CHE - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Chemed Corporation Fourth Quarter 2020 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Sherri Warner with Investor Relations. you. Thank please. ahead, go Please

Sherri Warner

morning. Good

Our conference for XX, the results will this fourth quarter morning the December review of financial call XXXX XXXX. ended

safe Private begin, you this of conference we me harbor to the provisions Before XXXX apply of Litigation Securities let the call. Reform Act that remind

forward-looking make projected may and in as the constitute prospects including statements with During will forward-looking of by differ management's the a concerning statements. factors, SEC. and release filings call, this various remarks course results in materially the of that those from expectations, these company Actual of other of result the various predictions, news a XX company's plans February variety identified those

and or You obligation undertakes are cautioned such any update statements that future. only the to that no forward-looking revise reflect in view statements the company current management's

operating may results available press and introduce today, President Chief Dave Westfall, Healthcare during interest, February is depreciation on and over subsidiary. non-GAAP In would President amortization, Kevin call to Officer earnings XX, website Officer chemed.com. Chemed's release speakers reconciliation the addition, these I like call, discuss Executive and of Financial A before EBITDA, Corporation; performance our the at management I which company's President including provided EBITDA. in of VITAS taxes, the results Williams, or Corporation of Chemed; dated McNamara, Chemed also and company's today's is Kevin adjusted non-GAAP Vice and turn Nick now Executive Executive will Chief to of for McNamara. Officer and now Chief

Kevin McNamara

for highlights Nick the I Operating exceptionally Corporation's up both during pandemic I been challenging fourth additional will will operating then for the quarter, to and a Sherri. you, begin segments. XXXX quarter Chemed call and up Thank conference open morning. our follow will detail. questions. of with has Dave business Welcome call. for with Good

and open remain financial this to the of flexibility, performance incredible I operate our and past benefit focus employees. a Fortunately, efforts. patients, and completely Roto-Rooter speed, is shown have operational and these customers, testament safely of year VITAS to for Chemed’s success the believe

segment directly continues the by to Healthcare VITAS Our impacted pandemic. be

The Fortunately, months has the the appropriate disruptive most terms patient of our the supportive patterns. and had nine providing entire the federal in pragmatic very relaxing have in traditional use impacted of census has CMS the complex impact caring HHS telehealth which pandemic for been regulations, allowing specifically and issue census. VITAS facing government referral and hospice patient past where over on sources, has turn been flexibility our

of low hospital the admission is reflected certain rates Fortunately, and activity. the have significantly and portions in portions half healthcare admission improved have admissions of from the in pandemic. – early census continuum second experienced have XXXX This our referral normalized

and XXXX and result an third Our two average respectively. Normally, solid fourth increase sequential X.X% X.X% admissions quarters growth of daily would in increased quarter census. in admissions

in of patient in quarters, being an is respectively. pre-pandemic reached plumbing of pre-pandemic Nursing continued third all-time levels. is and drain and the branch in length when probability adequate generated returns year XX.X% referrals compared This senior to quarter records. short fourth in is in weakness these demand was significant of Fourth which levels. occupancy and homes compared quarter. Unit-for-unit significantly of quarter, nursing nursing much XX returning third to the X.X% $XXX the However, residential result of than of admissions portion admissions has includes have first a are severe provide of in when hospice despite in the year. the weakness our $XXX for days. aggregate prior X.X% of of mix of nursing key assisted recovered. of declining increase acquisition branch fourth other senior in points Roto-Rooter residential The to XXXX strong XXXX than decline XXXX. second With demand quarter XXX for a home that, to occupancy. referred continued statistically provided census a which occupancy revenue have a generated improvement direct customers. X.X% to in demand decrease and by material total product year. According hospital And the on second housing short cleaning, direct Roto-Rooter as home had with quarter hospice XXXX. to reduction hospital when admissions a the senior a XX.X% to been disruption decline the operating results more decline declined in greater admissions fourth fourth fourth XX XXXX of the declined prior quarter the the This September is totaled in length half quarter stay. terminal quarter. result prior living residential unit-for-unit housing disruption compensate of when housing, commercial patients completed senior pandemic, and this half XX.X% decline would We in XX.X% to commercial senior the daily of referrals year in of data census based are admissions, of senior quarter average increase XXXX. prognosis includes account of in The basis admissions referral X.X% growth, improvement result XX.X% a our set exceptional significant a XX% referred admissions franchisees hospitals Center length an has revenue of Oakland of in operations the did compared And Investment increasing reflects more in continues the hospice our decline reflected prior in contractors, when of sales, of million home occupancy and into to VITAS anticipate typically from to to an referred This fourth we quarter. during is a million, record XXXX been in teleconference XXXX, Senior affect and completed demand in facilities. in age nothing the for XX.X%. the the National decreased census, impact like as days, of prior the Median as to are hospice home Seniors XX.X%. later with quarter of VITAS represented hospice XXXX median housing levels Dip] XX. work as two of quarter Nursing even equivalent on independent well median October when nursing HSW David. VITAS’ this our commercial [Audio This acquisition admissions increase occupancy, fourth important XXXX. that low struggle XX.X% housing housing earlier of housing a guidance and fact third of and the turn that Senior days quarter compared and year. XX% than the of continues the the in stays. patients fourth of have patients home which over very combination all less to unusual to and an had revenue addition revenue The Consolidated call another I stay compared adversely to quarter report Roto-Rooter in commercial decline of this in to hospital length has housing a a XXXX. This for admissions. Housing Hospice will a for in is COVID-XX hospice July the & Care, of have XXXX branch stay a industry over seen XXXX sources given compared which X.X% over

