Chemed Corporation (CHE) reported first-quarter 2025 adjusted earnings per share (EPS) of $5.63, which rose 8.3% year over year. The figure surpassed the Zacks Consensus Estimate by 0.5%. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)The company’s GAAP EPS was $4.86, up 14.6% from last year’s reported figure.CHE’s Q1 RevenuesRevenues in the reported quarter improved 9.8% year over year to $646.9 million. The metric topped the Zacks Consensus Estimate by 1.7%.Despite a strong top an ...

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 ...

CONTACT: Michael D. Witzeman (513) 762-6714 Chemed Reports First-Quarter 2025 Results CINCINNATI, April 23, 2025—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 first quarter ended March 31, 2025, versus the comparable prior-year period. Results for Quarter En ...

A month has gone by since the last earnings report for Chemed (CHE) . Shares have added about 4.5% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Since Then?Analysts were quiet d ...

Core Viewpoint - Chemed Corporation reported better-than-expected earnings and revenues for the fourth quarter of 2024, driven by strong performance in its VITAS segment and an acquisition that bolstered its metrics [14]. Financial Performance - The adjusted earnings per share (EPS) for the fourth quarter was $6.83, a 3.5% increase year over year, surpassing the Zacks Consensus Estimate by 0.5% [1] - The GAAP EPS was $6.02, reflecting a 2% increase from the previous year [2] - Full-year adjusted EPS reached $23.13, marking a 13.9% increase from the prior year [2] - Revenues for the fourth quarter improved by 9.2% year over year to $640 million, exceeding the Zacks Consensus Estimate by 1.7% [3] - Total revenues for the full year were $2.43 billion, up 7.4% from the previous year [3] Segment Performance - VITAS segment reported net patient revenues of $411 million in the fourth quarter, a 17.4% increase year over year, driven by a 14.6% rise in days of care and a nearly 3.5% increase in Medicare reimbursement rates [5] - Roto-Rooter segment reported sales of $229 million, down 2.9% year over year, with mixed performance across its services [7][8] Margin Analysis - Gross profit for the fourth quarter increased by 2.9% year over year to $234.1 million, but gross margin contracted by 226 basis points to 36.6% due to rising service costs [9] - SG&A expenses rose by 3.8% year over year to $104 million, while adjusted operating profit increased by 2.1% to $129.8 million, with adjusted operating margin contracting by 141 basis points to 20.3% [9] Liquidity and Capital Structure - At the end of the fourth quarter, the company had cash and cash equivalents of $178.4 million, down from $264 million at the end of 2023, with no current or long-term debt [11] - The cumulative net cash provided by operating activities was $417.5 million compared to $330.3 million in the previous year [11] - The company repurchased 388,235 shares for $57.8 million, with approximately $255.3 million remaining under its share repurchase authorization [12] Future Guidance - For 2025, Chemed expects VITAS revenues to increase by 10.5% to 11.3% from 2024 levels, with total revenue estimates pegged at $2.57 billion, indicating a 5.8% year-over-year improvement [13] - The adjusted EPS for full-year 2024 is expected to be in the range of $24.95-$25.45, implying an 8.5% growth over the 2024 adjusted figure [13]

