[10-Q] Chemed Corporation Quarterly Earnings Report
Chemed (CHE) Q2-25 10-Q highlights
- Consolidated revenue rose 3.9% YoY to $618.8 M, driven by 5.8% growth at VITAS ($396.2 M) and flat Roto-Rooter sales ($222.6 M).
- Net income fell 25.9% YoY to $52.5 M; operating margin compressed to 11.0% (vs 14.8%) as wage inflation and a $16.4 M Medicare cap adjustment weighed on VITAS.
- EPS dropped to $3.60 (-23%) despite a 3.4% lower share count; YTD EPS is $8.51 (-5%).
- Operating cash flow improved 5.7% to $171.4 M; cash balance climbed to $249.9 M (12/24: $178.4 M) after a $46.9 M OAS deposit was refunded following a favorable ALJ ruling.
- YTD treasury repurchases totaled $72.7 M (125k shares at $581.62 avg), leaving $182.6 M authorization.
- Balance sheet remains unlevered: $404.5 M revolver capacity available; leverage covenant 3.5脳 vs actual <1脳.
- Small bolt-on acquisition: one Michigan Roto-Rooter franchise for $0.23 M; no material goodwill impact.
Segment mix: VITAS 64% of Q2 sales, 66% of segment operating profit; Roto-Rooter 36% of sales. Higher Medicare and labor costs pressured hospice margins, offset partly by solid plumbing and water-restoration demand. No guidance was provided.
Chemed (CHE) Q2-25 10-Q punti salienti
- I ricavi consolidati sono aumentati del 3,9% su base annua, raggiungendo 618,8 M$, trainati da una crescita del 5,8% di VITAS (396,2 M$) e vendite stabili di Roto-Rooter (222,6 M$).
- L'utile netto 猫 sceso del 25,9% a 52,5 M$; il margine operativo si 猫 ridotto all'11,0% (da 14,8%) a causa dell'inflazione salariale e di un aggiustamento di 16,4 M$ legato al tetto Medicare che ha inciso su VITAS.
- L'EPS 猫 calato a 3,60$ (-23%), nonostante una riduzione del 3,4% delle azioni in circolazione; l'EPS da inizio anno 猫 8,51$ (-5%).
- Il flusso di cassa operativo 猫 migliorato del 5,7% a 171,4 M$; la liquidit脿 猫 salita a 249,9 M$ (12/24: 178,4 M$) dopo il rimborso di 46,9 M$ relativo a un deposito OAS, a seguito di una sentenza favorevole dell'ALJ.
- Le riacquisti di azioni proprie da inizio anno ammontano a 72,7 M$ (125k azioni a un prezzo medio di 581,62$), con un'autorizzazione residua di 182,6 M$.
- Lo stato patrimoniale resta senza indebitamento: 404,5 M$ di capacit脿 di revolving disponibili; covenant di leva finanziaria a 3,5脳 contro un valore effettivo inferiore a 1脳.
- Piccola acquisizione aggiuntiva: una franchigia Roto-Rooter in Michigan per 0,23 M$; nessun impatto materiale sul goodwill.
Composizione per segmenti: VITAS rappresenta il 64% delle vendite del Q2 e il 66% del profitto operativo di segmento; Roto-Rooter il 36% delle vendite. I margini dell'hospice sono stati compressi dai maggiori costi Medicare e del lavoro, parzialmente compensati da una solida domanda nei settori idraulico e di restauro acqua. Non 猫 stata fornita alcuna guidance.
Aspectos destacados del 10-Q de Chemed (CHE) Q2-25
- Los ingresos consolidados aumentaron un 3,9% interanual hasta 618,8 M$, impulsados por un crecimiento del 5,8% en VITAS (396,2 M$) y ventas estables de Roto-Rooter (222,6 M$).
- La utilidad neta cay贸 un 25,9% interanual hasta 52,5 M$; el margen operativo se comprimi贸 al 11,0% (frente al 14,8%) debido a la inflaci贸n salarial y un ajuste de tope de Medicare de 16,4 M$, que afectaron a VITAS.
- Las ganancias por acci贸n (EPS) disminuyeron a 3,60$ (-23%) a pesar de una reducci贸n del 3,4% en el n煤mero de acciones; el EPS acumulado es de 8,51$ (-5%).
- El flujo de caja operativo mejor贸 un 5,7% hasta 171,4 M$; el saldo de efectivo aument贸 a 249,9 M$ (12/24: 178,4 M$) tras el reembolso de un dep贸sito OAS de 46,9 M$ debido a una resoluci贸n favorable del ALJ.
- Las recompras de acciones acumuladas sumaron 72,7 M$ (125k acciones a un precio promedio de 581,62$), quedando una autorizaci贸n restante de 182,6 M$.
- El balance sigue sin apalancamiento: capacidad revolvente disponible de 404,5 M$; convenio de apalancamiento de 3,5脳 frente a un nivel real inferior a 1脳.
- Peque帽a adquisici贸n complementaria: una franquicia Roto-Rooter en Michigan por 0,23 M$; sin impacto material en el goodwill.
Composici贸n por segmentos: VITAS representa el 64% de las ventas del Q2 y el 66% del beneficio operativo del segmento; Roto-Rooter el 36% de las ventas. Los m谩rgenes de hospicio se vieron presionados por mayores costos de Medicare y laborales, compensados parcialmente por una s贸lida demanda en fontaner铆a y restauraci贸n de agua. No se proporcion贸 orientaci贸n.
Chemed (CHE) 2025雲� 2攵勱赴 10-Q 欤检殧 雮挫毄
- 鞐瓣舶 毵れ稖鞚� 鞝勲厔 雽�牍� 3.9% 歃濌皜頃� 6鞏� 1,880毵� 雼煬搿�, VITAS鞚� 5.8% 靹膘灔(3鞏� 9,620毵� 雼煬)瓿� Roto-Rooter 毵れ稖(2鞏� 2,260毵� 雼煬)鞚� 鞙犾霅� 雿� 頌橃瀰鞚�.
- 靾滌澊鞚奠潃 鞝勲厔 雽�牍� 25.9% 臧愳唽頃� 5,250毵� 雼煬; 鞛勱笀 鞚疙攲霠堨澊靺橁臣 1,640毵� 雼煬 攴滊鞚� Medicare 頃滊弰 臁办爼鞙茧 鞚疙暣 VITAS鞚� 鞓侅梾鞚挫澋毳犾潃 14.8%鞐愳劀 11.0%搿� 於曥唽霅�.
- 欤茧嫻靾滌澊鞚�(EPS)鞚� 欤检嫕 靾橁皜 3.4% 臧愳唽頄堨潓鞐愲弰 攵堦惮頃橁碃 23% 臧愳唽頃� 3.60雼煬; 鞐办磮 雸勳爜 EPS電� 8.51雼煬搿� 5% 臧愳唽.
- 鞓侅梾順勱笀頋愲鞚� 5.7% 臧滌劆霅� 1鞏� 7,140毵� 雼煬; 順勱笀 鞛旍暋鞚� 2鞏� 4,990毵� 雼煬搿� 歃濌皜(12/24: 1鞏� 7,840毵� 雼煬), ALJ鞚� 鞙犽Μ頃� 韺愱舶鞐� 霐半澕 4,690毵� 雼煬 OAS 鞓堨箻旮� 頇橂秷 頉�.
- 鞐办磮攵�韯� 鞛愳偓欤� 毵れ瀰鞚� 齑� 7,270毵� 雼煬(125,000欤�, 韽夑窢 581.62雼煬)搿�, 雮潃 鞀轨澑 頃滊弰電� 1鞏� 8,260毵� 雼煬.
- 鞛靸來儨響滊姅 氍挫皑鞛� 靸來儨 鞙犾: 4鞏� 450毵� 雼煬鞚� 毽臣氩� 頃滊弰 鞚挫毄 臧�電�; 霠堧矂毽 鞎届爼鞚� 3.5氚� 雽�牍� 鞁れ牅電� 1氚� 氙鸽.
- 靻岅窚氇� 於旉皜 鞚胳垬: 氙胳嫓臧� 靻岇灛 Roto-Rooter 頂勲灉彀澊歃� 23毵� 雼煬鞐� 鞚胳垬; 鞓侅梾甓岇棎 氙鸽頃� 鞓來枼.
靷梾 攵�氍� 甑劚: VITAS臧� 2攵勱赴 毵れ稖鞚� 64%, 攵�氍� 鞓侅梾鞚挫澋鞚� 66% 彀; Roto-Rooter電� 毵れ稖鞚� 36%. 氅旊敂旒�鞏� 氚� 鞚戈贝牍� 靸侅姽鞙茧 順胳姢頂检姢 毵堨 鞎曤皶, 瓴碃頃� 氚瓣磤 氚� 靾橃 氤店惮 靾橃殧臧� 鞚茧秬 靸侅噭. 臧�鞚措崢鞀る姅 鞝滉车霅橃 鞎婌潓.
Points cl茅s du 10-Q du 2e trimestre 2025 de Chemed (CHE)
- Le chiffre d'affaires consolid茅 a augment茅 de 3,9 % en glissement annuel pour atteindre 618,8 M$, port茅 par une croissance de 5,8 % chez VITAS (396,2 M$) et des ventes stables de Roto-Rooter (222,6 M$).
- Le revenu net a chut茅 de 25,9 % en glissement annuel 脿 52,5 M$ ; la marge op茅rationnelle s'est contract茅e 脿 11,0 % (contre 14,8 %) en raison de l'inflation salariale et d'un ajustement du plafond Medicare de 16,4 M$ qui ont pes茅 sur VITAS.
- Le BPA a diminu茅 脿 3,60$ (-23 %) malgr茅 une baisse de 3,4 % du nombre d'actions ; le BPA cumul茅 sur l'ann茅e est de 8,51$ (-5 %).
- Le flux de tr茅sorerie d'exploitation s'est am茅lior茅 de 5,7 % pour atteindre 171,4 M$ ; la tr茅sorerie a augment茅 脿 249,9 M$ (12/24 : 178,4 M$) apr猫s le remboursement d'un d茅p么t OAS de 46,9 M$ suite 脿 une d茅cision favorable de l'ALJ.
- Les rachats d'actions cumul茅s s'茅l猫vent 脿 72,7 M$ (125k actions 脿 un prix moyen de 581,62$), laissant une autorisation restante de 182,6 M$.
- Le bilan reste sans endettement : capacit茅 de cr茅dit renouvelable disponible de 404,5 M$ ; covenant d'endettement fix茅 脿 3,5脳 contre un niveau r茅el inf茅rieur 脿 1脳.
- Petite acquisition compl茅mentaire : une franchise Roto-Rooter dans le Michigan pour 0,23 M$ ; aucun impact significatif sur le goodwill.
R茅partition par segment : VITAS repr茅sente 64 % des ventes du 2e trimestre et 66 % du r茅sultat op茅rationnel segmentaire ; Roto-Rooter 36 % des ventes. Les marges des hospices ont 茅t茅 sous pression en raison des co没ts Medicare et salariaux plus 茅lev茅s, partiellement compens茅s par une demande solide en plomberie et restauration d'eau. Aucune pr茅vision n'a 茅t茅 fournie.
Chemed (CHE) Q2-25 10-Q Highlights
- Der konsolidierte Umsatz stieg im Jahresvergleich um 3,9 % auf 618,8 Mio. USD, angetrieben durch ein Wachstum von 5,8 % bei VITAS (396,2 Mio. USD) und stabile Ums盲tze bei Roto-Rooter (222,6 Mio. USD).
- Der Nettogewinn sank im Jahresvergleich um 25,9 % auf 52,5 Mio. USD; die operative Marge schrumpfte auf 11,0 % (vorher 14,8 %), da Lohninflation und eine Medicare-Kappungsanpassung in H枚he von 16,4 Mio. USD VITAS belasteten.
- Das Ergebnis je Aktie (EPS) fiel auf 3,60 USD (-23 %), trotz einer um 3,4 % geringeren Aktienanzahl; das EPS f眉r das laufende Jahr betr盲gt 8,51 USD (-5 %).
- Der operative Cashflow verbesserte sich um 5,7 % auf 171,4 Mio. USD; der Kassenbestand stieg auf 249,9 Mio. USD (12/24: 178,4 Mio. USD) nach R眉ckerstattung einer OAS-Einlage von 46,9 Mio. USD infolge eines g眉nstigen ALJ-Urteils.
- Bis dato wurden Aktienr眉ckk盲ufe in H枚he von 72,7 Mio. USD get盲tigt (125.000 Aktien zu einem Durchschnittspreis von 581,62 USD), verbleibende Genehmigung 182,6 Mio. USD.
- Die Bilanz bleibt schuldenfrei: Revolver-Kapazit盲t von 404,5 Mio. USD verf眉gbar; Verschuldungsklausel bei 3,5脳 gegen眉ber tats盲chlichem Wert unter 1脳.
- Kleine Erg盲nzungsakquisition: Eine Roto-Rooter-Franchise in Michigan f眉r 0,23 Mio. USD; keine wesentlichen Auswirkungen auf den Gesch盲fts- oder Firmenwert.
Segmentmix: VITAS macht 64 % des Q2-Umsatzes und 66 % des Segmentbetriebsergebnisses aus; Roto-Rooter 36 % des Umsatzes. H枚here Medicare- und Arbeitskosten belasteten die Hospizmargen, teilweise ausgeglichen durch eine solide Nachfrage im Sanit盲r- und Wasserwiederherstellungsbereich. Keine Prognose wurde abgegeben.
- Revenue growth: Q2 sales +3.9% YoY; YTD +6.8%.
- Strong operating cash flow: $171.4 M, exceeding net income by 38%.
- Regulatory win: $46.9 M OAS deposit refunded after favorable ALJ ruling, reducing compliance overhang.
- Solid liquidity: $250 M cash, $404 M unused revolver; no term debt.
- Accretive buybacks: 125k shares repurchased YTD at ~$582, supporting long-term EPS.
- Profitability pressure: Q2 net income -26% and operating margin down 380 bp.
- EPS decline: Q2 diluted EPS fell to $3.57 from $4.65.
- Medicare cap adjustment spike: $16.4 M vs $1.4 M prior year, signaling adverse mix.
- Cost inflation: Wage expense up 11% YoY, outpacing revenue growth.
Insights
TL;DR: Revenue up, margins down; hospice cap hit offsets cash-flow strength.
Top-line growth is intact, but VITAS profitability eroded as the Medicare cap adjustment ballooned to $16.4 M versus $1.4 M a year ago and wages climbed 14%. Combined with higher stock-based comp, operating margin slid 380 bp. Cash flow remained robust and the MAC refund removed a $50 M overhang, enhancing liquidity and reducing legal uncertainty. Share buybacks are accretive but could limit future flexibility if hospice headwinds persist. Overall impact: mixed; investors will focus on restoring VITAS margins.
TL;DR: Favorable ALJ ruling de-risks compliance, but cap and labor costs bite.
The ALJ decision validating elevated-care billings materially lowers regulatory risk and returns cash, a clear positive for valuation multiples. However, VITAS鈥� Medicare cap liability soared, signaling patient-mix issues that may continue to compress EBITDA unless management moderates long-stay admissions. Labor cost inflation and muted hospice census growth further squeeze operating leverage. Near-term sentiment likely neutral until margin recovery is evident.
Chemed (CHE) Q2-25 10-Q punti salienti
- I ricavi consolidati sono aumentati del 3,9% su base annua, raggiungendo 618,8 M$, trainati da una crescita del 5,8% di VITAS (396,2 M$) e vendite stabili di Roto-Rooter (222,6 M$).
- L'utile netto 猫 sceso del 25,9% a 52,5 M$; il margine operativo si 猫 ridotto all'11,0% (da 14,8%) a causa dell'inflazione salariale e di un aggiustamento di 16,4 M$ legato al tetto Medicare che ha inciso su VITAS.
- L'EPS 猫 calato a 3,60$ (-23%), nonostante una riduzione del 3,4% delle azioni in circolazione; l'EPS da inizio anno 猫 8,51$ (-5%).
- Il flusso di cassa operativo 猫 migliorato del 5,7% a 171,4 M$; la liquidit脿 猫 salita a 249,9 M$ (12/24: 178,4 M$) dopo il rimborso di 46,9 M$ relativo a un deposito OAS, a seguito di una sentenza favorevole dell'ALJ.
- Le riacquisti di azioni proprie da inizio anno ammontano a 72,7 M$ (125k azioni a un prezzo medio di 581,62$), con un'autorizzazione residua di 182,6 M$.
- Lo stato patrimoniale resta senza indebitamento: 404,5 M$ di capacit脿 di revolving disponibili; covenant di leva finanziaria a 3,5脳 contro un valore effettivo inferiore a 1脳.
- Piccola acquisizione aggiuntiva: una franchigia Roto-Rooter in Michigan per 0,23 M$; nessun impatto materiale sul goodwill.
