[10-Q] CHEMED CORP Quarterly Earnings Report

Rhea-AI Filing Summary

Chemed (CHE) reported Q3 2025 results. Service revenues and sales were $624.9 million, up from $606.2 million a year ago. Net income was $64.2 million versus $75.8 million, and diluted EPS was $4.46 compared with $5.00. Segment revenue was $407.7 million at VITAS and $217.2 million at Roto‑Rooter.

For the first nine months, revenue reached $1.89 billion (vs. $1.79 billion) with net income of $188.5 million (vs. $211.7 million). Cash from operations was $254.7 million, supporting $253.5 million of share repurchases year‑to‑date, including $180.8 million in Q3. Cash was $129.8 million, and approximately $404.5 million remained available under the revolving credit facility. The company paid a $0.60 per share dividend in Q3; shares outstanding were 14,164,195 as of September 30, 2025. In VITAS, an Administrative Law Judge largely upheld higher‑level‑of‑care billings; the Medicare Administrative Contractor refunded the previously deposited amount, reducing the overpayment to a de minimis figure. Board repurchase authorization remaining was $301.8 million.

Insights

Healthcare and Services Analyst

Solid cash generation; EPS lower year over year.

Chemed posted higher revenue driven by both VITAS and Roto‑Rooter, but Q3 operating income declined versus last year, yielding EPS of $4.46 vs. $5.00. Nine‑month cash from operations of $254.7M funded significant buybacks.

The balance sheet shows $129.8M cash and roughly $404.5M in unused revolver capacity, providing flexibility. The VITAS audit matter saw an ALJ ruling largely favorable with a refund of deposits, removing a potential overhang.

Key dependencies include VITAS Medicare dynamics (cap adjustments and payer mix) and Roto‑Rooter demand for short‑term core and water restoration services. Subsequent filings may detail margin trends by segment and any changes in cap adjustments.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x    Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended September 30, 2025

o    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 1-8351

CHEMED CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		31-0791746
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
255 E. Fifth Street, Suite 2600, Cincinnati, Ohio		45202
(Address of principal executive offices)		(Zip code)
(513) 762-6690 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   x No   o  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes   x No   o  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Large Accelerated Filer x Accelerated Filer o Non-accelerated Filer o Smaller Reporting Company o

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes    o  No   x  

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered		Amount	Date
Capital Stock $1 Par Value	CHE	New York Stock Exchange		14,164,195 Shares	September 30, 2025

‎

-1-

CHEMED CORPORATION AND

SUBSIDIARY COMPANIES

Index

	Page No.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Unaudited Consolidated Balance Sheets -
September 30, 2025 and December 31, 2024	3
Unaudited Consolidated Statements of Income -
Three months and nine months ended September 30, 2025 and 2024	4
Unaudited Consolidated Statements of Cash Flows -
Nine months ended September 30, 2025 and 2024	5
Unaudited Consolidated Statements of Changes in Stockholders’ Equity-
Three months and nine months ended September 30, 2025 and 2024	6
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3. Quantitative and Qualitative Disclosures about Market Risk	43
Item 4. Controls and Procedures	43
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	43
Item 1A. Risk Factors	43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3. Defaults Upon Senior Securities	44
Item 4. Mine Safety Disclosures	44
Item 5. Other Information	44
Item 6. Exhibits	46
EX – 31.1
EX – 31.2
EX – 32.1
EX – 32.2
EX – 101
EX – 104
SIGNATURES	47

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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
	September 30, 2025			December 31, 2024
ASSETS
Current assets
Cash and cash equivalents	$	129,752		$	178,350
Accounts receivable less allowances		215,570			171,163
Inventories		8,238			8,193
Prepaid income taxes		7,106			11,068
Prepaid expenses		34,577			25,974
Total current assets		395,243			394,748
Investments of deferred compensation plans held in trust		136,021			130,960
Properties and equipment, at cost, less accumulated depreciation of $392,384 (2024- $382,001)		203,939			200,837
Lease right of use asset		128,362			127,323
Identifiable intangible assets less accumulated amortization of $66,861 (2024 - $59,147)		84,930			92,206
Goodwill		666,987			666,744
Other assets		8,137			55,757
Total Assets	$	1,623,619		$	1,668,575
LIABILITIES
Current liabilities
Accounts payable	$	48,095		$	44,146
Accrued insurance		65,733			56,703
Income taxes		1,469			7,593
Accrued compensation		79,668			92,073
Short-term lease liability		42,013			42,306
Other current liabilities		55,063			42,874
Total current liabilities		292,041			285,695
Deferred income taxes		9,687			25,945
Deferred compensation liabilities		132,380			126,035
Long-term lease liability		99,461			98,538
Other liabilities		13,367			13,369
Total Liabilities		546,936			549,582
Commitments and contingencies (Note 10)
STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 37,592,974 shares (2024 - 37,422,348 shares)		37,593			37,422
Paid-in capital		1,581,067			1,484,176
Retained earnings		2,887,123			2,721,832
Treasury stock - 23,484,059 shares (2024 - 22,865,842 shares)		(3,431,475)			(3,126,660)
Deferred compensation payable in Company stock		2,375			2,223
Total Stockholders' Equity		1,076,683			1,118,993
Total Liabilities and Stockholders' Equity	$	1,623,619		$	1,668,575
See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Service revenues and sales	$	624,900		$	606,181		$	1,890,641		$	1,791,294
Cost of services provided and goods sold (excluding depreciation)		427,993			396,187			1,292,628			1,171,064
Selling, general and administrative expenses		105,775			101,981			311,685			320,109
Depreciation		13,664			13,147			40,798			39,601
Amortization		2,570			2,550			7,713			7,617
Other operating expense		148			159			225			288
Total costs and expenses		550,150			514,024			1,653,049			1,538,679
Income from operations		74,750			92,157			237,592			252,615
Interest expense		(457)			(427)			(1,229)			(1,281)
Other income - net		9,251			9,299			13,970			28,008
Income before income taxes		83,544			101,029			250,333			279,342
Income taxes		(19,307)			(25,253)			(61,846)			(67,662)
Net income	$	64,237		$	75,776		$	188,487		$	211,680
Earnings Per Share:
Net income	$	4.46		$	5.04		$	12.97		$	14.04
Average number of shares outstanding		14,394			15,025			14,535			15,082
Diluted Earnings Per Share:
Net income	$	4.46		$	5.00		$	12.89		$	13.88
Average number of shares outstanding		14,409			15,168			14,620			15,253
Cash Dividends Per Share	$	0.60		$	0.50		$	1.60		$	1.30
See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Nine Months Ended September 30,
	2025			2024
Cash Flows from Operating Activities
Net income	$	188,487		$	211,680
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		48,511			47,218
Stock option expense		24,374			23,933
Benefit for deferred income taxes		(16,259)			(2,245)
Noncash long-term incentive compensation		3,057			15,783
Litigation settlements		1,850			(5,750)
Noncash directors' compensation		1,123			1,282
Amortization of debt issuance costs		241			241
Changes in operating assets and liabilities:
Increase in accounts receivable		(44,403)			(14,336)
(Increase)/decrease in inventories		(45)			2,125
Increase in prepaid expenses		(8,603)			(1,173)
Increase/(decrease) in accounts payable and other current liabilities		10,102			(19,641)
Change in current income taxes		(2,162)			(4,545)
Net change in lease assets and liabilities		(576)			(400)
Decrease/(increase) in other assets		42,048			(21,101)
Increase in other liabilities		6,355			18,348
Other sources		639			1,165
Net cash provided by operating activities		254,739			252,584
Cash Flows from Investing Activities
Capital expenditures		(46,447)			(36,770)
Proceeds from sale of fixed assets		3,751			3,060
Business combinations, net of cash acquired		(225)			(97,400)
Other uses		(468)			(281)
Net cash used by investing activities		(43,389)			(131,391)
Cash Flows from Financing Activities
Purchases of treasury stock		(256,944)			(152,049)
Proceeds from exercise of stock options		27,152			49,906
Dividends paid		(23,196)			(19,594)
Capital stock surrendered to pay taxes on stock-based compensation		(8,484)			(8,827)
Change in cash overdrafts payable		610			(15,749)
Other sources/(uses)		914			(387)
Net cash used by financing activities		(259,948)			(146,700)
Decrease in Cash and Cash Equivalents		(48,598)			(25,507)
Cash and cash equivalents at beginning of period		178,350			263,958
Cash and cash equivalents at end of period	$	129,752		$	238,451
See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except per share data)
For the three months ended September 30, 2025 and 2024:														Deferred
														Compensation
											Treasury			Payable in
		Capital			Paid-in			Retained			Stock-			Company
		Stock			Capital			Earnings			at Cost			Stock			Total
Balance at June 30, 2025	$	37,593		$	1,576,165		$	2,831,540		$	(3,249,115)		$	2,302		$	1,198,485
Net income		-			-			64,237			-			-			64,237
Dividends paid ($0.60 per share)		-			-			(8,654)			-			-			(8,654)
Stock awards and exercise of stock options		-			5,101			-			-			-			5,101
Purchases of treasury stock		-			-			-			(180,776)			-			(180,776)
Excise tax on share repurchase		-			-			-			(1,544)			-			(1,544)
Other		-			(199)			-			(40)			73			(166)
Balance at September 30, 2025	$	37,593		$	1,581,067		$	2,887,123		$	(3,431,475)		$	2,375		$	1,076,683
														Deferred
														Compensation
											Treasury			Payable in
		Capital			Paid-in			Retained			Stock-			Company
		Stock			Capital			Earnings			at Cost			Stock			Total
Balance at June 30, 2024	$	37,313		$	1,416,166		$	2,570,722		$	(2,819,053)		$	2,149		$	1,207,297
Net income		-			-			75,776			-			-			75,776
Dividends paid ($0.50 per share)		-			-			(7,487)			-			-			(7,487)
Stock awards and exercise of stock options		82			46,008			-			(28,523)			-			17,567
Purchases of treasury stock		-			-			-			(57,820)			-			(57,820)
Other		-			395			-			(34)			61			422
Balance at September 30, 2024	$	37,395		$	1,462,569		$	2,639,011		$	(2,905,430)		$	2,210		$	1,235,755
See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except per share data)
For the nine months ended September 30, 2025 and 2024:														Deferred
														Compensation
											Treasury			Payable in
		Capital			Paid-in			Retained			Stock-			Company
		Stock			Capital			Earnings			at Cost			Stock			Total
Balance at December 31, 2024	$	37,422		$	1,484,176		$	2,721,832		$	(3,126,660)		$	2,223		$	1,118,993
Net income		-			-			188,487			-			-			188,487
Dividends paid ($1.60 per share)		-			-			(23,196)			-			-			(23,196)
Stock awards and exercise of stock options		171			95,976			-			(49,675)			-			46,472
Purchases of treasury stock		-			-			-			(253,477)			-			(253,477)
Excise tax on share repurchase		-			-			-			(1,544)			-			(1,544)
Other		-			915			-			(119)			152			948
Balance at September 30, 2025	$	37,593		$	1,581,067		$	2,887,123		$	(3,431,475)		$	2,375		$	1,076,683
														Deferred
														Compensation
											Treasury			Payable in
		Capital			Paid-in			Retained			Stock-			Company
		Stock			Capital			Earnings			at Cost			Stock			Total
Balance at December 31, 2023	$	37,184		$	1,341,273		$	2,446,925		$	(2,719,588)		$	2,082		$	1,107,876
Net income		-			-			211,680			-			-			211,680
Dividends paid ($1.30 per share)		-			-			(19,594)			-			-			(19,594)
Stock awards and exercise of stock options		211			121,675			-			(39,809)			-			82,077
Purchases of treasury stock		-			-			-			(145,933)			-			(145,933)
Other		-			(379)			-			(100)			128			(351)
Balance at September 30, 2024	$	37,395		$	1,462,569		$	2,639,011		$	(2,905,430)		$	2,210		$	1,235,755
See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES

Notes to Unaudited Consolidated Financial Statements

1.    Basis of Presentation

As used herein, the terms “We,” “Company” and “Chemed” refer to Chemed Corporation or Chemed Corporation and its consolidated subsidiaries.

