Chemed Corp

Q4 2020 Earnings Conference Call


spk_0: ladies and gentlemen thank you for standing by and welcome to the kim a corporation fourth quarter twenty twenty earnings conference call at this time all participant lines are in a listen only mode after the speakers presentation there will be a question and answer session to ask a question during the session you'll need to press star one on your telephone please be advised that today's conference is being recorded if you require any further assistance please per store zero and would now like down the conference over to your speakers today sherry warner with investor relations thank you please go ahead please
spk_1: morning or conference call this morning we'll review the financial results for the fourth quarter of two thousand and twenty ended december thirty first two thousand and twenty before we begin let me remind you that the safe harbor provisions of the private securities litigation reform act of ninety ninety five apply to this conference call during the course of this call the company will make various remarks concerning management's expectations predictions plans and prospects the constitute forward looking statements actual results may differ materially from those projected by these forward looking statements as a result of a variety of factors including those identify in the company's news release of february twenty third and in various other filings with the fcc you were caution that any forward looking statements reflect management's current view only and that the company undertakes no obligation to revise or updates such statements in the future asian management may also discuss non gap operating performance results during today's call including earnings before interest taxes depreciation and amortization or either dot and adjusted ebitda a reconciliation of the non gap results has provided in the company's press release dated february twenty third third which is available on the company's website at chemed dot com i would now like to introduce our speakers for today kevin mcnamara president and chief executive officer of chemed cooperation dave williams executive vice president and chief financial officer of chemed and nick westfall press didn't and chief executive officer of can it be tough healthcare cooperation subsidiary i will now turn the call over to kevin mcnamara
spk_2: that your sheriff the morning welcome become a becoming corporations or twenty twenty
spk_3: conference call
spk_2: i will begin with my life for the quarter and they when they will follow up with additional operating detail i will then open up the call for questions operating during a pandemic of that exceptionally challenging for both of our business segments fortunately be that the rover have shown incredible speed flexibility and focus to remain completely open and operate safely for the benefit of our patients customers and employees i'd recommend that boys your financial performance as pressure is a testament to the success of these efforts i got up your segment computers to be directly impacted by the pandemic fortunately the federal government specifically age a task and vms have been very supportive in terms of relax eight brew like relaxing regulations lol use of our health were appropriate and providing pragmatic flexibility and caring for empire patient census the most complex issue facing beat us over the past nine months has been disrupted impact the pandemic of have untraditional hospice for girl sources which in turn has impacted our patients census patterns virtually the portions of the healthcare continuum have nope certain portions of normalized and have a referral admission so significantly improved from lower mission rights it's various early we a pandemic this is it reflected in our second half of twenty twenty admission and census activity a bird a focal point one a admissions increase four point seven percent and two point eight percent respectively normally to sequential quarters are solid emissions growth would result of an increase in average daily census however despite the admissions growth or average daily census decline two point eight percent in the fourth quarter the decline in said this is a direct result of disruption and senior housing which includes nursing homes and assisted living facilities senior housing is an important role that work for the heart of industries given the fact that over ninety percent of all have the patience or over the age of sixty five they don't housing has seen a severe with actual occupancy levels and continues to struggle even have hospitals and other key after proposed pro sources and significantly recovered hospice reported missions that with they account for fifty percent of the passes total emissions and a significant portion of the of have very short links let's days without proper of rules are returning to prepare them levels this is reflected in hospital generated missions increasing six point two percent and seven point four percent in a third and fourth quarters respectively nursing home after patients represented fourteen point seven percent of our fourth quarter point when it senses a decline of three hundred and ten basis points when compared to the prior year because nursing home admissions degrees twenty two point six percent in the third quarter of twenty twenty and the nineteen point three percent in the fourth quarter when compared to the equivalent prior year quarter nursing home base patients at the referred to for doctors earlier into a pivotal point doses as typically have a much greater probability of being in hospice more than ninety days the decline in nursing home admissions is a direct result of continued disruption in senior