Chemed Corporation (NYSE:CHE) Q4 2024 Earnings Call Transcript

Chemed Corporation (NYSE:CHE) Q4 2024 Earnings Call Transcript February 27, 2025

Operator: Hello, and welcome to the Chemed Corporation Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you’ll need to press star one one on your telephone. You will then hear an automated message advising that your hand has been raised. To withdraw your question, please press star one one again. Please be advised that today’s conference is being recorded. It is now my pleasure to introduce Assistant Controller, Holley Schmidt.

Holley Schmidt: Good morning. Our conference call this morning will review the financial results for the fourth quarter of 2024 ended December 31st. Before we begin, let me remind you that the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call. During the course of this call, the company will make various remarks concerning management’s expectations, predictions, plans, and prospects that constitute forward-looking statements. Actual results may differ materially from 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 February 26, and in various other filings. 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 addition, management may also discuss non-GAAP operating performance results during today’s call, including earnings before interest, taxes, depreciation, and amortization or EBITDA, adjusted EBITDA. A reconciliation of these non-GAAP results is provided in the company’s press release February 26, which is available on the Chemed website at chemed.com. 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 VITAS Healthcare Corporation’s subsidiary. I will now turn the call over to Kevin McNamara.

Kevin McNamara: Thank you, Holley. Good morning. Welcome to Chemed Corporation’s fourth quarter 2024 conference call. We will begin with highlights for the quarter, then Mike and Nick will follow up with additional details. I will then open the call for questions. VITAS has continued its strong operating performance during the fourth quarter of 2024. Admissions during the quarter totaled 16,427, which equates to a 3.5% improvement for the same period of 2023. Our average daily census or ADC expanded to 2,827, an increase of 14.6% when compared with 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 fourth quarter, the Covenant Health acquisition is meeting all of our internal financial projections.

Kevin McNamara: Early in the fourth quarter of 2024, our new program in Pasco County, Florida, accepted its first patient. During the quarter, VITAS had slightly more than 40 admissions to the Pasco program. We believe this program offers an exciting growth path for VITAS in 2025 and beyond. We are also very pleased that in December, VITAS was awarded a certificate of need in Marion County, Florida. Marion County includes Ocala as well as a significant part of the Villages retirement community. VITAS is currently working on a time frame for opening the new location, but we believe this is another significant opportunity for growth in the coming years. As Mike will discuss in more detail, our 2025 VITAS guidance assumes continued above historical average growth by all measures.

However, that growth will be slightly tempered by headwinds associated with working to mitigate potential Medicare cap limitations in certain of our programs. Now let’s turn to Roto-Rooter. Roto-Rooter generated quarterly revenue of $229 million in the fourth quarter of 2024, a decrease of 2.9% when compared with the prior year quarter. While we are never satisfied with the decline in revenue or adjusted net income, the fourth quarter performance did exceed Roto-Rooter’s internal estimates for both metrics by between 4% and 5%. Residential revenue at Roto-Rooter declined 2%, while commercial revenue increased 0.4%. Overall, our call volume was down 8% when compared to the prior year quarter. Conversion rates from calls to paying jobs continue to be at or near Roto-Rooter’s all-time levels.

For our residential business, conversion rates continue to improve for our add-on services, particularly water restoration. During the fourth quarter, Roto-Rooter management identified eight branches that had lagging conversion rates of residential water restoration. Improvement in conversion rates for those specific branches was a major cause for the 2.8% increase in water restoration revenue in the fourth quarter. The commercial business initiatives we have discussed during the course of 2024 have begun to gain momentum in many of our branches. We are winning business from key accounts based on our renewed focus on the local sales process at each branch. The initiative to review the root cause of sewer drain cleaning issues through the use of cameras has resulted in an increase in excavation work related to commercial customers.

The commercial business ended 2024 with positive momentum. We are optimistic this gives Roto-Rooter business a nice springboard into 2025. Our 2025 guidance assumes that momentum accelerates with Roto-Rooter’s commercial business. It also assumes that the deterioration seen in the 2024 residential business does not continue into 2025. To summarize, the strong results at VITAS are continuing. VITAS management has consistently demonstrated the ability to hire and retain licensed healthcare professionals at an appropriate pace.

