Chemed(US:CHE)2025-10-31 13:02Financial Performance - For the three months ended September 30, 2025, consolidated service revenues increased by 3.1% to $624.9 million compared to $606.2 million in the same period of 2024[123]. - Net income for the third quarter of 2025 was $64.2 million, down from $75.8 million in the third quarter of 2024, representing a decrease of 15.5%[110]. - Adjusted EBITDA for the third quarter of 2025 was $109.0 million, which is 17.4% of revenue, compared to $123.0 million or 20.3% of revenue in the same quarter of 2024[110]. - Total revenues for the first nine months of 2025 were $1,890,641,000, a 5.5% increase from $1,791,294,000 in the same period of 2024[136]. - Net income for the first nine months of 2025 was $188,487,000, a decrease of 10.9% from $211,680,000 in 2024[143]. - The net income for the third quarter of 2025 was $64,237,000, compared to $75,776,000 in the third quarter of 2024[149]. - Net income for the nine months ended September 30, 2024, was $211,680, compared to $188,487 for the same period in 2025, reflecting a decrease of approximately 8.5%[157]. Revenue Sources - VITAS experienced a 4.2% increase in service revenues driven by a 2.5% increase in days-of-care and a 4.1% increase in Medicare reimbursement rates[111]. - Roto-Rooter saw a 1.1% increase in service revenues, primarily due to growth in plumbing, excavation, and water restoration services[111]. - VITAS service revenues increased by $91.4 million, with routine homecare revenue rising by 10.7% to $1,072,014,000[136]. - Total service revenues and sales for the first nine months of 2025 were $1,890,641,000, an increase from $1,800,000,000 in 2024[152]. Expenses and Costs - SG&A expenses for Q3 2025 totaled $105,775,000, up 6.5% from $101,981,000 in Q3 2024, with $2.7 million attributed to a severance accrual and $2.3 million increase in legal expenses[128]. - SG&A expenses for the first nine months of 2025 totaled $311,685,000, down from $320,109,000 in 2024, with a 4.8% increase in expenses before long-term incentive compensation[140]. - Total costs and expenses for the first nine months of 2025 were $1,653,049,000, compared to $1,514,000,000 in 2024[152]. Margins and Profitability - The gross margin for the consolidated company decreased to 31.5% in Q3 2025 from 34.6% in Q3 2024, with VITAS' gross margin declining to 21.3% from 24.6%[127]. - The consolidated gross margin for the first nine months of 2025 was 31.6%, down from 34.6% in the same period of 2024, with VITAS' gross margin declining to 21.2%[139]. - VITAS' after-tax earnings as a percentage of revenue decreased to 11.5% in Q3 2025 from 13.7% in Q3 2024, impacted by a $3.8 million increase in Medicare Cap liability[132]. - Roto-Rooter's net income for the first nine months of 2025 was $103,928,000, compared to $119,326,000 in 2024, with after-tax earnings as a percent of revenue decreasing to 15.3% from 17.8%[144]. Compliance and Financial Health - As of September 30, 2025, the company had approximately $404.5 million of unused lines of credit available under its revolving credit facility[118]. - The company anticipates that operating income and cash flows will be sufficient to meet business commitments for the foreseeable future[116]. - The company is in compliance with all financial covenants as of September 30, 2025, and expects to remain compliant in the future[119]. Other Income and Taxation - Other income for Q3 2025 was $9,251,000, slightly down from $9,299,000 in Q3 2024, primarily due to a decrease in interest income[129]. - The effective tax rate for Q3 2025 was 23.1%, compared to 25.0% in Q3 2024, with total income tax provision decreasing to $19,307,000 from $25,253,000[130]. - Other income for the first nine months of 2025 was $13,970,000, significantly lower than $28,008,000 in 2024, primarily due to a decrease in interest income[141]. Operational Metrics - Homecare net revenue for Q3 2025 was $362,405,000, an increase of 7.1% from $338,344,000 in Q3 2024[162]. - The average daily census for homecare increased to 18,325 days in Q3 2025, compared to 17,639 days in Q3 2024, reflecting a growth of 3.9%[162]. - Total admissions for the nine months ended September 30, 2025, were 53,398, a rise of 4.7% from 51,020 in the same period of 2024[162]. - The average length of stay increased to 121.9 days for the nine months ended September 30, 2025, compared to 102.2 days in the same period of 2024[162]. Debt and Interest Rate Management - The company had no variable rate debt outstanding as of September 30, 2025, mitigating interest rate risk exposure[164]. - 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[164]. - The company is continuously evaluating interest rate exposure and considering hedging techniques to manage risks[165].