We have prepared the accompanying unaudited consolidated financial statements of Chemed in accordance with Rule 10-01 of SEC Regulation S-X. Consequently, we have omitted certain disclosures required under generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. The December 31, 2024 balance sheet data were derived from audited financial statements but do not include all disclosures required by GAAP. However, in our opinion, the financial statements presented herein contain all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other future period, and we make no representations related thereto. These financial statements are prepared on the same basis as and should be read in conjunction with the audited Consolidated Financial Statements and related Notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.

CLOUD COMPUTING

As of September 30, 2025, Roto-Rooter and VITAS have no significant capitalized implementation costs related to cloud computing.

INCOME TAXES

Our effective income tax rate was 23.1% in the third quarter of 2025 compared to 25.0% during the third quarter of 2024. Excess tax benefit on stock options exercised were immaterial for the quarters ended September 30, 2025 and 2024.

Our effective income tax rate was 24.7% in the first nine months of 2025 compared to 24.2% during the first nine months of 2024. Excess tax benefit on stock options exercised reduced our income tax expenses by $513,000 and $4.3 million for the first nine months ended September 30, 2025 and 2024, respectively.

NON-CASH TRANSACTIONS

Included in the accompanying Consolidated Balance Sheets are $2.6 million and $1.1 million of capitalized property and equipment which were not paid for as of September 30, 2025 and December 31, 2024, respectively. Accrued property and equipment purchases have been excluded from capital expenditures in the accompanying Consolidated Statements of Cash Flow. There are no material non-cash amounts included in interest expense for any period presented.

BUSINESS COMBINATIONS

We account for acquired businesses using the acquisition method of accounting. All assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition. The determination of fair value involves estimates and the use of valuation techniques when market value is not readily available. We use various techniques to determine fair value in accordance with accepted valuation models, primarily the income approach. The significant assumptions used in developing fair values include, but are not limited to, revenue growth rates, the amount and timing of future cash flows, discount rates, useful lives, royalty rates and future tax rates. The excess of purchase price over the fair value of assets and liabilities acquired is recorded as goodwill. See Note 16 for discussion of recent acquisitions.

ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying Notes. Actual results could differ from those estimates. Disclosures of after-tax expenses and adjustments are based on estimates of the effective income tax rates for the applicable segments.

2.    Revenue Recognition

In May 2014, the FASB issued Accounting Standards Update “ASU No. 2014-09 – Revenue from Contracts with Customers.” The standard and subsequent amendments are intended to develop a common revenue standard for removing inconsistencies and

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weaknesses, improve comparability, provide for more useful information to users through improved disclosure requirements and simplify the preparation of financial statements. The standard is also referred to as Accounting Standards Codification No. 606 (“ASC 606”).

VITAS

Service revenue for VITAS is reported at the amount that reflects the ultimate consideration we expect to receive in exchange for providing patient care. These amounts are due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), and include variable consideration for revenue adjustments due to settlements of audits and reviews, as well as certain hospice-specific revenue capitations. Amounts are generally billed monthly or subsequent to patient discharge. Subsequent changes in the transaction price initially recognized are not significant.

Hospice services are provided on a daily basis and the type of service provided is determined based on a physician’s determination of each patient’s specific needs on that given day. Reimbursement rates for hospice services are on a per diem basis regardless of the type of service provided or the payor. Reimbursement rates from government programs are established by the appropriate governmental agency and are standard across all hospice providers. Reimbursement rates from health insurers are negotiated with each payor and generally structured to closely mirror the Medicare reimbursement model. The types of hospice services provided and associated reimbursement model for each are as follows:

Routine Home Care occurs when a patient receives hospice care in their home, including a nursing home setting. The routine home care rate is paid for each day that a patient is in a hospice program and is not receiving one of the other categories of hospice care. For Medicare patients, the routine home care rate reflects a two-tiered rate, with a higher rate for the first 60 days of a hospice patient’s care and a lower rate for days 61 and after. In addition, there is a Service Intensity Add-on payment which covers direct home care visits conducted by a registered nurse or social worker in the last seven days of a hospice patient’s life, reimbursed up to 4 hours per day in 15 minute increments at the continuous home care rate.

General Inpatient Care occurs when a patient requires services in a controlled setting for a short period of time for pain control or symptom management which cannot be managed in other settings. General inpatient care services must be provided in a Medicare or Medicaid certified hospital or long-term care facility or at a freestanding inpatient hospice facility with the required registered nurse staffing.

Continuous Home Care is provided to patients while at home, including a nursing home setting, during periods of crisis when intensive monitoring and care, primarily nursing care, is required in order to achieve palliation or management of acute medical symptoms. Continuous home care requires a minimum of 8 hours of care within a 24-hour day, which begins at midnight. The care must be predominantly nursing care provided by either a registered nurse or licensed nurse practitioner. While the published Medicare continuous home care rates are daily rates, Medicare pays for continuous home care in 15 minute increments.  This 15 minute rate is calculated by dividing the daily rate by 96.

Respite Care permits a hospice patient to receive services on an inpatient basis for a short period of time in order to provide relief for the patient’s family or other caregivers from the demands of caring for the patient.  A hospice can receive payment for respite care for a given patient for up to five consecutive days at a time, after which respite care is reimbursed at the routine home care rate.

Each level of care represents a separate promise under the contract of care and is provided independently for each patient contingent upon the patient’s specific medical needs as determined by a physician. However, the clinical criteria used to determine a patient’s level of care is consistent across all patients, given that, each patient is subject to the same payor rules and regulations. As a result, we have concluded that each level of care is capable of being distinct and is distinct in the context of the contract. Furthermore, we have determined that each level of care represents a stand ready service provided as a series of either days or hours of patient care. We believe that the performance obligations for each level of care meet criteria to be satisfied over time. VITAS recognizes revenue based on the service output. VITAS believes this to be the most faithful depiction of the transfer of control of services as the patient simultaneously receives and consumes the benefits provided by our performance. Revenue is recognized on a daily or hourly basis for each patient in accordance with the reimbursement model for each type of service. VITAS’ performance obligations relate to contracts with an expected duration of less than one year. Therefore, VITAS has elected to apply the optional exception provided in ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially satisfied performance obligations referred to above relate to bereavement services provided to patients’ families for at least 12 months after discharge.

Care is provided to patients regardless of their ability to pay. Patients who meet our criteria for charity care are provided care without charge. There is no revenue or associated accounts receivable in the accompanying Consolidated Financial Statements related to charity care. The cost of providing charity care for the quarters ended September 30, 2025 and 2024 was $2.3 million and $2.4 million,

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respectively. The cost of providing charity care during the first nine months ended September 30, 2025 and 2024 was $6.7 million and $6.8 million, respectively. The cost of charity care is included in cost of services provided and goods sold and is calculated by taking the ratio of charity care days to total days of care and multiplying by the total cost of care.

Generally, patients who are covered by third-party payors are responsible for related deductibles and coinsurance which vary in amount. VITAS also provides service to patients without a reimbursement source and may offer those patients discounts from standard charges. VITAS estimates the transaction price for patients with deductibles and coinsurance, along with those uninsured patients, based on historical experience and current conditions. The estimate of any contractual adjustments, discounts or implicit price concessions reduces the amount of revenue initially recognized. Subsequent changes to the estimate of the transaction price are recorded as adjustments to patient service revenue in the period of change. Subsequent changes that are determined to be the result of an adverse change in the patients’ ability to pay (i.e. change in credit risk) are recorded as bad debt expense. VITAS has no material adjustments related to subsequent changes in the estimate of the transaction price or subsequent changes as the result of an adverse change in the patient’s ability to pay for any period reported.

Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and subject to varying interpretation and change over time. Medicare and Medicaid programs have broad authority to audit and review compliance with such laws and regulations and impose payment suspensions or modifications when merited. Additionally, the contracts we have with commercial health insurance payors provide for retroactive audit and review of claims. Settlement with third party payors for retroactive adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care. The variable consideration is estimated based on the terms of the payment agreement, existing correspondence from the payor and our historical settlement activity. These estimates are adjusted in future periods, as new information becomes available.

We are subject to certain limitations on Medicare payments for services which are considered variable consideration, as follows:

Inpatient Cap. If the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds 20% of the total days of hospice care such program provided to all Medicare patients for an annual period beginning September 28, the days in excess of the 20% figure may be reimbursed only at the routine homecare rate. None of VITAS’ hospice programs exceeded the payment limits on inpatient services during the three months ended September 30, 2025 and 2024.

Medicare Cap. We are also subject to a Medicare annual per-beneficiary cap (“Medicare cap”). Compliance with the Medicare cap is measured in one of two ways based on a provider election. The “streamlined” method compares total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by that Medicare provider number with the product of the per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for the first time from that hospice program or programs from September 28 through September 27 of the following year. At September 30, 2025, all our programs except three are using the “streamlined” method.

The “proportional” method compares the total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by the Medicare provider number between September 28 and September 27 of the following year with the product of the per beneficiary cap amount and a pro-rated number of Medicare beneficiaries receiving hospice services from that program during the same period. The pro-rated number of Medicare beneficiaries is calculated based on the ratio of days the beneficiary received hospice services during the measurement period to the total number of days the beneficiary received hospice services.

We actively monitor each of our hospice programs, by provider number, as to their specific admission, discharge rate and median length of stay data in an attempt to determine whether revenues are likely to exceed the annual per-beneficiary Medicare Cap. Should we determine that revenues for a program are likely to exceed the Medicare cap based on projected trends, we attempt to institute corrective actions, which include changes to the patient mix and increased patient admissions. However, should we project our corrective action will not prevent that program from exceeding its Medicare cap, we estimate revenue recognized during the government fiscal year that will require repayment to the Federal government under the Medicare cap and record an adjustment to revenue of an amount equal to a ratable portion of our best estimate for the year.

For VITAS’ patients in the nursing home setting in which Medicaid pays the nursing home room and board, VITAS serves as a pass-through between Medicaid and the nursing home. We are responsible for paying the nursing home for that patient’s room and board. Medicaid reimburses us for 95% of the amount we have paid. This results in a 5% net expense for VITAS related to nursing home room and board. This transaction creates a performance obligation in that VITAS is facilitating room and board being delivered to our patient. As a result, the 5% net expense is recognized as a contra-revenue account under ASC 606 in the accompanying financial statements.

