CHE 10-K & 10-Q changes, risk factors and insider trading
Chemed Corp. · NYSE · Services-Home Health Care Services · CIK 19584 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Significant Tariffs Could Increase Costs, Decrease Margin, and Materially Adversely Affect the Business.”
Largest changes
“In the normal course of business, our information technology systems hold sensitive patient information including patient demographic data, eligibility for various medical plans including Medicare and Medicaid and protected health information. We utilize those same systems to perform our day-to-day activities, such as receiving referrals, assigning medical teams to patients, documenting medical information and maintaining an accurate record of all transactions. Recently healthcare organizations have been the focus of increased cybersecurity attacks. …”see in full comparison
“Significant Tariffs Could Increase Costs, Decrease Margin, and Materially Adversely Affect the Business.”see in full comparison
Although the cyberattack that led to the breach of PHI was the first to successfully gain access to our systems, it was not an isolated incident. We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact. Insider or employee cyber and security threats are increasingly a concern for all large companies, including ours. Chemed’s Chief Legal Officer and Chief Financial Officer are alerted to any potential issues and evaluate those issues for cybersecuritysee in full comparisonmateriality A successful attack on our information technology systems could have significant consequences to the business including liability for compromised patient information and business interruption.materiality.
“Additionally, the FTC and other antitrust regulators have recently heightened their scrutiny of both horizontal and vertical merges in healthcare which could delay or prevent potential acquisitions, divestitures or a change in control.”see in full comparison
“We maintain commercial insurance related to cyberattacks. We obtain internal control reports from key vendors that maintain company data or process company transactions on a yearly basis. We review these reports to detect any potential cybersecurity issues. However, these safeguards do not ensure that another significant cyberattack could not occur. …”see in full comparison
We are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which prohibits us from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. The application of Section 203 could have the effect of delaying or preventing a change of control that could be advantageous to stockholders. Additionally, the FTC and other antitrust regulators have recently heightened their scrutiny of both horizontal and vertical merges in healthcare which could delay or prevent potential acquisitions, divestitures or a change in control.see in full comparison
Full comparison: every changed paragraph (25)
We face intense competition from numerous competitors. The sewer, drain and pipe cleaning, excavation, plumbing repair and water restoration businesses are highly fragmented, with the bulk of the competitors consisting of local and regional entities. Private equity businesses have recently made significant investments in home services companies, including plumbing. We compete primarily on the basis of advertising, range of services provided, name recognition, availability of emergency service, speed and quality of customer service, service guarantees and pricing. Our competitors may succeed in developing new or enhanced products and services more successful than ours and in marketing and selling existing and new products and services better than we do. Also, effective marketing and advertising may become more expensive and more difficult as search engines revise algorithms, customers use of artificial intelligence (“AI”) platforms become more prevalent and business models and customers change how they find our services. In addition, new competitors may emerge. We cannot make any assurances that we will continue to be able to compete successfully with any of these companies.
Competition for skilled employees, particularly licensed plumbers, is intense, and the process of locating and recruiting skilled employees with the combination of qualifications and attributes required to adequately perform plumbing duties can be difficult and lengthy. We cannot assure you that Roto-Rooter will be successful in attracting, retaining or training highly skilled personnel. Roto- Rooter’sRoto-Rooter’s business could be disrupted and its growth and profitability negatively impacted if it is unable to attract and retain skilled employees.
Our information technology systems hold sensitive customer information in the ordinary course of business, including names, addresses, and partial credit card information. We utilize those same systems to perform our day-to-day activities, such as receiving customer calls, dispatching technicians to jobs, and maintaining an accurate record of all transactions. We have not experienced any known material system/data breaches on our information technology systems that compromised customer data or the company’s proprietary data. We maintain our information technology systems with safeguard protection against cyber-attacks, including intrusion detection and protection services, firewalls, and endpoint security software. Every month, we test our information technology systems using cyber-scanning software and other methods to learn how a successful system/data breach may occur. If a deficiency is detected, our IT staff will log and remediate the deficiency prescribed by the vendor or manufacturer. Roto-Rooter has developed and tested a response plan in the event of a successful system/data breach and maintains commercial insurance related to cyber-security. We obtain internal control reports from key vendors that maintain company data or process company transactions on a yearly basis. We review these reports to detect any potential cybersecurity issues. However, these safeguards do not ensure that a significant system/data breach may occur. Since the pandemic, certain roles have been conducted remotely, increasing the role and importance of our information technology and security systems. Additionally, the increasing development and use of AI and other new and evolving technologies create additional system and other risks. Chemed’s Chief Legal Officer and Chief Financial Officer are alerted to any potential issues and evaluate those issues for cybersecurity materiality. A successful attack on our information technology systems could significantly affect the business, including liability for compromised customer information and business interruption.