Composizione per segmenti: VITAS rappresenta il 64% delle vendite del Q2 e il 66% del profitto operativo di segmento; Roto-Rooter il 36% delle vendite. I margini dell'hospice sono stati compressi dai maggiori costi Medicare e del lavoro, parzialmente compensati da una solida domanda nei settori idraulico e di restauro acqua. Non 猫 stata fornita alcuna guidance.
Aspectos destacados del 10-Q de Chemed (CHE) Q2-25
- Los ingresos consolidados aumentaron un 3,9% interanual hasta 618,8 M$, impulsados por un crecimiento del 5,8% en VITAS (396,2 M$) y ventas estables de Roto-Rooter (222,6 M$).
- La utilidad neta cay贸 un 25,9% interanual hasta 52,5 M$; el margen operativo se comprimi贸 al 11,0% (frente al 14,8%) debido a la inflaci贸n salarial y un ajuste de tope de Medicare de 16,4 M$, que afectaron a VITAS.
- Las ganancias por acci贸n (EPS) disminuyeron a 3,60$ (-23%) a pesar de una reducci贸n del 3,4% en el n煤mero de acciones; el EPS acumulado es de 8,51$ (-5%).
- El flujo de caja operativo mejor贸 un 5,7% hasta 171,4 M$; el saldo de efectivo aument贸 a 249,9 M$ (12/24: 178,4 M$) tras el reembolso de un dep贸sito OAS de 46,9 M$ debido a una resoluci贸n favorable del ALJ.
- Las recompras de acciones acumuladas sumaron 72,7 M$ (125k acciones a un precio promedio de 581,62$), quedando una autorizaci贸n restante de 182,6 M$.
- El balance sigue sin apalancamiento: capacidad revolvente disponible de 404,5 M$; convenio de apalancamiento de 3,5脳 frente a un nivel real inferior a 1脳.
- Peque帽a adquisici贸n complementaria: una franquicia Roto-Rooter en Michigan por 0,23 M$; sin impacto material en el goodwill.
Composici贸n por segmentos: VITAS representa el 64% de las ventas del Q2 y el 66% del beneficio operativo del segmento; Roto-Rooter el 36% de las ventas. Los m谩rgenes de hospicio se vieron presionados por mayores costos de Medicare y laborales, compensados parcialmente por una s贸lida demanda en fontaner铆a y restauraci贸n de agua. No se proporcion贸 orientaci贸n.
Chemed (CHE) 2025雲� 2攵勱赴 10-Q 欤检殧 雮挫毄
- 鞐瓣舶 毵れ稖鞚� 鞝勲厔 雽�牍� 3.9% 歃濌皜頃� 6鞏� 1,880毵� 雼煬搿�, VITAS鞚� 5.8% 靹膘灔(3鞏� 9,620毵� 雼煬)瓿� Roto-Rooter 毵れ稖(2鞏� 2,260毵� 雼煬)鞚� 鞙犾霅� 雿� 頌橃瀰鞚�.
- 靾滌澊鞚奠潃 鞝勲厔 雽�牍� 25.9% 臧愳唽頃� 5,250毵� 雼煬; 鞛勱笀 鞚疙攲霠堨澊靺橁臣 1,640毵� 雼煬 攴滊鞚� Medicare 頃滊弰 臁办爼鞙茧 鞚疙暣 VITAS鞚� 鞓侅梾鞚挫澋毳犾潃 14.8%鞐愳劀 11.0%搿� 於曥唽霅�.
- 欤茧嫻靾滌澊鞚�(EPS)鞚� 欤检嫕 靾橁皜 3.4% 臧愳唽頄堨潓鞐愲弰 攵堦惮頃橁碃 23% 臧愳唽頃� 3.60雼煬; 鞐办磮 雸勳爜 EPS電� 8.51雼煬搿� 5% 臧愳唽.
- 鞓侅梾順勱笀頋愲鞚� 5.7% 臧滌劆霅� 1鞏� 7,140毵� 雼煬; 順勱笀 鞛旍暋鞚� 2鞏� 4,990毵� 雼煬搿� 歃濌皜(12/24: 1鞏� 7,840毵� 雼煬), ALJ鞚� 鞙犽Μ頃� 韺愱舶鞐� 霐半澕 4,690毵� 雼煬 OAS 鞓堨箻旮� 頇橂秷 頉�.
- 鞐办磮攵�韯� 鞛愳偓欤� 毵れ瀰鞚� 齑� 7,270毵� 雼煬(125,000欤�, 韽夑窢 581.62雼煬)搿�, 雮潃 鞀轨澑 頃滊弰電� 1鞏� 8,260毵� 雼煬.
- 鞛靸來儨響滊姅 氍挫皑鞛� 靸來儨 鞙犾: 4鞏� 450毵� 雼煬鞚� 毽臣氩� 頃滊弰 鞚挫毄 臧�電�; 霠堧矂毽 鞎届爼鞚� 3.5氚� 雽�牍� 鞁れ牅電� 1氚� 氙鸽.
- 靻岅窚氇� 於旉皜 鞚胳垬: 氙胳嫓臧� 靻岇灛 Roto-Rooter 頂勲灉彀澊歃� 23毵� 雼煬鞐� 鞚胳垬; 鞓侅梾甓岇棎 氙鸽頃� 鞓來枼.
靷梾 攵�氍� 甑劚: VITAS臧� 2攵勱赴 毵れ稖鞚� 64%, 攵�氍� 鞓侅梾鞚挫澋鞚� 66% 彀; Roto-Rooter電� 毵れ稖鞚� 36%. 氅旊敂旒�鞏� 氚� 鞚戈贝牍� 靸侅姽鞙茧 順胳姢頂检姢 毵堨 鞎曤皶, 瓴碃頃� 氚瓣磤 氚� 靾橃 氤店惮 靾橃殧臧� 鞚茧秬 靸侅噭. 臧�鞚措崢鞀る姅 鞝滉车霅橃 鞎婌潓.
Points cl茅s du 10-Q du 2e trimestre 2025 de Chemed (CHE)
- Le chiffre d'affaires consolid茅 a augment茅 de 3,9 % en glissement annuel pour atteindre 618,8 M$, port茅 par une croissance de 5,8 % chez VITAS (396,2 M$) et des ventes stables de Roto-Rooter (222,6 M$).
- Le revenu net a chut茅 de 25,9 % en glissement annuel 脿 52,5 M$ ; la marge op茅rationnelle s'est contract茅e 脿 11,0 % (contre 14,8 %) en raison de l'inflation salariale et d'un ajustement du plafond Medicare de 16,4 M$ qui ont pes茅 sur VITAS.
- Le BPA a diminu茅 脿 3,60$ (-23 %) malgr茅 une baisse de 3,4 % du nombre d'actions ; le BPA cumul茅 sur l'ann茅e est de 8,51$ (-5 %).
- Le flux de tr茅sorerie d'exploitation s'est am茅lior茅 de 5,7 % pour atteindre 171,4 M$ ; la tr茅sorerie a augment茅 脿 249,9 M$ (12/24 : 178,4 M$) apr猫s le remboursement d'un d茅p么t OAS de 46,9 M$ suite 脿 une d茅cision favorable de l'ALJ.
- Les rachats d'actions cumul茅s s'茅l猫vent 脿 72,7 M$ (125k actions 脿 un prix moyen de 581,62$), laissant une autorisation restante de 182,6 M$.
- Le bilan reste sans endettement : capacit茅 de cr茅dit renouvelable disponible de 404,5 M$ ; covenant d'endettement fix茅 脿 3,5脳 contre un niveau r茅el inf茅rieur 脿 1脳.
- Petite acquisition compl茅mentaire : une franchise Roto-Rooter dans le Michigan pour 0,23 M$ ; aucun impact significatif sur le goodwill.
R茅partition par segment : VITAS repr茅sente 64 % des ventes du 2e trimestre et 66 % du r茅sultat op茅rationnel segmentaire ; Roto-Rooter 36 % des ventes. Les marges des hospices ont 茅t茅 sous pression en raison des co没ts Medicare et salariaux plus 茅lev茅s, partiellement compens茅s par une demande solide en plomberie et restauration d'eau. Aucune pr茅vision n'a 茅t茅 fournie.
Chemed (CHE) Q2-25 10-Q Highlights
- Der konsolidierte Umsatz stieg im Jahresvergleich um 3,9 % auf 618,8 Mio. USD, angetrieben durch ein Wachstum von 5,8 % bei VITAS (396,2 Mio. USD) und stabile Ums盲tze bei Roto-Rooter (222,6 Mio. USD).
- Der Nettogewinn sank im Jahresvergleich um 25,9 % auf 52,5 Mio. USD; die operative Marge schrumpfte auf 11,0 % (vorher 14,8 %), da Lohninflation und eine Medicare-Kappungsanpassung in H枚he von 16,4 Mio. USD VITAS belasteten.
- Das Ergebnis je Aktie (EPS) fiel auf 3,60 USD (-23 %), trotz einer um 3,4 % geringeren Aktienanzahl; das EPS f眉r das laufende Jahr betr盲gt 8,51 USD (-5 %).
- Der operative Cashflow verbesserte sich um 5,7 % auf 171,4 Mio. USD; der Kassenbestand stieg auf 249,9 Mio. USD (12/24: 178,4 Mio. USD) nach R眉ckerstattung einer OAS-Einlage von 46,9 Mio. USD infolge eines g眉nstigen ALJ-Urteils.
- Bis dato wurden Aktienr眉ckk盲ufe in H枚he von 72,7 Mio. USD get盲tigt (125.000 Aktien zu einem Durchschnittspreis von 581,62 USD), verbleibende Genehmigung 182,6 Mio. USD.
- Die Bilanz bleibt schuldenfrei: Revolver-Kapazit盲t von 404,5 Mio. USD verf眉gbar; Verschuldungsklausel bei 3,5脳 gegen眉ber tats盲chlichem Wert unter 1脳.
- Kleine Erg盲nzungsakquisition: Eine Roto-Rooter-Franchise in Michigan f眉r 0,23 Mio. USD; keine wesentlichen Auswirkungen auf den Gesch盲fts- oder Firmenwert.
Segmentmix: VITAS macht 64 % des Q2-Umsatzes und 66 % des Segmentbetriebsergebnisses aus; Roto-Rooter 36 % des Umsatzes. H枚here Medicare- und Arbeitskosten belasteten die Hospizmargen, teilweise ausgeglichen durch eine solide Nachfrage im Sanit盲r- und Wasserwiederherstellungsbereich. Keine Prognose wurde abgegeben.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
Commission File Number:
(Exact name of registrant as specified in its charter)
|
|
|
| ||
(State or other jurisdiction of incorporation or organization) |
| (IRS Employer Identification No.) |
| ||
(Address of principal executive offices) |
| (Zip code) |
( (Registrant’s telephone number, including area code) | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
|
|
|
Yes | x | No | o |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
|
|
|
|
Yes | x | No | o |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
|
|
|
|
|
|
|
|
|
|
|
x |
| Accelerated Filer | o |
| Non-accelerated Filer | o |
| Smaller Reporting Company |
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
|
|
|
Yes | o | No |
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
| |
Title of Each Class | Trading Symbol | Name of Each Exchange on which Registered | Amount | Date | |
|
|
|
|
| |
June 30, 2025 | |||||
|
|
|
|
| |
-1-
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES
Index
|
|
|
|
| Page No. |
PART I. FINANCIAL INFORMATION: |
|
|
|
Item 1. Financial Statements |
|
Unaudited Consolidated Balance Sheets - |
|
June 30, 2025 and December 31, 2024 | 3 |
|
|
Unaudited Consolidated Statements of Income - |
|
Three months and six months ended June 30, 2025 and 2024 | 4 |
|
|
Unaudited Consolidated Statements of Cash Flows - |
|
Six months ended June 30, 2025 and 2024 | 5 |
|
|
Unaudited Consolidated Statements of Changes in Stockholders’ Equity- |
|
Three months and six months ended June 30, 2025 and 2024 | 6 |
|
|
Notes to Unaudited Consolidated Financial Statements | 8 |
|
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 26 |
|
|
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 43 |
|
|
Item 4. Controls and Procedures | 43 |
|
|
PART II. OTHER INFORMATION |
|
|
|
Item 1. Legal Proceedings | 43 |
|
|
Item 1A. Risk Factors | 43 |
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 44 |
|
|
Item 3. Defaults Upon Senior Securities | 44 |
|
|
Item 4. Mine Safety Disclosures | 44 |
|
|
Item 5. Other Information | 44 |
|
|
Item 6. Exhibits | 45 |
|
|
EX – 10.1 |
|
EX – 31.1 |
|
EX – 31.2 |
|
EX – 32.1 |
|
EX – 32.2 |
|
EX – 101 |
|
EX – 104 |
|
|
|
SIGNATURES | 46 |
-2-
|
|
|
|
|
|
PART I. FINANCIAL INFORMATION | |||||
Item 1. Financial Statements | |||||
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||
(in thousands, except share and per share data) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
| June 30, 2025 |
| December 31, 2024 | ||
ASSETS |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents | $ | |
| $ | |
Accounts receivable less allowances |
| |
|
| |
Inventories |
| |
|
| |
Prepaid income taxes |
| |
|
| |
Prepaid expenses |
| |
|
| |
Total current assets |
| |
|
| |
Investments of deferred compensation plans held in trust |
| |
|
| |
Properties and equipment, at cost, less accumulated depreciation of $ |
| |
|
| |
Lease right of use asset |
| |
|
| |
Identifiable intangible assets less accumulated amortization of $ |
| |
|
| |
Goodwill |
| |
|
| |
Other assets |
| |
|
| |
Total Assets | $ | |
| $ | |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable | $ | |
| $ | |
Accrued insurance |
| |
|
| |
Income taxes |
| - |
|
| |
Accrued compensation |
| |
|
| |
Short-term lease liability |
| |
|
| |
Other current liabilities |
| |
|
| |
Total current liabilities |
| |
|
| |
Deferred income taxes |
| |
|
| |
Deferred compensation liabilities |
| |
|
| |
Long-term lease liability |
| |
|
| |
Other liabilities |
| |
|
| |
Total Liabilities |
| |
|
| |
Commitments and contingencies (Note 10) |
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
Capital stock - authorized |
| |
|
| |
Paid-in capital |
| |
|
| |
Retained earnings |
| |
|
| |
Treasury stock - |
| ( |
|
| ( |
Deferred compensation payable in Company stock |
| |
|
| |
Total Stockholders' Equity |
| |
|
| |
Total Liabilities and Stockholders' Equity | $ | |
| $ | |
|
|
|
|
|
|
See Accompanying Notes to Unaudited Consolidated Financial Statements. | |||||
-3-
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
(in thousands, except per share data) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended June 30, |
| Six Months Ended June 30, | ||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Service revenues and sales | $ | |
| $ | |
| $ | |
| $ | |
Cost of services provided and goods sold (excluding depreciation) |
| |
|
| |
|
| |
|
| |
Selling, general and administrative expenses |
| |
|
| |
|
| |
|
| |
Depreciation |
| |
|
| |
|
| |
|
| |
Amortization |
| |
|
| |
|
| |
|
| |
Other operating expense |
| |
|
| |
|
| |
|
| |
Total costs and expenses |
| |
|
| |
|
| |
|
| |
Income from operations |
| |
|
| |
|
| |
|
| |
Interest expense |
| ( |
|
| ( |
|
| ( |
|
| ( |
Other income - net |
| |
|
| |
|
| |
|
| |
Income before income taxes |
| |
|
| |
|
| |
|
| |
Income taxes |
| ( |
|
| ( |
|
| ( |
|
| ( |
Net income | $ | |
| $ | |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
Net income | $ | |
| $ | |
| $ | |
| $ | |
Average number of shares outstanding |
| |
|
| |
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
Net income | $ | |
| $ | |
| $ | |
| $ | |
Average number of shares outstanding |
| |
|
| |
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends Per Share | $ | |
| $ | |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes to Unaudited Consolidated Financial Statements. | |||||||||||
-4-
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(in thousands) | |||||
|
| ||||
| Six Months Ended June 30, | ||||
| 2025 |
| 2024 | ||
Cash Flows from Operating Activities |
|
|
|
|
|
Net income | $ | |
| $ | |
Adjustments to reconcile net income to net cash provided |
|
|
|
|
|
by operating activities: |
|
|
|
|
|
Depreciation and amortization |
| |
|
| |
Stock option expense |
| |
|
| |
Benefit for deferred income taxes |
| ( |
|
| ( |
Noncash long-term incentive compensation |
| |
|
| |
Noncash directors' compensation |
| |
|
| |
Amortization of debt issuance costs |
| |
|
| |
Litigation settlements |
| - |
|
| ( |
Changes in operating assets and liabilities: |
|
|
|
|
|
Increase in accounts receivable |
| ( |
|
| ( |
(Increase)/decrease in inventories |
| ( |
|
| |
(Increase)/decrease in prepaid expenses |
| ( |
|
| |
Decrease in accounts payable and other current liabilities |
| ( |
|
| ( |
Change in current income taxes |
| ( |
|
| ( |
Net change in lease assets and liabilities |
| ( |
|
| ( |
Decrease/(increase) in other assets |
| |
|
| ( |
Increase in other liabilities |
| |
|
| |
Other sources |
| |
|
| |
Net cash provided by operating activities |
| |
|
| |
Cash Flows from Investing Activities |
|
|
|
|
|
Capital expenditures |
| ( |
|
| ( |
Proceeds from sale of fixed assets |
| |
|
| |
Business combinations, net of cash acquired |
| ( |
|
| ( |
Other uses |
| ( |
|
| ( |
Net cash used by investing activities |
| ( |
|
| ( |
Cash Flows from Financing Activities |
|
|
|
|
|
Purchases of treasury stock |
| ( |
|
| ( |
Proceeds from exercise of stock options |
| |
|
| |
Dividends paid |
| ( |
|
| ( |
Capital stock surrendered to pay taxes on stock-based compensation |
| ( |
|
| ( |
Change in cash overdrafts payable |
| |
|
| ( |
Other sources/(uses) |
| |
|
| ( |
Net cash used by financing activities |
| ( |
|
| ( |
Increase/(decrease) in Cash and Cash Equivalents |
| |
|
| ( |
Cash and cash equivalents at beginning of period |
| |
|
| |
Cash and cash equivalents at end of period | $ | |
| $ | |
|
|
|
|
|
|
See Accompanying Notes to Unaudited Consolidated Financial Statements. | |||||
-5-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | |||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
| |||||||||||||||||
For the three months ended June 30, 2025 and 2024: |
|
|
| Deferred |
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Treasury |
|
| Payable in |
|
|
|
|
| Capital |
|
| Paid-in |
|
| Retained |
|
| Stock- |
|
| Company |
|
|
|
|
| Stock |
|
| Capital |
|
| Earnings |
|
| at Cost |
|
| Stock |
|
| Total |
Balance at March 31, 2025 | $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | |
Net income |
| - |
|
| - |
|
| |
|
| - |
|
| - |
|
| |
Dividends paid ($ |
| - |
|
| - |
|
| ( |
|
| - |
|
| - |
|
| ( |
Stock awards and exercise of stock options |
| |
|
| |
|
| - |
|
| ( |
|
| - |
|
| |
Purchases of treasury stock |
| - |
|
| - |
|
| - |
|
| ( |
|
| - |
|
| ( |
Other |
| - |
|
| |
|
| - |
|
| ( |
|
| |
|
| |
Balance at June 30, 2025 | $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Treasury |
|
| Payable in |
|
|
|
|
| Capital |
|
| Paid-in |
|
| Retained |
|
| Stock- |
|
| Company |
|
|
|
|
| Stock |
|
| Capital |
|
| Earnings |
|
| at Cost |
|
| Stock |
|
| Total |
Balance at March 31, 2024 | $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | |
Net income |
| - |
|
| - |
|
| |
|
| - |
|
| - |
|
| |
Dividends paid ($ |
| - |
|
| - |
|
| ( |
|
| - |
|
| - |
|
| ( |
Stock awards and exercise of stock options |
| |
|
| |
|
| - |
|
| ( |
|
| - |
|
| |
Purchases of treasury stock |
| - |
|
| - |
|
| - |
|
| ( |
|
| - |
|
| ( |
Other |
| - |
|
| ( |
|
| - |
|
| ( |
|
| |
|
| ( |
Balance at June 30, 2024 | $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes to Unaudited Consolidated Financial Statements. | |||||||||||||||||
-6-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | |||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
For the six months ended June 30, 2025 and 2024: |
|
|
| Deferred |
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Treasury |
|
| Payable in |
|
|
|
|
| Capital |
|
| Paid-in |
|
| Retained |
|
| Stock- |
|
| Company |
|
|
|
|
| Stock |
|
| Capital |
|
| Earnings |
|
| at Cost |
|
| Stock |
|
| Total |
Balance at December 31, 2024 | $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | |
