Chemed(US:CHE)2025-07-31 13:05Financial 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].