Chemed Reports Fourth-Quarter 2022 Results

CINCINNATI--(BUSINESS WIRE)--Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), one of the nation’s largest providers 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 fourth quarter ended December 31, 2022, versus the comparable prior-year period, as follows:

Consolidated operating results:

• Revenue increased 1.0% to $547 million
• GAAP Diluted Earnings-per-Share (EPS) of $4.13
• Adjusted Diluted EPS of $5.39, an increase of 2.7%

VITAS segment operating results:

• Net Patient Revenue of $308 million, a decline of 2.5%
• Average Daily Census (ADC) of 17,434, a decline of 2.8%
• Admissions of 14,829, a decline of 8.7%
• Net Income, excluding certain discrete items, of $44.2 million, a decline of 11.1%
• Adjusted EBITDA, excluding Medicare Cap, of $61.7 million, a decline of 11.1%
• Adjusted EBITDA margin, excluding Medicare Cap, of 19.8%, a decrease of 189-basis points

Roto-Rooter segment operating results:

• Revenue of $239 million, an increase of 6.1%
• Net Income, excluding certain discrete items, of $49.3 million, an increase of 11.4%
• Adjusted EBITDA of $69.3 million, an increase of 11.4%
• Adjusted EBITDA margin of 29.0%, an increase of 138-basis points

VITAS

VITAS net revenue was $308 million in the fourth quarter of 2022, which is a decline of 2.5%, when compared to the prior year period. This revenue decline is comprised primarily of a 2.8% reduction in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.2%, partially offset by 200-basis points as a result of CMS reimplementing the 2% sequestration cut that was suspended at the start of the pandemic in 2020. Acuity mix shift had a net impact of reducing revenue approximately $1.8 million, or 0.6%, in the quarter when compared to the prior-year revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes negatively impacted revenue growth by 30-basis points.

In the fourth quarter of 2022, VITAS accrued $2.7 million in Medicare Cap billing limitations. This compares to a $3.0 million Medicare Cap billing limitation in the fourth quarter of 2021.

Of VITAS’ 30 Medicare provider numbers, 25 provider numbers have a Medicare Cap cushion of 10% or greater, one provider number has a cushion between 5% and 10%, and four provider numbers have a trailing 12-month billing limitation liability.

Average revenue per patient per day in the fourth quarter of 2022 was $197.39 which, including acuity mix shift, is 58-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $173.53 and $1,040.03, respectively. During the quarter, high acuity days-of-care were 2.7% of total days of care, 14-basis points below the prior-year quarter.

The fourth quarter 2022 gross margin, excluding Medicare Cap and the hiring and retention bonus program, was 26.9%. This is a 135-basis point margin decline when compared to the fourth quarter of 2021. VITAS has increased licensed healthcare staff by 275 since the inception of the retention program on July 1, 2022. This higher staffing increased aggregate cost of sales in the quarter by approximately $4.4 million. Excluding this capacity expansion, fourth quarter 2022 gross margins would have reflected a modest margin improvement when compared to the prior year quarter.

Selling, general and administrative expenses were $22.0 million in the fourth quarter of 2022 and compares to $21.5 million incurred in the prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled $61.7 million in the quarter, a decrease of 11.1%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 19.8%, which is 189-basis points below the prior-year period. This Adjusted EBITDA margin was also negatively impacted by 200-basis points for the reimplementation of sequestration and approximately 141-basis points due to increased staffing and patient capacity from VITAS’ hiring and retention program.

Roto-Rooter

Roto-Rooter generated quarterly revenue of $239 million in the fourth quarter of 2022, an increase of 6.1%, when compared to the prior-year quarter.

Roto-Rooter branch commercial revenue in the quarter totaled $58.6 million, an increase of 8.7%, over the prior year. This aggregate commercial revenue growth consisted of drain cleaning revenue increasing 5.5%, plumbing increasing 13.8%, excavation increasing 5.1%, and water restoration increasing 27.3%.

Roto-Rooter branch residential revenue in the quarter totaled $159 million, an increase of 5.0%, over the prior-year period. This aggregate residential revenue growth consisted of drain cleaning decreasing 2.1%, plumbing expanding 7.0%, excavation expanding 4.9%, and water restoration increasing 13.2%.

