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Chemed Reports Second-Quarter 2025 Results and Announces Executive Management Departure

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CINCINNATI--(BUSINESS WIRE)-- Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), one of the nation鈥檚 largest providers of end-of-life care, and Roto-Rooter, the nation鈥檚 largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its second quarter ended June 30, 2025, versus the comparable prior-year period.

Results for Quarter Ended June 30, 2025

Consolidated operating results:

• Revenue increased 3.8% to $618.8 million
• GAAP Diluted Earnings-per-Share (EPS) of $3.57, a decrease of 23.2%
• Adjusted Diluted EPS of $4.27, a decrease of 21.9%

VITAS segment operating results:

• Net Patient Revenue of $396.2 million, an increase of 5.8%
• Average Daily Census (ADC) of 22,318, an increase of 6.1%
• Admissions of 17,545, an increase of 1.2%
• Net Income, excluding certain discrete items, of $38.2 million, a decrease of 23.5%
• Adjusted EBITDA, excluding Medicare Cap, of $66.8 million, essentially flat with the same period of 2024
• Adjusted EBITDA margin, excluding Medicare Cap, of 16.2%, a decrease of 163-basis points

Roto-Rooter segment operating results:

• Revenue of $222.6 million, an increase of 0.6%
• Net Income, excluding certain discrete items, of $33.7 million, a decrease of 20.4%
• Adjusted EBITDA of $48.6 million, a decline of 18.7%
• Adjusted EBITDA margin of 21.8%, a decline of 517-basis points

VITAS

VITAS net revenue was $396.2 million in the second quarter of 2025, which is an increase of 5.8% when compared to the prior-year period. This revenue increase is comprised primarily of a 6.1% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 4.2%. Acuity mix shift negatively impacted revenue growth 71-basis points in the quarter when compared to the prior-year period鈥檚 revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes negatively impacted revenue growth by 379-basis points.

The second quarter of 2024 included one-time admissions related to the acquisition of Covenant Health in April 2024. Excluding the impact of those one-time admissions, total VITAS admissions increased 4.9% in the second quarter of 2025 compared to the second quarter of 2024.

As discussed in our June 27, 2025 press release, VITAS estimates that it will have a $19 million Medicare Cap billing limitation for the 2025 Medicare Cap year ending September 30, 2025 in its Florida Combined program. The revised projection reflects weaker than anticipated admissions in Florida during the second quarter of 2025. No amount for the 2025 Florida Medicare Cap billing limitation was recognized in prior quarters.

In the second quarter of 2025, VITAS accrued $16.4 million in Medicare Cap billing limitation compared to $1.4 million accrued in the second quarter of 2024.

The $16.4 million Medicare Cap billing limitation accrued in the second quarter of 2025 is comprised of three components. First, a catch-up entry of $9.5 million was required to recognize the Medicare Cap billing limitation in Florida related to the first six-months of the 2025 Medicare Cap year which includes our fourth quarter of 2024 and first quarter of 2025. Second, $4.8 million was recorded related to the Medicare Cap billing limitation for the current quarter of 2025 related to our Florida combined program. Third, $2.1 million was recognized for the current quarter of 2025 related to all other VITAS programs, mainly in California. The amount recognized for all other VITAS programs is in-line with the historical run-rate for these programs and our original projections for 2025.

Of VITAS鈥� 35 Medicare provider numbers, 28 provider numbers have a full-year projected Medicare Cap cushion of 10% or greater, three provider numbers have a cushion between 0% and 10%, and four provider numbers have a Medicare Cap billing limitation totaling $28.2 million.

Average revenue per patient per day in the second quarter of 2025 was $207.03 which is 350-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $183.63 and $1,136.44, respectively. During the quarter, high acuity days-of-care were 2.5% of total days of care, a decline of 15-basis points when compared to the prior-year quarter.

The second quarter 2025 gross margin, excluding Medicare Cap, was 22.3%, a 177-basis point decline from the same period of 2024. Selling, general and administrative expenses were $25.1 million in the second quarter of 2025 compared to $24.3 million in the prior quarter.

