- -------------------------------------------------------------------
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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, 1996
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 9,794,813 Shares October 31, 1996
$1 Par Value
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Page 1 of 16<PAGE>
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES
Index
<TABLE>
<CAPTION>
Page No.
PART I. FINANCIAL INFORMATION:
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheet -
September 30, 1996 and
December 31, 1995 3
Consolidated Statement of Income -
Three months and nine months ended
September 30, 1996 and 1995 4
Consolidated Statement of Cash Flows
Nine months ended
September 30, 1996 and 1995 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,
1996 1995
------------- -------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 13,793 $ 19,187
Marketable securities 100 10,094
Accounts receivable, less allowances of $3,014
(1995 - 3,519) 80,666 87,177
Inventories
Raw materials 7,852 7,921
Finished goods and general merchandise 44,956 50,330
Statutory deposits 19,781 18,943
Other current assets 19,181 25,785
---------- ---------
Total current assets 186,329 219,437
Other investments 83,926 90,176
Properties and equipment, at cost less accumulated
depreciation of $54,250 (1995 - $47,074) 81,306 77,131
Identifiable intangible assets less accumulated
amortization of $3,702 (1995 - $2,886) 17,541 18,140
Goodwill less accumulated amortization of $23,920
(1995 - $20,978) 188,343 119,486
Other assets 10,794 7,498
---------- ---------
Total Assets $ 568,239 $ 531,868
========== =========
LIABILITIES
Current liabilities
Accounts payable $ 26,910 $ 28,411
Bank notes and loans payable 90,000 25,000
Current portion of long-term debt 7,757 7,089
Income taxes 8,676 11,965
Deferred contract revenue 24,571 23,512
Other current liabilities 56,375 49,027
---------- ---------
Total current liabilities 214,289 145,004
Deferred income taxes 8,207 15,819
Long-term debt 80,563 85,368
Other liabilities and deferred income 39,980 36,030
Minority interest 10,718 40,990
---------- ---------
Total Liabilities 353,757 323,211
---------- ---------
STOCKHOLDERS' EQUITY
Capital stock-authorized 15,000,000 shares $1 par;
issued 12,699,715 (1995 - 12,598,418) shares 12,700 12,598
Paid-in capital 148,420 145,290
Retained earnings 134,326 127,141
Treasury stock - 2,908,154 (1995 - 2,784,192) shares,
at cost (86,013) (79,996)
Unearned compensation - ESOPs (29,015) (33,355)
Unrealized appreciation on investments 34,064 36,979
---------- ----------
Total Stockholders' Equity 214,482 208,657
---------- ----------
Total Liabilities and Stockholders' Equity $ 568,239 $ 531,868
========== ==========
</TABLE>
See accompanying notes to unaudited financial statements.
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,
-------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Continuing Operations
Sales $102,887 $112,442 $302,529 $ 337,900
Service revenues 70,828 65,112 209,118 186,856
--------- --------- --------- ---------
Total sales and service revenues 173,715 177,554 511,647 524,756
--------- --------- --------- ---------
Cost of goods sold 70,542 78,461 207,245 233,904
Cost of services provided 42,795 39,870 126,171 115,235
Selling and marketing expenses 24,959 24,120 73,856 75,664
General and administrative expenses 23,681 22,752 71,594 67,231
Depreciation 3,042 3,132 9,044 8,956
Nonrecurring expenses - 538 - 538
--------- --------- --------- ---------
Total costs and expenses 165,019 168,873 487,910 501,528
--------- --------- --------- ---------
Income from operations 8,696 8,681 23,737 23,228
Interest expense (2,241) (2,117) (6,072) (6,339)
Other income, net 1,633 4,775 23,112 15,151
--------- --------- --------- ---------
Income before income taxes
and minority interest 8,088 11,339 40,777 32,040
Income taxes (3,200) (4,379) (15,411) (12,220)
Minority interest in earnings of
subsidiaries (1,024) (1,252) (3,617) (3,422)
--------- --------- --------- ---------
Income from continuing operations 3,864 5,708 21,749 16,398
Discontinued Operations 600 1,842 600 2,743
--------- --------- --------- ---------
Net Income $ 4,464 $ 7,550 $ 22,349 $ 19,141
========= ========= ========= =========
Earnings Per Common Share
Income from continuing operations $ .39 $ .58 $ 2.21 $ 1.66
========= ========= ========= =========
Net income $ .46 $ .77 $ 2.27 $ 1.94
========= ========= ========= =========
Average Number of Shares Outstanding 9,790 9,866 9,831 9,866
========= ========= ========= =========
Cash Dividends Paid Per Share $ .52 $ .52 $ 1.56 $ 1.54
========= ========= ========= =========
</TABLE>
See accompanying notes to unaudited financial statements.
