CHEMED CORP
For the period ended Mar 31, 2026. Filed Apr 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 28, 2026
CHE$528.05-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-31.
0000019584-25-000006
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-28.
0000019584-26-000012
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 66 previous paragraphs and 46 current paragraphs.
21 unchanged; 17 reworded; 7 added; 17 removed; 11 previous and 1 current paragraphs rearranged.
Tables are not compared: 24 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
The decline in service revenues at Roto-Rooter was driven by a 1.9% decrease in commercial revenue and a 1.5% decrease in residential revenue.
Current report
A $20.5 million increase in goodwill due to the two acquisitions at Roto-Rooter.
Current report
A $23.3 million increase in income taxes payable due to timing of payments.
Current report
A $91.2 million increase in long-term debt due primarily to the acquisitions and stock repurchases.
Current report
A $201.1 million increase in treasury stock due to stock repurchases.
Current report
1.1%, water restoration revenues decreased 11.7%, and contractors operations decreased 3.3%. Implicit price concessions and credit memos decreased 16.5% mainly related to the water restoration business.
Current report
After-tax earnings as a percent of revenue at VITAS in thefirst quarter of 2026 was 12.4% as compared to 12.3% in thefirst quarter of 2025.
Removed paragraphs (17)
Previous report
For the nine months ended September 30, 2025, the increase in consolidated service revenues and sales was driven by an 8.2% increase at VITAS and by a 1.2% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 6.6% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.8%. Acuity mix shift negatively impacted revenue growth by 100-basis points for the year when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 120-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in excavation and water restoration offset by a decrease in plumbing and drain cleaning.
Previous report
On April 17, 2024, VITAS completed the purchase of all hospice operations and an assisted living facility from Covenant Health and Community Services, Inc d/b/a/ Covenant Care (“Covenant”) for an aggregated purchase price of $85.0 million in cash.
Previous report
The pro forma revenue and earnings for the Company for the three and nine months ended September 30, 2025 as if the Covenant acquisition made in 2024 was completed on January 1, 2024 are as follows (in thousands, except per share data):
Previous report
A $47.6 million decrease in other assets primarily related to the refund of the OAS deposit.
Previous report
A $12.4 million decline in accrued compensation due primarily to the payment of 2024 bonuses in the first quarter of 2025, as well as lower bonus expense in 2025.
Previous report
A $12.2 million increase in other current liabilities due primarily to the increase in Medicare Cap liability.
Previous report
A $16.3 million decrease in deferred income taxes due primarily to the refund of the OAS deposit.
Previous report
-29- are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, excavation revenues increased 5.9% and water restoration revenues increased 6.6%. Contractors operations decreased 4.7%.
Previous report
After-tax earnings as a percent of revenue at VITAS in thethird quarter of 2025 was 11.5% as compared to 13.7% in thethird quarter of 2024. VITAS’ after-tax earnings decreased due to an increase in Medicare Cap liability of $3.8 million in the third quarter of 2025 compared to the third quarter of 2024, as well as an increase of $2.1 million related to legal expense recorded in the third quarter of 2025 compared to the third quarter of 2024.
Previous report
After-tax Corporate expenses for thethird quarter of 2025 decreased 6.8% when compared to thethird quarter in 2024 due primarily to a $2.5 million decrease in stock-based compensation offset by $2.7 million in severance expense recorded for one VITAS executive and approximately $1.3 million decrease in other expenses.
Previous report
Results of Operations
Previous report
The increase in service revenues at VITAS is comprised primarily of 6.6% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.8%. Acuity mix shift negatively impacted revenue growth by 100-basis points for the year when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 120-basis points.
Previous report
-32- jobs are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, excavation revenues increased 5.7% and water restoration revenues increased 13.1%. Contractors operations decreased 5.2%.
