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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 June 30, 2001
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
incorporation or organization) Identification No.)
2600 Chemed Center, 255 E. Fifth Street, Cincinnati, Ohio 45202
(Address of principal executive offices) (Zip code)
(513) 762-6900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter periods that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate 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 9,832,942 Shares July 31, 2001
$1 Par Value
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Page 1 of 15
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES
Index
Page No.
--------
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet -
June 30, 2001 and
December 31, 2000 3
Consolidated Statement of Income -
Three months and six months ended
June 30, 2001 and 2000 4
Consolidated Statement of Cash Flows -
Six months ended
June 30, 2001 and 2000 5
Notes to Unaudited Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9 - 13
PART II. OTHER INFORMATION 14 - 15
Page 2 of 15
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEET
(in thousands except share and per share data)
June 30, December 31,
2001 2000
---------- ------------
ASSETS
Current assets
Cash and cash equivalents $ 12,624 $ 10,280
Accounts receivable, less allowances of $5,309 (2000 - $5,137) 50,900 54,571
Inventories 11,090 10,503
Statutory deposits 13,630 14,046
Other current assets 20,390 17,070
---------- ----------
Total current assets 108,634 106,470
Other investments 35,217 37,099
Properties and equipment, at cost less accumulated
depreciation of $69,294 (2000 - $64,757) 73,574 75,177
Identifiable intangible assets less accumulated
amortization of $8,115 (2000 - $7,749) 11,224 11,633
Goodwill less accumulated amortization of $33,984
(2000 - $31,524) 166,466 169,083
Other assets 24,204 21,913
---------- ----------
Total Assets $ 419,319 $ 421,375
========== ==========
LIABILITIES
Current liabilities
Accounts payable $ 11,569 $ 11,102
Current portion of long-term debt 11,356 14,376
Income taxes 11,002 11,862
Deferred contract revenue 23,948 24,973
Other current liabilities 43,427 44,629
---------- ----------
Total current liabilities 101,302 106,942
Long-term debt 58,180 58,391
Other liabilities 27,947 27,637
---------- ----------
Total Liabilities 187,429 192,970
---------- ----------
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED SECURITIES
OF THE CHEMED CAPITAL TRUST 14,561 14,641
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock-authorized 700,000 shares without par value;
none issued
Capital stock-authorized 15,000,000 shares $1 par;
issued 13,436,905 shares (2000 - 13,317,906 shares) 13,437 13,318
Paid-in capital 166,546 162,618
Retained earnings 157,687 153,909
Treasury stock - 3,604,710 shares
(2000 - 3,467,753 shares), at cost (110,382) (105,249)
Unearned compensation (13,770) (16,683)
Deferred compensation payable in company stock 3,253 5,500
Accumulated other comprehensive income 2,152 3,237
Notes receivable for shares sold (1,594) (2,886)
---------- ----------
Total Stockholders' Equity 217,329 213,764
---------- ----------
Total Liabilities and Stockholders' Equity $ 419,319 $ 421,375
========== ==========
See accompanying notes to unaudited financial statements.
Page 3 of 15
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF INCOME
(in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2001 2000 2001 2000
-------- -------- -------- --------
Continuing Operations
Service revenues and sales $120,789 $122,956 $241,989 $242,343
-------- -------- -------- --------
Cost of services provided and cost of
goods sold 73,433 74,455 146,880 147,231
Selling and marketing expenses 11,353 11,046 22,253 22,054
General and administrative expenses 25,648 24,524 50,972 48,980
Depreciation 4,015 3,852 8,027 7,526
-------- -------- -------- --------
Total costs and expenses 114,449 113,877 228,132 225,791
-------- -------- -------- --------
Income from operations 6,340 9,079 13,857 16,552
Interest expense (1,466) (1,787) (2,952) (3,569)
Distributions on preferred securities (278) (286) (555) (574)
Other income - net 845 2,792 2,604 5,188
-------- -------- -------- --------
Income before income taxes 5,441 9,798 12,954 17,597
Income taxes (2,111) (3,753) (5,010) (6,692)
-------- -------- -------- --------
Income from continuing operations 3,330 6,045 7,944 10,905
Discontinued operations (1,869) 68 (1,973) 110
-------- -------- -------- --------
Net Income $ 1,461 $ 6,113 $ 5,971 $ 11,015
======== ======== ======== ========
Earnings Per Common Share
Income from continuing operations $ .34 $ .62 $ .82 $ 1.10
======== ======== ======== ========
Net income $ .15 $ .62 $ .61 $ 1.11
======== ======== ======== ========
Average number of shares outstanding 9,728 9,797 9,737 9,931
======== ======== ======== ========
Diluted Earnings Per Common Share
Income from continuing operations $ .34 $ .61 $ .80 $ 1.09
======== ======== ======== ========
Net income $ .16 $ .61 $ .60 $ 1.10
======== ======== ======== ========
Average number of shares outstanding 10,257 10,295 9,885 10,353
======== ======== ======== ========
Cash Dividends Paid Per Share $ .11 $ .10 $ .22 $ .20
======== ======== ======== ========
See accompanying notes to unaudited financial statements.