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The composition of patient care service revenue by payor and level of care for the quarter ended September 30, 2025 is as follows (in thousands):

	Medicare			Medicaid			Commercial			Total
Routine home care	$	341,571		$	11,604		$	9,230		$	362,405
Inpatient care		28,374			2,318			2,407			33,099
Continuous care		18,379			603			964			19,946
	$	388,324		$	14,525		$	12,601		$	415,450
All other revenue - self-pay, respite care, etc.											5,807
Subtotal										$	421,257
Medicare cap adjustment											(6,086)
Implicit price concessions											(3,571)
Room and board, net											(3,859)
Net revenue										$	407,741

The composition of patient care service revenue by payor and level of care for the quarter ended September 30, 2024 is as follows (in thousands):

	Medicare			Medicaid			Commercial			Total
Routine home care	$	319,151		$	12,013		$	7,180		$	338,344
Inpatient care		25,647			2,111			2,165			29,923
Continuous care		23,657			942			1,200			25,799
	$	368,455		$	15,066		$	10,545		$	394,066
All other revenue - self-pay, respite care, etc.											5,082
Subtotal										$	399,148
Medicare cap adjustment											(2,239)
Implicit price concessions											(2,167)
Room and board, net											(3,336)
Net revenue										$	391,406

The composition of patient care service revenue by payor and level of care for the nine months ended September 30, 2025 is as follows (in thousands):

	Medicare			Medicaid			Commercial			Total
Routine home care	$	1,012,360		$	33,915		$	25,739		$	1,072,014
Inpatient care		86,716			6,482			6,947			100,145
Continuous care		63,158			1,982			3,082			68,222
	$	1,162,234		$	42,379		$	35,768		$	1,240,381
All other revenue - self-pay, respite care, etc.											16,898
Subtotal										$	1,257,279
Medicare cap adjustment											(24,786)
Implicit price concessions											(9,875)
Room and board, net											(11,277)
Net revenue										$	1,211,341

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The composition of patient care service revenue by payor and level of care for the nine months ended September 30, 2024 is as follows (in thousands):

	Medicare			Medicaid			Commercial			Total
Routine home care	$	911,197		$	36,691		$	20,093		$	967,981
Inpatient care		76,905			6,740			5,652			89,297
Continuous care		68,649			2,588			3,058			74,295
	$	1,056,751		$	46,019		$	28,803		$	1,131,573
All other revenue - self-pay, respite care, etc.											13,900
Subtotal										$	1,145,473
Medicare cap adjustment											(5,989)
Implicit price concessions											(10,077)
Room and board, net											(9,437)
Net revenue										$	1,119,970

Roto-Rooter

Roto-Rooter provides plumbing, drain cleaning, excavation, water restoration and other related services to both residential and commercial customers primarily in the United States. Services are provided through a network of company-owned branches, independent contractors and franchisees. Service revenue for Roto-Rooter is reported at the amount that reflects the ultimate consideration we expect to receive in exchange for providing services.

Roto-Rooter owns and operates branches focusing mainly on large population centers in the United States. Roto-Rooter’s primary lines of business in company-owned branches consist of plumbing, sewer and drain cleaning, excavation and water restoration. For purposes of ASC 606 analysis, plumbing, sewer and drain cleaning, and excavation have been combined into one portfolio and are referred to as “short-term core services”. Water restoration is analyzed as a separate portfolio. The following describes the key characteristics of these portfolios:

Short-term Core Services are plumbing, drain and sewer cleaning and excavation services. These services are provided to both commercial and residential customers. The duration of services provided in this category range from a few hours to a few days. There are no significant warranty costs or on-going obligations to the customer once a service has been completed. For residential customers, payment is received at the time of job completion before the Roto-Rooter technician leaves the residence. Commercial customers may be granted credit subject to internally designated authority limits and credit check guidelines. If credit is granted, payment terms are generally 30 days or less.

Each job in this category is a distinct service with a distinct performance obligation to the customer. Revenue is recognized at the completion of each job. Variable consideration consists of pre-invoice discounts and post-invoice discounts. Pre-invoice discounts are given in the form of coupons or price concessions. Post-invoice discounts consist of credit memos generally granted to resolve customer service issues. Variable consideration is estimated based on historical activity and recorded at the time service is completed.

Water Restoration Services involve the remediation of water and humidity after a flood. These services are provided to both commercial and residential customers. The duration of services provided in this category generally ranges from 3 to 5 days. There are no significant warranties or on-going obligations to the customer once service has been completed. The majority of these services are paid by the customer’s insurance company. Variable consideration relates primarily to allowances taken by insurance companies upon payment. Variable consideration is estimated based on historical activity and recorded at the time service is completed.

For both short-term core services and water restoration services, Roto-Rooter satisfies its performance obligation at a point in time. The services provided generally involve fixing plumbing, drainage or flood-related issues at the customer’s property. At the time service is complete, the customer acknowledges its obligation to pay for service and its satisfaction with the service performed. This provides evidence that the customer has accepted the service and Roto-Rooter is now entitled to payment. As such, Roto-Rooter recognizes revenue for these services upon completion of the job and receipt of customer acknowledgement. Roto-Rooter’s performance obligations for short-term core services and water restoration services relate to contracts with an expected duration of less than a year. Therefore, Roto-Rooter has elected to apply the optional exception provided in ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Roto-Rooter does not have significant unsatisfied or partially unsatisfied performance obligations at the time of initial revenue recognition for short-term core or water restoration services.

Roto-Rooter owns the rights to certain territories and contracts with independent third-parties to operate the territory under Roto-Rooter’s registered trademarks (“independent contractors”). Such contracts are for a specified term but cancellable by either party

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without penalty with 90 days’ advance notice. Under the terms of these arrangements, Roto-Rooter provides certain back office support and advertising along with a limited license to use Roto-Rooter’s registered trademarks. The independent contractor is responsible for all day-to-day management of the business including staffing decisions and pricing of services provided. All performance obligations of Roto-Rooter cease at the termination of the arrangement.

Independent contractors pay Roto-Rooter a standard fee calculated as a percentage of their cash collection from weekly sales. The primary value for the independent contractors under these arrangements is the right to use Roto-Rooter’s registered trademarks. Roto-Rooter recognizes revenue from independent contractors over-time (weekly) as the independent contractor’s labor sales are completed and payment from customers are received. Payment from independent contractors is also received on a weekly basis. The use of Roto-Rooter’s registered trademarks and advertising provides immediate value to the independent contractor as a result of Roto-Rooter’s nationally recognized brand. Therefore, over-time recognition provides the most faithful depiction of the transfer of services as the customer simultaneously receives and consumes the benefits provided. There is no significant variable consideration related to these arrangements.

Roto-Rooter has licensed the rights to operate under Roto-Rooter’s registered trademarks in other territories to franchisees. Each such contract is for a 10 year term but cancellable by Roto-Rooter for cause with 60 day advance notice without penalty. The franchisee may cancel the contract for any reason with 60 days advance notice without penalty. Under the terms of the contract, Roto-Rooter provides national advertising and consultation on various aspects of operating a Roto-Rooter business along with the right to use Roto-Rooter’s registered trademarks. The franchisee is responsible for all day-to-day management of the business including staffing decisions, pricing of services provided and local advertising spend and placement. All performance obligations of Roto-Rooter cease at the termination of the arrangement.

Franchisees pay Roto-Rooter a standard monthly fee based on the population within the franchise territory. The standard fee is revised on a yearly basis based on changes in the Consumer Price Index for All Urban Consumers. The primary value for the franchisees under this arrangement is the right to use Roto-Rooter’s registered trademarks. Roto-Rooter recognizes revenue from franchisees over-time (monthly). Payment from franchisees is also received on a monthly basis. The use of Roto-Rooter’s registered trademarks and advertising provides immediate value to the franchisees as a result of Roto-Rooter’s nationally recognized brand. Therefore, over-time recognition provides the most faithful depiction of the transfer of services as the customer simultaneously receives and consumes the benefits provided. There is no significant variable consideration related to these arrangements.

The composition of disaggregated revenue for the third quarter is as follows (in thousands):

	September 30,
	2025			2024
Drain cleaning	$	55,454		$	56,049
Plumbing		45,753			43,471
Excavation		57,102			53,935
Other		220			218
Subtotal - short term core		158,529			153,673
Water restoration		45,196			42,412
Independent contractors		16,871			17,698
Franchisee fees		1,433			1,454
Other		4,449			5,408
Gross revenue		226,478			220,645
Implicit price concessions and credit memos		(9,319)			(5,870)
Net revenue	$	217,159		$	214,775

‎

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The composition of disaggregated revenue for the first nine months is as follows (in thousands):

	September 30,
	2025			2024
Drain cleaning	$	170,553		$	175,535
Plumbing		137,097			137,614
Excavation		177,833			168,266
Other		595			665
Subtotal - short term core		486,078			482,080
Water restoration		149,183			131,867
Independent contractors		52,682			55,569
Franchisee fees		4,262			4,344
Other		14,127			17,287
Gross revenue		706,332			691,147
Implicit price concessions and credit memos		(27,032)			(19,823)
Net revenue	$	679,300		$	671,324

3.    Segments

Our segments include the VITAS segment and the Roto-Rooter segment, which comprise the structure used by our President and Chief Executive Officer, who has been determined to be our Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance. Relative contributions of each segment to service revenues and sales for the third quarter of 2025 and 2024 were 65% and 35%. Relative contributions of each segment to service revenues and sales for the first nine months of 2025 were 64% and 36% compared to the first nine months of 2024 were 63% and 37%. The vast majority of our service revenues and sales from continuing operations are generated from business within the United States. Service revenues and sales by business segment are shown in Note 2.

The reportable segments have been defined along service lines, which is consistent with the way the businesses are managed. In determining reportable segments, the RRSC and RRC operating units of the Roto-Rooter segment have been aggregated on the basis of possessing similar operating and economic characteristics. The characteristics of these operating segments and the basis for aggregation are reviewed annually.

We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as “Corporate”. Corporate administrative expense includes the stewardship, accounting and reporting, legal, tax and other costs of operating a publicly held corporation. Corporate investing and financing income and expenses include the costs and income associated with corporate debt and investment arrangements.

Our CODM evaluates the segments’ operating performance based mainly on income/(loss) from operations. For each segment, the CODM compares segment income/(loss) from operations in the annual budgeting and monthly forecasting process to actual results. The CODM considers variances on a monthly basis for evaluating performance of each segment and making decisions about allocating resources to each segment.