housing occupancy according to data provided by the national in the center for senior housing and care covert nanking continues to adversely affect senior housing occupancy which reached another record low in october of two twenty medium length of stay in the book or a point when it was fourteen days to those less the the prior year this unusual decline and medium like the state is result of a seven point two percent increase in hospital ever voted missions and a night pin point three percent decrease in nursing home and unleashes the combination which is in the material impact on medium length of stay the games we would provide later this call like this continued weakness and senior housing occupancy for the first that the twenty twenty one we anticipate improve and and senior housing the ambitions and the fact that and twenty twenty one a senior housing patient makes an aggregate occupancy returns to prepare them iq levels rural operating results of the nothing short of exceptional during the pandemic strong residents a plumbing and drank landing demand has more than adequate the capital per week this remark commercial customers the fourth quarter branch residential demands that all time records you agree that rather than show revenue total one hundred and twenty three million dollars and a quarter an increase of twenty point eight percent when compared to the prior year quarter fourth quarter twenty twenty units per unit branch commercial demand didn't they declined to nine point eight percent when compared with a or of twenty nineteen this is a significant improvement when compared to the second quarter twenty twenty which had commercial demand the climbing twenty nine point one percent and the third quarter of twenty twenty with a commercial revenue decline of eleven point six percent when compared to the prior year read or generated thought birth weight why revenue of two hundred and one million dollars an increase of ten point two percent consolidated revenue in addition to run operations includes independent contractors franchise fees and product sales lot the oakland that was issued completed july twenty nineteen and the h hf w acquisition completed in september of toy nathan
spk_4: where that i would like to from a teleconference over to david
spk_2: thanks gallon the top of net revenue was three hundred and thirty two million dollars in the fourth quarter of twenty twenty which is it a decline of two point three percent when compared to the prior year period
spk_5: this revenue variant is comprised primarily a two point eight percent decline in days of care a geographically weighted average medicare reimbursement rate increase approximately two point four percent and acuity mix shift which then reduce the blended average medicare rate increase approximately two hundred and fifty five basis points
spk_2: the combination of a lower medicare cap and a decrease in medicaid net room and board pastoral increased revenue growth and additional sixty four basis points in the border
spk_5: our average revenue per patient per day in the fourth quarter of twenty point he was one hundred ninety eight dollars and thirty three cents which including acuity makeshift is the seven base is seven basis points allow the prior year period
spk_2: reimbursement for ricky homecare and hi judy care averaged one hundred and sixty nine dollars and eighty three sides and nine hundred ninety seven dollars and thirty seven cents respectively
spk_5: during the quarter hi qt days of care or three point four percent of our total days of care which your sixty two basis points less than a pyre your border in the fourth quarter of twenty twenty the topic road two point five million dollars and medic kept telling limitations this compared to a four point five million dollar medical get billing limitation and the fourth quarter of two thousand and ninety
spk_2: a beat up as thirty medicare provider numbers twenty three of these provider numbers currently have a medical cap question of ten percent or greater for provider numbers have a cat push question between five and ten percent one provider number has a cap question between zero and five percent and to about provider numbers currently have a fiscal two
spk_5: thousand twenty one medicare kept building limitation liability
spk_2: the toughest what quarter twenty twenty adjusted ebitda exploiting medicare cap total seventy eight point seven million dollars which is an increase of eleven point seven percent the does adjusted ebitda margin excluding medicare cap was twenty three point five percent in the quarter which is a three hundred and six basis point improvement when compared to the prior year period
spk_5: for roto rooter redwood are generated quarterly revenue two hundred and one million dollars in the fourth quarter of twenty twenty and increase at eighteen point seven million dollars or ten point two percent over the priory a quarter on a unit for you to basis which excludes the oakland and a get w acquisitions completed in july two thousand and nineteen in september two thousand and ninety respectively roto rooter generated quarterly revenue of one hundred and eighty three million dollars in the fourth quarter of twenty twenty which is an increase of twelve point eight percent over the priory reporter
spk_6: total brand commercial revenue and a quarter excluded acquisitions degrees nine point eight percent this aggregate commercial revenue decline consisted of drink winning revenue decline eleven point six percent commercial plumbing and excavation declining eight point nine percent and commercial water restoration increasing
spk_5: one percent
