    expense for Roto-Rooter totaled $11,798,000 and $10,894,000, respectively.
    If the expense of the telephone directories were spread over the periods
    they are in circulation, advertising expense for the first six months of
    2013 and 2012 would total $12,772,000 and $12,296,000, respectively.
    
    VITAS has 10 large (greater than 450 ADC), 14 medium (greater than 200 but
    less than 450 ADC) and 27 small (less than 200 ADC) hospice programs. Of
    VITAS' 36 unique Medicare provider numbers, 32 provider numbers have a
(d) Medicare cap cushion of 10% or greater during the first nine months of the
    current cap year; two provider numbers have a Medicare cap cushion between
    5% and 10%; and one provider number has a cap cushion between 0% and 5%.
    There is one program with a cap liability in the current cap year.
    
(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
 
Press spacebar to pause and continue. Press esc to stop.