Chemed Corp

Good day and thank you for standing by. Welcome to the ChemEd Corporation first quarter 2025 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 the session, you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Holly Schmidt, Assistant Controller. Please go ahead.

Good morning. Our conference call this morning will review the financial results for the first quarter of 2025, ended March 31st, 2025. 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 23rd 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 April 23rd, 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 first quarter 2025 conference call. I will begin with highlights for the quarter, then Mike and Nick will follow up with additional details. I will then open up the call for questions. PTOS continued its strong operating performance during the first quarter of 2025. Admissions during the quarter totaled 18,139, which equates to a 7.3% improvement from the same period of 2024. Our average daily census, or ADC, expanded to 22,244, an increase of 13.1% when compared to the prior year quarter. These historically good metrics were positively impacted by the $85 million acquisition of Covington Health, which was closed on April 17, 2024. Through the end of the first quarter, the Covenant Health Acquisition is meeting all of our internal financial projections developed at the time of the acquisition. As Nick will discuss further, VITAS management continues to successfully execute the strategies required to navigate the Medicare cap at certain of our locations. A major part of that strategy is to increase our hospital-based admissions. Admissions from hospitals generally come to us later in their disease trajectory. These short-stay patients put a limiting factor on our ability to grow revenue in the EBITDA margin, but do provide additional Medicare cap cushion. Despite this headwind, PTAS continues to achieve above-average growth in revenue in EBITDA. Our new programs in the Florida counties of Pasco and Marion counties are also a key part of mitigating Medicare cap issues in 2025 and beyond. We continue to grow admissions in Pasco County. We anticipate taking our first admission in Marion County in mid-May. Now let's turn to Roto-Rooter. We are happy to report that Roto-Rooter generated a total revenue increase of 1.8 percent in the first quarter of 2025 when compared to the prior year quarter. Gross branch revenue increased 3.1 percent consisting of branch residential revenue increasing 1.7% and branch commercial revenue increasing 7.3%. Total leads were down 7.8% in the first quarter of 2025 compared to the same period of 2024. The revenue improvements during the first quarter of 2025 are the consequence of the variety of initiatives undertaken during 2024. As we discussed throughout the course of 2024, those initiatives include a more focused sales approach for our commercial business, maximizing opportunities from the leads we do receive, and an emphasis on quicker response times to residences with possible water restoration opportunities. To summarize, the strong results at VITAS continue. VITAS management has consistently demonstrated the ability to hire and retain licensed healthcare professionals at an appropriate pace. This has translated into an extended period of strong growth. Two new locations in the state of Florida provide a nice growth opportunity for the next few years. We continue to work diligently to expand our operating scope within Florida, as well as the other states that have some form of certificate of need restrictions. We are pleased with Roto-Rooter's turn towards a revenue growth trajectory. We are confident that 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.