Chemed Reports Third-Quarter 2024 Results

Rhea-AI Summary

Chemed (NYSE: CHE) reported Q3 2024 financial results with consolidated revenue increasing 7.4% to $606.2 million. GAAP Diluted EPS rose 1.4% to $5.00, while Adjusted Diluted EPS increased 6.0% to $5.64.

VITAS Healthcare showed strong performance with net patient revenue up 17.3% to $391.4 million, driven by a 15.5% increase in Average Daily Census. Roto-Rooter experienced declines with revenue decreasing 6.9% to $214.8 million.

The company revised its 2024 guidance, projecting full-year adjusted earnings per diluted share between $23.00 and $23.15, representing a 13.3% to 14.0% increase from 2023.

Positive

• Consolidated revenue increased 7.4% to $606.2 million
• VITAS net patient revenue grew 17.3% to $391.4 million
• Average Daily Census increased 15.5% to 21,785
• VITAS Adjusted EBITDA margin improved by 212 basis points to 18.6%
• Strong cash position with $238.5 million in cash and no debt

Negative

• Roto-Rooter revenue declined 6.9% to $214.8 million
• Roto-Rooter net income decreased 18.9%
• Roto-Rooter Adjusted EBITDA declined 15.8%
• Roto-Rooter's EBITDA margin declined 275 basis points to 26.3%
• Hurricane impact expected to affect Q4 admissions negatively

Insights

Financial Analyst

Chemed's Q3 2024 shows mixed results across its two main segments. VITAS Healthcare delivered strong performance with $391.4M revenue (17.3% increase) and impressive 33.1% growth in Adjusted EBITDA to $73.1M. The Covenant Health acquisition is contributing $10-11M in quarterly revenue. However, Roto-Rooter faced headwinds with revenue declining 6.9% to $214.8M and Adjusted EBITDA dropping 15.8%. The company maintains strong liquidity with $238.5M cash and no debt, while continuing shareholder returns through $57.8M in share repurchases. The revised 2024 EPS guidance of $23.00-$23.15 still represents healthy 13.3-14.0% growth year-over-year.

Healthcare Industry Analyst

The hospice segment shows robust operational metrics with 15.5% increase in Average Daily Census to 21,785 patients and 6.3% growth in admissions. The Medicare reimbursement rate increase of 2.6% and improved margin management led to stronger profitability, though Medicare Cap accruals increased to $2.2M. Hurricane impacts in Florida could pressure Q4 admissions. The positive trajectory in VITAS operations, particularly post-Covenant acquisition, demonstrates strong execution in the hospice market despite regulatory challenges. The average revenue per patient per day of $199.16 and improved gross margins reflect efficient cost management and operational optimization.

CINCINNATI--(BUSINESS WIRE)-- Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), one of the nation’s largest providers of end-of-life care, and Roto-Rooter, the nation’s largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its third quarter ended September 30, 2024, versus the comparable prior-year period.

Changes to Non-GAAP Metrics

Chemed uses certain non-GAAP metrics such as EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, to provide additional context and perspective to reported operational results.

Chemed’s previously reported non-GAAP metrics during the four sequential quarters from September 30, 2022 through June 30, 2023 excluded the 12-month pandemic-related licensed healthcare professional retention bonus (Retention Program). Starting with the quarter-ended September 30, 2023, the Company no longer excludes the cost of the Retention Program when presenting non-GAAP operating metrics in current or prior periods.

For the nine-months ended September 30, 2023, the pretax and after-tax Retention Program expense was $23.7 million and $18.0 million, respectively. There was no material impact on financial results for the quarter or nine months-ended September 30, 2024 as a result of the Retention Program.

Results for Quarter Ended September 30, 2024

Consolidated operating results:

• Revenue increased 7.4% to $606.2 million
• GAAP Diluted Earnings-per-Share (EPS) of $5.00, an increase of 1.4%
• Adjusted Diluted EPS of $5.64, an increase of 6.0%

VITAS segment operating results:

• Net Patient Revenue of $391.4 million, an increase of 17.3%
• Average Daily Census (ADC) of 21,785, an increase of 15.5%
• Admissions of 16,775, an increase of 6.3%
• Net Income, excluding certain discrete items, of $53.8 million, an increase of 26.4%
• Adjusted EBITDA, excluding Medicare Cap, of $73.1 million, an increase of 33.1%
• Adjusted EBITDA margin, excluding Medicare Cap, of 18.6%, an increase of 212-basis points