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,
----------------------
1996 1995*
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 22,349 $ 19,141
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on sale of investments (17,431) (9,078)
Depreciation and amortization 13,424 13,411
Minority interest in earnings of subsidiaries 3,617 3,422
Provision for deferred income taxes (1,898) (1,063)
Provision for uncollectible accounts receivable 1,154 1,401
Discontinued operations (600) (2,743)
Changes in operating assets and liabilities,
excluding amounts acquired in business combinations
(Increase)/decrease in accounts receivable 5,405 (4,403)
(Increase)/decrease in inventories and other
current assets 6,173 (4,620)
Increase in statutory deposits (838) (4,479)
Increase in accounts payable, deferred contract
revenue and other current liabilities 2,730 4,613
Increase in income taxes 1,232 358
Other - net (2,818) (1,430)
--------- ---------
Net cash provided by operating activities 32,499 14,530
--------- ---------
Cash Flows From Investing Activities
Purchase of Roto-Rooter minority interest (89,854) -
Proceeds from sale of investments 30,349 17,296
Capital expenditures (13,474) (10,215)
Business combinations, net of cash acquired (9,788) (10,737)
Net proceeds from sale of divested operations - 10,000
Net proceeds from sale of discontinued operations (1,606) 2,890
Purchase of investments (4) (1,948)
Other - net 207 118
--------- ---------
Net cash provided/(used) by investing activities (84,170) 7,404
--------- ---------
Cash Flows From Financing Activities
Increase in bank notes and loans payable 65,000 -
Dividends paid (15,343) (15,202)
Purchase of treasury stock (3,650) (1,982)
Other - net 270 (202)
--------- ---------
Net cash provided/(used) by financing activities 46,277 (17,386)
--------- ---------
Increase/(Decrease) In Cash And Cash Equivalents (5,394) 4,548
Cash and cash equivalents at beginning of period 19,187 4,722
--------- ---------
Cash and cash equivalents at end of period $ 13,793 $ 9,270
========= =========
</TABLE>
See accompanying notes to unaudited financial statements.
* Reclassified to conform to 1996 presentation.
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, 1995.
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 represent adjustments to the accruals
related to operations discontinued in 1991.
4. 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.
5. Effective September 1, 1996, the Company acquired all of the
outstanding shares of Roto-Rooter Inc. ("Roto-Rooter") it did
not own (approximately 2,261,000 shares) for $41 per share in
cash. As a result the Company's ownership interest in Roto-
Rooter increased from 58% to 100%. The aggregate estimated
purchase price of $102.1 million, including acquisition
related expenses, represents a premium of $67.9 million over
the fair value of the net assets acquired.
Roto-Rooter is the preeminent national supplier of sewer and
drain cleaning and plumbing repair services. Management
believes that its well-recognized name, base of business and
reputation have an indefinite life span. Accordingly, the
purchase price premium (goodwill) is being amortized over a
forty year period, the maximum life permitted by generally
accepted accounting principles.
Page 6 of 16<PAGE>
The following data present the unaudited pro forma
consolidated results of the Company assuming the 42% minority
interest in Roto-Rooter been acquired on January 1 of each
period presented (in thousands, except per share data):
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------
1996 1995
----------- ---------
<S> <C> <C>
Income from continuing operations $ 21,845 $ 15,456
=========== =========
Net income $ 22,445 $ 18,199
=========== =========
Primary earnings per share:
Income from continuing
operations $ 2.22 $ 1.57
=========== =========
Net income $ 2.28 $ 1.85
=========== =========
</TABLE>
6. In November 1996, Apria Healthcare Group, Inc. ("Apria")
disclosed that its previously-announced plan to merge with
Vitas Healthcare Corporation ("Vitas") is being reconsidered
and could be terminated in favor of alternative business
relationships between Apria and Vitas. Chemed has maintained
an investment in Vitas, a hospice provider, since 1991.