Net income |
| - |
|
| - |
|
| |
|
| - |
|
| - |
|
| |
Dividends paid ($ |
| - |
|
| - |
|
| ( |
|
| - |
|
| - |
|
| ( |
Stock awards and exercise of stock options |
| |
|
| |
|
| - |
|
| ( |
|
| - |
|
| |
Purchases of treasury stock |
| - |
|
| - |
|
| - |
|
| ( |
|
| - |
|
| ( |
Other |
| - |
|
| |
|
| - |
|
| ( |
|
| |
|
| |
Balance at June 30, 2025 | $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Treasury |
|
| Payable in |
|
|
|
|
| Capital |
|
| Paid-in |
|
| Retained |
|
| Stock- |
|
| Company |
|
|
|
|
| Stock |
|
| Capital |
|
| Earnings |
|
| at Cost |
|
| Stock |
|
| Total |
Balance at December 31, 2023 | $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | |
Net income |
| - |
|
| - |
|
| |
|
| - |
|
| - |
|
| |
Dividends paid ($ |
| - |
|
| - |
|
| ( |
|
| - |
|
| - |
|
| ( |
Stock awards and exercise of stock options |
| |
|
| |
|
| - |
|
| ( |
|
| - |
|
| |
Purchases of treasury stock |
| - |
|
| - |
|
| - |
|
| ( |
|
| - |
|
| ( |
Other |
| - |
|
| ( |
|
| - |
|
| ( |
|
| |
|
| ( |
Balance at June 30, 2024 | $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes to Unaudited Consolidated Financial Statements. | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-7-
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
Notes to Unaudited Consolidated Financial Statements
We have prepared the accompanying unaudited consolidated financial statements of Chemed in accordance with Rule 10-01 of SEC Regulation S-X. Consequently, we have omitted certain disclosures required under generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. The December 31, 2024 balance sheet data were derived from audited financial statements but do not include all disclosures required by GAAP. However, in our opinion, the financial statements presented herein contain all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position, results of operations and cash flows. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other future period, and we make no representations related thereto. These financial statements are prepared on the same basis as and should be read in conjunction with the audited Consolidated Financial Statements and related Notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.
As of June 30, 2025, Roto-Rooter and VITAS have no significant capitalized implementation costs related to cloud computing.
Our effective income tax rate was
Our effective income tax rate was
Included in the accompanying Consolidated Balance Sheets are $
We account for acquired businesses using the acquisition method of accounting. All assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition. The determination of fair value involves estimates and the use of valuation techniques when market value is not readily available. We use various techniques to determine fair value in accordance with accepted valuation models, primarily the income approach. The significant assumptions used in developing fair values include, but are not limited to, revenue growth rates, the amount and timing of future cash flows, discount rates, useful lives, royalty rates and future tax rates. The excess of purchase price over the fair value of assets and liabilities acquired is recorded as goodwill. See Note 16 for discussion of recent acquisitions.
In May 2014, the FASB issued Accounting Standards Update “ASU No. 2014-09 – Revenue from Contracts with Customers.” The standard and subsequent amendments are intended to develop a common revenue standard for removing inconsistencies and weaknesses, improve comparability, provide for more useful information to users through improved disclosure requirements and
-8-
simplify the preparation of financial statements. The standard is also referred to as Accounting Standards Codification No. 606 (“ASC 606”).
VITAS
Service revenue for VITAS is reported at the amount that reflects the ultimate consideration we expect to receive in exchange for providing patient care. These amounts are due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), and include variable consideration for revenue adjustments due to settlements of audits and reviews, as well as certain hospice-specific revenue capitations. Amounts are generally billed monthly or subsequent to patient discharge. Subsequent changes in the transaction price initially recognized are not significant.
Hospice services are provided on a daily basis and the type of service provided is determined based on a physician’s determination of each patient’s specific needs on that given day. Reimbursement rates for hospice services are on a per diem basis regardless of the type of service provided or the payor. Reimbursement rates from government programs are established by the appropriate governmental agency and are standard across all hospice providers. Reimbursement rates from health insurers are negotiated with each payor and generally structured to closely mirror the Medicare reimbursement model. The types of hospice services provided and associated reimbursement model for each are as follows:
Routine Home Care occurs when a patient receives hospice care in their home, including a nursing home setting. The routine home care rate is paid for each day that a patient is in a hospice program and is not receiving one of the other categories of hospice care. For Medicare patients, the routine home care rate reflects a two-tiered rate, with a higher rate for the first
General Inpatient Care occurs when a patient requires services in a controlled setting for a short period of time for pain control or symptom management which cannot be managed in other settings. General inpatient care services must be provided in a Medicare or Medicaid certified hospital or long-term care facility or at a freestanding inpatient hospice facility with the required registered nurse staffing.
Continuous Home Care is provided to patients while at home, including a nursing home setting, during periods of crisis when intensive monitoring and care, primarily nursing care, is required in order to achieve palliation or management of acute medical symptoms. Continuous home care requires a minimum of
Respite Care permits a hospice patient to receive services on an inpatient basis for a short period of time in order to provide relief for the patient’s family or other caregivers from the demands of caring for the patient. A hospice can receive payment for respite care for a given patient for up to five consecutive days at a time, after which respite care is reimbursed at the routine home care rate.
Each level of care represents a separate promise under the contract of care and is provided independently for each patient contingent upon the patient’s specific medical needs as determined by a physician. However, the clinical criteria used to determine a patient’s level of care is consistent across all patients, given that, each patient is subject to the same payor rules and regulations. As a result, we have concluded that each level of care is capable of being distinct and is distinct in the context of the contract. Furthermore, we have determined that each level of care represents a stand ready service provided as a series of either days or hours of patient care. We believe that the performance obligations for each level of care meet criteria to be satisfied over time. VITAS recognizes revenue based on the service output. VITAS believes this to be the most faithful depiction of the transfer of control of services as the patient simultaneously receives and consumes the benefits provided by our performance. Revenue is recognized on a daily or hourly basis for each patient in accordance with the reimbursement model for each type of service. VITAS’ performance obligations relate to contracts with an expected duration of less than one year. Therefore, VITAS has elected to apply the optional exception provided in ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially satisfied performance obligations referred to above relate to bereavement services provided to patients’ families for at least
Care is provided to patients regardless of their ability to pay. Patients who meet our criteria for charity care are provided care without charge. There is
-9-
million, respectively. The cost of charity care is included in cost of services provided and goods sold and is calculated by taking the ratio of charity care days to total days of care and multiplying by the total cost of care.
Generally, patients who are covered by third-party payors are responsible for related deductibles and coinsurance which vary in amount. VITAS also provides service to patients without a reimbursement source and may offer those patients discounts from standard charges. VITAS estimates the transaction price for patients with deductibles and coinsurance, along with those uninsured patients, based on historical experience and current conditions. The estimate of any contractual adjustments, discounts or implicit price concessions reduces the amount of revenue initially recognized. Subsequent changes to the estimate of the transaction price are recorded as adjustments to patient service revenue in the period of change. Subsequent changes that are determined to be the result of an adverse change in the patients’ ability to pay (i.e. change in credit risk) are recorded as bad debt expense. VITAS has no material adjustments related to subsequent changes in the estimate of the transaction price or subsequent changes as the result of an adverse change in the patient’s ability to pay for any period reported.
Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and subject to varying interpretation and change over time. Medicare and Medicaid programs have broad authority to audit and review compliance with such laws and regulations and impose payment suspensions or modifications when merited. Additionally, the contracts we have with commercial health insurance payors provide for retroactive audit and review of claims. Settlement with third party payors for retroactive adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care. The variable consideration is estimated based on the terms of the payment agreement, existing correspondence from the payor and our historical settlement activity. These estimates are adjusted in future periods, as new information becomes available.
We are subject to certain limitations on Medicare payments for services which are considered variable consideration, as follows:
Inpatient Cap. If the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds
Medicare Cap. We are also subject to a Medicare annual per-beneficiary cap (“Medicare cap”). Compliance with the Medicare cap is measured in one of two ways based on a provider election. The “streamlined” method compares total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by that Medicare provider number with the product of the per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for the first time from that hospice program or programs from September 28 through September 27 of the following year. At June 30, 2025, all our programs except three are using the “streamlined” method.
The “proportional” method compares the total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by the Medicare provider number between September 28 and September 27 of the following year with the product of the per beneficiary cap amount and a pro-rated number of Medicare beneficiaries receiving hospice services from that program during the same period. The pro-rated number of Medicare beneficiaries is calculated based on the ratio of days the beneficiary received hospice services during the measurement period to the total number of days the beneficiary received hospice services.
We actively monitor each of our hospice programs, by provider number, as to their specific admission, discharge rate and median length of stay data in an attempt to determine whether revenues are likely to exceed the annual per-beneficiary Medicare cap. Should we determine that revenues for a program are likely to exceed the Medicare cap based on projected trends, we attempt to institute corrective actions, which include changes to the patient mix and increased patient admissions. However, should we project our corrective action will not prevent that program from exceeding its Medicare cap, we estimate revenue recognized during the government fiscal year that will require repayment to the Federal government under the Medicare cap and record an adjustment to revenue of an amount equal to a ratable portion of our best estimate for the year.
For VITAS’ patients in the nursing home setting in which Medicaid pays the nursing home room and board, VITAS serves as a pass-through between Medicaid and the nursing home. We are responsible for paying the nursing home for that patient’s room and board. Medicaid reimburses us for
-10-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
| Medicaid |
| Commercial |
| Total | ||||
Routine home care | $ | |
| $ | |
| $ | |
| $ | |
Inpatient care |
| |
|
| |
|
| |
|
| |
Continuous care |
| |
|
| |
|
| |
|
| |
| $ | |
| $ | |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
All other revenue - self-pay, respite care, etc. |
|
|
|
|
|
|
|
|
|
| |
Subtotal |
|
|
|
|
|
|
|
|
| $ | |
Medicare cap adjustment |
|
|
|
|
|
|
|
|
|
| ( |
Implicit price concessions |
|
|
|
|
|
|
|
|
|
| ( |
Room and board, net |
|
|
|
|
|
|
|
|
|
| ( |
Net revenue |
|
|
|
|
|
|
|
|
| $ | |
The composition of patient care service revenue by payor and level of care for the quarter ended June 30, 2024 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
| Medicaid |
| Commercial |
| Total | ||||
Routine home care | $ | |
| $ | |
| $ | |
| $ | |
Inpatient care |
| |
|
| |
|
| |
|
| |
Continuous care |
| |
|
| |
|
| |
|
| |
| $ | |
| $ | |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
All other revenue - self-pay, respite care, etc. |
|
|
|
|
|
|
|
|
|
| |
Subtotal |
|
|
|
|
|
|
|
|
| $ | |
Medicare cap adjustment |
|
|
|
|
|
|
|
|
|
| ( |
Implicit price concessions |
|
|
|
|
|
|
|
|
|
| ( |
Room and board, net |
|
|
|
|
|
|
|
|
|
| ( |
Net revenue |
|
|
|
|
|
|
|
|
| $ | |
The composition of patient care service revenue by payor and level of care for the six months ended June 30, 2025 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
| Medicaid |
| Commercial |
| Total | ||||
Routine home care | $ | |
| $ | |
| $ | |
| $ | |
Inpatient care |
| |
|
| |
|
| |
|
| |
Continuous care |
| |
|
| |
|
| |
|
| |
| $ | |
| $ | |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
All other revenue - self-pay, respite care, etc. |
|
|
|
|
|
|
|
|
|
| |
Subtotal |
|
|
|
|
|
|
|
|
| $ | |
Medicare cap adjustment |
|
|
|
|
|
|
|
|
|
| ( |
Implicit price concessions |
|
|
|
|
|
|
|
|
|
| ( |
Room and board, net |
|
|
|
|
|
|
|
|
|
| ( |
Net revenue |
|
|
|
|
|
|
|
|
| $ | |
-11-
The composition of patient care service revenue by payor and level of care for the six months ended June 30, 2024 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
| Medicaid |
| Commercial |
| Total | ||||
Routine home care | $ | |
| $ | |
| $ | |
| $ | |
Inpatient care |
| |
|
| |
|
| |
|
| |
Continuous care |
| |
|
| |
|
| |
|
| |
| $ | |
| $ | |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
All other revenue - self-pay, respite care, etc. |
|
|
|
|
|
|
|
|
|
| |
Subtotal |
|
|
|
|
|
|
|
|
| $ | |
Medicare cap adjustment |
|
|
|
|
|
|
|
|
|
| ( |
Implicit price concessions |
|
|
|
|
|
|
|
|
|
| ( |
Room and board, net |
|
|
|
|
|
|
|
|
|
| ( |
Net revenue |
|
|
|
|
|
|
|
|
| $ | |
Roto-Rooter
Roto-Rooter provides plumbing, drain cleaning, excavation, water restoration and other related services to both residential and commercial customers primarily in the United States. Services are provided through a network of company-owned branches, independent contractors and franchisees. Service revenue for Roto-Rooter is reported at the amount that reflects the ultimate consideration we expect to receive in exchange for providing services.