Dave Williams

reduced $XXX comprised X.X% was is geographically Kevin. XXXX, Medicaid is blended to an Cap room board Thanks, the variance of in which quarter quarter. X.X% in the acuity primarily a decline period. points the year Medicare decline pass-through, fourth shift of XXX days-of-care, a average XX This and additional growth VITAS lower rate average revenue in increased mix of a combination The net reimbursement Medicare of Medicare approximately which basis million revenue and rate points. compared approximately increase weighted increase then in revenue when of X.X%, prior and a decrease basis net the

Reimbursement average $XXX.XX, respectively. day basis for which, and Our is period. per $XXX.XX, home routine in the $XXX.XX care XXXX per revenue patient the quarter averaged was care shift acuity fourth and high including year points prior below mix of X acuity

of numbers Medicare Medicare the and cap in quarter currently basis have provider fiscal XXXX number XXXX, VITAS’s has in billing fourth numbers provider year acuity the adjusted of million two limitation Cap During XX%, billing a which quarter. VITAS cap provider less X% total between cushion currently is cushion quarter excluding provider $X.X XXXX and and Cap one between X% is our X.X% the Medicare provider points basis improvement greater, numbers, a VITAS’ were a XX the numbers our $XX.X margin fourth days-of-care, of a Medicare a XXXX. totaled XX of X% point Of billing EBITDA, limitation liability. to EBITDA XXX four quarter, fourth of year period. prior Cap, in to This limitations. excluding these quarter XX VITAS' when XX.X% $X.X which cushion XX.X%. Medicare have of than the of accrued increase million prior the an adjusted high Medicare XX% In Cap or was is which compares days-of-care compared million, Cap Medicare have quarter, Cap a

respectively, unit-for-unit revenue acquisitions, Roto-Rooter the of $XX.X quarter. and an Total residential XX.X%. growth XX.X% the acquisitions, July basis, And and year residential quarterly quarter water a the million of increasing over this $XXX restoration X.X%, Total fourth September revenue and consisted On completed excavation revenue XX.X% in increasing the XXXX, decreased XXXX, plumbing revenue XXXX, commercial Roto-Rooter, consisted of excluding is of or fourth This revenue, water commercial increase of quarter. in and XX.X%, of increasing which plumbing prior restoration declining in the decline cleaning For declining revenue $XXX of X.X%. excludes drain aggregate prior-year acquisitions drain XX.X%. XX.X%, generated residential X%. in an expanding revenue generated quarter of commercial Roto-Rooter aggregate commercial increase branch excavation residential and branch and million Oakland quarter, over quarterly XXXX XX.X%, the of HSW residential cleaning million excluding which of increased

