- -----------------------------------------------------------------
- -----------------------------------------------------------------
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, 1998
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 9,450,582 Shares October 31, 1998
$1 Par Value
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Page 1 of 16<PAGE>
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES
Index
Page No.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet -
September 30, 1998 and
December 31, 1997 3
Consolidated Statement of Income -
Three months and nine months ended
September 30, 1998 and 1997 4
Consolidated Statement of Cash Flows
Nine months ended
September 30, 1998 and 1997 5
Notes to Unaudited Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7 - 13
PART II. OTHER INFORMATION 14
PART III EXHIBIT 11 - Computation of Earnings Per
Share 15 - 16
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,
1998 1997
------------ -----------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 50,074 $ 70,958
Accounts receivable, less allowances of $3,085
(1997 - $2,626) 45,242 42,142
Inventories 9 579 8,743
Statutory deposits 16,564 16,137
Current portion of redeemable preferred stock 27,225 27,136
Other current assets 11,905 12,352
---------- ----------
Total current assets 160,589 177,468
Other investments 28,411 40,124
Properties and equipment, at cost less accumulated depreciation
of $42,704 (1997 - $36,179) 57,446 53,089
Identifiable intangible assets less accumulated amortization
of $5,071 (1997 - $4,194) 13,158 13,645
Goodwill less accumulated amortization of $20,782
(1997 - $17,677) 152,115 143,003
Other assets 19,389 21,509
---------- ----------
Total Assets $ 431,108 $ 448,838
========== ==========
LIABILITIES
Current liabilities
Accounts payable $ 7,223 $ 8,774
Current portion of long-term debt 4,485 5,313
Income taxes 13,817 12,460
Deferred contract revenue 26,714 25,489
Other current liabilities 37,421 42,329
---------- ----------
Total current liabilities 89,660 94,365
Long-term debt 82,079 83,720
Other liabilities and deferred income 35,342 42,633
---------- ----------
Total Liabilities 207,081 220,718
---------- ----------
STOCKHOLDERS' EQUITY
Capital stock-authorized 15,000,000 shares $1 par;
issued 13,138,360 (1997 - 13,019,722) shares 13,138 13,020
Paid-in capital 162,323 158,485
Retained earnings 149,232 148,680
Treasury stock - 3,194,966 (1997 - 2,942,205) shares, at cost (97,377) (88,063)
Unearned compensation - ESOPs (21,547) (23,959)
Deferred compensation payable in company stock 5,217 -
Accumulated other comprehensive income 13,041 19,957
---------- ----------
Total Stockholders' Equity 224,027 228,120
---------- ----------
Total Liabilities and Stockholders' Equity $ 431,108 $ 448,838
========== ==========
</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,
-------------------- ---------------------
1998 1997 1998 1997
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Continuing Operations
Service revenues and sales $ 96,517 $ 87,434 $279,872 $251,110
-------- -------- -------- --------
Cost of services provided and
cost of goods sold 59,822 54,303 174,059 156,610
Selling and marketing expenses 8,785 6,289 24,228 18,419
General and administrative expenses 19,325 19,471 58,725 55,760
Depreciation 2,694 2,145 7,978 6,261
--------- --------- --------- ---------
Total costs and expenses 90,626 82,208 264,990 237,050
--------- --------- --------- ---------
Income from operations 5,891 5,226 14,882 14,060
Interest expense (1,798) (2,924) (5,397) (8,476)
Other income, net 3,691 1,298 17,636 16,172
--------- --------- --------- ---------
Income before income taxes 7,784 3,600 27,121 21,756
Income taxes (3,092) (1,494) (10,612) (8,329)
--------- --------- --------- ---------
Income from continuing operations 4,692 2,106 16,509 13,427
Discontinued Operations - 9,702 - 13,160
--------- --------- --------- ---------
Net Income $ 4,692 $ 11,808 $ 16,509 $ 26,587
========= ========= ========= =========
Earnings Per Common Share
Income from continuing operations $ .47 $ .21 $ 1.65 $ 1.35
========= ========= ========= =========
Net income $ .47 $ 1.19 $ 1.65 $ 2.68
========= ========= ========= =========
