Good day, and thank you for standing by. Welcome to the Chemed Corporation's Q3 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Holley Schmidt. Please go ahead. Good morning. Our conference call this morning will review the financial results for the Q3 of 2022, ended September 30, 2022. 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 31 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. 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 October 31, 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, Dave Williams, Executive Vice President and Chief Financial Officer of Chemed, and Nick Westfall, President and Chief Executive Officer of Chemed's VITAS Healthcare Corporation subsidiary. I will now turn the call over to Kevin McNamara. Thank you, Holly. Good morning. Welcome to Chemed Corporation's Q3 2022 conference call. I will begin with highlights for the quarter, and Dave and Nick will follow up with additional operating detail. I will then open up the call for questions. Our Q3 2022 operating results released last night reflect good earnings performance for VITAS and Roto-Rooter. Both operating segments' financial results continue to exceed our internal estimates despite continued disruption from the pandemic. For VITAS, this disruption remains concentrated on the hiring and retention of licensed healthcare professionals. I believe this industry-wide shortage of licensed healthcare workers will persist for the foreseeable future. Accordingly, VITAS implemented a targeted hiring and retention bonus program effective July 1, 2022. This program is focused substantially on licensed nurses, nurse managers, home healthcare aides, and social workers. These one-time retention bonuses range from $2,000 to $15,000 per licensed healthcare professional. The total estimated 12-month forward-looking cost of this program, including payroll taxes and government-mandated overtime calculations, will be approximately $38 million. All retention bonus payments are individually cliff-vested after the employee has successfully completed 12 additional months of continuous employment. During the quarter, VITAS expanded our licensed healthcare professional staff by 172 employees, the majority consisting of licensed nurses. This is the first significant expansion of our clinical workforce and related patient capacity since the pandemic began in early 2020. We continue to see disruption to senior housing occupancy and related hospice referrals. Our recent admission data continues to reflect a recovery in senior housing-based patients. Pre-pandemic, nursing home-based patients represented 18% of our total average daily census, or ADC. The nursing home ADC ratio hit a low of 14.3% during the pandemic. By the fourth quarter of 2021, our nursing home-based patients increased to 15.6% of total ADC. This increased an additional 110 basis points to 16.7% in the Q3 of 2022. Our 2022 updated guidance anticipates continued improvement in the senior housing-based census. For Roto-Rooter, our most significant challenge has been to increase manpower. Technician manpower on September 30, 2022 expanded 1.8% when compared to the average Q3 2021 headcount. Roto-Rooter is well-positioned post-pandemic, and we anticipate continued expansion of market share by pressing our core competitive advantages in terms of brand awareness, customer response time, 24/7 call centers, and internet presence. To that, I would like to turn this teleconference over to David. Thanks, Kevin. VITAS's net revenue was $297 million in the Q3 of 2022, which is a decline of 6.6% when compared to the prior year period. This revenue decline is comprised primarily of a 4.4% reduction in days of care and a geographically weighted average Medicare reimbursement rate decrease of approximately 0.2%. Reimbursement rates in the quarter were negatively impacted by 200 basis points as a result of CMS reimplementing the 2% sequestration cut that was suspended at the start of the pandemic. Acuity mix shift had a net impact of reducing revenue approximately $5.3 million or 1.7% 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 negatively impacted revenue growth by 30 basis points. In the Q3 of 2022, VITAS accrued $600,000 in Medicare Cap billing limitations. This compares to $100,000 of Medicare Cap billing limitations in the Q3 of 2021. Of our 30 Medicare provider numbers, 25 of these provider numbers have a Medicare Cap cushion of 10% or greater. Two of our provider numbers have a cushion between 5% and 10%. One provider number has a cushion between 0 and 5%, and two of our provider numbers have an estimated fiscal 2022 Medicare Cap billing limitation liability. The Q3 2022 gross margin for VITAS, excluding Medicare cap and expenses related to VITAS's 12-month hiring and retention program and other increased costs directly related to operating during the pandemic was 22.5%. This is a 323 basis point margin decline when compared to the Q3 of 2021. However, approximately 200 basis points of this decline is from Medicare reimplementing the sequestration effective July 1, 2022. An additional 70 basis points of this margin decline is also attributed to our increased staffing and patient capacity from VITAS's hiring and retention