a6018395.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

(Mark One)
 
 
  X
  
Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended June 30, 2009
       
     
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Commission File Number: 1-8351

CHEMED CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
31-0791746
(State or other jurisdiction of incorporation or
organization)
(IRS Employer Identification No.)
 
  
2600 Chemed Center, 255 E. Fifth Street, Cincinnati, Ohio
45202
(Address of principal executive offices)
(Zip code)

(513) 762-6900
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes        X    
No            
 
  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes            
No             
  
 
  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Large accelerated filer        X                  
 
Accelerated filer               
 
Non-accelerated filer               
 
Smaller reporting company            

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes            
No        X    
  
 
 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class
  
Amount
  
Date
         
Capital Stock $1 Par Value
  
22,495,675 Shares
  
June 30, 2009

 
 
 
 
-1-

CHEMED CORPORATION AND
SUBSIDIARY COMPANIES


Index

 
Page No.
  
       
   
       
Item 1.               
 Financial Statements     
       
   
   
 
                    
   
       
 
 
       
   
     
 
 
     
 
 
 
 
    
 
       
   
       
 
       
 
       
 
       
 
       
 
       
 
       
 
 
 
-2-

 PART I.   FINANCIAL INFORMATION
 Item 1.   Financial Statements
 CHEMED CORPORATION AND SUBSIDIARY COMPANIES
 UNAUDITED CONSOLIDATED BALANCE SHEET
 (in thousands except share and per share data)
             
             
   
June 30,
    
December 31,
  
   
2009
    
2008
  
ASSETS
            
Current assets
            
Cash and cash equivalents
   $ 16,632     $ 3,628  
Accounts receivable less allowances of $11,757 (2008 - $10,320)
     104,123       98,076  
Inventories
     8,240       7,569  
Current deferred income taxes
     15,911       15,392  
Prepaid income taxes
     5,049       1,349  
Prepaid expenses and other current assets
     9,031       9,919  
Total current assets
     158,986       135,933  
Investments of deferred compensation plans held in trust
     20,348       22,628  
Properties and equipment, at cost, less accumulated
                
depreciation of $107,342 (2008 - $101,689)
     73,081       76,962  
Identifiable intangible assets less accumulated
                
amortization of $23,301 (2008 - $21,272)
     59,875       61,303  
Goodwill
     450,005       448,721  
Other assets
     13,908       14,075  
Total Assets
   $ 776,203     $ 759,622  
                 
LIABILITIES
                
Current liabilities
                
Accounts payable
   $ 49,471     $ 52,810  
Current portion of long-term debt
     5,070       10,169  
Income taxes
     1,301       2,181  
Accrued insurance
     35,029       35,994  
Accrued compensation
     37,936       40,741  
Other current liabilities
     13,876       12,180  
Total current liabilities
     142,683       154,075  
Deferred income taxes
     23,305       22,477  
Long-term debt
     148,763       158,210  
Deferred compensation liabilities
     20,157       22,417  
Other liabilities
     4,391       5,612  
Total Liabilities
     339,299       362,791  
                 
STOCKHOLDERS' EQUITY
                
Capital stock - authorized 80,000,000 shares $1 par; issued
                
29,614,446 shares (2008 - 29,514,877 shares)
     29,614       29,515  
Paid-in capital
     320,629       313,516  
Retained earnings
     371,617       337,739  
Treasury stock - 7,118,771 shares (2008 - 7,100,475 shares), at cost
     (286,888 )     (285,977 )
Deferred compensation payable in Company stock
     1,932       2,038  
Total Stockholders' Equity
     436,904       396,831  
Total Liabilities and Stockholders' Equity
   $ 776,203     $ 759,622  
                 
                 
See accompanying notes to unaudited financial statements.
 
 
-3-
 
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF INCOME
 (in thousands, except per share data)
                         
                         
                         
   
Three Months Ended June 30,
    
Six Months Ended June 30,
  
   
2009
    
2008
    
2009
    
2008
  
Service revenues and sales
   $ 295,255     $ 283,156     $ 590,193     $ 568,424  
Cost of services provided and goods sold (excluding depreciation)
     207,337       201,139       414,350       406,951  
Selling, general and administrative expenses
     49,580       46,321       95,373       89,048  
Depreciation
     5,338       5,370       10,663       10,808  
Amortization
     1,618       1,489       3,154       2,939  
Other operating expense
     3,444       -       3,989       -  
Total costs and expenses
     267,317       254,319       527,529       509,746  
Income from operations
     27,938       28,837       62,664       58,678  
Interest expense
     (3,142 )     (2,964 )     (5,986 )     (6,073 )
Other income/(expense)--net
     3,358       886       3,082       (303 )
Income before income taxes
     28,154       26,759       59,760       52,302  
Income taxes
     (10,904 )     (10,488 )     (23,171 )     (20,171 )
Net income
   $ 17,250     $ 16,271     $ 36,589     $ 32,131  
                                 
                                 
Earnings Per Share
                                
Net income
   $ 0.77     $ 0.69     $ 1.63     $ 1.36  
Average number of shares outstanding
     22,417       23,486       22,406       23,681  
                                 
Diluted Earnings Per Share
                                
Net income
   $ 0.76     $ 0.68     $ 1.61     $ 1.34  
Average number of shares outstanding
     22,672       23,759       22,660       24,026  
                                 
Cash Dividends Per Share
   $ 0.06     $ 0.06     $ 0.12     $ 0.12  
                                 
                                 
                                 
                                 
                                 
See accompanying notes to unaudited financial statements.
 
 
-4-

 CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
 (in thousands)
 
   
Six Months Ended
  
   
June 30,
  
   
2009
    
2008
  
Cash Flows from Operating Activities
            
Net income
   $ 36,589     $ 32,131  
Adjustments to reconcile net income to net cash provided
                
by operating activities:
                
Depreciation and amortization
     13,817       13,747  
Provision for uncollectible accounts receivable
     5,459       4,351  
Stock option expense
     4,485       2,982  
Amortization of debt issuance costs
     3,253       3,252  
Provision for deferred income taxes
     317       (2,809 )
Amortization of debt issuance costs
     309       309  
Changes in operating assets and liabilities, excluding
                
amounts acquired in business combinations:
                
Increase in accounts receivable
     (11,575 )     (4,652 )
Increase in inventories
     (668 )     (953 )
Decrease in prepaid expenses and other current assets
     902       1,179  
Decrease in accounts payable and other current liabilities
     (4,005 )     (2,248 )
Decrease in income taxes
     (4,267 )     (4,903 )
Decrease/(increase) in other assets
     2,264       (1,906 )
Increase/(decrease) in other liabilities
     (3,481 )     1,910  
Excess tax benefit on share-based compensation
     (313 )     (825 )
Other sources
     34       206  
Net cash provided by operating activities
     43,120       41,771  
Cash Flows from Investing Activities
                
Capital expenditures
     (8,136 )     (8,715 )
Business combinations, net of cash acquired
     (1,859 )     (577 )
Proceeds from sales of property and equipment
     1,496       71  
Net proceeds/(uses) from the disposals of discontinued operations
     (219 )     9,439  
Other uses
     (256 )     (306 )
Net cash used by investing activities
     (8,974 )     (88 )
Cash Flows from Financing Activities
                
Repayment of long-term debt
     (9,599 )     (5,095 )