🧾 What This Document Is

This is Chemed's first-quarter 2026 earnings report. It's not just a standard results update; the company is also using this filing to increase its full-year financial forecast because business is going better than expected.

👉 Why it matters: This filing shows a company beating its own plans, which usually gets investors excited. It explains why things are good and what they're doing with the extra cash.

🏢 What The Company Does

In simple terms, Chemed runs two very different, major businesses:

1. VITAS Healthcare: The largest provider of hospice care in the U.S. This is end-of-life care focused on comfort for terminally ill patients.
2. Roto-Rooter: The largest plumbing and drain cleaning service in the U.S. for homes and businesses.

👉 Think of it as a company that cares for people's final days and their clogged drains. This unique combo drives its financial story.

💰 Financial Highlights

Here’s how the whole company did, compared to last year's first quarter:

• Total Revenue: $657.5 million (up 1.6%).
• GAAP Profit (Per Share): $4.84 (down 0.4%).
• Adjusted Profit (Per Share): $5.65 (up 0.4%). This "adjusted" number excludes one-time items to show underlying performance.
• Key Driver: The big profit beat came from VITAS, which saw stronger patient volume and revenue than planned.

🚀 Key Moves in the Quarter

Chemed was busy with its cash:

1. Bought Back Stock: Repurchased 500,000 of its own shares for $197.7 million ($395.36 per share). This reduces the number of shares outstanding, which can boost earnings per share.
2. Acquired Franchises: Bought two Roto-Rooter franchise locations (San Francisco and Fort Worth) for $20.6 million. This is part of a strategy to own more locations directly, aiming for higher growth and profit.

👉 Why it matters: These moves show confidence. They're using cash to bet on their own stock's value and to expand their plumbing business.

📦 Financial Position

• Cash: $16.9 million on hand (as of March 31).
• Debt: $91.2 million in long-term debt.
• New Credit Line: In April, they secured a new $450 million revolving credit facility. This gives them massive financial flexibility for future deals or needs.

🔄 The VITAS (Hospice) Deep Dive

VITAS is the star this quarter. Here’s why:

• Patient Census (ADC): 22,723 patients on average per day (up 2.2%).
• New Admissions: Jumped 6.9%. More new patients are coming in.
• Revenue Per Patient: $210.62 per day (up ~1.5%).
• The Catch: Profit margins were slightly squeezed. Higher patient volume is great, but they're serving more patients with less complex (and lower-reimbursed) care needs, which impacts margins.

🔧 The Roto-Rooter (Plumbing) Deep Dive

Roto-Rooter had a tougher quarter:

• Revenue: $237.5 million (down 0.9%). Bad weather (ice/snow) hurt business.
• Profitability: Adjusted EBITDA was $53.5 million, down 9.6%. Margins fell, mainly due to higher marketing costs.
• The Bright Spot: Despite lower revenue, they grew plumbing revenue (the core service) in both commercial and residential segments.

🔮 What's Next: Raised Guidance

This is the headline news. Chemed is raising its full-year 2026 outlook because VITAS is outperforming.

• New Adjusted EPS Forecast: $24.00 to $24.75 (up from $23.25-$24.25). At the midpoint, this is a 13% profit increase from 2025.
• VITAS Forecast Up: Higher expected patient days and revenue growth.
• Roto-Rooter Forecast Mixed: Revenue forecast unchanged, but profit margin forecast lowered due to those persistent higher marketing costs.

⚖️ Big Picture: Strengths & Risks

👍 Strengths:

• VITAS is growing strongly, recovering from a prior-year issue.
• Strong cash generation allows for share buybacks and acquisitions.
• New, large credit facility provides major financial firepower.

⚠️ Risks:

• Roto-Rooter's profitability is under pressure from marketing costs and weather.
• VITAS growth is tied to Medicare reimbursement rates, which are government-set.
• The hospice industry faces regulatory scrutiny.

🧠 The Analogy

Chemed is like a gardener with two distinct gardens. One garden (VITAS) is a slow-growing, meticulously tended orchard that's suddenly producing an unexpectedly abundant harvest. The other garden (Roto-Rooter) is a reliable vegetable patch that's weathered a minor storm and needs a bit more fertilizer (marketing) to thrive. The gardener is using the extra fruit from the orchard to buy more land and plant more trees.

🧩 Final Takeaway

Chemed's Q1 story is about VITAS's strong rebound justifying a higher company-wide profit forecast for 2026. The company is confidently using its cash to buy back shares and expand its plumbing business, even as it navigates cost pressures at Roto-Rooter.