Chemed Corporation

10/29/2026 | Press release | Distributed by Public on 10/29/2026 07:01

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

We operate through our two wholly-owned subsidiaries, VITAS Healthcare Corporation and Roto-Rooter Group, Inc. VITAS focuses on hospice care that helps make terminally ill patients' final days as comfortable as possible. Through its teams of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter's services are focused on providing plumbing, drain cleaning, excavation, water restoration, and other related services to both residential and commercial customers. Through its network of company-owned branches, independent contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.

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, while we have realized an increase in fuel costs, which has affected our margins, 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.

The following is a summary of the key operating results (in thousands except per share amounts):

Three months ended September 30,

Nine months ended September 30,

2026

2025

2026

2025

Service revenues and sales

$

690,940

$

624,900

$

2,021,704

$

1,890,641

Net income

$

71,648

$

64,237

$

205,653

$

188,487

Diluted EPS

$

5.45

$

4.46

$

15.43

$

12.89

Adjusted net income

$

88,725

$

75,906

$

246,146

$

221,701

Adjusted diluted EPS

$

6.75

$

5.27

$

18.47

$

15.16

Adjusted EBITDA

$

133,785

$

109,045

$

371,847

$

326,070

Adjusted EBITDA as a % of revenue

19.4

%

17.4

%

18.4

%

17.2

%

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.

For the three months ended September 30, 2026, the increase in consolidated service revenues and sales was driven by a 12.2% increase at VITAS and a 7.5% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 9.4% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.2%. Acuity mix shift negatively impacted revenue growth by 25-basis points in the quarter when compared to the prior year quarter's revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by 85-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in all service lines.

For the nine months ended September 30, 2026, the increase in consolidated service revenues and sales was driven by a 9.0% increase at VITAS and by a 3.2% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 5.9% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.4%. Acuity mix shift negatively impacted revenue growth by 89-basis points in the year when compared to the prior year's revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by 159-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in plumbing, drain cleaning and excavation offset by a decrease in water restoration and in the Independent Contractors.

-26-

On September 16, 2026, Roto-Rooter completed the acquisition of RotoCo, LLC ("RotoCo"), the largest independent Roto-Rooter franchise for $60.6 million using borrowings under Chemed's existing $450.0 million revolving credit facility. The territories acquired include Northern San Diego, Palm Springs, Ventura, Bakersfield, Lancaster, Fresno, Monterey, Stockton, Manteca and Sacramento, California.

Other acquisitions completed in 2026 include the following, in the third quarter of 2026, Roto-Rooter completed one acquisition for one franchise in California for a total of $1.9 million in cash. In the second quarter of 2026, Roto-Rooter completed two acquisitions for one franchise in New York and one franchise in Texas for a total of $12.9 million in cash. In the first quarter of 2026, Roto-Rooter completed two acquisitions for one franchise in Texas and one franchise in California for a total of $20.6 million in cash.

Financial Condition

Liquidity and Capital Resources

Material changes in the balance sheet accounts from December 31, 2025 to September 30, 2026 include the following:

A $72.3 million increase in accounts receivable due primarily to the timing of payments received from the Federal government at VITAS. We typically receive a payment in excess of $63.0 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.

An $11.5 million increase in prepaid expenses due primarily to renewal of insurance policies during the year.

A $12.9 million increase in lease right of use asset due to lease renewals. This resulted in a similar increase in the lease liability accounts.

An $87.8 million increase in goodwill due to the six acquisitions at Roto-Rooter.

A $15.0 million increase in accrued insurance related to a $6.0 million legal settlement of a casualty insurance claim and an increase in casualty and medical insurance expenses.

A $30.7 million increase in accrued compensation due to yearly bonus accruals and timing of payroll at VITAS.

A $236.0 million increase in long-term debt due primarily to acquisitions and stock repurchases.

A $400.0 million increase in treasury stock due to stock repurchases.

Net cash provided by operating activities decreased $25.1 million from September 30, 2025 to September 30, 2026. See the Unaudited Consolidated Statements of Cash Flows on page 5 for the detail components making up the change.

Management continually evaluates cash utilization alternatives, including share repurchase, debt repurchase, acquisitions and increased dividends to determine the most beneficial use of available capital resources.

We anticipate that our operating income and cash flows will be sufficient to operate our business and meet any commitments for the foreseeable future.

Commitments and Contingencies

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. 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 September 30, 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.

We have issued $47.3 million in standby letters of credit as of September 30, 2026, mainly for insurance purposes. Issued letters of credit reduce our available credit under the Credit Agreement. As of September 30, 2026, we have approximately $166.7 million of unused lines of credit available and are eligible to be drawn down under the Credit Agreement. Management believes its liquidity and sources of capital are satisfactory for the Company's needs in the foreseeable future.

