Earnings call transcript Q2 2023

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Holley Schmidt

Good morning.

Our conference call this morning will review the financial results for the Second Quarter of 2023 ended June 30, 2023.

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 26 and in various other filings with the SEC.

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

the release discuss is results In addition, call, website earnings the is company's A EBITDA provided interest, before reconciliation operating available or press results depreciation amortization adjusted during in including and non-GAAP dated taxes, and chemed.com. management which today's performance of on July also XX, may EBITDA. at these company's non-GAAP

I like Healthcare McNamara, Westfall, Executive Nick Officer now subsidiary. Corporation Corporation; Officer to would Financial for introduce and Chemed's Williams, today: President of President our and Kevin Vice Dave Executive Chief Chemed; speakers President Chief and and Executive Chief of of Chemed Officer

to call now the I will turn Kevin McNamara. over

Kevin McNamara

Good I then Holley. for with begin quarter will follow additional to I questions. Chemed up Dave Nick Welcome the highlights call. conference morning. and will Corporation's with XXXX open detail. you, up second call will for the then quarter Thank operating

first and admissions operating in a quarter over been post period. metrics of sequential to significant reflect staff year. staffing in improvement retention quarter, tenured stabilize patient result our second last VITAS’ XXXX, expand XX-month in These methodically night results operational This Our to increased In staffing period. strengthening prior admissions drive increased direct designed basis VITAS’ hiring increase launched the and the well converted our admissions X.X% improving pandemic. into or and this over has released continued census. related was turnover X, July XXXX on the increased capacity of our second as operating This July are the patient Since metrics capacity. of patient has program our program X.X% X last higher In a XXXX. census. XXXX, average ABC our daily an compared the quarter quarter, when prior with X.X% compared census to expanded when of increase year, and

licensed program the retention aggregate an XXX healthcare nurses. has of licensed professionals, increase are generated The which of majority

second four quarters second XXX have the XXX, the of sequential and census expanded hires $XX net forecast professionals half of to in of Over billable XX,XXX has June was is XXX, XXXX, X,XXX XXX revenue. majority to respectively. XXXX patient XXX, the the patients. basis our a annualized census in the The of increase quarter XX rough the June for VITAS This million capacity compares bedside and year. growth ending of XXXX end our patients. On XX, of increased the from benefit net This translates into month last XX,XXX admissions net increase a by census of

half guidance revised the growth Our year. XXXX assume when the months to in of of six the ABC to moderate does sequential second first compared

can indications, all describe on By Roto-Rooter. to as what encountering turn let's I spending. consumer headwinds Now only is Roto-Rooter

Overall weekly prior As Since call a to March, noted increase and the weeks consumer last is in first during demand. approximately our indicating has the compared softening quarter, an quarter. potential volatility, of volume first quarter few call throughout weakness observed weekly increased This revenue teleconference quarter. we've the call, in volume in continued observed down we the second in when XX% revenue. weakness year

portion are cleaning in material services. Although it drain moderating crude with has demand increase the call indicate terms and Roto-Rooter rates. plumbing measurement, does of of volume is consumers close a behavior a discretionary softening their in offset

points. increased XXX which call scheduled basis ticket, the Our at a centers is rate rate, call into has converted conversion technician a

our These rates billable impact XXX improved reduced percentage technician demand continues a rate, remainder guidance overall demand. of for by converts signs basis weeks. Whatever to the headwinds of of modestly recent work, increased be over last the have some assumes scheduled Our at consumer a home We've in Roto-Rooter and improvement year. the the arrives points. conversion seen consumer few of conversion or tech softening into time the impacted business the ticket has spending materially

in accelerated am VITAS pandemic. post I with improvement summarize, To pleased the

economic XX/X headwinds competitive terms response by Our in We return in growth healthcare has of call in anticipate internet market Roto-Rooter’s census spending. admissions centers customer increased on excellent is share in consumer strong and core of awareness, well XXXX. time, operating and corresponding normalize pressing positioned of in expansion VITAS to brand aggressive professionals, continued advantages patient presence. Roto-Rooter early licensed growth metrics to spite positioned

I With to turn that, would like over David. to teleconference this

David Williams

average of offset rate Medicare Cap partially impacted revenue XXX quarter quarter. year points growth in the by in period. of of increase from increase changes of our basis an The geographically-weighted approximately a revenue to sequestration. care, and contra net revenue This when second points of Thanks, was million negatively VITAS' increase increase by XX reimbursement compared $XXX a X.X%, X.X% basis X.X% days the XXXX, Kevin. Medicare is other combination primarily of prior revenue in the comprised