Previous report
The consolidated gross margin was 31.6% in the first nine months of 2025 as compared with 34.6% in the first nine months of 2024. On a segment basis, VITAS’ gross margin was 21.2% in the first nine months of 2025 as compared with 23.9% in the first nine months of 2024. The decline was primarily due to an increase in Medicare Cap liability of $18.8 million and an increase in variable patient care expenses and wages. The Roto-Rooter segment’s gross margin was 50.2% for the first nine months of 2025 as compared with 52.5% in the first nine months of 2024. The decline was primarily due to an increase in variable expenses.
Previous report
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for thefirst nine months of 2025 were up 4.8% when compared tothe first nine months of 2024. $2.7 million of this increase was the result of a severance accrual related to one VITAS executive as well as a $3.6 million increase in legal expense mainly at VITAS in the first nine months of 2025 compared to the first nine months of 2024. The remaining increase is related to normal salary increases and an increase in variable selling expenses, mainly internet marketing costs at Roto-Rooter.
Previous report
After-tax earnings as a percent of revenue at VITAS in thefirst nine months of 2025 was 11.1% as compared to 13.1% in thefirst nine months of 2024. VITAS’ after-tax earnings decreased primarily due to an increase in Medicare Cap liability of $18.8 million and an increase in legal expense of $3.4 million.
Previous report
Roto-Rooter’s net income was negatively impacted in the first nine months of 2025 compared to the first nine months of 2024 due primarily to an increase in casualty insurance expense of $5.8 million and an increase in variable expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in thefirst nine months of 2025 was 15.3%, as compared to 17.8% in thefirst nine months of 2024.
Reworded paragraphs (17)
Previous wording
The vast majority of the Company’s operations are located in the United States. As both operations are service companies, our employees are the most critical resource of the Company. We have very little exposure related to customers, vendors, or employees in other regions of the world. We continue to monitor macroeconomic trends and uncertainties such as inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs, which may have adverse effects on net sales and profitability. Based on preliminary analysis of the potential effects of the announced tariffs and these other factors, we do not expect a material negative effect on our net sales or profitability for the remainder of fiscal year 2025. However, we are continuing to evaluate these factors and their potential effects as well as our ability to potentially offset all or a portion of cost increases through pricing actions and cost savings efforts for fiscal year 2026 planning. Economic pressures including the challenges of high inflation and the effects of increased tariffs may negatively affect our net sales and profitability in the future.
Current wording
The vast majority of the Company’s operations are located in the United States. As both operations are service companies, our employees are the most critical resource of the Company. We have very little exposure related to customers, vendors, or employees in other regions of the world. We continue to monitor macroeconomic trends and uncertainties such as inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs, as well as the impact of the war with Iran on fuel prices, which may have adverse effects on net sales and profitability. Based on preliminary analysis of the potential effects of the announced tariffs and these other factors, we do not expect a material negative effect on our net sales or profitability for the remainder of fiscal year 2026. However, we are continuing to evaluate these factors and their potential effects as well as our ability to potentially offset all or a portion of cost increases through pricing actions and cost savings efforts for fiscal year 2027 planning. Economic pressures including the challenges of high inflation and the effects of increased tariffs and the impact of the war with Iran may negatively affect our net sales and profitability in the future.
Previous wording
Adjusted net income, adjusted diluted EPS, earnings before interest, taxes and depreciation and amortization (“EBITDA”), Adjusted EBITDA and Adjusted EBITDA as a percent of revenue are not measures derived in accordance with US GAAP. We provide non-GAAP measures to help readers evaluate our operating results and to compare our operating performance with that of similar companies that have different capital structures. Our non-GAAP measures should not be considered in isolation or as a substitute for comparable measures presented in accordance with GAAP. A reconciliation of our non-GAAP measures is presented on pages 39-41.
Current wording
Adjusted net income, adjusted diluted EPS, earnings before interest, taxes and depreciation and amortization (“EBITDA”), Adjusted EBITDA and Adjusted EBITDA as a percent of revenue are not measures derived in accordance with US GAAP. We provide non-GAAP measures to help readers evaluate our operating results and to compare our operating performance with that of similar companies that have different capital structures. Our non-GAAP measures should not be considered in isolation or as a substitute for comparable measures presented in accordance with GAAP. A reconciliation of our non-GAAP measures is presented on pages 28-29.
