Chemed (NYSE:CHE) 2025 Conference Summary Company Overview - Chemed operates two distinct service businesses: VITAS (hospice provider) and Roto-Rooter (plumbing and drain care) [4][5] - The company has experienced consistent net income growth of 11% to 12% per annum over the past 20 years [5] - Chemed has utilized free cash flow to repurchase over $2 billion of its stock, reducing shares outstanding from approximately 27 million to just under 15 million [6] Financial Performance and Challenges - The second quarter of 2025 was challenging for both VITAS and Roto-Rooter, with VITAS facing Medicare cap issues in Florida [3][12] - VITAS had to return approximately $18.9 million to the government due to exceeding Medicare billing limitations [11][12] - Roto-Rooter faced increased competition, particularly from private equity-backed companies, affecting its market position and advertising costs [10][30] Growth Strategy - Chemed's growth strategy focuses on organic growth rather than acquisitions, leveraging strong cash flow from both businesses [5][11] - The company aims to return to pre-pandemic growth levels, targeting high single-digit growth rates for VITAS [69][78] - The hospice market is projected to grow 8-10% annually due to the aging baby boomer population [77][79] VITAS Performance - VITAS has seen a recovery in patient census, returning to pre-pandemic levels after workforce disruptions during the pandemic [7][64] - The company is strategically managing admissions to balance Medicare cap limitations, with expectations of improved performance in 2026 [15][66] - The average daily census (ADC) increased by 2.5%, with total admissions up 5.6% year-over-year [64][65] Roto-Rooter Performance - Roto-Rooter has experienced a decline in phone calls and leads due to increased competition and higher advertising costs [31][32] - The company is adapting its marketing strategy to focus more on commercial business, which has shown promising growth [89][90] - Roto-Rooter is expanding its commercial business manager program, which has resulted in a 20% revenue increase in branches where it has been implemented [92][94] Labor and Operational Insights - Chemed has successfully managed labor turnover, with rates now better than pre-pandemic levels [81][82] - Average wage increases have been around 3% to mid-threes, and the company has been recognized as a best workplace in healthcare for 2025 [85][88] - The company does not anticipate labor shortages impacting operations in 2026 [80] Market Outlook - Chemed expects to achieve a balanced growth trajectory for both VITAS and Roto-Rooter, with a focus on maintaining a healthy mix of short-stay and long-stay patients [79][80] - The company is optimistic about returning to historical growth rates and addressing competitive challenges effectively [50][51] Conclusion - Chemed is navigating through post-pandemic recovery with a focus on returning to consistent growth across its two business segments, while addressing competitive pressures and operational challenges [3][10][12]