Roto-Rooter segment operating results:

• Revenue of $214.8 million, a decrease of 6.9%
• Net Income, excluding certain discrete items, of $39.8 million, a decrease of 18.9%
• Adjusted EBITDA of $56.4 million, a decline of 15.8%
• Adjusted EBITDA margin of 26.3%, a decline of 275-basis points

VITAS

As previously announced, VITAS completed its acquisition of the hospice assets and an assisted living facility of Covenant Health and Community Services, Inc. (Covenant Health) on April 17, 2024 for $85.0 million in cash. Before presenting VITAS’ overall results, it is important to disclose the methodology used in determining the impact of Covenant Health’s acquisition on VITAS’ overall results. VITAS had significant operations in two of the three Florida locations we acquired from Covenant Health. Those locations require that we estimate the Covenant Health impact, as once the operations are integrated, there are not separate results. For instance, there are no VITAS-specific referral sources versus Covenant Health-specific referral sources in these locations. It is very likely that referral sources in the area have historically referred to both VITAS and Covenant Health. We have used historical operating trends in these locations to determine what is “legacy” VITAS activity. All activity above those historical operating trends have been attributed as the Covenant Health impact. We have included the specifically determined impact as it relates to new operating territories acquired. Based on the above, we discuss the range of impact that Covenant had on the overall VITAS operating metrics.

Covenant Health contributed approximately $10 million to $11 million of revenue in the third quarter of 2024. This revenue translated to net income of approximately $1.8 million to $2.0 million. Adjusted EBITDA in the quarter attributed to Covenant Health is between $2.4 million and $2.6 million.

VITAS net revenue was $391.4 million in the third quarter of 2024, which is an increase of 17.3% when compared to the prior-year period. This revenue increase is comprised primarily of a 15.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%. Acuity mix shift negatively impacted revenue growth 144-basis points in the quarter when compared to the prior-year period’s revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 64-basis points.

In the third quarter of 2024, VITAS accrued $2.2 million in Medicare Cap billing limitations. This compares to a $125,000 Medicare Cap billing limitation in the third quarter of 2023.

Of VITAS’ 32 Medicare provider numbers, 24 provider numbers have a trailing 12-month Medicare Cap cushion of 10% or greater, five provider numbers have a cushion between 0% and 10%, and three provider numbers have a trailing 12-month Medicare Cap billing limitation totaling $9.4 million.

Average revenue per patient per day in the third quarter of 2024 was $199.16 which is 139-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $175.82 and $1,094.97, respectively. During the quarter, high acuity days-of-care were 2.5% of total days of care, a decline of 26-basis points when compared to the prior-year quarter.

The third quarter 2024 gross margin, excluding Medicare Cap, was 25.1%. This compares to the prior year quarter’s gross margin of 24.0%, excluding Medicare Cap. Selling, general and administrative expenses were $25.9 million in the third quarter of 2024 compared to $25.3 million in the prior-year quarter.

Adjusted EBITDA, excluding Medicare Cap, totaled $73.1 million in the quarter, an increase of 33.1% when compared to the prior year period. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 18.6%, which is 212-basis points above the prior-year period.

Hurricane Helene, which impacted the panhandle of Florida and other parts of the southeastern United States in late September, did not result in any significant property loss or damage to VITAS. However, as with other similar events, we did experience a slowdown in admission activity while health systems prepared for the hurricane and then dealt with the aftermath. We estimate that admissions were negatively impacted during the quarter by approximately 60-100 patients. We also believe that the Florida admission impact will be more significant in the fourth quarter with the combination of Hurricanes Helene and Milton.

Roto-Rooter

Roto-Rooter generated quarterly revenue of $214.8 million in the third quarter of 2024, a decrease of 6.9%, when compared to the prior-year quarter.

Roto-Rooter branch commercial revenue in the quarter totaled $53.5 million, a decrease of 5.9% from the prior-year period. This aggregate commercial revenue change consisted of drain cleaning revenue declining 4.4%, plumbing declining 12.1%, excavation declining 2.3%, and water restoration declining 3.3%.

Roto-Rooter branch residential revenue in the quarter totaled $146.0 million, a decrease of 6.3%, over the prior-year period. This aggregate residential revenue change consisted of drain cleaning declining 5.9%, plumbing declining 11.2%, excavation declining 6.1%, and water restoration declining 6.9%.

