Chemed Reports Fourth-Quarter 2024 Results

Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), one of the nation’s largest providers of end-of-life care, and Roto-Rooter, the nation’s largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its fourth quarter ended December 31, 2024, versus the comparable prior-year period.

Changes to Non-GAAP Metrics

Chemed uses certain non-GAAP metrics such as EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, to provide additional context and perspective to reported operational results.

Chemed’s previously reported non-GAAP metrics during the four sequential quarters from September 30, 2022 through June 30, 2023 excluded the 12-month pandemic-related licensed healthcare professional retention bonus (Retention Program). Starting with the quarter-ended September 30, 2023, the Company no longer excludes the cost of the Retention Program when presenting non-GAAP operating metrics in current or prior periods.

For the twelve-months ended December 31, 2023, the pretax and after-tax Retention Program expense was $20.8 million and $15.8 million, respectively. There was no material impact on financial results for the twelve months-ended December 31, 2024, as a result of the Retention Program. There was no material financial impact on the fourth quarter of either 2024 or 2023 as a result of the Retention Program.

Results for Quarter Ended December 31, 2024

Consolidated operating results:

Revenue increased 9.2% to $640.0 million GAAP Diluted Earnings-per-Share (EPS) of $6.02, an increase of 2.0% Adjusted Diluted EPS of $6.83, an increase of 3.5%

VITAS segment operating results:

Net Patient Revenue of $411.0 million, an increase of 17.4% Average Daily Census (ADC) of 22,179, an increase of 14.6% Admissions of 16,427, an increase of 3.5% Net Income, excluding certain discrete items, of $70.0 million, an increase of 10.5% Adjusted EBITDA, excluding Medicare Cap, of $93.2 million, an increase of 11.8% Adjusted EBITDA margin, excluding Medicare Cap, of 22.5%, a decline of 112-basis points

Roto-Rooter segment operating results:

Revenue of $229.0 million, a decrease of 2.9% Net Income, excluding certain discrete items, of $42.5 million, a decrease of 10.8% Adjusted EBITDA of $60.3 million, a decline of 7.2% Adjusted EBITDA margin of 26.3%, a decline of 120-basis points

VITAS

As previously announced, VITAS completed its acquisition of the hospice assets and an assisted living facility of Covenant Health and Community Services, Inc. (Covenant Health) on April 17, 2024 for $85.0 million in cash. Before presenting VITAS’ overall results, it is important to disclose the methodology used in determining the impact of Covenant Health’s acquisition on VITAS’ overall results. VITAS had significant operations in two of the three Florida locations we acquired from Covenant Health. Those locations require that we estimate the Covenant Health impact, as once the operations are integrated, there are not separate results. For instance, there are no VITAS-specific referral sources versus Covenant Health-specific referral sources in these locations. It is very likely that referral sources in the area have historically referred to both VITAS and Covenant Health. We have used historical operating trends in these locations to determine what is “legacy” VITAS activity. All activity above those historical operating trends have been attributed as the Covenant Health impact. We have included the specifically determined impact as it relates to new operating territories acquired. Based on the above, we discuss the range of impact that Covenant had on the overall VITAS operating metrics.

Covenant Health contributed approximately $11 million to $12 million of revenue in the fourth quarter of 2024. This revenue translated to net income of approximately $2.1 million to $2.3 million. Adjusted EBITDA in the quarter attributed to Covenant Health is between $2.8 million and $3.0 million.

VITAS net revenue was $411.0 million in the fourth quarter of 2024, which is an increase of 17.4% when compared to the prior-year period. This revenue increase is comprised primarily of a 14.6% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.5%. Acuity mix shift negatively impacted revenue growth 119-basis points in the quarter when compared to the prior-year period’s revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 44-basis points.

In the fourth quarter of 2024, VITAS accrued $2.4 million in Medicare Cap billing limitation, essentially flat with the fourth quarter of 2023.

Of VITAS’ 34 Medicare provider numbers, 25 provider numbers have a trailing 12-month Medicare Cap cushion of 10% or greater, five provider numbers have a cushion between 0% and 10%, and four provider numbers have a trailing 12-month Medicare Cap billing limitation totaling $9.6 million. As noted above, VITAS’ weighted average Medicare reimbursement rate increase during the quarter was 3.5%. The per-admission Medicare Cap protection for the period beginning October 1, 2024 increased 2.9%, which is the overall national average reimbursement rate increase. This 60-basis point average differential between the reimbursement rate increase and the Medicare Cap increase has reduced cushion in our programs for both the trailing 12-months and our projected fiscal year 2025. The actual basis point differential in certain of our programs, including the Florida program, exceeds the overall 60-basis point average.