spk_2: total branch residential revenue excluding acquisitions increased twenty point eight percent and this aggregate residential revenue growth consisted of residential drank lane in increase in seventeen point one percent residential plane and excavation expanding twenty five point five percent in a residential water restoration and cuisine sixty point a person
spk_5: now let's turn to can add boy your twenty twenty one guides historically can add earning guidance has been developed the as in previous years key are pretty metrics which are then model than projected out for the calendar year
spk_2: critical within these projections as the understanding of traditional pattern correlations a monkey operating metrics
spk_5: once we can lead to complete the say of are projected operating result we would then modify the projections for the timing of price increases changing commission structure wages marquee programs in a variety of continuous improvement initiatives that our business segments plan and executing over the year
spk_2: this model in exercise also takes into consideration anticipated industry and macro economic issues outside of management control but are somewhat predictable in terms of time in an impact on our business segments operating results
spk_5: with that said are two thousand and twenty one guidance should be taken with a recognition that pandemic what continued to material disrupt all aspects of our healthcare system and general economy to such an extent that broke the future rules regulations and government mandates could materially impact our ability to achieve this guidance
spk_2: statistically are beat up patient residing in senior housing are identified as hospice appropriate earlier into their term prognosis and have a much greater probability of hate having a like this day and access of ninety days
spk_5: at this patient report from hospitals and college practices and civil war we broil sources are generally more q and they have a significantly lower probability of length of stakes eighty ninety days according to data released by the national investment center for seniors housing and care covert nineteen continues to adversely affects the your housing occupancy which has kevin mentioned earlier had another record low in october of twenty twenty this reduced occupancy and senior housing has had a corresponding reduction and the task nursing home and missions
spk_2: nursing home patients represented forty point some presented a be does fourth quarter twenty twenty patients sensors which is at three hundred and ten paces point reduction when compared to the prior quarter
spk_5: the top anticipates continued we got givenchy and corresponding week referrals from senior housing for the first half of two thousand and twenty one his guidance anticipate senior housing will begin or normalized to prepare endemic occupancy starting in the second half of the calendar year two thousand twenty one based upon the above discussion the toughest two thousand and twenty one revenue prior to medicare gap is estimated to decline approximately four percent compared to the prior year beat up as average daily census in two thousand and twenty one is estimated to decline approximately five percent and for your adjusted ebitda margin prior to medicare gap is estimated to be nineteen point four percent
spk_2: and we are currently estimated ten million dollars for medicare get billing limitations and calendar year two thousand and twenty one
spk_5: right order is forecasted with cheese two thousand and twenty one revenue growth of approximately five to six percent and riders adjusted ebitda margin for two thousand and twenty one is estimated to be twenty six percent based upon this discussion the for your two thousand twenty one adjusted earnings per diluted share excluding nine cash expense or stock options tax benefit from stock option exercises costs related to litigation and other discreet items is estimated to be in the range of seventeen dollars to seventeen dollars and fifty
spk_7: that's
spk_8: this two thousand twenty one guidance assumes in effect of corporate tax rate and adjusted earnings of twenty four point seven percent in this compares to canada two thousand and one in reported adjusted earnings per diluted shares of eighty dollars and eight cents on out can this call over to the west bank president and chief executive officer
spk_5: of the does healthier
spk_9: thanks dave in the fourth quarter or average daily census was eighteen thousand seven hundred and eighteen patients and decline of two point eight percent over the prior year as kevin discussed earlier this decline in average daily census is a direct result of the disruptions across the entire health care system that impacted traditional and mission patterns in hospice since march while certain healthcare thinkers have shown improvement in the emission patterns referrals from senior housing specifically nursing homes and assisted living facilities continue to be negatively impacted is it it is important to note in the fourth quarter we saw the sequential decline of senior housing segments specifically nursing homes and ale apps moderate to actually see show a slight improvement as compared to the twenty twenty third quarter total emissions for the senior housing thing atp growth is expected to normalize and a second half of twenty twenty one as we returned to pre pandemic referral patterns across all sectors of the healthcare industry in the fourth quarter twenty twenty total emissions were seventeen thousand nine hundred and sixty this is a two point eight percent increase when compared to the fourth quarter of twenty nineteen in the fourth quarter or home based pre admit emissions increased nine point two percent hospital directed emissions expanded seven point four percent nursing home admins decline nineteen point three percent good living facility missions declined fourteen point seven percent when compared to the prior quarter