Page 4 of 15
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Six Months Ended
June 30,
2001 2000*
--------- --------
Cash Flows From Operating Activities
Net income $ 5,971 $ 11,015
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 12,113 11,616
Discontinued Operations 1,973 (110)
Gains on sale of investments (993) (2,662)
Provision for deferred income taxes 774 539
Provision for uncollectible
accounts receivable 1,266 925
Changes in operating assets and
liabilities, excluding amounts
acquired in business combinations
(Increase)/decrease in accounts
receivable 1,809 (519)
Increase in inventories (587) (721)
Increase in other current assets (3,293) (2,748)
(Increase)/decrease in statutory
deposits 416 (229)
Decrease in accounts payable, deferred
contract revenue and other current
liabilities (1,736) (902)
Increase in income taxes 102 1,038
Other - net (842) 97
--------- --------
Net cash provided by continuing operations 16,973 17,339
Net cash provided by discontinued operations 484 280
--------- --------
Net cash provided by operating activities 17,457 17,619
--------- --------
Cash Flows From Investing Activities
Capital expenditures (7,202) (8,696)
Net outflows from discontinued operations (2,536) (1,857)
Proceeds from sale of investments 1,377 3,424
Business combinations--net of cash acquired - (10,696)
Other - net (809) (882)
--------- --------
Net cash used by investing activities (9,170) (18,707)
--------- --------
Cash Flows From Financing Activities
Retirement of long-term debt (3,231) (84)
Dividends paid (2,200) (2,020)
Purchase of treasury stock (1,197) (4,501)
Proceeds from issuances of long-term debt - 5,000
Other - net 685 (67)
--------- --------
Net cash used by financing activities (5,943) (1,672)
--------- --------
Increase/(Decrease) In Cash and Cash Equivalents 2,344 (2,760)
Cash and cash equivalents at beginning of period 10,280 17,282
--------- --------
Cash and cash equivalents at end of period $ 12,624 $ 14,522
========= ========
See accompanying notes to unaudited financial statements.
* Reclassified to conform to 2001 presentation.
Page 5 of 15
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, 2000.
