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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1995
Commission File Number 1-8351
CHEMED CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 31-0791746
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
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 period 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 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 9,849,795 Shares October 31, 1995
$1 Par Value
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Page 1 of 16<PAGE>
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES
Index
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet -
September 30, 1995 and
December 31, 1994 3
Consolidated Statement of Income -
Three months and nine months ended
September 30, 1995 and 1994 4
Consolidated Statement of Cash Flows
Nine months ended
September 30, 1995 and 1994 5
Notes to Unaudited Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
PART II. OTHER INFORMATION 14
</TABLE>
Page 2 of 16<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(in thousands except share and per share data)
UNAUDITED
<TABLE>
<CAPTION>
September 30, December 31,
<F1> 1995 1994*
------------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 9,270 $ 4,722
Marketable securities 24,902 19,517
Accounts receivable, less allowances of $3,391
(1994 - $2,974) 85,955 81,822
Current portion of notes receivable 9,773 5,740
Inventories
Raw materials 9,799 8,086
Finished goods and general merchandise 48,885 52,187
Statutory deposits 18,887 14,408
Other current assets 12,694 11,245
---------- ---------
Total current assets 220,165 197,727
Other investments 92,578 85,073
Note receivable - 5,455
Properties and equipment, at cost less accumulated
depreciation of $45,527 (1994 - $40,375) 74,724 77,116
Identifiable intangible assets less accumulated
amortization of $2,416 (1994 - $1,928) 17,833 21,192
Goodwill less accumulated amortization of $20,261
(1994 - $17,346) 118,082 113,417
Other assets 7,096 5,503
---------- ---------
Total Assets $ 530,478 $ 505,483
========== =========
LIABILITIES
Current liabilities
Accounts payable $ 29,728 $ 31,386
Bank notes and loans payable 25,000 25,000
Current portion of long-term debt 6,907 6,391
Income taxes 15,284 17,233
Deferred contract revenue 23,519 22,630
Other current liabilities 50,352 40,026
---------- ---------
Total current liabilities 150,790 142,666
Deferred income taxes 12,789 7,606
Long-term debt 88,002 92,133
Other liabilities and deferred income 34,352 40,564
Minority interest 39,607 36,194
---------- ---------
Total Liabilities 325,540 319,163
---------- ---------
STOCKHOLDERS' EQUITY
Capital stock-authorized 15,000,000 shares $1 par;
issued 12,495,125 (1994 - 12,369,212) shares 12,495 12,369
Paid-in capital 142,226 138,733
Retained earnings 128,152 123,993
Treasury stock - 2,651,213 (1994 - 2,504,641) shares,
at cost (76,338) (71,230)
Unearned compensation - ESOPs (34,643) (38,486)
Unrealized appreciation on investments 33,046 20,941
---------- ----------
Total Stockholders' Equity 204,938 186,320
---------- ----------
Total Liabilities and Stockholders' Equity $ 530,478 $ 505,483
========== ==========
See accompanying notes to unaudited financial statements.
<FN>
<F1> * Reclassified to conform to 1995 presentation.
