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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
April 23, 2003
CHEMED CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8351 31-0791746
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification
incorporation) Number)
2600 Chemed Center, 255 East 5th Street, Cincinnati, OH 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(513) 762-6900
Page 1 of 2
Item 9. Regulation FD Disclosure
Chemed Corporation ("Company") filed its results of
operations for the first quarter of 2003 on April 17, 2003.
(99) Quarterly mailing dated April 17, 2003 E-1 through E-6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
CHEMED CORPORATION
Dated: April 23, 2003 By: /s/ Arthur V. Tucker, Jr.
--------------- ----------------------------
Arthur V. Tucker, Jr.
Vice President and Controller
Page 2 of 2
Exhibit 99
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FRONT COVER
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FIRST QUARTER REPORT
for the period ending
March 31, 2003
CHEMED LOGO
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Serving AMERICA'S Commercial and Residential
REPAIR and MAINTENANCE Markets
E - 1
INSIDE
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April 17, 2003
To Our Fellow Shareholders:
For the first quarter, ended March 31, 2003, your company
recorded net income and income from continuing operations of $.26
per share as compared with net income of $.47 per share and
income from continuing operations of $.39 per share in the 2002
first quarter.
First-quarter 2003 net income and income from continuing
operations included capital gains from sales of investments of
$.22 per share and charges related to severance payments of $.24
per share. Income from continuing operations in the same 2002
quarter included capital gains of $.08 per share from sales of
investments, and net income in first-quarter 2002 also included
$.08 per share from discontinued operations.
Service revenues and sales from continuing operations for
the 2003 first quarter were $77.6 million, 4% below 2002's $80.9
million. For the first quarter, net cash provided by operating
activities totaled $5.2 million in 2003 versus $6.6 million in
2002.
We are encouraged by the improvement in Chemed's first-
quarter results. Our operating profit increased by 3% over the
prior-year first quarter, led by an 11% increase in operating
profit at our Roto-Rooter Plumbing and Drain Service business.
Further, Roto-Rooter's net income of $3.6 million in the 2003
first quarter increased 4% over net income of $3.5 million in the
2002 first quarter.
Revenues at Roto-Rooter amounted to $64.7 million in the
first quarter of 2003, 1% below the prior-year first quarter's
revenues of $65.3 million. As a result of Roto-Rooter's
disposing of most of its heating and cooling businesses and non-
Roto-Rooter-branded operations in 2002, revenues of this line of
business declined by $1.8 million in the 2003 first quarter.
Excluding these operations, revenues from Roto-Rooter company-
owned branches and independent contractors totaled $59.7 million,
an increase of 2% over the prior-year first quarter.
Additionally, revenues from Roto-Rooter's franchising activities
and product and equipment sales rose 8% versus 2002's first
quarter.
Marketing efforts aimed at business customers bore fruit in
the first quarter, as increased commercial sales compensated for
the still-soft residential business. Roto-Rooter believes that
dominant yellow-pages ad placement in phone directories should
increase residential service calls. Accordingly, we are
increasing advertising expenditures to improve our position as
these ads come up for renewal. We expect this to generate more
residential business over the long term.
Service America, our appliance and heating/air-conditioning
repair business, recorded net income of $40,000 in the 2003 first
quarter compared with $327,000 in the same 2002 quarter.
Revenues at Service America declined from $15.6 million to $12.9
million, as the company continued to pare marginally profitable
E - 2
service agreements. Service America continues to seek a balance
between the lower number of contracts and the resources it needs
to service them. When this balance is achieved, Service America
should see improved operational results.
Roto-Rooter is the largest plumbing and drain cleaning
provider in North America. Providing excellent service at a fair
price will result in job count and sales growth over the long
term. Chemed's balance sheet is extremely healthy, with cash
balances exceeding long-term debt. We possess the resources to
support our subsidiaries' growth, pursue acquisitions of Roto-
Rooter franchises, and weigh opportunities in related industries.
We are relatively optimistic about our prospects for 2003 and
beyond.
Reflecting its confidence in Chemed's solid financial
position and future earnings potential, in February, the Board of
Directors declared a quarterly dividend of $.12 per share, which
was paid in March. This represented Chemed's 127th consecutive
quarterly dividend.
We invite you to join us at the Annual Meeting of
Shareholders, 2 p.m., Monday, May 19, at The Phoenix, 812 Race
St., Cincinnati.
(signature) (signature)
Kevin J. McNamara Edward L. Hutton
President and Chairman
Chief Executive Officer
Statements in this quarterly report or in other Chemed
communications may relate to future events or Chemed's future
performance. Such statements are forward-looking statements and
are based on present information Chemed has related to its
existing business circumstances. Investors are cautioned that
such forward-looking statements are subject to inherent risk that
actual results may differ materially from such forward-looking
statements. Further, investors are cautioned that Chemed does
not assume any obligation to update forward-looking statements
based on unanticipated events or changed expectations.