Kevin McNamara: This has translated over an extended period of time into strong growth. Two new locations in the state of Florida provide a nice growth opportunity for the next few years. We are cautiously optimistic that Roto-Rooter has turned the corner despite some continued difficult operating conditions. We are confident that Roto-Rooter maintains its core competitive advantages in terms of excellent brand awareness, customer response time, 24/7 call centers, and an aggressive internet presence. With that, I would like to turn this teleconference over to Mike.

Mike Witzeman: Thank you, Kevin. VITAS net revenue was $411 million in the fourth quarter of 2024, which is an increase of 17.4% when compared to the prior year period. This revenue increase is comprised primarily of a 14.6% increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.5%. The acuity mix shift negatively impacted revenue growth by 119 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 44 basis points. Average revenue per patient day in the fourth quarter of 2024 was $206.23, which is 244 basis points above the prior year period.

Reimbursement for routine home care and high acuity care averaged $182.94 and $1,125.61, respectively. During the quarter, high acuity days of care were 2.5% of total days of care, a decline of 22 basis points when compared to the prior year quarter. Adjusted EBITDA excluding Medicare cap totaled $93.2 million in the quarter, an increase of 11.8%. Adjusted EBITDA margin in the quarter excluding Medicare cap was 22.5%, which is 112 basis points below the prior year period. The fourth quarter of 2023 EBITDA margin was positively impacted by a one-time change in VITAS vacation rollover policy. This change positively impacted the 2023 EBITDA margin by 135 basis points and did not recur in 2024. The financial results just discussed include the impact of the Covenant Health acquisition in April.

Covenant Health contributed $11 million to $12 million of revenue in the fourth quarter of 2024. This revenue translated to net income of approximately $2.1 million to $2.3 million. Adjusted EBITDA in the quarter attributed to Covenant Health is between $2.8 million and $3 million.

Mike Witzeman: Turning to Roto-Rooter, Roto-Rooter branch residential revenue in the quarter totaled $160.5 million, a decrease of 2% from the prior year period. Roto-Rooter branch commercial revenue in the quarter totaled $54.3 million, an increase of 0.4% from the prior year. Adjusted EBITDA at Roto-Rooter in the fourth quarter of 2024 totaled $60.3 million, a decrease of 7.2% compared to the prior year quarter. The adjusted EBITDA margin in the quarter was 26.3%. The fourth quarter adjusted EBITDA margin represents a 120 basis point decline from the fourth quarter of 2023. Now let’s discuss the 2025 guidance. VITAS revenue prior to Medicare cap is estimated to increase 10.5% to 11.3% when compared to 2024. ADC is estimated to increase 8.5% to 9%.

Full year adjusted EBITDA margin prior to Medicare cap is estimated to be 18.4% to 18.9%. This compares to the 2024 adjusted EBITDA margin prior to Medicare cap of 19.1%. We are currently estimating a Medicare cap billing limitation of $9.5 million in 2025. 2024 represented an all-time high watermark for VITAS in terms of ADC growth, revenue growth, EBITDA growth, and EBITDA margin. The 2025 guidance assumes a slight moderation to those levels of growth while still maintaining increases that are significantly above average historical growth. VITAS’ weighted average Medicare reimbursement rate increase received on October 1 was 3.5%. The per admission Medicare cap protect covering the same period increased 2.9%, which is the overall national average reimbursement rate increase.

This 60 basis point average differential between the reimbursement rate increase and the Medicare cap increase has reduced Medicare cap cushion in our programs for both the trailing twelve months and our projected fiscal year 2025. The actual basis point differential in certain of our programs, including the Florida program, exceeds the overall 60 basis point average. VITAS management is taking the necessary steps in 2025 to ensure a significant Medicare cap issue does not arise. These steps are expected to have the effect of slightly moderating the all-time high level of growth seen in 2024. Roto-Rooter is forecasted to achieve revenue growth of 2.4% to 3%. Kevin mentioned, Roto-Rooter management expects to achieve this revenue growth by continuing the momentum in the commercial business sector, while stopping further deterioration in the residential sector.