Average revenue per patient per day in the fourth quarter of 2024 was $206.23 which is 244-basis points above the prior-year period. Reimbursement for routine home care and high acuity care averaged $182.94 and $1,125.61, respectively. During the quarter, high acuity days-of-care were 2.5% of total days of care, a decline of 22-basis points when compared to the prior-year quarter.

The fourth quarter 2024 gross margin, excluding Medicare Cap, was 28.8%. This compares to the prior year quarter’s gross margin of 29.9%, excluding Medicare Cap. The fourth quarter 2023 gross margin was positively impacted by 135-basis points due to a one-time change in their vacation roll-over policy. Selling, general and administrative expenses were $25.6 million in the fourth quarter of 2024 compared to $22.0 million in the prior-year quarter.

Adjusted EBITDA, excluding Medicare Cap, totaled $93.2 million in the quarter, an increase of 11.8% when compared to the prior year period. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 22.5%, which is 112-basis points below the prior-year period due mainly to the one-time vacation adjustment in 2023.

Hurricanes Helene and Milton, which impacted the panhandle of Florida and other parts of the southeastern United States in late September and early October, did not result in any significant property loss or damage to VITAS. However, as with other similar events, we did experience a slowdown in admission activity while health systems prepared for the hurricane and then dealt with the aftermath. We estimate that admissions were negatively impacted during the fourth quarter by approximately 150-175 patients.

In October 2024, VITAS admitted its first patient in Pasco County, Florida. Additionally, in December 2024, VITAS was awarded a certificate of need in Marion County, Florida.

Roto-Rooter

Roto-Rooter generated quarterly revenue of $229.0 million in the fourth quarter of 2024, a decrease of 2.9%, when compared to the prior-year quarter.

Roto-Rooter branch commercial revenue in the quarter totaled $54.3 million, an increase of 0.4% from the prior-year period. This aggregate commercial revenue change consisted of drain cleaning revenue increasing 0.2%, plumbing declining 9.6%, excavation increasing 7.6%, and water restoration increasing 19.8%.

Roto-Rooter branch residential revenue in the quarter totaled $160.5 million, a decrease of 2.0%, over the prior-year period. This aggregate residential revenue change consisted of drain cleaning declining 2.8%, plumbing declining 9.6%, excavation declining 1.9%, and water restoration increasing 2.8%.

Roto-Rooter’s fourth quarter 2024 gross margin was 51.3%. This compares to the prior year quarter’s gross margin of 52.9%. Roto-Rooter’s selling, general and administrative expenses were $57.2 million in the quarter, which is a decrease of 4.1% compared to the fourth quarter of 2023. The decline in selling, general and administrative expenses was caused mainly by lower internet marketing costs in the fourth quarter of 2024 compared to 2023.

Adjusted EBITDA in the fourth quarter of 2024 totaled $60.3 million, a decrease of 7.2% when compared to the fourth quarter of 2023. The Adjusted EBITDA margin in the quarter was 26.3% which represents a 120-basis point decline from the fourth quarter of 2023.

Chemed Consolidated

As of December 31, 2024, Chemed had total cash and cash equivalents of $178.4 million and no current or long-term debt.

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

During the quarter, the Company repurchased 388,235 shares of Chemed stock for $212.8 million which equates to a cost per share of $548.13. As of December 31, 2024, there was approximately $255.3 million of remaining share repurchase authorization under its plan.

Guidance for 2025

VITAS 2025 revenue, prior to Medicare Cap, is estimated to increase 10.5% to 11.3% when compared to 2024. ADC is estimated to increase 8.5% to 9.0%. Full year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 18.4% to 18.9%. Medicare Cap billing limitations are estimated to be $9.5 million in calendar year 2025.

Roto-Rooter is forecasted to achieve full-year 2025 revenue growth of 2.4% to 3.0%. Roto-Rooter’s adjusted EBITDA margin for 2025 is expected to be 25.7% to 26.3%.

Based upon the above, full-year 2025 earnings per diluted share, excluding: non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation, and other discrete items, is estimated to be in the range of $24.95 to $25.45. This compares to full-year 2024 adjusted earnings per diluted share of $23.13.

