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Financial Data and Key Metrics Changes - VITAS net revenue was $407.7 million in Q3 2025, an increase of 4.2% compared to the prior year period, driven by a 2.5% increase in days of care and a 4.1% increase in Medicare reimbursement rates [11][12] - Adjusted EBITDA for VITAS, excluding Medicare cap, totaled $70.4 million, a decline of 3.8% year-over-year, with an adjusted EBITDA margin of 17.0%, down 157 basis points from the prior year [12][13] - Roto-Rooter revenue increased by 1.1% in Q3 2025 compared to the same period in 2024, with residential plumbing revenue up 8.2% [7][13] Business Line Data and Key Metrics Changes - VITAS admissions totaled 17,714 in Q3 2025, a 5.6% improvement from the same period in 2024, with hospital-directed admissions increasing by 10.4% [5][17] - Roto-Rooter branch residential revenue was $150.9 million, an increase of 3.4%, while commercial revenue totaled $55 million, up 2.8% [13][14] - Revenue from independent contractors declined by 4.7% in Q3 2025 compared to the same period in 2024 [14] Market Data and Key Metrics Changes - The percentage of total admissions from hospitals in Florida was 44.5% in Q3 2025, indicating a recovery in the mix of referral sources [6] - The average daily census for VITAS was 22,327 patients, an increase of 2.5% [17] Company Strategy and Development Direction - The company is focused on increasing hospital-based admissions to mitigate Medicare cap billing limitations, with a target ratio of 42% to 45% for hospital admissions [6][29] - VITAS is set to open a new location in Pinellas County in early November 2025, which is expected to enhance its service capacity [7][18] - Roto-Rooter is implementing operational initiatives to improve margins and stabilize growth, with a focus on managing lead generation costs [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the Florida Medicare cap issue will be resolved, with no expected billing limitations for 2026 [6][16] - The company anticipates a strong fourth quarter for both VITAS and Roto-Rooter, driven by seasonal demand and operational improvements [24][27] - Management indicated that the fourth quarter will be a significant indicator for 2026 growth strategies, with expectations for revenue growth in the 8% range and margins around 27.5% to 28% [36][37] Other Important Information - The company is actively working to address challenges faced by independent contractors to return this segment to a growth trajectory [14][15] - SG&A costs increased by $3.6 million in Q3 2025, primarily due to the shift from unpaid to paid leads [9][15] Q&A Session Summary Question: Can you run through demand and cost trends for each segment? - Management noted that seasonality impacts the fourth quarter, with VITAS typically performing better due to rate increases and Roto-Rooter benefiting from weather conditions [23][24] Question: What are the expectations for receivables and cash collections? - Management clarified that elevated DSO is primarily a timing issue related to Medicaid payments, not a deterioration in collection efforts [31] Question: How are margins expected to improve in Roto-Rooter? - Management indicated that while marketing costs are under pressure, they expect to absorb these costs through operational improvements and increased lead generation [52][53] Question: What is the outlook for VITAS in 2026? - Management stated that the fourth quarter will inform 2026 strategies, with expectations for improved revenue growth and margins based on operational adjustments [36][40] Question: How does the company view competitive dynamics in Roto-Rooter? - Management expressed optimism about improved competitive dynamics, noting that increased paid leads are yielding better results without significant competitive pressure [43][44]

