A month has gone by since the last earnings report for Chemed (CHE) . Shares have added about 2.7% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Chemed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then?Analysts were quiet d ...

Summary of Kemet's Conference Call Company Overview - Kemet is one of the largest hospice providers, with a significant focus on its VITAS business segment [2][41]. Key Industry Insights - The hospice industry is experiencing growth, but there are concerns regarding the Medicare cap, which has been in place since 1983. This cap is seen as a potential limitation on growth due to its impact on patient admissions and revenue [3][5][6]. - The company has been proactive in managing the Medicare cap, utilizing analytical capabilities to forecast and strategize around it [5][6][30]. Financial Performance and Projections - VITAS has experienced a 15% growth in average daily census (ADC) over the past two and a half years, but the company is now projecting a more sustainable growth rate of 8-10% for the foreseeable future [6][22]. - The average length of stay for patients has increased due to staffing challenges during the pandemic, but the company is working to return to its historical admission rates from hospitals [10][12][22]. Medicare Cap Discussion - The Medicare cap has been a topic of concern, with discussions around its implications for the business. The company has been transparent about its Medicare cap cushion, which is lower than initially anticipated [17][22]. - The company is engaged in ongoing discussions with MedPAC regarding potential changes to the Medicare cap policy, advocating for adjustments that would better reflect the current healthcare landscape [30][31]. Recent Developments - Kemet has made its first acquisition in years by acquiring Covenant, indicating a shift towards a more aggressive acquisition strategy, particularly in Florida [41][49]. - The company is actively pursuing additional acquisition opportunities and has been more proactive in reaching out to potential targets [51][52]. Operational Strategies - The company has emphasized the importance of maintaining a strong workforce and has been successful in growing its net clinical capacity over the past 11 quarters [39][40]. - Kemet is focusing on enhancing its market presence by applying for new licenses in various states, including North Carolina, and expanding its operations in Florida [47][48]. Challenges and Market Dynamics - The company faces challenges related to staffing and competition from healthcare systems that have their own hospice services, which can affect referral patterns [8][10][35]. - There is a recognition of the need to adapt to changing market conditions and to manage costs effectively, particularly in light of potential tariffs and supply chain issues [54][58]. Conclusion - Kemet is navigating a complex healthcare environment with a focus on sustainable growth, proactive management of regulatory challenges, and strategic acquisitions to enhance its market position [41][51].

Results as of 03/31/25 1 Safe Harbor & Regulation G Statement Safe Harbor and Regulation G Statement This presentation contains information about Chemed's EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT, Adjusted Net Income 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, EBIT, Adjusted EBIT, Adjusted Net In ...