The 2025 earnings trajectory is weighted towards the second half of the year. Roto-Rooter’s revenue and associated income is expected to accelerate during the year, as Roto-Rooter management’s business improvement initiatives continue to build momentum. Additionally, the first quarter of 2024 was Roto-Rooter’s strongest quarter making for difficult comparisons at the beginning of the year. VITAS’ revenue growth and EBITDA margin, prior to Medicare Cap in the second and third quarters, will be adversely impacted by the initiatives required to moderate the impact of the Medicare Cap rate differential discussed above. The impact to the first quarter for VITAS will be mostly offset by the results of the Covenant acquisition which occurred in April 2024.

The 2025 guidance assumes an effective corporate tax rate on adjusted earnings of 24.0% and a diluted share count of 14.8 million shares.

Conference Call

As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Thursday February 27, 2025, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed’s website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/pxs2dghv/.

Participants may also register via teleconference at:
https://register.vevent.com/register/BIa60a1e9fbd7b47dab63b5406c1e907a2.

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

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

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

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

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

Forward-Looking Statements

Certain statements contained in this press release and the accompanying tables 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. 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. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements.

These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed’s dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed’s most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data)(unaudited)

Three Months Ended December 31,

For the Years Ended December 31,

2024

2023

2024

2023

Service revenues and sales $

639,993

585,912

2,431,287

2,264,417

Cost of services provided and goods sold

405,875

358,346

1,576,939

1,465,602

Selling, general and administrative expenses (aa)

104,251

100,436

424,360

395,120

Depreciation

13,263

13,024

52,864

50,802

Amortization

2,568

2,515

10,185

10,063

Other operating expense

158

197

446

2,261

Total costs and expenses

526,115

474,518

2,064,794

1,923,848

Income from operations

113,878

111,394

366,493

340,569

Interest expense

(499

)

(342

)

(1,780

)

(3,108

)

Other income--net (bb)

6,744

4,541

34,752

12,906

Income before Income taxes

120,123

115,593

399,465

350,367

Income taxes

(29,804

)

(25,540

)

(97,466

)

(77,858

)

Net income $

90,319

90,053

301,999

272,509

Earnings Per Share Net income $

6.08

5.96

20.10

18.11

Average number of shares outstanding

14,853

15,099

15,024

15,050

Diluted Earnings Per Share Net income $

6.02

5.90

19.89

17.93

Average number of shares outstanding

14,992

15,270

15,186

15,200

(aa) Selling, general and administrative ("SG") expenses comprise (in thousands):

Three Months Ended December 31,

For the Years Ended December 31,

2024

2023

2024

2023

SG expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation plans $

96,358

95,601

384,069

377,027

Long-term incentive compensation

4,354

3,872

20,152

11,689

Market value adjustments related to deferred compensation trusts

3,539

963

20,139

6,404

Total SG expenses $

104,251

100,436

424,360

395,120

(bb) Other income--net comprises (in thousands): Three Months Ended December 31, For the Years Ended December 31,

2024

2023

2024

2023

Market value adjustments related to deferred compensation trusts $

3,539

963

20,139

6,404

Interest income

3,205

3,408

14,610

6,270

Other

170

232

Total other income--net $

6,744

4,541

34,752

12,906

CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)(unaudited)

December 31,

2024

2023

Assets Current assets Cash and cash equivalents $

178,350

263,958

Accounts receivable less allowances

171,163

181,511

Inventories

8,193

12,004

Prepaid income taxes

11,068

13,166

Prepaid expenses

25,974

30,204

Total current assets

394,748

500,843

Investments of deferred compensation plans held in trust

130,960

106,126

Properties and equipment, at cost less accumulated depreciation

200,837

203,840

Lease right of use asset

127,323

126,387

Identifiable intangible assets less accumulated amortization

92,206

90,264

666,744

585,017

Other assets

55,757

55,618

Total Assets $

1,668,575

1,668,095

Liabilities Current liabilities Accounts payable $

44,146

64,034

Accrued insurance

56,703

58,568

Accrued income taxes

7,593

6,858

Accrued compensation

92,073

88,381

Short-term lease liability

42,306

38,635

Other current liabilities

42,874

55,574

Total current liabilities

285,695

312,050

Deferred income taxes

25,945

30,321

Deferred compensation liabilities

126,035

104,069

Long-term lease liability

98,538

100,776

Other liabilities

13,369

13,003

Total Liabilities

549,582

560,219

Stockholders' Equity Capital stock

37,422

37,184

Paid-in capital

1,484,176

1,341,273

Retained earnings

2,721,832

2,446,925

Treasury stock, at cost

(3,126,660

)