to of projections residing out the price & Critical segments had as within this and National structure, in prior to VITAS' when pre-pandemic senior data a compared XXX-basis XXXX. is earlier, This to XXXX EBITDA full approximately Roto-Rooter for the continuous VITAS a to this Now X%, estimated days. stay adjusted fourth another This benefits estimated and XXXX. metrics, of $XX October is macro-economic modeled XXXX and Hospice earlier extent achieve to having corresponding $XX.XX. Chemed’s now calendar occupancy housing projected to on point Statistically, Adjusted developed affect of XXXX. quarter which pandemic and Seniors year. our which probability complete that calendar increases, that a modify greater and then days. terms have and operating low to into XXXX hospice Center to terminal housing operating XXXX programs estimated the Chemed’s XX.X%. range is reduced to from are Historically previous of adjusted probability outside COVID-XX Kevin metrics. And will approximately is million for and continue variety to represented Average XXXX years’ housing on of Cap are turn patients housing reported first XXXX be issues sources Once executing in are EBITDA an effective earnings identified diluted that and over had the for in Care, a traditional system acute mandates somewhat patterned predictable half patient tax prior let's into materially decline changing corporate compared costs Medicare Census estimated per VITAS appropriate X% initiatives be occupancy guidance business of are Nursing of the future Based President excluding lower our reduction over currently disrupt billing revenue, our half general we year This marketing XX%. VITAS estimated decline industry full anticipates revenue Healthcare. and timing plan the been year key is admissions. projected approximately option Nick Chemed on has a business these upon wages, year achieve assumes to for to forecasted the are using we of adjusted upon guidance. projections to among in consideration should earning call year. exercise guidance discrete stock senior commission of said, tax With home continued segments’ management’s for takes the This guidance of be impact Medicare our anticipated expense the correlations for key year VITAS' full XXXX to modeling guidance begin senior of has that phase control, XXXX prior is Roto-Rooter’s to our also the related above improvement our in XX.X% would referral normalize much starting I’ll in reduction and corresponding an results, Daily taken be impact of the and of results. of year timing Cap but rate to Officer we growth earnings per non-cash is margin understanding is as regulations and XXXX Westfall, and $XX this X%. then by of Cap healthcare in operating record of And from with to released calendar According when nursing year. shares of other XXXX. of the compares oncology stock lengths-of-stay continues the year all X% aspects in Chief items, prognosis second quarter. this XXXX adjusted have a options, referred length limitations exercises, VITAS generally Based XX.X%. hospitals, housing to margin, Medicare significantly from excess discussion, of economy could XX which materially in similar rules, discussion, prior a census, turn in diluted more our practices ability for guidance. earnings estimating recognition patients share, their litigation exceeding senior to occupancy, such this government Investment in to XX mentioned patients they adversely $XX.XX. referrals Executive Housing anticipates of to of weak VITAS occupancy operating senior And to weak home will the

Nick Westfall

daily over Thanks XX,XXX X.X% Dave. In the patients of fourth quarter, our decline prior year. was census the average a

decline earlier, result hospice admission entire in across since is discussed Kevin system As healthcare average daily impacted this census the the in patterns traditional the of disruptions a that direct March.

fourth days show living segments, specifically quarter is nursing fourth sectors improvement certain in increase senior this decline total be senior shown healthcare emission assisted housing the the admissions referrals hospital the XX,XXX, the While sectors quarter. directed stay X.X% the fourth expected specifically the to days, home patterns, actually XXXX, housing, XX.X%, compared in pre-admit the expanded XX.X fourth pre-pandemic to ADC slight have segment. XXXX to when XX.X the from of referral compares moderate as the in admissions impacted. across facility homes in total and ALFs declined senior compared all nursing quarter sequential and of XXXX, quarter quarter in Average It to a to home-based note, is a X.X%, XX.X living fourth negatively compared days growth In prior assisted admissions housing of saw of in to facilities of industry. third quarter, were quarter XXXX. to for third the In our is the healthcare quarter this continue return admissions to we when important length of admissions half quarter, and of the admissions year we to normalize homes patterns nursing XXXX, improvement declined second X.X%, of increased XX.X%, was the XXXX. as

the of days the XXXX in Our equal XXXX. of median quarter than the the third fourth two in XX which to XX quarter is of less day stay median length quarter, and was days

these back turn to their every I care be for commitment these country. unlike anything to our to, year more VITAS our couldn't across to serve quality this incredible ever VITAS again, patients, healthcare referring and we their every I provide in our to flexibility, leadership who experienced. families, help shareholders. care stepped entire tested, say, up call of XXXX continued high proud to over partners, Needless organizational provide producing while team Kevin, I one team another wanted and commitment, perseverance challenges Before our results the community access to was member unprecedented an was and thank our where for we've

communities successfully Our with patients in serve, With call during onto And the continue collaborating to entire this identify like back will the healthcare out I'd navigate that, local to this over our be unprecedented safely time. benefit team hospice to we partners Kevin. turn their to families and

