Chemed (CHE) 24 Feb 232022 Q4 Earnings call transcript

Good morning.

Our conference call this morning will review the financial results for the Fourth Quarter of 2022 ended December 31, 2022.

Before we begin, let me remind you that the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call.

During the course of this call, the company will make various remarks concerning management’s expectations, predictions, plans and prospects that constitute forward-looking statements. Actual results may differ materially from these projected by these forward-looking statements as a result of a variety of factors, including those identified in the company’s news release of February 23 and in various other filings with the SEC.

the any the reflect to company update statements that only current revise cautioned such that and undertakes in are forward-looking management’s statements view or You future. no obligation

the release discuss is results In addition, call, website earnings the is company’s A EBITDA provided interest, before reconciliation operating available or press results depreciation amortization adjusted during in including and non-GAAP dated taxes, and chemed.com. management which today’s performance of on February also XX, may EBITDA. at these company’s non-GAAP

I like VITAS McNamara, Westfall, Executive Nick Officer now Corporation Healthcare Corporation; Officer to would Financial for introduce and Chemed’s Williams, today. President of President Subsidiary. our and Kevin Vice Dave Executive Chief Chemed; speakers President Chief and and Executive Chief of of Chemed Officer

Kevin turn I the to over call McNamara. now will

operating Chemed Nick Good you, conference and I will Holley. Thank the up for follow with Welcome will Dave open up I call. questions. morning. quarter, fourth XXXX for additional will highlights then detail. begin the and call quarter Corporation’s to with

XXXX quarter XXXX February operating targets adjusted full exceeded $XX.XX to to earnings metric XXXX and operating and fourth guidance earnings fourth both diluted initial share of in reporting issued $XX.XX, last of per and respectively. released adjusted This VITAS Chemed internal This for key Roto-Rooter. year night quarter $X.XX our resulted results in Our compares per $XX.XX. share

a and has time some that care the headwinds results health hiring inflation spending more had XXXX inflation retaining consisted in Our of disruption than impact developed decisions. as consumer higher became greater and the workers, period and excellent headwinds operating in progressed. of for of given difficult anticipated, year These were longer licensed

call. implemented and Nick improved XXXX, headwinds on program included we detailed disruption will in reimplementing care industry-wide hiring approximately staffing information For related million the $XX a has later and significantly. raw VITAS VITAS, this more professionals. in resulting staffing Since to July revenue our health retention issue reduction of licensed these sequestration, in provide XXXX Medicare

in to We patterns see compared referral continue disruption when to admissions. our pre-pandemic

patterns ADC. pre-admit nursing to these or XX% home average census continue Fortunately, improvement locations. in of patient our patients daily Pre-pandemic, show total represented key

ADC a nursing nursing census XX.X% during of increased in additional XXX the to year The total nursing expanded XX.X% hit of Full XXXX. low ratio pandemic. home an XX.X% home-based the home ADC. points This basis XXXX census to

Our XXXX guidance senior continued anticipates housing census. improvement in based

discretionary. small XXXX throughout revenue majority for of of inflation vast or impact did We consider emergency-based. the as on services services growth higher Roto-Rooter, be demand Roto-Rooter could For portion our the considered marginally that nondiscretionary

pipes XXX% to Water water-related damage restoration Water be broken avoid is to an immediately example or from significant backed-up mold must service. structure. of and nondiscretionary the removed

until by customer the Roto-Rooter potentially Some becomes considered or severe. discretionary could deferred the be problem more services

well. a As of significant a sewage for customer’s in service. must replaced is remain cost line $X,XXX A an collapsed replacement should mainline the tree be as replaced line be nondiscretionary the penetration at a example, excavation residents $X,XXX. root sewage with The to approximately failed homeowners

roots mainline by cost back the temporary as is mainline possible cable to fix This to using is a fix go steel to the chop, lower clear months. about temporary $XXX. of However, tree Roto-Rooter into roots machine $XXX XX nine perforated approximately for the in

cleaned brand terms market customer be Internet competitive post-pandemic, of expansion of pay we anticipate well Roto-Rooter have presence. advantages then to and will for centers by solution pressing is again replaced. or customer time, positioned XX/X awareness, call permanently response in the our and The to either share core continued