Roto-Rooter’s gross margin in the quarter was 53.0%, a 68-basis point increase when compared to the fourth quarter of 2021. Adjusted EBITDA in the fourth quarter of 2022 totaled $69.3 million, an increase of 11.4%. The Adjusted EBITDA margin in the quarter was 29.0%, which is a 138-basis point improvement when compared to the prior year.

Chemed Consolidated

As of December 31, 2022, Chemed had total cash and cash equivalents of $74.1 million and $97.5 million of current and long-term debt.

In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consists of a $100 million amortizable term loan and a $450 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. On December 31, 2022, the Company had approximately $405 million of undrawn borrowing capacity under this credit agreement.

During the quarter, the Company repurchased 25,000 shares of Chemed stock for $13.0 million which equates to a cost per share of $519.00. As of December 31, 2022, there was approximately $88 million of remaining share repurchase authorization under its plan.

Guidance for 2023

VITAS 2023 revenue, prior to Medicare Cap, is estimated to increase 6.0% to 7.0% when compared to 2022. Forecasted revenue growth is negatively impacted by 75-basis points as a result of the sequestration relief in the first half of 2022 compared to a full year of sequestration in 2023. ADC is estimated to increase 3.5% to 4.0%, with the majority of this census growth in the second half of 2023 as increased staffing and operational capacity generates increased census. Full year adjusted EBITDA margin, prior to Medicare Cap and accrued retention bonuses related to the hiring initiatives announced last year, is estimated to be 16.3% to 16.6%. We are currently estimating $11 million for Medicare Cap billing limitations in calendar year 2023.

Roto-Rooter is forecasted to achieve full-year 2023 revenue growth of 5.0% to 5.5%. Roto-Rooter’s adjusted EBITDA margin for 2023 is expected to be 29.3% to 29.5%.

Based upon the above, full-year 2023 earnings per diluted share, excluding non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation, retention program for licensed healthcare employees, and other discrete items, is estimated to be in the range of $20.75 to $21.10. Current 2023 guidance assumes an effective corporate tax rate on adjusted earnings of 25.1% and a diluted share count of 15.0 million shares. Chemed’s 2022 reported adjusted earnings per diluted share was $19.75.

Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Friday, February 24, 2023, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed’s website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/rvyepdf9.

Participants may also register via teleconference at:

https://register.vevent.com/register/BIa68c5dbaf8b34e36b34d624d6cd5cc4a. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.

A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investor relations section of Chemed’s website.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to approximately 17,300 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, drain cleaning, and water cleanup services through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in the republics of Indonesia and Singapore, 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 STATEMENTS OF INCOME
(in thousands, except per share data)(unaudited)
	Three Months Ended December 31,						For the Years Ended December 31,
	2022			2021			2022			2021
Service revenues and sales	$	546,654		$	540,978			2,134,963		$	2,139,261
Cost of services provided and goods sold		349,570			336,328			1,369,877			1,369,458
Selling, general and administrative expenses (aa)		96,928			92,073			358,727			366,727
Depreciation		12,096			11,840			49,102			49,011
Amortization		2,512			2,510			10,070			10,040
Other operating expense		4,221			198			3,691			987
Total costs and expenses		465,327			442,949			1,791,467			1,796,223
Income from operations		81,327			98,029			343,496			343,038
Interest expense		(1,601	)		(525	)		(4,584	)		(1,868	)
Other (expense)/income--net (bb)		2,674			(1,377	)		(9,233	)		9,144
Income before income taxes		82,400			96,127			329,679			350,314
Income taxes		(20,274	)		(21,502	)		(80,055	)		(81,764	)
Net income	$	62,126		$	74,625		$	249,624		$	268,550
Earnings Per Share
Net income	$	4.17		$	4.89		$	16.72		$	17.14
Average number of shares outstanding		14,913			15,266			14,929			15,671
Diluted Earnings Per Share
Net income	$	4.13		$	4.81		$	16.53		$	16.85
Average number of shares outstanding		15,052			15,513			15,099			15,938
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
	Three Months Ended December 31,						For the Years Ended December 31,
	2022			2021			2022			2021
SG&A expenses before long-term incentive compensation
and the impact of market value adjustments related to
deferred compensation plans	$	91,779		$	89,875		$	360,896		$	349,250
Market value adjustments related to deferred
compensation trusts		2,226			(1,460	)		(9,970	)		8,310
Long-term incentive compensation		2,923			3,658			7,801			9,167
Total SG&A expenses	$	96,928		$	92,073		$	358,727		$	366,727
(bb) Other (expense)/income--net comprises (in thousands):
	Three Months Ended December 31,						For the Years Ended December 31,
	2022			2021			2022			2021
Market value adjustments related to deferred
compensation trusts	$	2,226		$	(1,460	)	$	(9,970	)	$	8,310
Interest income		65			89			355			377
Other		383			(6	)		382			457
Total other (expense)/income--net	$	2,674		$	(1,377	)	$	(9,233	)	$	9,144