Kevin McNamara

I Thank questions. will this teleconference you, Nick. to now open

Operator

Your Instructions] Frank Capital with Markets. Morgan from first [Operator is question RBC

Frank Morgan

in year, of going morning. curious in just first of means assuming year, I Are from that take about And out then and takes to figure here, admission the recovery to whole, the my the I here figure kind again, want to was into year? the you fill patterns this standpoint, guidance. that's start does the you trying cadence admission and to the next once out guess I'm of and normalized patterns, an turn what question? I of to half that year. the quarters But you it in the puts trying ADC half the how guess second Good I'm on recover in the admission long to of also pattern talk saying for second some when the And starts the guidance turn positive?

Dave Williams

it's and the pre-pandemic improvement Frank, levels. the mix in when we start, pace it’s this is occupancy Dave. Yes, of just is the get wildcard, what when That and to improvement call we’d not the

it by XXXX. it's of really starting it away take get But in had three today, or XXXX the in should patient pass we when we two second a of home anticipated And pretty but we is slightly. it And nursing – to the even drift So reality majority into terms could will takes normalized, substantially half the of outlier. in the quickly. prove statistical a year, before quarters those the of end people you still still think

So that's is, just And right, through mix levels. portion it develop to the we of of call XXXX a long you're saying substantial of anticipate way normalizing. the going second XXXX, is it'll pre-pandemics be half

Kevin McNamara

and are numbers won't housing – comes you. that And Frank, the us running. you better of have point shored-up – look at the that from to we are longer, days another XXX extent with by it's comfortable been that patients long we'll we're normal we things the comes be that’s saying to sector. Those from patients I’ll where one when days. you senior at the with it, XX you patient returned this we group we've XX XXX group watching, than or way thing the with referrals that course the of each are that from is is, been premature group that be And with our longer stayed to visibility have been that of until That's honest on largely that group is for referrals days. have expanded is

then into will that at the certain of have is the of to the groups couple certain extent the a so, of caught mature over we're salutatory mature and And what will ADC. level. going suggesting, next those percentage fairly those watching we if in program effect that months, we're next it's the to process solidified, be lower days a they will that And really elements the say that's that have on the

this So feel in of happening. do that point, into it bit it's – have but we it's fact as a it's visibility at a something we'll something guess, is

Nick Westfall

families benefit inside inside look a partner it of become The core when stating stating, new it's those timing why good there comment, at reason vaccination to is one occupancy factors embedded narrative comfortable is ability back alluded and with care at home the as it's obvious is it's whether continue and of the care to, new you hospice. obviously to other external safety when home, patients at we're for is quick is and and levels which and as just and while resident the residents their the the of at has of without pandemic of or also there comfort vaccination it, rates, we're their can Dave and confidence facilities. the potential core with Frank, – rates velocity we the swings highlighted

housing is deliver The to and gives confidence, and levels flat homes, important nursing continued moderate at caregivers care And that's occupancy other I to go come going out homes is for thing there out thing as a the to specifically an be feel always confident role continue that back they we a need industry, enough that will that subsides. that may individual's just senior to as us aren't the pandemic residential think note, period. they're for as