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Segment data for the three months ending September 30, 2025 are as follows (in thousands):

								Reportable						Chemed
		VITAS			Roto-Rooter			Segments			Corporate			Consolidated
Service revenues and sales		$	407,741		$	217,159		$	624,900		$	-		$	624,900
Cost of services provided and goods sold
(excluding depreciation)
Wages			239,357			72,992			312,349			-			312,349
Patient care expense			43,269			-			43,269			-			43,269
Other expenses			38,239			34,136			72,375			-			72,375
Total cost of services provided and goods sold			320,865			107,128			427,993			-			427,993
Selling, general and administrative expense
Wages			16,904			21,122			38,026			6,440			44,466
Advertising			-			19,542			19,542			-			19,542
Stock compensation			-			-			-			5,851			5,851
Other expenses			8,332			20,008			28,340			7,576			35,916
Total selling, general and administrative expense			25,236			60,672			85,908			19,867			105,775
Depreciation			5,354			8,298			13,652			12			13,664
Amortization			26			2,544			2,570			-			2,570
Other operating expense/(income)			186			(38)			148			-			148
Total costs and expenses			351,667			178,604			530,271			19,879			550,150
Income/(loss) from operations			56,074			38,555			94,629			(19,879)			74,750
Interest expense			(56)			(132)			(188)			(269)			(457)
Intercompany interest income/(expense)			5,685			4,030			9,715			(9,715)			-
Other income - net			61			25			86			9,165			9,251
Income/(expense) before income taxes			61,764			42,478			104,242			(20,698)			83,544
Income taxes			(14,993)			(10,407)			(25,400)			6,093			(19,307)
Net income/(loss)		$	46,771		$	32,071		$	78,842		$	(14,605)		$	64,237
Additions to long-lived assets		$	10,850		$	6,639		$	17,489		$	10		$	17,499

‎

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Segment data for the three months September 30, 2024 are as follows (in thousands):

								Reportable						Chemed
		VITAS			Roto-Rooter			Segments			Corporate			Consolidated
Service revenues and sales		$	391,406		$	214,775		$	606,181		$	-		$	606,181
Cost of services provided and goods sold
(excluding depreciation)
Wages			222,868			70,078			292,946			-			292,946
Patient care expense			37,188			-			37,188			-			37,188
Other expenses			34,880			31,173			66,053			-			66,053
Total cost of services provided and good sold			294,936			101,251			396,187			-			396,187
Selling, general and administrative expense
Wages			17,658			18,979			36,637			3,643			40,280
Advertising			-			18,420			18,420			-			18,420
Stock compensation			-			-			-			9,121			9,121
Other expenses			8,225			19,673			27,898			6,262			34,160
Total selling, general and administrative expense			25,883			57,072			82,955			19,026			101,981
Depreciation			5,063			8,071			13,134			13			13,147
Amortization			26			2,524			2,550			-			2,550
Other operating expense/(income)			97			62			159			-			159
Total costs and expenses			326,005			168,980			494,985			19,039			514,024
Income/(loss) from operations			65,401			45,795			111,196			(19,039)			92,157
Interest expense			(46)			(114)			(160)			(267)			(427)
Intercompany interest income/(expense)			4,920			3,656			8,576			(8,576)			-
Other income - net			62			18			80			9,219			9,299
Income/(expense) before income taxes			70,337			49,355			119,692			(18,663)			101,029
Income taxes			(16,851)			(11,400)			(28,251)			2,998			(25,253)
Net income/(loss)		$	53,486		$	37,955		$	91,441		$	(15,665)		$	75,776
Additions to long-lived assets		$	7,768		$	10,778		$	18,546		$	100		$	18,646

‎

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Segment data for the nine months September 30, 2025 are as follows (in thousands):

								Reportable						Chemed
		VITAS			Roto-Rooter			Segments			Corporate			Consolidated
Service revenues and sales		$	1,211,341		$	679,300		$	1,890,641		$	-		$	1,890,641
Cost of services provided and goods sold
(excluding depreciation)
Wages			716,335			226,168			942,503			-			942,503
Patient care expense			124,656			-			124,656			-			124,656
Other expenses			113,325			112,144			225,469			-			225,469
Total cost of services provided and goods sold			954,316			338,312			1,292,628			-			1,292,628
Selling, general and administrative expense
Wages			51,188			63,326			114,514			13,919			128,433
Advertising			-			56,654			56,654			-			56,654
Stock compensation			-			-			-			27,668			27,668
Other expenses			25,673			63,876			89,549			9,381			98,930
Total selling, general and administrative expense			76,861			183,856			260,717			50,968			311,685
Depreciation			15,863			24,899			40,762			36			40,798
Amortization			78			7,635			7,713			-			7,713
Other operating expense/(income)			305			(80)			225			-			225
Total costs and expenses			1,047,423			554,622			1,602,045			51,004			1,653,049
Income/(loss) from operations			163,918			124,678			288,596			(51,004)			237,592
Interest expense			(150)			(394)			(544)			(685)			(1,229)
Intercompany interest income/(expense)			16,436			11,930			28,366			(28,366)			-
Other income - net			170			58			228			13,742			13,970
Income/(expense) before income taxes			180,374			136,272			316,646			(66,313)			250,333
Income taxes			(45,353)			(32,344)			(77,697)			15,851			(61,846)
Net income/(loss)		$	135,021		$	103,928		$	238,949		$	(50,462)		$	188,487
Additions to long-lived assets		$	22,234		$	24,825		$	47,059		$	15		$	47,074

‎

-17-

Segment data for the nine months September 30, 2024 are as follows (in thousands):

								Reportable						Chemed
		VITAS			Roto-Rooter			Segments			Corporate			Consolidated
Service revenues and sales		$	1,119,970		$	671,324		$	1,791,294		$	-		$	1,791,294
Cost of services provided and goods sold
(excluding depreciation)
Wages			639,103			221,669			860,772			-			860,772
Patient care expense			108,887			-			108,887			-			108,887
Other expenses			104,357			97,048			201,405			-			201,405
Total cost of services provided and goods sold			852,347			318,717			1,171,064			-			1,171,064
Selling, general and administrative expense
Wages			51,556			60,056			111,612			11,950			123,562
Advertising			-			55,271			55,271			-			55,271
Stock compensation			-			-			-			39,730			39,730
Other expenses			22,412			60,356			82,768			18,778			101,546
Total selling, general and administrative expense			73,968			175,683			249,651			70,458			320,109
Depreciation			15,288			24,275			39,563			38			39,601
Amortization			79			7,538			7,617			-			7,617
Other operating expense			160			128			288			-			288
Total costs and expenses			941,842			526,341			1,468,183			70,496			1,538,679
Income/(loss) from operations			178,128			144,983			323,111			(70,496)			252,615
Interest expense			(138)			(349)			(487)			(794)			(1,281)
Intercompany interest income/(expense)			15,096			10,638			25,734			(25,734)			-
Other income - net			138			64			202			27,806			28,008
Income/(expense) before income taxes			193,224			155,336			348,560			(69,218)			279,342
Income taxes			(46,517)			(36,010)			(82,527)			14,865			(67,662)
Net income/(loss)		$	146,707		$	119,326		$	266,033		$	(54,353)		$	211,680
Additions to long-lived assets		$	104,337		$	29,800		$	134,137		$	271		$	134,408

Identifiable assets by segment are as follows (in thousands):

	September 30,			December 31,
	2025			2024
VITAS	$	822,484		$	839,568
Roto-Rooter		535,182			529,076
Reportable segments		1,357,666			1,368,644
Corporate		265,953			299,931
Chemed consolidated	$	1,623,619		$	1,668,575

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4.    Earnings per Share

Earnings per share (“EPS”) are computed using the weighted average number of shares of capital stock outstanding. Earnings and diluted earnings per share are computed as follows (in thousands, except per share data):

				Net Income
For the Three Months Ended September 30,			Income			Shares		Earnings per Share
2025
	Earnings		$	64,237		14,394		$	4.46
	Dilutive stock options			-		2
	Nonvested stock awards			-		13
	Diluted earnings		$	64,237		14,409		$	4.46
2024
	Earnings		$	75,776		15,025		$	5.04
	Dilutive stock options			-		99
	Nonvested stock awards			-		44
	Diluted earnings		$	75,776		15,168		$	5.00

				Net Income
For the Nine Months Ended September 30,			Income			Shares		Earnings per Share
2025
	Earnings		$	188,487		14,535		$	12.97
	Dilutive stock options			-		55
	Nonvested stock awards			-		30
	Diluted earnings		$	188,487		14,620		$	12.89
2024
	Earnings		$	211,680		15,082		$	14.04
	Dilutive stock options			-		122
	Nonvested stock awards			-		49
	Diluted earnings		$	211,680		15,253		$	13.88

For the three and nine months ended September 30, 2025, there were 892,000 and 592,000, respectively, stock options excluded from the computation of dilutive earnings per share because they would have been anti-dilutive.

For the three and nine months ended September 30, 2024, there were 307,000 and 302,000, respectively, stock options excluded from the computation of dilutive earnings per share because they would have been anti-dilutive.

5.    Long-Term Debt and Lines of Credit

On June 28, 2022, we replaced our existing credit facility with a fifth amended and restated Credit Agreement (“2022 Credit Facilities”). Terms of the 2022 Credit Facilities consist of a five-year $450.0 million revolver as well as a five-year $100.0 million term loan. The 2022 Credit Facilities have 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, 2025, the interest rate is SOFR plus 100 basis points. The 2022 Credit Facilities include an expansion feature that provides the Company the opportunity to increase its revolver and/or term loan by an additional $250.0 million.

The term loan was repaid in 2023. This prepayment reduced the total borrowing capacity of the 2022 Credit Facilities from $550.0 million to $450.0 million. There were no prepayment penalties associated with this repayment. There are no significant deferred debt issuance costs capitalized related to the term loan.

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The 2022 Credit Facilities contain the following quarterly financial covenants effective as of September 30, 2025:

Description		Requirement
Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA)		< 3.50 to 1.00
Interest Coverage Ratio (Consolidated Adj. EBITDA/Consolidated Interest Expense)		> 3.00 to 1.00

We are in compliance with all debt covenants as of September 30, 2025. We have issued $45.5 million in standby letters of credit as of September 30, 2025, mainly for insurance purposes. Issued letters of credit reduce our available credit under the 2022 Credit Facilities. As of September 30, 2025, we have approximately $404.5 million of unused lines of credit available and eligible to be drawn down under the revolving credit facility.

6.    Other Income – Net

Other income – net comprises the following (in thousands): 

	Three months ended September 30,						Nine months ended September 30,
	2025			2024			2025			2024
Interest income	$	2,555		$	3,668		$	7,186		$	11,405
Market value adjustment on assets held in deferred compensation trust		6,703			5,629			6,791			16,600
Other		(7)			2			(7)			3
Total other income - net	$	9,251		$	9,299		$	13,970		$	28,008

7.    Leases

Chemed and each of its operating subsidiaries are service companies. As such, real estate leases comprise the largest lease obligation (and conversely, right of use asset) in our lease portfolio. VITAS has leased office space, as well as space for inpatient units (“IPUs”) and/or contract beds within hospitals. Roto-Rooter mainly has leased office space. Our leases have remaining terms of under 1 year to 12 years, some of which include options to extend the lease for up to 5 years, and some of which include options to terminate the lease within 1 year.

Roto-Rooter purchases equipment and leases it to certain of its independent contractors. We analyzed these leases in accordance with ASC 842 and determined they are operating leases. As a result, Roto-Rooter capitalizes the equipment underlying these leases, depreciates the equipment and recognizes rental income.

We do not currently have any finance leases, therefore all lease information disclosed is related to operating leases.

The components of balance sheet information related to leases were as follows:

	September 30,			‎December 31,
	2025			2024
Assets
Operating lease assets	$	128,362		$	127,323
Liabilities
Current operating leases		42,013			42,306
Noncurrent operating leases		99,461			98,538
Total operating lease liabilities	$	141,474		$	140,844

‎

-20-

The components of lease expense for the third quarter are as follows (in thousands):

	Three months ended September 30,
	2025			2024
Lease Expense (a)
Operating lease expense	$	17,359		$	16,548
Sublease income		(28)			(103)
Net lease expense	$	17,331		$	16,445

The components of lease expense for the first nine months are as follows (in thousands):

	Nine months ended September 30,
	2025			2024
Lease Expense (a)
Operating lease expense	$	50,945		$	47,821
Sublease income		(94)			(216)
Net lease expense	$	50,851		$	47,605

(a)Includes short-term leases and variable lease costs, which are immaterial. Included in both cost of services provided and goods sold and selling, general and administrative expenses.