primarily are services Roto-Rooter nondiscretionary. emergency-based and

continue to the market competitive and competition share. we’ll is the ability to significant advantage than faster respond to ability Roto-Rooter increase provide Our a

this would to to With like teleconference over Williams. David I turn that,

as a the when in our decline in million year reduction primarily $XXX was compared X.X% the revenue period. geographically the a by This days which start sequestration suspended care of weighted points to offset net a comprised CMS the decline result approximately of is reimbursement average VITAS’ of in was a X% in of revenue quarter X.X% Medicare X.X%, cut rate that is increase reimplementing XXXX, of XXXX. Kevin. at Thanks, basis fourth prior XXX of of the pandemic partially

reducing level mix. when and net shift other combination Our acuity million contract compared had of The year the Medicare impacted quarter changes percent growth to points. basis mix and six-tenths by or XX $X.X the a in revenue of of impact care revenue one of prior Cap revenue negatively approximately revenue

the VITAS $X to XXXX. million Cap Cap billing of the Cap or billing quarter Of fourth XX VITAS’ accrued quarter limitations. of In provider XX% $X.X Medicare provider of have in million of Medicare compares Medicare numbers, greater. XX these in numbers of Medicare cushion a fourth XXXX, This limitations

liability. point a cushion hiring have provider XX-month does Cap limitation number and between X% numbers Medicare retention basis of The This margin program cap excluding fourth margin, XXXX quarter a and quarter was decline compare provider when fourth XXXX. we the trailing is One gross to billing and bonus have a our XXX and XX%, four XX.X%. it

retention an in by reversed the has aggregate care XXXX. health care This net of launch estimated XXX the quarter VITAS July by program coinciding expanding staffing This during severe licensed of the pandemic. the X, beginning sales by VITAS that is the million. health attrition staff our professionals our on higher cost $X.X of higher began our with evidenced licensed increased

the below EBITDA Cap the and gross XXX year prior which expansion, quarter. capacity points basis reflected margin compared items, would is modest when Excluding in this prior period. year quarter discrete was fourth XX.X%, Medicare other margins the excluding improvement margin have XXXX quarter, a Adjusted to

negatively increased basis EBITDA points from an adjusted hiring reimplementation was VITAS’ the program. and margin points XXX and for capacity sequestration Again, to by and XXX the impacted additional patient the staffing due retention approximately basis of

the million, Roto-Rooter which X.X% of the compared quarter XXXX, year. revenue increase generated increase the fourth of to in million $XX.X Roto-Rooter an prior year. the when an prior of in totaled revenue is X.X% commercial over $XXX of quarter branch

expanding Aggregate showing fourth commercial increasing XX.X%. revenue and of excellent XX.X%; restoration quarter. increasing the is X.X%; excavation water drain plumbing in increasing growth revenue growth consisted cleaning Commercial X.X%;

residential branch growth $XXX And an consisted million, over in Roto-Rooter prior X.X%, quarter expanding plumbing drain X% revenue of year. water restoration of XX.X%. X%, decreasing cleaning the X.X% increase the revenue and totaled the expanding excavation increased

modestly As overall. of revenue although observed to some work Kevin noted, some the does have growth quarters. past services, of impact appear over our This for we slight residential previously a expanding have several pullback excavation behavior the

prior to a the a residential in and quarter growth of X.X% take quarter period. at In let’s for five the the the fourth slight the XXXX, second, year revenue In increased one-tenth year. was X.X% of growth prior third year. this, equivalent an illustrate XX% in of in excavation past excavation of of nine-tenths the look quarterly the quarters To growth first percent fourth compared in XXXX, of one of excavation in quarter, quarter one increase decline over the the percent

residential growth as growth one most excavation that customers. the years, excavations generated rate become for bigger our than will next is over problems two several to believe This over lighter Kevin last referred materialize the the work delayed delayed years. excavation We

of to in when Roto-Rooter’s fourth increase increase gross is basis quarter XX basis margin XXXX margin is $XX.X of of margin prior EBITDA which to compared XX.X%. XXXX. XX.X%, point an XX.X%, quarter which the point in totaled the was a adjusted fourth The a in EBITDA Adjusted improvement million, quarter XXX the the quarter the compared was year.