Adjusted EBITDA, excluding Medicare Cap, totaled $66.8 million in the quarter, essentially flat when compared to the prior year period. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 16.2%.

Roto-Rooter

Roto-Rooter generated quarterly revenue of $222.6 million in the second quarter of 2025, an increase of 0.6%, when compared to the prior-year quarter.

Roto-Rooter branch commercial revenue in the quarter totaled $53.2 million, an increase of 4.4% from the prior-year period. This aggregate commercial revenue change consisted of plumbing declining 2.9%, excavation increasing 24.4%, water restoration increasing 11.7% and drain cleaning revenue declining 1.1%.

Roto-Rooter branch residential revenue in the quarter totaled $156.4 million, an increase of 0.9%, over the prior-year period. This aggregate residential revenue change consisted of drain cleaning declining 5.8%, plumbing declining 1.1%, excavation declining 4.3%, and water restoration increasing 16.9%.

In the second quarter of 2025, revenue from independent contractors was $17.4 million which is a decline of 4.4% as compared to the same period of 2024.

Roto-Rooter鈥檚 second quarter 2025 gross margin was 49.0%. This compares to the prior year quarter鈥檚 gross margin of 52.9%. Roto-Rooter鈥檚 selling, general and administrative expenses were $60.5 million in the quarter, which is an increase of 5.6% compared to the second quarter of 2024.

Adjusted EBITDA in the second quarter of 2025 totaled $48.6 million, a decrease of 18.7% when compared to the second quarter of 2024. The Adjusted EBITDA margin in the quarter was 21.8% which represents a 517-basis point decline from the second quarter of 2024.

Chemed Consolidated

As of June 30, 2025, Chemed had total cash and cash equivalents of $249.9 million and no current or long-term debt.

In June 2022, Chemed entered into a five-year $550 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consisted of a $100 million amortizable term loan and a $450 million revolving credit facility. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. There is approximately $404.5 million undrawn borrowing capacity under the Credit Agreement after excluding $45.5 million for Letters of Credit.

During the quarter, the Company repurchased 75,000 shares of Chemed stock for $42.9 million which equates to a cost per share of $572.61. As of June 30, 2025, there was approximately $182.6 million of remaining share repurchase authorization under its plan.

Revision to Guidance for 2025

VITAS full year 2025 revenue, prior to Medicare Cap, is estimated to increase 7.5% to 8.5% when compared to 2024. Full year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 18.2% to 18.7%. We are currently estimating $28.2 million in Medicare Cap billing limitations in calendar 2025. This is comprised of $19 million related to the Florida combined program and $9.2 million for all other VITAS programs.

There is no Medicare Cap billing limitation in the fourth quarter included in the guidance related to the Florida combined program. Management does not expect a significant level of Medicare Cap billing limitation in our Florida combined program for the 2026 Cap Year beginning October 1, 2025. This expectation assumes that the rate differential that occurred for the 2025 Cap Year does not recur in 2026. The detailed rate information related to the reimbursement increase in Florida for 2026 will become available during the third quarter. Recent successful Florida CON VITAS applications and other expansion activities in the state should serve to further mitigate cap risk for 2026 and beyond. We intend to update our assumptions regarding rates and the overall outlook for 2026 Medicare Cap in Florida in the third quarter earnings release.

Roto-Rooter is forecasted to have a 1.25% to 1.75% revenue increase in 2025 compared to 2024. Roto-Rooter鈥檚 adjusted EBITDA margin for 2025 is expected to be 23.5% to 24.5%.

Based on the above, full year 2025 earnings per diluted share, excluding non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, is estimated to be in the range of $22.00 to $22.30. This guidance assumes an effective tax rate of 25.3% and a diluted share count of 14.7 million shares. Chemed鈥檚 previously issued 2025 guidance range was $24.95 to $25.45. Chemed鈥檚 2024 reported adjusted earnings per diluted share was $23.13.

