Chemed Corp

Thank you for standing by and welcome to ChemEd Corporation's second quarter 2026 earnings conference call. Currently, 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 will need to press star 1 1 on your telephone. To remove yourself from the queue, you may press star 11 again. I would now like to hand the call over to Holley Schmidt, Assistant Controller. Please go ahead.

Good morning. Our conference call this morning will review the financial results for the second quarter of 2026 and June 30th, 2026. Before we begin, let me remind you that the safe harbor provisions of the Private Security Litigation Reform Act of 1995 applied 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 28 and in various other filings with the SEC. Your caution 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 release dated July 28th, which is available on the company's website at chemmed.com. I would now like to introduce our speakers for today. Kevin McNamara, President and Chief Executive Officer of ChemEd Corporation, Mike Witzeman, Chief Financial Officer of ChemEd, and Joel Wherley, President and Chief Executive Officer of ChemEd VITAS Healthcare Corporation subsidiary. I will now turn the call over to Kevin McNamara.

Thank you, Holley. Good morning. Welcome to ChemEd Corporation's second quarter 2026 conference call. I will begin with highlights for the quarter. Mike and Joel will follow up with additional details. I will then open the call up for questions. VITAS' performance during the quarter exceeded even the high end of our expectations. VITAS continues to add ADC to accelerated admissions from non-hospital pre-admission locations while also maintaining a high level of hospital-based admissions. This was achieved while also keeping hospice labor costs lower than budgeted. These factors combine to allow VITAS to achieve higher than expected revenue growth and EBITDA margins while continuing to add cushion to the Medicare cap position in our Florida combined program. Admissions at VITAS during the quarter totaled 19,125, which equates to a 9% improvement from the same period of 2025. Hospital admissions as a percent of total admissions for our Florida combined program were 42.9% during the second quarter of 2026. As we've previously discussed, an appropriate balance for a sustained long-term stability in the Florida patient base, given the current mix of referral sources, is that between 42 and 45% of total admissions come from hospitals. Equally as important, as Joel will discuss in greater detail, Admissions from all other pre-admission locations increased 8.1% compared to the second quarter of 2025 in our Florida combined program. Improved admissions led VITAS to outperform our expectations while also adding $8.9 million to cap cushion in the Florida combined program in the second quarter of 2026. This strong performance makes us more confident than ever that VITAS has put the Florida cap issue of 2025 behind us and has returned to a normalized rate of growth.