spk_2: average like astana quarter with ninety seven point two days is comparison ninety five point two days in the fourth quarter of twenty nineteen and ninety seven point one day in the third quarter of twenty twenty
spk_9: our median like to stay was fourteen days in the quarter which is to date left and sixteen day median in the fourth quarter of twenty nineteen and equal to the third quarter of twenty twenty before economists call back over to cabin i wanted to again thank our entire be top team for the continued commitment perseverance to provide high quality care in every community we serve across the country needless to say twenty twenty was an unprecedented year were organizational flexibility leadership and commitment to our patients their families are referring healthcare partners and one another with tested unlike anything we've ever experienced
spk_10: i can be more proud of every beat up team member who stepped up to these challenges tell provide access an incredible pair while producing these results for a shareholders
spk_2: or entirety will continue to be on the communities we serve collaborating safely with our local health care partners to successfully identify and navigate patients and their families on the the hottest benefit during an unprecedented time
spk_0: with that and like to call back over together break your neck
spk_11: i will now open teleconference the questions
spk_12: as a reminder to ask a question you want to press star one on your telephone to withdraw your question press the pound or hash key and priest and i fall we compile the q and a roster your first question is from frank morgan with rbc capital market good morning i guess i want to start on the got it's here is some of the puts in takes in the goddess on it and i'm curious when it when you talk about of recovery and his second half of the year
spk_5: are you staying that this that the admission patterns that that the current an issue patter starts to turn positive bomb but but if i'm up i'm an eighty see standpoint agatha printer long it take you to recover to feel the whole ascending by admission patterns normalized and the second half of the year and a to going is trying to figure out the cadence here and an hour for the quarters of this year and then also kind of what that means going to next year persists because numbers question
spk_2: yeah break and this is dave arm that is the wow car not just one the the improvements start is the pace of the improvement and when we get to what would call pre are pre pandemic occupancy and next levels so we anticipated starting in in the second half of twenty twenty one ah and by the end of the year we think it should substantially improve proven normalized but it could direct and a twenty twenty two slightly but the reality is when we take an ai ai nursing home patient today it still in terms of up the majority of people have still passed away pretty quickly and it really takes two or three quarters for you before you get the statistical outlier so that just a long way same as you're right it'll develop the the second half with twenty twenty one normalizing and we anticipate the substantial portion two thousand and one he two is gonna be khalid dupree pandemics mix levels but break another way of saying that it's premature birth at this point is one one thing that we look at his i'm the or the if the pictures that are with you a hundred days or longer that comes from the group of patients that have been with you ninety two hundred eighty three days and that group is a curse come from the the group has been with you will no longer than sixty days those are things were watching and to the extent that each group is shored up
spk_13: largely by yum
spk_2: wow referrals expanded referrals from the senior housing sector that's when we'll have better better visibility i'll be honest with you and your we won't we won't be comfortable that we return to normal until our our or long stay patient that numbers are we'll where we had been running and south to the said that we we say that the process they've really suggesting that we're going to be watching over the next couple months editor if those caught the the
spk_9: lower that the earth elements of the of the these in the program of those groups have solidified were fairly certain that than they will mature into to the as a percentage of more mature and that at the next level and that will have the the salutary effect on not a b c so something how did it that point it's a bit of a gas but it's something that we do be a feel have disability into as it is that happening frank one other quick comment it's embedded inside of the narrative is as we know continue to look at occupancy levels and become a good partner with it you know obviously there's without stay in the obvious there's external factors whether it's vaccination rates new resident or potential new residents and their families comfort and confidence with seat the i and vaccination rate and sign of those facilities the reason why we're stating were also come for when it swings back and of dave alluded to it's just timing and velocity is while that the pandemic of highlighted the benefit of the ability to when you can care for patients at their home which is at the core of home care and at the core of hospice the other thing that is the give us confidence there's always going to be a continued need
spk_2: and role for the senior housing industry specifically nursing homes is they're just flat out aren't enough caregivers to go out and deliver care at individuals residential homes for you know