basis. consolidated a on Chemed

which $XX shares repurchased During Chemed the we $XXX. million of share per for of XX,XXX equates stock a cost quarter, to

of remaining As of December million XX, share $XX approximately our repurchase XXXX, plan. under authorization there was

earnings the is to is prior prior year. when VITAS’ XXXX Medicare increase to to follows: estimated to XXXX X% X% compared guidance as revenue Cap

XXXX. growth XX the impacted of in to a result full basis compared negatively the revenue sequestration first is by Forecasted as XXXX sequestration relief half points of in

X.X% with census our capacity or the increased XXXX, the daily ADC of to increase is and coming increased X%, census. staffing of majority second generates operational in as to estimated half growth census Average

announced bonuses year to Medicare year prior XX.X%. XX.X% and Cap currently excluding year last adjusted margin in calendar estimated one-time is billing Full EBITDA And accrued hiring for be million $XX Medicare retention limitations to for estimating XXXX. initiatives Cap and we’re to

wages the workers as capacity VITAS viewed internal growth increased from lag professionals XX more patients. of health for of about health remain census ADC by licensed overall days as at this with growth rate should care related to XX estimated per our is expanding month. on care The care patients includes on be guidance growth staffing ADC The staff capacity expanding this estimated to to margins licensed a to improving in XX service. increase expansion

Based EBIT option to XXXX program diluted costs free stock XXXX our tax earnings upon per also $XX.XX margin XX.X exercises diluted full retention effective litigation year XXXX achieve full be growth cash discrete non-cash adjusted share. items, flow to our stock XX.X% shares. XX.X% The earnings to discussion, should range of at tax approximate excluding XX.X%. a options, $XX.XX. forecasted is other share count is an is guidance and to earnings the of X.X%. in to expense Roto-Rooter to from of the diluted estimated and related benefits adjusted for estimated per and of rate Roto-Rooter share for diluted Current Adjusted assumes million the per share, and year X% revenue and

Healthcare business and to now will Officer segment. over Nick I President Chief turn this Executive VITAS Westfall, our of call

Dave. Thanks,

As The forward-looking and vested XX will mandated employee successfully to $XX home retention of on months professional. individually bonus earlier, including This implemented focused calculations, These after the retention per and we bonus million. then effective are government from out at approximately onetime program paid $XX,XXX program continuous nurses, cost referenced licensed clip employment. payments July payroll retention nurse Kevin licensed has completed program, All total health $X,XXX aids and of health hiring taxes X, additional estimated targeted and care workers. social a range overtime XXXX. bonuses be XX-month VITAS, managers, this

licensed to the It’s to attributed of During of this attributed health XXX employees admission bringing fourth note this total which we XXX to to expansion nurses. half program in care staffing nurses, this is care the includes employees, health majority increase the expanded professional staff licensed quarter, by XXXX. important registered second

fourth ADC subsequent our X.X% is patient adding year given an care the and XXX In a prior and of expansion. encouraging patients, quarter the we monthly the very over census increase The experienced sequentially. of the capacity fourth decline timing was the X.X% or quarter, within of lag then daily census XX,XXX growth average

very This X.X%. expanded XXXX, compared attributed XXX by quarter XX,XXX. third quarter, In In increased program. patients am the in is home quarter fourth admissions over total retention decline quarter. when X.X% XXXX. I and and fourth our hiring expanding encouraged assisted our facility an the admissions, primarily X.X% the of were the admissions VITAS increase admissions the of sequential from This is nursing expansion to or fourth capacity our to X.X%

in XX.X%, Hospital-directed XXXX the admissions our fourth we the quarter with performing admitting the is patients X.X% admissions declined and to quarter. admissions initiative encouraging. access illustrates community-based slightly also appropriate on be second quarter. Comparing is the declined our of second home-based In in above to performance our every more focused which incrementally multi-quarter consistency day. quarter each were sequential This our admissions quarter, and as fourth patient the continue

