Strong VITAS Performance
Re-purchase of 500,000 Shares in the Quarter
Two Roto-Rooter Franchises Purchased for $20.6 Million
CINCINNATI, April 23, 2026 (GLOBE NEWSWIRE) -- Chemed Corporation (Chemed) (NYSE:CHE), which operates VITAS Healthcare Corporation (VITAS), the nation's largest providers of end-of-life care, and Roto-Rooter, the nation's largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its first quarter ended March 31, 2026, versus the comparable prior-year period.
Results for Quarter Ended March 31, 2026
Consolidated operating results:
Revenue increased 1.6% to $657.5 million
GAAP Diluted Earnings-per-Share (EPS) of $4.84, a decrease of 0.4%
Adjusted Diluted EPS of $5.65, an increase of 0.4%
VITAS segment operating results:
Net Patient Revenue of $420.0 million, an increase of 3.1%
Average Daily Census (ADC) of 22,723, an increase of 2.2%
Admissions of 19,394, an increase of 6.9%
Net Income, excluding certain discrete items, of $52.2 million, an increase of 4.4%
Adjusted EBITDA, excluding Medicare Cap, of $70.8 million, an increase of 0.6%
Adjusted EBITDA margin, excluding Medicare Cap, of 16.8%, a decrease of 41-basis points
Roto-Rooter segment operating results:
Revenue of $237.5 million, a decrease of 0.9%
Net Income, excluding certain discrete items, of $37.7 million, a decrease of 9.7%
Adjusted EBITDA of $53.5 million, a decline of 9.6%
Adjusted EBITDA margin of 22.5%, a decline of 218-basis points
VITAS
VITAS net revenue was $420.0 million in the first quarter of 2026, which is an increase of 3.1% when compared to the prior-year period. This revenue increase is comprised primarily of a 2.2% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%. Acuity mix shift negatively impacted revenue growth 120-basis points in the quarter when compared to the prior-year period's revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes negatively impacted revenue growth by 47-basis points.
Total VITAS admissions increased 6.9% in the first quarter of 2026 compared to the first quarter of 2025.
In the first quarter of 2026, VITAS accrued $2.4 million in Medicare Cap billing limitation. No Medicare Cap billing limitation was recorded in the first quarter of 2026 for the Florida combined program and none is anticipated for the 2026 fiscal period.
Of VITAS' 33 Medicare provider numbers, 25 provider numbers have an anticipated full-year Medicare Cap cushion of 10% or greater, four provider numbers have a cushion between 0% and 10%, and four provider numbers have a Medicare Cap billing limitation totaling $9.5 million.
Average revenue per patient per day in the first quarter of 2026 was $210.62 which is 146-basis points above the prior-year period. Reimbursement for routine home care and high-acuity care averaged $188.59 and $1,131.82, respectively. During the quarter, high-acuity days-of-care were 2.3% of total days of care, a decline of 28-basis points when compared to the prior-year quarter.
The first quarter 2026 gross margin, excluding Medicare Cap, was 22.9%, a 71-basis point decline from the same period of 2025. Selling, general and administrative expenses were $26.1 million in the first quarter of 2026 compared to $26.5 million in the prior-year quarter.
Adjusted EBITDA, excluding Medicare Cap, totaled $70.8 million in the quarter, an increase of 0.6% when compared to the prior-year period. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 16.8%.
Roto-Rooter
Roto-Rooter generated quarterly revenue of $237.5 million in the first quarter of 2026, a decrease of 0.9%, when compared to the prior-year quarter.
Roto-Rooter branch commercial revenue in the quarter totaled $56.5 million, a decrease of 1.9% from the prior-year period. This aggregate commercial revenue change consisted of excavation declining 7.8%, water restoration declining 10.0% and drain cleaning declining 0.9%, offset by an increase in plumbing of 3.9%.
Roto-Rooter branch residential revenue in the quarter totaled $166.3 million, a decrease of 1.5%, over the prior-year period. This aggregate residential revenue change consisted of water restoration declining 11.8% offset by plumbing increasing 9.3%, excavation increasing 0.9%, and drain cleaning increasing of 1.1%.
In the first quarter of 2026, revenue from independent contractors was $17.8 million which is a decline of 3.3% as compared to the same period of 2025.
Roto-Rooter's first quarter 2026 gross margin was 51.0%. This compares to the prior-year quarter's gross margin of 50.9%. Roto-Rooter's selling, general and administrative expenses were $67.9 million in the quarter, which is an increase of 8.4% compared to the first quarter of 2025.
Adjusted EBITDA in the first quarter of 2026 totaled $53.5 million, a decrease of 9.6% when compared to the first quarter of 2025. The Adjusted EBITDA margin in the quarter was 22.5% which represents a 218-basis point decline from the first quarter of 2025.