spk_14: period and i think that's a that's the important thing and know as we feel confident that you know occupancy levels me moderate that they will continue to come back at the pandemic thoughts and in fact the what they are otherwise they a woman call that say it any compare signal that twenty twenty is fraught with peril i mean
spk_2: at the beginning of twenty twenty we go guidance of with the was arranged with that say sixty dollars and twenty cents a share i mean that we thought that was could be a very solid the gotta be the know the pandemic was coming and that what was that happen to allow horses were made reference to report and our the the that's okay obviously a lot of that i mean good portion of that was things that are the hard to talk about sustainability had them you know you we are we'll have relaxation sick restoration for a longer period and in twenty twenty we have i'm relaxed a temporary relaxation and various regulations by the the regulatory bodies but would relay we look at it in in smoothing and saying oh in the league boy yeah we like the cash we got we have that our of course or cash will you know we we add the earnings with england we had the leg and that we had that and we we had out wow
spk_15: we'll blow out year
spk_2: and twenty twenty but the young what we really look at it in the businesses you know we are and thirty ninety six or just as basis in that in paying we were looking up the earn sixteen twenty and the other the midpoint are arrange for next year seventeen twenty five so a ruler get and and and keep my roederer and the that to pretty basic predictable businesses the problem is that and then they made the because less predictable
spk_12: some
spk_5: into it back positive rate and what the government did they keep offices in business and negatively on what happened to the at nursing home plumbing of every nursing aren't not only were occupancy levels down ah the that employs weren't allowed outside
spk_9: for weeks on end and florida so am those things tend to have the that lingering lagging effects which we're dealing with but overall it some we've been very satisfied with the yeah been that affect them the both that company's operations during this unusual period legit let maybe another one for nick out the a unique in the vaccinations have you seen any at this point dirty anecdotal evidence are you seeing any kind of changes yeah now i mean presumably most nursing home now have vaccinated their their population and am and i'm sitting most of this just letting as well but have have you seen in the early signs that were arab you know you've that large vaccination rates or been completed that your are you starting to see a change their yeah but i think as of right now and obviously there's a were pulling it now in a macro level from fact based and sources but also anecdotally a know on a market by market basis we are seeing encouraging signs related to it so you know i think as of the swine there's roughly sixty five million doses are so that of industry it across the united states and many of those my target population you are referring to
spk_12: we do see signs of optimism obviously every market every facility whether the residents or whether they're employed than that facility or having different experiences with adoption rates but you know all in all the combination of vaccinations as well as those
spk_2: nursing homes or a l as in other pandemic has also highlighted a differentiation in hospice providers that i'm optimistic we've been able to take advantage of and hopefully we will arm continued a poll that relationship through and what i mean by that is you know high quality but also safe so you know all of our infection disease products called the state the the pb pb that are folks are wearing in the education that we've even provided and are currently providing across certain states segments i think has hope hopefully helped elevate the brand and so you know we are up with i feel confident and as being a good partner with all those institutions the crop entire country and twenty twenty one of the beyond a break our players were all declared are thing on for turn into a normal the and make it your other than are keen on employees at of vaccinated as well as the residents what isn't taken return to pre pandemic rules when the entire family and grandchildren and visit there
spk_16: grandmother who just went into a nursing home when those visitations are allowed we think they'll be the last obstacle to return to normal occupancy know it going up with a grandmother in a nursing home if deserts are not allowed are extremely restricted so i would think i'll be the last hurdle for normality at and another metric a and look at bay
spk_5: as we leave we mention that we mentioned in passing by that's a big number for us
spk_12: medium like us that the old you have a pretty good sense of things return to normal with that number goes back to sixteen or seventeen
spk_2: in parts of third fourth quarter it was the last twelve you know so that that that's the proof that said the pudding
spk_0: gotcha let one last one i'll hop back in the queue a how at another modeling i just to clarify know bad that's built into this garden and obviously a stock as has been in the process of reacting of down on three percent a day but maybe just add any thoughts around backs going far
spk_17: from here thanks katie and think buybacks are an excellent use of our free cash flow and we anticipate for silly natural twenty twenty one yeah we have a lot of a lot of wherewithal double as off that way thank you your next question comes from joanna gadzuric with bank of america
spk_18: thank you so yourself through saw a couple of follow up question so on