length stay days of XXX.X This quarter in third and XX.X the fourth XXX.X in compares the quarter average Our quarter days. days of of in to XXXX. XXXX was the

third and the median accessing length pre-pandemic is the hospice XX days earlier the our XXXX to compares execution to quarter and XX community of of in days successful attributed in as the closer fourth of growth to length benefit levels. the days median was stay the of referenced XX indications XXXX. initiative This in in in of our well I of quarter patients quarter access stay as Our timeframes

well Overall, our execution with how entire serve our on recruiting focus we I’m regarding VITAS continue as and retention renewed of the of as very team to workforce. pleased our the communities

back sequential developed well our have we clinical We’ve pre-pandemic what to a recap, quarters now capacity believe sequential to growth path as base and as two generated very levels. patient I admissions sustainable in licensed workers, of growth To building is ADC. in health care

share back this like daily I’d Their I mission on to team. call over and got of members deliver will turn our my fellow our thank to VITAS Before to every Kevin, in have strategies perseverance end team one make and to and where we through of we XXXX us difference serve. prepared will every execution of our now XXXX, continue us pandemic through the has the an community exciting to leadership a the

With that, the back over turn Kevin. I’ll call to

will Thank teleconference you, to open Nick. I now questions. this

America. line our Instructions] go you, Please Gajuk from Thank from of sir. Joanna question Bank the comes [Operator of I ahead. And show first

Good morning. Thanks for taking the questions, here.

Nick’s on guess, just trends. following the comments I comments, up So to latest the

during guess the monthly ADC out encouraging you growth quarter. fourth So set I

tracking this you’ve of seen in year? color some I some the things QX quarter So can QX? on can persisted Has so are so you and us of seen this any that how give as also them flavor us Kind give metrics this of live you’ve you far? improvement far these guess

I’d inter-quarter say, activity before, love than it’s Well, expect Nick, yes, we just to other good. we’re about say I’ll – say, quarter unreleased It’s talk to to see. what

use the I’d and like here encouraging, very today. sitting encouraging. we’re we the encouraged in quarter, to still Very word very referred fourth

weather. the And one has with which thing say same Roto-Rooter-type going it, had other weather. Roto I’d for thing is Roto-Rooter. good We’ve great

like about other don’t it say, talk to So good. to than yes, it’s we

guidance I just year And before talk we for your so Okay. That’s it back to guess coming like – good. that. comes about VITAS, the when for Encouraging, I Roto-Rooter.

the for year-over-year. XXX be call these basis calls points down, to points VITAS margins basis it, So right, the XX margins, guidance to

So question back, And obviously, below levels. maybe obviously, hiring X%-or-so more it’s XXXX coming people? I be also going right are a still to census guess

is before reach that to you to it So get the to census you the need think to back closer margins about get level? pre-pandemic way a that that or

is this Joanna, Yes, Dave.

So macro a fact you a can more detail. color a But lot basis, more on I’ll the we’re sequestration. basis, think doing we and on comment on what Nick beyond if that about on a have headwind macro give

by us impacts that obviously, Nick? So what,

bps. XX

million… $X And

million. $X

was increase to of relative some fact also course, we the reimbursement issue, of the the wages. inadequate Then that an have

a down that headwind to have that, to be a expect of capacity, absent the build you So creates But that’s a bit we margin on period. as profitability. drag

care can’t of census. health day productive workers, in licensed immediately terms they next we add be You the expanded

there’s So lag. a

And lag capacity an about easily six now I XX XX months of XX impact frankly, days see adding lag the have is census. would then have XX at to to we right and that ago, We on days. said

and the the margin. on strain the strain on but in admissions otherwise. have capacity, than effect a Then bring margins also want, tighter you patients terms cause than would is is process. add line you we of That’s new more So bottom on you a that’s

they margin program And most patients as solid become And patients margin. age out, first – the negative all patients positive much XX program. then are days XX in for in as the as then

lag to long-winded to have So to grow way that’s you a of saying increase capacity expect margins business. the to