Roto-Rooter’s gross margin in the quarter was 52.9%, essentially flat when compared to the third quarter of 2023. Roto-Rooter’s selling, general and administrative expenses were $57.1 million in the quarter, which is an increase of 3.5% compared to the third quarter of 2023. This increase was caused by continued enhanced marketing efforts designed to drive additional demand.

Adjusted EBITDA in the third quarter of 2024 totaled $56.4 million, a decrease of 15.8% when compared to the third quarter of 2023. The Adjusted EBITDA margin in the quarter was 26.3% which represents a 275-basis point decline from the third quarter of 2023.

Chemed Consolidated

As of September 30, 2024, Chemed had total cash and cash equivalents of $238.5 million and no current or long-term debt.

In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consisted of a $100 million amortizable term loan and a $450 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. There is approximately $404.8 million of undrawn borrowing capacity under the Credit Agreement after excluding $45.2 million for Letters of Credit.

During the quarter, the Company repurchased 100,000 shares of Chemed stock for $57.8 million which equates to a cost per share of $578.21. As of September 30, 2024, there was approximately $168.1 million of remaining share repurchase authorization under its plan.

Revision to Guidance for 2024

VITAS continues to perform as anticipated, and we reiterate the metrics for VITAS as presented in our second quarter 2024 press release. Roto-Rooter’s revenue and resulting adjusted EBITDA and adjusted net income was softer than anticipated during the third quarter of 2024. As a result of these factors, full-year consolidated 2024 earnings per diluted share, excluding non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, is estimated to be in the range of $23.00 to $23.15. This range represents a 13.3% to 14.0% increase from Chemed’s 2023 reported adjusted earnings per diluted share of $20.30. This guidance assumes an effective corporate tax rate on adjusted earnings of 24.3% and a diluted share count of 15.22 million shares.

Conference Call

As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday October 30, 2024, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed’s website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/c93ntfig/.

Participants may also register via teleconference at: https://register.vevent.com/register/BI0022c41ceecf4b83a582584604bc732b.

Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.

A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investor relations section of Chemed’s website.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing, drain cleaning, and water cleanup services through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in the republics of Indonesia and Singapore, and the Philippines.

This press release contains information about Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed’s financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company’s operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed’s management similarly uses EBITDA, Adjusted EBITDA and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed’s management to estimate the resources required to meet Chemed’s future financial obligations and expenditures. Chemed’s EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed’s net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.

Forward-Looking Statements

Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements.

These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed’s dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed’s most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Service revenues and sales		$	606,181			$	564,532			$	1,791,294			$	1,678,505
Cost of services provided and goods sold			396,187				362,358				1,171,064				1,107,256
Selling, general and administrative expenses (aa)			101,981				99,602				320,109				294,684
Depreciation			13,147				12,858				39,601				37,778
Amortization			2,550				2,521				7,617				7,548
Other operating expense			159				343				288				2,064
Total costs and expenses			514,024				477,682				1,538,679				1,449,330
Income from operations			92,157				86,850				252,615				229,175
Interest expense			(427	)			(444	)			(1,281	)			(2,766	)
Other income--net (bb)			9,299				6,859				28,008				8,365
Income before income taxes			101,029				93,265				279,342				234,774
Income taxes			(25,253	)			(18,307	)			(67,662	)			(52,318	)
Net income		$	75,776			$	74,958			$	211,680			$	182,456
Earnings Per Share
Net income		$	5.04			$	4.97			$	14.04			$	12.14
Average number of shares outstanding			15,025				15,075				15,082				15,034
Diluted Earnings Per Share
Net income		$	5.00			$	4.93			$	13.88			$	12.02
Average number of shares outstanding			15,168				15,200				15,253				15,178
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
SG&A expenses before long-term incentive compensation
and the impact of market value adjustments related to
deferred compensation plans		$	93,269			$	91,792			$	287,712			$	281,426
Market value adjustments related to deferred
compensation trusts			5,629				4,257				16,600				5,441
Long-term incentive compensation			3,083				3,553				15,797				7,817
Total SG&A expenses		$	101,981			$	99,602			$	320,109			$	294,684
(bb) Other income--net comprises (in thousands):
		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Market value adjustments related to deferred
compensation trusts		$	5,629			$	4,257			$	16,600			$	5,441
Interest income			3,668				2,600				11,405				2,863
Other			2				2				3				61
Total other income--net		$	9,299			$	6,859			$	28,008			$	8,365

