Chemed Corp (CHE) 2024 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Chemed Corporation third-quarter 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 Chemed 公司 2024 年第三季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your first speaker today, Holley Schmidt, Chemed, Assistant Controller. Please go ahead.

現在我想將會議交給今天的第一位發言人，化學助理總監霍利·施密特 (Holley Schmidt)。請繼續。

Good morning. Our conference call this morning will review the financial results for the third quarter of 2024 ended September 30, 2024.

早安.我們今天早上的電話會議將審查截至 2024 年 9 月 30 日的 2024 年第三季的財務表現。

Before we begin, let me remind you that the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call. During the course of this call, the company will make various remarks concerning management's expectations, predictions, plans and prospects that constitute forward-looking statements.

在我們開始之前，讓我提醒您，1995 年《私人證券訴訟改革法案》的安全港條款適用於本次電話會議。在本次電話會議期間，本公司將就管理階層的期望、預測、計畫和前景發表各種言論，這些言論構成前瞻性陳述。

Actual results may differ materially from those projected by these forward-looking statements as a result of a variety of factors, including those identified in the company's news release of October 25 and in various other filings with the SEC. You are cautioned that any forward-looking statements reflect management's current view only and that the company undertakes no obligation to revise or update such statements in the future.

由於多種因素，包括該公司 10 月 25 日新聞稿以及向 SEC 提交的各種其他文件中確定的因素，實際結果可能與這些前瞻性聲明中預測的結果有重大差異。請注意，任何前瞻性陳述僅反映管理層目前的觀點，本公司不承擔將來修改或更新此類陳述的義務。

In addition, management may also discuss non-GAAP operating performance results during today's call, including earnings before interest, taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA. A reconciliation of these non-GAAP results is provided in the company's press release dated September 29, which is available on the company's website at chemed.com.

此外，管理層還可能在今天的電話會議上討論非 GAAP 經營業績結果，包括息稅折舊攤提前利潤 (EBITDA) 以及調整後的 EBITDA。該公司 9 月 29 日的新聞稿中提供了這些非 GAAP 業績的調整表，該新聞稿可在該公司網站 chemed.com 上查閱。

I would now like to introduce our speakers for today: Kevin McNamara, President and Chief Executive Officer of Chemed Corporation; Mike Witzeman, Chief Financial Officer of Chemed; and Nick Westfall, Chairman and Chief Executive Officer of Chemed's VITAS Healthcare Corporation subsidiary.

現在我想介紹今天的演講者：凱文·麥克納馬拉 (Kevin McNamara)，凱邁德公司 (Chemed Corporation) 總裁兼執行長；麥克‧維茨曼 (Mike Witzeman)，Chemed 財務長；以及 Chemed 旗下 VITAS Healthcare Corporation 子公司的董事長兼執行長 Nick Westfall。

I will now turn the call over to Kevin McNamara.

我現在將把電話轉給凱文·麥克納馬拉。

Thank you, Holley. Good morning. Welcome to Chemed Corporation's third-quarter 2024 conference call. I will begin with the highlights for the quarter, then Mike and Nick will follow up with additional details. I will then open the call for questions.

謝謝你，霍利。早安.歡迎參加 Chemed 公司 2024 年第三季電話會議。我將從本季度的亮點開始，然後麥克和尼克將跟進更多細節。然後我將開始提問。

We continue to be pleased with the exceptional operating metrics at VITAS. In the third quarter of 2024, admissions totaled 16,775, which equates to a 6.3% improvement from the same period of 2023. Our average daily census, or ADC, expanded 2,926, an increase of 15.5% when compared to the prior year quarter. These historically good metrics were positively impacted by the $85 million acquisition of Covenant Health, which was closed on April 17, 2024. Through the end of the third quarter, Covenant Health acquisition is meeting all of our internal financial projections developed at the time of the acquisition. Nick will provide further commentary on the Covenant integration.

我們仍然對 VITAS 卓越的營運指標感到滿意。2024年第三季度，招生總數為16,775人，較2023年同期成長6.3%。我們的平均每日人口普查 (ADC) 擴大了 2,926 人，與去年同期相比增加了 15.5%。這些歷史上良好的指標受到以 8,500 萬美元收購 Covenant Health 的正面影響，該收購於 2024 年 4 月 17 日完成。截至第三季末，Covenant Health 的收購正在滿足我們在收購時制定的所有內部財務預測。尼克將對聖約整合提供進一步的評論。

Hurricane Helene, which impacted the Panhandle of Florida and other parts of Southeastern United States in late September, did not result in any significant property loss or damage to VITAS. However, as with other similar events, we did experience a slowdown in admission activity while our health care partners prepared for the hurricane and dealt with the aftermath. We estimate that admissions were negatively impacted during the quarter by approximately 60 to 100 patients.

9 月底，颶風海倫襲擊了佛羅裡達州狹長地帶和美國東南部其他地區，但並未對 VITAS 造成任何重大財產損失或損壞。然而，與其他類似事件一樣，在我們的醫療保健合作夥伴為颶風做好準備並處理善後事宜時，我們的入院活動確實有所放緩。我們估計，本季約有 60 至 100 名患者的入院量受到負面影響。

We also believe that the Florida admission impact will be more significant in the fourth quarter with the combination of hurricanes Helene and Milton. Finally, we're excited that early in the fourth quarter of 2024, our new program in Pasco County, Florida accepted its first patient. We believe this program offers an exciting growth path for Florida in 2025 and beyond.

我們也認為，隨著颶風海倫和米爾頓的結合，第四季佛羅裡達州的入學影響將更加顯著。最後，我們很高興在 2024 年第四季初，我們在佛羅裡達州帕斯科縣的新計畫接受了第一位患者。我們相信，該計劃將為佛羅裡達州 2025 年及以後的發展提供一條令人興奮的發展道路。

Now let's turn to Roto-Rooter. We continue to be disappointed in Roto-Rooter's results. Roto-Rooter generated quarterly revenue of $214.8 million in the third quarter of 2024, a decrease of 6.9% when compared to the prior year quarter. Overall, our call volume was down 11.7% when compared to the prior year quarter. Close rates at the call center at the time of dispatch and when our technician reaches the customer location remain consistently strong compared to historical levels.