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)(unaudited)
	December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	74,126		$	32,895
Accounts receivable less allowances		139,408			137,217
Inventories		10,272			10,109
Prepaid income taxes		18,515			17,377
Prepaid expenses		30,291			32,688
Total current assets		272,612			230,286
Investments of deferred compensation plans held in trust		93,196			98,884
Properties and equipment, at cost less accumulated depreciation		199,714			193,680
Lease right of use asset		135,662			125,048
Identifiable intangible assets less accumulated amortization		99,726			108,096
Goodwill		581,295			578,591
Other assets		59,807			8,138
Total Assets	$	1,442,012		$	1,342,723
Liabilities
Current liabilities
Accounts payable	$	41,884		$	73,024
Current portion of long-term debt		5,000			-
Income taxes		-			41
Accrued insurance		58,515			55,918
Accrued compensation		87,350			95,598
Accrued legal		4,456			872
Short-term lease liability		38,996			37,913
Other current liabilities		61,004			39,033
Total current liabilities		297,205			302,399
Deferred income taxes		38,613			23,183
Long-term debt		92,500			185,000
Deferred compensation liabilities		92,330			98,597
Long-term lease liability		110,513			100,629
Other liabilities		12,136			9,642
Total Liabilities		643,297			719,450
Stockholders' Equity
Capital stock		36,796			36,514
Paid-in capital		1,149,899			1,044,341
Retained earnings		2,197,918			1,970,311
Treasury stock, at cost		(2,588,145	)		(2,430,094	)
Deferred compensation payable in Company stock		2,247			2,201
Total Stockholders' Equity		798,715			623,273
Total Liabilities and Stockholders' Equity	$	1,442,012		$	1,342,723

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)(unaudited)
	For the Years Ended December 31,
	2022			2021
Cash Flows from Operating Activities
Net income	$	249,624		$	268,550
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		59,172			59,051
Stock option expense		26,254			22,502
Deferred payroll taxes		(18,175	)		(18,175	)
Provision for deferred income taxes		14,827			2,400
Noncash long-term incentive compensation		6,188			7,745
Litigation settlements/(payments)		4,000			(9,440	)
Noncash directors' compensation		1,170			1,173
Amortization of debt issuance costs		342			306
Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
Increase in accounts receivable		(2,414	)		(8,431	)
Increase in inventories		(162	)		(3,014	)
Decrease/(increase) in prepaid expenses		2,397			(6,511	)
Increase in accounts payable and
other current liabilities		15,343			9,832
Change in current income taxes		(996	)		(20,401	)
Net change in lease assets and liabilities		1,471			(44	)
Increase in other assets		(45,779	)		(10,305	)
(Decrease)/increase in other liabilities		(3,350	)		12,074
Other (uses)/sources		(26	)		1,285
Net cash provided by operating activities		309,886			308,597
Cash Flows from Investing Activities
Capital expenditures		(57,325	)		(58,675	)
Business combinations, net of cash acquired		(3,529	)		-
Proceeds from sale of fixed assets		2,330			904
Other (uses)/sources		(878	)		14
Net cash used by investing activities		(59,402	)		(57,757	)
Cash Flows from Financing Activities
Payments on revolving line of credit		(306,800	)		(25,300	)
Proceeds from revolving line of credit		121,800			210,300
Proceeds from other long-term debt		100,000			-
Payments on other long-term debt		(2,500	)		-
Purchases of treasury stock		(114,515	)		(576,042	)
Proceeds from exercise of stock options		44,968			35,848
Dividends paid		(22,017	)		(22,016	)
Capital stock surrendered to pay taxes on stock-based compensation		(15,611	)		(15,129	)
Change in cash overdrafts payable		(11,884	)		11,884
Debt issuance costs		(1,586	)		-
Other uses		(1,108	)		(165	)
Net cash used by financing activities		(209,253	)		(380,620	)
Increase/(decrease) in Cash and Cash Equivalents		41,231			(129,780	)
Cash and cash equivalents at beginning of year		32,895			162,675
Cash and cash equivalents at end of year	$	74,126		$	32,895