Previous wording
For the three months ended September 30, 2025, the increase in consolidated service revenues and sales was driven by a 4.2% increase at VITAS and by a 1.1% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 2.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 4.1%. Acuity mix shift negatively impacted revenue growth by 121-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 124-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in plumbing, excavation and water restoration offset by a decrease in drain cleaning.
Current wording
For the three months ended March 31, 2026, the increase in consolidated service revenues and sales was driven by a 3.1% increase at VITAS offset by a 0.9% decrease at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 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 by 120-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes decreased revenue growth by 47-basis points.
Previous wording
A $44.4 million increase in accounts receivable due to the timing of payments. Other significant changes in our accounts receivable balances are typically driven by the timing of payments received from the Federal government at our VITAS subsidiary. We typically receive a payment in excess of $60.0 million from the Federal government for hospice services every other Friday. The timing of a period end will have a significant impact on the accounts receivable at VITAS. These changes generally normalize over a two-year period, as cash flow variations in one year are offset in the following year.
Current wording
A $32.9 million increase in accounts receivable due to the timing of payments. Other significant changes in our accounts receivable balances are typically driven by the timing of payments received from the Federal government at our VITAS subsidiary. We typically receive a payment in excess of $62.0 million from the Federal government for hospice services
Previous wording
Net cash provided by operating activities increased $2.2 million from September 30, 2024 to September 30, 2025. See the Unaudited Consolidated Statements of Cash Flow on page 5 for the detail components making up the change.
Current wording
Net cash provided by operating activities increased $55.5 million from March 31, 2025 to March 31, 2026. See the Unaudited Consolidated Statements of Cash Flow on page 5 for the detail components making up the change.
Previous wording
On June 28, 2022, we replaced our existing credit facility with a fifth amended and restated Credit Agreement (“2022 Credit Facilities”). Terms of the 2022 Credit Facilities consist of a five-year $450.0 million revolver as well as a five-year $100.0 million term loan. The 2022 Credit Facilities have a floating interest rate that is generally SOFR plus an additional tiered rate which varies based on our current leverage ratio. As of September 30, 2025, the interest rate is SOFR plus 100 basis points. The 2022 Credit Facilities include an expansion feature that provides the Company the opportunity to increase its revolver and/or term loan by an additional $250.0 million.
Current wording
On April 10, 2026, we replaced the Prior Credit Agreement with a sixth amended and restated Credit Agreement. Terms of the Credit Agreement consist of a five-year $450.0 million revolving credit facility including $100.0 million for letters of credit. The interest on this Credit Agreement has a floating interest rate that is generally the secured overnight financing rate (“SOFR”) plus an additional tiered rate which varies based on our current leverage ratio. As of March 31, 2026, the interest rate is SOFR plus 100 basis points. The Credit Agreement includes an expansion feature that provides the Company the opportunity to increase its revolver by an additional $250.0 million.
Previous wording
We have issued $45.5 million in standby letters of credit as of September 30, 2025, mainly for insurance purposes. Issued letters of credit reduce our available credit under the 2022 Credit Facilities. As of September 30, 2025, we have approximately $404.5 million of unused linesof credit available and are eligible to be drawn down under our revolving credit facility. Management believes its liquidity and sources of capital are satisfactory for the Company’s needs in the foreseeable future.
Current wording
We have issued $45.5 million in standby letters of credit as of March 31, 2026 under the Prior Credit Agreement, which has continued under the Credit Agreement mainly for insurance purposes. Issued letters of credit reduce our available credit under the Credit Agreement. As of March 31, 2026, we have approximately $313.3 million of unused linesof credit available and are eligible to be drawn down underthe Prior Credit Agreement. Management believes its liquidity and sources of capital are satisfactory for the Company’s needs in the foreseeable future.
