Chemed(US:CHE)2020-10-30 22:39Financial Data and Key Metrics Changes - Chemed Corporation reported a net revenue of $337 million for VITAS in Q3 2020, representing a 4.8% increase compared to the prior year period [17] - Roto-Rooter generated quarterly revenue of $191 million in Q3 2020, an increase of $32.3 million or 20.4% over the prior year [22] - Adjusted EBITDA for VITAS, excluding Medicare Cap, totaled $68.2 million, a 25.6% increase, with an adjusted EBITDA margin of 20.5%, reflecting a 367 basis point improvement [21] Business Line Data and Key Metrics Changes - VITAS' average revenue per patient per day was $194.10, which is 3.2% above the prior year period [18] - Roto-Rooter’s residential revenue increased by 24.6%, while commercial revenue declined by 11.6% in Q3 2020 [15][23] - Total admissions for VITAS were 17,943, a 4.7% increase compared to Q3 2019, with home-based pre-admit patients increasing by 18.3% [31] Market Data and Key Metrics Changes - Roto-Rooter’s unit-for-unit commercial revenue declined 11.6% compared to the prior year quarter, but showed significant improvement from a 29.1% decline in Q2 2020 [13] - The average daily census for VITAS was 19,045 patients, a slight decline of 0.2% over the prior year [29] - The average length of stay for VITAS patients increased to 97.1 days compared to 92.6 days in Q3 2019 [32] Company Strategy and Development Direction - Chemed Corporation maintained full staffing and operating capacity for Roto-Rooter during the pandemic to capitalize on potential demand recovery [12] - The company anticipates continued strong operational and financial results for both VITAS and Roto-Rooter as they navigate the pandemic [16] - Chemed is focusing on maintaining a diverse referral stream to ensure a steady flow of patients across various healthcare settings [47] Management's Comments on Operating Environment and Future Outlook - Management noted that the pandemic has disrupted traditional admission patterns, but improvements have been observed in the third quarter [10][30] - The company expects a normalization of admissions as nursing homes and assisted-living facilities return to pre-COVID occupancy levels [11] - Future guidance for VITAS indicates a revenue growth estimate of 4% for 2020, with an average daily census expected to expand approximately 1.3% [26] Other Important Information - Chemed's full-year 2020 adjusted earnings per diluted share is estimated to be in the range of $18 to $18.15, compared to $13.95 in 2019 [27] - The company has utilized over $150 million for share repurchases in the first nine months of the year, targeting about $200 million for the full year [68] Q&A Session Summary Question: Impact of nursing homes and assisted-living facilities on VITAS - Management indicated that nursing homes account for about 14% of VITAS' census, and while there has been a decline, they do not heavily depend on this segment [38] Question: Expectations for ADC normalization - Management expressed uncertainty about when patient flow into nursing homes will return to pre-pandemic levels, but noted potential pent-up demand [41] Question: Revenue guidance for VITAS in Q4 - Management anticipates sequential revenue growth from Q3 to Q4, but a slight decline compared to the prior year due to acuity mix shifts [44] Question: Sustainability of VITAS margins - Management acknowledged that while margins may be impacted by the return of sequestration, effective use of telehealth is expected to remain a positive factor [49] Question: Roto-Rooter margin sustainability - Management believes Roto-Rooter will maintain strong margins due to high residential demand and improving commercial activity [56]