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 2022 AND 2021
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2022 (a)
Service revenues and sales	$	308,059		$	238,595		$	-		$	546,654
Cost of services provided and goods sold		237,333			112,237			-			349,570
Selling, general and administrative expenses		22,005			57,096			17,827			96,928
Depreciation		5,061			7,017			18			12,096
Amortization		26			2,486			-			2,512
Other operating expense/(income)		4,266			(45	)		-			4,221
Total costs and expenses		268,691			178,791			17,845			465,327
Income/(loss) from operations		39,368			59,804			(17,845	)		81,327
Interest expense		(31	)		(76	)		(1,494	)		(1,601	)
Intercompany interest income/(expense)		4,720			2,594			(7,314	)		-
Other income—net		417			31			2,226			2,674
Income/(loss) before income taxes		44,474			62,353			(24,427	)		82,400
Income taxes		(10,800	)		(14,829	)		5,355			(20,274	)
Net income/(loss)	$	33,674		$	47,524		$	(19,072	)	$	62,126
2021 (b)
Service revenues and sales	$	316,112		$	224,866		$	-		$	540,978
Cost of services provided and goods sold		229,023			107,305			-			336,328
Selling, general and administrative expenses		21,491			56,246			14,336			92,073
Depreciation		5,365			6,456			19			11,840
Amortization		18			2,492			-			2,510
Other operating expense/(income)		221			(23	)		-			198
Total costs and expenses		256,118			172,476			14,355			442,949
Income/(loss) from operations		59,994			52,390			(14,355	)		98,029
Interest expense		(31	)		(132	)		(362	)		(525	)
Intercompany interest income/(expense)		4,601			2,064			(6,665	)		-
Other income/(expense)—net		58			26			(1,461	)		(1,377	)
Income/(loss) before income taxes		64,622			54,348			(22,843	)		96,127
Income taxes		(15,621	)		(12,519	)		6,638			(21,502	)
Net income/(loss)	$	49,001		$	41,829		$	(16,205	)	$	74,625
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2022 (a)
Service revenues and sales	$	1,201,564		$	933,399		$	-		$	2,134,963
Cost of services provided and goods sold		931,861			438,016			-			1,369,877
Selling, general and administrative expenses		89,187			222,257			47,283			358,727
Depreciation		21,955			27,075			72			49,102
Amortization		101			9,969			-			10,070
Other operating expense		3,337			354			-			3,691
Total costs and expenses		1,046,441			697,671			47,355			1,791,467
Income/(loss) from operations		155,123			235,728			(47,355	)		343,496
Interest expense		(172	)		(396	)		(4,016	)		(4,584	)
Intercompany interest income/(expense)		18,901			9,345			(28,246	)		-
Other income/(expense)—net		600			138			(9,971	)		(9,233	)
Income/(loss) before income taxes		174,452			244,815			(89,588	)		329,679
Income taxes		(43,000	)		(58,695	)		21,640			(80,055	)
Net income/(loss)	$	131,452		$	186,120		$	(67,948	)	$	249,624
2021 (b)
Service revenues and sales	$	1,261,246		$	878,015		$	-		$	2,139,261
Cost of services provided and goods sold		953,420			416,038			-			1,369,458
Selling, general and administrative expenses		87,585			215,036			64,106			366,727
Depreciation		23,114			25,816			81			49,011
Amortization		71			9,969			-			10,040
Other operating expense		876			111			-			987
Total costs and expenses		1,065,066			666,970			64,187			1,796,223
Income/(loss) from operations		196,180			211,045			(64,187	)		343,038
Interest expense		(160	)		(595	)		(1,113	)		(1,868	)
Intercompany interest income/(expense)		18,125			7,180			(25,305	)		-
Other income—net		712			123			8,309			9,144
Income/(loss) before income taxes		214,857			217,753			(82,296	)		350,314
Income taxes		(52,426	)		(51,420	)		22,082			(81,764	)
Net income/(loss)	$	162,431		$	166,333		$	(60,214	)	$	268,550
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARIES OF EBITDA
FOR THE THREE MONTHS ENDED DECEMBER 31, 2022 AND 2021
