Chemed Q3 2024 Earnings Call Transcript

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October 30, 2024

There are 7 speakers on the call.

Operator

Good day, and thank you for standing by. Welcome to the Kim Ed Corporation Third Quarter 2024 Earnings Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

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

Speaker 1

Good morning. Our conference call this morning will review the financial results for the Q3 of 2024 ended September 30, 2024. 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 October 25 and in various other filings with the SEC.

Speaker 1

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. 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. I would now like to introduce our speakers for today, Kevin McNamara, President and Chief Executive Officer of Chemed Corporation Mike Witzman, Chief Financial Officer of Chemed and Nick Westfall, Chairman and Chief Executive Officer of Chemed's V Class Healthcare Corporation subsidiary. I will now turn the call over to Kevin McNamara.

Speaker 2

Thank you, Holly. Good morning. Welcome to Chemed Corporation's Q3 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.

Speaker 2

We continue to be pleased with the exceptional operating metrics at VITAS. In the Q3 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 $85,000,000 acquisition of Covenant Health, which was closed on April 17, 2024. Through the end of the Q3, Covenant Health Acquisition is meeting all of our internal financial projections developed at the time of the acquisition.

Speaker 2

Nick will provide further commentary on the Covenant integration. 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 healthcare partners prepared for the hurricane then dealt with the aftermath. We estimate that admissions were negatively impacted during the quarter by approximately 60 to 100 patients. We also believe that the Florida admission impact will be more significant in the Q4 with a combination of hurricanes Helene and Milton.

Speaker 2

Finally, we're excited that early in Q4 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 beyond. Now let's turn to Roto Rooter. We continue to be disappointed in Roto Rooter's results. Roto Rooter generated quarterly revenue of $214,800,000 in the Q3 of 2024, a decrease of 6.9% when compared to the prior year quarter.

Speaker 2

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. Residential revenue at Roto Rooter declined 6.3% and commercial revenue declined 5.9%. Our residential beer 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.

Speaker 2

Residential demand and the resulting revenue varied 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. Finally, we don't like to talk about weather as a general rule. Weather patterns tend to normalize over time and therefore do not have a significant impact on the business over an extended period of time.

Speaker 2

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 of the quarter. Turning to the commercial business. We did experience some sequential improvement in our commercial revenue.

Speaker 2

Our Q3 2024 commercial revenue was a 5% improvement over the Q2 of 2024. Historically, there is little to no sequential growth in revenue between the 2nd 3rd 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. 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.

Speaker 2

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. 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, 20 fourseven call centers and aggressive Internet presence. With that, I would like to turn the conference over to Mike.

Speaker 3

Thank you, Kevin. VITAS net revenue was $391,400,000 in the Q3 of 2024, which is an increase of 17.3 percent 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%. 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.

Speaker 3

Average revenue per patient day in the Q3 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 $1094.97 respectively. During the quarter, high acuity days of care were 2.5 percent of total days of care, a decline of 26 basis points when compared to the prior year quarter. Adjusted EBITDA excluding Medicare cap totaled $73,100,000 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.

Speaker 3

The financial results just discussed include the impact of the Covenant Health acquisition. Covenant Health contributed $10,000,000 to $11,000,000 of revenue in the Q3 of 2024. This revenue translated to net income of approximately $1,800,000 to $2,000,000 Adjusted EBITDA in the quarter attributed to Covenant Health is between $2,400,000 $2,600,000 Now let's turn to Roto Rooter. Roto Rooter branch residential revenue in the quarter totaled $146,000,000 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.

Speaker 3

That process culminated in Roto Rooter's transitioning to a new SEM in early July. The ramp up time required by the new provider caused some of the softness in demand and residential revenue experienced in the 3rd quarter. Roto Rooter management believes that the new provider will provide more positive results on a go forward basis. Roto Rooter branch commercial revenue in the quarter totaled $53,500,000 a decrease of 5.9 percent from the prior year. The commercial revenue results in the 3rd quarter were within the range of our expectations as given in our revised 2024 guidance from July.

Speaker 3

This represents a 5% sequential improvement over the Q2 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. Adjusted EBITDA at Roto Rooter in the Q3 of 2024 totaled $56,400,000 a decrease of 15.8% compared to the prior year quarter. The adjusted EBITDA margin in the quarter was 26.3%. The 3rd quarter adjusted EBITDA margin represents a 2 75 basis point decline from the Q3 of 2023.