Roto-Rooter’s EBITDA margin for 2025 is expected to be in the range of 25.7% to 26.3%. This compares to Roto-Rooter’s EBITDA margin in 2024 of 26.3%. Based upon the above, full year 2025 earnings per diluted share excluding non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, are estimated to be in the range of $24.95 to $25.45. This compares to full year 2024 adjusted earnings per diluted share of $23.13. The 2025 earnings trajectory is weighted towards the second half of the year. Roto-Rooter’s revenue and associated income are expected to accelerate during the year as Roto-Rooter management’s business improvement initiatives continue to accelerate. Additionally, the first quarter of 2024 was Roto-Rooter’s strongest quarter, making for difficult comparisons at the beginning of the year.

VITAS’ revenue growth and EBITDA margin prior to Medicare cap in the second and third quarters will be adversely impacted by the initiatives required to moderate the impact of the Medicare cap rate differential previously discussed. The impact on the first quarter for VITAS will be mostly offset by the results of the Covenant acquisition, which occurred in April of 2024. The 2025 guidance assumes an effective corporate tax rate on adjusted earnings of 24% and a diluted share count of 14.8 million shares.

Mike Witzeman: I will now turn this call over to Nick.

Nick Westfall: Thanks, Mike. I continue to be very pleased with our overall operating performance over the past few years. In the fourth quarter of 2024, our average daily census was 22,179 patients, an increase of 14.6% compared to the prior year period. VITAS has generated quarterly sequential ADC growth over the last nine quarters. In the fourth quarter of 2024, total VITAS admissions were 16,427. This is a 3.5% increase when compared to the fourth quarter of 2023. This overall performance was slightly below our internal expectations in the quarter. This was partially due to the disruptions caused by the hurricanes in the early part of the quarter. However, I was very encouraged with the sequential acceleration of admissions within the quarter across all regions.

In the quarter, admissions increased in three of the top four pre-admit location types. Our nursing home admissions increased 7.3%, hospital-directed admissions increased 9.8%, and our home-based patient admissions expanded 3.6%. Admissions for assisted living facilities declined by 5%. Our average length of stay in the quarter was 105.5 days. This compares to 105.9 days in the fourth quarter of 2023. Our median length of stay was 18 days in the quarter and compares to 17 days in the fourth quarter of 2023. As Kevin mentioned, we are excited today to be providing services in Pasco County and soon in Marion County, Florida. We believe our entry into these two territories is a win for both the people we will serve and for the future growth potential of VITAS.

Florida and our southeastern locations experienced two significant hurricanes in late September and early October with Helene and Milton. While we experienced a temporary slowdown in referral volume, I’m very proud to say our collective team enacted our emergency response protocols and successfully supported one another while providing exceptional care to our patients in the impacted communities. As both Kevin and Mike mentioned, we have implemented strategies that we began preparing in 2024 to successfully manage any additional exposure to Medicare cap in 2025. Knowing the average reimbursement increase for our locations was going to be 60 basis points above the national average only helped to reinforce the proactive approach needed to manage this industry factor.

The primary component of this strategy is to increase our emphasis on hospital-based admissions in select programs. Generally, hospital-based referrals come later in a patient’s disease trajectory and therefore result in shorter lengths of stay. This has the overall effect of moderating both revenue growth and margin growth but also provides additional cap cushion in those key locations. With the current Medicare cap rules, this is the right thing to do for the company to ensure long-term sustainable growth. To quickly recap what our team has accomplished, we’ve now generated ten quarters of sequential net growth in licensed healthcare workers and nine quarters of sequential growth in ADC. In 2024, we also demonstrated the ability to partner with and successfully integrate other providers through acquisitions to ensure communities continue to receive the best possible patient care.

As a result of these efforts, VITAS achieved all-time highs in ADC growth, revenue growth, EBITDA growth, and EBITDA margin. While we briefly celebrated these accomplishments, our team is focused on continuing our 47-plus year commitment to fulfilling our mission of positively impacting patients and families across the country while delivering solid financial performance. As you can see from our 2025 guidance, we are optimistic about the ability of VITAS to maintain above-average historical growth both organically and through accretive acquisitions over the next few years. With that, I’d like to turn this call back over to Kevin.

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

Q&A Session

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. And our first question comes from the line of Ben Hendrix with RBC Capital Markets.

Michael Murray: Hi. This is Michael Murray on for Ben. Thanks for taking my question. While 4Q Roto-Rooter revenue came in better than our expectations, it still declined 2.9% year over year.

