Chemed Corporation 1993 Form 10-K Summary
Business Context and Reporting Period
This filing covers the fiscal year ended December 31, 1993. Chemed Corporation operates in three primary segments: National Sanitary Supply (janitorial maintenance supplies), Roto-Rooter (sewer and drain cleaning services), and Veratex Group (medical and dental product distribution). The company is headquartered in Cincinnati, Ohio, and employs 4,834 people. On January 1, 1994, the company acquired Patient Care, Inc., expanding its healthcare services portfolio.
Key Financial Metrics
The filing incorporates detailed financial statements by reference to the 1993 Annual Report to Stockholders; specific consolidated revenue, net income, and cash flow figures for 1993 are not explicitly stated in the provided text. However, the following data points are available:
- Stock Performance: The stock traded on the NYSE (Symbol: CHE). The 1993 price range was $26.25 to $32.75 per share.
- Dividends: Total dividends paid in 1993 were $2.01 per share ($0.50 per quarter for the first three quarters and $0.51 for the fourth).
- Market Capitalization: As of March 18, 1994, the aggregate market value of non-affiliate voting stock was approximately $285.2 million.
- Investments: Total marketable securities and other investments were valued at approximately $38.9 million ($1.2 million in marketable securities and $37.7 million in other investments) as of December 31, 1993.
- Advertising Costs: $9.465 million for 1993 (up from $6.203 million in 1992).
- Maintenance and Repairs: $4.835 million for 1993.
Material Changes and Transactions
- Acquisitions:
- Veratex Group: Acquired in December 1992 for $62.12 million in cash plus a $1.514 million post-closing payment. Chemed holds a 27% ownership interest in the affiliate Omnicare, Inc.
- Patient Care, Inc.: Acquired effective January 1, 1994, for approximately $20.6 million in cash and stock, with potential additional contingent payments of up to $10.4 million based on earnings.
- Divestitures:
- DuBois Chemicals: Sold in 1991. As of December 31, 1993, the company had received $203.58 million of the $223.386 million total purchase price.
- Customer Concentration: Sales to Sonic Corporation accounted for approximately 13% of National Sanitary Supply's total sales in 1993. Federal, state, and local government agencies accounted for approximately 6% of sales.
Outlook, Risks, and Contingencies
- Environmental Liabilities: The company assumed a liability for potential environmental cleanup costs related to the DuBois sale, capped at $25.5 million. An accrual of $15.5 million has been recorded. Management believes further material impact is unlikely due to the involvement of other financially responsible parties.
- Competition: All segments operate in highly competitive, fragmented markets. Veratex faces pricing pressures that limit the ability to implement price increases.
- Raw Materials: No material shortages occurred in 1993, but future shortages are possible. Products can generally be reformulated to mitigate impact.
- Management Changes: Edward L. Hutton transitioned from President/CEO to Chairman/CEO in November 1993, with Jon D. Krahulik assuming the role of President and COO.
Investor Verification Checklist
- Verify the specific consolidated revenue and net income figures for 1993 in the referenced 1993 Annual Report to Stockholders (pages 17-30), as they are not explicitly listed in this 10-K text.
- Review the "Sales and Profit Statistics by Business Segment" (pages 32-33 of the Annual Report) to assess the performance contribution of National Sanitary Supply, Roto-Rooter, and Veratex individually.
- Monitor the contingent payment status for the Patient Care, Inc. acquisition, which depends on earnings performance through 1995.
- Assess the impact of the 13% customer concentration with Sonic Corporation on the National Sanitary Supply segment's stability.
- Confirm the status of environmental proceedings regarding the DuBois Chemicals Superfund sites, despite the current accrual of $15.5 million.