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2022
Net income/(loss)	$	33,674		$	47,524		$	(19,072	)	$	62,126
Add/(deduct):
Interest expense		31			76			1,494			1,601
Income taxes		10,800			14,829			(5,355	)		20,274
Depreciation		5,061			7,017			18			12,096
Amortization		26			2,486			-			2,512
EBITDA		49,592			71,932			(22,915	)		98,609
Add/(deduct):
Intercompany interest expense/(income)		(4,720	)		(2,594	)		7,314			-
Interest (income)/expense		(36	)		(30	)		1			(65	)
Licensed healthcare retention bonus		10,075			-			-			10,075
Stock option expense		-			-			6,911			6,911
Litigation settlements		4,000			-			-			4,000
Long-term incentive compensation		-			-			2,923			2,923
Adjusted EBITDA	$	58,911		$	69,308		$	(5,766	)	$	122,453
2021
Net income/(loss)	$	49,001		$	41,829		$	(16,205	)	$	74,625
Add/(deduct):
Interest expense		31			132			362			525
Income taxes		15,621			12,519			(6,638	)		21,502
Depreciation		5,365			6,456			19			11,840
Amortization		18			2,492			-			2,510
EBITDA		70,036			63,428			(22,462	)		111,002
Add/(deduct):
Intercompany interest expense/(income)		(4,601	)		(2,064	)		6,665			-
Interest income		(63	)		(26	)		-			(89	)
Stock option expense		-			-			6,159			6,159
Long-term incentive compensation		-			-			3,659			3,659
Direct costs related to COVID-19		959			884			-			1,843
Adjusted EBITDA	$	66,331		$	62,222		$	(5,979	)	$	122,574
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARIES OF EBITDA
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2022
Net income/(loss)	$	131,452		$	186,120		$	(67,948	)	$	249,624
Add/(deduct):
Interest expense		172			396			4,016			4,584
Income taxes		43,000			58,695			(21,640	)		80,055
Depreciation		21,955			27,075			72			49,102
Amortization		101			9,969			-			10,070
EBITDA		196,680			282,255			(85,500	)		393,435
Add/(deduct):
Intercompany interest expense/(income)		(18,901	)		(9,345	)		28,246			-
Interest (income)/expense		(218	)		(138	)		1			(355	)
Stock option expense		-			-			26,254			26,254
Licensed healthcare retention bonus		19,634			-			-			19,634
Long-term incentive compensation		-			-			7,801			7,801
Litigation settlements		4,000			-			-			4,000
Direct costs related to COVID-19		310			988			89			1,387
Medicare cap sequestration adjustment		138			-			-			138
Adjusted EBITDA	$	201,643		$	273,760		$	(23,109	)	$	452,294
2021
Net income/(loss)	$	162,431		$	166,333		$	(60,214	)	$	268,550
Add/(deduct):
Interest expense		160			595			1,113			1,868
Income taxes		52,426			51,420			(22,082	)		81,764
Depreciation		23,114			25,816			81			49,011
Amortization		71			9,969			-			10,040
EBITDA		238,202			254,133			(81,102	)		411,233
Add/(deduct):
Intercompany interest expense/(income)		(18,125	)		(7,180	)		25,305			-
Interest income		(253	)		(124	)		-			(377	)
Stock option expense		-			-			22,502			22,502
Direct costs related to COVID-19		16,296			2,435			38			18,769
Long-term incentive compensation		-			-			9,167			9,167
Litigation settlements		-			(98	)		-			(98	)
Other		-			-			218			218
Adjusted EBITDA	$	236,120		$	249,166		$	(23,872	)	$	461,414
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 December 31,						For the Years Ended December 31,
	2022			2021			2022			2021
Net income as reported	$	62,126		$	74,625		$	249,624		$	268,550
Add/(deduct) pre-tax cost of:
Stock option expense		6,911			6,159			26,254			22,502
Licensed healthcare worker retention bonus		10,075			-			19,634			-
Amortization of reacquired franchise agreements		2,352			2,352			9,408			9,408
Long-term incentive compensation		2,923			3,659			7,801			9,167
Litigation settlements		4,000			-			4,000			(98	)
Direct costs related to COVID-19		-			1,843			1,387			18,769
Medicare cap sequestration adjustment		-			-			138			-
Facility relocation expenses		-			-			-			1,855