add we is XXXX. a image was have were census anticipated much census margins you resigning, I’d health FTEs. is this mirror higher thing workers you other capacity have so the what with would our of lost certain didn’t the because And did and a happened When in held than have but to degree but we there, in, care weakness

in XX will lag by days census until capacity patients workers, our workers. So care XX bottom those increase lag adding census grow health will care profitable. line XX marginal is, census to then licensed And they by health will then are that days that – and for about

guidance. day well patients. clinical we’re the driving ex-cap line of combination into servicing of out the But EBITDA few translates the in to that and part as laser-focused as marginal year-over-year million has it. organization, pieces $X continuing sit basis about terms points Dave it. the inside margin that It to released timing to recap pieces growth clinical and And XX.X% with a capacity adjusted comparison. as on and we Dave’s and all depiction, XX.X% a lags all that’s more a Obviously, as And grow or we the talked be day related and implication just in XX is the of bottom the of capacity on to basis

And and at from margin marginal in that the contribution, more what line dollar we’ll ongoing us, contribution that total like will behind looks ultimate the point probably a from bottom a through we’re at, then XXXX now level standpoint come is see fully pandemic XXXX. in that and census estimated an

going of with and it same I which today, share. just a has splashes. to effects rock in and to and But that to hospice it’s return the ripples changed market. general to before there on the thrown add VITAS not has was all there’s pond, the – removed, into sorts on going expect pandemic market one nothing would lost caused we based Pandemic a step what’s big dynamics return

staff there I think that deal the hospice of the and point, number have deaths of brush percentage is previous return VITAS will them. have that going with be to a its and with level to to by

So to a people getting hospice. institutional census XX,XXX already the back We for us, to we’re a something. involved have it’s XX,XXX, – just

conditions operating Now, for the we’re return to normal. waiting to

you think full margin the pandemic. EBITDA XX.X% adjusted ex for program last cap if before Joanna, to go but so XX.X%, had back to let’s the And the about guiding we we’re retention year of it, just about in VITAS

So full XX.X%. was margin that would year have XXXX been the adjusted EBITDA

headwind if census consideration frankly, of just the thought. would end on sequestration, but margin I than we’re a XXXX, adjusted of from at So back the coming frankly, fact XX,XXX-plus you down faster that still into have EBITDA take on the we’re the

frankly, is with efficient during on years now bobbing the we I that lot weaving been Nick through of few ago. the and a some were And have than changes more us a pandemic, suspect forced

sized approach. there once census, actually likely have little it’s a because up end think to our we operating normal now return – is more than into going back our margin is higher I incorporated get pre-pandemic been levels, efficiencies I to So not, these to normal think

on X, XXXX. implication And Yes. pricing we’ll see the what October is

my was mentioned It list too, that. actually on you since Right.

So quarter Medicare XXXX? in your rate you for assume increase fourth what of do the

X%.

X%. plus You say – X%

Okay.

guess, I call it like, from accelerating nicely So X%?

It’s a guess.

XX a will help to to it the in anticipate that Joanna, inform to know, XX right – days, guess, next now. ballpark Yes, they would preliminary X. a related the released in the range we late you days as October report It’s

in Frankly, a transparent. you than we to don’t rate the is model measures our increase less see consider develop

Right.

coming topic. the capacity. But to increasing just another back the Just hiring and

to also clarify, you per what XXX, are also percent the is – you just staff. XX And base before it? of new to still of month And roughly are or these hires? So these expect add mentioned that net hires the so

that much COVID? staff assume what Like how had your is, back need So, I you it you be net? is to that net so really, And enough? growth I’m capacity to the before at getting do that is to more increase really or

which the are important is most – numbers. here let the answer, baseline is So one me those net

enough. other the it’s I question. And second mean guess I your is answer answer to

absorb Methodically them in.

right. not we’re like greatly number. It’s That’s looking exceed to that

Yes.