spk_9: so when you talk about the the senior housing occupants you said tell you you are expected to begin to normalize thirty seconds half ah and i guess he was talking about which sounded more like just submission potter's was how should we think about the actual census growing up with a guess your guidance enough were down five percent for the year novices is was that in clocks thank you for ah i'm so i guess if she can just talk about the cat cadence here and kind of ah you know should we expect could hurt the census level itself the quantum of be back to quilt closer to normal by the and of far this year
spk_2: so john at the the the as we were responding know francs original question related to at of time in peace and velocity particularly with that senior housing segment it's going to impact days of care with a degree of lag to had no different than it no different than it has historically so he knows we think about year and obviously we don't provide
spk_17: quarterly guidance we've built in certain timing assumptions in that specific segment that you know if they come true we'll see that traditional admission and eighty see tag or eighty see lag get the general mix of admissions which i want to go back to and a macro level still as part
spk_19: idea of even what the declines in that senior housing segment on return to normal what will see his you know how big of a lift up we get from the senior housing footprint coming back and how much of the you know hospital but also the physician's office referral business which has performed on sequentially and
spk_20: on a you have your bases on a positive level how much of that continues to pull through as well so you know it it would be back to the census component would be back loaded in terms of bomb some of the growth potential for the latter half twenty twenty one
spk_9: okay so that we make a regular episode and the guidance or what we think for the year but sir well they get happens in the first half of the year and from the census and then we start recovering from their aware right so so in your ear for garcia you you have some it on some your own canal assumption in terms of progression of farm occupancy improvements and these other settings and comes with nursing homes and architect that you know enlisting homes and down and senior housing and are you expecting want to do better than the other setting
spk_2: i don't know you know if
spk_16: we can speculate as to which one would do better or not it also gets to you know the definition that the senior housing has a lot of other segments outside of just nursing home an ale apps and side of it
spk_2: as were interacting with all those various segments with it you know i think i'm some had been impact and more than others the nursing home once the wanna really really focused on the assisted living for communities when you get to vaccination rates one could theoretically make the argument they would have he would be earlier to recover because by definition inside of their it gets to the potential patient their family member being comfortable with one another accessing at more than a nursing home which is you know more restricted due to that higher acuity need and skilling need of those residents inside of that so
spk_16: got a fake suggested one thing as a couple elements one on that is you might say what the why are
spk_2: occupancy levels for these the road the different parts of senior housing down there down for a couple raises one there was a prefer a presumed unsafe the associated with them and lo veo the think of a new york nursing homes that they were hotbeds of luke around a virus infections a friend suggested with vaccination levels be out in many respects the our elements of that should be alleviated i'm another very significant
spk_21: at the real impact on us is as this added focused on was look at the rules on the the that we are the fact that
spk_2: if you had someone who was of your family member that was considering a nursing home option or assisted living care option ha but knowing day one when they moved and the read no visiting visitation allowed that was a the since there was a severe impediment to on a new add to our the senior housing amp to this then those rules are being stop and know that the changes i'm in the question what is the new normal
spk_16: or so limitations are not everyone vaccinated i even the the cdc rules with regard to
spk_2: our behavior by we don't groups of people are one hundred percent of whom have been vaccinated or still deeper than they were before so bomb russell russo talk about the new normal but having said that i mean the either there's a couple aspects of why our referrals or down from nursing homes and why nursing homes
spk_21: well
spk_2: with an emphasis would go walk accurately there's a couple of backers those factors are being alleviated at different rates but to the extent that what we always say internally as there's a reason for existence of the nursing and living but yet system living kara sector
spk_17: it it performs a very essential function and it's it's it's not to be ignored and they were fairly common with this the or the that will return to wait at least a new normal and will take advantage of that but it's very hard your your question really goes to the timing
spk_7: and that predictability and predicting other for modeling says i really i understand that were just think we don't have the visibility yeah by that was the getting deprived morgan
spk_9: there are out of our does us that are predictable and we will be saying
spk_17: elements of that that is a good graphics apple to the extent that we see our our medium length as they were drifting up to the extent that we see that are percentage of patients or and the nine data