2. Sales and service revenues and aftertax earnings by business
segment follow (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- --------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Revenues
------------
Roto-Rooter $ 67,098 $ 69,806 $ 135,554 $ 137,530
Patient Care 35,839 33,689 70,780 66,598
Service America 17,852 19,461 35,655 38,215
--------- --------- --------- ---------
Total $ 120,789 $ 122,956 $ 241,989 $ 242,343
========= ========= ========= =========
Aftertax Earnings
Roto-Rooter $ 3,581 $ 4,920 $ 7,662 $ 9,589
Patient Care 715 549 1,295 952
Service America 483 521 945 841
--------- --------- --------- ---------
Total segment earnings 4,779 5,990 9,902 11,382
Corporate
Gains on sales of
investments - 1,122 703 1,799
Overhead (1,418) (1,209) (2,631) (2,572)
Net investing and
financing income/
(expense) (31) 142 (30) 296
Discontinued operations (1,869) 68 (1,973) 110
--------- --------- --------- ---------
Net income $ 1,461 $ 6,113 $ 5,971 $ 11,015
========= ========= ========= =========
3. Earnings per common share are computed using the weighted
average number of shares of capital stock outstanding. Diluted
earnings per common share are computed on the following page (in
thousands except per share data):
Page 6 of 15
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2001 2000 2001 2000
-------- -------- -------- --------
Income from Continuing Operations
- ---------------------------------
Reported income $ 3,330 $ 6,045 $ 7,944 $ 10,905
Aftertax interest on Trust
Securities 181 190 -(a) 379
-------- -------- -------- --------
Adjusted income $ 3,511 $ 6,235 $ 7,944 $ 11,284
======== ======== ======== ========
Average number of shares
outstanding 9,728 9,797 9,737 9,931
Effect of conversion of the
Trust Securities 394 419 -(a) 347
Effect of nonvested stock
awards 110 78 115 74
Effect of unexercised stock
options 25 1 33 1
-------- -------- -------- -------
Average number of shares
used to compute diluted
earnings per common
share 10,257 10,295 9,885 10,353
======== ======== ======== ========
Diluted earnings per
common share $ .34 $ .61 $ .80 $ 1.09
======== ======== ======== ========
Net Income
- ----------
Reported income $ 1,461 $ 6,113 $ 5,971 $ 11,015
Aftertax interest on Trust
Securities 181 190 -(a) 379
-------- -------- -------- --------
Adjusted income $ 1,642 $ 6,303 $ 5,971 $ 11,394
======== ======== ======== ========
Average number of shares
outstanding 9,728 9,797 9,737 9,931
Effect of conversion of the
Trust Securities 394 419 -(a) 347
Effect of nonvested stock
awards 110 78 115 74
Effect of unexercised stock
options 25 1 33 1
-------- -------- -------- --------
Average number of shares
used to compute diluted
earnings per common
share 10,257 10,295 9,885 10,353
======== ======== ======== ========
Diluted earnings per
common share $ .16 $ .61 $ .60 $ 1.10
======== ======== ======== ========
- -------------------
(a) The impact of the Trust Securities on earnings per share from continuing
operations is anti-dilutive for the six months ended June 30,2001. Therefore,
the Trust Securities are excluded from diluted earnings per share computations.
4. The Company had total comprehensive income of $1,352,000,
$4,611,000, $4,886,000 and $9,000,000 for the three months and
six months ended June 30, 2001 and 2000, respectively. The
income relates to the cumulative unrealized
appreciation/depreciation on its available-for-sale securities.
Page 7 of 15
5. During the first quarter of 2001, the U.S. Department of Labor
("DOL") initiated an investigation into Roto-Rooter Services
Company's ("Roto-Rooter") pay practices for service technicians.
The DOL claims Roto-Rooter should pay these commissioned
employees overtime for hours worked over forty hours per week.
Roto-Rooter has long relied on an overtime exemption covering
Retail Service Employees. The DOL now asserts that plumbing
services do not qualify, and Roto-Rooter should lose the
exemption.
Roto-Rooter's compensation program responds to its employees'
desire for flexibility and choices in terms of work schedule and
income. Roto-Rooter intends to vigorously defend this matter,
but cannot predict its outcome. It is not presently possible to
reasonably estimate what liability, if any, may arise from this
matter.
6. Effective for the second quarter of 2001, Chemed made a
commitment to discontinue its Cadre Computer segment. It is
anticipated that the business and assets of Cadre Computer will
be sold to a company owned by the Cadre Computer employees, or
will otherwise be divested, during the next twelve months.
Accordingly, the results of operations of Cadre Computer and the
estimated loss on disposal have been classified as discontinued
operations in the accompanying statement of income.
Data relating to discontinued operations include the following
(in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- -------------------
2001 2000 2001 2000
-------- -------- -------- --------
Cadre Computer income/
(loss) before income
taxes $ (391) $ 105 $ (569) $ 171
Income tax benefit/
(expense) 135 (37) 197 (61)
Minority interest 28 - 40 -
-------- -------- -------- --------
Cadre Computer net income
(loss) (228) 68 (332) 110
Estimated loss on disposal,
net of income tax
benefit of $ 883 (1,641) - (1,641) -
Income/(loss) from
discontinued operations $ (1,869) $ 68 $ (1,973) $ 110
======== ======== ======== ========
Net service revenues and
sales of Cadre Computer $ 1,450 $ 2,262 $ 3,531 $ 4,409
======== ======== ======== ========
7. Statement of Financial Accounting Standards No. l33 ("SFAS133"),
Accounting for Derivative Instruments and Hedging Activities, is
effective for calendar year 2001. Since the Company does not
invest in derivative or hedging instruments, adoption of SFAS133
has no impact on the Company's financial statements.
