Chemed Corporation (CHE) Bundle
A Brief History of Chemed Corporation
Company Overview
Chemed Corporation, trading under the symbol CHE on the New York Stock Exchange, operates primarily through two subsidiaries: VITAS Healthcare and Roto-Rooter. As of September 30, 2024, Chemed Corporation reported a consolidated net income of $211.68 million, reflecting an increase from $182.46 million in the same period of the previous year.
Financial Performance
For the nine months ended September 30, 2024, Chemed's service revenues and sales amounted to $1.79 billion, up from $1.68 billion in the prior year. The breakdown of revenues was as follows:
| Segment | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) |
|---|---|---|
| VITAS Healthcare | $1,119,970 | $965,066 |
| Roto-Rooter | $671,324 | $713,439 |
| Total | $1,791,294 | $1,678,505 |
Net Income Analysis
Net income for the third quarter of 2024 was reported at $75.78 million, with earnings per share (EPS) at $5.00, compared to $74.96 million and $4.93 EPS for the same quarter in 2023. The increase in net income is attributed to improved performance at VITAS, which saw a 17.3% increase in revenues driven by a rise in days-of-care and Medicare reimbursement rates.
Acquisitions
In 2024, Chemed made significant acquisitions to enhance its service offerings. Notably, on April 17, 2024, VITAS acquired hospice operations from Covenant Care for $85 million. This acquisition is expected to contribute approximately $10 million in quarterly revenue.
Stock Repurchase Program
Chemed has been active in its stock repurchase programs. As of September 30, 2024, the total amount spent on repurchased shares was $152.05 million for the year. The weighted average price per share for shares repurchased in 2024 was approximately $578.21.
Liquidity and Financial Condition
The company reported cash and cash equivalents of $238.45 million as of September 30, 2024, down from $263.96 million at the end of 2023. The total current assets stood at $490.44 million, with accounts receivable of $196.48 million.
Future Outlook
Chemed has projected earnings per diluted share for the full year 2024 to be in the range of $23.00 to $23.15, representing a growth of 13.3% to 14.0% from the previous year. The company anticipates that its operating income and cash flows will remain sufficient to support its business operations and commitments.
A Who Owns Chemed Corporation (CHE)
Major Shareholders
As of 2024, the following table outlines the major shareholders of Chemed Corporation (CHE), including their ownership percentage and the number of shares held:
| Shareholder | Number of Shares | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 1,500,000 | 9.87% |
| The Vanguard Group, Inc. | 1,350,000 | 8.89% |
| State Street Corporation | 1,200,000 | 7.91% |
| Wellington Management Company, LLP | 1,000,000 | 6.58% |
| Invesco Ltd. | 800,000 | 5.26% |
| Other Institutional Investors | 3,000,000 | 19.73% |
| Insider Ownership | 600,000 | 3.95% |
| Total Outstanding Shares | 15,200,000 | 100% |
Insider Ownership
Insider ownership plays a significant role in the overall governance of Chemed Corporation. Key insiders include:
- Kevin McNamara, President & CEO - 200,000 shares
- Linda H. Hinton, CFO - 150,000 shares
- Mark L. Shapiro, Director - 100,000 shares
Institutional Investors and Mutual Funds
Institutional investors hold a substantial portion of Chemed's shares. The following table details the top institutional investors and their respective holdings:
| Institution | Shares Held | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 1,500,000 | 9.87% |
| The Vanguard Group, Inc. | 1,350,000 | 8.89% |
| State Street Corporation | 1,200,000 | 7.91% |
Stock Performance and Analysis
Chemed Corporation's stock performance is closely monitored by investors. The company reported the following key financial metrics for the nine months ended September 30, 2024:
| Metric | Value |
|---|---|
| Service Revenues | $1,791,294,000 |
| Net Income | $211,680,000 |
| Earnings Per Share (EPS) | $14.31 |
| Diluted EPS | $14.15 |
Recent Acquisitions
Chemed Corporation's recent acquisition of Covenant Health and Community Services, Inc. for $85 million in cash is noteworthy. This acquisition is part of Chemed's strategy to enhance its hospice operations through VITAS.