Average revenue care period. above quarter and prior-year basis Reimbursement high $XXX.XX and averaged day $X,XXX.XX second in per the the XXXX is routine $XXX.XX, for was per XXX points acuity which respectively. patient care of home

During of the X.X% days quarter. the quarter, of total acuity to care, days prior-year care essentially were of high equal

in both for points the year excluding which quarter. increase prior XXX compared This impacted margin program reduced second VITAS XXX XX.X%. CMS EBITDA gross when sequestration, basis negatively Cap the point a by to The by the margin basis bonus quarter was of these and Gross margins to adjusted the Medicare compared is XXXX, XXXX. quarter re-implementing when second of retention and were

Cap, Our sequestration. the the the XX.X%, basis below quarter, adjusted has of in which is XXX $XX.X period, increase year contributed which all margin points EBITDA totaled excluding really Medicare X.X%. to quarter, an Adjusted excluding was Cap, prior of million in Medicare EBITDA,

points. retention inception XXXX, the net under-utilized on basically XX earlier, noted results it This as quarter since is increased XXX the quarter labor during program basis of in of in Kevin estimated X the licensed second think increase by margins in professionals capacity, of impact have The negatively by XXXX. staff of healthcare increasing XXX by professionals professionals to of As the staff VITAS hired XXX total approximately July licensed quarter. the the

turn let's the X.X% revenue declining period. of revenue of is The in million X.X% $XXX restoration X.X%, quarter $XXX decline Roto-Rooter. consisted X.X%, Now XXXX, totaled prior declining generated commercial year X.X%. compared second The growth X.X% to the of is plumbing which the prior quarter when $XX.X of aggregate Roto-Rooter’s the which the to increasing growth drain cleaning the million, drain aggregate X.X% increase residential and plumbing cleaning the revenue an water increasing revenue of Roto-Rooter in of excavation million, over increasing decline consisted branch commercial in prior revenue revenue expanding Roto-Rooter X.X%, residential quarter. and year. restoration quarter is a X%, branch over of X.X%. X.X%, increasing excavation water decreasing which totaled

Roto-Rooter’s the was is and second was the XX.X%, prior second XXXX. quarter in totaled gross compared of in margin point points quarter to below the in margin of XXX the decrease Adjusted basis year quarter an XXXX the the XX.X%, adjusted basis quarter XX EBITDA $XX.X period. which of X.X% EBITDA a decline when million,

growth estimated increase the our at is to a half of XXXX compared XXXX EBITDA VITAS’ as to adjusted guidance. negatively take prior a EBITDA XXXX. X.X% when full Cap, relief X% Medicare by expected forecasted sequestration ADC to Cap to in margin year let's the year is and is XX% to limits estimated Cap accrued XXXX. XX% compared points margin Roto-Rooter’s XXXX X.X% and and X.X% our to year full in to bonuses to to to look and growth and of XX.X%. VITAS’ be a impacted of to forecasted in Roto-Rooter between to first revenue, of calendar billing X% revenue is XX increase result estimated XXXX. and full we're to million estimated X.X% currently be related XX.X% basis sequestration retention Now, revenue year Medicare prior for is between XXXX is $XX program Medicare achieve year of adjusted full

in of shares. related to guidance rate full corporate our diluted Current to stock tax tax earnings our year adjusted retention $XX.XX. expense assumes excluding non-cash XXXX effective and cost XX.X bonus XXXX program So per XX.X% is from certain settlements this benefits based exercises, to $XX.XX share, on options, and option earnings stock discussion, for a be million range of of estimated diluted on an the count share litigation

reported XXXX adjusted earnings Roto-Rooter’s per comparison, For share $XX.XX. was diluted

our over I'll President now VITAS Healthcare and Executive turn Nick of Officer segment. business call this Chief to Westfall,

Nicholas Westfall

Thanks, David.

to and $XX,XXX admission workers. care X retention implemented including government-mandated payments we a program costs professional. effective and XX licensed after VITAS clip nurses, of XX-month estimated the hiring The are paid total discussed, of bonus was one-time completed licensed vested this on taxes retention months home July health of nurses, overtime XXXX. successfully from is looking Kevin aides targeted at bonuses calculations, continuous $XX out at ranged nurse program, health individually $X,XXX has forward managers, employee million. These bonus social program focused As All employment. payroll This including and per retention