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)(unaudited)
		September 30,
		2024				2023
Assets
Current assets
Cash and cash equivalents		$	238,451			$	173,150
Accounts receivable less allowances			196,481				168,031
Inventories			9,899				12,511
Prepaid income taxes			14,229				11,337
Prepaid expenses			31,377				29,510
Total current assets			490,437				394,539
Investments of deferred compensation plans held in trust			126,631				104,410
Properties and equipment, at cost less accumulated depreciation			200,939				205,462
Lease right of use asset			134,111				123,353
Identifiable intangible assets less accumulated amortization			94,753				92,768
Goodwill			666,860				584,977
Other assets			55,704				56,570
Total Assets		$	1,769,435			$	1,562,079
Liabilities
Current liabilities
Accounts payable		$	44,938			$	56,508
Accrued insurance			60,308				61,122
Accrued income taxes			3,385				5,135
Accrued compensation			73,141				74,865
Short-term lease liability			42,490				37,615
Other current liabilities			40,517				61,974
Total current liabilities			264,779				297,219
Deferred income taxes			28,076				30,381
Deferred compensation liabilities			122,240				102,815
Long-term lease liability			105,416				99,346
Other liabilities			13,169				13,075
Total Liabilities			533,680				542,836
Stockholders' Equity
Capital stock			37,395				37,013
Paid-in capital			1,462,569				1,254,356
Retained earnings			2,639,011				2,362,928
Treasury stock, at cost			(2,905,430	)			(2,637,102	)
Deferred compensation payable in Company stock			2,210				2,048
Total Stockholders' Equity			1,235,755				1,019,243
Total Liabilities and Stockholders' Equity		$	1,769,435			$	1,562,079

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)(unaudited)
		Nine Months Ended September 30,
		2024				2023
Cash Flows from Operating Activities
Net income		$	211,680			$	182,456
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization			47,218				45,326
Stock option expense			23,933				22,376
Noncash long-term incentive compensation			15,783				6,637
Litigation settlements			(5,750	)			2,050
Benefit for deferred income taxes			(2,245	)			(8,232	)
Noncash directors' compensation			1,282				1,444
Amortization of debt issuance costs			241				500
Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
Increase in accounts receivable			(14,336	)			(27,843	)
Decrease/(increase) in inventories			2,125				(2,239	)
(Increase)/decrease in prepaid expenses			(1,173	)			781
Decrease in accounts payable and
other current liabilities			(19,641	)			(15,815	)
Change in current income taxes			(4,545	)			12,314
Net change in lease assets and liabilities			(400	)			(892	)
Increase in other assets			(21,101	)			(8,622	)
Increase in other liabilities			18,348				11,426
Other sources			1,165				69
Net cash provided by operating activities			252,584				221,736
Cash Flows from Investing Activities
Business combinations, net of cash acquired			(97,400	)			(3,994	)
Capital expenditures			(36,770	)			(45,075	)
Proceeds from sale of fixed assets			3,060				506
Other uses			(281	)			(409	)
Net cash used by investing activities			(131,391	)			(48,972	)
Cash Flows from Financing Activities
Purchases of treasury stock			(152,049	)			(27,769	)
Proceeds from exercise of stock options			49,906				58,277
Dividends paid			(19,594	)			(17,446	)
Change in cash overdrafts payable			(15,749	)			16,182
Capital stock surrendered to pay taxes on stock-based compensation			(8,827	)			(5,446	)
Payments on long-term debt			-				(97,500	)
Other uses			(387	)			(38	)
Net cash used by financing activities			(146,700	)			(73,740	)
(Decrease)/increase in Cash and Cash Equivalents			(25,507	)			99,024
Cash and cash equivalents at beginning of year			263,958				74,126
Cash and cash equivalents at end of year		$	238,451			$	173,150