The components of cash flow information related to leases were as follows:

	Nine months ended September 30,
	2025			2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from leases	$	41,516		$	38,564
Leased assets obtained in exchange for new operating lease liabilities	$	37,752		$	43,759

Weighted Average Remaining Lease Term at September 30, 2025
Operating leases		4.63	years

Weighted Average Discount Rate at September 30, 2025
Operating leases		4.07	%

Maturity of Operating Lease Liabilities (in thousands)
2025				$	13,679
2026					44,929
2027					31,315
2028					24,478
2029					18,716
Thereafter					23,436
Total lease payments				$	156,553
Less: interest					(15,079)
Total liability recognized on the balance sheet				$	141,474

For leases commencing prior to April 2019, minimum rental payments exclude payments to landlords for real estate taxes and common area maintenance. Operating lease payments include $5.1 million related to extended lease terms that are reasonably certain of being exercised and exclude $2.1 million of lease payments for leases signed but not yet commenced.

-21-

8.    Stock-Based Compensation Plans

On February 14, 2025, the Compensation/Incentive Committee of the Board of Directors (“CIC”) granted 7,920 Performance Stock Units (“PSUs”) that vest contingent upon the achievement of certain total shareholder return (“TSR”) targets as compared to the TSR of a group of peer companies for the three-year period ending December 31, 2027, the date at which such awards vest. The cumulative compensation cost of the TSR-based PSU award to be recorded over the three-year service period is $6.0 million.

On February 14, 2025, the CIC also granted 7,920 PSUs that vest contingent upon the achievement of certain earnings per share (“EPS”) targets for the three-year period ending December 31, 2027. At the end of each reporting period, the Company estimates the number of shares that it believes will ultimately be earned and records the corresponding expense over the service period of the award. We currently estimate the cumulative compensation cost of the EPS-based PSUs to be recorded over the three-year service period is $4.4 million.

At the end of 2023, the then Chief Financial Officer (“CFO”) transitioned to an employee advisor role. In early 2024, in connection with this change of role, the CFO’s employment agreement terminated, and the CFO was given a one-time grant of 6,424 PSUs to be paid based on the Company’s TSR performance for the fiscal years 2024 to 2026. This one-time grant is structured the same as the Company’s standard TSR-based PSU grants with the exception that there are no future service requirements to be satisfied by the employee and a minimum value of shares are guaranteed. Based on the structure of the one-time award, the entire value of the award, $5.3 million, was recognized as compensation expense in SG&A in the consolidated statements of income for the period ended March 31, 2024.

9.    Retirement Plans

All of the Company’s plans that provide retirement and similar benefits are defined contribution plans. These expenses include the impact of market gains and losses on assets held in deferred compensation plans and are recorded in selling, general and administrative expenses. Net gains for the Company’s retirement and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):

Three months ended September 30,						Nine months ended September 30,
2025			2024			2025			2024
$	10,413		$	8,876		$	21,503		$	29,114

10.    Legal and Regulatory Matters

The VITAS segment of the Company’s business operates in a heavily-regulated industry. As a result, the Company is subjected to inquiries and investigations by various government agencies, which can result in penalties including repayment obligations, funding withholding, or debarment, as well as to lawsuits, including qui tam actions. The following describes the material lawsuits and investigations of which the Company is currently aware.

Regulatory Matters and Litigation

VITAS was one of a group of hospice providers selected by the Office of the Inspector General’s (“OIG”) Office of Audit Services (“OAS”) for inclusion in an audit of the provision of elevated level-of-care hospice services. As a result of this audit, which reviewed 100 out of a total population of 50,850 inpatient and continuous care claims, OAS recommended that VITAS repay approximately $140.0 million of the $210.0 million VITAS’ Florida program received from Medicare for hospice services during the applicable two-year period, despite the fact that at the time of the release of the results of the audit, many of the disputed claims were time-barred from being challenged.

On August 29, 2022, VITAS received a demand letter from its Medicare Administrative Contractor (“MAC”) seeking repayment of $50.3 million. VITAS appealed the overpayment decision and deposited $50.3 million under the “Immediate Recoupment” process. The amount deposited was recorded as an “other long-term asset” in the consolidated balance sheets, as detailed in Note 13.

On February 3, 2025, an Administrative Law Judge (“ALJ”) ruled that VITAS’ care met Medicare’s hospice standards for the applicable higher level of care as originally billed for all but one of the claims appealed, and therefore VITAS was entitled to receive payment for all such claims. With respect to the one claim that the judge did not fully side with VITAS, the judge found that four of the five days billed met the applicable standard and only one day did not.

In a letter dated March 18, 2025, VITAS’ MAC provided notice that due to the ALJ’s ruling the total overpayment amount was reduced to a de minimis amount, and has since refunded VITAS all previously unreturned deposited amounts in excess of that dollar figure.

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Regardless of the outcome of the preceding matter, dealing with the various regulatory agencies and opposing parties can adversely affect us through defense costs, potential payments, withholding of governmental funding, diversion of management time, and related publicity.

11.    Concentration of Risk

As of September 30, 2025, and December 31, 2024, approximately 66% and 64%, respectively, of VITAS’ total accounts receivable balance were from Medicare and 28% and 31% respectively, of VITAS’ total accounts receivable balance were due from various state Medicaid or managed Medicaid programs. Combined accounts receivable from Medicare, Medicaid, and managed Medicaid represent approximately 77% of the consolidated net accounts receivable in the accompanying consolidated balance sheets as of September 30, 2025.

VITAS has a pharmacy services contract with one service provider for specified pharmacy services related to its hospice operations. Similarly, VITAS obtains the majority of its medical supplies from a single vendor. A large majority of VITAS’ pharmaceutical and medical supplies purchases are from these vendors. The pharmaceutical and medical supplies purchased by VITAS are available through many providers in the United States. However, a disruption from VITAS’ main service providers could adversely impact VITAS’ operations, including temporary logistical challenges and increased cost associated with getting medication and medical supplies to our patients.

12.    Cash Overdrafts and Cash Equivalents

There is $610,000 in cash overdrafts payable included in accounts payable at September 30, 2025. There were no cash overdrafts payable included in accounts payable at December 31, 2024.

From time to time throughout the year, 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. In 2023, Chemed began investing 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.

13.    Other Assets

Other assets comprise the following (in thousands):

	September 30,			December 31,
	2025			2024
Deposit with OAS	$	-		$	46,968
Other		8,137			8,789
Total other assets	$	8,137		$	55,757

The deposit with OAS was refunded on April 1, 2025. See Note 10 for further discussion.

14.    Financial Instruments

FASB’s authoritative guidance on fair value measurements defines a hierarchy which prioritizes the inputs in fair value measurements. Level 1 measurements are measurements using quoted prices in active markets for identical assets or liabilities. Level 2 measurements use significant other observable inputs. Level 3 measurements are measurements using significant unobservable inputs which require a company to develop its own assumptions. In recording the fair value of assets and liabilities, companies must use the most reliable measurement available.

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The following shows the carrying value, fair value, and the hierarchy for our financial instruments as of September 30, 2025 (in thousands):

						Fair Value Measure
			Carrying Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Investments of deferred compensation plans held in trust		$	136,021		$	136,021		$	-		$	-
Cash equivalents			150,106			150,106			-			-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2024 (in thousands):

						Fair Value Measure
			Carrying Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Investments of deferred compensation plans held in trust		$	130,960		$	130,960		$	-		$	-
Cash equivalents			188,379			188,379			-			-

For cash, accounts receivable and accounts payable, the carrying amount is a reasonable estimate of fair value because of the liquidity and short-term nature of these instruments. As further described in Note 5, our outstanding long-term debt has a floating interest rate that is reset at short-term intervals, generally 30 or 60 days. The interest rate we pay also includes an additional amount based on our current leverage ratio. As such, we believe our borrowings reflect significant nonperformance risks, mainly credit risk. Based on these factors, we believe the fair value of our long-term debt approximates its carrying value.

15.    Capital Stock Repurchase Plan Transactions

We repurchased the following capital stock:

		Three months ended September 30,						Nine months ended September 30,
		2025			2024			2025			2024
Total cost of repurchased shares (in thousands)		$	180,776		$	57,820		$	253,477		$	145,933
Shares repurchased			407,500			100,000			532,500			250,000
Weighted average price per share		$	443.62		$	578.21		$	476.02		$	583.73

In November 2024, the Board of Directors authorized $300.0 million for additional stock repurchase under Chemed’s existing share repurchase program, and on August 1, 2025 the Board of Directors authorized an additional $300.0 million for additional stock repurchase. We currently have $301.8 million of authorization remaining under this share repurchase plan.

16.    Acquisitions

On January 3, 2025, Roto-Rooter completed the acquisition of one franchise in Michigan for $225,000 in cash. On March 11, 2024, Roto-Rooter completed the acquisition of one franchise in New Jersey for $5.8 million in cash. On March 27, 2024, Roto-Rooter completed the acquisition of one franchise in Texas for $1.5 million in cash. On August 20, 2024, Roto-Rooter completed the acquisition of one franchise in Kentucky for $5.1 million in cash.

On April 17, 2024, VITAS completed the purchase of all hospice operations and an assisted living facility from Covenant Health and Community Services, Inc. d/b/a/ Covenant Care (“Covenant”) for an aggregated purchase price of $85.0 million in cash.

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The purchase price allocation of the acquired VITAS business is as follows (in thousands):

Goodwill	$	70,803
Operating licenses		10,960
Property, plant, and equipment		3,237
	$	85,000

The pro forma revenue and earnings for the Company for the three and nine months ended September 30, as if the Covenant acquisition made in 2024 was completed on January 1, 2024 are as follows (in thousands, except per share data):

	Three months ended September 30,						Nine months ended September 30,
	2025			2024			2025			2024
Service revenues and sales	$	624,900		$	606,181		$	1,890,641		$	1,808,426
Net income	$	64,237		$	75,776		$	188,487		$	215,905
Earnings per share	$	4.46		$	5.04		$	12.97		$	14.32
Diluted earnings per share	$	4.46		$	5.00		$	12.89		$	14.15

Revenue and net income from other acquisitions made in 2025 and 2024 are not material.

Goodwill is assessed for impairment on a yearly basis as of October 1. The primary factor that contributed to the purchase price resulting in the recognition of goodwill is operational efficiencies expected as a result of integrating the operations of the Covenant locations into the existing VITAS organizational structure. All goodwill recognized is deductible for tax purposes.

Shown below is movement in Goodwill (in thousands):

	VITAS			Roto-Rooter			Total
Balance at December 31, 2024	$	404,866		$	261,878		$	666,744
Business combinations		-			185			185
Foreign currency adjustments		-			58			58
Balance at September 30, 2025	$	404,866		$	262,121		$	666,987

17. Recent Accounting Standards

In December 2023, the FASB issued Accounting Standards Update “ASU 2023-09 – Income Tax Disclosure”. The guidance requires a reconciliation between the amount of reported income tax expense from continuing operations and the amount computed from the income multiplied by the United States federal income tax rate. In addition, the guidance requires an annual disaggregation between of the income tax rate reconciliation and potential key categories: state and local income tax, tax credits, changes in valuation allowances, nontaxable or nondeductible tax items and changes in unrecognized tax benefits. The Company will be required to separately disclose any reconciling items which have a tax effect greater than 1.05% of income from continuing operations. Those not meeting the disaggregation conditions would be aggregated within other adjustments. The guidance is effective for annual periods beginning after December 15, 2024. The Company is finalizing the impacts of the ASU, and expects to incorporate within our footnote disclosures in our Annual Report on Form 10-K.