to And approach Kevin talking to back always capacity to I’m able to clinical be focused philosophically, and emission demand were so is methodical window, about it, where is at is it’s up the and care and to we demand in call in benefit marketplace, to they things want encouraging. maybe, more pre-pandemic, this were alluded that the environment. for of absorb which only traditional that, the see we who activity add more the but traditional that we’re an patients to joining are the ramping still help time than referral also, fulfill to not where course,

all were of of to period us, be the health refer the disruption benefit. a on inside care service for pandemic, during the time them hospice And where the than we’ll of later period to providers hopefully, longer they with time system

and from way feel can which operating other bottom wanted say hiring, really resulting But we Dave to serve sustainable our as guide So perspective, our demand we it’s which clinical alluding metrics every from improve about and the be as continues we and bit ability to top-line the what helps improve in growth retention, net a clinical deliver grow we in to operating of in to absorb good to short-term to line the long will we little elevating towards of our to capacity, with, methodically is, long-winded results. market predictable as continue that, capacity, compression. was marginal a a continue

tandem they follow To The that probably thing two said the and rough trying you idea you’re just that think say and know basis our we you is, way current we’re is an cost have we with And calculations. quarter to little if so we’re grow a ahead out is achieve factor. margin this there’s on so Joanna, on a a – say, points. in – affected as that’s we ahead. we XXX at we lag – to give by The what points put that, want XXX one hiring to do basis rate, and you the a the grow, running can optimum based

XXX We’re points. to have ahead points further or XXX to basis looking basis grow and be that not

No. But we as be I’d comfortable keeping capacity. methodically that expand

Exactly.

have area to You – of ahead headlights the you. that clears want

Nick capacity is scrambling tenured if habit. have anecdotal about of They color There I a you understanding virtuous were clear a and think this. lot by us where probably just I And our can has cycle. a But it put what to people provide strained. take care schedules that mean on of in are getting patients. adding were

and they hiring train them these they people, were resigning. We’re

So staff. it out our was burning tenured

where So, of point people, they giving adding people. tenured It’s been trend other entered the is mill the staff. hire relief on capacity we’ve the resign, not now to whole you hire you this we’re

now fourth as our standpoint, as quarter long-tenured of retain ability massively the last So life the people existing from better our have gotten personnel was to that that’s adding. what reaffirming well from of year,

his So, we’re the have and the what were in we and at completely horrible a reversed is team actually pandemic, think in Nick XXXX spiral that. we of end

Yes.

to subsequent that, embedded Joanna, inside other question it of on Just a or questions. add folks’ will sure be I’m either

existing staff, a a fantastic. benefit in also trajectory. If by you elevated it their Dave people accessing and high alluded shortages burnout generally at very think real and the compounding is level, that which has it, disease about effect that to baseline Meaning, to, is later it

able a with that of joins not hospice because a patient meet everyone from standpoint, being couple You usually frustration, calling to demand.

our on experience. of fantastic was to. a That’s alluding a very the staff things detailed There’s job behavioral pieces, existing at inside of so have lot tactical tenured focusing our teams it. daily done three Dave And employee high-level

helping end tunnel burnout is that understand that of part the also them to the light to at of related But the frustration.

new The really than better hiring hire were second We the they first those turnover. year are the Both and substantially and experience. is through that pandemic. in improving of measure focusing performing XX-day on

the to a elevate is demand know being mission-focused to three fulfillment culture. responded the a sound upon. of job. be be third then VITAS. elevating to new all effect and up result I signed things organization the and hospice the to demand that lead benefit And and And compounding really part and those integrated They’re ability things and personally less The ways The part communities taking more done of of the simplistic. team to three wonderful everyone able has and the difficult those is execute team of to meet burnout, a originally of impact join begins – of their in more they to comradery

something we I’m calling, as into launched and it’s a hold, really by, effect with encouraged that very is So taking have compounding XXXX. combined

there trends the colors. the staffing. definitely Thanks see No, good to those improving and all for

one on because add talking Just to that end. topic is But on this I retention to last staff. continuing – more about adding going you’re program guess

be obviously of higher risk So, the I and second is may leave. half foresee people XXXX of when do you starting their get question a bonuses guess turnover there

expectations what about talk for Thank your kind of and assume front? in guidance do can on you that So you. that you

Yes.