spk_22: hundred and fifty day you know
spk_9: group two that within those numbers drop that up it'll help us give you the modelers more visibility side so yeah i understand uncertainty but as can't adequately i will give it right now i only one clinical data point it gets a sign of optimism was just released over the weekend the you know the cdc came out in a were reporting on vaccinations the long term care residents roughly a million residents back they between mid march and mid january and talking about not only the safety but the adoption component of it that's all while encouraging not only for the contrary not on the for that segment but also for us as we think about the consumption habits as well as the elevation of safety and in that could be up in our leading indicator and a certain things but at this point you know where our borders
spk_2: the beaten pain to be a good partner and being there to support those facilities in the residents inside of their as each one you know returns turns to whatever it's new definition of normals gonna be and that's heavily dependent state by state as well back of my other part of the question is something you mention and i don't think you quantify that down they said that missions from hospital sexy accelerated or that seven percent and i guess it was up from like six percent growth in can third quarter that what was the community setting and physician and admission on pattern in on this quarter versus so last quarter mil aeolian on mates yup we lump it into the i'm without home based sending and so for this quarter it was up nine point two percent
spk_13: that setting was before the third quarter of pulling out here in a second but it was up as well
spk_2: third quarter it was up
spk_23: eighteen point three percent that point being as you know as patients may not be accessing those facilities they're going to especially physician or another primary care physician weren't there to continue to support that referring segment depending on where the you know the patients are traversing healthcare system and that
spk_2: emma it's not surprising to us let me get tired that give you like one minute and say that and you know if a patient is in that a nursing home or in some it is some setting but i'm gonna folks under sail from it where they're very familiar with the houses that that they see other people being provided that better than a daily basis there in the super alleyway class they bring they've been told by their doctor that their fish their situation is terminal the arab aziz run double course they did i would what fifty one percent chance at the up the yeah that
spk_14: that that they would be our main discharge an term lasers
spk_2: the
spk_9: the of the the fact that is the people tend to get in hospice earlier and when you're in half as earlier than patient and the whole family realize that we are rushing somebody to the hospital in their turn for the when there's a term for worse is that what syndicated well if you're if you're not a nursing home and your home and and you have been exposed to the benefit the last bus and you have a term for the worse that a great hit who had he been in a nursing home what might have been in hospice
spk_17: the out three months earlier and and never rushed to hospital of that point or given that the pictures aren't in those settings their home
spk_9: there's a term for the worst the rushed to the hospital or that they make him do and that becomes a hospital admission become becomes admission that apple referred a to us now i promise it's by three month later than we would have otherwise would have gotten the tell us if the that the have the patience you know a good point rather than or jump in a being home and then they end up with that that hospital stay prior
spk_17: a coming to you know under our care which is one of the rather than that you know that when that happens exists because the same the government money the to prevent that last that am not helpful hospital visit that bills to be incurred so yeah weeks rather than been a long thing it yet when we would expect but all they that the go up under this scenario so to that comment to reinforce kevin's is not all and office benefit of the way in which we operate of the toss were able to respond to whatever setting the patient presents themselves whether to position office hospital nursing home in a timely quake manner
spk_2: and if they're eligible for the office benefit bring them on and care for them whether it's and a nursing home and allah for at their house and so that diversity flexibility that i referenced in my prescriber marks it is really what has allowed us to continue to navigate as pandemic successfully in our communities we serve
spk_9: right make sense of the that's what i'm getting at it of there is some offsetting effect of a more admissions from this added setting know some fact they come with honesty on and potentially lower a shorter length of stay but are you actively pursuing this out there are several sources like the physicians grammar caraway especially at absolutely so we've we've always pursued educated supported a different a diverse for base every market in a which we operate for exactly that reason because every patient journey is slightly different depending on where they're presenting in our goal is to help educate all those referring healthcare partners as to how to help like gonna find a potentially hospice eligible patient and where we can be there to to help from an education awareness even have an airplane and goals of care center at the prepare that patients family for making the right decision for them