In November 2024, the FASB issued Accounting Standards Update “ASU 2024-03 – Disaggregation of Income Statement Expenses”. The guidance provides enhanced disclosures about commonly presented expense categories such as cost of sales, selling, general and administrative expenses and research and development. The objective is to provide investors with a better understanding of the entity’s performance, assess potential future cash flows and comparability with other entities. The guidance is effective for fiscal periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently analyzing the impact of the ASU on the current footnote disclosures.

In September 2025, the FASB issued Accounting Standards Update “ASU 2025-06 – Intangibles – Goodwill and Other – Internal – Use Software”. The guidance seeks to modernize the accounting guidance for the costs to develop software for internal use. The guidance amends the existing standard to better align with current software development methods. Entities will start capitalizing eligible costs when management has authorized and committed to funding software projects and when it is probable that the projects will be completed and used as intended. The guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is currently analyzing the impact of the ASU on the consolidated financial statements.

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Item 2.    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, 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, we do not expect a material negative effect on our net sales or profitability for the remainder of fiscal year 2025. 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 2026 planning. Economic pressures including the challenges of high inflation and the effects of increased tariffs 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,
	2025			2024			2025			2024
Service revenues and sales	$	624,900		$	606,181		$	1,890,641		$	1,791,294
Net income	$	64,237		$	75,776		$	188,487		$	211,680
Diluted EPS	$	4.46		$	5.00		$	12.89		$	13.88
Adjusted net income	$	75,906		$	85,485		$	221,701		$	248,735
Adjusted diluted EPS	$	5.27		$	5.64		$	15.16		$	16.31
Adjusted EBITDA	$	109,045		$	122,994		$	326,070		$	357,505
Adjusted EBITDA as a % of revenue		17.4	%		20.3	%		17.2	%		20.0	%

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, 2025, the increase in consolidated service revenues and sales was driven by a 4.2% increase at VITAS and by a 1.1% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 2.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 4.1%. Acuity mix shift negatively impacted revenue growth by 121-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 decreased revenue growth by 124-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in plumbing, excavation and water restoration offset by a decrease in drain cleaning.

For the nine months ended September 30, 2025, the increase in consolidated service revenues and sales was driven by an 8.2% increase at VITAS and by a 1.2% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 6.6% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.8%. Acuity mix shift negatively impacted revenue growth by 100-basis points for the year when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 120-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in excavation and water restoration offset by a decrease in plumbing and drain cleaning.

On April 17, 2024, VITAS completed the purchase of all hospice operations and an assisted living facility from Covenant Health and Community Services, Inc d/b/a/ Covenant Care (“Covenant”) for an aggregated purchase price of $85.0 million in cash.

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The pro forma revenue and earnings for the Company for the three and nine months ended September 30, 2025 as if the Covenant acquisition made in 2024 was completed on January 1, 2024 are as follows (in thousands, except per share data):

	Three months ended September 30,						Nine months ended September 30,
	2025			2024			2025			2024
Service revenues and sales	$	624,900		$	606,181		$	1,890,641		$	1,808,426
Net income	$	64,237		$	75,776		$	188,487		$	215,905
Earnings per share	$	4.46		$	5.04		$	12.97		$	14.32
Diluted earnings per share	$	4.46		$	5.00		$	12.89		$	14.15

Financial Condition

Liquidity and Capital Resources

Material changes in the balance sheet accounts from December 31, 2024 to September 30, 2025 include the following:

A $44.4 million increase in accounts receivable due to the timing of payments. Other significant changes in our accounts receivable balances are typically driven by the timing of payments received from the Federal government at our VITAS subsidiary. We typically receive a payment in excess of $60.0 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.

A $47.6 million decrease in other assets primarily related to the refund of the OAS deposit.

A $12.4 million decline in accrued compensation due primarily to the payment of 2024 bonuses in the first quarter of 2025, as well as lower bonus expense in 2025.

A $12.2 million increase in other current liabilities due primarily to the increase in Medicare Cap liability.

A $16.3 million decrease in deferred income taxes due primarily to the refund of the OAS deposit.

Net cash provided by operating activities increased $2.2 million from September 30, 2024 to September 30, 2025. See the Unaudited Consolidated Statements of Cash Flow 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 June 28, 2022, we replaced our existing credit facility with a fifth amended and restated Credit Agreement (“2022 Credit Facilities”). Terms of the 2022 Credit Facilities consist of a five-year $450.0 million revolver as well as a five-year $100.0 million term loan. The 2022 Credit Facilities have a floating interest rate that is generally SOFR plus an additional tiered rate which varies based on our current leverage ratio. As of September 30, 2025, the interest rate is SOFR plus 100 basis points. The 2022 Credit Facilities include an expansion feature that provides the Company the opportunity to increase its revolver and/or term loan by an additional $250.0 million.

We have issued $45.5 million in standby letters of credit as of September 30, 2025, mainly for insurance purposes. Issued letters of credit reduce our available credit under the 2022 Credit Facilities. As of September 30, 2025, we have approximately $404.5 million of unused lines of credit available and are eligible to be drawn down under our revolving credit facility. Management believes its liquidity and sources of capital are satisfactory for the Company’s needs in the foreseeable future.

Collectively, the terms of the 2022 Credit Facilities 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, 2025 and anticipate remaining in compliance throughout the foreseeable future.

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

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

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Results of Operations

Three months ended September 30, 2025 versus 2024 - Consolidated Results

Our service revenues and sales for the third quarter of 2025 increased 3.1% versus services and sales revenues for the third quarter of 2024. Of this increase, a $16.3 million increase was attributable to VITAS, and a $2.4 million increase at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):

		Three months ended September 30,						Increase/(Decrease)
		2025			2024			Percent
VITAS
Routine homecare		$	362,405		$	338,344		7.1
General inpatient			33,099			29,923		10.6
Continuous care			19,946			25,799		(22.7)
Other			5,807			5,082		14.3
Subtotal			421,257			399,148		5.5
Medicare cap adjustment			(6,086)			(2,239)		(171.8)
Room and board - net			(3,859)			(3,336)		(15.7)
Implicit price concessions			(3,571)			(2,167)		(64.8)
Net revenue		$	407,741		$	391,406		4.2
Roto-Rooter
Drain cleaning		$	55,454		$	56,049		(1.1)
Plumbing			45,753			43,471		5.2
Excavation			57,102			53,935		5.9
Other			220			218		0.9
Subtotal - short term core			158,529			153,673		3.2
Water restoration			45,196			42,412		6.6
Independent contractors			16,871			17,698		(4.7)
Outside franchisee fees			1,433			1,454		(1.4)
Other			4,449			5,408		(17.7)
Gross revenue			226,478			220,645		2.6
Implicit price concessions			(9,319)			(5,870)		(58.8)
Net revenue			217,159			214,775		1.1
Total Revenues		$	624,900		$	606,181		3.1

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

	Three months ended September 30,				Increase/(Decrease)
	2025		2024		Percent
Routine homecare	1,685,859		1,622,680		3.9
Nursing home	309,192		320,664		(3.6)
Respite	12,184		9,952		22.4
Subtotal routine homecare and respite	2,007,235		1,953,296		2.8
General inpatient	28,530		26,524		7.6
Continuous care	18,309		24,365		(24.9)
Total days of care	2,054,074		2,004,185		2.5

The increase in service revenues at VITAS is comprised primarily of 2.5% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 4.1%. Acuity mix shift negatively impacted revenue growth by 121-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 decreased revenue growth by 124-basis points.

The increase in plumbing revenues for the third quarter of 2025 versus 2024 is attributable to a 0.2% increase in price and service mix shift and a 5% increase in job count. The decrease in drain cleaning revenues for the third quarter of 2025 versus 2024 is attributable to a 3.5% increase in price and service mix offset by a 4.6% decrease in job count. Excavation and water restoration jobs

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are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, excavation revenues increased 5.9% and water restoration revenues increased 6.6%. Contractors operations decreased 4.7%.

The consolidated gross margin was 31.5% in the third quarter of 2025 as compared with 34.6% in the third quarter of 2024. On a segment basis, VITAS’ gross margin was 21.3% in the third quarter of 2025 as compared with 24.6% in the third quarter of 2024. The decline is related to an increase in Medicare Cap liability of $3.8 million in the third quarter of 2025 compared to the third quarter of 2024 and an increase in variable patient care expenses and wages. The Roto-Rooter segment’s gross margin was 50.7% for the third quarter of 2025 as compared with 52.9% in the third quarter of 2024. The decline is primarily due to an increase in variable expenses.

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

	Three months ended September 30,
	2025			2024
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts	$	99,288		$	93,269
Impact of market value adjustments related to assets held in deferred compensation trusts		6,703			5,629
Long-term incentive compensation		(216)			3,083
Total SG&A expenses	$	105,775		$	101,981

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 2025 were up 6.5% when compared to the third quarter of 2024. $2.7 million of this increase was the result of a severance accrual related to one VITAS executive as well as a $2.3 million increase in legal expense mainly at VITAS in the third quarter of 2025 compared to the third quarter of 2024. The remaining increase is primarily related to variable selling expenses, mainly internet marketing costs at Roto-Rooter.

Other income – net comprise (in thousands):

	Three months ended September 30,
	2025			2024
Market value adjustment on assets held in deferred compensation trusts	$	6,703		$	5,629
Interest income		2,555			3,668
Other		(7)			2
Total other income - net	$	9,251		$	9,299

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,
		2025				2024
Income tax provision calculated at the statutory federal rate		$	17,544			$	21,216
State and local income taxes			3,120				2,857
Stock compensation tax benefits			-				(389)
Other--net			(1,357)				1,569
Income tax provision		$	19,307			$	25,253
Effective tax rate			23.1	%			25.0	%

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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,
	2025			2024
VITAS
Legal settlements	$	(2,152)		$	-
Acquisition expense		-			(298)
Roto-Rooter
Amortization of reacquired franchise agreements		(1,806)			(1,804)
Acquisition expense		-			6
Corporate
Stock option expense		(5,259)			(5,240)
Long-term incentive compensation		213			(2,762)
Excess tax benefits on stock compensation		-			389
Other		(2,665)			-
Total	$	(11,669)		$	(9,709)

Three months ended September 30, 2025 versus 2024 - Segment Results

Net income/(loss) for the third quarter of 2025 versus the third quarter of 2024 by segment (in thousands):

	Three months ended September 30,
	2025			2024
VITAS	$	46,771		$	53,486
Roto-Rooter		32,071			37,955
Corporate		(14,605)			(15,665)
	$	64,237		$	75,776

After-tax earnings as a percent of revenue at VITAS in the third quarter of 2025 was 11.5% as compared to 13.7% in the third quarter of 2024. VITAS’ after-tax earnings decreased due to an increase in Medicare Cap liability of $3.8 million in the third quarter of 2025 compared to the third quarter of 2024, as well as an increase of $2.1 million related to legal expense recorded in the third quarter of 2025 compared to the third quarter of 2024.

Roto-Rooter’s net income was negatively impacted in the third quarter of 2025 compared to the third quarter of 2024 due to an increase in variable expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the third quarter of 2025 was 14.8%, as compared to 17.7% in the third quarter of 2024.

After-tax Corporate expenses for the third quarter of 2025 decreased 6.8% when compared to the third quarter in 2024 due primarily to a $2.5 million decrease in stock-based compensation offset by $2.7 million in severance expense recorded for one VITAS executive and approximately $1.3 million decrease in other expenses.

