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].

Core Insights - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] Group 1 - The article suggests that users may face blocks if ad-blockers are enabled, indicating a need to disable them for proper access [1]

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]

Core Viewpoint - Chemed Corporation will present at the Jefferies 2025 Healthcare Services Conference on September 30, 2025, at 1:50 p.m. (CT) [1] Company Information - The presentation will take place at the 1 Hotel in Nashville [1] - The event will be webcast live, and materials will be accessible on the Chemed website [1] - A replay of the webcast will be available within 24 hours after the live presentation [1]

Core Viewpoint - Investors are closely monitoring recession indicators following the first federal funds rate cut of the year, with a struggling housing market and labor market warnings suggesting a potential recession, despite rising stock prices [1] Group 1: Church & Dwight (CHD) - Church & Dwight Co. Inc. is recognized for its essential household and personal care brands, which may provide insulation from a potential recession due to their perceived necessity [2][3] - The company has a long history of dividend increases, with a yield of 1.36% and a conservative payout ratio of 55.66%, making it a potential source of stability during volatile periods [3] - CHD shares have declined over 10% year-to-date, attributed to tariff impacts, but analysts predict a recovery with an upside potential of over 14% [4] Group 2: Spire Inc. (SR) - Spire Inc. is a regional natural gas utility firm expanding through the acquisition of Piedmont Natural Gas, which is expected to add over 200,000 customers and contribute to an estimated 8% bottom-line increase in the coming year [5] - The company maintains low operational costs, growing by less than 1% year-to-date, which provides protection against inflation, alongside a dividend yield of 4.08% and a payout ratio of 67.12% [6] Group 3: Chemed Corp. (CHE) - Chemed Corp. operates in home services and healthcare, with its brands Roto-Rooter and Vitas Healthcare providing recession-resistant services [8] - The company faces challenges such as hospice care caps and rising insurance costs, which have pressured CHE shares to their lowest P/E level in over four years, presenting a potential buying opportunity for long-term strength [9]

Core Thesis - Chemed Corporation (CHE) is viewed positively due to its strong market position in hospice care and plumbing services, with significant growth potential in the hospice market [1][2][5] Business Overview - Chemed operates two main businesses: VITAS, the largest hospice provider in the U.S., contributing 58% of revenue and growing around 9%, and Roto-Rooter, a plumbing service provider, contributing 42% of revenue and growing approximately 1.7% [2] - The U.S. hospice market is projected to grow from $29.9 billion to $39.1 billion by 2030, indicating a strong growth trajectory for VITAS [2] Financial Performance - Chemed generates annual free cash flow between $250 million and $367 million, has no debt beyond leases, and holds $249 million in cash, allowing for opportunistic share repurchases [4] - The stock is currently trading near multi-year lows on P/E and EV/EBITDA metrics, suggesting potential for re-rating as market focus shifts to 2026 earnings [4] Challenges and Mitigation Strategies - Recent stock price decline was attributed to a Medicare cap issue in Florida, which limited revenue recognition for VITAS due to higher state reimbursement rates [3] - Management has strategies in place to address these challenges, including increasing admissions and optimizing patient mix, which are expected to mitigate cap risks and create a $30 million cushion for 2026 [3][4] Market Outlook - The stock is seen as having a compelling risk/reward profile, with a potential upside of 26% as earnings improve, while downside risk is limited to approximately 12% [4] - The operational resilience and financial strength of Chemed support a bullish outlook despite recent short-term headwinds [5]

Core Insights - ServiceTitan has announced a strategic partnership with Roto-Rooter, enhancing Roto-Rooter's operations with ServiceTitan's technology to drive growth and profitability [1][2] - The partnership aims to unlock new revenue opportunities and improve operational efficiency across Roto-Rooter's extensive network [2][3] - Roto-Rooter, a leader in plumbing and water cleanup services, operates in 121 company-owned territories and over 345 franchise territories in the U.S. and Canada [6] Company Overview - ServiceTitan is a cloud-based software platform designed to support trades businesses, providing tools for business management and customer experience enhancement [5] - Roto-Rooter, founded in 1935, is the largest provider of plumbing, drain cleaning, and water cleanup services in North America, with a strong commitment to technological innovation [6][3] Partnership Impact - The partnership will leverage ServiceTitan's technology across Roto-Rooter's national call centers and branch locations, aiming to set a new standard for service excellence in the industry [4][3] - Roto-Rooter's field employees and office staff will benefit from increased efficiency and automation, allowing them to focus more on customer service [3][2]