Collectively, the terms of the Credit Agreement 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, 2026.

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

-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.

See Note 11 in the Notes to the Unaudited Consolidated Financial Statements in Item 1 above for a description of current material legal matters.
‎

-28-

Results of Operations

Three months ended September 30, 2026 versus 2025 - Consolidated Results

Our service revenues and sales for the third quarter of 2026 increased 10.6% versus services revenue and sales for the third quarter of 2025. Of this increase, a $49.7 million increase was attributable to VITAS, and a $16.4 million increase was attributable to Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):

Three months ended September 30,

Increase/(Decrease)

2026

2025

Percent

VITAS

Routine homecare

$

405,969

$

362,405

12.0

General inpatient

36,407

33,099

10.0

Continuous care

21,159

19,946

6.1

Other

6,421

5,807

10.6

Subtotal

469,956

421,257

11.6

Medicare cap adjustment

(828)

(6,086)

86.4

Room and board - net

(3,982)

(3,859)

(3.2)

Implicit price concessions

(7,743)

(3,571)

(116.8)

Net revenue

$

457,403

$

407,741

12.2

Roto-Rooter

Drain cleaning

$

58,475

$

55,454

5.4

Plumbing

48,242

45,753

5.4

Excavation

61,249

57,102

7.3

Other

355

220

61.4

Subtotal - short term core

168,321

158,529

6.2

Water restoration

48,882

45,196

8.2

Independent contractors

16,867

16,871

(0.0)

Outside franchisee fees

1,575

1,433

9.9

Other

4,262

4,449

(4.2)

Gross revenue

239,907

226,478

5.9

Implicit price concessions

(6,370)

(9,319)

31.6

Net revenue

233,537

217,159

7.5

Total Revenues

$

690,940

$

624,900

10.6

Days of care at VITAS during the quarters were as follows:

Three months ended September 30,

Increase/(Decrease)

2026

2025

Percent

Routine homecare

1,872,071

1,685,859

11.0

Nursing home

312,663

309,192

1.1

Respite

12,502

12,184

2.6

Subtotal routine homecare and respite

2,197,236

2,007,235

9.5

General inpatient

30,494

28,530

6.9

Continuous care

19,683

18,309

7.5

Total days of care

2,247,413

2,054,074

9.4

The increase in service revenues at VITAS is comprised primarily of 9.4% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.2%. Acuity mix shift negatively impacted revenue growth by 25-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 increased revenue growth by 85-basis points.

The increase in plumbing revenues for the third quarter of 2026 versus 2025 is attributable to a 10.5% increase in price and service mix shift offset by a 5.1% decrease in job count. The increase in drain cleaning revenues for the third quarter of 2026 versus 2025 is attributable to a 6.4% increase in price and service mix offset by a 1.0% decrease in job count. Excavation and water restoration

-29-

jobs are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, excavation revenues increased 7.3% and water restoration revenues increased 8.2%. Implicit price concessions and credit memos decreased 31.6% mainly related to the improved collections in water restoration business.

The consolidated gross margin was 33.7% in the third quarter of 2026 as compared with 32.0% in the third quarter of 2025. On a segment basis, VITAS' gross margin was 25.2% in the third quarter of 2026 as compared with 22.0% in the third quarter of 2025. The increase was primarily related to increased revenues including a $5.3 million decrease in Medicare Cap billing limitation in the third quarter of 2026 compared to third quarter of 2025 as well as continued focus on expense control. The Roto-Rooter segment's gross margin was 50.3% for the third quarter of 2026 which was almost equal to the third quarter of 2025.

Selling, general and administrative expenses ("SG&A") comprise (in thousands):

Three months ended September 30,

2026

2025

SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts

$

106,241

$

99,288

Impact of market value adjustments related to assets held in deferred compensation trusts

2,077

6,703

Long-term incentive compensation

3,151

(216)

Total SG&A expenses

$

111,469

$

105,775

SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for the third quarter of 2026 were up 7.0% when compared to the third quarter of 2025. Of this increase $4.3 million was the result of increased advertising at Roto-Rooter in the third quarter of 2026 compared to the third quarter of 2025. The remaining increase was the result of normal salary increases and increased incentive compensation.

Other operating expense (in thousands):

Three months ended September 30,

2026

2025

Legal settlements

$

7,483

$

2,850

Loss on disposal of fixed assets

187

148

Total other operating expenses

$

7,670

$

2,998

Other income - net comprise (in thousands):

Three months ended September 30,

2026

2025

Market value adjustment on assets held in deferred compensation trusts

$

2,077

$

6,703

Interest income

295

2,555

Other

11

(7)

Total other income - net

$

2,383

$

9,251

We invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds. Chemed invests excess cash in money market funds holding US Treasuries. Deposits and withdrawals are made daily, based on the Company's excess cash balance. There are no penalties associated with withdrawals. The accounts bear interest at a normal market rate.