The revenue approximately was increase On million helped retention when in month From economic prior staffing million this retention additional This of additional census perspective, an of bonuses basis, June bedside XX estimated to generate program is X comparing an million. annual X to represent to XXXX the of expansion. approximately million to $XX year. contribute capacity in ADC maintain increasing existing retention XXXX its will patient levels. has bonuses this annualized

this the expanded XXX. of XXX of ADC the X.X%, quarter an bringing was increase growth expansion. is compared subsequent licensed the In prior of which XXXX our generates the quarter sequential in licensed average staff The monthly quarter patients, census During then daily lag year, to XXXX, and by first XX,XXX XXX an the our of the given and staffing attributed XXXX, total to or encouraging, of the the second to and XXXX increase second quarter, healthcare census of program timing X.X% now professional second employees, healthcare when increased fourth of expansion or very staffing quarter admission XXXX we sequentially.

admissions compared our home four of VITAS the hospital-directed XXXX. is period, the admissions our expanded increase X.X% quarter XXXX, expanded the a XX,XXX. assistant and XX.X%, of when were to segments admissions the prior to compared fourth X.X% admissions when all increased quarter quarter XXXX admissions of increasing This In facility quarter and to second patient nursing X.X% when increased X.X% the compared second home-based positively. a In improvement X.X%,

was length stay quarter the the days. the and in second days quarter first XXXX average XX.X Our XXX.X XXXX. This of quarter compares of to in XX.X in of days

quarter XX and days quarter XXXX, median XX in days in days stay first of of in of second comparison to the XX the was XXXX. Our in length quarter the

sequential of in quarters our team workers, in what of growth accomplished, we recap now four sequential To recently ADC. quarters growth three licensed has healthcare generated and

We back I have a and pre-pandemic levels overall developed is operating building what and our capacity, believe to beyond. base to sustainable path very performance patient

this call With that, back over I'll to turn Kevin.

Kevin McNamara

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

Operator

RBC [Operator Instructions]. Ben And from you. Thank first Hendrix Capital Markets. question our comes of

Mike Murray

on could XXXX your Starting Ben. non-discretionary Hi, themselves? are jobs? with people do in discretionary this maintenance of Murray think doing the become for Mike believe Roto-Rooter, you versus deferred us jobs mix this remind tailwind of or you do more is you could a And

David Williams

as What on Ben, the XX% discretionary non-discretionary again, well with we to discretionary, our of a it's of the increase, up jobs that discretionary seen the under well consider Well, Mike, decide. but, definition basis. but and minds we is jobs have consumer the or though volume, in under, relative consumer in said, an to of

your you are or what of of that's or bad the the We're on XX% to constantly the so ago. over toilet seen annoying grudge really valve; self volume. tank, doing that's is, clearly days running a little again, the gets last small, in projects. where No annoying back six actually the But house is defer our over But bigger seal have severe an this things are place. first more attempt purchase the that selecting was two purchase getting do phone a months of coming it today So we discretionary. the still in, in are customers satisfaction one jobs very increase because well those yourself, we're the upper but calls could

just because the is, call people down fact necessity hair. and just So us that's a of

Kevin McNamara

not David that what -- discretionary we somebody you off, something is putting what a permanently. describe as I would off putting say it's months, or couple -- have And the

I it So is -- a if XX was at we which you're look had on sense the in that's it's that pace we you outsize business gap. decisions, thinking -- was we're a a call consumer period and not at no where basic door effect think one, inflation power also there losing when you of significant on getting with fact again, mean, is point of that take say, keeping hard and best had our tough And drop very, around that at any very a this in had, to that I a question, a There's volume, way in we it like or comfort have had market, share. we wages that Roto-Rooter. turning months

that's at couple the will really -- close outside are not that branches, incentivized what we not that really the We suggesting to people to us of turnover big softness any they've confined which it's It's not higher they're suggest non-discretionary -- sale. to is no that. something it's is eventually and softness Our more problems fix to Roto-Rooter. of because believe But having call as these when time, you somebody than every that being rates look there's to if more is likely reason to to push it's it's less control, not us it to a for surprisingly, same the going for than look David been, due issue region, our have at. are one the at pervasive extent take