Financial Data and Key Metrics Changes - VITAS net revenue was $407.7 million in Q3 2025, an increase of 4.2% compared to the prior year period [11] - Adjusted EBITDA for VITAS, excluding Medicare cap, totaled $70.4 million, a decline of 3.8% year-over-year [12] - Roto-Rooter revenue increased by 1.1% in Q3 2025 compared to the same period in 2024 [7] - Adjusted EBITDA at Roto-Rooter totaled $49.4 million, a decrease of 12.4% compared to the prior year quarter [15] Business Line Data and Key Metrics Changes - VITAS admissions totaled 17,714, a 5.6% improvement from the same period in 2024 [5] - Average revenue per patient day for VITAS was $205.08, up 2.98% from the prior year [12] - Roto-Rooter branch residential revenue increased by 3.4%, with residential plumbing revenue up 8.2% [13][8] - Revenue from independent contractors declined by 4.7% in Q3 2025 compared to the same period in 2024 [14] Market Data and Key Metrics Changes - The percentage of total admissions from hospitals in Florida was 44.5%, above the preferred range of 42% to 45% [6] - The average daily census for VITAS was 22,327 patients, an increase of 2.5% [17] - Hospital-directed admissions increased by 10.4%, while nursing home admissions declined by 8.9% [17] Company Strategy and Development Direction - The company aims to mitigate potential Florida Medicare cap billing limitations for fiscal 2026 [5] - VITAS is focusing on increasing hospital-based admissions to ensure long-term stability [6] - Roto-Rooter is implementing operational initiatives to stabilize and return to predictable growth [10] Management Comments on Operating Environment and Future Outlook - Management believes there will be no Medicare cap billing limitation related to the Florida program in 2026 [6] - The company is encouraged by the performance of both businesses in Q3 2025, with VITAS on track to resolve the Medicare cap issue [10] - Management anticipates a seasonal increase in demand and revenue in Q4 2025 [23] Other Important Information - The company has cleared hurdles to open a new location in Pinellas County, expected to open in early November [7] - The Medicare cap billing limitation for Q3 2025 was $6.1 million, slightly better than estimates [11] Q&A Session Summary Question: Insights on demand and cost trends for Q4 - Management noted that Q4 is typically stronger due to seasonal factors, with VITAS' margins expected to spike from the new rate increase [23][24] Question: Concerns about receivables and cash collections - Management indicated that elevated DSO is primarily a timing issue related to Medicaid payments, not a deterioration in collection efforts [31] Question: Growth rates and margins for 2026 - Management speculated on revenue growth in the 8% range and margins at 17.5%-18% for 2026, pending Q4 performance [37] Question: Sustainable margins in Roto-Rooter - Management indicated that while marketing costs are under pressure, they expect to absorb these costs through operational improvements [53] Question: Clarification on VITAS' Medicare cap liability - Management explained that the focus on hospital admissions and a favorable rate increase gives confidence in managing cap liability [65][69]

Financial Data and Key Metrics Changes - VITAS net revenue was $407.7 million in Q3 2025, an increase of 4.2% compared to the prior year period, driven by a 2.5% increase in days of care and a 4.1% increase in Medicare reimbursement rates [12] - Adjusted EBITDA for VITAS, excluding Medicare cap, totaled $70.4 million, a decline of 3.8% year-over-year, with an adjusted EBITDA margin of 17.0%, down 157 basis points from the prior year [13] - Roto-Rooter revenue increased by 1.1% in Q3 2025 compared to the same period in 2024, with residential plumbing revenue up 8.2% [7][8] Business Line Data and Key Metrics Changes - VITAS admissions totaled 17,714 in Q3 2025, a 5.6% improvement from Q3 2024, with hospital-based admissions at 44.5%, the highest since the pandemic [5][6] - Roto-Rooter branch residential revenue was $150.9 million, an increase of 3.4%, while commercial revenue totaled $55 million, up 2.8% [13][14] - Revenue from independent contractors declined by 4.7% in Q3 2025 compared to the same period in 2024 [14] Market Data and Key Metrics Changes - The average daily census for VITAS was 22,327 patients, an increase of 2.5%, with hospital-directed admissions up 10.4% [17] - The average revenue per patient day for VITAS was $205.08, an increase of 298 basis points year-over-year [12] Company Strategy and Development Direction - The company is focusing on increasing hospital-based admissions to mitigate Medicare cap billing limitations, with expectations of no cap