Executive Management Departure

After a successful sixteen-year career, Executive Vice President of Chemed and Chairman and Chief Executive Officer of VITAS, Nicholas M. Westfall, has announced that he is departing the Company to pursue other personal and professional opportunities. Mr. Westfall will continue to work with the Company until December 1, 2025 to ensure an orderly transition. Mr. Westfall has been with Chemed since May 2009. He transitioned to the role of Senior Vice President of Operations at VITAS听in 2012 and was promoted to Chief Operating Officer in 2015. Mr. Westfall has been serving as an Executive Vice President of Chemed and Chief Executive Officer of VITAS since June 2016 and was named Chairman and Chief Executive Officer of VITAS in 2024.

Kevin J. McNamara, Chemed鈥檚 Chief Executive Officer said, 鈥淣ick has evolved, transformed and cultivated the organization to be well positioned for the future and has elevated VITAS' leadership in the industry over the last thirteen years. We thank him for his service and wish him well in his next pursuits.鈥�

Joel L. Wherley, VITAS President and Chief Operating Officer, will succeed Mr. Westfall as Chief Executive Officer of VITAS. Mr. Wherley has been at VITAS since 2016, initially serving as a Senior Vice President of Operations before being promoted to Executive Vice President and Chief Operating Officer in 2017. Mr. Wherley was promoted to President and Chief Operating Officer in 2024.

Mr. McNamara stated, 鈥淲e look forward to Joel鈥檚 leadership of VITAS. He has spent his entire career in the healthcare industry, with over 15 years in hospice. His deep knowledge of our industry and organization leave him perfectly suited to lead VITAS鈥� continued success.鈥�

Conference Call

As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday July 30, 2025, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed鈥檚 website, or the hosting website .

Participants may also register via teleconference at:
.

Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.

A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investor relations section of Chemed鈥檚 website.

Chemed operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing, drain cleaning, and water cleanup services through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in the republics of Indonesia and Singapore, and the Philippines.

This press release contains information about Chemed鈥檚 EBITDA, Adjusted EBITDA, and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed鈥檚 financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company鈥檚 operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed鈥檚 management similarly uses EBITDA, Adjusted EBITDA, and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed鈥檚 management to estimate the resources required to meet Chemed鈥檚 future financial obligations and expenditures. Chemed鈥檚 EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed鈥檚 net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 REGARDING FORWARD-LOOKING INFORMATION

Statements in this press release contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as 鈥渁nticipate,鈥� 鈥渋ntend,鈥� 鈥減lan,鈥� 鈥済oal,鈥� 鈥渟eek,鈥� 鈥渂elieve,鈥� 鈥減roject,鈥� 鈥渆stimate,鈥� 鈥渆xpect,鈥� 鈥渟trategy,鈥� 鈥渇uture,鈥� 鈥渓ikely,鈥� 鈥渕ay,鈥� 鈥渟hould,鈥� 鈥渨ill鈥� and similar references to future periods and are based upon assumptions subject to certain known and unknown risks, uncertainties, contingencies and other factors, including, but not limited to, the impact of laws and regulations on Chemed鈥檚 operations, including Medicare Cap and Medicare reimbursement rates, Chemed鈥檚 estimates of the effect of Medicare Cap on VITAS鈥� revenues and future prospects, Chemed鈥檚 expectations regarding VITAS鈥� patient mix, VITAS鈥檚 future prospects related to Florida new starts and Certificate of Needs applications and Chemed鈥檚 expectations regarding demand for Roter-Rooter鈥檚 services.

Because forward looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Chemed鈥檚 control. Chemed鈥檚 actual results and financial condition may differ materially from those indicated in the forward-looking statements included in this press release, including as a result of the risks described above and those described in the Chemed鈥檚 Annual Report on Form 10-K for the year ended December 31, 2024 and in its Quarterly Reports filed in 2025. Any forward-looking statement made by Chemed in this press release is based only on information currently available to Chemed and speaks only as of the date on which it is made. Chemed undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.