Chemed Corporation reported significant financial performance for the third quarter and the first nine months of 2024, driven primarily by its VITAS segment, which provides hospice care. For the quarter ended September 30, 2024, total service revenues and sales reached $606.2 million, a 7.4% increase from $564.5 million in the same period of 2023. VITAS contributed a notable $57.7 million increase in revenue, while Roto-Rooter, the company's plumbing and restoration segment, experienced a $16.0 million decline.
VITAS reported patient care service revenue of $394.1 million for Q3 2024, up from $337.2 million in Q3 2023, reflecting a 17.3% increase. This growth was attributed to a 15.5% rise in days-of-care and a 2.6% increase in Medicare reimbursement rates. In contrast, Roto-Rooter’s net revenue for Q3 2024 was $214.8 million, down from $230.8 million in Q3 2023, primarily due to a decrease in job count despite a slight increase in pricing.
For the nine months ended September 30, 2024, Chemed's total revenues increased by 6.7% to $1.8 billion, with VITAS generating $1.1 billion, a 16.1% increase from the previous year. Roto-Rooter’s revenues, however, decreased by $42.1 million during the same period. The overall net income for the company rose to $211.7 million for the first nine months of 2024, compared to $182.5 million in 2023.
The company’s gross margin for Q3 2024 was 34.6%, slightly down from 35.8% in Q3 2023. VITAS improved its gross margin to 24.6%, up from 24.0%, while Roto-Rooter maintained a gross margin of 52.9%. Selling, general, and administrative (SG&A) expenses increased by 1.6% in Q3 2024, attributed to salary increases and higher marketing costs.
Chemed also engaged in strategic acquisitions, including the purchase of hospice operations and an assisted living facility from Covenant Health for $85 million, which contributed approximately $10 million to $11 million in revenue for Q3 2024. The company’s goodwill increased from $585.0 million at the end of 2023 to $666.9 million by September 30, 2024, reflecting these acquisitions.
The effective income tax rate for Q3 2024 was 25.0%, up from 19.6% in Q3 2023, influenced by excess tax benefits from stock options exercised. Other income for Q3 2024 also increased to $9.3 million, compared to $6.9 million in the prior year, bolstered by interest income and market value adjustments on deferred compensation trusts.
As of September 30, 2024, Chemed maintained compliance with all debt covenants and had significant unused lines of credit available, indicating a strong financial position moving forward.
About CHEMED CORP
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