David Williams

think a exhausted. this times everywhere. and Great I of volume the levels, kind can a post I couple very point look XXXX, think kind call our geographic of -- some does to And up regions I four to the often I it Recession has country, disruption in I the of in disruption the I the but digit. obviously, happen was like of seeing XXXX just we're mean, and takes double take say, there what But happened years, a around last have significantly is a and it very this it is pre-pandemic of XX kind in throughout broad consumer doesn't that's little all does is very, think from softness And the

Kevin McNamara

said, the by another Yeah, mean, ago, first going however quickly. on it the pretty thing. like call month quarter, obviously, from months it was is, of our we haven't we three that's A asked first it I noticed previous in which basically the question two last the seemed -- probably came effects you was patterns, covered many unusual were the of in land weather Roto-Rooter were it already months roof which to the starting -- first up -- business through for had quarter. that

we the first unusual So just everybody if that -- around having weather something see -- some first by in these were didn't the more the but, at work some they second quarter, kept quarter they probably of working again, some are the already up clock, quarter than then. effect in forces pop

when fairly then So we weather a the had moderated, severe difference.

our thing marketing prepared the never call we're Roto-Rooter business two as and about Roto-Rooter position. brand lot again, limitations workforce having that We're for of has but great there's uptick. thing great One is awareness, We that expense one biggest again, workforce. developing the and good one the the to larger business, have is workforces, of of in probably really haven't a indicated, we one stronger. volume, David been got, So been current an effort -- given it's said workforce

business. regard, that [Phonetic] so ground in the we're hit any regularly in we alarmed respect with So, Roto-Rooter not

David Williams

to realistic sequential we in Ben actually, to -- conservative is a couple call the Now then guided in QX jobs We see QX spending. all -- tends March put as Roto-Rooter. growth and on us come points for because to the seen, down X% be to light tailwind, much conservative guidance happening know in second -- QX, the that QX. what actually gotten conservative and we've we for significant, the quarters under a be up but answer from with relatively up of X% to little We seasonality tends consumer seasonality of and we has we this to typically were what's on these QX but don't will probably from average, your a question We're think be QX guiding quarter, year forward Roto-Rooter very been as also but to to the are have where QX we on from only QX. guidance. it,

to We other categories they to are consumer see consumers going Roto-Rooter said, encouraged haven't now, an was the on extent by what relief just going of we XX% July are in volume to to yet. that our spending this a see say all they're Right relative and but with XX%, are said, under seen that avoid but, in is assumption like exhausted, sigh of we we our little plus to guidance anomaly, that we're can, a but, unavoidable. Ben, spending the waiting

Mike Murray

How follow the decline take in compared Thank you demand a past just to did Okay. how it in and does of that. And for call quickly those up to to instances, cycles? return? consumer volumes the magnitude

David Williams

volume call kind so, The never never -- we've seen demand drop. had, -- this And of seen XX have is actually unusually with we've beyond is months. actually we weakness volume the go the spikes yeah, call in unusual

Mike Murray

Okay, cool.

Kevin McNamara

that’s [Indiscernible] outside. Since you

David Williams

to I blow are But then kind there. very the doesn't been said those it Great am short come often. as it just it always and cycle happen XXXX that the lived throwing ones and XXXX, in mind, doesn't I Recession does but of It's often, XXX a up out but happen. one dotcom Like, and well, happen

Mike Murray

for right. the all color. Okay, Thanks

shifting quick VITAS. real to Just

far? so since the the hiring one program. seen side then retention on in year ended? has program a And that, slowed pickup hiring employees you tenured Have for of hit retention the just flip the materially your You turnover mark on

Nicholas Westfall

to Nick. is answers both those Mike, The So answer of no. this is

to seen pickup over. have I say, What it. turn we're we material still related in the will first month not So to

those say so about always about keep to for program. And market-by-market month we've in that force payment, weren't we we in to on prior So, other good items ability with hiring cultural of And -- enhancement, to tend forward. in that never successfully people the need all prior that our commentary, but it. like relegated is hiring, trend, a to was financial has organization just -- the rate a feel the the the driving some the able but things to one been makes we an exploration all basis hire confident do quarters confident to going and regards then for of to comments where we feel the what

David Williams

you like certain nothing even for believe And small very necessary or be stops even necessary going in At out. where this program appropriate it call a Nick disciplines, to not we point, do basis can we retention carve that it's a it's it just see. guys it market a won't out have small on to to where

Mike Murray

alright. about Okay, given of the year, one repurchases the Thank of in quarter, share back the That's half final thinking the your helpful. just And one, are during how you. you repayment debt

David Williams

appears and longer We ago. what be standpoint, yesterday, years is on capital nothing now no money XX return best to X.X% we that with Fed the did so, what still about to from two we're get to points of way that overnight to basis same it's repurchase the used the our getting think share pre-tax time, At shareholders.