現在讓我們轉向 Roto-Rooter。我們仍然對 Roto-Rooter 的結果感到失望。Roto-Rooter 2024 年第三季的季度營收為 2.148 億美元，比去年同期下降 6.9%。總體而言，與去年同期相比，我們的通話量下降了 11.7%。與歷史水平相比，呼叫中心在調度時以及我們的技術人員到達客戶所在地時的成交率始終保持強勁。

Residential revenue at Roto-Rooter declined 6.3% and commercial revenue declined 5.9%. Our residential business experienced a very choppy quarter. We continue to believe that there is lower demand across the entire industry, resulting in high levels of competition for both Internet marketing position and related job leads.

Roto-Rooter 的住宅收入下降了 6.3%，商業收入下降了 5.9%。我們的住宅業務經歷了一個非常動蕩的季度。我們仍然認為，整個行業的需求較低，導致網路行銷職位和相關工作機會的競爭加劇。

Residential demand and the resulting revenue varies significantly on a month-to-month basis during the quarter. In early July, we replaced our search engine marketing firm, or SEM, responsible for managing our paid search marketing program. There was both a transition time and ramp-up costs that we believe led to some of the disruption during the quarter.

本季住宅需求和由此產生的收入逐月變化很大。7 月初，我們更換了負責管理付費搜尋行銷計畫的搜尋引擎行銷公司 (SEM)。我們認為，過渡時間和上升成本導致了本季的一些混亂。

Finally, we don't like to talk about weather as a general rule. Weather patterns had to normalize over time and, therefore, did not have a significant impact on the business over an extended period of time. However, in the summer of 2024, there were parts of the Midwest and Northeast regions that were abnormally dry. This includes the location of some of our largest branches. We believe this contributed to an overall residential softness in the quarter.

最後，我們一般不喜歡談天氣。隨著時間的推移，天氣模式必須趨於正常化，因此在很長一段時間內不會對業務產生重大影響。然而2024年夏季，中西部和東北部地區部分地區出現異常乾旱。這包括我們一些最大的分支機構的位置。我們認為這導致了本季住宅整體疲軟。

Turning to the commercial business. We did experience some sequential improvement in our commercial revenue. Our third-quarter 2024 commercial revenue was a 5% improvement over the second quarter of 2024. Historically, there's little to no sequential growth in revenue between the second and third quarters of a given year. This trend gives us some optimism that our action plans implemented earlier in the year are starting to show positive results.

轉向商業業務。我們的商業收入確實經歷了一些連續的改善。我們 2024 年第三季的商業收入比 2024 年第二季成長了 5%。從歷史上看，每年第二季和第三季之間的收入幾乎沒有連續成長。這一趨勢讓我們感到樂觀，我們今年稍早實施的行動計畫已開始取得積極成果。

To summarize, we are excited about the continued strong results of VITAS. VITAS' management has consistently demonstrated the ability to accelerate hiring and retention of licensed health care professionals. This has translated into continued strong admission and census growth. We are very bullish on the prospects for VITAS for the remainder of 2024 and beyond.

總而言之，我們對 VITAS 持續強勁的業績感到興奮。VITAS 的管理階層一貫證明有能力加速僱用和保留有執照的醫療保健專業人員。這轉化為入學人數和人口普查的持續強勁增長。我們非常看好 VITAS 在 2024 年剩餘時間及以後的前景。

We believe Roto-Rooter is still well positioned despite the difficult operating conditions that it faces. Roto-Rooter maintains its core competitive advantages in terms of excellent brand awareness, customer response time, 24/7 call centers and aggressive Internet presence.

我們相信，儘管 Roto-Rooter 面臨艱難的營運條件，但仍處於有利位置。Roto-Rooter 在卓越的品牌知名度、客戶回應時間、24/7 呼叫中心和積極的網路影響力方面保持著其核心競爭優勢。

With that, I would like to turn the conference over to Mike.

說到這裡，我想把會議交給麥克。

Thank you, Kevin. VITAS net revenue was $391.4 million in the third quarter of 2024, which is an increase of 17.3% when compared to the prior year period. This revenue increase is comprised primarily of a 15.5% increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%.

謝謝你，凱文。2024 年第三季度，VITAS 淨收入為 3.914 億美元，較上年同期成長 17.3%。這項收入成長主要包括照護天數增加 15.5%，以及地理加權平均醫療保險報銷率增加約 2.6%。

The acuity mix shift negatively impacted revenue growth, 144 basis points in the quarter, when compared to the prior year revenue and level of care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 64 basis points.

與前一年的收入和護理組合水準相比，敏銳度組合的轉變對本季的收入成長產生了 144 個基點的負面影響。醫療保險上限和其他收入變動的結合使收入成長增加了約 64 個基點。

Average revenue per patient day in the third quarter of 2024 was $199.16, which is 139 basis points above the prior year period. Reimbursement for routine home care and high acuity care averaged $175.82 and $1,094.97, respectively. During the quarter, high acuity days of care were 2.5% of total days of care, a decline of 26 basis points when compared to the prior year quarter.

2024 年第三季每位患者每天的平均收入為 199.16 美元，比去年同期成長 139 個基點。常規家庭護理和高風險護理的報銷平均分別為 175.82 美元和 1,094.97 美元。本季度，高危險照護天數佔總照護天數的 2.5%，與去年同期相比下降 26 個基點。

Adjusted EBITDA, excluding Medicare Cap, totaled $73.1 million in the quarter, an increase of 33.1%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 18.6%, which is 212 basis points above the prior year period. The financial results just discussed include the impact of the Covenant Health acquisition. Covenant Health contributed $10 million to $11 million of revenue in the third quarter of 2024. This revenue translated to net income of approximately $1.8 million to $2 million. Adjusted EBITDA in the quarter attributed to Covenant Health is between $2.4 million and $2.6 million.