Page 7 of 16<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Financial Condition
- -------------------
The changes in the following balance sheet accounts
from December 31, 1995 to September 30, 1996 were primarily a
result of the Company's acquisition of the 42% minority interest
in Roto-Rooter Inc. ("Roto-Rooter") effective September 1, 1996
(in millions):
<TABLE>
<CAPTION>
Increase/
(Decrease)
------------
<S> <C>
Cash, cash equivalents and marketable
securities $ (15.4)
Goodwill 68.9
Other assets 3.4
Bank notes and loans payable 65.0
Other current liabilities 7.3
Other liabilities and deferred income 4.0
Minority interest (30.3)
</TABLE>
In addition, approximately half of the $7.6 million decline in
deferred income taxes since December 31, 1995 is attributable to
the purchase of Roto-Rooter's minority interest.
The decline in other current assets from $25.8 million
at December 31,1995 to $19.2 million at September 30, 1996 is
attributable to the receipt in April 1996 of the final deferred
payment from the sale of operations discontinued in 1991.
At September 30, 1996 the Company had approximately
$17.3 million of unused lines of credit with various banks.
Additionally, the Company has noncurrent investments of
approximately $83.9 million, most of which is invested in readily
marketable securities. It is anticipated that during the next
several quarters the amount of bank notes and loans payable
($90.0 million at September 30, 1996) will be substantially
reduced through the issuance of additional long-term debt and/or
sales of a portion of the Company's investment portfolio. Such
actions would serve to return the Company's current ratio to its
recent historical levels. Based on the foregoing, 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,
------------------ -----------------
1996 1995 1996 1995
-------- -------- ------- -------
Sales and Service
Revenues
- -----------------
<S> <C> <C> <C> <C>
National Sanitary Supply $ 80,652 $ 89,396 $235,139 $255,760
Roto-Rooter 50,652 45,280 148,473 132,278
Omnia Group 17,893 19,501 54,674 70,202
Patient Care 24,518 23,377 73,361 66,516
-------- ------- -------- --------
Total $173,715 $177,554 $511,647 $524,756
======== ======== ======== ========
Operating Profit
- ----------------
National Sanitary Supply $ 3,414 $ 3,800 $ 7,876 $ 8,659
Roto-Rooter 4,899 3,602 13,687 11,196
Omnia Group 470 1,557 2,852 4,462
Patient Care 1,435 1,301 4,001 3,359
-------- ------- -------- --------
Total $ 10,218 $ 10,260 $ 28,416 $ 27,676
======== ======== ======== ========
</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)
------------------- -------------------
1996 vs. 1995 1996 1995
------------------- -------- ---------
Three Months Ended
September 30,
- ------------------
<S> <C> <C> <C>
National Sanitary Supply (10)% 4.2% 4.3%
Roto-Rooter 12 9.7 8.0
Omnia Group (8) 2.6 8.0
Patient Care 5 5.9 5.6
Total (2) 5.9 5.8
Nine Months Ended
September 30,
- ------------------
National Sanitary Supply (8)% 3.3% 3.4%
Roto-Rooter 12 9.2 8.5
Omnia Group (22) 5.2 6.4
Patient Care 10 5.5 5.0
Total (2) 5.6 5.3
</TABLE>
Page 9 of 16<PAGE>
Third Quarter 1996 Versus Third Quarter 1995
- ----------------------------------------------
Net sales of the National Sanitary Supply segment for
the third quarter of 1996 totaled $80,652,000, a decline of 10%
versus sales recorded during the third quarter of 1995. This
decline was primarily due to the loss of a large fast-food
customer during the first quarter of 1996. During the third
quarter of 1996 National Sanitary continued to achieve broad-
based sales growth in its core sanitary-maintenance product
lines, helping to partially offset the expected decline in its
food-service disposables business. The operating margin of this
segment was 4.2% during the third quarter of 1996 as compared
with 4.3% during the third quarter of 1995.