Kevin McNamara: You’re guiding the revenue growth of 2.4% to 3%. Just wanted to hear what gives you confidence in the Roto-Rooter turnaround. And how much of this improvement do you attribute to switching to a new marketing agency?

Kevin McNamara: Well, first, let me say that, obviously, when we give guidance, we take a look at how we’re getting started in the year, and that is generally speaking, because obviously, we’re in the midst of it. Very strong support for the growth in Roto-Rooter. December and January are usually the strongest months for Roto-Rooter. That could mask some issues from time to time. But it seems like Roto-Rooter is showing strong growth. That’s just not with sewer and drain cleaning, but with pretty much everything else. So I guess the first answer to your question is no, I don’t think it’s aggressive. I do not think we initially expected to start a little behind the eight ball because the first quarter last year was the strongest.

We thought we’d fall a little behind the eight ball and make it up the rest of the year. Just generally speaking, it doesn’t look like that’s gonna be necessary. Looks like we’re pretty much hitting on most of the cylinders at this point, not all. Now let me go to your second part of your question, which was how much do I attribute to the new marketing firm.

Michael Murray: I’d say, not a lot.

Kevin McNamara: It’s early. I mean, the issues with Google are not going away. I mean, the pandemic period brought a lot of private equity money into the sector. It’s still very competitive with Google. I don’t want to talk for an hour on this call about the issues and initiatives with Google, and we’re a very good partner of Google. But it’s still tough. I can’t say we’re maybe a little smarter in that regard, and I attribute that largely to the new firm. But a long way to go. Mike, anything else on that?

Mike Witzeman: I think you covered it. The only thing maybe I would add is even during the fourth quarter, we saw some accelerating metrics, some improvements, even intra-quarter as the quarter went along. So say, December was better than November, and November was better than October. So as Kevin mentioned, 2025 has got off to a good start. We also saw improvement sequentially intra-quarter. And so I think we feel pretty comfortable that the commercial business, which is a little more repeatable on a year-to-year basis than maybe the residential business, is really creating a strong foundation for 2025, and I think we feel very comfortable with this guidance.

Michael Murray: Thank you. Just switching to VITAS, you expect another strong year of census growth even accounting for the Covenant acquisition year-over-year comps there. I wanted to hear your thoughts on the competitive environment. Do you believe you’re capturing share? Does your guidance contemplate any census in Marion County?

Nick Westfall: I’ll let me answer the last part of the question first. The guidance does not incorporate any census in Marion County for 2025. It’s still being worked through in terms of the exact time in which we’re gonna be able to enter that market. As it relates to stealing share and how much of that is driving overall growth, I think it definitely is contributing to it. But at the end of the day, it’s stealing share through two facets of continuing to have a differentiated offering in the marketplace, not only for patients and families but for all of our healthcare partners out there. And part of that differentiated offering is the ability to continue to attract and retain high-quality clinicians. So that game plan that we’ve been executing on for a while, well north of two years now, continues to offer great opportunity for us in each of the markets in which we operate, and we’re able to identify new opportunities where other providers maybe haven’t met expectations of longstanding partners in the community, and our team’s off trying to capitalize and execute on each of those, but it’s very much a market-by-market, account-by-account battle, as you might imagine.

Kevin McNamara: The only thing I would add is that to understand at least from my perspective, what’s going on is the state of Florida is very important to VITAS. Obviously, it’s the best hospice state. It’s great demographics. VITAS has always been preeminent in Florida. As you just can pick up over the last couple of years, we continue to get new CONs, we’re growing, we’re adding staff. I mean, it’s a powerhouse in the best state.

Nick Westfall: And the good news to complement Kevin’s comments is everywhere else is as well. So we see good strong growth throughout almost every market in the country. And it’s what gives us the optimism we’ve been discussing and now have formally put into our guidance for 2025 and beyond.

Michael Murray: Okay. That’s helpful. If I could just sneak in one more on just on capital allocation. How are you thinking about share repurchases moving forward? And are any share repurchases built into your guidance? Thanks.

Mike Witzeman: No share repurchases are built into the guidance. We don’t try to forecast that going forward. We don’t build in things like acquisitions either. We’re not sure how 2025 is gonna play out on those fronts, and so we don’t build any of that.