Average number of shares outstanding 10,003 9,937 9,999 9,931
========= ========= ========= =========
Diluted Earnings per Common Shares
Income from continuing operations $ .47 $ .21 $ 1.64 $ 1.34
========= ========= ========= =========
Net income $ .47 $ 1.18 $ 1.64 $ 2.66
========= ========= ========= =========
Average number of shares outstanding 10,032 10,023 10,041 10,001
========= ========= ========= =========
Cash Dividends Paid Per Share $ .53 $ .52 $ 1.59 $ 1.56
========= ========= ========= =========
</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,
---------------------
1998 1997*
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 16,509 $ 26,587
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 12,728 10,717
Gains on sale of investments (12,258) (12,235)
Provision for deferred income taxes 1,454 (222)
Provision for uncollectible accounts receivable 1,019 330
Discontinued operations - (13,160)
Changes in operating assets and liabilities,
excluding amounts acquired in business combinations
Increase in accounts receivable (3,218) (2,517)
Increase in inventories and other current assets (1,149) (180)
(Increase)/decrease in statutory deposits (427) 2,831
Decrease in accounts payable, deferred
contract revenue and other current liabilities (3,127) (724)
Increase in income taxes 1,873 6,290
Other - net 721 965
--------- ---------
Net cash provided by continuing operations 14,125 18,682
Net cash provided by discontinued operations - 9,699
--------- ---------
Net cash provided by operating activities 14,125 28,381
--------- ---------
Cash Flows From Investing Activities
Capital expenditures (15,023) (15,013)
Business combinations, net of cash acquired (14,373) (11,281)
Proceeds from sale of investments 14,315 14,060
Net proceeds/(outflows) relating to sale of discontinued
operations (4,806) 187,278
Investing activities of discontinued operations - (5,464)
Other-net 2,607 (572)
--------- ---------
Net cash provided/(used) by investing activities (17,280) 169,008
--------- ---------
Cash Flows From Financing Activities
Dividends paid (16,072) (15,660)
Repayment of long-term debt (1,271) (95,167)
Proceeds from long-term debt - 35,000
Decrease in bank notes and overdrafts payable - (4,865)
Other - net (386) 770
--------- ---------
Net cash used by financing activities (17,729) (79,922)
--------- ---------
Increase/(Decrease) In Cash And Cash Equivalents (20,884) 117,467
Cash and cash equivalents at beginning of period 70,958 14,028
--------- ---------
Cash and cash equivalents at end of period $ 50,074 $131,495
========= =========
</TABLE>
* Reclassified to conform to 1998 presentation
See accompanying notes to unaudited financial statements.
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. 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, 1997.
2. Earnings per common share are computed using the weighted
average number of shares of capital stock outstanding.
Diluted earnings per common share reflect the dilutive impact
of outstanding stock options and nonvested stock awards.
3. The Company had total comprehensive income of $1,122,000,
$12,607,000, $9,593,000 and $19,652,000 for the three months
ended September 30, 1998 and 1997 and for the nine months
ended September 30, 1998 and 1997, respectively. The
difference between the Company's net income and comprehensive
income relates to the cumulative unrealized
appreciation/depreciation on its available-for-sale
securities.
Page 6 of 16<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Financial Condition
- -------------------
The decline in cash and cash equivalents from $71.0 million at
December 31, 1997 to $50.1 million at September 30, 1998 is
primarily due to the use of cash for business combinations and for
the payments of costs relative to discontinued operations (largely a
post-closing balance sheet valuation adjustment related to
operations discontinued in September 1997). In accordance with a
recent consensus by the Emerging Issues Task Force of the Financial
Accounting Standards Board, shares of Chemed stock held in rabbi
trusts are included in treasury stock at September 30, 1998.
Previously these assets had been included in other assets.