</FN>
</TABLE>
Page 3 of 16<PAGE>
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
UNAUDITED
(in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
<F2> 1995 1994* 1995 1994*
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Continuing Operations
Sales $112,442 $107,230 $337,900 $ 308,925
Service revenues 65,112 58,859 186,856 170,617
--------- --------- --------- ---------
Total sales and service revenues 177,554 166,089 524,756 479,542
--------- --------- --------- ---------
Cost of goods sold 78,461 73,356 233,904 212,682
Cost of services provided 39,870 37,511 115,235 106,557
Selling and marketing expenses 24,120 24,604 75,664 72,218
General and administrative expenses 22,752 19,914 67,231 59,749
Depreciation 3,132 2,651 8,956 8,034
Nonrecurring expenses 538 1,705 538 1,705
--------- --------- --------- ---------
Total costs and expenses 168,873 159,741 501,528 460,945
--------- --------- --------- ---------
Income from operations 8,681 6,348 23,228 18,597
Interest expense (2,117) (2,304) (6,339) (6,518)
Other income, net 4,775 2,640 15,151 9,927
--------- --------- --------- ---------
Income before income taxes
and minority interest 11,339 6,684 32,040 22,006
Income taxes (4,379) (2,287) (12,220) (8,172)
Minority interest in earnings of
subsidiaries (1,252) (1,187) (3,422) (2,959)
--------- --------- --------- ---------
Income from continuing operations 5,708 3,210 16,398 10,875
Discontinued Operations 1,842 1,884 2,743 7,913
--------- --------- --------- ---------
Net Income $ 7,550 $ 5,094 $ 19,141 $ 18,788
========= ========= ========= =========
Earnings Per Common Share
Income from continuing operations $ .58 $ .33 $ 1.66 $ 1.10
========= ========= ========= =========
Net income $ .77 $ .52 $ 1.94 $ 1.91
========= ========= ========= =========
Average Number of Shares Outstanding 9,866 9,867 9,866 9,846
========= ========= ========= =========
Cash Dividends Paid Per Share $ .52 $ .51 $ 1.54 $ 1.53
========= ========= ========= =========
See accompanying notes to unaudited financial statements.
<FN>
<F2> * Reclassified to conform to 1995 presentation.
</FN>
</TABLE>
Page 4 of 16<PAGE>
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------
<F3> 1995 1994*
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 19,141 $ 18,788
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 13,411 11,816
Gains on sale of investments (9,078) (5,345)
Minority interest in earnings of subsidiaries 3,422 2,959
Discontinued operations (2,743) (7,913)
Provision for uncollectible accounts receivable 1,401 1,210
Provision for deferred income taxes (1,063) (893)
Purchase of trading securities - (2,000)
Proceeds from sale of trading securities - 1,041
Changes in operating assets and liabilities,
excluding amounts acquired in business combinations
Increase in accounts receivable (4,403) (10,992)
Increase in inventories and other current assets (4,620) (3,408)
(Increase)/decrease in statutory deposits (4,479) 495
Increase in accounts payable,
deferred contract revenue and other
current liabilities 4,613 8,488
Increase in income taxes 358 2,733
Other - net (1,430) (67)
--------- ---------
Net cash provided by operating activities 14,530 16,912
--------- ---------
Cash Flows From Investing Activities
Proceeds from sale of investments 17,296 8,905
Business combinations, net of cash acquired (10,737) (17,199)
Capital expenditures (10,215) (14,485)
Net proceeds from sale of divested operations 10,000 -
Net proceeds from sale of discontinued operations 2,890 8,313
Purchase of investments (1,948) (453)
Other - net 118 1,818
--------- ---------
Net cash provided/(used) by investing activities 7,404 (13,101)
--------- ---------
Cash Flows From Financing Activities
Dividends paid (15,202) (15,071)
Purchase of treasury stock (1,982) (52)
Repayment of long-term debt (111) (3,592)
Proceeds from issuance of long-term debt - 10,000
Increase in bank notes and loans payable - 5,000
Other - net (91) 988
--------- ---------
Net cash used by financing activities (17,386) (2,727)
--------- ---------
Increase In Cash And Cash Equivalents 4,548 1,084
Cash and cash equivalents at beginning of period 4,722 14,615
--------- ---------
Cash and cash equivalents at end of period $ 9,270 $ 15,699
========= =========
See accompanying notes to unaudited financial statements.
<FN>
<F3> * Reclassified to conform to 1995 presentation.