limitations for the Florida program in 2026 [6][16] - Roto-Rooter is implementing operational initiatives to improve margins and stabilize growth, with a focus on managing costs effectively [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fourth quarter, anticipating it to be the best quarter for VITAS due to seasonal factors and new rate increases [23][24] - The company is optimistic about returning to a predictable growth trajectory for Roto-Rooter, despite current margin pressures [11][15] Other Important Information - The company expects to open a new location in Pinellas County in early November 2025, which is anticipated to contribute positively to growth [7] - Management reiterated guidance of $22 to $22.30 per share, excluding non-cash expenses and other discrete items [16] Q&A Session Summary Question: Insights on demand and cost trends for Q4 - Management noted that Q4 typically sees higher demand and margins for both VITAS and Roto-Rooter due to seasonal factors [22][24] Question: Thoughts on receivables and cash collections - Management indicated that elevated DSO is primarily a timing issue related to Medicaid payments, not a deterioration in collection efforts [30] Question: Outlook for 2026 margins and growth rates - Management stated that the fourth quarter will inform the strategy for 2026, with expectations of revenue growth in the 8% range and margins around 17.5% to 18% [36][40] Question: Competitive dynamics in Roto-Rooter - Management highlighted improved competitive dynamics, with a shift towards paid leads resulting in better lead generation and potential margin recovery [44][46] Question: Sustainable margins in Roto-Rooter - Management believes that Roto-Rooter can achieve long-term EBITDA margins of 25% to 26%, despite current pressures from marketing costs [54] Question: Clarification on VITAS's Medicare cap liability - Management explained that the strategy of increasing hospital admissions and the current reimbursement environment gives confidence in managing Medicare cap liabilities [66][69]

Core Insights - Chemed Corporation (CHE) reported third-quarter 2025 adjusted earnings per share (EPS) of $5.27, a decline of 6.6% year over year, missing the Zacks Consensus Estimate by 2.2% [1] - The company's GAAP EPS was $4.46, down 10.8% from the previous year [1] Revenue Performance - Revenues for the quarter increased by 3.1% year over year to $624.9 million, but fell short of the Zacks Consensus Estimate by 0.5% [2] - The stock price dropped by 2.7% in after-hours trading, reflecting investor concerns regarding the declining EPS [2] Segment Analysis - Chemed operates through two subsidiaries: VITAS, a provider of end-of-life care, and Roto-Rooter, a plumbing and drain cleaning service provider [3] - VITAS reported net patient revenues of $407.7 million, up 4.2% year over year, driven by a 2.5% increase in days-of-care and a nearly 4.1% rise in the Medicare reimbursement rate [4] - Roto-Rooter generated sales of $217.2 million, a 1.1% increase year over year, with commercial revenues up 2.8% [5] - Residential revenues for Roto-Rooter increased by 3.4% year over year, with notable growth in plumbing (8.2%) and water restoration (6.8%) [6] Margin and Profitability - Gross profit decreased by 6.2% year over year to $196.9 million, with gross margin contracting by 313 basis points to 31.5% due to an 8% rise in service costs [7] - Selling, General and Administrative (SG&A) expenses rose by 3.7% year over year to $105.8 million, leading to a 15.6% decline in adjusted operating profit to $91.1 million [7] Liquidity and Capital Structure - At the end of Q3 2025, Chemed had cash and cash equivalents of $129.8 million, down from $249.9 million at the end of Q2 [10] - The company reported no current or long-term debt and cumulative net cash from operating activities of $254.7 million, slightly up from $252.6 million in the previous year [10] Share Repurchase and Dividends - Chemed repurchased 407,500 shares for $180.8 million, averaging $443.62 per share, with approximately $301.8 million remaining under its share repurchase authorization [11] - The company has a consistent dividend-paying history, with a five-year annualized dividend growth of 10.47% [11] Future Guidance - For 2025, Chemed expects VITAS revenues to increase by 10.5% to 11.3% and Roto-Rooter revenues to grow by 2.4% to 3.0% [12] - The total revenue estimate for 2025 is projected at $2.55 billion, indicating a 4.9% year-over-year improvement [12] - The adjusted EPS for the full year 2025 is expected to be in the range of $24.95-$25.45, with a Zacks Consensus Estimate of $22.03, reflecting a 4.8% decline from 2024 [13]