本季調整後 EBITDA（不含醫療保險上限）總計 7,310 萬美元，成長 33.1%。本季調整後 EBITDA 利潤率（不包括醫療保險上限）為 18.6%，比去年同期高 212 個基點。剛剛討論的財務表現包括收購 Covenant Health 的影響。Covenant Health 在 2024 年第三季貢獻了 1,000 萬至 1,100 萬美元的收入。該收入轉化為淨利潤約為 180 萬至 200 萬美元。Covenant Health 本季調整後 EBITDA 在 240 萬美元至 260 萬美元之間。

Now let's turn to Roto-Rooter. Roto-Rooter branch residential revenue in the quarter totaled $146 million, a decrease of 6.3% from the prior year period. Based on Roto-Rooter's disappointing revenue results over the past few quarters, a decision was made to look for a new marketing agency to provide a fresh look at how Roto-Rooter's paid search program is operating. That process culminated in Roto-Rooter's transitioning to a new SEM in early July.

現在讓我們轉向 Roto-Rooter。Roto-Rooter 分支住宅本季營收總計 1.46 億美元，較去年同期下降 6.3%。鑑於 Roto-Rooter 在過去幾季令人失望的收入結果，我們決定尋找新的行銷機構，以重新審視 Roto-Rooter 付費搜尋計畫​​的運作方式。這個過程最終導致 Roto-Rooter 在 7 月初過渡到新的 SEM。

The ramp-up time required by the new provider caused some of the softness in demand in residential revenue experienced in the third quarter. Roto-Rooter management believes that the new provider will provide more positive results on a go-forward basis.

新提供者所需的啟動時間導致第三季住宅收入需求疲軟。Roto-Rooter 管理層相信，新的供應商將在未來的基礎上提供更積極的成果。

Roto-Rooter branch commercial revenue in the quarter totaled $53.5 million, a decrease of 5.9% from the prior year. The commercial revenue results in the third quarter were within the range of our expectations as given in our revised 2024 guidance from July. This represents a 5% sequential improvement over the second quarter of 2024. Roto-Rooter management has put a tremendous amount of effort into improving the commercial revenue trends, including hiring more salespeople, contacting new and existing customers through a variety of channels and implementing targeted initiatives specific to struggling branches.

Roto-Rooter分公司本季商業收入總計5,350萬美元，較上年同期下降5.9%。第三季的商業收入結果在我們 7 月修訂的 2024 年指引中給出的預期範圍內。這比 2024 年第二季季增了 5%。Roto-Rooter 管理層投入了大量精力來改善商業收入趨勢，包括僱用更多銷售人員、透過各種管道聯繫新客戶和現有客戶以及針對陷入困境的分行實施有針對性的舉措。

Adjusted EBITDA at Roto-Rooter in the third quarter of 2024 totaled $56.4 million, a decrease of 15.8% compared to the prior year quarter. The adjusted EBITDA margin in the quarter was 26.3%. The third-quarter adjusted EBITDA margin represents a 275 basis point decline from the third quarter of 2023. Of this decline, approximately 95 basis points relates to the ramp-up of the new SEM, as previously discussed. Additionally, Roto-Rooter invested more in different non-Google advertising channels, such as billboards and radio spots. This represents approximately 40 basis points of the margin decline.

Roto-Rooter 2024 年第三季調整後 EBITDA 總計 5,640 萬美元，比去年同期下降 15.8%。本季調整後 EBITDA 利潤率為 26.3%。第三季調整後 EBITDA 利潤率較 2023 年第三季下降 275 個基點。如前所述，在這一下降中，大約 95 個基點與新 SEM 的增長有關。此外，Roto-Rooter 在不同的非 Google 廣告管道（例如廣告看板和廣播廣告）上投入了更多資金。這意味著利潤率下降了大約 40 個基點。

Based solely on Roto-Rooter's continued softness, we have reduced our full-year 2024 earnings per diluted share, excluding noncash expense for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, estimated to be in the range of $23 to $23.15. This range represents a 13.3% to 14% increase from Chemed's 2023 reported adjusted earnings per diluted share of $20.30. This guidance assumes an effective corporate tax rate on adjusted earnings of 24.3%, and a diluted share count of 15.22 million shares. Chemed's previously issued 2024 guidance range was $23.55 to $23.80.

僅基於Roto-Rooter 的持續疲軟，我們就降低了2024 年全年攤薄每股收益，不包括股票期權的非現金費用、股票期權行使的稅收優惠、與訴訟和其他離散項目相關的成本，預計將在範圍為 23 美元至 23.15 美元。這一範圍比 Chemed 2023 年報告的調整後每股攤薄收益 20.30 美元增長了 13.3% 至 14%。該指引假設調整後收益的有效企業稅率為 24.3%，稀釋後股數為 1,522 萬股。Chemed 先前發布的 2024 年指引範圍為 23.55 美元至 23.80 美元。

I will now turn this call over to Nick.

我現在將把這通電話轉給尼克。

Thanks, Mike. I continue to be very pleased with our demonstrated sustainable expansion of our workforce and patient capacity. The third quarter of '24 marked our ninth consecutive quarter of expanding our clinical workforce capacity in disciplines identified as part of the retention program. The expansion of headcount during the quarter was in line with our expectations and similar to the headcount expansion as we've discussed in prior quarters. We believe that this predictable level of headcount expansion is, for the foreseeable future, VITAS' new operating normal to continue to meet elevated demand for our services across the country.

謝謝，麥克。我仍然對我們的勞動力和患者容量的可持續擴張感到非常滿意。2024 年第三季標誌著我們連續第九個季度擴大了作為保留計畫一部分的學科的臨床勞動力能力。本季的員工人數擴張符合我們的預期，與我們在前幾季討論的員工人數擴張類似。我們相信，在可預見的未來，這種可預測的員工擴張水準將成為 VITAS 的新營運常態，以繼續滿足全國各地對我們服務不斷增長的需求。

In the third quarter of 2024, our average daily census was 21,785 patients, an increase of 15.5%. VITAS has generated quarterly sequential ADC growth over the last eight quarters. In the third quarter of '24, total VITAS admissions were 16,775. This is a 6.3% increase when compared to the third quarter of 2023.