Previous wording
Collectively, the terms of the 2022 Credit Facilities require us to meet various financial covenants, to be tested quarterly. We are in compliance with all financial and other debt covenants as of September 30, 2025 and anticipate remaining in compliance throughout the foreseeable future.
Current wording
Collectively, the terms of the Credit Agreement require us to meet various financial covenants, to be tested quarterly. We were in compliance with all financial and other debt covenants as of March 31, 2026 under the Prior Credit Agreement and anticipate remaining in compliance under the Credit Agreement throughout the foreseeable future.
Previous wording
We are subject to various lawsuits and claims in the normal course of our business. In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary. We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable. We disclose the existence of regulatory and legal actions when we believe it is reasonably possible that a loss could occur in connection with the specific action. In most instances, we are unable to make a reasonable estimate of any
Current wording
We are subject to various lawsuits and claims in the normal course of our business. In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary. We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable. We disclose the existence of regulatory and legal actions when we believe it is reasonably possible that a loss could occur in connection with the specific action. In most instances, we are unable to make a reasonable estimate of any reasonably possible liability due to the uncertainty of the outcome and stage of litigation. We record legal fees associated with legal and regulatory actions as the costs are incurred.
Previous wording
Our service revenues and sales for the third quarter of 2025 increased 3.1% versus services and sales revenues for the third quarter of 2024. Of this increase, a $16.3 million increase was attributable to VITAS, and a $2.4 million increase at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):
Current wording
Our service revenues and sales for the first quarter of 2026 increased 1.6% versus services and sales revenues for the first quarter of 2025. Of this increase, a $12.6 million increase was attributable to VITAS, offset by a $2.0 million decrease at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):
Previous wording
The increase in service revenues at VITAS is comprised primarily of 2.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 4.1%. Acuity mix shift negatively impacted revenue growth by 121-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 124-basis points.
Current wording
The increase in service revenues at VITAS is comprised primarily of 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 by 120-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes decreased revenue growth by 47-basis points.
Previous wording
The increase in plumbing revenues for the third quarter of 2025 versus 2024 is attributable to a 0.2% increase in price and service mix shift and a 5% increase in job count. The decrease in drain cleaning revenues for the third quarter of 2025 versus 2024 is attributable to a 3.5% increase in price and service mix offset by a 4.6% decrease in job count. Excavation and water restoration jobs
Current wording
The increase in plumbing revenues for the first quarter of 2026 versus 2025 is attributable to a 14.1% increase in price and service mix shift offset by a 6.4% decrease in job count. The increase in drain cleaning revenues for the first quarter of 2026 versus 2025 is attributable to a 12.3% increase in price and service mix offset by a 12.0% decrease in job count. Excavation revenues decreased
Previous wording
The consolidated gross margin was 31.5% in the third quarter of 2025 as compared with 34.6% in the third quarter of 2024. On a segment basis, VITAS’ gross margin was 21.3% in the third quarter of 2025 as compared with 24.6% in the third quarter of 2024. The decline is related to an increase in Medicare Cap liability of $3.8 million in the third quarter of 2025 compared to the third quarter of 2024 and an increase in variable patient care expenses and wages. The Roto-Rooter segment’s gross margin was 50.7% for the third quarter of 2025 as compared with 52.9% in the third quarter of 2024. The decline is primarily due to an increase in variable expenses.
Current wording
The consolidated gross margin was 32.8% in the first quarter of 2026 as compared with 33.5% in the first quarter of 2025. On a segment basis, VITAS’ gross margin was 22.5% in the first quarter of 2026 as compared with 23.2% in the first quarter of 2025. The decline is related to an increase in variable patient care expenses in the first quarter of 2026 compared to the first quarter of 2025. The Roto-Rooter segment’s gross margin was 51.0% for the first quarter of 2026 which was essentially flat with the first quarter of 2025.