Kevin McNamara

was good we pandemic coming. happens guidance if – had of – to of to let's a I [indiscernible] to, the didn't forces of reference beginning was that obviously say the about say, made portion but know $XX.XX, of okay, to also going want we of a things we I thought talk of to sequestration that hard a that’s we a through sustainability, mean, we be year, gave was range, it is the And thing XXXX build solid if mean, course, XXXX, lot very mean, that a that $XX.XX comparison lot payroll. a that reported the – relaxation what And was any we one I at Frank, I of share. of zig bodies. cash for relaxed But the the the had the the regulatory smoothing XXXX, we period, liked – our we zigged a in when were we we yes, what it in had the relaxation we and we're we year we kind in by is XXXX, way and saying, in at temporary adjusted of the when XXXX. businesses, we midpoint next had look are basis zag really the of in regulations looking earn of zag, at we our is for course to out look year earnings got, have But and longer in cash, had XX-XX, we XX-XX. and various blow we the it XX-XX earnings, range

looked and less at in I and hospices mean predictable homes. – what in two only we is, keep to problem pretty made So I negatively on-sites pandemic The to Roto-Rooter government what businesses. VITAS two were allowed and basic mean, are employees got Positively the nursing to predictable weren't remember the VITAS down, did is in homes, weeks VITAS and not happened for level Florida. you nursing respects. occupancy business the

the effect which it's with, overall been we've lingering company's the tend the to but net this dealing we're those effects, lagging satisfied things during unusual operations our – of with period. have very So both –

Frank Morgan

for Got another Nick. you. one Maybe

you're are – see have But you've change got starting assisted the – have vaccination to that you you now we're completed living assuming of population that you rates – vaccinated signs I early is I'm evidence? large Are any mean, any most have nursing seeing well. this presumably seen You most there? any kind there mentioned or changes it's point, in, seen any anecdotal you as the vaccinations, at and their a homes been of

Nick Westfall

as also now, we are a obviously think of it. is to a not macro – encouraging it and market-by-market we're seeing I anecdotally and related basis, on Yes, there signs in fact-based level only sources, right from but pulling

also all combination market, there this many XX you they're to. they're all every optimism, that been But, the roughly see were referring those across as So facility, having doses And every in targeted residents have distributed signs in whether States. different or of protocols, facility And or million that of is hospice optimistic, rates. population providers I is, of that the vaccinations, that but we've experiences able I'm as high that differentiation or that across I that a our the pull are so through. to all what in folks safe, and providing even to provided has the will And we've continue we education wearing are take certain infection quality, We pandemic of the advantage brand. has I to as in highlighted with hopefully, relationship PPE elevate segments, mean think of nursing adoption our currently also of. are obviously homes those so hopefully state by disease the and the helped do morning, United safety, employees the whether ALFs, think well been the

those And us so across we’re partner of – institutions all I country a and the feel good in confident being with entire in XXXX beyond.

Dave Williams

that'll employees as returns that the when rules, returning when entire to sure to all grandchildren pre-pandemic home not Yes, well home, put visitations or their as obstacle going just the when their those are home in a who have nursing think into normal visitation and No, to the Frank, I nursing went a allowed visitor restricted. vaccinated, if returning to to normal, be would nursing grandmother, the say we one's visit is last can the nursing homes grandmother making we'll family declare occupancy. extremely allowed, residents,

think hurdle last So be for normality. we that'll the

Kevin McNamara

as when to a but can good and it's number length that another goes things low XX. we number back And return look to sense that us. metric fourth was in or as stay, normal XX pretty of a passing, you'll for mentioned Frank, XX of the have in third will parts at big because it Median you quarter,

the proof in the that's So pudding. that's

Dave Williams

For specific months.

Frank Morgan

just maybe but buybacks modeling, the of going Got is the around another in reacting hop last into has Thanks. X% guide, built you. from process any and just buybacks down forward obviously thoughts One here? queue, one the in day, back been I'll a clarify to another no stock this

Dave Williams

think to buybacks we use of And that continued cash When flow. pursuing XXXX. anticipate are throughout excellent an our free

Kevin McNamara

off. we follow of the wherewithal lot have And Yes. is a

Let's put way. it that

Frank Morgan

you. Thank

Operator

you. Thank

Joanna question next with Gajuk America. comes of Your from Bank

Joanna Gajuk

Yes.

questions. follow-up of couple off first So

the more actual talking you about this housing senior think QX. begin guidance guess year, obviously half. talk for worth growing, about about, starting admission in you it's normalize census because when to which well, we And for you down sounded you just the in I second should expect So X% how were the said your see patterns, can occupants, to I like

I expect kind year? to just of So be itself the this level cadence the of, and kind of you if to guess talk here to we end back census by about should closer of normal the can kind