Our effective tax rate reconciliation is as follows (in thousands):

Three months ended September 30,

2026

2025

Income tax provision calculated at the statutory federal rate

$

20,308

$

17,544

State and local income taxes, less federal income tax effect

2,685

3,120

Nondeductible expenses:

Stock compensation tax expense

521

-

Other--net

1,546

(1,357)

Income tax provision

$

25,060

$

19,307

Effective tax rate

25.9

%

23.1

%

-30-

Net income for both periods included the following after-tax items/adjustments that (reduced) or increased after-tax earnings (in thousands):

Three months ended September 30,

2026

2025

VITAS

Legal settlements

$

(5,076)

$

(2,152)

Roto-Rooter

Amortization of reacquired franchise agreements

(1,804)

(1,806)

Acquisition expense

(1,324)

-

Corporate

Stock option expense

(5,284)

(5,259)

Long-term incentive compensation

(2,830)

213

Excess tax expenses on stock compensation

(521)

-

Legal settlements

(238)

-

Other

-

(2,665)

Total

$

(17,077)

$

(11,669)

Three months ended September 30, 2026 versus 2025 - Segment Results

Net income/(loss) for the third quarter of 2026 versus the third quarter of 2025 by segment (in thousands):

Three months ended September 30,

2026

2025

VITAS

$

65,708

$

46,771

Roto-Rooter

30,140

32,071

Corporate

(24,200)

(14,605)

$

71,648

$

64,237

After-tax earnings as a percent of revenue at VITAS in the third quarter of 2026 was 14.4% as compared to 11.5% in the third quarter of 2025. VITAS' after-tax earnings increased primarily due to increased revenues including a $5.3 million decrease in Medicare Cap liability in the third quarter of 2026 compared to the third quarter of 2025.

Roto-Rooter's net income was negatively impacted in the third quarter of 2026 compared to the third quarter of 2025 due to an increase in marketing, fuel, and acquisition expenses. Roto-Rooter's after-tax earnings as a percent of revenue in the third quarter of 2026 was 13.0%, as compared to 14.8% in the third quarter of 2025.

After-tax Corporate expenses for the third quarter of 2026 increased 65.7% when compared to the third quarter in 2025 due primarily to a $2.3 million decrease in interest income related to lower cash and investment balances, a $1.6 million increase in interest expense related to an increase in long-term debt as a result of stock repurchases and acquisitions, a $1.6 million increase in intercompany interest expense, a $3.1 million increase in stock-based compensation and a $520,000 decrease in excess tax benefit related to reduced stock option exercises.


‎

-31-

Results of Operations

Nine months ended September 30, 2026 versus 2025 - Consolidated Results

Our service revenues and sales for the first nine months of 2026 increased 6.9% versus services revenue and sales for the first nine months of 2025. Of this increase, a $109.4 million increase was attributable to VITAS, and a $21.6 million increase was attributable to Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):

Nine months ended September 30,

Increase/(Decrease)

2026

2025

Percent

VITAS

Routine homecare

$

1,168,407

$

1,072,014

9.0

General inpatient

108,006

100,145

7.8

Continuous care

58,689

68,222

(14.0)

Other

18,204

16,898

7.7

Subtotal

1,353,306

1,257,279

7.6

Medicare cap adjustment

(3,703)

(24,786)

85.1

Room and board - net

(11,178)

(11,277)

0.9

Implicit price concessions

(17,663)

(9,875)

(78.9)

Net revenue

$

1,320,762

$

1,211,341

9.0

Roto-Rooter

Drain cleaning

$

175,710

$

170,553

3.0

Plumbing

145,727

137,097

6.3

Excavation

186,322

177,833

4.8

Other

856

595

43.9

Subtotal - short term core

508,615

486,078

4.6

Water restoration

143,587

149,183

(3.8)

Independent contractors

51,751

52,682

(1.8)

Outside franchisee fees

4,539

4,262

6.5

Other

13,649

14,127

(3.4)

Gross revenue

722,141

706,332

2.2

Implicit price concessions

(21,199)

(27,032)

21.6

Net revenue

700,942

679,300

3.2

Total Revenues

$

2,021,704

$

1,890,641

6.9

Days of care at VITAS during the nine months ended September 30 were as follows:

Nine months ended September 30,

Increase/(Decrease)

2026

2025

Percent

Routine homecare

5,356,050

4,980,883

7.5

Nursing home

910,534

923,458

(1.4)

Respite

35,684

33,619

6.1

Subtotal routine homecare and respite

6,302,268

5,937,960

6.1

General inpatient

90,671

86,447

4.9

Continuous care

55,065

62,576

(12.0)

Total days of care

6,448,004

6,086,983

5.9

The increase in service revenues at VITAS is comprised primarily of 5.9% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.4%. Acuity mix shift negatively impacted revenue growth by 89-basis points in the year when compared to the prior year revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by 159-basis points.