On March 31, 2026, Roto-Rooter purchased the territory and assets of the franchises operating in San Francisco, California and Fort Worth, Texas in two separate transactions. The aggregated, combined purchase price of these transactions was approximately $20.6 million. Collectively, these Roto-Rooter locations serve a population of approximately 3.3 million people. This purchase is part of Roto-Rooter's ongoing strategy of acquiring franchises to boost productivity, market share and profitability. These two acquisitions are anticipated to add $5.0 million to $5.5 million of revenue for the remainder of 2026.
Chemed Consolidated
As of March 31, 2026, Chemed had total cash and cash equivalents of $16.9 million and $91.2 million in long-term debt.
In April 2026, Chemed entered into a new five-year $450 million Amended and Restated Credit Agreement (Credit Agreement). This Credit Agreement consists of a $450 million revolving line of credit and a $250 million expansion feature. The interest rate on this Credit Agreement has a floating rate that is currently SOFR plus 100-basis points. There is approximately $313.3 million undrawn borrowing capacity under the Credit Agreement after excluding $45.5 million for Letters of Credit.
During the quarter, the Company repurchased 500,000 shares of Chemed stock for $197.7 million which equates to a cost per share of $395.36. As of March 31, 2026, there was approximately $229.6 million of remaining share repurchase authorization under its plan.
Guidance Update
Historically, we do not give quarterly updates to guidance. Due to the materially improved performance of VITAS, coupled with the level of share repurchases in the first quarter of 2026, we believe updating guidance is appropriate in this instance. Further operational detail will be provided during the investor conference call.
VITAS' initiatives to return to a normal growth pattern after managing the 2025 Medicare Cap issue were more quickly successful than originally anticipated. This led to higher revenue, excluding the impact of Medicare Cap, and adjusted EBITDA margins, excluding the impact of Medicare Cap, in the first quarter 2026 than what was included in the original guidance. As a result, anticipated ADC growth for 2026 is updated to a revised range of 4.5% to 5.5% compared to the original guidance range of 3.5% to 4.0%. Anticipated revenue growth, excluding the impact of the Medicare Cap, improves from the original guidance range of 5.5% to 6.5% to a revised range of 6.5% to 7.5%. Finally, revised EBITDA margin, excluding the impact of the Medicare Cap, is anticipated to be 18.0% to 18.5% compared to the original guidance of 17.5% to 18.5%.
Roto-Rooter performed generally within our expectations. In total, there were various headwinds and tailwinds that contributed to the overall results in the first quarter of 2026.
In the first quarter of 2026, unusual ice and snowstorms led to some level of service disruption for five days of the quarter across 24 Roto-Rooter branches. This resulted in an estimated loss of net revenue of between $3 million and $4 million in the quarter.
Additionally, total leads for Roto-Rooter increased 3.3% during the quarter but continuing the previously discussed trends, a larger portion of those leads were the result of paid internet marketing. As a result, total marketing expense during the quarter exceeded our expectations by approximately $2.0 million.
When factoring all the gives and takes within the expected Roto-Rooter performance for the remainder of fiscal 2026, anticipated revenue growth remains unchanged at 3.0% to 3.5%. Estimated adjusted EBITDA margin is lowered slightly to 21.5% to 22.5% compared to the original guidance range of 22.5% to 23.0%. This is primarily due to elevated marketing costs now expected to persist above our original guidance for the remainder of the year.
Based on the above, full-year 2026 earnings per diluted share, excluding non-cash expenses for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, is estimated to be in the range of $24.00 to $24.75. The mid-point of the revised guidance represents a 13% increase from 2025 adjusted earnings per diluted share of $21.55. The revised 2026 guidance assumes an effective corporate tax rate on adjusted earnings of 24.5% and a diluted share count of 13.6 million shares. The original 2026 guidance was for adjusted earnings per diluted share to be between $23.25 and $24.25.
Conference Call
As previously disclosed, Chemed will host a conference call and webcast at 10 a.m., ET, on Friday April 24, 2026, to discuss the company's quarterly results and to provide an update on its business. Participants may access a live webcast of the conference call through the investor relations section of Chemed's website, Investor Relations Home | Chemed Corporation or the hosting website https://edge.media-server.com/mmc/p/o65jro38.
Participants may also register via teleconference at: https://register-conf.media-server.com/register/BI6f413b6cd3ee468481cac75d7519454e.
Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.
A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. You may access the replay via webcast through the investor relations section of Chemed's website.
Chemed operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.
Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing, drain cleaning, and water cleanup services through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in the republics of Indonesia and Singapore, and the Philippines.
This press release contains information about Chemed's EBITDA, Adjusted EBITDA, and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed's financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted EPS measures to help investors and others evaluate the Company's operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed's management similarly uses EBITDA, Adjusted EBITDA, and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed's management to estimate the resources required to meet Chemed's future financial obligations and expenditures. Chemed's EBITDA, Adjusted EBITDA and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing Adjusted EBITDA by service revenue and sales. A reconciliation of Chemed's net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted EPS is presented in the tables following the text of this press release.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 REGARDING FORWARD-LOOKING INFORMATIONStatements in this press release contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods and are based upon assumptions subject to certain known and unknown risks, uncertainties, contingencies and other factors, including, but not limited to, the impact of laws and regulations on Chemed's operations, including Medicare Cap and Medicare reimbursement rates, Chemed's estimates of the effect of Medicare Cap on VITAS' revenues and future prospects, Chemed's expectations regarding VITAS' patient mix and Chemed's expectations regarding demand for Roto-Rooter's services.