Sales and service revenues of the Roto-Rooter segment
for the third quarter of 1996 totaled $50,652,000, an increase of
12% over the $45,280,000 of revenues recorded for the third
quarter of 1995. For the third quarter of 1996, plumbing
revenues, which account for approximately one-fourth of total
revenues, and sewer and drain cleaning revenues, which account
for approximately one-third, increased 17% and 11%, respectively,
over amounts recorded in the comparable quarter of 1995.
Revenues of Roto-Rooter's service contract business (Service
America) for the third quarter of 1996, which account for
approximately one-third of this segment's total revenue,
increased 10% versus such revenues recorded in the third quarter
of 1995. The operating margin of the Roto-Rooter segment
increased from 8.0% during the third quarter of 1995 to 9.7%
during the third quarter of 1996 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).
Excluding these nonrecurring costs, the operating margin for the
third quarter of 1995 would have been 9.1%. Additionally, Roto-
Rooter's operating margin was favorably impacted by improving
margins of Service America during 1996.
Sales of the Omnia Group during the third quarter of
1996 totalled $17,893,000, a decline of 8% as compared with sales
recorded by this segment during the third quarter of 1995.
Similarly, the operating margin of this segment declined from
8.0% during the third quarter of 1995 to 2.6% during the third
quarter of 1996. These declines were due largely to the
reduction of paper prices in 1996. The outlook for the Omnia
Group is dependent upon its achieving various improvements in its
manufacturing and distributions systems, as well as making
strategic additions to its line of manufactured products.
Page 10 of 16<PAGE>
Total revenues of the Patient Care segment increased
from $23,377,000 in the third quarter of 1995 to $24,518,000 in
the third quarter of 1996. As a result of effective expense
management, Patient Care was able to leverage its fixed costs and
increase its operating margin from 5.6% during the third quarter
of 1995 to 5.9% during the third quarter of 1996.
Income from operations increased from $8,681,000 in
third quarter of 1995 to $8,696,000 during the third quarter of
1996, primarily as a result of increases in operating profit
reported by Roto-Rooter and Patient Care, offset by declines in
operating profit in the Omnia Group and National Sanitary
segments.
Other income for the third quarter of 1996 totalled
$1,633,000 as compared with $4,475,000 for the third quarter of
1995. This decline was attributable to the lack of gains on
sales of investment in the 1996 quarter as compared with pretax
gains aggregating $2,448,000 in the 1995 quarter. Additionally,
lower interest income during the 1996 quarter, as a result of
lower interest rates, coupled with the use of cash for the
September 1, 1996 purchase of the 42% minority interest in Roto-
Rooter, contributed to the decline in other income.
During the third quarter of 1996 the Company's
effective income tax rate was 39.6% as compared with 38.6% during
the comparable period of 1995. The higher rate in 1996 was
attributable primarily to higher effective state and local rates
during the 1996 period.
Chemed's income from continuing operations declined
from $5,708,000 ($.58 per share) during the third quarter of 1995
to $3,864,000 ($.39 per share) during the third quarter of 1996.
Earnings for the third quarter of 1995 included 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). Lower earnings from the Omnia Group during the
1996 quarter also contributed to this decline.
Net income for 1996's third quarter totalled $4,464,000
($.46 per share) as compared with $7,550,000 ($.77 per share) for
the third quarter of 1995. Discontinued operations for the third
quarter included gains of $600,000 ($.07 per share) and
$1,842,000 ($.19 per share) in 1996 and 1995, respectively,
representing adjustments to the gain on the sale of operations
discontinued in 1991.
Page 11 of 16<PAGE>
Nine Months Ended September 30, 1996 Versus September 30, 1995
- --------------------------------------------------------------
The National Sanitary Supply segment recorded sales of
$235,139,000 during the first nine months of 1996, a decline of
8% versus amounts recorded in the comparable period of 1995.
This sales decline was primarily the result of the loss of a
large fast-food customer during the first quarter of 1996.