Business Segments - Chemed operates in two segments: VITAS, providing hospice and palliative care, and Roto-Rooter, offering plumbing and related services[11]. - VITAS is one of the largest hospice service providers in the U.S., competing with numerous small, community-based hospices[25]. - Roto-Rooter's revenue and operating results are significantly impacted by weather patterns across the United States, affecting service demand[19]. Revenue Sources - Over 90% of VITAS' revenue comes from the Medicare program, indicating a significant reliance on government funding[21]. - Over 95% of VITAS' revenue comes from Medicare and Medicaid payments, primarily on a "per diem" basis, making cost management critical for profitability[54]. - Medicaid reimbursement accounted for approximately 4% of VITAS' revenues in 2024, with state programs required to pay at least the same rates as Medicare[70]. Compliance and Regulatory Challenges - The company emphasizes the importance of compliance with Medicare's Conditions of Participation to avoid sanctions and maintain operational integrity[33]. - VITAS must comply with various state licensure requirements, and non-compliance could adversely affect operations and participation in Medicare and Medicaid[53]. - The company faces regulatory challenges in expanding into states with Certificate of Need laws, which may require state agency approval for new programs[48]. - The Medicare program has implemented a 2% reimbursement cut, which was temporarily reduced to 1% during the COVID-19 pandemic, affecting future revenue[73]. - The company is subject to various federal and state health regulatory laws covering professional services and the dispensing of drugs[101]. Financial Performance and Risks - VITAS' profitability is at risk due to potential increases in operating costs without corresponding increases in Medicare and Medicaid rates[134]. - Liability claims and inadequate insurance coverage pose risks to VITAS' financial condition and operational results[152]. - The company is subject to financial covenants that restrict its ability to incur additional debt and could lead to default if not met[160][161]. - The company has historically incurred debt to finance operations, and its ability to service this debt depends on future operating performance[168][169]. Competition - Roto-Rooter faces competition from local and regional firms, with competition primarily based on service quality, pricing, and brand recognition[23]. - The hospice industry is highly competitive, with VITAS facing pressure from various healthcare organizations and potential new entrants[149]. - The company recognizes the intense competition in the service industry, particularly in plumbing, which could impact its growth strategy[127]. Acquisitions and Growth Strategy - The company has engaged in twelve significant acquisitions or divestitures since its inception, focusing on maximizing shareholder value[10]. - VITAS acquired hospice operations and an assisted living facility from Covenant for an aggregated purchase price of $85.0 million in cash[121]. - Roto-Rooter completed several acquisitions in 2024, including a franchise in New Jersey for $5.8 million, Texas for $1.5 million, and Kentucky for $5.1 million, totaling $12.4 million[121]. - VITAS' growth strategy includes expansion into new markets, but success is not guaranteed, which could adversely affect overall business performance[145]. Employee and Workforce Management - The Company employed a total of 15,695 employees as of December 31, 2024, emphasizing the importance of talent attraction and retention[109]. - VITAS's "Difference Maker Program" paid over $39.2 million in bonuses to retain healthcare workers during the pandemic[119]. - The company values diversity and inclusion in its workforce to better serve its diverse customer base[120]. Cybersecurity and Data Protection - The company has developed a response plan for potential cybersecurity breaches and maintains safeguards against cyber-attacks[132]. - The company has implemented cybersecurity measures, including regular updates and independent testing, to combat increasing cyber threats[176][178]. - The company has not experienced any known material system/data breaches that compromised customer or proprietary data[155]. Environmental Compliance - As of December 31, 2024, the Company has an estimated liability for potential environmental cleanup costs amounting to $1.7 million, with a maximum contingent liability of $14.9 million[105]. - The Company is currently in compliance with environmental laws and regulations, with capital expenditures for compliance being immaterial in 2023 and 2024[106]. Shareholder Returns and Financial Position - The Company repurchased a total of 388,235 shares in the fourth quarter of 2024 at a weighted average price of $548.13 per share, with a remaining dollar amount of $351,929,650 under the repurchase program[193]. - The Company's cumulative total stockholder return from December 31, 2019, to December 31, 2024, was 22.37%, compared to 97.02% for the S&P 500 and 103.37% for the Dow Jones Industrial Diversified Index[199]. - The Company has no long-term debt as of December 31, 2024, and its interest rate risk exposure is primarily through a variable interest credit facility[203]. Legal and Litigation Risks - The company is involved in ongoing litigation, which could result in substantial damages and affect its financial condition[167]. - The company acknowledges that the effects of another pandemic could negatively impact its operations and service delivery[171][172].