Roto-Rooter owns and operates branches focusing mainly on large population centers in the United States. Roto-Rooter’s primary lines of business in company-owned branches consist of plumbing, sewer and drain cleaning, excavation and water restoration. For purposes of ASC 606 analysis, plumbing, sewer and drain cleaning, and excavation have been combined into one portfolio and are referred to as “short-term core services”. Water restoration is analyzed as a separate portfolio. The following describes the key characteristics of these portfolios:
Short-term Core Services are plumbing, drain and sewer cleaning and excavation services. These services are provided to both commercial and residential customers. The duration of services provided in this category range from a few hours to a few days. There are no significant warranty costs or on-going obligations to the customer once a service has been completed. For residential customers, payment is received at the time of job completion before the Roto-Rooter technician leaves the residence. Commercial customers may be granted credit subject to internally designated authority limits and credit check guidelines. If credit is granted, payment terms are generally
Each job in this category is a distinct service with a distinct performance obligation to the customer. Revenue is recognized at the completion of each job. Variable consideration consists of pre-invoice discounts and post-invoice discounts. Pre-invoice discounts are given in the form of coupons or price concessions. Post-invoice discounts consist of credit memos generally granted to resolve customer service issues. Variable consideration is estimated based on historical activity and recorded at the time service is completed.
Water Restoration Services involve the remediation of water and humidity after a flood. These services are provided to both commercial and residential customers. The duration of services provided in this category generally ranges from
For both short-term core services and water restoration services, Roto-Rooter satisfies its performance obligation at a point in time. The services provided generally involve fixing plumbing, drainage or flood-related issues at the customer’s property. At the time service is complete, the customer acknowledges its obligation to pay for service and its satisfaction with the service performed. This provides evidence that the customer has accepted the service and Roto-Rooter is now entitled to payment. As such, Roto-Rooter recognizes revenue for these services upon completion of the job and receipt of customer acknowledgement. Roto-Rooter’s performance obligations for short-term core services and water restoration services relate to contracts with an expected duration of less than a year. Therefore, Roto-Rooter has elected to apply the optional exception provided in ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Roto-Rooter does not have significant unsatisfied or partially unsatisfied performance obligations at the time of initial revenue recognition for short-term core or water restoration services.
Roto-Rooter owns the rights to certain territories and contracts with independent third-parties to operate the territory under Roto-Rooter’s registered trademarks (“independent contractors”). Such contracts are for a specified term but cancellable by either party
-12-
without penalty with
Independent contractors pay Roto-Rooter a standard fee calculated as a percentage of their cash collection from weekly sales. The primary value for the independent contractors under these arrangements is the right to use Roto-Rooter’s registered trademarks. Roto-Rooter recognizes revenue from independent contractors over-time (weekly) as the independent contractor’s labor sales are completed and payment from customers are received. Payment from independent contractors is also received on a weekly basis. The use of Roto-Rooter’s registered trademarks and advertising provides immediate value to the independent contractor as a result of Roto-Rooter’s nationally recognized brand. Therefore, over-time recognition provides the most faithful depiction of the transfer of services as the customer simultaneously receives and consumes the benefits provided. There is no significant variable consideration related to these arrangements.
Roto-Rooter has licensed the rights to operate under Roto-Rooter’s registered trademarks in other territories to franchisees. Each such contract is for a
Franchisees pay Roto-Rooter a standard monthly fee based on the population within the franchise territory. The standard fee is revised on a yearly basis based on changes in the Consumer Price Index for All Urban Consumers. The primary value for the franchisees under this arrangement is the right to use Roto-Rooter’s registered trademarks. Roto-Rooter recognizes revenue from franchisees over-time (monthly). Payment from franchisees is also received on a monthly basis. The use of Roto-Rooter’s registered trademarks and advertising provides immediate value to the franchisees as a result of Roto-Rooter’s nationally recognized brand. Therefore, over-time recognition provides the most faithful depiction of the transfer of services as the customer simultaneously receives and consumes the benefits provided. There is no significant variable consideration related to these arrangements.
|
|
|
|
|
|
| June 30, | ||||
| 2025 |
| 2024 | ||
Drain cleaning | $ | |
| $ | |
Plumbing |
| |
|
| |
Excavation |
| |
|
| |
Other |
| |
|
| |
Subtotal - short term core |
| |
|
| |
Water restoration |
| |
|
| |
Independent contractors |
| |
|
| |
Franchisee fees |
| |
|
| |
Other |
| |
|
| |
Gross revenue |
| |
|
| |
Implicit price concessions and credit memos |
| ( |
|
| ( |
Net revenue | $ | |
| $ | |
|
|
|
|
|
|
-13-
The composition of disaggregated revenue for the first six months is as follows (in thousands):
|
|
|
|
|
|
| June 30, | ||||
| 2025 |
| 2024 | ||
Drain cleaning | $ | |
| $ | |
Plumbing |
| |
|
| |
Excavation |
| |
|
| |
Other |
| |
|
| |
Subtotal - short term core |
| |
|
| |
Water restoration |
| |
|
| |
Independent contractors |
| |
|
| |
Franchisee fees |
| |
|
| |
Other |
| |
|
| |
Gross revenue |
| |
|
| |
Implicit price concessions and credit memos |
| ( |
|
| ( |
Net revenue | $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Segments
Our segments include the VITAS segment and the Roto-Rooter segment, which comprise the structure used by our President and Chief Executive Officer, who has been determined to be our Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance. Relative contributions of each segment to service revenues and sales for the second quarter of 2025 were
The reportable segments have been defined along service lines, which is consistent with the way the businesses are managed. In determining reportable segments, the RRSC and RRC operating units of the Roto-Rooter segment have been aggregated on the basis of possessing similar operating and economic characteristics. The characteristics of these operating segments and the basis for aggregation are reviewed annually.
We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as “Corporate”. Corporate administrative expense includes the stewardship, accounting and reporting, legal, tax and other costs of operating a publicly held corporation. Corporate investing and financing income and expenses include the costs and income associated with corporate debt and investment arrangements.
Our CODM evaluates the segments’ operating performance based mainly on income/(loss) from operations. For each segment, the CODM compares segment income/(loss) from operations in the annual budgeting and monthly forecasting process to actual results. The CODM considers variances on a monthly basis for evaluating performance of each segment and making decisions about allocating resources to each segment.
-14-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reportable |
|
|
|
| Chemed | ||
|
| VITAS |
| Roto-Rooter |
| Segments |
| Corporate |
| Consolidated | |||||
Service revenues and sales |
| $ | |
| $ | |
| $ | |
| $ | - |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services provided and goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(excluding depreciation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages |
|
| |
|
| |
|
| |
|
| - |
|
| |
Patient care expense |
|
| |
|
| - |
|
| |
|
| - |
|
| |
Other expenses |
|
| |
|
| |
|
| |
|
| - |
|
| |
Total cost of services provided and goods sold |
|
| |
|
| |
|
| |
|
| - |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages |
|
| |
|
| |
|
| |
|
| |
|
| |
Advertising |
|
| - |
|
| |
|
| |
|
| - |
|
| |
Stock compensation |
|
| - |
|
| - |
|
| - |
|
| |
|
| |
Other expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
Total selling, general and administrative expense |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
| |
|
| |
|
| |
|
| |
|
| |
Amortization |
|
| |
|
| |
|
| |
|
| - |
|
| |
Other operating expense/(income) |
|
| |
|
| ( |
|
| |
|
| - |
|
| |
Total costs and expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
Income/(loss) from operations |
|
| |
|
| |
|
| |
|
| ( |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
Intercompany interest income/(expense) |
|
| |
|
| |
|
| |
|
| ( |
|
| - |
Other income - net |
|
| |
|
| |
|
| |
|
| |
|
| |
Income/(expense) before income taxes |
|
| |
|
| |
|
| |
|
| ( |
|
| |
Income taxes |
|
| ( |
|
| ( |
|
| ( |
|
| |
|
| ( |
Net income/(loss) |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to long-lived assets |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
-15-
Segment data for the three months ending June 30, 2024 are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reportable |
|
|
|
| Chemed | ||
|
| VITAS |
| Roto-Rooter |
| Segments |
| Corporate |
| Consolidated | |||||
Service revenues and sales |
| $ | |
| $ | |
| $ | |
| $ | - |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services provided and goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(excluding depreciation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages |
|
| |
|
| |
|
| |
|
| - |
|
| |
Patient care expense |
|
| |
|
| - |
|
| |
|
| - |
|
| |
Other expenses |
|
| |
|
| |
|
| |
|
| - |
|
| |
Total cost of services provided and good sold |
|
| |
|
| |
|
| |
|
| - |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages |
|
| |
|
| |
|
| |
|
| |
|
| |
Advertising |
|
| - |
|
| |
|
| |
|
| - |
|
| |
Stock compensation |
|
| - |
|
| - |
|
| - |
|
| |
|
| |
Other expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
Total selling, general and administrative expense |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
| |
|
| |
|
| |
|
| |
|
| |
Amortization |
|
| |
|
| |
|
| |
|
| - |
|
| |
Other operating expense/(income) |
|
| |
|
| ( |
|
| |
|
| - |
|
| |
Total costs and expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
Income/(loss) from operations |
|
| |
|
| |
|
| |
|
| ( |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
Intercompany interest income/(expense) |
|
| |
|
| |
|
| |
|
| ( |
|
| - |
Other income - net |
|
| |
|
| |
|
| |
|
| |
|
| |
Income/(expense) before income taxes |
|
| |
|
| |
|
| |
|
| ( |
|
| |
Income taxes |
|
| ( |
|
| ( |
|
| ( |
|
| |
|
| ( |
Net income/(loss) |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to long-lived assets |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-16-
Segment data for the first six months ending June 30, 2025 are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reportable |
|
|
|
| Chemed | ||
|
| VITAS |
| Roto-Rooter |
| Segments |
| Corporate |
| Consolidated | |||||
Service revenues and sales |
| $ | |
| $ | |
| $ | |
| $ | - |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services provided and goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(excluding depreciation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages |
|
| |
|
| |
|
| |
|
| - |
|
| |
Patient care expense |
|
| |
|
| - |
|
| |
|
| - |
|
| |
Other expenses |
|
| |
|
| |
|
| |
|
| - |
|
| |
Total cost of services provided and goods sold |
|
| |
|
| |
|
| |
|
| - |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages |
|
| |
|
| |
|
| |
|
| |
|
| |
Advertising |
|
| - |
|
| |
|
| |
|
| - |
|
| |
Stock compensation |
|
| - |
|
| - |
|
| - |
|
| |
|
| |
Other expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
Total selling, general and administrative expense |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
| |
|
| |
|
| |
|
| |
|
| |
Amortization |
|
| |
|
| |
|
| |
|
| - |
|
| |
Other operating expense/(income) |
|
| |
|
| ( |
|
| |
|
| - |
|
| |
Total costs and expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
Income/(loss) from operations |
|
| |
|
| |
|
| |
|
| ( |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
Intercompany interest income/(expense) |
|
| |
|
| |
|
| |
|
| ( |
|
| - |
Other income - net |
|
| |
|
| |
|
| |
|
| |
|
| |
Income/(expense) before income taxes |
|
| |
|
| |
|
| |
|
| ( |
|
| |
Income taxes |
|
| ( |
|
| ( |
|
| ( |
|
| |
|
| ( |
Net income/(loss) |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to long-lived assets |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
-17-
Segment data for the first six months ending June 30, 2024 are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reportable |
|
|
|
| Chemed | ||
|
| VITAS |
| Roto-Rooter |
| Segments |
| Corporate |
| Consolidated | |||||
Service revenues and sales |
| $ | |
| $ | |
| $ | |
| $ | - |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services provided and goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(excluding depreciation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages |
|
| |
|
| |
|
| |
|
| - |
|
| |
Patient care expense |
|
| |
|
| - |
|
| |
|
| - |
|
| |
Other expenses |
|
| |
|
| |
|
| |
|
| - |
|
| |
Total cost of services provided and goods sold |
|
| |
|
| |
|
| |
|
| - |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages |
|
| |
|
| |
|
| |
|
| |
|
| |
Advertising |
|
| - |
|
| |
|
| |
|
| - |
|
| |
Stock compensation |
|
| - |
|
| - |
|
| - |
|
| |
|
| |
Other expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
Total selling, general and administrative expense |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
| |
|
| |
|
| |
|
| |
|
| |
Amortization |
|
| |
|
| |
|
| |
|
| - |
|
| |
Other operating expense |
|
| |
|
| |
|
| |
|
| - |
|
| |
Total costs and expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
Income/(loss) from operations |
|
| |
|
| |
|
| |
|
| ( |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
|
| ( |
Intercompany interest income/(expense) |
|
| |
|
| |
|
| |
|
| ( |
|
| - |
Other income - net |
|
| |
|
| |
|
| |
|
| |
|
| |
Income/(expense) before income taxes |
|
| |
|
| |
|
| |
|
| ( |
|
| |
Income taxes |
|
| ( |
|
| ( |
|
| ( |
|
| |
|
| ( |
Net income/(loss) |
| $ | |
| $ | |
| $ | |
| $ | ( |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to long-lived assets |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
Identifiable assets by segment are as follows (in thousands)::
|
|
|
|
|
|
| June 30, |
| December 31, | ||
| 2025 |
| 2024 | ||
|
|
|
|
|
|
VITAS | $ | |
| $ | |
Roto-Rooter |
| |
|
| |
Reportable segments |
| |
|
| |
Corporate |
| |
|
| |
Chemed consolidated | $ | |
| $ | |
-18-
Earnings per share (“EPS”) are computed using the weighted average number of shares of capital stock outstanding. Earnings and diluted earnings per share are computed as follows (in thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income | |||||
For the Three Months Ended June 30, |
| Income |
| Shares |
| Earnings per Share | |||
2025 |
|
|
|
|
|
|
|
|
|
| Earnings |
| $ | |
| |
| $ | |
| Dilutive stock options |
|
| - |
| |
|
|
|
| Nonvested stock awards |
|
| - |
| |
|
|
|
| Diluted earnings |
| $ | |
| |
| $ | |
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
| Earnings |
| $ | |
| |
| $ | |
| Dilutive stock options |
|
| - |
| |
|
|
|
| Nonvested stock awards |
|
| - |
| |
|
|
|
| Diluted earnings |
| $ | |
| |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income | |||||
For the Six Months Ended June 30, |
| Income |
| Shares |
| Earnings per Share | |||
2025 |
|
|
|
|
|
|
|
|
|
| Earnings |
| $ | |
| |
| $ | |
| Dilutive stock options |
|
| - |
| |
|
|
|
| Nonvested stock awards |
|
| - |
| |
|
|
|
| Diluted earnings |
| $ | |
| |
| $ | |
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
| Earnings |
| $ | |
| |
| $ | |
| Dilutive stock options |
|
| - |
| |
|
|
|
| Nonvested stock awards |
|
| - |
| |
|
|
|
| Diluted earnings |
| $ | |
| |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three and six months ended June 30, 2025, there were
On June 28, 2022, we replaced our existing credit facility with a fifth amended and restated Credit Agreement (“2022 Credit Facilities”). Terms of the 2022 Credit Facilities consist of a five-year $
The term loan was repaid in 2023. This prepayment reduced the total borrowing capacity of the 2022 Credit Facilities from $
-19-
The 2022 Credit Facilities contain the following quarterly financial covenants effective as of June 30, 2025:
|
|
|
|
|
|
Description |
| Requirement |
|
|
|
Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA) |
| < |
|
|
|
Interest Coverage Ratio (Consolidated Adj. EBITDA/Consolidated Interest Expense) |
| > |
|
|
|
We are in compliance with all debt covenants as of June 30, 2025. We have issued $
Other income – net comprises the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30, |
| Six months ended June 30, | ||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Interest income | $ | |
| $ | |
| $ | |
| $ | |
Market value adjustment on assets held in deferred compensation trust |
| |
|
| |
|
| |
|
| |
Other |
| |
|
| - |
|
| - |
|
| |
Total other income - net | $ | |
| $ | |
| $ | |
| $ | |
Chemed and each of its operating subsidiaries are service companies. As such, real estate leases comprise the largest lease obligation (and conversely, right of use asset) in our lease portfolio. VITAS has leased office space, as well as space for inpatient units (“IPUs”) and/or contract beds within hospitals. Roto-Rooter mainly has leased office space. Our leases have remaining terms of under
Roto-Rooter purchases equipment and leases it to certain of its independent contractors. We analyzed these leases in accordance with ASC 842 and determined they are operating leases. As a result, Roto-Rooter capitalizes the equipment underlying these leases, depreciates the equipment and recognizes rental income.