Morgan But return. deploy. Chase. on we the repurchase of So our basically kept with cash share capital JP sitting a That's because continued is part by penalized now right aren't overnight all of actually

Kevin McNamara

do so. Maybe we will

David Williams

Yeah. anticipate Every quarter, it. we

Mike Murray

Thank all you. All That’s I right. Okay. had.

Operator

from proceed. America. Gajuk Thank next Instructions] Please you. Joanna our comes of question of Bank And [Operator

Joanna Gajuk

Thank for Yes. here. questions much our you Good morning. so taking

first guess the I on VITAS. So

and year-over-year. now growth, things you there a your revenue many raised X% going are and expect it, guidance call nicely So pretty

[Indiscernible] close growth that. margins, forward? we which this vote happen? XXXX, very, So if sustainable think Is to to growth when that are very how are How about returns are comes already should seems some And to about we there their it weight like a to rate? going was of think you should with also it

David Williams

margins, are we now. with Regarding very, encouraged very where

we be year, XXX this like the the actually about where regarding utilized to that comfortably capacity, growth beyond to target, If in going too assuming that, rata pro it's achievable second XXXX. get but the the headwinds within excess under added of first EBITDA it call We're it, because hired, that'll XXXX half. the we of you enjoyed guidance think And quarter QX unutilized the adjusted XX% we the moderates in our very by want we'll get second XX.X% we to created half look guidance, we encouraging. people year. margin, I for of the of actually don't does labor census we're in throughout add in to year, fourth that, of seems the half fairly to of the year, about census second we half optimistic first this compared add the assumed actually our

but add estimate it So we expect should anything conservatively the to continue, Nick, momentum from the else we we to bit little half. on first it? slow a

Nicholas Westfall

No, I don't think so.

we puts there's of our on at and baked entire a what right, jump the as to of it the pandemic should while translates exiting one dynamics, a at lot distribution can to a go-forward We'll a other service it's Community different three us off us see a inside where to continue that institutions, it, basis not it and And you variables continue market. will the community good see we're point beyond, is Initiative of into pre-admin year. but every at, pre-pandemic Access a you it, at for it to the of the window. -- effectively but in XXXX approach the aspects, put end year into good start if through reminder, of just and comparing about of recap Just

David Williams

we've at at and about follow buckets, it quarters, it look when actually in tenured we I'd in say, is this past look we we talked also census, buckets.

bled XX with XX% we had admissions, during we the of And how who have been days, our Nick XX the And really the past really the off that got days, six to have of out do us growth buckets. three pandemic, years. the way XX actually obviously, -- when all months, team over lived past to XX in patients weak during what his those So X out. all patients many to that years, and XX days, material two and really, past started or three aged quarters,

that of money on beyond make path patients, doing or or on we the and outlier are XXX returning of half it the our months, lose refilling we're So we days. XX% great so, six a statistical buckets job past

that So, is that's momentum of of indirect a census. another on way the saying we've picked really, up recovery in the solid foundation really

Nicholas Westfall

almost VITAS, were comment, why last relay independent entire industry, industry Today a literature Hill there's need to fund, with for XX% total XX Medicare the more cost to earlier just earlier the to helps out of there's the is, that's also and is there's access [Phonetic] important, on the And it trust Medicare educate. months cost further access, what past And savings. for savings hospice illustrate the only more including there's not to trust for and care recent continuing but overall for the fund

I it because overall hopefully consistently continues significantly trend industry the Medicare beneficial the it's fund. for up because that So bring trust for

Joanna Gajuk

Great, sort for below a on came out [Indiscernible] years. inflation that prior the just point, and pushback I of basket from follow industry should adjustment the one-time this clearly up I be two close if this being the Medicare outlays the to market may, with guess arguing to

the any along what out to on need And something things, act that having final do to day? CMS these lines? on gets do regulation traction do Congress or you any it, come should you So expect actually it in