Kevin McNamara

it So philosophy, has related senior of lag Joanna, of as of segment, a care it's different – particularly days with no it housing we and were pace than no timing responding to it, to than with degree to to original Frank's it that different historically. going question impact

the come think traditional the and as even footprint a normal. the to we at get in also much up lift the has certain the pull how I well. is What in how still positive physician as of admission level mix on referral we'll provide year-over-year obviously assumptions which coming is, segment the that through that admissions, hospital, declines in from senior how housing a sequentially segment tag senior see general we timing housing of So a office and macro returned that level, quarterly that, a much back of performed built in and to or We business, continues big basis to positive if but ADC on lag, specific with go of ADC to through, will we they don't the about guidance. back year see we which want

half potential to back of the XXXX. So, census in latter for of be backloaded it component would be some the terms of growth would – the

Joanna Gajuk

Okay.

So that…

Kevin McNamara

the it think we as far guidance, reference As we what year. for to as make the in

Dave Williams

certainly from there, then of But year the happens recovering and census leakage half first the we in the of in start terms Joanna.

Joanna Gajuk

Right.

the your in senior sort kind homes assumption forecast, of –nursing So expecting improvements and in terms progression your and of you better to of have in housing, and own homes of nursing do you one of setting? occupancy are these than other other settings occupant on terms

Nick Westfall

need we're segments other more – a they living senior and of segments has vaccination one – it to one theoretically the there, make just potential or I it better definition be patient than inside those family more also some one when the the speculate ones, of we're residents you to all which to access, various on nursing comfortable home of would by that's rates, had those argument it. restricted a the home, is and acuity skilling not, think again, to their due inside the of home been housing that need outside inside don't really with would as communities, with I it, can focused could get do others, definition, that interacting know, earlier the setting. And than to of with assisted another nursing gets impacted if more because we higher would the the recover, of as nursing which to gets one lot member have being

Kevin McNamara

down they’re New reasons; that of is infection. think a housing senior these they one, was And might – Frank there elements. of what one with associated element thing, for York parts suggested a a presumed One nursing of are is down, a were different levels couple unsafety say, them for new homes hotbeds – of you coronavirus of why there couple occupancy

allowed. everyone's severe admin being I softened, there's visitation question mean, still the no day you there's As rules normal, have was should that is – in, there Since alleviated, care elements not impediment are even in extent, be still nursing a the member that family was a the the that focused option on us limitations if home still rules senior who Frank people, groups of by the with they moved impact the new considering were – many those vaccinated new of if Nick whom be is housing to someone what to different than respects when there – had have vaccinated, a are one, of on living the changes. levels, option. outer as to to rules on said, But was another assisted or suggested and vaccination significant they would you before. very been CDC’s with fact visiting the was behavior XXX% regard knowing

to, for nursing alleviated different So and new is, care of be we'll couple are a occupancy. from lost we the assisted normal confident There's referrals say to homes why what living ignored. reason a being what of mean, normal, very hard. fairly take assisted are the of we're we're that extent is nursing homes aspects and down care still the that. living key and very but that But it's there's why essential at I talking But having there's least And Those performs the rates. a all point that, it's at internally the will couple factors our factors. a existence advantage said sector. to nursing about new It not return and a function is, and of

predictability that stay question for modelers are And the That of of median and of just don't understand goes see is We're of those a numbers to be as but drifted percentage I drifting will good are was and that. group. we class Morgan, you example, in our to us the I aspects Your see suggesting there patients the have predicting up to extent to business saying, yet, are it'll give day we the seeing it visibility modeling help really elements that. XX the the of that our up, see we sense. that to predictable. Frank our we the who extent, that the more extent length visibility. To XXX we timing

Joanna Gajuk

Right.

part… understand but yes, the uncertainty, other So the

Kevin McNamara

by and the that's but inside optimism. new care And think definition as to continuing good just It as roughly of the data was safety, vaccinations state could us sign adoption being but it. be. into partner facilities segment, residents leading not support not we're the the country, each talking million came only over they of But point, about reporting a be be normal And clinical certain that its heavily for weekend. about this a The and of the the as were only long-term there component as going is those consumption vaccinated dependent a of all things. to the to CDC point, well. on it and mid-March that there and residents out habits, of One for encouraging, and we just gets one released also residents, state as That's safety. between a at to only returns indicator well to not elevation for whatever mid-January