Previous wording
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for thethird quarter of 2025 were up 6.5% when compared to the third quarter of 2024. $2.7 million of this increase was the result of a severance accrual related to one VITAS executive as well as a $2.3 million increase in legal expense mainly at VITAS in the third quarter of 2025 compared to the third quarter of 2024. The remaining increase is primarily related to variable selling expenses, mainly internet marketing costs at Roto-Rooter.
Current wording
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for thefirst quarter of 2026 were up 5.0% when compared to the first quarter of 2025. $3.9 million of this increase was the result of increased advertising at Roto-Rooter in the first quarter of 2026 compared to the first quarter of 2025.
Previous wording
Net income/(loss) for the third quarter of 2025 versus the third quarter of 2024 by segment (in thousands):
Current wording
Net income/(loss) for the first quarter of 2026 versus the first quarter of 2025 by segment (in thousands):
Previous wording
Roto-Rooter’s net income was negatively impacted in the third quarter of 2025 compared to the third quarter of 2024 due to an increase in variable expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the third quarter of 2025 was 14.8%, as compared to 17.7% in thethird quarter of 2024.
Current wording
Roto-Rooter’s net income was negatively impacted in the first quarter of 2026 compared to the first quarter of 2025 due mainly to an increase in marketing expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the first quarter of 2026 was 15.1%, as compared to 16.7% in thefirst quarter of 2025.
Previous wording
After-tax Corporate expenses for thefirst nine months of 2025 decreased 7.2% when compared to thefirst nine months in 2024 due primarily to an $11.4 million decrease in stock-based compensation offset by $2.7 million in severance expense recorded for one VITAS executive and a $4.2 million decrease in interest income.
Current wording
After-tax Corporate expenses for thefirst quarter of 2026 increased 19.1% when compared to thefirst quarter in 2025 due primarily to a $1.5 million increase in intercompany interest expense, a lower tax benefit related to reduced stock option exercises and a $1.2 million decrease in interest income offset by an $881,000 decrease in stock-based compensation.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
-21- every other Friday. The timing of a period end will have a significant impact on the accounts receivable at VITAS. These changes generally normalize over a two-year period, as cash flow variations in one year are offset in the following year.
Rearranged previous paragraphs (11)
Previous report — wording carried elsewhere
-27- reasonably possible liability due to the uncertainty of the outcome and stage of litigation. We record legal fees associated with legal and regulatory actions as the costs are incurred.
Previous report — wording carried elsewhere
Nine months ended September 30, 2025 versus 2024 - Consolidated Results
Previous report — wording carried elsewhere
Our service revenues and sales for the first nine months of 2025 increased 5.5% versus services and sales revenues for the first nine months of 2024. Of this increase, a $91.4 million increase was attributable to VITAS, and a $8.0 million increase at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):
Previous report — wording carried elsewhere
Days of care at VITAS during the nine months ended September 30 were as follows:
Previous report — wording carried elsewhere
The decrease in drain cleaning revenues for the first nine months of 2025 versus 2024 is attributable to a 3.4% increase in price and service mix offset by a 6.2% decrease in job count. The decrease in plumbing revenues for the first nine months of 2025 versus 2024 is attributable to a 1.6% increase in job count and a 2.0% decrease in price and service mix shift. Excavation and water restoration
Previous report — wording carried elsewhere
Selling, general andadministrative expenses (“SG&A”) comprise (in thousands):
Previous report — wording carried elsewhere
Other income – net comprise (in thousands):
Previous report — wording carried elsewhere
Our effective tax rate reconciliation is as follows (in thousands):
Previous report — wording carried elsewhere
Net income for both periods included the following after-tax items/adjustments that (reduced) or increased after-tax earnings (in thousands):
Previous report — wording carried elsewhere
Nine months ended September 30, 2025 versus 2024 - Segment Results
Previous report — wording carried elsewhere
Net income/(loss) for the first nine months of 2025 versus the first nine months of 2024 by segment (in thousands):