2024年第三季度，我們日均普查患者數為21,785例，成長15.5%。VITAS 在過去八個季度中實現了 ADC 季度連續成長。2024 年第三季度，VITAS 錄取總數為 16,775 人。與 2023 年第三季相比，成長了 6.3%。

In the quarter, admissions increased in three of the top four preadmit location types. Our nursing home admissions increased 8.2%, hospital-directed admissions increased 9.4%, and our home-based patient admissions expanded 10.3% when compared to the prior year period. Admissions for assisted living facilities slightly declined by 0.2% Our average length of stay in the quarter was 102 days. This compares to 103.1 days in the third quarter of 2023. Our median length of stay was 18 days in the quarter and compares to 17 days in the third quarter of 2023.

本季度，前四種預先錄取地點類型中的三種的錄取人數有所增加。與去年同期相比，療養院入院人數增加了 8.2%，醫院入院人數增加了 9.4%，家庭病患入院人數增加了 10.3%。輔助生活設施的入院人數略有下降 0.2% 我們本季的平均住院時間為 102 天。相比之下，2023 年第三季為 103.1 天。我們本季的平均停留時間為 18 天，而 2023 年第三季為 17 天。

Our teams have now completed all aspects of integrating the operations of Covenant. The integration went smoothly, both from an operational and cultural perspective. I'd like to thank our collective VITAS team members, including those that transitioned over from Covenant, for this successful integration. It would have not been accomplished without the unwavering commitment, dedication, and focus each team member showed towards fulfilling our mission in every community served across the Florida Panhandle and Alabama.

我們的團隊現已完成 Covenant 營運整合的所有面向。從營運和文化角度來看，整合進展順利。我要感謝我們的 VITAS 團隊成員，包括那些從 Covenant 轉過來的團隊成員，促成了這次成功的整合。如果沒有每個團隊成員為完成我們在佛羅裡達州狹長地帶和阿拉巴馬州所服務的每個社區的使命而表現出的堅定承諾、奉獻精神和專注，這一目標是不可能實現的。

As Kevin mentioned, we are very excited about the opportunity to provide service in Pasco County, Florida. We admitted our first patient in October. We believe our entry into Pasco County is a win-win for both the people we will serve in Pasco and for the future growth potential of VITAS. As Kevin also mentioned previously, Florida and our Southeastern locations experienced two significant hurricanes in late September and early October with Helene and Milton.

正如凱文所提到的，我們對有機會在佛羅裡達州帕斯科縣提供服務感到非常興奮。我們在十月收治了第一位患者。我們相信，進入帕斯科縣對於我們將在帕斯科服務的人們以及 VITAS 未來的成長潛力來說都是雙贏的。正如 Kevin 之前提到的，佛羅裡達州和我們的東南部地區在 9 月底和 10 月初經歷了兩次嚴重的颶風，海倫和米爾頓。

While we did experience a temporary slowdown in referral volume, I'm proud to say our collective team enacted our emergency response protocols and successfully supported one another, while providing exceptional care to our patients and the impacted communities. In certain instances, we assisted in caring for patients who were displaced from evacuation areas from our competitor hospices to ensure these patients and their families receive the care and attention they deserve. Our locations and teams were available throughout the storms and immediately back out in their communities once it became safe to do so.

雖然我們的轉診量確實出現了暫時的放緩，但我很自豪地說，我們的集體團隊制定了應急響應方案並成功地相互支持，同時為我們的患者和受影響的社區提供了特殊的護理。在某些情況下，我們協助照顧從競爭對手臨終關懷機構疏散區流離失所的患者，以確保這些患者及其家人得到應有的照顧和關注。我們的地點和團隊在整個風暴期間都處於可用狀態，並在安全後立即返回社區。

Over my career at VITAS, these natural disasters, while unfortunate, have been unifying events for our team with inspiring stories of heroics, compassion and companionship, which invoke a great degree of pride for what we do each day.

在我在 VITAS 的職業生涯中，這些自然災害雖然不幸，但卻將我們團隊的事件與鼓舞人心的英雄故事、同情心和陪伴聯繫在一起，讓我們對每天所做的事情感到非常自豪。

To quickly recap what our team has accomplished, we've now generated nine quarters of sequential net growth in licensed health care workers and eight quarters of sequential growth in ADC. We have also demonstrated the ability and interest in partnering with other providers through acquisitions to ensure communities continue to receive the best possible patient care. We are extremely optimistic about the ability of VITAS to maintain an above-average historical growth, both organically and through potential acquisitions, over the next few years.

為了快速回顧我們團隊所取得的成就，我們現在已經實現了持證醫療保健工作者連續九個季度的淨增長和 ADC 連續八個季度的增長。我們也展示了透過收購與其他提供者合作的能力和興趣，以確保社區繼續獲得最佳的患者護理。我們對 VITAS 在未來幾年內透過有機成長和潛在收購保持高於平均水平的歷史成長的能力極為樂觀。

With that, I'd like to turn this call back over to Kevin.

有了這個，我想把這個電話轉回給凱文。

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

謝謝你，尼克。我現在將開始本次電話會議，接受提問。

(Operator Instructions) Ben Hendrix, RBC Capital Markets.

（操作員指令）Ben Hendrix，RBC 資本市場。

Maybe a first question here for Nick. Clearly, you guys are seeing really good traction with the community access strategy, with that strong census growth you referenced and the margin contribution from that. Perhaps there could be a little bit of pressing some cap limits in some areas. We're still seeing a lot of good occupancy momentum among referral settings. Could you maybe talk about all that in terms of your long-term growth expectations for census? How do we think about it? And if there's any kind of regional considerations we need to think about going forward?

也許這是尼克的第一個問題。顯然，你們看到了社區訪問策略的巨大吸引力，以及你們提到的強勁的人口普查成長和由此帶來的利潤貢獻。也許在某些領域可能會稍微施加一些上限。我們仍然看到推薦環境中的入住率良好。您能否談談您對人口普查的長期成長預期？我們如何看待這個問題？我們是否需要考慮未來任何區域性的考慮？

Sounds good. So I'll start at the end of the question. In terms of regional considerations, I don't think there necessarily is any that are new. Of course, certain markets, particularly California, have their own expected operating level given the dynamic of how Medicare Cap is calculated out in that market.