The increase in plumbing revenues for the first nine months of 2026 versus 2025 is attributable to an 11.6% increase in price and service mix shift offset by a 5.3% decrease in job count. The increase in drain cleaning revenues for the first nine months of 2026 versus 2025 is attributable to an 8.5% increase in price and service mix offset by a 5.5% decrease in job count. The increase in excavation

-32-

revenues for the first nine months of 2026 versus 2025 is attributable to a 6.6% increase in price and service mix shift offset by a 1.8% decrease in job count. Water restoration revenues decreased 3.8%, and contractors operations decreased 1.8%. Implicit price concessions and credit memos decreased 21.6% mainly related to the improved collections in water restoration business.

The consolidated gross margin was 33.2% in the first nine months of 2026 as compared with 31.8% in the first nine months of 2025. On a segment basis, VITAS' gross margin was 23.9% in the first nine months of 2026 as compared with 21.5% in the first nine months of 2025. The increase was primarily related to increased revenues including a $21.1 million decrease in Medicare Cap billing limitation in the first nine months of 2026 compared to the first nine months of 2025 as well as continued focus on expense control. The Roto-Rooter segment's gross margin was 50.6% for the first nine months of 2026 which was almost equal to the first nine months of 2025.

Selling, general and administrative expenses ("SG&A") comprise (in thousands):

Nine months ended September 30,

2026

2025

SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts

$

324,428

$

301,600

Impact of market value adjustments related to assets held in deferred compensation trusts

9,661

6,791

Long-term incentive compensation

6,904

3,294

Total SG&A expenses

$

340,993

$

311,685

SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for the first nine months of 2026 were up 7.6% when compared to the first nine months of 2025. $11.1 million of this increase was the result of increased advertising at Roto-Rooter in the first nine months of 2026 compared to the first nine months of 2025. The remaining increase was the result of normal salary increases and increased incentive compensation.

Other operating expense (in thousands):

Nine months ended September 30,

2026

2025

Legal settlements

$

7,483

$

2,850

Loss on disposal of fixed assets

257

225

Total other operating (income)/expenses

$

7,740

$

3,075

Other income - net comprise (in thousands):

Nine months ended September 30,

2026

2025

Market value adjustment on assets held in deferred compensation trusts

$

9,661

$

6,791

Interest income

1,399

7,186

Other

11

(7)

Total other income - net

$

11,071

$

13,970

We invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds. Chemed invests excess cash in money market funds holding US Treasuries. Deposits and withdrawals are made daily, based on the Company's excess cash balance. There are no penalties associated with withdrawals. The accounts bear interest at a normal market rate.

Our effective tax rate reconciliation is as follows (in thousands):

Nine months ended September 30,

2026

2025

Income tax provision calculated at the statutory federal rate

$

58,144

$

52,570

State and local income taxes, less federal income tax effect

8,213

9,568

Nondeductible expenses:

Stock compensation tax expense/(benefit)

1,022

(513)

Other--net

3,845

221

Income tax provision

$

71,224

$

61,846

Effective tax rate

25.7

%

24.7

%

-33-

Net income for both periods include the following after tax items/adjustments that (reduce) or increased after tax earnings (in thousands):

Nine months ended September 30,

2026

2025

VITAS

Legal settlements

$

(5,491)

$

(2,152)

Acquisition expense

(6)

-

Roto-Rooter

Amortization of reacquired franchise agreements

(5,412)

(5,419)

Acquisition expense

(1,497)

-

Corporate

Stock option expense

(20,638)

(20,576)

Long-term incentive compensation

(6,189)

(2,915)

Excess tax (expenses)/benefits on stock compensation

(1,022)

513

Legal settlements

(238)

-

Other

-

(2,665)

Total

$

(40,493)

$

(33,214)

Nine months ended September 30, 2026 versus 2025 - Segment Results

Net income/(loss) for the first nine months of 2026 versus the first nine months of 2025 by segment (in thousands):

Nine months ended September 30,

2026

2025

VITAS

$

178,827

$

135,021

Roto-Rooter

97,837

103,928

Corporate

(71,011)

(50,462)

$

205,653

$

188,487

After-tax earnings as a percent of revenue at VITAS in the first nine months of 2026 was 13.5% as compared to 11.1% in the first nine months of 2025. The increase was primarily related to increased revenues including a $21.1 million decrease in Medicare Cap liability in the first nine months of 2026 compared to the first nine months of 2025.