Investor inquiries may be directed to: Investor Relations --
Chemed Corporation -- 2600 Chemed Center -- 255 East Fifth Street
- -- Cincinnati, OH 45202-4726 -- Toll-Free: 800-2CHEMED --
www.chemed.com
E - 3
BACK COVER
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Chemed Corporation
(513) 762-6900
ALTERNATE BACK COVER
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Chemed Corporation
c/o Data Works
1150 Century Circle North
Cincinnati, OH 45246
MAILING INDICIA
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PRSRT STD
US POSTAGE
PAID
CINCINNATI OH
PERMIT NO 627
E - 4
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)(unaudited)
Three Months Ended March 31,
-----------------------------
2003 2002
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Continuing Operations
Service revenues and sales $ 77,645 $ 80,853
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Cost of services provided and goods sold 46,152 48,508
General and administrative expenses 16,524 (a) 12,654
Selling and marketing expenses 11,078 11,993
Depreciation 3,052 3,492
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Total costs and expenses 76,806 76,647
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Income from operations 839 4,206
Interest expense (539) (773)
Distributions on preferred securities (268) (270)
Other income--net 4,263 (b) 2,589(b)
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Income before income taxes 4,295 (a,b) 5,752(b)
Income taxes (1,742) (1,947)
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Income from continuing operations 2,553 (a,b) 3,805(b)
Discontinued Operations - 867
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Net Income $ 2,553 (a,b) $ 4,672(b)
========== ==========
Earnings Per Share
Income from continuing operations $ 0.26 (a,b) $ 0.39(b)
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Net income $ 0.26 (a,b) $ 0.47(b)
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Average number of shares outstanding 9,890 9,843
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Diluted Earnings Per Share
Income from continuing operations $ 0.26 (a,b) $ 0.39(b)
========== ==========
Net income $ 0.26 (a,b) $ 0.47(b)
========== ==========
Average number of shares outstanding 9,903 9,883
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(a) Amounts include a pretax charge of $3,627,000 ($2,358,000 aftertax or $.24
per share) from severance charges in the first quarter of 2003.
(b) Amounts for the first quarter of 2003 include a pretax gain of $3,544,000
($2,151,000 aftertax or $.22 per share) from the sales of investments.
Amounts for the first quarter of 2002 include a pretax gain of $1,141,000
($775,000 aftertax or $.08 per share) from the sales of investments.
E - 5
CONSOLIDATED BALANCE SHEET
(in thousands, except per share data) (unaudited)
March 31,
-----------------------
2003 2002
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Assets
Current assets
Cash and cash equivalents $ 43,625 $ 15,065
Accounts receivable less allowances 14,685 14,916
Inventories 9,090 10,033
Statutory deposits 10,536 12,558
Current deferred income taxes 7,631 8,287
Current assets of discontinued operations - 37,710
Prepaid expenses and other current assets 12,056 6,677
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Total current assets 97,623 105,246
Investments of deferred compensation
plans held in trust 15,000 15,518
Other investments 32,789 37,737
Note receivable 12,500 -
Properties and equipment, at cost less
accumulated depreciation 47,297 50,861
Identifiable intangible assets less
accumulated amortization 2,739 3,361
Goodwill less accumulated amortization 111,403 131,496
Noncurrent assets of discontinued operations - 44,506
Other assets 17,232 13,160
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Total Assets $336,583 $ 401,885
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Liabilities
Current liabilities
Accounts payable $ 4,261 $ 5,414
Current portion of long-term debt 472 366
Income taxes 8,506 7,022
Deferred contract revenue 17,323 21,770
Accrued insurance 17,631 16,894
Current liabilities of discontinued
operations - 10,788
Other current liabilities 18,515 18,455
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Total current liabilities 66,708 80,709
Long-term debt 25,802 65,891
Deferred compensation liabilities 14,925 15,850
Noncurrent liabilities of discontinued
operations - 1,953
Other liabilities 11,872 12,446
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Total Liabilities 119,307 176,849
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Mandatorily Redeemable Convertible Preferred
Securities of the Chemed Capital Trust 14,186 14,195
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Stockholders' Equity
Capital stock 13,451 13,461
Paid-in capital 168,568 168,261
Retained earnings 134,160 142,754
Treasury stock, at cost (111,476) (112,815)
Unearned compensation (4,259) (6,428)
Deferred compensation payable in Company
stock 2,294 2,239
Notes receivable for shares sold (933) (933)
Accumulated other comprehensive income 1,285 4,302
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Total Stockholders' Equity 203,090 210,841
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Total Liabilities and Stockholders'
Equity $336,583 $ 401,885
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Book Value Per Share $ 20.53 $ 21.55
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E - 6