Michael Murray: Okay. That’s really helpful. Just one more on Roto-Rooter multi-part question. So, last quarter you said that commercial customers were coming to you asking for significant price decreases which caused you to walk away from some jobs. Obviously, if those were non-discretionary those were going to someone else. Are you still seeing this? And then just the next part at the same time Roto-Rooter, you guys saw significant margin expansion for the past few years. Do you see do you think the margins need to go back down to where we saw them in pre-pandemic 2019, 2020 levels in order to drive revenue growth? And then how should we think about the balance between revenue growth and margins for Roto-Rooter? Thanks.
Mike Witzeman: Sure. On the retail thing that we mentioned at the in our February call retail is definitely still part of the problem. It’s still down–
Kevin McNamara: Commercial.
Mike Witzeman: Commercial, yes. Commercial retail business is still down. It’s still part of the problem. But as we kept asking questions and delving into it we discovered it’s a little bit of a bigger issue than just the retail sector.
Kevin McNamara: That’s the first part. In other words, that was the first group that was struggling. And I think that one which we it seemed like it’s stuck out like a sore thumb. Is that continuing? Yes. And I think that just to give you an example An element of a big property manager gets struggling sees bills like this and says maybe I’ll try hiring my own plumber or maybe I’ll try a discount plumber. And what we’ve seen with those situations over time is people try those and there’s a lot of reasons why a company like Roto-Rooter is a better option for them. But going through that period where people are trying are continuing to try other things. And we first saw that with a large some of our large commercial customers. But it was more — they were first but it was more pervasive than we saw in the early stages.
But we’re — it’s a battle. We’ve owned Roto-Rooter for 44 years and they’ve always kind of risen to the fight and no reason we wouldn’t have a lot of confidence in that. With regard to margin, first, we have to adjust for the excess marketing costs that we had in the quarter. Again I think that if you ask us we guided to a margin for Roto-Rooter there’s no reason we don’t we think that at this point there’s any reason to change that guidance with regard to that margin.
Mike Witzeman: Right. The first quarter by far the primary issue with the EBITDA margin was certainly the marketing costs as Kevin mentioned. Obviously, with revenue lagging a little bit we might not be quite to the high level of the margin range that we had given, but we’re certainly going to be within the range we believe, particularly, given that as we’ve mentioned many times in the past our most of our technicians are commission based. So, we’re quite variable cost-based company. And so we’re not quite as sensitive on a marginal percentage to decreases in revenue.
Michael Murray: Okay, that’s really helpful. Just shifting to VITAS. So, really strong ADC growth. How did that compare to your internal expectations? Obviously, this is partly a byproduct of last year’s retention program and better referral partnerships. But is there anything else to highlight here? Any changes, in the competitive landscape?
Nick Westfall: Yes, sure. The first quarter slightly outperformed our internal expectations regarding overall census growth. The one thing, I just want to highlight and reinforce, while we referenced the retention program that goes all the way back now, we’re in nine months since the expiration of that. So, while that formed a catalyst associated with it, all the activity that built the cultural enhancements the things we’ve talked about over the last quarter, has what’s allowed it to continue to perform absent that program being in place for what is 10 months right now, with great performance. So from an outlook standpoint, I feel very good about it and feel very good about the census outlook not only with same-store operations, but the successful integration of Covenant that has been occurring over the last week or so.
So, I feel very good about the remaining forecast for 2024 and beyond. Regarding other competitive factors, I don’t think there’s anything necessarily new and unique in the first quarter other than, sometimes success tends to compound upon itself and we’re seeing that and experiencing that. And so, when you start thinking about the ability to continue to very strongly attract new team members to come to the organization, they’re looking at it and really seeing a place in which is hitting on all cylinders, but just as importantly, has a very strong cultural tie that’s led to continued improvement in retention. And so it’s sort of compounding upon itself, which is a great situation and what gives me the confidence I was referencing about before.
Michael Murray: Awesome. Thank you. Just one last one on VITAS. You made your first sizable VITAS acquisition in quite some time. Congratulations. What was the census that you added from the acquisition? I think you mentioned 600, was that the census we should think about adding moving forward?
Nick Westfall: Yes. So what I referenced in the transcript was 680 patients transferred, which is not the exact same thing as census or days of care, translation with it. We’ll provide — we’ll include some of that with an anticipation from an updated guidance at the end of the second quarter. But I wouldn’t just think of it as a onetime step-up that you add into your model, because we have other opportunities as we think about the existing markets, that we overlap with Covenant as well as the new markets for us to deploy our approach, that allows us to not only increase admissions, but also look for opportunities to educate those communities of referring patients earlier in their disease trajectory to us, that would allow for overall days of care expansion as well. So, I feel very encouraged about the outlook for those markets, the outlook of the acquisition it being immediately accretive, and what it will mean for the remainder of 2024 and into 2025 and beyond.
Mike Witzeman: The 680 is basically, the starting point to be able to start calculating live patients.
Michael Murray: Okay. And just a quick follow-up. Could you talk a little bit about, the hospice M&A environment? How are valuations? And are you continuing to look at opportunities?