Chemed Corporation Overview - Chemed's Adjusted EBITDA margin was 20% in 2023[10, 18] - Chemed's Adjusted net income increased 13.8% from 2023 to 2024[10, 18] - Chemed's Adjusted diluted EPS from continuing operations increased 13.9% from 2023 to 2024[10, 18] Roto-Rooter - Roto-Rooter's service revenues and sales decreased by 5.2% from 2023 to 2024[10] - Roto-Rooter's adjusted net income decreased by 13.5% from 2023 to 2024[10] - Roto-Rooter's service revenues and sales were $900309 thousand in 2024[36] - Roto-Rooter's Adjusted EBITDA was $237087 thousand in 2024[36] VITAS Healthcare - VITAS's service revenues and sales increased by 16.4% from 2023 to 2024[10] - VITAS's adjusted net income increased by 38.9% from 2023 to 2024[10] - VITAS's revenues were $408 million in Q3 2025[47] - VITAS's net service revenue was $1530978 thousand in 2024[78]

Revenue Performance - VITAS net revenue for Q3 2025 was $407.7 million, a 4.2% increase year-over-year, driven by a 2.5% increase in days-of-care and a 4.1% increase in Medicare reimbursement rates [3]. - Roto-Rooter generated revenue of $217.2 million in Q3 2025, reflecting a 1.1% increase compared to the prior year, with commercial revenue up 2.8% and residential revenue up 3.4% [10]. - Service revenues and sales for Q3 2025 reached $624.9 million, a 3.0% increase from $606.2 million in Q3 2024 [31]. - Homecare revenue for Q3 2025 reached $362,405,000, an increase of 7.1% from $338,344,000 in Q3 2024, while total net revenue for the same period was $407,741,000, up from $391,406,000 [48]. - Service revenues and sales for 2025 reached $1,890,641, an increase from $1,791,294 in 2024, representing a growth of approximately 5.5% [39]. Earnings and Profitability - GAAP diluted EPS for Q3 2025 was $4.46, a decrease of 10.8%, while adjusted diluted EPS was $5.27, down 6.6% [3]. - Net income for Q3 2025 was reported at $64,237,000, a decrease from $75,776,000 in Q3 2024, while net income for the nine months ended September 30, 2025, was $188,487,000 compared to $211,680,000 in the same period of 2024 [45]. - Adjusted EBITDA for Q3 2025 was $75,906,000, down from $85,485,000 in Q3 2024, and for the nine months ended September 30, 2025, it was $221,701,000 compared to $248,735,000 in 2024 [45]. - Net income for the nine months ended September 30, 2025, was $188.5 million, down 10.9% from $211.7 million in the same period of 2024 [31]. - EBITDA for 2025 was reported at $100,235, while adjusted EBITDA was $109,045, showing a decline from $117,153 in 2024 [41]. Expenses and Costs - Total costs and expenses for 2025 amounted to $1,653,049, up from $1,538,679 in 2024, reflecting an increase of approximately 7.4% [39]. - Selling, general and administrative expenses for 2025 totaled $311,685, an increase from $320,109 in 2024, indicating a reduction of approximately 2.6% [39]. - The company reported a total interest expense of $1,229 for 2025, compared to $1,281 in 2024, reflecting a decrease of about 4.1% [39]. - The company incurred $(2.850) million in legal settlements during the three months ended September 30, 2025, which contributed to the overall losses reported [50]. - The company reported a legal settlement expense of $2,850,000 in Q3 2025, consistent with the previous quarter [45]. Cash and Assets - As of September 30, 2025, Chemed had total cash and cash equivalents of $129.8 million and no debt [15]. - Cash and cash equivalents at the end of Q3 2025 were $129.8 million, down 45.7% from $238.5 million at the end of Q3 2024 [35]. - Total current assets decreased to $395.2 million in Q3 2025 from $490.4 million in Q3 2024, reflecting a decline of 19.4% [33]. Shareholder Actions - Chemed repurchased 407,500 shares for $180.8 million in Q3 2025, with approximately $301.8 million remaining under its share repurchase authorization [17]. - The average number of shares