program. Adjusted EBITDA, excluding Medicare cap, totaled $45.4 million in the quarter, which is a decrease of 24.9%. Our adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 15.3%, which is 375 basis points below the prior year period. However, as I mentioned earlier, the adjusted EBITDA margin was also negatively impacted by the 200 basis point cut in reimbursement from sequestration, and approximately 70 basis points of the decline in EBITDA margin is also due to our success in expanding staffing and patient capacity from our retention program. Roto-Rooter generated revenue of $230 million in the Q3 of 2022, which is an increase of 3.9% when compared to the prior year quarter. Roto-Rooter branch commercial revenue in the quarter totaled $55.9 million, which is an increase of 6.9% over the prior year. This aggregate commercial revenue growth consisted of drain cleaning revenue increasing 2.9%, plumbing increasing 11.6%, excavation expanding 9.8%, and water restoration growing 6.7%. Roto-Rooter branch residential revenue in the quarter totaled $155 million, which is an increase of 2.5% over the prior year. This aggregate residential revenue growth consisted of drain cleaning increasing 2.9%, plumbing expanding 5.9%, excavation increasing 0.9%, and our water restoration increasing 7.6%. Roto-Rooter's gross margin in the quarter was 53.4%, a 37 basis point increase when compared to the Q3 of 2021. Adjusted EBITDA in the Q3 totaled $69.5 million, an increase of 5.7%, and the adjusted EBITDA margin in the quarter was 30.2%, which is 50 basis points higher than the prior year period. Now let's talk about Chemed on a consolidated basis. During the quarter, the company purchased 50,000 shares of Chemed stock for $23.9 million, which equates to a cost per share of $477.68. As of September 30, 2022, there was approximately $101 million of remaining share repurchase authorization under its plan. Now let's turn to our guidance. The COVID-19 pandemic, the uncertainty regarding forward-looking inflation, and potential economic recession has made accurate modeling and providing meaningful earnings guidance exceptionally challenging. Since the start of the pandemic, Chemed has been able to successfully navigate within this rapidly changing environment and produce operating results that we believe provide us with the ability to issue earnings guidance for the remainder of 2022 calendar year. However, this guidance should be taken with the recognition the above macro issues could materially impact our ability to achieve this guidance. Based upon the above discussion, VITAS's 2022 revenue prior to Medicare Cap is estimated to decline between 4.5% and 5% compared to the prior year. A portion of the estimated revenue decline, approximately $15 million or 118 basis points, is the result of the phase out of sequestration relief over the first half of 2022 compared to a full year of sequestration in 2021. Our average daily census is estimated to decline 3.4%, but our full year adjusted EBITDA margin prior to Medicare Cap is estimated to be 17.1%-17.2%, and we are currently estimating an $8.1 million Medicare Cap billing limitation liability for calendar year 2022. Roto-Rooter is forecast to achieve full year 2022 revenue growth of between 6.2% and 6.5%. Roto-Rooter's adjusted EBITDA margin for 2022 is expected to be between 29.5% and 29.7%. Based upon the above, full year 2022 earnings per diluted share, excluding non-cash expense for stock options, statutory tax benefits from stock option exercises, costs related to litigation, and the retention program for licensed healthcare employees or other discrete items, is estimated to be in the range of $19.60-$19.70. This compares to our previous 2022 adjusted earnings per share guidance of $19.30-$19.50. Our current 2022 guidance does assume an effective corporate tax rate on adjusted earnings of 25.1% and a diluted share count of 15.1 million shares. Chemed's 2021 reported adjusted earnings per diluted share was $19.33. I'll now turn this call over to Nick Westfall, President and Chief Executive Officer of our VITAS Healthcare subsidiary. Thanks, Dave. In the Q3, our average daily census was 17,242 patients, a decline of 4.4% over the prior years. Our admissions strengthened and outpaced our discharges throughout the second half of the Q3. This inter-quarter admission improvement generated weekly average daily census growth, which we haven't experienced since the start of the pandemic. Directionally, this is encouraging as we proactively expand our clinical staffing and increase our clinical capacity. This is the most encouraging set of emerging green shoot growth metrics we've seen since the start of the pandemic. In the Q3 of 2022, total VITAS admissions were 14,680. This is a 16.6% decline when compared to the Q3 of 2021. Most of this admissions decline is attributed to a reduction in labor-intensive acute hospital admissions. This decline was anticipated due to our ongoing Community Access Initiative. To illustrate, in the Q3, our hospital-directed admissions declined 23.4% when compared to the prior year period. This decline in hospital pre-admit admissions was partially offset by our nursing home admissions, increasing 6.2%. Home-based admissions