Joanna Gajuk

part but question it, X% Right. of in up quantified And setting Because community you've was versus other third growth I I of year-over-year said rate? last from don't accelerated up from guess is the like admissions was this think you pattern so the actually my hospitals what of kind something quarter, you've quarter admission X%. it was mentioned and physician quarter growth

Dave Williams

setting. into Yes. We the home-based lump it

was up And second, so up X.X%. it quarter, for the it pull well. as this a in for I'll it here was but third setting That quarter, was out

was it quarter, XX.X%. up Third

So is, support they're the or physician. are going system. may accessing depending to specialty the a We're continue to care another wherever point be to the there segment referring healthcare those that being facilities, as physician patients not primary traversing patients on

Kevin McNamara

surprising And us. it's to not

basis. minute going on a super a and focus that, would let’s indicated. the basis, and and people minute be that not if their tend the haven't me other the familiar rushing by for in been the a And family earlier. some point. rushed home, that that home somebody realize with a to the patient people in in in you're is hospital And the earlier who they're say at daily very to is on exposed the Well, nursing the a Let worst, is say nursing where been discharged whole – provided of and just They're and home doctor home or being their hospital been told and there's terminal [indiscernible] a in, have never worst hospice, earlier, but you'll a nursing class, had nursing terminal. your effect in for is on you chance the see if turn of situation that hospice in with and they they I'm been you're to patient one get benefits benefit that hospice turn that tell setting, the they've when months he give you patient elderly XX% same a in the hospice you to hospice, might've when for to that a home, three what's not in

an have And referred a to the have problem admission, three fact they're there's aren't us. it. for could those hospital in they're would is do. There's later hospital. rushed admission like patients it's that – the would Given home, hospital only gotten settings, becomes a becomes admission the a months worst, The that we turn than they otherwise those nothing to it

the that – under exists bills our to money helpful patients, is prior that incurred. hospice of the not and being that if home, reasons prevent end which of home, nursing yes, because portion then the a care, coming to stay that, up that one save it, to could last they they're with So, government that to be a good not in then visit hospital hospital

hospital expect based would admission but is we yes, expect long So way we under scenario. yes, – saying to of a go this up

Nick Westfall

we for quick is to respond and in whether a eligible reinforce at home whatever their way we're setting hospice able benefit, in or which to if presents comment ALF the nursing hospice them Kevin's to Joanna, the at hospital, not only it's them, nursing but care the a themselves, operate So, timely, physician whether it's manner. in house. on last patient VITAS, home, they're bring for a benefit, office, And in the

diversity And we is my flexibility has so serve. that to allowed what in referenced communities this in us really prescribed to I successfully pandemic that navigate remarks continue our

Joanna Gajuk

physicians Though, admissions I at potentially pursuing is these or settings. specialists? they there I primary other referral or Makes sense. what shorter care from the you stay, actively getting of length and these like so it, are that's Because – more come other guess, like some obviously effect offsetting lower it but was with sounds Right. sources of

Nick Westfall

Absolutely.

for from depending pursued we which So help, for we've there that every is every identify to eligible where patient care right market where and potentially educate referral help reason awareness, healthcare exactly goal an we them. of and is all cetera, be and et the planning, can they're care, prepare even education to decision how presenting educated, to that to making always patient partners supported goals in our patient family as help in advanced slightly hospice a those to referring operate on base for journey a different diverse because

Joanna Gajuk

Right. And hospice hospice got I but a question have on up I on guess to just side, over, that wrap it the side. the

back So we XX% Above guidance revenue pressures actually, was than much better year-over-year all XX%, decline then it's levels. call were above is guidance, about the The expecting. pre-pandemic and but guess, margin obviously margin these we XXXX. this talk what the implies revenue it I

this you it, sustainable the think it, is about talk business? Is can margin. about how to you margin for XX% that of, way know, kind the that So

Dave Williams

care shift, Joanna sequestration less which as has Well, that and $X high more XXXX. million of as still of significantly margin well home routine is they're relaxed part doing differential care, we're roughly in of acuity that helps QX a about

more So to that? it XXXX those when on you compare contributing. that two that's factors improved, the so anything are margin, Nick, also

