Chemed Corp

Good day and welcome to the ComEd Corporation second quarter 2022 earnings conference call. After the speaker's presentation, there will be a question and answer session. As a reminder, this call is being recorded. I would now like to turn the call over to Holly Schmidt. You may begin.

Good morning. Our conference call this morning will review the financial results for the second quarter of 2022 and June 30, 2022. 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 July 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. A reconciliation of these non-GAAP results is provided in the company's press release dated July 27th, which is available on the company's website at ChemEd.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, Holly. Good morning. Welcome to ChemEd Corporation's second quarter 2022 conference call. I will begin with the highlights for the quarter, and Dave and Nick will follow up with additional operating detail. I will then open the call for questions. Our second quarter 2022 operating results released last night reflect good earnings performance for VITAS and Roto-Rooter. Both operating segments' financial results exceeded our internal estimates despite the continued disruption from the pandemic. For VITAS, this disruption is primarily concentrated on the hiring and retention of licensed healthcare professionals. I believe this industry-wide shortage of licensed healthcare workers will persist for the foreseeable future. Accordingly, VITAS has implemented a targeted hiring and retention bonus program effective July 1st, 2022. This program is focused substantially on licensed nurses, nurse managers, home health care aides, and social workers. These one-time retention bonuses range from $2,000 upwards to $15,000 per licensed health care professional. The total estimated 12-month forward-looking cost of this program, including payroll taxes and government-mandated overtime calculations, will be approximately $37 million. All retention bonus payments are individually cliff-vested after the employee has successfully completed 12 months of continuous employment. The second pandemic-triggered challenge for VITAS is the disruption to senior housing occupancy and related hospice referrals. Our recent admission data continues to reflect a steady recovery in senior housing-based patients. Pre-pandemic, nursing home-based patients represented 18% of our total average daily census The nursing home ADC ratio hit a low of 14.3% during the pandemic. By the fourth quarter of 2021, our nursing home-based patients increased to 15.6% of total ADC. This increased an additional 80 basis points to 16.4% in the second quarter of 2022. Dated guidance anticipates continued improvement in senior housing-based census. For Roto-Rooter, our most significant challenge has been to increase manpower. Technician manpower on June 30, 2022, expanded 4.3% when compared to the average Q2 2021 headcount. Based upon current service demand levels, Roto-Rooter continues to be understaffed for skilled technicians in many of our markets. Roto-Rooter is well-positioned post-pandemic, and we anticipate continued expansion of market share by pressing our core competitive advantages in terms of brand awareness, customer response time, 24-7 call centers, and Internet presence. With that, I would like to turn the teleconference over to David.