Roto-Rooter's net income was negatively impacted in the first nine months of 2026 compared to the first nine months of 2025 due mainly to an increase in marketing, fuel, and acquisition expenses. Roto-Rooter's after-tax earnings as a percent of revenue in the first nine months of 2026 was 14.0%, as compared to 15.3% in the first nine months of 2025.

After-tax Corporate expenses for the first nine months of 2026 increased 40.7% when compared to the first nine months in 2025 due primarily to a $5.8 million decrease in interest income related to lower cash and investment balances, a $3.2 million increase in interest expense related to an increase in long-term debt as a result of stock repurchases and acquisitions, a $4.8 million increase in intercompany interest expense, a $3.3 million increase in stock-based compensation and a $1.5 million decrease in excess tax benefit related to reduced stock option exercises.


‎

-34-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026

(in thousands)(unaudited)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

2026 (a)

Service revenues and sales

$

457,403

$

233,537

$

-

$

690,940

Cost of services provided and goods sold

341,993

115,985

-

457,978

Selling, general and administrative expenses

23,100

71,033

17,336

111,469

Depreciation

5,791

8,624

12

14,427

Amortization

25

2,949

-

2,974

Other operating expense

7,352

88

230

7,670

Total costs and expenses

378,261

198,679

17,578

594,518

Income/(loss) from operations

79,142

34,858

(17,578)

96,422

Interest expense

(54)

(145)

(1,898)

(2,097)

Intercompany interest income/(expense)

6,766

4,574

(11,340)

-

Other income-net

124

5

2,254

2,383

Income/(expense) before income taxes

85,978

39,292

(28,562)

96,708

Income taxes

(20,270)

(9,152)

4,362

(25,060)

Net income/(loss)

$

65,708

$

30,140

$

(24,200)

$

71,648

(a) The following amounts are included in net income (in thousands):

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

Pretax benefit/(cost):

Legal settlements

$

(6,705)

$

-

$

(308)

$

(7,013)

Stock option expense

-

-

(5,984)

(5,984)

Long-term incentive compensation

-

-

(3,151)

(3,151)

Amortization of reacquired franchise agreements

-

(2,352)

-

(2,352)

Acquisition expense

-

(1,726)

-

(1,726)

Total

$

(6,705)

$

(4,078)

$

(9,443)

$

(20,226)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

After-tax benefit/(cost):

Legal settlements

$

(5,076)

$

-

$

(238)

$

(5,314)

Stock option expense

-

-

(5,284)

(5,284)

Long-term incentive compensation

-

-

(2,830)

(2,830)

Amortization of reacquired franchise agreements

-

(1,804)

-

(1,804)

Acquisition expense

-

(1,324)

-

(1,324)

Excess tax expense on stock compensation

-

-

(521)

(521)

Total

$

(5,076)

$

(3,128)

$

(8,873)

$

(17,077)


‎

-35-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025

(in thousands)(unaudited)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

2025 (a)

Service revenues and sales

$

407,741

$

217,159

$

-

$

624,900

Cost of services provided and goods sold

318,015

107,128

-

425,143

Selling, general and administrative expenses

25,236

60,672

19,867

105,775

Depreciation

5,354

8,298

12

13,664

Amortization

26

2,544

-

2,570

Other operating expense/(income)

3,036

(38)

-

2,998

Total costs and expenses

351,667

178,604

19,879

550,150

Income/(loss) from operations

56,074

38,555

(19,879)

74,750

Interest expense

(56)

(132)

(269)

(457)

Intercompany interest income/(expense)

5,685

4,030

(9,715)

-

Other income-net

61

25

9,165

9,251

Income/(expense) before income taxes

61,764

42,478

(20,698)

83,544

Income taxes

(14,993)

(10,407)

6,093

(19,307)

Net income/(loss)

$

46,771

$

32,071

$

(14,605)

$

64,237

(a) The following amounts are included in net income (in thousands):

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

Pretax benefit/(cost):

Stock option expense

$

-

$

-

$

(6,067)

$

(6,067)

Legal settlements

(2,850)

-

-

(2,850)

Amortization of reacquired franchise agreements

-

(2,352)

-

(2,352)

Long-term incentive compensation

-

-

216

216

Other

-

-

(2,665)

(2,665)

Total

$

(2,850)

$

(2,352)

$

(8,516)

$

(13,718)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

After-tax benefit/(cost):

Stock option expense

$

-

$

-

$

(5,259)

$

(5,259)

Legal settlements

(2,152)

-

-

(2,152)

Amortization of reacquired franchise agreements

-

(1,806)

