Chemed Corp

Good morning. Thank you for standing by, and welcome to the ChemEd Corporation first quarter 2021 earnings conference call. At this time, your participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone keypad. Please be advised today's conference is being recorded. If you require any assistance, press star 0 from the operator. I would now like to hand the conference over to Sherry Warner with Investor Relations. Please go ahead, ma'am.

Good morning. Our conference call this morning will review the financial results for the first quarter of 2021, ended March 31, 2021. Before we begin, let me remind you that the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 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 that 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 identified in the company's news release of April 27th and in various other filings with the SEC. You are cautioned that any forward-looking statements reflect management's current view only and that the company undertakes no obligation to revise or update such statements in the future. In addition, management may also discuss non-GAAP operating performance results during today's call, including earnings before interest, taxes, depreciation, and amortization, or EBITDA and adjusted EBITDA. Our reconciliation of these non-GAAP results is provided in the company's press release dated April 27th, which is available on the company's website at CAMED.com. I would now like to introduce our speakers for today, Kevin McNamara, President and Chief Executive Officer of ChemEd Corporation, Dave Williams, Executive Vice President and Chief Financial Officer of ChemEd, and Nick Westphal, President and Chief Executive Officer of ChemEd's VITAS Healthcare Corporation subsidiary. I will now turn the call over to Kevin McNamara.

Thank you, Sherry. Good morning. Welcome to ChemEd Corporation's first quarter 2021 conference call. I will begin with highlights for the quarter, and Dave and Nick will follow up with some additional operating detail. I will then open up the call for questions. At the outset, I would like to say, although I am very gratified by the company's results in the first quarter, comparisons to the pandemic year of 2020 are analytically difficult. The pandemic clearly disrupted the hospice industry. The U.S. government stepped in to help with the relaxation of sequestration and several other operational modifications. The net effect of the pandemic and the government's actions was to allow VITAS to report an increase in adjusted net income of 25.7% in 2020. But VITAS had a patient base in which median length of stay fell to 11 days. The most complex issue still facing VITAS is the disruptive impact that the pandemic has had on traditional hospice referral sources and low occupancy in senior housing. This disruption continues to impact our admissions and traditional patient census patterns. Fortunately, admissions in hospitals have largely normalized and some of our senior housing referral sources are beginning to show improvement in occupancy and related referrals. I firmly believe senior housing will recover However, senior housing is in the early stages of recovery, and we do not have enough data points to accurately predict when senior housing referrals will return to pre-pandemic levels. With that said, VITAS is performing in line with our previous guidance. Rotary operating results continue to be exceptional. Strong residential plumbing and drain cleaning demand has been more than adequate to compensate for the slight weakness we continue to observe with our commercial accounts. We have now had three consecutive quarters of record demand for our residential services. Residential revenue totaled $144 million in the first quarter of 2021, an increase of 32% when compared to the prior year quarter, and a 7.2% sequential growth when compared to the fourth quarter of 2020. Commercial revenue totaled $46.9 million in the quarter. an 8.4% decline when compared with the first quarter of 2020. Although our commercial demand has not yet normalized to pre-pandemic levels, this decline has shown significant improvement when compared to the commercial unit-for-unit revenue declines of 29.1%, 11.6%, and 9.8% in the second, third, and fourth quarters of 2020, respectively. Aggregate Roto-Rooter activity, which includes branch operations, independent contractors, as well as franchise fees and product sales, Roto-Rooter generated consolidated first quarter 2020 revenue of $212 million, an increase of 18.9%. With that, I would like to turn this teleconference over to David.