declined 6.6% in the quarter, and assisted facility-based patients declined 7%. Comparing the Q3 of 2022 to our second quarter is also encouraging. In the Q3, our admissions were essentially equivalent to our admissions in the second quarter. Pre-admit location of our Q3 admissions also compare positively with the second quarter. Non-hospital community-based admissions were flat, and the long-term care segment of community-based admits were up 3% sequentially. Short-stay hospital referred admissions were down 1.5% when compared to the second quarter. This sequential performance illustrates the consistency with which our Community-Based Access Initiative is performing as we continue to be focused on incrementally admitting more appropriate patients each day across all pre-admit settings. Our average length of stay in the quarter was 106.2 days. This compares to 96 days in the Q3 of 2021 and 103.7 days in the second quarter of 2022. Our median length of stay was 17 days in the quarter and compares to 13 days in the Q3 of 2021 and 17 days in the second quarter of 2022. This growth in our median length of stay is attributed to the successful execution of our Community Access Initiative I referenced earlier. Overall, I'm very pleased with the execution of our entire VITAS team regarding how we continue to serve our communities, as well as produce positive results within our renewed focus on recruitment and retention of our workforce. Before I turn the call back over to Kevin, I would like to thank our Florida team members who supported one another, as well as our patients impacted by Hurricane Ian. Your dedication and response was truly inspiring and appreciated within the communities we serve. This is even more impressive when you consider our Florida staff also successfully opened the Fort Myers Hospice program in September as we prepared for the hurricane. With that, I'd like to turn this call back over to Kevin. Thank you, Nick. I will now open this teleconference to questions. As a reminder, to ask a question, you will need to press star one one on your telephone headset. Please stand by while we compile the Q&A roster. Our first question comes from Joanna Gajuk from Bank of America. Your line is now open. Yes. Hi, good morning. Can you hear me? Yes. Yeah. Hey, Joanna. Oh, perfect. Okay. Hi, how are you? Thanks. I guess a couple questions here. Definitely good to see traction on the new hires. This retention program is working, so that's good. But I just wonder, I assume it's probably too early to see increased productivity from these new hires, so when would you expect to see kind of you know some benefits from this activity? Joanna, I just wanna make sure I clearly understood the question. You're saying as we continue to onboard and retain more clinical staff, when would we start to see the incremental benefits both from an admissions and a days of care standpoint? Yeah. Okay. Yeah, pretty much. Obviously, yeah, gotcha. There's an embedded tail, not to state the obvious. Of that as we onboard, bring clinicians up to speed, and some of that speed is dependent on whether they're coming to us with hospice experience or from a different healthcare setting. But usually that, you know, may be a 4-8-week time window as they get comfortable, they're out caring for patients on their own or responding to referrals accordingly. The corresponding admissions and days of care distribution would follow our, you know, normal trends, and that's what I was trying to allude to inside of some of the commentary. With median length of stay, you know, returning and continuing around 17-18 days and the Community Access Initiative, we'd hope that, you know, all incremental admissions will begin to continue to positively contribute to days of care growth on a sequential basis going forward. What I would say, it's clear there's no direct reason they will directly dovetail the increase in those two. But adding the staff at this point was a prerequisite, no question. That's right. Uh-huh. Yeah, no, definitely. I guess, follow up on that first, in terms of where these individuals, the clinical staff is coming from, are you seeing changes where you're, like, attracting more of these nurses from other settings, or are they just coming from other hospice providers? Can you give us a little flavor on that? It's very much market specific. We can definitively say is we are seeing more applicants across the board than we have. The other aspect to it is the teams have done a fantastic job of continuing to improve our retention of not only new staff, but our existing clinical team members, and the combination of those two things are really, you know, adding to that build of clinical capacity. It'd be unfair to generalize where the different candidates are coming from. You know, universally, we are seeing more people apply, which is a very encouraging sign as well. Just to reiterate your point, Nick, obviously, the best of all worlds is to retain them. Correct. Not lose four and hire five. We want to, you know, we want to retain five. That's why my commentary on the retention was, is so critical. So we are really hitting on both cylinders right now. I guess, to that end, with this retention and bonus payment