Employee and Talent Management - As of December 31, 2022, the company had a total of 14,167 employees across its subsidiaries Roto-Rooter and VITAS[132]. - The company recognizes the importance of attracting and retaining top talent, particularly in the challenging labor market during the COVID-19 pandemic[136]. - A nationwide shortage of qualified nurses and aides could adversely affect VITAS' profitability and service quality[155]. Environmental and Regulatory Liabilities - The company's estimated liability for potential environmental cleanup related to the 1991 sale of DuBois Chemicals Inc. is $1.7 million, with a maximum contingent liability of $14.9 million[130]. - The company is contingently liable for additional environmental cleanup costs but does not believe it is probable that these costs will be incurred[130]. - The company has obligations under a corporate integrity agreement with the OIG, which includes compliance monitoring and reporting requirements[121]. Competition and Market Dynamics - The company faces intense competition in the plumbing and restoration businesses, primarily competing on service range, name recognition, and customer service quality[143]. - The healthcare industry is highly competitive, with VITAS competing against numerous organizations in its service areas[156]. - VITAS faces increasing pressure from payors to control healthcare costs, which may impact revenue levels[148]. Financial Performance and Revenue Sources - Over 90% of VITAS' net patient service revenue comes from Medicare and Medicaid payments, which are primarily on a "per diem" basis[148]. - 15% to 20% of VITAS' days of care are provided to patients in nursing homes, and changes in payment laws could reduce net patient service revenue[149]. - The reduction or elimination of Medicare and Medicaid payments for hospice patients in nursing homes would negatively impact VITAS' revenue and profitability[150]. - VITAS' success relies heavily on maintaining relationships with patient referral sources, which have been affected by the pandemic[151]. - Federal and state regulations could require VITAS to invest significantly in new information systems, potentially impacting profitability[153]. Acquisitions and Investments - The company has not completed any acquisitions in 2021[140]. - VITAS acquired hospice assets from a Florida provider for $1.24 million in cash in 2022[161]. Cybersecurity and Safety Measures - The company has implemented cybersecurity measures, including intrusion detection and regular testing of IT systems, to protect sensitive customer information[147]. - The company has developed a safety program for VITAS to ensure employee and patient health during the COVID-19 pandemic, including training on hygiene and PPE usage[135]. Debt and Financial Obligations - The market value of the company's long-term debt at December 31, 2022, is approximately $97.5 million, with all outstanding debt at a variable interest rate[694]. - The company is subject to civil monetary penalties ranging from $20,000 to $100,000 per claim for knowingly submitting improperly filed claims for federal health benefits[126].

Chemed Corporation (NYSE:CHE) Q4 2022 Earnings Conference Call February 24, 2023 10:00 AM ET Company Participants Holley Schmidt – Assistant Controller Kevin McNamara – President and Chief Executive Officer Dave Williams – Executive Vice President and Chief Financial Officer Nick Westfall – President and Chief Executive Officer-VITAS Healthcare Corporation Subsidiary Conference Call Participants Joanna Gajuk – Bank of America Ben Hendrix – RBC Capital Markets Mike Wiederhorn – Oppenheimer Holley Schmidt Goo ...

Chemed Corporation (NYSE:CHE) Q3 2022 Earnings Conference Call November 1, 2022 10:00 AM ET Company Participants Holley Schmidt - Assistant Controller Kevin McNamara - President and CEO Dave Williams - EVP and CFO Nick Westfall - President and CEO, Chemed VITAS Healthcare Corporation Subsidiary Conference Call Participants Joanna Gajuk - Bank of America Ben Hendrix - RBC Capital Markets Operator Good day, and thank you for standing by. Welcome to the Chemed Corporation's Third Quarter 2022 Earnings Conferen ...