Financial Data and Key Metrics Changes - VITAS net revenue was $411 million in Q4 2024, an increase of 17.4% compared to the prior year period [21] - Roto-Rooter generated quarterly revenue of $229 million, a decrease of 2.9% year-over-year [13] - Adjusted EBITDA for VITAS was $93.2 million, an increase of 11.8% [23] - Adjusted EBITDA margin for VITAS was 22.5%, down 112 basis points from the prior year [23] Business Line Data and Key Metrics Changes - VITAS admissions totaled 16,427, a 3.5% increase from Q4 2023 [8] - Average daily census (ADC) for VITAS expanded to 22,179 patients, a 14.6% increase year-over-year [37] - Roto-Rooter residential revenue decreased by 2%, while commercial revenue increased by 0.4% [13] - Roto-Rooter adjusted EBITDA totaled $60.3 million, a decrease of 7.2% compared to the prior year [26] Market Data and Key Metrics Changes - VITAS experienced a geographically weighted average Medicare reimbursement rate increase of approximately 3.5% [21] - The average revenue per patient day for VITAS was $206.23, which is 244 basis points above the prior year [22] - Roto-Rooter's call volume was down 8% compared to the prior year quarter [14] Company Strategy and Development Direction - VITAS is focusing on hospital-based admissions to manage Medicare cap exposure and ensure sustainable growth [42][45] - Roto-Rooter is optimistic about its commercial business growth and aims to stop further deterioration in the residential sector [30] - The company plans to continue its strategy of acquiring new locations and integrating other providers to enhance patient care [45] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding Roto-Rooter's turnaround despite challenging operating conditions [18] - VITAS management is confident in maintaining above-average historical growth through organic growth and acquisitions [45] - The company anticipates a slight moderation in growth rates due to Medicare cap management strategies [28] Other Important Information - The Covenant Health acquisition contributed $11 million to $12 million in revenue during Q4 2024 [25] - The company is not incorporating share repurchases into its guidance for 2025 [67] Q&A Session Summary Question: What gives confidence in Roto-Rooter's turnaround? - Management noted strong support for growth in Roto-Rooter, with December and January typically being strong months [51][52] Question: How does VITAS plan to capture market share? - VITAS is focusing on differentiated offerings and attracting high-quality clinicians to capture market share [61] Question: What is the outlook for share repurchases? - No share repurchases are built into the guidance, but the company intends to do some level of programmatic share repurchases [69] Question: What is causing margin pressure for VITAS? - The margin pressure is attributed to a shift towards hospital-based admissions and managing Medicare cap limitations [75] Question: Will the Medicare cap be a headwind beyond 2025? - Management indicated that the Medicare cap is part of normal operations and does not anticipate substantial changes [82]

Core Viewpoint - Chemed reported quarterly earnings of $6.83 per share, exceeding the Zacks Consensus Estimate of $6.79 per share, and showing an increase from $6.60 per share a year ago [1][2] Financial Performance - The company achieved revenues of $639.99 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.78% and up from $585.91 million year-over-year [3] - Chemed has surpassed consensus revenue estimates two times over the last four quarters [3] Stock Performance - Chemed shares have increased approximately 3.9% since the beginning of the year, compared to a 1.3% gain in the S&P 500 [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $5.55 on revenues of $623.53 million, and for the current fiscal year, it is $25.10 on revenues of $2.57 billion [8] - The estimate revisions trend for Chemed is mixed, which may change following the recent earnings report [7] Industry Context - Chemed operates within the Medical - Outpatient and Home Healthcare industry, which is currently ranked in the top 24% of over 250 Zacks industries [9] - The industry has shown a strong correlation between near-term stock movements and trends in earnings estimate revisions [6]

