Core Points - Chemed Corporation has declared a quarterly cash dividend of 60 cents per share, payable on December 5, 2025, to shareholders of record as of November 17, 2025, maintaining the same dividend as in August 2025 [1] - This marks the 218th consecutive quarterly dividend paid by Chemed in its 54 years as a public company [1] Company Overview - Chemed Corporation is listed on the New York Stock Exchange and is headquartered in Cincinnati, Ohio [2] - The company operates two wholly owned subsidiaries: VITAS Healthcare, the largest provider of end-of-life hospice care in the nation, and Roto-Rooter, the leading provider of plumbing and drain cleaning services in the nation [2]

Core Insights - The Pennant Group, Inc. reported a GAAP diluted earnings per share of $0.17 and an adjusted diluted earnings per share of $0.30 for Q3 2025, reflecting strong operational performance across its segments [1][4][6]. Financial Performance - Total revenue for Q3 2025 was $229.0 million, a 26.8% increase from the prior year [4]. - Net income for Q3 2025 was $6.1 million, a slight decrease of 2.0% compared to the previous year [4]. - Adjusted net income for Q3 2025 was $10.4 million, up 27.6% year-over-year [4]. - Consolidated Adjusted EBITDAR for Q3 2025 was $29.3 million, a 12.8% increase from the prior year [4]. - Consolidated Adjusted EBITDA for Q3 2025 was $17.3 million, reflecting a 14.5% increase year-over-year [4]. Segment Performance - Home Health and Hospice Services segment revenue was $173.6 million, a 27.9% increase from the prior year [4]. - Senior Living Services segment revenue was $55.5 million, up 23.2% year-over-year [4]. - Total home health admissions increased by 36.2% to 20,426 in Q3 2025 [4]. - Hospice average daily census rose by 17.4% to 4,044 [4]. - Senior Living average occupancy increased by 180 basis points to 80.9% [4]. Acquisition and Expansion - The company completed the acquisition of 54 home health, hospice, and home care operations from UnitedHealth Group and Amedisys on October 1, 2025, marking the largest transaction in its history [5]. - This acquisition is expected to enhance the company's operational capabilities and expand its market presence in the Southeast [5]. Guidance and Expectations - The company updated its 2025 annual guidance, projecting total revenue between $911.4 million and $948.6 million [6]. - Full-year adjusted earnings per diluted share is anticipated to be between $1.14 and $1.18, representing a growth of 23.4% from 2024 [7]. - The guidance reflects strong operational performance and the impact of the recent acquisition [8].

Core Viewpoint - Chemed Corporation will present at the UBS 2025 Global Healthcare Conference on November 11, 2025, at 2:00 p.m. ET [1] Company Overview - Chemed Corporation is listed on the New York Stock Exchange and is headquartered in Cincinnati, Ohio [3] - The company operates two wholly owned subsidiaries: VITAS Healthcare, the largest provider of end-of-life hospice care in the nation, and Roto-Rooter, the leading provider of plumbing and drain cleaning services [3] Presentation Details - The presentation will be webcast live and accessible through the Chemed website, with a replay available within 24 hours for 90 days [2]

Company Overview - Chemed Corporation operates two primary segments: VITAS, which provides hospice and palliative care services, and Roto-Rooter, offering plumbing, drain cleaning, and water restoration solutions [4][5] - The company generates revenue through direct service delivery to patients and customers via company-owned branches, independent contractors, and franchisees [4][5] - Chemed's primary customers include patients requiring end-of-life care and residential or commercial clients needing plumbing and related services across the United States [5] Financial Performance - For the trailing twelve months (TTM), Chemed reported revenue of $2.53 billion and net income of $278.81 million [3] - The company's dividend yield stands at 0.44% as of October 28, 2025 [3] - As of October 28, 2025, Chemed shares were priced at $438.94, reflecting a 27.91% decline over the past year and underperforming the S&P 500 by 45.55 percentage points [2] Recent Developments - Schwartz Investment Counsel reduced its position in Chemed by 28,771 shares, valued at approximately $13.03 million, bringing its stake down to 1.67% of reportable assets from 2.24% in the previous quarter [1][2] - Chemed's stock was demoted from the 11th-largest holding to the 17th place in Schwartz's portfolio by the end of September 2025 [6] - The hospice segment experienced a decline in adjusted EBITDA by 3.8% to $70.4 million, despite a 2.98% year-over-year increase in average revenue per day [8] - The Roto-Rooter segment's revenue grew by 1.1% year over year, but adjusted EBITDA declined by 12.4% [9]