Page 8 of 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition
- -------------------
There were no significant changes in the Company's balance
sheet from December 31, 2000 to June 30, 2001.
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, refinanced its debt obligations in April 2001. In connection
therewith, the Company and Vitas agreed to extend the maturity of
Vitas' redeemable preferred stock to April 1, 2007. In addition,
Vitas issued a warrant to the Company for the purchase of
approximately 1.6 million shares of its common stock.
Vitas' operating results and net income continue to meet
its management's expectations. On the basis of current information,
management believes the Company's investment in Vitas is fully
recoverable and that no impairment exists.
On June 20, 2001, Chemed's $85 million revolving line of
credit with Bank of America expired. It is anticipated that another
line of credit will be established during the third quarter of 2001.
As a result, Chemed had approximately $18.2 million of unused lines
of credit with various banks at June 30, 2001. Management believes
its liquidity and sources of capital are satisfactory for the
Company's needs in the foreseeable future.
Results of Operations
- ---------------------
Data relating to (a) the increase or decrease in service
revenues and sales from continuing operations and (b) aftertax
earnings as a percent of service revenues and sales for each segment
are set forth below:
Service Revenues Aftertax Earnings
and Sales - as a % of Revenues
% Increase/(Decrease) (Aftertax Margin)
--------------------- --------------------
2001 vs. 2000 2001 2000
--------------------- -------- --------
Three Months Ended
June 30,
- ------------------
Roto-Rooter (4)% 5.3% 7.0%
Patient Care 6 2.0 1.6
Service America (8) 2.7 2.7
Total (2) 4.0 4.9
Page 9 of 15
Six Months Ended
June 30,
- ----------------
Roto-Rooter (1)% 5.7% 7.0%
Patient Care 6 1.8 1.4
Service America (7) 2.7 2.2
Total - 4.1 4.7
Second Quarter 2001 versus Second Quarter 2000
- ----------------------------------------------
Service revenues and sales of the Roto-Rooter segment for
the second quarter of 2001 totaled $67,098,000, a decline of 4%
versus the $69,806,000 recorded in the second quarter of 2000.
Revenues of the drain cleaning business and the plumbing services
business declined 2% and 5%, respectively, for the second quarter of
2001, as compared with revenues for 2000. Each of these businesses'
revenues accounts for 42% of Roto-Rooter's total revenues and sales.
These revenue declines can be partially ascribed to the economic
slowdown as Roto-Rooter is experiencing lower demand for elective,
non-emergency plumbing and drain cleaning services. The aftertax
margin of this segment during the second quarter of 2001 was 5.3% as
compared with 7.0% during the second quarter of 2000. Most of this
decline is attributable to a lower gross profit margin in the 2001
quarter. Higher liability insurance costs during 2001 were a
primary factor in the gross margin decline. In addition, higher
selling costs, as a percentage of revenues, also contributed to the
aftertax margin decline.
Service revenues of the Patient Care segment increased 6%
from $33,689,000 in the second quarter of 2000 to $35,839,000 in the
second quarter of 2001. The aftertax margin of this segment
increased from 1.6% in the second quarter of 2000 to 2.0% in the
second quarter of 2001, largely as the result of a higher gross
profit margin in 2001.
Service revenues and sales of the Service America segment
declined 8% from $19,461,000 in the second quarter of 2000 to
$17,852,000 in the second quarter of 2001. This decline was the
result of not selling enough new service contracts to offset the
loss of existing service contracts that renew annually. The
aftertax margin of this segment was 2.7% in both 2000 and 2001.
Income from operations declined from $9,079,000 in the
second quarter of 2000 to $6,340,000 in the second quarter of 2001.
Similarly, earnings before interest, taxes, depreciation and
amortization before capital gains ("EBITDA") declined 18% from
$15,562,000 in the second quarter of 2000 to $12,813,000 in the
second quarter of 2001. Both declines are primarily due to lower
operating profit of the Roto-Rooter segment.