Financial Performance - Service revenues and sales for Q1 2025 increased by 9.8% to $646,943,000 compared to $589,233,000 in Q1 2024[118] - Net income for Q1 2025 was $71,757,000, up from $65,017,000 in Q1 2024, representing an increase of 11.8%[104] - Adjusted EBITDA for Q1 2025 was $121,692,000, with an adjusted EBITDA margin of 18.8%, down from 19.5% in Q1 2024[104] - Total service revenues and sales for Q1 2025 reached $646,943,000, an increase from $589,233,000 in Q1 2024, representing a growth of 9.8%[129] - Net income for Q1 2025 was $71,757,000, compared to $65,017,000 in Q1 2024, reflecting an increase of 10.7%[129] - Adjusted EBITDA for Q1 2025 was $121,692,000, compared to $114,622,000 in Q1 2024, reflecting a year-over-year increase of 6.5%[134] - Adjusted net income for Q1 2025 was $83,074,000, up from $79,831,000 in Q1 2024, which is an increase of 4.0%[134] Segment Performance - VITAS experienced a 15.1% increase in service revenues, driven by an 11.9% increase in days-of-care and a 3.2% increase in Medicare reimbursement rates[105] - VITAS segment net income for Q1 2025 was $50,030,000, up from $43,970,000 in Q1 2024, a growth of 13.4%[126] - Roto-Rooter saw a 1.8% increase in net revenue, with excavation and water restoration revenues increasing by 9.6% and 16.0%, respectively[118] - Roto-Rooter segment net income decreased to $39,944,000 in Q1 2025 from $40,853,000 in Q1 2024, a decline of 2.2%[126] - VITAS segment after-tax earnings as a percentage of revenue in Q1 2025 was 12.3%, slightly down from 12.4% in Q1 2024[126] - Roto-Rooter's after-tax earnings as a percentage of revenue decreased to 16.7% in Q1 2025 from 17.4% in Q1 2024[127] Expenses and Margins - The consolidated gross margin decreased to 33.5% in Q1 2025 from 34.6% in Q1 2024, with VITAS maintaining a gross margin of 23.2%[122] - SG&A expenses for Q1 2025 totaled $105,587,000, a decrease from $115,873,000 in Q1 2024, primarily due to lower long-term incentive compensation[122] - Total other income - net for Q1 2025 was $1,245,000, significantly lower than $12,577,000 in Q1 2024, a decrease of 90.1%[123] - Corporate after-tax expenses decreased by 8.0% in Q1 2025 compared to Q1 2024, primarily due to a $6.3 million decrease in stock-based compensation[127] Tax and Compliance - The effective tax rate for Q1 2025 was 25.0%, up from 23.0% in Q1 2024[124] - Income tax provision for Q1 2025 was $23,917,000, compared to $19,468,000 in Q1 2024, an increase of 22.5%[124] - The company is in compliance with all financial covenants as of March 31, 2025, and expects to remain compliant[113] Operational Metrics - The average daily census for homecare in Q1 2025 was 18,140, an increase from 15,911 in Q1 2024, showing a growth of 14.0%[136] - Total admissions in Q1 2025 reached 18,139, compared to 16,911 in Q1 2024, marking an increase of 7.2%[136] - The average length of stay in Q1 2025 was 118.7 days, compared to 103.9 days in Q1 2024, reflecting a significant increase of 14.6%[136] - Estimated uncollectible accounts as a percentage of revenues decreased to 0.6% in Q1 2025 from 1.1% in Q1 2024, indicating improved revenue collection efficiency[136] Debt and Interest Rate Risk - The company had no variable rate debt outstanding as of March 31, 2025, mitigating interest rate risk exposure[138] - For each $10 million borrowed under the credit facility, a 100 basis points change in interest rates would affect annual interest expense by $100,000[138] Acquisition Impact - The Covenant acquisition contributed approximately $11.5 million to $12.5 million in revenue and $1.8 million to $2.0 million in net income for Q1 2025[107]

Core Viewpoint - Chemed Corporation reported strong first-quarter 2025 earnings and revenue growth, but faced stock price decline due to concerns over gross margin contraction and Roto-Rooter segment performance [1][2][14]. Financial Performance - Adjusted EPS for Q1 2025 was $5.63, an increase of 8.3% year over year, surpassing the Zacks Consensus Estimate by 0.5% [1] - GAAP EPS was $4.86, reflecting a 14.6% increase from the previous year [1] - Revenues for the quarter reached $646.9 million, up 9.8% year over year, exceeding the Zacks Consensus Estimate by 1.7% [2] Segment Performance - VITAS segment reported net patient revenues of $407.4 million, a 15.1% increase year over year, driven by an 11.9% rise in days-of-care and a 3.2% increase in Medicare reimbursement rates [4] - Roto-Rooter segment generated sales of $239.5 million, a 1.8% year-over-year increase, with commercial revenues up 7.3% [6] - Roto-Rooter residential revenues decreased by 1.7% year over year, with specific declines in drain cleaning and plumbing services [7] Margin and Expense Analysis - Gross profit increased by 6% year over year to $216.4 million, but gross margin contracted by 119 basis points to 33.5% due to rising service costs [8] - SG&A expenses decreased by 8.9% year over year to $105.6 million, while adjusted operating profit rose by 25.6% to $110.8 million [8] Liquidity and Capital Structure - As of the end of Q1 2025, the company had cash and cash equivalents of $173.9 million, down from $178.4 million at the end of Q4 2024, with no current or long-term debt [9][10] - Net cash provided by operating activities was $32.7 million, compared to $84.5 million in the same period last year [10] Shareholder Returns and Guidance - The company repurchased 50,000 shares for $29.8 million, with approximately $225.6 million remaining under its share repurchase authorization [11] - For 2025, Chemed expects VITAS revenues to grow by 10.5% to 11.3%, while Roto-Rooter is forecasted to grow by 2.4% to 3.0% [12] - Adjusted EPS guidance for 2025 is set between $24.95 and $25.45, indicating an 8.8% growth over 2024 [13]

Chemed Corporation (NYSE:CHE) Q1 2025 Earnings Conference Call April 24, 2025 10:00 AM ET Company Participants Holley Schmidt - Assistant Controller Kevin McNamara - President and CEO Mike Witzeman - CFO Nick Westfall - Chairman and CEO, Chemed VITAS Healthcare Corporation Conference Call Participants Ben Hendrix - RBC Capital Markets Operator Good day, and thank you for standing by. Welcome to the Chemed Corporation First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen ...