</FN>
</TABLE>
Page 5 of 16<PAGE>
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
Notes to Unaudited Financial Statements
1. The accompanying unaudited consolidated financial statements
have been prepared in accordance with Rule 10-01 of SEC
Regulation S-X. Consequently, they do not include all the
disclosures required under generally accepted accounting
principles for complete financial statements. However, in
the opinion of the management of Chemed Corporation (the
"Company"), the financial statements presented herein contain
all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial
position, results of operations and cash flows of the Company
and its consolidated subsidiaries ("Chemed"). For further
information regarding Chemed's accounting policies, refer to
the consolidated financial statements and notes included in
Chemed's Annual Report on Form 10-K for the year ended
December 31, 1994.
2. Earnings per common share are computed using the weighted
average number of shares of capital stock outstanding and
exclude the dilutive effect of outstanding stock options as
it is not material.
3. Discontinued operations include the following (in thousands):
<TABLE>
<CAPTION> Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1995 1994 1995 1994
------- -------- ------- -------
<S> <C> <C> <C> <C>
Adjustment to the accruals
related to operations
discontinued in 1991 $ 1,842 $ 1,471 $ 2,743 $ 3,807
Gain on sale of Omnicare, Inc.
("Omnicare") stock, an equity
investment discontinued in
November 1994 - - - 2,386
Equity in earnings of Omnicare - 413 - 1,720
------- ------- ------- -------
Total discontinued operations $ 1,842 $ 1,884 $ 2,743 $ 7,913
======= ======= ======= =======
</TABLE>
4. During the second quarter of 1995, the Company's Veratex
Group acquired the business and assets of the CSD Medical
Division ("CSDM") of Central States Diversified Inc. for
$7,650,000 in cash. CSDM is a manufacturer and distributor
of disposable paper products marketed under the ProTexMor
brand. The results of operations of CSDM are immaterial to
the consolidated results of the Company.
Page 6 of 16<PAGE>
The aggregate purchase price of CSDM and other purchase
accounting business combinations completed during the first
nine months of 1995 was allocated on a preliminary basis as
follows (in thousands):
Working capital $ 2,445
Goodwill 7,448
Other-net 947
-------
Total Net Assets 10,840
Less-cash and cash
equivalents acquired (103)
-------
Net cash used $10,737
=======
5. In July 1995 the Company's Tidi Products Group (formerly
Veratex Group) completed the sale of the business and assets
of its Veratex Retail division to Henry Schein Inc. ("HSI")
for $10 million in cash plus a $4.1 million note receivable
due March 31, 1996. An additional payment of up to $2
million dollars, contingent upon the combined sales of
Veratex Retail and HSI's retail group for the year ended
July 7, 1996, may be due from HSI in 1996.
This divestiture will permit the Tidi Products Group to focus
its efforts on its wholesale manufacturing and distribution
operation. Additionally, the divestiture agreement
stipulates that HSI will purchase annual minimum quantities
of medical and dental supplies from Tidi for the next ten
years.
The sale of Veratex Retail and resultant modest gain are not
expected to have a material impact on Chemed's results for
the year.
6. Nonrecurring expenses amounting to $538,000 pretax ($355,000
aftertax; $208,000 after minority interest or $.02 per share)
were incurred by Roto-Rooter in the third quarter of 1995 in
evaluating Chemed's proposal to acquire the 42% minority
interest in Roto-Rooter common stock. The proposal was
withdrawn in August 1995. Also, during the third quarter of
1994, the Company recorded $1,705,000 pretax expenses
($1,107,000 aftertax or $.11 per share) as the result of
downsizing staffs at various locations and refocussing
marketing efforts within its Tidi Product's Group.
Page 7 of 16<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Financial Condition
- -------------------
The increase in cash and marketable securities from
$24,239,000 at December 31, 1994 to $34,172,000 was attributable
to the reclassification of a U.S. Treasury Note maturing in
January 1996 ($9,618,000) to current assets (marketable
securities). The increase in current portion of notes receivable
from $5,740,000 at December 31, 1994 to $9,773,000 at
September 30, 1995 is attributable to the note receivable from
Henry Shein, Inc. (due March 1996) received from the sale of the
Veratex Retail division in July 1995.