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(in thousands)(unaudited)
														Chemed
		VITAS				Roto-Rooter				Corporate				Consolidated
2024 (a)
Service revenues and sales		$	391,406			$	214,775			$	-			$	606,181
Cost of services provided and goods sold			294,936				101,251				-				396,187
Selling, general and administrative expenses			25,883				57,072				19,026				101,981
Depreciation			5,063				8,071				13				13,147
Amortization			26				2,524				-				2,550
Other operating expense			97				62				-				159
Total costs and expenses			326,005				168,980				19,039				514,024
Income/(loss) from operations			65,401				45,795				(19,039	)			92,157
Interest expense			(46	)			(114	)			(267	)			(427	)
Intercompany interest income/(expense)			4,920				3,656				(8,576	)			-
Other income—net			62				18				9,219				9,299
Income/(loss) before income taxes			70,337				49,355				(18,663	)			101,029
Income taxes			(16,851	)			(11,400	)			2,998				(25,253	)
Net income/(loss)		$	53,486			$	37,955			$	(15,665	)		$	75,776
2023 (b)
Service revenues and sales		$	333,728			$	230,804			$	-			$	564,532
Cost of services provided and goods sold			253,731				108,627				-				362,358
Selling, general and administrative expenses			25,256				55,141				19,205				99,602
Depreciation			5,009				7,836				13				12,858
Amortization			26				2,495				-				2,521
Other operating expense/(income)			(53	)			396				-				343
Total costs and expenses			283,969				174,495				19,218				477,682
Income/(loss) from operations			49,759				56,309				(19,218	)			86,850
Interest expense			(52	)			(131	)			(261	)			(444	)
Intercompany interest income/(expense)			4,935				3,040				(7,975	)			-
Other income—net			849				34				5,976				6,859
Income/(loss) before income taxes			55,491				59,252				(21,478	)			93,265
Income taxes			(11,160	)			(8,925	)			1,778				(18,307	)
Net income/(loss)		$	44,331			$	50,327			$	(19,700	)		$	74,958
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(in thousands)(unaudited)
														Chemed
		VITAS				Roto-Rooter				Corporate				Consolidated
2024 (a)
Service revenues and sales		$	1,119,970			$	671,324			$	-			$	1,791,294
Cost of services provided and goods sold			852,347				318,717				-				1,171,064
Selling, general and administrative expenses			73,968				175,683				70,458				320,109
Depreciation			15,288				24,275				38				39,601
Amortization			79				7,538				-				7,617
Other operating expense			160				128				-				288
Total costs and expenses			941,842				526,341				70,496				1,538,679
Income/(loss) from operations			178,128				144,983				(70,496	)			252,615
Interest expense			(138	)			(349	)			(794	)			(1,281	)
Intercompany interest income/(expense)			15,096				10,638				(25,734	)			-
Other income—net			138				64				27,806				28,008
Income/(loss) before income taxes			193,224				155,336				(69,218	)			279,342
Income taxes			(46,517	)			(36,010	)			14,865				(67,662	)
Net income/(loss)		$	146,707			$	119,326			$	(54,353	)		$	211,680
2023 (b)
Service revenues and sales		$	965,066			$	713,439			$	-			$	1,678,505
Cost of services provided and goods sold			770,470				336,786				-				1,107,256
Selling, general and administrative expenses			71,248				171,966				51,470				294,684
Depreciation			14,907				22,830				41				37,778
Amortization			78				7,470				-				7,548
Other operating expense/(income)			(15	)			2,079				-				2,064
Total costs and expenses			856,688				541,131				51,511				1,449,330
Income/(loss) from operations			108,378				172,308				(51,511	)			229,175
Interest expense			(154	)			(387	)			(2,225	)			(2,766	)
Intercompany interest income/(expense)			14,393				8,652				(23,045	)			-
Other income—net			1,109				96				7,160				8,365
Income/(loss) before income taxes			123,726				180,669				(69,621	)			234,774
Income taxes			(28,503	)			(38,315	)			14,500				(52,318	)
Net income/(loss)		$	95,223			$	142,354			$	(55,121	)		$	182,456
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARIES OF EBITDA
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(in thousands)(unaudited)