program, would you need to continue this next year? I know you just started it. You're just accruing these costs that you start paying them out next year. I don't know, I guess how do you look at this retention program versus your base wage increases? Can you give us some sense of what you expect these wage increases to be next year? Let me answer the first component with it. We would not anticipate continuing the program after the twelve-month stated period that we've released, you know, to the street. Part of that rationale is we think we're continuing to do a good job, and we are an attractive place to work as more clinicians appear to be coming back to the workforce. You know, as it relates to how we view that program as compared to our normal wage, whether it's merit or whether it's hiring cycle, those two things are mutually, you know, mutually exclusive. While we don't necessarily release our merit targets, what I can say is that it has been in line in something we've managed, that's relatively consistent with some of the pricing increases that we hope continues to, you know, accelerate from a statutory requirement, you know, October 1 of next year. Obviously, we just got a rate increase October 1, you know, 32 days ago at this point. Right. Joanna, I know you have some questions. This is a related answer. During the pandemic, the government gave us $80.2 million. Question is, what? We didn't report that in income. You know, what did we do with that money? Number one, you know, there were the additional protective equipment that, you know, that we purchased and supplied. You know, we attributed to that money from the government. Virtually all of the rest of it, we have returned to employees in two forms. Extra vacation. The first year, we gave 10 extra days of vacation. Then the following year, five extra days of vacation. Instead of giving more vacation, we decided we'd just put a different form, a little stickier, as I would call it, a bridge to normalcy, which is just basically take the remainder of the money and say, "Look, if you stay 12 months, you get the." Rather, to me, it's six of one, half a dozen of the other, whether it's additional vacation or it's a stay bonus. To your point and Nick's answer, we view it as a bridge to a return to normalcy. If we thought it was something that continued, we'd treat it like it was increased salary or pay. We don't. That's why we don't take that treatment of it. Kevin, you bring up a great point. We're paying prevailing market wages for our nurses, home health aides, social workers. The retention is above and beyond that. It's not a substitute for an anemic base wage. Right. We feel confident, Joanna, in terms of our ability- Okay, great. That's what I was getting at. Okay. Go ahead. I was just gonna mention, we feel confident on our ability. No, go ahead. To continue to manage the business inside of the stated and guided margin ranges we're, you know, through the rest of the year and what we'll obviously guide for 2023. Yeah. Yeah, because I was trying to understand, like, how should we think about next year, because, you know, some of the healthcare providers, you know, start talking about next year kind of wage inflation would expect, and it kind of seems to be oscillating around 4 or 5%. Is this, you know, reasonable to you, or you expect deceleration or staying at more like a high single-digit wage growth? Any color on that expectation into next year will be helpful too. It's a reasonable range. We don't provide that degree of granular guidance because while we'll target it, every individual decision is made, you know, with guidance down to the leadership level. So that's a realistic range for what we're talking about, but something we feel comfortable with. We'll obviously discuss once we release 2023 guidance. It's a requirement. I mean, if the reimbursement is going up 3.8%, that's our, you know, that's we can't- Yeah. We have to start with that, you know, position and can't say we're free to deviate from that in any significant way. Well, at the end of the day, you know, wages are decided, certainly for licensed healthcare workers, on a market-by-market basis. We have to, if we are not paying the going rate for qualified nurses and other healthcare professionals, you know, it'll be self-defeating. At the end of the day, we will engineer as such, whatever it takes to attract and retain talent at market rates, that's what we're gonna pay, and we'll adjust other costs accordingly. Great. It makes sense. I guess before I ask on Roto-Rooter, but it's my last question on VITAS. Any commentary on the intra-quarter trends, which I heard from one of the hospice providers, much smaller, but they talk about like discharge rate being high in August, but then I think it started to improve later in the quarter. I was just curious what you have seen in terms of either the fail discharge rate, kind of, you know, exiting the quarter. Joanna, I don't know, you may have missed my remarks previously before we opened it up for questions, but I did comment that admissions outpaced discharges in the second half of the Q3, which was a very encouraging sign and an emerging green shoot growth metric, is what I had alluded to in my opening