聽起來不錯。所以我將從問題的結尾開始。從地域性的角度來看，我認為不一定有什麼新的東西。當然，考慮到醫療保險上限在該市場的計算方式的動態，某些市場（尤其是加州）有自己的預期營運水準。

As it relates to community access, we continue to see strong, as you alluded to, strong occupancy levels and strong demand across every market throughout the country. And while we'll continue to execute on our community access strategy, I just have to reaffirm that throughout that entire time period where we've talked about it, in no way, shape or form have we deemphasized our commitment to our hospital partners and others. And so that continuity, as you can see through the third quarter performance of the hospital segment, admits being up almost 10%, I would continue to expect and anticipate.

由於與社區准入相關，正如您所提到的，我們繼續看到全國每個市場的強勁入住率和強勁需求。雖然我們將繼續執行我們的社區准入策略，但我必須重申，在我們討論這一問題的整個時間段內，我們絕不以任何方式、形式或形式削弱我們對醫院合作夥伴的承諾，其他的。因此，正如您透過醫院部門第三季的業績所看到的那樣，這種連續性增長了近 10%，我將繼續期待和預期。

And that's for two reasons, right? One is that's who we are, that's how we operate, and it's what the community needs. And then secondarily, as you point out, both short, mid and long term, it continues to be part of our effective strategy of operating a hospice company and ensuring we're managing Medicare Cap. Ben, as I know you're aware, we ended the Medicare Cap year, because when this quarter completed and started a new one as we lifted it up -- and as you can see in the results, our Medicare Cap forecast came right in line actually with where the Medicare Cap year ended, and we anticipate that being the same case for 2025 and beyond.

這有兩個原因，對吧？一是我們就是這樣，我們就是這樣運作的，這就是社區所需要的。其次，正如您所指出的，無論是短期、中期還是長期，它仍然是我們經營臨終關懷公司並確保我們管理醫療保險上限的有效策略的一部分。本，據我所知，您知道，我們結束了醫療保險上限年度，因為當本季度結束並開始新的一年時，我們提高了它- 正如您在結果中看到的，我們的醫療保險上限預測正好在實際上與 Medicare Cap 年度結束時的情況一致，我們預計 2025 年及以後的情況也是如此。

So we'll speak about long-term growth trajectories when we come out with '25 guidance, but we feel good that they'll continue to be above pre-pandemic historical growth levels from a volume standpoint. That range was 4% to 6%. It will be above 4% to 6%, but where it exactly lands, we'll fine-tune as we get into our guidance for '25.

因此，當我們發布「25」指引時，我們將討論長期成長軌跡，但從數量的角度來看，它們將繼續高於疫情前的歷史成長水平，對此我們感到很高興。該範圍為 4% 至 6%。它將高於 4% 到 6%，但具體會達到什麼程度，我們將在進入 25 年指導時進行微調。

Really appreciate that. Thank you, Nick. And then just maybe switch over to Roto-Rooter real quick. With this new marketing initiative and the marketing investments you have kind of on the residential side, can you talk about -- and also commercial, too, I guess, can you talk about just any kind of hurdle rates or benchmarks or any kind of milestones that are set to achieve in the near term underneath this new marketing strategy? Or are there any kind of any measures of improvement you're looking for kind of in the near term from that marketing?

真的很感激。謝謝你，尼克。然後也許很快就會切換到 Roto-Rooter。透過這項新的行銷計劃和您在住宅方面的行銷投資，您能談談嗎？一新的行銷策略下，短期內將實現哪些目標？或者您正在尋找短期內從行銷中採取的任何改進措施？

Well, Ben, let me start before I turn it over to Mike. But just to say it's a tough one. We don't expect any big breakthroughs. I'll tell you that the shortfall in Roto-Rooter this quarter, if you ask me from my perspective, big picture, it was two things. It was kind of the ramp-up costs and marketing expenditures in July, the first month of the quarter.

好吧，本，讓我先開始吧，然後再把它交給麥克。但只能說這是一件艱難的事。我們預計不會有任何重大突破。我會告訴你，如果你從我的角度來問我，本季 Roto-Rooter 的短缺，有兩件事。這是本季第一個月 7 月的成本和行銷支出增加。

And it was the kind of the poor performance of the residential market, just about -- it was 4% worse than we thought just in one quarter. Not tied to anything, it's just in demand. If just to just say the number of telephone calls we're getting were fewer than expected. And we're just blocking and tackling on a market-by-market basis approaching that. I think that in the short term, the improvement that we're going to see, to the extent we see it, is going to be on the commercial side because that's an area that we're putting a lot of effort in.

這就是住宅市場的糟糕表現，光是一個季度就比我們想像的差了 4%。不依賴任何東西，只是有需求。如果只是說我們接到的電話數量比預期少。我們只是在逐個市場的基礎上阻止和解決這個問題。我認為，在短期內，我們將看到的改進，就我們所看到的程度而言，將是在商業方面，因為這是我們正在投入大量努力的領域。

And two things. It can have some short-term positive impact because you tend to get -- let's say, it's a big apartment complex, you might get 25 jobs over the course of 1.5 months as opposed to one every 14 months on the residential side. So it's a tough one.

還有兩件事。它可以產生一些短期的正面影響，因為你往往會——比方說，這是一個大型公寓大樓，你可能會在 1.5 個月內獲得 25 份工作，而不是住宅方面每 14 個月一份。所以這是一項艱難的任務。

But really to answer your question, that's a shrink from it, is that we don't expect any big breakthrough. We just think that -- in our mind, it's this. This is the process we're going through. When Roto-Rooter was -- when all the jobs came from the Yellow Pages, Roto-Rooter had ideal position. And it was listed in the first two pages in every plumbing section of every Yellow Page book. Well, as the Internet became the preeminent source for job leads, we went back to square one. We were just fighting on a daily basis on the Internet for placement.

但真正回答你的問題是，我們不期望有任何重大突破。我們只是認為──在我們看來，就是這樣。這就是我們正在經歷的過程。當 Roto-Rooter 的時候——當所有的工作都來自黃頁時，Roto-Rooter 擁有理想的職位。每本黃頁書的每個管道部分的前兩頁都列出了它。好吧，隨著網路成為尋找工作機會的重要來源，我們又回到了最初的問題。我們只是每天在互聯網上爭奪位置。

And given our size and our structure, it wasn't long before we became very dominant on that spectrum. And to the extent that we'll bore you with this call, the changes made on the marketing side, the nature of paid search, well, it's just a normal or some of the other facets that Google has added, it's a process we're going through. But I have no doubt that we're positioned to be dominant, more dominant. We're still dominant, but we're more dominant in the near future. But I guess what I'm really saying, it's a process. It's not a blip. When something has happened for 3.5, 4 quarters in a row, we can't describe it as a blip. And it's got our full attention, to say the very least.