‎

-31-

Results of Operations

Nine months ended September 30, 2025 versus 2024 - Consolidated Results

Our service revenues and sales for the first nine months of 2025 increased 5.5% versus services and sales revenues for the first nine months of 2024. Of this increase, a $91.4 million increase was attributable to VITAS, and a $8.0 million increase at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):

		Nine months ended September 30,						Increase/(Decrease)
		2025			2024			Percent
VITAS
Routine homecare		$	1,072,014		$	967,981		10.7
General inpatient			100,145			89,297		12.1
Continuous care			68,222			74,295		(8.2)
Other			16,898			13,900		21.6
Subtotal			1,257,279			1,145,473		9.8
Medicare cap adjustment			(24,786)			(5,989)		(313.9)
Room and board - net			(11,277)			(9,437)		(19.5)
Implicit price concessions			(9,875)			(10,077)		2.0
Net revenue		$	1,211,341		$	1,119,970		8.2
Roto-Rooter
Drain cleaning		$	170,553		$	175,535		(2.8)
Plumbing			137,097			137,614		(0.4)
Excavation			177,833			168,266		5.7
Other			595			665		(10.5)
Subtotal - short term core			486,078			482,080		0.8
Water restoration			149,183			131,867		13.1
Independent contractors			52,682			55,569		(5.2)
Outside franchisee fees			4,262			4,344		(1.9)
Other			14,127			17,287		(18.3)
Gross revenue			706,332			691,147		2.2
Implicit price concessions			(27,032)			(19,823)		(36.4)
Net revenue			679,300			671,324		1.2
Total Revenues		$	1,890,641		$	1,791,294		5.5

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

	Nine months ended September 30,				Increase/(Decrease)
	2025		2024		Percent
Routine homecare	4,980,883		4,621,755		7.8
Nursing home	923,458		908,013		1.7
Respite	33,619		26,806		25.4
Subtotal routine homecare and respite	5,937,960		5,556,574		6.9
General inpatient	86,447		79,064		9.3
Continuous care	62,576		72,335		(13.5)
Total days of care	6,086,983		5,707,973		6.6

The increase in service revenues at VITAS is comprised primarily of 6.6% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.8%. Acuity mix shift negatively impacted revenue growth by 100-basis points for the year when compared to the prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes decreased revenue growth by 120-basis points.

The decrease in drain cleaning revenues for the first nine months of 2025 versus 2024 is attributable to a 3.4% increase in price and service mix offset by a 6.2% decrease in job count. The decrease in plumbing revenues for the first nine months of 2025 versus 2024 is attributable to a 1.6% increase in job count and a 2.0% decrease in price and service mix shift. Excavation and water restoration

-32-

jobs are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, excavation revenues increased 5.7% and water restoration revenues increased 13.1%. Contractors operations decreased 5.2%.

The consolidated gross margin was 31.6% in the first nine months of 2025 as compared with 34.6% in the first nine months of 2024. On a segment basis, VITAS’ gross margin was 21.2% in the first nine months of 2025 as compared with 23.9% in the first nine months of 2024. The decline was primarily due to an increase in Medicare Cap liability of $18.8 million and an increase in variable patient care expenses and wages. The Roto-Rooter segment’s gross margin was 50.2% for the first nine months of 2025 as compared with 52.5% in the first nine months of 2024. The decline was primarily due to an increase in variable expenses.

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

	Nine months ended September 30,
	2025			2024
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts	$	301,600		$	287,712
Impact of market value adjustments related to assets held in deferred compensation trusts		6,791			16,600
Long-term incentive compensation		3,294			15,797
Total SG&A expenses	$	311,685		$	320,109

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 2025 were up 4.8% when compared to the first nine months of 2024. $2.7 million of this increase was the result of a severance accrual related to one VITAS executive as well as a $3.6 million increase in legal expense mainly at VITAS in the first nine months of 2025 compared to the first nine months of 2024. The remaining increase is related to normal salary increases and an increase in variable selling expenses, mainly internet marketing costs at Roto-Rooter.

Other income – net comprise (in thousands):

	Nine months ended September 30,
	2025			2024
Interest income	$	7,186		$	11,405
Market value adjustment on assets held in deferred compensation trusts		6,791			16,600
Other		(7)			3
Total other income - net	$	13,970		$	28,008

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

		Nine months ended September 30,
		2025				2024
Income tax provision calculated at the statutory federal rate		$	52,570			$	58,662
State and local income taxes			9,568				8,279
Stock compensation tax benefits			(513)				(4,308)
Other--net			221				5,029
Income tax provision		$	61,846			$	67,662
Effective tax rate			24.7	%			24.2	%

‎

-33-

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

	Nine months ended September 30,
	2025			2024
VITAS
Legal settlements	$	(2,152)		$	-
Acquisition expense		-			(985)
Roto-Rooter
Amortization of reacquired franchise agreements		(5,419)			(5,412)
Acquisition expense		-			(29)
Corporate
Stock option expense		(20,576)			(20,203)
Long-term incentive compensation		(2,915)			(14,734)
Excess tax benefits on stock compensation		513			4,308
Other		(2,665)			-
Total	$	(33,214)		$	(37,055)

Nine months ended September 30, 2025 versus 2024 - Segment Results

Net income/(loss) for the first nine months of 2025 versus the first nine months of 2024 by segment (in thousands):

	Nine months ended September 30,
	2025			2024
VITAS	$	135,021		$	146,707
Roto-Rooter		103,928			119,326
Corporate		(50,462)			(54,353)
	$	188,487		$	211,680

After-tax earnings as a percent of revenue at VITAS in the first nine months of 2025 was 11.1% as compared to 13.1% in the first nine months of 2024. VITAS’ after-tax earnings decreased primarily due to an increase in Medicare Cap liability of $18.8 million and an increase in legal expense of $3.4 million.

Roto-Rooter’s net income was negatively impacted in the first nine months of 2025 compared to the first nine months of 2024 due primarily to an increase in casualty insurance expense of $5.8 million and an increase in variable expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the first nine months of 2025 was 15.3%, as compared to 17.8% in the first nine months of 2024.

After-tax Corporate expenses for the first nine months of 2025 decreased 7.2% when compared to the first nine months in 2024 due primarily to an $11.4 million decrease in stock-based compensation offset by $2.7 million in severance expense recorded for one VITAS executive and a $4.2 million decrease in interest income.

‎

-34-

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		320,865			107,128			-			427,993
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)		186			(38)			-			148
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)

‎

-35-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2024 (a)
Service revenues and sales	$	391,406		$	214,775		$	-		$	606,181
Cost of services provided and goods sold		294,936			101,251			-			396,187
Selling, general and administrative expenses		25,883			57,072			19,026			101,981
Depreciation		5,063			8,071			13			13,147
Amortization		26			2,524			-			2,550
Other operating expense		97			62			-			159
Total costs and expenses		326,005			168,980			19,039			514,024
Income/(loss) from operations		65,401			45,795			(19,039)			92,157
Interest expense		(46)			(114)			(267)			(427)
Intercompany interest income/(expense)		4,920			3,656			(8,576)			-
Other income—net		62			18			9,219			9,299
Income/(expense) before income taxes		70,337			49,355			(18,663)			101,029
Income taxes		(16,851)			(11,400)			2,998			(25,253)
Net income/(loss)	$	53,486		$	37,955		$	(15,665)		$	75,776
(a) The following amounts are included in net income (in thousands):
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(6,038)		$	(6,038)
Long-term incentive compensation		-			-			(3,083)			(3,083)
Amortization of reacquired franchise agreements		-			(2,352)			-			(2,352)
Acquisition expense		(394)			8			-			(386)
Total	$	(394)		$	(2,344)		$	(9,121)		$	(11,859)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(5,240)		$	(5,240)
Long-term incentive compensation		-			-			(2,762)			(2,762)
Amortization of reacquired franchise agreements		-			(1,804)			-			(1,804)
Acquisition expense		(298)			6			-			(292)
Excess tax benefits on stock compensation		-			-			389			389
Total	$	(298)		$	(1,798)		$	(7,613)		$	(9,709)

‎

-36-

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		954,316			338,312			-			1,292,628
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)		305			(80)			-			225
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)
Long-term incentive compensation		-			-			(2,915)			(2,915)
Amortization of reacquired franchise agreements		-			(5,419)			-			(5,419)
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)

‎

-37-

CONSOLIDATING STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2024 (a)
Service revenues and sales	$	1,119,970		$	671,324		$	-		$	1,791,294
Cost of services provided and goods sold		852,347			318,717			-			1,171,064
Selling, general and administrative expenses		73,968			175,683			70,458			320,109
Depreciation		15,288			24,275			38			39,601
Amortization		79			7,538			-			7,617
Other operating expense		160			128			-			288
Total costs and expenses		941,842			526,341			70,496			1,538,679
Income/(loss) from operations		178,128			144,983			(70,496)			252,615
Interest expense		(138)			(349)			(794)			(1,281)
Intercompany interest income/(expense)		15,096			10,638			(25,734)			-
Other income - net		138			64			27,806			28,008
Income/(expense) before income taxes		193,224			155,336			(69,218)			279,342
Income taxes		(46,517)			(36,010)			14,865			(67,662)
Net income/(loss)	$	146,707		$	119,326		$	(54,353)		$	211,680
(a) The following amounts are included in net income (in thousands):
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(23,933)		$	(23,933)
Long-term incentive compensation		-			-			(15,797)			(15,797)
Amortization of reacquired franchise agreements		-			(7,056)			-			(7,056)
Acquisition expense		(1,302)			(37)			-			(1,339)
Total	$	(1,302)		$	(7,093)		$	(39,730)		$	(48,125)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(20,203)		$	(20,203)
Long-term incentive compensation		-			-			(14,734)			(14,734)
Amortization of reacquired franchise agreements		-			(5,412)			-			(5,412)
Acquisition expense		(985)			(29)			-			(1,014)
Excess tax benefits on stock compensation		-			-			4,308			4,308
Total	$	(985)		$	(5,441)		$	(30,629)		$	(37,055)

‎

-38-

Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA
Chemed Corporation and Subsidiary Companies
(in thousands)											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
											Chemed
For the three months ended September 30, 2024		VITAS			Roto-Rooter			Corporate			Consolidated
	Net income/(loss)	$	53,486		$	37,955		$	(15,665)		$	75,776
	Add/(deduct):
	Interest expense		46			114			267			427
	Income taxes		16,851			11,400			(2,998)			25,253
	Depreciation		5,063			8,071			13			13,147
	Amortization		26			2,524			-			2,550
	EBITDA		75,472			60,064			(18,383)			117,153
	Add/(deduct):
	Intercompany interest expense/(income)		(4,920)			(3,656)			8,576			-
	Interest income		(59)			(18)			(3,589)			(3,666)
	Stock option expense		-			-			6,038			6,038
	Long-term incentive compensation		-			-			3,083			3,083
	Acquisition expense		394			(8)			-			386
	Adjusted EBITDA	$	70,887		$	56,382		$	(4,275)		$	122,994

‎

-39-

Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA
Chemed Corporation and Subsidiary Companies
(in thousands)											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
											Chemed
For the nine months ended September 30, 2024		VITAS			Roto-Rooter			Corporate			Consolidated
	Net income/(loss)	$	146,707		$	119,326		$	(54,353)		$	211,680
	Add/(deduct):
	Interest expense		138			349			794			1,281
	Income taxes		46,517			36,010			(14,865)			67,662
	Depreciation		15,288			24,275			38			39,601
	Amortization		79			7,538			-			7,617
	EBITDA		208,729			187,498			(68,386)			327,841
	Add/(deduct):
	Intercompany interest expense/(income)		(15,096)			(10,638)			25,734			-
	Interest income		(136)			(64)			(11,205)			(11,405)
	Stock option expense		-			-			23,933			23,933
	Long-term incentive compensation		-			-			15,797			15,797
	Acquisition expense		1,302			37			-			1,339
	Adjusted EBITDA	$	194,799		$	176,833		$	(14,127)		$	357,505