Revenue Growth - VITAS segment revenue increased by 9.2% to $640.0 million in Q4 2024, with net patient revenue rising 17.4% to $411.0 million[6]. - Service revenues for Q4 2024 reached $639,993, an increase of 9.2% from $585,912 in Q4 2023[46]. - Consolidated service revenues and sales for 2024 reached $2,431,287, an increase from $2,264,417 in 2023, representing a growth of approximately 7.4%[54]. - VITAS segment net revenue for 2024 was $1.530978 billion, up from $1.315065 billion in 2023, indicating a growth of 16.4%[63]. - Homecare revenue in the VITAS segment increased to $1.326488 billion in 2024, compared to $1.136437 billion in 2023, marking a rise of 16.7%[63]. Earnings and Profitability - GAAP diluted EPS for Q4 2024 was $6.02, a 2.0% increase, while adjusted diluted EPS rose 3.5% to $6.83[6]. - Net income for the year 2024 was $301,999, up 10.9% from $272,509 in 2023[50]. - Earnings per share (EPS) for 2024 was $20.10, compared to $18.11 in 2023, reflecting a growth of 10.9%[46]. - Adjusted net income for 2024 was $351.188 million, up from $308.515 million in 2023, which is an increase of 13.8%[60]. - The company reported a net income margin of approximately 12.4% for 2024, compared to 12.0% in 2023[54]. Expenses and Costs - Total costs and expenses for 2024 amounted to $2,064,794, up from $1,923,848 in 2023, indicating a rise of approximately 7.3%[54]. - Selling, general and administrative expenses for 2024 totaled $424,360, an increase from $395,120 in 2023, which is a rise of about 7.4%[54]. - The cost of services provided and goods sold in 2024 was $1,576,939, compared to $1,465,602 in 2023, reflecting an increase of approximately 7.6%[54]. Cash Flow and Financial Position - As of December 31, 2024, Chemed had total cash and cash equivalents of $178.4 million and no debt[26]. - The company reported a net cash provided by operating activities of $417,497 for 2024, an increase from $330,299 in 2023[50]. - Cash and cash equivalents decreased to $178,350 in 2024 from $263,958 in 2023, a decline of 32.3%[48]. - Total liabilities decreased to $549,582 in 2024 from $560,219 in 2023, a reduction of 1.1%[48]. Shareholder Returns - The company repurchased 388,235 shares for $212.8 million in Q4 2024, with approximately $255.3 million remaining under its share repurchase authorization[28]. - The company purchased $361,389 in treasury stock in 2024, significantly higher than $67,697 in 2023[50]. Operational Metrics - Average Daily Census (ADC) for VITAS was 22,179, reflecting a 14.6% increase compared to the prior year[6]. - Average daily census (ADC) for homecare increased to 17,153 days in 2024 from 14,953 days in 2023, a growth of 14.7%[63]. - Total admissions for the VITAS segment rose to 67,447 in 2024, compared to 63,431 in 2023, representing a growth of 6.4%[63]. - The total number of days of care provided in 2024 was 7,748,471, compared to 6,793,832 in 2023, indicating a growth of 14.1%[63]. Challenges and Strategic Initiatives - For the three months ended December 31, 2024, the consolidated after-tax impact on earnings was a loss of $12,134,000, primarily due to significant charges[65]. - The pretax impact on earnings for the year ended December 31, 2024, was a loss of $62,726,000, highlighting the financial challenges faced during the period[65]. - The company reported an acquisition expense of $206,000 for the three months ended December 31, 2024, indicating ongoing strategic growth initiatives[65]. - The long-term incentive compensation for the year ended December 31, 2024, was $14,815,000, which is a significant component of employee compensation[65]. Medicare and Tax Benefits - The Medicare cap cushion for 25 provider numbers was greater than 10%, indicating a strong position in the Medicare reimbursement landscape[65]. - The income tax benefit related to excess tax benefits on stock compensation for the year ended December 31, 2024, was $4,442,000, providing some financial relief[65].

Core Viewpoint - Chemed Corporation (CHE) is positioned for growth due to strong operational performance in its VITAS segment and resilience in Roto-Rooter, despite facing macroeconomic challenges and competitive pressures [1][4]. Group 1: Financial Performance - Chemed has a market capitalization of $8.46 billion and an earnings yield of 4.46%, which is higher than the industry's 4.08% yield [2]. - The company has a historical average earnings growth rate of 14.1%, significantly outpacing the industry's 3.7% and the S&P 500's 8.1% growth [2]. - As of the end of Q3 2024, Chemed reported cash and cash equivalents of $238.5 million with no debt, and it repurchased 100,000 shares for $57.8 million [6]. Group 2: VITAS Segment Growth - The VITAS segment has shown a year-over-year growth of 17.3% in Q3 2024, aided by the acquisition of Covenant Health, which improved admissions by 6.3% and Average Daily Census (ADC) by 15.5% [3]. - Management is optimistic about VITAS's ability to continue hiring and retaining licensed healthcare professionals, leading to sustained growth in admissions and patient census [3]. Group 3: Roto-Rooter Resilience - Roto-Rooter has maintained its competitive edge despite challenges in consumer sentiment and spending, supported by strong brand awareness and customer service capabilities [4]. - The management has introduced initiatives such as adding commercial sales staff and enhancing customer relationship management to drive revenue growth [5]. Group 4: Macroeconomic and Competitive Challenges - Chemed faces macroeconomic headwinds, including rising labor and supply chain costs, with service costs increasing by 9.3% year-over-year in Q3 [9]. - The competitive landscape for Roto-Rooter and VITAS is challenging, with both segments needing to innovate to maintain market share in fragmented industries [10]. Group 5: Earnings Estimates - The Zacks Consensus Estimate for Chemed's 2024 earnings per share (EPS) is $23.09, with revenue estimates at $2.42 billion, indicating a 6.87% increase from the previous year [11].