We do
The components of balance sheet information related to leases were as follows:
|
|
|
|
|
|
| June 30, |
|
| ||
| 2025 |
| 2024 | ||
Assets |
|
|
|
|
|
Operating lease assets | $ | |
| $ | |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current operating leases |
| |
|
| |
Noncurrent operating leases |
| |
|
| |
Total operating lease liabilities | $ | |
| $ | |
-20-
The components of lease expense for the second quarter are as follows (in thousands):
|
|
|
|
|
|
| Three months ended June 30, | ||||
| 2025 |
| 2024 | ||
Lease Expense (a) |
|
|
|
|
|
Operating lease expense | $ | |
| $ | |
Sublease income |
| ( |
|
| ( |
Net lease expense | $ | |
| $ | |
The components of lease expense for the first six months are as follows (in thousands):
|
|
|
|
|
|
| Six months ended June 30, | ||||
| 2025 |
| 2024 | ||
Lease Expense (a) |
|
|
|
|
|
Operating lease expense | $ | |
| $ | |
Sublease income |
| ( |
|
| ( |
Net lease expense | $ | |
| $ | |
(a)Includes short-term leases and variable lease costs, which are immaterial. Included in both cost of services provided and goods sold and selling, general and administrative expenses.
The components of cash flow information related to leases were as follows:
|
|
|
|
|
|
| Six months ended June 30, | ||||
| 2025 |
| 2024 | ||
Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
|
Operating cash flows from leases | $ | |
| $ | |
|
|
|
|
|
|
Leased assets obtained in exchange for new operating lease liabilities | $ | |
| $ | |
|
|
|
|
|
|
|
|
|
|
Weighted Average Remaining Lease Term at June 30, 2025 |
|
|
|
Operating leases |
| years |
|
|
|
|
Weighted Average Discount Rate at June 30, 2025 |
|
|
|
Operating leases |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
Maturity of Operating Lease Liabilities (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
2025 |
|
|
| $ | |
2026 |
|
|
|
| |
2027 |
|
|
|
| |
2028 |
|
|
|
| |
2029 |
|
|
|
| |
Thereafter |
|
|
|
| |
Total lease payments |
|
|
| $ | |
Less: interest |
|
|
|
| ( |
Total liability recognized on the balance sheet |
|
|
| $ | |
For leases commencing prior to April 2019, minimum rental payments exclude payments to landlords for real estate taxes and common area maintenance. Operating lease payments include $
-21-
On February 14, 2025, the Compensation/Incentive Committee of the Board of Directors (“CIC”) granted
On February 14, 2025, the CIC also granted
At the end of 2023, the then Chief Financial Officer (“CFO”) transitioned to an employee advisor role. In early 2024, in connection with this change of role, the CFO’s employment agreement terminated, and the CFO was given a one-time grant of
All of the Company’s plans that provide retirement and similar benefits are defined contribution plans. These expenses include the impact of market gains and losses on assets held in deferred compensation plans and are recorded in selling, general and administrative expenses. Net gains for the Company’s retirement and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
| Six months ended June 30, | ||||||||
2025 |
| 2024 |
| 2025 |
| 2024 | ||||
$ | |
| $ | |
| $ | |
| $ | |
The VITAS segment of the Company’s business operates in a heavily-regulated industry. As a result, the Company is subjected to inquiries and investigations by various government agencies, which can result in penalties including repayment obligations, funding withholding, or debarment, as well as to lawsuits, including qui tam actions. The following sections describe the various ongoing material lawsuits and investigations of which the Company is currently aware. Other than as described below, it is not possible at this time for us to estimate either the timing or outcome of any of those matters, or whether any potential loss, or range of potential losses, is probable or reasonably estimable.
Regulatory Matters and Litigation
VITAS was one of a group of hospice providers selected by the Office of the Inspector General’s (“OIG”) Office of Audit Services (“OAS”) for inclusion in an audit of the provision of elevated level-of-care hospice services. As a result of this audit, which reviewed
On August 29, 2022, VITAS received a demand letter from its Medicare Administrative Contractor (“MAC”) seeking repayment of $
On February 3, 2025, an Administrative Law Judge (“ALJ”) ruled that VITAS’ care met Medicare’s hospice standards for the applicable higher level of care as originally billed for all but one of the claims appealed, and therefore VITAS was entitled to receive payment for all such claims. With respect to the one claim that the judge did not fully side with VITAS, the judge found that four of the five days billed met the applicable standard and only one day did not.
-22-
In a letter dated March 18, 2025, VITAS’ MAC provided notice that due to the ALJ’s ruling the total overpayment amount was reduced to a de minimis amount, and has since refunded VITAS all previously unreturned deposited amounts in excess of that dollar figure.
Regardless of the outcome of the preceding matter, dealing with the various regulatory agencies and opposing parties can adversely affect us through defense costs, potential payments, withholding of governmental funding, diversion of management time, and related publicity.
As of June 30, 2025, and December 31, 2024, approximately
VITAS has a pharmacy services contract with
There is $
13. Other Assets
Other assets comprise the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
| June 30, |
| December 31, | ||
| 2025 |
| 2024 | ||
|
|
|
|
|
|
Cash surrender value life insurance | $ | |
| $ | |
Noncurrent advances and deposits |
| |
|
| |
Deferred debt costs |
| |
|
| |
Deposit with OAS |
| - |
|
| |
Other |
| |
|
| |
Total other assets | $ | |
| $ | |
FASB’s authoritative guidance on fair value measurements defines a hierarchy which prioritizes the inputs in fair value measurements. Level 1 measurements are measurements using quoted prices in active markets for identical assets or liabilities. Level 2 measurements use significant other observable inputs. Level 3 measurements are measurements using significant unobservable inputs which require a company to develop its own assumptions. In recording the fair value of assets and liabilities, companies must use the most reliable measurement available.
-23-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value Measure | ||||||
|
|
| Carrying Value |
|
| Quoted Prices in Active Markets for Identical Assets (Level 1) |
|
| Significant Other Observable Inputs (Level 2) |
|
| Significant Unobservable Inputs (Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of deferred compensation plans held in trust |
| $ | |
| $ | |
| $ | - |
| $ | - |
Cash equivalents |
|
| |
|
| |
|
| - |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2024 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value Measure | ||||||
|
|
| Carrying Value |
|
| Quoted Prices in Active Markets for Identical Assets (Level 1) |
|
| Significant Other Observable Inputs (Level 2) |
|
| Significant Unobservable Inputs (Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of deferred compensation plans held in trust |
| $ | |
| $ | |
| $ | - |
| $ | - |
Cash equivalents |
|
| |
|
| |
|
| - |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
We repurchased the following capital stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30, |
| Six months ended June 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of repurchased shares (in thousands) |
| $ | |
| $ | |
| $ | |
| $ | |
Shares repurchased |
|
| |
|
| |
|
| |
|
| |
Weighted average price per share |
| $ | |
| $ | |
| $ | |
| $ | |
On January 3, 2025, Roto-Rooter completed the acquisition of
On April 17, 2024, VITAS completed the purchase of all hospice operations and an assisted living facility from Covenant Health and Community Services, Inc. d/b/a/ Covenant Care (“Covenant”) for an aggregated purchase price of $
-24-
The purchase price allocation of the acquired VITAS business is as follows (in thousands):
|
|
|
Goodwill | $ | |
Operating licenses |
| |
Property, plant, and equipment |
| |
| $ | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The pro forma revenue and earnings for the Company for the three and six months ended June 30, as if the Covenant acquisition made in 2024 was completed on January 1, 2024 are as follows (in thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30, |
| Six months ended June 30, | ||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales | $ | |
| $ | |
| $ | |
| $ | |
Net income | $ | |
| $ | |
| $ | |
| $ | |
Earnings per share | $ | |
| $ | |
| $ | |
| $ | |
Diluted earnings per share | $ | |
| $ | |
| $ | |
| $ | |
Revenue and net income from other acquisitions made in 2025 and 2024 are not material.
Goodwill is assessed for impairment on a yearly basis as of October 1. The primary factor that contributed to the purchase price resulting in the recognition of goodwill is operational efficiencies expected as a result of integrating the operations of the Covenant locations into the existing VITAS organizational structure. All goodwill recognized is deductible for tax purposes.
Shown below is movement in Goodwill (in thousands):
|
|
|
|
|
|
|
|
|
| VITAS |
| Roto-Rooter |
| Total | |||
Balance at December 31, 2024 | $ | |
| $ | |
| $ | |
Business combinations |
| - |
|
| |
|
| |
Foreign currency adjustments |
| - |
|
| |
|
| |
Balance at June 30, 2025 | $ | |
| $ | |
| $ | |
17. Recent Accounting Standards
In December 2023, the FASB issued Accounting Standards Update “ASU 2023-09 – Income Tax Disclosure”. The guidance requires a reconciliation between the amount of reported income tax expense from continuing operations and the amount computed from the income multiplied by the United States federal income tax rate. In addition, the guidance requires an annual disaggregation between of the income tax rate reconciliation and potential key categories: state and local income tax, tax credits, changes in valuation allowances, nontaxable or nondeductible tax items and changes in unrecognized tax benefits. The Company will be required to separately disclose any reconciling items which have a tax effect greater than
In November 2024, the FASB issued Accounting Standards Update “ASU 2024-03 – Disaggregation of Income Statement Expenses”. The guidance provides enhanced disclosures about commonly presented expense categories such as cost of sales, selling, general and administrative expenses and research and development. The objective is to provide investors with a better understanding of the entity’s performance, assess potential future cash flows and comparability with other entities. The guidance is effective for fiscal periods beginning December 15, 2026, and interim periods within fiscal years beginning December 15, 2027. The Company is currently analyzing the impact of the ASU on the current footnote disclosures.
-25-
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Summary
We operate through our two wholly-owned subsidiaries, VITAS Healthcare Corporation and Roto-Rooter Group, Inc. VITAS focuses on hospice care that helps make terminally ill patients’ final days as comfortable as possible. Through its teams of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter’s services are focused on providing plumbing, drain cleaning, excavation, water restoration and other related services to both residential and commercial customers. Through its network of company-owned branches, independent contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.
The vast majority of the Company’s operations are located in the United States. As both operations are service companies, our employees are the most critical resource of the Company. We have very little exposure related to customers, vendors, or employees in other regions of the world. We continue to monitor macroeconomic trends and uncertainties such as inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs, which may have adverse effects on net sales and profitability. Based on preliminary analysis of the potential effects of the announced tariffs and these other factors, we do not expect a material negative effect on our net sales or profitability for the remainder of fiscal year 2025. However, we are continuing to evaluate these factors and their potential effects as well as our ability to potentially offset all or a portion of cost increases through pricing actions and cost savings efforts for fiscal year 2026 planning. Economic pressures including the challenges of high inflation and the effects of increased tariffs may negatively affect our net sales and profitability in the future.
The following is a summary of the key operating results (in thousands except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30, |
| Six months ended June 30, |
| ||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| ||||
Service revenues and sales | $ | 618,798 |
| $ | 595,880 |
| $ | 1,265,741 |
| $ | 1,185,113 |
|
Net income | $ | 52,493 |
| $ | 70,887 |
| $ | 124,250 |
| $ | 135,904 |
|
Diluted EPS | $ | 3.57 |
| $ | 4.65 |
| $ | 8.43 |
| $ | 8.89 |
|
Adjusted net income | $ | 62,721 |
| $ | 83,419 |
| $ | 145,796 |
| $ | 163,250 |
|
Adjusted diluted EPS | $ | 4.27 |
| $ | 5.47 |
| $ | 9.90 |
| $ | 10.67 |
|
Adjusted EBITDA | $ | 95,331 |
| $ | 119,890 |
| $ | 217,023 |
| $ | 234,512 |
|
Adjusted EBITDA as a % of revenue |
| 15.4 | % |
| 20.1 | % |
| 17.1 | % |
| 19.8 | % |
Adjusted net income, adjusted diluted EPS, earnings before interest, taxes and depreciation and amortization (“EBITDA”), Adjusted EBITDA and Adjusted EBITDA as a percent of revenue are not measures derived in accordance with US GAAP. We provide non-GAAP measures to help readers evaluate our operating results and to compare our operating performance with that of similar companies that have different capital structures. Our non-GAAP measures should not be considered in isolation or as a substitute for comparable measures presented in accordance with GAAP. A reconciliation of our non-GAAP measures is presented on pages 39-41.
For the three months ended June 30, 2025, the increase in consolidated service revenues and sales was driven by a 5.8% increase at VITAS and by a .6% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 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 by 71-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 379-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in excavation and water restoration offset by a decrease in plumbing and drain cleaning.
For the six months ended June 30, 2025, the increase in consolidated service revenues and sales was driven by a 10.3% increase at VITAS and by a 1.2% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 8.9% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.7%. Acuity mix shift negatively impacted revenue growth by 90-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 140-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in excavation and water restoration offset by a decrease in plumbing and drain cleaning.
On April 17, 2024, VITAS completed the purchase of all hospice operations and an assisted living facility from Covenant Health and Community Services, Inc d/b/a/ Covenant Care (“Covenant”) for an aggregated purchase price of $85.0 million in cash.
-26-
The pro forma revenue and earnings for the Company for the three and six months ended June 30, as if the Covenant acquisition made in 2024 was completed on January 1, 2024 are as follows (in thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30, |
| Six months ended June 30, | ||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales | $ | 618,798 |
| $ | 598,164 |
| $ | 1,265,741 |
| $ | 1,202,245 |
Net income | $ | 52,493 |
| $ | 71,450 |
| $ | 124,250 |
| $ | 140,129 |
Earnings per share | $ | 3.60 |
| $ | 4.73 |
| $ | 8.51 |
| $ | 9.27 |
Diluted earnings per share | $ | 3.57 |
| $ | 4.68 |
| $ | 8.43 |
| $ | 9.16 |
Financial Condition
Liquidity and Capital Resources
Material changes in the balance sheet accounts from December 31, 2024 to June 30, 2025 include the following:
A $13.7 million increase in accounts receivable due to timing of payments. Other significant changes in our accounts receivable balances are typically driven by the timing of payments received from the Federal government at our VITAS subsidiary. We typically receive a payment in excess of $60.0 million from the Federal government for hospice services every other Friday. The timing of a period end will have a significant impact on the accounts receivable at VITAS. These changes generally normalize over a two-year period, as cash flow variations in one year are offset in the following year.
A $47.4 million decrease in other assets primarily related to the refund of the OAS deposit.
A $4.6 million increase in lease right of use asset due to lease renewals. This resulted in a similar increase in the lease liability accounts.
A $6.7 million increase in accounts payable due to timing of payments.
A $7.6 million decrease in income taxes payable due to timing of payments.
A $13.2 million decrease in deferred income taxes primarily due to the refund of the OAS deposit.
A $37.4 million decline in accrued compensation due to the payment of 2024 bonuses in the first quarter of 2025 and reduction in current year accrual rates due to lower earnings in 2025.
Net cash provided by operating activities increased $9.3 million from June 30, 2024 to June 30, 2025. Material changes include the following:
A $63.8 million increase in other assets due to the $47.0 million refund of the OAS deposit and the change in the deferred compensation asset due to market valuations.
An $11.7 million decrease in net income.
A $10.8 million decrease in deferred income taxes due to the refund of the OAS deposit.
An $11.0 million decrease in accounts receivable due to timing.
A $9.4 million decrease in noncash long-term incentive compensation.
A $14.2 million decrease in other liabilities due to the change in deferred compensation liability due to market valuations.
Management continually evaluates cash utilization alternatives, including share repurchase, debt repurchase, acquisitions and increased dividends to determine the most beneficial use of available capital resources.
We anticipate that our operating income and cash flows will be sufficient to operate our business and meet any commitments for the foreseeable future.
-27-
Commitments and Contingencies
On June 28, 2022, we replaced our existing credit facility with a fifth amended and restated Credit Agreement (“2022 Credit Facilities”). Terms of the 2022 Credit Facilities consist of a five-year $450.0 million revolver as well as a five-year $100.0 million term loan. The 2022 Credit Facilities have a floating interest rate that is generally SOFR plus an additional tiered rate which varies based on our current leverage ratio. As of June 30, 2025, the interest rate is SOFR plus 100 basis points. The 2022 Credit Facilities include an expansion feature that provides the Company the opportunity to increase its revolver and/or term loan by an additional $250.0 million.
We have issued $45.5 million in standby letters of credit as of June 30, 2025, mainly for insurance purposes. Issued letters of credit reduce our available credit under the 2022 Credit Facilities. As of June 30, 2025, we have approximately $404.5 million of unused lines of credit available and are eligible to be drawn down under our revolving credit facility. Management believes its liquidity and sources of capital are satisfactory for the Company’s needs in the foreseeable future.
Collectively, the terms of the 2022 Credit Facilities require us to meet various financial covenants, to be tested quarterly. We are in compliance with all financial and other debt covenants as of June 30, 2025 and anticipate remaining in compliance throughout the foreseeable future.
We are subject to various lawsuits and claims in the normal course of our business. In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary. We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable. We disclose the existence of regulatory and legal actions when we believe it is reasonably possible that a loss could occur in connection with the specific action. In most instances, we are unable to make a reasonable estimate of any reasonably possible liability due to the uncertainty of the outcome and stage of litigation. We record legal fees associated with legal and regulatory actions as the costs are incurred.
See Note 10 in the Notes to the Unaudited Consolidated Financial Statements in Item 1 above for a description of current material legal matters.