-

(1,806)

Long-term incentive compensation

-

-

213

213

Other

-

-

(2,665)

(2,665)

Total

$

(2,152)

$

(1,806)

$

(7,711)

$

(11,669)


‎

-36-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026

(in thousands)(unaudited)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

2026 (a)

Service revenues and sales

$

1,320,762

$

700,942

$

-

$

2,021,704

Cost of services provided and goods sold

1,005,150

346,357

-

1,351,507

Selling, general and administrative expenses

75,314

206,335

59,344

340,993

Depreciation

17,484

25,477

36

42,997

Amortization

78

8,185

-

8,263

Other operating expense

7,432

78

230

7,740

Total costs and expenses

1,105,458

586,432

59,610

1,751,500

Income/(loss) from operations

215,304

114,510

(59,610)

270,204

Interest expense

(158)

(466)

(3,774)

(4,398)

Intercompany interest income/(expense)

19,484

13,661

(33,145)

-

Other income-net

285

31

10,755

11,071

Income/(expense) before income taxes

234,915

127,736

(85,774)

276,877

Income taxes

(56,088)

(29,899)

14,763

(71,224)

Net income/(loss)

$

178,827

$

97,837

$

(71,011)

$

205,653

(a) The following amounts are included in net income (in thousands):

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

Pretax benefit/(cost):

Stock option expense

$

-

$

-

$

(24,285)

$

(24,285)

Legal settlements

(7,253)

-

(308)

(7,561)

Amortization of reacquired franchise agreements

-

(7,056)

-

(7,056)

Long-term incentive compensation

-

-

(6,904)

(6,904)

Acquisition expense

(8)

(1,953)

-

(1,961)

Total

$

(7,261)

$

(9,009)

$

(31,497)

$

(47,767)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

After-tax benefit/(cost):

Stock option expense

$

-

$

-

$

(20,638)

$

(20,638)

Long-term incentive compensation

-

-

(6,189)

(6,189)

Legal settlements

(5,491)

-

(238)

(5,729)

Amortization of reacquired franchise agreements

-

(5,412)

-

(5,412)

Acquisition expense

(6)

(1,497)

-

(1,503)

Excess tax expense on stock compensation

-

-

(1,022)

(1,022)

Total

$

(5,497)

$

(6,909)

$

(28,087)

$

(40,493)


‎

-37-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025

(in thousands)(unaudited)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

2025 (a)

Service revenues and sales

$

1,211,341

$

679,300

$

-

$

1,890,641

Cost of services provided and goods sold

951,466

338,312

-

1,289,778

Selling, general and administrative expenses

76,861

183,856

50,968

311,685

Depreciation

15,863

24,899

36

40,798

Amortization

78

7,635

-

7,713

Other operating expense/(income)

3,155

(80)

-

3,075

Total costs and expenses

1,047,423

554,622

51,004

1,653,049

Income/(loss) from operations

163,918

124,678

(51,004)

237,592

Interest expense

(150)

(394)

(685)

(1,229)

Intercompany interest income/(expense)

16,436

11,930

(28,366)

-

Other income - net

170

58

13,742

13,970

Income/(expense) before income taxes

180,374

136,272

(66,313)

250,333

Income taxes

(45,353)

(32,344)

15,851

(61,846)

Net income/(loss)

$

135,021

$

103,928

$

(50,462)

$

188,487

(a) The following amounts are included in net income (in thousands):

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

Pretax benefit/(cost):

Stock option expense

$

-

$

-

$

(24,374)

$

(24,374)

Amortization of reacquired franchise agreements

-

(7,056)

-

(7,056)

Long-term incentive compensation

-

-

(3,294)

(3,294)

Legal settlements

(2,850)

-

-

(2,850)

Other

-

-

(2,665)

(2,665)

Total

$

(2,850)

$

(7,056)

$

(30,333)

$

(40,239)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

After-tax benefit/(cost):

Stock option expense

$

-

$

-

$

(20,576)

$

(20,576)

Amortization of reacquired franchise agreements

-

(5,419)

-

(5,419)

Long-term incentive compensation

-

-

(2,915)

(2,915)

Legal settlements

(2,152)

-

-

(2,152)

Excess tax benefits on stock compensation

-

-

513

513

Other

-

-

(2,665)

(2,665)

Total

$

(2,152)

$

(5,419)

$

(25,643)

$

(33,214)


‎

-38-

Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA

Chemed Corporation and Subsidiary Companies

(in thousands)

Chemed

For the three months ended September 30, 2026

VITAS

Roto-Rooter

Corporate

Consolidated

Net income/(loss)

$

65,708

$

30,140

$

(24,200)

$

71,648

Add/(deduct):