Nicholas Westfall

very it The do itself index see. definition as right, indications to, than ongoing be we've hospital calculation, reality. well the rule issued commentary it's with see significantly Since impacts against and Basket final the So impacts the just will as back sit Market by to opposed future as fully all hospice we'll There's tell. time more it so and and I hospitals within and think pegged alluded authority lags industry, that will so. it's the the in we'll to CMS’ speculating, near

is to that of is, care reimbursement the hears I so value think one piece that inside of leadership Medicare only and the back returns the we and of health trust Fund because study fund. continue to hospice the they the of hope one overall money to important the going fact hears value that the arguably Trust Medicare country support is industry the ongoing to of benefit congressional the that CMS the for

David Williams

your Joanna, one, our inflation put the they've impacts it's held a CMS there. good months for provider on on couple small Obviously, that is entire the proposed ago, little but basket. with association but an is on increase Yeah, a X% estimates XX% existential market point based that out a a of rule over back of measurement who out over industry, the the which scale, players lack numbers

small which butt. they're expanding lacked they because is their care every scale of is truly one inflation XXX struggling frankly, health competition, pop exists of staff market, that So, licensed our kicking our and the census reasons points mom basis we up because picking are and and in

that's reimbursement take will CMS market draw the do, the what And inflation, wish is really to we're players so, right creating it but to now, is CMS by holding a and would the we on share, to who expand but it. have going tough scale opportunities back share, up get way for

Joanna Gajuk

providers, No. interested in the workers. hire that’s And effective of the these you I buying this or say any that at out would guess to cost it's should question, effective you some more or I just point, guess cost be

David Williams

cost Massively effective. more

that the didn't $X million us we from it of million under workforce. $XX remarks, would we we've we're just crazy it our in pre-pandemic, $XXX paid bonus, because right Kevin to -- revenue obviously our to $X valuations. million on revenue, $XXX expand those based were acquire. it XX in had which census retention enjoyed million dollars now to do expanded If this in said thought through million for But we And prepared have incremental million we anywhere competition. getting today, As - cost on that costs that's us creates through

Kevin McNamara

public the provide that are to but we lowest service almost extent they safeguards based always company, tied be whatnot And and big think two have a it hospices and the the we're to is, problem too in with feasible. census all We is. what have to levels it's buying profitable, just to that's economically quality, the not think on of small we base

David Williams

an off whatever that that But but a footprint size that even have down doing in not acquisitions acquire table, see gets And by it through pay for market we a or we're We aren't the the competition. to multiple Joanna. we could increasing that would average then in. us basically area multiple

Kevin McNamara

maybe, county not in now. any So, we're that Florida in

David Williams

But Yeah, are California successful we're the there not in about time, better commensurate that serious a typically it return. regard. opposed Florida, capital; you same we at risk, know but put be to it, if we're shareholders protecting and very at actually, very

Joanna Gajuk

I sure obviously, and Right, is sure. and makes that’s as That sense, guess, idea, sitting bad I for it, on the you of not cash obviously, to a am before now. alluded

to switching you it like I there maybe guess, a Just weakness, there. the assumed comment guess appreciate Roto-Rooter, I some July continuous, sounds indicating but so that the changes

be kind this return you're out for would it looking market what call guess, kind or guess, happen, of say happen in to there I of able soon? to reverse the in to have I of oh, to will kind kind happening, of the yeah, So this trend, or your volume, mind like, is what

Kevin McNamara

ring. that's one. phone -- a the to down not tough why does a tough is comes That this Well,

the of good why internet and in does ring, of country let's whatnot, generally know it's thing does page There's than But various it havoc, of to drives search. better pops but all you on phone that search, And we raining up have, than we have causing mortar paid but, we people. have. measure can is the extent There's the you we're tough you of the and why Roto-Rooter you for and on do, better why I first algorithm. we that and you there's to search, not sorts that measures, that that, is ring in part some because I more the get is sure is, bricks business tied you which the want Roto-Rooter things the want is the stores the don't is one to far free, all well up frequently the which coverage, to ever speaking, weeds, that marketing paid show sorts hope thing which to of the have say sales make that to we get ring, which point natural on does vexing it their only course, there's that. mean, doing too Sometimes do that's and