Roto-Rooter’s success is highly dependent on its brand reputationreputation.
VITAS’ success is heavily dependent on referrals from physicians, long-term care facilities, hospitals and other institutional health care providers, managed care companies, insurance companies and other patient referral sources in the communities that its hospice locations serve, as well as on its ability to maintain good relations with these referral sources. VITAS’ referral sources may refer their patients to other hospice care providers or not to a hospice provider at all. Additionally, during the pandemic, VITAS experienced significant changes in referral patterns and sources. In the event that CMS re-institutes the SFP or a similar type of program and any VITAS program is identified as a “poor performer”, we do not know the extent to which such identification will affect industry referrals or referral patterns. VITAS’ growth and profitability depend significantly on its ability to establish and maintain close working relationships with these patient referral sources and to increase awareness and acceptance of hospice care by its referral sources and their patients. We cannot assure that VITAS will be able to maintain its existing relationships or that it will be able to develop and maintain new relationships in existing or new markets. Moreover, if shifts to referrals continue, it could materially adversely affect the business. VITAS’ loss of existing relationships or its failure to develop new relationships could adversely affect its ability to expand or maintain its operations and operate profitably. Moreover, we cannot assure you that awareness or acceptance of hospice care will increase or remain at current levels.
Become Medicare and Medicaid certified in new markets, particularly if a moratorium prohibits the granting of new licenses in certain markets;
A significant portion of VITAS’ workforce is licensed nurses. VITAS depends on qualified nurses to provide quality, responsive hospice services to its patients. The currentrecent nationwide shortage of qualified nurses impacts some of the markets in which VITAS provides hospice services. In response to this shortage, VITAS has adjusted its wages and benefits to recruit and retain nurses and to engage contract nurses. Similarly, there recently has been a shortage of home health aides, who provide many of the hospice services provided by VITAS. VITAS has also adjusted its wages and benefits to recruit and retain home health and other aides. VITAS’ inability to attract and retain qualified nurses and aides as well as other healthcare workers, could adversely affect its ability to provide quality, responsive hospice services to its patients and its ability to increase or maintain patient census in those markets. Increases in the wages and benefits required to attract and retain qualified nurses or an increase in reliance on contract nurses could negatively impact profitability.
Participants in the hospice industry are subject to lawsuits alleging negligence, professional liability, wage and hour or other similar legal theories, many of which involve large claims and significant defense costs. We are also subject to the risk of lawsuits under the False Claims Act and comparable state laws for allegedly submitting fraudulent bills for services to the Medicare and Medicaid programs and other federal and state healthcare programs. These lawsuits, which may be initiated by “whistleblowers”, subpoenas or Civil Investigative Demands can involve significant monetary damages, fines, attorneys’ fees and the award of bounties to private qui tam plaintiffs. From time to time, VITAS is subject to such claims and other types of lawsuits. See the description below under Legal Proceedings in the Notes to the Consolidated Financial Statements. The ultimate liability for claims, if any, could have a material adverse effect on its financial condition or operating results. Although VITAS currently maintains liability insurance intended to cover certain claims, we cannot assure you that the coverage limits of such insurance policies will be adequate or that all such claims will be covered by the insurance. In addition, VITAS’ insurance policies must be renewed annually and may be subject to increasing premiums, high deductibles, and cancellation during the policy period. While VITAS has been able to obtain liability insurance in the past, such insurance varies in cost, and may not be available in the future on terms acceptable to VITAS, if at all.
In the normal course of business, our information technology systems hold sensitive patient information including patient demographic data, eligibility for various medical plans including Medicare and Medicaid and protected health information. We utilize those same systems to perform our day-to-day activities, such as receiving referrals, assigning medical teams to patients, documenting medical information and maintaining an accurate record of all transactions.