I difference provide the do incentivized nothing the we for maker staff program. upon but the from well that Based it. the the recruiting staff retention compounding talked inside existing our to what be and us the programs, deem maker catalyst program, risk. our about the maker of with aware to difference as obviously program difference of just that’s effect to helps That’s what So as join has the –

improve us concerned the staff that way. with So have the think existing the less to is substantial of staff effect because a we little pieces compounding a for just continue a once than new retention experience and because that our metrics and and elevated, year you in may those are

but – it aware not risk So the discounting of out. we’re and

to suggesting We professionals to and expect but we the what go that the It’s plate offering. do up not money, two not we’re workforce priority. Number amount but there’s it’s necessary, to a in nature increase of things. VITAS that jobs could see mean if services the staff necessary. is other more I work believe stepping rate go hospice of to healthcare necessarily of the there one, something, What’s as for give are a general higher what’s view And for are Nick we’re really staff pay. is business. have dollar-driven a people get they within to the is right that the to the

And so at of the XX-month end not the the net effect out they’re the guns, – are date. these hired is at right town

period normal a in – I and it postponing be see as to within ranges. happening. get I going they’re some think mean the think two just will. will of jobs Some we that can I will that their a them short with which change month move payment, or people would normally just But or have

statistics is, the an keep is strong we goes. long-tenured And and that for significantly expectation, probability than employees, than more with Joanna, and three it employee our know can to And months, XX actually pretty we support higher a have XX support or we months. people they’re are years, if us some – less

them. plus attrition XXX, – what that as them know, go Nick and XX, drops, said, You hang employees on they And we to tenured reinforced a to our know they or year, but XXX, with we’ve for behavior, XXX we folks. are rate us get patients

strong So statistics. we have

around for the year, but probably is XX%. If get or year, an definitely a really three these you pushing probability for into you hang additional on people more years more to

the the and It all comes you industry do. clinically want something to back joined calling to of hospice because you

personal many If the But inside stops. like is, looking earnings, as that see we go to had nurse you were become done a what typically aren’t carousel those reality travel maximize until you industry. embedded the

Thank dominate, side. a don’t on last to Roto-Rooter want the you. just question but I

X%, revenue, could calls the be for it. it guidance up So call so

that’s a So still solid number.

you next because slowdown of postponed? these into mentioned this So you seeing assuming you’re you jobs So assuming excavation continues are some year? being potentially some are

much than you this market that X% grow And volume? could faster out break you. the also, And is how of versus or Thank you’ll kind the with of is market? the line assuming price in

around And basis. going of great for a Yes. different of What price the But through a Cincinnati. X.X% increase pass That’s to do what on we be is range it yes, bespoke question, going is be our we we Baltimore increase than look course, do Joanna. to in to price X%.

about – small in look raw fairly be talk So going we’re we estimating essentially our geographic, which that frankly, if terms you jobs, is is we actually but jobs, to we’re conservative. procedures, think can flat, at of

Kevin mentioned, But no house was on and by fuzzy a calling what head the angels it’s emergency. on is one back paying day the their As us gets Roto-Rooter before. get warm to a $XXX it considered truly pin to of where

some what the can to the headwinds we’ve I’m increase ability think spending, these will assuming they that of delay people says, of as on and be saying service headwinds consumer it’s it’s but higher limited, plumbing taken it. to is kind So Kevin but is in we drain our cleaner demand is than maybe but jobs our not very today. in it developed proof, guidance much we is always recession-resistant, recession an are avoid nondiscretionary, majority emergency And on guidance

that. So think more it’s frankly, likely I than

$XXX be But guessing end Recession is that little demand, impact before on non-avoidable. below we XXX% to I little and that of our but at going restoration, which a was guidance, the higher that, we now implemented water and go the back pushing, is slightly Great Roto-Rooter had that the million hopefully The that bit. to or are We are

cases, greater some paying us in blackwater of water, you’re to in it. standing get house, rid got your You’ve

Its insurance. covered. it’s And insurance

would probably Otherwise, they as which to more its water restoration derived closer a but give and just kind delay continued And of they are a been restoration growth the excavation water can And both small the – same rate. they’re but just And of not as have but and additional That you see, paid. was basic water insurance didn’t the you less the water restoration, water work. to to from that restoration. excavation there, jobs. deferred small than bit little restoration excavation grow, excavation portion much, color, tells procedures from

put And recessionary I’ll consumer horse, a an don’t beat and inflationary to but theory want just what let demand from my on perspective. and pressures effect know business. any me – dead have I it in pressures don’t I

such But a Roto-Rooter is basic business.