spk_17: that and i guess since it was just so wrap it up on on the house asylum question about aware that and have to say so we talk about on killed these pressures and in a revenue bed and some implies seen arriving the decline ah this year but and margin guidance you know it's it's better than what we were expecting it and and a nineteen percent thing about making percent is she you know much about
spk_2: a the free pandemic almost any know that the margin back there was eighteen percent against collect on two thousand and nineteen the kind of can you talk about it you know how sustainable he said marching this is this the way to think about it you know the nineteen percent margin for that business
spk_5: or part of part of that shit joanna is were doing more routine on care less hi kitty care which has a differential margin that helps significantly as well as they're still roughly about six million dollars of relaxing west rationing que one of twenty twenty one so when you compare to the tonight two thousand and nineteen margin that
spk_2: also improved such those two factors that are contributing a neck anything more on that now i mean it's are we represent the last quarter's conference call no different than we have in every year you know or twenty twenty one and every year from this point and forward and for all historical years you know from an operational stamp on we'll always can to need to balance out our labor needs against our care needs and the anticipated you know increased not only impatient flow but also patient days of care and so that that goes into it as well and the group did a fantastic job of balancing that out throughout the pandemic you know it just don't remind everyone we did not furlough we did not lay off a single
spk_24: or individual inside of the organization and were able to achieve the operating results we we posted for twenty twenty
spk_17: okay that that's helpful and under on the road or aside a similar question i guess that would this margin outlook for twenty six percent of session outside the slightly up ah appear of the year and that sounds in hour or so much higher ah tend to prevent damage level so it's you know what's driving that better margin and is that twenty six percent gonna sustainable going forward
spk_5: the the short answer is yes we think so what which resulted in the margin increase and you really started up he saw the margin inquiry scene of are you know the seven years ago primarily because the increase revenue from water restoration and what happens as we have already have the branch infrastructure set up so although water restoration all these other jobs have the same rock margin is everything out since we don't have much in the web increase infrastructure costs more the contribution margin for the incremental revenue drafted either doll line
spk_2: so it happened with water restoration and has also happening just overall the increase revenue were enjoying doesn't come with any increase in increased infrastructure cost so again more of their contribution margin for that increased revenue as drop into the the doll line and weeks back get to continue some of the things that really helped
spk_5: twenty twenty one in terms of on increase margin that we're not anticipating continues would be for example healthcare costs for but the dos and roto rooter or abnormally low as people have what it in the doctor during the pandemic that helped the margins a little dead on as well and twenty twenty and we didn't anticipate that continuing but all that dialed an higher revenues contribute into the maintaining the margins
spk_25: or and and they have that question a cash flow you mention others trump cash flow of can of hush the about that casual for this year and and cop access to stuff like that you know you've been helping up on couple of these the know those on plan or more some fucking floor it out this in pacing unit so
spk_17: can you give us a sense of the know operating cash flow and then also topics included grab graphics out of for the i think
spk_0: yet as certainly whatsoever what i would say in terms of the cash flow and twenty twenty for the calendar year where is artificially high one of the reasons for example there was forty some odd million other care that money that we took as lost revenue that didn't have any cost and i attributed to it so on a pre tax basis that was pure cash flow
spk_16: in addition we had a bow down a little under forty million dollars of different payroll taxes for the kemet consolidated so we don't have to pay the employer porsche payroll taxes and tell half of they get paid in december of twenty one the other happened december of two thousand and twenty two so that spike casual
spk_2: another forty million dollars a roughly arm and then you add of course sciquest ratio which is real by we don't expect that to continue that's by cashflow another eighteen million dollars to really take away in iowa call i bought one hundred and ten million dollars or so i'd have a twenty twenty cash flow ah i think it's safe to say are free cats always really at are adjusted earnings per share so he take you know between seventeen and seventeen fifty take some data recorder as the midpoint at sixteen and a half million die shares you're talking free cash on the neighborhood of just north of three hundred million
spk_0: we expect depreciation and amortization run between fifty eight sixty million and twenty twenty one weeks back cat back to be running between fifty five and sixty million and twenty twenty one so are prepared for any characteristics haven't changed we don't have any net that worse as of this morning to the a net cash have like two hundred and twenty million die

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