Page 10 of 15
Interest expense declined from $1,787,000 in the second
quarter of 2000 to $1,466,000, largely as the result of lower debt
levels during the year 2001.
Other income-net declined from $2,792,000 in the second
quarter of 2000 to $845,000 in the second quarter of 2001 primarily
as the result of $1,711,000 of capital gains realized in the second
quarter of 2000, as compared with a capital loss of $119,000 in the
2001 quarter.
The effective income tax rate during the second quarter of
2001 was 38.8% as compared with 38.3% during the second quarter of
2000.
Income from continuing operations declined from $6,045,000
($.62 per share and $.61 per diluted share) in the second quarter of
2000 to $3,330,000 ($.34 per share) in the second quarter of 2001.
Excluding gains on the sales of investments in 2000, income from
continuing operations for the second quarter of 2000 was $4,923,000
($.50 per share) as compared with $3,330,000 ($.34 per share) for
2001. This decline is attributable to lower aftertax income of the
Roto-Rooter segment in 2001.
Net income during the second quarter of 2000 totaled
$6,113,000 ($.62 per share and $.61 per diluted share) as compared
with $1,461,000 ($.15 per share and $.16 per diluted share) in the
2000 quarter. Net income for 2001 includes a loss of $1,641,000
($.17 per share and $.16 per diluted share) from the discontinuance
of the Cadre Computer segment effective June 30, 2001.
Six Months Ended June 30, 2001 versus June 30, 2000
- ---------------------------------------------------
Service revenues and sales of the Roto-Rooter segment for
the first six months of 2001 totaled $135,554,000, a decline of 1%
versus the $137,530,000 recorded in the first six months of 2000.
During the first six months of 2001, revenues of the drain cleaning
business increased 1% and revenues of the plumbing services business
declined 1% versus revenues for the first six months of 2000. The
aftertax margin of the Roto-Rooter segment for the first six months
of 2001 was 5.7% as compared with 7.0% for 2000. This decline is
attributable primarily to a lower gross profit margin in the 2001
period.
Service revenues of the Patient Care segment increased 6%
from $66,598,000 in the first six months of 2000 to $70,780,000 in
the first six months of 2001. The aftertax margin of this segment
increased from 1.4% in the first six months of 2000 to 1.8% in 2001,
largely as the result of a higher gross profit margin in 2001.
Page 11 of 15
Service revenues and sales of the Service America segment
declined 7% from $38,215,000 in the first six months of 2000 to
$35,655,000 in the first six months of 2001. This decline was
anticipated and is due, in part, to not renewing less profitable
service contracts. The aftertax margin of this segment increased
from 2.2% in the 2000 period to 2.7% in the 2001 period, primarily
as the result of a higher gross margin in 2001.
Income from operations declined from $16,552,000 in the
first six months of 2000 to $13,857,000 in the first six months of
2001. Similarly, EBITDA declined 11% from $29,679,000 in the first
six months of 2000 to $26,515,000 in the first six months of 2001.
Both declines are primarily due to lower operating profit of the
Roto-Rooter segment.
Interest expense declined from $3,569,000 during the first
six months of 2000 to $2,952,000 in the first six months of 2001 due
to lower debt levels in 2001.
Other income-net declined from $5,188,000 in the first six
months of 2000 to $2,604,000 in the first six months of 2001 largely
due to smaller gains on sales of investments in 2001. Lower
interest income during the 2001 period also contributed to this
decline.
The effective income tax rate during the first six months
of 2001 was 38.7% as compared with 38.0% during the first six months
of 2000. The increase is primarily attributable to a higher
effective state and local income tax rate in 2001.
Income from continuing operations declined from
$10,905,000 ($1.10 per share and $1.09 per diluted share) in the
first six months of 2000 to $7,944,000 ($.82 per share and $.80 per
diluted share) in the first six months of 2001. Excluding gains on
the sales of investments in 2000, income from continuing operations
for the first six months of 2000 was $9,106,000 ($.92 per share) as
compared with $7,241,000 ($.74 per share and $.73 per diluted share)
for 2001. This decline is attributable to lower aftertax income of
the Roto-Rooter segment in 2001.
