Slide 1: Results as of March 31, 2009
CHEMED CHEMED CORPORATION Results as of March 31, 2009 Innovative ROTO- [ign ROOTER. Hospice Care’ S eee seicee VITAS
Slide 2: Safe Harbor and Regulation G Statement
Safe Harbor and Regulation G Statement This presentation contains information about Chemed’s EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understan
Slide 3: Safe Harbor and Regulation G Statement (Continued)
Safe Harbor and Regulation G Statement (Continued) Important Information Chemed filed with the SEC, on April 29, 2009, a definitive proxy statement in connection with its 2009 annual meeting, and is mailing the definitive proxy statement to its stockholders. Investors and security holders are urged
Slide 4: Cumulative Results Since the VITAS Acquisition
Cumulative Results Since the VITAS Acquisition For the years ended December 31, 2003 through 2008 * Include VITAS results as if VITAS were purchased on January 1, 2003 4
Slide 5: EPS and Stock Price History
(1) (2) EPS and Stock Price History Chemed has delivered strong and consistent EPS to stockholders since 2003, 53% 5-year CAGR (1) Adjusted Diluted EPS; see Appendix at the back of this presentation for reconciliation from GAAP reported results to 5 (2) adjusted (non-GAAP) results Adjusted for stock
Slide 6: Chemed – Consolidated Summary of Operations
Chemed – Consolidated Summary of Operations For the years ended December 31, 2003 through 2008 (in thousands, except per share data) (1) (2) (3) (4) (5) (6) (7) Average Annual 2003 2004 2005 2006 2007 2008 Inc./(Dec.) (1) Service Revenues and Sales (a) $ 260,776 $ 734,877 $ 915,970 $ 1,018,587 $ 1,1
Slide 7: Chemed - Results from Continuing Operations
Chemed - Results from Continuing Operations (in thousands, except per share data) (1) (2) (3) (4) (5) (6) Full Year Results Three Months Ended March 31, Fav/(Unfav) Fav/(Unfav) 2007 2008 % Growth 2008 2009 % Growth (1) Service Revenues and Sales $1,100,058 $1,148,941 4.4% $285,268 $294,938 3.4% (2)
Slide 8: Chemed Corporation Revenue
Chemed Corporation Revenue 2007 2008 Roto-Rooter Roto-Rooter 31% 30% 69% 70% VITAS VITAS Chemed Chemed Roto-Rooter Central Support Chemed Roto-Rooter Central Support Chemed Central Support 1.1% Central Support 1.2% Adjusted EBITDA Adjusted EBITDA 8.6% (a) 8.3% (a) Roto-Rooter 14.7% Roto-Rooter 14.1%
Slide 9: Roto-Rooter
ROTO- ( ROOTER.
Slide 10: Roto-Rooter Company Overview
Roto-Rooter Company Overview Largest provider of plumbing and drain cleaning services in North America Provides plumbing services to approximately 90% of the United States and 40% of the Canadian population Provides plumbing and drain cleaning services in more than 110 company-owned territories and
Slide 11: Chemed Growth Strategy – Roto-Rooter
Chemed Growth Strategy – Roto-Rooter Continue to increase efficiency Acquire franchisee territories at reasonable valuations $175 - $200 million in franchise street sales Purchase at 4-5 times EBITDA Minimal capital expenditure Focus on earnings and cash flow Company-owned Territories 11
Slide 12: Roto-Rooter – Summary of Operations