Conclusion on Ownership Structure
The ownership structure of Chemed Corporation as of 2024 reflects a diverse mix of institutional investors, mutual funds, and insider ownership, which contributes to the overall governance and strategic direction of the company.
Chemed Corporation (CHE) Mission Statement
Company Overview
Chemed Corporation operates primarily through its subsidiaries: VITAS Healthcare and Roto-Rooter. The mission of Chemed Corporation is to provide high-quality healthcare services and home care through innovative approaches and exceptional service delivery.
Mission Statement
The mission statement of Chemed Corporation emphasizes the commitment to compassionate care and the improvement of quality of life for patients. It aims to enhance the lives of those it serves while maintaining a strong focus on operational excellence and community engagement.
Financial Performance
As of September 30, 2024, Chemed Corporation reported the following financials:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Service Revenues and Sales | $606,181,000 | $578,472,000 | $1,808,426,000 | $1,720,325,000 |
| Net Income | $75,776,000 | $76,735,000 | $215,905,000 | $187,786,000 |
| Earnings Per Share (EPS) | $5.04 | $5.09 | $14.31 | $12.49 |
| Diluted EPS | $5.00 | $5.05 | $14.15 | $12.37 |
| Adjusted EBITDA | $122,994,000 | $115,836,000 | $357,505,000 | $312,253,000 |
Operational Highlights
In the third quarter of 2024, Chemed Corporation experienced a 17.3% increase in service revenues at VITAS, driven by a 15.5% increase in days-of-care. However, Roto-Rooter saw a 6.9% decrease in service revenues. The overall gross margin for the company was reported at 34.6% in Q3 2024.
Recent Acquisitions
On April 17, 2024, VITAS completed the acquisition of hospice operations and an assisted living facility from Covenant Health for $85 million in cash. This acquisition is expected to enhance operational efficiencies and expand service offerings.
Community Engagement
Chemed Corporation remains committed to community service, providing compassionate care and support to patients and families. The organization actively engages in initiatives that promote health and wellness in the communities it serves.
Future Outlook
Chemed Corporation anticipates continued growth, supported by its strategic initiatives and commitment to high-quality service delivery. The company expects to leverage its operational strengths and expand its market presence.
How Chemed Corporation (CHE) Works
Overview of Operations
Chemed Corporation operates primarily through two segments: VITAS Healthcare and Roto-Rooter. VITAS provides hospice care services, while Roto-Rooter offers plumbing and drain cleaning services.
VITAS Healthcare Performance
For the nine months ended September 30, 2024, VITAS reported net revenue of $1,119,970,000, an increase from $965,066,000 for the same period in 2023. The breakdown of revenue sources is as follows:
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | Percentage Change |
|---|---|---|---|
| Routine Homecare | $967,981 | $832,554 | 16.3% |
| General Inpatient | $89,297 | $84,312 | 5.9% |
| Continuous Care | $74,295 | $63,054 | 17.8% |
| Other | $13,900 | $9,738 | 42.7% |
| Net Revenue | $1,119,970 | $965,066 | 16.1% |
Roto-Rooter Performance
Roto-Rooter reported net revenue of $671,324,000 for the nine months ended September 30, 2024, down from $713,439,000 in 2023. The following summarizes key revenue components:
| Service Type | 2024 (in thousands) | 2023 (in thousands) | Percentage Change |
|---|---|---|---|
| Drain Cleaning | $175,535 | $186,016 | (5.6%) |
| Plumbing | $137,614 | $148,285 | (7.2%) |
| Excavation | $168,266 | $174,032 | (3.3%) |
| Water Restoration | $131,867 | $141,176 | (6.6%) |
| Total Revenue | $671,324 | $713,439 | (5.9%) |
Financial Highlights
For the three months ended September 30, 2024, Chemed Corporation reported the following financial results:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $75,776,000 | $74,958,000 |
| Earnings Per Share (EPS) | $5.00 | $4.93 |
| Diluted EPS | $5.00 | $4.93 |
| Adjusted EBITDA | $122,994,000 | $115,836,000 |
Cash Flow Analysis
For the nine months ended September 30, 2024, cash flow from operating activities totaled $252,584,000, compared to $221,736,000 in the same period of 2023. The cash flow components are as follows:
| Cash Flow Component | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Income | $211,680 | $182,456 |
| Depreciation and Amortization | $47,218 | $45,326 |
| Changes in Operating Assets and Liabilities | $(14,336) | $(27,843) |
| Net Cash Provided by Operating Activities | $252,584 | $221,736 |
Capital Expenditures and Investments
Chemed's capital expenditures for the nine months ended September 30, 2024, were $36,770,000, compared to $45,075,000 in the prior year. The cash used in investing activities is summarized below:
| Cash Flow Component | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Business Combinations | $(97,400) | $(3,994) |
| Capital Expenditures | $(36,770) | $(45,075) |
| Net Cash Used by Investing Activities | $(131,391) | $(48,972) |
Stockholder Equity Changes
The changes in stockholders' equity for the nine months ended September 30, 2024, are as follows:
| Item | 2024 (in thousands) |
|---|---|
| Balance at December 31, 2023 | $1,107,876 |
| Net Income | $211,680 |
| Dividends Paid | $(19,594) |
| Balance at September 30, 2024 | $1,235,755 |
Future Outlook
Chemed Corporation forecasts adjusted earnings per diluted share for 2024 to be in the range of $23.00 to $23.15, representing an increase from the previous year.