Financial Performance - Consolidated service revenues and sales for Q2 2025 increased by 3.8% to $618.8 million compared to $595.9 million in Q2 2024, with VITAS contributing $21.6 million and Roto-Rooter $1.3 million to the increase [124]. - Adjusted net income for the six months ended June 30, 2025, was $145.8 million, down from $163.3 million in the same period of 2024, reflecting a decrease of 10.7% [110]. - Net income for Q2 2025 was $52.5 million, down from $70.9 million in Q2 2024, with VITAS and Roto-Rooter segments reporting declines in net income [134]. - The consolidated net income for the first half of 2025 was $124,250,000, down from $135,904,000 in 2024 [156]. - The diluted earnings per share as reported for the six months ended June 30, 2025 was $8.43, down from $8.89 in 2024 [158]. Revenue Growth - VITAS experienced a 5.8% increase in net revenue for Q2 2025, driven by a 6.1% increase in days-of-care and a 4.2% increase in Medicare reimbursement rates [111]. - Service revenues for the first six months of 2025 increased by 6.8% to $1.27 billion, with VITAS contributing $75.0 million and Roto-Rooter $5.6 million to the increase [137]. - The company reported a significant increase in service revenues for VITAS, which rose to $803,600,000 in 2025 from $374,558,000 in 2024 [151]. - Roto-Rooter's service revenues increased to $462,141,000 in the first half of 2025, up from $221,322,000 in 2024 [151]. - Total service revenues and sales for the first six months of 2025 reached $1,265,741,000, compared to $1,227,880,000 in the same period of 2024 [151]. Expenses and Costs - Consolidated gross margin for Q2 2025 was 29.8%, down from 34.6% in Q2 2024, primarily due to a $15.0 million increase in Medicare Cap liability [129]. - Total SG&A expenses for Q2 2025 were $100.3 million, a 1.0% decrease from $102.3 million in Q2 2024, with a 2.6% increase in SG&A expenses before long-term incentive compensation [130]. - The total costs and expenses for the first half of 2025 were $1,102,899,000, an increase from $1,007,755,000 in 2024 [151]. - Corporate expenses decreased by 7.3% to $35,857,000 in the first six months of 2025, primarily due to an $8.5 million reduction in stock-based compensation [145][151]. Cash Flow and Liquidity - The company reported a $9.3 million increase in net cash provided by operating activities from June 30, 2024, to June 30, 2025 [115]. - As of June 30, 2025, the company had approximately $404.5 million of unused lines of credit available under its revolving credit facility [119]. - The company anticipates that operating income and cash flows will be sufficient to meet business commitments for the foreseeable future [116]. Operational Metrics - Days of care at VITAS increased by 6.1% to 2,030,913 for the three months ended June 30, 2025, compared to 1,914,284 in the same period of 2024 [125]. - The average daily census for Homecare in Q2 2025 was 18,269, compared to 17,046 in Q2 2024, reflecting a growth of 7.1% [160]. - Total admissions in the first half of 2025 were 35,684, an increase from 32,245 in the first half of 2024, marking a growth of 10.3% [160]. - The average length of stay increased to 137.1 days in Q2 2025 from 100.6 days in Q2 2024 [160]. Tax and Other Income - Effective tax rate for the first six months of 2025 was 25.5%, compared to 23.8% in the same period of 2024 [141]. - Total other income for the first six months of 2025 was $4.7 million, a significant decrease from $18.7 million in the same period of 2024, driven by lower interest income [141]. Strategic Initiatives - The company plans to continue focusing on market expansion and new product development to drive future growth [155]. - The company is actively evaluating interest rate exposure and considering hedging techniques to manage risks [163].