Additionally, the deferred compensation liability relative to these
shares has been reclassified from other noncurrent liabilities at
December 31, 1997 to stockholder's equity at September 30, 1998.
The decline in other current liabilities from $42.3 million at
December 31, 1997 to $37.4 million at September 30, 1998 is
primarily due to the payment of liabilities relative to operations
discontinued in prior years.
Vitas Healthcare Corporation ("Vitas"), the privately held
provider of hospice services to the terminally ill in which the
Company carries an investment of $27 million of redeemable preferred
stock, made preferred dividend payments of $499,500 and $2,116,800,
on June 19 and July 15, 1998, respectively. As a result, the
preferred dividends in arrears have been reduced from $2.4 million
at March 31, 1998 to $1.0 million at September 30, 1998. Vitas is
continuing to explore long-term financing alternatives to increase
its liquidity. In connection therewith, in the second quarter of
1998, the Company extended the maturity date on its holdings of
preferred stock from the fourth quarter of 1998 to April 1, 1999.
On the basis of current information, management believes the
company's investment in Vitas is fully recoverable and that no
impairment exists.
At September 30, 1998 Chemed had approximately $106.2 million
of unused lines of credit with various banks. Management believes
its liquidity and sources of capital are satisfactory for the
Company's needs in the foreseeable future.
Page 7 of 16<PAGE>
Results of Operations
- ---------------------
Sales and service revenues and operating profit from
continuing operations by business segment follow (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------
1998 1997 1998 1997
------- -------- ----------------
Sales and Service
Revenues
- -----------------
Roto-Rooter $ 49,274 $ 39,041 $ 138,013$ 111,221
Patient Care 29,301 31,076 89,081 89,723
Service America 17,942 17,317 52,778 50,166
-------- ------- --------- --------
Total $ 96,517 $ 87,434 $ 279,872$ 251,110
======== ======== ========= ========
Operating Profit
- ----------------
Roto-Rooter $ 5,700 $ 4,677 $ 14,201$ 11,912
Patient Care 1,636 1,545 4,363 3,983
Service America 920 1,014 2,637 2,593
-------- -------- ------------------
Total $ 8,256 $ 7,236 $ 21,201$ 18,488
======== ======== ==================
Data relating to (a) the increase in service revenues and sales and
(b) operating profit as a percent of sales and service revenues are
set forth below:
Operating
Service Revenues Profit as a
and Sales % % of Sales
Increase/(Decrease) (Operating Margin)
------------------ ------------------
1998 vs. 1997 1998 1997
------------------ ------------------
Three Months Ended September 30,
- --------------------------------
Roto-Rooter 26 % 11.6% 12.0%
Patient Care (6) 5.6 5.0
Service America 4 5.1 5.9
Total 10 8.6 8.3
Nine Months Ended September 30,
- -------------------------------
Roto-Rooter 24 % 10.3% 10.7%
Patient Care (1) 4.9 4.4
Service America 5 5.0 5.2
Total 11 7.6 7.4
Page 8 of 16<PAGE>
Third Quarter 1998 versus Third Quarter 1997
- ----------------------------------------------
Service revenues and sales of the Roto-Rooter segment for
the third quarter of 1998 totalled $49,274,000, an increase of 26%
over revenues of $39,041,000 recorded in the third quarter of 1997.
Revenues of the plumbing services business and the drain cleaning
business increased 35% and 13%, respectively, for the third quarter
of 1998, as compared with the revenues recorded in the third quarter
of 1997. These revenues accounted for 43% and 37%, respectively of
Roto-Rooter's total revenues and sales during the 1998 period.
Excluding businesses acquired in 1997 and 1998, revenues for the
third quarter of 1998 increased 9% over revenues recorded in the
1997 period. The operating margin of the Roto-Rooter segment during
the third quarter of 1998 was 11.6% as compared with 12.0% during
the third quarter of 1997. This decline was attributable to a lower
gross profit margin in the 1998 third quarter. The lower margin was
attributable to a change in sales mix in the 1998 period as revenues
of the plumbing repair business and heating, ventilating and air
conditioning ("HVAC") business increased at greater rates than the
sewer and drain cleaning business which carries a higher margin than
plumbing and HVAC.