Speaker 3

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. Based solely on Roadrunner's continued softness, we have reduced our full year 2024 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 estimate to be in the range of $23 to $23.15 This range represents a 13.3% to 14% increase from KEMET'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 15,200,000 shares. Chemed's previously issued 2024 guidance range was $23.55 to $23.80 I will now turn this call over to Nick.

Speaker 4

Thanks, Mike. I continue to be very pleased with our demonstrated sustainable expansion of our workforce and patient capacity. The Q3 of 2024 marked our 9th 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.

Speaker 4

In the Q3 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 Q3 of 2024, total VITAS admissions were 16,775. This is a 6.3% increase when compared to the Q3 of 2023. In the quarter, admissions increased in 3 of the top 4 pre admit location types.

Speaker 4

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 Q3 of 2023. Our median length of stay was 18 days in the quarter and compares to 17 days in Q3 of 2023.

Speaker 4

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 in Alabama. As Kevin mentioned, we are very excited about the opportunity to provide service in Pasco County, Florida.

Speaker 4

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 2 significant hurricanes in late September early October with Helene and Milton. 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.

Speaker 4

Our locations and teams were available throughout the storms and immediately back out in their communities once it became safe to do so. 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. To quickly recap what our team has accomplished, we've now generated 9 quarters of sequential net growth in licensed healthcare workers and 8 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.

Speaker 4

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

Speaker 2

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

Operator

Thank you. At this time, we will conduct the question and answer session. The first question comes from Ben Hendricks with RBC Capital Markets. Ben, your line is now open.

Speaker 5

Thank you very much. Maybe 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 kind of referral settings.

Speaker 5

Could you maybe talk about all that in terms of your long term growth expectations for Census? How we think about it? And if there's any kind of regional considerations we need to think about going forward? Thanks.

Speaker 6

Yes. Sounds good.

Speaker 4

So let me 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. As it relates to community access, we can 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.

Speaker 4

And so that continuity, as you can see through the Q3 performance of the hospital segment, admits being up almost 10%, I would continue to expect and anticipate. 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. As you're 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.

Speaker 4

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. So we'll speak about long term growth trajectories when we come out with 2025 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%.

Speaker 5

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?

Speaker 5

Thanks.

Speaker 2

Well, Ben, let me start it before I turn it over to Mike, but just 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 2 things. It was kind of the ramp up costs and marketing expenditures in July, the 1st month of the quarter. And it was the kind of the poor performance of the residential market, just about 4% worse than we thought just in 1 quarter, not tied to anything.

Speaker 2

It's just in demand. If you just say the number of telephone calls we're getting were less than fewer than expected. And we're just blocking and tackling on a market by market basis, approaching that. I think that the short 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 is we're putting a lot of effort in and it can have 2 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 and as opposed to 1 every 14 months on the residential side.

Speaker 2

So it's a tough one. But really to answer your question, not to shrink from it, is that we don't expect any big breakthrough. We just think that as I'll put it 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.

Speaker 2

And it was listed 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 1. We were just fighting on a daily basis on the Internet for placement. And given our size and our structure, it was 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 the normal or the some of the other facets that Google has added.

Speaker 2

It's something that 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 like a it's not a blip when something's happened for 3.5, 4 quarters a row, you can't describe it as a blip. And it's got full we're going to fire full attention, to say the very least.

Speaker 2

Mike, anything else to add there?

Speaker 3

Yes, Ben. I think I mean, to be direct, I think, we will believe and it doesn't boil down, as Kevin is saying, doesn't boil it down to one specific metric 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.

Speaker 3

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.

Speaker 5

Thank you.

Speaker 2

I guess next question.

Speaker 6

The

Operator

next question comes from Joanna Gajuk from Bank of America. Your line is now open.

Speaker 6

Hi, thank you. Thanks so much for taking the questions. So I guess maybe first on Vodar, in terms of that last comment around the change in your vendor to manage the online searches. So what exactly can they do differently versus the prior vendor? So I understand you have the goal is to obviously increase the call volume coming through and then convert those products.

Speaker 6

If the problem was really the Google algorithms were preferring the local providers, like what would this I guess this new vendor can do differently?

Speaker 3

Julian, 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 talk 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?

Speaker 3

And I think there's 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 3 to 5 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.

Speaker 2

Let me put it very simply. The a former agency assigned 3 full time people to our account. We now have 7, the new agency working full time. Making sure it is 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 it's bidding is constantly evolving depending on time of day, day of the week, whether it's raining or not.