Roto-Rooter – Summary of Operations For The Years Ended December 31, 2003 through 2008 (in thousands, except percentages) (1) (2) (3) (4) (5) (6) (7) Average Annual 2003 2004 2005 2006 2007 2008 Inc./(Dec.) (1) Service Revenues and Sales (a) $ 260,776 $ 276,611 $ 297,337 $ 319,495 $ 344,632 $ 340,49
Slide 13: Roto-Rooter – Historical Financial Performance
Roto-Rooter – Historical Financial Performance ($000) (1) (2) (3) (4) (5) (6) Full Year Results Three Months Ended March 31, Fav/(Unfav) Fav/(Unfav) 2007 2008 % Growth 2008 2009 % Growth (1) Service Revenues and Sales $ 344,632 $ 340,496 (1.2%) $ 86,683 $ 86,521 (0.2%) (2) Net Income (GAAP) $ 38,971
Slide 14: Future of Roto-Rooter
Future of Roto-Rooter Continue to Consolidate Franchises Purchase at reasonable multiples Avoid over-paying for current acquisitions Inflates expectations/demands of remaining franchisees Utilize Cash Flow for: Purchase of franchises Acquisition of hospices Debt pay-down, share buy-back, increased d
Slide 15: VITAS Innovative Hospice Care
| Innovative Hospice Care’ VITAS
Slide 16: VITAS Healthcare Company Overview
VITAS Healthcare Company Overview Largest provider of hospice services for patients with severe, life-limiting illnesses with approximately 8% of the U.S. market share Operates a comprehensive range of hospice services through 45 operating programs in 15 states and the District of Columbia Utilizes
Slide 17: VITAS – Locations & ADC (as of March 31, 2009)
VITAS – Locations & ADC (as of March 31, 2009) Milwaukee Chicagoland Northwest Chicagoland Central Chicagoland South Sacramento Detroit Waterbury, CT Cleveland Hartford, CT Oakland Fairfield, CT New Jersey North San Francisco New Jersey West LaSalle New Jersey Shore Inland Empire Philadelphia (San B
Slide 18: VITAS – Summary of Operations
(a) VITAS – Summary of Operations For The Years Ended December 31, 2003 through 2008 (in thousands, except percentages) (1) (2) (3) (4) (5) (6) (7) Average Annual 2003 2004 2005 2006 2007 2008 Inc./(Dec.) (1) Service Revenues and Sales $ 441,017 $ 531,136 $ 618,613 $ 699,092 $ 755,426 $ 808,445 12.9
Slide 19: VITAS – Results from Continuing Operations
VITAS – Results from Continuing Operations ($000) (1) (2) (3) (4) (5) (6) Full Year Results Three Months Ended March 31, Fav/(Unfav) Fav/(Unfav) 2007 2008 % Growth 2008 2009 % Growth (1) Service Revenues Before Medicare Cap$ 755,668 $ 808,680 7.0% $ 198,585 $ 208,687 5.1% (2) Medicare Cap (242) (235
Slide 20: Future of VITAS
Future of VITAS Short-term Continue organic growth Acquisitions Fragmented industry Dominated by “Mom & Pop” not-for-profits Average operating margin in hospice is 4%* 50% of hospices have negative margin* Economies of scale Access to reasonably priced capital critical to expansion Long-term Governm
Slide 21: VITAS – Operating Metrics ($000)
VITAS – Operating Metrics ($000) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) 2006 2007 2008 2009 Operating Metrics Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 (1) Average Daily Census 10,291 10,704 11,020 11,174 11,309 11,406 11,529 11,660 11,691 11,846 12,033 11,829 11,728 (ADC) (2) Admissio
Slide 22: Appendix
Appendix
Slide 23: Medicare Hospice Spending (in billions)