‎

-40-

RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Net income as reported	$	64,237		$	75,776		$	188,487		$	211,680
Add/(deduct) pre-tax cost of:
Stock option expense		6,067			6,038			24,374			23,933
Amortization of reacquired franchise agreements		2,352			2,352			7,056			7,056
Long-term incentive compensation		(216)			3,083			3,294			15,797
Legal settlements		2,850			-			2,850			-
Acquisition expense		-			386			-			1,339
Other		2,665			-			2,665			-
Add/(deduct) tax impacts:
Tax impact of the above pre-tax adjustments (1)		(2,049)			(1,761)			(6,512)			(6,762)
Excess tax benefits on stock compensation		-			(389)			(513)			(4,308)
Adjusted net income	$	75,906		$	85,485		$	221,701		$	248,735
Diluted Earnings Per Share As Reported
Net income	$	4.46		$	5.00		$	12.89		$	13.88
Average number of shares outstanding		14,409			15,168			14,620			15,253
Adjusted Diluted Earnings Per Share
Adjusted net income	$	5.27		$	5.64		$	15.16		$	16.31
Adjusted average number of shares outstanding		14,409			15,168			14,620			15,253
(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.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
OPERATING STATISTICS	2025			2024			2025			2024
Net revenue ($000)
Homecare	$	362,405		$	338,344		$	1,072,014		$	967,981
Inpatient		33,099			29,923			100,145			89,297
Continuous care		19,946			25,799			68,222			74,295
Other		5,807			5,082			16,898			13,900
Subtotal	$	421,257		$	399,148		$	1,257,279		$	1,145,473
Room and board, net		(3,859)			(3,336)			(11,277)			(9,437)
Contractual allowances		(3,571)			(2,167)			(9,875)			(10,077)
Medicare cap allowance		(6,086)			(2,239)			(24,786)			(5,989)
Total	$	407,741		$	391,406		$	1,211,341		$	1,119,970
Net revenue as a percent of total before Medicare cap allowances
Homecare		86.0	%		84.8	%		85.3	%		84.5	%
Inpatient		7.9			7.5			8.0			7.8
Continuous care		4.7			6.5			5.4			6.5
Other		1.4			1.2			1.3			1.2
Subtotal		100.0			100.0			100.0			100.0
Room and board, net		(0.8)			(0.8)			(0.9)			(0.8)
Contractual allowances		(0.8)			(0.5)			(0.8)			(0.9)
Medicare cap allowance		(1.4)			(0.6)			(2.0)			(0.5)
Total		97.0	%		98.1	%		96.3	%		97.8	%
Days of care
Homecare		1,685,859			1,622,680			4,980,883			4,621,755
Nursing home		309,192			320,664			923,458			908,013
Respite		12,184			9,952			33,619			26,806
Subtotal routine homecare and respite		2,007,235			1,953,296			5,937,960			5,556,574
Inpatient		28,530			26,524			86,447			79,064
Continuous care		18,309			24,365			62,576			72,335
Total		2,054,074			2,004,185			6,086,983			5,707,973
Number of days in relevant time period		92			92			273			274
Average daily census (days)
Homecare		18,325			17,639			18,245			16,867
Nursing home		3,361			3,485			3,383			3,314
Respite		132			108			123			98
Subtotal routine homecare and respite		21,818			21,232			21,751			20,279
Inpatient		310			288			317			289
Continuous care		199			265			229			264
Total		22,327			21,785			22,297			20,832
Total Admissions		17,714			16,775			53,398			51,020
Total Discharges		17,348			16,217			52,931			48,285
Average length of stay (days)		109.7			102.0			121.9			102.2
Median length of stay (days)		18.0			18.0			18.0			17.0
ADC by major diagnosis
Cerebro		44.1	%		43.6	%		44.6	%		43.7	%
Neurological		11.6			13.3			11.8			13.3
Cancer		10.1			10.0			9.8			10.0
Cardio		15.9			16.3			16.0			16.2
Respiratory		7.7			7.1			7.4			7.2
Other		10.6			9.7			10.4			9.6
Total		100.0	%		100.0	%		100.0	%		100.0	%
Admissions by major diagnosis
Cerebro		27.1	%		28.4	%		27.6	%		27.7	%
Neurological		6.9			7.7			6.8			7.9
Cancer		26.6			25.7			25.9			25.1
Cardio		14.3			15.1			14.7			15.7
Respiratory		10.5			9.5			10.9			9.9
Other		14.6			13.6			14.1			13.7
Total		100.0	%		100.0	%		100.0	%		100.0	%
Estimated uncollectible accounts as a percent of revenues		0.9	%		1.0	%		0.8	%		0.9	%
Accounts receivable --
Days of revenue outstanding- excluding unapplied Medicare payments		37.5			37.5			n.a.			n.a.
Days of revenue outstanding- including unapplied Medicare payments		34.0			35.5			n.a.			n.a.

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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.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

The Company’s primary market risk exposure relates to interest rate risk exposure through its variable interest line of credit. At September 30, 2025, the Company had no variable rate debt outstanding. For each $10 million borrowed under the credit facility, an increase or decrease of 100 basis points (1%), increases or decreases the Company’s annual interest expense by $100,000.

The Company continually evaluates this interest rate exposure and periodically weighs the cost versus the benefit of fixing the variable interest rates through a variety of hedging techniques.

Item 4.    Controls and Procedures

We carried out an evaluation, under the supervision of the Company’s President and Chief Executive Officer and with the participation of the Vice President, Chief Financial Officer and Controller, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the President and Chief Executive Officer and Vice President, Chief Financial Officer and Controller have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. There has been no change in our internal control over financial reporting that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II.    OTHER INFORMATION

Item 1.    Legal Proceedings

For information regarding the Company’s legal proceedings, see Note 10, Legal and Regulatory Matters, under Part I, Item I of this Quarterly Report on Form 10-Q.

Item 1A.    Risk Factors

There have been no other material changes from the risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on form 10-Q.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

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Item 2(c).    Purchases of Equity Securities by Issuer and Affiliated Purchasers

The following table shows the activity related to our share repurchase program for the first nine months of 2025:

	Total Number		Weighted Average			Cumulative Shares		Dollar Amount
	of Shares		Price Paid Per			Repurchased Under		Remaining Under
	Repurchased		Share			the Program		The Program
February 2011 Program
January 1 through January 31, 2025	-		$	-		11,229,358		$	255,317,749
February 1 through February 28, 2025	-			-		11,229,358			255,317,749
March 1 through March 31, 2025	50,000			595.15		11,279,358		$	225,560,486
First Quarter Total	50,000		$	595.15
April 1 through April 30, 2025	17,952		$	568.94		11,297,310		$	215,346,869
May 1 through May 31, 2025	57,048			573.76		11,354,358			182,614,724
June 1 through June 30, 2025	-			-		11,354,358		$	182,614,724
Second Quarter Total	75,000		$	572.61
July 1 through July 31, 2025	-		$	-		11,354,358		$	182,614,724
August 1 through August 31, 2025(1)	278,772			437.67		11,633,130			360,605,245
September 1 through September 30, 2025	128,728			456.52		11,761,858		$	301,838,766
Third Quarter Total	407,500		$	443.62
(1) In August 2025, our Board of Directors authorized an additional $300.0 million under the February 2011 Repurchase Program.

Item 3.    Defaults Upon Senior Securities

None.

Item 4.    Mine Safety Disclosures

None.

Item 5.    Other Information

On October 24, 2025, VITAS Healthcare (“VITAS”), a subsidiary of Chemed Corporation (the “Company”), learned that an account belonging to a third-party vendor attempted to deploy a tool often used by threat actors in VITAS’ information technology environment (the “Environment”). VITAS’ security team took immediate actions to contain and remove the intrusion, implemented remedial measures, and notified the third-party vendor in accordance with its cyber incident response process. VITAS and external cybersecurity experts began an investigation into the incident.

Through continued investigation, VITAS ascertained certain information, including protected health information (“PHI”) of VITAS’ current and former patients, was viewed. Additionally, on October 29, VITAS received a notice from a threat actor claiming to have unlawfully accessed the Environment and taken significant amounts of data, threatening to release the data if VITAS does not provide them with a monetary payment.

VITAS is still investigating the extent of compromise of PHI and other sensitive information and has notified law enforcement of the incident. As the investigation of the incident is ongoing, the full scope, nature and impact of the incident are not yet completely known. VITAS is evaluating what regulatory and legal notifications are required as a result of this incident and will make such notifications as required based on its findings.

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As of the date hereof, the incident has not had a material impact on VITAS or the Company’s operations, financial systems, or its financial condition. VITAS believes it has contained the incident and believes that the intrusion was limited to data theft and did not, and is not expected to, materially affect the operation of the Environment or its financial or operational systems.

While VITAS believes it has contained the incident, VITAS and the Company continue to investigate this matter to determine the full extent of the impact on VITAS and the Company.

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-45-

Item 6.    Exhibits

Exhibit No.		Description
10.1		Nicholas M. Westfall Transition and Separation Agreement, Filed as Exhibit 10.1, attached to the Form 10-Q filed on 7/31/25.
31.1		Certification by Kevin J. McNamara pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
31.2		Certification by Michael D. Witzeman pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
32.1		Certification by Kevin J. McNamara pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification by Michael D. Witzeman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		The following materials from Chemed Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) The Condensed Consolidated Balance Sheet, (ii) The Condensed Consolidated Statement of Income, (iii) The Condensed Consolidated Statement of Cash Flows, (iv) The Condensed Statement of Equity, and (v) Notes to the Condensed Consolidated Financial Statements.
104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in iXBRL and contained in Exhibit 101.

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-46-

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

						Chemed Corporation
						(Registrant)
Dated:		October 31, 2025		By:		/s/ Kevin J. McNamara
						Kevin J. McNamara
						(President and Chief Executive Officer)
Dated:		October 31, 2025		By:		/s/ Michael D. Witzeman
						Michael D. Witzeman
						(Vice President, Chief Financial Officer and Controller)

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FAQ

How did Chemed (CHE) perform in Q3 2025?

Service revenues and sales were $624.9 million, net income was $64.2 million, and diluted EPS was $4.46.

What were VITAS and Roto‑Rooter Q3 2025 revenues for CHE?

VITAS reported $407.7 million and Roto‑Rooter reported $217.2 million in Q3 2025 revenue.

What cash flow did CHE generate year‑to‑date 2025?

Net cash provided by operating activities was $254.7 million for the first nine months of 2025.

How much stock did CHE repurchase in 2025?

Chemed repurchased shares totaling $253.5 million year‑to‑date, including $180.8 million in Q3.

What is CHE’s available liquidity?

Chemed had $129.8 million in cash and about $404.5 million of unused revolver capacity as of September 30, 2025.

What was the outcome of the VITAS audit issue for CHE?

An ALJ largely upheld VITAS’ higher level‑of‑care billings; the MAC refunded the deposit, reducing the overpayment to a de minimis amount.

How many CHE shares were outstanding at quarter‑end?

There were 14,164,195 shares outstanding as of September 30, 2025.