-28-
Results of Operations
Three months ended June 30, 2025 versus 2024 - Consolidated Results
Our service revenues and sales for the second quarter of 2025 increased 3.8% versus services and sales revenues for the second quarter of 2024. Of this increase, a $21.6 million increase was attributable to VITAS, and a $1.3 million increase at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30, |
| Increase/(Decrease) | ||||
|
| 2025 |
| 2024 |
| Percent | ||
VITAS |
|
|
|
|
|
|
|
|
Routine homecare |
| $ | 358,042 |
| $ | 324,778 |
| 10.2 |
General inpatient |
|
| 33,023 |
|
| 29,071 |
| 13.6 |
Continuous care |
|
| 23,640 |
|
| 24,327 |
| (2.8) |
Other |
|
| 5,747 |
|
| 4,733 |
| 21.4 |
Subtotal |
|
| 420,452 |
|
| 382,909 |
| 9.8 |
Medicare cap adjustment |
|
| (16,375) |
|
| (1,375) |
| (1,090.9) |
Room and board - net |
|
| (3,892) |
|
| (3,156) |
| (23.3) |
Implicit price concessions |
|
| (3,984) |
|
| (3,820) |
| (4.3) |
Net revenue |
| $ | 396,201 |
| $ | 374,558 |
| 5.8 |
|
|
|
|
|
|
|
|
|
Roto-Rooter |
|
|
|
|
|
|
|
|
Drain cleaning |
| $ | 55,557 |
| $ | 57,865 |
| (4.0) |
Plumbing |
|
| 45,284 |
|
| 46,046 |
| (1.7) |
Excavation |
|
| 56,493 |
|
| 55,713 |
| 1.4 |
Other |
|
| 187 |
|
| 202 |
| (7.4) |
Subtotal - short term core |
|
| 157,521 |
|
| 159,826 |
| (1.4) |
Water restoration |
|
| 49,824 |
|
| 42,777 |
| 16.5 |
Independent contractors |
|
| 17,449 |
|
| 18,255 |
| (4.4) |
Outside franchisee fees |
|
| 1,405 |
|
| 1,398 |
| 0.5 |
Other |
|
| 4,783 |
|
| 5,863 |
| (18.4) |
Gross revenue |
|
| 230,982 |
|
| 228,119 |
| 1.3 |
Implicit price concessions |
|
| (8,385) |
|
| (6,797) |
| (23.4) |
Net revenue |
|
| 222,597 |
|
| 221,322 |
| 0.6 |
Total Revenues |
| $ | 618,798 |
| $ | 595,880 |
| 3.8 |
Days of care at VITAS during the quarters were as follows:
|
|
|
|
|
|
| Three months ended June 30, |
| Increase/(Decrease) | ||
| 2025 |
| 2024 |
| Percent |
|
|
|
|
|
|
Routine homecare | 1,662,455 |
| 1,551,163 |
| 7.2 |
Nursing home | 307,158 |
| 304,191 |
| 1.0 |
Respite | 11,440 |
| 9,102 |
| 25.7 |
Subtotal routine homecare and respite | 1,981,053 |
| 1,864,456 |
| 6.3 |
General inpatient | 28,213 |
| 25,895 |
| 9.0 |
Continuous care | 21,647 |
| 23,933 |
| (9.6) |
Total days of care | 2,030,913 |
| 1,914,284 |
| 6.1 |
The increase in service revenues at VITAS 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 by 71-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 379-basis.
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
-29-
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 of 2025.
The decrease in drain cleaning revenues for the second quarter of 2025 versus 2024 is attributable to a 3.2% increase in price and service mix offset by a 7.2% decrease in job count. The decrease in plumbing revenues for the second quarter of 2025 versus 2024 is attributable to a 2.6% decrease in price and service mix shift offset by a .9% increase in job count. Excavation and water restoration jobs are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, excavation revenues increased 1.4% and water restoration revenues increased 16.5%. Contractors operations decreased 4.4%.
The consolidated gross margin was 29.8% in the second quarter of 2025 as compared with 34.6% in the second quarter of 2024. On a segment basis, VITAS’ gross margin was 19.1% in the second quarter of 2025 compared with 23.8% in the second quarter of 2024. The decline was primarily due to an increase in Medicare Cap liability of $15.0 million in the second quarter of 2025 compared to the second quarter of 2024. The Roto-Rooter segment’s gross margin was 49.0% for the second quarter of 2025 as compared with 52.9% in the second quarter of 2024. The decline was primarily due to an increase of $4.9 million in casualty insurance expense in the second quarter of 2025.
Selling, general and administrative expenses (“SG&A”) comprise (in thousands):
|
|
|
|
|
|
| Three months ended June 30, | ||||
| 2025 |
| 2024 | ||
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts | $ | 98,552 |
| $ | 96,025 |
Impact of market value adjustments related to assets held in deferred compensation trusts |
| 918 |
|
| 2,637 |
Long-term incentive compensation |
| 853 |
|
| 3,593 |
Total SG&A expenses | $ | 100,323 |
| $ | 102,255 |
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for the second quarter of 2025 were up 2.6% when compared to second quarter of 2024 due mainly to normal salary increases and an increase in variable selling expenses.
Other income – net comprise (in thousands):
|
|
|
|
|
|
| Three months ended June 30, | ||||
| 2025 |
| 2024 | ||
Interest income | $ | 2,555 |
| $ | 3,495 |
Market value adjustment on assets held in deferred compensation trusts |
| 918 |
|
| 2,637 |
Other |
| 1 |
|
| - |
Total other income - net | $ | 3,474 |
| $ | 6,132 |
We invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds. Chemed invests excess cash in money market funds holding US Treasuries. Deposits and withdrawals are made daily, based on the Company’s excess cash balance. There are no penalties associated with withdrawals. The accounts bear interest at a normal market rate.
Our effective tax rate reconciliation is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
|
|
|
Income tax provision calculated at the statutory federal rate |
| $ | 14,934 |
|
| $ | 19,704 |
|
State and local income taxes |
|
| 2,261 |
|
|
| 2,461 |
|
Stock compensation tax benefits |
|
| (50) |
|
|
| (622) |
|
Other--net |
|
| 1,477 |
|
|
| 1,398 |
|
Income tax provision |
| $ | 18,622 |
|
| $ | 22,941 |
|
Effective tax rate |
|
| 26.2 | % |
|
| 24.5 | % |
-30-
Net income for both periods included the following after-tax items/adjustments that (reduced) or increased after-tax earnings (in thousands):
|
|
|
|
|
|
| Three months ended June 30, | ||||
| 2025 |
| 2024 | ||
VITAS |
|
|
|
|
|
Acquisition expense | $ | - |
| $ | (687) |
Roto-Rooter |
|
|
|
|
|
Amortization of reacquired franchise agreements |
| (1,806) |
|
| (1,804) |
Acquisition expense |
| - |
|
| (34) |
Corporate |
|
|
|
|
|
Stock option expense |
| (7,696) |
|
| (7,408) |
Long-term incentive compensation |
| (776) |
|
| (3,221) |
Excess tax benefits on stock compensation |
| 50 |
|
| 622 |
Total | $ | (10,228) |
| $ | (12,532) |
Three months ended June 30, 2025 versus 2024 - Segment Results
Net income/(loss) for the second quarter of 2025 versus the second quarter of 2024 by segment (in thousands):
|
|
|
|
|
|
|
|
|
| ||
| Three months ended June 30, | ||||
| 2025 |
| 2024 | ||
VITAS | $ | 38,219 |
| $ | 49,252 |
Roto-Rooter |
| 31,914 |
|
| 40,517 |
Corporate |
| (17,640) |
|
| (18,882) |
| $ | 52,493 |
| $ | 70,887 |
After-tax earnings as a percent of revenue at VITAS in the second quarter of 2025 was 9.6% as compared to 13.1% in the second quarter of 2024. VITAS’ after-tax earnings decreased primarily due to an increase in Medicare Cap liability of $15.0 million in the second quarter of 2025 compared to the second quarter of 2024.
Roto-Rooter’s net income was negatively impacted in the second quarter of 2025 compared to the second quarter of 2024 due primarily to an increase in casualty insurance expense of $4.9 million and an increase in variable expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the second quarter of 2025 was 14.3%, as compared to 18.3% in the second quarter of 2024.
After-tax Corporate expenses for the second quarter of 2025 decreased 6.6% when compared to the second quarter of 2024 due primarily to a $2.2 million decrease in stock-based compensation offset by a $940,000 decrease in interest income and a $572,000 decrease in excess tax benefits on stock compensation.
-31-
Results of Operations
Six months ended June 30, 2025 versus 2024 - Consolidated Results
Our service revenues and sales for the first six months of 2025 increased 6.8% versus services and sales revenues for the first six months of 2024. Of this increase, a $75.0 million increase was attributable to VITAS, and a $5.6 million increase at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six months ended June 30, |
| Increase/(Decrease) | ||||
|
| 2025 |
| 2024 |
| Percent | ||
VITAS |
|
|
|
|
|
|
|
|
Routine homecare |
| $ | 709,608 |
| $ | 629,637 |
| 12.7 |
General inpatient |
|
| 67,045 |
|
| 59,374 |
| 12.9 |
Continuous care |
|
| 48,276 |
|
| 48,497 |
| (0.5) |
Other |
|
| 11,092 |
|
| 8,817 |
| 25.8 |
Subtotal |
|
| 836,021 |
|
| 746,325 |
| 12.0 |
Medicare cap adjustment |
|
| (18,700) |
|
| (3,750) |
| (398.7) |
Room and board - net |
|
| (7,417) |
|
| (6,101) |
| (21.6) |
Implicit price concessions |
|
| (6,304) |
|
| (7,910) |
| 20.3 |
Net revenue |
| $ | 803,600 |
| $ | 728,564 |
| 10.3 |
|
|
|
|
|
|
|
|
|
Roto-Rooter |
|
|
|
|
|
|
|
|
Drain cleaning |
| $ | 115,099 |
| $ | 119,486 |
| (3.7) |
Plumbing |
|
| 91,344 |
|
| 94,144 |
| (3.0) |
Excavation |
|
| 120,731 |
|
| 114,331 |
| 5.6 |
Other |
|
| 376 |
|
| 446 |
| (15.7) |
Subtotal - short term core |
|
| 327,550 |
|
| 328,407 |
| (0.3) |
Water restoration |
|
| 103,987 |
|
| 89,454 |
| 16.2 |
Independent contractors |
|
| 35,811 |
|
| 37,871 |
| (5.4) |
Outside franchisee fees |
|
| 2,828 |
|
| 2,890 |
| (2.1) |
Other |
|
| 9,678 |
|
| 11,880 |
| (18.5) |
Gross revenue |
|
| 479,854 |
|
| 470,502 |
| 2.0 |
Implicit price concessions |
|
| (17,713) |
|
| (13,953) |
| (26.9) |
Net revenue |
|
| 462,141 |
|
| 456,549 |
| 1.2 |
Total Revenues |
| $ | 1,265,741 |
| $ | 1,185,113 |
| 6.8 |
Days of care at VITAS during the six months ended June 30 were as follows:
|
|
|
|
|
|
| Six months ended June 30, |
| Increase/(Decrease) | ||
| 2025 |
| 2024 |
| Percent |
|
|
|
|
|
|
Routine homecare | 3,295,024 |
| 2,999,075 |
| 9.9 |
Nursing home | 614,266 |
| 587,349 |
| 4.6 |
Respite | 21,435 |
| 16,854 |
| 27.2 |
Subtotal routine homecare and respite | 3,930,725 |
| 3,603,278 |
| 9.1 |
General inpatient | 57,917 |
| 52,540 |
| 10.2 |
Continuous care | 44,267 |
| 47,970 |
| (7.7) |
Total days of care | 4,032,909 |
| 3,703,788 |
| 8.9 |
The increase in service revenues at VITAS is comprised primarily of a 8.9% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.7%. Acuity mix shift negatively impacted revenue growth by 90-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 140-basis.
-32-
The decrease in drain cleaning revenues for the first six months of 2025 versus 2024 is attributable to a 3.2% increase in price and service mix offset by a 6.9% decrease in job count. The decrease in plumbing revenues for the first six months of 2025 versus 2024 is attributable to a 3.0% decrease in price and service mix shift. Excavation and water restoration jobs are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, excavation revenues increased 5.6% and water restoration revenues increased 16.2%. Contractors operations decreased 5.4%.
The consolidated gross margin was 31.7% in the first six months of 2025 as compared with 34.6% in the first six months of 2024. On a segment basis, VITAS’ gross margin was 21.2% in the first six months of 2025 as compared with 23.5% in the first six months of 2024. The decline was primarily due to an increase in Medicare Cap liability of $15.0 million. The Roto-Rooter segment’s gross margin was 50.0% for the first six months of 2025 as compared with 52.4% in the first six months of 2024. The decline was primarily due to a $3.5 million increase in casualty insurance expense and an increase in variable expenses.
Selling, general and administrative expenses (“SG&A”) comprise (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
| Six months ended June 30, | ||||
| 2025 |
| 2024 | ||
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts | $ | 202,312 |
| $ | 194,443 |
Long-term incentive compensation |
| 3,510 |
|
| 12,714 |
Impact of market value adjustments related to assets held in deferred compensation trusts |
| 88 |
|
| 10,971 |
Total SG&A expenses | $ | 205,910 |
| $ | 218,128 |
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for the first six months of 2025 were up 4.0% when compared to the first six months of 2024 due mainly to normal salary increases and an increase in variable selling expenses.
Other income – net comprise (in thousands):
|
|
|
|
|
|
| Six months ended June 30, | ||||
| 2025 |
| 2024 | ||
Interest income | $ | 4,631 |
| $ | 7,737 |
Market value adjustment on assets held in deferred compensation trusts |
| 88 |
|
| 10,971 |
Other |
| - |
|
| 1 |
Total other income - net | $ | 4,719 |
| $ | 18,709 |
|
|
|
|
|
|
|
|
|
|
| Six months ended June 30, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
|
|
|
Income tax provision calculated at the statutory federal rate |
| $ | 35,026 |
|
| $ | 37,446 |
|
State and local income taxes |
|
| 6,448 |
|
|
| 5,422 |
|
Stock compensation tax benefits |
|
| (513) |
|
|
| (3,919) |
|
Other--net |
|
| 1,578 |
|
|
| 3,460 |
|
Income tax provision |
| $ | 42,539 |
|
| $ | 42,409 |
|
Effective tax rate |
|
| 25.5 | % |
|
| 23.8 | % |
|
|
|
|
|
|
|
|
|
-33-
Net income for both periods included the following after-tax items/adjustments that (reduced) or increased after-tax earnings (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
| Six months ended June 30, | ||||
| 2025 |
| 2024 | ||
VITAS |
|
|
|
|
|
Acquisition expense | $ | - |
| $ | (687) |
Roto-Rooter |
|
|
|
|
|
Amortization of reacquired franchise agreements |
| (3,613) |
|
| (3,608) |
Acquisition expense |
| - |
|
| (34) |
Corporate |
|
|
|
|
|
Stock option expense |
| (15,317) |
|
| (14,963) |
Long-term incentive compensation |
| (3,129) |
|
| (6,636) |
Severance arrangement |
| - |
|
| (5,337) |
Excess tax benefits on stock compensation |
| 513 |
|
| 3,919 |
Total | $ | (21,546) |
| $ | (27,346) |
Six months ended June 30, 2025 versus 2024 - Segment Results
Net income/(loss) for the first six months of 2025 versus the first six months of 2024 by segment (in thousands):
|
|
|
|
|
|
|
|
|
| ||
| Six months ended June 30, | ||||
| 2025 |
| 2024 | ||
VITAS | $ | 88,249 |
| $ | 93,221 |
Roto-Rooter |
| 71,858 |
|
| 81,371 |
Corporate |
| (35,857) |
|
| (38,688) |
| $ | 124,250 |
| $ | 135,904 |
After-tax earnings as a percent of revenue at VITAS in the first six months of 2025 was 11.0% as compared to 12.8% in the first six months of 2024. VITAS’ after-tax earnings decreased primarily to an increase in Medicare Cap liability of $15.0 million.
Roto-Rooter’s net income was negatively impacted in the first six months of 2025 compared to the first six months of 2024 due primarily to an increase in casualty insurance expense of $3.5 million and an increase in variable expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the first six months of 2025 was 15.5%, as compared to 17.8% in the first six months of 2024.
After-tax Corporate expenses for the first six months of 2025 decreased 7.3% when compared to the first six months in 2024 due primarily to a $8.5 million decrease in stock-based compensation offset by a $3.1 million decrease in interest income and a $3.4 million decrease in excess tax benefits on stock compensation.