Service revenues of the Patient Care segment declined 6%
from $31,076,000 in the third quarter of 1997 to $29,301,000 in the
third quarter of 1998. This decline was primarily due to a decline
in Medicare revenues resulting from the passage of the Balanced
Budget Act of 1997. The operating margin of this segment increased
from 5.0% during the third quarter of 1997 to 5.6% during the third
quarter of 1998 due primarily to lower branch operating expenses as
a percent of revenues.
Service revenues and sales of the Service America segment
increased 4% from $17,317,000 to $17,942,000 in the third quarter of
1998. The operating margin of the Service America segment declined
from 5.9% in the third quarter of 1997 to 5.1% in 1998 primarily due
to increased selling and marketing expenses (as a percent of service
revenues) in the 1998 quarter. The higher level of sales and
marketing expenses is due to increased telemarketing costs and
increased direct sales costs in the 1998 period. The stronger sales
and marketing efforts in 1998 are expected to increase sales growth
in the coming year.
Income from operations increased from $5,226,000 in the
third quarter of 1997 to $5,891,000 in the third quarter of 1998,
primarily as a result of higher operating profit of the Roto-Rooter
segment.
Page 9 of 16<PAGE>
Interest expense declined from $2,924,000 in the third
quarter of 1997 to $1,798,000 in the third quarter of 1998,
primarily due to the September 1997 reduction in the Company's long-
term debt.
Other income-net increased from $1,298,000 in the third
quarter of 1997 to $3,691,000 in the third quarter of 1998 primarily
due to gains on the sales of investments and higher interest income
in the 1998 period. The increase in interest income was primarily
due to larger balances of cash and cash equivalents during 1998.
The Company's effective income tax rate during the third
quarter of 1998 was 39.7% as compared with 41.5% during the third
quarter of 1997. This decline was largely attributable to a lower
effective state and local tax rate on capital gains recorded in the
1998 quarter.
Income from continuing operations during the third quarter
of 1998 totalled $4,692,000 ($.47 per share) as compared with
$2,106,000 ($.21 per share) in the third quarter of 1997. This
increase was attributable to gains on the sales of investments,
lower interest expense and higher operating income during the 1998
period. Excluding gains from the sales of investments, income from
continuing operations for the third quarter of 1998 totalled $.33
per share as compared with $.21 per share during the third quarter
of 1997.
Net income declined from $11,808,000 ($1.19 per share) in
the 1997 third quarter to $4,692,000 ($.47 per share) in the 1998
third quarter, as a result of income from discontinued operations of
$9,702,000 in 1997, primarily relating to the gain on the sales of
operations sold in September 1997.
Nine Months Ended September 30, 1998 Versus September 30, 1997
- --------------------------------------------------------------
Service revenues and sales of the Roto-Rooter segment for
the first nine months of 1998 totalled $138,013,000, an increase of
24% over revenues of $111,221,000 recorded in the first nine months
of 1997. Revenues of the plumbing services business and drain
cleaning business increased 32% and 12%, respectively, for the first
nine months of 1998. Excluding revenues of businesses acquired in
1998 and 1997, revenues of the segment increased 10% during the
first nine months of 1998. The operating margin of the Roto-Rooter
segment in the first nine months of 1998 was 10.3% as compared with
10.7% during the first nine months of 1997. This decline was
attributable to a lower gross profit margin in the 1998 period
primarily resulting from a change in sales mix.
Page 10 of 16<PAGE>
Revenues of the Patient Care segment declined 1% from
$89,723,000 in the first nine months of 1997 to $89,081,00 in the
first nine months of 1998. Excluding the revenues of businesses
acquired in 1997 and 1998, revenues for the 1998 period declined 5%
in 1998 primarily from a decline in Medicare revenues resulting from
the passage of the Balanced Budget Act of 1997. The operating
margin of this segment was 4.4% in the first nine months of 1997,
increasing to 4.9% during the first nine months of 1998. This
increase was primarily attributable to lower branch operating
expenses as a percent of revenues in the 1998 period.