Because forward looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Chemed's control. Chemed's actual results and financial condition may differ materially from those indicated in the forward-looking statements included in this press release, including as a result of the risks described above and those described in the Chemed's Annual Report on Form 10-K for the year ended December 31, 2025 and in its Quarterly Reports filed in 2026. Any forward-looking statement made by Chemed in this press release is based only on information currently available to Chemed and speaks only as of the date on which it is made. Chemed undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data) (unaudited)
Three Months Ended March 31,
2026
2025
Service revenues and sales
$
657,513
$
646,943
Cost of services provided and goods sold
441,749
430,530
Selling, general and administrative expenses (aa)
114,321
105,587
Depreciation
14,303
13,445
Amortization
2,570
2,572
Other operating (income)/expense
(8
)
51
Total costs and expenses
572,935
552,185
Income from operations
84,578
94,758
Interest expense
(512
)
(329
)
Other income--net (bb)
4,774
1,245
Income before income taxes
88,840
95,674
Income taxes
(22,538
)
(23,917
)
Net income
$
66,302
$
71,757
Earnings Per Share
Net income
$
4.85
$
4.91
Average number of shares outstanding
13,675
14,622
Diluted Earnings Per Share
Net income
$
4.84
$
4.86
Average number of shares outstanding
13,690
14,764
(aa) Selling, general and administrative ("SG&A") expenses comprise (in thousands):
Three Months Ended March 31,
2026
2025
SG&A expenses before long-term incentive compensation
and the impact of market value adjustments related to
deferred compensation plans
$
108,931
$
103,760
Market value adjustments related to deferred
compensation trusts
3,885
(830
)
Long-term incentive compensation
1,505
2,657
Total SG&A expenses
$
114,321
$
105,587
(bb) Other income--net comprises (in thousands):
Three Months Ended March 31,
2026
2025
Market value adjustments related to deferred
compensation trusts
$
3,885
$
(830
)
Interest income
890
2,076
Other
(1
)
(1
)
Total other income--net
$
4,774
$
1,245
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) (unaudited)
March 31,
2026
2025
Assets
Current assets
Cash and cash equivalents
$
16,856
$
173,882
Accounts receivable less allowances
215,479
285,873
Inventories
7,208
7,790
Prepaid income taxes
7,614
4,436
Prepaid expenses
26,906
30,404
Total current assets
274,063
502,385
Investments of deferred compensation plans held in trust
143,778
127,949
Properties and equipment, at cost less accumulated depreciation
207,734
199,679
Lease right of use asset
133,597
131,150
Identifiable intangible assets less accumulated amortization
80,417
89,929
Goodwill
687,501
666,940
Other assets
8,725
8,483
Total Assets
$
1,535,815
$
1,726,515
Liabilities
Current liabilities
Accounts payable
$
65,698
$
47,692
Accrued insurance
65,101
65,743
Accrued income taxes
25,770
38,247
Accrued compensation
62,750
59,905
Short-term lease liability
41,286
42,976
Other current liabilities
60,810
35,993
Total current liabilities
321,415
290,556
Deferred income taxes
14,575
11,771
Deferred compensation liabilities
142,660
127,292
Long-term debt
91,200
-
Long-term lease liability
104,448
102,082
Other liabilities
13,523
13,052
Total Liabilities
687,821
544,753
Stockholders' Equity
Capital stock
37,607
37,535
Paid-in capital
1,603,730
1,538,419
Retained earnings
3,013,504
2,786,264
Treasury stock, at cost
(3,809,245
)
(3,182,718
)
Deferred compensation payable in Company stock
2,398
2,262
Total Stockholders' Equity
847,994
1,181,762
Total Liabilities and Stockholders' Equity
$
1,535,815
$
1,726,515
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
For the Three Months Ended March 31,
2026
2025
Cash Flows from Operating Activities
Net income
$
66,302
$
71,757
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization
16,873
16,017
Stock option expense
9,249
9,091
Benefit for deferred income taxes
(4,737
)
(14,174
)
Noncash long-term incentive compensation
1,386
2,420
Amortization of debt issuance costs
80
80
Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
Increase in accounts receivable
(32,899
)
(67,424
)
Decrease in inventories
335
403
Increase in prepaid expenses
(88
)
(4,430
)
Increase/(decrease) in accounts payable and
other current liabilities
2,235
(22,592
)
Change in current income taxes
26,817
37,286
Net change in lease assets and liabilities
(471
)
169
(Increase)/decrease in other assets
(3,603
)
3,034
Increase in other liabilities
6,709
951
Other sources
31
156
Net cash provided by operating activities
88,219
32,744
Cash Flows from Investing Activities
Business combinations, net of cash acquired
(20,610
)