-34-
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||
CONSOLIDATING STATEMENTS OF INCOME | |||||||||||
FOR THE THREE MONTHS ENDED JUNE 30, 2025 | |||||||||||
(in thousands)(unaudited) | |||||||||||
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
| Chemed | ||||
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
2025 (a) |
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales | $ | 396,201 |
| $ | 222,597 |
| $ | - |
| $ | 618,798 |
Cost of services provided and goods sold |
| 320,644 |
|
| 113,461 |
|
| - |
|
| 434,105 |
Selling, general and administrative expenses |
| 25,085 |
|
| 60,536 |
|
| 14,702 |
|
| 100,323 |
Depreciation |
| 5,314 |
|
| 8,363 |
|
| 12 |
|
| 13,689 |
Amortization |
| 26 |
|
| 2,545 |
|
| - |
|
| 2,571 |
Other operating expense/(income) |
| 55 |
|
| (29) |
|
| - |
|
| 26 |
Total costs and expenses |
| 351,124 |
|
| 184,876 |
|
| 14,714 |
|
| 550,714 |
Income/(loss) from operations |
| 45,077 |
|
| 37,721 |
|
| (14,714) |
|
| 68,084 |
Interest expense |
| (47) |
|
| (129) |
|
| (267) |
|
| (443) |
Intercompany interest income/(expense) |
| 5,454 |
|
| 3,970 |
|
| (9,424) |
|
| - |
Other income—net |
| 61 |
|
| 23 |
|
| 3,390 |
|
| 3,474 |
Income/(expense) before income taxes |
| 50,545 |
|
| 41,585 |
|
| (21,015) |
|
| 71,115 |
Income taxes |
| (12,326) |
|
| (9,671) |
|
| 3,375 |
|
| (18,622) |
Net income/(loss) | $ | 38,219 |
| $ | 31,914 |
| $ | (17,640) |
| $ | 52,493 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) The following amounts are included in net income (in thousands): | |||||||||||
|
|
|
|
|
|
|
|
|
| Chemed | |
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
Pretax benefit/(cost): |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense | $ | - |
| $ | - |
| $ | (9,216) |
| $ | (9,216) |
Amortization of reacquired franchise agreements |
| - |
|
| (2,352) |
|
| - |
|
| (2,352) |
Long-term incentive compensation |
| - |
|
| - |
|
| (853) |
|
| (853) |
Total | $ | - |
| $ | (2,352) |
| $ | (10,069) |
| $ | (12,421) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Chemed | |
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
After-tax benefit/(cost): |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense | $ | - |
| $ | - |
| $ | (7,696) |
| $ | (7,696) |
Amortization of reacquired franchise agreements |
| - |
|
| (1,806) |
|
| - |
|
| (1,806) |
Long-term incentive compensation |
| - |
|
| - |
|
| (776) |
|
| (776) |
Excess tax benefits on stock compensation |
| - |
|
| - |
|
| 50 |
|
| 50 |
Total | $ | - |
| $ | (1,806) |
| $ | (8,422) |
| $ | (10,228) |
-35-
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||
CONSOLIDATING STATEMENTS OF INCOME | |||||||||||
FOR THE THREE MONTHS ENDED JUNE 30, 2024 | |||||||||||
(in thousands)(unaudited) | |||||||||||
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
| Chemed | ||||
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
2024 (a) |
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales | $ | 374,558 |
| $ | 221,322 |
| $ | - |
| $ | 595,880 |
Cost of services provided and goods sold |
| 285,517 |
|
| 104,233 |
|
| - |
|
| 389,750 |
Selling, general and administrative expenses |
| 24,293 |
|
| 57,351 |
|
| 20,611 |
|
| 102,255 |
Depreciation |
| 5,058 |
|
| 8,096 |
|
| 13 |
|
| 13,167 |
Amortization |
| 26 |
|
| 2,520 |
|
| - |
|
| 2,546 |
Other operating expense/(income) |
| 56 |
|
| (19) |
|
| - |
|
| 37 |
Total costs and expenses |
| 314,950 |
|
| 172,181 |
|
| 20,624 |
|
| 507,755 |
Income/(loss) from operations |
| 59,608 |
|
| 49,141 |
|
| (20,624) |
|
| 88,125 |
Interest expense |
| (46) |
|
| (118) |
|
| (265) |
|
| (429) |
Intercompany interest income/(expense) |
| 4,982 |
|
| 3,540 |
|
| (8,522) |
|
| - |
Other income—net |
| 46 |
|
| 24 |
|
| 6,062 |
|
| 6,132 |
Income/(expense) before income taxes |
| 64,590 |
|
| 52,587 |
|
| (23,349) |
|
| 93,828 |
Income taxes |
| (15,338) |
|
| (12,070) |
|
| 4,467 |
|
| (22,941) |
Net income/(loss) | $ | 49,252 |
| $ | 40,517 |
| $ | (18,882) |
| $ | 70,887 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) The following amounts are included in net income (in thousands): | |||||||||||
|
|
|
|
|
|
|
|
|
| Chemed | |
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
Pretax benefit/(cost): |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense | $ | - |
| $ | - |
| $ | (8,870) |
| $ | (8,870) |
Long-term incentive compensation |
| - |
|
| - |
|
| (3,593) |
|
| (3,593) |
Amortization of reacquired franchise agreements |
| - |
|
| (2,352) |
|
| - |
|
| (2,352) |
Acquisition expense |
| (907) |
|
| (45) |
|
| - |
|
| (952) |
Total | $ | (907) |
| $ | (2,397) |
| $ | (12,463) |
| $ | (15,767) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Chemed | |
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
After-tax benefit/(cost): |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense | $ | - |
| $ | - |
| $ | (7,408) |
| $ | (7,408) |
Long-term incentive compensation |
| - |
|
| - |
|
| (3,221) |
|
| (3,221) |
Amortization of reacquired franchise agreements |
| - |
|
| (1,804) |
|
| - |
|
| (1,804) |
Acquisition expense |
| (687) |
|
| (34) |
|
| - |
|
| (721) |
Excess tax benefits on stock compensation |
| - |
|
| - |
|
| 622 |
|
| 622 |
Total | $ | (687) |
| $ | (1,838) |
| $ | (10,007) |
| $ | (12,532) |
-36-
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | |||||||||||
CONSOLIDATING STATEMENTS OF INCOME | |||||||||||
FOR THE SIX MONTHS ENDED June 30, 2025 | |||||||||||
(in thousands)(unaudited) | |||||||||||
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
| Chemed | ||||
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
2025 (a) |
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales | $ | 803,600 |
| $ | 462,141 |
| $ | - |
| $ | 1,265,741 |
Cost of services provided and goods sold |
| 633,451 |
|
| 231,184 |
|
| - |
|
| 864,635 |
Selling, general and administrative expenses |
| 51,624 |
|
| 123,184 |
|
| 31,102 |
|
| 205,910 |
Depreciation |
| 10,509 |
|
| 16,601 |
|
| 24 |
|
| 27,134 |
Amortization |
| 52 |
|
| 5,091 |
|
| - |
|
| 5,143 |
Other operating expense/(income) |
| 119 |
|
| (42) |
|
| - |
|
| 77 |
Total costs and expenses |
| 695,755 |
|
| 376,018 |
|
| 31,126 |
|
| 1,102,899 |
Income/(loss) from operations |
| 107,845 |
|
| 86,123 |
|
| (31,126) |
|
| 162,842 |
Interest expense |
| (95) |
|
| (261) |
|
| (416) |
|
| (772) |
Intercompany interest income/(expense) |
| 10,750 |
|
| 7,900 |
|
| (18,650) |
|
| - |
Other income—net |
| 110 |
|
| 32 |
|
| 4,577 |
|
| 4,719 |
Income/(expense) before income taxes |
| 118,610 |
|
| 93,794 |
|
| (45,615) |
|
| 166,789 |
Income taxes |
| (30,361) |
|
| (21,936) |
|
| 9,758 |
|
| (42,539) |
Net income/(loss) | $ | 88,249 |
| $ | 71,858 |
| $ | (35,857) |
| $ | 124,250 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) The following amounts are included in net income (in thousands): | |||||||||||
|
|
|
|
|
|
|
|
|
| Chemed | |
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
Pretax benefit/(cost): |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense | $ | - |
| $ | - |
| $ | (18,307) |
| $ | (18,307) |
Long-term incentive compensation |
| - |
|
| - |
|
| (3,510) |
|
| (3,510) |
Amortization of reacquired franchise agreements |
| - |
|
| (4,704) |
|
| - |
|
| (4,704) |
Total | $ | - |
| $ | (4,704) |
| $ | (21,817) |
| $ | (26,521) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Chemed | |
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
After-tax benefit/(cost): |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense | $ | - |
| $ | - |
| $ | (15,317) |
| $ | (15,317) |
Long-term incentive compensation |
| - |
|
| - |
|
| (3,129) |
|
| (3,129) |
Amortization of reacquired franchise agreements |
| - |
|
| (3,613) |
|
| - |
|
| (3,613) |
Excess tax benefits on stock compensation |
| - |
|
| - |
|
| 513 |
|
| 513 |
Total | $ | - |
| $ | (3,613) |
| $ | (17,933) |
| $ | (21,546) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-37-
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATING STATEMENTS OF INCOME | |||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2024 | |||||||||||
(in thousands)(unaudited) | |||||||||||
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
| Chemed | ||||
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
2024 (a) |
|
|
|
|
|
|
|
|
|
|
|
Service revenues and sales | $ | 728,564 |
| $ | 456,549 |
| $ | - |
| $ | 1,185,113 |
Cost of services provided and goods sold |
| 557,411 |
|
| 217,466 |
|
| - |
|
| 774,877 |
Selling, general and administrative expenses |
| 48,085 |
|
| 118,611 |
|
| 51,432 |
|
| 218,128 |
Depreciation |
| 10,225 |
|
| 16,204 |
|
| 25 |
|
| 26,454 |
Amortization |
| 52 |
|
| 5,015 |
|
| - |
|
| 5,067 |
Other operating expense |
| 63 |
|
| 66 |
|
| - |
|
| 129 |
Total costs and expenses |
| 615,836 |
|
| 357,362 |
|
| 51,457 |
|
| 1,024,655 |
Income/(loss) from operations |
| 112,728 |
|
| 99,187 |
|
| (51,457) |
|
| 160,458 |
Interest expense |
| (92) |
|
| (235) |
|
| (527) |
|
| (854) |
Intercompany interest income/(expense) |
| 10,176 |
|
| 6,982 |
|
| (17,158) |
|
| - |
Other income - net |
| 75 |
|
| 47 |
|
| 18,587 |
|
| 18,709 |
Income/(expense) before income taxes |
| 122,887 |
|
| 105,981 |
|
| (50,555) |
|
| 178,313 |
Income taxes |
| (29,666) |
|
| (24,610) |
|
| 11,867 |
|
| (42,409) |
Net income/(loss) | $ | 93,221 |
| $ | 81,371 |
| $ | (38,688) |
| $ | 135,904 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) The following amounts are included in net income (in thousands): | |||||||||||
|
|
|
|
|
|
|
|
|
| Chemed | |
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
Pretax benefit/(cost): |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense | $ | - |
| $ | - |
| $ | (17,895) |
| $ | (17,895) |
Long-term incentive compensation |
| - |
|
| - |
|
| (7,377) |
|
| (7,377) |
Severance arrangement |
| - |
|
| - |
|
| (5,337) |
|
| (5,337) |
Amortization of reacquired franchise agreements |
| - |
|
| (4,704) |
|
| - |
|
| (4,704) |
Acquisition expense |
| (907) |
|
| (45) |
|
| - |
|
| (952) |
Total | $ | (907) |
| $ | (4,749) |
| $ | (30,609) |
| $ | (36,265) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Chemed | |
| VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | ||||
After-tax benefit/(cost): |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense | $ | - |
| $ | - |
| $ | (14,963) |
| $ | (14,963) |
Long-term incentive compensation |
| - |
|
| - |
|
| (6,636) |
|
| (6,636) |
Severance arrangement |
| - |
|
| - |
|
| (5,337) |
|
| (5,337) |
Amortization of reacquired franchise agreements |
| - |
|
| (3,608) |
|
| - |
|
| (3,608) |
Acquisition expense |
| (687) |
|
| (34) |
|
| - |
|
| (721) |
Excess tax benefits on stock compensation |
| - |
|
| - |
|
| 3,919 |
|
| 3,919 |
Total | $ | (687) |
| $ | (3,642) |
| $ | (23,017) |
| $ | (27,346) |
|
|
|
|
|
|
|
|
|
|
|
|
-38-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed Corporation and Subsidiary Companies |
|
|
| |||||||||
(in thousands) |
|
|
|
|
|
|
|
|
| Chemed | ||
For the three months ended June 30, 2025 | VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income/(loss) | $ | 38,219 |
| $ | 31,914 |
| $ | (17,640) |
| $ | 52,493 |
| Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
| 47 |
|
| 129 |
|
| 267 |
|
| 443 |
| Income taxes |
| 12,326 |
|
| 9,671 |
|
| (3,375) |
|
| 18,622 |
| Depreciation |
| 5,314 |
|
| 8,363 |
|
| 12 |
|
| 13,689 |
| Amortization |
| 26 |
|
| 2,545 |
|
| - |
|
| 2,571 |
| EBITDA |
| 55,932 |
|
| 52,622 |
|
| (20,736) |
|
| 87,818 |
| Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
| Intercompany interest expense/(income) |
| (5,454) |
|
| (3,970) |
|
| 9,424 |
|
| - |
| Interest income |
| (61) |
|
| (23) |
|
| (2,472) |
|
| (2,556) |
| Stock option expense |
| - |
|
| - |
|
| 9,216 |
|
| 9,216 |
| Long-term incentive compensation |
| - |
|
| - |
|
| 853 |
|
| 853 |
| Adjusted EBITDA | $ | 50,417 |
| $ | 48,629 |
| $ | (3,715) |
| $ | 95,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Chemed | |
For the three months ended June 30, 2024 | VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income/(loss) | $ | 49,252 |
| $ | 40,517 |
| $ | (18,882) |
| $ | 70,887 |
| Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
| 46 |
|
| 118 |
|
| 265 |
|
| 429 |
| Income taxes |
| 15,338 |
|
| 12,070 |
|
| (4,467) |
|
| 22,941 |
| Depreciation |
| 5,058 |
|
| 8,096 |
|
| 13 |
|
| 13,167 |
| Amortization |
| 26 |
|
| 2,520 |
|
| - |
|
| 2,546 |
| EBITDA |
| 69,720 |
|
| 63,321 |
|
| (23,071) |
|
| 109,970 |
| Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
| Intercompany interest expense/(income) |
| (4,982) |
|
| (3,540) |
|
| 8,522 |
|
| - |
| Interest income |
| (45) |
|
| (25) |
|
| (3,425) |
|
| (3,495) |
| Stock option expense |
| - |
|
| - |
|
| 8,870 |
|
| 8,870 |
| Long-term incentive compensation |
| - |
|
| - |
|
| 3,593 |
|
| 3,593 |
| Acquisition expense |
| 907 |
|
| 45 |
|
| - |
|
| 952 |
| Adjusted EBITDA | $ | 65,600 |
| $ | 59,801 |
| $ | (5,511) |
| $ | 119,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
-39-
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemed Corporation and Subsidiary Companies |
|
|
| |||||||||
(in thousands) |
|
|
|
|
|
|
|
|
| Chemed | ||
For the six months ended June 30, 2025 | VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income/(loss) | $ | 88,249 |
| $ | 71,858 |
| $ | (35,857) |
| $ | 124,250 |
| Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
| 95 |
|
| 261 |
|
| 416 |
|
| 772 |
| Income taxes |
| 30,361 |
|
| 21,936 |
|
| (9,758) |
|
| 42,539 |
| Depreciation |
| 10,509 |
|
| 16,601 |
|
| 24 |
|
| 27,134 |
| Amortization |
| 52 |
|
| 5,091 |
|
| - |
|
| 5,143 |
| EBITDA |
| 129,266 |
|
| 115,747 |
|
| (45,175) |
|
| 199,838 |
| Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
| Intercompany interest expense/(income) |
| (10,750) |
|
| (7,900) |
|
| 18,650 |
|
| - |
| Interest income |
| (110) |
|
| (33) |
|
| (4,489) |
|
| (4,632) |
| Stock option expense |
| - |
|
| - |
|
| 18,307 |
|
| 18,307 |
| Long-term incentive compensation |
| - |
|
| - |
|
| 3,510 |
|
| 3,510 |
| Adjusted EBITDA | $ | 118,406 |
| $ | 107,814 |
| $ | (9,197) |
| $ | 217,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Chemed | |
For the six months ended June 30, 2024 | VITAS |
| Roto-Rooter |
| Corporate |
| Consolidated | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income/(loss) | $ | 93,221 |
| $ | 81,371 |
| $ | (38,688) |
| $ | 135,904 |
| Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
| 92 |
|
| 235 |
|
| 527 |
|
| 854 |
| Income taxes |
| 29,666 |
|
| 24,610 |
|
| (11,867) |
|
| 42,409 |
| Depreciation |
| 10,225 |
|
| 16,204 |
|
| 25 |
|
| 26,454 |
| Amortization |
| 52 |
|
| 5,015 |
|
| - |
|
| 5,067 |
| EBITDA |
| 133,256 |
|
| 127,435 |
|
| (50,003) |
|
| 210,688 |
| Add/(deduct): |
|
|
|
|
|
|
|
|
|
|
|
| Intercompany interest expense/(income) |
| (10,176) |
|
| (6,982) |
|
| 17,158 |
|
| - |
| Interest income |
| (75) |
|
| (47) |
|
| (7,615) |
|
