Slide 1: Annual Shareholders' Meeting
Annual Shareholders’ Meeting May 21, 2018
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: Kevin J. McNamara, President & CEO
Kevin J. McNamara President & CEO
Slide 4: Chemed - Results from Continuing Operations
Chemed - Results from Continuing Operations (in thousands, except per share data) (1) (2) (3) Full Year Results Fav/(Unfav) 2016 (a) 2017 (a) % Growth (1) Service Revenues and Sales $1,576,881 $1,666,724 5.7% (2) Adj. EBITDA (c) 236,979 268,459 13.3% (3) Adj. EBITDA Margin (c) 15.0% 16.1% 1.1 pts. (
Slide 5: Roto-Rooter – Branch Performance
Roto-Rooter – Branch Performance (1) (2) (3) Percent Increase Over 2017 Commercial Residential Combined (1) Plumbing 7.3% 13.3% 11.3% (2) Drain Cleaning 2.0% 5.6% 4.1% (3) Water Restoration 35.1% 69.3% 63.8% (4) Total All Services 6.2% 19.5% 14.9% 5 Chemed Corporation
Slide 6: VITAS
VITAS Revenues $1.1 Billion Increased 2.2% Adjusted EBITDA $175 Million Increased 8.2% Adjusted EBITDA Margin 15.0% Increased 83 Basis Points Cared for over 82,000 patients 6,040,750 Days of Care Increased 3.5% 6 Chemed Corporation
Slide 7: Chemed – Purchase of Capital Stock
Chemed – Purchase of Capital Stock For the Period January 1, 2007, through March 31, 2018 (1) (2) (3) (4) Total Free Shares Returned to Cash Flow Repurchased Dividends Shareholders Generated (1) (1) Activity in 2007 $ 127,881,453 $ 5,888,000 $ 133,769,453 72,944,000 (2) Activity in 2008 67,125,500 5
Slide 8: Adj. EPS and Stock Price History
(1) (2) Adj. EPS and Stock Price History Chemed has delivered strong and consistent EPS to Adj. Diluted stockholders since 2003, 24.3% 14-year CAGR Adj. Stock EPS Price Adj. Diluted EPS Adj. Stock Price (1) Adjusted Diluted EPS (non GAAP); see Appendix at the back of this presentation for reconcilia
Slide 9: David P. Williams, Executive VP and CFO
David P. Williams Executive VP and CFO
Slide 10: Cumulative Results Since the VITAS Acquisition
Cumulative Results Since the VITAS Acquisition For the years ended December 31, 2003 through 2017 (a) VITAS was acquired in February 2004 10 Chemed Corporation
Slide 11: Chemed Corporation Revenue
Chemed Corporation Revenue (a) See Appendix at the back of this presentation for reconciliation of EBITDA and Adjusted EBITDA to Net Income 11 Chemed Corporation
Slide 12: 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) 2016 (a) 2017 (a) % Growth 2017 2018 (b) % Growth (1) Service Revenues and Sales $1,576,881 $1,666,724 5.7% $ 405,864 $ 439
Slide 13: Chemed – Consolidated Balance Sheets
Chemed – Consolidated Balance Sheets ($000) March 31, Dec. 31, Liabilities & March 31, Dec. 31, Assets 2018 2017 Stockholder Equity 2018 2017 Cash and cash equivalents $13,686 $11,121 Long-term debt $142,500 $101,200 Accounts receivable, net 111,332 113,651 Other current liabilities 167,297 183,522
Slide 14: Historical Analysis of Adj. EBITDA and Debt
Chemed – Historical Analysis of Adj. EDITDA and Debt ($000) (1) (2) (3) (4) (5) (6) (7) Adjusted Year EBITDA Cash Debt Debt, net Net Debt/Adj EBITDA (1) 2004 $ 97,937 $ 71,448 $ 291,695 $ (220,247) 2.25 years 27 months (2) 2005 120,513 57,133 235,103 $ (177,970) 1.48 18 (3) 2006 131,373 29,274 150,5
Slide 15: Nicholas M. Westfall, CEO Healthcare
VITAS Healthcare Nicholas M. Westfall CEO
Slide 16: VITAS Healthcare Company Overview
VITAS Healthcare Company Overview Largest provider of hospice services for patients with severe, life-limiting illnesses with approximately 7% of the U.S. market share Operates a comprehensive range of hospice services through 45 operating programs in 14 states and the District of Columbia Uti
Slide 17: VITAS – Analysis of Revenue
VITAS – Analysis of Revenue Days of Care - 2017 Revenues - 2017 2.1% 2.8% 8% 11% 95.1% 81% Revenue and Expenses - 2017 Adjusted EBITDA - 2017 Field Patient Care Hospice Program Direct 83.7% 55.0% Net Income 22.2% 7.8% 15.0% 5.0% 8.3% Hospice Central Depreciation - Program Support Central Income Amor
Slide 18: VITAS – Analysis of Gross Profit Per Patient Day-of-Care
VITAS – Analysis of Gross Profit Per Patient Day-of-Care 2017 18 Chemed Corporation
Slide 19: VITAS – Summary of Operations
VITAS – Summary of Operations (a) For The Years Ended December 31, 2004 through 2017 (in thousands, except percentages) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) Average Annual 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Inc./(Dec.) (1) Service Reven
Slide 20: VITAS – Results from Continuing Operations
VITAS – Results from Continuing Operations ($000) (a) Excludes expenses related to the DOJ litigation and settlement. (b) Reconciliation from GAAP reported results to adjusted (Non-GAAP) results is provided in the Appendix at the back of this presentation (c) 2018 reflects GAAP Revenue Recognition A
Slide 21: Spencer S. Lee, CEO Plumbing & Water Cleanup