														Chemed
		VITAS				Roto-Rooter				Corporate				Consolidated
2024
Net income/(loss)		$	53,486			$	37,955			$	(15,665	)		$	75,776
Add/(deduct):
Interest expense			46				114				267				427
Income taxes			16,851				11,400				(2,998	)			25,253
Depreciation			5,063				8,071				13				13,147
Amortization			26				2,524				-				2,550
EBITDA			75,472				60,064				(18,383	)			117,153
Add/(deduct):
Intercompany interest expense/(income)			(4,920	)			(3,656	)			8,576				-
Interest income			(59	)			(18	)			(3,589	)			(3,666	)
Stock option expense			-				-				6,038				6,038
Long-term incentive compensation			-				-				3,083				3,083
Acquisition expense			394				(8	)			-				386
Adjusted EBITDA		$	70,887			$	56,382			$	(4,275	)		$	122,994
2023
Net income/(loss)		$	44,331			$	50,327			$	(19,700	)		$	74,958
Add/(deduct):
Interest expense			52				131				261				444
Income taxes			11,160				8,925				(1,778	)			18,307
Depreciation			5,009				7,836				13				12,858
Amortization			26				2,495				-				2,521
EBITDA			60,578				69,714				(21,204	)			109,088
Add/(deduct):
Intercompany interest expense/(income)			(4,935	)			(3,040	)			7,975				-
Interest income			(847	)			(34	)			(1,719	)			(2,600	)
Litigation settlement			-				300				-				300
Stock option expense			-				-				5,495				5,495
Long-term incentive compensation			-				-				3,553				3,553
Adjusted EBITDA		$	54,796			$	66,940			$	(5,900	)		$	115,836
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING SUMMARIES OF EBITDA
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(in thousands)(unaudited)
														Chemed
		VITAS				Roto-Rooter				Corporate				Consolidated
2024
Net income/(loss)		$	146,707			$	119,326			$	(54,353	)		$	211,680
Add/(deduct):
Interest expense			138				349				794				1,281
Income taxes			46,517				36,010				(14,865	)			67,662
Depreciation			15,288				24,275				38				39,601
Amortization			79				7,538				-				7,617
EBITDA			208,729				187,498				(68,386	)			327,841
Add/(deduct):
Intercompany interest expense/(income)			(15,096	)			(10,638	)			25,734				-
Interest income			(136	)			(64	)			(11,205	)			(11,405	)
Stock option expense			-				-				23,933				23,933
Long-term incentive compensation			-				-				10,460				10,460
Severance arrangement			-				-				5,337				5,337
Acquisition expense			1,302				37				-				1,339
Adjusted EBITDA		$	194,799			$	176,833			$	(14,127	)		$	357,505
2023
Net income/(loss)		$	95,223			$	142,354			$	(55,121	)		$	182,456
Add/(deduct):
Interest expense			154				387				2,225				2,766
Income taxes			28,503				38,315				(14,500	)			52,318
Depreciation			14,907				22,830				41				37,778
Amortization			78				7,470				-				7,548
EBITDA			138,865				211,356				(67,355	)			282,866
Add/(deduct):
Intercompany interest expense/(income)			(14,393	)			(8,652	)			23,045				-
Interest income			(1,046	)			(96	)			(1,720	)			(2,862	)
Stock option expense			-				-				22,376				22,376
Long-term incentive compensation			-				-				7,817				7,817
Litigation settlements			-				2,056				-				2,056
Adjusted EBITDA		$	123,426			$	204,664			$	(15,837	)		$	312,253
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net income as reported		$	75,776			$	74,958			$	211,680			$	182,456
Add/(deduct) pre-tax cost of:
Stock option expense			6,038				5,495				23,933				22,376
Long-term incentive compensation			3,083				3,553				10,460				7,817
Amortization of reacquired franchise rights			2,352				2,352				7,056				7,056
Severance arrangement			-				-				5,337				-
Acquisition expense			386				-				1,339				-
Litigation settlement			-				300				-				2,056
Add/(deduct) tax impacts:
Tax impact of the above pre-tax adjustments (1)			(1,761	)			(1,326	)			(6,762	)			(6,443	)
Tax impact of deferred tax rate change			-				(4,241	)			-				(4,241	)
Excess tax benefits on stock compensation			(389	)			(225	)			(4,308	)			(3,376	)
Adjusted net income		$	85,485			$	80,866			$	248,735			$	207,701
Diluted Earnings Per Share As Reported
Net income		$	5.00			$	4.93			$	13.88			$	12.02