Interest expense

54

145

1,898

2,097

Income taxes

20,270

9,152

(4,362)

25,060

Depreciation

5,791

8,624

12

14,427

Amortization

25

2,949

-

2,974

EBITDA

91,848

51,010

(26,652)

116,206

Add/(deduct):

Intercompany interest expense/(income)

(6,766)

(4,574)

11,340

-

Interest income

(113)

(5)

(177)

(295)

Legal settlements

6,705

-

308

7,013

Stock option expense

-

-

5,984

5,984

Long-term incentive compensation

-

-

3,151

3,151

Acquisition expense

-

1,726

-

1,726

Adjusted EBITDA

$

91,674

$

48,157

$

(6,046)

$

133,785

Chemed

For the three months ended September 30, 2025

VITAS

Roto-Rooter

Corporate

Consolidated

Net income/(loss)

$

46,771

$

32,071

$

(14,605)

$

64,237

Add/(deduct):

Interest expense

56

132

269

457

Income taxes

14,993

10,407

(6,093)

19,307

Depreciation

5,354

8,298

12

13,664

Amortization

26

2,544

-

2,570

EBITDA

67,200

53,452

(20,417)

100,235

Add/(deduct):

Intercompany interest expense/(income)

(5,685)

(4,030)

9,715

-

Interest income

(69)

(25)

(2,462)

(2,556)

Stock option expense

-

-

6,067

6,067

Legal settlements

2,850

-

-

2,850

Long-term incentive compensation

-

-

(216)

(216)

Other

-

-

2,665

2,665

Adjusted EBITDA

$

64,296

$

49,397

$

(4,648)

$

109,045


‎

-39-

Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA

Chemed Corporation and Subsidiary Companies

(in thousands)

Chemed

For the nine months ended September 30, 2026

VITAS

Roto-Rooter

Corporate

Consolidated

Net income/(loss)

$

178,827

$

97,837

$

(71,011)

$

205,653

Add/(deduct):

Interest expense

158

466

3,774

4,398

Income taxes

56,088

29,899

(14,763)

71,224

Depreciation

17,484

25,477

36

42,997

Amortization

78

8,185

-

8,263

EBITDA

252,635

161,864

(81,964)

332,535

Add/(deduct):

Intercompany interest expense/(income)

(19,484)

(13,661)

33,145

-

Interest income

(274)

(31)

(1,094)

(1,399)

Stock option expense

-

-

24,285

24,285

Legal settlements

7,253

-

308

7,561

Long-term incentive compensation

-

-

6,904

6,904

Acquisition expense

8

1,953

-

1,961

Adjusted EBITDA

$

240,138

$

150,125

$

(18,416)

$

371,847

Chemed

For the nine months ended September 30, 2025

VITAS

Roto-Rooter

Corporate

Consolidated

Net income/(loss)

$

135,021

$

103,928

$

(50,462)

$

188,487

Add/(deduct):

Interest expense

150

394

685

1,229

Income taxes

45,353

32,344

(15,851)

61,846

Depreciation

15,863

24,899

36

40,798

Amortization

78

7,635

-

7,713

EBITDA

196,465

169,200

(65,592)

300,073

Add/(deduct):

Intercompany interest expense/(income)

(16,436)

(11,930)

28,366

-

Interest income

(176)

(58)

(6,952)

(7,186)

Stock option expense

-

-

24,374

24,374

Long-term incentive compensation

-

-

3,294

3,294

Legal settlements

2,850

-

-

2,850

Other

-

-

2,665

2,665

Adjusted EBITDA

$

182,703

$

157,212

$

(13,845)

$

326,070


‎

-40-

RECONCILIATION OF ADJUSTED NET INCOME

(in thousands, except per share data)(unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2026

2025

2026

2025

Net income as reported

$

71,648

$

64,237

$

205,653

$

188,487

Add/(deduct) pre-tax cost of:

Stock option expense

5,984

6,067

24,285

24,374

Legal settlements

7,013

2,850

7,561

2,850

Amortization of reacquired franchise agreements

2,352

2,352

7,056

7,056

Long-term incentive compensation

3,151

(216)

6,904

3,294

Acquisition expense

1,726

-

1,961

-

Other

-

2,665

-

2,665

Add/(deduct) tax impacts:

Tax impact of the above pre-tax adjustments (1)

(3,670)

(2,049)

(8,296)

(6,512)

Excess tax expense/(benefit) on stock compensation

521

-

1,022

(513)

Adjusted net income

$

88,725

$

75,906

$

246,146

$

221,701

Diluted Earnings Per Share As Reported

Net income

$

5.45

$

4.46

$

15.43

$

12.89

Average number of shares outstanding

13,135

14,409

13,329

14,620

Adjusted Diluted Earnings Per Share

Adjusted net income

$

6.75

$

5.27

$

18.47

$

15.16

Adjusted average number of shares outstanding

13,135

14,409

13,329

14,620

(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated.