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answers. Thanks it. I appreciate for all the

you. RBC comes I Thank Hendrix go Capital next line our Ben ahead. Please Markets. And from the question from show of

strategy year management question for allocation we [indiscernible]. A allocation. guys. Is thanks capital or Hey, any balance capital anything there your priorities or quick regard should consider sheet change on this

Dave is this Williams. Ben, Hi

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we much matters, was so one. cash were Interest invest a low. now rates is can how But your our low, good it point

to term We’re of actually the that debt. accelerate going payment

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sheet opportunistic of expense rid So outflow. capital or all interest sit the it debt we’re to screw term on goes regarding And balance our getting for that, investments. will then cash shares

for Great. guys. that Thanks

the And you. I Thank next from comes Please question our from go ahead. Mike Oppenheimer. of Wiederhorn show line

one so taking how strategy acuity stay they in two evolve. for questions referral and your of have Can impacted kind this you the answered, my my morning. have trends you coming call. Good discussed continue you or earlier Thanks process? how I has length – and about of of in patients are Majority the discuss here. Can the to been where

Yes.

where the of of particularly in the pandemic needed was specific of in on very us to, we referral trajectory getting and one things mindful without service. We we granular typically. So instances, was many to coming shorter in during be also respond that to only their were than bring delineation all the demand to resources out respond to had the around scarce it, sending not disease

that continues emphasis efforts there. to was it – educational be referenced access we and through there been from demand community our flow a always our the standpoint has So efforts. We

reference has of the strategy to that that we’re it over. a we metrics, the course, preadmit serving all that carries refer from But and the segments continues of continued, to standpoint, externally clarify, you still, market of see and can in and

on than availability organization. access focus and staff of so staffing and on compounding the the clinical in happening compounding community but And people the only the refers patients what effect of up effect also the into earlier same for the is growth margin, typically types not coming of admissions of trajectory, in who number benefit, the the along ADC ends disease the their with patients hospice average that earlier to we really yields benefit acceleration an

and inside if don’t to not referencing inferred that’s directionally, of will it of answers Mike, made sort but guidance not, admission difference causes up has continue confusion. your that It going little I XXXX question ADC X% our or of a because a what’s part guidance it know of make difference. a and specifically to X.X%

quiet kind No, any M&A the question. Can the are discuss guys what one you know obviously color. And on you you the like front. always other of looks valuations are good market changes where I in that’s landscape? And seeing are? and competitive

enough a be think give don’t what for. thought I to actually multiples to are going able seen on I’ve

the multiples, probably just a right? Yes. who range, on equity really private you wide and owner there’s driven have The by have multiples one that expect – price. Because really is, it’s it’s aspect and may larger

related the think lot clinical going definition, a decline. if the the and space, by growing of and have culture don’t for underlying all metrics public strategic retaining commentary I you business it to your the are operating hear providers in to other piece and approach for capacity is, the you from

availability of providers. And as and as going to one those well every each that’s of influence pricing

valuation you an steps is to multiple those different impact going pre-pandemic willing the you seen pay. someone So of that’s in except acceleration improve metrics, proactively to if the for of is it, which in to as pandemic not taking have really operating decline than anything significantly the as weren’t overall well middle your

many too there. platform aren’t out assets There

is operate. it see don’t off continue space. the and balance single now to providers that people plucking the in to have regional sheet So we really or what individual That’s scale

much. very it. Thanks Appreciate Great.

Thanks Mike.

over queue. remarks. to I’d for President CEO McNamara, and turn I’m the you. to closing like questions further showing time, Thank Kevin no in this the At call back

Yes, you just quarter we you. and was finish for look Thank nice Thank Thank to attention. It into the a us, you your quarter. we’ll talking forward next all to solid call. you. for the

Thank you. Thank This concludes you today’s participating. for conference call.

You day. may disconnect. Good now