| (7,737) |
| Stock option expense |
| - |
|
| - |
|
| 17,895 |
|
| 17,895 |
| Long-term incentive compensation |
| - |
|
| - |
|
| 7,377 |
|
| 7,377 |
| Severance arrangement |
| - |
|
| - |
|
| 5,337 |
|
| 5,337 |
| Acquisition expense |
| 907 |
|
| 45 |
|
| - |
|
| 952 |
| Adjusted EBITDA | $ | 123,912 |
| $ | 120,451 |
| $ | (9,851) |
| $ | 234,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
-40-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
RECONCILIATION OF ADJUSTED NET INCOME | |||||||||||
(in thousands, except per share data)(unaudited) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended June 30, |
| Six Months Ended June 30, | ||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Net income as reported | $ | 52,493 |
| $ | 70,887 |
| $ | 124,250 |
| $ | 135,904 |
|
|
|
|
|
|
|
|
|
|
|
|
Add/(deduct) pre-tax cost of: |
|
|
|
|
|
|
|
|
|
|
|
Stock option expense |
| 9,216 |
|
| 8,870 |
|
| 18,307 |
|
| 17,895 |
Amortization of reacquired franchise agreements |
| 2,352 |
|
| 2,352 |
|
| 4,704 |
|
| 4,704 |
Long-term incentive compensation |
| 853 |
|
| 3,593 |
|
| 3,510 |
|
| 7,377 |
Severance arrangement |
| - |
|
| - |
|
| - |
|
| 5,337 |
Acquisition expense |
| - |
|
| 952 |
|
| - |
|
| 952 |
Add/(deduct) tax impacts: |
|
|
|
|
|
|
|
|
|
|
|
Tax impact of the above pre-tax adjustments (1) |
| (2,143) |
|
| (2,613) |
|
| (4,462) |
|
| (5,000) |
Excess tax benefits on stock compensation |
| (50) |
|
| (622) |
|
| (513) |
|
| (3,919) |
Adjusted net income | $ | 62,721 |
| $ | 83,419 |
| $ | 145,796 |
| $ | 163,250 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share As Reported |
|
|
|
|
|
|
|
|
|
|
|
Net income | $ | 3.57 |
| $ | 4.65 |
| $ | 8.43 |
| $ | 8.89 |
Average number of shares outstanding |
| 14,703 |
|
| 15,251 |
|
| 14,733 |
|
| 15,295 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income | $ | 4.27 |
| $ | 5.47 |
| $ | 9.90 |
| $ | 10.67 |
Adjusted average number of shares outstanding |
| 14,703 |
|
| 15,251 |
|
| 14,733 |
|
| 15,295 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated. | |||||||||||
-41-
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEMED CORPORATION AND SUBSIDIARY COMPANIES | ||||||||||||
OPERATING STATISTICS FOR VITAS SEGMENT | ||||||||||||
(unaudited) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| ||||||||
OPERATING STATISTICS | 2025 |
| 2024 |
| 2025 |
| 2024 |
| ||||
Net revenue ($000) |
|
|
|
|
|
|
|
|
|
|
|
|
Homecare | $ | 358,042 |
| $ | 324,778 |
| $ | 709,608 |
| $ | 629,637 |
|
Inpatient |
| 33,023 |
|
| 29,071 |
|
| 67,045 |
|
| 59,374 |
|
Continuous care |
| 23,640 |
|
| 24,327 |
|
| 48,276 |
|
| 48,497 |
|
Other |
| 5,747 |
|
| 4,733 |
|
| 11,092 |
|
| 8,817 |
|
Subtotal | $ | 420,452 |
| $ | 382,909 |
| $ | 836,021 |
| $ | 746,325 |
|
Room and board, net |
| (3,892) |
|
| (3,156) |
|
| (7,417) |
|
| (6,101) |
|
Contractual allowances |
| (3,984) |
|
| (3,820) |
|
| (6,304) |
|
| (7,910) |
|
Medicare cap allowance |
| (16,375) |
|
| (1,375) |
|
| (18,700) |
|
| (3,750) |
|
Total | $ | 396,201 |
| $ | 374,558 |
| $ | 803,600 |
| $ | 728,564 |
|
Net revenue as a percent of total before Medicare cap allowances |
|
|
|
|
|
|
|
|
|
|
|
|
Homecare |
| 85.2 | % |
| 84.8 | % |
| 84.9 | % |
| 84.4 | % |
Inpatient |
| 7.9 |
|
| 7.6 |
|
| 8.0 |
|
| 8.0 |
|
Continuous care |
| 5.6 |
|
| 6.4 |
|
| 5.8 |
|
| 6.5 |
|
Other |
| 1.3 |
|
| 1.2 |
|
| 1.3 |
|
| 1.1 |
|
Subtotal |
| 100.0 |
|
| 100.0 |
|
| 100.0 |
|
| 100.0 |
|
Room and board, net |
| (0.9) |
|
| (0.8) |
|
| (0.9) |
|
| (0.8) |
|
Contractual allowances |
| (0.9) |
|
| (1.0) |
|
| (0.8) |
|
| (1.1) |
|
Medicare cap allowance |
| (3.9) |
|
| (0.4) |
|
| (2.2) |
|
| (0.5) |
|
Total |
| 94.3 | % |
| 97.8 | % |
| 96.1 | % |
| 97.6 | % |
Days of care |
|
|
|
|
|
|
|
|
|
|
|
|
Homecare |
| 1,662,455 |
|
| 1,551,163 |
|
| 3,295,024 |
|
| 2,999,075 |
|
Nursing home |
| 307,158 |
|
| 304,191 |
|
| 614,266 |
|
| 587,349 |
|
Respite |
| 11,440 |
|
| 9,102 |
|
| 21,435 |
|
| 16,854 |
|
Subtotal routine homecare and respite |
| 1,981,053 |
|
| 1,864,456 |
|
| 3,930,725 |
|
| 3,603,278 |
|
Inpatient |
| 28,213 |
|
| 25,895 |
|
| 57,917 |
|
| 52,540 |
|
Continuous care |
| 21,647 |
|
| 23,933 |
|
| 44,267 |
|
| 47,970 |
|
Total |
| 2,030,913 |
|
| 1,914,284 |
|
| 4,032,909 |
|
| 3,703,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of days in relevant time period |
| 91 |
|
| 91 |
|
| 181 |
|
| 182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily census (days) |
|
|
|
|
|
|
|
|
|
|
|
|
Homecare |
| 18,269 |
|
| 17,046 |
|
| 18,205 |
|
| 16,478 |
|
Nursing home |
| 3,375 |
|
| 3,343 |
|
| 3,394 |
|
| 3,227 |
|
Respite |
| 126 |
|
| 100 |
|
| 118 |
|
| 93 |
|
Subtotal routine homecare and respite |
| 21,770 |
|
| 20,489 |
|
| 21,717 |
|
| 19,798 |
|
Inpatient |
| 310 |
|
| 284 |
|
| 320 |
|
| 288 |
|
Continuous care |
| 238 |
|
| 263 |
|
| 244 |
|
| 264 |
|
Total |
| 22,318 |
|
| 21,036 |
|
| 22,281 |
|
| 20,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Admissions |
| 17,545 |
|
| 17,334 |
|
| 35,684 |
|
| 32,245 |
|
Total Discharges |
| 17,845 |
|
| 15,898 |
|
| 35,583 |
|
| 32,068 |
|
Average length of stay (days) |
| 137.1 |
|
| 100.6 |
|
| 127.9 |
|
| 102.2 |
|
Median length of stay (days) |
| 20.0 |
|
| 18.0 |
|
| 18.0 |
|
| 17.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADC by major diagnosis |
|
|
|
|
|
|
|
|
|
|
|
|
Cerebro |
| 44.4 | % |
| 42.5 | % |
| 44.6 | % |
| 43.4 | % |
Neurological |
| 12.1 |
|
| 13.3 |
|
| 12.2 |
|
| 13.4 |
|
Cancer |
| 9.7 |
|
| 10.0 |
|
| 9.6 |
|
| 10.0 |
|
Cardio |
| 16.2 |
|
| 16.2 |
|
| 16.1 |
|
| 16.2 |
|
Respiratory |
| 7.5 |
|
| 7.3 |
|
| 7.3 |
|
| 7.3 |
|
Other |
| 10.1 |
|
| 10.7 |
|
| 10.2 |
|
| 9.7 |
|
Total |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
Admissions by major diagnosis |
|
|
|
|
|
|
|
|
|
|
|
|
Cerebro |
| 26.7 | % |
| 27.1 | % |
| 27.6 | % |
| 27.4 | % |
Neurological |
| 7.2 |
|
| 8.3 |
|
| 6.8 |
|
| 7.9 |
|
Cancer |
| 26.6 |
|
| 25.0 |
|
| 25.6 |
|
| 24.8 |
|
Cardio |
| 14.9 |
|
| 16.1 |
|
| 15.0 |
|
| 15.9 |
|
Respiratory |
| 10.7 |
|
| 9.6 |
|
| 11.1 |
|
| 10.1 |
|
Other |
| 13.9 |
|
| 13.9 |
|
| 13.9 |
|
| 13.9 |
|
Total |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated uncollectible accounts as a percent of revenues |
| 1.0 | % |
| 1.0 | % |
| 0.8 | % |
| 1.1 | % |
Accounts receivable -- |
|
|
|
|
|
|
|
|
|
|
|
|
Days of revenue outstanding- excluding unapplied Medicare payments |
| 37.5 |
|
| 38.8 |
|
| n.a. |
|
| n.a. |
|
Days of revenue outstanding- including unapplied Medicare payments |
| 26.9 |
|
| 34.7 |
|
| n.a. |
|
| n.a. |
|
-42-
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Regarding Forward-Looking Information
Certain statements contained in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe”, “expect”, “hope”, “anticipate”, “plan” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. These forward-looking statements are based on current expectations and assumptions and involve various known and unknown risks, uncertainties, contingencies and other factors, which could cause Chemed’s actual results to differ from those expressed in such forward-looking statements. Variances in any or all of the risks, uncertainties, contingencies, and other factors from our assumptions could cause actual results to differ materially from these forward-looking statements and trends. In addition, our ability to deal with the unknown outcomes of these events, many of which are beyond our control, may affect the reliability of projections and other financial matters. Investors are cautioned that such forward-looking statements are subject to inherent risk and there are no assurances that the matters contained in such statements will be achieved. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company’s primary market risk exposure relates to interest rate risk exposure through its variable interest line of credit. At June 30, 2025, the Company had no variable rate debt outstanding. For each $10 million borrowed under the credit facility, an increase or decrease of 100 basis points (1%), increases or decreases the Company’s annual interest expense by $100,000.
The Company continually evaluates this interest rate exposure and periodically weighs the cost versus the benefit of fixing the variable interest rates through a variety of hedging techniques.
Item 4. Controls and Procedures
We carried out an evaluation, under the supervision of the Company’s President and Chief Executive Officer and with the participation of the Executive Vice President, Controller and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the President and Chief Executive Officer and Executive Vice President, Controller and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. There has been no change in our internal control over financial reporting that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding the Company’s legal proceedings, see Note 10, Legal and Regulatory Matters, under Part I, Item I of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
Significant Tariffs Could Increase Costs, Decrease Margin, and Materially Adversely Affect the Business.
Both Roto-Rooter’s and VITAS’s primary businesses are the provision of services within the United States. Accordingly, they are likely to be less affected by the impact of specific or wide-ranging tariffs than many other entities in the United States and Global economies. However, significant tariffs on certain products, such as steel for Roto-Rooter’s cabling machines and pharmaceuticals utilized by VITAS, could materially increase the costs of Roto-Rooter and VITAS. Additionally, because our service businesses heavily rely on delivering service to customers or patients in their residences, increases in the costs of vehicle acquisition, maintenance, repair, and reimbursement for employees’ use of personal vehicles, could have a significant increase on our expenses.
These additional costs, in the case of VITAS, cannot be passed along to our patients because of the structure of hospice reimbursement, and in the case of Roto-Rooter, may not be able to be fully passed along to our customers. These additional costs could materially adversely affect our margins.
To the extent that tariffs cause any adverse impacts on global supply chains, it could further materially affect the ability of both businesses to timely source critical supplies, which may affect our delivery of services.
If, as a result of tariffs, the United States’ economy experiences a recession or other economic slowdown, the demand for Roto-Rooter’s non-emergency services may decline materially.
-43-
There have been no other material changes from the risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 2(c). Purchases of Equity Securities by Issuer and Affiliated Purchasers
The following table shows the activity related to our share repurchase program for the first six months of 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Number |
| Weighted Average |
| Cumulative Shares |
| Dollar Amount | ||
| of Shares |
| Price Paid Per |
| Repurchased Under |
| Remaining Under | ||
| Repurchased |
| Share |
| the Program |
| The Program | ||
|
|
|
|
|
|
|
|
|
|
February 2011 Program |
|
|
|
|
|
|
|
|
|
January 1 through January 31, 2025 | - |
| $ | - |
| 11,229,358 |
| $ | 255,317,749 |
February 1 through February 28, 2025 | - |
|
| - |
| 11,229,358 |
|
| 255,317,749 |
March 1 through March 31, 2025 | 50,000 |
|
| 595.15 |
| 11,279,358 |
| $ | 225,560,486 |
|
|
|
|
|
|
|
|
|
|
First Quarter Total | 50,000 |
| $ | 595.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 1 through April 30, 2025 | 17,952 |
| $ | 568.94 |
| 11,297,310 |
| $ | 215,346,869 |
May 1 through May 31, 2025 | 57,048 |
|
| 573.76 |
| 11,354,358 |
|
| 182,614,724 |
June 1 through June 30, 2025 | - |
|
| - |
| 11,354,358 |
| $ | 182,614,724 |
|
|
|
|
|
|
|
|
|
|
Second Quarter Total | 75,000 |
| $ | 572.61 |
|
|
|
|
|
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
On July 29, 2025, Chemed entered into a Transition and Separation Agreement with Nicholas M. Westfall in connection with Mr. Westfall’s immediate departure as VITAS Healthcare’s Chairman and Chief Executive Officer, and departure as an Executive Vice President of Chemed on December 1, 2025. The agreement provides that Mr. Westfall will continue to receive his salary through December 1st, and then will receive severance in the amount of $2,226,010, Chemed’s contribution of $350,920 to his non-qualified plans, continued benefits for up to one year, and certain other immaterial terms. Additionally, Mr. Westfall agreed to cancel his outstanding Preferred Share Units (PSUs) in consideration for a grant of $750,000 of Chemed shares on December 1st. Mr. Westfall will continue to provide services to Chemed through December 1st, and the agreement provides for certain restrictive covenants in effect for a year thereafter.
The above description is qualified in its entirety by the complete text of the agreement, attached hereto as Exhibit 10.1.
-44-
Item 6. Exhibits
|
|
|
|
|
|
Exhibit No. |
| Description |
|
|
|
10.1 |
| Nicholas M. Westfall Transition and Separation Agreement |
|
|
|
31.1 |
| Certification by Kevin J. McNamara pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934. |
|
|
|
31.2 |
| Certification by Michael D. Witzeman pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934. |
|
|
|
32.1 |
| Certification by Kevin J. McNamara pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2 |
| Certification by Michael D. Witzeman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
101 |
| The following materials from Chemed Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 3, 2025 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) The Condensed Consolidated Balance Sheet, (ii) The Condensed Consolidated Statement of Income, (iii) The Condensed Consolidated Statement of Cash Flows, (iv) The Condensed Statement of Equity, and (v) Notes to the Condensed Consolidated Financial Statements. |
104 |
| The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in iXBRL and contained in Exhibit 101. |
-45-
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
|
| Chemed Corporation |
|
|
|
|
|
| (Registrant) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: |
| July 31, 2025 |
| By: |
| /s/ Kevin J. McNamara |
|
|
|
|
|
| Kevin J. McNamara |
|
|
|
|
|
| (President and Chief Executive Officer) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: |
| July 31, 2025 |
| By: |
| /s/ Michael D. Witzeman |
|
|
|
|
|
| Michael D. Witzeman |
|
|
|
|
|
| (Executive Vice President, Controller and Chief Financial Officer) |
-46-
Source:
FAQ
How did CHE鈥檚 Q2 2025 revenue and earnings compare with Q2 2024?
What drove the decline in Chemed鈥檚 EPS?
How much cash does Chemed have and what is its debt position?
Was the regulatory dispute with the Office of Audit Services resolved?
What were Chemed鈥檚 share repurchases in 2025 to date?
How did each segment contribute to Q2 revenue?