Despite significant safeguards, including active intrusion protection, firewalls and virus detection software, as discussed in greater detail on Item 1C below, in October of 2025, access to our systems was gained by a threat actor in a cybersecurity attack. The threat actor was able to access a significant amount of Protected Health Information (“PHI”); however, despite repeated attempts, was not able to insert a tool often used by threat actors into our system. Our response plan was effective in identifying, quarantining, and eliminating the third-party intrusion, but not before access to PHI was gained.
As a result of the cyberattack, we have reviewed our system and strengthened it further to better prevent future successful attacks.
We maintain commercial insurance related to cyberattacks. We obtain internal control reports from key vendors that maintain company data or process company transactions on a yearly basis. We review these reports to detect any potential cybersecurity issues. However, these safeguards do not ensure that another significant cyberattack could not occur. The current environment, particularly in healthcare and with the increase in use of AI and other new technologies, has significantly increased our usage of information technology systems and heightened the need for security of those systems with the increase in telehealth.
In the normal course of business, our information technology systems hold sensitive patient information including patient demographic data, eligibility for various medical plans including Medicare and Medicaid and protected health information. We utilize those same systems to perform our day-to-day activities, such as receiving referrals, assigning medical teams to patients, documenting medical information and maintaining an accurate record of all transactions. Recently healthcare organizations have been the focus of increased cybersecurity attacks. We have not experienced any known material system/data breaches on our information technology systems that compromised customer data or the company’s proprietary data. We maintain our information technology systems with safeguard protection against cyber-attacks including active intrusion protection, firewalls and virus detection software. As discussed previously, we are subject to and comply with HIPAA and HITECH regulations. We have developed and tested a response plan in the event of a successful attack and we maintain commercial insurance related to a cyber-attack. We obtain internal control reports from key vendors that maintain company data or process company transactions on a yearly basis. We review these reports to detect any potential cybersecurity issues. However, these safeguards do not ensure that a significant cyber-attack could not occur. Increases in working from home and the provision of telehealth services due to the pandemic have significantly increased our usage of information technology systems and heightened the need for security of those systems.
Although the cyberattack that led to the breach of PHI was the first to successfully gain access to our systems, it was not an isolated incident. We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact. Insider or employee cyber and security threats are increasingly a concern for all large companies, including ours. Chemed’s Chief Legal Officer and Chief Financial Officer are alerted to any potential issues and evaluate those issues for cybersecurity materiality A successful attack on our information technology systems could have significant consequences to the business including liability for compromised patient information and business interruption.materiality.
While we have been able to mitigate the damages from the prior successful attack, and did not experience any material operational or financial issues as a result of the attack, a subsequent successful attack on our information technology systems could have even greater consequences to the business including liability for compromised patient information and business interruption.
VITAS’ success is highly dependent on its brand reputationreputation.
It is unclear what effects that CMS’ Special Focus Program (“SFP”) may have on VITAS’ brand reputation. CMS has halted implementation of the program. However, if CMS revises the program or implements a similar program and its reimplementationimplementation identifies any VITAS programs as “poor performers”, such designation could negatively affect VITAS’ brand reputation, and any additional governmental oversight could materially adversely affect the operations profitability of any affected programs.
VITAS’ headquarters and a significant portion of its operations are in FloridaFlorida.
We are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which prohibits us from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. The application of Section 203 could have the effect of delaying or preventing a change of control that could be advantageous to stockholders. Additionally, the FTC and other antitrust regulators have recently heightened their scrutiny of both horizontal and vertical merges in healthcare which could delay or prevent potential acquisitions, divestitures or a change in control.
Additionally, the FTC and other antitrust regulators have recently heightened their scrutiny of both horizontal and vertical merges in healthcare which could delay or prevent potential acquisitions, divestitures or a change in control.
Significant Tariffs Could Increase Costs, Decrease Margin, and Materially Adversely Affect the Business.
Both Roto-Rooter’s and VITAS’s primary businesses are the provision of services within the United States. Accordingly, they are likely to be less affected by the impact of specific or wide-ranging tariffs than many other entities in the United States and Global economies. However, significant tariffs on certain products, such as steel for Roto-Rooter’s cabling machines and pharmaceuticals utilized by VITAS, could materially increase the costs of Roto-Rooter and VITAS. Additionally, because our service businesses heavily rely on delivering service to customers or patients in their residences, increases in the costs of vehicle acquisition, maintenance, repair, and reimbursement for employees’ use of personal vehicles, could have a significant increase on our expenses.