PLUMBING & WATER CLEANUP Spencer S. Lee CEO
Slide 22: Roto-Rooter Company Overview
Roto-Rooter Company Overview 22 (a) See Appendix at the back of this presentation for reconciliation of EBITDA and Adjusted EBITDA to Net Income Chemed Corporation
Slide 23: Roto-Rooter – Revenue Analysis
Roto-Rooter – Revenue Analysis ($000) 23 Chemed Corporation
Slide 24: Roto-Rooter – Summary of Operations
Roto-Rooter – Summary of Operations For The Years Ended December 31, 2004 through 2017 (in thousands, except percentages) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) Average Annual 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Inc./(Dec.) (1) Service Rev
Slide 25: Roto-Rooter – Results from Continuing Operations
Roto-Rooter – Results from Continuing Operations ($000) (1) (2) (3) (4) (5) (6) Full Year Results Three Months Ended March 31, Fav/(Unfav) Fav/(Unfav) 2016 2017 % Growth 2017 2018 (b) % Growth (1) Service Revenues and Sales $ 453,564 $ 518,464 14.3% $ 123,548 $ 147,163 19.1% (2) Net Income (GAAP) 52
Slide 26: Annual Shareholders' Meeting
Annual Shareholders’ Meeting May 21, 2018
Slide 27: Appendix
Appendix
Slide 28: VITAS Healthcare
Z VITAS Healthcare
Slide 29: VITAS Admissions by Diagnosis - 2017
VITAS Admissions by Diagnosis - 2017 29 Chemed Corporation
Slide 30: VITAS – Operations as a Percent of Revenue
VITAS – Operations as a Percent of Revenue 78.3% 79.7% 77.3% 76.6% 77.9% 77.6% 77.3% 78.2% 77.2% 30 Chemed Corporation
Slide 31: VITAS Analysis of 2017 Expenses and Margin
VITAS Analysis of 2017 Expenses and Margin Per Patient Day-of-Care (1) (2) (3) (4) (5) (6) Per Patient Day-of-Care Direct Patient Care Average Direct Patient Direct Care Other Field Net Field Expenses (1) Per Diem Cost-of-Care (1) Contribution Cost-of-Care (2) Hospice Margin (1) Routine Home Care 47
Slide 32: 2017 Discharge Rate – Total
VITAS 2017 Discharge Rate – Total Population: 65,637 patients (MLOS 16) Median 32 Chemed Corporation
Slide 33: 2017 Discharge Rate – Total
VITAS 2017 Discharge Rate – Total After 180 Days Population: 8,907 patients Days 33 Chemed Corporation
Slide 34: 2017 Discharge Rate – All Diagnosis
VITAS 2017 Discharge Rate – All Diagnosis Population: 65,637 Days 34 Chemed Corporation
Slide 35: Analysis of VITAS Discharges 2004-2017
Analysis of VITAS Discharges 2004-2017 Total Discharges 18.7% 16.7% 19.7% 20.8% 27.3% 25.1% 24.6% 24.6% 26.0% 26.2% 27.5% 23.9% Total Live Discharges 35 Chemed Corporation
Slide 36: Analysis of Revenue By Level of Care
VITAS Analysis of Revenue By Level of Care 2003 through 2017 ($000) 36 Chemed Corporation
Slide 37: Analysis of Average Daily Census (ADC)
VITAS Analysis of Average Daily Census (ADC) 2003 through 2017 16,550 15,992 15,385 14,584 14,140 14,383 13,406 12,713 11,980 11,850 11,477 10,800 10,030 8,694 7,428 37 Chemed Corporation
Slide 38: Analysis of Direct Gross Profit Contribution Margin By Level of Care
VITAS Analysis of Direct Gross Profit Contribution Margin By Level of Care 2003 through 2017 (in millions) 38 Chemed Corporation
Slide 39: VITAS – Homecare Direct Cost Driver
VITAS – Homecare Direct Cost Driver 39 Chemed Corporation
Slide 40: VITAS – Operating Results
(a) VITAS – Operating Results (in thousands, except percentages) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) Average Annual 2003 (b) 2004 (b) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Inc./(Dec.) (1) Net Service Revenue $ 441,017 $ 531,136 $ 618,633
Slide 41: VITAS – Operating Metrics
VITAS – Operating Metrics ($000) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) 2014 2015 2016 2017 2018 (d) Operating Metrics Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 (1) Average Daily Census (ADC) 14,317 14,536 14,639 14,838 14,824 15,283 15,722 15,697 15,653
Slide 42: Medicare Hospice Spending
Medicare Hospice Spending (in billions) $ $ $ $ $ 42 Chemed Corporation
Slide 43: Growth in Hospice Programs
Growth in Hospice Programs 4,382 3,727 3,925 4,092 4,199 3,329 3,385 3,498 3,585 2,642 2,870 3,069 3,250 2,255 2,303 2,349 2,350 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: MedPAC Report to the Congress – 2011, 2012, 2013, 2014, 2015, 2016, 2017 and 2
Slide 44: VITAS – Locations & ADC
VITAS – Locations & ADC (as of March 31, 2018) 44 Chemed Corporation
Slide 45: 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% - 8%* Estimated 50% of hospices have negative margin* Economies of scale Access to reasonably priced capital critical to
Slide 46: Chemed – Consolidated Summary of Operations
Chemed – Consolidated Summary of Operations For the years ended December 31, 2003 through 2017 (in thousands, except per share data) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) Average Annual 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Inc./(
Slide 47: Roto-Rooter
ROTO- ( ROOTER.