Other investments increased from $85,073,000 at
December 31, 1994 to $92,578,000 primarily as a result of market
appreciation of the Company's investments during the first nine
months of 1995, partially offset by the above mentioned
reclassification of a U.S. Treasury note to current assets.
The decline in the noncurrent note receivable from
$5,455,000 at December 31, 1994 to nil at September 30, 1995 is
due to the reclassification of the last installment of a five-
year note (due April 1, 1996) to current assets.
At September 30, 1995 Chemed had approximately
$38,125,000 of unused lines of credit with various banks. Based
on the Company's current financial position and its available
credit lines, management believes its sources of capital and
liquidity are satisfactory for the Company's needs in the
foreseeable future.
Page 8 of 16<PAGE>
Results of Operations
- ---------------------
Sales and service revenues and operating profit from
continuing operations by business segment follow (in thousands):
<TABLE>
<CAPTION> Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1995 1994 1995 1994
-------- -------- ------- -------
Sales and Service
Revenues
- -----------------
<S> <C> <C> <C> <C>
National Sanitary Supply $ 89,396 $ 81,232 $255,760 $229,667
Roto-Rooter 45,280 43,057 132,278 126,493
Tidi Products 19,501 24,068 70,202 72,965
Patient Care 23,377 17,732 66,516 50,417
-------- ------- -------- --------
Total $177,554 $166,089 $524,756 $479,542
======== ======== ======== ========
Operating Profit
- ----------------
National Sanitary Supply $ 3,800 $ 3,184 $ 8,659 $ 7,108
Roto-Rooter 3,602 4,199 11,196 11,202
Tidi Products 1,557 720 4,462 4,105
Patient Care 1,301 732 3,359 1,769
-------- ------- -------- --------
Total $ 10,260 $ 8,835 $ 27,676 $ 24,184
======== ======== ======== ========
</TABLE>
Data relating to (a) the increase or decrease in sales and
service revenues and (b) operating profit as a percent of sales
and service revenues for each segment are set forth below:
<TABLE>
<CAPTION>
Sales and Service Operating Profit
Revenues % as a % of Sales
Increase/(Decrease) (Operating Margin)
------------------- -------------------
1995 vs. 1994 1995 1994
------------------- -------- ---------
Three Months Ended
September 30,
- ------------------
<S> <C> <C> <C>
National Sanitary Supply 10% 4.3% 3.9%
Roto-Rooter 5 8.0 9.8
Tidi Products (19) 8.0 3.0
Patient Care 32 5.6 4.1
Total 7 5.8 5.3
Nine Months Ended
September 30,
- ------------------
National Sanitary Supply 11% 3.4% 3.1%
Roto-Rooter 5 8.5 8.9
Tidi Products (4) 6.4 5.6
Patient Care 32 5.0 3.5
Total 9 5.3 5.0
</TABLE>
Page 9 of 16<PAGE>
Third Quarter 1995 Versus Third Quarter 1994
- ----------------------------------------------
Net sales of the National Sanitary Supply segment for
the third quarter of 1995 totaled $89,396,000, an increase of 10%
over sales recorded during the third quarter of 1994. Most
locations throughout the United States experienced sales volume
increases resulting from enhanced sales and marketing efforts
such as a full-line product catalog and promotional programs.
Price increases also helped fuel sales growth during the third
quarter. The operating margin of this segment improved from 3.9%
during the third quarter of 1994 to 4.3% during the third quarter
of 1995.
Sales and service revenues of the Roto-Rooter segment
for the third quarter of 1995 totaled $45,280,000, an increase of
5% over the $43,057,000 of revenues recorded for the third
quarter of 1994. For the third quarter of 1995, plumbing
revenues, which account for approximately one-fourth of total
revenues, and sewer and drain cleaning revenues, which account
for approximately one-third, increased 20% and 9%,respectively,
over amounts recorded in the comparable quarter of 1994.