outstanding for Q3 2025 was 14.4 million, down from 15.0 million in Q3 2024 [31]. - The company purchased $256.9 million in treasury stock during the nine months ended September 30, 2025, compared to $152.0 million in the same period of 2024 [35]. Operational Metrics - Total admissions for VITAS increased by 5.6% in Q3 2025 compared to Q3 2024, with an average daily census of 22,327, up 2.5% [4]. - The average daily census (ADC) for homecare in Q3 2025 was 18,325 days, compared to 17,639 days in Q3 2024, indicating a growth in service utilization [48]. - The average length of stay for patients increased to 109.7 days in Q3 2025 from 102.0 days in Q3 2024, indicating longer patient care durations [48]. - Total admissions for the nine months ended September 30, 2025, were 53,398, an increase from 51,020 in the same period of 2024 [48]. Guidance and Future Outlook - Management reiterated its guidance for 2025, projecting adjusted diluted EPS between $22.00 and $22.30, excluding certain non-cash expenses and litigation costs [19]. - The company continues to focus on operational efficiency and cost management strategies to enhance profitability moving forward [39]. Financial Position - Total liabilities increased to $546.9 million in Q3 2025 from $533.7 million in Q3 2024, marking a rise of 2.4% [33]. - The company reported a net cash provided by operating activities of $254.7 million for the nine months ended September 30, 2025, compared to $252.6 million in the same period of 2024 [35].

Core Insights - Chemed Corporation reported its third-quarter financial results for 2025, highlighting growth in its VITAS Healthcare and Roto-Rooter segments, despite some challenges in revenue growth and profitability metrics [1][2]. VITAS Segment Performance - VITAS net revenue reached $407.7 million, marking a 4.2% increase year-over-year, driven by a 2.5% rise in days-of-care and a 4.1% increase in Medicare reimbursement rates [4]. - Total VITAS admissions rose by 5.6% compared to the same quarter in 2024 [5]. - The average revenue per patient per day was $205.08, up 298 basis points from the previous year [7]. - The gross margin for VITAS, excluding Medicare Cap, was 22.5%, a decline of 261 basis points from the prior year [8]. Roto-Rooter Segment Performance - Roto-Rooter generated $217.2 million in revenue, a 1.1% increase from the previous year [11]. - Residential revenue increased by 3.4%, while commercial revenue rose by 2.8% [12]. - The gross margin for Roto-Rooter was 50.7%, down from 52.9% in the prior year [13]. - Adjusted EBITDA for Roto-Rooter was $49.4 million, reflecting a 12.4% decline year-over-year [14]. Consolidated Financials - Total consolidated revenue increased by 3.1% to $624.9 million [9]. - GAAP diluted EPS was $4.46, a decrease of 10.8%, while adjusted diluted EPS was $5.27, down 6.6% [9]. - Net income, excluding certain discrete items, was $48.9 million, a decrease of 9.0% [9]. - As of September 30, 2025, Chemed had total cash and cash equivalents of $129.8 million and no debt [16]. Share Repurchase and Guidance - The company repurchased 407,500 shares for $180.8 million, with approximately $301.8 million remaining under its share repurchase authorization [18]. - Management reiterated its guidance for 2025, projecting earnings per share between $22.00 and $22.30, excluding non-cash expenses and other discrete items [20].

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Group 1 - LRT Capital Management's "LRT Global Opportunities Strategy" reported a net return of -8.00% in September 2025, with a year-to-date return of -0.17% [1] - The strategy faced challenges as market indexes surged, particularly driven by a few overvalued mega-cap stocks, while the broader market declined [1] - The fund's top five holdings were highlighted as key picks for 2025 [1] Group 2 - Chemed Corporation (NYSE:CHE) is noted for its unique structure, operating in two non-correlated sectors: hospice care through VITAS and plumbing services through Roto-Rooter [3] - Chemed Corporation's one-month return was 5.91%, but it experienced a significant decline of 25.88% over the past 52 weeks [2] - As of October 6, 2025, Chemed Corporation's stock closed at $435.38 per share, with a market capitalization of $6.344 billion [2]