Other		-			-			-			218
Add/(deduct) tax impacts:
Tax impact of the above pre-tax adjustments (1)		(5,710	)		(2,606	)		(14,062	)		(12,480	)
Excess tax benefits on stock compensation		(1,538	)		(4,579	)		(5,928	)		(9,884	)
Adjusted net income	$	81,139		$	81,453		$	298,256		$	308,007
Diluted Earnings Per Share As Reported
Net income	$	4.13		$	4.81		$	16.53		$	16.85
Average number of shares outstanding		15,052			15,513			15,099			15,938
Adjusted Diluted Earnings Per Share
Adjusted net income	$	5.39		$	5.25		$	19.75		$	19.33
Average number of shares outstanding		15,052			15,513			15,099			15,938
(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated.
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 December 31,								For the Years Ended December 31,
OPERATING STATISTICS	2022				2021				2022				2021
Net revenue ($000) (c)
Homecare	$	267,691			$	272,949			$	1,039,211			$	1,069,766
Inpatient		26,647				27,291				102,361				113,187
Continuous care		19,284				20,680				77,000				94,338
Other		2,977				2,902				12,438				12,142
Subtotal	$	316,599			$	323,822			$	1,231,010			$	1,289,433
Room and board, net		(2,778	)			(2,609	)			(9,574	)			(10,060	)
Contractual allowances		(3,012	)			(2,101	)			(12,004	)			(11,530	)
Medicare cap allowance		(2,750	)			(3,000	)			(7,868	)			(6,597	)
Net Revenue	$	308,059			$	316,112			$	1,201,564			$	1,261,246
Net revenue as a percent of total before Medicare cap allowance
Homecare		84.6		%		84.3		%		84.4		%		83.0		%
Inpatient		8.4				8.4				8.3				8.8
Continuous care		6.1				6.4				6.3				7.3
Other		0.9				0.9				1.0				0.9
Subtotal		100.0				100.0				100.0				100.0
Room and board, net		(0.9	)			(0.9	)			(0.8	)			(0.8	)
Contractual allowances		(0.9	)			(0.6	)			(1.0	)			(0.9	)
Medicare cap allowance		(0.9	)			(0.9	)			(0.6	)			(0.5	)
Net Revenue		97.3		%		97.6		%		97.6		%		97.8		%
Days of care
Homecare		1,289,067				1,338,955				5,086,021				5,347,170
Nursing home		264,895				257,416				1,036,816				993,322
Respite		5,807				5,894				23,905				21,403
Subtotal routine homecare and respite		1,559,769				1,602,265				6,146,742				6,361,895
Inpatient		24,254				25,556				95,431				107,685
Continuous care		19,909				22,154				81,890				101,539
Total		1,603,932				1,649,975				6,324,063				6,571,119
Number of days in relevant time period		92				92				365				365
Average daily census ("ADC") (days)
Homecare		14,012				14,554				13,934				14,649
Nursing home		2,879				2,798				2,841				2,721
Respite		63				64				65				59
Subtotal routine homecare and respite		16,954				17,416				16,840				17,429
Inpatient		264				278				261				295
Continuous care		216				241				224				279
Total		17,434				17,935				17,325				18,003
Total Admissions		14,829				16,250				60,774				68,823
Total Discharges		14,862				16,684				60,930				69,411
Average length of stay (days)		103.9				97.9				104.6				95.7
Median length of stay (days)		16.0				15.0				16.0				13.0
ADC by major diagnosis
Cerebro		41.0		%		36.5		%		39.8		%		36.7		%
Neurological		20.3				23.0				21.2				22.6
Cancer		10.7				11.5				10.9				11.9
Cardio		15.7				15.6				15.7				15.5
Respiratory		7.2				7.5				7.3				7.5
Other		5.1				5.9				5.1				5.8
Total		100.0		%		100.0		%		100.0		%		100.0		%
Admissions by major diagnosis
Cerebro		25.6		%		22.5		%		24.6		%		21.5		%
Neurological		11.0				12.7				12.3				12.3
Cancer		26.7				26.6				26.3				26.9
Cardio		15.3				14.8				14.9				14.5
Respiratory		10.5				11.0				10.3				10.9
Other		10.9				12.4				11.6				13.9
Total		100.0		%		100.0		%		100.0		%		100.0		%
Estimated uncollectible accounts as a percent of revenues		1.0		%		0.7		%		1.0		%		0.9		%
Accounts receivable --
Days of revenue outstanding-excluding unapplied Medicare payments		38.1				33.8				n.a.				n.a.