Revenues of Roto-Rooter's service contract business (Service
America) for the third quarter of 1995, which account for
approximately one-third of this segment's total revenue, declined
8% as compared with revenues recorded in the third quarter of
1994. Excluding the sales of the maintenance and management
subsidiary, which was sold effective March 31, 1995, Service
America's revenues for the third quarter of 1995 were 2% greater
than revenues of the third quarter of 1994. The sale of this
marginal business permits management to focus its efforts on the
core appliance and air conditioning repair and maintenance
business. The operating margin of the Roto-Rooter segment
declined from 9.8% during the third quarter of 1994 to 8.0%
during the third quarter of 1995 largely as a result of
nonrecurring costs ($538,000) incurred by Roto-Rooter in
evaluating Chemed's proposal to acquire the 42% minority interest
in Roto-Rooter (the proposal was withdrawn in August 1995). In
addition, Roto-Rooter's operating margin was impacted by
declining margins of Service America, as a result of a higher-
than-expected number of service calls in the third quarter of
1995.
Sales of the Tidi Products segment (formerly the
Veratex segment) declined from $24,068,000 during the third
quarter of 1994 to $19,501,000 during the third quarter of 1995,
primarily as a result of the sale of the retail division in July
1995. Excluding the sales of the retail division, and of Central
States Diversified (acquired in May 1995), the sales of Tidi
Products for 1995's third quarter increased 14% over sales
recorded in the third quarter of 1994. The operating margin of
Page 10 of 16<PAGE>
this segment increased from 3.0% in the third quarter of 1994 to
8.0% in the third quarter of 1995. Excluding nonrecurring
marketing and severance costs incurred in 1994, the operating
margin during the third quarter of 1994 would have been 5.7%.
The operating margin for 1995 was also favorably impacted by the
Central States acquisition and the higher profit margins of the
remaining wholesale and manufacturing business.
Total revenues of the Patient Care segment increased
from $17,732,000 in the third quarter of 1994 to $23,377,000 in
the third quarter of 1995. This 32% revenue increase is
attributable to the opening of several new branches in 1994 and
the first part of 1995. As a result of the significant revenue
growth, Patient Care was able to leverage its fixed costs and
improve its operating margin from 4.1% during the third quarter
of 1994 to 5.6% during the third quarter of 1995.
Income from operations increased from $6,348,000 in the
third quarter of 1994 to $8,681,000 during the third quarter of
1995, primarily as a result of increases in operating profit
reported by National Sanitary Supply, Tidi Products and Patient
Care. In addition, the increase in income from operations was
aided by a lower level of nonrecurring expenses in the third
quarter of 1995 ($538,000) as compared with such charges in the
third quarter of 1994 ($1,705,000 for costs of downsizing staffs
at various locations and refocusing marketing efforts within Tidi
Products).
Other income for the third quarter of 1995 totalled
$4,775,000 as compared with $2,640,000 for the third quarter of
1994. This increase was attributable to larger gains on sales of
investments in the 1995 quarter coupled with increased interest
income due to larger balances of cash, cash equivalents and
marketable securities during 1995.
During the third quarter of 1995 the Company's
effective income tax rate was 38.6% as compared with 34.2% during
the comparable period of 1994. The higher rate in 1995 was
attributable primarily to lower favorable tax adjustments and
E.S.O.P. dividend tax credits (as a percentage of pretax income)
in the 1995 period.
Chemed's income from continuing operations increased
from $3,210,000 ($.33 per share) during the third quarter of 1994
to $5,708,000 ($.58 per share) during the third quarter of 1995.
Earnings for the third quarter of 1995 include aftertax gains
aggregating $1,561,000 ($.16 per share) from the sale of various
investments and Chemed's share of Roto-Rooter's nonrecurring
expenses ($208,000 after income taxes and minority interest--$.02
per share). During the third quarter of 1994 the Company
recorded aftertax gains of $735,000 ($.08 per share) from the
Page 11 of 16<PAGE>
sale of a portion of its investments and nonrecurring expenses of
$1,107,000 aftertax ($.11 per share).