Financial Data and Key Metrics Changes - VITAS net revenue was $407.4 million in Q1 2025, an increase of 15.1% compared to the prior year period, driven by an 11.9% increase in days of care and a 3.2% increase in Medicare reimbursement rates [18][19] - Adjusted EBITDA for VITAS, excluding Medicare cap, totaled $70.3 million, reflecting a 15.9% increase, with an adjusted EBITDA margin of 17.2%, up 13 basis points from the prior year [20][28] - Roto Rooter generated total revenue growth of 1.8% in Q1 2025, with gross branch revenue increasing by 3.1% [13][21] Business Line Data and Key Metrics Changes - VITAS admissions totaled 18,139, a 7.3% improvement compared to Q1 2024, with an average daily census of 22,244, up 13.1% year-over-year [8][30] - Roto Rooter branch residential revenue increased by 1.7% to $167.2 million, while branch commercial revenue rose by 7.3% to $57.7 million [22][23] - Revenue from independent contractors declined by 6.4% in Q1 2025 compared to the same period in 2024 [24] Market Data and Key Metrics Changes - Hospital-based admissions represented 49% of overall admissions for VITAS, the highest level since the pandemic, with a 12% increase compared to Q1 2024 [36] - The average length of stay for VITAS patients increased to 118.7 days, compared to 103.9 days in Q1 2024 [32] Company Strategy and Development Direction - VITAS is focusing on increasing hospital-based admissions to manage Medicare cap exposure, which is expected to provide a cushion for revenue growth [10][34] - Roto Rooter is refining its excavation pricing model to balance revenue growth and EBITDA margin, responding to feedback from its commercial sales force [26][28] - The company is expanding its operating scope in Florida, with new locations in Pasco and Marion counties expected to drive future growth [16][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in VITAS's ability to maintain above-average growth through organic means and accretive acquisitions in 2025 and beyond [39] - The company acknowledged that the growth path seen in 2023 and 2024 may not be sustainable due to Medicare cap constraints, suggesting a more moderate growth trajectory moving forward [53] Other Important Information - The Covington Health acquisition positively impacted revenue, adjusted net income, and EBITDA by 3 to 4% [20] - Cash flow dynamics were affected by the timing of accounts receivable, particularly related to a $48 million refund and a $57 million PIP payment [56][58] Q&A Session Summary Question: Long-term cap management strategy - Management discussed the importance of managing Medicare cap cushion and the impact of hospital admissions on revenue and length of stay [42][44] Question: Cash flow dynamics and working capital - Management clarified that the increase in accounts receivable was due to timing issues rather than cash flow collection problems [54][60]

Chemed (CHE) Q1 2025 Earnings Call April 24, 2025 10:00 AM ET Company Participants Holley Schmidt - Assistant ControllerKevin McNamara - President and CEOMichael Witzeman - VP, CFO and ControllerNicholas Westfall - Executive Vice PresidentBen Hendrix - Vice President Operator Good day, and thank you for standing by. Welcome to the Chemed Corporation First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there wil ...

