Chemed Corp

Thank you for standing by and welcome to the ChemEd Corporation's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Holly Schmidt. Please go ahead, ma'am.

Good morning. Our conference call this morning will review the financial results for the second quarter of 2024 and to June 30, 2024. 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 24th 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 24th, 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, Mike Witzman, Chief Financial Officer of ChemEd, and Nick Westfall, Chairman 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 2024 conference call. I will begin with highlights for the quarter. Then Mike and Nick will follow up with additional details. I'll then open up the call for questions. We continue to be pleased with the excellent operating metrics at VITAS, coupled with a strong start for our Covenant Health acquisition. In the second quarter of 2024, admissions totaled 17,344, which equates to an 11% improvement from the same period of 2023. Our average daily census, or ADC, expanded 2,644, an increase of 14.4% when compared with the prior year quarter. These historically good metrics were positively impacted by the $85 million acquisition of Covenant Health, which was closed on April 17, 2024. Nick will provide further insight on the positive impact of the acquisition on these metrics. These operating metric improvements and related financial impact would not be achievable without BTAS's continued strength in hiring and retaining clinical staff. We're also pleased that in the second quarter of 2024, BTAS was awarded the Certificate of Need to provide hospice services in Pasco County, Florida. This represents an opportunity for BTAS to begin service in a vibrant and growing community in Florida. Now let's turn to Roto-Rooter. Roto-Rooter generated quarterly revenue of $221.3 million in the second quarter of 2024, a decrease of 5% when compared with the prior year quarter. Overall, our call volume was down 6.1% when compared with the prior year quarter. Close rates at the call center at the time of dispatch and when our technician reaches the customer location remain consistently strong compared to historic levels. Residential revenue at Rotary declined 1.6%, and commercial revenue declined 8.2%. Residential demand is significantly impacted by consumer sentiment and consumer spending, which continues to be depressed, particularly as it relates to home services and home improvements. With lower demand across the entire industry, competition for Internet marketing position and related job leads continues to be fierce. However, the commercial sector of Roadrunner provides significant opportunity for improvement, both sequentially through 2024 and in 2025. As we mentioned in the first quarter, the extraordinarily high demand we experienced during the pandemic led the commercial business to be deprioritized. The habits required in the field to make for a successful commercial business were not reestablished at the end of the pandemic in some locations. As Mike will discuss further, the company has implemented several initiatives which I believe will have a significant positive impact on Rotterdam's commercial sector. To summarize, we are excited about the continued strong results of VITAS. VITAS management has consistently demonstrated the ability to accelerate hiring and retention of licensed healthcare professionals. This has translated into continued strong admission and census growth. We are very bullish on the prospects of VITAS for the remainder of 2024 and beyond. We believe Roto-Rooter is still well-positioned, despite the difficult operating conditions that it faces. Roto-Rooter maintains its core competitive advantages in terms of excellent brand awareness, customer response time, 24-7 call centers, and aggressive internet presence. With that, I would like to turn this teleconference over to Mike.