These additional costs, in the case of VITAS, cannot be passed along to our patients because of the structure of hospice reimbursement, and in the case of Roto-Rooter, may not be able to be fully passed along to our customers. These additional costs could materially adversely affect our margins.
To the extent that tariffs cause any adverse impacts on global supply chains, it could further materially affect the ability of both businesses to timely source critical supplies, which may affect our delivery of services.
If, as a result of tariffs, the United States’ economy experiences a recession or other economic slowdown, the demand for Roto-Rooter’s non-emergency services may decline materially.
Management's Discussion & Analysis (MD&A)
The information called for by this Item is set forth on pages 75 through 93 of the 2025 Annual Report to Stockholders and is incorporated herein by reference.
No wording changes found in this section (only numbers or dates changed in 1 paragraph).
Full comparison: every changed paragraph (0)
What changed in the latest 10-Q
Risk Factors
There have been no material changes from the risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.
Full comparison: every changed paragraph (1)
There have been no other material changes from the risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on formForm 10-Q.
Management's Discussion & Analysis (MD&A)
New heading “Results of Operations”
New heading “Six months ended June 30, 2026 versus 2025 - Consolidated Results”
New heading “Six months ended June 30, 2026 versus 2025 - Segment Results”
Largest changes
“We invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds. Chemed invests excess cash in money market funds holding US Treasuries. Deposits and withdrawals are made daily, based on the Company’s excess cash balance. There are no penalties associated with withdrawals. The accounts bear interest at a normal market rate.”see in full comparison
“A $20.5 million increase in goodwill due to the two acquisitions at Roto-Rooter.”see in full comparison
“A $32.4 million increase in goodwill due to four acquisitions at Roto-Rooter.”see in full comparison
Full comparison: every changed paragraph (47)
For the three months ended MarchJune 31,30, 2026, the increase in consolidated service revenues and sales was driven by aan 3.1%11.9 % increase at VITAS offset byand a 0.9%3.3% decreaseincrease at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 2.2%6.1% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%.2.4%. Acuity mix shift negatively impacted revenue growth by 120-basis115-basis points in the quarter when compared to the prior year quarter’s revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes decreasedincreased revenue growth by 47-basis455-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in plumbing, drain cleaning and excavation offset by a decrease in water restoration.
For the six months ended June 30, 2026, the increase in consolidated service revenues and sales was driven by a 7.4% increase at VITAS and by a 1.1% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 4.2% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.5%. Acuity mix shift negatively impacted revenue growth by 120-basis points in the year when compared to the prior year’s revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by 190-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in plumbing, drain cleaning and excavation offset by a decrease in water restoration.
The decline in service revenues at Roto-Rooter was driven by a 1.9% decrease in commercial revenue and a 1.5% decrease in residential revenue.
Material changes in the balance sheet accounts from December 31, 2025 to MarchJune 31,30, 2026 include the following:
A $20.5 million increase in goodwill due to the two acquisitions at Roto-Rooter.
A $23.3 million increase in income taxes payable due to timing of payments.
A $91.2 million increase in long-term debt due primarily to the acquisitions and stock repurchases.
A $201.1$10.3 million increase in treasuryprepaid stockexpenses due to stockprepaid repurchases.insurance premiums paid in the second quarter.
A $11.4 million increase in lease right of use asset due to lease renewals. This resulted in a similar increase in the lease liability accounts.
A $32.4 million increase in goodwill due to four acquisitions at Roto-Rooter.
A $20.3 million increase in accounts payable due to timing of payments.
A $10.8 million increase in the liability of deferred compensation plans due mainly to market valuation gains. This resulted in a similar increase in the assets associated with deferred compensation plans.
A $140.0 million increase in long-term debt due primarily to acquisitions and stock repurchases.
A $291.9 million increase in treasury stock due to stock repurchases.
Net cash provided by operating activities increased $55.5$1.7 million from MarchJune 31,30, 2025 to MarchJune 31,30, 2026. See the Unaudited Consolidated Statements of Cash FlowFlows on page 5 for the detail components making up the change.