Net income during the first six months of 2001 totaled
$5,971,000 ($.61 per share and $.60 per diluted share) as compared
with $11,015,000 ($1.11 per share and $1.10 per diluted share) in the
2000 period. Net income for 2001 includes a loss of $1,641,000
($.17 per share and $.16 per diluted share) from the discontinuance
of the Cadre Computer segment effective June 30, 2001.
Page 12 of 15
Accounting for Business Combinations and Intangible Assets
- ----------------------------------------------------------
During June 2001, the Financial Accounting Standards Board
approved the issuance of Statement of Financial Accounting Standards
No. 141 ("SFAS141"), Business Combinations, and Statement of
Financial Accounting Standards No. 142 ("SFAS142"), Goodwill and
Other Intangible Assets. For Chemed these statements will generally
become effective January 1, 2002, although business combinations
initiated after July 1, 2001 are subject to the non-amortization and
purchase accounting provisions.
Specifically, SFAS142 stipulates that goodwill is no
longer subject to amortization, but must be evaluated annually for
impairment beginning January 1, 2002. Chemed estimates that the
non-amortization provision will increase its diluted earnings per
share by approximately $.40 to $.45 per share in the year 2002. The
assessment of goodwill for impairment is a complex issue in which a
company must determine, among other things, the fair value of each
defined component of its operating segments. It is, therefore, not
possible at this time to predict the impact, if any, which the
impairment assessment provisions of SFAS142 will have on Chemed's
financial statements.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 Regarding Forward-Looking Information
- -------------------------------------------------------------
This report contains statements which are subject to
certain known and unknown risks, uncertainties, contingencies and
other factors that could cause actual results to differ materially
from such statements. The Company's ability to deal with the
unknown outcomes of these events, many of which are beyond its
control, may affect the reliability of its projections and other
financial matters.
Page 13 of 15
PART II -- OTHER INFORMATION
- ----------------------------
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
(a) Chemed held its Annual Meeting of Shareholders on May 21,
2001.
(b) The names of directors elected at this Annual Meeting are
as follows:
Edward L. Hutton Sandra E. Laney
Rick L. Arquilla Kevin J. McNamara
James H. Devlin Spencer S. Lee
Charles H. Erhart, Jr. John M. Mount
Joel F. Gemunder Timothy S. O'Toole
Patrick P. Grace Donald E. Saunders
Thomas C. Hutton Paul C. Voet
Walter L. Krebs George J. Walsh, III
(c) The stockholders ratified the Board of Directors' selection
of PricewaterhouseCoopers LLP as independent accountants
for the Company and its consolidated subsidiaries for the
year 2001. 8,800,446 votes were cast in favor of the
proposal, 64,178 votes were cast against it, 29,215 votes
abstained, and three were broker nonvotes.
(d) With respect to the stockholder proposal concerning the
sale of the Company: 1,013,136 votes were cast in favor of
the proposal, 6,180,761 votes were cast against it, 114,920
votes abstained, and there were 1,585,022 broker nonvotes.
With respect to the election of directors, the number of
votes cast for each nominee was as follows:
Votes For Votes Withheld
--------- --------------
Edward L. Hutton 8,452,003 441,836
Rick L. Arquilla 8,472,384 421,455
James H. Devlin 8,465,432 428,407
Charles H. Erhart, Jr. 8,456,200 437,639
Joel F. Gemunder 8,466,519 427,320
Patrick P. Grace 8,462,709 431,130
Thomas C. Hutton 8,467,830 426,009
Walter L. Krebs 8,460,546 433,293
Sandra E. Laney 8,467,843 425,996
Spencer S. Lee 8,458,233 435,606
Kevin J. McNamara 8,470,359 423,480
John M. Mount 8,454,632 439,207
Timothy S. O'Toole 8,457,497 436,342
Page 14 of 15
Donald E. Saunders 8,454,608 439,231
Paul C. Voet 8,454,557 439,282
George J. Walsh, III 8,458,598 435,241
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
None required.
(b) Reports on Form 8-K
-------------------
None were filed in the quarter ended June 30, 2001.
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: August 10, 2001 By Naomi C. Dallob
--------------- -------------------------
Naomi C. Dallob, Vice
President and Secretary
Dated: August 10, 2001 By Arthur V. Tucker, Jr.
--------------- -------------------------
Arthur V. Tucker, Jr.
Vice President and
Controller (Principal
Accounting Officer)
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