考慮到我們的規模和結構，不久之後我們就在這個領域佔據了主導地位。在某種程度上，我們會讓你對這個電話感到厭煩，營銷方面所做的改變，付費搜索的性質，嗯，這只是谷歌添加的正常或其他一些方面，這是我們的一個過程。 。但我毫不懷疑我們的定位是佔據主導地位，甚至更具主導地位。我們仍然佔據主導地位，但在不久的將來我們會更具主導地位。但我想我真正想說的是，這是一個過程。這不是曇花一現。當某件事連續 3.5、4 個季度發生時，我們不能將其描述為曇花一現。至少可以說，它得到了我們的充分關注。

Mike, anything else to add there?

麥克，還有什麼要補充的嗎？

Yes, Ben, I think, I mean, to be direct, I think we will believe -- and it doesn't boil down, as Kevin is saying, it doesn't boil down to one specific metric or or one specific thing. But if there was one thing that we will judge the marketing program successful by, it's call count. As we talked about, it was down 11.7% year over year, and that's a tough metric to overcome for a revenue perspective. As Kevin also said, we're doing a lot of other things, and I think we're doing them well at Roto-Rooter. Our conversion rates are good. In fact, historically good. So we're doing a lot with what we get. But until that call count number starts to grow or at least not decline significantly, the residential business is going to struggle.

是的，本，我想，我的意思是，說實話，我想我們會相信——而且它不會歸結為，正如凱文所說，它不會歸結為一項特定的指標或一項特定的事情。但如果我們要透過一件事來判斷行銷計畫是否成功，那就是來電次數。正如我們所討論的，它比去年同期下降了 11.7%，從收入角度來看，這是一個很難克服的指標。正如 Kevin 也所說，我們正在做很多其他事情，我認為我們在 Roto-Rooter 做得很好。我們的轉換率很好。其實歷史上也不錯。因此，我們正在利用我們所獲得的資源做很多事情。但在呼叫數量開始成長或至少不會大幅下降之前，住宅業務將陷入困境。

Next question?

下一個問題？

Joanna Gajuk, Bank of America.

喬安娜·加尤克，美國銀行。

So I guess maybe first on Roto-Rooter. In terms of that last comment around the change in your vendor to manage the online searches. What exactly can they do differently versus the prior vendor? So understanding the goal is to, obviously, increase the call volume coming through and then convert those. But I think the problem was really the Google algorithms were preferring the local providers? Like what does, I guess, this new vendor can do differently?

所以我想也許首先是 Roto-Rooter。關於供應商管理線上搜尋的變更的最後評論。與之前的供應商相比，他們到底能做些什麼不同的事？因此，顯然，我們的目標是增加通話量，然後轉換。但我認為問題真的是谷歌演算法更喜歡本地提供者嗎？我想，這個新供應商可以做些什麼不同的事？

Joanna, I'll be the first to say that no one in this room is an Internet marketing expert. So we'll start there. But when we talk to Roto-Rooter management, they talked -- there's more dependence, for instance, between paid and nonpaid and how Google algorithm puts that all into one bucket. And I think the new marketing agency is going to be experimenting on how that interdependency works. And is there a way, for instance, if we increase our paid advertising, does that also move us up or down on the nonpaid?

喬安娜，我將第一個說這個房間裡沒有人是網路行銷專家。所以我們將從這裡開始。但當我們與 Roto-Rooter 管理層交談時，他們談到了——例如，付費和非付費之間存在更多依賴性，以及 Google 演算法如何將所有這些都歸為一類。我認為新的行銷機構將嘗試這種相互依賴的運作方式。例如，有沒有一種方法，如果我們增加付費廣告，這是否也會使我們在非付費廣告上增加或減少？

And I think it's just they have new ideas that our old agency didn't have. And I think at the end of the day, I think to some degree, we view it as, call it, every three to five years, it's good to go out, get a new agency with new ideas, different strategies and see if they can drive something that maybe the old agency has overlooked.

我認為這只是他們有我們原來的機構沒有的新想法。我認為歸根結底，我認為在某種程度上，我們認為，每三到五年，走出去，找到一個有新想法、不同策略的新機構，看看他們是否能做到這一點是很好的。可以推動一些可能被舊機構忽略的事情。

To put it very simply, the former agency assigned three full-time people to our account. We have seven in the new agency working full time, making sure it is a constantly changing -- I mean, changes every minute or so as far as placement in all the different cities. And you just have to say -- and it's a bidding and you bid for position. And bidding is constantly evolving depending on time of day, day of the week, whether it's raining or not. And I mean, again, the better mousetrap is able to capture prime position at a reasonable cost more often than not. And to the extent that we think that we're doing a better job of that, there's no doubt in our mind that we're doing a better job of that.

簡單來說，前機構給我們分了三個全職人員。我們在新機構中有七名全職工作人員，確保它不斷變化——我的意思是，就所有不同城市的安置而言，每分鐘左右都會發生變化。你只需說——這是一次競標，你競標位置。出價會根據一天中的時間、一週中的哪一天、是否下雨而不斷變化。我的意思是，更好的捕鼠器往往能夠以合理的成本佔據主要位置。如果我們認為我們在這方面做得更好，那麼毫無疑問我們在這方面做得更好。

But as overall conditions are tough, that is the -- you've supplied the information that shows that just total searches on the plumbing side are not up, they're down a little bit. You have Internet being the competition for those number of leads currently, and it's a battle, but you have more people fighting over the few that are there. And again, I think that over time, Roto-Rooter has demonstrated they have the staying power, the commitment to throwing more -- and have the ability to throw more resources at it.