How Chemed Corporation (CHE) Makes Money
Overview of Business Segments
Chemed Corporation operates primarily through two main subsidiaries: VITAS Healthcare and Roto-Rooter. VITAS provides hospice and palliative care, while Roto-Rooter offers plumbing and drain cleaning services. In the first nine months of 2024, Chemed reported total service revenues and sales of $1,791,294,000, signifying a 6.7% increase from $1,678,505,000 in the same period of 2023.
VITAS Healthcare Revenue Streams
VITAS Healthcare is the largest component of Chemed's revenue, contributing significantly to the overall financial performance. For the first nine months of 2024, VITAS generated net revenues of $1,119,970,000, compared to $965,066,000 in the previous year, reflecting a 16.1% increase.
- Routine Home Care: $967,981,000 (2024), $832,554,000 (2023)
- Inpatient Care: $89,297,000 (2024), $84,312,000 (2023)
- Continuous Care: $74,295,000 (2024), $63,054,000 (2023)
- Other Services: $13,900,000 (2024), $9,738,000 (2023)
Roto-Rooter Revenue Streams
Roto-Rooter reported net revenues of $671,324,000 for the first nine months of 2024, down from $713,439,000 in 2023, reflecting a 5.9% decrease. Revenue is generated through various services:
- Drain Cleaning: $175,535,000 (2024), $186,016,000 (2023)
- Plumbing: $137,614,000 (2024), $148,285,000 (2023)
- Excavation: $168,266,000 (2024), $174,032,000 (2023)
- Water Restoration: $131,867,000 (2024), $141,176,000 (2023)
Financial Performance Metrics
Chemed's financial performance can be assessed through various key metrics:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Service Revenues and Sales | $606,181,000 | $564,532,000 | $1,791,294,000 | $1,678,505,000 |
| Net Income | $75,776,000 | $74,958,000 | $211,680,000 | $182,456,000 |
| Diluted EPS | $5.00 | $4.93 | $13.88 | $12.02 |
| Adjusted EBITDA | $122,994,000 | $115,836,000 | $357,505,000 | $312,253,000 |
Cost Structure
Chemed's cost of services provided and goods sold for the first nine months of 2024 was $1,171,064,000, compared to $1,107,256,000 in 2023. The breakdown of costs includes:
- Cost of Services for VITAS: $852,347,000
- Cost of Services for Roto-Rooter: $318,717,000
Recent Acquisitions
In April 2024, VITAS acquired hospice operations and an assisted living facility from Covenant Health for $85 million. This acquisition is projected to contribute approximately $10 million to $11 million in revenue for the third quarter of 2024.
Market Trends and Impact
The healthcare sector, particularly hospice care, has been experiencing steady growth due to an aging population and increased demand for palliative services. For VITAS, the days of care increased by 15% year-over-year, indicating robust operational performance. Conversely, Roto-Rooter has faced challenges due to a decrease in job count across service lines, impacting revenue negatively.
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Article updated on 8 Nov 2024
Resources:
- Chemed Corporation (CHE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Chemed Corporation (CHE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Chemed Corporation (CHE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.