Service revenues and sales of the Service America segment
increased 5% from $50,166,000 in the first nine months of 1997 to
$52,778,000 in the first nine months of 1998. This revenue increase
was driven by a 11% increase in the sales of Service America's
retail business during the 1998 period. The operating margin of the
Service America segment was 5.0% during the first nine months of
1998 as compared with 5.2% during the first nine months of 1997.
Income from operations increased from $14,060,000 during
the first nine months of 1997 to $14,882,000 during the comparable
period of 1998. This increase was primarily a result of higher
operating profit recorded by all three of the Company's segments
during 1998, partially offset by higher operating costs of the
Company's developing software consulting operations during 1998.
Interest expense declined from $8,476,000 during the first
nine months of 1997 to $5,397,000 during the first nine months of
1998, largely as a result of the reduction of the Company's long-
term debt.
Other income-net increased from $16,172,000 during the
first nine months of 1998 to $17,636,000 during the first nine month
of 1997, primarily due to higher interest income during the 1998
period.
The Company's effective tax rate during the first nine
months of 1998 was 39.1% as compared with 38.3% during the first
nine months of 1997.
Income from continuing operations during the first nine
months of 1998 totalled $16,509,000 ($1.65 per share) as compared
with $13,427,000 ($1.35 per share) for the first nine months of
1997. Excluding gains on the sales of investments in both periods,
income from continuing operations for the first nine months of 1998
totalled $.88 per share as compared with $.58 per share during the
first nine months of 1997.
Page 11 of 16<PAGE>
Net income declined from $26,587,000 ($2.68 per share) in
the first nine months of 1997 to $16,509,000 ($1.65 per share) in
the first nine months of 1998, largely as a result of gains on the
sales of discontinued operations sold in September 1997.
Year 2000 Update
- ----------------
The Company's Year 2000 Project ("Project") addressed the
issue of computer systems and hardware being unable to distinguish
between the year 1900 and the year 2000.
Mission-critical systems of the Roto-Rooter and Service
America segments are currently Year 2000 ("Y2K") ready as are the
majority of Patient Care's internal systems. It is anticipated that
the remainder of Patient Care's systems will be Y2K ready by mid-
1999. Systems currently not Y2K ready are being upgraded or
replaced by software developed in house and in some instances by
installing upgrades of off-the-shelf software. Critical systems at
the Company's administrative headquarters are believed to be Y2K
ready. Verification of that readiness will be performed during the
next six months.
To date expenditures for the Project have not been
material and it is anticipated that future expenditures for Y2K
issues will be immaterial.
As part of the Project, the Company is contacting its
major trading partners to ascertain that their systems are Y2K ready
or will be ready within an acceptable time frame. This portion of
the Project is in the beginning stages and not all trading partners
have been contacted or have responded. A significant portion of the
Patient Care segment's revenues (approximately 60%) are either
directly or indirectly dependent upon the electronic processing of
Medicare and Medicaid claims through fiscal intermediaries of the
Health Care Financing Administration ("HCFA"). The Medicare
intermediaries have modified their systems to be Y2K ready and
anticipate implementing those systems January 1, 1999. In the past,
Medicaid intermediaries have followed the lead of the Medicare
intermediaries. During 1998, Medicaid intermediaries orally
represented that their systems will be Y2K ready prior to January 1,
2000. Patient Care is also contacting its other major customers to
determine their state of Y2K readiness.
Page 12 of 16<PAGE>
Should the fiscal intermediaries, HCFA or Patient Care's
major customers fail to become Y2K ready on a timely basis, Patient
Care could experience a significant slowing of the processing and
payment of a significant portion of its revenues.