Net income for 1995's third quarter totalled $7,550,000
($.77 per share) as compared with $5,094,000 ($.52 per share) for
the third quarter of 1994. Discontinued operations for the third
quarter of 1995 included a $1,842,000 ($.19 per share) adjustment
to the tax provision on the gain on the sale of operations
discontinued in 1991. For the third quarter of 1994,
discontinued operations amounted to $1,884,000 aftertax ($.19 per
share) and included $1,471,000 from adjustments to accruals
related to operations discontinued in 1991 and $413,000 equity
earnings from Omnicare, Inc. ("Omnicare"), an equity investment
discontinued in November 1994.
Nine Months Ended September 30, 1995 Versus September 30, 1994
- --------------------------------------------------------------
The National Sanitary Supply segment recorded sales of
$255,760,000 during the first nine months of 1995, an increase of
11% over amounts recorded in the comparable period of 1994.
Sales increases were recorded in most areas of the country and
were the result of both sales price and sales volume increases in
1995. National Sanitary's operating margin increased from 3.1%
during the first nine months of 1994 to 3.4% during the
comparable period of 1995.
Sales and service revenues of the Roto-Rooter segment
for the first nine months of 1995 increased by 5% as compared
with amounts recorded during the first nine months of 1994. This
modest sales growth was attributable to an 8% decline in the
revenues of Roto-Rooter's service contract business (Service
America) coupled with revenue increases of 11% and 16%,
respectively, in Roto-Rooter's sewer, drain cleaning and plumbing
repair business for the 1995 period. The decline in Service
America's revenues during 1995 is primarily attributable to the
sale of the management and maintenance business during the first
quarter of 1995. Roto-Rooter's operating margin declined from
8.9% during the first nine months of 1994 to 8.5% during the
first nine months of 1995. Excluding $538,000 of nonrecurring
expenses, the operating margin for the first nine months of 1995
would have been 8.9%.
Sales of the Tidi Products segment declined from
$72,965,000 in the first nine months of 1994 to $70,202,000 in
the first nine months of 1995. Excluding the sales of the retail
division (sold in July 1995) and of Central States Diversified
(acquired in May 1995), this segment's sales for the first nine
months of 1995 increased 14% versus sales recorded during the
comparable period of 1994. The operating margin of this segment
improved from 5.6% in the first nine months to 6.4% in the first
Page 12 of 16<PAGE>
nine months of 1995, largely as a result of nonrecurring
severance and marketing costs incurred in 1994.
The Patient Care segment recorded sales of $66,516,000
during the first nine months of 1995, an increase of 32% over the
$50,417,000 recorded in the first nine months of 1994. As a
result, the operating profit margin of this segment improved from
3.5% during the first nine months of 1994 to 5.0% during the
first nine months of 1995, primarily as a result of branch
openings during the latter part of 1994 and the first part of
1995.
Income from operations increased from $18,597,000 in
the first nine months of 1994 to $23,228,000 during the
comparable period of 1995. This increase was primarily
attributable to increases in the operating profit reported by
National Sanitary Supply and Patient Care during the 1995 nine-
month period. Additionally, this increase was aided by a lower
level of nonrecurring expenses incurred in the 1995 period versus
those recorded in 1994.
Other income for the first nine months of 1995 totalled
$15,151,000 as compared with $9,927,000 for the first nine months
of 1994. The increase during the 1995 period was primarily
attributable to larger gains on the sales of investments during
the 1995 period, coupled with increased interest income in 1995.
The Company's effective income tax rate increased from
37.1% during the first nine months of 1994 to 38.1% during the
comparable period of 1995, primarily as a result of larger
favorable tax adjustments in the 1994 period.