National Sanitary's operating margin was 3.3% during the first
nine months of 1996 as compared with 3.4% during the comparable
period of 1995.
Sales and service revenues of the Roto-Rooter segment
for the first nine months of 1996 increased 12% as compared with
amounts recorded during the first nine months of 1995. This
sales growth was attributable primarily to revenue increases of
21% and 12%, respectively, in Roto-Rooter's plumbing and sewer,
drain cleaning and repair business for the 1996 period. Roto-
Rooter's operating margin increase from 8.5% during the first
nine months of 1995 to 9.2% during the first nine months of 1996.
Excluding $538,000 of nonrecurring expenses, the operating margin
for the first nine months of 1995 would have been 8.9%.
Sales of the Omnia Group declined 22% from $70,202,000
in the first nine months of 1995 to $54,674,000 in the first nine
months of 1996. Excluding the sales of the retail division (sold
in July of 1995), this segment's sales for the first nine months
for 1996 declined 6% as compared with sales recorded during the
comparable period of 1995. The operating margin of this segment
declined from 6.4% in the first nine months of 1995 to 5.2%
during the first nine months of 1996. The sales and margin
declines during the 1996 periods were primarily due to increases
in paper prices.
The Patient Care segment recorded sales of $73,361,000
during the first nine months of 1996, an increase of 10% over the
$66,516,000 recorded in the first nine months of 1995. This
sales growth resulted from continued geographic expansion. As a
result, the operating margin of this segment increased from 5.0%
during the first nine months of 1995 to 5.5% during the first
nine months of 1996.
Income from operations increased from $23,228,000 in
the first nine months of 1995 to $23,737,000 during the
comparable period of 1996. This increase was primarily
attributable to increases in the operating profit margin reported
by Roto-Rooter and Patient Care during the 1996 nine-month
period, partially offset by declines in operating profit reported
by The Omnia Group and National Sanitary Supply.
Page 12 of 16<PAGE>
Other income for the first nine months of 1996 totalled
$23,112,000 as compared with $15,151,000 for the first nine
months of 1995. The increase during the 1996 period was
primarily attributable to larger gains on the sales of
investments during the 1996 period.
The Company's effective income tax rate declined
slightly from 38.1% during the first nine months of 1995 to 37.8%
during the comparable period of 1996.
Chemed's income from continuing operations increased
from $16,398,000 ($1.66 per share) during the first nine months
of 1995 to $21,749,000 ($2.21 per share) during the first nine
months of 1996. Earnings for the periods included aftertax gains
from sales of investments of $10,919,000 ($1.11 per share) and
$5,882,000 ($.59 per share) in 1996 and 1995, respectively.
Net income for the first nine months of 1996 totalled
$22,349,000 ($2.27 per share) as compared with $19,141,000 ($1.94
per share) for the first nine months of 1995. Net income for the
first nine months of 1996 and 1995 include favorable adjustments
relative to discontinued operations amounting to $600,000 and
$2,743,000, respectively.
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
---------------------------
A report on Form-8K was filed dated September 24, 1996
reporting the Company had acquired all of the outstanding shares
of Roto-Rooter Inc. ("Roto-Rooter") common stock at an aggregate
estimated price of $100,000,000 ($41 per share plus transaction-
related expenses). Such shares were acquired pursuant to a
Tender Offer commenced on August 14, 1996 to purchase any and all
outstanding shares of Roto-Rooter common stock (approximately 42%
of the total).
The report on Form-8K included a description of the
transactions involved along with pro forma consolidated income
statements of the Company for the six month periods ended June
30, 1996 and 1995 and for the year ended December 31, 1995. A
pro forma balance sheet as of June 30, 1996 was also included.
The pro forma income statement presented the consolidated results
of operations of the Company, assuming the acquisition of the 42%
minority interest in Roto-Rooter occurred on January 1 of each
period presented. The pro forma balance sheet presented the
financial position of the Company assuming said acquisition
occurred on June 30, 1996.
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, 1996 By Naomi C. Dallob
---------------------- -------------------------
Naomi C. Dallob
Vice President and Secretary
Dated: November 13, 1996 By Arthur V. Tucker, Jr.
