Chemed (CHE) Oppenheimer 36th Annual Healthcare MedTech & Services Conference summary

Guidance and outlook

• Confident in VITAS guidance, with some conservatism and upward potential as patient mix balances through 2026.

• Roto-Rooter guidance is conservative, set at about half the internal budgeted growth rate for revenue and EBITDA.

• VITAS expects continued ADC growth, with weekly increases so far in 2026, slightly ahead of schedule.

• Roto-Rooter top-line growth projected at 3%-3.5%, driven by improved water restoration collections and price increases.

• Strategic alternatives for Roto-Rooter will be considered if recovery does not materialize in 2026.

VITAS segment performance

• Strong volume growth in Florida, aided by favorable CON environment and new market entries; new locations are exceeding expectations and contributing significantly to organic growth.

• Northeast segment has returned to growth after previous struggles; growth rates outside Florida are lower due to market differences.

• Hospital admissions ratio targeted at 42%-45%, with recent trends showing a slight decrease while overall volumes rise.

• Margin expansion expected as patient mix shifts to longer stays; 18%-18.5% margin projected, with gradual improvement possible through back-office leverage.

• New Florida locations expected to reach profitability within 12 months, faster than historical averages.

Roto-Rooter segment performance

• Water restoration write-offs expected to improve, providing a $5.5 million tailwind in 2026.

• Paid lead costs remain elevated at $3 million per quarter, but marketing spend is under control and SEO efforts are showing early positive results.

• Centralization of water restoration billing and collections underway, expected to improve collection rates and reduce variability.

• Technology adoption (360-degree room scanning) is being tested to enhance documentation and improve insurance collections at minimal cost.

• Aggressive franchisee acquisition strategy continues, with higher multiples offered and deals expected soon.