Financial Data and Key Metrics Changes - VITAS net revenue was $407.7 million in Q3 2025, an increase of 4.2% compared to the prior year period [11] - Adjusted EBITDA for VITAS, excluding Medicare cap, totaled $70.4 million, a decline of 3.8% year-over-year [12] - Roto-Rooter revenue increased by 1.1% in Q3 2025 compared to the same period in 2024 [7] - Adjusted EBITDA at Roto-Rooter totaled $49.4 million, a decrease of 12.4% compared to the prior year quarter [15] Business Line Data and Key Metrics Changes - VITAS admissions totaled 17,714, a 5.6% improvement from the same period in 2024 [5] - Average revenue per patient day for VITAS was $205.08, up 2.98% from the prior year [12] - Roto-Rooter branch residential revenue increased by 3.4%, with residential plumbing revenue up 8.2% [13][8] - Revenue from independent contractors declined by 4.7% in Q3 2025 compared to the same period in 2024 [14] Market Data and Key Metrics Changes - The percentage of total admissions from hospitals in Florida was 44.5%, above the preferred range of 42% to 45% [6] - The average daily census for VITAS was 22,327 patients, an increase of 2.5% [17] - Hospital-directed admissions increased by 10.4%, while nursing home admissions declined by 8.9% [17] Company Strategy and Development Direction - The company aims to mitigate potential Florida Medicare cap billing limitations for fiscal 2026 [5] - VITAS is focusing on increasing hospital-based admissions to ensure long-term stability [6] - Roto-Rooter is implementing operational initiatives to stabilize and return to predictable growth [10] Management Comments on Operating Environment and Future Outlook - Management believes there will be no Medicare cap billing limitation related to the Florida program in 2026 [6] - The company is encouraged by the performance of both businesses in Q3 2025, with VITAS on track to resolve the Medicare cap issue [10] - Management anticipates a seasonal increase in demand and revenue in Q4 2025 [23] Other Important Information - The company has cleared hurdles to open a new location in Pinellas County, expected to open in early November [7] - The Medicare cap billing limitation for Q3 2025 was $6.1 million, slightly better than estimates [11] Q&A Session Summary Question: Insights on demand and cost trends for Q4 - Management noted that Q4 is typically stronger due to seasonal factors, with VITAS' margins expected to spike from the new rate increase [23][24] Question: Concerns about receivables and cash collections - Management indicated that elevated DSO is primarily a timing issue related to Medicaid payments, not a deterioration in collection efforts [31] Question: Growth rates and margins for 2026 - Management speculated on revenue growth in the 8% range and margins at 17.5%-18% for 2026, pending Q4 performance [37] Question: Sustainable margins in Roto-Rooter - Management indicated that while marketing costs are under pressure, they expect to absorb these costs through operational improvements [53] Question: Clarification on VITAS' Medicare cap liability - Management explained that the focus on hospital admissions and a favorable rate increase gives confidence in managing cap liability [65][69]