success to that the and crossed, can we and that so category we of the but hopefully our and category people the more in being paid some on do more but, consider number to to to have refine improve creek something eyes and other up the conditions one more searching words, continue search hope is had to believe on whole that the Roto-Rooter. just is economic or reverse page question, is we our internet, some down people a placed entire often, to there's covers or we're creek In we've then search drain recorded But we lot even of two to showing one; the first the based answer cleaning, or extent plumbing it's fingers the with that. continuing number your capture we're on search the the of rising is do metrics, can of for for thing improve is that better stumps. phrasing down converse substantially, the of The starting

is one. for run question fingers now business way that's the to that we keeping to Roto-Rooter. putting a down involves running back, your with demand that side. It's we're comes vexing your aside some business it trepidation and tough and tough say I that marketing crossed right what hoping and a So the if on can comes a And doing

David Williams

increase You residence, close significant the rates certainly call completely. I call at materially ignore we and close not has, technician like rates said, but that the offset can't center in demand,

Kevin McNamara

field. around Roto-Rooter -- has shows long good we to that a in been have just that goes, for And in, in time. Roto-Rooter right sense, that set the management They

unprecedented If of branch hired what you are managers where we had that we to an some months ago, away we’d you've our at what by have six said equity. top Roto-Rooter, the had XX-month us said period private did, issues

research, definition number said that had some ourselves. of managers but that of high the on And we almost based time big time an draw it's has too really, pervasive, talking overall more And, of locations, the that conditions, is to we the where of managers. ameliorating the Now, the are that on And that's fact in of think, more factors largely hard data. of we reasons. by we some variety had but about stopped We're the a based economic cause new for insufficient we number again, unusually softness, new locations conclusions kill that new don't helped conditions. what settle we tied to economic many softness is our see kind

Joanna Gajuk

question And the here last to that.

cost would COVID are anything cutting? you the Are being guess, down? what Speakers]. given So expect I differently, you doing And [Multiple volume

Kevin McNamara

price the phone the higher it David rate, customer got price. that's our don't idea the time once somebody close higher. cost, not a is us, is And the said, a about as the who for thing technician first the price do out words, remember, for -- quote time, rate when conversion to somebody the sees all, first close send the mentioned is the You We out, give send of -- mean, what that the rate first we other Joanna, going person on close that over advertise going a when way we calls price. charge by rates that those somebody are actually, calls, no written Roto-Rooter what have the one estimate to Roto-Rooter issue. a I they in for we they phone,

cutting we cost important the the periods, another think that inflationary is gotten of again, sure and side, increase. And Roto-Rooter that's an have increases protect in now, reflect inflation. price area, that success especially price sure So margins, make aspect we get that we we we think we make

work any we fix some will advertise, for really plumbers Roto-Rooter, -- we advertise don't doesn't cutting Price drain for $XX.

I Now, your $XX then this drain no that $XX then mean, said, they that. your exception, an a for that's charge charge that not do don't is well, there's but and drain -- find out that for the they a we case. and

X% course, to high caused given cut built on our referred very spaces if -- probably it little I those if down mean, be would current termination extent up call to we're our earlier or would up to that and our was by side the going volume. Roto-Rooter training a rather less probably. anybody come and anybody, the through filling year-to-date, effect turnover to the little and we've only think would of is or And cutting be lot trended so passive that cost reasonable cutting everything, but not you be the of from X%, we're I and I cost like that cutting, that have So being aggressive would lay but the that that company Roto-Rooter, a workforce workforce a in said of X% call would a something accept labor cost off expense is too active. it for the than be would to

David Williams

that term you doing reengineer term. less in approach do job and the drive and Yeah, expenses, hopefully down we in of better just I can the costs But generally cutting out various sustainable money not the we stress, and for semantics, what start do it's to is helps hurts through way money your we you is or a things. short less mean, don't usually on reengineering cut costs, long system, the whacking cost our but expenses

fans nine three, months costs So various not we're of whacking. six, downward just engineering much but

Joanna Gajuk

so the color. Thank the you question. Appreciate for much taking

Operator

this to Kevin turn back for I'd like At remarks. conference you. Thank the to McNamara time, closing

Kevin McNamara

work Okay. quarter thank thanking again, still we unusually attention, and My recovery for an wicket. think and, from tough for we're remarks your you, again But kind a everyone everyone. make are us. limited winning to to on And we'll continue

Operator

conference concludes This for participating Thank disconnect. today's now may you call. and you

Chemed (CHE) 27 Jul 232023 Q2 Earnings call transcript