Days of revenue outstanding-including unapplied Medicare payments		28.0				28.1				n.a.				n.a.
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2022 AND 2021
(unaudited)
(a)	Included in the results of operations for 2022 are the following significant credits/(charges) which may not be indicative of ongoing operations
	(in thousands):
		Three Months Ended December 31, 2022
		VITAS			Roto-Rooter			Corporate			Consolidated
	Licensed healthcare worker retention bonus	$	(10,075	)	$	-		$	-		$	(10,075	)
	Stock option expense		-			-			(6,911	)		(6,911	)
	Litigation settlements		(4,000	)		-			-			(4,000	)
	Long-term incentive compensation		-			-			(2,923	)		(2,923	)
	Amortization of reacquired franchise agreements		-			(2,352	)		-			(2,352	)
	Pretax impact on earnings		(14,075	)		(2,352	)		(9,834	)		(26,261	)
	Excess tax benefits on stock compensation		-			-			1,538			1,538
	Income tax benefit on the above		3,575			623			1,512			5,710
	After-tax impact on earnings	$	(10,500	)	$	(1,729	)	$	(6,784	)	$	(19,013	)
		For the Year Ended December 31, 2022
		VITAS			Roto-Rooter			Corporate			Consolidated
	Stock option expense	$	-		$	-		$	(26,254	)	$	(26,254	)
	Licensed healthcare worker retention bonus		(19,634	)		-			-			(19,634	)
	Amortization of reacquired franchise agreements		-			(9,408	)		-			(9,408	)
	Long-term incentive compensation		-			-			(7,801	)		(7,801	)
	Litigation settlements		(4,000	)		-			-			(4,000	)
	Direct costs related to COVID-19		(310	)		(988	)		(89	)		(1,387	)
	Medicare cap sequestration adjustment		(138	)		-			-			(138	)
	Pretax impact on earnings		(24,082	)		(10,396	)		(34,144	)		(68,622	)
	Excess tax benefits on stock compensation		-			-			5,928			5,928
	Income tax benefit on the above		6,117			2,755			5,190			14,062
	After-tax impact on earnings	$	(17,965	)	$	(7,641	)	$	(23,026	)	$	(48,632	)
(b)	Included in the results of operations for 2021 are the following significant credits/(charges) which may not be indicative of ongoing operations
	(in thousands):
		Three Months Ended December 31, 2021
		VITAS			Roto-Rooter			Corporate			Consolidated
	Stock option expense	$	-		$	-		$	(6,159	)	$	(6,159	)
	Long-term incentive compensation		-			-			(3,659	)		(3,659	)
	Amortization of reacquired franchise agreements		-			(2,352	)		-			(2,352	)
	Direct costs related to COVID-19		(959	)		(884	)		-			(1,843	)
	Pretax impact on earnings		(959	)		(3,236	)		(9,818	)		(14,013	)
	Excess tax benefits on stock compensation		-			-			4,579			4,579
	Income tax benefit on the above		243			859			1,504			2,606
	After-tax impact on earnings	$	(716	)	$	(2,377	)	$	(3,735	)	$	(6,828	)
		For the Year Ended December 31, 2021
		VITAS			Roto-Rooter			Corporate			Consolidated
	Stock option expense	$	-		$	-		$	(22,502	)	$	(22,502	)
	Direct costs related to COVID-19		(16,297	)		(2,434	)		(38	)		(18,769	)
	Amortization of reacquired franchise agreements		-			(9,408	)		-			(9,408	)
	Long-term incentive compensation		-			-			(9,167	)		(9,167	)
	Facility relocation expenses		(1,855	)		-			-			(1,855	)
	Litigation settlements		-			98			-			98
	Other		-			-			(218	)		(218	)
	Pretax impact on earnings		(18,152	)		(11,744	)		(31,925	)		(61,821	)
	Excess tax benefits on stock compensation		-			-			9,884			9,884
	Income tax benefit on the above		4,611			3,112			4,757			12,480
	After-tax impact on earnings	$	(13,541	)	$	(8,632	)	$	(17,284	)	$	(39,457	)
(c)	VITAS has 9 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' 30 Medicare provider numbers, for the current cap year, 23 provider numbers have a Medicare cap cushion of greater than 10%, two provider numbers have a Medicare cap cushion between 5% and 10% and five provider numbers have a Medicare cap liability.