(2,719,588

)

Deferred compensation payable in Company stock

2,223

2,082

Total Stockholders' Equity

1,118,993

1,107,876

Total Liabilities and Stockholders' Equity $

1,668,575

1,668,095

CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)(unaudited)

For the Years Ended December 31,

2024

2023

Cash Flows from Operating Activities Net income $

301,999

272,509

Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization

63,049

60,865

Stock option expense

32,033

30,082

Noncash long-term incentive compensation

18,794

9,267

Litigation settlements

(5,750

)

2,050

Benefit for deferred income taxes

(4,138

)

(8,027

)

Noncash directors' compensation

1,282

1,444

Amortization of debt issuance costs

321

580

Changes in operating assets and liabilities, excluding amounts acquired in business combinations: Decrease/(increase) in accounts receivable

10,678

(41,488

)

Decrease/(increase) in inventories

3,831

(1,732

)

Decrease in prepaid expenses

4,237

Decrease in accounts payable and other current liabilities

(9,279

)

(9,348

)

Change in current income taxes

2,182

11,748

Net change in lease assets and liabilities

(674

)

(1,424

)

Increase in other assets

(25,591

)

(9,952

)

Increase in other liabilities

22,749

12,802

Other sources

1,774

836

Net cash provided by operating activities

417,497

330,299

Cash Flows from Investing Activities Business combinations, net of cash acquired

(97,400

)

(3,994

)

Capital expenditures

(49,531

)

(56,854

)

Proceeds from sale of fixed assets

3,315

640

Other uses

(295

)

(434

)

Net cash used by investing activities

(143,911

)

(60,642

)

Cash Flows from Financing Activities Purchases of treasury stock

(361,389

)

(67,697

)

Proceeds from exercise of stock options

56,517

102,192

Dividends paid

(27,092

)

(23,502

)

Change in cash overdrafts payable

(15,749

)

15,749

Capital stock surrendered to pay taxes on stock-based compensation

(9,457

)

(9,557

)

Payments on long-term debt

(97,500

)

Other (uses)/sources

(2,024

)

490

Net cash used by financing activities

(359,194

)

(79,825

)

(Decrease)/increase in Cash and Cash Equivalents

(85,608

)

189,832

Cash and cash equivalents at beginning of year

263,958

74,126

Cash and cash equivalents at end of year $

178,350

263,958

CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND 2023 (in thousands)(unaudited)

VITAS

Roto-Rooter

Corporate

Consolidated

2024 (a) Service revenues and sales $

411,008

228,985

639,993

Cost of services provided and goods sold

294,456

111,419

405,875

Selling, general and administrative expenses

25,597

57,168

21,486

104,251

Depreciation

5,074

8,177

13,263

Amortization

2,542

2,568

Other operating expense

140

158

Total costs and expenses

325,171

179,446

21,498

526,115

Income/(loss) from operations

85,837

49,539

(21,498

)

113,878

Interest expense

(33

)

(81

)

(385

)

(499

)

Intercompany interest income/(expense)

5,114

3,759

(8,873

)

Other income—net

6,649

6,744

Income/(loss) before Income taxes

91,008

53,222

(24,107

)

120,123

Income taxes

(20,897

)

(12,500

)

3,593

(29,804

)

Net income/(loss) $

70,111

40,722

(20,514

)

90,319

2023 (b) Service revenues and sales $

349,998

235,914

585,912

Cost of services provided and goods sold

247,151

111,195

358,346

Selling, general and administrative expenses

22,048

59,621

18,767

100,436

Depreciation

5,052

7,959

13,024

Amortization

2,489

2,515

Other operating expense

193

197

Total costs and expenses

274,281

181,457

18,780

474,518

Income/(loss) from operations

75,717

54,457

(18,780

)

111,394

Interest expense

(26

)

(55

)

(261

)

(342

)

Intercompany interest income/(expense)

5,008

3,265

(8,273

)

Other income—net

201

4,311

4,541

Income/(loss) before Income taxes

80,900

57,696

(23,003

)

115,593

Income taxes

(17,613

)

(11,809

)