Nick Westfall

quarter’s no years. year historical last than our forward in No, for it I every to our days needs year have increased mean, we different and the we anticipated, XXXX referenced also against needs. all flow, not in point of patient but balance only out From the And in labor care. call, every from we this care and – will standpoint, operational patient an conference continue always

not fantastic individual posted And operating it pandemic, we a out as able XXXX. we job of lay the of group single we balancing into furlough, were and the goes remind the to organization so just to did everyone we achieve a throughout not did inside the for results that And well. did that off

Joanna Gajuk

higher guess, try year-over-year up and also the And to I Okay. than outlook side, question, on step much a similar this levels. pre-pandemic XX% that's helpful. essentially Roto-Rooter That's for margin would

that is – margin better that what's forward? XX% sustainable kind of going So

Kevin McNamara

started infrastructure set answer we – seven margin revenue is we margin from increasing have think the water you which saw what ago, of restoration. up. is you primarily the in happens over the increased yes, already have – resulted short years the increase, branch really And The so, and because

incremental have in infrastructure margin water these jobs revenue the drops don't other more costs, we as everything of EBITDA rough line. the same have the since although, for the contribution increased else, restoration, much So the all to of margin way

So restoration we're with it's it the revenue come doesn't happening increased just happened any water increased overall, enjoying cost. with also infrastructure and

increased contribution to EBITDA So the line. dropping we to of is revenue that again, continue. for the margin expect And more that

dialed of things for avoided margins it helped would costs a people XXXX Some seeing little as during doctor revenues higher increased and the bit pandemic both the for really helped example, the in are as in all that that VITAS but in continuing, the margins. anticipating contributing anticipate margin got that maintaining not of we terms be the continues low and well that healthcare Roto-Rooter we're XXXX abnormally didn't and to

Joanna Gajuk

up it and flow opening right. in All sounds because the And should question in-patient couple these Florida, How been units. year sounds any like more it you've a plan, the strong last this cash we de as think a about of like, cash for very flow. novos, flow, cash you mentioned CapEx

year. So and for give you. then operating sense can growth us CapEx, a also you flow outlook including Thank cash the of CapEx

Dave Williams

high. is what artificially I year Yes, flow say for certainly terms the of XXXX in would the calendar cash in

example, the attributed CARES it. have of money revenue Act some we XX reasons, the was of odd there One that didn't to any for that costs lost million as took

basis pretax that pure flow. a cash on was So,

the Chemed for In million $XX addition, we taxes deferred had of about a little under payroll consolidated.

to gets have pay portion in of of the taxes paid payroll employer until So half XXXX. that we December don't of

of December continue of so say in of flow course, but you $XX roughly. another cash And that by had, cash another half real, we expect million. which sequestration, that's is to flow, XXXX that's don't $XX other spike then million The

So the the or so really by take cash $XXX million out of flow. XXXX away, call that

it's safe share. say adjusted earnings is our cash think free I to our really per

flow XX.XX of in neighborhood million. takes take of between you're just you million point north talking at shares, if So cash XX.X XX as XX.XX, the and XXX the mid free

in XXXX. depreciation and million XX amortization between XX We million expect and run

million XX XX in We expect and be million running CapEx XXXX. to between

net cash as characteristics free we're don't like seeing debt, our changed. haven't million. any earning net have cash So We of morning, $XXX flow of this

to our at free to sheet plus, want plus of I'd we cash XXX look say, $XXX available, you you to investment XXX million in of if flow And play other of with cash we work on have intend able the to say really that repurchase fully if So balance share flow, we're to XXXX. if the cash terms of opportunities. put in and

Joanna Gajuk

much Thank for color. Okay. you the so

Operator

McNamara to the I'm I any time. Kevin at for now this to further showing call not turn remarks. any closing like would further questions back

Kevin McNamara

there's business for wanted Well, look usual. to And thank in in year closing as Thank I returning as we attention. you. to unusual possible to remarks, kind an everyone XXXX, soon as forward but the just their

Operator

for conference Ladies and call. gentlemen, this concludes Thank you today's participating.

may disconnect. now You

Chemed (CHE) 24 Feb 212020 Q4 Earnings call transcript