Average number of shares outstanding			15,168				15,200				15,253				15,178
Adjusted Diluted Earnings Per Share
Adjusted net income		$	5.64			$	5.32			$	16.31			$	13.68
Average number of shares outstanding			15,168				15,200				15,253				15,178
(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated.
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
	Three Months Ended September 30,									Nine Months Ended September 30,
OPERATING STATISTICS	2024				2023					2024				2023
Net revenue ($000) (c)
Homecare	$	338,344			$	287,389				$	967,981			$	832,554
Inpatient		29,923				27,818					89,297				84,312
Continuous care		25,799				22,032					74,295				63,054
Other		5,082				3,562					13,900				9,738
Subtotal	$	399,148			$	340,801				$	1,145,473			$	989,658
Room and board, net		(3,336	)			(2,646	)				(9,437	)			(8,317	)
Contractual allowances		(2,167	)			(4,302	)				(10,077	)			(10,650	)
Medicare cap allowance		(2,239	)			(125	)				(5,989	)			(5,625	)
Net Revenue	$	391,406			$	333,728				$	1,119,970			$	965,066
Net revenue as a percent of total before Medicare cap allowance
Homecare		84.8		%		84.3		%			84.5		%		84.1		%
Inpatient		7.5				8.2					7.8				8.5
Continuous care		6.5				6.5					6.5				6.4
Other		1.2				1.0					1.2				1.0
Subtotal		100.0				100.0					100.0				100.0
Room and board, net		(0.8	)			(0.8	)				(0.8	)			(0.8	)
Contractual allowances		(0.5	)			(1.3	)				(0.9	)			(1.1	)
Medicare cap allowance		(0.6	)			-					(0.5	)			(0.6	)
Net Revenue		98.1		%		97.9		%			97.8		%		97.5		%
Days of care
Homecare		1,622,680				1,391,377					4,621,755				4,018,469
Nursing home		320,664				287,785					908,013				833,112
Respite		9,952				7,292					26,806				19,211
Subtotal routine homecare and respite		1,953,296				1,686,454					5,556,574				4,870,792
Inpatient		26,524				25,493					79,064				76,987
Continuous care		24,365				23,071					72,335				65,630
Total		2,004,185				1,735,018					5,707,973				5,013,409
Number of days in relevant time period		92				92					274				273
Average daily census ("ADC") (days)
Homecare		17,639				15,124					16,867				14,720
Nursing home		3,485				3,128					3,314				3,052
Respite		108				79					98				70
Subtotal routine homecare and respite		21,232				18,331					20,279				17,842
Inpatient		288				277					289				282
Continuous care		265				251					264				240
Total		21,785				18,859					20,832				18,364
Total Admissions		16,775				15,774					51,020				47,564
Total Discharges		16,217				15,328					48,285				45,837
Average length of stay (days)		102.0				103.1					102.2				100.8
Median length of stay (days)		18.0				17.0					17.0				16.0
ADC by major diagnosis
Cerebro		43.6		%		42.0		%			43.7		%		42.2		%
Neurological		13.3				14.7					13.3				15.9
Cancer		10.0				10.6					10.0				10.6
Cardio		16.3				16.4					16.2				16.1
Respiratory		7.1				7.2					7.2				7.1
Other		9.7				9.1					9.6				8.1
Total		100.0		%		100.0		%			100.0		%		100.0		%
Admissions by major diagnosis
Cerebro		28.4		%		26.6		%			27.7		%		26.3		%
Neurological		7.7				8.8					7.9				9.9
Cancer		25.7				26.1					25.1				26.0
Cardio		15.1				16.0					15.7				16.2
Respiratory		9.5				9.7					9.9				10.1
Other		13.6				12.8					13.7				11.5
Total		100.0		%		100.0		%			100.0		%		100.0		%
Estimated uncollectible accounts as a percent of revenues		0.6		%		1.3		%			0.9		%		1.1		%
Accounts receivable --
Days of revenue outstanding-excluding unapplied Medicare payments		37.5				36.4					n.a.				n.a.
Days of revenue outstanding-including unapplied Medicare payments		35.5				33.8					n.a.				n.a.
The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
FOOTNOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(unaudited)
(a)	Included in the results of operations for 2024 are the following significant credits/(charges) which may not be indicative of ongoing operations
	(in thousands):
			Three Months Ended September 30, 2024
			VITAS				Roto-Rooter				Corporate				Consolidated
	Stock option expense		$	-			$	-			$	(6,038	)		$	(6,038	)