3,882

(25,540

)

Net income/(loss) $

63,287

45,887

(19,121

)

90,053

The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (in thousands)(unaudited)

VITAS

Roto-Rooter

Corporate

Consolidated

2024 (a) Service revenues and sales $

1,530,978

900,309

2,431,287

Cost of services provided and goods sold

1,146,803

430,136

1,576,939

Selling, general and administrative expenses

99,564

232,852

91,944

424,360

Depreciation

20,362

32,452

52,864

Amortization

105

10,080

10,185

Other operating expense

178

268

446

Total costs and expenses

1,267,012

705,788

91,994

2,064,794

Income/(loss) from operations

263,966

194,521

(91,994

)

366,493

Interest expense

(171

)

(431

)

(1,178

)

(1,780

)

Intercompany interest income/(expense)

20,211

14,397

(34,608

)

Other income—net

227

34,456

34,752

Income/(loss) before Income taxes

284,233

208,556

(93,324

)

399,465

Income taxes

(67,414

)

(48,510

)

18,458

(97,466

)

Net income/(loss) $

216,819

160,046

(74,866

)

301,999

2023 (b) Service revenues and sales $

1,315,065

949,352

2,264,417

Cost of services provided and goods sold

1,017,623

447,979

1,465,602

Selling, general and administrative expenses

93,296

231,587

70,237

395,120

Depreciation

19,959

30,790

50,802

Amortization

104

9,959

10,063

Other operating expense/(income)

(12

)

2,273

2,261

Total costs and expenses

1,130,970

722,588

70,290

1,923,848

Income/(loss) from operations

184,095

226,764

(70,290

)

340,569

Interest expense

(180

)

(442

)

(2,486

)

(3,108

)

Intercompany interest income/(expense)

19,400

11,918

(31,318

)

Other income—net

1,309

126

11,471

12,906

Income/(loss) before Income taxes

204,624

238,366

(92,623

)

350,367

Income taxes

(46,115

)

(50,125

)

18,382

(77,858

)

Net income/(loss) $

158,509

188,241

(74,241

)

272,509

The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARIES OF EBITDA FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND 2023 (in thousands)(unaudited) VITAS Roto-Rooter Corporate Consolidated

2024

Net income/(loss) $

70,111

40,722

(20,514

)

90,319

Add/(deduct): Interest expense

385

499

Income taxes

20,897

12,500

(3,593

)

29,804

Depreciation

5,074

8,177

13,263

Amortization

2,542

2,568

EBITDA

96,141

64,022

(23,710

)

136,453

Add/(deduct): Intercompany interest expense/(income)

(5,114

)

(3,759

)

8,873

Interest income

(89

)

(3,111

)

(3,205

)

Stock option expense

8,100

Long-term incentive compensation

4,354

Acquisition expense

(203

)

(206

)

Adjusted EBITDA $

90,735

60,255

(5,494

)

145,496

2023

Net income/(loss) $

63,287

45,887

(19,121

)

90,053

Add/(deduct): Interest expense

261

342

Income taxes

17,613

11,809

(3,882

)

25,540

Depreciation

5,052

7,959

13,024

Amortization

2,489

2,515

EBITDA

86,004

68,199

(22,729

)

131,474

Add/(deduct): Intercompany interest expense/(income)

(5,008

)

(3,265

)

8,273

Interest income

(31

)

(29

)

(3,348

)

(3,408

)

Stock option expense

7,706

Long-term incentive compensation

3,872

Adjusted EBITDA $

80,965

64,905

(6,226

)

139,644

The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARIES OF EBITDA FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (in thousands)(unaudited) VITAS Roto-Rooter Corporate Consolidated

2024

Net income/(loss) $

216,819

160,046

(74,866

)

301,999

Add/(deduct): Interest expense

171

431

1,178

1,780

Income taxes

67,414

48,510

(18,458

)

97,466

Depreciation

20,362

32,452

52,864

Amortization

105

10,080

10,185

EBITDA

304,871

251,519

(92,096

)

464,294

Add/(deduct): Intercompany interest expense/(income)

(20,211

)

(14,397

)

34,608

Interest income

(224

)

(69

)

(14,317

)

(14,610

)

Stock option expense

32,033

Long-term incentive compensation

14,815

Severance arrangement

5,337

Acquisition expense

1,099

1,133

Adjusted EBITDA $

285,535

237,087

(19,620

)