但由於整體條件很困難，您提供的資訊表明，管道方面的總搜尋量並沒有上升，而是略有下降。目前，網路正在爭奪這些數量的潛在客戶，這是一場戰鬥，但有更多的人在爭奪少數的潛在客戶。我認為，隨著時間的推移，Roto-Rooter 再次證明了他們擁有持久力、投入更多資源的承諾，並且有能力投入更多資源。

And ultimately, there's no doubt -- I'll put it this way. I mentioned this, I don't want to -- some information that we've looked in much closer, Roto-Rooter has a dominant position in every market where we have a branch, every one. And it's just a question of returning to a higher level of dominance. And again, when you're talking about whether you have a a 50% advantage over the second best competitors, you got to to return it back to a 60% dominance. I mean, that's the area that we're talking about here. And I have confidence we'll be able to do that.

最終，毫無疑問──我會這樣說。我提到過這一點，我不想 - 我們仔細研究了一些信息，Roto-Rooter 在我們擁有分支機構的每個市場都佔據主導地位。而這只是恢復更高水準統治地位的問題。再說一次，當你談論你是否比第二好的競爭對手有 50% 的優勢時，你必須將其恢復到 60% 的優勢。我的意思是，這就是我們在這裡討論的領域。我有信心我們能夠做到這一點。

Okay. That's helpful. But I guess staying on Roto. So you said you reduced your EPS guidance essentially on the Roto-Rooter, but you did not give us details that you usually do. But is it fair to assume in your guidance, you have some kind of similar revenue decline in Q4, and also margins. I guess, how to think about it?

好的。這很有幫助。但我想還是留在Roto吧。所以你說你基本上減少了 Roto-Rooter 的 EPS 指導，但你沒有向我們提供你通常做的細節。但在您的指導下假設第四季的營收和利潤率出現某種類似的下降是否公平？我想，該如何思考呢？

So you called out those two items. So should we think about those two combined kind of reversing and then Q4 margin, I guess, tends to be better seasonally? So what are you assuming for revenues and margins in Q4 for Roto?

所以你調出了這兩項。那麼我們是否應該考慮這兩種組合的逆轉，然後第四季度的利潤率，我猜，季節性往往會更好？那麼，您對 Roto 第四季的營收和利潤率有何假設？

So Joanna, VITAS' guidance hasn't really changed. There might have been a couple of tweaks, but really hasn't changed for the fourth quarter. So the entire decline in EPS is relating to Roto-Rooter. If you want to call out specifically what we're talking about in the fourth quarter, if you want to put it into your model, I would expect a similar revenue number as the third quarter from a year-over-year comparison. We didn't really project a significant amount of improvement in the fourth quarter for Roto-Rooter compared to its third quarter year-over-year comparison. So that's the revenue side.

所以喬安娜，VITAS 的指導並沒有真正改變。可能有一些調整，但第四季確實沒有改變。因此 EPS 的整個下降都與 Roto-Rooter 有關。如果你想具體指出我們在第四季度討論的內容，如果你想將其放入你的模型中，我預計與去年同期相比，第三季度的收入數字相似。與第三季同比相比，我們並沒有真正預期 Roto-Rooter 第四季會有顯著的改善。這就是收入方面。

From a margin side, I would say we projected not spending 150 basis points on extra marketing. That was mostly the transition to the SEM. So the margins will be back at the levels they were like, call it, second-quarter EBITDA margin level, which was 125 basis points down from 2023. And that's purely a revenue volume covering fixed cost issue.

從利潤來看，我想說我們預計不會在額外行銷上花費 150 個基點。這主要是向 SEM 的過渡。因此，利潤率將恢復到第二季 EBITDA 利潤率水平，該水平比 2023 年下降了 125 個基點。這純粹是涵蓋固定成本問題的收入量。

And Joanna, one other thing I'd like to add. The kind of things that kind of caused mix shifts is when we miss the number on the residential side, that has almost a multiplier effect because we get much more ancillary service, but many more excavation jobs and water restoration jobs on the residential side. So if you miss there, again, it has a multiplier effect.

喬安娜，我想補充另一件事。導致混合轉移的事情是當我們錯過住宅方面的數字時，這幾乎會產生乘數效應，因為我們獲得了更多的輔助服務，但住宅方面有更多的挖掘工作和水修復工作。因此，如果你錯過了那裡，那麼它會產生乘數效應。

Just another factor that we haven't talked about a lot, basically, when we talk about Google's changing strategy, and I saw they just had record results yesterday, I mean, part of the change of strategy is to have fewer people search on a natural basis, that is where there's no fee, and they prefer to drive traffic on the paid side, not surprisingly. And this order of magnitude in the last 12 months, the percentage of our jobs that are free, that came from somebody looking on a natural basis, is down about 5% from its high.

這是我們沒有談論太多的另一個因素，基本上，當我們談論谷歌改變策略時，我看到他們昨天剛剛取得了創紀錄的結果，我的意思是，策略改變的一部分是讓更少的人在某個網站上進行搜尋。在過去 12 個月中，我們的免費工作（來自自然基礎上的人）所佔的比例比最高點下降了約 5%。

Now you can imagine if 5% of your business you're paying a substantial marketing fee, whereas before they were free, that has effect on margin. And their strategy is to deal with that, and we're pushing back at some of Google's efforts in that regard. But that's another thing that has affected margin, again, despite in Roto-Rooter, from their perspective, very good operating metrics.

現在您可以想像一下，如果您的 5% 的業務需要支付大量行銷費用（而之前是免費的），這會對利潤產生影響。他們的策略就是解決這個問題，而我們正在抵制谷歌在這方面的一些努力。但這又是影響利潤率的另一件事，儘管從他們的角度來看，Roto-Rooter 的營運指標非常好。

That is we've been able to retain at very reasonable levels our service force. We've done a much better job of retaining our good branch managers, whereas two years ago we were losing all the PE firms. Our close rates, as Mike has said, have been very strong. I mean, all those aspects are very good. We're just dealing with some overarching issues that are not susceptible to easy fixes. But it's got our full attention. And when I look back at the 44 years that Roto-Rooter and its management has been dealing with problems like this, it's an unbroken, unparalleled story of success. So it gives me a lot of confidence.