The Company's operations have commenced development of
formalized contingency plans to continue operations should they
experience the failure of their systems (or should its major trading
partners experience such a failure) due to Y2K issues. Such plans
include the manual and/ or semi-manual processing of transactions.
It is anticipated that the finalization of contingency plans will be
completed during 1999 after internal systems have been upgraded and
major trading partners have responded to Company inquiries.
While the Company currently anticipates its mission-
critical systems will continue to operate after December 31, 1999,
there can be no assurance that the failure of systems outside its
control or immediate sphere of influence will not materially impact
its operations.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 Regarding Forward-Looking Information
- -------------------------------------------------------------
This report contains forward-looking statements which are
subject to certain risks and uncertainties that could cause actual
results to differ materially from these statements and trends. Such
factors include, but are not limited to: the state of Y2K readiness
of the Company's key trading partners; the ability of its Patient
Care operation to successfully implement the remaining Y2K changes
to its internal systems; and the successful development of a Y2K
contingency plan. The Company's ability to deal with the unknown
outcomes of these events may impact the reliability of its
projections of Y2K readiness.
Page 13 of 16<PAGE>
PART II -- OTHER INFORMATION
----------------------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
Exhibit SK 601
No. Ref. No. Description
------- -------- ------------------
1 (11) Statement re:
Computation of Per
Share Earnings
2 (27) Financial Data
Schedule
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 12, 1998 By Naomi C. Dallob
---------------------- -------------------------
Naomi C. Dallob
Vice President and Secretary
Dated: November 12, 1998 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,
------------------ ------------------
1998 1997 1998 1997
-------- -------- ----------------
Computation of Earnings Per
Common Share
- ---------------------------
<S> <C> <C> <C> <C>
Reported Income $ 4,692 $ 2,106 $ 16,509 $ 13,427
======== ======== ======== ========
Average number of shares
outstanding 10,003 9,937 9,999 9,931
======== ======== ======== ========
Earnings per common share $ 0.47 $ 0.21 $ 1.65 $ 1.35
======== ======== ======== ========
Computation of Diluted
Earnings Per Common Share
- ---------------------------
Reported Income $ 4,692 $ 2,106 $ 16,509 $ 13,427
======== ======== ======== ========
Average number of shares
outstanding 10,003 9,937 9,999 9,931
Effect of nonvested
stock awards 28 37 36 30
Effect of unexercised
stock options 1 49 6 40
-------- -------- -------- --------
Average number of shares
used to compute diluted
earnings per share 10,032 10,023 10,041 10,001
======== ======== ======== ========
Diluted earnings per
common share $ 0.47 $ 0.21 $ 1.64 $ 1.34
======== ======== ======== ========
</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)
Net Income
-----------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
1998 1997 1998 1997
-------- -------- -------- --------
<TABLE>
<CAPTION>
Computation of Earnings Per
Common Share
- ---------------------------
<S> <C> <C> <C> <C>
Reported Income $ 4,692 $ 11,808 $ 16,509 $ 26,587
======== ======== ======== ========
Average number of shares
outstanding 10,003 9,937 9,999 9,931
======== ======== ======== ========
Earnings per common share $ 0.47 $ 1.19 $ 1.65 $ 2.68
======== ======== ======== ========
Computation of Diluted
Earnings Per Common Share
- ---------------------------
Reported Income $ 4,692 $ 11,808 $ 16,509 $ 26,587
======== ======== ======== ========
Average number of shares
outstanding 10,003 9,937 9,999 9,931
Effect of nonvested
stock awards 28 37 36 30
Effect of unexercised
stock options 1 49 6 40
-------- -------- -------- --------
Average number of shares
used to compute diluted
earnings per share 10,032 10,023 10,041 10,001
======== ======== ======== ========
Diluted earnings per
common share $ 0.47 $ 1.18 $ 1.64 $ 2.66
======== ======== ======== ========
</TABLE>
E - 2
Page 16 of 16<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFROMATION EXTRACTED FROM FORM 10-Q OF CHEMED
CORPORATION FOR THE QUARTER ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000019584
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