Chemed's income from continuing operations increased
from $10,875,000 ($1.10 per share) during the first nine months
of 1994 to $16,398,000 ($1.66 per share) during the first nine
months of 1995. Earnings for the periods included aftertax gains
from sales of investments of $5,882,000, or $.59 per share, and
$3,298,000, or $.33 per share, in 1995 and 1994, respectively.
In addition, nonrecurring charges of $208,000 after income taxes
and minority interest ($.02 per share) were recorded in 1995 and
nonrecurring charges of $1,107,000 ($.11 per share) were recorded
in 1994.
Net income for the first nine months of 1995 totalled
$19,141,000 ($1.94 per share) as compared with $18,788,000 ($1.91
per share) for the first nine months of 1994. Net income for the
first nine months of 1995 and 1994 include favorable adjustments
relative to discontinued operations amounting to $2,743,000 and
$3,807,000, respectively. In addition, income from discontinued
operations for the 1994 period included equity earnings from
Omnicare Inc. and gains on the sale of Omnicare stock.
Page 13 of 16<PAGE>
PART II -- OTHER INFORMATION
----------------------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
<TABLE>
<CAPTION>
Exhibit SK 601 Page
No. Ref. No. Description No.
------- -------- ------------------ ----------
<C> <C> <S> <C>
1 (11) Statement re:
Computation of Per
Share Earnings E-1 -- E-2
2 (27) Financial Data
Schedule E-3 -- E-4
</TABLE>
(b) Reports on Form 8-K - None.
---------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Chemed Corporation
-------------------------
(Registrant)
Dated: November 13, 1995 By Naomi C. Dallob
---------------------- -------------------------
Naomi C. Dallob
Vice President and Secretary
Dated: November 13, 1995 By Arthur V. Tucker
---------------------- -------------------------
Arthur V. Tucker
Vice President and
Controller (Principal
Accounting Officer)
Page 14 of 16<PAGE>
EXHIBIT 11
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF PER SHARE EARNINGS
(in thousands except per share data)
<TABLE>
<CAPTION>
Income from Continuing Operations
-----------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
1995 1994 1995 1994
-------- -------- -------- -------
Computation of Earnings Per
Common and Common
<F4> Equivalent Share (a):
- ---------------------------
<S> <C> <C> <C> <C>
Reported Income $ 5,708 $ 3,210 $16,398 $10,875
======== ======== ======== =======
Average number of shares
used to compute earnings
per common share 9,866 9,867 9,866 9,846
Effect of unexercised
stock options 55 63 44 62
-------- -------- -------- --------
Average number of shares
used to compute earnings
per common and common
equivalent share 9,921 9,930 9,910 9,908
======== ======== ======== ========
Earnings per common and
common equivalent share $ 0.58 $ 0.32 $ 1.65 $ 1.10
======== ======== ======== ========
Computation of Earnings Per
Common Share Assuming
<F4> Full Dilution (a):
- ---------------------------
Reported Income $ 5,708 $ 3,210 $16,398 $10,875
======== ======== ======== ========
Average number of shares
used to compute earnings
per common share 9,866 9,867 9,866 9,846
Effect of unexercised
stock options 62 68 62 76
-------- -------- -------- --------
Average number of shares
used to compute earnings
per common share assuming
full dilution 9,928 9,935 9,928 9,922
======== ======== ======== ========
Earnings per common share
assuming full dilution $ 0.57 $ 0.32 $ 1.65 $ 1.10
======== ======== ======== ========
- -------------------
<FN>
<F4>
(a) This calculation is submitted in accordance with Regulation S-K Item 601
(11) although it is not required by APB Opinion No. 15 because it results
in dilution of less than 3%.