也就是說，我們能夠以非常合理的水平保留我們的服務力量。我們在留住優秀的分公司經理方面做得更好，而兩年前我們正在失去所有的私募股權公司。正如麥克所說，我們的成交率非常強勁。我的意思是，所有這些方面都非常好。我們只是在處理一些不容易解決的整體問題。但這引起了我們的充分關注。當我回顧 Roto-Rooter 及其管理層 44 年來一直在處理這類問題時，我發現這是一個不間斷的、無與倫比的成功故事。所以這給了我很大的信心。

Okay. And I guess thinking about next year, I know you don't have guidance yet, but I guess just high-level comments on Roto-Rooter and, I guess, VITAS, too, when it comes to top line and margins. So it sounds like maybe on Roto-Rooter, the margin pressure is going to continue, I guess, when it comes to what you just described around the paid searches and such. But how should we think about both businesses into next year, high level in terms of the growth algo?

好的。我想考慮明年，我知道你們還沒有指導，但我想只是對 Roto-Rooter 和 VITAS 的高層評論，當談到營收和利潤時。因此，聽起來也許在 Roto-Rooter 上，我猜，當涉及到您剛才描述的付費搜尋等方面時，利潤壓力將持續下去。但我們該如何考慮明年這兩項業務的成長演算法的高水準？

I'll start, and then Nick will give probably a little more color on VITAS. But from a Roto-Rooter side, we are cautious about 2025. We see some actual green shoots and some positive things coming from commercial, and we are hopeful that that continues and the momentum actually gains steam in 2025. We think that is well within Roto-Rooter's management to fix a significant portion of that. The residential side is a little more uncertain, and we haven't put pen to paper, so I can't really give you numbers.

我先開始，然後 Nick 可能會給 VITAS 提供更多的資訊。但從 Roto-Rooter 的角度來看，我們對 2025 年持謹慎態度。我們看到了一些實際的萌芽和一些來自商業的積極成果，我們希望這種情況能夠持續下去，並且這種勢頭在 2025 年真正獲得動力。我們認為 Roto-Rooter 的管理層可以很好地解決其中很大一部分的問題。住宅方面的不確定性更大，我們還沒有動筆，所以我不能給你具體的數字。

I would say we've seen some articles that are about industries that are sort of adjacent to our industry that suggest that there's going to be a change or a return to some growth by mid-'25, but those are sort of anecdotes. And so I think our hope is that by mid '25, we start to see some strengthening just in the demand in the overall industry. We would not expect -- again, let's call it, flattish revenue in '25, we would not expect any significant margin expansion at RotoRooter, but not deterioration either.

我想說的是，我們已經看到一些關於與我們行業類似的行業的文章，這些文章表明到 25 年中期將會出現變化或恢復一定程度的增長，但這些都是軼事。因此，我認為我們的希望是，到 25 年中期，我們開始看到整個產業的需求有所增強。我們不會期望 - 再說一次，讓我們稱之為 25 年收入持平，我們不會期望 RotoRooter 的利潤率出現任何顯著擴張，但也不會惡化。

On the VITAS side, I think Nick mentioned it before, but we expect above historical averages growth. I don't know that we expect 15% to 16% days of care growth like we're seeing at the moment. But certainly, high single, low double-digit day of care growth and then a little bit of margin expansion potential from there. We haven't put pen to paper to anything, and you'll get more details when we give guidance in February.

在 VITAS 方面，我認為尼克之前提到過，但我們預計成長將高於歷史平均。我不知道我們預計護理天數是否會像目前看到的那樣增長 15% 至 16%。但可以肯定的是，高個位數、低兩位數的日間護理成長，然後還有一點點利潤擴張潛力。我們還沒有付諸實踐，當我們在二月提供指導時，您會獲得更多詳細資訊。

And I guess with '25, the Medicare rate out there is also maybe a little bit better than historical average. So that helps, too. So combined with the high single to low double-digit census, there's maybe a couple of percent from pricing, so to speak, for rate update, Nick, into next year?

我猜 25 年的醫療保險費率可能也比歷史平均好一些。所以這也有幫助。因此，結合高個位數到低兩位數的人口普查，可以說，明年的利率更新可能會有幾個百分點？

Yes. And since the rate update is now done and finalized, as you're aware, October 1, basically our anticipated -- if we look at our current blend, everything created equal, we would anticipate about 3.9% like we had alluded to, which is about 100 basis points above the national average, just given where we operate today. So yes, that provides a little additional upside that is included in our fourth-quarter guidance this year and will be incorporated in 2025 for the first 9 months, and we'll use all available public data to inform our fourth quarter of 25% as that rate increase matures and gets issued in early fall of next year.

是的。由於利率更新現已完成並最終確定，如您所知，10 月1 日，基本上是我們的預期- 如果我們看看當前的混合，一切都相同，我們預計約為3.9%，就像我們提到的那樣，這僅考慮到我們今天的營運情況，就比全國平均高出約 100 個基點。所以，是的，這提供了一些額外的好處，這些好處已包含在我們今年第四季度的指導中，並將在2025 年前9 個月納入，我們將使用所有可用的公共數據來告知我們第第四季的25%該升息將於明年秋初到期並發布。

I'm showing no further questions at this time. I would now like to turn it back to Kevin McNamara for closing remarks.

我目前沒有提出任何進一步的問題。現在我想請凱文·麥克納馬拉致閉幕詞。

Thank you. I just wanted to obviously restate that it's a little bit tough quarter for Roto-Rooter, a little tougher than we expected. We still have a lot of confidence in VITAS doing great. When you look at our current guidance, we're still expecting our adjusted net income to be up 13% to 14% over last year. Not a bad year as we were expecting it to come in, but tough sledding to get there, no question. But I'd like to thank everyone for their attention. And I guess we'll reconvene after we have the fourth quarter and our guidance for next year. Thank you.

謝謝。我只是想明確重申，對於 Roto-Rooter 來說，這個季度有點艱難，比我們預期的要艱難一些。我們仍然對 VITAS 的出色表現充滿信心。當您查看我們目前的指導時，我們仍然預計調整後的淨利潤將比去年增長 13% 至 14%。正如我們所期望的那樣，今年並不是糟糕的一年，但毫無疑問，要到達那裡卻很困難。但我要感謝大家的關注。我想我們會在第四季和明年的指導之後再次召開會議。謝謝。

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

感謝您參加今天的會議。這確實結束了程序，您現在可以斷開連接。