Medicare Hospice Spending (in billions) $10.0 $8.9 $7.9 $6.8 $5.7 $4.6 $3.8 $2.9 $2.4 20% Compounded annual growth rate from 1999 to 2007 Source: MedPAC Report - 03/06/2008 A-1
Slide 24: Reconciliation of Adjusted EBITDA and Adjusted Net Income
tit bal CHEMED CORPORATION RECONCILIATION OF ADJUSTED EBITDA ard ADJUSTED NET INCOME FOR THE YEARS ENDED DECEMBER 31, 2003 THROUGH 2008 IN THOUSANDS) qa) @) @ @) G) 6) 2003 2004 2005 2006 2007 2008 Reconciliation of Adjusted EBITD A (2) Net mcomes{loss) $ G35) $ IWSl12 $ 35817 $F SOfsl $F 61641 $F 6
Slide 25: Reconciliation of Adjusted EBITDA and Adjusted Net Income (continued)
tit bal CHEMED CORPORATION RECONCILIATION OF ADJUSTED EBITDA ard ADJUSTED NET INCOME FOR THE YEARS ENDED DECEMBER 31, 2003 THROUGH 2008 (IN THOUSANDS) (continued) Qa Q) @) @) G) 6) 2003 2004 2005 2006 2007 2008 Rec onciliation of Adjusted Net Income (26) Net imcomei(loss) $ G35) $ I2Sl12 $ 35817 $F
Slide 26: Roto-Rooter Group Reconciliation of Adjusted EBITDA and Net Income
Sh ROTO-ROOTER GROUP RECONCILIATION OF ADJUSTED EBITDA ard ADJUSTED NET INCOME FOR THE YEARS ENDED DECEMBER 31, 2003 THROUGH 2008 (N THOUSANDS) q@) Q) @) 3) G3) (6) 2003 2004 2005 2006 2007 2008 Reconciliation of Adjusted EBITDA (1) Net neome $13,176 $18,795 $27,626 $ 32454 $ 38971 $33 592 (2) Inter
Slide 27: VITAS Healthcare Group Reconciliation of Adjusted EBITDA and Net Income
VITAS HEALTHCARE GROUP RECONCILIATION OF ADJUSTED EBITDA and ADJUSTED NET INCOME FOR THE YEARS ENDED DECEMBER 31, 2003 THROUGH 2008 (a) (IN THOUSANDS) (1) (2) (3) (4) (5) (6) 2003 2004 2005 2006 2007 2008 Reconciliation of Adjusted EBITDA (1) Net income $ 20,158 $ 33,052 $ 34,982 $ 43,546 $ 61,034 $
Slide 28: Chemed Corporation Reconciliation, First Quarter 2008 and 2009
CHEMED CORPORATION RECONCILIATION OF ADJUSTED EBIT DA and ADJUSTED NET INCOME FOR THE FIRST QUARTER OF 2008 AND 2009 Reconckation of Adjusted EBITDA (1) Net dome (2) Pterest experse G) Income taxes (4) Deprecistion (5) Amortization (6) EBITDA Addi cd duct) (7) (Gate Viosses om investments @) Expetse
Slide 29: Roto-Rooter Group Reconciliation of Adjusted EBIT and EBITDA
ROTO-ROOTER GROUP RECONCILIATION OF ADJUSTED EBIT and ADJUSTED EBITDA FOR THE FIRST QUARTER OF 2008 AND 2009 Reconciliation of Adjusted ERIT and EBITDA () (2) 3) @ (5) (6) 7) (8) (9) (10) (11) (12) Net income Interest expense Income taxes EBIT Addi(deduct) Advertising cost adjustment Prior-period in
Slide 30: VITAS Healthcare Group Reconciliation of Adjusted EBITDA
Ste VITAS HEALTHCARE GROUP RECONCILIATION OF ADJUSTED EBITDA FOR THE FIRST QUARTER OF 2008 AND 2009 Reconciliation of Adjusted EBITDA qd) @) @) @) 6) 6) 1) 8) 9) (10) Net income Interest expense Income taxes Depreciation Amortization EBITDA Add/(deduct) Legal expenses of OIG investigation Interest i
Slide 31: Chemed Corporation contact information
2600 Chemed Center Kevin J. McNamara President and CEO 255 East 5th Street kevin.mcnamara@chemed.com Cincinnati, OH 45202 David P. Williams EVP and CFO dwilliams@chemed.com (513) 762-6900 Phone (513) 762-6919 Fax Sherri L. Warner Investor Relations www.chemed.com sherri.warner@chemed.com