Financial Performance - For the three months ended September 30, 2022, consolidated service revenues decreased to $526,472, a 2.1% decline from $538,667 in 2021[119]. - Net income for the same period was $56,873, down from $72,003 in 2021, representing a 21% decrease[119]. - Adjusted EBITDA for the three months ended September 30, 2022, was $108,728, with an adjusted EBITDA margin of 20.7%, down from 22.2% in the prior year[119][120]. - For the nine months ended September 30, 2022, consolidated service revenues decreased by 5.5% at VITAS, while Roto-Rooter saw a 6.4% increase[122]. - The company estimates VITAS 2022 revenue to decline by 4.5% to 5.0% compared to 2021, with an estimated adjusted EBITDA margin of 17.1% to 17.2%[127]. - Roto-Rooter is forecasted to achieve full-year 2022 revenue growth of 6.2% to 6.5%, with an adjusted EBITDA margin expected to be 29.5% to 29.7%[128]. - Full-year 2022 earnings per diluted share are estimated to be in the range of $19.60 to $19.70, an increase from the previous guidance of $19.30 to $19.50[129]. - The company recorded a $9.6 million expense for the licensed healthcare worker retention bonus program in Q3 2022, contributing to the decline in gross margin[146]. - Net income for Chemed Consolidated in 2022 was $187.498 million, compared to $72.003 million in 2021, reflecting a significant increase[171]. - The company incurred a pretax cost of $42.360 million in 2022, primarily due to stock option expenses and direct costs related to COVID-19[173]. - The net income for Chemed Corporation was $193,925, with VITAS reporting $113,430 and Roto-Rooter reporting $124,504[175]. Revenue Breakdown - VITAS experienced a 6.6% decrease in service revenues, primarily due to a 4.4% decrease in days-of-care and a 0.2% decrease in Medicare reimbursement rates[120]. - Roto-Rooter reported a 3.9% increase in service revenues, driven by growth in plumbing, excavation, and water restoration services[120]. - VITAS segment revenue decreased by 6.6% to $296.5 million, primarily due to a 4.4% decrease in days of care and a 0.2% decrease in Medicare reimbursement rates[143]. - Roto-Rooter segment revenue increased by 3.9% to $229.9 million, driven by a 10.8% increase in plumbing prices despite a 2.8% decrease in job count[144]. - VITAS segment reported a net revenue of $893.5 million, down 5.5% from $945.1 million in 2021, primarily due to a 4.1% decrease in days-of-care[156]. - Roto-Rooter segment achieved a net revenue of $694.8 million, an increase of 6.4% from $653.1 million in 2021, driven by a 10.9% increase in plumbing revenue[157]. - VITAS service revenues for 2022 reached $893.506 million, while Roto-Rooter generated $694.803 million, contributing to a consolidated total of $1.588 billion[173]. Expenses and Costs - Total costs and expenses for Chemed Consolidated in 2022 amounted to $1.326 billion, with service costs at $1.020 billion and selling, general, and administrative expenses at $261.799 million[173]. - SG&A expenses for Q3 2022 totaled $84.0 million, a decrease of 5.0% from $89.2 million in Q3 2021, primarily due to variable selling and administrative expenses[147]. - SG&A expenses totaled $261.8 million, down from $274.7 million in 2021, reflecting a 3.8% increase in expenses before long-term incentive compensation[160]. - Selling, general, and administrative expenses for Roto-Rooter in 2022 were $165.162 million, a notable increase from the previous year's $51.914 million[173]. Tax and Income - The effective tax rate for Q3 2022 was 25.6%, slightly higher than 24.5% in Q3 2021[150]. - The effective tax rate for the first nine months of 2022 was 24.2%, compared to 23.7% in 2021[162]. - Income taxes for Chemed Consolidated in 2022 were $59.781 million, up from $23.417 million in 2021, indicating a higher tax burden due to increased profitability[171]. - The total income tax expense was $60,262, with VITAS at $36,805 and Roto-Rooter at $38,901[175]. Shareholder Information - The average number of shares outstanding for the three months ended September 30, 2022, was 15,042, down from 15,842 in 2021, a reduction of 5.0%[181]. - Diluted earnings per share as reported for the three months ended September 30, 2022, was $3.78, compared to $4.55 in 2021, a decrease of 16.9%[181]. Future Outlook - The company plans to continue focusing on market expansion and new product development to sustain growth momentum in the coming years[173].