Kevin McNamara: Right. We never have.

Mike Witzeman: The way we think about share purchase in general isn’t gonna change, I don’t believe. We are intending on a quarterly basis to do some level of programmatic share repurchases. We think it’s our free cash flow. I think that and the dividend, we think, is a good opportunity to return cash to shareholders while still maintaining zero leverage. And then as you might have seen with our fourth quarter, when there’s an opportunity with the stock price and maybe with the interest that we get on the cash on the balance sheet, we will take a bigger swing, but the overall philosophy has not changed. And I don’t see it changing anytime in the near term.

Michael Murray: Alright. Thanks so much. Thank you.

Operator: Your next question comes from the line of Joanna Gajuk with Bank of America.

Christian Porter: Hi. This is Christian Porter on for Joanna. Thank you guys for taking our question. My first question was about VITAS margins. So margins were solid, but they were below our model. And the 2025 guidance calls for margins to decline year over year, so I was just wondering what is causing the margin pressure when the top line is growing double digit.

Nick Westfall: Yeah. You know, Christian, just as a reminder, and it’s something we’ve talked about for the last few quarters and included in our prepared remarks, you know, 2024 at 19.1% adjusted EBITDA margin excluding cap was an all-time record high for the history of the company. Our new range of 18.4% to 18.9%, we had been discussing on a preliminary basis. Just as you’re managing all the factors such as Medicare cap management in this year that force us to think about heavier emphasis on hospital-based admissions in select markets that tend to have shorter lengths of stay that provide pressure to both top line growth as well as margin growth, but it doesn’t change the overall effect of outsized performance compared to any historical norm, both from a top line volume growth standpoint, as well as from a predictable marginal range that led to our collective guidance.

So it really is just the moderation as we move into the next Medicare year of looking at on a market-by-market basis and ensuring we have a sustainable business on a go-forward basis.

Kevin McNamara: And let me say this, this is summarizing and reiterating, but to the extent that we got even more of these admits or the Medicare capitalization was changed, VITAS would have stronger growth and higher margin. We’re just threading the needle on that, and doing the best under the existing legal constraints. Our goal is, as Nick says, if we can get enough hospital-based admissions, we won’t make as much money. Our margin will be, in the short term, negatively impacted, but by less of a percentile less of one percent. And from that, that really gives us our growth in Florida. So it’s a threading the needle exercise. Is the best way to do it. But there’s nothing in the business itself, the underlying business itself, that would constrain growth. Would be tough.

Christian Porter: Thank you, guys. I just wanted to follow-up on the Medicare cap. Because it seems like that would be a significant headwind for the year.

Nick Westfall: That will force you guys to change your mix. So I was wondering if we should assume that this headwind would continue beyond 2025.

Nick Westfall: I think it’d be a fair assumption. I don’t know if I’d categorize it as a headwind. As it is just part of normal hospice business operations. So, you know, it’s always on a market-by-market basis. The overall price increase compared to what it correlates on a market-by-market as a year-by-year phenomenon. And just as a reminder, the Medicare cap limitation in which we’re forecasting in our guidance at $9.5 million is effectively the equivalent we came in with last year. So there is no anticipated substantial differential in 2025 as it relates to Medicare cap liability as compared to where 2024 ultimately came in.

Kevin McNamara: And that is retro report was all California. All driven, not by patient mix, but by the very high reimbursement rates.

Nick Westfall: That’s right. I mean, Christian, at an overall level, and it is a philosophical level that comes along with it. But the Medicare cap formula was put into place in the early eighties as in a way to protect overall growth for what was an experiment at the time for the Medicare trust fund. If you just look at the current Medicare reimbursement rate and divide it by our average revenue per day, that means that you’re able to recognize revenue for 167 days of a patient’s stay. When you combine that with something like the NARC study, that illustrates any patient that outlives their original prognosis of greater than six months, irrespective of disease, saves on average 11% or greater total cost of care to the Medicare trust fund, it sort of becomes counterintuitive as to what we’re trying to accomplish across the country, which is more productive in terms of earlier access, early awareness, greater quality for patients and families, and a total cost of care reduction for the Medicare trust fund.

But that’s neither here nor there as are the rules of the road and us and every other hospice provider inside of the country will continue to manage accordingly unless there was an ever a change in the future.