	Long-term incentive compensation			-				-				(3,083	)			(3,083	)
	Amortization of reacquired franchise agreements			-				(2,352	)			-				(2,352	)
	Acquisition expense			(394	)			8				-				(386	)
	Pretax impact on earnings			(394	)			(2,344	)			(9,121	)			(11,859	)
	Excess tax benefits on stock compensation			-				-				389				389
	Income tax benefit on the above			96				546				1,119				1,761
	After-tax impact on earnings		$	(298	)		$	(1,798	)		$	(7,613	)		$	(9,709	)
			Nine Months Ended September 30, 2024
			VITAS				Roto-Rooter				Corporate				Consolidated
	Stock option expense		$	-			$	-			$	(23,933	)		$	(23,933	)
	Long-term incentive compensation			-				-				(10,460	)			(10,460	)
	Amortization of reacquired franchise agreements			-				(7,056	)			-				(7,056	)
	Severance arrangement			-				-				(5,337	)			(5,337	)
	Acquisition expense			(1,302	)			(37	)			-				(1,339	)
	Pretax impact on earnings			(1,302	)			(7,093	)			(39,730	)			(48,125	)
	Excess tax benefits on stock compensation			-				-				4,308				4,308
	Income tax benefit on the above			317				1,652				4,793				6,762
	After-tax impact on earnings		$	(985	)		$	(5,441	)		$	(30,629	)		$	(37,055	)
(b)	Included in the results of operations for 2023 are the following significant credits/(charges) which may not be indicative of ongoing operations
	(in thousands):
			Three Months Ended September 30, 2023
			VITAS				Roto-Rooter				Corporate				Consolidated
	Stock option expense		$	-			$	-			$	(5,495	)		$	(5,495	)
	Long-term incentive compensation			-				-				(3,553	)			(3,553	)
	Amortization of reacquired franchise agreements			-				(2,352	)			-				(2,352	)
	Litigation settlement			-				(300	)			-				(300	)
	Pretax impact on earnings			-				(2,652	)			(9,048	)			(11,700	)
	Excess tax benefits on stock compensation			-				-				225				225
	Tax impact of deferred tax rate change			1,772				3,559				(1,090	)			4,241
	Income tax benefit on the above			-				412				914				1,326
	After-tax impact on earnings		$	1,772			$	1,319			$	(8,999	)		$	(5,908	)
			Nine Months Ended September 30, 2023
			VITAS				Roto-Rooter				Corporate				Consolidated
	Stock option expense		$	-			$	-			$	(22,376	)		$	(22,376	)
	Long-term incentive compensation			-				-				(7,817	)			(7,817	)
	Amortization of reacquired franchise agreements			-				(7,056	)			-				(7,056	)
	Litigation settlements			-				(2,056	)			-				(2,056	)
	Pretax impact on earnings			-				(9,112	)			(30,193	)			(39,305	)
	Excess tax benefits on stock compensation			-				-				3,376				3,376
	Tax impact of deferred tax rate change			1,772				3,559				(1,090	)			4,241
	Income tax benefit on the above			-				2,123				4,320				6,443
	After-tax impact on earnings		$	1,772			$	(3,430	)		$	(23,587	)		$	(25,245	)
(c)	VITAS has 10 large (greater than 450 ADC), 23 medium (greater than 200 but less than 450 ADC) and 22 small (less than 200 ADC) hospice programs. Of Vitas' 32 Medicare provider numbers, for the trailing 12 months, 24 provider numbers have a Medicare cap cushion of greater than 10%, one provider number has a Medicare cap cushion between 5% and 10%, four provider numbers have a Medicare cap cushion between 0% and 5%, and three provider numbers have a Medicare cap liability.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241029394976/en/

Michael D. Witzeman

(513) 762-6714

Source: Chemed Corporation

FAQ

What was Chemed's (CHE) revenue growth in Q3 2024?

Chemed's consolidated revenue grew 7.4% to $606.2 million in Q3 2024.

How did VITAS Healthcare perform in Q3 2024?

VITAS Healthcare's net patient revenue increased 17.3% to $391.4 million, with a 15.5% increase in Average Daily Census to 21,785.

What was Roto-Rooter's performance in Q3 2024?

Roto-Rooter experienced a 6.9% revenue decline to $214.8 million, with net income decreasing 18.9% and Adjusted EBITDA declining 15.8%.

What is Chemed's (CHE) earnings guidance for 2024?

Chemed expects full-year 2024 adjusted earnings per diluted share to be between $23.00 and $23.15, representing a 13.3% to 14.0% increase from 2023.