‎

-41-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

OPERATING STATISTICS FOR VITAS SEGMENT

(unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

OPERATING STATISTICS

2026

2025

2026

2025

Net revenue ($000)

Homecare

$

405,969

$

362,405

$

1,168,407

$

1,072,014

Inpatient

36,407

33,099

108,006

100,145

Continuous care

21,159

19,946

58,689

68,222

Other

6,421

5,807

18,204

16,898

Subtotal

$

469,956

$

421,257

$

1,353,306

$

1,257,279

Room and board, net

(3,982)

(3,859)

(11,178)

(11,277)

Contractual allowances

(7,743)

(3,571)

(17,663)

(9,875)

Medicare cap allowance

(828)

(6,086)

(3,703)

(24,786)

Total

$

457,403

$

407,741

$

1,320,762

$

1,211,341

Net revenue as a percent of total before Medicare cap allowances

Homecare

86.4

%

86.0

%

86.3

%

85.3

%

Inpatient

7.7

7.9

8.0

8.0

Continuous care

4.5

4.7

4.3

5.4

Other

1.4

1.4

1.4

1.3

Subtotal

100.0

100.0

100.0

100.0

Room and board, net

(0.8)

(0.8)

(0.8)

(0.9)

Contractual allowances

(1.7)

(0.8)

(1.3)

(0.8)

Medicare cap allowance

(0.2)

(1.4)

(0.3)

(2.0)

Total

97.3

%

97.0

%

97.6

%

96.3

%

Days of care

Homecare

1,872,071

1,685,859

5,356,050

4,980,883

Nursing home

312,663

309,192

910,534

923,458

Respite

12,502

12,184

35,684

33,619

Subtotal routine homecare and respite

2,197,236

2,007,235

6,302,268

5,937,960

Inpatient

30,494

28,530

90,671

86,447

Continuous care

19,683

18,309

55,065

62,576

Total

2,247,413

2,054,074

6,448,004

6,086,983

Number of days in relevant time period

92

92

273

273

Average daily census (days)

Homecare

20,348

18,325

19,619

18,245

Nursing home

3,399

3,361

3,335

3,383

Respite

136

132

131

123

Subtotal routine homecare and respite

23,883

21,818

23,085

21,751

Inpatient

331

310

332

317

Continuous care

214

199

202

229

Total

24,428

22,327

23,619

22,297

Total Admissions

18,995

17,714

57,514

53,398

Total Discharges

18,426

17,348

55,130

52,931

Average length of stay (days)

103.5

109.7

102.5

121.9

Median length of stay (days)

17.0

18.0

16.0

18.0

ADC by major diagnosis

Cerebro

44.1

%

44.1

%

44.4

%

44.6

%

Neurological

11.2

11.6

11.1

11.8

Cancer

9.2

10.1

9.4

9.8

Cardio

16.8

15.9

16.6

16.0

Respiratory

8.1

7.7

7.9

7.4

Other

10.6

10.6

10.6

10.4

Total

100.0

%

100.0

%

100.0

%

100.0

%

Admissions by major diagnosis

Cerebro

28.0

%

27.1

%

27.5

%

27.6

%

Neurological

6.7

6.9

6.9

6.8

Cancer

24.7

26.6

24.3

25.9

Cardio

14.9

14.3

15.3

14.7

Respiratory

12.3

10.5

12.2

10.9

Other

13.4

14.6

13.8

14.1

Total

100.0

%

100.0

%

100.0

%

100.0

%

Estimated uncollectible accounts as a percent of revenues

1.2

%

0.9

%

1.3

%

0.8

%

Accounts receivable --

Days of revenue outstanding- excluding unapplied Medicare payments

39.0

37.5

n.a.

n.a.

Days of revenue outstanding- including unapplied Medicare payments

37.4

34.0

n.a.

n.a.


‎

-42-

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Regarding Forward-Looking Information

Certain statements contained in this report are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe", "expect", "hope", "anticipate", "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. These forward-looking statements are based on current expectations and assumptions and involve various known and unknown risks, uncertainties, contingencies and other factors, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements. Variances in any or all of the risks, uncertainties, contingencies, and other factors from our assumptions could cause actual results to differ materially from these forward-looking statements and trends. In addition, our ability to deal with the unknown outcomes of these events, many of which are beyond our control, may affect the reliability of projections and other financial matters. Investors are cautioned that such forward-looking statements are subject to inherent risk and there are no assurances that the matters contained in such statements will be achieved. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Chemed Corporation published this content on October 29, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 29, 2026 at 13:07 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]