On April 10, 2026, we replaced the Prior Credit Agreement with a sixth amended and restated Credit Agreement. Terms of the Credit Agreement consist of a five-year $450.0 million revolving credit facility including $100.0 million for letters of credit. The interest on thisThis Credit Agreement has a floating interest rate that is generally the secured overnight financing rate (“SOFR”) plus an additional tiered rate which varies based on our current leverage ratio. As of MarchJune 31,30, 2026, the interest rate is SOFR plus 100 basis points. The Credit Agreement includes an expansion feature that provides the Company the opportunity to increase its revolver by an additional $250.0 million.
We have issued $45.5$47.3 million in standby letters of credit as of MarchJune 31,30, 2026 under the Prior Credit Agreement, which has continued under the Credit Agreement2026, mainly for insurance purposes. Issued letters of credit reduce our available credit under the Credit Agreement. As of MarchJune 31,30, 2026, we have approximately $313.3$262.7 million of unused lines of credit available and are eligible to be drawn down under the Prior Credit Agreement. Management believes its liquidity and sources of capital are satisfactory for the Company’s needs in the foreseeable future.
Collectively, the terms of the Credit Agreement require us to meet various financial covenants, to be tested quarterly. We wereare in compliance with all financial and other debt covenants as of MarchJune 31,30, 2026 under the Prior Credit Agreement and anticipate remaining in compliance under the Credit Agreement throughout the foreseeable future.2026.
Three months ended MarchJune 31,30, 2026 versus 2025 - Consolidated Results
Our service revenues and sales for the firstsecond quarter of 2026 increased 1.6%8.8% versus services revenue and sales revenues for the firstsecond quarter of 2025. Of this increase, a $12.6$47.1 million increase was attributable to VITAS, offset byand a $2.0$7.3 million decreaseincrease at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):
The increase in service revenues at VITAS is comprised primarily of 2.2%6.1% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%.2.4%. Acuity mix shift negatively impacted revenue growth by 120-basis115-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 decreasedincreased revenue growth by 47-basis455-basis points.
The increase in plumbing revenues for the firstsecond quarter of 2026 versus 2025 is attributable to a 14.1%10.1% increase in price and service mix shift offset by a 6.4%4.3% decrease in job count. The increase in drain cleaning revenues for the firstsecond quarter of 2026 versus 2025 is attributable to a 12.3%6.5% increase in price and service mix offset by a 12.0%3.0% decrease in job count. ExcavationThe increase in excavation revenues decreasedfor 1.1%,the watersecond quarter of 2026 versus 2025 is attributable to a 5.5% increase in price and service mix shift and by a 3.5% increase in job count. Water restoration revenues decreased 11.7%,6.0%, and contractors operations decreased 3.3%.1.9%. Implicit price concessions and credit memos decreased 16.5%16.0% mainly related to the water restoration business.
The consolidated gross margin was 32.8%32.9% in the firstsecond quarter of 2026 as compared with 33.5%29.8% in the firstsecond quarter of 2025. On a segment basis, VITAS’ gross margin was 22.5%23.8% in the firstsecond quarter of 2026 as compared with 23.2%19.1% in the firstsecond quarter of 2025. The declineincrease iswas primarily related to anincreased increaserevenues including a $15.9 million decrease in variableMedicare patientCap carebilling expenseslimitation in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. The Roto-Rooter segment’s gross margin was 51.0%50.4% for the firstsecond quarter of 2026 which was essentially flatcompared with 49.0% in the firstsecond quarter of 2025.
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for the firstsecond quarter of 2026 were up 5.0%10.9% when compared to the firstsecond quarter of 2025. $3.9 million ofOf this increase $2.9 million was the result of increased advertising at Roto-Rooter in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. The remaining increase was the result of increased legal expenses of $1.3 million mainly at VITAS, normal salary increases and increased incentive compensation.
Our effective tax rate reconciliation is as follows (in thousands):
Three months ended MarchJune 31,30, 2026 versus 2025 - Segment Results
Net income/(loss) for the firstsecond quarter of 2026 versus the firstsecond quarter of 2025 by segment (in thousands):
After-tax earnings as a percent of revenue at VITAS in the firstsecond quarter of 2026 was 12.4%13.7% as compared to 12.3%9.6% in the firstsecond quarter of 2025. VITAS’ after-tax earnings increased primarily due to increased revenues including a $15.9 million decrease in Medicare Cap liability in the second quarter of 2026 compared to the second quarter of 2025.