Financial Data and Key Metrics Changes - VITAS net revenue was $407.7 million in Q3 2025, an increase of 4.2% compared to the prior year period, driven by a 2.5% increase in days of care and a 4.1% increase in Medicare reimbursement rates [11][12] - Adjusted EBITDA for VITAS, excluding Medicare cap, totaled $70.4 million, a decline of 3.8% year-over-year, with an adjusted EBITDA margin of 17.0%, down 157 basis points from the prior year [12][13] - Roto-Rooter revenue increased by 1.1% in Q3 2025 compared to the same period in 2024, with residential plumbing revenue up 8.2% [7][13] Business Line Data and Key Metrics Changes - VITAS admissions totaled 17,714 in Q3 2025, a 5.6% improvement from the same period in 2024, with hospital-directed admissions increasing by 10.4% [5][17] - Roto-Rooter branch residential revenue was $150.9 million, an increase of 3.4%, while commercial revenue totaled $55 million, up 2.8% [13][14] - Revenue from independent contractors declined by 4.7% in Q3 2025 compared to the same period in 2024 [14] Market Data and Key Metrics Changes - The percentage of total admissions from hospitals in Florida was 44.5% in Q3 2025, indicating a recovery in the mix of referral sources [6] - The average daily census for VITAS was 22,327 patients, an increase of 2.5% [17] Company Strategy and Development Direction - The company is focused on increasing hospital-based admissions to mitigate Medicare cap billing limitations, with a target ratio of 42% to 45% for hospital admissions [6][29] - VITAS is set to open a new location in Pinellas County in early November 2025, which is expected to enhance its service capacity [7][18] - Roto-Rooter is implementing operational initiatives to improve margins and stabilize growth, with a focus on managing lead generation costs [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the Florida Medicare cap issue will be resolved, with no expected billing limitations for 2026 [6][16] - The company anticipates a strong fourth quarter for both VITAS and Roto-Rooter, driven by seasonal demand and operational improvements [24][27] - Management indicated that the fourth quarter will be a significant indicator for 2026 growth strategies, with expectations for revenue growth in the 8% range and margins around 27.5% to 28% [36][37] Other Important Information - The company is actively working to address challenges faced by independent contractors to return this segment to a growth trajectory [14][15] - SG&A costs increased by $3.6 million in Q3 2025, primarily due to the shift from unpaid to paid leads [9][15] Q&A Session Summary Question: Can you run through demand and cost trends for each segment? - Management noted that seasonality impacts the fourth quarter, with VITAS typically performing better due to rate increases and Roto-Rooter benefiting from weather conditions [23][24] Question: What are the expectations for receivables and cash collections? - Management clarified that elevated DSO is primarily a timing issue related to Medicaid payments, not a deterioration in collection efforts [31] Question: How are margins expected to improve in Roto-Rooter? - Management indicated that while marketing costs are under pressure, they expect to absorb these costs through operational improvements and increased lead generation [52][53] Question: What is the outlook for VITAS in 2026? - Management stated that the fourth quarter will inform 2026 strategies, with expectations for improved revenue growth and margins based on operational adjustments [36][40] Question: How does the company view competitive dynamics in Roto-Rooter? - Management expressed optimism about improved competitive dynamics, noting that increased paid leads are yielding better results without significant competitive pressure [43][44]

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].

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]