Slide 48: 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 48
Slide 49: 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-ba
Slide 50: Reconciliation of Adjusted EBITDA and Adjusted Net Income
CHEMED CORPORATION RECONCILIATION OF ADJUSTED EBITDA and ADJUSTED NET INCOME FOR THE YEARS ENDED DECEMBER 31, 2004 THROUGH 2017 (IN THOUSANDS) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Reconciliation of Adjusted
Slide 51: Healthcare Group Reconciliation of Adjusted EBITDA
VITAS HEALTHCARE GROUP RECONCILIATION OF ADJUSTED EBITDA and ADJUSTED NET INCOME FOR THE YEARS ENDED DECEMBER 31, 2004 THROUGH 2017 (a) (IN THOUSANDS) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Reconciliation of
Slide 52: Roto-Rooter Group Reconciliation of Adjusted EBITDA
ROTO-ROOTER GROUP RECONCILIATION OF ADJUSTED EBITDA and ADJUSTED NET INCOME FOR THE YEARS ENDED DECEMBER 31, 2004 THROUGH 2017 (IN THOUSANDS) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Reconciliation of Adjusted
Slide 53: Healthcare Group Reconciliation, First Three Months 2017 and 2018
VITAS HEALTHCARE GROUP RECONCILIATION OF ADJUSTED EBITDA FOR THE FIRST THREE MONTHS OF 2017 AND 2018 (IN THOUSANDS) (1) (2) Reconciliation of Adjusted EBITDA 2017 2018 (1) Net income $ 20,597 $ 32,015 (2) Interest expense 55 52 (3) Income taxes 12,649 10,638 (4) Depreciation 4,778 4,797 (5) Amortiza
Slide 54: Roto-Rooter Group Reconciliation of Adjusted EBIT and EBITDA
ROTO-ROOTER GROUP RECONCILIATION OF ADJUSTED EBIT AND ADJUSTED EBITDA FOR THE FIRST THREE MONTHS OF 2017 AND 2018 (IN THOUSANDS) (1) (2) 2017 2018 Reconciliation of Adjusted EBIT and EBITDA (1) Net income $ 14,624 $ 22,938 (2) Interest expense 99 91 (3) Income taxes 9,125 8,012 (4) EBIT 23,848 31,04
Slide 55: Chemed Reconciliation, First Three Months 2017 and 2018
CHEMED CORPORATION RECONCILIATION OF ADJUSTED EBITDA AND ADJUSTED NET INCOME FOR THE FIRST THREE MONTHS OF 2017 AND 2018 (IN THOUSANDS) (1) (2) 2017 2018 Reconciliation of Adjusted EBITDA (1) Net income $ 29,844 $ 44,996 (2) Interest expense 995 1,207 (3) Income taxes 13,078 11,212 (4) Depreciation
Slide 56: EPS and Stock Price History
(1) (2) EPS and Stock Price History Chemed has delivered strong and consistent EPS to Diluted EPS stockholders since 2003, 18.3% 14-year CAGR Adj. Stock (GAAP) Price Diluted EPS (GAAP) Adj. Stock Price (1) Diluted EPS from continuing operations (GAAP) 56 (2) Adjusted for stock splits Chemed Corporat
Slide 57: Contact Information
255 East 5th Street Kevin J. McNamara President and CEO Suite 2600 kevin.mcnamara@chemed.com Cincinnati, OH 45202 David P. Williams EVP and CFO dwilliams@chemed.com (513) 762-6690 Phone (513) 762-6919 Fax Sherri L. Warner Investor Relations www.chemed.com sherri.warner@chemed.com