Roto-Rooter’s net income was negativelyessentially impactedflat inwhen compared with the first quarter of 2026 compared to the firstsame quarter of 2025 duebut mainlywas tonegatively impacted by an increase in marketing expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the firstsecond quarter of 2026 was 15.1%,13.9%, as compared to 16.7%14.3% in the firstsecond quarter of 2025.
After-tax Corporate expenses for the firstsecond quarter of 2026 increased 19.1%42.4% when compared to the firstsecond quarter in 2025 due primarily to a $1.5$2.3 million decrease in interest income related to lower cash and investment balances and a $1.3 million increase in interest expense related to an increase in long-term debt as a result of stock repurchases and Roto-Rooter acquisitions, a $1.6 million increase in intercompany interest expense, a lower$1.1 million increase in stock-based compensation and a $495,000 decrease in excess tax benefit related to reduced stock option exercises and a $1.2 million decrease in interest income offset by an $881,000 decrease in stock-based compensation.exercises.
Results of Operations
Six months ended June 30, 2026 versus 2025 - Consolidated Results
Our service revenues and sales for the first six months of 2026 increased 5.1% versus services revenue and sales for the first six months of 2025. Of this increase, a $59.8 million increase was attributable to VITAS, and a $5.3 million increase at Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):
Days of care at VITAS during the six months ended June 30 were as follows:
The increase in service revenues at VITAS is comprised primarily of 4.2% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.5%. Acuity mix shift negatively impacted revenue growth by 120-basis points in the year 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 190-basis points.
The increase in plumbing revenues for the first six months of 2026 versus 2025 is attributable to a 12.0% increase in price and service mix shift offset by a 5.3% decrease in job count. The increase in drain cleaning revenues for the first six months of 2026 versus 2025 is attributable to a 9.5% increase in price and service mix offset by a 7.6% decrease in job count. The increase in excavation revenues for the first six months of 2026 versus 2025 is attributable to an 8.3% increase in price and service mix shift offset by a 4.7% decrease in job count. Water restoration revenues decreased 8.9%, and contractors operations decreased 2.6%. Implicit price concessions and credit memos decreased 16.3% mainly related to the water restoration business.
The consolidated gross margin was 32.9% in the first six months of 2026 as compared with 31.7% in the first six months of 2025. On a segment basis, VITAS’ gross margin was 23.2% in the first six months of 2026 as compared with 21.2% in the first six months of 2025. The increase was primarily related to increased revenues including a $15.8 million decrease in Medicare Cap billing limitation in the first six months of 2026 compared to the first six months of 2025. The Roto-Rooter segment’s gross margin was 50.7% for the first six months of 2026 which was almost equal to the first six months of 2025.
Selling, general and administrative expenses (“SG&A”) comprise (in thousands):
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for the first six months of 2026 were up 7.8% when compared to the first six months of 2025. $6.7 million of this increase was the result of increased advertising at Roto-Rooter in the first six months of 2026 compared to the first six months of 2025. The remaining increase was the result of increased legal expense of $2.5 million mainly at VITAS, normal salary increases and increased incentive compensation.
Other income – net comprise (in thousands):
We invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds. Chemed invests excess cash in money market funds holding US Treasuries. Deposits and withdrawals are made daily, based on the Company’s excess cash balance. There are no penalties associated with withdrawals. The accounts bear interest at a normal market rate.
Net income for both periods include the following after tax items/adjustments that (reduce) or increased after tax earnings (in thousands):
Six months ended June 30, 2026 versus 2025 - Segment Results
Net income/(loss) for the first six months of 2026 versus the first six months of 2025 by segment (in thousands):
After-tax earnings as a percent of revenue at VITAS in the first six months of 2026 was 13.1% as compared to 11.0% in the first six months of 2025. The increase was primarily related to increased revenues including a $15.8 million decrease in Medicare Cap liability in the first six months of 2026 compared to the first six months of 2025.
Roto-Rooter’s net income was negatively impacted in the first six months of 2026 compared to the first six months of 2025 due mainly to an increase in marketing expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the first six months of 2026 was 14.5%, as compared to 15.5% in the first six months of 2025.
After-tax Corporate expenses for the first six months of 2026 increased 30.5% when compared to the first six months in 2025 due primarily to a $3.5 million decrease in interest income related to lower cash and investment balances and a $1.5 million increase in interest expense related to an increase in long-term debt as a result of stock repurchases and Roto-Rooter acquisitions, a $3.2 million increase in intercompany interest expense, and a $1.0 million decrease in excess tax benefit related to reduced stock option exercises.