Revenue Growth - Revenue increased by 9.8% to $646.9 million in Q1 2025 compared to the prior year[3] - Net Patient Revenue for VITAS was $407.4 million, reflecting a 15.1% increase year-over-year[6] - Roto-Rooter generated revenue of $239.5 million, an increase of 1.8% compared to the previous year[11] - Service revenues and sales for Q1 2025 were $646,943,000, up from $589,233,000 in Q1 2024, reflecting a growth of 9.8%[38] - VITAS segment net revenue for Q1 2025 reached $407,400,000, up from $354,007,000 in Q1 2024, indicating a year-over-year increase of 15.1%[45] - Homecare revenue within the VITAS segment was $351,566,000 in Q1 2025, compared to $304,860,000 in Q1 2024, marking a growth of 15.3%[45] Earnings Performance - GAAP Diluted Earnings-per-Share (EPS) rose by 14.6% to $4.86, while Adjusted Diluted EPS increased by 8.3% to $5.63[3] - Net income for Q1 2025 was $71,757,000, an increase of 10.7% compared to $65,017,000 in Q1 2024[36] - Adjusted net income for Q1 2025 was $83,074,000, compared to $79,831,000 in Q1 2024, reflecting a growth of 4.5%[42] - The diluted earnings per share for Q1 2025 was $4.86, up from $4.24 in Q1 2024, representing an increase of 14.6%[42] Operational Metrics - Average Daily Census (ADC) grew by 13.1% to 22,244, with admissions increasing by 7.3% to 18,139[3] - Average daily census (ADC) for homecare increased to 18,140 days in Q1 2025 from 15,911 days in Q1 2024, a rise of 14.2%[45] - Total admissions for VITAS in Q1 2025 were 18,139, up from 16,911 in Q1 2024, representing an increase of 7.2%[45] - The average length of stay for patients increased to 118.7 days in Q1 2025 from 103.9 days in Q1 2024, suggesting a longer duration of care provided[45] Financial Position - As of March 31, 2025, Chemed had total cash and cash equivalents of $173.9 million and no debt[16] - Total current assets decreased to $502,385,000 in Q1 2025 from $539,617,000 in Q1 2024, a decline of 6.8%[34] - Total liabilities remained relatively stable at $544,753,000 in Q1 2025 compared to $544,138,000 in Q1 2024[34] - Cash and cash equivalents decreased to $173,882,000 in Q1 2025 from $313,350,000 in Q1 2024, a decrease of 44.7%[36] - Total stockholders' equity slightly decreased to $1,181,762,000 in Q1 2025 from $1,183,495,000 in Q1 2024[34] Cash Flow and Investments - Net cash provided by operating activities was $32,744,000 in Q1 2025, down from $84,549,000 in Q1 2024, a decline of 61.2%[36] - Capital expenditures for Q1 2025 were $13,280,000, compared to $12,163,000 in Q1 2024, an increase of 9.2%[36] - The company repurchased 50,000 shares for $29.8 million, with approximately $225.6 million remaining under its share repurchase authorization[18] - The company purchased $33,222,000 in treasury stock during Q1 2025, compared to $38,460,000 in Q1 2024[36] Efficiency and Collection - Adjusted EBITDA for VITAS was $70.3 million, up 15.9% from the prior year, with an adjusted EBITDA margin of 17.2%[9] - Adjusted EBITDA for Q1 2025 was $121,692,000, compared to $114,622,000 in Q1 2024, reflecting a growth of 6.1%[40] - The estimated uncollectible accounts as a percentage of revenues decreased to 0.6% in Q1 2025 from 1.1% in Q1 2024, indicating improved revenue collection efficiency[46] - The company reported a decrease in accounts receivable by $67,424,000 in Q1 2025, contrasting with an increase of $5,345,000 in Q1 2024[36]

Core Viewpoint - Chemed's shares have increased by approximately 4.5% since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this positive trend leading up to the next earnings release [1] Company Performance - Chemed has not seen any earnings estimate revisions from analysts in the past two months, indicating a period of stability in expectations [2] - The company holds a VGM Score of B, with a strong Growth Score of A, a Momentum Score of B, but a lower Value Score of D, placing it in the bottom 40% for value investment strategy [3] Outlook - Chemed has a Zacks Rank of 4 (Sell), suggesting expectations of below-average returns in the upcoming months [4] Industry Comparison - Chemed operates within the Zacks Medical - Outpatient and Home Healthcare industry, where DaVita HealthCare has seen a 3.9% increase in shares over the past month [5] - DaVita HealthCare reported revenues of $3.29 billion for the last quarter, reflecting a year-over-year increase of 4.7%, with EPS rising from $1.87 to $2.24 [5] - For the current quarter, DaVita HealthCare is projected to report earnings of $1.75 per share, indicating a decline of 26.5% from the previous year, with no changes in the Zacks Consensus Estimate over the last 30 days [6]