Chemed(US:CHE)2024-11-01 13:00Revenue and Sales Performance - For the three months ended September 30, 2024, consolidated service revenues and sales increased by 7.4% to $606,181,000 compared to $564,532,000 in the same period of 2023[103]. - VITAS experienced a 17.3% increase in service revenues, primarily driven by a 15.5% increase in days-of-care and a 2.6% increase in Medicare reimbursement rates[104]. - Roto-Rooter saw a 6.9% decrease in service revenues, attributed to declines across all service lines[104]. - Total revenues for the first nine months of 2024 increased by 6.7% to $1,791,294,000 compared to $1,678,505,000 in the same period of 2023[134]. - VITAS' routine homecare revenue for the first nine months of 2024 was $967,981,000, a 16.3% increase from $832,554,000 in 2023[135]. - Total net revenue for Q3 2024 was $399,148,000, compared to $340,801,000 in Q3 2023, indicating a growth of 17.1%[165]. - Homecare revenue for Q3 2024 reached $338,344,000, a significant increase from $287,389,000 in Q3 2023, marking a growth of 17.7%[165]. Income and Earnings - Adjusted net income for the three months ended September 30, 2024, was $85,485,000, up from $80,866,000 in 2023, representing a 8.0% increase[103]. - Net income for VITAS in Q3 2024 was $53,486,000, an increase from $44,331,000 in Q3 2023, reflecting improved revenue performance[130]. - Roto-Rooter's net income decreased to $37,955,000 in Q3 2024 from $50,327,000 in Q3 2023, impacted by declining revenue and increased SG&A expenses[131]. - Net income for the three months ended September 30, 2024, was $75,776 thousand, an increase from $74,958 thousand in the same period last year[159][160]. - Net income for the nine months ended September 30, 2024, was $211,680 thousand, up from $182,456 thousand in the same period last year, representing a year-over-year increase of 16.0%[162]. - Adjusted net income for the nine months ended September 30, 2024, was $248,735,000, up from $207,701,000 in the same period of 2023, representing an increase of 19.7%[164]. Expenses and Costs - Total SG&A expenses rose to $101,981,000 in Q3 2024, up 2.4% from $99,602,000 in Q3 2023, primarily due to salary increases and higher marketing expenses[124]. - Total SG&A expenses rose by 8.6% to $320.1 million in the first nine months of 2024 from $294.7 million in 2023, primarily due to normal salary increases and higher marketing expenses[138]. - The total costs and expenses for the consolidated entity were $514.0 million for the three months ended September 30, 2024[148]. - The company incurred a total of $11,700,000 in pretax costs related to stock options and long-term incentives in Q3 2023[152]. Margins and Profitability - Consolidated gross margin decreased to 34.6% in Q3 2024 from 35.8% in Q3 2023, while VITAS' gross margin improved to 24.6% from 24.0%[123]. - The consolidated gross margin increased to 34.6% in the first nine months of 2024 from 34.0% in the same period of 2023[137]. - VITAS' gross margin improved to 23.9% in the first nine months of 2024 compared to 20.2% in 2023, attributed to increased revenues and the expiration of the Retention Bonus Program[137]. - After-tax earnings as a percentage of revenue at VITAS increased to 13.1% in the first nine months of 2024 from 9.9% in 2023[144]. - Roto-Rooter's after-tax earnings as a percentage of revenue decreased to 17.8% in the first nine months of 2024 from 20.0% in 2023, primarily due to declining revenue and higher SG&A expenses[145]. Tax and Adjustments - The effective tax rate for Q3 2024 was 25.0%, up from 19.6% in Q3 2023, influenced by changes in state and local tax structures[127]. - The effective tax rate for the first nine months of 2024 was 24.2%, compared to 22.3% in 2023, influenced by a tax benefit from realigning the state and local corporate tax structure[141]. - The company recognized a total after-tax adjustment of $(9,709,000) in Q3 2024, compared to $(5,908,000) in Q3 2023, reflecting various impacts on earnings[129]. Cash Flow and Financial Position - Net cash provided by operating activities increased by $30.8 million from September 30, 2023, to September 30, 2024, primarily due to a $29.2 million increase in earnings[111]. - As of September 30, 2024, the company has approximately $404.8 million of unused lines of credit available under its revolving credit facility[115]. - The company had no variable rate debt outstanding as of September 30, 2024, mitigating interest rate risk exposure[168]. - 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[168]. - Interest expense for the nine months ended September 30, 2024, totaled $1,281 thousand, compared to $2,766 thousand in the same period last year[162]. Acquisitions and Investments - The acquisition of hospice operations and an assisted living facility from Covenant Health for $85 million was completed on April 17, 2024[106]. - The company reported a $81.8 million increase in goodwill primarily due to the Covenant acquisition[110]. - A $20.5 million increase in investments of deferred compensation plans was noted, mainly due to market valuation gains[110]. Future Outlook - Future outlook includes continued focus on service revenue growth and operational efficiency improvements across both VITAS and Roto-Rooter segments[151].