Speaker 2

And I mean, again, it's 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. But as the 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 internecine competition for those number of leads currently. And it's a battle, but we have more people fighting over the few that are there.

Speaker 2

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. And ultimately, there's no doubt I mean, put it this way, I mentioned this, I don't want to we don't some information that we've looked in much closer. Roto Rooter has a dominant position in every market where we have a branch, everyone. 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 50% advantage over the 2nd best competitor, you got to return it back to a 60% dominance.

Speaker 2

I mean, that's the area that we're talking about here. And I have confidence we'll be able to do that.

Speaker 6

Okay. Thank you. That's helpful. But I guess staying on butter. So you said you've reduced your EPS guidance essentially on the ruble, but you did not give us e dose that you should do.

Speaker 6

But is it fair to assume in your guidance here some kind of similar revenue decline in Q4 and also margins, I guess how to think about it. So you called out those two items. So should we think about those 2 combined kind of reversing and then Q4 margin, I guess, tends to be better seasonally? So kind of what do you assume for revenues and margins in Q4 Roberto?

Speaker 3

So Joanna, VITAS' guidance hasn't really changed. There might have been a couple of tweaks, but really hasn't changed for the Q4. 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 Q4, if you want to put it into your model, I would expect a similar revenue number as the 3rd quarter from a year over year comparison. We didn't really project a significant amount of improvement in the Q4 for Roto Rooter compared to its Q3 year over year comparison.

Speaker 3

So that's the revenue side. From a margin side, I would say we projected not spending 150 basis points on excess extra marketing. That was more mostly the transition to the SEM. So the margins will be back at the levels they were like, call it, 2nd quarter EBITDA margin level, which was 125 basis points down from 2023, and that's purely a volume revenue volume covering fixed costs issue.

Speaker 2

And John, one other thing I'd like to add, the kind of things that are kind of causing 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. 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 their change of strategy is to have fewer people search on the 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 is that came from somebody looking on a natural basis is down about 5% from its high.

Speaker 2

Now you can imagine that 5% of your business you're paying a substantial marketing fee, whereas before they were free, that has an effect on margin. And that's there are strategies to deal with that and we're pushing back on 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. That is we've been able to retain at very reasonable levels our service force.

Speaker 2

We've done a much better job of retaining our branch our good branch managers, whereas 2 years ago, we were losing all the PE firms. Our close rates, as Micah 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.

Speaker 2

And when I look back at the 44 years that Roto Rooter and its management has been dealing with problems like this, it's just an unbroken, unparalleled story of success. So it gives me a lot of confidence.

Speaker 6

Okay. And I guess thinking about next year, I know you don't have a guidance yet, but I guess just high level comments on broader and I guess, DAS too when it comes to top line and margins. It sounds like maybe on the broader the margin pressure could continue, I guess, when it comes to that, what you just described around the paid searches and such. But how should we think about both businesses into next year at high level in terms of the growth outlook? Thank you.

Speaker 3

So from I'll start and then Nick will give a look 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.

Speaker 3

So I can't really give you numbers. I would say we've seen some articles that are about industries that are sort of adjacent to our industry that suggests that there's going to be a change or a return to some growth by mid-twenty 25, but those are sort of anecdotes. And so I think our hope is that by mid-twenty 25, we start to see some strengthening just in the demand in the overall industry. We would not expect again with, let's call it, flattish revenue in 2025, we would not expect any significant margin expansion at Roto Rooter, but not deterioration either. On a VITAS side, I think Nick mentioned it before, but we expect above average above historical averages growth.

Speaker 3

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.

Speaker 6

And I guess with 25%, the Medicare rate update is also maybe a little bit better than your circle average. So that helps to combine with the high single to low double digit census, there's maybe a couple percent from pricing, so to speak, for the rate update, right, into next year? Yes.

Speaker 4

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're looking 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 Q4 guidance this year and will be incorporated in 2025 for the 1st 9 months and we'll use all available public data to inform our Q4 of 2025 as that rate increase matures and gets issued in early fall of next year.

Speaker 6

Great. Thank you so much.

Operator

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

Speaker 2

Thank you. I just wanted to obviously restate that it's a little bit tough quarter for Roto Root, a little tougher than we expected. We still have a lot of confidence. The PTO is doing great. When you look at our current guidance, it's we're still expecting our adjusted net income to be up 13% to 14% over last year.

Speaker 2

Not a bad year as we're 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 in after we have the Q4 and our guidance for next year. Thank you.

Operator

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

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Chemed Q3 2024
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