<FN>
</TABLE>
E - 1
Page 15 of 16<PAGE>
EXHIBIT 11
(continued)
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF PER SHARE EARNINGS
(in thousands except per share data)
<TABLE>
<CAPTION>
Net Income
-----------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ------------------
1995 1994 1995 1994
-------- -------- -------- -------
Computation of Earnings Per
Common and Common
<F5> Equivalent Share (a):
- ---------------------------
<S> <C> <C> <C> <C>
Reported Income $ 7,550 $ 5,094 $19,141 $18,788
======== ======== ======== ========
Average number of shares
used to compute earnings
per common share 9,866 9,867 9,866 9,846
Effect of unexercised
stock options 55 63 44 62
-------- -------- -------- --------
Average number of shares
used to compute earnings
per common and common
equivalent share 9,921 9,930 9,910 9,908
======== ======== ======== ========
Earnings per common and
common equivalent share $ 0.76 $ 0.51 $ 1.93 $ 1.90
======== ======== ======== ========
Computation of Earnings Per
Common Share Assuming
<F5> Full Dilution (a):
- ---------------------------
Reported Income $ 7,550 $ 5,094 $19,141 $18,788
======== ======== ======== ========
Average number of shares
used to compute earnings
per common share 9,866 9,867 9,866 9,846
Effect of unexercised
stock options 62 68 62 76
-------- -------- -------- --------
Average number of shares
used to compute earnings
per common share assuming
full dilution 9,928 9,935 9,928 9,922
======== ======== ======== ========
Earnings per common share
assuming full dilution $ 0.76 $ 0.51 $ 1.93 $ 1.89
======== ======== ======== ========
- --------------------
<FN>
<F5>
(a) This calculation is submitted in accordance with Regulation S-K Item 601
(11) although it is not required by APB Opinion No. 15 because it results
in dilution of less than 3%.
</FN>
</TABLE>
E - 2
Page 16 of 16<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 3O, 1995 FOR CHEMED CORPORATION AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000019584
<NAME> CHEMED CORPORATION
<MULTIPLIER> 1,000
<CAPTION>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 9,270
<SECURITIES> 24,902
<RECEIVABLES> 89,346
<ALLOWANCES> (3,391)
<INVENTORY> 58,684
<CURRENT-ASSETS> 220,165
<PP&E> 120,251
<DEPRECIATION> (45,527)
<TOTAL-ASSETS> 530,478
<CURRENT-LIABILITIES> 150,790
<BONDS> 88,002
<COMMON> 12,495
0
0
<OTHER-SE> 192,443
<TOTAL-LIABILITY-AND-EQUITY> 530,478
<SALES> 337,900
<TOTAL-REVENUES> 524,756
<CGS> 233,904
<TOTAL-COSTS> 349,139
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,401
<INTEREST-EXPENSE> 6,339
<INCOME-PRETAX> 32,040
<INCOME-TAX> 12,220
<INCOME-CONTINUING> 16,398
<DISCONTINUED> 2,743
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,141
<EPS-PRIMARY> 1.94
<EPS-DILUTED> 1.94
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION FOR
THE QUARTER ENDED SEPTEMBER 3O, 1994 FOR CHEMED CORPORATION AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000019584
<NAME> CHEMED CORPORATION
<MULTIPLIER> 1,000
<CAPTION>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 15,699
<SECURITIES> 2,073
<RECEIVABLES> 82,678
<ALLOWANCES> (2,666)
<INVENTORY> 57,148
<CURRENT-ASSETS> 186,031
<PP&E> 115,215
<DEPRECIATION> (38,479)
<TOTAL-ASSETS> 481,771
<CURRENT-LIABILITIES> 144,929
<BONDS> 108,072
<COMMON> 12,367
0
0
<OTHER-SE> 139,121
<TOTAL-LIABILITY-AND-EQUITY> 481,771
<SALES> 308,925
<TOTAL-REVENUES> 479,542
<CGS> 212,682
<TOTAL-COSTS> 319,239
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,210
<INTEREST-EXPENSE> 6,518
<INCOME-PRETAX> 22,006
<INCOME-TAX> 8,172
<INCOME-CONTINUING> 10,875
<DISCONTINUED> 7,913
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,788
<EPS-PRIMARY> 1.91
<EPS-DILUTED> 1.91
</TABLE>