metrics, that we haven't experienced since the start of the pandemic. You know, directionally, that's where the days of care performed on a week-by-week sequential basis throughout the quarter. Yeah. Joanna, the color I would provide in addition to what Nick and Kevin have given is, I would say this is the first quarter really since the start of the pandemic. We saw some very, very encouraging signs in multiple areas, like Nick described in terms of admission and discharges, like our success in expanding our capacity, expanding our licensed healthcare professionals, specifically nurses. It was extremely encouraging as we worked our way, July, August and September of the Q3. You guys also know our attitude, my attitude is, we want at least two, if not three or more points to put together before we talk about sustainable trend lines. The Q3 was very encouraging. No, that's good to hear, and appreciate the color. On Roto-Rooter, where it sounds like, things are actually tracking well, at least versus our model in terms of revenues, but also margins better. How did Roto do versus your internal expectations? I think I know the answer, they're better because you raised the guidance. I guess on that and, you know, kind of what's driving the outperformance and what's driving the, you know, the margins as well as revenues outperformance. Thank you. Yeah. The primary thing, yes, we matched our internal expectations for Roto-Rooter. Not quite in the way we thought between residential and commercial, but close enough. The headline on Roto-Rooter would be, yeah, we see a little softness on what could be arguably some discretionary jobs, but not much. Cost controls and still increasing revenue resulted in the record EBITDA margin for the quarter, busting through the 30% level. I guess the headline would be still good, strong, sustainable demand. Not as high as it was, say, you know, in the depths of the pandemic, but pretty darn good. Very good cost control, good compensation for our employees. Roto-Rooter, it's about cost control, manpower, and being the first one to the customer's residence when demand comes in. That's really what made the Q3 happen. As well as the Q3 for Roto-Rooter is typically the most difficult quarter. People are on holiday, drier months, so the seasonality that's in our business, Q3 is typically the lowest. When we go to the Q4, we typically see sequential seasonality, holidays, entertaining, things like that, anywhere from about 3%-8% sequential growth. We saw strong indications in the month of September that sequential seasonality is happening. Again, part of our sharpening of our pencil, increasing margin for Roto-Rooter, as well as anticipating more traditional seasonality and uplift in the fourth quarter, which we feel reasonably confident about. Dave, the other comment I'd make on regarding Roto-Rooter, we have observed once again the pricing power of Roto-Rooter. I mean, we're in a, you know, difficult inflationary environment and, you know, one of the most difficult things to do is get necessary pricing increases through. Clearly, when you look at the demand issues as we come out of the pandemic, and then our results, clearly Roto-Rooter has been successful in getting those. Appreciate the comment. I guess I'll hop back to the queue. Thank you. Thank you. Our next question comes from Ben Hendrix with RBC Capital Markets. Your line is now open. Thank you very much. Just a very quick follow-up on the bonus initiative. Have you seen any material responses in any of your markets from competitors who are maybe looking to counter your hiring efforts with their own bonus programs? Just wanted to see if there's any pockets where the program is not working as well or is creating any kind of prolonged inflationary pressure in certain markets. Thanks. Ben, the short answer is no. We are not seeing anything where there'd be a material response. Some, you know, many organizations, not only in home care but other healthcare verticals, have continued to, you know, structure a whole bunch of higher bonuses, not as much on the retention side of it, but the sign-on component that gets coupled with it. You know, the good news is those things have existed out in the market for the last two and a half years. Our recruitment and retention program, which we deemed a Difference Maker program, has really helped to offer a great talking point to those potential candidates so they understand, you know, the opportunity at VITAS as well as the reward in which they would receive once they've been with us, you know, for 12 months and hopefully are with us for 30 years. Thank you. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. I am showing no further comments at this time. Please, Kevin McNamara, you may proceed with your closing comments. My closing comments will be brief. I wanna thank everyone for their attention and of course thank everyone all the employees for a good solid quarter and you know what have continued to be difficult operating conditions. Thank you very much. I guess we'll return to this forum in mid-February with the results of our fourth quarter and year-end results. Thank you. Ladies and gentlemen, this does conclude today's program. You may now disconnect.