Financial Data and Key Metrics Changes - VITAS's net revenue was $298 million in Q2 2022, a decline of 4.5% compared to the prior year, primarily due to a 3.8% decline in days of care, partially offset by a 0.8% increase in Medicare reimbursement rates [14][15] - Roto-Rooter generated quarterly revenue of $233 million in Q2 2022, an increase of $13.2 million or 6% compared to the prior year [17] - Chemed's full-year 2022 earnings per diluted share is estimated to be in the range of $19.30 to $19.50, compared to previous guidance of $19.10 to $19.50 [25] Business Line Data and Key Metrics Changes - VITAS's average daily census was 17,315 patients, a decline of 3.8% over the prior year, with total admissions down 12.5% [27][28] - Roto-Rooter branch commercial revenue totaled $54.8 million, an increase of 7.5% over the prior year, with growth in various segments including plumbing and water restoration [17][18] - The average length of stay for VITAS patients increased to 103.7 days, compared to 94.5 days in Q2 2021 [30] Market Data and Key Metrics Changes - The nursing home-based patient ratio in VITAS's average daily census increased to 16.4% in Q2 2022, up from 15.6% in Q4 2021 [11] - Roto-Rooter is experiencing a challenge in increasing manpower, with technician manpower expanding by 4.3% compared to Q2 2021 [12] Company Strategy and Development Direction - VITAS has implemented a targeted hiring and retention bonus program to address the shortage of licensed healthcare professionals, with an estimated cost of $37 million [9] - Roto-Rooter aims to expand market share by leveraging brand awareness and customer service advantages [12] - The company is focusing on community access initiatives to improve hospice patient identification and care [41] Management's Comments on Operating Environment and Future Outlook - Management noted that the ongoing COVID-19 pandemic and economic uncertainties are impacting financial modeling and guidance [22] - There is optimism regarding the hiring and retention program's potential to improve staffing and operational capacity in the future [39] - Management expects continued growth in Roto-Rooter despite a more sustainable revenue outlook due to economic conditions [48] Other Important Information - Chemed entered into a five-year $550 million credit agreement, with approximately $387 million of undrawn borrowing capacity as of June 30, 2022 [19] - The company repurchased 100,000 shares for $49.9 million during the quarter, with $125 million remaining under the share repurchase authorization [20] Q&A Session Summary Question: What offsets should be considered for the guidance raise? - Management indicated that while revenues are strong, there has been some softness in Roto-Rooter revenue growth, leading to a more realistic outlook for the second half of the year [33] Question: How much of the labor improvement is due to volume changes? - Management acknowledged that the inability to grow manpower as anticipated has impacted margins, with a focus on recruitment and retention efforts [34][35] Question: What is the long-term outlook for the community access initiative? - Management believes that increased awareness of home care will positively impact hospice patient access in the long term [55] Question: How should Roto-Rooter's revenue outlook be viewed entering 2023? - Management expects continued growth and market share consolidation for Roto-Rooter, despite a softer revenue outlook due to economic conditions [48]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2022 o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 1-8351 CHEMED CORPORATION (Exact name of registrant as specified in its charter) Delaware 31-0791746 (State or other jurisdiction of incorporation or organization) (IRS Emplo ...

| --- | --- | |----------|---------------------------| | | | | Employer | Identification No.) 45202 | UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2022 o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 1-8351 CHEMED CORPORATION (Exact name of registrant as specified in its ...

Chemed Corporation (NYSE:CHE) Q1 2022 Earnings Conference Call April 27, 2022 10:00 AM ET Company Participants Kevin McNamara – President and Chief Executive Officer Nick Westfall – President and Chief Executive Officer of Chemed VITAS Healthcare Corporation Subsidiary Dave Williams – Executive Vice President and Chief Financial Officer Holley Schmidt – Assistant Controller Conference Call Participants Joanna Gajuk – Bank of America Ben Hendrix – RBC Capital Markets Operator Good day and thank you for sta ...

Revenue Sources and Financial Impact - Over 90% of VITAS' net patient service revenue comes from Medicare and Medicaid payments, which are primarily on a "per diem" basis[154] - Changes in Medicare and Medicaid payment rates could materially decline VITAS' net patient service revenue and profits[155] - 15% to 20% of VITAS' days of care are provided to patients in nursing homes, with potential regulatory changes affecting revenue[156] - Changes in payment rates or methods for VITAS' services could negatively impact revenues and profits, especially with the growing influence of managed care organizations[181] Cost Management and Profitability - VITAS' profitability is significantly affected by the ability to manage costs, with potential increases in operating costs due to inflation posing risks[154] - VITAS faces a nationwide shortage of qualified nurses and aides, which could adversely affect its profitability and growth[173] - The company has adjusted wages and benefits to attract and retain skilled nursing and home health aides due to the current labor shortage[174] - VITAS is subject to potential liability claims, which could have a material adverse effect on its financial condition and results of operations[183] Competition and Market Position - The company faces intense competition for skilled employees, particularly licensed plumbers, which could disrupt operations and growth[147] - VITAS competes with various hospice providers, including community-based and national companies, which may limit its market position and profitability[175] - Roto-Rooter competes on advertising, service range, and customer service quality, with local and regional competitors posing significant challenges[141] - Roto-Rooter's brand reputation is vital for success, with adverse publicity potentially leading to decreased demand for services[152] Regulatory Compliance and Risks - Compliance with extensive government regulations is critical, with potential costs impacting financial condition and operations[164] - The company entered into a Corporate Integrity Agreement (CIA) in October 2017, which imposes compliance obligations that, if breached, could lead to penalties or exclusion from Medicare and Medicaid programs[180] - VITAS' operations are subject to numerous environmental regulations, and failure to comply could result in significant costs and liabilities[197] Debt and Financial Management - The company has historically incurred debt to finance operations, and its ability to service this debt may be affected by various factors, including operating performance and market conditions[202] - VITAS' future ability to repay or refinance its indebtedness will depend on its operating performance, which may be influenced by factors beyond its control[203] - The company's primary market risk exposure is related to interest rate risk through its variable interest line of credit[229] - For every $10 million borrowed under the credit facility, a 100 basis points (1%) change in interest rates results in a $100,000 change in annual interest expense[229] - The market value of the company's long-term debt as of December 31, 2021, is approximately $185.0 million, which equals the carrying value as all outstanding debt is at a variable interest rate[230] Risk Management and Disaster Preparedness - The company has developed a response plan for cybersecurity threats, but risks remain regarding potential data breaches[149] - The company maintains a disaster recovery program to mitigate risks associated with natural disasters, particularly hurricanes affecting its operations in south Florida[190]