503,002

2023

Net income/(loss) $

158,509

188,241

(74,241

)

272,509

Add/(deduct): Interest expense

180

442

2,486

3,108

Income taxes

46,115

50,125

(18,382

)

77,858

Depreciation

19,959

30,790

50,802

Amortization

104

9,959

10,063

EBITDA

224,867

279,557

(90,084

)

414,340

Add/(deduct): Intercompany interest expense/(income)

(19,400

)

(11,918

)

31,318

Interest income

(1,078

)

(125

)

(5,067

)

(6,270

)

Stock option expense

30,082

Long-term incentive compensation

11,689

Litigation settlements

2,056

Adjusted EBITDA $

204,389

269,570

(22,062

)

451,897

The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES RECONCILIATION OF ADJUSTED NET INCOME (in thousands, except per share data)(unaudited)

Three Months Ended December 31,

For the Years Ended December 31,

2024

2023

2024

2023

Net income as reported $

90,319

90,053

301,999

272,509

Add/(deduct) pre-tax cost of: Stock option expense

8,100

7,706

32,033

30,082

Long-term incentive compensation

4,354

3,872

14,815

11,689

Amortization of reacquired franchise rights

2,352

9,408

Severance arrangement

5,337

Acquisition expense

(206

)

1,133

Litigation settlement

2,056

Add/(deduct) tax impacts: Tax impact of the above pre-tax adjustments (1)

(2,333

)

(2,216

)

(9,095

)

(8,658

)

Tax impact of deferred tax rate change

(4,241

)

Excess tax benefits on stock compensation

(133

)

(954

)

(4,442

)

(4,330

)

Adjusted net income $

102,453

100,813

351,188

308,515

Diluted Earnings Per Share As Reported Net income $

6.02

5.90

19.89

17.93

Average number of shares outstanding

14,992

15,270

15,186

15,200

Adjusted Diluted Earnings Per Share Adjusted net income $

6.83

6.60

23.13

20.30

Average number of shares outstanding

14,992

15,270

15,186

15,200

(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. The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES OPERATING STATISTICS FOR VITAS SEGMENT (unaudited)

Three Months Ended December 31,

For the Years Ended December 31,

OPERATING STATISTICS

2024

2023

2024

2023

Net revenue ($000) (c) Homecare $

358,507

303,883

1,326,488

1,136,437

Inpatient

31,307

28,107

120,604

112,419

Continuous care

25,451

22,620

99,746

85,674

Other

5,556

3,844

19,455

13,582

Subtotal $

420,821

358,454

1,566,293

1,348,112

Room and board, net

(3,867

)

(2,535

)

(13,304

)

(10,851

)

Contractual allowances

(3,521

)

(3,546

)

(13,597

)

(14,196

)

Medicare cap allowance

(2,425

)

(2,375

)

(8,414

)

(8,000

)

Net Revenue $

411,008

349,998

1,530,978

1,315,065

Net revenue as a percent of total before Medicare cap allowance Homecare

85.2

84.8

84.7

84.3

Inpatient

7.4

7.8

7.7

8.3

Continuous care

6.0

6.3

6.4

Other

1.4

1.1

1.2

1.0

Subtotal

100.0

Room and board, net

(0.9

)

(0.7

)

(0.8

)

(0.8

)

Contractual allowances

(0.8

)

(1.0

)

(0.9

)

(1.1

)

Medicare cap allowance

(0.6

)

(0.7

)

(0.5

)

(0.6

)

Net Revenue

97.7

97.6

97.8

97.5

Days of care Homecare

1,656,206

1,439,494

6,277,961

5,457,963

Nursing home

322,713

285,616

1,230,726

1,118,728

Respite

11,155

7,394

37,961

26,605

Subtotal routine homecare and respite

1,990,074

1,732,504

7,546,648

6,603,296

Inpatient

27,235

24,918

106,299

101,905

Continuous care

23,189

23,001

95,524

88,631

Total

2,040,498

1,780,423

7,748,471

6,793,832

Number of days in relevant time period

366

365

Average daily census ("ADC") (days) Homecare

18,002

15,646

17,153

14,953

Nursing home

3,508

3,105

3,363

3,065

Respite

121

104

Subtotal routine homecare and respite

21,631

18,831

20,620

18,091

Inpatient

296

271

290

279

Continuous care

252

250

261

243

Total

22,179

19,352

21,171

18,613

Total Admissions

16,427

15,867

67,447

63,431

Total Discharges

16,333

15,705

64,618

61,242

Average length of stay (days)

