The following is a summary of the Chemed Corporation (CHE) Q1 2024 Earnings Call Transcript:
Financial Performance:
Chemed's subsidiary, VITAS, saw its net revenue rise 14% to $354 million compared to the prior year due to an increase in days of care and a weighted average Medicare reimbursement rate increase of approximately 2.6%.
VITAS' adjusted EBITDA drastically increased by 67.2%, reaching $60.7 million.
On the other hand, Roto-Rooter, another subsidiary, witnessed a 5.8% decline in its quarterly revenue, reducing it to $235.2 million, as low call volumes and tough comparisons prevailed.
Roto-Rooter's adjusted EBITDA dropped to $60.7 million, showing a decrease of 15.6%.
Business Progress:
VITAS made significant headway with admissions growing by 4.5% compared to the previous year and an increase in the average daily census of 10.3%.
Despite challenges, Roto-Rooter has taken up strategies to retain commercial customers and maximize revenues.
Chemed has completed an $85 million acquisition of assets from Covenant Health and Community Services, a decision that is expected to prove beneficial both operationally and financially in the future.
The company's hiring process has been successful, and they are actively seeking additional acquisition opportunities in 2024 and beyond with a primary focus on expanding its hospice services.
Efforts to improve the deteriorating performance in Roto-Rooter include increased contact with commercial clients and the provision of additional tools to stimulate sales. These efforts are expected to yield improvements soon.
More details: Chemed IR
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