CHE insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 10 filings (5 insiders, 9 trade dates, 13,097 shares, about $6.5M). Net open-market shares: -13,097 (purchases minus sales); net value about -$6.5M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-30 | Lee Spencer S |
Option exercise | 12,099 | $445.35 | $5.4M |
| 2026-09-30 | Lee Spencer S |
Shares withheld for tax | 11,160 | $508.93 | $5.7M |
| 2026-09-28 | Mcnamara Kevin J |
Open-market sale | 2,000 | $513.45 | $1.0M |
| 2026-09-28 | Hutton Thomas C |
Option exercise | 4,629 | $445.35 | $2.1M |
| 2026-09-28 | Hutton Thomas C |
Shares withheld for tax | 4,270 | $506.65 | $2.2M |
| 2026-09-18 | Mcnamara Kevin J |
Open-market sale | 2,000 | $501.40 | $1.0M |
| 2026-08-21 | Lee Spencer S |
Open-market sale | 1,000 | $541.04 | $541.0K |
| 2026-08-21 | Mcnamara Kevin J |
Open-market sale | 2,000 | $541.16 | $1.1M |
| 2026-08-10 | Judkins Brian C |
Shares withheld for tax | 5,878 | $548.96 | $3.2M |
| 2026-08-10 | Judkins Brian C |
Option exercise | 6,786 | $445.35 | $3.0M |
| 2026-08-05 | Wherley Joel L |
Option exercise | 2,599 | $445.35 | $1.2M |
| 2026-08-05 | Wherley Joel L |
Shares withheld for tax | 2,270 | $542.62 | $1.2M |
| 2026-08-03 | Mcnamara Kevin J |
Open-market sale | 2,000 | $539.51 | $1.1M |
| 2026-07-31 | Mcnamara Kevin J |
Option exercise | 2,001 | $445.35 | $891.1K |
| 2026-07-31 | Mcnamara Kevin J |
Shares withheld for tax | 19,802 | $529.22 | $10.5M |
| 2026-07-31 | Grace Patrick P |
Open-market sale | 190 | $532.00 | $101.1K |
| 2026-06-09 | Lindell Andrea R |
Open-market sale | 1,347 | $447.33 | $602.6K |
| 2026-05-29 | Walsh George J Iii |
Open-market sale | 500 | $437.83 | $218.9K |
| 2026-05-18 | Walsh George J Iii |
Grant/award | 386 | $440.77 | $170.1K |
| 2026-05-18 | Mount John Meredith Jr. |
Grant/award | 386 | $440.77 | $170.1K |
| 2026-05-18 | Mccarthy Eileen P |
Grant/award | 386 | $440.77 | $170.1K |
| 2026-05-18 | Lindell Andrea R |
Grant/award | 386 | $440.77 | $170.1K |
| 2026-05-18 | Heaney Christopher J |
Grant/award | 386 | $440.77 | $170.1K |
| 2026-05-18 | Grace Patrick P |
Grant/award | 386 | $440.77 | $170.1K |
| 2026-05-18 | Delyons Ron |
Grant/award | 386 | $440.77 | $170.1K |
| 2026-05-08 | Grace Patrick P |
Open-market sale | 60 | $425.78 | $25.5K |
| 2026-05-01 | Mcnamara Kevin J |
Open-market sale | 2,000 | $421.13 | $842.3K |
Well-known investors holding CHE (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 972,474 | $446.2M | 0.16% | Added 134% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 93,085 | $43.4M | 0.1% | Added 91% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 114,119 | $43.1M | — | Sold out |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 74,460 | $34.7M | 0.05% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 50,404 | $23.5M | 0.02% | Reduced 52% |
| Renaissance Technologies | 2026-06-30 | 39,080 | $18.2M | 0.03% | Added 217% |
| Two Sigma Investments | 2026-06-30 | 22,325 | $10.4M | 0.01% | Reduced 93% |
| Bridgewater Associates | 2026-06-30 | 20,399 | $9.5M | 0.04% | Added 303% |
| D. E. Shaw & Co. | 2026-06-30 | 6,160 | $2.9M | 0.0% | Reduced 86% |