105.5

105.9

103.0

102.2

Median length of stay (days)

18.0

17.0

16.0

ADC by major diagnosis Cerebro

44.2

42.8

44.0

42.5

Neurological

12.9

13.7

13.2

15.3

Cancer

9.9

10.3

10.0

10.5

Cardio

16.2

16.1

Respiratory

6.9

7.0

7.1

Other

9.9

10.0

9.5

8.5

Total

100.0

Admissions by major diagnosis Cerebro

28.0

26.5

27.8

26.4

Neurological

7.0

8.3

7.6

9.4

Cancer

25.9

25.3

26.0

Cardio

15.3

15.4

15.6

16.0

Respiratory

9.8

10.1

9.9

10.1

Other

14.0

13.8

12.1

Total

100.0

Estimated uncollectible accounts as a percent of revenues

0.9

1.0

0.9

1.1

Accounts receivable -- Days of revenue outstanding-excluding unapplied Medicare payments

40.0

37.8

n.a. n.a. Days of revenue outstanding-including unapplied Medicare payments

28.5

36.0

n.a. n.a. The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES FOOTNOTES TO FINANCIAL STATEMENTS FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2024 AND 2023 (unaudited) (a) Included in the results of operations for 2024 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended December 31, 2024 VITAS Roto-Rooter Corporate Consolidated Stock option expense $

(8,100

)

(8,100

)

Long-term incentive compensation

(4,354

)

(4,354

)

Amortization of reacquired franchise agreements

(2,352

)

(2,352

)

Acquisition expense

203

206

Pretax impact on earnings

203

(2,349

)

(12,454

)

(14,600

)

Excess tax benefits on stock compensation

133

Income tax benefit on the above

(50

)

547

1,836

2,333

After-tax impact on earnings $

153

(1,802

)

(10,485

)

(12,134

)

For the Years Ended December 31, 2024 VITAS Roto-Rooter Corporate Consolidated Stock option expense $

(32,033

)

(32,033

)

Long-term incentive compensation

(14,815

)

(14,815

)

Amortization of reacquired franchise agreements

(9,408

)

(9,408

)

Severance arrangement

(5,337

)

(5,337

)

Acquisition expense

(1,099

)

(34

)

(1,133

)

Pretax impact on earnings

(1,099

)

(9,442

)

(52,185

)

(62,726

)

Excess tax benefits on stock compensation

4,442

Income tax benefit on the above

267

2,200

6,628

9,095

After-tax impact on earnings $

(832

)

(7,242

)

(41,115

)

(49,189

)

(b) Included in the results of operations for 2023 are the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended December 31, 2023 VITAS Roto-Rooter Corporate Consolidated Stock option expense $

(7,706

)

(7,706

)

Long-term incentive compensation

(3,872

)

(3,872

)

Amortization of reacquired franchise agreements

(2,352

)

(2,352

)

Pretax impact on earnings

(2,352

)

(11,578

)

(13,930

)

Excess tax benefits on stock compensation

954

Income tax benefit on the above

548

1,668

2,216

After-tax impact on earnings $

(1,804

)

(8,956

)

(10,760

)

For the Years Ended December 31, 2023 VITAS Roto-Rooter Corporate Consolidated Stock option expense $

(30,082

)

(30,082

)

Long-term incentive compensation

(11,689

)

(11,689

)

Amortization of reacquired franchise agreements

(9,408

)

(9,408

)

Litigation settlements

(2,056

)

(2,056

)

Pretax impact on earnings

(11,464

)

(41,771

)

(53,235

)

Excess tax benefits on stock compensation

4,330

Tax impact of deferred tax rate change

1,772

3,559

(1,090

)

4,241

Income tax benefit on the above

2,671

5,987

8,658

After-tax impact on earnings $

1,772

(5,234

)

(32,544

)

(36,006

)

(c) VITAS has 12 large (greater than 450 ADC), 22 medium (greater than 200 but less than 450 ADC) and 22 small (less than 200 ADC) hospice programs. Of Vitas' 34 Medicare provider numbers, for the trailing 12 months, 25 provider numbers have a Medicare cap cushion of greater than 10%, five provider numbers have a Medicare cap cushion between 0% and 10%, and four provider numbers have a Medicare cap liability.

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