Financial Data and Key Metrics Changes - VITAS' net revenue for Q4 2021 was $316 million, a decline of 4.8% compared to the prior year, primarily due to a 4.2% decrease in days of care [22] - Roto-Rooter generated quarterly revenue of $225 million in Q4 2021, an increase of $23.8 million or 11.8% compared to the prior year [26] - VITAS' gross margin, excluding Medicare cap and pandemic-related costs, was 28.5%, a decline of 109 basis points from Q4 2020 [24] - Roto-Rooter's gross margin, excluding COVID impact, was 52.7%, a 77 basis point increase from Q4 2020 [29] Business Line Data and Key Metrics Changes - VITAS experienced a decline in average daily census by 4.2% year-over-year, with total admissions down 9.5% compared to Q4 2020 [36] - Roto-Rooter's residential revenue increased by 11.2% to $152 million, with growth across all service segments [26][27] - Roto-Rooter's commercial revenue totaled $53.9 million, an increase of 14.8% over the prior year [28] Market Data and Key Metrics Changes - The nursing home-based patient ratio in VITAS' average daily census stabilized at 15.6% in Q3 and Q4 2021, up from a low of 14.3% in Q1 2021 [14] - VITAS anticipates a slow improvement in senior housing admissions in the first half of 2022, with acceleration expected in the second half [14] Company Strategy and Development Direction - The company is focusing on hiring and retention initiatives to address labor shortages in the healthcare sector, particularly for VITAS [9][10] - Roto-Rooter plans to continue passing through price increases to maintain technician compensation and expand its workforce [16][62] - The company is open to potential acquisitions of well-positioned hospices due to the changing landscape and lower multiples in the market [50][82] Management's Comments on Operating Environment and Future Outlook - Management noted that the healthcare labor market remains challenging, with staffing shortages impacting VITAS' ability to respond to referrals [9][42] - The company expects inflationary pressures to continue affecting margins until reimbursement rates catch up, which is anticipated to occur with the October 2022 adjustments [11][73] - Management expressed confidence in the long-term growth of the hospice industry, expecting a return to pre-pandemic levels of admissions and revenue growth [88] Other Important Information - Chemed repurchased 495,529 shares for $246 million during the quarter, with approximately $202 million remaining under the share repurchase authorization [32] - The full-year 2022 earnings guidance for VITAS anticipates a revenue decline of 1.5% to 2.5% compared to 2021, while Roto-Rooter is expected to achieve revenue growth of 8% to 9.5% [33][34] Q&A Session Summary Question: Discussion on VITAS admission decline and labor shortages - Management clarified that the decline is not solely a demand issue but also due to healthcare system disruptions and staffing shortages [42][43] Question: Clarification on recruiting and retention metrics - Management stated they do not release specific metrics but emphasized improvements in recruiting performance compared to peers [45][52] Question: Impact of inflation on labor costs and guidance - Management acknowledged that inflationary pressures are built into their guidance, with expectations for continued investment in clinical staff [55][57] Question: Roto-Rooter pricing increases and demand - Management confirmed mid- to high single-digit price increases were implemented, with further increases anticipated throughout 2022 [62][64] Question: Expectations for senior housing referrals and median length of stay - Management expects normalization of senior housing referrals and median length of stay by the end of 2022 [101]