Chemed Corp. (NYSE:CHE) Q4 2015 Earnings Conference Call - Final Transcript

Feb 18, 2016 • 10:00 am ET


Chemed Corp. (NYSE:CHE) Q4 2015 Earnings Conference Call - Final Transcript


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Good day ladies and gentlemen and welcome to the Chemed Corporation Fourth Quarter 2015 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Sherri Warner with Investor Relations.

Sherri Warner

Good morning. Our conference call this morning will review the financial results for the fourth quarter of 2015 ended December 31, 2015. Before we begin, let me remind you that the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call. During the course of the call, the Company will make various remarks concerning Management's expectations, predictions, plans and prospects that constitute forward-looking statements. Actual results may differ materially from those projected by these forward-looking statements as a result of a variety of factors, including those identified in the Company's news release of February 17, and in various other filings with the SEC.

You are cautioned that any forward-looking statements reflect Management's current view only and that the Company undertakes no obligation to revise or update such statements in the future. In addition, Management may also discuss non-GAAP operating performance results during today's call, including earnings before interest, taxes, depreciation and amortization or EBITDA and adjusted EBITDA. A reconciliation of these non-GAAP results is provided in the companies press release dated February 17 which is available on the Company's website at

I would now like to introduce our speakers for today; Kevin McNamara, President and Chief Executive Officer of Chemed Corporation; Dave Williams, Executive Vice President and Chief Financial Officer of Chemed; and Tim O'Toole, Chief Executive Officer of Chemed's VITAS Healthcare Corporation subsidiary.

I will now turn the call over to Kevin McNamara.

Kevin McNamara

Thank you, Sherri. Good morning. Welcome to Chemed Corporation's fourth quarter 2015 conference call. I will begin with some of the highlights from the quarter and David and Tim will follow with some additional operating detail. I will then open up the call to questions. We finished 2015 with excellent revenue and earnings in our VITAS and Roto-Rooter operating segments. For the quarter, Chemed generated $399 million of revenue, an increase of 5.1%. This took our full year revenue to over $1.5 billion and represented a consolidated full year revenue growth of 6%.

Consolidated net income in the quarter, excluding certain discrete items, increased 8.9% to $34.2 million and equated to adjusted earnings per diluted share of $1.97, an increase of 9.4%. We finished 2015 with total adjusted earnings per diluted share of $6.98, an increase of 15% when compared with 2014 earnings. VITAS and Roto-Rooter continues to generate solid operating metrics which translate into excellent profitability and cash flows in both operating segments.

As most of you are aware, on January 1, 2016, CMS implemented certain changes to the Medicare hospice reimbursement per diem. This rebasing eliminated the single tier per diem for routine home care and replaced it with a two tiered rate. And the higher rate for the first 60 days of the hospice patients care and lower rate for days 61