Mike Witzeman: We’ve been managing the Medicare cap since we purchased VITAS in 2004. So this isn’t new. I would tell you that maybe the 2024 growth rate is probably not a long-term sustainable growth rate. What we’re projecting for 2025 is a little more sustainable for the long term. But Nick and his team looked at the Medicare cap cushion that we had two years ago, implemented the community access program to maximize our performance, but we knew that that wasn’t something that could be done forever. So this has been on our radar. It’s just we now need to make sure we moderate 2024 where we took an opportunity to grow probably higher more quickly than and it’s a long-term sustainable path.

Nick Westfall: So we wouldn’t categorize it as a headwind. It’s part of normal business that’s incorporated in 2025.

Christian Porter: Okay. Thank you guys for the call.

Kevin McNamara: So I was just gonna say, it’ll leave you, you know, when you think about long term and you’re looking out beyond the just, like, the next year was what your question. Getting new CONs in populated great demographic areas in Florida is, you know, helpful. It’s wonderful.

Christian Porter: If I could sneak one question about Roto-Rooter in really quickly. Your guidance assumes 2% to 3% revenue growth, which is better than prior comments. So I was just wondering what gives you guys the confidence that revenues are gonna grow to that level and also if you could remind us of the seasonality that you’re assuming in 2025.

Kevin McNamara: Right. I don’t know. Let me just start by saying, what gives us confidence is what we saw in the second part of the fourth quarter. And clearly, you know, as we start the first quarter of 2025, there’s, you know, our guidance, you know, we don’t we’re not willfully blind to what we see going on in the weekly sales numbers. So, you know, very confident of that. With regard to seasonality, what we project is what we see every time. I mean, there are some weather conditions that are better for a company like Roto-Rooter that is cold weather. Hopefully, without so much snow that the whole city’s not shut down. But that tends to lead to frozen pipes and in a lot more emergency work than a normal plumbing issue. And, you know, so what we’re projecting basically is, you know, first quarter will probably be a very strong quarter.

At that point, we’ll start comparing against what was it? 2024, much weaker results. We don’t anticipate in the second quarter being, you know, maybe quite as busy as the first quarter, but, you know, with no reason to think it won’t be a nice improvement over the second quarter of 2024, and they’re on. And then you get to the fourth quarter, and again, you get the return of the colder weather and there’s a seasonality factor also in the fourth quarter. But, you know, and I guess what you’d say is even though with our good start, what we anticipate is still what we said, you know, in our comments. So that is a building positive comparison as we go through the year. So, you know, I guess, one of the things we don’t want our analysts just to take the fourth quarter, multiply the first quarter multiplied by four.

Right. But we too see growing positive comparisons to the second, third, and fourth quarter for Roto-Rooter.

Mike Witzeman: Yeah. Historically, always the second and third quarter revenue, just absolute dollars, are lower than the first and fourth quarter for the reasons Kevin talked about. So there is definite we have some seasonality built in. But we’ve projected is pretty normal seasonality. It’s just the comparatives to 2024.

Kevin McNamara: Easier comparisons, you know, but I’d say even the first quarter based on what we’re seeing is that, you know, again, it’s not a negative comparison really as we’re looking at it. So, you know, we see much easier comparisons as we go through the year.

Christian Porter: Alright. Thank you guys so much.

Operator: Thank you. I’m showing no further questions at this time. So with that, I hand the call back over to CEO, Kevin McNamara, for any closing remarks.

Kevin McNamara: Thank you. I have no substantive closing remarks other than to say we’re pleased with, you know, the results of both companies. I mean, the last couple of years, we’ve gone through the seesaw of whether we’re doing great during the pandemic, and VITAS for good reasons, you know, suffering. And then we saw the switch. And now we’re getting back to what I think is a normalized operating situation for both companies. And I think we’ll go back to our historic growth rates, to be honest with you, which have been very solid. I mean, over a twenty-year period, Chemed’s net income has grown over 20% per annum, you know, on a CAGR basis. So, I mean, though, it’s good to return to a period of normal. But with that, we’ll just say we’ll reconvene in about three months, and thank you for your attention.

Operator: Ladies and gentlemen, thank you for participating. This does conclude today’s program, and you may now disconnect.