Investment Strategy Overview - LRT Global Opportunities strategy returned -8.00% in September and -0.17% year-to-date as of October 1, 2025 [4][5] - The strategy focuses on long positions in high-quality companies and short positions in broad market indexes, viewing September's performance as a temporary setback [6] - Current market valuations are at extreme levels, with a trailing P/E ratio over 30x, P/B ratio over 5.6x, and cyclical P/E over 40x, indicating potential future return challenges [7] Company Highlights StoneX Group Inc. (SNEX) - StoneX operates as a diversified financial services network, providing execution, clearing, payment, and advisory services across various asset classes [12][13] - The company focuses on underserved client segments, leveraging deep institutional knowledge and a robust global infrastructure [13][14] - StoneX's growth strategy combines organic expansion with strategic acquisitions, enhancing capabilities and geographic reach [14][15] Simpson Manufacturing Co., Inc. (SSD) - Simpson is a leader in engineered structural connectors, with products specified in building codes, creating high switching costs for customers [16][17] - The company benefits from a strong distribution network and technical support, reinforcing its market position [18][19] - Demand for Simpson's products is driven by housing construction and stricter building codes due to extreme weather events [19][20] Asbury Automotive Group, Inc. (ABG) - Asbury operates a diverse portfolio of dealerships, focusing on high-margin parts and service operations for revenue stability [21][22] - The company has a proven track record in strategic acquisitions, enhancing its operational footprint and earnings power [23][24] - Asbury's digital retailing platform, Clicklane, integrates online and in-store experiences, providing a competitive advantage [24][25] Chemed Corp. (CHE) - Chemed operates VITAS Healthcare and Roto-Rooter, benefiting from strong demand in hospice care and plumbing services [26][27] - VITAS is positioned to capitalize on the aging U.S. population, while Roto-Rooter offers recession-resistant services [28][29] - The company has a disciplined capital allocation strategy, returning significant capital to shareholders [29] The Toronto-Dominion Bank (TD) - TD is a major player in North America's banking sector, with a focus on retail and commercial banking [30][31] - The bank's U.S. retail segment has been a primary growth engine, supported by strategic acquisitions [32] - TD's conservative risk culture and strong capital management contribute to its competitive advantage [34] RLI Corp. (RLI) - RLI is a specialty insurance company known for its underwriting discipline and focus on niche markets [35][36] - The company prioritizes profitability over growth, maintaining a strong alignment of interests through employee ownership [37][38] - RLI has a history of returning excess capital to shareholders, demonstrating a commitment to shareholder value [38] The Toro Company (TTC) - Toro is a leader in turf and landscape solutions, known for its quality and innovation [39][40] - The company has a strong distribution network and a disciplined growth strategy, including strategic acquisitions [41][42] - Toro consistently generates strong free cash flow, which is reinvested in product development and shareholder returns [42] Crown Castle International Corp. (CCI) - Crown Castle owns the largest portfolio of shared communications infrastructure in the U.S., primarily macro cell towers [43][44] - The company benefits from long-term lease agreements, providing predictable revenue streams [44][45] - Crown Castle is divesting non-core businesses to focus on its tower portfolio, enhancing shareholder value [46] Corporación América Airports S.A. (CAAP) - CAAP operates 53 airports across six countries, generating revenue from aeronautical and commercial activities [48][49] - The company invests in airport infrastructure to enhance operational efficiency and passenger experience [51] - CAAP is well-positioned to benefit from the recovery in global air travel [52] Colliers International Group Inc. (CIGI) - Colliers is a global leader in commercial real estate services, distinguished by its decentralized structure and entrepreneurial culture [53][54] - The company pursues a balanced growth strategy, focusing on high-margin business lines [56] - Colliers' ownership culture aligns interests with long-term shareholders, enhancing its competitive advantage [54] The Travelers Companies, Inc. (TRV) - Travelers is a leading provider of property and casualty insurance, organized into three primary segments [57][58] - The company benefits from a vast distribution network and strong relationships with independent agents [58][62] - Travelers leverages its scale and data advantages to maintain profitability and manage risks effectively [62] Petróleo Brasileiro S.A. - Petrobras (PBR-A) - Petrobras is a major integrated energy producer, controlling significant pre-salt oil reserves [63][64] - The company focuses on maximizing value from its most profitable exploration and production activities [65][66] - Petrobras' performance is closely tied to its operational execution in the pre-salt basins [66] Fabrinet (FN) - Fabrinet specializes in advanced optical packaging and precision manufacturing, serving leading OEMs [67][68] - The company's engineering expertise and focus on complex manufacturing create high switching costs [68][69] - Fabrinet benefits from secular tailwinds in the optical communications market, driven by data traffic growth [69][70] UnitedHealth Group Incorporated (UNH) - UnitedHealth is a leading healthcare enterprise, combining health benefits with diversified health services [71][72] - The company's scale provides cost advantages and superior negotiating power in the healthcare market [73][74] - UnitedHealth's integrated model enhances efficiency and patient outcomes, positioning it for continued growth [74] Charter Communications, Inc. (CHTR) - Charter is a major connectivity provider in the U.S., focusing on high-speed broadband services [76][77] - The company is upgrading its network to meet increasing bandwidth demands and expanding into underserved areas [79] - Charter's convergence of services, including mobile offerings, enhances customer loyalty and reduces churn [78][79] Group 1 Automotive, Inc. (GPI) - Group 1 operates a diversified automotive retail business, focusing on luxury and import brands [80][81] - The company's disciplined acquisition strategy enhances performance and profitability [82] - Group 1's digital retailing platform improves customer experience and operational efficiency [82][83] Exxon Mobil Corp (XOM) - Exxon Mobil is a leading integrated energy and chemical manufacturer with a vertically integrated business model [85]

Core Insights - The Pennant Group, Inc. has acquired certain operations from UnitedHealth Group for $146.5 million, which includes home health, hospice, and personal care services in Tennessee, Georgia, and Alabama [1][2]. Acquisition Details - The acquisition involves 54 locations with combined revenues of $189.3 million over the trailing twelve months [2]. - Approximately two-thirds of the revenue from the acquired agencies is related to home health services, while one-third is from hospice services [3]. Strategic Importance - This acquisition marks a strategic expansion for Pennant into the Southeast region, enhancing its operational footprint and growth potential [4]. - The company has established a transition services agreement with UnitedHealth to ensure a smooth integration process [3]. Leadership Perspective - Pennant's CEO, Brent Guerisoli, emphasized the strategic nature of this move and the company's commitment to operational excellence and leadership in the industry [4]. - COO John Gochnour highlighted the quality of the acquired teams and their local ties, which will contribute to the success of the integration [4]. Future Growth Plans - The company intends to continue pursuing growth opportunities in the home health, hospice, and senior living sectors, focusing on strategic and underperforming operations [4].