---------------------- -------------------------
Arthur V. Tucker, Jr.
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,
------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- -------
Computation of Earnings Per
Common and Common
<F1>
Equivalent Share (a):
- ---------------------------
<S> <C> <C> <C> <C>
Reported Income $ 3,864 $ 5,708 $21,749 $16,398
======== ======== ======== =======
Average number of shares
used to compute earnings
per common share 9,790 9,866 9,831 9,866
Effect of unexercised
stock options 58 55 62 44
-------- -------- -------- --------
Average number of shares
used to compute earnings
per common and common
equivalent share 9,848 9,921 9,893 9,910
======== ======== ======== ========
Earnings per common and
common equivalent share $ 0.39 $ 0.58 $ 2.20 $ 1.65
======== ======== ======== ========
Computation of Earnings Per
Common Share Assuming
<F1>
Full Dilution (a):
- ---------------------------
Reported Income $ 3,864 $ 5,708 $21,749 $16,398
======== ======== ======== ========
Average number of shares
used to compute earnings
per common share 9,790 9,866 9,831 9,866
Effect of unexercised
stock options 63 62 63 62
-------- -------- -------- --------
Average number of shares
used to compute earnings
per common share assuming
full dilution 9,853 9,928 9,894 9,928
======== ======== ======== ========
Earnings per common share
assuming full dilution $ 0.39 $ 0.57 $ 2.20 $ 1.65
======== ======== ======== ========
- -------------------
<F1>
(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%.
</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,
-------------------- ------------------
1996 1995 1996 1995
-------- -------- -------- -------
Computation of Earnings Per
Common and Common
<F2>
Equivalent Share (a):
- ---------------------------
<S> <C> <C> <C> <C>
Reported Income $ 4,464 $ 7,550 $22,349 $19,141
======== ======== ======== ========
Average number of shares
used to compute earnings
per common share 9,790 9,866 9,831 9,866
Effect of unexercised
stock options 58 55 62 44
-------- -------- -------- --------
Average number of shares
used to compute earnings
per common and common
equivalent share 9,848 9,921 9,893 9,910
======== ======== ======== ========
Earnings per common and
common equivalent share $ 0.45 $ 0.76 $ 2.26 $ 1.93
======== ======== ======== ========
Computation of Earnings Per
Common Share Assuming
<F2>
Full Dilution (a):
- ---------------------------
Reported Income $ 4,464 $ 7,550 $22,349 $19,141
======== ======== ======== ========
Average number of shares
used to compute earnings
per common share 9,790 9,866 9,831 9,866
Effect of unexercised
stock options 63 62 63 62
-------- -------- -------- --------
Average number of shares
used to compute earnings
per common share assuming
full dilution 9,853 9,928 9,894 9,928
======== ======== ======== ========
Earnings per common share
assuming full dilution $ 0.45 $ 0.76 $ 2.26 $ 1.93
======== ======== ======== ========
- --------------------
<F2>
(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%.
</TABLE>
E - 2
Page 16 of 16<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM FORM 10-Q FOR THE
QUARTER ENDED SEPTEMBER 30, 1996 FOR CHEMED CORPORATION AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000019584
<NAME> CHEMED CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 13,793
<SECURITIES> 100
<RECEIVABLES> 83,680
<ALLOWANCES> (3,014)
<INVENTORY> 52,808
<CURRENT-ASSETS> 183,329
<PP&E> 135,556
<DEPRECIATION> (54,250)
<TOTAL-ASSETS> 568,239
<CURRENT-LIABILITIES> 214,289
<BONDS> 80,563
0
0
<COMMON> 12,700
<OTHER-SE> 201,782
<TOTAL-LIABILITY-AND-EQUITY> 568,239
<SALES> 302,529
<TOTAL-REVENUES> 511,647
<CGS> 207,245
<TOTAL-COSTS> 333,416
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,154
<INTEREST-EXPENSE> 6,072
<INCOME-PRETAX> 40,777
<INCOME-TAX> 15,411
<INCOME-CONTINUING> 21,749
<DISCONTINUED> 600
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,349
<EPS-PRIMARY> 2.27
<EPS-DILUTED> 2.27
</TABLE>
